HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR
HOUSE BILL 9
47th legislature - STATE OF NEW MEXICO - first special session, 2005
AN ACT
RELATING TO BUSINESS; ENACTING THE EMERGENCY ANTI-PRICE-GOUGING ACT; PROVIDING PENALTIES; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Emergency Anti-Price-Gouging Act".
Section 2. LEGISLATIVE INTENT.--It is the intent of the legislature in enacting the Emergency Anti-Price-Gouging Act to protect consumers from excessive and unjustified increases in the prices charged, during or immediately after a declared state of emergency or disaster, for goods or services that are vital and necessary for the health, safety and welfare of consumers.
Section 3. DEFINITIONS.--As used in the Emergency Anti-Price-Gouging Act:
A. "abnormal market disruption" means any change in the market proximately caused by an emergency or disaster where market forces are or appear likely to be insufficient to ensure reasonably stable prices of goods or services;
B. "essential goods or services" means any goods or services necessary to preserve, protect or sustain the life, health or safety of persons or their property; and
C. "person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or any legal or commercial entity, including any individual or entity within the chain of distribution of goods or services such as a manufacturer, supplier, wholesaler, distributor or retail seller, but not including the state or its political subdivisions.
Section 4. PROHIBITED PRACTICES.--
A. Upon any federal or state declaration of emergency or disaster and a determination by the governor in executive order that the emergency or disaster has caused or appears likely to cause an abnormal market disruption within the state, it is a violation of the Emergency Anti-Price-Gouging Act for any person to sell, rent or lease, or to offer to sell, rent or lease, essential goods or services for an unconscionable price.
B. In an executive order determining an abnormal market disruption issued pursuant to Subsection A of this section, the governor shall specify:
(1) the cause of the abnormal market disruption;
(2) the geographic regions within which the restrictions imposed by this section apply; and
(3) with particularity, those categories of essential goods and services to which the restrictions imposed by this section apply.
C. The period of time during which the restrictions imposed by Subsection A of this section are in effect is from the issuance by the governor of an executive order that an abnormal market disruption exists within the state until the date that the governor determines by executive order that the abnormal market disruption has ceased, but such time period shall not exceed thirty days. The governor may extend that period of time through the issuance of not more than one additional executive order extending that time period for not more than thirty additional days for each declared federal or state emergency or disaster.
D. Notwithstanding the provisions of Subsection C of this section, the period of time during which the restrictions imposed by Subsection A of this section are in effect may be extended or terminated by a joint resolution of the legislature.
Section 5. EXEMPTIONS.--
A. A person subject to the restrictions imposed by Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act may file a petition for an exemption to those restrictions in the first judicial district court or in any district court in a county included within the geographic scope of an executive order issued pursuant to Subsection A of Section 4 of that act. Notice of a petition for an exemption shall be served upon the attorney general.
B. The court shall act upon a petition for exemption pursuant to Rule of Civil Procedure 1-066 NMRA. The court may grant the exemption if:
(1) the court determines that enforcement of the restrictions of Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act could result in a catastrophic loss of life or property; or
(2) the petitioner shows that due to certain circumstances the petitioner is unable to comply with the restrictions of Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act without suffering undue hardship beyond the hardship suffered by persons generally subject to those restrictions.
Section 6. UNCONSCIONABLE PRICE.--
A. In any proceeding brought pursuant to the Emergency Anti-Price-Gouging Act, evidence that the amount charged by the alleged violator was more than fifteen percent above the average price charged by the alleged violator at the same location during the twenty days prior to the issuance of an executive order pursuant to Subsection A of Section 4 of that act shall constitute prima facie evidence that the price was unconscionable and constituted a violation of Section 4 of that act.
B. In determining whether a price is unconscionable, the finder of fact shall take into consideration the totality of the circumstances, including, but not limited to, the following factors:
(1) whether and when the alleged violator had actual or constructive notice of the issuance of an executive order pursuant to Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act;
(2) the timing, frequency and extent of increases in price by the alleged violator;
(3) whether there was an exercise of unfair economic or other advantage by the alleged violator;
(4) a comparison between the price sought for the essential goods or services by the alleged violator and the average price of those same or similar essential goods or services in the same market area during the twenty days prior to the issuance of an executive order pursuant to Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act;
(5) whether the price sought by the alleged violator would have resulted in a profit margin greater than the alleged violator's usual and customary profit margin;
(6) whether the price sought by the alleged violator was a result of historical seasonal price changes; and
(7) whether an increase in local prices is attributable to regional, national or international trends, indices and postings.
C. An increase in the price sought for essential goods or services shall not be deemed unconscionable to the extent that:
(1) the increase is directly attributable to actual costs imposed by a supplier of essential goods or services or other costs of providing goods or services, including additional costs for labor, transportation or materials used to provide essential goods or services; or
(2) the increase in price was necessary to prevent a catastrophic loss of life or property.
Section 7. PENALTIES, REMEDIES AND ENFORCEMENT.--
A. Each instance of selling, renting or leasing essential goods or services at a price that violates the restrictions set forth in Section 4 of the Emergency Anti-Price-Gouging Act constitutes a separate violation of that act.
B. Upon a finding by a court that a person has engaged in continuous and willful violations of the Emergency Anti-Price-Gouging Act, the court may suspend or revoke any license or certificate authorizing that person to engage in business in the state or may enjoin that person from engaging in that business in the state.
C. Where a person is found to have charged an unconscionable price in violation of the Emergency Anti-Price-Gouging Act, the court may require that person to disgorge profits realized as a result of such violations.
Section 8. APPLICATION OF UNFAIR PRACTICES
ACT.--A violation of the Emergency Anti-Price-Gouging Act constitutes an unfair or deceptive trade practice and an unconscionable trade practice pursuant to the Unfair Practices Act and is subject to all of the provisions and remedies of that act.
Section 9. EMERGENCY CIVIL INVESTIGATIVE DEMANDS.--In addition to any other authority given to the attorney general to investigate alleged violations of the Emergency Anti-Price-Gouging Act, when the governor has issued an executive order pursuant to Subsection A of Section 4 of that act, the attorney general may serve a civil investigative demand pursuant to Section 57-12-12 NMSA 1978 and may require the person to whom the demand is directed to respond within three business days.
Section 10. NOTICE PROVISIONS.--Upon the governor's issuance of an executive order regarding an abnormal market disruption pursuant to Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act, the office of the governor shall immediately notify the public and those registered with that office for the purpose of receiving notice of the issuance of such an executive order. That office shall notify the public by any means available, including the office's web site, news media and electronic mail. Any person may register with that office for the purpose of receiving such notification.
Section 11. ANTI-PRICE-GOUGING FUND CREATED--APPROPRIATION.--
A. The "anti-price-gouging fund" is created in the state treasury and shall be administered by the attorney general. The fund shall consist of money transferred from the general fund operating reserve pursuant to Section 12 of the Emergency Anti-Price-Gouging Act and any other appropriations, gifts, grants or donations.
B. Money in the fund is appropriated to the attorney general for the investigation and prosecution of alleged violations of the Emergency Anti-Price-Gouging Act, including expenses of other state agencies involved in such investigations. Money in the fund shall not revert at the end of a fiscal year but shall remain to the credit of the fund until such time as the attorney general determines that the investigation and prosecution of alleged violations of the Emergency Anti-Price-Gouging Act have been completed.
C. In the event there is a transfer of funds to the anti-price-gouging fund pursuant to Section 12 of the Emergency Anti-Price-Gouging Act, on or before the first day of a regular legislative session that convenes at least one hundred twenty days after the issuance of an executive order pursuant to Subsection A of Section 4 of that act, the attorney general shall report to the legislature regarding the following:
(1) the amount of funds that have been expended from the anti-price-gouging fund through December 31 of the calendar year prior to the legislative session and the purposes for which those funds have been expended;
(2) the amount of funds the attorney general anticipates spending from the anti-price-gouging fund during the calendar year in which the legislative session has convened and the purposes for which those funds may be expended; and
(3) whether the attorney general anticipates that the funds remaining in the anti-price-gouging fund will be sufficient to complete investigations and prosecutions regarding alleged violations of the Emergency Anti-Price-Gouging Act during an abnormal market disruption set forth in an executive order issued pursuant to Subsection A of Section 4 of that act.
Section 12. EMERGENCY TRANSFER OF FUNDS.--In the event the governor issues an executive order pursuant to Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act, the governor, with state board of finance approval, may immediately transfer from the general fund operating reserve to the anti-price-gouging fund the amount necessary, in a total not to exceed one million dollars ($1,000,000) for a single abnormal market disruption resulting from a single cause, for the investigation and prosecution of alleged violations of that act.
Section 13. SEVERABILITY.--If any part or application of the Emergency Anti-Price-Gouging Act is held invalid, the remainder or its application to other situations or persons shall not be affected.
Section 14. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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