Tag Archive | "legislation"

Mich. Governor Signs ‘Anti-Tesla’ Bill

LANSING, Mich. — Michigan Governor Rick Snyder signed into law on Tuesday legislation that adds tighter restrictions on direct-to-consumer vehicle sales. The move effectively bans Tesla Motors from selling vehicles in the state.

Introduced in May, House Bill 5606 originally focused on prohibiting auto manufacturers from dictating what fees a franchised dealer can charge customers. But thanks to a procedural loophole, state lawmakers were able to toss in a last-minute amendment without public comment or debate. And that amendment reinforces a ban on selling vehicles directly to consumers.

The “Tesla Motors Team” reacted the day after the state legislature approved the legislation on Oct. 15. The electric-car maker called the bill a “raw deal,” writing that the last-minute change created an “effective prohibition against Tesla operating in Michigan. The company added that the move was a continuation of the “anti-competitive behavior” the company faced in New Jersey and Missouri.

“By striking a single, but critical word from … the law governing franchise relations in Michigan, the dealers seek to force Tesla into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers,” Tesla stated in its blog post.

Gov. Snyder, however, said Tesla misunderstood what the new law does.

“The bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan,” Snyder said in a press release. “This is already prohibited under Michigan law.”

The last-minute amendment deleted the word “its” from a sentence in the existing law. A press release from the Governor’s office said that the change was made to allow manufacturers who don’t have their own franchised dealers to sell through another manufacturer’s dealer network.

Snyder added that lawmakers should discuss the current business model to determine if it was good for the state’s consumers.

“We should always be willing to re-examine our business and regulatory practices with an eye toward improving the customer experience for our citizens and doing things in a more efficient and less costly fashion,” said Snyder.

General Motors issued a statement yesterday in support of the legislation, saying the new law would “provide stability and support for our dealers.”

“Further, it will ensure we compete under the same rules in the marketplace as other automobile manufacturers,” GM stated.

Tesla officials could not be reached for comment.

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Tesla Makes Strides on East Coast

Albany, NY and Trenton, NJ — Telsa Motors made strides in two East Coast states this week, when the New Jersey Assembly passed a bill favorable to the electric automaker and New York Governor Andrew M. Cuomo signed legislation resolving a dispute between Tesla and auto dealers.

The New York legislation, which was signed by Gov. Cuomo on June 16, will allow Tesla to maintain its five currently licensed retail locations in New York State. Additional Tesla retail locations will be established under a strengthened dealer franchise law, agreed upon by Tesla, the New York State Automobile Dealers Association and the Greater New York Automobile Dealers Association.

“This agreement is a big win for New York State — one that proves the Empire State remains a leader in spurring innovation, supporting economic growth, and creating new opportunities for all,” Gov. Cuomo said in a statement. “New York’s franchised auto dealers and manufacturers as well as innovative companies like Tesla are critical to our state’s economy, and this bill ensures that both sides will thrive and be able to grow the market for cutting edge zero-emission vehicles.”

On the same day, the New Jersey Assembly voted to approve a bill that allows manufacturers to directly sell zero-emissions vehicles to consumers at a maximum of four locations in the state. The bill still must pass the state Senate and be signed into law by Governor Chris Christie.

In April, the New Jersey’s Motor Vehicle Commission voted unanimously to prohibit Tesla from selling directly to consumers in the state. At the time, Tesla CEO Elon Musk called the move a “backroom deal” with Gov. Christie to circumvent the legislative process.

“The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures ‘consumer protection.’ If you believe this, Gov. Christie has a bridge closure he wants to sell you!” Musk wrote at the time. “Unless they are referring to the mafia version of ‘protection,’ this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.”

The electric-vehicle maker still faces legislative roadblocks in a number of other states, including Missouri, where last month lawmakers added language to an existing bill that would require consumers to purchase vehicles through franchised dealerships.

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House Committee Votes to Repeal CFPB Auto Lending Guidance

Washington, D.C. — A bill supporters believe will bring more transparency into the Consumer Financial Protection Bureau’s guidance-making process was passed by the House Financial Services Committee on Tuesday.

The bill, H.R. 4811, adds safeguards such as requiring prior public notice and greater transparency of future CFPB guidance. In addition, the bill would rescind a bulletin the bureau issued in March 2013. It stated that auto finance sources would be held responsible for discriminatory pricing resulting from policies that permit dealers to mark up interest rates as compensation for services rendered. The CFPB would be allowed to reissue the guidance, but with transparency and public review.

The Guidance Transparency Act bill passed the committee on a bipartisan 35-to-24 vote, with Democrats Joyce Beatty (Ohio), Steven Horsford (Nev.) and David Scott (Ga.) supporting the bill. It now heads to the full House of Representatives for a vote.

The bill will now be voted on by the full House of Representatives.

Associations such as the National Automobile Dealers Association (NADA) have been vocal in support of the bill. On June 10, the NADA and the Alliance of Automobile Manufacturers, the American International Automobile Dealers Association (AIADA), American Financial Services Association (AFSA), Recreation Vehicle Industry Association (RVIA), and the Recreation Vehicle Dealers Association (RVDA) sent a letter to the committee in support of the bill.

“The auto finance guidance pressures indirect auto finance companies (lenders who finance auto loans originated by dealers) to eliminate the ability of dealerships to discount the interest rates offered to customers who finance their auto purchase,” the letter read, in part. “The bureau embarked on this new policy, by its own subsequent admission to Congress, without first studying what impact these policy changes would have on the auto finance market, or the marginally creditworthy.”

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Congress Votes to End Dealer Paperwork Requirement

WASHINGTON, D.C. — On May 23, the U.S. Senate voted unanimously to pass a bill that eliminates a provision in the Clean Air Act requiring dealers to provide consumers with a certificate confirming a vehicle’s compliance with the law. The bill is now headed to the president’s desk.

The National Automobile Dealers Association-backed measure eliminates a 1977 federal mandate requiring auto dealers to verify that new vehicles are compliant with the Clean Air Act.

“All new cars and light trucks delivered to dealerships from the factory already come with documentation that the vehicles conform to federal emission laws,” said Forrest McConnell, NADA chairman. “Requiring dealerships to fill out a form to recertify that a new vehicle complies with the Clean Air Act is redundant and unnecessary.”

McConnell added that new-vehicle owners can find documentation of Clean Air Act compliance under the hood of the vehicle, on the Internet, or in the owner’s manual and supplements, making additional government paperwork provided by the dealer unnecessary.

The bill was first introduced by Reps. Bob Latta (R-Ohio), and Gary Peters (D-Mich.), and passed the U.S. House of Representatives by a vote of 405 to 0 on Jan. 8. Sens. Debbie Stabenow, (D-Mich.), and Deb Fischer, (R-Neb.), helped guide passage of H.R. 724 through the senate.

“NADA commends Reps. Latta and Peters and Sens. Stabenow and Fischer for their leadership on behalf of small business auto dealers to cut red tape and reduce an unnecessary regulation,” McConnell added. “Because of their bipartisan efforts, auto dealers can focus on helping customers instead of pointless paperwork.”

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Tesla: New Wording in Missouri Bill is ‘Sneak Attack’ by Dealers

PALO ALTO, Calif. — In a statement posted on its website last week, Tesla Motors admonished Missouri lawmakers for adding new language to an existing bill that would require consumers to purchase vehicles through franchised dealerships, making the company’s sales model illegal. The bill passed the Senate on May 7 and could move to the House for a final vote.

“We have just become aware of a last-minute attempt by the auto dealers lobby, via pressure on legislators, to bar Tesla from selling its vehicles direct to consumers in the state,” the statement read, in part. “This extraordinary maneuver amounts to a sneak attack to thwart due process and hurt consumer freedom in Missouri.”

House Bill 1124 was passed by the House on April 17 minus the language banning direct-to-consumer vehicle sales. Dealers have since thrown their weight behind the new wording. Tesla faces similar hurdles in states like New Jersey, Arizona and Texas, where the direct sale of vehicles to consumers has been banned.

“This change is not an innocent, minor amendment. It is completely unrelated to the original bill, which was about laws regarding all-terrain vehicles, recreational off-highway vehicles, and utility vehicles,” read Tesla’s statement. “It is also a complete 180 from current law. The current statute only bars franchisors from competing against their franchisees (for example, Ford cannot compete against Ford dealerships).”

The automaker currently operates a service center in Missouri and plans to open another in Kansas City later this year.

“This debate should be held in the full light of day with all sides being given an opportunity to make their case. Instead, the dealers are again trying to ram through a provision under the cover of darkness and without public debate,” Tesla said in its statement. “The people of Missouri deserve better from their elected officials.”

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If Tax Breaks for Business Investment are a Good Idea, Why Not Make Them Permanent?

Via The Business Journals

Small businesses could expense up to $500,000 a year in capital expenditures, and the research and development tax credit would be strengthened and made permanent, under legislation approved by a House committee Tuesday.

Don’t get too excited, however. These bills may pass the House, but they likely won’t go anywhere in the Senate, at least in their current form.

The House Ways and Means Committee approved six bills that would permanently extend tax breaks that expired Dec. 31. These bills would cost the federal government $310 billion in lost tax revenue over the next 10 years.

Making these tax breaks permanent without offsetting their cost is fiscally irresponsible, said Rep. Sander Levin, D-Mich., the committee’s ranking Democrat.

But Chairman Dave Camp, R-Mich., said “short-term tax policy is bad for business, and bad for economic growth and jobs.”

There is bipartisan agreement on the value of these six tax breaks, he said. By making them permanent, “businesses small and large will have the ability to plan for the future, invest in the economy, hire new workers, and invent new technologies and products.”

Earlier this month, the Senate Finance Committee approved legislation that would extend around 50 tax breaks through the end of 2015. The cost of this bill wasn’t offset either, but this is only a temporary extension. Committee Chairman Ron Wyden, D-Ore., said the bill puts “an expiration date on the status quo” while giving businesses tax certainty for two years as Congress debates comprehensive tax reform.

None of these tax breaks will be extended unless the House and Senate work out their differences on this issue.

Many business groups support comprehensive tax reform, which would eliminate many tax breaks in return for lower tax rates. In the meantime, however, tax breaks like the R&D tax credit and Section 179 expensing for small businesses need to be revived and strengthened in order to boost the economy, they contend.

“The extension of these provisions would foster more effective business decisions and help spur capital investment and job creation,” the U.S. Chamber of Commerce wrote in a letter to House Ways and Means Committee leaders.

Making the R&D tax credit permanent would be “a game changer for our industry,” said Matt Hettinger, senior vice president at TechAmerica, a technology trade association.

“The United States was the originator of the credit, but we’ve been bested by our competitors as of late,” he said. “These changes help even the playing field. “

Small businesses, meanwhile, strongly support raising the limit for Section 179 expensing to $500,000. That limit dropped to $25,000 in 2014. Section 179 expensing allows small businesses to immediately deduct all of the cost of new equipment such as computers, vehicles and office furniture instead of having depreciate the cost over time.

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