Sponsors (3)
The bill lowers fuel costs and preserves transportation and cleanup funding in the short term by using general‑fund transfers, but it increases federal outlays (and potential deficits), weakens long‑term incentives for fuel efficiency, and creates timing uncertainty for planners and industry.
Drivers, households, and businesses pay lower pump prices while the federal fuel excise is suspended, reducing transportation costs in the short term.
The Highway Trust Fund is guaranteed compensation from the general fund for lost excise receipts, preserving funding for highways and transit projects and protecting related jobs and services.
The Leaking Underground Storage Tank (LUST) Trust Fund is replenished via general‑fund transfers, maintaining cleanup and environmental protection programs at the state level.
General‑fund transfers to cover lost excise receipts raise federal outlays, which could increase the deficit, crowd out other priorities, or require future offsets paid by taxpayers.
Temporarily suspending the fuel excise reduces long‑term price signals that encourage fuel efficiency and investment in alternatives, potentially slowing emissions reductions and efficiency gains.
Phased reimplementation and presidential discretion over timing create uncertainty for fuel distributors, state planners, and transportation projects about future funding and compliance.
Based on analysis of 2 sections of legislative text.
Temporarily suspends specified federal fuel excise taxes and the LUST rate and directs Treasury transfers to reimburse affected trust funds.
Official title: To amend the Internal Revenue Code of 1986 to provide a tax holiday for gasoline and diesel fuel.
Introduced May 12, 2026 by Nicole Malliotakis · Last progress May 12, 2026
Temporarily suspends certain federal excise taxes on taxable motor fuels and pauses the small Leaking Underground Storage Tank (LUST) financing charge for fuels sold after enactment and before a specified “applicable date.” The Treasury must transfer amounts from the general fund to reimburse the Highway Trust Fund and the LUST Trust Fund for lost receipts caused by the tax suspension, and the President has limited authority to extend the suspension or phase reimplementation.