Price gouging bill becomes law in Pennsylvania

| Tuesday, November 14, 2006

Gov. Ed Rendell has signed a bill into law that allows the Pennsylvania attorney general to investigate complaints of price gouging during disasters and impose penalties. It received unanimous support in the Legislature.

"We understand that market forces sometimes dictate higher prices for goods and services, and, that often, those instances are beyond anyone's control," Rendell said in a written statement. "However, when we find ourselves in a state of emergency, enduring astronomical prices just for the sake of boosting a company's bottom line will not be tolerated."

The new law, previously HB2001, prohibits sellers from raising prices of products such as diesel and gasoline more than 20 percent above the average price one week before an emergency is declared. The restriction would apply until 30 days after the disaster declaration is lifted.

Anyone involved in the distribution or sale of consumer goods or services found in violation of the protection would face fines up to $10,000 per occurrence.

"The vast majority of business operators are generous and helpful when disaster strikes, but those few who seek to exploit such hardship will now find themselves having to answer for it," Sen. Mary Jo White, R-Franklin, said in a written statement.

The rule will take effect after a natural disaster, labor strike, act of terrorism or other event, White said. It does not apply to price increases caused by additional expenses, such as replacement costs, taxes and transportation.

Pennsylvania isn't the only state this year to look into adopting anti-gouging protections. The governors in Vermont and Wisconsin approved protections while their counterparts in Colorado and South Carolina vetoed similar efforts. Another measure failed to gain approval in California.

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