Bill to combat price gouging in state of emergency awaits Moore’s signature

A proposal from Maryland Attorney General Anthony Brown to prohibit price gouging during a state of emergency has passed both General Assembly chambers and is awaiting a signature from Gov. Wes Moore.

The 90-day legislative session is scheduled to conclude April 10, and Moore, a Democrat, is expected to begin signing bills the following day.

Under the bill, Maryland businesses that sell essential goods or services will be prohibited from raising their prices by 15% or more during a state of emergency.

The governor would determine which goods and services are essential.

The prices for essential goods and services “just skyrocket” during natural disasters and public health emergencies, most recently during the COVID-19 pandemic, Sen. Arthur Ellis, D-Charles, said as he described the bill to lawmakers in March.

The state’s Consumer Protection Division, which mediates complaints against businesses and health insurance carriers, cannot assist people who file complaints about price gouging following a storm or other large-scale emergency because Maryland doesn’t have a law against price gouging, a letter of support from the division states.

The Senate voted 39-8 in favor of the bill on Friday. Five out of 13 Republicans voted for it.

Among the senators opposed to the bill was Minority Leader Steve Hershey, R-Eastern Shore, who said that 15% was an arbitrary threshold for price increases.

“Arbitrary percentages in these times of economic turmoil don’t make sense because there are so many other market influences,” Hershey wrote in an email to The Daily Record.

Hershey wrote that legislation in Texas requiring that the attorney general prove that a business used a “deceptive trade practice rather than a business having to disprove it” would have been a better option.

House Minority Whip Jesse Pippy, R-Frederick, who voted against the bill, said in a phone interview that businesses may be forced to increase their prices because of inflation, rising gas prices or other cost increases.

“It’s too much,” Pippy said of the Maryland attorney general’s proposal. “A lot of these prices are out of the businesses’ control.”

Consumers, he said, can buy goods or services elsewhere if they think a business’s prices are too high.

The House voted 101-33 to pass the bill in March.

Business owners will be allowed to increase their prices by 15% or more if they prove that the change was the result of a supplier raising its prices, higher costs for labor or materials, or seasonal price variations.

In 2020, Gov. Larry Hogan, a Republican, issued an executive order prohibiting businesses selling essential goods or services from increasing their prices by more than 10%.

Hogan’s executive order, which restricted price gouging for items like food, medicine, child care and car parts, expired in 2021.

The attorney general’s initial proposal this year was to prohibit businesses from increasing their prices by 10% or more, but lawmakers raised the limit to 15%.

If Moore signs the bill, it will take effect Oct. 1.