Michigan Senate Democrats approved a three-bill package Thursday placing limits on how much the cost of lodging, food, emergency supplies and fuel can increase during a declared state of emergency, with backers of the plan saying it will protect vulnerable individuals during their time of need.
Senate Bills 954, 955 and 956 each passed by party-line votes. The proposal would bar merchants from charging an "excessively increased price" during declared states of emergency in Michigan. An "excessively increased price" is defined as a 10% or more jump in the price offered "immediately before a declaration of emergency," under the bills.
The excessively increased price provision would apply to hotels and other lodging providers, anyone selling food or other emergency supplies, and those selling gasoline, propane and home heating oil.
Sellers would not be in violation of the proposal if they can demonstrate that the increase in price is the result of goods or labor, an "extraordinary discount" in the time before the emergency is declared, or the increase was previously scheduled to take place.
Under the proposal, state or local prosecutors could investigate potential violators of the law and bring action for potential injunctive relief for the affected residents.
Price gouging generally refers to charging exorbitant rates for goods or services, particularly during times when those goods or services are scarce or in high demand. Thirty-seven states had price gouging laws on the books as of 2022, according to the National Conference of State Legislatures.
Michigan has a price gouging law on its books currently, but Attorney General Dana Nessel's office said it only allows prosecutors to take action against a single business or small group of businesses raise prices in comparison to others, rather than when sellers uniformly raise rates. Nessel's office supported the plan, which was introduced by Sens. Jeremy Moss, D-Southfield, and Mary Cavanagh, D-Redford Township.
Republicans in the Senate were uniform in their opposition to the plan. Sen. Thomas Albert, R-Lowell, said the plan veered close to price control laws, and that the current law gives prosecutors enough bandwidth to go after price gougers.
"It's yet another baby step toward socialism," Albert said.
Moss, however, said many states currently have similar price gouging protections in place and the proposal was modeled after the law in the "socialist state of Arkansas," a likely dig given that Republicans have largely had control of the state's government over the past decade.
The plan would protect vulnerable Michigan residents when they most need protection, Moss said, adding "This is a bill package to save people from anguish and high costs during an emergency."
The plan now advances to the Michigan House of Representatives for consideration, where lawmakers are taking up a flurry of proposals as the so-called lame-duck session winds down. Democrats are set to lose their trifecta of control of state government, as Republicans will have a majority of seats in the House starting next year.
Nessel's office has gone after businesses for apparent price gouging before. Last year, a Novi hotel agreed to reimburse customers who paid more than $200 a night for a room when ice storms knocked out power for hundreds of thousands in February 2023. The Hilton Garden Inn in Novi denied any violation of the Michigan Consumer Protection Act in that case but settled with Nessel's office in Oakland County Circuit Court.
Contact Arpan Lobo: [email protected].