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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1735 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1735

To improve the Federal Trade Commission's ability to protect consumers 
 from price-gouging during energy emergencies, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 20, 2005

   Ms. Cantwell (for herself, Mr. Reid, Mr. Durbin, Mr. Inouye, Mrs. 
Feinstein, Mr. Kerry, Mr. Feingold, Mrs. Clinton, Mr. Wyden, Mr. Kohl, 
 Mr. Schumer, Ms. Stabenow, Mr. Dorgan, Mr. Jeffords, Mrs. Boxer, Ms. 
   Mikulski, Mr. Biden, Mr. Lieberman, Mr. Harkin, Mr. Reed, and Mr. 
   Salazar) introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL

 
To improve the Federal Trade Commission's ability to protect consumers 
 from price-gouging during energy emergencies, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Energy Emergency 
Consumer Protection Act of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Unfair or deceptive acts or practices in commerce related to 
                            gasoline and petroleum distillates.
Sec. 3. Declaration of energy emergency.
Sec. 4. Enforcement.
Sec. 5. Enforcement by State attorneys general.
Sec. 6. Penalties.
Sec. 7. Effect on other laws.
Sec. 8. Market transparency for crude oil, gasoline, and petroleum 
                            distillates.
Sec. 9. Report on United States energy emergency preparedness.
Sec. 10. Alternative fuels investment by major oil companies and 
                            automobile manufacturers.
Sec. 11. Protective action to prevent future disruptions of supply.
Sec. 12. Authorization of appropriations.

SEC. 2. UNFAIR OR DECEPTIVE ACTS OR PRACTICES IN COMMERCE RELATED TO 
              GASOLINE AND PETROLEUM DISTILLATES.

    (a) Sales to Consumers at Unconscionable Price.--
            (1) In general.--During any energy emergency declared by 
        the President under section 3, it is unlawful for any person to 
        sell crude oil, gasoline, or petroleum distillates in, or for 
        use in, the area to which that declaration applies at a price 
        that--
                    (A) is unconscionably excessive; or
                    (B) indicates the seller is taking unfair advantage 
                of the circumstances to increase prices unreasonably.
            (2) Factors considered.--In determining whether a violation 
        of paragraph (1) has occured, there shall be taken into 
        account, among other factors, whether--
                    (A) the amount charged represents a gross disparity 
                between the price of the crude oil, gasoline, or 
                petroleum distillate sold and the price at which it was 
                offered for sale in the usual course of the seller's 
                business immediately prior to the energy emergency; or
                    (B) the amount charged grossly exceeds the price at 
                which the same or similar crude oil, gasoline, or 
                petroleum distillate was readily obtainable by other 
                purchasers in the area to which the declaration 
                applies.
            (3) Mitigating factors.--In determining whether a violation 
        of paragraph (1) has occurred, there also shall be taken into 
        account, among other factors, the price that would reasonably 
        equate supply and demand in a competitive and freely 
        functioning market and whether the price at which the crude 
        oil, gasoline, or petroleum distillate was sold reasonably 
        reflects additional costs, not within the control of the 
        seller, that were paid or incurred by the seller.
    (b) False Pricing Information.--It is unlawful for any person to 
report information related to the wholesale price of crude oil, 
gasoline, or petroleum distillates to the Federal Trade Commission if--
            (1) that person knew, or reasonably should have known, the 
        information to be false or misleading;
            (2) the information was required by law to be reported; and
            (3) the person intended the false or misleading data to 
        affect data compiled by that department or agency for 
        statistical or analytical purposes with respect to the market 
        for crude oil, gasoline, or petroleum distillates.
    (c) Market Manipulation.--It is unlawful for any person, directly 
or indirectly, to use or employ, in connection with the purchase or 
sale of crude oil, gasoline, or petroleum distillates at wholesale, any 
manipulative or deceptive device or contrivance, in contravention of 
such rules and regulations as the Commission may prescribe as necessary 
or appropriate in the public interest or for the protection of United 
States citizens.

SEC. 3. DECLARATION OF ENERGY EMERGENCY.

    (a) In General.--If the President finds that the health, safety, 
welfare, or economic well-being of the citizens of the United States is 
at risk because of a shortage or imminent shortage of adequate supplies 
of crude oil, gasoline, or petroleum distillates due to a disruption in 
the national distribution system for crude oil, gasoline, or petroleum 
distillates (including such a shortage related to a major disaster (as 
defined in section 102(2) of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5122))), or significant pricing 
anomalies in national energy markets for crude oil, gasoline, or 
petroleum distillates, the President may declare that a Federal energy 
emergency exists.
    (b) Scope and Duration.--The declaration shall apply to the Nation, 
a geographical region, or 1 or more States, as determined by the 
President, but may not be in effect for a period of more than 45 days.
    (c) Extensions.--The President may--
            (1) extend a declaration under subsection (a) for a period 
        of not more than 45 days; and
            (2) extend such a declaration more than once.

SEC. 4. ENFORCEMENT UNDER FEDERAL TRADE COMMISSION ACT.

    (a) Enforcement by Commission.--This Act shall be enforced by the 
Federal Trade Commission. In enforcing section 2(a) of this Act, the 
Commission shall give priority to enforcement actions concerning 
companies with total United States wholesale or retail sales of crude 
oil, gasoline, and petroleum distillates in excess of $500,000,000 per 
year but shall not exclude enforcement actions against companies with 
total United States wholesale sales of $500,000,000 or less per year.
    (b) Violation Is Unfair or Deceptive Act or Practice.--The 
violation of any provision of this Act shall be treated as an unfair or 
deceptive act or practice proscribed under a rule issued under section 
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
57a(a)(1)(B)).

SEC. 5. ENFORCEMENT AT RETAIL LEVEL BY STATE ATTORNEYS GENERAL.

    (a) In General.--A State, as parens patriae, may bring a civil 
action on behalf of its residents in an appropriate district court of 
the United States to enforce the provisions of section 2(a) of this 
Act, or to impose the civil penalties authorized by section 6 for 
violations of section 2(a), whenever the attorney general of the State 
has reason to believe that the interests of the residents of the State 
have been or are being threatened or adversely affected by a person 
engaged in retail sales of gasoline or petroleum distillates to 
consumers for purposes other than resale that violates this Act or a 
regulation under this Act.
    (b) Notice.--The State shall serve written notice to the Commission 
of any civil action under subsection (a) prior to initiating such civil 
action. The notice shall include a copy of the complaint to be filed to 
initiate such civil action, except that if it is not feasible for the 
State to provide such prior notice, the State shall provide such notice 
immediately upon instituting such civil action.
    (c) Authority To Intervene.--Upon receiving the notice required by 
subsection (b), the Commission may intervene in such civil action and 
upon intervening--
            (1) be heard on all matters arising in such civil action; 
        and
            (2) file petitions for appeal of a decision in such civil 
        action.
    (d) Construction.--For purposes of bringing any civil action under 
subsection (a), nothing in this section shall prevent the attorney 
general of a State from exercising the powers conferred on the attorney 
general by the laws of such State to conduct investigations or to 
administer oaths or affirmations or to compel the attendance of 
witnesses or the production of documentary and other evidence.
    (e) Venue; Service of Process.--In a civil action brought under 
subsection (a)--
            (1) the venue shall be a judicial district in which--
                    (A) the defendant operates;
                    (B) the defendant was authorized to do business; or
                    (C) where the defendant in the civil action is 
                found;
            (2) process may be served without regard to the territorial 
        limits of the district or of the State in which the civil 
        action is instituted; and
            (3) a person who participated with the defendant in an 
        alleged violation that is being litigated in the civil action 
        may be joined in the civil action without regard to the 
        residence of the person.
    (f) Limitation on State Action While Federal Action Is Pending.--If 
the Commission has instituted a civil action or an administrative 
action for violation of this Act, no State attorney general, or 
official or agency of a State, may bring an action under this 
subsection during the pendency of that action against any defendant 
named in the complaint of the Commission or the other agency for any 
violation of this Act alleged in the complaint.
    (f) Enforcement of State Law.--Nothing contained in this section 
shall prohibit an authorized State official from proceeding in State 
court to enforce a civil or criminal statute of such State.

SEC. 6. PENALTIES.

    (a) Civil Penalty.--
            (1) In general.--In addition to any penalty applicable 
        under the Federal Trade Commission Act--
                    (A) any person who violates section 2(b) or 2(c) of 
                this Act is punishable by a civil penalty of not more 
                than $1,000,000; and
                    (B) any person who violates section 2(a) of this 
                Act is punishable by a civil penalty of not more than 
                $3,000,000.
            (2) Method of assessment.--The penalties provided by 
        paragraph (1) shall be assessed in the same manner as civil 
        penalties imposed under section 5 of the Federal Trade 
        Commission Act (15 U.S.C. 45).
            (3) Multiple offenses; mitigating factors.--In assessing 
        the penalty provided by subsection (a)--
                    (A) each day of a continuing violation shall be 
                considered a separate violation; and
                    (B) the Commission shall take into consideration 
                the seriousness of the violation and the efforts of the 
                person committing the violation to remedy the harm 
                caused by the violation in a timely manner.
    (b) Criminal Penalty.--Violation of section 2(a) of this Act is 
punishable by a fine of not more than $1,000,000, imprisonment for not 
more than 5 years, or both.

SEC. 7. EFFECT ON OTHER LAWS.

    (a) Other Authority of Commission.--Nothing in this Act shall be 
construed to limit or affect in any way the Commission's authority to 
bring enforcement actions or take any other measure under the Federal 
Trade Commission Act (15 U.S.C. 41 et seq.) or any other provision of 
law.
    (b) State Law.--Nothing in this Act preempts any State law.

SEC. 8. MARKET TRANSPARENCY FOR CRUDE OIL, GASOLINE, AND PETROLEUM 
              DISTILLATES.

    (a) In General.--The Federal Trade Commission shall facilitate 
price transparency in markets for the sale of crude oil and essential 
petroleum products at wholesale, having due regard for the public 
interest, the integrity of those markets, fair competition, and the 
protection of consumers.
    (b) Marketplace Transparency.--
            (1) Dissemination of information.--In carrying out this 
        section the Commission shall provide by rule for the 
        dissemination, on a timely basis, of information about the 
        availability and prices of wholesale crude oil, gasoline, and 
        petroleum distillates to the Commission, States, wholesale 
        buyers and sellers, and the public.
            (2) Protection of public from anticompetitive activity.--In 
        determining the information to be made available under this 
        section and time to make the information available, the 
        Commission shall seek to ensure that consumers and competitive 
        markets are protected from the adverse effects of potential 
        collusion or other anticompetitive behaviors that can be 
        facilitated by untimely public disclosure of transaction-
        specific information.
            (3) Protection of market mechanisms.--The Commission shall 
        withhold from public disclosure under this section any 
        information the Commission determines would, if disclosed, be 
        detrimental to the operation of an effective market or 
        jeopardize security.
    (c) Information Sources.--
            (1) In general.--In carrying out subsection (b), the 
        Commission may--
                    (A) obtain information from any market participant; 
                and
                    (B) rely on entities other than the Commission to 
                receive and make public the information, subject to the 
                disclosure rules in subsection (b)(3).
            (2) Published data.--In carrying out this section, the 
        Commission shall consider the degree of price transparency 
        provided by existing price publishers and providers of trade 
        processing services, and shall rely on such publishers and 
        services to the maximum extent possible.
            (3) Electronic information systems.--The Commission may 
        establish an electronic information system if it determines 
        that existing price publications are not adequately providing 
        price discovery or market transparency. Nothing in this 
        section, however, shall affect any electronic information 
        filing requirements in effect under this Act as of the date of 
        enactment of this section.
            (4) De minimus exception.--The Commission may not require 
        entities who have a de minimus market presence to comply with 
        the reporting requirements of this section.
    (d) Cooperation With Other Federal Agencies.--
            (1) Memorandum of understanding.--Within 180 days after the 
        date of enactment of this Act, the Commission shall conclude a 
        memorandum of understanding with the Commodity Futures Trading 
        Commission and other appropriate agencies (if applicable) 
        relating to information sharing, which shall include 
        provisions--
                    (A) ensuring that information requests to markets 
                within the respective jurisdiction of each agency are 
                properly coordinated to minimize duplicative 
                information requests; and
                    (B) regarding the treatment of proprietary trading 
                information.
            (2) CFTC jurisdiction.--Nothing in this section may be 
        construed to limit or affect the exclusive jurisdiction of the 
        Commodity Futures Trading Commission under the Commodity 
        Exchange Act (7 U.S.C. 1 et seq.).
    (e) Rulemaking.--Within 180 days after the date of enactment of 
this Act, the Commission shall initiate a rulemaking proceeding to 
establish such rules as the Commission determines to be necessary and 
appropriate to carry out this section.

SEC. 9. REPORT ON UNITED STATES ENERGY EMERGENCY PREPAREDNESS.

    (a) Potential Impacts Report.--Within 30 days after the date of 
enactment of this Act, the Federal Trade Commission shall transmit to 
the Congress a report describing the potential impact on domestic 
prices of crude oil, residual fuel oil, and refined petroleum products 
that would result from the disruption for periods of 1 week, 1 year, 
and 5 years, respectively, of not less than--
            (1) 30 percent of United States oil production;
            (2) 20 percent of United States refining capacity; and
            (3) 5 percent of global oil supplies.
    (b) Projections and Possible Remedies.--The President shall include 
in the report--
            (1) projections of the impact any such disruptions would be 
        likely to have on the United States economy; and
            (2) detailed and prioritized recommendations for remedies 
        under each scenario covered by the report.

SEC. 10. ALTERNATIVE FUELS INVESTMENT BY MAJOR OIL COMPANIES AND 
              AUTOMOBILE MANUFACTURERS.

    The Comptroller General shall conduct an investigation within 1 
year after the date of enactment of this Act and every 4 years 
thereafter of the extent to which companies with total United States 
wholesale or retail sales of crude oil, gasoline, and petroleum 
distillates in excess of $500,000,000 per year and automobile 
manufacturers have invested in alternative fuels production, 
infrastructure, and technology development to diversify the motor 
vehicle fuel and vehicle options available to consumers in the United 
States. At the conclusion of each such investigation, the Comptroller 
General shall transmit a report containing the findings and conclusions 
to the Congress.

SEC. 11. PROTECTIVE ACTION TO PREVENT FUTURE DISRUPTIONS OF SUPPLY.

    The National Academy of Sciences shall review expenditures by, and 
activities undertaken by, companies with total United States wholesale 
or retail sales of crude oil, gasoline, and petroleum distillates in 
excess of $500,000,000 per year to protect the energy supply system 
from terrorist attacks, international supply disruptions, and natural 
disasters, and ensure a stable and reasonably priced supply of such 
products to consumers in the United States, that includes an assessment 
of the companies' preparations for the current forecasted period of 
more frequent and, due to global warming, more intense hurricane 
activity in the Gulf of Mexico and other vulnerable coastal areas.

SEC. 12. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Federal Trade 
Commission such sums as may be necessary to carry out the provisions of 
this Act.
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