I 

109TH CONGRESS 

1ST SESSION H. R. 2944

To provide for the assessment of a penalty to gasoline retailers who charge 

prices grossly in excess of the prescribed index price for gasoline. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 16, 2005

Mr. HASTINGS of Florida (for himself, Mr. HINCHEY, Mr. MOORE of Kansas, 

and Mr. OWENS) introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL

To provide for the assessment of a penalty to gasoline retailers who charge prices grossly in excess of the prescribed 

index price for gasoline.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Gross Overcharging 

5 Undermines Gasoline Economics Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 
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1 (1) From May 2004 to May 2005, average 

2 United States gasoline prices rose by 24 percent, ac3 cording to the Energy Information Administration. 

4 (2) Most United States oil companies showed 

5 huge profits last year, some as much as 200 percent. 

6 The American people have paid over and above their 

7 fair share of this increased cost. Consumers have 

8 been at the whim of oil companies who use record9 breaking oil prices to make record-breaking profits. 

10 (3) Although 24 States have consumer protec11 tion statutes to restrict prices that are ‘‘unconscion12 able’’, ‘‘excessive’’, or ‘‘grossly in excess’’ of a speci13 fied amount, in all but one of those States the prohi14 bition applies only during a state of emergency or 

15 natural disaster. 

16 (4) While consumers express concerns about 

17 being ‘‘gouged’’ when prices spike at the gas pump, 

18 there is no legal definition of gouging. The Federal 

19 Trade Commission has never found a violation of 

20 Federal antitrust laws related to gasoline price 

21 spikes. An in-depth investigation of the entire oil in22 dustry is necessary to determine whether extra 

23 charges are driven by collusion among oil companies 

24 or simply by legitimate market influences. 
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1 (5) With only a few nominal exceptions, gas 

2 prices are expected to increase indefinitely. Higher 

3 fuel costs impact all methods of transportation. As 

4 a result, the increased cost of goods and services 

5 puts an even greater financial burden on consumers. 

6 SEC. 3. DEFINITIONS. 

7 In this Act—

8 (1) the term ‘‘base price index’’ means the aver9 age of the closing unit price on the New York Mer10 cantile Exchange, for contracts to purchase regular 

11 unleaded gasoline during the subsequent calendar 

12 month, for the 10 days in each of the most recent 

13 2 preceding years which correspond to the 10 most 

14 recent trading days; and 

15 (2) the term ‘‘rate of inflation’’ means the aver16 age consumer price index for all urban consumers, 

17 not seasonally adjusted, which corresponds to the 

18 time period between the days used for calculating 

19 the base price index under paragraph (1). 

20 SEC. 4. GASOLINE PRICE GOUGING. 

21 (a) PROHIBITION.—No person shall sell gasoline at 

22 retail for a price that exceeds the base price index multi23 plied by twice the rate of inflation, as adjusted according 

24 to the regional price structure index developed under sub25 section (b). 
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1 (b) REGIONAL PRICE STRUCTURE INDEX.—Not later 

2 than 30 days after the date of enactment of this Act, the 

3 Secretary of Energy shall develop a regional price struc4 ture index to reflect regional variances in gasoline refor5 mulation requirements and transportation costs. 

6 (c) PENALTY.—The Secretary of Energy shall assess 

7 a civil penalty for a violation of subsection (a) in the 

8 amount of—

9 (1) not less than $5,000 for a first offense; 

10 (2) not less than $10,000 for a second offense; 

11 and 

12 (3) not more than $25,000 for any subsequent 

13 offense. 

14 (d) OFFENSES.—Each day on which a person violates 

15 subsection (a) shall constitute a separate offense for pur16 poses of subsection (c). 

17 (e) EFFECTIVE DATE.—This section, except for sub18 section (b), shall take effect 90 days after the date of en19 actment of this Act. 

20 SEC. 5. FEDERAL TRADE COMMISSION REPORT. 

21 Not later than 1 year after the date of enactment 

22 of this Act, and annually thereafter, the Federal Trade 

23 Commission shall transmit to Congress a report that—

24 (1) examines passive and active collusion to set 

25 gasoline prices; 
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1 (2) examines antitrust practices throughout all 

2 supply chains in the oil industry; and 

3 (3) recommends policies to protect consumers 

4 against gasoline price gouging. 

5 SEC. 6. STRATEGIC PETROLEUM RESERVE. 

6 (a) FINDINGS.—Congress finds that—

7 (1) the Strategic Petroleum Reserve was cre8 ated to enhance the physical and economic security 

9 of the United States; 

10 (2) the Energy Policy and Conservation Act al11 lows the Strategic Petroleum Reserve to be used to 

12 provide relief when oil and gasoline supply shortages 

13 cause economic hardship; 

14 (3) the proper management of the resources of 

15 the Strategic Petroleum Reserve could provide gaso16 line price relief to families of the United States and 

17 provide the United States with a tool to counter18 balance the Organization of Petroleum Exporting 

19 Countries’ supply management policies; and 

20 (4) the United States current policy of filling 

21 the Strategic Petroleum Reserve despite the fact 

22 that the Strategic Petroleum Reserve is more than 

23 98 percent full could further exacerbate the rising 

24 price of crude oil and record high retail price of gas25 oline. 
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1 (b) PRICE PROTECTION MEASURES.—

2 (1) INITIAL MEASURES.—For the period begin3 ning on the date of enactment of this Act and end4 ing on the date that is 30 days after such date of 

5 enactment—

6 (A) the Secretary of Energy shall not ac7 quire any new petroleum products for, or place 

8 any petroleum products in, the Strategic Petro9 leum Reserve; and 

10 (B) the Secretary of Energy shall release 

11 from the Strategic Petroleum Reserve 

12 1,000,000 barrels of oil per day. 

13 (2) SUBSEQUENT MEASURES.—If the President 

14 finds it necessary, to lower the burden of gasoline 

15 prices on the economy of the United States and to 

16 circumvent the efforts of the Organization of Petro17 leum Exporting Countries to reap windfall crude oil 

18 profits, the Secretary may continue the measures de19 scribed in paragraph (1)(A) and (B) for an addi20 tional 30 days. 

21 SEC. 7. PRICING AND ECONOMIC IMPACT COMMISSION. 

22 (a) ESTABLISHMENT.—The Secretary of Energy 

23 shall establish a commission to be known as the ‘‘Pricing 

24 and Economic Impact Commission’’ (in this section re25 ferred to as the ‘‘Commission’’). 
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1 (b) DUTIES OF COMMISSION.—Not later than 1 year 

2 after the date of enactment of this Act, the Commission 

3 shall transmit to Congress a report containing rec4 ommendations on the effect of this Act on—

5 (1) domestic oil production; 

6 (2) foreign oil imports; 

7 (3) profits of the oil industry; 

8 (4) inflation; 

9 (5) employment; 

10 (6) economic growth; 

11 (7) Federal revenues; and 

12 (8) national security. 

13 (c) MEMBERSHIP.—

14 (1) NUMBER AND APPOINTMENT.—The Com15 mission shall be composed of 23 members as follows: 

16 (A) 11 members appointed by the Presi17 dent. These shall include no less than 1 mem18 ber from each of the Environmental Protection 

19 Agency, the Department of Transportation, the 

20 Department of Energy, the Department of 

21 Commerce, the Council of Economic Advisors, 

22 and the Office of Science and Technology. 

23 (B) 6 members appointed by the House of 

24 Representatives, of whom 3 shall be appointed 
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1 by the Speaker of the House of Representatives 

2 and 3 shall be appointed by the minority leader. 

3 (C) 6 members appointed by the Senate, of 

4 whom 3 shall be appointed by the majority 

5 leader and 3 shall be appointed by the minority 

6 leader. 

7 (2) QUALIFICATIONS.—In making appointments 

8 under this subsection, the appointing authorities 

9 shall make a special effort to appoint individuals 

10 who are particularly qualified to perform the func11 tions of the Commission, by reason of either prac12 tical experience or academic expertise. 

13 (3) TERMS AND VACANCIES.—Each member 

14 shall be appointed for the life of the Commission. A 

15 vacancy in the Commission shall be filled in the 

16 manner in which the original appointment was 

17 made. 

18 (4) PAY AND TRAVEL.—Each member of the 

19 Commission, other than a full-time officer or em20 ployee of the United States—

21 (A) shall be paid the daily equivalent of 

22 the annual rate of basic pay payable for level V 

23 of the Executive Schedule for each day (includ24 ing travel time) during which the member is en-
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1 gaged in the actual performance of duties vest2 ed in the Commission; and 

3 (B) shall receive travel expenses, including 

4 per diem in lieu of subsistence, in accordance 

5 with applicable provisions under subchapter I of 

6 chapter 57 of title 5, United States Code. 

7 (5) QUORUM.—12 members of the Commission 

8 shall constitute a quorum, but a lesser number may 

9 hold hearings. 

10 (6) CHAIRMAN.—The Chairman of the Commis11 sion shall be elected by the members. 

12 (7) MEETINGS.—The Commission shall meet at 

13 the call of the Chairman or a majority of its mem14 bers. 

15 (d) STAFF.—

16 (1) IN GENERAL.—With the approval of the 

17 Commission, the Chairman may appoint and fix the 

18 pay of not more than six individuals for the staff of 

19 the Commission. Such individuals may be appointed 

20 without regard to the provisions of title 5, United 

21 States Code, governing appointments in the competi22 tive service, and may be paid without regard to the 

23 provisions of chapter 51 and subchapter III of chap24 ter 53 of that title relating to classification and Gen25 eral Schedule pay rates, except that an individual so 
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1 appointed may not receive pay in excess of the max2 imum annual rate of basic pay payable for grade 

3 GS–15 of the General Schedule under section 5332 

4 of title 5, United States Code. 

5 (2) EXPERTS AND CONSULTANTS.—With the 

6 approval of the Commission, the Chairman may pro7 cure temporary and intermittent services in the 

8 manner prescribed in section 3109(b) of title 5, 

9 United States Code, but at rates for individuals not 

10 to exceed the daily equivalent of the maximum an11 nual rate of basic pay payable for grade GS–15 of 

12 the General Schedule under section 5332 of title 5, 

13 United States Code. 

14 (3) STAFF OF FEDERAL AGENCIES.—Upon re15 quest of the Commission, the head of any Federal 

16 department or agency may detail, on a reimbursable 

17 basis, any of the personnel of that department or 

18 agency to the Commission to assist it in carrying out 

19 its duties under this section. 

20 (e) POWERS OF COMMISSION.—

21 (1) HEARINGS.—The Commission may, for the 

22 purpose of carrying out this section, hold hearings, 

23 sit and act at times and places, take testimony, and 

24 receive evidence as the Commission considers appro25 priate. 
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1 (2) MEMBERS AND AGENTS.—Any member or 

2 agent of the Commission may, if authorized by the 

3 Commission, take any action which the Commission 

4 is authorized to take by this subsection. 

5 (3) MAILS.—The Commission may use the 

6 United States mails in the same manner and under 

7 the same conditions as departments and agencies of 

8 the United States. 

9 (4) ADMINISTRATIVE SUPPORT SERVICES.—

10 Upon the request of the Commission, the Adminis11 trator of General Services shall provide to the Com12 mission, on a reimbursable basis, the administrative 

13 support services necessary for the Commission to 

14 carry out its responsibilities under this section. 

15 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

16 will be authorized to be appropriated to carry out this sec17 tion $2,000,000, to remain available until expended. 

18 (g) TERMINATION.—The Commission shall cease to 

19 exist on the last day of the month in which its report is 

20 submitted under subsection (b).

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