(a) A person must be licensed to establish or operate an assisted living facility in Texas.
  (1) HHSC considers one or more facilities to be part of the same establishment and, therefore, subject to licensure as an assisted living facility, based on the following factors:
    (A) common ownership;
    (B) physical proximity;
    (C) shared services, personnel, or equipment in any part of the facilities' operations; and
    (D) any public appearance of joint operations or of a relationship between the facilities.
  (2) The presence or absence of any one factor in paragraph (1) of this subsection is not conclusive.
(b) To obtain a license, a person must follow the application requirements in this subchapter and meet the criteria for a license.
(c) An applicant must affirmatively show that the applicant, license holder, controlling person, and any person required to submit background and qualification information meet the criteria and eligibility for licensing, in accordance with this section, and:
  (1) the building in which the facility is housed:
    (A) meets local fire ordinances;
    (B) is approved by the local fire authority;
    (C) meets HHSC licensing standards in accordance with Subchapter D of this chapter (relating to Facility Construction) based on an on-site inspection by HHSC; and
    (D) if located in a county of more than 3.3 million residents for initial license applications submitted or issued on or after December 6, 2022, is not located in a 100-year floodplain; and
  (2) operation of the facility meets HHSC licensing standards based on an on-site health inspection by HHSC, which must include observation of the care of a resident; or
  (3) the facility meets the standards for accreditation based on an on-site accreditation survey by the accreditation commission.
(d) An applicant who chooses the option authorized in subsection (c)(3) of this section must contact HHSC to determine which accreditation commissions are available to meet the requirements of that subsection. If a license holder uses an on-site accreditation survey by an accreditation commission, as provided in this subsection and §553.33(i) of this subchapter (relating to Renewal Procedures and Qualifications), the license holder must:
  (1) provide written notification to HHSC by submitting an updated application in the licensing system within five working days after the license holder receives a notice of change in accreditation status from the accreditation commission; and
  (2) include a copy of the notice of change with its written notification to HHSC.
(e) HHSC issues a license to a facility meeting all requirements of this chapter. The facility must not exceed the maximum allowable number of residents specified on the license.
(f) HHSC denies an application for an initial license or a renewal of a license if:
  (1) the applicant, license holder, controlling person, or any person required to be disclosed on the application for licensure has been debarred or excluded from the Medicare or Medicaid programs by the federal government or a state;
  (2) a court has issued an injunction prohibiting the applicant, license holder, controlling person, or any person required to be disclosed on the application for licensure from operating a facility; or
  (3) during the five years preceding the date of the application, a license to operate a health care facility, long-term care facility, assisted living facility, or similar facility in any state held by the applicant, license holder, controlling person, or any person required to be disclosed on the application for licensure has been revoked.
(g) A license holder or controlling person who operates a nursing facility or an assisted living facility for which a trustee was appointed and for which emergency assistance funds, other than funds to pay the expenses of the trustee, were used is subject to exclusion from eligibility for:
  (1) the issuance of an initial license for a facility for which the person has not previously held a license; and
  (2) the renewal of the license of the facility for which the trustee was appointed.
(h) HHSC may deny an application for an initial license or refuse to renew a license if an applicant, license holder, controlling person, or any person required to be disclosed on the application for licensure:
  (1) violates Texas Health and Safety Code, Chapter 247; a section, standard, or order adopted under Chapter 247; or a license issued under Chapter 247 in either a repeated or substantial manner;
  (2) commits an act described in §553.751(a)(2) - (9) of this chapter (relating to Administrative Penalties);
  (3) aids, abets, or permits a substantial violation described in paragraph (1) or (2) of this subsection about which the person had or should have had knowledge;
  (4) fails to provide the required information, facts, or references;
  (5) engages in the following:
    (A) knowingly submits false or intentionally misleading statements to HHSC;
    (B) uses subterfuge or other evasive means of filing an application for licensure;
    (C) engages in subterfuge or other evasive means of filing on behalf of another who is unqualified for licensure;
    (D) knowingly conceals a material fact related to licensure; or
    (E) is responsible for fraud;
  (6) fails to pay the following fees, taxes, and assessments when due:
    (A) license fees, as described in §553.47 of this subchapter (relating to License Fees); or
    (B) franchise taxes, if applicable;
  (7) during the five years preceding the date of the application, has a history in any state or other jurisdiction of any of the following:
    (A) operation of a facility that has been decertified or has had its contract canceled under the Medicare or Medicaid program;
    (B) federal or state long-term care facility, assisted living facility, or similar facility sanctions or penalties, including monetary penalties, involuntary downgrading of the status of a facility license, proposals to decertify, directed plans of correction, or the denial of payment for new Medicaid admissions;
    (C) unsatisfied final judgments, excluding judgments wholly unrelated to the provision of care rendered in long-term care facilities;
    (D) eviction involving any property or space used as a facility; or
    (E) suspension of a license to operate a health care facility, long-term care facility, assisted living facility, or a similar facility;
  (8) violates Texas Health and Safety Code §247.021 by operating a facility without a license; or
  (9) is subject to denial or refusal as described in Chapter 560 of this title (relating to Denial or Refusal of License) during the time frames described in that chapter.
(i) Without limitation, HHSC reviews all information provided by an applicant, a license holder, a person required to be disclosed on the application for licensure, or a manager when considering grounds for denial of an initial license application or a renewal application in accordance with subsection (h) of this section. HHSC may grant a license if HHSC finds the applicant, license holder, person required to be disclosed on the application for licensure, affiliate, or manager is able to comply with the rules in this chapter.
(j) HHSC reviews final actions when considering the grounds for denial of an initial license application or renewal application in accordance with subsections (f) and (h) of this section. An action is final when routine administrative and judicial remedies are exhausted. An applicant must disclose all actions, whether pending or final.
(k) If an applicant owns multiple facilities, HHSC examines the overall record of compliance in all of the applicant's facilities. An overall record poor enough to deny issuance of a new license does not preclude the renewal of a license of a facility with a satisfactory record.

Source Note: The provisions of this §553.17 adopted to be effective August 31, 2021, 46 TexReg 5017; amended to be effective December 6, 2022, 47 TexReg 7705