Sponsors (2)
The bill temporarily lowers diesel costs for consumers and uses general-fund transfers to protect highway and cleanup funding, but does so by increasing federal outlays, weakening a dedicated transportation revenue stream, and risking that consumers may not fully receive the intended price relief.
Drivers, households, and transport-dependent small businesses (especially in rural areas) will pay less for diesel while the suspension is in effect, lowering transportation and goods-delivery costs.
Transportation agencies, workers, and communities will see highway and transit funding preserved because the Highway Trust Fund is replenished via general fund transfers replacing lost excise receipts.
Local governments and communities will maintain funding for leaking underground storage tank cleanups because the LUST Trust Fund is replenished with general fund transfers.
Taxpayers will face higher federal outlays because general fund transfers replace excise receipts, which may increase the deficit or crowd out other spending priorities.
State governments, transportation planners, and road/transit users face greater long-term uncertainty because suspending the diesel excise tax reduces a stable, dedicated revenue stream for transportation even if temporarily backfilled.
Middle-class families and small businesses may not receive the intended consumer benefit if fuel suppliers do not fully pass the tax cut through to retail prices despite Treasury guidance.
Based on analysis of 2 sections of legislative text.
Suspends the federal excise tax on diesel (except kerosene) through Dec 31, 2026 and directs Treasury to reimburse the Highway Trust Fund and LUST Fund from the general fund.
Official title: To provide a diesel fuel tax holiday.
Introduced May 12, 2026 by Eugene Simon Vindman · Last progress May 12, 2026
Temporarily eliminates the federal excise tax on diesel fuel (except kerosene) for diesel removed, entered, or sold from enactment through December 31, 2026, and suspends the LUST financing rate tied to that tax for the same period. The Treasury must transfer amounts from the general fund to reimbursed trust funds (Highway Trust Fund and LUST Trust Fund) equal to lost receipts and may use authorities to help ensure the tax cut’s benefits reach consumers.