[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3637 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 3637
To direct the Federal Trade Commission to promulgate regulations to
prohibit an entity from selling, leasing, or offering for sale or lease
water rights at an excessive price during certain droughts, and for
other purposes.
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IN THE HOUSE OF REPRESENTATIVES
May 24, 2023
Mr. Gallego introduced the following bill; which was referred to the
Committee on Energy and Commerce
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A BILL
To direct the Federal Trade Commission to promulgate regulations to
prohibit an entity from selling, leasing, or offering for sale or lease
water rights at an excessive price during certain droughts, and for
other purposes.
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 ``Drought-Related Overpricing
Prevention Act'' or the ``DROP Act''.
SEC. 2. PROHIBITION ON WATER RIGHTS PRICE GOUGING.
(a) Prohibition.--Not later than 1 year after the date of the
enactment of this Act, the Commission shall promulgate, under section
553 of title 5, United States Code, regulations to prohibit an entity
from selling, leasing, or offering for sale or lease, at an excessive
price, water rights relating to an area subject to a covered drought.
(b) Exemptions.--
(1) In general.--In promulgating regulations under
subsection (a), the Commission shall exempt from such
regulations the following:
(A) An entity with less than $100,000,000 in gross
revenues in the United States (including the revenues
of any parent entity of such entity) during the 1-year
period preceding the date of the relevant sale, lease,
or offer.
(B) A State government.
(C) A local government.
(D) A Tribal government.
(2) Adjustments for inflation.--On an annual basis, the
Commission shall adjust the amount specified in paragraph
(1)(A) to reflect changes in the Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics.
(c) Excessive Price Determinations.--
(1) Standards required.--In promulgating regulations under
subsection (a), the Commission shall establish standards for
determining if a price is excessive.
(2) Determinations of excessive price.--The standards
established under paragraph (1) shall provide for a price to be
determined excessive if the Commission finds that the relevant
entity is selling, leasing, or offering for sale or lease water
rights--
(A) using a covered drought as a pretext to
increase prices; and
(B) at an inappropriately excessive price compared
to the average price at which similar water rights were
sold, leased, or offered for sale or lease (as the case
may be), during the 120-day period preceding such
covered drought, by--
(i) such relevant entity; or
(ii) by all sellers in the relevant market.
(3) Costs not within control of entity.--The standards
established under paragraph (1) may ensure that an entity is
not determined to be selling, leasing, or offering for sale or
lease water rights at an excessive price if the entity
demonstrates, by clear and convincing evidence, that a relevant
increase in price is directly attributable to costs that are
not within the control of the entity.
(d) Enforcement by Commission.--
(1) Unfair or deceptive acts or practices.--A violation of
the regulations promulgated under subsection (a) shall be
treated as a violation of a regulation under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)) regarding unfair or deceptive acts or practices.
(2) Powers of commission.--The Commission shall enforce the
regulations promulgated under subsection (a) in the same
manner, by the same means, and with the same jurisdiction,
powers, and duties as though all applicable terms and
provisions of the Federal Trade Commission Act (15 U.S.C. 41 et
seq.) were incorporated into and made a part of this Act. Any
person who violates such regulations shall be subject to the
penalties and entitled to the privileges and immunities
provided in the Federal Trade Commission Act.
(e) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(2) Covered drought.--The term ``covered drought'' means
any of the following:
(A) As determined by the Commission in coordination
with the United States Geological Survey, a weather
pattern and precipitation deficit that has continued
for a period in excess of 6 months.
(B) As determined by the Commission in coordination
with the Bureau of Reclamation, a Tier 1 or more severe
shortage designation with respect to the Colorado
River.
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