Tesla Motors service bay with Model S in red and white

A surprise pair of bills in the New York State Assembly that would have narrowly targeted Tesla Motors and its direct-to-customer sales model has been put in neutral. The State Assembly ended the 2013 legislative session Friday without taking action on the bill and, since the lawmakers will not reconvene until January, it is effectively dormant for now.

Tesla said that had the bill passed, it would have had to close its stores and stop operations in New York, which is why Tesla CEO Elon Musk took a personal interest in the situation when it hit the headlines late last week. Once the bill was stopped, Musk tweeted, "The kill Tesla bill in NY was stopped in the 11th hour due to public outcry. Am super grateful to everyone who helped."

Behind the scenes, Automotive News reports that there were attempts at dealmaking that Tesla turned down. The Greater New York Automobile Dealers Association said it would allow Tesla's existing New York stores (all three of them) to keep operating but would not allow new stores to open. Tesla turned down the deal. A Republican sponsor of the bill also offered to put in a Tesla exception, so as not to "adversely impact any business operating in the state of New York," Senator Lee Zeldin told AN.

The president of the Greater New York Automobile Dealers Association, Mark Schienberg, told AN that Tesla should just set up dealers like other automakers (something Musk has explained is a bad idea) and that Musk has "just chosen that he'd rather not follow any of the rules and regulations and standards that each state has, and that's why there's a pushback right now."

The "pushback" here was started when the New York dealers association filed a suit against Tesla in late 2012. The NY State Supreme Court ruled this year that they did not have a claim to file suit. With this case and more pushback in Texas and Massachusetts and other states, we wouldn't be at all surprised if this issue goes national at some point.