S T A T E   O F   N E W   Y O R K
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                                   7345
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              April 10, 2025
                                ___________
 
 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, subdivision 2 as amended by chapter  725
 of the laws of 2023, 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. (a) 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  distrib-
 ution  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  uncon-
 scionably excessive price.
   (b)  For  purposes of this section, the phrase "abnormal disruption of
 the market" shall mean any change in the market, whether actual or immi-
 nently 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 emergen-
 cy,  drug  shortage,  or  other  cause  of an abnormal disruption of the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05429-01-5
              

 S. 7345                             2
 
 market [which], WHERE SUCH ABNORMAL DISRUPTION results in  the  declara-
 tion of a state of emergency by the governor.
   (c) For purposes of this section, the term "drug shortage" shall mean,
 with respect to any drug or medical product intended for human use, that
 such  drug or medical product is publicly reported as being subject to a
 shortage by the U.S. Food and Drug Administration.
   (d) For the purposes of this section, the term  "goods  and  services"
 shall  include  (i) consumer goods and services used, bought or rendered
 primarily for personal, family or  household  purposes,  (ii)  essential
 medical  supplies  and  services  used  for  the care, cure, mitigation,
 treatment or prevention of any illness or disease, and (iii)  any  other
 essential  goods  and  services used to promote the health or welfare of
 the public.
   (e) This prohibition shall apply to all parties within  the  chain  of
 distribution, including any manufacturer, supplier, wholesaler, distrib-
 utor  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.  For  the  purposes  of  this  subdivision,  the  term  "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
 S. 7345                             3
 
   (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.
   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.