Fight Continues Over Texas Auto Dealership Rules (3/8/2019)

Story by RVBusiness

Debate over the complex regulations for selling and servicing motor vehicles in the state is set to continue, even though electric car-maker Tesla Inc. appears to have retreated from its long-running fight to open Texas dealerships.

The Statesman reported that two other major companies -- Berkshire Hathaway Inc. and Cummins Inc. -- remain sideways of the state’s dealership rules and are in the midst of contesting two-year-old enforcement proceedings initiated against them by the Texas Department of Motor Vehicles. But both companies’ allies at the state Capitol recently undertook separate legislative efforts to preempt the legal cases by carving out exceptions for them.

“All we are trying to do is clarify what is in the statute currently,” said state Sen. Kelly Hancock, R-North Richland Hills, who has filed Senate Bill 1415, a repeat of an unsuccessful bill he sponsored in 2017 that would allow Berkshire Hathaway to continue to own a manufacturer of recreational vehicles while also owning car dealerships.

Under the existing dealership regulations in Texas, manufacturers of motor vehicles are prohibited from also owning retail dealerships, even if the vehicles aren’t of the same type. Berkshire Hathaway -- the Omaha, Neb., conglomerate controlled by billionaire Warren Buffett -- operates more than two dozen dealerships in Texas and also owns Indiana-based RV maker Forest River, although its dealerships don’t sell RVs.

“I don’t think the intent of Texas law was ever to prevent someone selling apples from growing oranges,” Hancock said. His bill, along with companion House Bill 2940, filed by Fort Worth Republican state Rep. Charlie Geren, would allow manufacturers to operate dealerships if they don’t sell their own vehicles.

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