(a) The Commission shall annually review each inactive racetrack license. At the conclusion of each review, the Commission may:

(1) designate the license as Active-Operating;

(2) designate the license as Active-Other;

(3) renew the license as Inactive; or

(4) refer the inactive racetrack license to the State Office of Administrative Hearings for an evidentiary hearing and Proposal for Decision as to whether the Commission should refuse to renew the license.

(b) Notice of Review. The executive secretary shall provide written notice to an inactive license holder that the license holder must file an application for renewal. Such notice must be provided by certified or registered mail no later than June 1 of each year the license remains in effect and is designated as inactive. The first such notice shall be sent by the executive secretary by June 1, 2013. The notice must specify the procedure for filing an application for renewal and the information to be included in the application. The application for renewal shall be filed on or before July 1 following the receipt of the notice. The first application for renewal shall be filed by July 1, 2013, with additional applications filed annually on July 1 thereafter. The executive secretary may extend the deadline for filing the renewal application. The timely filing of an application for renewal extends the license until the Commission renews or refuses to renew the license. If an inactive racetrack license holder does not file a timely application for renewal, the Commission may either renew the license or refer the license to the State Office of Administrative Hearings for an evidentiary hearing and Proposal for Decision as to whether the Commission should refuse to renew the license.

(c) Application for Renewal.

(1) Each inactive racetrack license holder must submit an application for renewal on a form prescribed by the executive secretary.

(2) The applicant must submit one original and two copies of the application and any supplemental documents.

(3) The applicant must swear before a notary public to the truth and validity of the information in the application and its supplemental documents. If the applicant is not an individual, the chief executive officer of the applicant must swear before a notary public to the truth and validity of the information in the application and its supplemental documents.

(4) The applicant must state the name, address, and telephone number of an individual designated by the applicant to be the primary contact person for the Commission during the review and renewal process.

(d) Renewal Criteria. In determining whether to renew an inactive racetrack license, the Commission shall consider:

(1) the inactive racetrack license holder's: (A) financial stability; (B) ability to conduct live racing; (C) ability to construct and maintain a racetrack facility; (D) other good faith efforts to conduct live racing; and

(2) other necessary factors considered in the issuance of the original license.

(3) For purposes of this section, the Commission will consider actions that demonstrate good faith efforts towards conducting live racing, although live racing is not imminent. Actions the Commission may consider include, but are not limited to: (A) securing sufficient financial commitments to fund construction of the racetrack facility; (B) securing the real property of the designated location for which the racetrack license was granted, either by purchase or through a long-term lease of 20 years or more; (C) entering into contracts for the construction of the simulcasting and racetrack facilities; (D) securing Commission approval of the racing facility's construction plans; (E) securing permits and utilities necessary for the construction of the racing facilities; and (F) beginning and sustaining construction of the simulcasting or live racing facilities.

(e) Nonrenewal. The Commission may refuse to renew an inactive racetrack license if, after notice and a hearing, the Commission determines that:

(1) renewal of the license is not in the best interests of the racing industry or the public; or

(2) the license holder has failed to make a good faith effort to conduct live racing.

(f) For purposes of this section, the Commission will consider, but is not limited to, the following factors as evidence that renewal of a license is not in the best interests of the racing industry or the public:

(1) the presence of any ground for denial, revocation, or suspension of a license under §6.06 or §6.0603 of the Act;

(2) forfeiture of any bond by an inactive racetrack license holder that was required by the Commission;

(3) failure by an inactive racetrack license holder to comply with any condition or order placed on the license by the Commission;

(4) failure to maintain the ownership or leasehold interest in the real property constituting the designated location; or

(5) any factor identified in §6.04(a) of the Act.

(g) The presence of any particular factor or factors under this section does not require the Commission to renew or refuse to renew an inactive racetrack license.

(h) Review Fees.

(1) Each inactive racetrack license must submit a review fee with its application for renewal. The review fee is composed of a variable processing charge. The processing charge is the amount needed by the Commission to cover the administrative and enforcement costs of processing the request for renewal, including any costs associated with processing a hearing at the State Office of Administrative Hearings. A license holder must pay the initial review fee contemporaneously with filing the application for renewal. The Commission shall hold the review fee in the state treasury in a suspense account. The Commission may transfer the processing funds due to the Commission to the Texas Racing Commission Fund as costs are incurred. If the actual cost to the Commission of processing the request exceeds the amount deposited for the applicable charge, the requestor shall pay the remaining amount not later than 10 business days after receipt of a bill from the Commission. If the costs of processing the request are less than the amount of the charge, the Commission shall refund the excess not later than 10 business days after the Commission's decision on the request becomes final.

(2) The initial review fee for an inactive racetrack license is $5,000. If the Commission refers an application to the State Office of Administrative Hearings under subsection (a) of this section, the applicant for renewal shall submit an additional $50,000 review fee within 30 days of the referral.

Source Note: The provisions of this §309.52 adopted to be effective August 9, 2012, 37 TexReg 5739