S.B. No. 1777 aims to regulate certain group homes in Texas by establishing a prohibition on payments for referrals to these homes, particularly when the homes 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 mandates that owners or operators of group homes must obtain criminal history record information for all applicants and employees, prohibiting the hiring of individuals with certain criminal convictions. A new section is added to create a criminal offense for health care providers who accept payment for referring potential residents to unlicensed group homes, classifying such violations as a Class B misdemeanor. The bill is set to take effect on September 1, 2025.