(a) The commission shall adopt rules for licensing applicants, including rules for denial of an application if the applicant, a partner, principal, officer, or general manager of the applicant, or another license or permit holder with a connection to the applicant, has:
(1) before the application date, been convicted of, pleaded guilty or nolo contendere to, or been placed on deferred adjudication for:
(A) a felony; or
(B) a misdemeanor punishable by confinement in jail or by a fine exceeding $500;
(2) violated an order of the commission or executive director, including an order for sanctions or administrative penalties; or
(3) knowingly submitted false information on the application.
(b) The commission by rule shall adopt standards of conduct for license holders under this chapter.