[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1640 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1640

  To prohibit price gouging relating to certain goods and services in 
                   areas affected by major disasters.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 8, 2005

  Mr. Nelson of Florida introduced the following bill; which was read 
     twice and referred to the Committee on Commerce, Science, and 
                             Transportation

_______________________________________________________________________

                                 A BILL


 
  To prohibit price gouging relating to certain goods and services in 
                   areas affected by major disasters.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protection From Price Gouging 
Against Disaster Victims Act of 2005''.

SEC. 2. FINDINGS AND GOALS.

    (a) Findings.--Congress finds that--
            (1) the United States experiences tremendous generosity and 
        goodwill in the wake of natural disasters;
            (2) unfortunately, some unscrupulous individuals take 
        advantage of those disasters in an attempt to gain financially;
            (3) the Federal Trade Commission is charged with preventing 
        unfair methods of competition and unfair and deceptive acts or 
        practices under section 5 of the Federal Trade Commission Act 
        (15 U.S.C. 45);
            (4) the Federal Trade Commission has extensive experience 
        analyzing markets and competitive issues in order to determine 
        whether market participants are engaging in actions that may 
        have anticompetitive effects; and
            (5) the Committee on Commerce, Science, and Transportation 
        of the Senate and the Committee on Energy and Commerce of the 
        House of Representatives are charged by their respective Houses 
        with consumer protection.
    (b) Goals.--The goals of this Act are--
            (1) to decrease the occurrence of persons charging 
        unconscionably excessive prices for consumer goods and services 
        following natural disasters;
            (2) to require the Federal Trade Commission to conduct 
        ongoing investigations of actions intended to disadvantage 
        consumers following natural disasters; and
            (3) to ensure that sufficient enforcement authority is 
        available to the Commission to carry out the responsibilities 
        of the Commission under this Act and the amendments made by 
        this Act.

SEC. 3. PRICE GOUGING PROHIBITION FOLLOWING MAJOR DISASTERS.

    The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is 
amended--
            (1) by redesignating sections 25 and 26 as sections 26 and 
        27, respectively; and
            (2) by inserting after section 24 the following:

``SEC. 25. PROTECTION FROM PRICE GOUGING FOLLOWING MAJOR DISASTERS.

    ``(a) Definitions.--In this section:
            ``(1) Affected area.--The term `affected area' means an 
        area affected by a major disaster declared by the President 
        under Federal law in existence on the date of enactment of the 
        Protection From Price Gouging Against Disaster Victims Act of 
        2005.
            ``(2) Consumer good or service.--
                    ``(A) In general.--The term `consumer good or 
                service' means a good, piece of equipment, or service 
                provided primarily for personal, family, or household 
                purposes, including food, water, ice, a chemical, a 
                building supply, a tool, a petroleum product, a 
                residential construction, reconstruction, or repair 
                service, or a service for the removal of debris 
                (including a damaged tree) or garbage.
                    ``(B) Inclusion.--The term `consumer good or 
                service' includes a property or a facility rented to a 
                consumer for use as a residence or storage facility.
            ``(3) Price gouging.--The term `price gouging' means the 
        charging of an unconscionably excessive price by a supplier in 
        an affected area.
            ``(4) Supplier.--The term `supplier' includes a seller, 
        reseller, wholesaler, distributor, retailer, lessor, provider, 
        or licensed or unlicensed contractor, subcontractor, or laborer 
        engaged in the provision or distribution of a consumer good or 
        service.
            ``(5) Unconscionably excessive price.--The term 
        `unconscionably excessive price' means a price charged in an 
        affected area for a consumer good or service that--
                    ``(A) represents a gross disparity, as determined 
                by the Commission in accordance with subsection (e), 
                between the price charged for the good or service and 
                the average price of the good or service charged by 
                suppliers in the affected area during the 30-day period 
                immediately before the President declares the existence 
                of a major disaster; and
                    ``(B) is not attributable to increased wholesale or 
                operational costs incurred by the supplier in 
                connection with the provision of the consumer good or 
                service.
    ``(b) Determination of the Commission.--Following the declaration 
of a major disaster by the President, the Commission shall--
            ``(1) consult with the Attorney General of the United 
        States, the United States Attorney for the district in which 
        the disaster occurred, and State and local law enforcement 
        officials to determine whether any supplier in the affected 
        area is charging or has charged an unconscionably excessive 
        price for any consumer good or service provided in the affected 
        area; and
            ``(2) establish within the Commission--
                    ``(A) a toll-free hotline that a consumer may call 
                to report an incidence of price gouging in the affected 
                area; and
                    ``(B) a program to develop and distribute to the 
                public informational materials in English and Spanish 
                to assist residents of the affected area in detecting 
                and avoiding price gouging.
    ``(c) Price Gouging Involving Disaster Victims.--
            ``(1) Offense.--During the 180-day period after the date on 
        which a major disaster is declared by the President, no 
        supplier shall provide, or offer to provide, any consumer good 
        or service in an affected area at an unconscionably excessive 
        price.
            ``(2) Action by commission.--
                    ``(A) In general.--During the period described in 
                paragraph (1), the Commission shall conduct 
                investigations to determine whether any supplier in an 
                affected area is in violation of paragraph (1).
                    ``(B) Positive determination.--If the Commission 
                determines under subparagraph (A) that a supplier is in 
                violation of paragraph (1), the Commission shall take 
                any action the Commission determines to be appropriate 
                to remedy the violation.
            ``(3) Civil penalties.--A supplier that commits an offense 
        described in paragraph (1) may, in a civil action brought in a 
        court of competent jurisdiction, be subject to--
                    ``(A) a civil penalty not more than $500,000;
                    ``(B) an order to pay special and punitive damages;
                    ``(C) an order to pay reasonable attorney's fees;
                    ``(D) an order to pay costs of litigation relating 
                to the offense;
                    ``(E) an order for disgorgement of profits earned 
                as a result of a violation of paragraph (1); and
                    ``(F) any other relief determined by the court to 
                be appropriate.
            ``(4) Criminal penalty.--A supplier that knowingly commits 
        an offense described in paragraph (1) shall be imprisoned not 
        more than 1 year.
            ``(5) Action by victims.--A person, Federal agency, State, 
        or local government that suffers loss or damage as a result of 
        a violation of paragraph (1) may bring a civil action against a 
        supplier in any court of competent jurisdiction for 
        disgorgement, special or punitive damages, injunctive relief, 
        reasonable attorney's fees, costs of the litigation, and any 
        other appropriate legal or equitable relief.
            ``(6) Action by state attorneys general.--An attorney 
        general of a State, or other authorized State official, may 
        bring a civil action in the name of the State, on behalf of 
        persons residing in the State, in any court of competent 
        jurisdiction for disgorgement, special or punitive damages, 
        reasonable attorney's fees, costs of litigation, and any other 
        appropriate legal or equitable relief.
            ``(7) No preemption.--Nothing in this section preempts any 
        State law.
    ``(d) Report.--Not later than 1 year after the date of enactment of 
the Protection From Price Gouging Against Disaster Victims Act of 2005, 
and annually thereafter, the Commission shall submit to the Committee 
on Commerce, Science, and Transportation of the Senate and the 
Committee on Energy and Commerce of the House of Representatives a 
report describing--
            ``(1) the number of price gouging complaints received by 
        the Commission for each major disaster declared by the 
        President during the preceding year;
            ``(2) the number of price gouging investigations of the 
        Commission initiated, in progress, and completed as of the date 
        on which the report is prepared;
            ``(3) the number of enforcement actions of the Commission 
        initiated, in progress, and completed as of the date on which 
        the report is prepared;
            ``(4) an evaluation of the effectiveness of the toll-free 
        hotline and program established under subsection (b)(2); and
            ``(5) recommendations for any additional action with 
        respect to the implementation or effectiveness of this section.
    ``(e) Definition of Gross Disparity.--Not later than 180 days after 
the date of enactment of the Protection From Price Gouging Against 
Disaster Victims Act of 2005, the Commission shall promulgate 
regulations to define the term `gross disparity' for purposes of this 
section.''.

SEC. 4. EFFECT OF ACT.

    Nothing in this Act, or an amendment made by this Act, affects any 
authority of the Federal Trade Commission in existence on the date of 
enactment of this Act with respect to price gouging actions.
                                 <all>