Tax panel narrowly approves in-state Tesla sales

The logo for the Tesla Motors The logo for the Tesla Motors Photo: Stan Honda / AFP /Getty Images Photo: Stan Honda / AFP /Getty Images Image 1 of / 5 Caption Close Tax panel narrowly approves in-state Tesla sales 1 / 5 Back to Gallery

HARTFORD — Amid charges that Connecticut’s century-old franchise laws for selling automobiles are outdated, the tax-writing legislative Finance Committee on Monday approved a bill that would allow the upstart Tesla, Inc. to sell luxury electric cars directly to consumers.

But the relatively soft support for the legislation, which passed 25-20 and heads to the House of Representatives, indicates the bill may have to overcome more opposition from the 250 traditional car dealers that employ about 14,000 employees.

Supporters of the bill agreed that the legislation, which has died in recent years because of opposition from car dealers, might be revised by the time it reaches the House floor for debate.

But a bipartisan group said it’s time for the state to rethink the franchising law, which still exists in 23 states.

“I feel this technology, we need to embrace it here in the state Connecticut,” said Rep. Joe Gresko, D-Stratford, stressing that a compromise on the bill may be in the works for next week.

“Let’s give innovation a chance,” added Rep. John Hennessy, D-Bridgeport. “We have to question the business models we have,” said Rep. Gail Lavielle, R-Wilton.

“I think we have to address the franchise law,” said Rep. Terrie Wood, R-Darien, who voted for the bill. “We’re losing sales to these other states. We need to look forward. We need to be inventive and be entrepreneurial. Let’s embrace this company and welcome them to the state. Our state needs business.”

But opponents led by Sen. Michael A. McLachlan, R-Danbury, and Rep. Jason Perillo, R-Shelton, said that Tesla, led by its enigmatic CEP Elon Musk, hasn’t made a good argument for special treatment. They warned that the bill could create the possibility for disruption that can hurt a solid, dependable, locally owned retail car-franchise system.

“I think it’s a cool car,” McLachlan said. “I don’t feel comfortable kicking aside 100 years of franchise law in the state of Connecticut. I’m perplexed in trying to understand why the Legislature is willing to carve out a special exception for one company and kick aside this long history of success for new car sales in the state of Connecticut.”

He said that local car dealers have led the way in local involvement and philanthropy for generations. “I am trying to figure out why I have been unable to convince some of my Republican legislators that a carve-out like this is what we often are opposed to,” McLachlan said. “Policy making should be about covering all, not just special interests. Not just one company. Tesla can turn on sales in Connecticut tomorrow. Tesla won’t do that. Why? We have successful business people in the state Connecticut willing to be partners with Tesla.”

He warned that if the bill passes, it could trigger a spate of lawsuits, or possibly lead to other car companies bailing out of the franchise system.

“It would seem to me that there is a very simple compromise right in front of us,” said Perillo. “We have a car manufacturer that wants to sell cars through dealerships in Connecticut and we have existing dealerships that don’t want to disrupt the system that’s been in place for many years. So in order for both of those parties to accomplish what they want, the solution is simple: Tesla can sell cars through the dealerships that exist in Connecticut right now.”

kdixon@ctpost.com; Twitter: @KenDixonCT

A divided committee on direct-auto sales

In favor:

Sen. L. Scott Frantz, R-Greenwich

Rep. Laura Devlin, R-Fairfield

Rep. Adam Dunsby, R-Easton

Rep. Nicole Klarides-Ditria, R-Seymour

Rep. Gail Lavielle, R-Wilton

Rep. John Hennessy, D-Bridgeport

Rep. Patricia Billie Miller, D-Stamford

Rep. Chris Perone, D-Norwalk

Rep. Terrie Wood, R-Darien

Rep. Steve Stafstrom, D-Bridgeport

Sen. Marilyn Moore, D-Bridgeport

Against

Sen. Toni Boucher, R-Wilton

Rep. John Frey, R-Ridgefield

Rep. Laura Hoydick, R-Stratford

Rep. Brenda Kupchick, R-Fairfield

Rep. Jason Perillo, R-Shelton

Sen. Michael McLachlan, R-Danbury

Absent

Sen. Carlo Leone, D-Stamford

Rep. Livvy Floren, R-Greenwich

Rep. Steve Harding Jr., R-Brookfield

Rep. Bruce Morris, D-Norwalk