SANTA FE, N.M. -- The New Mexico House passed a bill Tuesday aimed at protecting consumers against unconscionable price increases during times of emergency, but the bill died later Tuesday evening in the Senate Judiciary Committee, reported the Carlsbad Current Argus.
Earlier in the day, on a 53 to 8 vote, the House passed the state's first price gouging bill. Governor Bill Richardson had called for the legislation following an increase in gasoline prices in the aftermath of Hurricane Katrina. But what started as a gasoline gouging bill was passed without [image-nocss] any reference to gasoline. Instead, it would apply to any essential goods or services.
The bill's sponsor, State Representative Hector Balderas (D), said the bill would not prevent companies from raising prices when their own costs go up. But, it would prevent them from making unfair profits during times of emergency. We're not concerned with price. We're concerned with unconscionable profit, Balderas said. We're not trying to price fix. You can quadruple the price if your price quadruples. What we think is if your profit quadruples, and not just the price, then that's unconscionable. We don't want citizens to be taken advantage of during their most vulnerable state.
House Judiciary Committee Chairman Joseph Cervantes said it is important people understand that the bill would not lead to lower prices at the pump. It's an assurance that in times of disaster or emergency that citizens won't find themselves without the necessities of gasoline, food, water and other essential goods and services, he said. This is a bill that's going to apply when there is a natural disaster or emergencyand for a limited amount of time.
Opposition to the bill came from Republicans who said they were concerned that it was antibusiness and would interfere with the natural reaction of the marketplace, said the report. When you start interfering with the marketplace, it's easy to screw things up, said House Minority Leader Ted Hobbs (R). Supply and demand control the marketplace. When you interfere with the marketplace, you have major problems.
While several Republicans voiced opposition to the bill, many voted for it following passage of a floor amendment introduced by State Rep. Eric Youngberg (R) that allows those being sued to cite regional, national or international trends as a defense. The amendment also precludes individual lawsuits under this specific act, the report said. But those who believe that they have been victims of price gouging could still file suit under the Unfair Trade Practices Act.
The bill would only take effect following a federal or state declaration of emergency and an executive order by the governor stating that the emergency is likely to cause market disruption. If a seller of essential goods and services raises prices by 15% or more above the average price charged in the region during the 20 days prior to the emergency, that could be considered evidence of an unconscionable price.
The bill also includes a list of circumstances for the finder of fact to consider, such as the timing, frequency and extent of the increase and whether the price increase would result in a profit margin greater than under normal conditions. The original bill set the limit at a 10% increase. The hike to 15% was one of numerous changes made to the bill during four days of work in the House Judiciary Committee.
The authority of the governor is now limited to two 30-day periods, and is limited to the geographic area of the emergency, the report said. The authority is limited to the immediate aftermath of a disaster or emergency, Cervantes said.
Other changes from the original bill include a removal of all criminal penalties, as well as a provision that would have limited gas stations to one price increase per each 24 hours. Cities and counties are now exempted from the bill. And, criteria was added for sellers to gain relief in court, said the report.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.