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.
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.
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.
