NY State Senate Bill S3079

Current Bill Status - In Senate Committee Consumer Protection Committee

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 27, 2023	referred to consumer protection

S3079 (ACTIVE) - Details

Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §396-r, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2013-2014: S3656
2015-2016: S2825
2017-2018: S5440
2019-2020: S803
2021-2022: S4565

S3079 (ACTIVE) - Summary

Relates to price gouging; defines unconscionably excessive price for the purposes of prohibiting price gouging during abnormal disruption of the market.

S3079 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S3079

SPONSOR: LANZA
 
TITLE OF BILL:

An act to amend the general business law, in relation to price gouging

 
PURPOSE OR GENERAL IDEA OF BILL:

To further define "unconscionably excessive price" in the context of
price gouging.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends Section 396-r of the General Business law. The bill
provides that during periods of abnormal disruption of the market for
consumer goods and services vital and necessary for the health, safety
and welfare. Of consumers, no party within the chain of distribution of
such consumer goods shall offer to sell goods for an "unconscionably
excessive price." Unconscionably excessive prices is further defined as
a price that is excessive as compared to the price at which the good or
service was sold or offered for sale by the seller in the usual course

of business immediately prior to the state of emergency.

A price will be deemed excessive if the price exceeds, by at least 10%,
the price at which the good "or service was sold immediately prior to
the state of emergency, unless the price charged is because of addi-
tional costs imposed by the supplier or other costs of providing the
good. In such situations, the price will be excessive if it represents
10% increase in the amount of markup from cost, compared to the markup
customarily applied by the seller in the usual course of business imme-
diately prior to the State of emergency.

Section 2 provides the effective date.

 
JUSTIFICATION:

In the wake of Hurricane Sandy, gas stations sought to capitalize on the
gas shortage by gouging the price of gas, charging customers a much
higher price than before the storm. Additionally, some hotels also
allegedly engaged in price gouging, charging upwards of $30D for a room
after the storm. Such nightly rates are not unusual in Manhattan and
other tourist destinations; however, for residents of the outer
boroughs, such prices were up to triple the amount they would have paid
for a room prior to the storm.

While the Attorney General's office is currently investigating and
imposing fines on such gas stations and other merchants for price goug-
ing after the hurricane, it is difficult for consumers to determine
whether price gouging is occurring because there is not an objective
definition.

Under current law, whether a price is "unconscionably excessive" is a
court determination. Evidence of price gouging includes a showing that
the amount charged represents a "gross disparity" between the price of
the goods or services and their value before the abnormal disruption of
the market; or the amount charged "grossly exceeded" the price at which
other goods were readily obtainable by other consumers in the trade
area. Additionally, there is no standard for what an abnormal disruption
of the market is. Thus, the bill defines an abnormal disruption of the
market as a disruption as declared by both, the Governor and the Commis-
sioner of the Division of Homeland Security and Emergency Services.

This bill would add more clarity to the law and would allow for a more
objective standard in the investigation of price gouging complaints,
rather, than placing determination in the hands of the courts.  Addi-
tionally, this would also allow consumers to know whether they are
victims of price gouging so that they may report such instances to the
Attorney General's office.

 
PRIOR LEGISLATIVE HISTORY:

2022: S.4565 Referred to Consumer Protection/A.5850 - Referred to
Consumer Affairs and Protection

2021: S.4565 Referred to Consumer Protection/A.5850 - Referred to
Consumer Affairs and Protection

2020: S.803 - Referred to Consumer Protection / A.237 Referred to
Consumer Affairs and Protection

2019: S.803 - Referred to Consumer Protection / A.237 Referred to
Consumer Affairs and Protection

2018: S.5440 - Referred to Consumer Protection/A.334 Referred to Consum-
er Affairs and Protection

2017: S.5440 - Referred to Consumer Protection/A.334 Referred to Consum-
er Affairs and Protection

2016: S.2825 - Referred to Consumer Protection/A.2133 - Referred to
Consumer Affairs and Protection

2015: S.2825 - Referred to Consumer Protection/A.2133 - Referred to
Consumer Affairs and Protection

2014: S.3656-A - Referred to Consumer Protection

2013: S.3656-A - Referred to Consumer Protection

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

S3079 (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3079
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 27, 2023
                                ___________
 
 Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer 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:

   Section  1.  Section  396-r of the general business law, as amended by
 chapter 90 of the laws of 2020, is amended to read as follows:
   § 396-r. Price gouging. 1. Legislative findings and  declaration.  The
 legislature  hereby  finds that during periods of abnormal disruption of
 the market caused by strikes, power failures, severe shortages or  other
 extraordinary  adverse  circumstances,  some parties within the chain of
 distribution of goods have taken  unfair  advantage  of  the  public  by
 charging grossly excessive prices for essential goods and services.
   In  order to prevent any party within the chain of distribution of any
 goods from  taking  unfair  advantage  of  the  public  during  abnormal
 disruptions  of  the  market,  the  legislature declares that the public
 interest requires that such conduct be prohibited and  made  subject  to
 civil penalties.
   2. During any abnormal disruption of the market for goods and services
 vital  and  necessary for the health, safety and welfare of consumers or
 the general public, no party within the chain of  distribution  of  such
 goods  or services or both shall sell or offer to sell any such goods or
 services or both for an amount which represents an unconscionably exces-
 sive  price.  For  purposes  of  this  section,  the  phrase   "abnormal
 disruption  of  the market" shall mean any change in the market, whether
 actual or imminently  threatened,  resulting  from  stress  of  weather,
 convulsion  of  nature,  failure  or shortage of electric power or other
 source of energy, strike, civil disorder, war, military action, national
 or local emergency, or other cause of  an  abnormal  disruption  of  the
 market  [which],  WHERE SUCH ABNORMAL DISRUPTION results in the declara-
 tion of a state of emergency by the governor. For the purposes  of  this
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07485-01-3

 S. 3079                             2
 
 section,  the  term  goods and services shall include (a) consumer goods
 and services used, bought or rendered primarily for personal, family  or
 household purposes, (b) essential medical supplies and services used for
 the  care,  cure,  mitigation, treatment or prevention of any illness or
 disease, and (c) any other essential goods and services used to  promote
 the health or welfare of the public. This prohibition shall apply to all
 parties  within  the  chain of distribution, including any manufacturer,
 supplier, wholesaler, distributor or retail seller of goods or  services
 or  both  sold by one party to another when the product sold was located
 in the state prior to the sale. Goods and services  shall  also  include
 any  repairs made by any party within the chain of distribution of goods
 on an emergency basis as a result of such  abnormal  disruption  of  the
 market.
   3.  [Whether  a price is unconscionably excessive is a question of law
 for the court.
   (a) The court's determination that a violation  of  this  section  has
 occurred  shall  be  based on any of the following factors: (i) that the
 amount of the excess in price is unconscionably extreme;  or  (ii)  that
 there  was  an  exercise  of unfair leverage or unconscionable means; or
 (iii) a combination of both factors in subparagraphs  (i)  and  (ii)  of
 this paragraph.
   (b)  In  any proceeding commenced pursuant to subdivision four of this
 section, prima facie proof that a violation of this section has occurred
 shall include evidence that:
   (i) the amount charged represents a gross disparity between the  price
 of  the  goods or services which were the subject of the transaction and
 their value measured by the price at which such goods or  services  were
 sold  or  offered for sale by the defendant in the usual course of busi-
 ness immediately prior to the onset of the abnormal  disruption  of  the
 market; or
   (ii)  the  amount charged grossly exceeded the price at which the same
 or similar goods or services were readily obtainable in the trade area.
   (c)] (A) A PRICE IS NOT AN "UNCONSCIONABLY EXCESSIVE PRICE" IF ANY ONE
 OF THE FOLLOWING APPLIES:
   (I) IT IS TEN PERCENT OR LESS ABOVE THE SELLER'S PRICE FOR THAT  PROD-
 UCT  IMMEDIATELY  PRIOR  TO THE DECLARATION OF THE STATE OF EMERGENCY BY
 THE GOVERNOR;
   (II) IT IS TEN PERCENT OR LESS ABOVE CURRENT PRICES FOR  THAT  PRODUCT
 IN ANY AREA OUTSIDE THE GEOGRAPHIC SCOPE OF THE DECLARATION OF THE STATE
 OF EMERGENCY OR AN ADJOINING STATE, TAX-ADJUSTED;
   (III)  IT  IS  TEN  PERCENT OR LESS ABOVE THE SUM OF THE SELLER'S: (A)
 ACQUISITION OR REPLACEMENT COST, WHICHEVER IS HIGHER; PLUS (B) THE MARK-
 UP CUSTOMARILY APPLIED BY THE SELLER IN THE  USUAL  COURSE  OF  BUSINESS
 IMMEDIATELY  PRIOR  TO  THE DECLARATION OF THE STATE OF EMERGENCY BY THE
 GOVERNOR;
   (IV) IT IS ATTRIBUTABLE TO  FLUCTUATIONS  IN  APPLICABLE  REGIONAL  OR
 NATIONAL SPOT OR COMMODITY MARKETS; OR
   (V)  IT  IS  A  CONTRACT PRICE OR PRICE FORMULA AGREED TO PRIOR TO THE
 DECLARATION OF THE STATE OF EMERGENCY BY THE GOVERNOR.
   (B) A defendant may rebut a prima facie case with evidence that  [(1)]
 (I)  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 or [(2)] (II) additional costs not
 within the control of the defendant were imposed on  the  defendant  for
 the goods or services.
 S. 3079                             3
 
   4.  Where a violation of this section is alleged to have occurred, the
 attorney general may apply in the name of the People of the State of New
 York to the supreme court of the State of New York within  the  judicial
 district  in  which  such  violations  are  alleged to have occurred, on
 notice of five days, for an order enjoining or restraining commission or
 continuance  of  the  alleged unlawful acts. In any such proceeding, the
 court shall impose a civil penalty in an amount not  to  exceed  twenty-
 five  thousand  dollars  per violation or three times the gross receipts
 for the relevant goods or services,  whichever  is  greater  and,  where
 appropriate, order restitution to aggrieved parties.
   5.  The  attorney general may promulgate such rules and regulations as
 are necessary to effectuate and enforce the provisions of this section.
   § 2. This act shall take effect immediately.

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The New York State Senate

senate Bill S3079

Sponsored By

Current Bill Status - In Senate Committee Consumer Protection Committee

Your Voice

Actions

S3079 (ACTIVE) - Details

S3079 (ACTIVE) - Summary

S3079 (ACTIVE) - Sponsor Memo

S3079 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S3079

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Sponsored By

Andrew J. Lanza

Current Bill Status - In Senate Committee Consumer Protection Committee

Your Voice

Actions

S3079 (ACTIVE) - Details

S3079 (ACTIVE) - Summary

S3079 (ACTIVE) - Sponsor Memo

S3079 (ACTIVE) - Bill Text download pdf

Comments