II 

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. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Energy Emergency Consumer Protection Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 
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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. 

1 SEC. 2. UNFAIR OR DECEPTIVE ACTS OR PRACTICES IN 

2 COMMERCE RELATED TO GASOLINE AND PE3 TROLEUM DISTILLATES. 

4 (a) SALES TO CONSUMERS AT UNCONSCIONABLE

5 PRICE.— 

6 (1) IN GENERAL.—During any energy emer7 gency declared by the President under section 3, it 

8 is unlawful for any person to sell crude oil, gasoline, 

9 or petroleum distillates in, or for use in, the area to 

10 which that declaration applies at a price that— 

11 (A) is unconscionably excessive; or 

12 (B) indicates the seller is taking unfair ad13 vantage of the circumstances to increase prices 

14 unreasonably. 

15 (2) FACTORS CONSIDERED.—In determining 

16 whether a violation of paragraph (1) has occured, 

17 there shall be taken into account, among other fac18 tors, whether— 
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1 (A) the amount charged represents a gross 

2 disparity between the price of the crude oil, gas3 oline, or petroleum distillate sold and the price 

4 at which it was offered for sale in the usual 

5 course of the seller’s business immediately prior 

6 to the energy emergency; or 

7 (B) the amount charged grossly exceeds 

8 the price at which the same or similar crude oil, 

9 gasoline, or petroleum distillate was readily ob10 tainable by other purchasers in the area to 

11 which the declaration applies. 

12 (3) MITIGATING FACTORS.—In determining 

13 whether a violation of paragraph (1) has occurred, 

14 there also shall be taken into account, among other 

15 factors, the price that would reasonably equate sup16 ply and demand in a competitive and freely func17 tioning market and whether the price at which the 

18 crude oil, gasoline, or petroleum distillate was sold 

19 reasonably reflects additional costs, not within the 

20 control of the seller, that were paid or incurred by 

21 the seller. 

22 (b) FALSE PRICING INFORMATION.—It is unlawful 

23 for any person to report information related to the whole24 sale price of crude oil, gasoline, or petroleum distillates 

25 to the Federal Trade Commission if— 
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1 (1) that person knew, or reasonably should have 

2 known, the information to be false or misleading; 

3 (2) the information was required by law to be 

4 reported; and 

5 (3) the person intended the false or misleading 

6 data to affect data compiled by that department or 

7 agency for statistical or analytical purposes with re8 spect to the market for crude oil, gasoline, or petro9 leum distillates. 

10 (c) MARKET MANIPULATION.—It is unlawful for any 

11 person, directly or indirectly, to use or employ, in connec12 tion with the purchase or sale of crude oil, gasoline, or 

13 petroleum distillates at wholesale, any manipulative or de14 ceptive device or contrivance, in contravention of such 

15 rules and regulations as the Commission may prescribe as 

16 necessary or appropriate in the public interest or for the 

17 protection of United States citizens. 

18 SEC. 3. DECLARATION OF ENERGY EMERGENCY. 

19 (a) IN GENERAL.—If the President finds that the 

20 health, safety, welfare, or economic well-being of the citi21 zens of the United States is at risk because of a shortage 

22 or imminent shortage of adequate supplies of crude oil, 

23 gasoline, or petroleum distillates due to a disruption in 

24 the national distribution system for crude oil, gasoline, or 

25 petroleum distillates (including such a shortage related to 
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1 a major disaster (as defined in section 102(2) of the Rob2 ert T. Stafford Disaster Relief and Emergency Assistance 

3 Act (42 U.S.C. 5122))), or significant pricing anomalies 

4 in national energy markets for crude oil, gasoline, or pe5 troleum distillates, the President may declare that a Fed6 eral energy emergency exists. 

7 (b) SCOPE AND DURATION.—The declaration shall 

8 apply to the Nation, a geographical region, or 1 or more 

9 States, as determined by the President, but may not be 

10 in effect for a period of more than 45 days. 

11 (c) EXTENSIONS.—The President may— 

12 (1) extend a declaration under subsection (a) 

13 for a period of not more than 45 days; and 

14 (2) extend such a declaration more than once. 

15 SEC. 4. ENFORCEMENT UNDER FEDERAL TRADE COMMIS16 SION ACT. 

17 (a) ENFORCEMENT BY COMMISSION.—This Act shall 

18 be enforced by the Federal Trade Commission. In enforc19 ing section 2(a) of this Act, the Commission shall give pri20 ority to enforcement actions concerning companies with 

21 total United States wholesale or retail sales of crude oil, 

22 gasoline, and petroleum distillates in excess of 

23 $500,000,000 per year but shall not exclude enforcement 

24 actions against companies with total United States whole25 sale sales of $500,000,000 or less per year. 
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1 (b) VIOLATION IS UNFAIR OR DECEPTIVE ACT OR

2 PRACTICE.—The violation of any provision of this Act 

3 shall be treated as an unfair or deceptive act or practice 

4 proscribed under a rule issued under section 18(a)(1)(B) 

5 of the Federal Trade Commission Act (15 U.S.C. 

6 57a(a)(1)(B)). 

7 SEC. 5. ENFORCEMENT AT RETAIL LEVEL BY STATE ATTOR8 NEYS GENERAL. 

9 (a) IN GENERAL.—A State, as parens patriae, may 

10 bring a civil action on behalf of its residents in an appro11 priate district court of the United States to enforce the 

12 provisions of section 2(a) of this Act, or to impose the 

13 civil penalties authorized by section 6 for violations of sec14 tion 2(a), whenever the attorney general of the State has 

15 reason to believe that the interests of the residents of the 

16 State have been or are being threatened or adversely af17 fected by a person engaged in retail sales of gasoline or 

18 petroleum distillates to consumers for purposes other than 

19 resale that violates this Act or a regulation under this Act. 

20 (b) NOTICE.—The State shall serve written notice to 

21 the Commission of any civil action under subsection (a) 

22 prior to initiating such civil action. The notice shall in23 clude a copy of the complaint to be filed to initiate such 

24 civil action, except that if it is not feasible for the State 
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1 to provide such prior notice, the State shall provide such 

2 notice immediately upon instituting such civil action. 

3 (c) AUTHORITY TO INTERVENE.—Upon receiving the 

4 notice required by subsection (b), the Commission may in5 tervene in such civil action and upon intervening— 

6 (1) be heard on all matters arising in such civil 

7 action; and 

8 (2) file petitions for appeal of a decision in such 

9 civil action. 

10 (d) CONSTRUCTION.—For purposes of bringing any 

11 civil action under subsection (a), nothing in this section 

12 shall prevent the attorney general of a State from exer13 cising the powers conferred on the attorney general by the 

14 laws of such State to conduct investigations or to admin15 ister oaths or affirmations or to compel the attendance 

16 of witnesses or the production of documentary and other 

17 evidence. 

18 (e) VENUE; SERVICE OF PROCESS.—In a civil action 

19 brought under subsection (a)— 

20 (1) the venue shall be a judicial district in 

21 which— 

22 (A) the defendant operates; 

23 (B) the defendant was authorized to do 

24 business; or 
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1 (C) where the defendant in the civil action 

2 is found; 

3 (2) process may be served without regard to the 

4 territorial limits of the district or of the State in 

5 which the civil action is instituted; and 

6 (3) a person who participated with the defend7 ant in an alleged violation that is being litigated in 

8 the civil action may be joined in the civil action with9 out regard to the residence of the person. 

10 (f) LIMITATION ON STATE ACTION WHILE FEDERAL

11 ACTION IS PENDING.—If the Commission has instituted 

12 a civil action or an administrative action for violation of 

13 this Act, no State attorney general, or official or agency 

14 of a State, may bring an action under this subsection dur15 ing the pendency of that action against any defendant 

16 named in the complaint of the Commission or the other 

17 agency for any violation of this Act alleged in the com18 plaint. 

19 (f) ENFORCEMENT OF STATE LAW.—Nothing con20 tained in this section shall prohibit an authorized State 

21 official from proceeding in State court to enforce a civil 

22 or criminal statute of such State. 

23 SEC. 6. PENALTIES. 

24 (a) CIVIL PENALTY.— 
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1 (1) IN GENERAL.—In addition to any penalty 

2 applicable under the Federal Trade Commission 

3 Act— 

4 (A) any person who violates section 2(b) or 

5 2(c) of this Act is punishable by a civil penalty 

6 of not more than $1,000,000; and 

7 (B) any person who violates section 2(a) of 

8 this Act is punishable by a civil penalty of not 

9 more than $3,000,000. 

10 (2) METHOD OF ASSESSMENT.—The penalties 

11 provided by paragraph (1) shall be assessed in the 

12 same manner as civil penalties imposed under sec13 tion 5 of the Federal Trade Commission Act (15 

14 U.S.C. 45). 

15 (3) MULTIPLE OFFENSES; MITIGATING FAC16 TORS.—In assessing the penalty provided by sub17 section (a)— 

18 (A) each day of a continuing violation shall 

19 be considered a separate violation; and 

20 (B) the Commission shall take into consid21 eration the seriousness of the violation and the 

22 efforts of the person committing the violation to 

23 remedy the harm caused by the violation in a 

24 timely manner. 
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1 (b) CRIMINAL PENALTY.—Violation of section 2(a) of 

2 this Act is punishable by a fine of not more than 

3 $1,000,000, imprisonment for not more than 5 years, or 

4 both. 

5 SEC. 7. EFFECT ON OTHER LAWS. 

6 (a) OTHER AUTHORITY OF COMMISSION.—Nothing 

7 in this Act shall be construed to limit or affect in any 

8 way the Commission’s authority to bring enforcement ac9 tions or take any other measure under the Federal Trade 

10 Commission Act (15 U.S.C. 41 et seq.) or any other provi11 sion of law. 

12 (b) STATE LAW.—Nothing in this Act preempts any 

13 State law. 

14 SEC. 8. MARKET TRANSPARENCY FOR CRUDE OIL, GASO15 LINE, AND PETROLEUM DISTILLATES. 

16 (a) IN GENERAL.—The Federal Trade Commission 

17 shall facilitate price transparency in markets for the sale 

18 of crude oil and essential petroleum products at wholesale, 

19 having due regard for the public interest, the integrity of 

20 those markets, fair competition, and the protection of con21 sumers. 

22 (b) MARKETPLACE TRANSPARENCY.— 

23 (1) DISSEMINATION OF INFORMATION.—In car24 rying out this section the Commission shall provide 

25 by rule for the dissemination, on a timely basis, of 
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1 information about the availability and prices of 

2 wholesale crude oil, gasoline, and petroleum dis3 tillates to the Commission, States, wholesale buyers 

4 and sellers, and the public. 

5 (2) PROTECTION OF PUBLIC FROM ANTI6 COMPETITIVE ACTIVITY.—In determining the infor7 mation to be made available under this section and 

8 time to make the information available, the Commis9 sion shall seek to ensure that consumers and com10 petitive markets are protected from the adverse ef11 fects of potential collusion or other anticompetitive 

12 behaviors that can be facilitated by untimely public 

13 disclosure of transaction-specific information. 

14 (3) PROTECTION OF MARKET MECHANISMS.— 

15 The Commission shall withhold from public disclo16 sure under this section any information the Commis17 sion determines would, if disclosed, be detrimental to 

18 the operation of an effective market or jeopardize se19 curity. 

20 (c) INFORMATION SOURCES.— 

21 (1) IN GENERAL.—In carrying out subsection 

22 (b), the Commission may— 

23 (A) obtain information from any market 

24 participant; and 
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1 (B) rely on entities other than the Com2 mission to receive and make public the informa3 tion, subject to the disclosure rules in sub4 section (b)(3). 

5 (2) PUBLISHED DATA.—In carrying out this 

6 section, the Commission shall consider the degree of 

7 price transparency provided by existing price pub8 lishers and providers of trade processing services, 

9 and shall rely on such publishers and services to the 

10 maximum extent possible. 

11 (3) ELECTRONIC INFORMATION SYSTEMS.—The 

12 Commission may establish an electronic information 

13 system if it determines that existing price publica14 tions are not adequately providing price discovery or 

15 market transparency. Nothing in this section, how16 ever, shall affect any electronic information filing re17 quirements in effect under this Act as of the date 

18 of enactment of this section. 

19 (4) DE MINIMUS EXCEPTION.—The Commission 

20 may not require entities who have a de minimus 

21 market presence to comply with the reporting re22 quirements of this section. 

23 (d) COOPERATION WITH OTHER FEDERAL AGEN24 CIES.— 
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1 (1) MEMORANDUM OF UNDERSTANDING.— 

2 Within 180 days after the date of enactment of this 

3 Act, the Commission shall conclude a memorandum 

4 of understanding with the Commodity Futures Trad5 ing Commission and other appropriate agencies (if 

6 applicable) relating to information sharing, which 

7 shall include provisions— 

8 (A) ensuring that information requests to 

9 markets within the respective jurisdiction of 

10 each agency are properly coordinated to mini11 mize duplicative information requests; and 

12 (B) regarding the treatment of proprietary 

13 trading information. 

14 (2) CFTC JURISDICTION.—Nothing in this sec15 tion may be construed to limit or affect the exclusive 

16 jurisdiction of the Commodity Futures Trading 

17 Commission under the Commodity Exchange Act (7 

18 U.S.C. 1 et seq.). 

19 (e) RULEMAKING.—Within 180 days after the date 

20 of enactment of this Act, the Commission shall initiate a 

21 rulemaking proceeding to establish such rules as the Com22 mission determines to be necessary and appropriate to 

23 carry out this section. 
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1 SEC. 9. REPORT ON UNITED STATES ENERGY EMERGENCY 

2 PREPAREDNESS. 

3 (a) POTENTIAL IMPACTS REPORT.—Within 30 days 

4 after the date of enactment of this Act, the Federal Trade 

5 Commission shall transmit to the Congress a report de6 scribing the potential impact on domestic prices of crude 

7 oil, residual fuel oil, and refined petroleum products that 

8 would result from the disruption for periods of 1 week, 

9 1 year, and 5 years, respectively, of not less than— 

10 (1) 30 percent of United States oil production; 

11 (2) 20 percent of United States refining capac12 ity; and 

13 (3) 5 percent of global oil supplies. 

14 (b) PROJECTIONS AND POSSIBLE REMEDIES.—The 

15 President shall include in the report— 

16 (1) projections of the impact any such disrup17 tions would be likely to have on the United States 

18 economy; and 

19 (2) detailed and prioritized recommendations 

20 for remedies under each scenario covered by the re21 port. 

22 SEC. 10. ALTERNATIVE FUELS INVESTMENT BY MAJOR OIL 

23 COMPANIES AND AUTOMOBILE MANUFAC24 TURERS. 

25 The Comptroller General shall conduct an investiga26 tion within 1 year after the date of enactment of this Act 
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1 and every 4 years thereafter of the extent to which compa2 nies with total United States wholesale or retail sales of 

3 crude oil, gasoline, and petroleum distillates in excess of 

4 $500,000,000 per year and automobile manufacturers 

5 have invested in alternative fuels production, infrastruc6 ture, and technology development to diversify the motor 

7 vehicle fuel and vehicle options available to consumers in 

8 the United States. At the conclusion of each such inves9 tigation, the Comptroller General shall transmit a report 

10 containing the findings and conclusions to the Congress. 

11 SEC. 11. PROTECTIVE ACTION TO PREVENT FUTURE DIS12 RUPTIONS OF SUPPLY. 

13 The National Academy of Sciences shall review ex14 penditures by, and activities undertaken by, companies 

15 with total United States wholesale or retail sales of crude 

16 oil, gasoline, and petroleum distillates in excess of 

17 $500,000,000 per year to protect the energy supply sys18 tem from terrorist attacks, international supply disrup19 tions, and natural disasters, and ensure a stable and rea20 sonably priced supply of such products to consumers in 

21 the United States, that includes an assessment of the com22 panies’ preparations for the current forecasted period of 

23 more frequent and, due to global warming, more intense 

24 hurricane activity in the Gulf of Mexico and other vulner25 able coastal areas. 
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1 SEC. 12. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated to the Fed3 eral Trade Commission such sums as may be necessary 

4 to carry out the provisions of this Act. 

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