Anti-price-gouging law labeled 'unworkable'

Heavyweight lobbyists, including those representing resorts and the petroleum industry, attempted to head off legislation to criminalize profiteering and price gouging during emergencies.

John Sande, speaking for the Western States Petroleum Association, described SB82 as "totally unworkable" because, as written, "it's nearly impossible to figure out whether you're violating the bill."

The bill prohibits retailers from increasing the prices of goods or services by more than 25 percent in the wake of an emergency. But Sande said it was so ambiguous, retailers might refuse to provide certain goods and services after a disaster because of fears they would be breaking the law.

Senate Minority Leader Dina Titus, D-Las Vegas, prime sponsor of the bill, said the arguments against it were "a lot of red herrings."

"I love bills like this," she told a subcommittee of Senate Commerce and Labor. "Whenever you're trying to do something to protect the public, you get a room full of suits like you have here," she said referring to the major industry lobbyists in the room.

Titus said the bill is "narrowly defined" and based on successful legislation already in effect in several other states.

Senior Deputy Attorney General Kathleen Delaney agreed with Titus saying the bill requires a "knowing and willful violation" before any retailer would face criminal charges of profiteering.

"This is a situation where the merchant tries to profiteer," she said.

Lobbyist Greg Ferraro representing Nevada's resorts, said his clients fear they could face charges for raising room rates during such events as New Year's and the Super bowl, which all major resorts do. But Titus said the legislation wasn't intended to do that.

Subcommittee member Sen. Mike Schneider, D-Las Vegas, agreed those increases wouldn't be prohibited by SB82.

"Everybody understands those prices are out there,' he said.

Alfredo Alonzo, representing the Peppermill in Reno, said their concern was that, with lower-cost rooms going for rates like $49 a night, even a $15 raise during a special event could violate the law and provide the hotel guest the right to file a court action against the hotel.

Subcommittee Chairman Sen. Joe Heck, R-Las Vegas, said some parts of the bill need to be more clearly defined such as how the average price of goods or services are defined before the percentage increase is defined. He said when the price controls take effect when a disaster or other emergency occurs and how it is determined that it should trigger the law in Nevada must also be better explained. He also asked for examples to show if price gouging has occurred in Nevada.

Titus said one example would be the huge increases in prices of some rental cars in the days following 9/11 when no commercial air flights were allowed. She said some agencies were demanding $700 a day for cars that before that rented for $100 a day.

And Delaney said some states have included language in their laws tying services covered by anti-price gouging legislation to those related to the emergency. Examples would include hotel room prices for those stranded by an emergency, bottled water in an emergency that knocked out utility services or the rental car prices when airline services were grounded.

Heck told Titus and opponents of the bill to get together and work out some language both sides could support.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.