What's happening
This bill amends New York's price gouging law to define "unconscionably excessive price" as more than 10% above certain reference prices during a declared state of emergency.
Why it matters
Creates a clear, objective standard. for what counts as price gouging during a state of emergency, making it easier for consumers and businesses to understand and comply with the law. By setting the threshold at 10% above certain reference prices, the bill removes ambiguity from current law.
Expands possible defenses for sellers. by allowing them to justify higher prices if they can prove increased costs outside their control, or if prices are tied to pre-existing contracts or market fluctuations, helping protect businesses from unfair prosecution.
Strengthens consumer protections. by making it easier for authorities to identify and penalize price gouging, potentially deterring exploitative pricing during emergencies when consumers are most vulnerable.
Provides consistency for enforcement. by replacing the prior subjective, court-determined standard with specific, quantifiable criteria, likely resulting in more predictable legal outcomes and fairer enforcement across the state.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Limit Price Gouging During Emergencies
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit Emergency Price Gouging
In Assembly Committee · Consumer Affairs And Protection · Sponsor Edward Braunstein
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5440
2017-2018 Regular Sessions
IN SENATE
March 28, 2017
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 Assembly, do enact as follows:
Section 1. Section 396-r of the general business law, as amended by chapter 510 of the laws of 1998, subdivision 4 as amended by chapter 224 of the laws of 2008, 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 consumer goods have taken unfair advantage of consumers by charging grossly excessive prices for essential consumer goods and services.
In order to prevent any party within the chain of distribution of any consumer goods from taking unfair advantage of consumers 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 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 or services or both shall sell or offer to sell any such goods or services or both for an amount which represents an unconscionably excessive 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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01746-01-7
S. 5440 2
market [which], where such abnormal disruption results in the declaration of a state of emergency by the governor. For the purposes of this section, the term consumer goods and services shall mean those used, bought or rendered primarily for personal, family or household purposes. This prohibition shall apply to all parties within the chain of distribution, including any manufacturer, supplier, wholesaler, distributor or retail seller of consumer goods or services or both sold by one party to another when the product sold was located in the state prior to the sale. Consumer goods and services shall also include any repairs made by any party within the chain of distribution of consumer 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 consumer goods or services were sold or offered for sale by the defendant in the usual course of business 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 by other consumers in the trade area.]
(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 product 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 markup 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 additional costs not within the control of the defendant were imposed on the defendant for the goods or services.
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
S. 5440 3
continuance of the alleged unlawful acts. In any such proceeding, the court shall impose a civil penalty in an amount not to exceed twentyfive thousand dollars and, where appropriate, order restitution to aggrieved consumers.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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.
Read the full memo (627 words)
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 $300 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
2017: S.5440 - Referred to Consumer Protection/A.334 -Referred to Consumer Affairs & Protection 2016: S.2825 - Referred to Consumer Protection/A.2133- Referred to Consumer Affairs & Protection 2015: S.2825 - Referred to Consumer Protection/A.2133- Referred to Consumer Affairs & 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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.