Short title

This Act may be cited as the

Gross Overcharging Undermines Gasoline Economics Act

Findings

Congress finds the following: (1)From May 2004 to May 2005, average United States gasoline prices rose by 24 percent, according to the Energy Information Administration. (2)Most United States oil companies showed huge profits last year, some as much as 200 percent. The American people have paid over and above their fair share of this increased cost. Consumers have been at the whim of oil companies who use record-breaking oil prices to make record-breaking profits. (3)Although 24 States have consumer protection statutes to restrict prices that are unconscionable, excessive, or grossly in excess of a specified amount, in all but one of those States the prohibition applies only during a state of emergency or natural disaster. (4)While consumers express concerns about being gouged when prices spike at the gas pump, there is no legal definition of gouging. The Federal Trade Commission has never found a violation of Federal antitrust laws related to gasoline price spikes. An in-depth investigation of the entire oil industry is necessary to determine whether extra charges are driven by collusion among oil companies or simply by legitimate market influences. (5)With only a few nominal exceptions, gas prices are expected to increase indefinitely. Higher fuel costs impact all methods of transportation. As a result, the increased cost of goods and services puts an even greater financial burden on consumers.

Definitions

In this Act— (1)the term base price index means the average of the closing unit price on the New York Mercantile Exchange, for contracts to purchase regular unleaded gasoline during the subsequent calendar month, for the 10 days in each of the most recent 2 preceding years which correspond to the 10 most recent trading days; and (2)the term rate of inflation means the average consumer price index for all urban consumers, not seasonally adjusted, which corresponds to the time period between the days used for calculating the base price index under paragraph (1).

Gasoline price gouging

(a)

Prohibition

No person shall sell gasoline at retail for a price that exceeds the base price index multiplied by twice the rate of inflation, as adjusted according to the regional price structure index developed under subsection (b). (b)

Regional price structure index

Not later than 30 days after the date of enactment of this Act, the Secretary of Energy shall develop a regional price structure index to reflect regional variances in gasoline reformulation requirements and transportation costs. (c)

Penalty

The Secretary of Energy shall assess a civil penalty for a violation of subsection (a) in the amount of— (1)not less than $5,000 for a first offense; (2)not less than $10,000 for a second offense; and (3)not more than $25,000 for any subsequent offense. (d)

Offenses

Each day on which a person violates subsection (a) shall constitute a separate offense for purposes of subsection (c). (e)

Effective date

This section, except for subsection (b), shall take effect 90 days after the date of enactment of this Act.

Federal Trade Commission report

Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Federal Trade Commission shall transmit to Congress a report that— (1)examines passive and active collusion to set gasoline prices; (2)examines antitrust practices throughout all supply chains in the oil industry; and (3)recommends policies to protect consumers against gasoline price gouging.

Strategic Petroleum Reserve

(a)

Findings

Congress finds that— (1)the Strategic Petroleum Reserve was created to enhance the physical and economic security of the United States; (2)the Energy Policy and Conservation Act allows the Strategic Petroleum Reserve to be used to provide relief when oil and gasoline supply shortages cause economic hardship; (3)the proper management of the resources of the Strategic Petroleum Reserve could provide gasoline price relief to families of the United States and provide the United States with a tool to counterbalance the Organization of Petroleum Exporting Countries’ supply management policies; and (4)the United States current policy of filling the Strategic Petroleum Reserve despite the fact that the Strategic Petroleum Reserve is more than 98 percent full could further exacerbate the rising price of crude oil and record high retail price of gasoline. (b)

Price protection measures

(1)

Initial measures

For the period beginning on the date of enactment of this Act and ending on the date that is 30 days after such date of enactment— (A)the Secretary of Energy shall not acquire any new petroleum products for, or place any petroleum products in, the Strategic Petroleum Reserve; and (B)the Secretary of Energy shall release from the Strategic Petroleum Reserve 1,000,000 barrels of oil per day. (2)

Subsequent measures

If the President finds it necessary, to lower the burden of gasoline prices on the economy of the United States and to circumvent the efforts of the Organization of Petroleum Exporting Countries to reap windfall crude oil profits, the Secretary may continue the measures described in paragraph (1)(A) and (B) for an additional 30 days.

Pricing and Economic Impact Commission

(a)

Establishment

The Secretary of Energy shall establish a commission to be known as the Pricing and Economic Impact Commission (in this section referred to as the Commission). (b)

Duties of commission

Not later than 1 year after the date of enactment of this Act, the Commission shall transmit to Congress a report containing recommendations on the effect of this Act on— (1)domestic oil production; (2)foreign oil imports; (3)profits of the oil industry; (4)inflation; (5)employment; (6)economic growth; (7)Federal revenues; and (8)national security. (c)

Membership

(1)

Number and appointment

The Commission shall be composed of 23 members as follows: (A)11 members appointed by the President. These shall include no less than 1 member from each of the Environmental Protection Agency, the Department of Transportation, the Department of Energy, the Department of Commerce, the Council of Economic Advisors, and the Office of Science and Technology. (B)6 members appointed by the House of Representatives, of whom 3 shall be appointed by the Speaker of the House of Representatives and 3 shall be appointed by the minority leader. (C)6 members appointed by the Senate, of whom 3 shall be appointed by the majority leader and 3 shall be appointed by the minority leader. (2)

Qualifications

In making appointments under this subsection, the appointing authorities shall make a special effort to appoint individuals who are particularly qualified to perform the functions of the Commission, by reason of either practical experience or academic expertise. (3)

Terms and vacancies

Each member shall be appointed for the life of the Commission. A vacancy in the Commission shall be filled in the manner in which the original appointment was made. (4)

Pay and travel

Each member of the Commission, other than a full-time officer or employee of the United States— (A)shall be paid the daily equivalent of the annual rate of basic pay payable for level V of the Executive Schedule for each day (including travel time) during which the member is engaged in the actual performance of duties vested in the Commission; and (B)shall receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code. (5)

Quorum

12 members of the Commission shall constitute a quorum, but a lesser number may hold hearings. (6)

Chairman

The Chairman of the Commission shall be elected by the members. (7)

Meetings

The Commission shall meet at the call of the Chairman or a majority of its members. (d)

Staff

(1)

In general

With the approval of the Commission, the Chairman may appoint and fix the pay of not more than six individuals for the staff of the Commission. Such individuals may be appointed without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of that title relating to classification and General Schedule pay rates, except that an individual so appointed may not receive pay in excess of the maximum annual rate of basic pay payable for grade GS–15 of the General Schedule under section 5332 of title 5, United States Code. (2)

Experts and consultants

With the approval of the Commission, the Chairman may procure temporary and intermittent services in the manner prescribed in section 3109(b) of title 5, United States Code, but at rates for individuals not to exceed the daily equivalent of the maximum annual rate of basic pay payable for grade GS–15 of the General Schedule under section 5332 of title 5, United States Code. (3)

Staff of federal agencies

Upon request of the Commission, the head of any Federal department or agency may detail, on a reimbursable basis, any of the personnel of that department or agency to the Commission to assist it in carrying out its duties under this section. (e)

Powers of commission

(1)

Hearings

The Commission may, for the purpose of carrying out this section, hold hearings, sit and act at times and places, take testimony, and receive evidence as the Commission considers appropriate. (2)

Members and agents

Any member or agent of the Commission may, if authorized by the Commission, take any action which the Commission is authorized to take by this subsection. (3)

Mails

The Commission may use the United States mails in the same manner and under the same conditions as departments and agencies of the United States. (4)

Administrative support services

Upon the request of the Commission, the Administrator of General Services shall provide to the Commission, on a reimbursable basis, the administrative support services necessary for the Commission to carry out its responsibilities under this section. (f)

Authorization of appropriations

There will be authorized to be appropriated to carry out this section $2,000,000, to remain available until expended. (g)

Termination

The Commission shall cease to exist on the last day of the month in which its report is submitted under subsection (b).