S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3079
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 27, 2023
                                ___________
 
 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 90 of the laws of 2020, 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 goods have taken  unfair  advantage  of  the  public  by
 charging grossly excessive prices for essential goods and services.
   In  order to prevent any party within the chain of distribution of any
 goods from  taking  unfair  advantage  of  the  public  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 goods and services
 vital  and  necessary for the health, safety and welfare of consumers or
 the general public, no party within the chain of  distribution  of  such
 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
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07485-01-3
              

 S. 3079                             2
 
 section,  the  term  goods and services shall include (a) consumer goods
 and services used, bought or rendered primarily for personal, family  or
 household purposes, (b) essential medical supplies and services used for
 the  care,  cure,  mitigation, treatment or prevention of any illness or
 disease, and (c) any other essential goods and services used to  promote
 the health or welfare of the public. This prohibition shall apply to all
 parties  within  the  chain of distribution, including any manufacturer,
 supplier, wholesaler, distributor or retail seller of goods or  services
 or  both  sold by one party to another when the product sold was located
 in the state prior to the sale. Goods and services  shall  also  include
 any  repairs made by any party within the chain of distribution of goods
 on an emergency 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 goods or  services  were
 sold  or  offered for sale by the defendant in the usual course of busi-
 ness 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 in the trade area.
   (c)] (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  [(1)]
 (I)  the  increase  in the amount charged preserves the margin of profit
 that the defendant received for the same goods or services prior to  the
 abnormal  disruption  of  the  market or [(2)] (II) additional costs not
 within the control of the defendant were imposed on  the  defendant  for
 the goods or services.
 S. 3079                             3
 
   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
 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  per violation or three times the gross receipts
 for the relevant goods or services,  whichever  is  greater  and,  where
 appropriate, order restitution to aggrieved parties.
   5.  The  attorney general may promulgate such rules and regulations as
 are necessary to effectuate and enforce the provisions of this section.
   § 2. This act shall take effect immediately.