Attorney General Suthers Issues Statement On Senate Amendment To Gas Pricing Bill; Questions Its Legality

DENVER – Colorado Attorney General John W. Suthers today issued the following statement after the State Senate amended House Bill 1208:

Today’s action by the State Senate has completely changed the original intent of the bill. The legislation was designed to update a 70-year old statute and bring cheaper gas, prescription drugs, and other essential items to Coloradans. Now, it could drive potential competitors from rural areas and dramatically increase prices across the state.

“Not only has this amendment completely undone the good intentions of the original bill, it has actually made the legislation counterproductive. If this bill passes with today’s amendment intact, Coloradans in fifty-five counties will pay higher prices for gas, for prescription drugs, and for a litany of other products. No longer can a business sell products below cost for any purpose – not to move inventory, not as a loss-leader, and not as a means of getting customers in the door.

“This amendment is bad for rural Colorado. Consumers in rural counties benefit just as much from price competition as do consumers in more urban areas. With the amendment, the Senate has declared that residents in rural Colorado counties are not entitled to the benefits of aggressive price competition, even where such competition could not possibly lead to the creation of a monopoly. This action has corrupted the legislation, and I seriously hope the legislature corrects its mistake.”

The amendment was passed on third reading of House Bill 07-1208, a bill that originally was designed to update and clarify Colorado’s 70-year Unfair Practices Act. While the focus of debate on the bill had been on allowing gasoline discount loyalty programs, the bill covered similar programs on any other product or service offered in Colorado.

The Senate amendment divides Colorado into counties with 200,000 or more people and those with less than 200,000 people. Consumers in the nine large counties will continue to benefit from aggressive discount programs, except where there is a specific intent to monopolize a particular market. Consumers in the 55 smaller counties are not so fortunate. Under the Senate amendment, any retailer that sells any product or service below the cost of that product or service will be in violation of the law, even if their only intent was to build some market share, promote a new product, or simply get stale products off the shelves.

The Attorney General also expressed concern that this proposed change in the law is unconstitutional under Article V, Section 25 of the Colorado constitution. “Passing a law that applies in certain counties and not in others potentially violates both the equal protection clause and constitutes special legislation prohibited by the Colorado constitution.”

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