Who is a "Controlling Person"?
The Texas Human Resources Code §42.002(18) states that a Controlling Person is "a person who, either alone or in connection with others, has the ability to directly or indirectly influence or direct the management, expenditures, or policies" of a child care operation. 40* Texas Administrative Code §745.901 more specifically defines a controlling person of a child-care operation (including a child care home) as follows:
(a) Any person who:
- Is the owner of the operation or member of the governing body of the operation, including, as applicable, an executive, an officer, a board member, a partner, a sole proprietor and the sole proprietor's spouse, or the primary caregiver at a child-care home and the primary caregiver's spouse;
- Manages, administrates, or directs the operation or its governing body, including a child care director or a licensed administrator; or
- Either alone or in connection with others has the ability to influence or direct the management, expenditures, or policies of the operation. For example, a person may have influence over the operation because of a personal, familial, or other relationship with the governing body, manager, or other controlling person of the operation.
(b) A person does not have to be present at the operation or home or hold an official title at the operation or governing body in order to be a controlling person.
(c) An employee, lender, secured creditor, or landlord of the operation is not a controlling person unless the person meets criteria in subsection (a).
*Currently, Child Care Licensing rules are located in Title 40 of the Texas Administrative Code. The rules will be transferred to Title 26 at a later date.
What child day care operations are required to submit controlling person information?
The following child day care operations are required to submit information on each of the operation's controlling persons:
- Licensed Child Care Centers
- School Age Programs
- Before or After-School Programs
- Licensed Child Care Homes
- Registered Child Care Homes
- Listed Family Homes
Why do I need to report controlling person information to Licensing?
Human Resources Code §§42.062 and 42.072 make the following persons ineligible to serve as a controlling person at a child care operation or child care home:
- Persons who are ineligible to receive a permit; or
- Persons who were serving as a controlling person at the time a permit was revoked.
After Licensing receives information on controlling persons from an applicant or operation, the inspector determines if the person is eligible to serve as a controlling person at an operation. If the person is ineligible to serve as a controlling person, Licensing will notify the operation that the person must be removed from their role as a controlling person. If the operation is unable or unwilling to remove the person from their controlling person role, then the law requires that Licensing revoke the operation's permit or deny the operation a permit.
Does Licensing approve controlling persons?
Not exactly. Licensing determines whether the person is eligible to serve as a controlling person at a regulated operation, based upon statutes in the Texas Human Resources Code and rules in the Texas Administrative Code.
How will I know if someone is or is not eligible to serve as a controlling person at my operation?
Your inspector will send you a letter if a person is ineligible to serve as a controlling person at your operation.
If a person is eligible to serve as a controlling person at your operation, the inspector will send a letter to the controlling person that explains the responsibilities of being as a controlling person.
What does Licensing do with the controlling person information that is submitted?
The information is recorded into the Licensing database and is used to determine whether the controlling person is eligible to serve as a controlling person.
What could happen if an operation doesn't give information on all controlling persons to Licensing?
If an operation does not give information on all controlling persons, Licensing could take any of the following actions with an operation:
- Cite for failing to comply with the law or administrative rules;
- Corrective action; or
- Adverse action.
Submitting Controlling Person Information
I am applying for a permit. Am I required to submit controlling person information to Licensing?
You are required to submit information on each of your controlling persons when you submit your application.
If you complete a paper application, you will complete Form 2760, Controlling Person Form – Child Care Licensing, to submit information on your controlling persons to Licensing.
If you are applying for a permit for a registered family home or listed family home and complete an online application (e-application), you will submit information on your controlling persons through your online Child Care Licensing Account.
When and how do I provide updates on my controlling persons to Licensing?
You are able to enter, update, and view controlling person information through your online Child Care Licensing Account.
You are required to provide us with information on controlling persons within two days after a person becomes a controlling person at your operation or when an individual that was previously a controlling person at your operation ceases to be a controlling person at your operation. These requirements are outlined in:
- Subchapter G of Texas Administrative Code Chapter 745; and
- Subchapter B of the operation's applicable minimum standards.
Listed Family Homes do not have minimum standards; therefore, these homes provide controlling person information only as required by Subchapter G of TAC Chapter 745.
Consequences of Being a Controlling Person
What are the consequences of being a controlling person?
There are no consequences to being a controlling person unless your permit is revoked or your application for a permit is denied.
What are the consequences of being a controlling person if my application for a permit is denied?
If Licensing denies issuance of a permit, the applicant and all other controlling persons associated with the application may be entered into the Adverse Action Record Sharing System (AARS). See "What is AARS and how is it used?" below.
How does someone become a designated or sustained controlling person?
If Licensing revokes a child care permit, Licensing determines which controlling persons associated with the operation will be categorized as a designated controlling person. If the revocation and person's status of "designated controlling person" is upheld after due process is completed, the person is categorized as a sustained controlling person.
What are the consequences of being categorized as a "designated controlling person"?
If an operation applying for a permit has a controlling person who is categorized as a designated controlling person, Licensing cannot issue a permit to that operation until due process is complete or until the person is removed from the role of a controlling person.
If an operation with a permit has a controlling person who is categorized as a designated controlling person, the person can serve as a controlling person while due process is being completed.
What are the consequences of being categorized as a "sustained controlling person"?
For five years after the date a person's status designation as a controlling person is sustained, the person cannot:
- Obtain a permit to operate a child care operation; or
- Serve as a controlling person at a child care operation.
Licensing enters sustained controlling persons into the Health and Human Service Commission's Adverse Action Record Sharing system (AARS). See "What is AARS and how is it used?" below.
If an operation cannot or refuses to remove the sustained controlling person from their role as a controlling person, Licensing must revoke the operation's permit.
HHSC Adverse Action Record Sharing System
What is AARS and how is it used?
AARS is the Health and Human Service Commission's Adverse Action Record Sharing system.
Texas Government Code §§531.951-954 require all HHSC agencies to share information on certain adverse actions taken against an operation or person for 10 years after the action is taken. Additionally, an HHSC agency may deny a person a permit based upon an adverse action taken against the person by another HHSC agency. The purpose of the legislation is to prevent individuals from moving from one agency where they might continue to be in contact with or be responsible for at risk populations served by HHSC.
Licensing enters an operation that was denied a permit or whose permit was revoked and any controlling persons for that operation into the AARS system if the adverse action was based on:
- An act or omission that resulted in physical or mental harm to an individual in the operation's care;
- A threat to the health, safety, or well-being of an individual in the operation's care;
- The physical, mental, or financial exploitation of an individual in the operation's care; or
- A determination by the agency that took the action that the operation was unqualified or unfit to fulfill the obligations of the permit that was denied or revoked.
Licensing conducts an AARS search of each controlling person before issuing a permit to an operation. If a person has a record in the AARS, Licensing staff assess the information to determine whether the person can be issued a permit or serve as a controlling person for an operation.
If someone is in the AARS, does that mean they cannot get a permit or serve as a controlling person?
Maybe. Having a record in the AARS does not necessarily prevent a person from receiving a permit or serving as a controlling person. Licensing staff consider this information before making a decision.
Online Child Care Licensing Account
How do I add, update, or view controlling persons through my online Child Care Licensing Account?
You can use the "Add/Update/View Controlling Persons" link in your Child Care Licensing Account to enter, view, and update controlling person information. The controlling person information you enter into your account will be electronically transferred into Licensing's electronic database, CLASS. Your licensing inspector will then review the information and let you know if you need to take any additional actions or provide more information. Any changes to the controlling person list must be reported to Licensing within two days.
Refer to the instructions in the Public and Provider Website Manual to learn how to add, update, and view information about controlling persons through your online account.
How will I submit my Controlling Person information if I don't have an online account?
If you do not have an online account, you can visit Create a Child Care Licensing Account and follow the instructions to create one. Once logged in, you can click on the "Add/Update/View Controlling Persons" link on your Child Care Licensing Account Main Page to submit your controlling person information.
It is highly recommended for any child care operation to have an online account to update any changes to their operation in a timely manner. If you don't have an online account, you can:
- Submit information on new controlling persons by completing Form 2760, Controlling Person Form – Child Care Licensing; and
- Provide updated information on existing controlling persons directly to your inspector.
Who do I contact if I have other questions?
Please contact your Licensing monitoring inspector with questions.