N.J. lawmakers approve direct car sales by Tesla

Philadephia Inquirer
March 17, 2015
Andrew Seidman
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Electric-car manufacturers such as Tesla Motors would be able to bypass auto dealerships and sell their vehicles directly to consumers under a bill passed by the Legislature on Monday.

The Democratic-controlled Senate also tried but failed to override Gov. Christie's controversial veto of legislation that would overhaul the Port Authority of New York and New Jersey.

The Senate voted 30-2 in favor of the Tesla bill. The Assembly passed it 77-0, with one abstention, in June.

It now heads to Christie, about a year after the Motor Vehicle Commission ruled against Tesla's direct-sales model and the company's chief executive, Elon Musk, accused the governor of cutting a "backroom deal" with the auto-dealer lobby.

Christie had said Tesla needed to work with the Legislature to change the law to accommodate its model. Kevin Roberts, a spokesman for the Republican governor, said the bill would "be reviewed in the 45 days we have to take action now that it has passed in a final form."

Under current regulations, cars must be sold through franchised dealers.

Tesla opened its first store in 2012 and had been selling cars directly to consumers until the MVC issued new regulations in April 2013. Since then, Tesla's stores have served "essentially as galleries," spokesman Will Nicholas said. Consumers can test-drive cars but cannot purchase them or discuss details such as pricing, financing, and leasing, Nicholas said.

Tesla, warning that the MVC rules would destroy its direct-sales model, threatened to leave.

Tesla operates four stores in the state - two in Paramus, Bergen County; one in Short Hills, Essex County; and one in Springfield Township, Union County, Nicholas said. He did not have immediate comment on the legislation.

Environmentalists have praised Tesla because its cars do not emit carbon. Its Model S sedan sells for $70,000 to $104,000, according to autoguide.com.

The measure would allow direct sales by makers of zero-emission vehicles.

"Tesla is an innovative company that has produced a top-rated, environmentally conscious product," said Assembly Majority Leader Louis D. Greenwald (D., Camden), a bill sponsor. "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."

In a more contentious vote, Democrats, who hold a 24-16 majority in the Senate, failed to override Christie's veto of a bill that would have overhauled the Port Authority.

Democrats needed three Republicans to join them to achieve the two-thirds vote required for an override. But only one, Sen. Mike Doherty of Warren County, did.

Christie has used his pen liberally since he took office in 2010, and the Democratic-controlled Legislature has repeatedly failed to override his vetoes of bills that passed with GOP support.

The initial Port Authority legislation passed both houses of the New York and New Jersey legislatures last year. Then in December, Christie and New York Gov. Andrew Cuomo, a Democrat, announced they would veto the measure and offered their own plan, based on a report by a panel they appointed.

Bill sponsors said the measure was aimed at requiring greater transparency and accountability at the Port Authority, which came under scrutiny when it imposed massive toll hikes in 2011 and then became embroiled in the George Washington Bridge lane-closure scandal.

The bill would have established a new Office of the Inspector General and required the agency to submit to annual audits, among other provisions. The bistate agency operates the region's airports, tunnels, and bridges.

Federal prosecutors have been investigating the September 2013 lane closures for more than a year. E-mails subpoenaed by legislators and disclosed in January 2014 showed a former top Port Authority official apparently plotting with a Christie staffer to close the lanes.

Following the veto, State Sen. Thomas H. Kean Jr., the Republican leader of Union County, introduced a measure he said combined components of the initial bill and the governors' proposal.

Even as they blasted the Port Authority as corrupt and the bridge scandal as an embarrassment, Republicans urged Democrats to work with them on a compromise rather than forcing an override vote.

Sen. Bob Gordon (D., Bergen) rejected Kean's proposal as "watered-down" and "substantially weaker." He said Kean's bill stripped away guidelines for real estate transactions and competitive bidding, and weakened independent monitoring and legislative oversight.

Kean said the Democrats' bill had not advanced in New York. He said his bill was the only one that had a "chance to be signed." It would "get the Port Authority out of the non-transportation business," he said.

Doherty, the Republican who voted in favor of the override, said he would also support Kean's bill if it reached the Senate floor for a vote.

"Every opportunity I have to say I don't support a corrupt Port Authority, I want it reined in, I'm going to support that," he said.

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