HR-10589-119
Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, the Judiciary, and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sponsored by Chris Pappas (D-NH)
What it does
The bill would set the federal excise tax rates on taxable fuel (gasoline, diesel and kerosene) to zero for fuel removed, entered, or sold from enactment through September 30, 2027, and would turn off the Leaking Underground Storage Tank financing rate for that fuel. It would require the Treasury to move money from the general fund into the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund to replace the lost tax receipts. It also states a policy of Congress that consumers get the savings, with penalties for sellers who do not pass them on, and directs Treasury, the FTC and the CFTC to use their existing authorities to ensure pass-through and to monitor fuel markets for price gouging and manipulation.
Who benefits
Drivers and households that buy gasoline or diesel, and airline passengers if airlines pass through savings. Trucking, delivery, farming and bus companies with high fuel use. Airlines and aviation fuel buyers, if the rate cut applies to their fuel. The highway and storage tank trust funds, which would be made whole by general fund transfers during the holiday.
Who is hurt
Federal taxpayers broadly, since the general fund would cover the trust fund shortfall and the federal deficit could grow. Fuel producers and retailers who may face monitoring and possible penalties if prices do not fall by the tax amount. Over the longer term, road and transit programs could face funding pressure if the holiday were extended. Consumers might not see the full savings if market prices absorb part of the cut.
Supporters argue
Supporters argue that the bill gives immediate, broad relief at the pump to nearly every household and business that buys fuel, with a clear end date of October 1, 2027. They contend that general fund transfers keep the Highway Trust Fund whole, so road funding is not cut, and that FTC, CFTC and Treasury oversight gives the savings a real chance of reaching consumers.
Opponents argue
Opponents argue that the bill would cost the federal government tens of billions of dollars in revenue and add to deficits, since the general fund would replace the lost trust fund receipts. They contend that pass-through to consumers is uncertain because the penalty language is only a statement of policy, and that market prices may absorb part of the cut, benefiting sellers rather than drivers.
Constitutional context
Congress's power to set excise taxes comes from the Taxing and Spending Clause (Art. I, §8, cl. 1), and a revenue bill must originate in the House under Art. I, §7, which this one did. The bill raises no clear constitutional question, and the Supreme Court has long upheld broad congressional discretion over federal excise taxes, as in NFIB v. Sebelius (2012), which treated the taxing power as broad.
Checks and balances
Congress gains power over fuel tax rates and trust fund financing, while the Treasury, FTC and CFTC would be directed to enforce within existing authorities; courts could review any penalties that agencies impose.
Historical precedent
Congress has considered federal gas tax holidays several times, including proposals in 2008 and 2022, though none of those proposals was enacted; Congress did suspend certain other excise taxes temporarily in the past.