States Declare States of Emergency Due to Isaac; Price Gouging Laws, HOS Waivers in Effect

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In anticipation of Hurricane Isaac, Alabama, Florida, Louisiana and Mississippi declared states of emergency. In many states, the declaration of a state of emergency automatically triggers price gouging laws and waives Federal hours-of-service (HOS) requirements for commercial vehicles transporting emergency equipment, supplies or personnel. 

Alabama Gov. Robert Bentley issued a temporary waiver of Federal Motor Carrier Safety Administration (FMCSA) Hours-of-Service (HOS) regulations on Aug. 29 for drivers involved in direct relief efforts. The waiver went into effect immediately and remains so until Sept. 25, 2012. It does not include size and weight restrictions.

The Alabama Attorney General's office also issued a press release Aug. 28 stating that the state's price gouging and looting laws are now in effect. Alabama's price gouging law prohibits the "unconscionable pricing" of items for sale or rent. Although what constitutes an unconscionable price is not specifically set forth in state law, a price that is 25 percent or more above the average price charged in the same area within the last 30 days--unless the increase can be attributed to a reasonable cost-- is considered to be unconscionable pricing. The penalty is a fine of up to $1,000 per violation, and those determined to have willfully and continuously violated this law may be prohibited from doing business in Alabama.

Florida Gov. Rick Scott declared a state of emergency that includes a waiver of federal HOS rules, and Attorney General Pam Bondi activated the state's price gouging hotline last Saturday so that formal complaints can be filed with The State Division of Consumer Services. Florida statute states that during a state of emergency, it is unlawful to sell essential commodities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency, unless the seller can justifying the price by showing increases in its prices or market trends. Examples of necessary commodities are food, ice, gas, and lumber.

Louisiana Attorney General Buddy Caldwell reminded residents and businesses that Louisiana price gouging laws are in effect following the state of emergency declaration from Governor Bobby Jindal. The price gouging statute prohibits the raising of prices above the pre-emergency levels unless there is a national or regional market commodity shortage. This means that sellers of gasoline and petroleum products and retailers are prohibited from raising prices during this state of emergency unless they incur a verifiable spike in the prices they have to pay as part of doing business. The price gouging laws carry both civil and criminal penalties. The Louisiana state of emergency extends from Aug. 26 through Sept. 25 unless terminated sooner.

In Louisiana, the Environmental Protection Agency (EPA) also granted a partial fuel waiver to make it easier for distributors to keep the state's supply of fuel available as it responds to Hurricane Isaac. This waiver will give Louisiana refineries in 14 parishes the latitude to utilize slightly higher Reid Vapor Pressure (RVP) fuels starting immediately until Sept. 6, which is when the actual RVP changes for key pipelines. Using fuel with the same RVP will make it easier to help ease the shortages caused by evacuations ahead of Hurricane Isaac, the EPA said.

Mississippi Attorney General Jim Hood said the proclamation engaging the state's price gouging law only applies in counties traversed by Interstate 20 and all counties south of that line. He said the rule of thumb for merchants inside this area is that they can pass on verifiable increases in their cost of products, but they cannot increase their average profit margin on products after 5:20 p.m. on Aug. 27 until the executive order is rescinded. Violations of the Mississippi price gouging laws could result in one to five years in prison per count.

Photo Credit: samc/bigstock.com

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