New Texas Bill to Screw Tesla Owners!

[Prunesquallor]

Unfortunately, I believe this bill has a decent shot of making it out of committee because Governor Abbott wants it to help Warren Buffett solve his dealership problem. It is going to take a good showing at the committee hearing, better than we've had at previous ones. This will be hard because Senator Hancock will no doubt schedule the hearing and then move it around a few times to try and minimize resistance. Each person gets three minutes to speak and the dealers usually only send a few. Par for the course is Bill Wolters from the Texas Auto Dealer Association or someone who is good buddies with the Chairman, a bogus charity like Easter Seals or junior softball league who will be saying how much money they get from dealers, who will no doubt die if this bill is rejected, and perhaps an OEM like GM who will say "if we can't do it, Tesla shouldn't be able to do it either".

Tesla emailed me the language they are concerned about. It is the warranty information. Attached below is their note to Senator Hancock's office:

SB 1415 (Hancock)/ HB 2940 (Geren)

While we support bringing the franchise system into the 21st century as this bill intends to do, there is language added to the bill this session which attempts to outline specifically that manufacturers cannot perform warranty work.

SB 1415, as proposed, defines acting in the capacity of dealer as “...the business of which includes buying, selling, exchanging, servicing, or repairing...” and adds that definition to subsection 2301.476 of the Occupations Code in an attempt to make it explicit that manufacturers are prohibited from this work.

By adding the language to this subsection specifically, the intent is to add warranty repairs to the definition of acting in the capacity of a dealer, and effectively force Tesla to close its service centers.

While current law is clear that manufacturers cannot also be a dealer and sell vehicles, currently, nothing in statute prohibits a manufacturer from performing warranty repairs; in fact, manufacturers are required to do so under 2301.603 of the Occupations Code, which places the obligation of warranty repair solely on them. While most manufacturers contract with their franchise dealers to complete warranty work, nothing requires them to.

While the new language may appear innocuous, the intent causes great concern, and would give the DMV the authority to interpret the statute and enforce against warranty repairs performed by a manufacturer in a way that does not exist under current law. The intent of the language is to erode the protections currently in place for manufacturers like Tesla, but also those of consumers that have relied and continue to rely on manufacturers to repair and service vehicles.

The committee substitute we offered would accomplish the stated intent of addressing the franchise issue for a manufacturer that makes one product and sells another, while at the same time alleviating the concerns we, along with other manufacturers, have expressed on the current bill version.

This is most helpful. Do you have access to the substitute that the Tesla lawyers offered?

 

[jerry33]

This is most helpful. Do you have access to the substitute that the Tesla lawyers offered?

As far as I know, no one does. And since it wasn't leaked by the politicians, it must have something in it that would make them lose face if they shared it.

 

[reddy]

First, Sen Hancock's bill should make it out of committee, because, if for no other reason, Senator Hancock is the committee chairman.

I emailed Sen. Hancock's aide, whose contact information was on their March 18 bulletin, the one complaining that they had been the subject of 'Fake News'.

Yesterday I point blank asked, why they didn't add clarifying language to the bill. I suggested adding a paragraph (d).

“(d) A manufacturer or distributor may service and repair the same type of motor vehicle that the manufacturer or distributor manufactures or distributes if there are no manufacturer’s franchised dealers within 75 miles of the service center. “

No reply of any kind.

 

[Prunesquallor]

First, Sen Hancock's bill should make it out of committee, because, if for no other reason, Senator Hancock is the committee chairman.

I emailed Sen. Hancock's aide, whose contact information was on their March 18 bulletin, the one complaining that they had been the subject of 'Fake News'.

Yesterday I point blank asked, why they didn't add clarifying language to the bill. I suggested adding a paragraph (d).

“(d) A manufacturer or distributor may service and repair the same type of motor vehicle that the manufacturer or distributor manufactures or distributes if there are no manufacturer’s franchised dealers within 75 miles of the service center. “

No reply of any kind.

I appreciate those more knowledgeable than myself pushing this effort. I’m out of ideas about what I can do. The carpet-bombing just needs to continue until it’s so much of a distraction that it’s easier for him to fix it or defer it.

If we can kill this thing this time, the next time it comes up (in two years) it will be too late. There will likely be 30-40,000 of us by then, and the idea of screwing THAT many people may make even THESE guys take pause.

 

[mxnym]

SB 1415, as proposed, defines acting in the capacity of dealer as “...the business of which includes buying, selling, exchanging, servicing, or repairing...” and adds that definition to subsection 2301.476 of the Occupations Code in an attempt to make it explicit that manufacturers are prohibited from this work.

I this were true, it would be very concerning. This is what I cannot find happening. Nowhere in anything I have found does anything mention amending anything other than the provided text specific to 2301.476. IANAL, but AFAICT, section 2301.002 definitions would apply to all of section 2301 unless explicitly overridden (you can find those here: TCAS - Home and I quote the two relevant ones further down). In the provided text, they list what "manufacturer" will include for 2301.476 in (a) (1) and they define what "type of motor vehicle" mean in (a) (2). They do NOT explicitly state that the dealer or dealership will mean anything other than what they have already been defined to mean:

(7) "Dealer" means a person who holds a general distinguishing number issued by the board under Chapter 503, Transportation Code.

(8) "Dealership" means the physical premises and business facilities on which a franchised dealer operates the dealer's business, including the sale and repair of motor vehicles. The term includes premises or facilities at which a person engages only in the repair of a motor vehicle if the repair is performed under a franchise and a motor vehicle manufacturer's warranty.

(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.

The alleged "definition" causing the alleged problem isn't even in the section where "manufacturer" and "type of motor vehicle" are given explicit meaning. Moreover, it is only applied specifically and repeatedly only to franchised dealerships while nonfranchised dealerships are listed separately without the "definition." Here are the places I've looked, only briefly, though, dig (including all other tabs) and prove me wrong:

Texas Legislature Online - 86(R) Text for SB 1415
Texas Legislature Online - 86(R) Text for HB 2940

 

[mxnym]

To be clear, there is no definition for "nonfranchised dealership" but here is how the relevant text technically reads after modification:

(b) For purposes of Subsection (a)(1)(B)(ii), 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:
(B) a nonfranchised dealer or dealership;
(2) operate or control:
(B) a nonfranchised dealer or dealership; or
(3) act in the capacity of:
(B) a nonfranchised dealer.

Technically, the fact that "nonfranchised dealership" isn't defined COULD be problematic, except for two things:

1. The previous text already limited these things and said "a franchised or nonfranchised dealer or dealership" in the old (1) and the old (2).
2. Tesla would be acting in the capacity, and "dealership" is left out in (3)(B) just as it was before in the old (3).

 

[StealthP3D]

To be clear, there is no definition for "nonfranchised dealership" but here is how the relevant text technically reads after modification:Technically, "nonfranchised dealership" isn't defined at all, so that COULD be problematic, except for two things:

1. The previous text already limited these things and said "a franchised or nonfranchised dealer or dealership" in the old (1) and the old (2).
2. Tesla would be acting in the capacity, and "dealership" is left out in (3)(B) just as it was before in the old (3).

Three things:

3) The lack of a definition of "non-franchised dealer" simply means a "dealer" that is not franchised. In other words, all dealers are dealers under the definition of "dealer". That's how it works when a term is not specifically defined.

Again, there is no need to act like a lawyer and parse the finer points of the language, all you need to know is that Tesla is concerned enough to send a legal team on an airplane, get hotels and try to get appropriate language inserted. The fact that the sponsor of the bill is saying Tesla is attacking his office tells me all I need to know about this legislator's intentions. He's a bad actor.

 

[mxnym]

Three things:

3) The lack of a definition of "non-franchised dealer" simply means a "dealer" that is not franchised. In other words, all dealers are dealers under the definition of "dealer". That's how it works when a term is not specifically defined.

Again, there is no need to act like a lawyer and parse the finer points of the language, all you need to know is that Tesla is concerned enough to send a legal team on an airplane, get hotels and try to get appropriate language inserted. The fact that the sponsor of the bill is saying Tesla is attacking his office tells me all I need to know about this legislator's intentions. He's a bad actor.

I understand where you're coming from, but someone had to write the same thing in the house, where it was filed later and read and referred sooner, and AFAICT, no one is talking to or about Geren. Regardless, I think these are more realistic possibilities:

• Tesla is trying to get direct sell because they see an opportunity to do so.
• Tesla service centers are already illegal and Tesla is afraid that now that it's been noticed it'll be acted upon.

People have been acting like this amendment changes anything where franchised dealerships don't exist, and AFAICT, it doesn't. People have also been acting like this amendment gives the DMV some new authority, and AFAICT, it doesn't. Those are the points of every post I've made in this thread.

ETA: If Tesla service centers are actually illegal and that is acted on, it would be very bad, and now might be a good time to fix that if it were the case, but no number of people complaining that a bill will change something that it won't change should have any effect on said bill's progress.

 

[mxnym]

Three things:

3) The lack of a definition of "non-franchised dealer" simply means a "dealer" that is not franchised. In other words, all dealers are dealers under the definition of "dealer". That's how it works when a term is not specifically defined.

Again, there is no need to act like a lawyer and parse the finer points of the language, all you need to know is that Tesla is concerned enough to send a legal team on an airplane, get hotels and try to get appropriate language inserted. The fact that the sponsor of the bill is saying Tesla is attacking his office tells me all I need to know about this legislator's intentions. He's a bad actor.

Also, you'll be surprised what you find if you act like a lawyer. I mean, I said "nonfranchised dealership" specifically because "nonfranchised dealer" actually is defined, and the definition of "dealership" specifically includes the term "franchised" so in the old text "franchised or nonfranchised dealer" or dealership might automatically mean "franchised dealer, franchised dealership, or nonfranchised dealer" but in the new text, "nonfranchised dealer or dealership" doesn't have any good clean obvious meaning and instead adds ambiguity.

 

[TexasEV]

Also, you'll be surprised what you find if you act like a lawyer. I mean, I said "nonfranchised dealership" specifically because "nonfranchised dealer" actually is defined, and the definition of "dealership" specifically includes the term "franchised" so in the old text "franchised or nonfranchised dealer" or dealership might automatically mean "franchised dealer, franchised dealership, or nonfranchised dealer" but in the new text, "nonfranchised dealer or dealership" doesn't have any good clean obvious meaning and instead adds ambiguity.

This might be a fun mental exercise for you, but it doesn’t matter how you or I or an uninterested party might interpret the bill. What matters is how a dealer-friendly regulatory body or court might interpret it. And who might that dealer-friendly regulatory body be? Let me introduce you to the Texas Department of Motor Vehicles:

The Texas DMV Board is appointed by the governor, whose campaigns have been supported millions of dollars from the auto dealer cartel over the years and he has publically supported the dealers against Tesla (in the last session).

The Board chairman is a franchised auto dealer. (By law the board has two franchised auto dealers).

The Board vice-chairman is the president of a beer distributor. He is one of two “customer (public)” representatives required on the board. Why would a beer distributor want to be one of the consumer representatives on the Motor Vehicles Board? Hint: it’s not because he’s a gear head. The beer distributors are protected by a similar law that prevents breweries from selling to stores. The state requires that a franchised beer distributor acts as a middleman. The beer distributor cartel has a vested interest in protecting the auto dealer cartel and vice-versa, because a crack in one would be a bad precedent for the other. Whoever said drinking and driving don’t mix doesn’t understand Texas politics.

 

[mxnym]

This might be a fun mental exercise for you, but it doesn’t matter how you or I or an uninterested party might interpret the bill. What matters is how a dealer-friendly regulatory body or court might interpret it. And who might that dealer-friendly regulatory body be? Let me introduce you to the Texas Department of Motor Vehicles:

The Texas DMV Board is appointed by the governor, whose campaigns have been supported millions of dollars from the auto dealer cartel over the years and he has publically supported the dealers against Tesla (in the last session).

The Board chairman is a franchised auto dealer. (By law the board has two franchised auto dealers).

The Board vice-chairman is the president of a beer distributor. He is one of two “customer (public)” representatives required on the board. Why would a beer distributor want to be one of the consumer representatives on the Motor Vehicles Board? Hint: it’s not because he’s a gear head. The beer distributors are protected by a similar law that prevents breweries from selling to stores. The state requires that a franchised beer distributor acts as a middleman. The beer distributor cartel has a vested interest in protecting the auto dealer cartel, because a crack in one would be a bad precedent for the other. Whoever said drinking and driving don’t mix doesn’t understand Texas politics.

I can't think of a clearer way to put this, if the DMV wanted to shut down Tesla service centers, they could use the existing law, these changes are completely immaterial to that potential action.

 

[StealthP3D]

I can't think of a clearer way to put this, if the DMV wanted to shut down Tesla service centers, they could use the existing law, these changes are completely immaterial to that potential action.

You appear to be saying that the lawyers at Tesla are wasting their time in Texas trying to get sensible changes to the language while not changing the declared intent of the law.

You also appear to be trying to obscure and confuse the issue, leaving people here to throw their hands up and say "I don't know what to believe anymore, I guess I'll do nothing and see what happens". I don't know if that is your intention but, if it were, that's a good way to achieve it.

 

[mxnym]

You appear to be saying that the lawyers at Tesla are wasting their time in Texas trying to get sensible changes to the language while not changing the declared intent of the law.

You also appear to be trying to obscure and confuse the issue, leaving people here to throw their hands up and say "I don't know what to believe anymore, I guess I'll do nothing and see what happens". I don't know if that is your intention but, if it were, that's a good way to achieve it.

I have provided official links to official text and fully recommend everyone do their own research. It's really not that hard to follow the text (although I obviously made some mistakes early in the thread as it takes time to learn how to navigate it). If there is a law that says "dogs are illegal" and someone attempts to amend the law to say "dogs are illegal unless they marry a cat" it won't be effective to go to that person and say "don't ban dogs." For that reason, I believe a lot of resources are being wasted here regardless of whether Tesla and/or Hancock have ulterior motives.

 

[StealthP3D]

I have provided official links to official text and fully recommend everyone do their own research. It's really not that hard to follow the text (although I obviously made some mistakes early in the thread as it takes time to learn how to navigate it). If there is a law that says "dogs are illegal" and someone attempts to amend the law to say "dogs are illegal unless they marry a cat" it won't be effective to go to that person and say "don't ban dogs." For that reason, I believe a lot of resources are being wasted here regardless of whether Tesla and/or Hancock have ulterior motives.

It appears that most people here disagree with your interpretation (including Tesla's legal team). I recommend that people not get distracted by the noise and the people trying to explain this all away as if it's all just a big misunderstanding. There's a reason why the bill's sponsor accused Tesla of attacking his office. It's because he's a bad actor and this bill needs to be stopped!

It couldn't be any more clear.

 

[mxnym]

We don't know what Tesla tried to get added, if anything, because that's not public, so it's hardly fair to assume they are "trying to get sensible changes to the language while not changing the declared intent" while at the same time assuming that the media didn't release "fake news." Quite frankly, if I was a politician, and I started getting unfounded calls about an issue with an amendment I'd written, I would describe that as attacking my office, so that doesn't really mean much to me, either. OTOH, Tesla's stated concerns have finally been made public and don't make sense to me. If someone can actually show a real problem with the letter of the amended law that is new and didn't exist before, then that is what everyone going to the hearing should be on about. If the problem already exists and they are attempting to fix it, then saying "don't break it" isn't going to be effective, and might even put a dirty taste in the mouths of anyone whose time was wasted and make them less likely to support or author any sort of beneficial bill in the near future.

 

[mxnym]

Tesla says a Texas lawmaker wants to block it from servicing its own cars in the state | Autos | Dallas News

State Sen. Kelly Hancock, R-North Richland Hills, told The Dallas Morning News Tuesday that the code the bill would amend has long been on the books. He said that after reaching out to the Department of Motor Vehicles, his office determined that Tesla was actually in violation of existing law.

 

[Darmie]

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

If he really intended no harm, he would talk to Tesla but he fails to have any talks with them. I would expect better results from an elected Republican official by not hiding the true nature of this SB bill. Why on earth would they jeopardize travelers in the state of Texas that would not allow them to obtain service on their vehicle in time of need. I don't think they are making new friends by this bill and especially any owner of a Tesla automobile.

 

[reddy]

State Sen. Kelly Hancock, R-North Richland Hills, told The Dallas Morning News Tuesday that the code the bill would amend has long been on the books. He said that after reaching out to the Department of Motor Vehicles, his office determined that Tesla was actually in violation of existing law.

That is about as slimy as they come. DMV's opinion was that the NEW language would put Tesla in violation. The tweet didn't say anything about EXISTING law.

And note that Sen Hancock's statement is that his office determined . As in, nobody else on Earth has determined this, only us. And for a statute that has been on the books for years.

I was hoping the man would be reasonable. It now appears otherwise.

 

[StealthP3D]

State Sen. Kelly Hancock, R-North Richland Hills, told The Dallas Morning News Tuesday that the code the bill would amend has long been on the books.

I found the defense that it would only amend a law that had been on the books for years to be laughable.

It implies any amendments to long-standing laws must not be all that bad, LOL!

So, we can take a law that criminalizes murder, and amend it to say murder is capital offense except in cases where a duly elected state official murders his running mate, in which case it's only a misdemeanor with a maximum fine of $500. Since we are amending a law that has been on the books for years, it must be a good amendment, right?