BILL ANALYSIS
By: Leibowitz
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Current law makes post-disaster price gouging a violation of the Deceptive Trade Practices Act. However, the statute sets no threshold or definition of what constitutes price-gouging. HB 695 defines what is an unconscionable price and lays out a procedure to prevent price-gouging after a disaster. The Governor would be able to issue a proclamation detailing the area where the measures in this bill would have effect. Where it has effect, it would be illegal to price an essential good or service 20% more than it cost immediately before the disaster. The exception to this would be for goods and services whose prices genuinely rose more than 20% because of the disaster.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
SECTION 1. This bill defines essential consumer goods and services. It calls for the Governor to declare an abnormal disruption of the market because of a disaster and the geographical area affected. The bill provides that the Governor or the Legislature may terminate the proclamation.
The bill prohibits the sale of an essential good or service in the area for a price 20% more than it cost immediately before the disaster. A violation of this would constitute a deceptive trade practice. It would be a defense to liability if the price of the seller's essential good or service actually went up more than 20% either because of the disaster or unrelated events.
SECTION 2. Effective Date is September 1, 2005
EFFECTIVE DATE
September 1, 2005
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute modifies the original version of the bill in Section 1 by correcting an incorrect statutory cite in Sec. 48 .005 (c) of the original bill.