How Changes to Texas Law Will Help Elon Musk’s Companies — ProPublica

Elon Musk was pleading.

It was April 2013, and Musk stood at a podium in a small committee room within the basement of the Texas Capitol. The Tesla CEO requested the legislators gathered earlier than him to vary state regulation, permitting him to bypass the state’s highly effective automotive dealership foyer and promote his electrical automobiles on to the general public.

He painted a bleak image of what might occur in the event that they didn’t give him his method.

“We’d, I’m afraid, we might fail,” Musk advised the assembled representatives. “So for us, it’s a matter of life or dying.”

Clad in a darkish swimsuit as an alternative of his now ubiquitous black T-shirt and baseball hat, the youthful Musk was unable to steer lawmakers in Austin. That 12 months, the bill he wanted to go died.

Greater than a decade later, nonetheless, Musk’s fortunes contained in the Texas Capitol have modified — dramatically.

Musk is no longer solely one of many richest individuals on this planet, who, until recently, was a key member of President Donald Trump’s second administration, however he’s additionally change into one of the crucial highly effective enterprise and political figures within the state.

Throughout this 12 months’s legislative session, Musk’s lobbyists and representatives publicly advocated for nearly a dozen payments that might profit his corporations. The Texas Newsroom recognized these priorities by looking legislative data for committee testimony and different proof of his public stances.

Musk needed legislators to go new legal guidelines that might make it quicker and simpler for owners to install backup power generators, just like the kind Tesla makes, on their properties. He needed them to create new crimes so individuals who fly drones or intervene with operations at his rocket firm SpaceX might be arrested. And he needed to vary who managed the freeway and public beach near SpaceX’s South Texas website so he can launch his rockets in accordance with his timeline.

Musk acquired all of them.

In a Capitol the place the overwhelming majority of payments fail to go, all however three of Musk’s public priorities will change into regulation. The 2 payments his lobbyists overtly opposed are lifeless, together with a measure that might have regulated autonomous automobiles.

Musk made beneficial properties even on payments he didn’t publicly endorse. Texas lawmakers adopted the tech large’s lead by rewriting the state’s corporate laws and creating a new office modeled after the Division of Authorities Effectivity, the controversial effort he led within the Trump administration to chop federal spending.

By all accounts, Musk’s affect was nice sufficient that he didn’t need to formally handle lawmakers in particular person this session to make the case for any of his priorities.

Critics stated these new legal guidelines will hand Musk’s corporations more money, extra energy and extra safety from scrutiny as his business footprint continues to expand throughout Texas.

“The actual hurt is the affect of a personal firm on the selections made by authorities,” Cyrus Reed, the conservation director for the Sierra Membership’s Lone Star Chapter, advised The Texas Newsroom. The Sierra Membership is a part of a gaggle suing the state over SpaceX’s actions in South Texas.

Musk and his representatives didn’t reply to requests for an interview. He recently ended his run with DOGE, and his relationship with Trump has increasingly frayed.

Opposite to his slash-and-burn techniques in Washington, D.C., the place he bulldozed his method onto the scene after Trump’s reelection, Musk has performed the lengthy recreation to amass energy in Texas. He nonetheless hasn’t succeeded in altering Texas regulation to permit for Tesla direct gross sales, however that hasn’t stopped him from steadily investing his private {and professional} capital within the state over greater than a decade. Most of his companies, together with the tunneling agency The Boring Firm, social media giant X and Tesla, are now headquartered here. Whereas it’s nonetheless based mostly in California, SpaceX operates production, testing and launch websites throughout Texas.

Musk has additionally moved his private house to the state, reportedly securing properties in the Austin area and South Texas.

Within the Texas Capitol, Musk’s energy is delicate however simple.

Calendars and emails obtained by The Texas Newsroom by way of public data requests present his firm’s representatives met recurrently with lawmakers backing his precedence payments and invited Lt. Gov. Dan Patrick to tour SpaceX. Patrick, who leads the state Senate, additionally penned a letter to the Federal Aviation Administration supporting the rocket firm’s request to extend its launches in South Texas.

Texas politics, with its lengthy historical past of outsize characters, has by no means seen the likes of Musk, stated Rice College political scientist Mark Jones.

“Even within the heyday of the [George W.] Bush period, you couldn’t discover anyone who had such dramatic wealth as Musk, who additionally had the identical degree of entry and enterprise pursuits right here in Texas,” Jones advised The Texas Newsroom. “At this time, Elon Musk is arguably probably the most highly effective and influential personal citizen within the nation.”

“It’s All to Assist Elon”

When lawmakers convened their 2025 legislative session in January, considered one of Musk’s prime priorities was rapidly clear. He needed extra management over the area around SpaceX’s launch site in South Texas.

Often called Starbase, the large rocket testing and launch facility has come to dominate the small rural space between Brownsville, on the border, and the Gulf of Mexico. It’s the launch website for Starship, the rocket meant to finally take people to Mars and the guts of Musk’s mission to make people a multiplanetary species. The FAA not too long ago gave SpaceX permission to increase Starship launches fivefold.

Though SpaceX owns a lot of the land round Starbase, county officers retained the authority over entry to the adjoining public seaside, referred to as Boca Chica. The county labored intently with SpaceX to make sure the realm was cleared forward of launches, however the firm’s leaders didn’t have final management over the method.

That modified this 12 months. First, Musk decided to incorporate the launch website as its personal metropolis. That occurred on Could 3, when the few residents who dwell within the space — most of whom The Texas Newsroom determined work for SpaceX — voted to create the new city of Starbase.

Musk then needed state lawmakers at hand the brand new metropolis the facility to shut Boca Chica Seashore and the adjoining public freeway through the week, a change the county officers opposed.

State Sen. Adam Hinojosa, a newly elected Republican who represents the realm, authored the laws to shift management to Starbase. Dozens of SpaceX staff acquired concerned within the effort, submitting pages of identical comments to lawmakers in help.

Democrats succeeded in killing Hinojosa’s invoice, prompting native activists to celebrate. Their victory was short-lived. Late within the session, lawmakers determined as an alternative to shift a few of this energy to the Texas House Fee, which facilitates the state’s house exploration agenda.

The brand new regulation states that the fee’s board can shut highways and gulf seashores with the approval of an area municipality, which, on this case, is Starbase. SpaceX retains a connection to the fee itself: Kathy Lueders, who confirmed that she left her job as Starbase basic supervisor final month, nonetheless sits on the House Fee board. She directed further inquiries to the fee.

The House Fee declined to reply questions on SpaceX’s potential future involvement with these discussions.

“The way in which I view it’s SpaceX needed a specific amount of energy,” stated Reed, with the Sierra Membership. “And on the finish of the day, they didn’t fairly get it, however they acquired one thing fairly shut.”

The bill handed alongside largely partisan traces. Republican state Rep. Greg Bonnen, who authored the invoice, didn’t reply to a request for remark in regards to the function Starbase might play now that it’ll change into regulation.

Lawmakers handed a number of extra payments to learn spaceports, the websites the place spacecraft launch, like SpaceX.

Whereas Texas is house to a number of spaceports, together with Amazon founder Jeff Bezos’ Blue Origin, SpaceX dwarfs the remainder in measurement and scope of affect throughout the state and nation, boasting massive federal authorities contracts and a rising satellite tv for pc {industry}.

Hinojosa was an creator or sponsor on most of those payments; he didn’t reply to a number of requests for an interview or remark for this story.

Apart from the seaside closure laws, many handed with the help of Democrats.

At SpaceX’s urging, Texas lawmakers handed a measure to ban drones over spaceports. In addition they added spaceports to the state’s “critical infrastructure” facilities, which already embody airports and navy bases. The regulation will make it a felony to deliberately harm or interrupt the operation of any website the place a spacecraft is examined or launched. Related crucial infrastructure legal guidelines have been utilized in different states to arrest people protesting oil and gasoline pipeline initiatives.

Bekah Hinojosa with the South Texas Environmental Justice Community, an area activist group, advised The Texas Newsroom the brand new crucial infrastructure regulation will let Musk “militarize our Boca Chica Seashore for his harmful rocket testing endeavors.”

The Sierra Membership and different teams from South Texas, together with an area Indigenous tribe, are suing the state, arguing that closing Boca Chica violates an modification to the Texas Structure that protects access to public beaches.

The Normal Land Workplace, the principle defendant in that swimsuit, declined to remark. In courtroom filings, Texas Lawyer Normal Ken Paxton argues the state can nonetheless regulate seaside entry for public security causes and that it can’t be sued on this case as a result of it has immunity. The case is pending on the Texas Supreme Courtroom.

Legislators additionally handed two extra new legal guidelines that may defend corporations like SpaceX from public scrutiny and legal challenges.

One will exempt sure navy and aerospace points from public conferences legal guidelines, permitting elected officers in some circumstances to debate these matters behind closed doorways. The proposal was so regarding to residents who dwell near SpaceX’s facility close to Waco, the place locals say the corporate’s rocket testing has spooked livestock and damaged homes, that they submitted a dozen feedback in opposition to it.

This regulation went into impact on Could 15.

Another new regulation will make it more durable for crew members and sure different staff to sue house flight corporations. This, like most new laws accepted this session, will change into regulation on Sept. 1.

SpaceX’s solely vital public defeat throughout this 12 months’s legislative session was the failure of a invoice it supported to present spaceports a tax cut. The measure would have cost nearly $14.5 million over 5 years, in accordance with an official estimate from the Legislative Finances Board.

Moriba Jah, a professor of aerospace engineering and engineering mechanics on the College of Texas at Austin, believes Texas is pandering to Musk.

“It’s all to assist Elon,” stated Jah, who added that his viewpoint is rooted in resisting insurance policies that allow what he referred to as “environmental plunder masked as ‘innovation.’” He has considerations that the state is investing in spaceports, most notably Musk’s, whereas carving out exceptions that prohibit public perception and enter into what’s occurring at these services.

“There’s this entire cloak of secrecy with no matter Elon is doing,” Jah stated. “We won’t and mustn’t stop to launch satellites or discover house. However the way in which during which we do it issues lots.”

“They By no means Come Out of the Shadows”

This 12 months, Tesla’s lobbyists publicly advocated in opposition to solely two payments. Each died.

One was a GOP-authored proposal meant to create a buffer zone between properties and large-scale power storage services like the kind Tesla sells.

The other bill would have imposed extra rules on the kind of automobiles that Musk is rolling out as robotaxis in Texas, and would have required a public listening to if a collision involving an autonomous automobile resulted in a fatality.

Invoice creator Rep. Terry Canales, an Edinburg Democrat, believes his laws failed as a result of it was not pro-industry sufficient.

“Tesla is the worst actor that I’ve ever handled within the Capitol. They’re subversive. They by no means come out of the shadows,” Canales advised The Texas Newsroom. “Not solely did I not hear from them, I didn’t count on to listen to from them as a result of that’s the way in which they function.”

Lawmakers as an alternative superior a different bill, one with a lighter regulatory contact that was crafted with enter from the autonomous automobile {industry}.

It is going to require industrial operators, similar to robotaxi and driverless large rig corporations, to acquire authorization from the state. This approval might be revoked if the corporate’s automobiles endanger the general public, together with inflicting “severe bodily harm,” although it requires no public hearings within the case of a fatality, as Canales’ invoice would have finished. Autonomous automobile corporations can even need to develop plans for interacting with emergency responders.

Tesla took a impartial stance on the laws. However the invoice’s creator, state Sen. Robert Nichols, R-Jacksonville, advised The Texas Newsroom that Tesla’s crew participated in work teams and stakeholder conversations with {industry} teams, trial attorneys and others.

Texas has been on the forefront of testing this expertise for years, rolling out its first rules in 2017. However with extra autonomous automobiles hitting the streets, Nichols stated it was time to make clear the principles and referred to as his invoice “an actual alternative right here to truly enhance security.”

Nichols’ laws initially died within the Texas Home. However with lower than every week earlier than lawmakers packed as much as go house, a Home member added everything of Nichols’ invoice as an modification to another transportation bill, which can change into regulation Sept. 1.

Tray Gober, a private harm lawyer who handles automobile crash circumstances in Austin, stated it’s sensible to get new rules for autonomous automobiles on the books. However he worries that Texas is speeding to present its blessing to a expertise that has not been absolutely examined.

“We’re not speaking about rockets crashing into the ocean. We’re speaking about automobiles crashing into different individuals,” he stated, comparing Tesla to SpaceX. “There’s going to be individuals which are damage throughout this technique of bettering these programs, and that’s unlucky. I feel it’s considered as collateral harm by these corporations.”

When requested about considerations that there might be fatalities because the variety of driverless automobiles grows in Texas, Nichols stated, “There most likely shall be. Ultimately there shall be. I’d not doubt that.” However he pointed to research displaying autonomous vehicles are safer than human drivers.

“For those who begin trying on the breakdown of the fatalities on the roads and the crashes and the wrecks, what causes them? It’s not gear failure. It’s driver distraction,” he advised The Texas Newsroom.

Critics of those research argue their scope is just too slim to make conclusions in regards to the security of self-driving expertise. Citing security considerations, some native lawmakers requested Tesla’s robotaxi rollout in Austin to be delayed. The company continued with the launch but with human monitors within the passenger seats.

Many Democrats opposed Nichols’ proposal. However no less than three different payments affecting Tesla acquired bipartisan help.

At instances, the Sierra Membership was preventing in opposition to Musk’s SpaceX payments whereas working along with his Tesla lobbyists on clear power laws, stated Reed, the membership’s conservation director. For instance, Tesla and the Sierra Membership each supported laws to create new fire standards for battery power storage services and handle the environmental and monetary challenges related to decommissioning them.

Tesla additionally backed a invoice that had bipartisan help to make it simpler for owners to put in backup energy mills, similar to the corporate’s Powerwall.

Reed stated Musk’s shift to the proper has created attention-grabbing bedfellows, generally making it simpler for Republicans to again a number of the power insurance policies extra historically related to progressives.

He remarked, “It’s an attention-grabbing time in our nation, proper?”

Musk’s Oblique Affect

For all of the payments Musk pushed to see go, he additionally not directly influenced the creation of recent legal guidelines on which he didn’t take a public stance.

Texas lawmakers created the state’s own DOGE office housed underneath the governor, the title an homage to Musk’s controversial federal cost-slashing effort in Washington, D.C.

Musk himself took no public function in creating the brand new workplace. However at a signing ceremony for the invoice, Gov. Greg Abbott defined he was the inspiration.

Texas legislators additionally rewrote the state’s company legal guidelines after Musk raised considerations about enterprise codes in different states. Authored by Republican state Sen. Bryan Hughes, the rewrite shields enterprise leaders from lawsuits and establishes thresholds for the kinds of authorized challenges shareholders can file.

Musk and his lobbyists by no means got here out in help of the invoice, however he has lengthy complained that states wanted to shore up protections for CEOs and different enterprise leaders.

Musk started crusading on the problem after his $55 billion compensation package at Tesla was challenged in Delaware’s enterprise courts. Musk moved many of his businesses elsewhere, together with Texas, and publicly urged other companies to “get the hell out of Delaware.”

The laws written in response was dubbed the “DExit” invoice.

“Texas is a lot better than Delaware,” Musk posted on X in early April, simply days after the invoice handed the state Senate. “If Delaware doesn’t reform, it is going to lose all its company enterprise.”

Final 12 months, a Delaware decide dominated Musk’s pay package violated his fiduciary duties to the corporate’s stockholders. He received most of it back in a shareholder vote, however the decide again rejected his pay package in December.

In an interview, Hughes advised The Texas Newsroom he heard enter from completely different teams in crafting the Texas laws and couldn’t bear in mind whether or not Musk’s corporations have been concerned.

Abbott signed the DExit bill and a handful of different enterprise payments into regulation on Could 14. Standing behind him at a public ceremony marking the event have been Hughes and a big group of enterprise representatives.

Standing behind Hughes was a consultant from Tesla.