[Congressional Record Volume 153, Number 85 (Wednesday, May 23, 2007)]
[House]
[Pages H5628-H5636]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL PRICE GOUGING PREVENTION ACT
Mr. RUSH. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 1252) to protect consumers from price-gouging of gasoline and
other fuels, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1252
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 ``Federal Price Gouging
Prevention Act''.
SEC. 2. UNCONSCIONABLE PRICING OF GASOLINE AND OTHER
PETROLEUM DISTILLATES DURING EMERGENCIES.
(a) Unconscionable Pricing.--
(1) In general.--It shall be unlawful for any person to
sell, at wholesale or at retail in an area and during a
period of an energy emergency, gasoline or any other
petroleum distillate covered by a proclamation issued under
paragraph (2) at a price that--
(A) is unconscionably excessive; and
(B) indicates the seller is taking unfair advantage of the
circumstances related to an energy emergency to increase
prices unreasonably.
(2) Energy emergency proclamation.--
(A) In general.--The President may issue an energy
emergency proclamation for any area within the jurisdiction
of the United States, during which the prohibition in
paragraph (1) shall apply. The proclamation shall state the
geographic area covered, the gasoline or other petroleum
distillate covered, and the time period that such
proclamation shall be in effect.
(B) Duration.--The proclamation--
(i) may not apply for a period of more than 30 consecutive
days, but may be renewed for such consecutive periods, each
not to exceed 30 days, as the President determines
appropriate; and
(ii) may include a period of time not to exceed 1 week
preceding a reasonably foreseeable emergency.
(3) Factors considered.--In determining whether a person
has violated paragraph (1), there shall be taken into
account, among other factors--
(A) whether the amount charged by such person for the
applicable gasoline or other petroleum distillate at a
particular location in an area covered by a proclamation
issued under paragraph (2) during the period such
proclamation is in effect--
(i) grossly exceeds the average price at which the
applicable gasoline or other petroleum distillate was offered
for sale by that person during the 30 days prior to such
proclamation;
(ii) grossly exceeds the price at which the same or similar
gasoline or other petroleum distillate was readily obtainable
in the same area from other competing sellers during the same
period;
(iii) reasonably reflected additional costs, not within the
control of that person, that were paid, incurred, or
reasonably anticipated by that person, or reflected
additional risks taken by that person to produce, distribute,
obtain, or sell such product under the circumstances; and
(iv) was substantially attributable to local, regional,
national, or international market conditions; and
(B) whether the quantity of gasoline or other petroleum
distillate the person produced, distributed, or sold in an
area covered by a proclamation issued under paragraph (2)
during a 30-day period following the issuance of such
proclamation increased over the quantity that that person
produced, distributed, or sold during the 30 days prior to
such proclamation, taking into account usual seasonal demand
variations.
(b) False Pricing Information.--It shall be unlawful for
any person to report to a Federal agency information related
to the wholesale price of gasoline or other petroleum
distillates with actual knowledge or knowledge fairly implied
on the basis of objective circumstances that such information
is false or misleading.
(c) Definitions.--As used in this section--
(1) the term ``wholesale'', with respect to sales of
gasoline or other petroleum distillates, means either
truckload or smaller sales of gasoline or petroleum
distillates where title transfers at a product terminal or a
refinery, and dealer tank wagon sales of gasoline or
petroleum distillates priced on a delivered basis to retail
outlets; and
(2) the term ``retail'', with respect to sales of gasoline
or other petroleum distillates, includes all sales to end
users such as motorists as well as all direct sales to other
end users such as agriculture, industry, residential, and
commercial consumers.
(d) Construction.--As described in this section, a sale of
gasoline or other petroleum distillate does not include a
transaction on a futures market.
SEC. 3. 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
[[Page H5629]]
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 gasoline and other 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 with actual knowledge or knowledge fairly
implied on the basis of objective circumstances shall be
subject to the following penalties:
(A) Price gouging; unjust profits.--Any person who violates
section 2(a) 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.--Any person who violates section
2(b) shall be subject to a civil penalty of not more than
$1,000,000.
(2) Method.--The penalties provided by paragraph (1) shall
be obtained in the same manner as civil penalties obtained
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 court shall take into consideration, among other
factors, 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.
SEC. 4. CRIMINAL PENALTIES.
(a) In General.--In addition to any penalty applicable
under section 3, any person who violates section 2 shall be
fined under title 18, United States Code--
(1) if a corporation, not to exceed $150,000,000; and
(2) if an individual not to exceed $2,000,000, or
imprisoned for not more than 10 years, or both.
(b) Enforcement.--The criminal penalty provided by
subsection (a) may be imposed only pursuant to a criminal
action brought by the Attorney General or other officer of
the Department of Justice.
SEC. 5. 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 3(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, involving a retail sale.
(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) 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.
SEC. 6. LOW INCOME ENERGY ASSISTANCE.
Amounts collected in fines and penalties under section 3 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,
the fund shall be used to provide assistance under the Low
Income Home Energy Assistance Program administered by the
Secretary of Health and Human Services.
SEC. 7. 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.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Illinois (Mr. Rush) and the gentleman from Texas (Mr. Barton) each will
control 20 minutes.
The Chair recognizes the gentleman from Illinois.
General Leave
Mr. RUSH. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days to revise and extend their remarks and include
extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
{time} 1030
Mr. RUSH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, gasoline prices are now at record highs. The average
price of gas is $3.19 nationwide, with my home State of Illinois having
higher prices than any other at $3.46 a gallon. Now, rising gas prices
are one thing, and I fully recognize the reality of global oil markets,
the current state of our refinery capacity, and the basic laws of
supply and demand. But the gouging of American consumers is another
matter entirely, and the bill on the floor, H.R. 1252, the Federal
Price Gouging Protection Act, ensures that American consumers are
protected from companies that will prey on them during emergencies when
they are most vulnerable.
I want to commend the gentleman from Michigan (Mr. Stupak) for a fine
piece of legislation that is both thoughtful and careful in its scope.
On the one hand, the bill is tough and decisive. It gives the Federal
Trade Commission the tools to crack down on and punish those companies
that would price-gouge American consumers by unscrupulously taking
advantage of unique energy shortages and unconscionably raising the
price of gasoline on the American consumer.
On the other hand, the bill explicitly takes into account the
totality of market forces, both domestic and international. H.R. 1252
preserves the ability of companies to mitigate against legitimate risks
and raise prices as necessary. Simply put, the bill is carefully
written such that if a company is found liable of price gouging under
this act, then they are in fact price gouging. It is very difficult to
argue that we are overreaching or too vague in this bill.
As chairman of the Subcommittee on Commerce, Trade, and Consumer
Protection, I fully support Mr. Stupak's bill and its expeditious
treatment on the suspension calendar. It is important for the American
people to know we are on the ball, and that this ball is moving quickly
to address their concerns. I urge Members of the House to pass the
legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. PENCE. Mr. Speaker, I ask unanimous consent to control the time
of the gentleman from Texas.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Indiana?
There was no objection.
Mr. PENCE. I reserve the balance of my time.
Mr. RUSH. Mr. Speaker, I yield 1 minute to the gentleman from
Wisconsin (Mr. Kagen).
Mr. KAGEN. Mr. Speaker, yesterday in my hometown of Appleton,
Wisconsin, the price for a gallon of gas hit
[[Page H5630]]
$3.45. Since President Bush assumed office, the price for gas has
nearly doubled. Higher prices for gas punish all Americans, punish
small businesses, students, senior citizens, farmers, and even our
local, State and Federal Governments as well.
Everybody is asking, why? Why did the price at the pump go up even
when the cost per barrel went down? The most likely answer is price
gouging somewhere along the supply line, from the oil company to the
refinery to the speculators in the options markets who buy and hold the
oil for only a nanosecond.
People everywhere want answers, and here is what we can do. Today the
House will consider the Federal Price Gouging Prevention Act. And along
with Congressman Stupak and Congressman Rush and others, we will put a
cop back on the block. What we need is effective and active oversight,
not hide-and-seek politics.
Let's take this step together in the right direction. This bill
defines what price gouging is. I urge my colleagues to support H.R.
1252.
Mrs. BACHMANN. Mr. Speaker, I ask unanimous consent to claim the time
for our side.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Minnesota?
There was no objection.
Mrs. BACHMANN. Mr. Speaker, I yield 2 minutes to the gentleman from
Louisiana (Mr. Boustany).
Mr. BOUSTANY. Mr. Speaker, I urge my colleagues to oppose this bill.
Let's make no mistake about this. The last-minute changes don't improve
this legislation. The revisions are simply fig-leaf changes to provide
cover for oil patch Democratic Members who are being strong-armed into
voting for this bill.
No matter how much you dress this up, this bill is still about price
controls. We tried price controls in the 1970s, and they didn't work.
It resulted in mass rationing, long lines at the pump, and consumer
outrage. History is quite clear on this.
George Mason University economist Walter Williams has said:
``Politicians of both parties have rushed in to exploit public
ignorance and emotion. But there's an important downside to these
political attacks on producers.
``What about the next disaster? How much sense does it make for
producers to make the extra effort to provide goods and services if
they know they risk prosecution for charging what might be seen as
`unconscionable prices'?''
Mr. Williams is right.
The American public deserves better. Congress has the responsibility
to pass a balanced, comprehensive energy program that uses innovative
technology to explore and expand our domestic energy supply, to move us
towards energy independence. The last thing we need to do is to turn
back the clock to the failed energy policies of the 1970s. For those
reasons, I urge my colleagues to oppose this bill.
Mr. RUSH. Mr. Speaker, I yield 1 minute to the gentleman from
Connecticut (Mr. Courtney).
Mr. COURTNEY. Mr. Speaker, I strongly support passage of the Price
Gouging Prevention Act, and I commend Congressman Stupak for his
leadership on this issue.
In eastern Connecticut, where I come from, the price of gas has
reached its highest level in history, $3.26 today, up 31 cents from a
month ago, and more than $1 since February.
The Government Accountability Office reported on Tuesday that the
increasing gasoline prices have cost consumers an extra $20 billion
this year, and we are only in May. That is a tax on consumers. It is a
tax on small businesses. It has a ripple effect all throughout our
economy.
And this is not just about driving over Memorial Day weekend. This is
about whether or not energy prices are going to cripple the ability of
this economy to grow and thrive and prosper.
It is time to put accountability into the system. The Stupak bill is
not price controls, it is a system to make sure that the price is a
fair one and is justifiable according to market conditions. Those are
the tools that we are giving to the Federal Trade Commission.
Mrs. BACHMANN. Mr. Speaker, I yield 30 seconds to the gentleman from
Louisiana (Mr. Boustany).
Mr. BOUSTANY. Mr. Speaker, I just want to respond to that. We are
dealing with a world energy market, a world energy market. This bill
basically doesn't seem to understand that prices are set on world
markets. Clearly what we need to do is understand that aspect of this
to craft a meaningful energy policy.
That is why investment in technology to come up with a broad range of
alternative energy sources is the appropriate way to approach this. We
don't want to go back to the price controls of the 1970s.
Mr. RUSH. Mr. Speaker, I yield 1 minute to the gentleman from Rhode
Island (Mr. Kennedy).
Mr. KENNEDY. Mr. Speaker, setting new records in the United States is
generally associated with achievements and innovation.
Unfortunately, this week our Nation hit a new record that most
consumers are not celebrating. Gasoline prices were reported to reach
nationwide averages of $3.20 or higher.
It is not hard to understand these prices if you look at the
Republican-controlled Congress' Energy Policy Act of 2005, which
provided billions of dollars to the oil and gas companies while
spending only pennies on renewable efforts for fuel that would allow us
to get ourselves off the dependency on foreign oil.
As Americans, we do not have a history of shying away from a
challenge, and there is no reason to step down from the challenge that
is ahead of us because of these Republicans. I think we can do better,
and our history as Americans show that we will do better if we have the
right leadership.
I urge my colleagues to support the Federal Price Gouging Protection
Act because it fulfills America's promise to do what Americans can do
if they put their mind to it, and that is to do better and get off this
dependency on foreign oil.
Mrs. BACHMANN. Mr. Speaker, I reserve the balance of my time.
Mr. RUSH. Mr. Speaker, I reserve the balance of my time.
Parliamentary Inquiry
Mr. STUPAK. Mr. Speaker, parliamentary inquiry.
The SPEAKER pro tempore. The gentleman will state his parliamentary
inquiry.
Mr. STUPAK. Mr. Speaker, if the other side has no more Members
available to speak on this legislation, are they not then required
under House rules to yield back the balance of their time?
The SPEAKER pro tempore. The gentleman from Illinois will close.
Mr. STUPAK. Mr. Speaker, what I asked was if the other side has no
more speakers available, can they continue to reserve time, or do they
have to yield back the balance of their time?
The SPEAKER pro tempore. The gentleman from Illinois may continue to
reserve his time.
Mr. BARTON of Texas. Mr. Speaker, I ask unanimous consent to claim
the balance of time on our side.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. BARTON of Texas. May I inquire as to how much time I have?
The SPEAKER pro tempore. The gentleman from Texas has 18 minutes
remaining. The gentleman from Illinois has 14\1/2\ minutes remaining.
Mr. BARTON of Texas. May I further inquire if I am the last speaker?
Is Mr. Rush prepared to close?
Mr. RUSH. Mr. Speaker, we have additional speakers.
Mr. BARTON of Texas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, let me first say that it is appropriate that the House
bring this type of legislation in this Congress before the body because
gasoline prices are high, and the American public is concerned about
those high prices, so it is not inappropriate to consider legislation
of this type. We did it twice in the last Congress, passed an anti-
price-gouging bill, once as part of a larger energy package and once as
a stand-alone piece of legislation. So there is nothing inappropriate
about bringing this before the body.
Having said that, I think it is fair to say that it is inappropriate,
at least in my opinion, to bring it before the body in the way it has
been brought. The bill
[[Page H5631]]
that is actually before us, I don't know how many Members of the
majority saw this bill as it is currently configured, but nobody in the
minority saw it until approximately 2:45 p.m. yesterday afternoon.
When I left the Capitol at approximately 6:15, it had still not been
noticed that it was going to be on the suspension calendar this
morning. It may have been noticed and I just didn't get that notice,
but I was told it was up at 10 a.m. this morning, and now it's 10:45.
So those of us in the minority have a certain sense of concern that
we've not been contacted. We've not been asked for our input.
{time} 1045
We've not been allowed to negotiate, participate in any shape, form
or fashion. All we've been allowed to do is come onto the floor, in my
case at 10:45, and speak on the bill, and at some point in time, I
assume there will be a vote on it.
I did study the bill last evening. I have lots of concerns about this
bill. I don't know what ``unconscionably excessive'' means. It's not
defined in statute. As far as I can tell, it's not been defined in any
case law. Apparently, it's going to be determined on a case-by-case
basis.
I also asked my staff to check around, see if there had been price-
gouging lawsuits brought in the various States. Over half of the States
of our great Union have price-gouging statutes on the books. We're
aware of one State, in the State of Kentucky, the Kentucky Attorney
General has either filed a suit or prepared to file a lawsuit in
Kentucky. There may be others, but that's the only one that I know of.
There's certainly no systemic outbreak of price-gouging lawsuits
being filed around the country, and if we really had pandemic price
gouging going on, I think the States that have price-gouging statutes
would be using their State statues. They're not doing that.
Why is that? Well, again, I'm not a trained economist, but it seems
to me that what we have is a case of the chickens coming home to roost.
We have not done much, if any, on the supply side for our oil situation
in this country in the last 30 years; haven't built a refinery, brand
new, from scratch, in almost 35 years. We've put almost every place
that has any potential for new oil development off-limits. Can't drill
up in ANWR, Alaska; can't drill off the coast of California; can't
drill off the coast of Florida; can't drill off the coast of South
Carolina, North Carolina; can't drill off a lot of portions of the
eastern Gulf of Mexico.
And funny things happen. As we've kind of sat on our supply haunches
and not done anything, demand worldwide and domestically has gone up,
and as demand goes up, if you don't have some ability to increase the
supply, sooner or later that price is going to go up.
Now, I wasn't here to hear Mr. Stupak's opening statement, and he may
not have said this, but he said yesterday in the oversight hearing the
price of crude oil has dipped slightly. He doesn't understand why the
price of gasoline has gone up. And all you have to do is look at the
housing market in northern Virginia to get the answer to that.
I had supper last evening with my son who is working at the
Department of Energy. They are living in a home that's probably 35
years old. I don't know what that home cost brand new when it was
built, but a good guess would be $30-, $40,000. That price at the time
was based on the cost of construction, the cost of the land, fair
profit for the builder and real estate agent. So you could say the cost
of that property was $30- or $40,000. Well, the people that own the
home have just sold it. It wouldn't be appropriate to tell the exact
selling price. My son is renting it, but it's over $700,000.
Now, is that price gouging? No. It's what the market demand for
housing in northern Virginia is. It's not related to the cost of the
property, it's related to the demand for housing in northern Virginia.
So those folks have made a nice profit.
Well, the same thing in the oil industry. Demand for oil is going up
in China, demand for oil is going up in Europe, demand for oil is going
up in Asia, demand for oil is going up in the United States, and if you
don't have more of it, price is going to go up. Is that price gouging?
No. It is what the market requires to balance limited supply with
increasing demand.
The price of gasoline in the United States 3 years ago doubled.
Demand actually increased 1 percent. Now, eventually, last time prices
got to about $3 a gallon demand did dip slightly, supply increased a
little bit, price went back down. Right before the last election, the
price in Texas for gasoline got down to about $1.90 a gallon. Since my
friends on the other side have won the election and taken over, the
price has gone back up to what we see today. Is it their fault? It is
not their fault right now. It's not Bobby Rush's fault, it's not Bart
Stupak's fault, it's not John Dingell's fault. It's not Ed Markey's
fault over there in the corner. Although I'm tempted to blame Mr.
Markey, but it wouldn't be fair.
Demand has gone up and supply has not gone up and the price has gone
up, and it's going to keep going up until we do something, both on the
demand side and the supply side.
So, is this the worst bill that's ever been on the floor of the House
of Representatives? No, it's not. Is it the best bill that's ever been
on the floor? No, it's not. You know, I think it is a flawed bill. The
definitions are not there. The mitigating factors are not there.
We would be well-served, since it's on the Suspension Calendar, to
defeat it, get 140, 150 votes, then go back to committee, have some
hearings, try to develop a little bipartisanship, bring a different
bill to the floor, and probably pass with an overwhelming margin.
So I'm going to vote against this bill, and I'm going to ask that all
my colleagues take a serious look at it, vote against it, so we can
figure out the right thing to do. And the next time we bring an energy
package, don't just bring something that's symbolic to the floor. Let's
bring a bill that helps build new refineries. Let's bring a bill that
actually increases the supply. Yes, let's bring a bill that might do
something to limit demand. I think the time has come to look at some of
those bills seriously.
Let's bring a package that actually might do something, other than
rhetorical, to bring gasoline prices in the United States back down to
levels that we think are more appropriate.
I don't like to pay 3 dollars or more for gas anymore than our
constituents do, but this legislation won't do a single thing to keep
market prices down or address the reasons gas prices are rising. What
it will do is threaten legitimate businesses with huge fines and hard-
working people with long jail terms. Furthermore, the bill could quite
possibly lead to price controls and 1970s-style gas lines. I oppose the
legislation before us today for substantive reasons, as well as based
on the process--or lack of process--that has brought this bill to the
Floor.
First, Mr. Speaker, I want the American public to understand how the
legislative process has broken down in this case. In light of your
unprecedented intent to remove the minority's right to a motion to
recommit, it should not surprise anyone in this chamber that the bill
before us has bypassed the Committee of jurisdiction--The Energy and
Commerce Committee--to come straight to the House Floor. The Committee
did not hold a legislative hearing. The Committee did not hold a mark
up. The only opportunity my Committee Members had to seek input from
the Federal regulators with expertise on legislation was yesterday
afternoon during an oversight hearing--a hearing in which the
Democratic majority did not even have a witness testify who represents
the independent gas stations. It's really too bad their voice was not
heard, because the little Mom-and-Pop gas store owner who sells 60
percent of the gas in the U.S. could go to jail for up to 10 years
under this bill if they price their gas wrong.
On top of my concern for the absence of certain witnesses at our
oversight hearing, a new version of this bill was circulated only
yesterday afternoon. That's right: we have had less than 24 hours to
review the changes, but we are supposed to vote on it. Mr. Speaker, I
thought things were going to be fair in this Congress, but I seem to
have been mistaken.
The Administration has issued a Statement of Administration Policy
Against this bill. It indicates that it will lead to gas shortages and
do nothing to help consumers.
On the substance of this legislation, I have serious concerns that
this won't have the intended effect. The Federal Trade Commission is
the expert on competition policy and has conducted several studies and
investigations of the oil and gas markets markets. In its most recent
investigation, the FTC studied each
[[Page H5632]]
segment of the industry after Hurricane Katrina. Guess what they found?
No evidence of price manipulation at the refining level. To the
contrary, they found a competitive market. Transportation sector? No
evidence of manipulation. Inventory levels? Again, no evidence of
manipulation. Gasoline futures? You guessed it, Mr. Speaker, no
evidence of manipulation.
What the FTC found was a competitive market that responded to the
Katrina crisis by changing their priorities and shipping products to
the areas that needed it. The FTC has studied the issue repeatedly, and
has not found any evidence of price increases that were not a result of
a change in market conditions or other factors that may affect the
price.
It may surprise Members that the FTC is opposed to a Federal price
gouging law. Why? Because they're concerned that it could do more harm
to consumers than good. The Secretary of the Department of Energy
opposes it, as well as the National Association of Convenience Stores,
the U.S. Chamber of Commerce, the Society of Independent Gas Marketers
of America, the American Petroleum Institute, and just about every
economist who knows that price controls harm consumers when they cause
shortages. What is better, higher-priced gas, or no gas at all?
Mr. Speaker, I agree with the sponsor of this bill that people who
take unfair advantage of others should be punished. But we already have
laws on the books to address those issues at the Federal and state
level. Now we are going to add a Federal standard to the patchwork of
state laws for gouging--a term which has no legal or economic meaning.
I believe it is unnecessary and fear it will return us to the 1970s gas
shortages. No retailer will want to supply the market at a higher price
and risk being fined millions and going to jail for years. And what
wholesaler will risk $150 million in fines and possible jail time if
they raise their price more than a competitor?
Mr. Speaker, I know many here would like to go home to their
constituents over Memorial Day recess with a gas price gouging bill
rather than address substantive Federal Energy Policy that might
actually address the factors causing gasoline prices to rise.
Republicans were able to pass many energy-related bills when we were in
the Majority, though Democrats in the House and Senate voted against
almost every piece of legislation that would have increased our
domestic energy supply.
I can understand a visitor to California might suspect they are being
gouged at the pump when they fill up in San Francisco for upwards of $4
a gallon, but that is just a result of the Federal, State and Local
taxes and other state fuel requirements. If something is broken, Mr.
Speaker, it is not the free market. This Congress must act to increase
domestic supply of gasoline, not enact feel-good legislation that is
ill-conceived and ineffective.
Mr. Speaker, I reserve the balance of my time.
Mr. RUSH. Mr. Speaker, I want to remind my friend from Texas that he
should take a closer look at the bill. The bill explicitly takes into
account market conditions, both domestic and international. The bill
has two pages of mitigating factors. If the costs go up, and they are
going up, this bill allows companies to capture the costs.
And I would have to just conclude, Mr. Speaker, that my friend from
Texas needs to take a closer look at this bill because his arguments
are just not true.
Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr.
Stupak).
Mr. STUPAK. I thank Mr. Rush for yielding me time. I'd like to
respond to the gentleman from Texas and some of the claims he made.
First of all, Democrats have only been in the majority for 4 months,
and we are looking for ways to end this pain that motorists are feeling
every day when they fill up their car at the gas pump, and that is, to
bring forth the price-gouging legislation you see before us.
Now, Mr. Barton says we should not pass this for this reason or that
reason. These are just excuses. He complains about the process. With
all due respect, we learned the process from Mr. Barton.
Last year, they brought forth a gas price bill, was introduced on
Tuesday, May 2, 2006. Wednesday, May 3, 2006, we voted on it. We never
saw it. This bill has been around for over a year. So let's stop the
excuses. American people don't want arguments about what process. They
want relief at the pump, and that's what we're doing.
Lookit, today Members of the House have a very simple choice. Vote to
stand up with consumers, your constituents, who are paying record
gasoline prices, nationwide average, record prices, or vote to protect
big oil companies' enormous profits.
My bill, H.R. 1252, which has over 120 bipartisan cosponsors, would
give the Federal Trade Commission the explicit authority to investigate
and punish those who artificially inflate the price of energy. The bill
would provide a clear, enforceable definition of price gouging; focus
enforcement on the worst offenders, especially companies that sell more
than a half billion dollars a year of gasoline. We strengthen
penalties, both criminal and civil, with up to triple damage for those
who would price-gouge us; and direct the penalties collected to go into
the Low Income Home Energy Assistance Program.
Congress must pass without any more excuses this legislation. Today's
legislation is truly a first step in addressing the outrageous prices
we're seeing at the gas pump.
We'll be working to protect consumers from high natural gas prices.
We've introduced the Prevent Unfair Manipulation of Prices legislation
to improve the oversight of energy trading in this country, and I hope
we can move this legislation later this year.
Last year, the House of Representatives actually voted on a weaker
bill, on May 3 as I indicated, brought forth by Republicans on price
gouging. We passed that bill under suspension, like we are today, 389-
34. The Senate didn't do anything with it.
I'm proud to announce that since the Democrats are in charge, the
Senate bill, very similar to my bill, has already made it out of
committee, and we expect a vote on it next month. So we can actually
bring relief to consumers now that the Democrats are in charge.
Today, every Member has a choice. Side with big oil or side with the
consumers who are being ripped off at the gas pump.
I'd like to thank Speaker Pelosi for her work and leadership in
bringing this legislation to the floor, also Chairman Dingell of the
full Energy and Commerce Committee, and his staff for their help in
putting forth a very fine piece of legislation that is much broader in
scope than what we voted on last year, has stronger penalties and will
truly give the American people relief at the pump.
Before Members leave for the Memorial Day recess, vote to provide
your constituents with some relief at the gas pump. Vote for H.R. 1252.
Mr. BARTON of Texas. Mr. Speaker, how much time do we have on this
side?
The SPEAKER pro tempore. The gentleman from Texas has 9 minutes
remaining, and the gentleman from Illinois has 11 minutes remaining.
Mr. BARTON of Texas. Mr. Speaker, I yield 2 minutes to the gentleman
from Arizona (Mr. Shadegg), a member of the committee.
Mr. SHADEGG. Mr. Speaker, I thank the gentleman for yielding and I
rise in opposition to this legislation, but I compliment my colleague,
the gentleman from Michigan (Mr. Stupak). He has, in fact, worked
diligently on this issue, and I join him in my concern about prices
that are charged to the American people. Indeed, he just indicated he
would very much like to see relief at the pump, and so would I. I
happen to drive a Ford F-250, which does not get good gas mileage, and
I, along with others, would like to see relief at the pump. I certainly
commend all those who are cosponsors of this legislation as having good
intentions.
My concern, however, is that it will not achieve that result. The
reality is we do have very high gas prices, and we have prices that
have gone up dramatically in just the recent few months. We all want to
know the answer for that, and I've spent some time trying to look at
it.
Unfortunately, I don't see evidence that there is price gouging and
that high gas prices are a result of price gouging. What I see is that
they are the result of policies of this government, and it seems to me
that we ought to be looking at the policies of this government.
For example, we as a Nation, this Congress, have imposed a tariff on
imported ethanol. We could bring in ethanol produced in other countries
at a dramatically lower price than the ethanol we're producing in this
country today, but instead, we tax that ethanol and make it even higher
priced. Last year, when the prices went up, I voted
[[Page H5633]]
against price-gouging legislation, but I dropped my own bill to suspend
that tariff so that we could take advantage of lower-priced ethanol.
Unfortunately, the Congress didn't move in that direction.
Two years ago, I went to the commodities market in New York, and they
told me the problem with gasoline prices is refineries. We do have a
lack of refineries in this country, and I've dropped legislation to
encourage the construction of more refineries. I think there is concern
that the refinery industry is holding the capacity of those refineries
right at the edge so the prices can be the highest possible.
But one of the issues you hear is that part of the reason gasoline
prices are so high right now is because of the conversion from winter
gas to summer gas. That conversion is compelled by government
regulations which drive up the cost and by government regulations which
spell out precisely how it must be done and that they must draw down
supplies.
It seems to me, before we start tampering with the free market, which
has served us so well, and before we start passing very wide ranging
legislation of this type, we have to make a decision. Do we want the
government to regulate prices? Do we want a huge new bureaucracy in
there looking at a poor mom-and-pop gas station to see if they raise
prices? Or do we want to look at the policies of this government which
have held down supply and which have not met demand?
It seems to me this is simple and straightforward. I understand the
urge to do it, but the problem is, if we empower a massive new
government bureaucracy, we will not get relief at the pump which Mr.
Stupak wants and which I'd like to see. We will indeed just create a
large bureaucracy.
{time} 1100
In my home State of Arizona, we have tried this. We have had attorney
general after attorney general, even in my tenure, when I was in the
attorney general's office, we investigated price gouging and could not
find evidence of it. Let's look at the market forces that are causing
these high prices. I urge my colleagues to oppose the bill.
Mr. RUSH. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Markey).
Mr. MARKEY. I thank the gentleman from Illinois, and for his
leadership on this bill, and the gentleman from Michigan. The bill
before us today would give the Federal Trade Commission the authority
to investigate and punish wholesale or retail sale of gasoline or other
petroleum distillates at prices that are unconscionably excessive or
take unfair advantage of consumers during any presidentially declared
national or regional energy emergency.
Now, we hear from the Republicans, don't interfere in the free
market. Don't touch the free market. Don't have the Federal Government
getting in on the side of the consumers. It's just a matter of supply
and demand. That's what the Republicans are arguing. Don't interfere
with the free market, even if it goes up to $3.20 a gallon for
gasoline, $3.80 a gallon for gasoline, $4 a gallon for gasoline. Don't
let the Federal Government help out the consumer.
You know what? The Republicans are right. It is a matter of supply
and demand. Consumers are forced to supply whatever money the oil
companies demand from the consumers. The oil companies have the
consumer over a barrel, a barrel of oil that the oil companies control
and that they price. They price it wherever they want to put it.
They tip the consumer upside down, the oil companies do, and they
shake money out of the pockets of consumers at the pump. The Christians
had a better chance against the lions than the consumer has against the
oil companies at the pumps in the United States today.
All we are saying is let's give the Federal Government a sword to get
into the battle in the arena on behalf of the consumers in America. And
the Republicans are saying, we don't want to arm the Federal Trade
Commission so they can help the consumers so that they are not tipped
upside down. It is clear that high gas prices are hitting families
hard, but they are also causing our economy to stall and to sputter
like a jalopy.
The bill before us today addresses one potential cause of high
prices: price gouging by the oil companies. It sends a signal to oil
companies that there will now be a regulator out there that has been
empowered to take action when unconscionably high prices are being
charged.
The free market, I don't think so. I think that when we look at this
oil market, we understand that the consumer is at the whim of the oil
companies.
Mr. BARTON of Texas. Mr. Speaker, I yield 2 minutes to a member of
the committee, Mrs. Blackburn of Tennessee.
Mrs. BLACKBURN. I thank the gentleman from Texas.
Mr. Speaker, I do rise today in opposition to this legislation,
because I certainly feel that it is going to increase the cost of
gasoline to the American people. H.R. 1252 does purport to crack down
on price gouging and marketplace manipulation by integrated large oil
companies. Yet that is not what this legislation is going to do.
We had a hearing in committee about it yesterday, and I wish, indeed,
that we were going to have the bill before us for a markup. What I find
in this piece of legislation is that it will put a target on the back
of every small business owner who runs and operates a neighborhood
convenience store, a filling station or a truck stop. As I said in our
hearing yesterday, there are so many of these that are the local
gathering spot. These are not people that are going to gouge their
neighbors.
You know, I know it is tempting to react to constituents' frustration
with high gas prices. We are all frustrated with that. But the way to
do it is not passing a hastily drafted price-control legislation. We
should be focused on the real problem and work for real results on this
issue. That is what our constituents want.
H.R. 1252 is not going to give us the real results. What we are going
to see is a turn-back to energy policy, back to the Jimmy Carter era.
It is a clumsy attempt, I think, to punish bad actors who take
advantage of the public. But the bill adopts some vague language,
employs some heavy-handed criminal penalties, some unenforceable civil
penalties that no small business owner could afford.
I do think it's a little bit of legislative overkill, and some people
would call it unconscionably excessive. They are entitled to that
point. It was my hope that Congress would go through regular order,
would address some of the issues pertaining to this Nation's energy
policy, and look for some real solutions to the root problem.
Mr. RUSH. Mr. Speaker, I yield 10 seconds to the gentleman from
Michigan (Mr. Stupak).
Mr. STUPAK. In response to the last speaker, this bill does not
target mom-and-pop grocery stores. You have to sell half a billion
dollars of gasoline products.
Secondly, the record high prices of oil that we are seeing was not
under Jimmy Carter. It was under Ronald Reagan in 1981.
Mr. BARTON of Texas. Mr. Speaker, I yield 2 minutes to Congressman
Murphy of Pennsylvania, a member of the committee.
Mr. TIM MURPHY of Pennsylvania. I thank the gentleman.
One of the things that's important to keep in mind is why are
gasoline prices what they are, and it is not the retailer. When we look
at what has happened to prices over all, let's keep in mind that we
have become more and more dependent upon other nations. When we look at
what's contributed to costs, look at this: Crude oil costs are 56
percent of the price; taxes are 18 percent of the price; refining
nearly 17 percent of the price; distribution and marketing, nearly 9
percent of the price.
What has happened with regard to crude oil prices, they have doubled
since 2004, they have tripled since 2001, and they have gone up over
600 percent since the 1980s.
But what has happened, as the cost of a barrel of oil has gone from
$11 a barrel to over $70 a barrel, is Congress has continually stood in
the way of trying to come up with more sources. We have abundant
supplies. We have the Atlantic coast, the gulf coast, the Pacific
coast, the western States and Alaska. Whenever those come up for a
vote, Congress shuts it down. Over 90 percent
[[Page H5634]]
of Federal lands are off-limits to exploring for the vast supplies of
oil we have there.
We have shut off some of our other sources, and some are still trying
to do that with regard to using coal as another energy source. We have
not funded fully the things we need to do for hydrogen fuel cell. We
have not gone far enough with conservation, with our automobiles, with
reducing homeowner uses.
So between these issues of exploration, conservation,
diversification, we have not taken the steps we need to do to truly
reduce energy costs. It concerns me greatly that we are moving forward
to blaming the retailer when we ought to be looking to blame ourselves.
After all, if we have supplies of oil in the gulf coast, which we set
off-limits to ourselves, and, yet, we let Cuba explore for them,
something is terribly wrong.
I hope that what this Congress does is work more towards energy
independence and recognize that it's changing the way we explore for
oil and making sure that we do much more for diversification of our
sources and conserving our huge energy waste in this country. That is
what is going to lower the prices of gasoline.
Until we make this commitment as a Nation, and until we make this
commitment as a Congress, we will not see these prices go down.
Mr. RUSH. Mr. Speaker, may I inquire how much time we have remaining?
The SPEAKER pro tempore. The gentleman from Illinois has 7\3/4\
minutes remaining.
Mr. RUSH. Mr. Speaker, I yield 2 minutes to the gentleman from
Florida (Mr. Klein).
Mr. KLEIN of Florida. I thank the gentleman for the time and thank
you for the opportunity to speak to this very important issue.
Mr. Speaker, the rising cost of gasoline is causing huge problems for
families throughout south Florida, which I represent, and certainly
throughout the whole country. In south Florida a gallon of gasoline is
well over $3.25 and rising. In fact, there is gas even at $3.59 per
gallon in my local area.
What is the excuse this time? Is it disruptions of oil in the Middle
East? Not that I am aware of. I haven't heard. Hurricane damage to
refineries? No, again. How about the summer driving season? Seems to me
this is May. So, again, no excuses, no excuses, but we just hear more
and more excuses from oil companies that it's the drivers, it's this or
that.
Yes, there are a lot of answers here, but let's focus on where the
market manipulation is going on.
In my area, tourism drives the economy. When gas prices go up, the
first thing families do is they stay within their budget and cut back
on their vacations, vacations that many times are planned to Florida.
When gas prices go up, families and businesses feel it, and it
negatively impacts every part of our economy.
That's why I am here today to show my strong support for the Federal
Price Gouging Prevention Act. This bill, authored by my friend Mr.
Stupak and others, would give the Federal Trade Commission the
authority to crack down on the people who price gouge. This bill is an
excellent step in the short term because it protects consumers and
gives the government the teeth it needs to go after market
manipulators.
In the long term, we are only going to solve this problem by moving
towards energy independence. American families can no longer afford to
rely exclusively on oil for their energy needs. We all know that
investing in alternative fuel sources is vital to our national security
and to our economy.
Being energy-independent is a goal that many of us have been talking
about and working on for many years. That goal has never been more
important than it is right now. But today is the time we need to make
changes that will reduce gas prices for American consumers now, and in
the future let's work towards energy independence.
Mr. BARTON of Texas. Mr. Speaker, I yield 1 minute to a member of the
committee, Congressman Burgess of Texas.
Mr. BURGESS. I thank the gentleman for yielding.
Mr. Speaker, I have grave concerns about the bill before us today,
specifically the lack of clarity in defining ``unconscionable.'' I
believe this term to be ambiguous, and, in fact, could lead to severe
supply shortages in times of national emergency.
Under this proposal, a gasoline station owner could receive civil and
criminal penalties totaling $5 million and 10 years in prison for
charging ``unconscionable'' prices. Yet there is no clear definition
for what is unconscionable.
To add insult to injury, if a station owner were to charge less than
the market price, he could also be subject to charges of undercutting
the market. Were I a gasoline station owner in a time of crisis, I
likely would shut down my pumps and sell Snickers bars and Coca-Colas
and try to make money that way.
I am not defending those who would charge unfairly. I firmly believe,
and, in fact, in my home State of Texas, we have a strong antigouging
price statute already on the books. If it is determined that illegal
pricing has occurred, the individuals should be prosecuted to the
fullest extent of the law.
But let's be sure we do not create a climate which causes business
owners to stop selling gasoline at a time in crisis when we so clearly
will need those resources.
Mr. RUSH. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan (Mr. Stupak).
Mr. STUPAK. Mr. Speaker, yesterday we had a hearing on gas price
gouging, and the Commissioner of the Federal Trade Commission actually
came and testified. On page 12 of his testimony, footnote number 24, I
would like to quote the following: The statute mandating post-Katrina
price investigation effectively defined price gouging as an average
price of gasoline available for sale to the public that exceeded its
average price in the area for the month before the event, unless the
increase was substantially attributable to additional costs in
connection with production, transportation, delivery and sale of
gasoline in that area, or to national or international markets.
When questioned yesterday, Commissioner Kovacic said, We've used it.
We have the definition.
My legislation makes it clear to take these factors into
consideration when you determine whether price gouging is going on: How
much did it cost delivered at transportation? What was the bill of sale
from the supplier. These are factors in the legislation.
The FTC clearly understands it. Members of the House should be able
to understand it. Vote ``yes'' on H.R. 1252.
Mr. BARTON of Texas. Mr. Speaker, we have two speakers. I think we
have 2 minutes.
The SPEAKER pro tempore. The gentleman from Texas has 1 minute
remaining.
Mr. BARTON of Texas. One minute remaining. Then we have one speaker
left.
I yield the balance of the time on the minority side to the
distinguished minority whip, who is a member of the committee, on
leave, Mr. Blunt of Missouri.
{time} 1115
Mr. BLUNT. I thank the gentleman for yielding and for his hard work
on these issues, and I also appreciate my colleagues from the
committee. But I am here to say to my friends that, as we look at this
bill, I don't know what this bill does because the bill is so unclear.
It didn't go through our committee. Like the other legislation we
passed in this Congress, it is not likely to become law. I believe we
have put around 21 bills on the President's desk so far this year, a
dozen of them to name post offices. And the reason for that is all of
the bills we passed in the House don't create a result, they don't
create law.
Let me just refer to one thing. It says you can't sell fuel in an
emergency situation at a price that is, (a), ``unconscionably
excessive.'' Of course you shouldn't do that. We shouldn't allow that.
But we should define what that means.
One of the supporters of the bill has told me, well, every court will
decide what that means. I have got to tell you, the mom-and-pop grocery
and gasoline station owner can't wonder what every court is going to
decide.
This bill is unclear. It needs work. It puts an undue hardship on
people that are trying to make a living running a
[[Page H5635]]
service station, and I urge my colleagues to oppose it.
Mr. RUSH. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, the opponents of this bill, my friends on the other side
of the aisle, are asking for this Congress to wait until a more perfect
time, a more perfect time to help the American consumer out.
Mr. Speaker, I want to remind my friends on the other side of the
aisle that the American people are suffering right now, and they are
demanding this Congress to take action right now.
There can never be a more perfect time for this Congress to take
action. Now is the time to take action. Now is the time, Mr. Speaker.
Mr. Speaker, I just want to just inform my colleagues that scare
tactics will not work this time. If they will look at this bill, they
will see that scare tactics are nowhere in this bill. This bill is a
scalpel, it is not a meat axe. This bill carefully speaks to the issues
that the American people face. This bill is carefully crafted to take
into account market conditions, explicitly listing those mitigating
factors that will spur the FTC into action.
Any company that gouges should be sought out, should be identified,
should be brought before justice, should be brought before the American
people in the form of the Federal Trade Commission. A company will be
found guilty of price gouging under this bill only, and I repeat, only
if they engage in unconscionable pricing. We do not suspend free
markets nor do we suspend the laws of supply and demand.
Mr. Speaker, again, the American consumers need us to act, they want
us to act, they demand that we do act. Now is the time. Now is the time
for us to act. I ask Members of this Congress to vote in favor of this
bill.
Mr. DINGELL. Mr. Speaker, H.R. 1252 is intended to stop and punish
unscrupulous gasoline price gougers. The bill empowers the Federal
Trade Commission to go after gougers at all levels of the gasoline
distribution chain and to impose stiff penalties on violators. It also
provides authority for the States to go after retail price gougers
under Federal law.
The bill is not, however, intended to prohibit all increases in
price--only those increases that grossly exceed the supplier's earlier
prices and competitors' prices and that do not reflect reasonable
responses to an emergency situation.
This bill would not prohibit a seller from raising prices to
compensate for extra risks, such as staying open while a hurricane is
bearing down, traveling outside an affected area to secure additional
supplies and transport them to people in need, or postponing regular
maintenance to increase output during an emergency. These are all
efforts that ameliorate a dire situation and the bill is not intended
to discourage them.
Finally, the bill would permit suppliers to reasonably factor in
other local, regional, national, and international market developments
in the quickly-changing and uncertain market conditions characteristic
of energy emergency situations.
In sum, Mr. Speaker, this bill is intended to prohibit grossly
excessive, pernicious, and predatory increases in the price of gasoline
during emergencies--but not to prevent or discourage fair and
reasonable responses to unusual market conditions.
Mr. LEVIN. Mr. Speaker, as a cosponsor of H.R. 1252, I rise in
support of the Federal Price Gouging Prevention Act, and urge its
passage by the House.
Gasoline prices are now at record highs. In my home state of
Michigan, the average price of regular gas is $3.47 a gallon--a full 66
cents a gallon higher than it was at this time last year. According to
the General Accounting Office, the rise in gasoline prices this year
has drained consumers of an extra $20 billion. The six largest oil
companies announced $30 billion in profits over the first three months
of 2007 alone. This is on top of the $125 billion in profits they
racked up last year.
The other side says that we should do nothing. They say that it's a
world market for oil, and therefore something we cannot control. How
then do they explain that the cost of gasoline has been rising even in
the face of falling world oil prices? We must face the fact that there
is something wrong in the distribution chain, especially during times
of energy emergencies such as when Hurricane Katrina hit the Gulf
Coast. As a first step in attacking the problem, we need to give the
Federal Trade Commission the explicit authority to investigate and
punish those who artificially inflate the price of gasoline.
The oil companies oppose this bill. The White House also has
indicated that the President may veto the bill. With all due resect, we
work for our constituents, not the oil companies and not the White
House. I urge the House to stand with consumers and vote for this
needed legislation.
Mr. HARE Mr. Speaker, I rise today in strong support of H.R 1252, the
Federal Price Gouging Prevention Act. I am proud to be an original
cosponsor of this important piece of legislation.
Oil prices are continuing to skyrocket, increasing the burden on
American families, small businesses, and individuals who rely on their
vehicles for their livelihood. Every day I hear from troubled
constituents who are paying over $3.00 per gallon at the pump.
Constituents like Richard Benefiel, a small business owner who called
me yesterday out of desperation explaining he would have to shut down
his shipping operation in less than 30 days unless relief was provided.
On the other hand, Exxon-Mobil raked in $9.3 billion between January
and March--its best first quarter in history. This is unacceptable.
The bill before us today is a much needed step toward addressing
market manipulation by Big Oil and the egregious impact it has on the
American consumer. The Federal Price Gouging Prevention Act provides
the Federal Trade Commission with new authority to investigate and
prosecute energy companies who engage in predatory pricing, market
manipulation, and other unfair practices, with an emphasis on those who
profit most, thereby providing immediate and much needed relief to
consumers.
Yet, this is only the first step in bringing down energy costs. Last
year, our Nation hit its highest dependence on foreign oil, importing
771,000 barrels daily from Saudi Arabia and other Organization of
Petroleum Exporting Countries, OPEC. This served as a wake-up call for
the United States to begin taking measures to decrease our dependence
on foreign oil. I refuse to continue to allow OPEC, which accounts for
65 percent of internationally traded oil, to continue to dictate our
Nation's gas prices. Antitrust laws must be put into action and greedy
oil exporters need to be held accountable.
I am pleased that we voted yesterday to pass H.R. 2264, which
authorizes the Justice Department to take legal action against OPEC
state-controlled entities who conspire to limit supply or fix the price
of oil.
I also believe that building a diverse energy portfolio which focuses
on renewable, homegrown energy sources like ethanol, biodiesel, as well
as wind, solar, hydro-power and clean-coal technologies is a critical
step toward energy independence, which will bring down prices, and
clean up our environment.
The Federal Price Gouging Prevention Act is a critical first step in
addressing skyrocketing energy costs and I urge all my colleagues to
support the bill.
Mr. WELDON of Florida. Mr. Speaker, I rise in opposition to price
gouging.
The good news for Florida consumers is that the state of Florida
already has the ability to protect consumers from price gouging.
Florida law finds that gouging has occurred when a commodity's price
represents a ``gross disparity'' from the average price of that
commodity during the 30 days immediately prior to the declared
emergency. This applies unless the increase is attributable to
additional costs incurred by the seller or to national or international
market trends. In fact, Florida law enforcement fully investigated over
58 cases of alleged gouging after Tropical Storm Rita.
Violators of Florida's anti-gouging law are subject to civil
penalties of $1,000 per violation. In 2005, the State of Florida
enacted criminal penalties for those who engage in price gouging.
In addition to the protections that Florida consumers already have in
place through State law enforcement, the Federal Trade Commission has
the authority to investigate and bring charges against those that
engage in price gouging.
In a significant departure from previous legislation addressing this
issue, Floridians who are gouged would not receive a rebate. Instead,
H.R. 1252 would direct any fines collected from gougers to a program
that largely benefits the Northeast and the Midwest. Previous
legislation on this matter directed that any fines collected from price
gouging be returned to the State where the gouging occurred so that the
consumers could be reimbursed. H.R. 1252, however, directs that all of
these funds instead be placed in the Low Income Home Energy Assistance,
LIHEAP, fund. Unfortunately for the residents of Florida, this is a
fund that they get little benefit from. The primary beneficiaries
LIHEAP grants are those living in the Northeast and Midwest. While New
York and Florida have populations that are nearly equal, New York
received 10 times the amount of LIHEAP money that Florida received
($247 million for New York vs. $26 million for Florida). Other large
beneficiaries include: New York, Michigan, New Jersey, Pennsylvania,
Ohio, Wisconsin, and Illinois. In fact, on a per capita basis, no state
does worse than Florida when it comes to
[[Page H5636]]
LIHEAP. The bottom line is that if Florida consumers get gouged, those
living in the Northeast and the Midwest get the rebate.
This bill is more about show than about substance. Even the
comprehensive investigation by the Federal Trade Commission, FTC, in
the aftermath of hurricane's Katrina and Rita found no gouging or anti-
trust violations.
The real driver of price for gas is the growing global demand for
energy. The rapid growth in the worldwide demand for crude oil is being
driven primarily by economic growth in China, India and the United
States.
Ironically, during a Congressional hearing on this bill, the
proponents of the bill offered some bizarre testimony. When asked if
the oil companies were engaging in collusion--which is already
illegal--a proponent of the bill offered that what was being engaged in
is ``conscious parallelism.'' He then offered that you cannot prove
``conscious parallelism'' in court, so this bill does virtually nothing
to address that. Another advocate for the price-gouging bill testified
before the committee that ``drilling [for oil] will do nothing to lower
the price of oil.'' I am concerned that these individuals are so
dedicated to an ideology that they defy common sense.
The most important thing we can do to lower the price of gas for
American consumers and to ensure our energy independence is to expand
domestic energy production, expand refining capacity in the U.S. by
reducing excessive burdens, encouraging more nuclear power, fostering
the development of renewable energy, and encouraging conservation.
Unfortunately, it took us 12 years to end the Democrat filibuster that
kept America from developing more oil and gas off the Outer Continental
Shelf, OCS. Last year we were successful in opening a small portion of
the OCS to oil and gas recovery, and I hope that we can build on that
success. Also, last year we secured passage of legislation that allows
for greater production of oil and gas from Federal lands.
Unfortunately, Democrat leaders have introduced legislation and are
holding hearings to close off those sources of domestic energy
production. We streamlined regulations for nuclear power plants, yet
Democrats are considering injecting new regulations into the process. I
was also pleased that we were able to secure passage of renewable
energy tax credits. I have cosponsored legislation to extend these tax
cuts for renewable energy and conservation so they are not allowed to
expire.
The Democrats expression of ``outrage'' over gas prices is a bit
ironic given that they are the ones who have consistently proposed
higher gas taxes, higher energy taxes like the proposed BTU tax, and
who are presently moving forward with ``cap and trade'' global warming
legislation along the lines of what has been adopted in Europe. As the
Washington Post pointed out last month, this cap and trade system has
led German consumers to pay 25 percent more for electricity than they
did two years ago, while German utilities are making record profits.
This higher cost for electricity has made it difficult for some
European countries to compete with cheaper foreign imports, resulting
in European workers losing their jobs.
The rhetoric simply does not match the policies being advocated by
the Democrat majority.
Mr. SPACE. Mr. Speaker, I rise today in support of H.R. 1252, the
Federal Price Gouging Prevention Act.
My district is currently experiencing some of the highest gas prices
in its history. In several towns in my district, my constituents are
paying prices as high as $3.49 per gallon to fill their tanks.
The price of gas is a crippling figure for the people of Southeastern
Ohio who depend on their cars and trucks for transportation. Working
families frequently commute long distances to reach their places of
employment. For these families, the rise in gas prices is essentially
an undeserved pay cut.
The farmers in my district also face the challenge of fueling their
equipment on which they depend to make their modest profits.
I fear most for the fate of my district's retired and elderly
populations. Most of these individuals are on a fixed income that
already limits their ability to pay for the prescription drugs and
medical visits they need. The rising price of gas places them only
further into a bind and forces them to make decisions that no American
should ever face.
I co-sponsored H.R. 1252 because I believe it is time for Congress to
intervene on behalf of working Americans. This common-sense legislation
simply ensures that oil companies play by the rules and offer consumers
a fair price for gas, not one that takes advantage of circumstances.
I am a firm believer in the power of the marketplace to deliver the
best possible services to American consumers. Free markets drive our
economy and make it the most powerful in the world. However, when
companies don't play by the rules, they must be punished because it is
the consumer that ultimately suffers.
I believe that passage of this legislation offers important
protections to the people of my district in their daily battle with the
price of gas. I encourage my colleagues to lend their support as well.
Ms. HIRONO. Mr. Speaker, I rise in support of H.R. 1252, the Federal
Price Gouging Prevention Act.
I am a proud cosponsor of this bill, which makes it illegal for any
company to sell gasoline at excessive prices or to take advantage of
market conditions by increasing prices during an energy crisis. It
allows the Federal Trade Commission and the States' Attorneys General
to bring lawsuits against corporations that charge excessive prices for
gasoline. The bill also permits investigations of companies suspected
of price gouging and requires honest and accurate reporting of pricing
practices.
In the first month of the 110th Congress, the House took away $14
billion in taxpayer subsidies from the oil companies. This money will
be reinvested in alternative, renewable energy sources.
Yesterday the House passed a bill by a bipartisan 345-72 vote, a bill
that authorizes the Justice Department to take legal action against
OPEC state-controlled entities and governments that conspire to limit
the supply or fix the price of oil.
Hawaii's consumers pay some of the highest gasoline prices in the
Nation. In 1998, the State of Hawaii filed a lawsuit against the major
oil companies operating in our state. The lawsuit revealed that 22
percent of an oil company's nationwide dealer profits came from Hawaii,
a state that represented only 3 percent of the market. Clearly,
Hawaii's consumers were contributing an excessive share of the
company's profits in relation to market share.
Since President Bush took office, gas prices have more than doubled,
and previous Congresses have failed to protect consumers from price
increases. For the first time in years, Congress has begun exercising
its oversight responsibilities. This is important given that the six
largest oil companies made $30 billion in profits for the first quarter
of 2007, on top of the $125 billion in record profits for 2006.
I urge my colleagues to vote for this bill, which aims to reduce the
burden of high energy costs on American families and businesses, build
on efforts to increase energy efficiency, lessen our dependence on
foreign oil, and cut greenhouse gas emissions in the longer term.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Illinois (Mr. Rush) that the House suspend the rules and
pass the bill, H.R. 1252, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. BARTON of Texas. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this question will
be postponed.
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