ANNAPOLIS – After Hurricane Isabel swept through Maryland in 2003, the state Attorney General’s office received numerous complaints about price gouging.
“We had to tell the consumers, ‘Sorry, Maryland law does not protect you,'” said Steven Sakamoto-Wengel, deputy chief of the Attorney General’s Consumer Protection Division.
The Senate Judicial Proceedings Committee on Thursday heard a bill to outlaw price gouging during declared emergencies.
It would prohibit vendors of essential goods and services from increasing their cost by more than 10 percent of the price two weeks before the emergency.
The bill applies to a wide range of items, such as food, medical supplies, gasoline, building supplies and hotel rooms.
It is based on laws in effect in nearly 30 other states, said Sakamoto-Wengel, whose boss, Attorney General Joseph Curran, supports the bill.
The price protection would be in effect for 180 days after the emergency. The governor or head of the local jurisdiction could extend that period in 30-day periods if necessary.
The bill, sponsored by committee Vice Chairman Leo Green, D-Prince George’s, would make price gouging during emergencies a misdemeanor. Violators could receive up to a year in jail and a $1,000 fine.
Exceptions would be made for vendors if the price increase is because of additional labor, material or supplier costs.
Business groups complained the bill’s scope was too broad and its time frames too long.
The Maryland Chamber of Commerce said the bill’s definition of “essential services” would “encompass virtually every good or service sold in the state.”
“Imposition of price controls on the entire state’s economy would cause chaos and needless lawsuits,” the chamber said in a brief filed with the committee.
The chamber and other business groups say the bill is too loose with who can declare an emergency and under what conditions.
In addition to presidential and gubernatorial declarations of emergency, the bill also applies to “red,” or the most-severe, alerts issued by the U.S. Department of Homeland Security.
Price controls would also take effect if there is a shortage for an essential good or service such as flu vaccine. The governor, the state health secretary and local executive officers would have the authority to decide whether there is a shortage in their respective jurisdictions.
Jeff Zellmer, a lobbyist for the Maryland Retailers Association, said the bill should be amended to include distributors and manufacturers.
“Everybody just jumps on this stuff. The prices just pile up, and our costs go up,” he said.
Pete Horrigan, president and executive director of the Mid-Atlantic Petroleum Distributors’ Association, said the bill was going too far.
“We’re going from … 0 miles per hour to 180 miles per hour, without skipping a beat,” he said. “We think there should be a few steps in between there.”