ASSEMBLY CONSUMER AFFAIRS AND REGULATED PROFESSIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 1617

STATE OF NEW JERSEY

DATED: JUNE 10, 1996

      The Assembly Consumer Affairs and Regulated Professions Committee reports favorably Assembly Bill No. 1617.

      This bill prohibits the charging of an excessive price for an essential consumer good or service during a state of emergency or within 30 days of the termination of a state of emergency. The bill defines a state of emergency as a natural or man-made disaster or emergency for which a state of emergency has been declared by the President of the United States or the Governor, or for which a state of local disaster emergency has been proclaimed by a municipal emergency management coordinator.

      The bill defines excessive price as a price that is excessive as compared to the price at which the consumer good or service was sold or offered for sale by the seller in the usual course of business immediately prior to the state of emergency. A price shall be deemed excessive if the price exceeds by more than 10 percent the price at which the good or service was sold or offered for sale by the seller in the usual course of business immediately prior to the state of emergency, unless the price charged by the seller is attributable to additional costs imposed by the seller's supplier or other costs of providing the good or service during the state of emergency. In those situations where the increase in price is attributable to additional costs imposed by the seller's supplier or additional costs of providing the good or service during the state of emergency, the price shall be deemed excessive if it represents an increase of more than 10 percent in the amount of markup from cost, compared to the markup customarily applied by the seller in the usual course of business immediately prior to the state of emergency.

      The bill provides that it is an unlawful practice under the consumer fraud law to charge an excessive price during a state of emergency, thereby subjecting violators to a penalty of not more than $7,500 for a first offense and not more than $15,000 for the second and each subsequent offense.