STATE OF NEW YORK ________________________________________________________________________ 5249 2017-2018 Regular Sessions IN ASSEMBLY February 7, 2017 ___________ Introduced by M. of A. DINOWITZ, RICHARDSON, MOSLEY, COOK, GALEF, SIMON, JENNE, SKOUFIS, ABINANTI, RIVERA, BLAKE, GOTTFRIED, HOOPER -- Multi- Sponsored by -- M. of A. BRAUNSTEIN, ENGLEBRIGHT, GLICK, HIKIND, LIFTON, MAGEE, THIELE -- 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 consumers 9 by charging grossly excessive prices for essential consumer goods and 10 services. 11 In order to prevent any party within the chain of distribution of any 12 consumer goods from taking unfair advantage of consumers during abnormal 13 disruptions of the market, the legislature declares that the public 14 interest requires that such conduct be prohibited and made subject to 15 civil and criminal penalties. 16 2. During any abnormal disruption of the market for consumer goods and 17 services vital and necessary for the health, safety and welfare of 18 consumers, no party within the chain of distribution of such consumer 19 goods or services or both shall sell or offer to sell any such goods or 20 services or both for an amount which represents an unconscionably exces- 21 sive price. For purposes of this section, the phrase "abnormal 22 disruption of the market" shall mean any change in the market, whether 23 actual or imminently threatened, resulting from stress of weather, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00507-01-7

A. 5249 2 1 convulsion of nature, failure or shortage of electric power or other 2 source of energy, strike, civil disorder, war, military action, national 3 or local emergency, or other cause of an abnormal disruption of the 4 market [~~which results in the declaration of a state of emergency by the~~ 5 ~~governor~~]. For the purposes of this section, the term consumer goods and 6 services shall mean those used, bought or rendered primarily for 7 personal, family or household purposes. This prohibition shall apply to 8 all parties within the chain of distribution, including any manufactur- 9 er, supplier, wholesaler, distributor or retail seller of consumer goods 10 or services or both sold by one party to another when the product sold 11 was located in the state prior to the sale. Consumer goods and services 12 shall also include any repairs made by any party within the chain of 13 distribution of consumer goods on an emergency basis as a result of such 14 abnormal disruption of the market. 15 3. Whether a price is unconscionably excessive is a question of law 16 for the court. 17 (a) The court's determination that a violation of this section has 18 occurred shall be based on any of the following factors: (i) that the 19 amount of the excess in price is unconscionably extreme; or (ii) that 20 there was an exercise of unfair leverage or unconscionable means; or 21 (iii) a combination of both factors in subparagraphs (i) and (ii) of 22 this paragraph. 23 (b) In any proceeding commenced pursuant to subdivision [~~four~~] five of 24 this section, prima facie proof that a violation of this section has 25 occurred shall include evidence that 26 (i) the amount charged represents a gross disparity between the price 27 of the goods or services which were the subject of the transaction and 28 their value measured by the price at which such consumer goods or 29 services were sold or offered for sale by the defendant in the usual 30 course of business immediately prior to the onset of the abnormal 31 disruption of the market or 32 (ii) the amount charged grossly exceeded the price at which the same 33 or similar goods or services were readily obtainable by other consumers 34 in the trade area. A defendant may rebut a prima facie case with 35 evidence that additional costs not within the control of the defendant 36 were imposed on the defendant for the goods or services. 37 4. Any person who violates the provisions of this section shall be 38 guilty of a violation. 39 5. Where a violation of this section is alleged to have occurred, a 40 district attorney may file an accusatory instrument with a criminal 41 court within the judicial district in which such violations are alleged 42 to have occurred, and the attorney general may apply in the name of the 43 People of the State of New York to the supreme court of the State of New 44 York within the judicial district in which such violations are alleged 45 to have occurred, on notice of five days, for an order enjoining or 46 restraining commission or continuance of the alleged unlawful acts. In 47 any such proceeding, the court shall impose a civil penalty in an amount 48 not to exceed twenty-five thousand dollars and, where appropriate, order 49 restitution to aggrieved consumers. 50 § 2. This act shall take effect immediately.

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