John Weninger, the association's attorney, said the association had planned build a facility for $15.8 million and run 16 days of Thoroughbred and Quarter Horse racing each year. Most of the proceeds would have funded agricultural studies and scholarships, he said. But the Texas Racing Commission made no motion to grant the group a license during its August meeting, because it did not present a "recognition of exemption" from the Internal Revenue Service.
Weninger said El Primero met all of the requirements Texas has established for an association to receive a Class 3 license and the section pertaining to fairs in the Texas Racing Act "doesn't say anything about IRS approval."
The Texas State Office of Administrative Hearings had planned to review the El Primero case in December, before the racing commission could reconsider action on its application in February 2003. However, Weninger said the schedule would not give the association enough time to "prove that we comply with the law" and show it did not need an IRS exemption.
"That obstacle can't be overcome, because the IRS doesn't work quickly," Weninger said. El Primero might submit another bid for a Class 2 or 3 license sometime in the future, possibly after the end of the state legislative session next year, Weninger said.
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