BOISE, Idaho (AP) — Legislation to alter state law to allow what the Idaho attorney general’s office considers a form of price gouging during a declared emergency such as the pandemic headed to the full Senate on Tuesday.
The Senate Commerce and Human Resources Committee voted unanimously to approve the legislation that would allow sellers to keep prices high to consumers if prices they paid suppliers plummeted.
The proposed change follows three Idaho gas retailers in November agreeing to provide $1.5 million in sales credits after the attorney general’s office launched an investigation into their fuel prices during the pandemic.
The retailers — Maverik, Jacksons Food Stores and Stinker Stores — didn’t acknowledge any wrongdoing under the agreement. They back the change in the current law.
Specifically, the attorney general's office enforced the current law that requires it to determine whether a price is exorbitant or excessive, and applied that to the gas retailers. The attorney general's office said the difference, or margin, between what the retailers paid for gas and then sold to consumers early in the pandemic fell into that category. The office said the gas retailers' margin was much higher than a 14-year average.
The new law, if approved, would eliminate examining the margin and look only at whether a price increase was exorbitant or excessive. Besides fuel, the law applies to food, pharmaceuticals and water.
The attorney general’s office took the rare step of opting to testify before the committee, urging them to leave the law unchanged.
Price increases are “not the only way that consumers or farmers or businesses can be price-gouged," said Deputy Attorney General Brett DeLange. He said the proposed change would gut the existing price-gouging law, suggesting it would be the equivalent of eliminating the law entirely.
Republican Gov. Brad Little issued an emergency declaration in mid-March and followed that up in late March with a stay-at-home order as the virus threatened to overwhelm the state’s health care system. Restrictions were gradually lifted into the summer. The emergency order triggered the state's price-gouging law.
Charley Jones, president and owner of Stinker Stores, testified before the committee that business plummeted, and that the volume of gas sold at his 60-plus stores dropped precipitously. He said he worried about the future of the company because consumers were staying put and not buying gas.
“I run my business in a fair and ethical way,” he told lawmakers. “Our margins are fair, and the government shouldn't be regulating that anyway.”
State officials said the 14-year average margin was 10 cents a gallon, with that number climbing to 63 cents a gallon during the early part of the pandemic. Representatives for the gas retailers disputed those numbers, saying the average margin was higher and the difference not as great.
Lawmakers questioned whether the law should include looking at the profitability of a company to determine price gouging. DeLange told lawmakers the attorney general's office didn't do that because it was outside of the current statute.