1. (a) A license holder may not transfer its license.
2. (b) A prospective license holder must submit, via the online portal, a complete HHSC application for an initial license based on a change of ownership in accordance with §553.23 of this subchapter (relating to Initial Application Procedures and Requirements). The full payment of the fees required in §553.47 of this subchapter (relating to License Fees) must be submitted no less than 30 days before the date the prospective license holder seeks to be licensed based on a change of ownership.
3. (c) To avoid a facility operating while unlicensed, an applicant must submit an application for an initial license based on a change of ownership at least 30 days before the anticipated date of the change of ownership. The effective date of the change of ownership cannot precede the date the application is received by the HHSC Licensing and Credentialing Section, Long-term Care Regulation.
4. (d) HHSC may assess an administrative penalty in accordance with Subchapter H, Division 9 of this chapter (relating to Administrative Penalties) against a person who fails to notify HHSC before the effective date of the change of ownership.
5. (e) Pending HHSC review of the application for an initial license based on a change of ownership, the current license holder must continue to meet all requirements for operation of the facility.

6. (f) HHSC staff conduct an on-site health inspection to verify compliance with the licensure requirements before issuing a license based on a change of ownership. HHSC may conduct a desk review instead of an on-site health inspection if HHSC determines that the prospective license holder will have a new tax identification number and:

   1. (1) less than 50 percent of the direct or indirect ownership interest in the current license holder differs from that of the prospective license holder; or
   2. (2) every owner with a disclosable interest in the prospective license holder has a disclosable interest in the current license holder.
7. (g) HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection of the facility to determine if the facility meets the applicable NFPA 101 and other physical plant requirements in Subchapter D of this chapter (relating to Facility Construction), and, as applicable, §553.311 of this chapter (relating to Physical Plant Requirements in Alzheimer's Units) before issuing a license based on a change of ownership.
8. (h) HHSC issues the license within 30 days after HHSC determines that the applicant and the facility have met the licensure requirements of this section. The issuance of a license constitutes HHSC's official written notice to the facility of the approval of the application for a change of ownership.
9. (i) HHSC may deny an application for a change of ownership if the applicant, controlling person, or any person required to submit background and qualification information fails to meet the criteria for a license established in §553.17 of this subchapter (relating to Criteria for Licensing).
10. (j) If HHSC denies an application for an initial license based on a change of ownership, HHSC sends the applicant a written notice of the denial and informs the applicant of the applicant's right to request an administrative hearing to appeal the denial. The administrative hearing is held in accordance with Texas Health and Human Services Commission rules at 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act).
11. (k) If a license holder that is not a publicly traded company adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify HHSC via the online portal no later than 30 days after the addition of the owner.

Source Note:The provisions of this §553.35 adopted to be effective August 31, 2021, 46 TexReg 5017.