Texas Senate Bill SB1415

Texas 2019 - 86th Regular

Caption

Relating to the ownership, control, or operation of a franchised or nonfranchised dealer or dealership by certain motor vehicle manufacturers and distributors.

Impact

The bill is set to amend existing statutes governing the automotive industry, which include definitions and regulations that explicitly delineate the boundaries of manufacturers' involvement with dealerships. By establishing clear limitations on manufacturers' abilities to exert control over dealers, the legislation seeks to promote a more equitable business environment within the state. This change is expected to protect both franchised and nonfranchised dealers from potential overreach by larger automobile manufacturers, which can negatively affect local dealerships.

Summary

SB1415 addresses the ownership, control, and operation of franchised and nonfranchised motor vehicle dealers and dealerships by manufacturers and distributors. This legislation aims to clarify the relationship between manufacturers and dealers by outlining restrictions on ownership and operational control. Under this bill, manufacturers and distributors are prohibited from owning an interest or controlling a dealership that operates in the same market except as permitted by law, thus safeguarding the independence of dealerships.

Sentiment

The general sentiment around SB1415 appears to be positive among lawmakers, as indicated by the overwhelming support it received in both the Senate and House, passing with a significant majority—30-1 in the Senate and 142-0 in the House. This strong backing suggests a consensus among legislators regarding the need for reform in the automotive dealership landscape and an acknowledgment of the importance of protecting local business interests.

Contention

Despite its legislative success, there may be concerns about how the new regulations will be enforced and the potential implications for dealership operations in the state. Critics might argue that limitations on manufacturers could lead to reduced support or incentives for improving dealer performance. Furthermore, defining the exact scope of 'control' and navigating the legal nuances can be contentious areas that require careful consideration as the bill is implemented.