Texas House Bill HB4097

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 bill allows manufacturers or distributors to maintain an ownership interest in used motor vehicle dealerships, provided that they do not increase their ownership share and adhere to stipulated conditions. Notably, the bill allows for the addition of no more than four new dealership locations in Texas, giving companies some flexibility for expansion while keeping their established interests intact. As such, the bill creates a framework that could impact the landscape of used vehicle sales and dealership operation in Texas, promoting certain established business models while ensuring compliance with state regulations.

Summary

House Bill 4097 aims to address the ownership, control, and operation of certain used motor vehicle dealers by manufacturers and distributors. The bill specifically modifies Section 2301.476 of the Occupations Code to clarify the conditions under which manufacturers or distributors that had an interest in a used motor vehicle dealer before January 1, 2007, can continue to maintain that interest without facing restrictions from the chapter relating to motor vehicle dealer regulation. This change reflects the state's effort to adapt existing laws to better reflect current practices in the automotive industry, especially concerning the sale of used vehicles.

Contention

While the bill seeks to ensure that manufacturers and distributors can sustain their interests without undue restrictions, some concerns may arise regarding market competition and customer choices. Detractors may argue that allowing manufacturers to maintain control over used vehicle dealerships could limit the opportunities for independent dealers. This contention is rooted in fears that big manufacturers might dominate the used vehicle market, potentially leading to reduced competitiveness and fewer options for consumers. Overall, the discussion surrounding the bill may spark debate over the appropriate level of regulation in the automotive sector and the balance between business interests and market fairness.