New Texas Bill to Screw Tesla Owners!

[RRM998]

I didn't see any language about grandfathering existing businesses. Usually laws that stop certain a business activity have a clause to not impact anyone already on the ground. Without that, I would think Tesla would have an easy court case if the bills actually pass.

Being a TX resident, I've emailed my representatives expressing my concern.

 

[davecolene0606]

Tesla cannot cede a single inch. Besides the anti free market/competitive/capatlist purpose of this bill there is a back handed attempt to crack the “no existing franchise” defense that has been virtually the only successful defense for Tesla so far.

The clear demonstrative moves of this so called republican legislator to put the interests of the highest bidders (TADA & Berkshire Hathaway) in front of his constituents should be smashed by Republicans who stand for free market capitalism, integrity and rule of law conservatism.

Fire Away!

 

[TexasRat]

I've contacted my local representatives to make sure they're aware how unhappy I would be if this passes

 

[dethman]

Such nonsense by the dealer lobby. I can't believe you still can't direct sell a car in many states and now this...

Politics is so f*cked up.

 

[buttershrimp]

The lead d-bag in Ft. Worth has received a nice email from Buttershrimp.... Someone needs to punch this dude in the nuts.... it's what happens when you live in Waco and go to Baylor in the 80's.... you basically just walk around being perpetually pissed off at electricity and science .... and I thought being republican was about free markets.... WTF

 

[jerry33]

and I thought being republican was about free markets.... WTF

Only if they personally benefit. Greed is all to Republicans.

 

[bob_p]

This is an overreach for the dealership lobby. Eventually this will be settled in federal court or by a federal law, and the dealerships will eventually lose, allowing Tesla (and other new manufacturers) the ability to do direct sales & service in every state, and likely stripping the dealerships of any protections for their outdated brick & mortar business model.

In the long run, the dealerships would be better off by reassessing their business models to provide actual value to customers and manufacturers, justifying their existence without relying on artificial legal barriers forcing customers and manufacturers to go through dealers.

Many bills get submitted in the Texas legislature - which meets only for 4 months every 2 years (bills have to be submitted in the first few months of each session) - and most bills aren't approved. Because Texas generally has few regulations restricting businesses, the odds of this bill actually passing seem pretty small.

And, even if it does become law, Tesla should be able to implement a workaround. And because the legislature won't meet again for 2 years, Tesla will have at least 2 years to operate with the workaround - and in the meantime, the number of Tesla customers will continue to increase, eventually reaching a point where it will be difficult to pass any legislation that would adversely impact Tesla customers.

We're not too worried about this one, and actually believe if the bill passes it could provide enough ammunition to take down the dealership protections.

 

[mxnym]

Direct Response to SB 1415 from Senator Hancock

Here is part of what the redditor who posted in the link above had to say:

For those that don't know, Senator Hancock issued a response to his bill that many here deemed to be the end of Tesla service centers in Texas. He basically says his bill has no intention of prohibiting OEMs from servicing their own vehicles and that his billed has been misinterpreted by the media.

https://senate.texas.gov/members/d09/press/en/p20190318a.pdf

I read the response and offered my take on how the wording does not necessarily mean doom and gloom for Tesla service centers in Texas in another post.

If you follow the link above the quote, you will also see a response from the senator's office quoted where he reached out to them about this. Perhaps some torches and pitchforks need put away and others in this thread who have written should also be posting responses they recieve.

 

[jerry33]

Direct Response to SB 1415 from Senator Hancock

Here is part of what the redditor who posted in the link above had to say:If you follow the link above the quote, you will also see a response from the senator's office quoted where he reached out to them about this. Perhaps some torches and pitchforks need put away and others in this thread who have written should also be posting responses they recieve.

Until the bill passes, and an about face is done. My trust in the "no intention of prohibiting OEMs from servicing their own vehicles" statement is low based on the wording of the bills.

 

[mxnym]

Until the bill passes, and an about face is done. My trust in the "no intention of prohibiting OEMs from servicing their own vehicles" statement is low based on the wording of the bills.

OK, if you can't click two links, I'm guessing nobody else can either. I guess I can do some hand-holding. Here is the response I recommended you go read:

When reading legislation, it's helpful to note that the language that is underlined is new language provided by the bill, the language with a line through it is being removed from code by the bill, and the rest is already current statute. Below is a full reply:

The current definition of "franchised dealer" in Texas code is: "(16) "Franchised dealer" means a person who: (A) holds a franchised motor vehicle dealer's license issued by the board under this chapter and Chapter 503, Transportation Code; and (B) is engaged in the business of buying, selling, or exchanging new motor vehicles and servicing or repairing motor vehicles under a manufacturer's warranty at an established and permanent place of business under a franchise in effect with a manufacturer or distributor." https://statutes.capitol.texas.gov/SOTWDocs/OC/htm/OC.2301.htm

That seems to be where the confusion is coming from…

SB 1415 does not change the definition of "franchised dealer" or "dealership." It simply references the various elements of the existing definitions for the sake of adding clarifying language that, to use the Senator's apples and oranges analogy from his statement, a manufacturer of an orange MAY own an interest in a dealership that buys, sells, exchanges, services, or repairs an apple. The key language in the bill is "same type." Is that clear? That's why he called it a step in the free market direction; the law as-is has been interpreted as banning manufacturers of certain types of vehicles from selling vehicles other than what they manufacture, and we're trying to correct that.

Secondly, the bill (and the portion of code it's modifying) is about dealers and dealerships, not service or repair centers. It just references "servicing" and "repairing" as examples of things that dealers and dealerships do per the definition already codified elsewhere in statute. Since we are not modifying the actual definition, just referencing it, Tesla service centers would not be impacted by this legislation in any way.

All of this notwithstanding, as the Senator's statement said, he was open to belts-and-suspenders language to assuage anyone's concerns… instead, we seem to be on the receiving end of a misinformation campaign.

Again, thank you for taking the time to contact us directly, and we'd be happy to help provide any additional necessary clarification.

and here are some key point s pulled from that quote with original formatting:

SB 1415 does not change the definition of "franchised dealer" or "dealership."

Secondly, the bill (and the portion of code it's modifying) is about dealers and dealerships, not service or repair centers. It just references "servicing" and "repairing" as examples of things that dealers and dealerships do per the definition already codified elsewhere in statute.

 

[mxnym]

Also, a quote from the press release that was linked in the quote in my post numbered 28 with my (bold) emphasis added:

The intent of SB 1415 is to reduce over-regulation of vehicle manufacturers in Texas. Specifically, it adds 'of the same type' to existing statutory references to franchise dealer activities to clarify that an auto manufacturer that grows apples can sell oranges, so-to-speak. While not a full-blown direct auto sales bill, which I have authored in the past, it's a step in the free market direction.

 

[TexasEV]

Direct Response to SB 1415 from Senator Hancock

Here is part of what the redditor who posted in the link above had to say:If you follow the link above the quote, you will also see a response from the senator's office quoted where he reached out to them about this. Perhaps some torches and pitchforks need put away and others in this thread who have written should also be posting responses they recieve.

And Tesla’s lobbyist said two days ago they reached out to Sen. Hancock’s office with proposed amendment language that would remove their concerns but have not heard back yet if he will accept it and amend the bill. She hopes they can reach a compromise but as currently drafted Tesla opposes the bill.

So I wouldn’t necessarily trust the senator’s statement about the service issue being “fake news”.

 

[jerry33]

OK, if you can't click two links, I'm guessing nobody else can either. I guess I can do some hand-holding. Here is the response I recommended you go read:

Yes, I read it. It only takes a sharp lawyer to convince a judge that the wording means ONLY a franchised dealer may...
Unless there is clear and unambiguous language specifically allowing servicing, sales, delivery, etc. in the bill allowing an OEM to do these things, then it's subject to interpretation, and given the dealer lobby's political power, any Texas court case is likely to harm Tesla owners. (Federal anti-trust legislation is different, but that takes years.)

 

[mxnym]

And Tesla’s lobbyist said two days ago they reached out to Sen. Hancock’s office with proposed amendment language that would remove their concerns but have not heard back yet if he will accept it and amend the bill. She hopes they can reach a compromise but as currently drafted Tesla opposes the bill.

So I wouldn’t necessarily trust the senator’s statement about the service issue being “fake news”.

You may notice that I didn't quote that. I stayed away from the term because I'm trying to be apolitical. The fact of the matter is that if the amendment doesn't change who the bill affects, then either the bill doesn't affect Tesla service centers or the real news is Tesla service centers are already illegal whether the amendment is passed or not.

Yes, I read it. It only takes a sharp lawyer to convince a judge that the wording means ONLY a franchised dealer may...
Unless there is clear and unambiguous language specifically allowing servicing, sales, delivery, etc. in the bill allowing an OEM to do these things, then it's subject to interpretation, and given the dealer lobby's political power, any Texas court case is likely to harm Tesla owners. (Federal anti-trust legislation is different, but that takes years.)

See my response to the quote just above. To the extent that your concerns are well-founded, they should already exist without the amendment passing. More to the point, the senator's office's argument is that the existing bill and amended bill both have NOTHING to do with service centers, only dealerships. Finally, if the wording were able to be manipulated so that ONLY a franchised dealer may, then wouldn't all independent service centers suddenly be behind the crosshairs?

 

[jerry33]

You may notice that I didn't quote that. I stayed away from the term because I'm trying to be apolitical. The fact of the matter is that if the amendment doesn't change who the bill affects, then either the bill doesn't affect Tesla service centers or the real news is Tesla service centers are already illegal whether the amendment is passed or not.See my response to the quote just above. To the extent that your concerns are well-founded, they should already exist without the amendment passing. More to the point, the senator's office's argument is that the existing bill and amended bill both have NOTHING to do with service centers, only dealerships. Finally, if the wording were able to be manipulated so that ONLY a franchised dealer may, then wouldn't all independent service centers suddenly be behind the crosshairs?

The way I read it (not a lawyer) is that it would only affect OEM that perform dealer actions. Sorry, but six years of dealer manipulation have left me very distrustful of both dealers and politicians.

 

[TexasEV]

There are numerous examples in recent years where the auto dealer cartel has taken a slight possibility of an ambiguity in other state’s dealer franchise laws to challenge Tesla before a friendly regulator or court. Tesla is right to be concerned about a Trojan horse in any bill backed by TADA. Why won’t the senator accept Tesla’s proposed clarifying language to make certain this bill can’t be used to challenge Tesla’s ability to have service centers?

 

[mxnym]

For anyone who wants to read the current text (which is referred to committee, where most bills die), you can do so here:
86(R) SB 1415 - Introduced version - Bill Text

You can see some changes in formatting and some added definitions, but the ONLY thing the bill actually legislates is that manufacturers may NOT own, control, operate, or act in the capacity of franchised or non-franchised dealerships. Prior to this change, Chevy couldn't own stake in a Ford dealership, after this change it could, because this is added (emphasis mine): "the business of which includes buying, selling, exchanging, servicing, or repairing the same type of motor vehicle that the manufacturer or distributor manufactures or distributes". Yes, that quote begins with "the business of which includes buying, selling, exchanging, servicing, or repairing" but it is in reference to the defined dealership, whose definition isn't materially changing (it is technically changing from a1, a2A, and a2B to a1A, a1Bi, and a1Bii, but that is only necessary to add a second definition section). Technically, the addition of definitions might relieve a company like John Deere from that restriction if it had been being enforced on them, but definitions for a specific bill do not have anything to do with legalizing or restricting behavior of a defined entity.

 

[mxnym]

The way I read it (not a lawyer) is that it would only affect OEM that perform dealer actions. Sorry, but six years of dealer manipulation have left me very distrustful of both dealers and politicians.

OK, after re-reading it one more time, I am going to back-pedal a bit. They don't define dealership in the definitions section, only manufacturer, so I agree that the inclusion of the word "or" in the repeating section about what dealerships do is potentially a huge problem, regardless of the senator's intent.

ETA: the use of the word and wouldn't be much better, as it would practically neuter the bill's original intent, although that would arguably be a good thing.

 

[jerry33]

OK, after re-reading it one more time, I am going to back-pedal a bit. They don't define dealership in the definitions section, only manufacturer, so I agree that the inclusion of the word "or" in the repeating section about what dealerships do is potentially a huge problem, regardless of the senator's intent.

ETA: the use of the word and wouldn't be much better, as it would practically neuter the bill's original intent, although that would arguably be a good thing.

Agreed. If the Senator really intended no harm, there would be clear and unambiguous language to that effect.

 

[mxnym]

Agreed. If the Senator really intended no harm, there would be clear and unambiguous language to that effect.

In movies and TV shows, there is often talk of "pressing charges" wherein the implication is that the prosecuting attorney can only act with permission or must act at the behest of an injured individual (I believe the legal definition of injured is to have suffered a loss). In reality, I don't believe an injured individual can force or prevent prosecution. Given this, the bill may not be as dangerous as it seems, because a Tesla competitor presumably can't really bring charges from the state unless they can actually pocket the state's AG. Unfortunately, even that isn't an unrealistic possibility. I'm not sure what Tesla's recommended changes were, but realistically, there is no currently legitimate reason for "servicing or repairing" in those repeating quasi-definitions; given the term "includes," simply dropping those two terms and moving the "or" would properly reflect the alleged intent of the bill.