Gino DiCaro

Assembly Speaker pushing expansive price cap bill

By Gino DiCaro, VP, Communications

Capitol Update, July 14, 2006 Share this on FacebookTweet thisEmail this to a friend

AB 457 (Fabian Nunez, D-Los Angeles) is a newly amended bill that expands price control laws, criminal liability, and unfair competition liability to apply when a state of emergency exists and/or when there is an "abnormal market disruption."

The bill is apparently aimed at the oil industry, but could very likely impact the following other industries: farmers, food companies, grocers, retailers of all types, electronics companies, construction companies, building material and supply companies, paper product companies, pharmaceutical companies and other manufacturers.

AB 457 would impose stiff price caps on a wide range of products and services during periods of "abnormal market disruption" and/or when a state of emergency exists.  Upon a proclamation of an "abnormal market disruption," and for a period of 60 days following such a declaration, or upon an extension by the Legislature or a local legislative body, it would be illegal to sell any consumer food items or goods, products, or services used for emergency cleanup, emergency supplies, medical supplies, home heating products, building materials, housing, transportation, freight and storage services, or fuel for a price of more than 10 percent above the price charged prior to the initial proclamation.

AB 457 has not been an active bill since August 2005 and was stripped of prior contents on June 7th of this year and amended to contain the current price control language. AB 457 has been approved by the Senate Judiciary Committee and is slated to go before the Senate Public Safety Committee next.

AB 457 casts a very wide net and creates a vague new trigger for price controls and criminal and civil prosecutions. The CMTA Corporate Counsel Committee will be formally reviewing AB 457 in the very near future to determine a position on the bill.

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