The Connally Hot Oil Act of 1935 was enacted in the wake of the Supreme Court's decision to strike down Section 9 (c) of the National Industrial Recovery Act (NIRA) in Panama Refining Co. v. Ryan.
The act gave the president authority "to prohibit the transportation in interstate and foreign commerce of petroleum ... produced or withdrawn from storage in excess of the amount permitted ... by any State law.
It revived the provisions of Section 9 (c) of the NIRA and added procedural safeguards, which, the Supreme Court argued, were constitutional.
[3] Though the legislation was intended to expire on June 16, 1937, it was maintained afterwards as a permanent law.
[3] There was some debate as to the law's effects on the transport of other fuels such as coal and timber, and many independent oil producers vehemently opposed the government regulations.