S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    803
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 9, 2019
                                ___________
 
 Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law, in relation to price gouging
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section  396-r of the general business law, as amended by
 chapter 510 of the laws of 1998, subdivision 4 as amended by chapter 224
 of the laws of 2008, is amended to read as follows:
   § 396-r. Price gouging. 1. Legislative findings and  declaration.  The
 legislature  hereby  finds that during periods of abnormal disruption of
 the market caused by strikes, power failures, severe shortages or  other
 extraordinary  adverse  circumstances,  some parties within the chain of
 distribution of consumer goods have taken unfair advantage of  consumers
 by  charging  grossly  excessive prices for essential consumer goods and
 services.
   In order to prevent any party within the chain of distribution of  any
 consumer goods from taking unfair advantage of consumers during abnormal
 disruptions  of  the  market,  the  legislature declares that the public
 interest requires that such conduct be prohibited and  made  subject  to
 civil penalties.
   2. During any abnormal disruption of the market for consumer goods and
 services  vital  and  necessary  for  the  health, safety and welfare of
 consumers, no party within the chain of distribution  of  such  consumer
 goods  or services or both shall sell or offer to sell any such goods or
 services or both for an amount which represents an unconscionably exces-
 sive  price.  For  purposes  of  this  section,  the  phrase   "abnormal
 disruption  of  the market" shall mean any change in the market, whether
 actual or imminently  threatened,  resulting  from  stress  of  weather,
 convulsion  of  nature,  failure  or shortage of electric power or other
 source of energy, strike, civil disorder, war, military action, national

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD02659-01-9

 S. 803                              2
 
 or local emergency, or other cause of  an  abnormal  disruption  of  the
 market  [which],  WHERE SUCH ABNORMAL DISRUPTION results in the declara-
 tion of a state of emergency by the governor. For the purposes  of  this
 section,  the  term  consumer  goods and services shall mean those used,
 bought or rendered primarily for personal, family or household purposes.
 This prohibition shall apply to all parties within the chain of distrib-
 ution, including any manufacturer, supplier, wholesaler, distributor  or
 retail seller of consumer goods or services or both sold by one party to
 another  when  the  product  sold  was located in the state prior to the
 sale. Consumer goods and services shall also include any repairs made by
 any party within the chain of distribution of consumer goods on an emer-
 gency basis as a result of such abnormal disruption of the market.
   3. [Whether a price is unconscionably excessive is a question  of  law
 for the court.
   (a)  The  court's  determination  that a violation of this section has
 occurred shall be based on any of the following factors:  (i)  that  the
 amount  of  the  excess in price is unconscionably extreme; or (ii) that
 there was an exercise of unfair leverage  or  unconscionable  means;  or
 (iii)  a  combination  of  both factors in subparagraphs (i) and (ii) of
 this paragraph.
   (b) In any proceeding commenced pursuant to subdivision four  of  this
 section, prima facie proof that a violation of this section has occurred
 shall include evidence that
   (i)  the amount charged represents a gross disparity between the price
 of the goods or services which were the subject of the  transaction  and
 their  value  measured  by  the  price  at  which such consumer goods or
 services were sold or offered for sale by the  defendant  in  the  usual
 course  of  business  immediately  prior  to  the  onset of the abnormal
 disruption of the market or
   (ii) the amount charged grossly exceeded the price at which  the  same
 or  similar goods or services were readily obtainable by other consumers
 in the trade area.]
   (A) A PRICE IS NOT AN "UNCONSCIONABLY EXCESSIVE PRICE" IF ANY  ONE  OF
 THE FOLLOWING APPLIES:
   (I)  IT IS TEN PERCENT OR LESS ABOVE THE SELLER'S PRICE FOR THAT PROD-
 UCT IMMEDIATELY PRIOR TO THE DECLARATION OF THE STATE  OF  EMERGENCY  BY
 THE GOVERNOR;
   (II)  IT  IS TEN PERCENT OR LESS ABOVE CURRENT PRICES FOR THAT PRODUCT
 IN ANY AREA OUTSIDE THE GEOGRAPHIC SCOPE OF THE DECLARATION OF THE STATE
 OF EMERGENCY OR AN ADJOINING STATE, TAX-ADJUSTED;
   (III) IT IS TEN PERCENT OR LESS ABOVE THE SUM OF THE  SELLER'S:    (A)
 ACQUISITION OR REPLACEMENT COST, WHICHEVER IS HIGHER; PLUS (B) THE MARK-
 UP  CUSTOMARILY  APPLIED  BY  THE SELLER IN THE USUAL COURSE OF BUSINESS
 IMMEDIATELY PRIOR TO THE DECLARATION OF THE STATE OF  EMERGENCY  BY  THE
 GOVERNOR;
   (IV)  IT  IS  ATTRIBUTABLE  TO  FLUCTUATIONS IN APPLICABLE REGIONAL OR
 NATIONAL SPOT OR COMMODITY MARKETS; OR
   (V) IT IS A CONTRACT PRICE OR PRICE FORMULA AGREED  TO  PRIOR  TO  THE
 DECLARATION OF THE STATE OF EMERGENCY BY THE GOVERNOR.
   (B)  A defendant may rebut a prima facie case with evidence that addi-
 tional costs not within the control of the defendant were imposed on the
 defendant for the goods or services.
   4. Where a violation of this section is alleged to have occurred,  the
 attorney general may apply in the name of the People of the State of New
 York  to  the supreme court of the State of New York within the judicial
 district in which such violations  are  alleged  to  have  occurred,  on

 S. 803                              3
 
 notice of five days, for an order enjoining or restraining commission or
 continuance  of  the  alleged unlawful acts. In any such proceeding, the
 court shall impose a civil penalty in an amount not  to  exceed  twenty-
 five  thousand  dollars  and,  where  appropriate,  order restitution to
 aggrieved consumers.
   § 2. This act shall take effect immediately.