H.R. 1252 (110th): Federal Price Gouging Prevention Act

110th Congress, 2007–2009. Text as of May 24, 2007 (Referred to Senate Committee).

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IIB

110th CONGRESS

1st Session

H. R. 1252

IN THE SENATE OF THE UNITED STATES

May 24, 2007

Received; read twice and referred to the Committee on Commerce, Science, and Transportation

AN ACT

To protect consumers from price-gouging of gasoline and other fuels, and for other purposes.

1.

Short title

This Act may be cited as the Federal Price Gouging Prevention Act.

2.

Unconscionable pricing of gasoline and other petroleum distillates during emergencies

(a)

Unconscionable pricing

(1)

In general

It shall be unlawful for any person to sell, at wholesale or at retail in an area and during a period of an energy emergency, gasoline or any other petroleum distillate covered by a proclamation issued under paragraph (2) at a price that—

(A)

is unconscionably excessive; and

(B)

indicates the seller is taking unfair advantage of the circumstances related to an energy emergency to increase prices unreasonably.

(2)

Energy emergency proclamation

(A)

In general

The President may issue an energy emergency proclamation for any area within the jurisdiction of the United States, during which the prohibition in paragraph (1) shall apply. The proclamation shall state the geographic area covered, the gasoline or other petroleum distillate covered, and the time period that such proclamation shall be in effect.

(B)

Duration

The proclamation—

(i)

may not apply for a period of more than 30 consecutive days, but may be renewed for such consecutive periods, each not to exceed 30 days, as the President determines appropriate; and

(ii)

may include a period of time not to exceed 1 week preceding a reasonably foreseeable emergency.

(3)

Factors considered

In determining whether a person has violated paragraph (1), there shall be taken into account, among other factors—

(A)

whether the amount charged by such person for the applicable gasoline or other petroleum distillate at a particular location in an area covered by a proclamation issued under paragraph (2) during the period such proclamation is in effect—

(i)

grossly exceeds the average price at which the applicable gasoline or other petroleum distillate was offered for sale by that person during the 30 days prior to such proclamation;

(ii)

grossly exceeds the price at which the same or similar gasoline or other petroleum distillate was readily obtainable in the same area from other competing sellers during the same period;

(iii)

reasonably reflected additional costs, not within the control of that person, that were paid, incurred, or reasonably anticipated by that person, or reflected additional risks taken by that person to produce, distribute, obtain, or sell such product under the circumstances; and

(iv)

was substantially attributable to local, regional, national, or international market conditions; and

(B)

whether the quantity of gasoline or other petroleum distillate the person produced, distributed, or sold in an area covered by a proclamation issued under paragraph (2) during a 30-day period following the issuance of such proclamation increased over the quantity that that person produced, distributed, or sold during the 30 days prior to such proclamation, taking into account usual seasonal demand variations.

(b)

False Pricing Information

It shall be unlawful for any person to report to a Federal agency information related to the wholesale price of gasoline or other petroleum distillates with actual knowledge or knowledge fairly implied on the basis of objective circumstances that such information is false or misleading.

(c)

Definitions

As used in this section—

(1)

the term wholesale, with respect to sales of gasoline or other petroleum distillates, means either truckload or smaller sales of gasoline or petroleum distillates where title transfers at a product terminal or a refinery, and dealer tank wagon sales of gasoline or petroleum distillates priced on a delivered basis to retail outlets; and

(2)

the term retail, with respect to sales of gasoline or other petroleum distillates, includes all sales to end users such as motorists as well as all direct sales to other end users such as agriculture, industry, residential, and commercial consumers.

(d)

Construction

As described in this section, a sale of gasoline or other petroleum distillate does not include a transaction on a futures market.

3.

Enforcement by the Federal Trade Commission

(a)

Enforcement by FTC

A violation of section 2 shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this Act. In enforcing section 2(a) of this Act, the Commission shall give priority to enforcement actions concerning companies with total United States wholesale or retail sales of gasoline and other petroleum distillates in excess of $500,000,000 per year.

(b)

Civil penalties

(1)

In general

Notwithstanding the penalties set forth under the Federal Trade Commission Act, any person who violates this Act with actual knowledge or knowledge fairly implied on the basis of objective circumstances shall be subject to the following penalties:

(A)

Price gouging; unjust profits

Any person who violates section 2(a) shall be subject to—

(i)

a fine of not more than 3 times the amount of profits gained by such person through such violation; or

(ii)

a fine of not more than $3,000,000.

(B)

False information

Any person who violates section 2(b) shall be subject to a civil penalty of not more than $1,000,000.

(2)

Method

The penalties provided by paragraph (1) shall be obtained in the same manner as civil penalties obtained under section 5 of the Federal Trade Commission Act (15 U.S.C. 45).

(3)

Multiple offenses; mitigating factors

In assessing the penalty provided by subsection (a)—

(A)

each day of a continuing violation shall be considered a separate violation; and

(B)

the court shall take into consideration, among other factors, the seriousness of the violation and the efforts of the person committing the violation to remedy the harm caused by the violation in a timely manner.

4.

Criminal penalties

(a)

In general

In addition to any penalty applicable under section 3, any person who violates section 2 shall be fined under title 18, United States Code—

(1)

if a corporation, not to exceed $150,000,000; and

(2)

if an individual not to exceed $2,000,000, or imprisoned for not more than 10 years, or both.

(b)

Enforcement

The criminal penalty provided by subsection (a) may be imposed only pursuant to a criminal action brought by the Attorney General or other officer of the Department of Justice.

5.

Enforcement at retail level by State attorneys general

(a)

In general

A State, as parens patriae, may bring a civil action on behalf of its residents in an appropriate district court of the United States to enforce the provisions of section 2(a) of this Act, or to impose the civil penalties authorized by section 3(b)(1)(B), whenever the attorney general of the State has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a violation of this Act or a regulation under this Act, involving a retail sale.

(b)

Notice

The State shall serve written notice to the Federal Trade Commission of any civil action under subsection (a) prior to initiating such civil action. The notice shall include a copy of the complaint to be filed to initiate such civil action, except that if it is not feasible for the State to provide such prior notice, the State shall provide such notice immediately upon instituting such civil action.

(c)

Authority To intervene

Upon receiving the notice required by subsection (b), the Federal Trade Commission may intervene in such civil action and upon intervening—

(1)

be heard on all matters arising in such civil action; and

(2)

file petitions for appeal of a decision in such civil action.

(d)

Construction

For purposes of bringing any civil action under subsection (a), nothing in this section shall prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence.

(e)

Venue; service of process

In a civil action brought under subsection (a)—

(1)

the venue shall be a judicial district in which—

(A)

the defendant operates;

(B)

the defendant was authorized to do business; or

(C)

the defendant in the civil action is found;

(2)

process may be served without regard to the territorial limits of the district or of the State in which the civil action is instituted; and

(3)

a person who participated with the defendant in an alleged violation that is being litigated in the civil action may be joined in the civil action without regard to the residence of the person.

(f)

Limitation on State action while Federal action is pending

If the Federal Trade Commission has instituted a civil action or an administrative action for violation of this Act, no State attorney general, or official or agency of a State, may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the Federal Trade Commission or the other agency for any violation of this Act alleged in the complaint.

(g)

Enforcement of State Law

Nothing contained in this section shall prohibit an authorized State official from proceeding in State court to enforce a civil or criminal statute of such State.

6.

Low Income energy assistance

Amounts collected in fines and penalties under section 3 of this Act shall be deposited in a separate fund in the treasury to be known as the Consumer Relief Trust Fund. To the extent provided for in advance in appropriations Acts, the fund shall be used to provide assistance under the Low Income Home Energy Assistance Program administered by the Secretary of Health and Human Services.

7.

Effect on other laws

(a)

Other authority of Federal Trade Commission

Nothing in this Act shall be construed to limit or affect in any way the Federal Trade Commission’s authority to bring enforcement actions or take any other measure under the Federal Trade Commission Act (15 U.S.C. 41 et seq.) or any other provision of law.

(b)

State law

Nothing in this Act preempts any State law.

Passed the House of Representatives May 23, 2007.

Lorraine C. Miller,

Clerk.