EXCLUSION OF PETROLEUM, OIL, AND LUBRICANTS FROM LIMITATIONS ON ANNUAL AMOUNT OF LIABILITIES THE UNITED STATES MAY ACCRUE UNDER ACQUISITION AND CROSS-SERVICING AGREEMENTS.

SEC. 1221. EXCLUSION OF PETROLEUM, OIL, AND LUBRICANTS FROM LIMITATIONS ON ANNUAL AMOUNT OF LIABILITIES THE UNITED STATES MAY ACCRUE UNDER ACQUISITION AND CROSS-SERVICING AGREEMENTS.(a) Exclusion.—Section 2347 of title 10, United States Code, is amended—(1) in subsection (a), by striking “(other than petroleum, oils, and lubricants)” in paragraphs (1) and (2); and(2) by adding at the end the following new subsection:“(d) The amount of any sale, purchase, or exchange of petroleum, oils, or lubricants by the United States under this subchapter in any fiscal year shall be excluded in any computation for the purposes of subsection (a) or (b) of the amount of reimbursable liabilities or reimbursable credits that the United States accrues under this subchapter in that fiscal year.”.(b) Effective Date.—The amendments made by subsection (a) shall take effect beginning with fiscal year 2007.(c) Reports.—Not later than October 31 of 2007 and 2008, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the exercise during the preceding fiscal year of the authority provided in subchapter I of chapter 138 of title 10, United States Code, with respect to the sale, purchase, or exchange of petroleum, oil, or lubricants. Each report shall identify each country involved in a sale, purchase, or exchange of petroleum, oil, or lubricants with the United States and include a description, by country, of the type, quantity, and value of the petroleum, oil, and lubricants that were sold, purchased, or exchanged by the United States.