(a) Effective December 1, 2008, minimum standards of financial condition require the applicant or license holder to have sufficient financial resources to:      
        (1) satisfy obligations at the time they come due; and       
        (2) ensure at all times the delivery of essential care and services, such as nursing or dietary services, or utilities.       
      (b) A license holder must notify DADS of significant adverse changes in financial condition, which include changes in financial position, cash flow, results of operation, or other events that could adversely affect the delivery of essential care and services, such as nursing or dietary services, or utilities. The following are examples of significant adverse changes in  financial condition that must be reported:      
        (1) The license holder, operator, administrator, manager, or other controlling person receives notice that a judgment or tax lien of at least $50,000 has been filed, recorded, or levied against the facility or any of the assets of the facility or the license holder and the judgment or tax lien is not satisfied, or an appropriate extension has not been obtained, within three working days after receipt of the notice.       
        (2) A financial institution refuses to honor facility-operation-related checks or other financial instruments issued by the license holder, operator, administrator, manager, or other controlling person or agent of the license holder, operator, administrator, manager, or other controlling person  and:                  (A) the cumulative amounts of the checks or financial instruments are $50,000 or more; and                   (B) the checks or financial instruments are not honored or replaced to the satisfaction of the holders of the instruments within five working days after the holders have notified the license holder, operator, administrator, manager, or the person authorized to issue the instrument of the dishonored items.         
        (3) The facility fails to maintain the facility's utilities or a sufficient quantity of supplies, including nursing, dietary, pharmaceutical, or other care and service supplies, to meet the needs of the residents.       
        (4) The license holder, operator, administrator, manager, or other controlling person  fails to make timely payments of any facility-related tax of at least $10,000 and fails to satisfy such tax within five working days after the date the tax becomes due.       
        (5) The license holder, operator, administrator, manager, or other controlling person files a voluntary bankruptcy petition, or a creditor files an involuntary bankruptcy petition against the license holder or controlling person, under the United States Code or any other laws of the United States.       
        (6) A court appoints a bankruptcy trustee for the facility.       
        (7) A person seeking appointment of a receiver for the facility files a petition in any jurisdiction.       
        (8) The license holder, operator, administrator, manager, or other  controlling person is unable to meet conditions of a facility-operation-related loan or debt covenant unless the loan or debt covenant has been waived, and that inability leads to:                  (A) the imposition of a fine or penalty;                   (B) restructuring;                   (C) a change in terms or conditions of the loan or debt covenant; or                   (D) a recall by the issuing entity.         
        (9) The license holder, operator, administrator, manager, or other controlling person is delinquent on more than $50,000 of facility-related contractual obligations or vendor contracts and has not cured the delinquency within five working days after receipt of notice from the creditor or creditors to pay the debt.       
      (c) The license holder must notify DADS in writing of a significant adverse change in its financial condition as required by subsection (b) of this section within 72 hours after the license holder becomes aware of or should have become aware of the change.     
      (d) The license holder's notice required by subsection (b) of this section must include a description of:      
        (1) the specific significant adverse change in financial condition;       
        (2) how the significant adverse change in financial condition affects the license holder's ability to deliver essential care and services; and       
        (3) the actions the license holder has taken to address the significant adverse change in financial condition.       
      (e) The license holder must fax the notice required in subsection (b) of this section to (512) 438-2730 or (512) 438-2728, and the notice must be kept on file with a copy of the fax confirmation.     
      (f) The license holder must provide any other information DADS requests to substantiate continued compliance with the requirements of this section within 30 days after the request.     
     Source Note:        The provisions of this §554.1925 adopted to be effective September 1, 2007, 32 TexReg 4231; transferred effective January 15, 2021, as published in the Texas Register December 11, 2020, 45 TexReg 8871