Texas Gov. Greg Abbott this week signed legislation that is expected to allow billionaire investor Warren Buffett's new-vehicle dealership business to lawfully operate its more than two dozen stores in the state.
The new law follows a failed attempt during the 2017 legislative session and should end years of regulatory uncertainty for Berkshire Hathaway Automotive in Texas, where it is headquartered.
Abbott, a Republican, on Tuesday signed Senate Bill 1415, which allows a vehicle manufacturer or distributor to also own a dealership, as long as it is for a different type of vehicle than what that company manufactures or distributes. The law takes effect Sept. 1.
Berkshire Hathaway Inc., the parent company of Berkshire Hathaway Automotive, also owns Forest River Inc., an Indiana RV manufacturer. Texas law had prohibited vehicle manufacturers from also operating dealerships.
Berkshire Hathaway Automotive formed in 2015 when Berkshire bought the Van Tuyl Group, then the nation's largest privately held dealership group. Buffett's auto retail company has been contesting alleged violations of state law dating to 2017 from the Texas Department of Motor Vehicles. A spokesman for the department did not immediately respond with comment.
The governor's signature follows the Texas House of Representatives' unanimous approval of Senate Bill 1415 in May and the Senate passing the bill on a 30-1 vote a month earlier.
Republican Sen. Kelly Hancock, who authored Senate Bill 1415, said in a statement:
“SB 1415 fixes an arcane distinction in Texas statute that prevented any manufacturer of one type of vehicle from owning an interest in a dealership, even for a completely different type of vehicle. This bill being signed into law is a small yet important step in the free market direction.”
The Texas Legislature this spring also worked with Tesla Inc., concerned Tesla customers and others to ensure the electric vehicle manufacturer could continue to service vehicles in Texas under the law change.
Berkshire Hathaway Automotive CEO Jeff Rachor did not immediately respond to requests for comment. The group has 85 dealerships in 10 states, up from 81 when it acquired the Van Tuyl Group, according to its website.