Texas House Bill HB654

Texas 2009 - 81st Regular

Caption

Relating to the prices of certain consumer goods and services during a declared state of disaster.

Impact

The legislation would amend the Business and Commerce Code to enforce stricter controls on pricing in designated disaster areas. According to the bill, merchants and wholesalers would be prohibited from selling essential goods at prices exceeding those prior to the disaster declaration. Additionally, the bill permits the governor to specify which categories of goods are subject to price restrictions, allowing for adaptability to different disaster situations. This could significantly impact consumer welfare as it directly addresses the financial strain that price gouging can create in disaster scenarios.

Summary

House Bill 654 aims to regulate the pricing of essential consumer goods and services during a declared state of disaster in Texas. The bill introduces a framework under which the governor can issue an executive order to freeze prices to prevent price gouging. This is particularly pertinent during emergencies when the demand for essential items surges due to unforeseen circumstances like natural disasters. By establishing this price control mechanism, the bill seeks to protect consumers from exorbitant pricing practices that could arise during vulnerable times.

Contention

While supporters argue that HB654 provides a necessary safeguard for consumers, critics may voice concerns over the implications for businesses, particularly in terms of operational costs and supply chain challenges. Some may argue that freezing prices could lead to unintended shortages if suppliers are unwilling to sell at unprofitable prices. Moreover, there may be questions regarding the effectiveness of enforcement and how the bill could impact free market dynamics in Texas, particularly during crises when price flexibility is often required to ensure supply meets increased demand.