SENATE BILL 445
47th legislature - STATE OF NEW MEXICO - second session, 2006
INTRODUCED BY
John T. L. Grubesic
AN ACT
RELATING TO BUSINESS; PROHIBITING PROFITEERING DURING AN EMERGENCY OR DISASTER; PROVIDING PENALTIES; CREATING A FUND; AMENDING AND ENACTING SECTIONS OF THE UNFAIR PRACTICES ACT; MAKING APPROPRIATIONS; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 57-12-2 NMSA 1978 (being Laws 1967, Chapter 268, Section 2, as amended) is amended to read:
"57-12-2. DEFINITIONS.--As used in the Unfair Practices Act:
A. "person" means, where applicable, natural persons, corporations, trusts, partnerships, associations, cooperative associations, clubs, companies, firms, joint ventures or syndicates;
B. "seller-initiated telephone sale" means a sale, lease or rental of goods or services in which the seller or [his] the seller's representative solicits the sale by telephoning the prospective purchaser and in which the sale is consummated entirely by telephone or mail, but does not include a transaction:
(1) in which a person solicits a sale from a prospective purchaser who has previously made an authorized purchase from the seller's business; or
(2) in which the purchaser is accorded the right of rescission by the provisions of the federal Consumer Credit Protection Act, 15 U.S.C. 1635 or regulations issued pursuant thereto;
C. "trade" or "commerce" includes the advertising, offering for sale or distribution of any services and any property and any other article, commodity or thing of value, including any trade or commerce directly or indirectly affecting the people of this state;
D. "unfair or deceptive trade practice" means an act specifically declared unlawful pursuant to the Unfair Practices Act, a false or misleading oral or written statement, visual description or other representation of any kind knowingly made in connection with the sale, lease, rental or loan of goods or services or in the extension of credit or in the collection of debts by a person in the regular course of [his] the person's trade or commerce, which may, tends to or does deceive or mislead any person and includes:
(1) representing goods or services as those of another when the goods or services are not the goods or services of another;
(2) causing confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services;
(3) causing confusion or misunderstanding as to affiliation, connection or association with or certification by another;
(4) using deceptive representations or designations of geographic origin in connection with goods or services;
(5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation or connection that [he] the person does not have;
(6) representing that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used or secondhand;
(7) representing that goods or services are of a particular standard, quality or grade or that goods are of a particular style or model if they are of another;
(8) disparaging the goods, services or business of another by false or misleading representations;
(9) offering goods or services with intent not to supply them in the quantity requested by the prospective buyer to the extent of the stock available, unless the purchaser is purchasing for resale;
(10) offering goods or services with intent not to supply reasonable expectable public demand;
(11) making false or misleading statements of fact concerning the price of goods or services, the prices of competitors or one's own price at a past or future time or the reasons for, existence of or amounts of price reduction;
(12) making false or misleading statements of fact for the purpose of obtaining appointments for the demonstration, exhibition or other sales presentation of goods or services;
(13) packaging goods for sale in a container that bears a trademark or trade name identified with goods formerly packaged in the container, without authorization, unless the container is labeled or marked to disclaim a connection between the contents and the trademark or trade name;
(14) using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if doing so deceives or tends to deceive;
(15) stating that a transaction involves rights, remedies or obligations that it does not involve;
(16) stating that services, replacements or repairs are needed if they are not needed; or
(17) [failure] failing to deliver the quality or quantity of goods or services contracted for; and
E. "unconscionable trade practice" means an act or practice in connection with the sale, lease, rental or loan, or in connection with the offering for sale, lease, rental or loan, of any goods or services, including services provided by licensed professionals, or in the extension of credit or in the collection of debts which to a person's detriment:
(1) takes advantage of the lack of knowledge, ability, experience or capacity of a person to a grossly unfair degree; [or]
(2) results in a gross disparity between the
value received by a person and the price paid; or
(3) results in a price that grossly exceeds the price at which similar goods or services were readily obtainable in similar transactions by similar persons."
Section 2. A new section of the Unfair Practices Act is enacted to read:
"[NEW MATERIAL] PROFITEERING DURING A STATE OF EMERGENCY OR DISASTER.--
A. As used in this section:
(1) "disaster" means natural or man-made events, including, but not limited to, tornado or other severe storm, earthquake, flood, fire, riot, act of war, terrorism, civil disorder or other extraordinary adverse circumstance. The court shall find that an event constitutes a disaster if the event results in the declaration of a state of emergency or disaster by the president of the United States or the governor. The court may find that an event constitutes a disaster in the absence of a declared state of emergency;
(2) "necessary property or service" means any necessary property or service for which consumer demand does, or is likely to, increase as a consequence of the emergency or disaster and includes, but is not limited to, consumer food items or property, property or services for emergency cleanup, emergency supplies, communication supplies and services, medical supplies and services, home heating fuel, building materials and services, freight, storage services, housing, lodging, transportation and motor fuels;
(3) "profiteer during a state of emergency or disaster" means unjustifiably increasing during a time of a state of emergency or disaster the price at which any necessary property or service is offered for sale to consumers. Actual sales at the increased price shall not be required for the increase to be considered unconscionable. In determining whether the price increase described in this subsection is unjustified, the court shall consider all relevant circumstances, including the following:
(a) whether the price charged by the alleged profiteer during the time of a state of emergency or disaster grossly exceeded the average price charged by the alleged profiteer for similar property or services at the same location during the twenty days prior to the state of emergency or disaster, and an increase of more than twenty percent shall be prima facie evidence of gross excess;
(b) whether the amount charged by the alleged profiteer during the time of a state of emergency or disaster grossly exceeded the average price at which the same or similar property or services were readily obtainable by other consumers in the trade area at the same location during the twenty days prior to the state of emergency or disaster, and a price difference of more than twenty percent shall be prima facie evidence of gross excess;
(c) whether the increase in the amount charged by the alleged profiteer during the time of a state of emergency or disaster was attributable to additional costs incurred by the alleged profiteer in connection with the sale of the product or service, and proof the alleged profiteer incurred such additional costs shall be prima facie evidence that the price increase was justified when such additional costs were actually incurred by the alleged profiteer during the period in which the substantially increased price was being charged;
(d) whether the price sought by the alleged profiteer would have resulted in a profit margin greater than the alleged profiteer's usual and customary profit margin; and
(e) whether the price sought by the alleged profiteer was a result of historical seasonal price changes; and
(4) "time of a state of emergency or disaster" means the period of time when a declaration of a state of emergency or disaster by the president of the United States or the governor is in effect or thirty days after the occurrence of the event that constitutes the emergency or disaster, whichever is longer.
B. It is an unconscionable trade practice pursuant to the Unfair Practices Act for any person to profiteer during a state of emergency or disaster as declared by the president of the United States or the governor.
Section 3. A new section of the Unfair Practices Act is enacted to read:
"[NEW MATERIAL] PENALTIES, REMEDIES AND ENFORCEMENT.--
A. Upon an entry of judgment or decree for a violation of the prohibition against profiteering during a state of emergency or disaster, a court shall impose a civil penalty not to exceed one thousand dollars ($1,000) per violation with an aggregate total not to exceed twenty-five thousand dollars ($25,000) for any twenty-four-hour period.
B. Upon a showing to a court by the office of the attorney general that a person has engaged in continuous and willful violations of the prohibition against profiteering during a state of emergency or disaster, the court may suspend or revoke any license or certificate authorizing that person to engage in business in this state or the court may enjoin any person from engaging in business in this state."
Section 4. [NEW MATERIAL] ANTIPROFITEERING FUND CREATED.--
A. The "antiprofiteering fund" is created in the state treasury and consists of appropriations, gifts, grants or donations. All income received from investments of the fund shall be credited to the fund.
B. Money in the fund shall be administered by the office of the attorney general and is appropriated to the office of the attorney general for the investigation and prosecution of alleged violations of Section 2 of this 2006 act, including expenses of other state agencies involved in such investigations. Disbursements from the fund shall be made on warrants of the secretary of finance and administration pursuant to vouchers signed by the attorney general or an authorized representative of the attorney general. Money in the fund shall not revert at the end of a fiscal year.
Section 5. APPROPRIATION.--One million dollars ($1,000,000) is appropriated from the general fund to the antiprofiteering fund for expenditure in fiscal year 2006 and subsequent fiscal years to carry out the purposes of the fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
Section 6. SEVERABILITY.--If any part or application of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.
Section 7. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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