Texas Senate Bill SB1584

Texas 2021 - 87th Regular

Caption

Relating to the ownership, control, or operation of certain used motor vehicle dealers by certain motor vehicle manufacturers and distributors.

Impact

The implications of SB1584 are significant as they clarify the boundaries of ownership for used motor vehicle dealerships in relation to their manufacturers and distributors. By preventing manufacturers from expanding their interests beyond what they had previously established, the bill aims to foster a stable and predictable business environment for these dealerships. However, it also places a restriction on the expansion of existing manufacturers' interests, thus potentially limiting market competition in the used vehicle sector.

Summary

Senate Bill 1584 addresses the ownership, control, and operation of used motor vehicle dealerships by manufacturers and distributors. The bill amends the Occupations Code, specifically Section 2301.476, to allow certain manufacturers and distributors who owned interests in such dealerships before January 1, 2007, to retain their ownership as long as they do not increase their stake. This provision is designed to ensure that these entities can continue operating without the risk of losing their interests in used motor vehicle dealers they helped establish prior to the cutoff date.

Contention

The bill has generated discussions regarding the balance of interests between manufacturers, distributors, and independent used vehicle dealers. Concerns have been raised about the potential for unfair competitive advantages for larger manufacturers who might benefit from retaining control over their dealership interests. Critics argue that such provisions could impede the market dynamics, limiting opportunities for independent dealers and possibly leading to a monopolistic environment in certain regions of Texas. Proponents, on the other hand, defend the bill by citing the stability it provides for existing arrangements.