Nick Snow
Washington Correspondent
WASHINGTON, DC, May 5 -- The US House passed a bill to make oil "price-gouging" a federal federal crime just 2 days after Rep. Heather Wilson (R-NM) introduced the measure.
"The government doesn't set prices, but we do have a responsibility to prohibit price-gouging and unfair manipulation of the markets," Wilson said after the 389-34 vote on May 3.
The bill required a bipartisan two-thirds majority to pass because it was brought up rapidly on a vote for suspension. It now awaits action by the Senate.
Democrats charged the measure didn't go far enough.
Rep. Bart Stupak (D-Mich.), who earlier introduced a similar bill, complained, "In the past year, gas station operators have limited their cost of a gallon of gas to 5% while crude oil producers increased their price by 46% and refineries a whopping 255%."
Wilson's measure aims to create a nationwide price-gouging standard and set penalties to replace definitions in 23 states that sometimes are contradictory. It applies to crude oil, gasoline, diesel fuel, home heating oil, and biofuel.
It would require the US Federal Trade Commission to define "price-gouging" within 6 months of the bill's becoming law.
States and their attorneys-general where statutes already exist would continue investigating price-gouging allegations with support from the US Attorney General, Justice Department, and FTC, Wilson said.
Possible penalties
It also would establish civil and criminal penalties, including fines up to $150 million for wholesale sales and $2 million for retail sales, and prison terms of up to 2 years.
It also sets civil fines of 3 times the "excess profit." On wholesale sales it also applies a fine of $3 million/day of violation.
Revenue from civil penalties would go into a fund established by each state to compensate consumers. If such a fund does not exist, the money would go into the state treasury's general fund.
This was the second Wilson-proposed price-gouging measure passed by the House. On Oct. 7, it passed her amendment giving the FTC authority to investigate price-gouging allegations in federally designated disaster areas as part of a larger bill promoting increased domestic refining capacity.
Stupak offered provisions from his bill as an amendment to Wilson's measure, but it was defeated in a party-line vote. His bill would give the president authority to declare a national energy emergency and make it illegal to sell crude oil, home heating oil, gasoline, natural gas, and propane at excessively high prices.
His bill also would have directed the FTC to define oil product "price-gouging" and establish civil penalties up to three times the excess profits made by companies violating that standard.
Like Wilson, Stupak noted that only a limited number of states currently have laws directed at price-gouging. "There is no oversight protection on the federal level at all. Citizens in this country are pleading with us to do something to protect them from these excessive gas prices," he said.
Wilson's price-gouging bill fared better on the House floor on May 3 than a companion measure from Rep. Charles F. Bass (R-NH) to create a federally-coordinated permitting process for new domestic oil and biofuel refineries (OGJ Online, May 3, 2006).
That bill, which also required a two-thirds majority because it was brought up rapidly on a vote for suspension, fell 53 votes short of passage as 224 Republicans and 13 Democrats supported it. Opponents charged that it would remove local control from refining permit processes. Supporters strongly disagreed.
Energy and Commerce Committee Chairman Joe Barton (R-Tex.), who strongly backed both Bass and Wilson's measures, said he would bring the refining bill back to the House floor next week.
Contact Nick Snow at [email protected].