New Texas Bill to Screw Tesla Owners!

[Boourns]

Since the Senator's response confused me (and frankly raised an alarm bell by crying "fake news") I did some digging. I think this is what he's saying. The proposed bill essentially adds language clarifying the types of activities a "franchised dealer" does. It also mentions "nonfranchised dealers," though, curiously, doesn't include the same type of descriptive language. Not sure why. Anyway, those terms are defined in section 2301 of the Occupations code (emphasis mine):

(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.

(25) "Nonfranchised dealer" means a person who holds an independent motor vehicle dealer's general distinguishing number, an independent mobility motor vehicle dealer's general distinguishing number, or a wholesale motor vehicle dealer's general distinguishing number issued by the board under Chapter 503, Transportation Code.

I think what the Senator is: Because Tesla does not hold a “franchised motor vehicle dealer's license” or an “independent motor vehicle dealer's general distinguishing number,” these provisions don’t change the law as it currently exists. In other words, this law still prevents Tesla from owning a franchised or nonfranchised dealer because, necessarily, you must have a license or a distinguishing number to be a dealer. These additions don’t change that fact.

What the additions do is clarify that a manufacturer cannot own a dealer that sells, services, etc. the same type of vehicles that that manufacturer makes. In theory, this bill actually would allow Tesla to own dealers that sell go karts or some other type of vehicle (a semi perhaps??).

All that said, I still don’t trust the guy who took $15,000 from John Eagle last election cycle. I think there is sufficient ambiguity in the proposed bill to be exploited by the NADA. And if this guy really believed in free-market principles, he’d be introducing a bill to end the franchise dealer cartel as it exists. In short, since Tesla’s lawyers are probably smarter than me (and certainly have more time to research this) I will continue to oppose the bills until Tesla says I don’t have anything to worry about. End rant.

 

[mxnym]

Since the Senator's response confused me (and frankly raised an alarm bell by crying "fake news") I did some digging. I think this is what he's saying. The proposed bill essentially adds language clarifying the types of activities a "franchised dealer" does. It also mentions "nonfranchised dealers," though, curiously, doesn't include the same type of descriptive language. Not sure why. Anyway, those terms are defined in section 2301 of the Occupations code (emphasis mine):



I think what the Senator is: Because Tesla does not hold a “franchised motor vehicle dealer's license” or an “independent motor vehicle dealer's general distinguishing number,” these provisions don’t change the law as it currently exists. In other words, this law still prevents Tesla from owning a franchised or nonfranchised dealer because, necessarily, you must have a license or a distinguishing number to be a dealer. These additions don’t change that fact.

What the additions do is clarify that a manufacturer cannot own a dealer that sells, services, etc. the same type of vehicles that that manufacturer makes. In theory, this bill actually would allow Tesla to own dealers that sell go karts or some other type of vehicle (a semi perhaps??).

All that said, I still don’t trust the guy who took $15,000 from John Eagle last election cycle. I think there is sufficient ambiguity in the proposed bill to be exploited by the NADA. And if this guy really believed in free-market principles, he’d be introducing a bill to end the franchise dealer cartel as it exists. In short, since Tesla’s lawyers are probably smarter than me (and certainly have more time to research this) I will continue to oppose the bills until Tesla says I don’t have anything to worry about. End rant.

Great research, if the code being modified falls under those definitions, then there shouldn't be any concern, but if the definitions already exist, why add them to the section being modified? Perhaps so dealers can do something they can't already do if it doesn't include the listed activities? Would that actually ALLOW Tesla showrooms if they didn't sell cars? Also, what of the senator's comment that he has previously authored a full-blown direct auto sales bill (as seen in my post numbered 31)?

 

[jerry33]

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.

If they can't get the prosecutor to act, they can use the law to take civil action. This would put them in a bad light with the public, but they are desperately trying to hold on to legislation that was written when the landscape was far different to keep their monopoly alive. Back when the legislation was originally written, each dealer dealt with one and only one vehicle manufacturer. The manufacturers had great power over the dealer because if the dealer couldn't get cars he was gone. Now dealers (at least in the cities) are mostly owned by mega companies and have most if not all of the brands for sale (at different locations, but same ultimate ownership). The manufacturers can't hold the dealers hostage any longer because if they lose one manufacturer they have many other brands. And consumers are now at the mercy of the dealers because there is no effective competition. The dealers know that the existing manufacturers are woefully behind Tesla in technology, are further hampered by having to create profit for their shareholders (unlike a startup where you have to create value in the future), and the various internal departments that are protecting the status quo.

If this bill passes, it will be inconvenient for Tesla owners until dealerships start failing or no longer have the funds to pass anti-Tesla bills. I'd expect to see them run into trouble at around the five year mark.

 

[mxnym]

If they can't get the prosecutor to act, they can use the law to take civil action. This would put them in a bad light with the public, but they are desperately trying to hold on to legislation that was written when the landscape was far different to keep their monopoly alive. Back when the legislation was originally written, each dealer dealt with one and only one vehicle manufacturer. The manufacturers had great power over the dealer because if the dealer couldn't get cars he was gone. Now dealers (at least in the cities) are mostly owned by mega companies and have most if not all of the brands for sale (at different locations, but same ultimate ownership). The manufacturers can't hold the dealers hostage any longer because if they lose one manufacturer they have many other brands. And consumers are now at the mercy of the dealers because there is no effective competition. The dealers know that the existing manufacturers are woefully behind Tesla in technology, are further hampered by having to create profit for their shareholders (unlike a startup where you have to create value in the future), and the various internal departments that are protecting the status quo.

If this bill passes, it will be inconvenient for Tesla owners until dealerships start failing or no longer have the funds to pass anti-Tesla bills. I'd expect to see them run into trouble at around the five year mark.

Let me repeat that I'm don't know how this would work, but again based on individuals, a civil suit can even be filed after the defendant has been found not guilty in a criminal suit. The burden of proof is lower in a civil suit, and the resolution of the suit is often monetary. While a civil suit would be newsworthy, I'm not sure why it would be embarrassing to a public servant who is following the intent of the law, and I'm not sure it would lead to any sort of cease and desist order from the court since intellectual property isn't involved. OTOH, you could be suggesting that the civil case would be against the AG as opposed to Tesla, in which case, don't mind me.

 

[StealthP3D]

Look, this can be made as complicated and difficult to understand as you like but Tesla doesn't hire stupid lawyers so here is all you need to know:

Tesla thinks the bill threatens their ability to lawfully service their cars in Texas. They wouldn't waste another minute of precious time on it if this were not true.

If the author of the bills intent was to harm Tesla, they have already succeeded by diverting precious resources to a new and uncalled for diversion from their core mission.

 

[mxnym]

Look, this can be made as complicated and difficult to understand as you like but Tesla doesn't hire stupid lawyers so here is all you need to know:

Tesla thinks the bill threatens their ability to lawfully service their cars in Texas. They wouldn't waste another minute of precious time on it if this were not true.

If the author of the bills intent was to harm Tesla, they have already succeeded by diverting precious resources to a new and uncalled for diversion from their core mission.

I know I'm hearing that Tesla cares, but I haven't seen it. Do you have any links that show anything to prove Tesla has concerns and/or has reached out? Better still, do you have a link that shows their actual correspondence (what they recommend gets changed)? It's certainly not mentioned at tesla.com/blog. Even if Tesla is concerned with it and has reached out, if we can't see their suggested changes, then for all we know their concern could simply be that this change will leave less reasons for a future law change that allows direct sell, and at that point, does their core mission not support using resources to get direct sell everywhere?

 

[StealthP3D]

I know I'm hearing that Tesla cares, but I haven't seen it. Do you have any links that show anything to prove Tesla has concerns and/or has reached out? Better still, do you have a link that shows their actual correspondence (what they recommend gets changed)? It's certainly not mentioned at tesla.com/blog. Even if Tesla is concerned with it and has reached out, if we can't see their suggested changes, then for all we know their concern could simply be that this change will leave less reasons for a future law change that allows direct sell, and at that point, does their core mission not support using resources to get direct sell everywhere?

Yes, Tesla did "reach out" they had a meeting with the sponsor of the bill. Apparently, it was unproductive:

Kelly Hancock on Twitter

It sounds like they might be meeting again this morning.

 

[Boourns]

Do you have any links that show anything to prove Tesla has concerns and/or has reached out?

The email that everyone got is from "[email protected]" so, yes, they have concerns.

 

[mxnym]

The email that everyone got is from "[email protected]" so, yes, they have concerns.

Everyone? I didn't get an e-mail from Tesla on this issue. Perhaps "everyone" only includes Tesla owners in Texas? In that case, why hasn't anyone posted the text of that e-mail? The most useful post in this thread is probably your previous post with the deeper research regarding definitions, but I'm not familiar with Texas law to know whether or not those definitions apply. If they do, perhaps a CA lawyer didn't know how to navigate TX law and the meeting that presumably happened after this e-mail was unproductive because they couldn't show a real reason why the bill would actually be a problem.

 

[NHK X]

Not sure if it has been put out, can you post emails for the representatives we should reach out to?

I’ll be moving to Texas this summer.

 

[reddy]

Time to leave Texas. Bans this, bans certain books in schools ...

Many of us are actually California expatriates. Taxes and cost of housing here are far less than what you pay in California.

I do credit California for providing me with an excellent education at the University of California, which has served everyone in Texas quite well.

Now back to regular programming....

 

[Boourns]

The link leads here: Support TESLA in Texas - Electric auto manufacturer in the U.S

 

[reddy]

Here is the full text
A BILL TO BE ENTITLED
AN ACT
relating to the ownership, control, or operation of a franchised or
nonfranchised dealer or dealership by certain motor vehicle
manufacturers and distributors.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2301.476(a), (b), and (c), Occupations
Code, are amended to read as follows:
(a) In this section:
(1) "Manufacturer"[, "manufacturer"] includes:
(A) [(1)] a representative; or
(B) [(2)] a person who:
(i) [(A)] is affiliated with a manufacturer
or representative; or
(ii) [(B)] directly or indirectly through
an intermediary, is controlled by, or is under common control with,
a manufacturer.
(2) "Type of motor vehicle" means the classification
of a motor vehicle as one of the following:
(A) a passenger car or a truck, including a
pickup truck, van, panel delivery truck, or a carryall truck, with a
gross vehicle weight rating of 14,000 pounds or less that is used
primarily to transport persons or property;
(B) a motorcycle or motor-driven cycle, which
includes:
(i) an all-terrain vehicle, as defined by
Section 502.001, Transportation Code;
(ii) a recreational off-highway vehicle, as
defined by Section 502.001, Transportation Code;
(iii) an autocycle, as defined by Section
501.008, Transportation Code;
(iv) a moped, as defined by Section
541.201, Transportation Code;
(v) a motorcycle, as defined by Section
541.201, Transportation Code; or
(vi) a motor-driven cycle, as defined by
Section 541.201, Transportation Code;
(C) an engine, transmission, or rear axle, as
described by Section 2301.002(23)(C);
(D) a medium-duty or heavy-duty truck with a
gross vehicle weight rating of more than 14,000 pounds;
(E) a bus, as defined by Section 541.201,
Transportation Code;
(F) a road tractor or truck tractor, as defined
by Section 541.201, Transportation Code;
(G) a firefighting vehicle; or
(H) a recreational vehicle, which includes:
(i) a motor home;
(ii) a towable recreational vehicle;
(iii) a travel trailer, as defined by
Section 501.002, Transportation Code; or
(iv) a house trailer, as defined by Section
501.002, Transportation Code.
(b) For purposes of Subsection (a)(1)(B)(ii) [(a)(2)(B)], a
person is controlled by a manufacturer if the manufacturer is
directly or indirectly authorized, by law or by agreement of the
parties, to direct or influence the person's management and
policies.
(c) Except as provided by this section, a manufacturer or
distributor may not directly or indirectly:
(1) own an interest in:
(A) a franchised [or nonfranchised] dealer or
dealership, 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;
or
(B) a nonfranchised dealer or dealership;
(2) operate or control:
(A) a franchised [or nonfranchised] dealer or
dealership, 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;
or
(B) a nonfranchised dealer or dealership; or
(3) act in the capacity of:
(A) a franchised [or nonfranchised] dealer or
dealership, 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;
or
(B) a nonfranchised dealer.
SECTION 2. This Act takes effect September 1, 2019.

 

[Boourns]

Not sure if it has been put out, can you post emails for the representatives we should reach out to?

I’ll be moving to Texas this summer.

The sponsor of the Senate bill is Kelly Hancock: The Texas State Senate – Senator Kelly Hancock: District 9

House bill is Charlie Geren: Texas House of Representatives

You can find your representative/senator here: Who Represents Me?

At this point I think it is more impactful if you reach out to your individual representative & senator to make the point that you are against any form of direct sales prohibition, rather than trolling Hancock, who seems from his Twitter feed to live up to the last half of his surname.

 

[NHK X]

The sponsor of the Senate bill is Kelly Hancock: The Texas State Senate – Senator Kelly Hancock: District 9

House bill is Charlie Geren: Texas House of Representatives

You can find your representative/senator here: Who Represents Me?

At this point I think it is more impactful if you reach out to your individual representative & senator to make the point that you are against any form of direct sales prohibition, rather than trolling Hancock, who seems from his Twitter feed to live up to the last half of his surname.

Great thanks

 

[neroden]

The recent cutout of "nonfranchised" from the clause including "service" (during amendments) *might* leave Tesla where it was before, but I'd need a legal opinion (it's really squirrely language). The underlying bill is a cutout for Berkshire Hathaway, BTW, so that it can own a manufacturer of one vehicle and a dealership in a different brand of vehicles.

 

[SpiceWare]

I think what the Senator is: Because Tesla does not hold a “franchised motor vehicle dealer's license” or an “independent motor vehicle dealer's general distinguishing number,” these provisions don’t change the law as it currently exists. In other words, this law still prevents Tesla from owning a franchised or nonfranchised dealer because, necessarily, you must have a license or a distinguishing number to be a dealer. These additions don’t change that fact.

per @stephenpace the Texas Department of Motor Vehicles provided input that the bill as written it would prevent Tesla from providing service.

Stephen Pace on Twitter

 

[buttershrimp]

This will answer the question for me.... perhaps one of the bright individuals on this forum can help me answer the question "why was this legislation introduced now? and at whose urging?"

Is Hancock a car dealership guy? Or is he letting a constituent serve him up some ready to submit legislation that a team of dealer-lobbyists are writing? What's the motive and why is he the legislative vessel of this turd?

 

[Boourns]

per @stephenpace the Texas Department of Motor Vehicles provided input that the bill as written it would prevent Tesla from providing service.

Stephen Pace on Twitter

I haven't read the opinion, but that's exactly why I oppose the bill. Even if it wasn't the intent, I think there is ambiguity that could be a problem.

 

[jerry33]

This will answer the question for me.... perhaps one of the bright individuals on this forum can help me answer the question "why was this legislation introduced now? and at whose urging?"

Is Hancock a car dealership guy? Or is he letting a constituent serve him up some ready to submit legislation that a team of dealer-lobbyists are writing? What's the motive and why is he the legislative vessel of this turd?

My understanding is that he got $15K in contributions from Glen-Eagle. Perhaps others too, though I haven't heard. He's just doing what he was paid to do.