Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Silva/Martinez, J.
LAST UPDATED
ORIGINAL DATE 2/17/25
SHORT TITLE Use of Certain Dynamic Pricing as Unfair
BILL
NUMBER House Bill 285
ANALYST Chavez
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Fines and
Forfeitures
See fiscal
implication.
See fiscal
implication.
See fiscal
implication.
See fiscal
implication.
See fiscal
implication.
Recurring
General
Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
NMAG
No fiscal
impact
Indeterminate
but minimal
Indeterminate
but minimal
Indeterminate
but minimal
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to House Bill 61
Sources of Information
LFC Files
Agency Analysis Received From
New Mexico Attorney General (NMAG) Agency Analysis was Solicited but Not Received From
Economic Development Department (EDD) Agency Declined to Respond
Administrative Office of the Courts (AOC)
SUMMARY
Synopsis of House Bill 285
House Bill 285 (HB285) amends the Unfair Practices Act by adding a section to restrict the use
of dynamic pricing in grocery and retail stores under certain conditions. The first section of
HB285 defines:
“Dynamic pricing” as a digital program that determines or changes the price of a House Bill 285 – Page 2
good or service displayed on an electronic shelving label in a store;
“Electronic shelving label” as a digital label or price tag that displays the price of a
good or service; and
“Store” as a grocery or retail store.
Section 2 describes the use of dynamic pricing to change the price of a good or service during
events that could cause a sudden increase in demand for goods or services (HB285 specifically
calls out holidays, weather events, natural disasters, and supply chain disruptions) as an unfair or
deceptive trade practice. HB285 also defines the use of dynamic pricing changes the price of a
good or service based on personal data or data collected on purchasing patterns as an unfair or
deceptive trade practices.
Section 3 defines measures for grocery or retail stores to take if dynamic pricing is used to
determine or change prices. If a grocery or retail store were to use dynamic pricing, they would
have to have clear visible signage in their store that:
Informs customers on the dynamic pricing process;
Informs customers of factors used to change the price of goods and services;
Informs customers that the use of dynamic pricing under certain circumstances is an
unfair or deceptive trade practice;
If personal or purchasing patterns are being collected by the store, that a customer has
a right to know how their data is collected, with what entities the data is being shared
with, and if and how that data is used to determine or change the price of the goods
and services sold; and
Informs customers that they have the option to opt out of personal data or purchasing
patterns data collection.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The Unfair Practices Act empowers the New Mexico Attorney Geneal (NMAG) to enforce the
act as well as allows NMAG to impose a civil fine not exceeding $5 thousand per violation. To
create an estimate of the possible revenue, the analysis will focus on if a percentage of grocery
stores did not comply with HB285. There are 476 grocery stores in New Mexico;
1
if 25 percent,
or 119 grocery stores, did not comply with the provisions of HB285, enforcement actions would
generate around $595 thousand in revenues. However this estimate is subject to:
The ability of NMAG can prosecute entities subject to HB285;
The additional number of retail stores in New Mexico that are also subject to HB285;
and
The number of grocery and retail stores that have the ability to implement dynamic
pricing.
NMAG’s estimated additional operating budget impact reflects an indeterminate but minimal
increase because NMAG as the agency already investigates significant price increases due surges
1
Grocery Stores in New Mexico House Bill 285 – Page 3
in demand for goods or services. For example, NMAG issued cease-and-desist letters to various
hotels whose prices changed in the aftermath of the South Fork and Salt Fires.
2
While the
example is not related to grocery or retail stores, NMAG could feasibly transition to enforce the
provisions of HB285.
SIGNIFICANT ISSUES
Dynamic pricing has faced significant scrutiny due to concerns over fairness, transparency, and
consumer trust. In 2024, Wendy's announced plans to implement surge pricing, adjusting menu
prices based on demand, which led to consumer backlash and forced the company to clarify its
intentions.
3
In the airline industry, U.S. senators questioned Frontier and Spirit Airlines in 2025
about potential manipulation of seat pricing, suggesting that personal customer information
might be used to set variable fees, thereby undermining consumer trust.
4
While these examples
would not be directly affected by HB285, they show how the use of dynamic pricing can cause
ethical considerations that could be addressed by the bill.
There are existing forms of dynamic pricing that are seen as more traditional but could fall under
the regulations of HB285 even if the practice has long been accepted and seen as a benefit to
consumers. These traditional dynamic pricing practices include practices like happy hour
discounts or seasonal pricing for retail goods, holiday price specials, or back-to-school season
where pricing changes to capitalize on peak demand.
5,6
Grocery or retail stores engaging in these
traditional pricing methods, using digital price programing, could be subject to HB285’s signage
regulations or the bill’s prohibition on dynamic pricing.
HB285 does not provide provisions for offerings by grocery or retail stores that a consumer may
opt in to, such as a rewards program, that could use personal information to change pricing.
Grocery or retail stores could use data collected from an individual’s purchase history to help
design a reward structure that is more suitable to the needs of the consumer. If the rewards
program clearly asks for consent and provides information on the use of the data, it could be seen
as a benefit to the consenting consumer but would still be seen as an unfair or deceptive trade
practice under HB285.
NMAG provides the following:
Investigating and enforcing the provisions of this legislation may require additional labor
hours for attorneys, investigators, and paralegals within the Consumer Protection
Division of the New Mexico Department of Justice (“NMDOJ”).
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
NMAG provides the following with references to “UPA” referring to the Unfair Practices Act:
House Bill 61, also amending the UPA, provides for an elevated civil monetary penalty in
2
Media Alert: The New Mexico Department of Justice Sends Cease and Desist Letters to Several Hotels for Alleged
Price Gouging - New Mexico Department of Justice
3
Wendy’s says it won’t use surge pricing | CNN Business
4
Senators Question if Frontier, Spirit Airlines Are Manipulating Seat Pricing
5
From Happy Hour To Digital Markets: Making Dynamic Pricing Work
6
Dynamic Pricing: Comprehensive Analysis and Strategies House Bill 285 – Page 4
when unfair or deceptive trade practices or unconscionable trade practices arise out
disasters or declared states of emergency. This increased fine would likely apply to some
violations of HB285’s proposed prohibitions.
OTHER SUBSTANT IVE ISSUES
NMAG provides the following:
While the rest of Section 2(B)(1) seems to suggest a prohibition against dynamic pricing
in cases more akin to price gouging during natural disasters or supply chain disruptions, it
is unclear if common, everyday occurrences such as significantly increased demand at a
particular time of day would constitute “events that can cause a sudden increased demand
for goods or services.” Legislators may consider revision to more explicitly identify the
nature of events that fall within the scope of this prohibition.
FC/hj