LANSING – Two bills proponents say will give the Michigan attorney general more guidance in determining if consumers have been grossly overcharged for a product were debated in committee and overwhelmingly passed by the House Wednesday, as representatives of petroleum dealers, wholesalers and retailers argued that, while the bills may provide more clarity, the legislation needs to make sure gas stations aren’t unfairly targeted for their business practices.

HB 6249 and HB 6250 make amendments to the Antitrust Reform and Consumer Protection acts granting the attorney general or prosecuting attorney authority to investigate cases regarding restraints of trade as outlined and allowed by federal statutes. The legislation also provides a definition for “prima facie” evidence that a product’s price was excessive.

The attorney general or prosecutor would have to look at a 30-day cycle of charges for a product or service, compare them to other prices in the trade area and check to make sure an increase in price was not attributable to added costs coming from the sale, lease or rental of the property to determine if a company grossly overcharged its customers.

On the floor, the legislation was also amended by Rep. Paul Condino (D-Southfield) to include a prohibition on using any money connected to a settlement in an anti-trust or consumer protection case for an advertisement or public service message by a state officeholder or candidate for state office.

The legislation was further amended by Rep. Kimberly Meltzer (R-Clinton Twp.) to require the Public Service Commission to review motor fuel prices in Michigan quarterly and publish that information on its website.

As the bills were debated before the Judiciary Committee earlier in the day, Condino said the legislation will make the attorney general’s job more efficient because it provides specific evidence that can be used in consumer protection cases.

Ed Weglarz, executive vice president of Associated Food and Petroleum Dealers, testified in opposition to the bills, arguing that while the bills may clarify what the attorney general can use as evidence, the added statutory wording includes more gray areas.

“How much is ‘grossly exceeds’? Some people think 2 cents is too much,” Weglarz told the committee, adding the variance would show just by looking at the complaints about gas prices given to the Department of Attorney General over the past few days.

Weglarz said his members are not supportive of gouging, but he also insisted gouging wasn’t occurring on the retail level.

As the bills come on the heels of Hurricane Ike, Weglarz said contempt for higher gas prices was misdirected; he laid the blame on the feet of OPEC, refiners, credit card companies who charge processing fees and the state, which collects sales tax on gasoline.

As committee members asked questions about how gas at the pump is priced out, Weglarz said retailers sell gas at a price that reflects the cost of restocking fuel. Most stations switch their fuel every two to three days and retailers get a daily report detailing what direction the prices are going: if they are going up, then the cost for consumers will go up and vice versa. He said most retailers are making a five-cent to six-cent profit on each gallon of gas.

One of the biggest issues last week was that several oil refineries shut down because of the hurricane, he said. Without oil refineries, it doesn’t matter if the barrel of oil is free, because that can’t go into a person’s tank without it being refined first.

Mark Griffin, president of the Michigan Petroleum Association and Michigan Association of Convenience Stores, who said his group is neutral on the legislation, also told committee members that the average cost of a gallon of gas increased 60 cents last week, but not all of those costs were passed onto consumers. If the true cost had been passed down, then the average price for a gallon of gas would have been $4.35-$4.38, not $4.19.

“The fluctuation we’ve had to deal with have been incredible,” he said. “The good news is we are seeing those costs come down.”

While Griffin too questioned how business owners who deal with cents and percentages are going to know when gouging has occurred.

Rep. Mark Meadows (D-East Lansing) said the legislation is not directed at the 99 percent of dealers who charge their customers correctly. But he added the language gives more certainty to dealers than the act has done since its inception. While there have been no convictions in the state for gas gouging, Meadows said that’s because the attorneys general have been aggressive on the issue and just having the statute in place deters bad actors.

While she supported the bill, Rep. Tonya Schuitmaker (R-Lawton) questioned how the bills would work with existing federal law in terms of allowing the attorney general to bring criminal penalties or ask the federal courts for subpoenas.

AARP indicated in committee that it supports the bills.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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