BILL REQ. #:  H-3934.1 

Read first time 01/12/2006.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to price gouging during significant disruption, emergency, or disaster; adding new sections to chapter 19.86 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 19.86 RCW to read as follows:
     The legislature finds that consumers are vulnerable to price gouging or clearly excessive pricing during times of abnormal market conditions caused by significant disruptions, emergencies, or disasters. The legislature declares that excessive and unjustified increases in retail prices charged during abnormal market conditions as defined in section 2 of this act should be prohibited and made subject to civil remedies.

NEW SECTION.  Sec. 2   A new section is added to chapter 19.86 RCW to read as follows:
     The definitions in this section apply throughout sections 1 through 4 of this act unless the context clearly requires otherwise.
     (1) "Abnormal market conditions" means those instances of significant disruption to the marketplace caused by terrorist acts, civil disorder, war, military action, or natural disaster.
     (2) "Building materials" includes lumber, construction tools, nails, windows, and other products used to protect, repair, build, or rebuild property.
     (3) "Emergency cleanup, repair, or reconstruction services" means services provided and equipment used to clear or remove debris or other material that poses a public safety or health hazard and to repair residential or commercial property of any type to a safe and habitable condition.
     (4) "Emergency supplies" includes but is not limited to water, flashlights, fire extinguishers, radios, batteries, candles, blankets, soaps, diapers, temporary shelters, tape, toiletries, and portable fossil-fueled electric generators.
     (5) "Essential consumer good or service" means a retail good or service that is used, bought, or rendered primarily for personal, family, or household purposes, and is necessary for consumption or use during a period of abnormal market condition, including food items; emergency supplies; medical supplies; building materials; fuel; transportation services; storage services; and temporary housing.
     (6) "Food item" means any article that is used or intended for use for food or drink by a person or animal.
     (7) "Fuel" includes oil or propane used for home heating, or any fuel used to power any motor vehicle, portable electric generator, or power tool.
     (8) "Medical supplies" includes but is not limited to prescription and nonprescription medications, bandages, gauze, isopropyl alcohol, and antibacterial products.
     (9) "Person" has the same meaning as provided under RCW 19.86.010.
     (10) "Storage services" includes any service that is performed by any person who contracts to store personal or business property or rents equipment for such purposes.
     (11) "Temporary housing" includes any rental housing or office space leased on a temporary or short-term basis to a person who has been displaced from his or her dwelling, housing, or office space because of a significant disruption, emergency, or disaster.
     (12) "Transportation services" includes any service that is performed by any person who contracts to move or transport persons or personal or business property, or rents equipment for such purposes.

NEW SECTION.  Sec. 3   A new section is added to chapter 19.86 RCW to read as follows:
     (1) In addition to the powers in chapters 43.06 and 38.52 RCW for the governor to make disaster or emergency proclamations, for purposes of triggering sections 1 through 4 of this act, the governor may make and rescind a proclamation of an abnormal market condition.
     (2) Upon the proclamation by the governor under sections 1 through 4 of this act of an abnormal market condition, and for a period of thirty days following the proclamation, or a lesser time period if the proclamation is rescinded, it is unlawful for any person to sell or offer to sell at retail any essential consumer good or service within the area designated in the proclamation at a clearly excessive increase in price above the price charged by that person for such goods or services immediately before the proclamation as specified in section 4 of this act.
     (3) Upon the proclamation by the governor under sections 1 through 4 of this act of an abnormal market condition, and for a period of ninety days following the proclamation, or a lesser time period if the proclamation is rescinded, it is unlawful for any person to sell or offer to sell at retail any emergency cleanup, repair, or reconstruction service within the area designated in the proclamation at a clearly excessive increase in price above the price charged by that person for such goods or services immediately before the proclamation as defined in section 4 of this act.
     (4) An increase in price is not unlawful if the higher price charged reflected reasonable expenses in addition to the prior price of the goods or services but such reasonable expenses are limited to those which are necessarily incurred in procuring or delivering such goods and services during the period of time set forth in subsections (2) and (3) of this section. A price increase in excess of fifteen percent not tied to the reasonable expenses necessarily incurred in procuring or delivering an essential consumer good or service during the period of time set forth in subsections (2) and (3) of this section is prima facie evidence of a clearly excessive price increase.
     (5) Any person who sold or had offered to sell an essential consumer good or service, or emergency cleanup, repair, or reconstruction service at a temporarily discounted or reduced price immediately before the proclamation as set forth in this section may use the price at which the person normally or usually sold the good or service to determine whether a price increase violates sections 1 through 4 of this act.
     (6) The governor may extend the time periods set forth in subsections (2) and (3) of this section for additional thirty-day periods by issuing a renewed proclamation, upon a finding that the abnormal market condition continues and that an extension is necessary to protect the health, safety, or welfare of the citizens of the state.
     (7) The governor may rescind an emergency proclamation made in accordance with subsection (1) of this section upon a finding that no abnormal market conditions exist.

NEW SECTION.  Sec. 4   A new section is added to chapter 19.86 RCW to read as follows:
     (1) The legislature finds that the practices covered by sections 1 through 4 of this act are matters vitally affecting the public interest. A violation of sections 1 through 4 of this act is not reasonable in relation to the development and preservation of business and is an unfair or deceptive practice in trade or commerce and an unfair method of competition.
     (2) Sections 1 through 4 of this act do not apply to persons whose activities or transactions as to prices for goods or services are subject to regulation by the Washington utilities and transportation commission or the federal energy regulatory commission.
     (3) Persons who merely provide advertising and related services for persons engaged in making offers to sell goods or perform services shall not be deemed to be making any offer to sell any goods or perform any services for purposes of sections 1 through 4 of this act.
     (4) In an action against a person under sections 1 through 4 of this act, the defendant is deemed not to have violated sections 1 through 4 of this act if the defendant proves all of the following:
     (a) The violation of the price limitation was unintentional;
     (b) The defendant voluntarily rolled back prices to a level permitted under sections 1 through 4 of this act upon discovering that this section was or may have been violated; and
     (c) The defendant has instituted a restitution program for all consumers who may have paid excessive prices.
     (5) Subsequent remedial measures are not admissible as evidence of a violation of sections 1 through 4 of this act.

NEW SECTION.  Sec. 5   This act may be known and cited as the preventing price gouging during emergencies and disasters act.