Summary — HB 5896 (Hotel and Lodging Pricing Protection Act)
Status and procedural posture
- House Bill 5896, sponsored by Rep. Jason Hoskins, was passed by the Michigan House (substitute H‑3) on December 13, 2024, and subsequently transmitted to the Senate. Legislative records show referral to the Committee on Government Operations (and a later referral entry to a joint committee). The text summarized below is based on the H‑3 substitute as passed by the House.
Purpose / intent
- The bill creates the "hotel and lodging pricing protection act" to prohibit what it characterizes as price gouging in the lodging industry during a declared state of emergency. The goal is to protect residents and visitors from excessive, opportunistic increases in lodging rates when disasters or public‑health emergencies occur.
Key definitions
- "State of emergency": a governor-declared state of emergency arising from natural or man‑made disasters (tornado, flood, fire, riot, act of war, terrorist attack aftermath, public‑health threat, etc.).
- "Lodging": broadly defined to include inns, hotels (full- and limited-service), resorts, conference centers, extended‑stay properties, vacation ownership/convention hotels, bed & breakfasts, and rented spaces in mobile home parks or campgrounds.
- "Excessively increased price": a price that shows an "unjustified disparity" between the price advertised/offered immediately before the declaration and the price during or reasonably after the declaration. Under the H‑3 substitute, an unjustified disparity is generally a difference of more than 20% unless the operator shows the increase is attributable to (a) higher costs of goods or labor, (b) an extraordinary pre‑declaration discount, or (c) a regularly scheduled rate adjustment.
Prohibited conduct
- During or reasonably after a declared state of emergency in an affected county/city/township, a person engaged in offering, selling, or renting lodging must not:
- Charge a price "grossly in excess" of comparable lodging;
- Charge an "excessively increased price" (as defined above); or
- Offer lodging for sale or rent at an excessively increased price.
Enforcement, remedies and procedural elements
- Enforcement authority: Michigan Attorney General (AG) and local prosecuting attorneys.
- Investigatory powers: AG/prosecutors may issue written investigatory demands/subpoenas for testimony and documents; materials are confidential until an enforcement action is filed.
- Civil remedies: The AG may bring a class action on behalf of Michigan residents to recover actual damages (or $100, whichever is greater). Courts may order reimbursement, injunctive relief, appointment of a receiver, sequestration of assets, strike unconscionable contract clauses, and other equitable relief.
- Defenses/limits: If a defendant proves a violation resulted from a bona fide error despite reasonable procedures, recovery is limited to actual damages.
- Limitations: AG claims must be brought within specified time limits (the text sets bars such as no more than 6 years after the conduct and certain 1‑year transaction windows).
Who is affected / likely impact
- Directly affected: hotels and other lodging providers operating in Michigan, especially those renting rooms in areas under a state of emergency.
- Consumers: visitors and residents seeking temporary shelter during emergencies would be protected against sudden, large price increases.
- Practical effects: operators will need recordkeeping to justify price changes (cost drivers, preexisting discounts, scheduled rate changes). Potential increased compliance costs and exposure to AG enforcement actions and class recovery.
Notes and uncertainties
- The bill applies to pricing "during or reasonably after" a declaration — the precise temporal scope may be clarified by regulation or litigation.
- The H‑3 substitute sets a 20% unjustified disparity threshold; earlier versions considered different thresholds (10%–15%). The version passed by the House uses 20% as noted above.
- Civil penalty amounts (beyond restitution and equitable relief) are not specified in the excerpts provided.
