Arkansas Center for Earthquake Education and Technology Transfer

As Engrossed: S3/3/97

State of Arkansas

As Engrossed: S3/3/97
81st General Assembly

A Bill
ACT 376 OF 1997

Regular Session, 1997
SENATE BILL 465

By: Senators Harriman, Jeffries, Kennedy, Hill, Malone, Walters, Bell, Fitch, Dowd, Beebe, Gordon, and Webb
By: Representatives Hall, Pollan, and Thicksten

For An Act To Be Entitled

"AN ACT TO AMEND ARKANSAS CODE ANNOTATED TITLE 4, CHAPTER 88, TO ADD SUBCHAPTER 3 TO PROTECT CONSUMERS FROM PRICE GOUGING AND UNFAIR PRICING PRACTICES DURING AND SHORTLY AFTER A STATE OF EMERGENCY; TO PROVIDE PENALTIES AND REMEDIES IN THE EVENT OF SUCH PRICE GOUGING; AND FOR OTHER PURPOSES."

Subtitle

"TO AMEND THE DECEPTIVE TRADE PRACTICES ACT TO PROTECT CONSUMERS FROM PRICE GOUGING AND UNFAIR PRICING PRACTICES DURING AND SHORTLY AFTER A STATE OF EMERGENCY"

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

SECTION 1. Arkansas Code Annotated Title 4, Chapter 88 is amended by adding a new Subchapter 3 to read as follows:

"Subchapter 3 - Protection of Consumers from Price Gouging and Unfair Pricing Practices During and Shortly After a State of Emergency

4-88-301. Emergencies and natural disasters - Unfair advantage of consumers.

The General Assembly hereby finds that during emergencies and major disasters, including, but not limited to, tornadoes, earthquakes, fires, floods, or civil disturbances, some merchants have taken unfair advantage of consumers by greatly increasing prices for essential consumer goods or services. While the pricing of consumer goods and services is generally best left to the marketplace under ordinary conditions, when a declared state of emergency results in abnormal disruptions of the market, the public interest requires that excessive and unjustified increases in the prices of essential consumer goods and services be prohibited. It is the intent of the General Assembly in enacting this act to protect citizens from excessive and unjustified increases in the prices charged during or shortly after a declared state of emergency for goods and services that are vital and necessary for the health, safety, and welfare of consumers. Further it is the intent of the General Assembly that this section be liberally construed so that its beneficial purposes may be served.

4-88-302. Definitions.

(a) _State of emergency_ means a natural or manmade disaster or emergency resulting from a tornado, earthquake, flood, fire, riot, or storm for which a state of emergency has been declared by the President of the United States or the Governor of Arkansas.
(b) _Local emergency_ means a natural or manmade disaster or emergency resulting from a tornado, earthquake, flood, fire, riot, or storm for which a local emergency has been declared by the executive officer or governing body of any city or county in Arkansas.
(c) _Consumer food item_ means any article that is used or intended for use for food, drink, confection, or condiment by a person or animal.
(d) _Repair or reconstruction services_ means services performed by any person for repairs to residential or commercial property of any type that is damaged as a result of a disaster.
(e) _Emergency supplies_ includes, but is not limited to, water, flashlights, radios, batteries, candles, blankets, soaps, diapers, temporary shelters, tape, toiletries, plywood, nails, and hammers.
(f) _Medical supplies_ includes, but is not limited to, prescription and nonprescription medications, bandages, gauze, isopropyl alcohol, and antibacterial products.
(g) _Building materials_ means lumber, construction tools, windows, and anything else used in the building or rebuilding of property.
(h) _Gasoline_ means any fuel used to power any motor vehicle or power tool.
(i) _Transportation, freight, and storage services_ means any service that is performed by any company that contracts to move, store, or transport personal or business property or rents equipment for those purposes.
(j) _Housing_ means any rental housing leased on a month-to-month term.
(k) _Goods_ has the same meaning as defined in Arkansas Code Title 4, Chapter 88, Subchapter 1.

4-88-303. Prohibited unfair pricing practices.

(a) Upon the proclamation of a state of emergency resulting from a tornado, earthquake, flood, fire, riot, storm, or natural or manmade disaster declared by the President of the United States or the Governor, and upon the declaration of a local emergency resulting from a tornado, earthquake, flood, fire, riot, storm, or natural or manmade disaster by the executive officer of any city or county, and for a period of thirty (30) days following that declaration, it is unlawful for any person, contractor, business, or other entity to sell or offer to sell any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels for a price of more than ten percent (10%) above the price charged by that person for those goods or services immediately prior to the proclamation of emergency. However, a greater price increase shall not be unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, provided that in those situations where the increase in price is attributable to additional costs imposed by the seller_s supplier or additional costs of providing the good or service during the state of emergency, the price represents no more than ten percent (10%) above the total of the cost to the seller plus the markup customarily applied by the seller for that good or service in the usual course of business immediately prior to the onset of the state of emergency.

(b) Upon the proclamation of a state of emergency resulting from a tornado, earthquake, flood, fire, riot, or storm declared by the President of the United States or the Governor, or upon the declaration of a local emergency resulting from a tornado, earthquake, flood, fire, riot, or storm by the executive officer of any city or county, and for a period of one hundred eighty (180) days following that declaration, it is unlawful for any contractor to sell or offer to sell any repair or reconstruction services or any services used in emergency cleanup for a price of more than ten percent (10%) above the price charged by that person for those services immediately prior to the proclamation of emergency. However, a greater price increase shall not be unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, provided that in those situations where the increase in price is attributable to the additional costs imposed by the contractor_s supplier or additional costs of providing the service during the state of emergency, the price represents no more than ten percent (10%) above the total of the cost to the contractor plus the markup customarily applied by the contractor for that good or service in the usual course of business immediately prior to the onset of the state of
emergency.

(c) The provisions of this section may be extended for additional thirty (30) day periods by a local governing body or the General Assembly if deemed necessary to protect the lives, property, or welfare of the citizens.

(d) Any business offering an item for sale at a reduced price immediately prior to the proclamation of the emergency may use the price at which they usually sell the item to calculate the price pursuant to subsection (a) or (b).

4-88-304. Penalties, remedies, and enforcement.

(a) When a person violates this subchapter or a regulation prescribed under this subchapter, such violation shall constitute an unfair or deceptive act or practice as defined by the Deceptive Trade Practices Act, Arkansas Code Annotated §§ 4-88-101 et seq. All remedies, penalties, and authority granted to the Attorney General under the Deceptive Trade Practices Act shall be available to the Attorney General for the enforcement of this subchapter.

(b) Any person who is found to have violated this subchapter shall be guilty of a Class A misdemeanor and imprisoned not more than one (1) year and subject to a fine of not more than one thousand dollars ($1,000), or both, for each violation.

(c) The remedies and penalties provided by this section are cumulative to each other, the remedies under Arkansas Code Annotated §§ 17-25-301 et seq. and the remedies or penalties available under all other laws of this state.

4-88-305. Preemption.

Nothing in this section shall preempt any local ordinance prohibiting the same or similar conduct or imposing a more severe penalty for the same conduct prohibited in this section."

SECTION 2. All provisions of this act of a general and permanent nature are amendatory to the Arkansas Code of 1987 Annotated and the Arkansas Code Revision Commission shall incorporate the same in the Code.

SECTION 3. If any provision of this act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.

SECTION 4. All laws and parts of laws in conflict with this act are hereby repealed.

SECTION 6. EMERGENCY. It is found and determined by the General Assembly of the State of Arkansas that the widespread practice of price gouging and unfair pricing during and shortly after an emergency has created numerous problems for consumers; that such price gouging is particularly egregious due to the very nature of such an emergency; that such price gouging has a significant negative impact upon the economy and well-being of this state and its local communities; and that this act is necessary for the protection of the people of Arkansas. Therefore an emergency is declared to exist and this act being immediately necessary for the preservation of the public peace, health and safety shall become effective on the date of its approval by the Governor. If the bill is neither approved nor vetoed by the Governor, it shall become effective on the expiration of the period of time during which the Governor may veto the bill. If the bill is vetoed by the Governor and the veto is overridden, it shall become effective on the date the last house overrides the veto.

/s/Harriman et al

APPROVED:3-06-97


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