With bulked-up lobbying teams making a free-market pitch at the Texas Capitol, Tesla Motors and the ride-for-hire services Uber and Lyft seemed to have good reason for optimism that lawmakers would drop regulations complicating their expansion here. After all, state leaders relish calling Texas “wide open for business.”
But four months into the session, the companies have little to show for the millions of dollars they spent hiring a combined 59 lobbyists, with Tesla and Uber among the biggest teams at the Capitol.
As legislative deadlines loom, the bills they were steering appear to have run out of gas.
Tesla’s battle against the state’s powerful auto dealers perhaps had the highest profile.
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The California company’s model is simple: It sells its high-end electric cars directly to consumers, bypassing middleman dealers. But a longstanding state law bars that practice in Texas, meaning buyers here can only order the car online from the company’s headquarters in California.
Dealers say that law protects consumers and that efforts to overturn it threaten their livelihoods.
Elon Musk, Tesla’s CEO, tried to poke holes in the law during the 2013 session and was crushed. Legislation that would have allowed electric car manufacturers to sell up to 5,000 cars directly only wriggled out of a House committee before it died.
Musk, who calls the current law “extremely un-Texan,” reloaded in 2015, pumping more contributions into campaign coffers and spending hundreds of thousands of dollars on 22 lobbyists, more than doubling the size of his team.
With some high-profile names, Tesla’s lobbyists pushed legislation – House Bill 1653 and its companion, Senate Bill 639 — to allow auto manufacturers that have never sold their cars through independent dealerships in Texas (like Tesla) to operate up to 12 stores. It was modeled on deals Tesla has forged in other states including New York, Ohio, Pennsylvania and, most recently, Maryland.
His efforts appear to have stalled out.
The bills haven’t even drawn a committee vote in either chamber, and Tesla’s lobbyists and lawmakers concede they are doomed. The Senate bill never even drew a hearing in the Committee on Natural Resources and Economic Development. State Sen. Troy Fraser, the committee’s chairman, recently told The Texas Tribune that the reason was simple: His members didn’t want to do so until the House passed its version. He said he sees no reason to “piss off all the auto dealers’’ on a vote that he believes would ultimately be meaningless.
State Sen. Kelly Hancock, R-North Richland Hills, the bill's sponsor, was not available for comment on Wednesday.
Proponents of Tesla’s expansion call the apparent failure just another sign of the long-entrenched relationship auto dealers have with the Legislature, and the difficulties outside parties face in overcoming it.
According to a recent report by Texans for Public Justice, a liberal watchdog group that tracks the influence of money in politics, dealer interests outspent Musk 40 to 1 in the 2014 election cycle — contributing more than $1 million to Gov. Greg Abbott and almost $800,000 to Lt. Gov. Dan Patrick.
Tom “Smitty” Smith of the liberal consumer group Public Citizen said much of that influence comes from dealers back in lawmakers’ home districts.
“We tend to think of lobby power as concentrating only in Austin,” he said. “But the back-home lobby – the organized back-home lobby can often triumph over the Austin-based lobby.”