(a) The executive director or commission may deny an application for or for the renewal of, suspend, or revoke a license issued under this chapter if the applicant, instructor, instructor training provider, or motorcycle school:
(1) does not satisfy the requirements established under this chapter to receive or retain the license;
(2) permits fraud or engages in a fraudulent practice with reference to an application for the license;
(3) induces or countenances fraud or a fraudulent practice by a person applying for a driver's license or permit;
(4) permits fraud or engages in a fraudulent practice in an action between the applicant or license holder and the public; or
(5) fails to comply with this chapter or rules adopted under this chapter.
(b) A proceeding under this section is a contested case under Chapter 2001, Government Code.