LASSO Act

The LASSO Act, HR34, mandates that 10% of all revenue generated from public lands under the Department of the Interior and the Forest Service, including submerged lands on the Outer Continental Shelf, be deposited into the Federal Old-Age and Survivors Insurance Trust Fund. This action directly reallocates existing revenue streams without increasing or decreasing the total revenue generated from these lands. The bill explicitly states it does not authorize price increases for activities on public lands nor does it reduce amounts made available to states, Indian Tribes, territories, or local governments from these revenues. This means the 10% diversion will come from the federal government's share of these revenues, impacting other federal programs that previously relied on these funds. The money trail for this bill is straightforward: 10% of existing revenue from activities like oil and gas leasing, timber sales, and mining on federal lands will be redirected to Social Security. Companies involved in resource extraction on federal lands, such as major oil and gas producers like Exxon Mobil ($XOM), Chevron ($CVX), BP ($BP), Shell ($SHEL), EQT Corporation ($EQT), APA Corporation ($APA), and Occidental Petroleum ($OXY), will continue their operations as before. Their revenue generation from these lands remains unchanged. The bill does not create new revenue streams or alter the regulatory environment for these companies. The impact is on federal budget allocation, not on corporate operations or profitability. Historical precedent for direct reallocation of public land revenues to specific trust funds is limited, but shifts in federal revenue allocation have occurred. For example, the Great American Outdoors Act (GAOA) in 2020 permanently funded the Land and Water Conservation Fund (LWCF) with $900 million annually from offshore oil and gas revenues. This reallocation did not impact the operations or stock prices of the energy companies generating the revenue, but rather ensured a stable funding source for conservation efforts. Similarly, the LASSO Act reallocates existing funds without altering the underlying economic activity. The market did not react to the GAOA with significant movements in energy stocks as the revenue generation mechanism remained intact. Specific winners and losers are not directly corporate entities in terms of increased or decreased revenue. The Social Security Trust Fund is the direct beneficiary of this reallocation. Federal agencies and programs that previously received the 10% share of public land revenues will see a reduction in their funding. This includes various Department of Interior and Forest Service programs. Companies operating on these lands, such as $XOM, $CVX, $BP, $SHEL, $EQT, $APA, and $OXY, are neither winners nor losers from this bill, as their operational costs and revenue generation are unaffected. The bill's sponsor, Rep. Gosar, is a senior Republican, indicating some legislative weight, but the bill's impact is primarily on federal budgeting rather than market dynamics. The bill has had subcommittee hearings. The next steps involve potential committee markup and a vote in the House Committee on Natural Resources and the Committee on Agriculture. If it passes committee, it would then proceed to a full House vote. Given its nature as a reallocation of existing funds, rather than a new tax or spending measure, its passage could be relatively smooth if bipartisan support for shoring up Social Security is found, even if indirectly. However, it faces the challenge of competing with other federal programs for these funds.