The Fishery Share

The problem

Forty years ago American fisheries were a race. Every boat fished as hard as it could before the season closed, the halibut season in Alaska shrank to a few days of dangerous derby, and stocks collapsed. The answer, adopted fishery by fishery from the 1990s, was the catch share: a scientific limit on the total catch, divided into individual quotas that a fisherman may hold, lease or sell. It worked. Stocks recovered, seasons lengthened, the boats stopped sinking, and the fish got more valuable.

It also created a new kind of property. A quota, once handed out, could be sold, and it was, for large sums; and it could be leased, so that a holder who never went to sea collected rent from the ones who did. In Alaska's halibut and sablefish fisheries, lease rates have run at half or more of the value of the fish landed. The original holders received the quota free, on the basis of what they had caught in the derby years. Their heirs and buyers now hold a privilege worth billions, granted by the public, for which the public is paid almost nothing.

The law is explicit about what a quota is: the Magnuson-Stevens Act says an individual fishing quota is a permit, revocable, that creates no right, title or interest in the fish. It is equally explicit about what the public may charge for it: a cost-recovery fee of not more than 3 percent of the value of the catch, to cover management and enforcement, and nothing more. In some fisheries the fee is the full 3 percent; in the largest, the Bering Sea pollock cooperatives, it was 0.32 percent in 2022. The commercial catch of the United States is worth about $6 billion a year at the dock. The public's take from the privilege of catching it rounds to zero.

Iceland, whose economy depends on fish more than any country's, faced the same question and answered it differently. It introduced a fishing fee in 2004 to cover management, then raised it so that a share of the rent went to the public, on the explicit reasoning that a catch-share system would not keep public support if the public got nothing. By 2014 the fee was 6 percent of catch value, about €52 million, or 1.2 percent of the entire revenue of the Icelandic treasury. New Zealand had resource rentals in its quota system from the start and gave them away in a 1992 settlement; it has been trying to get them back since.

The proposal

The Fishery Share: a royalty of 5 percent of the landed value of the catch in every federally managed catch-share fishery, on top of the existing cost-recovery fee, phased in over five years. The first $100,000 of any vessel's annual landings is exempt. Quota holdings are published in a public registry. The royalty is deposited in the American Permanent Fund.

How it would work

1. A royalty, not a fee. The existing 3 percent cap covers management and stays. The Share is a separate charge, a royalty on a public resource in the same sense as the royalty on federal oil, and the Act is amended to say so. It applies where the public has granted a tradable quota, because that is where the rent is: the open-access fisheries that have no quota have no rent to charge.

1. Five percent, in five steps. One point a year, so that a quota holder who leases to an active fisherman has time to reprice the lease, and an active fisherman who owns quota has time to plan. The rate is below Iceland's and far below the lease rates the market already bears, which is the proof it can be paid.

1. The small boat. The first $100,000 of a vessel's landings in a year pays no royalty. A family boat landing $80,000 of halibut pays nothing; a corporate fleet landing $50 million pays on all but a sliver. The Share is on scale.

1. Who holds the fish. Every quota holding above a threshold, by owner, published in a registry, as land titles are. Quota has concentrated in every fishery that has it, sometimes past the limits the councils set, through structures designed to obscure the owner. A public resource held by a private party is a matter of public record.

1. Collected at the dock. The royalty is calculated on the landing report every fishery already files and collected with the cost-recovery fee. No new form. The processor withholds it, as Iceland's do.

1. To the fund. Deposited as principal under № 065 to № 067, and shown on № 050's report as the rent the ocean paid this year.

The numbers

The base. Catch-share fisheries account for roughly half the value of the federal commercial catch, about $3 billion a year. A 5 percent royalty is about $150 million a year, less the small-boat exemption; if applied over time to all federal fisheries, about $300 million. It is not a large deposit. Iceland's fee is 1.2 percent of its treasury; this is a rounding error in ours, and the argument for it is the principle rather than the sum.

What the rent actually is. A study of Iceland's fisheries estimated the resource rent at about $380 million a year on average from 1997 to 2017, about 17 percent of the industry's export value, with roughly a fifth reaching the public through the fee and corporate tax. American fisheries are several times larger. The rent the public is not collecting is plausibly in the billions; the Share asks for a fraction of it.

The lease test. A quota holder who leases at 50 percent of landed value and pays a 5 percent royalty still keeps 45. The fisherman on the water is unaffected, because the royalty falls on the value of the privilege, and the privilege is the lessor's.

The honest objections

"Fishermen already pay 3 percent and margins are thin." The 3 percent pays for the scientists and the enforcement that keep the fishery alive, and the Share leaves it alone. The royalty falls on the rent, which is the difference between what the fish is worth and what it costs to catch, and in a catch-share fishery that difference is captured, visibly, in the lease rate and the sale price of quota. Where margins are actually thin, the small-boat exemption applies. Where they are not, a five percent royalty on a privilege that leases for fifty is not what closes the business.

"Quota holders paid for their quota, and a royalty takes what they bought." Some did, from the people who got it free. The five-year phase-in is the transition, and the registry will show how much of the quota is still held by original recipients and their heirs. A permit the law says is revocable and creates no property right was never a promise of rent-free perpetuity, and every buyer's lawyer knew it.

"Foreign fleets don't pay it, so American fish loses at market." Foreign fleets do not fish in American waters, and the royalty is on the privilege of fishing there, not on the price of fish. Iceland's 6 percent has not cost it its markets. Norway, Russia and Chile charge resource rents on fish and sell them everywhere.

"The money is trivial and the fight is not worth it." The money is trivial. The principle, that a public resource granted to a private party as a tradable privilege carries a rent, is the principle of this entire block, from the range to the seabed, and a country that will not collect it on fish will not collect it on anything.

"The councils that manage the fisheries are run by the industry and will gut this." They may try; that is why the Share is in statute rather than in council rules, with the rate, the exemption and the registry fixed by Congress. The councils keep what they have, which is the science and the allocation. The rent is not theirs to waive.

Sources

• Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. § 1853a, on limited access privileges and the 3 percent cost-recovery cap
• NOAA Fisheries, cost recovery fee notices for the Central Gulf of Alaska Rockfish Program (2025) and the American Fisheries Act pollock cooperatives (2022); Fisheries of the United States, landed value
• Gunnlaugsson and Saevaldsson, "Fishing for a fee: Resource rent taxation in Iceland's fisheries," Marine Policy 96 (2018); Gunnlaugsson, Kristofersson and Saevaldsson, "Resource Rent and its Distribution in Iceland's Fisheries" (2020)
• Government of Iceland, Fisheries resource rent, island.is
• Szymkowiak and Himes-Cornell, on quota leasing and lease rates in Alaska halibut and sablefish IFQ fisheries, Marine Policy
• Proposals № 037 (The Hardrock Royalty); № 050 (The Shareholder's Report); № 071 (The Acreage Audit); № 074 (The Timber Trust)