Price gouging protections fail in Missouri, Texas

| Thursday, June 07, 2007

Efforts in two states to help protect consumers from being gouged at the fuel pump have died.

The National Conference of State Legislatures reports nearly 30 states have some type of price gouging ban with still others pursuing their own rules. The laws in many of those states are triggered by emergency declarations.

In Missouri, a bill was intended to prevent price gouging during state or federal emergencies. The protections would have applied to necessities, including food, fuel, water and transportation.

Sponsored by Rep. Mark Bruns, R-Jefferson City, the bill would have prohibited sellers from increasing prices more than 10 percent above their costs immediately before emergency declarations. Offenders would have been liable for three times the amount “unfairly received for each transaction.”

The bill – HB241 – remained in a House committee at the close of the session, effectively killing it for the year.

Texas
In the Lone Star State, a similar effort has died in the House that would have created a new violation of the state’s existing price gouging protection law.

State law now sets no threshold or definition of what constitutes price gouging. Sponsored by Rep. David Leibowitz, D-San Antonio, the bill defined what is an unconscionable price for goods and services – including food, fuel and medicine – to prevent excessive pricing after disasters.

It would have been illegal to price essential goods or services 20 percent more than their cost immediately before a disaster. Price increases implemented by merchants and wholesalers that are attributed to a special event or a traditionally higher period of demand would have been exempt from the proposed rule change.

The bill – HB70 – failed to meet a deadline to advance.

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