Missouri HB 1124 Attempting to Ban Tesla with Semantics
Last-minute changes to Missouri HB 1124 could result in another state banning Tesla's direct-to-consumer sales model.
It appears that the next volley in the ongoing war against Tesla will come from The Show-Me State, who consequently is not particularly interested in letting the automaker show car buyers their product. According to Tesla, some back-door lobbying and last-minute rewording to Missouri HB 1124 may ultimately lead to Missouri becoming the next in a line of states to ban Tesla/hate freedom.
From Tesla’s blog:
In the last week before Missouri’s legislature ends its current session, dealers proposed new language in an existing bill that would force Missouri consumers to purchase new vehicles only through middleman franchised dealers. The bill, HB 1124, has been in circulation since December 2013. It was passed by the House on April 17 without the anti-Tesla language. Last night, the bill with the new anti-Tesla language passed the Senate after zero public consultation and could soon move to the House floor for a final vote, essentially without debate.
According to current Missouri law, franchisors cannot compete against their franchisees (e.g. Toyota is unable to compete against Toyota dealerships), but the re-wording seeks to change “franchisors” to “manufacturer,” thereby making Tesla unable to sell their vehicles in the state. Oh, boy! Semantics!
Love Legalese? Then You’re Gonna Love Missouri HB 1124!
From section 407.826, subsection 3 of Missouri HB 1124 (which states “A franchisor shall be prohibited from owning or operating a new motor vehicle dealership in this state”):
For the purposes of this section, “franchisor” shall be deemed to include any manufacturer of new motor vehicles which establishes any business location or facility within the state of Missouri, when such facilities are used by the manufacturer to inform, entice, or otherwise market to potential customers, or where customer orders for the manufacturer’s new motor vehicles are placed, received, or processed, whether or not any sales of such vehicles are finally consummated, and whether or not any such vehicles are actually delivered to the retail customer, at such business location or facility. Accordingly, for the purposes of this section, “new motor vehicle dealership” shall be deemed to include any business location or facility as described in this subsection.
Subsection 4 states:
In enacting subsection 3 of this section, it is the express intent of the legislature to prevent any manufacturer of new motor vehicles from circumventing the public policy as stated in section 407.811, by engaging in methods of retailing new motor vehicles which are designed to avoid the provisions of sections 407.810 to 407.835.
Emphasis mine. Section 407.810 to 407.835 is a little number known as the “Motor Vehicle Practices Act,” of which Section 407.826, Subsection 1, Article 1 is perhaps most pertinent: “A franchisor shall be prohibited from owning or operating a new motor vehicle dealership in this state.”
So there you have it. A change in terminology may well be the backdoor through which dealerships in Missouri will be able to shut out their competitor. Tesla states that it already operates a Service+ center in St. Louis that currently employs 15 people, and that it has plans to open a larger Service+ center in Kansas City later this year. Tesla has invested $2 million in the state, and the new center would create another $1 million investment and 15 more jobs.
Tesla notes that the reconfigured language does not actually impact the bill proper, which primarily deals with laws pertaining to ATVs, recreational vehicles, and utility vehicles.