Warren Buffett is no longer a scofflaw when it comes to arcane Texas rules regarding who can own an automobile dealership in the state.
The Statesman reported that Gov. Greg Abbott signed a bill this week that provides a loophole for the billionaire’s holding company — Berkshire Hathaway Inc. — to continue owning its more than two dozen Texas car dealerships while also owning an Indiana manufacturer of recreational vehicles, bringing an end to a two-year-old legal fight with Texas regulators.
State law has prohibited motor vehicle manufacturers from owning stakes in dealerships, even if the vehicles aren’t of the same type, prompting the Texas Department of Motor Vehicles to initiate enforcement actions against Berkshire Hathaway in 2017 and to move to revoke its dealership licenses. Berkshire Hathaway, based in Omaha, Neb., went into the automobile retailing business in 2015, when it paid $4.1 billion for privately held Van Tuyl Group and renamed it Berkshire Hathaway Automotive.
The company continued to operate its Texas dealerships — most of which are in the Dallas-Fort Worth area — while contesting the state’s enforcement effort. But it shelved plans to open its first Austin dealership, a Mercedes-Benz franchise, amid the controversy.
Jeff Rachor, chief executive of Berkshire Hathaway Automotive, which is based in Irving, didn’t respond to a request for comment regarding Berkshire’s Austin plans now that the issue has been resolved in the company’s favor.
Under the measure signed by Abbott — Senate Bill 1415, which takes effect Sept. 1 — manufacturers are only prohibited from owning stakes in dealerships that sell the same vehicles they produce. The change means Berkshire Hathaway’s RV company will no longer put it at odds with the Texas dealership regulations, because Berkshire’s dealerships don’t sell RVs.
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