II 

109TH CONGRESS 

1ST SESSION S. 1640 

To prohibit price gouging relating to certain goods and services in areas 

affected by major disasters. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 8, 2005 

Mr. NELSON of Florida introduced the following bill; which was read twice and 

referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To prohibit price gouging relating to certain goods and 

services in areas affected by major disasters. 

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 ‘‘Protection From Price 

5 Gouging Against Disaster Victims Act of 2005’’. 

6 SEC. 2. FINDINGS AND GOALS. 

7 (a) FINDINGS.—Congress finds that— 

8 (1) the United States experiences tremendous 

9 generosity and goodwill in the wake of natural disas10 ters; 
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1 (2) unfortunately, some unscrupulous individ2 uals take advantage of those disasters in an attempt 

3 to gain financially; 

4 (3) the Federal Trade Commission is charged 

5 with preventing unfair methods of competition and 

6 unfair and deceptive acts or practices under section 

7 5 of the Federal Trade Commission Act (15 U.S.C. 

8 45); 

9 (4) the Federal Trade Commission has exten10 sive experience analyzing markets and competitive 

11 issues in order to determine whether market partici12 pants are engaging in actions that may have anti13 competitive effects; and 

14 (5) the Committee on Commerce, Science, and 

15 Transportation of the Senate and the Committee on 

16 Energy and Commerce of the House of Representa17 tives are charged by their respective Houses with 

18 consumer protection. 

19 (b) GOALS.—The goals of this Act are— 

20 (1) to decrease the occurrence of persons charg21 ing unconscionably excessive prices for consumer 

22 goods and services following natural disasters; 

23 (2) to require the Federal Trade Commission to 

24 conduct ongoing investigations of actions intended to 
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1 disadvantage consumers following natural disasters; 

2 and 

3 (3) to ensure that sufficient enforcement au4 thority is available to the Commission to carry out 

5 the responsibilities of the Commission under this Act 

6 and the amendments made by this Act. 

7 SEC. 3. PRICE GOUGING PROHIBITION FOLLOWING MAJOR 

8 DISASTERS. 

9 The Federal Trade Commission Act (15 U.S.C. 41 

10 et seq.) is amended— 

11 (1) by redesignating sections 25 and 26 as sec12 tions 26 and 27, respectively; and 

13 (2) by inserting after section 24 the following: 

14 ‘‘SEC. 25. PROTECTION FROM PRICE GOUGING FOLLOWING 

15 MAJOR DISASTERS. 

16 ‘‘(a) DEFINITIONS.—In this section: 

17 ‘‘(1) AFFECTED AREA.—The term ‘affected 

18 area’ means an area affected by a major disaster de19 clared by the President under Federal law in exist20 ence on the date of enactment of the Protection 

21 From Price Gouging Against Disaster Victims Act 

22 of 2005. 

23 ‘‘(2) CONSUMER GOOD OR SERVICE.— 

24 ‘‘(A) IN GENERAL.—The term ‘consumer 

25 good or service’ means a good, piece of equip-
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1 ment, or service provided primarily for personal, 

2 family, or household purposes, including food, 

3 water, ice, a chemical, a building supply, a tool, 

4 a petroleum product, a residential construction, 

5 reconstruction, or repair service, or a service for 

6 the removal of debris (including a damaged 

7 tree) or garbage. 

8 ‘‘(B) INCLUSION.—The term ‘consumer 

9 good or service’ includes a property or a facility 

10 rented to a consumer for use as a residence or 

11 storage facility. 

12 ‘‘(3) PRICE GOUGING.—The term ‘price 

13 gouging’ means the charging of an unconscionably 

14 excessive price by a supplier in an affected area. 

15 ‘‘(4) SUPPLIER.—The term ‘supplier’ includes a 

16 seller, reseller, wholesaler, distributor, retailer, les17 sor, provider, or licensed or unlicensed contractor, 

18 subcontractor, or laborer engaged in the provision or 

19 distribution of a consumer good or service. 

20 ‘‘(5) UNCONSCIONABLY EXCESSIVE PRICE.— 

21 The term ‘unconscionably excessive price’ means a 

22 price charged in an affected area for a consumer 

23 good or service that— 

24 ‘‘(A) represents a gross disparity, as deter25 mined by the Commission in accordance with 
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1 subsection (e), between the price charged for 

2 the good or service and the average price of the 

3 good or service charged by suppliers in the af4 fected area during the 30-day period imme5 diately before the President declares the exist6 ence of a major disaster; and 

7 ‘‘(B) is not attributable to increased whole8 sale or operational costs incurred by the sup9 plier in connection with the provision of the 

10 consumer good or service. 

11 ‘‘(b) DETERMINATION OF THE COMMISSION.—Fol12 lowing the declaration of a major disaster by the Presi13 dent, the Commission shall— 

14 ‘‘(1) consult with the Attorney General of the 

15 United States, the United States Attorney for the 

16 district in which the disaster occurred, and State 

17 and local law enforcement officials to determine 

18 whether any supplier in the affected area is charging 

19 or has charged an unconscionably excessive price for 

20 any consumer good or service provided in the af21 fected area; and 

22 ‘‘(2) establish within the Commission— 

23 ‘‘(A) a toll-free hotline that a consumer 

24 may call to report an incidence of price gouging 

25 in the affected area; and 
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1 ‘‘(B) a program to develop and distribute 

2 to the public informational materials in English 

3 and Spanish to assist residents of the affected 

4 area in detecting and avoiding price gouging. 

5 ‘‘(c) PRICE GOUGING INVOLVING DISASTER VIC6 TIMS.— 

7 ‘‘(1) OFFENSE.—During the 180-day period 

8 after the date on which a major disaster is declared 

9 by the President, no supplier shall provide, or offer 

10 to provide, any consumer good or service in an af11 fected area at an unconscionably excessive price. 

12 ‘‘(2) ACTION BY COMMISSION.— 

13 ‘‘(A) IN GENERAL.—During the period de14 scribed in paragraph (1), the Commission shall 

15 conduct investigations to determine whether any 

16 supplier in an affected area is in violation of 

17 paragraph (1). 

18 ‘‘(B) POSITIVE DETERMINATION.—If the 

19 Commission determines under subparagraph 

20 (A) that a supplier is in violation of paragraph 

21 (1), the Commission shall take any action the 

22 Commission determines to be appropriate to 

23 remedy the violation. 

24 ‘‘(3) CIVIL PENALTIES.—A supplier that com25 mits an offense described in paragraph (1) may, in 
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1 a civil action brought in a court of competent juris2 diction, be subject to— 

3 ‘‘(A) a civil penalty not more than 

4 $500,000; 

5 ‘‘(B) an order to pay special and punitive 

6 damages; 

7 ‘‘(C) an order to pay reasonable attorney’s 

8 fees; 

9 ‘‘(D) an order to pay costs of litigation re10 lating to the offense; 

11 ‘‘(E) an order for disgorgement of profits 

12 earned as a result of a violation of paragraph 

13 (1); and 

14 ‘‘(F) any other relief determined by the 

15 court to be appropriate. 

16 ‘‘(4) CRIMINAL PENALTY.—A supplier that 

17 knowingly commits an offense described in para18 graph (1) shall be imprisoned not more than 1 year. 

19 ‘‘(5) ACTION BY VICTIMS.—A person, Federal 

20 agency, State, or local government that suffers loss 

21 or damage as a result of a violation of paragraph (1) 

22 may bring a civil action against a supplier in any 

23 court of competent jurisdiction for disgorgement, 

24 special or punitive damages, injunctive relief, reason-
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1 able attorney’s fees, costs of the litigation, and any 

2 other appropriate legal or equitable relief. 

3 ‘‘(6) ACTION BY STATE ATTORNEYS GEN4 ERAL.—An attorney general of a State, or other au5 thorized State official, may bring a civil action in the 

6 name of the State, on behalf of persons residing in 

7 the State, in any court of competent jurisdiction for 

8 disgorgement, special or punitive damages, reason9 able attorney’s fees, costs of litigation, and any other 

10 appropriate legal or equitable relief. 

11 ‘‘(7) NO PREEMPTION.—Nothing in this section 

12 preempts any State law. 

13 ‘‘(d) REPORT.—Not later than 1 year after the date 

14 of enactment of the Protection From Price Gouging 

15 Against Disaster Victims Act of 2005, and annually there16 after, the Commission shall submit to the Committee on 

17 Commerce, Science, and Transportation of the Senate and 

18 the Committee on Energy and Commerce of the House 

19 of Representatives a report describing— 

20 ‘‘(1) the number of price gouging complaints re21 ceived by the Commission for each major disaster 

22 declared by the President during the preceding year; 

23 ‘‘(2) the number of price gouging investigations 

24 of the Commission initiated, in progress, and com-
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1 pleted as of the date on which the report is pre2 pared; 

3 ‘‘(3) the number of enforcement actions of the 

4 Commission initiated, in progress, and completed as 

5 of the date on which the report is prepared; 

6 ‘‘(4) an evaluation of the effectiveness of the 

7 toll-free hotline and program established under sub8 section (b)(2); and 

9 ‘‘(5) recommendations for any additional action 

10 with respect to the implementation or effectiveness 

11 of this section. 

12 ‘‘(e) DEFINITION OF GROSS DISPARITY.—Not later 

13 than 180 days after the date of enactment of the Protec14 tion From Price Gouging Against Disaster Victims Act 

15 of 2005, the Commission shall promulgate regulations to 

16 define the term ‘gross disparity’ for purposes of this sec17 tion.’’. 

18 SEC. 4. EFFECT OF ACT. 

19 Nothing in this Act, or an amendment made by this 

20 Act, affects any authority of the Federal Trade Commis21 sion in existence on the date of enactment of this Act with 

22 respect to price gouging actions. 

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