109 HR 3936 IH: Federal Response to Energy Emergencies Act of 2005 U.S. House of Representatives 2005-09-28 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 3936 IN THE HOUSE OF REPRESENTATIVES September 28, 2005 Mr. Stupak (for himself, Ms. Herseth, Mr. Etheridge, Ms. Pelosi, Mr. DeFazio, Mr. Oberstar, Ms. Schakowsky, Mr. Holden, Mr. Kildee, Mr. Rahall, Mr. Michaud, Ms. Bordallo, Mrs. Capps, Ms. Schwartz of Pennsylvania, Mr. Filner, Mr. Pascrell, Mr. Bishop of New York, Mr. McNulty, Mr. Costello, Mr. Sanders, Mr. Conyers, Mr. Lipinski, Mr. Boucher, Ms. Eshoo, Ms. Harman, Mr. Evans, Mr. Pallone, Ms. McCollum of Minnesota, Mr. Engel, Mr. Markey, Mrs. McCarthy, Mr. Hinchey, Ms. Solis, and Mr. Van Hollen) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To protect consumers from price-gouging of gasoline and other fuels during energy emergencies, and for other purposes.

1.

Short title

This Act may be cited as the Federal Response to Energy Emergencies Act of 2005.

2.

Unconscionable pricing of gasoline, oil, natural gas, and petroleum distillates during emergencies

(a)

Unconscionable pricing

(1)

In general

During any energy emergency declared by the President under section 3, it is unlawful for any person to sell crude oil, gasoline, natural gas, or petroleum distillates in, or for use in, the area to which that declaration applies at a price that— (A)is unconscionably excessive; or (B)indicates the seller is taking unfair advantage of the circumstances to increase prices unreasonably. (2)

Factors considered

In determining whether a violation of paragraph (1) has occurred, there shall be taken into account, among other factors, whether— (A)the amount charged represents a gross disparity between the price of the crude oil, gasoline, natural gas, or petroleum distillate sold and the price at which it was offered for sale in the usual course of the seller’s business immediately prior to the energy emergency; or (B)the amount charged grossly exceeds the price at which the same or similar crude oil, gasoline, natural gas, or petroleum distillate was readily obtainable by other purchasers in the area to which the declaration applies. (3)

Mitigating factors

In determining whether a violation of paragraph (1) has occurred, there also shall be taken into account, among other factors, whether the price at which the crude oil, gasoline, natural gas, or petroleum distillate was sold reasonably reflects additional costs, not within the control of the seller, that were paid or incurred by the seller. (b)

False pricing information

It is unlawful for any person to report information related to the wholesale price of crude oil, gasoline, natural gas, or petroleum distillates to the Federal Trade Commission if— (1)that person knew, or reasonably should have known, the information to be false or misleading; (2)the information was required by law to be reported; and (3)the person intended the false or misleading data to affect data compiled by that department or agency for statistical or analytical purposes with respect to the market for crude oil, gasoline, natural gas, or petroleum distillates. (c)

Market manipulation

It is unlawful for any person, directly or indirectly, to use or employ, in connection with the purchase or sale of crude oil, gasoline, natural gas, or petroleum distillates at wholesale, any manipulative or deceptive device or contrivance, in contravention of such rules and regulations as the Federal Trade Commission may prescribe as necessary or appropriate in the public interest or for the protection of United States citizens. (d)

Rulemaking

Not later than 180 days after the date of the enactment of this Act, the Federal Trade Commission shall promulgate rules necessary and appropriate to enforce this section.

3.

Declaration of energy emergency

(a)

In general

If the President finds that the health, safety, welfare, or economic well-being of the citizens of the United States is at risk because of a shortage or imminent shortage of adequate supplies of crude oil, gasoline, natural gas, or petroleum distillates due to a disruption of the national distribution system for crude oil, gasoline, natural gas, or petroleum distillates (including such a shortage related to a major disaster (as defined in section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122))), or significant pricing anomalies in national or regional energy markets for crude oil, gasoline, natural gas, or petroleum distillates of a more than transient nature, the President may declare that a Federal energy emergency exists. (b)

Scope and duration

The declaration shall apply to the Nation, a geographical region, or 1 or more States, as determined by the President, but may not be in effect for a period of more than 45 days. (c)

Extensions

The President may— (1)extend a declaration under subsection (a) for a period of not more than 45 days; and (2)extend such a declaration more than once.

4.

Enforcement by the Federal Trade Commission

(a)

Enforcement by FTC

A violation of section 2 shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this Act. In enforcing section 2(a) of this Act, the Commission shall give priority to enforcement actions concerning companies with total United States wholesale or retail sales of crude oil, gasoline, and petroleum distillates in excess of $500,000,000 per year. (b)

Civil penalties

(1)

In general

Notwithstanding the penalties set forth under the Federal Trade Commission Act, any person who violates this Act shall be subject to the following penalties: (A)

Price gouging; unjust profits

Any person who violates section 2(a) of this Act shall be subject to— (i)a fine of not more than 3 times the amount of profits gained by such person through such violation; or (ii)a fine of not more than $3,000,000. (B)

False information; market manipulation

Any person who violates section 2(b) or 2(c) of this Act shall be subject to a civil penalty of not more than $1,000,000. (2)

Method of assessment

The penalties provided by paragraph (1) shall be assessed in the same manner as civil penalties imposed under section 5 of the Federal Trade Commission Act (15 U.S.C. 45). (3)

Multiple offenses; mitigating factors

In assessing the penalty provided by subsection (a)— (A)each day of a continuing violation shall be considered a separate violation; and (B)the Federal Trade Commission shall take into consideration the seriousness of the violation and the efforts of the person committing the violation to remedy the harm caused by the violation in a timely manner.

5.

Criminal penalties

Any person who violates section 2 or any rule or order issued thereunder shall be fined under title 18, United States Code— (1)if a corporation, not to exceed $100,000,000; or (2)if any other person, not to exceed $1,000,000, or imprisoned for not more than 10 years, or both.

6.

Enforcement at retail level by State attorneys general

(a)

In general

A State, as parens patriae, may bring a civil action on behalf of its residents in an appropriate district court of the United States to enforce the provisions of section 2(a) of this Act, or to impose the civil penalties authorized by section 4(b)(1)(B), whenever the attorney general of the State has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a violation of this Act or a regulation under this Act. (b)

Notice

The State shall serve written notice to the Federal Trade Commission of any civil action under subsection (a) prior to initiating such civil action. The notice shall include a copy of the complaint to be filed to initiate such civil action, except that if it is not feasible for the State to provide such prior notice, the State shall provide such notice immediately upon instituting such civil action. (c)

Authority to intervene

Upon receiving the notice required by subsection (b), the Federal Trade Commission may intervene in such civil action and upon intervening— (1)be heard on all matters arising in such civil action; and (2)file petitions for appeal of a decision in such civil action. (d)

Construction

For purposes of bringing any civil action under subsection (a), nothing in this section shall prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence. (e)

Venue; service of process

In a civil action brought under subsection (a)— (1)the venue shall be a judicial district in which— (A)the defendant operates; (B)the defendant was authorized to do business; or (C)where the defendant in the civil action is found; (2)process may be served without regard to the territorial limits of the district or of the State in which the civil action is instituted; and (3)a person who participated with the defendant in an alleged violation that is being litigated in the civil action may be joined in the civil action without regard to the residence of the person. (f)

Limitation on State action while Federal action is pending

If the Federal Trade Commission has instituted a civil action or an administrative action for violation of this Act, no State attorney general, or official or agency of a State, may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the Federal Trade Commission or the other agency for any violation of this Act alleged in the complaint. (g)

Enforcement of State Law

Nothing contained in this section shall prohibit an authorized State official from proceeding in State court to enforce a civil or criminal statute of such State.

7.

Low Income energy assistance

Amounts collected in fines and penalties under sections 4 or 5 of this Act shall be deposited in a separate fund in the treasury to be known as the Consumer Relief Trust Fund. To the extent provided for in advance in appropriations Acts fund shall be used to provide assistance under the Low Income Home Energy Assistance Program administered by the Secretary of Health and Human Services.

8.

Effect on other laws

(a)

Other authority of Federal Trade Commission

Nothing in this Act shall be construed to limit or affect in any way the Federal Trade Commission’s authority to bring enforcement actions or take any other measure under the Federal Trade Commission Act (15 U.S.C. 41 et seq.) or any other provision of law. (b)

State law

Nothing in this Act preempts any State law.

9.

Market transparency for crude oil, gasoline, and petroleum distillates

(a)

In general

The Federal Trade Commission shall facilitate price transparency in markets for the sale of crude oil and essential petroleum products at wholesale, having due regard for the public interest, the integrity of those markets, fair competition, and the protection of consumers. (b)

Marketplace Transparency

(1)

Dissemination of information

In carrying out this section the Federal Trade Commission shall provide by rule for the dissemination, on a timely basis, of information about the availability and prices of wholesale crude oil, gasoline, and petroleum distillates to the Federal Trade Commission, States, wholesale buyers and sellers, and the public. (2)

Protection of public from anticompetitive activity

In determining the information to be made available under this section and time to make the information available, the Federal Trade Commission shall seek to ensure that consumers and competitive markets are protected from the adverse effects of potential collusion or other anticompetitive behaviors that can be facilitated by untimely public disclosure of transaction-specific information. (3)

Protection of market mechanisms

The Federal Trade Commission shall withhold from public disclosure under this section any information the Commission determines would, if disclosed, be detrimental to the operation of an effective market or jeopardize system security. (c)

Information sources

(1)

In general

In carrying out subsection (b), the Federal Trade Commission may— (A)obtain information from any market participant; and (B)rely on entities other than the Commission to receive and make public the information, subject to the disclosure rules in subsection (b)(3). (2)

Published data

In carrying out this section, the Federal Trade Commission shall consider the degree of price transparency provided by existing price publishers and providers of trade processing services, and shall rely on such publishers and services to the maximum extent possible. (3)

Electronic information systems

The Federal Trade Commission may establish an electronic information system if it determines that existing price publications are not adequately providing price discovery or market transparency. Nothing in this section, however, shall affect any electronic information filing requirements in effect under this Act as of the date of enactment of this section. (4)

De minimus exception

The Federal Trade Commission may not require entities who have a de minimus market presence to comply with the reporting requirements of this section. (d)

Cooperation with other Federal agencies

(1)

Memorandum of understanding

Within 180 days after the date of enactment of this Act, the Federal Trade Commission shall conclude a memorandum of understanding with the Commodity Futures Trading Commission and other appropriate agencies (if applicable) relating to information sharing, which shall include provisions— (A)ensuring that information requests to markets within the respective jurisdiction of each agency are properly coordinated to minimize duplicative information requests; and (B)regarding the treatment of proprietary trading information. (2)

CFTC jurisdiction

Nothing in this section may be construed to limit or affect the exclusive jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.). (e)

Rulemaking

Within 180 days after the date of enactment of this Act, the Federal Trade Commission shall initiate a rulemaking proceeding to establish such rules as the Commission determines to be necessary and appropriate to carry out this section.

10.

Report on United States energy emergency preparedness

(a)

Potential impacts report

Within 30 days after the date of enactment of this Act, the Federal Trade Commission shall transmit to the Congress a confidential report describing the potential impact on domestic prices of crude oil, residual fuel oil, and refined petroleum products that would result from the disruption for periods of 1 week, 1 year, and 5 years, respectively, of not less than— (1)30 percent of United States oil production; (2)20 percent of United States refinery capacity; and (3)5 percent of global oil supplies. (b)

Projections and possible remedies

The President shall include in the report— (1)projections of the impact any such disruptions would be likely to have on the United States economy; and (2)detailed and prioritized recommendations for remedies under each scenario covered by the report.

11.

Protective action to prevent future disruptions of supply

The Secretary of Energy and the Energy Information Administration shall review expenditures by, and activities undertaken by, companies with total United States wholesale or retail sales of crude oil, gasoline, and petroleum distillates in excess of $500,000,000 per year to protect the energy supply system from terrorist attacks, international supply disruptions, and natural disasters, and ensure a stable and reasonably priced supply of such products to consumers in the United States, and, not later than 180 days after the date of the enactment of this title, shall transmit a report of their findings to Congress. Such report shall include an assessment of the companies’ preparations for the forecasted period of more frequent and more intense hurricane activity in the Gulf of Mexico and other vulnerable coastal areas.

12.

Authorization of Appropriations

There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this Act.