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A00255 Summary:

BILL NOA00255
 
SAME ASNo Same As
 
SPONSORRozic
 
COSPNSR
 
MLTSPNSR
 
Amd §396-r, Gen Bus L
 
Prohibits price gouging with respect to fuel, energy, and transportation goods and services; directs the attorney general to promulgate rules and regulations requiring the periodic public disclosure by actors in the chain of distribution for fuel sold in or into the state of the prices charged or proposed to be charged for fuel.
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A00255 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A255
 
SPONSOR: Rozic
  TITLE OF BILL: An act to amend the general business law, in relation to prohibiting price gouging with respect to fuel, energy, and transportation goods and services   PURPOSE: This bill is intended to clarify that the state's price gouging law reaches fuel, energy, and transportation goods and services, require the attorney general to obligate public disclosure of prices charged for fuel to provide transparency and rapid identification of price gougers, clarify that the attorney general may also require such disclosure of prices charged in the supply chain for other vital and necessary goods and services, and clarifies that the statute extends to transactions made out-of-state for goods and services sold in or into the state.   SUMMARY OF SPECIFIC PROVISIONS: Section one amends section 396-r of the general business law to make three changes clarifying the existing statutory text. First, the defi- nition of "goods and services" is amended to clarify that the statute reaches the entire chain of distribution for goods and services sold in or into the state. Second, the definition of "goods and services" is further amended to clarify that vital and necessary goods include fuel, energy, and trans- portation goods and services. Third, the section clarifies that product recalls leading to supply shortages can be a cause of an abnormal disruption of the market that triggers application of the statute. In addition, the statute is amended to require the attorney general promul- gate regulations providing for periodic public disclosure of the prices charged throughout the chain of distribution for fuel sold in or into the state. The amendment clarifies that this mandate does not foreclose the attorney general promulgating regulations imposing such disclosure requirements or other disclosure requirements on actors in the supply chain for other goods and services (as that term is defined by the stat- ute), or alter in any way the attorney general's pre-existing regulatory authority. Section two provides that this Act shall take effect immediately.   JUSTIFICATION: The Russian invasion of Ukraine has provided an abnormal disruption of the market for fuel, among other commodities. Oil and gas companies have used this disruption to increase fuel prices on consumers, most notably at the gas pump. The New York courts have long held that fuel falls within the ambit of the price gouging statute (see, e.g., People ex rel. Spitzer v My Serv. Ct., Inc., 14 Misc 3d 1217(A) Sup Ct, Westchester County 2007 Lippman, J. gas station's prices for gasoline "patently violated GBL § 396-r" and granting injunction; People ex re. Spitzer v Weyer Petrole- um, Inc., 14 Misc 3d 491 Sup Ct, Albany County 2006 finding gross disparity in retail gas prices following Hurricane Katrina sufficient to warrant injunction under GBL § 396-r; People ex rel. Spitzer v Oneida Lake Petroleum Corp., Sup Ct, Oswego County, Dec. 18, 2006, Seiter, J., Index No. 2006-1710 same). Similarly, New York courts have held that other energy sources, such as portable generators, fall within the ambit of the price gouging statute (see, e.g., People ex rel. Abrams v Two Wheel Corp., 71 NY2d 693, 697 1988 "If a power failure or shortage is the cause of a market disruption, the purchase of a generator is precisely the kind of transaction that the statute was designed to regu- late"; accord People ex rel. Vacco v Beach Boys Equip. Co., Inc., 273 AD2d 850 4th Dept 2000; People ex rel. Vacco v Chazy Hardware. Inc., 176 Misc 2d 960 Sup Ct,Clinton County 1998). This legislation aims to codify this judicial finding and permit public scrutiny of oil and gas price gouging by requiring that the attorney general promulgate regulations that would obligate periodic price disclosure by all actors in the supply chain for fuels, whether gas, diesel, crude oil, or otherwise, that are being sold in or into the state. In the specific context of the oil and gas industry, requiring periodic disclosure the prices charged at each stage of the supply chain for oil and gas in New York by every actor in that chain, rather than simply the spot prices charged at the pump or at the terminal, permits rapid detection of both unconscionably excessive prices and the actors behind those unconscionably excessive prices after abnormal disruptions of the market such as the present Ukrainian crisis. At the same time, the bill clarifies that the fuel disclosure mandate does not diminish the attorney general's regulatory authority to require periodic disclosure of prices throughout the supply chain for any other goods or services covered by the statute. This bill also does not dimin- ish or alter any other aspect of the attorney general's pre-existing regulatory authority. At the same time, the State is experiencing other egregious instances of price gouging, as seen in recent deeply disturbing reports that parents are being price gouged for infant formula owing to a shortage caused by an abnormal disruption of the market linked to the COVID-19 pandemic and bacterial contamination of some portion of the existing supply. This bill accordingly amends the statute to clarify that a product recall may be the cause of an abnormal disruption of the market for a vital and necessary good. Although the statute already covers such causes, the express clarifica- tion made in this bill sends a strong message to all actors in this supply chain: the despicable practice of exploiting product recalls to force desperate parents to pay staggering sums to feed their babies is not merely morally repugnant but flatly illegal, and always has been. Finally, the statute is amended to clarify that any actor in the chain of distribution for vital and necessary goods and services, wherever situated, is subject to the price gouging statute if the goods and services at issue are sold in or into New York state. The legislature intends for the ambit of the statute to reach the entire supply chain for goods and services sold in or into New York state, to the maximum extent permitted by the U.S. Constitution and federal law.   PRIOR LEGISLATIVE HISTORY: 2024: A450 (Rozic) - Consumer Affairs and Protection 2023: A450 (Rozic) - Consumer Affairs and Protection 2022: A10597 (Rozic) - Consumer Affairs and Protection   FISCAL IMPACT ON THE STATE: None.   EFFECTIVE DATE: This section shall take effect immediately.
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A00255 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           255
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 8, 2025
                                       ___________
 
        Introduced  by M. of A. ROZIC -- read once and referred to the Committee
          on Consumer Affairs and Protection
 
        AN ACT to amend the general business law,  in  relation  to  prohibiting
          price  gouging  with respect to fuel, energy, and transportation goods
          and services

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Subdivisions 2 and 5 of section 396-r of the general busi-
     2  ness law, subdivision 2 as amended by chapter 725 of the  laws  of  2023
     3  and  subdivision  5  as  added  by  chapter  90 of the laws of 2020, are
     4  amended to read as follows:
     5    2. (a) During any abnormal disruption of  the  market  for  goods  and
     6  services  vital  and  necessary  for  the  health, safety and welfare of
     7  consumers or the general public, no party within the chain  of  distrib-
     8  ution  of such goods or services or both shall sell or offer to sell any
     9  such goods or services or both for an amount which represents an  uncon-
    10  scionably excessive price.
    11    (b)  For  purposes of this section, the phrase "abnormal disruption of
    12  the market" shall mean any change in the market, whether actual or immi-
    13  nently threatened, resulting  from  stress  of  weather,  convulsion  of
    14  nature, failure or shortage of electric power or other source of energy,
    15  product recall leading to supply shortages, strike, civil disorder, war,
    16  military  action,  national  or local emergency, drug shortage, or other
    17  cause of an abnormal disruption of  the  market  which  results  in  the
    18  declaration of a state of emergency by the governor.
    19    (c) For purposes of this section, the term "drug shortage" shall mean,
    20  with respect to any drug or medical product intended for human use, that
    21  such  drug or medical product is publicly reported as being subject to a
    22  shortage by the U.S. Food and Drug Administration.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01369-01-5

        A. 255                              2
 
     1    (d) For the purposes of this section, the term  "goods  and  services"
     2  shall  include all goods and services sold in or into the state that are
     3  (i) consumer goods and services used, bought or rendered  primarily  for
     4  personal,  family or household purposes, (ii) essential medical supplies
     5  and   services  used  for  the  care,  cure,  mitigation,  treatment  or
     6  prevention of any illness or disease, (iii) fuel, energy, and  transpor-
     7  tation  goods  and  services, and [(iii)] (iv) any other essential goods
     8  and services used to promote the health or welfare of the public.
     9    (e) This prohibition shall apply to all parties within  the  chain  of
    10  distribution  for any good or service that is sold in or into the state,
    11  including any manufacturer, supplier, wholesaler, distributor or  retail
    12  seller  of  goods or services or both [sold by one party to another when
    13  the product sold was located in the state prior to the  sale].  For  the
    14  purposes  of  this subdivision, the term "goods and services" shall also
    15  include any repairs made by any party within the chain  of  distribution
    16  of  goods  on an emergency basis as a result of such abnormal disruption
    17  of the market.
    18    5. The attorney general shall promulgate rules and regulations requir-
    19  ing the periodic public disclosure by actors in the  chain  of  distrib-
    20  ution  for  fuel  sold  in  or  into  the state of the prices charged or
    21  proposed to be charged for fuel.  The attorney general may also  promul-
    22  gate  rules  and regulations requiring the periodic public disclosure by
    23  actors in the chain of distribution for any goods or services sold in or
    24  into the state of the prices charged or proposed to be charged for  such
    25  goods and services. The attorney general may promulgate such other rules
    26  and   regulations  as  are  necessary  to  effectuate  and  enforce  the
    27  provisions of this section.
    28    § 2. This act shall take effect immediately.
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