House OKs Anti-Price Gouging Measure
WASHINGTON - Gouging drivers on the price of a gallon of gasoline will
become a federal crime under legislation passed Wednesday in the House. The
bill, sponsored by U.S. Rep. Heather Wilson, R-N.M., passed on a vote of 389-34.
It prohibits price gouging on gasoline, diesel fuel, crude oil, home heating
oil and biofuels. It does so regardless of whether the gouging occurs amid the
crisis conditions like those following Hurricane Katrina or gouging drivers is
just business as usual.
"We need to do something, not only to bring these prices down but we
need to do something to make sure there is adequate supplies available at every
service station in the country that serves the American driving public,"
said U.S. Rep. Joe Barton, R-Texas. "Three-dollar-a-gallon gasoline may
mean nothing to some people, but it sure means something to most, and everything
to the poorest of our society. If the spikes in gasoline prices are due to
anything other than market conditions, consumers have a right to count on us,
the government, for protection from ripoffs."
"It seems to me that this is one thing we have to do," said Wilson,
a member of the House Energy and Commerce Committee "We want America to be
more energy independent and that is going to take a long-term, balanced approach
that deals with supply, demand and protecting consumers. This is one piece of
that puzzle."
Barton and Wilson worked with Science Committee Chairman Sherwood Boehlert,
R-N.Y., to draft the legislation. Boehlert praised the legislation.
"This bill is far stronger than the price gouging language the House
considered last fall and could offer Americans true protection if price gouging
is occurring," Boehlert said. "The bill will allow new suits under
federal law against retail and wholesale price gouging, and those suits can be
brought by either the federal government or a state attorney general. The
penalties in the bill are significant, and the bill allows criminal as well as
civil penalties."
Among the bill's highlights:
- Directs the FTC to define "price gouging," "wholesale
sale" and "retail sale" through rule-making within six months
of enactment.
- Provides for strong civil enforcement by the FTC and by states' attorneys
general, and criminal enforcement by the U.S. attorney general and the
Department of Justice.
- Provides for civil penalties for price gouging.
- For "wholesale sale" violations, the penalties are three
times the ill-gotten gains of the seller, plus an amount not to exceed
$3 million per day of a continuing violation.
- For "retail sale" violations, the penalties are three times
the ill-gotten gains of the seller.
- Requires any civil penalty imposed to be deposited into any either
account or fund used for paying compensation to consumers for violation
of state consumer protection laws or into a state's treasury general
fund.
- Provides for criminal penalties.
- "Wholesale" violations will be punishable by a fine of up to
$150 million, imprisonment for up to two years, or both.
- "Retail sale" violations will be punishable by a fine of no
more than $2 million imprisonment for up to two years, or both.
Barton also said that the definition of price gouging would not cover spikes
in gas prices that are caused by market conditions.
"Committee hearings have demonstrated that when artificial regulation
supplants normal supply and demand as the primary means of pricing a commodity,
the result is market distortions and shortages," Barton said. "I will
strenuously oppose any policies that choke off the flow of gasoline to drivers.
We want to have effective enforcement against scams without interfering with the
efficient functioning of the market."
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