Texas Law Creates Loophole for Berkshire Hathaway Dealerships

AUSTIN — Texas Gov. Greg Abbott has signed Senate Bill 1415 into law, effectively resolving a dispute between Berkshire Hathaway Automotive and the Texas Department of Motor Vehicles.

The auto group owns 85 dealerships in 10 states, including 28 in Texas, most of which are in the Dallas-Fort Worth area. It was known as the Van Tuyl Group until 2015, when Berkshire Hathaway Inc., the Omaha, Neb., firm helmed by billionaire investor Warren Buffett, acquired the then-81-store operation.

In 2017, the Texas DMV attempted to revoke Berkshire Hathaway’s dealer licenses, citing state laws prohibiting a single company from manufacturing and selling vehicles. DMV officials made their case based on the fact that the dealer group’s parent company also owns Forest River, an Indiana RV factory.

SB 1415 creates a loophole, allowing one company to build and sell vehicles if they are of different types. The bill comes as no relief to Tesla Inc., which only recently dropped a prolonged campaign to operate physical dealerships in the state, and Cummins Inc., which sells and services heavy-duty engines.

State Sen. Kelly Hancock authored the bill — and an earlier incarnation, which failed to advance — and applauded its passage in a written 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,” Hancock wrote, in part. “This bill being signed into law is a small yet important step in the free market direction.”