SENATE BILL 3
47th legislature - STATE OF NEW MEXICO - first special session, 2005
INTRODUCED BY
Michael S. Sanchez
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 FINDINGS AND PURPOSE.--The legislature finds that during emergencies and disasters that affect the health, welfare and safety of consumers, persons may take unfair advantage of consumers by greatly increasing prices for essential goods or services. While the pricing of goods and services is generally best left to the marketplace under ordinary conditions, when a declared disaster or emergency results in abnormal disruptions of the market, the public interest requires that excessive or unjustified increases in the prices of essential goods or services be prohibited. 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 shortly after a declared state of disaster or emergency 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, whether actual or imminently threatened, resulting from an emergency or disaster where market forces are or appear likely to be insufficient to ensure reasonably stable prices of goods or services;
B. "goods or services" means any goods or services necessary to preserve, protect or sustain the life, health or safety of persons or their property, including gasoline, natural gas, heating oil and other fuels; repair or reconstruction services; and the rental of residential, commercial and storage facilities or space;
C. "motor fuel" means any liquid product used for the generation of power in an internal combustion engine, excluding liquified petroleum gases and aviation fuels; and
D. "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.
Section 4. PROHIBITED PRACTICES.--
A. Upon any federal or state declaration of emergency or disaster and a determination by the governor by 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, regardless of whether an actual sale, rental or lease occurs during the time period set forth in Subsection B of this section, goods or services for an unconscionable price.
B. 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.
Section 5. 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 ten percent above the average price in the same market area during the thirty days prior to the event causing the emergency or disaster that resulted in the abnormal market disruption 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 the following factors:
(1) whether there was an exercise of unfair leverage by the alleged violator;
(2) a comparison between the price sought for the goods or services by the alleged violator and the average price of those same or similar goods or services in the same market area during the thirty days prior to the event causing the emergency or disaster that resulted in the abnormal market disruption;
(3) the degree to which 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; and
(4) whether an increase in the price sought for goods or services is directly attributable to additional costs imposed by a supplier of a good or service or other cost of providing the good or service, including an additional cost for labor or materials used to provide goods or services. In determining an alleged violator's additional costs, no allowance shall be made for the replacement costs of goods if the alleged violator was reasonably assured of recouping the replacement costs as a part of the price of subsequent sales of the goods or services.
Section 6. INCREASES IN MOTOR FUEL PRICE.--During the period of time set forth in Subsection B of Section 4 of the Emergency Anti-Price-Gouging Act, a retail dealer shall not increase the retail price of motor fuel more frequently than once in twenty-four hours.
Section 7. PENALTIES, REMEDIES AND ENFORCEMENT.--
A. A person who violates the restrictions set forth in Section 4 of the Emergency Anti-Price-Gouging Act is guilty of a misdemeanor and shall be punished by a fine of not more than one thousand dollars ($1,000) or by imprisonment for a definite term not to exceed one year, or both.
B. Each instance of selling, renting or leasing 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.
C. 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 business in the state.
D. Nothing in this section precludes a private cause of action pursuant to Section 57-12-10 NMSA 1978 on behalf of any person damaged by a violation of Section 4 of the Emergency Anti-Price-Gouging Act. Where the trier of fact finds that the defendant violated that act, the court may award to the prevailing party up to three times actual damages or one thousand dollars ($1,000), whichever is greater, and the court shall award reasonable attorney fees and costs.
E. Where a person is found to have charged an unconscionable price in violation of Section 4 of the Emergency Anti-Price-Gouging Act, the court may require that person to disgorge excess profits realized as a result of such violations.
F. The remedies and penalties set forth in this section are cumulative and do not preclude another remedy or penalty available pursuant to the laws of this state.
Section 8. APPLICATION OF UNFAIR PRACTICES
ACT--REGULATIONS.--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. The attorney general has all of the authority given under the Unfair Practices Act and is empowered to issue and file as required by law all regulations necessary to implement and enforce any provision of the Emergency Anti-Price-Gouging 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. ASSISTANCE FROM STATE AGENCIES.--When the governor has issued an executive order pursuant to Subsection A of Section 4 of the Emergency Anti-Price-Gouging Act, all state agencies, including the department of public safety, the energy, minerals and natural resources department and the New Mexico department of agriculture, shall cooperate with the attorney general in the investigation of alleged violations of that act.
Section 11. PREEMPTION.--The Emergency Anti-Price-Gouging Act does not preempt any local ordinance prohibiting conduct that is the same or similar to conduct prohibited by Section 4 of that act or imposing penalties more severe than those imposed by that act.
Section 12. 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 notify, as soon as possible, 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 13. 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 14 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.
Section 14. 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 the investigation and prosecution of alleged violations of that act.
Section 15. LIBERAL INTERPRETATION.--The Emergency Anti-Price-Gouging Act shall be liberally construed to carry out its purpose.
Section 16. 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 17. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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