Bill to guard against price gouging dies in California

| 9/11/2006

A bill in the California Legislature that was intended to prevent price gouging by big oil companies – not just fuel stations – has died.

Attorney General Bill Lockyer and Assembly Speaker Fabian Nunez offered the measure in response to prices at the fuel pump that have jumped by more than $1 per gallon since the first of this year.

In the final hours of the legislative session that ended late last month, Nunez, D-Los Angeles, canceled a final Assembly vote on the bill – AB457 – that had undergone changes in the Senate. Lockyer’s staff said Nunez had concluded he didn’t have enough votes to pass the bill.

California law already authorizes the attorney general to investigate allegations of price gouging at the retail level in the state during emergencies declared by the governor or president. Retailers are prohibited from boosting prices for goods and services, such as food, medicine and fuel, more than 10 percent during a 30-day period after a declared emergency.

The bill would have given the attorney general 30 days after an emergency to initiate an investigation into alleged price gouging. The entire fuel supply chain – including oil companies, refineries and fuel distributors – would have been reviewed.

Nunez’s bill originally called for giving the attorney general 60 days to initiate an investigation.

The bill sought to allow an emergency to be declared when an “abnormal market disruption,” such as a cutoff of shipments by an oil producer, increases wholesale and retail prices. The governor now can act only during such circumstances like severe weather, earthquakes and acts of war or terrorism.

“The state’s anti-gouging law currently does not allow law enforcement to hold accountable oil companies that profiteer when consumers are most vulnerable,” Lockyer said in a written statement. He said the bill would have fixed that.

Violators would have faced fines up to $10,000 and one year in jail.

California isn’t the only state this year to look into adopting anti-gouging protections. The governors in Vermont and Wisconsin have approved protections while their counterparts in Colorado and South Carolina vetoed similar efforts.