Bill to Strengthen Auto Industry & Keep Tesla in New Jersey Gets Final Legislative OK

March 16, 2015

Legislation New Jersey Assembly Democrats Majority Leader Lou Greenwald, Timothy Eustace, Paul Moriarty and Pamela Lampitt sponsored to permit certain zero emission vehicle manufacturers to directly sell motor vehicles to consumers and require them to operate service facilities received final legislative approval 30-2 by the full Senate on Monday.

The bill (A-3216), which now heads to the Governor's desk, would keep Tesla in operation in New Jersey. Under a Motor Vehicle Commission decision, automobiles must be sold through franchises.

Under the legislation, which was approved by the Assembly in June, Tesla will be allowed to sell directly to consumers at up to four licensed locations in New Jersey. Manufacturers engaging in direct sales would also be required to operate at least one retail facility in the state for vehicle service, thus addressing public safety and consumer protection concerns.

"Tesla is an innovative company that has produced a top-rated, environmentally conscious product," said Greenwald (D-Camden/Burlington). "Their commitment to innovation, job-creation and customer satisfaction is precisely the kind of entrepreneurial spirit we should be encouraging in New Jersey. Unfortunately, the Motor Vehicle Commission's decision threatened to hamstring those efforts."

"As an electric car driver, I'm honored to be part of this effort to find solutions to keep a state-of-the-art product and the future of the auto manufacturing industry right here in New Jersey," said Eustace (D-Bergen/Passaic). "This legislation will incentivize entrepreneurship, create jobs, promote environmental protection and address the important concerns of consumers in our state."

"We need New Jersey to be at forefront of advancing technology if we want to put ourselves into position for strong economic development and job creation, and we also need to promote clean energy and the health benefits it brings to our residents," said Moriarty (D-Gloucester/Camden). "This bill ensures New Jersey will not be left behind."

"It makes no sense to keep innovative companies out of New Jersey," said Lampitt (D-Camden/Burlington). "New Jersey needs to promote innovation, economic development and job creation, not stand in the way. This bill reverses course and does the right thing for our state."

"We need to support innovation and clean energy," said McKeon (D-Essex/Morris). "New Jersey must be on the forefront of alternative energy industries or else we risk being left behind, and that would be bad for our economy and our environment."

The bill amends current law to allow any ZEV manufacturer to directly or indirectly buy from and directly sell, offer to sell, or deal to a consumer a ZEV if the manufacturer was licensed by the New Jersey Motor Vehicle Commission (MVC) on or prior to January 1, 2014.

This bill provides that ZEVs may be directly sold by certain manufacturers, like Tesla Motors, and preempts any rule or regulation that restricts sales exclusively to franchised dealerships.

The provisions of the bill would not prevent a licensed franchisor from operating under an existing license issued by the MVC.

The bill additionally requires manufacturers and franchisees to annually report to the Division of Taxation the number of ZEVs sold in the State each calendar year. Under current law, these vehicles are exempt from the state's sales and use tax.

"We have come together around a compromise solution--which will strengthen our auto industry, promote innovation and keep Tesla in our state," Greenwald said. "This bill is a win-win for New Jersey consumers."

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