[Congressional Record (Bound Edition), Volume 154 (2008), Part 10]
[House]
[Pages 13486-13493]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  FEDERAL PRICE GOUGING PREVENTION ACT

  Mr. STUPAK. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6346) 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. 6346

     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--

[[Page 13487]]

       (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) 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.
       (c) 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 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--
       (A) a fine of not more than 3 times the amount of profits 
     gained by such person through such violation; or
       (B) a fine of not more than $3,000,000.
       (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 
Michigan (Mr. Stupak) and the gentleman from Texas (Mr. Barton) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Michigan.


                             General Leave

  Mr. STUPAK. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and to 
include extraneous materials on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. STUPAK. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today the U.S. House of Representatives has an 
opportunity to

[[Page 13488]]

vote on my legislation, the Federal Gas Price Gouging Prevention Act, 
H.R. 6346. Every Member of the House will face a simple choice: Vote to 
stand up for consumers, your constituents, who are paying outrageous 
gas prices at the pump, or vote to allow oil companies to go on setting 
them unchecked.
  As of last night, the national average for a gallon of gasoline, 
regular gasoline, was $4.07. With rising prices, it makes sense that we 
vote on this legislation before the House leaves for the 4th of July 
holiday and millions of Americans fill their gas tanks and hit the 
road. Or even as we look forward to this winter, with home heating oil 
at $3.98 per gallon, it will be impossible for people to heat their 
homes this winter.
  The high cost of energy produces more opportunities for multiple 
opportunities to have price gouging and price manipulation. 
Unfortunately, with these high prices, fewer families will be traveling 
this year, and that takes an especially hard toll on districts like 
mine that rely on tourism.
  As I travel my vast northern Michigan congressional district, I have 
heard from everyone from clergy to farmers to seniors who are outraged 
by prices at the pump. They are shocked to learn that there is no 
Federal law against gas price gouging. Just as speculators are driving 
up prices on the global energy markets, unscrupulous wholesalers, 
retailers and refiners operate without the Federal oversight to ensure 
prices are fair and justified.
  Twenty-nine States and the District of Columbia have put their own 
price gouging laws into place, but there is no uniform standard as to 
price gouging. Absent Federal action, Michigan Governor Jennifer 
Granholm is pushing State legislation that would give the Michigan 
Attorney General full authority to investigate price fixing and gas 
gouging at Michigan's gas pumps.
  In Michigan, in fact, in my district, we have seen recent evidence of 
price gouging. An energy company of Kansas City, Missouri, opted to 
settle a class action suit brought under the Michigan's Consumer 
Protection Act in May over charges that they charged at least $1 above 
the State average over energy this year. I am pleased a deal was 
reached that will provide Michigan consumers with recourse, but I have 
a hard time believing this is an isolated case. If price gouging is 
occurring in my district, I have to believe it is not happening in 
other parts of the country and we need a uniform law to prevent it and 
enforce penalties on those who violate it.
  Because there is no Federal law against price gouging, the Federal 
Trade Commission has never prosecuted a case of gas price gouging. Let 
me give you an example.
  After Hurricane Katrina, the Federal Trade Commission at the request 
of Congress examined gas prices and found 23 percent of the refineries 
looked at, 9 percent of the wholesalers looked at and 25 percent of the 
retailers that were reviewed had increased prices that ``were not 
substantially attributed to increased costs'' and ``could not be 
attributed to national market trends.''
  In other words, they were price gouging after Hurricane Katrina. Yet, 
the FTC was still powerless to act because there is no law against gas 
price gouging. I hope my colleagues in the other body will take action 
and join the House in passing this bill and work toward giving Federal 
agencies the tools to provide effective oversight of energy companies. 
There is no reason for my colleagues on either side the aisle to vote 
against my legislation.
  Today, every House Member has a choice: Side with big oil companies 
who are making obscene profits, or side with the American consumer.

                              {time}  1400

  A vote against my bill is a vote against consumers and a vote for Big 
Oil. I am pleased to be joined by other Members and colleagues who are 
here to work very hard on this issue with me.
  I reserve the balance of my time.
  Mr. BARTON of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in opposition to H.R. 6346. I know it is very 
similar to a bill that my friend introduced a year ago, and I think we 
even had a vote on the House floor a year ago on the bill, but there 
are some changes. Let me give the process argument against it, and then 
I will give the policy argument against it.
  The process argument against it is a bill that is introduced on one 
day, is voted out of the House Floor the next day. That certainly shows 
a speedy government, but it doesn't show due process under the normal 
rules of the House of Representatives.
  It would be good to have a legislative hearing on the bill and to 
have either a subcommittee and/or, and preferably or, a full committee 
markup. We have a number of bills right now that have been introduced 
on oil speculation in the futures markets. My friend, Mr. Stupak of 
Michigan, has introduced a bill, I have introduced a bill. He and I and 
the chairman of the full committee, Mr. Dingell, are on a bill together 
on that issue. We had an excellent oversight hearing yesterday that 
Chairman Stupak chaired. We have got a commitment from Chairman Dingell 
that we are going to have a legislative hearing and go through regular 
order on the oil speculation bill. So we will have an oil speculation 
bill on the floor hopefully within the month that will have gone 
through the process, that will be bipartisan. This bill doesn't meet 
that test. It was introduced in its current form yesterday and we are 
voting on it on the floor today.
  Now, as to the substance of the bill. Let me read into the record 
some information on prices. These are national average gasoline prices 
in the United States of America.
  In 2006, the average retail price was $2.56 a gallon. This is the 
national retail price for self-serve unleaded gasoline. The average 
retail margin was 14 cents, and the average credit card fee was a 
little over 6 cents. Last year in 2007, the average retail price had 
gone up to $2.79. The average retail margin was still 14 cents, and the 
average credit card fee had gone up to 7 cents.
  So far, for data that we have this year for calendar year 2008, the 
average retail price has jumped to $3.37. Now we know as a side note 
that as of today the average national retail price is a little over $4, 
I believe $4.07. The average retail margin has gone down to 12 cents, 
so we have lost 2 cents in retail margin, and the average credit card 
fee has gone up 8.4 cents.
  So based on, such as there is, the definition of price gouging in 
this bill, which if you go over to page 3 of the bill, they don't 
directly have a definition of price gouging, but in the factors 
considered on page 3 of the bill it does speak about a price that 
grossly exceeds--we don't know what grossly means--grossly exceeds the 
average price at which the applicable gasoline or other petroleum 
distillate offered for sale during the 30 days prior to a proclamation, 
which is a presidential emergency proclamation, or grossly exceeds the 
price at which the same or similar gasoline or petroleum distillate was 
readily obtainable in the same period.
  So to the extent we have a definition of price gouging in this bill, 
it is based on an average price 30 days prior or an average price in 
the same period.
  Based on that kind of implicit definition, we don't have price 
gouging, as far as I can tell, going on in the United States of America 
today. We do have high prices. There is no question that an average 
national price of $4.08 a gallon for self-service unleaded is a price 
that we should not be having to pay right now. But the reason we have 
that price is not because of price gouging at retail. If the average 
national price is a little over $4, and that is the average, in some 
parts of the country I am told out in California it is up over $4.20. 
In my State in Texas, I did not see but I was told that in Dallas near 
Love Field they were having a gas price war and you could get a gallon 
for $3.62, which is a price that is certainly preferable to $4 or 
$4.50. But according to the statistics that I have, we don't have price 
gouging going on in the United States of America.
  The second point. I am not aware of any pending State action on price

[[Page 13489]]

gouging. And almost every State in the Union has State law that gives 
the State Attorney General the ability to go after price gougers within 
the boundaries of that State. Now, my friend from Michigan may have 
information about some price gouging efforts that are going on at the 
State level, but I don't have that information. That would indicate 
that we don't--again, we have high gasoline prices and high diesel 
prices and high fuel oil prices and high aviation fuel prices, but it 
is not because of retail or wholesale price gouging.
  The second issue with the bill, it requires the declaration of a 
Presidential energy emergency. I am going to read that title or that 
paragraph:
  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, the gasoline or other petroleum distillate 
covered, and the time period that such proclamation shall be in effect.
  The bill doesn't give any definition as to why the President should 
declare an energy emergency, but it does say that, in order for the 
bill to go into effect, the President has to declare that emergency. It 
has the term in the bill unconscionable pricing, but again does not 
define it. It just says unconscionably excessive, or the seller is 
taking unfair advantage. It doesn't define that.
  So here we have a bill that has not been through any kind of a 
process, no hearings. My good friend from Michigan did introduce a 
similar bill last year, and so it is obviously something that perhaps 
at the Federal level--and I say perhaps. I am not saying it should be, 
but I will admit that it could be addressed. We passed a price gouging 
bill in the last Congress in this body. It went to the other body, it 
went to the Senate, and was not passed over there.
  So I can't say categorically that I am opposed to any price gouging 
legislation. But I do think, on process grounds, it ought to go through 
the committee system. And I think on policy grounds, this bill is 
undefined, it doesn't state the reasons the President should declare a 
national emergency, it doesn't define what unconscionably excessive is. 
It appears to base when you would bring a finding based on an average 
price that was it in a region 30 days before the current period or a 
price in the region in the current period that is grossly excessive. 
And, again, it doesn't define grossly excessive.
  So Mr. Speaker, I know there is a lot of pressure on the Congress 
doing something. I would state we would be better served to look at the 
underlying fundamentals, and the underlying fundamental is pretty 
straightforward:
  Oil is a fungible commodity. It can be produced anywhere in the 
world; and once it is produced, it can be shipped and refined anywhere 
in the world. We are currently consuming worldwide about 85 million 
barrels of petroleum products, and we have the capacity to produce 
about 86 million barrels. So we have about a 1 million barrel per day 
surplus production capacity. That is less than 1 percent.
  Any time you get the oil markets less than 3 percent capacity in 
terms of surplus over the demand, you are going to have what is called 
a very tight market, and the prices are going to tend to spike because 
there is enough uncertainty in the market that people will bid up, not 
necessarily in the United States, but in China and India and the 
developing countries where demand is high and increasing, they will bid 
these high prices to get that marginal barrel of oil.
  What we need to do in this Congress on this floor is bring to the 
floor bills that address the fundamental supply situation. The United 
States of America is a treasure house of energy resources. We have 2 
trillion barrels of shale oil reserves. We have a 300-year supply of 
coal that we can convert to liquids. We have hundreds of billions of 
barrels potentially of oil reserves that are off-limits in the Outer 
Continental Shelf and in the State of Alaska and on the Federal lands 
and the lower 48 that we have put off-limits from drilling.
  Only 6 percent of the Federal lands in the United States have been 
made available for leasing under current law. We need to unlock our 
treasure house. We need to at least start the process of letting there 
be an opportunity to increase American made energy for America's 
families. And if we do that, we won't need to depend on false remedies 
like price gouging legislation. We can bring to the floor bills that 
increase our supply. And as our supply increases, the price we have to 
pay will go down, will change domestically and in the world the 
fundamental supply/demand equation. That is why we have high prices. We 
are not meeting the demand for energy in the United States from 
American-made energy, but we could do a lot better.
  So I have great respect for my friend from Michigan. I understand it 
is difficult to focus on the long term in the mid-term strategy. But 
bringing bills like this to the floor, they may be politically 
satisfying, but they do not do anything to address the underlying 
problems. So I would hope that we would vote against this legislation, 
and then work together on substantive issues that will address the 
supply and demand inequality.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STUPAK. Mr. Speaker, before I yield to Mr. Markey of 
Massachusetts, if I may just respond a little bit to my good friend, 
Mr. Barton.
  I agree with him, we need to have a short-term and long-term 
strategy. And as the former chairman of the Energy and Commerce 
Committee, my friend Mr. Barton knows that this is my third bill we 
have had on price gouging. And the reason why we have it is short term, 
like in Midland in 2005 where gas went up 75 cents in one day, that is 
price gouging. Or in Escanaba, you wake up and it is 30 cents in one 
night. What happened in that one night? Or if you take a look at it, 
the reason why we need a Federal law, because as we see in the bill it 
is wholesale. So when refineries increase their prices 255 percent from 
September 2005 to September 2006, for a State like mine to enforce a 
price gouging legislation we need a Federal law to help them out.
  And the Presidential emergency the gentleman brought up; we need that 
because, as you know, before Hurricane Katrina gas went up over $5 a 
gallon before the hurricane even struck. Therefore, you need a 
President who can step forward and say that is excessive, that is not 
necessary in this region, we will keep gas prices at a reasonable 
price.
  As far as the millions of acres and the drilling that should be done, 
and I know the Republican Party has been advocating we should drill 
more and drill more and drill more, but I would remind the gentleman 
that for the last 6 years, when the Republican Party controlled the 
House, the Senate, and the Presidency, you never sought to open up 
those areas now, because there is about 48 million acres of oil leases 
unused. I hope later this week we will have a chance to vote on a piece 
of legislation called Use It Or Lose It. It is unfair for oil companies 
to tie up our areas and refuse to drill in it when they have leases on 
it. So if you don't use that lease, let's give it up to someone who 
will drill, who will bring the oil to the surface, and therefore we can 
help to address our energy needs.
  Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts 
(Mr. Markey).
  Mr. MARKEY. Mr. Speaker, I rise in strong support of this 
legislation. And I want to commend especially the gentleman from 
Michigan (Mr. Stupak) for his historic leadership in bringing this bill 
to the floor.
  Time and again, the opponents of Mr. Stupak's measure have exhorted 
us not to interfere with the free market, not to let the Federal 
Government help consumers in the face of price gouging.

                              {time}  1415

  Even as gas prices have sped past $4 a gallon, it is all just a 
matter of supply and demand, say the oil companies and Republican 
leaders in Washington. Well, it is a matter of supply and demand: 
consumers are being forced to supply whatever money the oil companies 
demand from them at the pump.
  The oil companies have the consumer over a barrel, a barrel of oil, 
that the

[[Page 13490]]

oil companies control and that they price. They tip the consumer upside 
down at the pump every single day and shake every bit of money out of 
their pockets, which they can.
  The Christians had a better chance against the lions than the 
American consumer has against the oil companies at the pumps in the 
United States today. And all we are saying, all Mr. Stupak is saying is 
let's give the Federal Government a sword to get into the battle, to 
get into the arena on behalf of the American consumer.
  The bill before us today would give the Federal Trade Commission new 
authority to investigate and punish the 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.
  The Republicans think that is terrible. Why would you pass a law 
against unconscionably excessive or unfair practices that are tipping 
the consumers upside down. Don't give the Federal Government that kind 
of authority to take on the oil and gas industry. And President Bush 
and Dick Cheney, the oil President and Vice President for 8 years, are 
saying that they will veto legislation that gives authority to go after 
excessive, unconscionable pricing of gasoline.
  Under the bill, the Justice Department could impose criminal 
penalties of up to $150 million on corporations, and fines of up to $2 
million and jail sentences of up to 10 years for individuals. The 
legislation would give the regulators the tools they need to more 
aggressively aid consumers when the oil companies are turning them 
upside down.
  When President Bush took office, the price of oil was $30 a barrel. A 
couple of years ago, oil at $100 a barrel was unthinkable. Now we are 
up to $135 a barrel.
  So the first energy crisis back in 1973-1974, it was an oil embargo; 
1979-1980, a revolution in Iran. What has been going on for the last 
year? How could the price of oil double and everyone says it is not a 
crisis in the White House. How about manipulation. How about fraud. How 
about the consumer being taken advantage of at the pump.
  I thank the gentleman for his good leadership.
  Mr. BARTON of Texas. I would like my good friend, Mr. Markey, to stay 
at the microphone and let's have a little colloquy, if he is willing.
  I recognize myself for 1 minute just to make an observation.
  I don't know, Mr. Speaker, that this is a totally true story, so 
that's why I needed Mr. Markey's input. But I am told when he was a 
young man, he sold ice cream cones and Popsicles outside of Fenway 
Park. I am also told that he bought or purchased those ice cream cones 
and Popsicles at a very low price, and he tended to mark the price to 
market in a somewhat monopolistic fashion. And so depending on how hot 
the day was and how heated the Red Sox nation was, he was known to 
price those Popsicles in a way that maximized his profit.
  Now my question, if he is willing to answer it, would he consider 
what he did selling Popsicles and ice cream cones outside of Fenway 
Park as a young lad, would he consider that unconscionably excessive 
price gouging, or would he consider that simply being a capitalistic 
entrepreneur?
  The SPEAKER pro tempore (Mr. Blumenauer). The gentleman's time has 
expired.
  Mr. BARTON of Texas. I continue to yield myself such time as I may 
consume.
  I am happy to yield to my friend to give us an explanation of his 
pricing scheme selling ice cream cones at Fenway Park.
  Mr. MARKEY. I hate to say this because there is a bit of the 
capitalist, the unregulated capitalist in all of us. But when I had my 
Fudgsicles, my chocolate eclairs, my strawberry shortcakes, my twin 
fudges, and Mr. Softie wasn't coming down the same street, there is a 
tendency to try to raise the price because there is no one else in the 
market and there is no regulator going up and down those streets. And 
if you are outside Fenway Park and there are 35,000 fans coming out and 
there is no regulator around to say what you can charge as an audience 
is coming toward you in desperate need of a Popsicle, of a Fudgsicle or 
a Coke, you have a tendency without a regulator to charge 
unconscionably high prices.
  Now at the time, I didn't think of it that way because, of course, 
the capitalist never thinks that way. That is why you need regulators 
to protect consumers against anyone who is selling any product in the 
marketplace. And that's the lesson I learned.
  And I decided early, I was not going to do that any longer, I was 
going to move over to the regulatory side to protect consumers against 
human nature that sometimes can affect certain corporate chieftains, 
especially in the oil industry, to tip consumers upside down and take 
advantage of them.
  Mr. BARTON of Texas. Reclaiming my time, it seems to me that given 
the circumlocutory answer that I got from my friend from Massachusetts, 
that he did tend to price somewhat above the market, and he seems to at 
the time take glee in it.
  Mr. MARKEY. I feel guilty about. I feel very guilty about it.
  Mr. BARTON of Texas. The statute of limitations under the 
Commonwealth of Massachusetts has expired.
  Mr. Speaker, if it is still my time, I want to yield 3 minutes to the 
gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. I thank the gentleman for yielding, and I certainly 
regret I didn't have an opportunity to negotiate a Popsicle with the 
gentleman from Massachusetts. I am sure that would have been an 
interesting experience; about as interesting as this experience is in 
debating a bill which I feel has a lot to do with feel-good politics, a 
bill that is particularly unworkable, I fear may lead to de facto price 
controls, and really takes our attention off of the challenge that we 
face, and that is to increase American production of American energy.
  As much as Members of Congress might like to do it, in over 200 years 
I have yet to see the ability to repeal the laws of supply and demand. 
And so again, I am sure the gentleman from Michigan is very sincere, 
and I know that he has worked on similar legislation for quite some 
time, but when we talk about price gouging and an emergency situation, 
what are we doing to bring down the price of gas at the pump today.
  Instead, we have a piece of legislation that is going to allow 
Federal regulators, bureaucrats that according to the gentleman from 
Massachusetts, appear to be the savior of the Nation, to tell us what 
is, quote, ``unconscionably excessive,'' and ``taking unfair 
advantage'' related to ``an energy emergency to increase prices 
unreasonably.'' So now we are going to have a Federal bureau come in 
and tell us what are reasonable prices and reasonable situations.
  The FTC, the Federal Trade Commission, after Katrina researched this 
issue. They could find very little evidence of it. We have 
unconscionably high gas prices in America, but it has everything to do 
with a Congress that wants to put its head in the sand and produce no 
energy.
  Our friends from the other side of the aisle, the Democrats, since 
taking over the energy policy of the Nation, since taking over the 
economic policy of the Nation 18 months ago, have overseen gas prices 
that are now 75 percent higher. They have attempted to beg their way, 
beg OPEC to somehow produce more and bring down the cost of energy. 
Well, if we can't beg them, maybe we should sue them. We have had 
legislation to sue OPEC. We are going to sue for lower prices at the 
pump.
  Well, if that doesn't work, maybe we can tax. Let's tax oil 
producers. Well, Mr. Speaker, the only challenge with that is once you 
tax them, they turn around and put it in the price of the product, and 
the poor, beleaguered consumer who is going to the convenience store 
trying to decide do I buy a gallon of milk or do I buy a gallon of gas, 
he ends up paying for it. I mean, these are policies that are out of 
the 1970s. President Carter and a Democrat Congress tried them; they 
failed. We became more dependent using these types of policies on 
foreign sources of energy.

[[Page 13491]]

  The SPEAKER pro tempore. The gentleman's time has expired.
  Mr. BARTON of Texas. I yield the gentleman an additional 30 seconds.
  Mr. HENSARLING. We have tried these policies. It is deja vu all over 
again. What our friends on the other side of the aisle won't do is open 
up ANWR where we know we have half of the Nation's proven reserves. 
Almost 85 percent of our deep sea energy resources have been put out of 
bounds.
  Listen, we all agree, we need to develop renewables. We need to 
develop alternative sources of energy, but people have to go to work 
every day and take the children to school every day. This bill does 
nothing to help them. We need to produce American energy in America 
today.
  Mr. STUPAK. I yield 2 minutes to the gentleman from northern New York 
(Mr. Hall) who has been a real advocate and a fighter for lower energy 
costs since he came to Congress 18 months ago.
  Mr. HALL of New York. Mr. Speaker, in my district, my constituents 
are complaining and wondering why one day a gas tanker pulls up to a 
service station and fills a tank underground at the price of that day, 
and 2 days later the world price of crude oil goes up and the guy at 
the local gas station goes up on a ladder and changes the numbers, 
raising the numbers from $4.17 to $4.29, or whatever it is currently in 
the 19th Congressional District. We are well above $4 for regular. Why 
is it that gas that is already in the ground goes up on the world price 
of crude, but when the world price of crude comes down, the price at 
the pump detaches from it and keeps going up or staying up?
  They ask me this question, and I ask people down here who supposedly 
know what they are talking about, and they tell me: Oh, it's a 
commodity. It fluctuates on the commodity market.
  Well, I call it the rockets-and-feathers syndrome. The price of gas 
goes up like a rocket, and it comes down like a feather. And it never 
seems to deviate from that. While American families are scrimping, oil 
company profits are soaring. The Big Five's profits jumped a whooping 
$37 billion this quarter.
  After the Bush administration's drill first and ask questions later 
policy has padded oil profits on the backs of working families, it is 
time for us here to look out for American drivers.
  The Federal Energy Price Gouging Prevention Act, which I strongly 
support, will give the government the authority to investigate and 
punish anyone who takes advantage of consumers by running up energy 
costs with a steep fine and jail time.
  After Hurricane Katrina, the FTC found 23 percent of refineries, 9 
percent of wholesalers, and 23 percent of retailers had price spikes 
that could not be explained by increased costs or market trends.
  We need to be aggressively vigilant to ensure that none of that 
behavior is going on and consumers are protected. President Bush 
threatened to veto this bill the last time Congress tried to take this 
action. I hope that this time he and his allies will for once choose to 
stand with the American driver and against Big Oil.
  Mr. BARTON of Texas. Mr. Speaker, could I inquire as to the time 
remaining on each side.
  The SPEAKER pro tempore. The gentleman from Texas has 2 minutes 
remaining. The gentleman from Michigan has 9\1/2\ minutes remaining.
  Mr. BARTON of Texas. Mr. Speaker, I reserve the balance of my time 
because I only have one more speaker who is not on the floor.
  Mr. STUPAK. Mr. Speaker, it is my pleasure to yield to the gentleman 
from New York (Mr. Arcuri), a freshman Member who has been a great 
advocate for increased energy, not only supply but lower prices here in 
this country, for 2 minutes.
  Mr. ARCURI. I thank the gentleman from Michigan for yielding.
  Mr. Speaker, traveling across my district, there is one thing I hear 
about again and again, and that is gas prices. Whether it is at the 
grocery store or at the gas pumps, Americans are feeling the crunch. 
Skyrocketing gas prices are hitting hardworking families across my 
upstate New York district and across the country.
  Today, we will take one more step to bring down gas prices by 
cracking down on price gouging by big oil companies. The Energy Price 
Gouging Prevention Act would provide relief for consumers by giving the 
Federal Trade Commission the authority to investigate and punish 
companies that artificially inflate the price of energy.
  The largest oil companies have seen record profits and record 
paychecks for their CEOs, while middle-class families struggle just to 
fill up their tank. It is time to hold them accountable.
  Under this bill, the Justice Department could impose criminal 
penalties of up to $150 million on corporations and jail sentences of 
up to 10 years to crack down on wholesale and retail companies charging 
unconscionable and excessive prices. Penalties from price gougers would 
go to the Low-Income Home Energy Assistance Program, LIHEAP, to help 
families with heating and air conditioning bills. Already this Congress 
has fought to increase domestic oil supply and hold OPEC and 
speculators accountable for price manipulations.

                              {time}  1430

  We have invested in new alternative energy sources that will decrease 
our dependency on finite fossil fuels and create good-paying jobs in 
places like Upstate New York.
  Mr. Speaker, we owe it to our constituents and to our children and 
grandchildren to do everything we can to bring down outrageous gas 
prices, put our economy back on track and make sure that this country 
is on a new path to energy independence and success.
  Mr. BARTON of Texas. Mr. Speaker, I continue to reserve.
  Mr. STUPAK. Mr. Speaker, I yield 3 minutes to the gentleman from New 
Jersey (Mr. Pascrell) who sits on the Ways and Means Committee and 
knows the ins and outs of the oil industry.
  Mr. PASCRELL. Mr. Speaker, I'm proud to rise in support of H.R. 6346, 
the Federal Price Gouging Prevention Act. And I want to commend the 
gentleman from Michigan not only for this legislation but other 
legislation he's put forward debunking the theory that this is simply a 
supply-and-demand problem. It is not. It is not.
  The New York Mercantile Exchange laid it out very clearly. The 
speculators have increased their share of oil futures, oil future 
contracts to 71 percent this year from 37 percent in 2000. At the same 
time, the contracts held by traditional oil users have fallen to less 
than 30 percent from more than 60 percent. So while this piece of 
legislation talks about gouging at the pump, there is gouging going on 
Wall Street; and if you don't want to recognize it, that's your 
problem. The American people want answers.
  In these tough economic times, price gouging is a very real problem 
for Americans struggling to get to work. How about that for openers. As 
prices climb, so does the potential for consumers to be gouged at the 
pump. Now, it's $4.07 a gallon; when the President took office in 
January of 2001, $1.36. That's a 270 percent increase. The food becomes 
more expensive, millions of Americans lose their jobs.
  It is shameful that unscrupulous vendors try to make a quick buck by 
artificially inflating the price. Just last week, officials in my home 
State of New Jersey issued 350 citations for price gouging-related 
offenses after surveying 1,000 gas stations. 350 citations. Where is 
the urgency? If you don't understand the urgency, then we ought to go 
back to 101.
  H.R. 6346 will ensure that those who engage in this practice are not 
only investigated and found guilty, thoroughly punished, just like what 
we should do to those on Wall Street who gouge those prices who have 
speculated and speculated and got us to believe at a time when 
consumption and supply is just about the same as last year. That's 
ridiculous.
  This bill directs penalties from price gougers to the Low-Income Home 
Energy Assistance Program to help families with their heating and their 
air-conditioning bills. Twenty-eight States, Mr. Speaker, have anti-
price gouging laws on the books. And it's time for the Federal 
Government to do exactly the same thing.

[[Page 13492]]

  I urge my colleagues to support Mr. Stupak in his efforts and to 
support the Federal Price Gouging Prevention Act.
  And I don't sit until I say, Mr. Stupak, the American people say 
thank you to you.
  Mr. BARTON of Texas. I continue to reserve.
  Mr. STUPAK. Mr. Speaker, I think we have the right to close on this 
side. So I would ask for their last speaker, and we will close on this 
side.
  Mr. BARTON of Texas. Well, Mr. Speaker, let me just simply say in 
closing that with regards to the last speaker's comment about the 
futures market, I tend to agree there may be something that we need to 
look at. That's why I'm on a bill with Mr. Stupak and Mr. Dingell to 
look at the futures market. But on page 3 of this bill, there is a line 
that specifically excludes the futures market from the jurisdiction of 
the bill that's before us.
  We have a Federal price gouging bill on the floor right now that 
deals with retail and wholesale price gouging when there is absolutely 
no evidence of States' attorneys general conducting prosecutions of 
price gouging anywhere in this country. And as I pointed out in my 
opening statement, the average retail price for gasoline is up while 
retail margins are down, refineries margins are down.
  Retail prices are up because the wholesale price of crude oil is up 
over $130 a barrel. We're not doing anything in this bill to address 
that fundamental supply problem. We are a treasure house of energy 
resources here in the United States. We could produce more American 
energy for America's families and factories.
  You know, a price gouging bill when you don't have any real evidence 
of price gouging and where the States that think there's price gouging 
going on in their States have legislation to deal with that seems to me 
to be superfluous and symbolic.
  So I would ask for a ``no'' vote on this legislation, and let's work 
together on issues that would fundamentally address the supply and 
balance and bring prices down.
  With that, I yield back.
  Mr. STUPAK. Mr. Speaker, in closing, let me just once again reiterate 
today every Member of the House has a choice. He can side with the big 
oil companies and the record profits, or you can side with the American 
consumer. A vote against my bill is a vote against consumers and a vote 
for Big Oil.
  I am pleased so many of my Democratic Members came and joined me. 
This legislation is necessary. As I said, this is the third time I have 
had legislation on price gouging. As I pointed out earlier, this winter 
we experienced price gouging for energy needs, it was a dollar more 
than the rest of the region in Michigan and the area was being charged. 
The attorney general in Michigan, because we don't have a price gouging 
law, had nowhere to go.
  Here's the bill that the Michigan legislature--House bill 6249--just 
introduced 2 weeks ago, tried new price gouging because we see it going 
on and on and on; and it's going to continue as we see these record 
prices and further chances to manipulate the market and to charge 
excessive prices to support these excessive profits of the oil 
companies.
  Underneath the Democratic House, and I feel I have to say this, we 
have done a number of things in the last 18 months: Renewable Energy 
and Jobs Creation Act, which extends tax incentives for renewable 
energy. We had the Gas Price Relief for Consumers Act, which combats 
record gas prices. We have the energy price gouging bill we're doing 
today. We put forth the first new vehicle fuel efficiency standards in 
32 years. We have a commitment to affordable American-grown biofuels 
which are keeping gas prices down. They are lower now than what they 
would have been if we did not pass this legislation. Action for lower 
gas prices by suspending oil purchases for the Strategic Petroleum 
Reserve. Later, hopefully the next month or two, we will see the bill 
on speculation that Mr. Barton has mentioned. That is a piece of 
legislation we're looking at for excessive speculation which is driving 
up record profits for the price of oil.
  But in this Democratic-led Congress, we will continue to invest in 
clean American renewable energy. We will boost energy technologies. We 
will help Americans struggling with the high energy prices. We will 
reward conservation. We will promote efficient vehicles, we will reduce 
mass transit fares and build infrastructure. We will further close the 
Enron loophole and speculators in dark petroleum markets which is 
driving up prices. We will encourage safe domestic drilling by forcing 
Big Oil to use it or lose it on Federal drilling permits.
  I am perplexed that there's 68 million acres that we are not even 
drilling on because the oil companies have them tied up in leases. And 
what we are saying is if you're not going to drill to help the American 
people, then give up your lease. Let's give it to oil companies that at 
least drill. Democrats aren't against drilling. Let's at least go in 
these leases, which have been approved, environmentally sound, let's 
drill, let's bring that energy to the surface. If you're not going to 
use it, then we're going to pass legislation to say you lose it.
  And last but not least, Democrats are leading the way to transition 
America to a more affordable energy future. But right now, as we go 
fill up this 4th of July weekend as we travel our parades in our 
districts and enjoy the summer months, can't we at least make sure that 
the price we're paying at the pump is based on a reasonable basis, 
reasonable factor, reasonable cost for taking that oil out of the 
ground, for shipping it, for refining it, for distributing it and 
putting it in your gas pump? We should not have to worry about being 
gouged tomorrow. We should not wake up on July 3 and find that gas went 
up 40 cents overnight for no reason other than someone needs a few more 
pennies to pay for their 4th of July. I don't want to pay for the big 
oil companies' 4th of July. I want the American people to enjoy this 
4th of July and to know when they fill up at the pump, it's based on a 
fair, reasonable price.
  Let's finally pass, after some 3 years of arguments on this floor, a 
Federal price gouging legislation that the other body will take up and 
we can present to the President. Let's have a reasonable basis for our 
pricing, and let's try to give the American people some relief from 
these high excessive energy prices we are experiencing.
  Mr. HOLT. Madam Speaker, I rise today in support of H.R. 6346, The 
Federal Energy Price Gouging Prevention Act.
  Today, my constituents in Central New Jersey are paying on average 
$3.98 at the pump, over a dollar more than they were paying at the 
beginning of the year. Increases in gas prices have affected every 
sector of the economy. We are paying $2 more whenever we get a pizza 
delivered, $10 more for lawn mowing services, $1.70 for shipping 
packages, an extra penny for every letter that we send, and these are 
just a few examples of the effects of gas price increases on the 
economy at large. As American families suffer, oil companies continue 
to rake in record profits. It is essential that we prevent price 
gouging, speculation, and profiteering by those who would take 
advantage of our energy predicament and guard against harm to commuters 
and struggling families.
  Current law does not have a mechanism for allowing the investigation 
and punishment of individuals and corporations that are artificially 
inflating the price of energy. H.R. 6346 would grant the Federal Trade 
Commission the authority to investigate and punish those who engage in 
price gouging. H.R. 6346 would finally provide a clear definition of 
price gouging so that the FTC can prosecute the worst offenders, 
specifically those companies with more than $500,000,000 in sales per 
year. It would strengthen the criminal penalties for price gouging to 
up to $150 million for corporations, and fines of up to $2 million plus 
jail sentences of up to 10 years for individuals. Finally, it would 
redirect the fines assessed to help fund the Low Income Home Energy 
Assistance Program (LIHEAP).
  Unfortunately, we are seeing examples across the country of 
unscrupulous individuals taking advantage of consumers during this 
energy emergency. Last week, New Jersey's Attorney General Anne Milgram 
released the results of an investigation that uncovered over 350 ticket 
worthy instances of gasoline price

[[Page 13493]]

manipulation after a survey of 1,000 gas stations in the state. Among 
the citations issued were: 62 violations for the pump not accurately 
measuring fuel, 46 violations for per-gallon prices being different on 
each side of the pump, 37 violations for fuel grades not posted, 26 
violations for inaccurate octane ratings, 19 violations for inaccurate 
total sale price calculation and 14 violations for multiple price 
changes in a 24-hour period. States like New Jersey are already taking 
action to prosecute gas price manipulation on a small scale; however, 
they do not have the means necessary to prosecute large-scale 
offenders. It is past time that Congress gives the FTC the tools it 
needs protect American consumers from these egregious violations at the 
pump and the legislation before us today takes an important first step 
towards achieving this goal.
  Passing H.R. 6346 would help to prevent price gouging and I urge my 
colleagues to support this legislation. However this bill is merely a 
short term solution to our long term energy needs. There are no easy 
answers to the fluctuating gas prices. We are paying at the pump today 
for flawed decisions made years ago. That is why we must work to 
implement strategies that will lower demand for oil in the long term.
  Mr. RANGEL. Mr. Speaker, I rise today to express my full support for 
H.R. 6346, also know as the Federal Price-gouging Prevention Act. I 
join my other colleagues from both sides of the aisle and American 
consumers to address the issue of price gouging of gasoline and other 
fuels.
  This bill has received widespread support for several reasons. First, 
the bill gives the Federal Trade Commission the ability to investigate 
and punish companies that falsely inflate energy prices. It is 
unacceptable for energy companies to artificially raise prices. This 
bill serves to address these crimes and protect the American people.
  Second, this bill will allow for the Justice Department to collect 
criminal penalties and impose jail time during a state of national 
emergency on those who are found guilty of price-gouging. Most 
importantly, penalties collected from price-gouging companies will be 
forwarded to the Low-Income Home Energy Assistance Program, LIHEAP, to 
help families pay for their heating and air-conditioning bills.
  At this time, 28 states have passed legislation against price-
gouging. More laws are needed at both the state and local levels to 
ensure that those who are responsible for artificially raising energy 
prices are investigated and punished.
  I urge other colleagues to support this bill. I applaud the work done 
by to protect the American people from energy price-gouging.
  Mr. STUPAK. Mr. Speaker, I yield back my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Michigan (Mr. Stupak) that the House suspend the rules 
and pass the bill, H.R. 6346, 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. STUPAK. 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 motion will be 
postponed.

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