Legislation signed by Texas Gov. Greg Abbott last week is intended to end years of regulatory uncertainty surrounding Berkshire Hathaway Automotive and its more than two dozen dealerships in the state.
Abbott, a Republican, 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 the company manufactures or distributes. The law takes effect Sept. 1.
Billionaire investor Warren Buffett's 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.
The auto retailer, formed in 2015 when Berkshire bought Van Tuyl Group, then the nation's largest privately held dealership group with 81 stores, had been contesting alleged violations of state law since 2017 with the Texas Department of Motor Vehicles.
A spokesman for the department told Automotive News in an email last week that it was "actively reviewing pending cases that may be affected by the new law.
"The department will work with the involved parties to determine the disposition of the pending matters in connection with the passage of Senate Bill 1415."
Berkshire Hathaway Automotive CEO Jeff Rachor declined to comment on the new law and its effect on the dealership group. The group, headquartered in Irving, Texas, has 85 dealerships in 10 states, according to its website.
The Texas House of Representatives unanimously approved the bill in May, a month after the Senate passed it on a 30-1 vote. The state legislature this spring worked with Tesla Inc., concerned Tesla customers and others to ensure the bill would not stop the electric vehicle manufacturer from servicing vehicles in Texas.
Republican Sen. Kelly Hancock of North Richland Hills, who authored Senate Bill 1415 and introduced 2017 legislation to aid Berkshire Hathaway Automotive that died, was pleased to get the governor's signature this time.
"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," Hancock said in an emailed statement. "This bill being signed into law is a small yet important step in the free market direction."