A10270 Summary:

BILL NOA10270
 
SAME ASSAME AS S08189
 
SPONSORRozic
 
COSPNSRDinowitz, Buchwald, Ortiz, Lentol, Simon, Simotas, Seawright, Griffin, McDonough, Giglio, Montesano, Gottfried, Weprin, Glick, Cahill, McDonald, DenDekker, Otis, Bichotte, Buttenschon, Rosenthal L, Fall, Colton, Blake, Lupardo, Zebrowski, Reyes, Mosley, Epstein, Cusick, Jacobson, Weinstein, Barron, Bronson
 
MLTSPNSR
 
Amd 396-r, Gen Bus L
 
Relates to price gouging; prohibits price gouging for essential medical supplies and services and any other essential goods and services used to promote the health or welfare of the public.
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A10270 Actions:

BILL NOA10270
 
04/08/2020referred to consumer affairs and protection
05/26/2020reported referred to codes
05/26/2020reported referred to rules
05/27/2020reported
05/27/2020rules report cal.30
05/27/2020substituted by s8189
 S08189 AMEND= HOYLMAN
 04/13/2020REFERRED TO CONSUMER PROTECTION
 05/26/2020REPORTED AND COMMITTED TO RULES
 05/27/2020ORDERED TO THIRD READING CAL.648
 05/27/2020PASSED SENATE
 05/27/2020DELIVERED TO ASSEMBLY
 05/27/2020referred to codes
 05/27/2020substituted for a10270
 05/27/2020ordered to third reading rules cal.30
 05/27/2020passed assembly
 05/27/2020returned to senate
 06/05/2020DELIVERED TO GOVERNOR
 06/06/2020SIGNED CHAP.90
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A10270 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10270
 
SPONSOR: Rozic
  TITLE OF BILL: An act to amend the general business law, in relation to price gouging   PURPOSE: This legislation would update New York's statute regarding the price gouging of consumer goods by expanding it to cover essential medical supplies and services and other goods or services used to promote the health or welfare of the public.   SUMMARY OF PROVISIONS: Section 1 of the bill amends Section 396-r of the general business law to broaden the application of New York's price gouging statute by apply- ing it to goods and services vital and necessary for the health, safety and welfare of consumers or the general public, rather than simply to consumer goods and services. Section 1 also broadens the definition of "goods and services" to include essential medical supplies and services used for the care, cure, mitigation, treatment or prevention of any illness or disease, and any other goods and services used to promote the health or general welfare of the public. The term used under current statute is "consumer goods and services," and is limited to goods and services used, bought, or rendered primarily for personal, family or household purposes. Section 1 also adds language allowing a defendant to rebut a prima facie case with evidence that the increase in the amount charged preserves the margin of profit that the defendant received for the same goods or services prior to the abnormal disruption of the market. Section 1 also allows a court to impose a civil penalty for violations of Section 396-r of up to $25,000 per violation, or three times the gross receipts for the relevant goods or services, whichever is greater, which would increase allowable penalties for egregious instances of price gouging. Finally, Section 1 allows the Attorney General to promulgate rules and regulations to effectuate and enforce the provisions of Section 396-r. Section 2 provides the effective date.   JUSTIFICATION: New York's current price gouging statute, which prohibits selling or offering for sale consumer goods or services at an "unconscionably excessive price" during an abnormal disruption of the market, is limited in its application to goods or services "vital and necessary for the health, safety, and welfare of consumers." During the COVED-19 pandemic, we have seen countless instances of egre- gious price gouging, particularly of medical supplies such as hand sani- tizer, face masks, bandages, medical-grade apparel, and other crucial medical supplies that are desperately needed by our hospitals and other health care facilities. These examples have illustrated ways to strengthen our existing price gouging statute, namely by broadening its application to, any goods and services vital for the health, safety, and welfare of the general public, specifically applying it to medical supplies and services used to treat, cure, or prevent disease or illness, and authorizing the Attorney General to pursue increased penalties against those trying to profit off of others' misfortune. This legislation would be a strong deterrent to individuals seeking to use a pandemic or other emergency to enrich themselves at the expense of the general public and the health care workers who are fighting to keep us safe, at great personal danger to themselves.   LEGISLATIVE HISTORY: This is a new bill in the Assembly.   FISCAL IMPLICATIONS: None to the state.   EFFECTIVE DATE: This act shall take effect immediately.
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A10270 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          10270
 
                   IN ASSEMBLY
 
                                      April 8, 2020
                                       ___________
 
        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 price gouging
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Section  396-r of the general business law, as amended by
     2  chapter 510 of the laws of 1998, subdivision 4 as amended by chapter 224
     3  of the laws of 2008, is amended to read as follows:
     4    § 396-r. Price gouging. 1. Legislative findings and  declaration.  The
     5  legislature  hereby  finds that during periods of abnormal disruption of
     6  the market caused by strikes, power failures, severe shortages or  other
     7  extraordinary  adverse  circumstances,  some parties within the chain of
     8  distribution of [consumer] goods have taken unfair advantage of [consum-
     9  ers] the public by  charging  grossly  excessive  prices  for  essential
    10  [consumer] goods and services.
    11    In  order to prevent any party within the chain of distribution of any
    12  [consumer] goods from taking unfair advantage of [consumers] the  public
    13  during abnormal disruptions of the market, the legislature declares that
    14  the  public  interest  requires that such conduct be prohibited and made
    15  subject to civil penalties.
    16    2. During any abnormal disruption of the market for  [consumer]  goods
    17  and  services  vital and necessary for the health, safety and welfare of
    18  consumers or the general public, no party within the chain  of  distrib-
    19  ution  of  such [consumer] goods or services or both shall sell or offer
    20  to sell any such goods or services or both for an amount  which  repres-
    21  ents  an  unconscionably  excessive price. For purposes of this section,
    22  the phrase "abnormal disruption of the market" shall mean any change  in
    23  the  market,  whether  actual  or  imminently threatened, resulting from
    24  stress of weather, convulsion of nature, failure or shortage of electric
    25  power or other source of energy, strike, civil disorder,  war,  military
    26  action,  national  or  local  emergency,  or  other cause of an abnormal
    27  disruption of the market which results in the declaration of a state  of
    28  emergency  by  the  governor. For the purposes of this section, the term
    29  [consumer] goods and services shall [mean those]  include  (a)  consumer
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16097-03-0

        A. 10270                            2
 
     1  goods  and  services  used,  bought  or rendered primarily for personal,
     2  family  or  household  purposes,  (b)  essential  medical  supplies  and
     3  services used for the care, cure, mitigation, treatment or prevention of
     4  any  illness  or disease, and (c) any other essential goods and services
     5  used to promote the health or welfare of the public.   This  prohibition
     6  shall  apply  to all parties within the chain of distribution, including
     7  any manufacturer, supplier, wholesaler, distributor or retail seller  of
     8  [consumer]  goods  or services or both sold by one party to another when
     9  the product sold was located in the state prior to the  sale.  [Consumer
    10  goods]  Goods  and  services  shall also include any repairs made by any
    11  party within the chain of distribution of [consumer] goods on  an  emer-
    12  gency basis as a result of such abnormal disruption of the market.
    13    3.  Whether  a  price is unconscionably excessive is a question of law
    14  for the court.
    15    (a) The court's determination that a violation  of  this  section  has
    16  occurred  shall  be  based on any of the following factors: (i) that the
    17  amount of the excess in price is unconscionably extreme;  or  (ii)  that
    18  there  was  an  exercise  of unfair leverage or unconscionable means; or
    19  (iii) a combination of both factors in subparagraphs  (i)  and  (ii)  of
    20  this paragraph.
    21    (b)  In  any proceeding commenced pursuant to subdivision four of this
    22  section, prima facie proof that a violation of this section has occurred
    23  shall include evidence that:
    24    (i) the amount charged represents a gross disparity between the  price
    25  of  the  goods or services which were the subject of the transaction and
    26  their value measured by the price at  which  such  [consumer]  goods  or
    27  services  were  sold  or  offered for sale by the defendant in the usual
    28  course of business immediately  prior  to  the  onset  of  the  abnormal
    29  disruption of the market; or
    30    (ii)  the  amount charged grossly exceeded the price at which the same
    31  or similar goods or services were readily obtainable [by  other  consum-
    32  ers] in the trade area.
    33    (c)  A  defendant  may rebut a prima facie case with evidence that (1)
    34  the increase in the amount charged preserves the margin of  profit  that
    35  the  defendant  received  for  the  same  goods or services prior to the
    36  abnormal disruption of the market or (2) additional costs not within the
    37  control of the defendant were imposed on the defendant for the goods  or
    38  services.
    39    4.  Where a violation of this section is alleged to have occurred, the
    40  attorney general may apply in the name of the People of the State of New
    41  York to the supreme court of the State of New York within  the  judicial
    42  district  in  which  such  violations  are  alleged to have occurred, on
    43  notice of five days, for an order enjoining or restraining commission or
    44  continuance of the alleged unlawful acts. In any  such  proceeding,  the
    45  court  shall  impose  a civil penalty in an amount not to exceed twenty-
    46  five thousand dollars per violation or three times  the  gross  receipts
    47  for  the  relevant  goods  or  services, whichever is greater and, where
    48  appropriate, order restitution to aggrieved [consumers] parties.
    49    5. The attorney general may promulgate such rules and  regulations  as
    50  are necessary to effectuate and enforce the provisions of this section.
    51    § 2. This act shall take effect immediately.
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A10270 LFIN:

 NO LFIN
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