(a) A license holder may not transfer its license. If there is a change of ownership, the license holder's license becomes invalid on the date of the change of ownership. The new owner must obtain a change of ownership license in accordance with subsection (b) of this section. The license holder and new license applicant must notify DADS before a change of ownership occurs.
(b) The applicant must submit to DADS:
  (1) a complete application for a change of ownership license under §19.201 of this subchapter (relating to Criteria for Licensing) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information;
  (2) the application fee, in accordance with §19.216 of this subchapter (relating to License Fees); and
  (3) signed, written notice from the facility's existing license holder of his intent to transfer operation of the facility to the applicant beginning on a date specified by the applicant.
(c) To avoid a facility operating while unlicensed, an applicant must submit all items in subsection (b) of this section at least 30 days before the anticipated date of the change of ownership. DADS considers an application as submitted timely if the application is postmarked at least 30 days before the anticipated date of the change of ownership and received in DADS Licensing and Credentialing Section, Regulatory Services Division, within 15 days after the date of the postmark.
(d) The 30-day notification from the applicant or the 30-day notification from the existing license holder or both may be waived if DADS determines that the applicant presented evidence showing that circumstances prevented the submission of the 30-day notice and if DADS determines that not waiving the 30-day notification would create a threat to resident welfare or health and safety. If the applicant submits a timely and sufficient application for a change of ownership license and meets all requirements for a license, DADS issues a change of ownership license effective on the date requested by the applicant.
(e) A change of ownership license is a 90-day temporary license issued to an applicant who proposes to become the new operator of a nursing facility that exists on the date the application is submitted. Upon receipt of a complete application, fee, and signed, written notice from the facility's existing license holder of the intent to transfer the operation of the facility to the applicant beginning on a date specified by the applicant, DADS issues a change of ownership license to the applicant if DADS finds that the applicant and any other persons listed in §19.201(e) of this subchapter meet the requirements in §19.201(d)(1) and (f) of this subchapter.
  (1) All applications must be made on forms prescribed by and available from DADS. Each application must be completed in accordance with DADS instructions, signed, and notarized, and must contain all forms required by DADS.
  (2) DADS approves or denies an application for a change of ownership license not later than the 31st day after the date of receipt of the complete application, fee, and signed, written notice from the facility's existing license holder of his intent to transfer the operation of the facility to the applicant beginning on a date specified by the applicant. The effective date of the license is the later of the date requested in the application or the 31st day after the date DADS receives the application, fee, and signed, written notice from the existing license holder, unless waived in accordance with subsection (d) of this section. The effective date of the change of ownership license cannot precede the date the application is received in DADS Licensing and Credentialing Section, Regulatory Services Division.
  (3) If the applicant meets the requirements of §19.201 of this subchapter and passes an initial inspection, desk review, or a subsequent inspection before the change of ownership license expires, a regular three-year license is issued. The effective date of the regular three-year license is the same date as the effective date of the change of ownership and cannot precede the date the application is received by DADS Licensing and Credentialing Section, Regulatory Services Division.
  (4) When an applicant has not previously held a license in Texas, a probationary license is issued following the change of ownership license. The effective date of the probationary one-year license is the same date as the change of ownership license and cannot precede the date the application is received in DADS Licensing and Credentialing Section, Regulatory Services Division.
  (5) A change of ownership license expires on the 90th day after its effective date.
  (6) DADS conducts an on-site health inspection to verify compliance with the licensure requirements after issuing a change of ownership license. DADS may conduct a desk review instead of an on-site health inspection after issuing a change of ownership license if:
    (A) 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
    (B) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder.
  (7) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection after issuing a change of ownership license.
(f) A license holder may be eligible to acquire, on an expedited basis, a license to operate another existing nursing facility. A license holder that appears on the expedited change of ownership list may be granted expedited approval in obtaining a change of ownership license to operate another existing nursing facility in Texas.
  (1) DADS maintains and keeps current a list of nursing facility license holders that operate an institution in Texas and that have met the criteria to qualify for an expedited change of ownership according to the information available to DADS.
  (2) In order to establish and maintain the expedited change of ownership list, DADS uses the criteria found in §19.2322(e) of this chapter (relating to Medicaid Bed Allocation Requirements). A license holder meeting these criteria appears on the list and is eligible to be issued, on an expedited basis, a change of ownership license to operate another existing institution in Texas.
  (3) A license holder appearing on the list must submit an affidavit that demonstrates the license holder continues to meet the criteria established for being listed on the expedited change of ownership list, and continues to meet the requirements in §19.201(d)(1) and (f) of this subchapter.
  (4) DADS processes a change of ownership license application on an expedited basis for a license holder on the list if DADS finds that the license holder and any other persons listed in §19.201(e) of this subchapter meet the requirements in §19.201(d)(1) and (f) of this subchapter.
  (5) If the license holder requesting a change of ownership license on an expedited basis complies with subsections (b) - (e) of this section, DADS approves or denies the application for a change of ownership license not later than the 15th day after the date of receipt of the complete application, fee, and signed, written notice from the facility's existing license holder of the intent to transfer the operation of the facility to the applicant beginning on a date requested in the application. The effective date of the license is the later of the date requested in the application or the 31st day after the date DADS receives the application fee, and signed, written notice from the existing license holder, unless waived in accordance with subsection (d) of this section. The effective date of the change of ownership license cannot precede the date the application is received in DADS Licensing and Credentialing Section, Regulatory Services Division.
  (6) An applicant for a change of ownership license on an expedited basis must meet all applicable requirements that an applicant for renewal of a license must meet. Any requirement relating to inspections or to an accreditation review applies only to institutions operated by the license holder at the time the application is made for the change of ownership license.
(g) If a license holder changes its name, but does not undergo a change of ownership, the license holder must notify DADS and submit documentation evidencing a legal name change. On receipt of the notice and documentation, DADS re-issues the current license in the license holder's new name.
(h) If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify DADS no later than 30 days after the addition of the owner.

Source Note: The provisions of this §554.210 adopted to be effective December 1, 2008, 33 TexReg 9713; amended to be effective September 1, 2009, 34 TexReg 5138; amended to be effective December 2, 2012, 37 TexReg 9525; amended to be effective October 11, 2017, 42 TexReg 5498; transferred effective January 15, 2021, as published in the Texas Register December 11, 2020, 45 TexReg 8871