S.B. No. 1777 aims to regulate certain group homes in Texas by prohibiting payments for referrals to these homes if they are not properly licensed. The bill redesignates Chapter 769 of the Health and Safety Code to Chapter 767 and introduces new definitions and requirements for group homes. It specifies that a group home must provide lodging and certain services to three or more unrelated residents but does not include personal care services. Additionally, the bill outlines exemptions for various types of facilities, such as licensed child-care facilities and retirement communities.

The legislation also establishes a criminal history record requirement for group home owners and operators, mandating that they obtain background checks on employees and applicants. If an owner or operator hires someone with certain criminal convictions, they commit a Class A misdemeanor. Furthermore, the bill creates a new offense for health care providers who accept payment for referring potential residents to unlicensed group homes, classifying this violation as a Class B misdemeanor. The act is set to take effect on September 1, 2025.