1. (a) A center license is not assignable or transferable. If a change of ownership occurs, the applicant must obtain a license in accordance with subsection (c) of this section.
2. (b) An application for a center license when there is a change of ownership is an application for an initial license.

3. (c) An applicant must submit to HHSC:

   1. (1) a complete application for a license in accordance with §15.101 of this subchapter (relating to Criteria and Eligibility for a License) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information;
   2. (2) the application fee, in accordance with §15.112 of this subchapter (relating to Licensing Fees);
   3. (3) a letter of credit for $250,000 from a bank that is insured by the Federal Deposit Insurance Corporation, or other documentation acceptable to HHSC, to demonstrate the applicant's financial viability; and
   4. (4) a signed written notice from the center's existing license holder of intent to transfer operation of the center to the applicant beginning on a date specified by the applicant, unless waived in accordance with subsection (f) of this section.
4. (d) HHSC may deny issuance of a license if the applicant, a controlling person, or any person required to submit background and qualification information fails to meet the criteria for a license established in §15.101 of this subchapter or for any reason specified in §15.115 of this subchapter (relating to Criteria for Denial of a License).
5. (e) To avoid a center operating without a license, an applicant must submit all items in subsection (c) of this section at least 30 days before the anticipated date of the change of ownership in accordance with HHSC application instructions.

6. (f) The 30-day notice required by subsection (e) of this section may be waived by HHSC if:

   1. (1) the applicant presents evidence to HHSC demonstrating that an eviction of the center or a foreclosure of the property from which the center operates is imminent and that circumstance prevented the timely submission of the notice; or
   2. (2) HHSC, in its sole discretion, determines that circumstances are present that threaten a minor's health, safety, or welfare and necessitate waiver of timely submission of the notice.

7. (g) HHSC conducts an on-site health inspection to verify compliance with the licensure requirements before issuing a license as a result of a change of ownership. HHSC may conduct a desk review instead of an on-site health inspection before issuing a license as a result of a change of ownership if:

   1. (1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or
   2. (2) every person with a disclosable interest in the new license holder had a disclosable interest in the former license holder.
8. (h) HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership.
9. (i) If an applicant meets the requirements for a license, HHSC issues a license. The effective date of the license is the same date as the effective date of the change of ownership and cannot precede the date the application was received by HHSC Licensing and Credentialing Section.
10. (j) The initial license issued to the new license holder expires on the third anniversary after the effective date.
11. (k) The previous license holder's license is invalid on the effective date of the new license holder's initial license.

Source Note:The provisions of this §550.108 adopted to be effective September 1, 2014, 39 TexReg 6569; amended to be effective October 11, 2017, 42 TexReg 5492; amended to be effective October 29, 2018, 43 TexReg 7188; transferred effective May 1, 2019, as published in the Texas Register April 12, 2019, 44 TexReg 1875.