SECTION 7.11. Changes of Ownership and Other Substantive Changes

(a) Change of Ownership or Control for Career Schools and Colleges. In the event of a change in ownership or control of a career school or college, the Certificate of Authority or Certificate of Authorization is automatically void unless the institution meets the requirements of this section.

(b) The Commissioner may authorize the institution to retain the Certificate of Authority or Certificate of Authorization during and after a change of ownership or control, provided that the institution notifies Board staff of the impending transfer in time for staff to receive, review, and approve the documents listed in paragraphs (1) - (4) of this subsection and provided that the following conditions are met:

(1) The institution must submit acceptable evidence that the new owner is complying with all Texas Workforce Commission requirements regarding the purchase or transfer of ownership of a career school or college;

(2) The institution must submit an acceptable written statement of assurance that the new owner understands and undertakes to fully comply with all applicable Board rules, regulations, and/or policies;

(3) The institution must submit documentation that the new owner has been approved by the institution's Board-recognized accreditor to operate the institution or is able to meet the requirements of the existing Certificate of Authority; and

(4) The institution must submit satisfactory evidence of financial ability to adequately support and conduct all approved programs. Documentation shall include but may not be limited to independently audited financial statements and auditor's reports and assurance that the new owner does not currently own or operate any institutions under financial restrictions for, or is not permanently debarred from participating in, federal financial aid by the United States Department of Education. Individuals who become new owners of an institution may be required to submit independently audited personal financial records to show evidence of financial ability to adequately support and conduct all approved programs.

(c) If the institution does not meet the conditions outlined under this section prior to completion of transfer of ownership or control and the institution loses its Certificate of Authority or Certificate of Authorization, the new owner(s) shall submit a new application for a Certificate of Authority as outlined under §7.8 of this chapter (relating to Institutions Not Accredited by a Board-Recognized Accreditor) or a new application for a Certificate of Authorization as outlined under §7.7 of this chapter (relating to Institutions Accredited by Board-Recognized Accreditors).

(d) Any modification of an approved degree program that results from a change of ownership or control constitutes a program revision. Requests for approval of program revisions or other substantive changes as defined in §7.3 of this chapter (relating to Definitions) shall conform to the procedures and requirements contained in §7.7 and §7.8 of this chapter.

(e) If the ownership or control of a career school or college is transferred within, among, or between different subsidiaries, branches, divisions, or other components of a corporation and if said transfer in no way diminishes the career school or college's administrative capability or educational program quality, the Commissioner may permit the school to retain its Certificate of Authority or Certificate of Authorization during the transfer period. In such cases, the career school or college shall fully comply with all provisions outlined in this section.

(f) All notifications regarding changes of ownership or other substantive changes, as defined in §7.3 of this chapter (relating to definitions), should be provided to the Board via the institution's designated Single Point of Contact.

Source Note: The provisions of this §7.11 adopted to be effective December 6, 2009, 34 TexReg 8515; amended to be effective May 26, 2010, 35 TexReg 4152; amended to be effective February 26, 2013, 38 TexReg 1152; amended to be effective November 23, 2016, 41 TexReg 9113; amended to be effective February 28, 2018, 43 TexReg 1068; amended to be effective March 2, 2020, 45 TexReg 1395