House passes legislation to regulate 'liquidation' sales after consumer-protection debate

The Utah House passed Substitute HB6 on Feb. 16, a bill intended to curb deceptive liquidation and false 'going out of business' sales and to protect legitimate local merchants.

Representative Jones, sponsor of the measure, described a pattern where some out-of-state operators mark up goods, advertise going-out-of-business sales repeatedly, and then move on — leaving unfair competition and consumer harm. The substitute extends the initial notice window to 45 days, requires a consumer-protection notification that includes applicant identity, location and reason for the sale, and requires a permit plus inventory disclosures for any extension beyond the initial period.

The measure bars the Division of Consumer Protection from issuing permits to applicants convicted of fraud or similar offenses and allows denial where an injunction with fraud findings exists. Sponsors said the bill was requested by the Retail Merchants Association and similar business groups. Opponents cautioned that the bill could trap honest, small merchants who are unfamiliar with regulatory requirements and noted steep penalties (transcript cites $100 per transaction and up to $1,000 per day or administrative penalties) that could harm small-business operators.

After back-and-forth on penalties, scope and enforcement, the House adopted amendments on the pink sheet and passed the substitute bill; the transcript records the final tally as passage (reported as 73 yes, 29 no). The bill was sent to the Senate for consideration.

Next steps: The Senate will consider the bill; the Division of Consumer Protection will be responsible for implementing the notification and permit process if the legislation becomes law.