To provide relief from unfair interest and penalties on refunds retroactively ordered by the Federal Energy Regulatory Commission.

Amends the Natural Gas Policy Act of 1978 to preclude the payment of interest or penalties on refunds of any rates and charges for reimbursement of State ad valorem taxes ordered to be made by the Federal Energy Regulatory Commission (FERC) in connection with natural gas sales prior to 1989.

Declares that such refunds shall be required only to the extent that the purchaser demonstrates to FERC that the refund will be passed on to ultimate consumers of the natural gas.