The Magnuson-Stevens Act provides for the conservation and management of fishery resources in the United States. The act established eight regional fishery management councils that are responsible for preparing plans for managing fisheries in federal waters and submitting them to the Secretary of Commerce for approval. NMFS, within the Department of Commerce’s National Oceanic and Atmospheric Administration, is responsible for implementing these plans. The eight councils are New England, Mid-Atlantic, South Atlantic, Gulf of Mexico, Caribbean, Pacific, North Pacific, and Western Pacific. The Magnuson-Stevens Act, as amended by the Sustainable Fisheries Act, also establishes national standards for fishery conservation and management. The fishery councils use these standards to develop appropriate plans for conserving and managing fisheries under their jurisdiction. For example: National Standard 1 requires that conservation and management measures prevent overfishing while achieving, on a continuing basis, the optimum yield from each fishery; National Standard 4 requires that conservation and management measures not discriminate between residents of different states; National Standard 5 requires that conservation and management measures, where practicable, consider efficiency in the use of fishery resources; and National Standard 8 requires that fishery conservation and management measures take into account the importance of fishery resources to fishing communities in order to provide for the sustained participation of these communities in the fishery and, to the extent practicable, minimize adverse economic impacts on these communities. In addition to the national standards, the Magnuson-Stevens Act also requires that new IFQ programs consider providing opportunities for new individuals to enter IFQ fisheries. The Magnuson-Stevens Act defines a fishing community as one that is substantially dependent on, or engaged in, harvesting or processing fishery resources to meet social and economic needs. The definition includes fishing vessel owners, operators, and crew, and U.S. fish processors based in such a community. NMFS guidance further defines fishing community to mean a social or economic group whose members reside in a specific location. At the time of our review, NMFS had implemented three IFQ programs: (1) the Mid-Atlantic surfclam/ocean quahog program in 1990, (2) the South Atlantic wreckfish program in 1992, and (3) the Alaskan halibut and sablefish (black cod) program in 1995. New IFQ programs were being considered in other commercial fisheries, such as the Bering Sea crab; the Gulf of Alaska groundfish (e.g., pollock, cod, and sole); and the Gulf of Mexico red snapper. Under IFQ programs, fishery managers set a maximum, or total allowable catch, in a particular fishery—typically for a year—based on stock assessments and other indicators of biological productivity, and they allocate quota—generally expressed as a percentage of the TAC—to eligible vessels, fishermen, or other recipients, based on initial qualifying criteria, such as catch history. In the United States, fishery councils can raise or lower the TAC annually to reflect changes in the fishery’s health. Fishery managers distribute these changes among the quota holders proportional to their share. For example, a fisherman who received a 5 percent quota share in a fishery with a TAC of 100 metric tons can catch 5 tons of fish. Should the TAC increase from 100 to 200 metric tons in the following year, the quota holder with a 5 percent share would be able to catch 10 tons, or 5 tons more than the previous year. Furthermore, IFQs are generally transferable, meaning that quota holders can buy, sell, lease, or otherwise transfer some or all of their shares, depending on how much or how little they want to participate in the fishery. The nature of the fishing right varies by country. In New Zealand, for example, an IFQ is an exclusive property right that can be held in perpetuity, whereas in the United States, an IFQ represents the privilege to fish a public resource. While this privilege has an indefinite duration, the government may legally revoke it at any time. IFQ programs arose in response to conditions that resulted in a race for fish and overfishing and that reduced economic efficiency, safety, and product quality. For example, before the IFQ program, the Alaskan halibut fishery had limits on the amount of time allowed for commercial fishing in an attempt to keep the annual halibut catch within the TAC, but it did not have limits on the number of boats that could fish. In response, fishermen increased the number of vessels in their fleets and used larger vessels with more gear to catch as much fish as they could in the time allowed. As a result, the halibut season was reduced to a few days. After the IFQ program was implemented, the fishing season was increased to 8 months. Fishermen could choose when to fish and they could use more economical fishing methods, as long as they kept within their quota limits. Individual IFQ programs may differ considerably, depending on the circumstances of the fishery and the objectives of the program. For example, an IFQ program for a fishery where there are concerns about overfishing and the consolidation of power among corporate interests may have different objectives than a program for a fishery where there are concerns about developing the fishery and attracting new fishermen. Depending on the fishery, fishery managers may be willing to trade some potential gains in economic efficiency in exchange for the opportunity to protect fishing communities or facilitate new entry. IFQ programs are largely intended to improve economic efficiency and conserve the resource. According to the theory underlying IFQ programs, unrestricted quota trading promotes economic efficiency, because those willing to pay the highest price for quota would be those expected to use quota the most profitably, by catching fish at a lower cost or transforming the fish into a more valuable product. Over time, unrestricted trading should lead less efficient fishermen to either improve their efficiency or sell their quota. In contrast, restrictions on quota transfers could be expected to reduce the economic benefits that would otherwise be obtained where quota is freely transferable. Another fundamental tenet of this theory is that quota holders will act in ways to promote the stewardship of the resource. Specifically, giving fishermen a long-term interest in the resource is likely to provide incentives to fish in ways that protect the value of their interest. Several methods are available under IFQ programs for protecting the economic viability of fishing communities and facilitating new entry. For protecting communities, the easiest and most direct method is allowing communities to hold quota. Fishery managers may also help protect communities by adopting program rules aimed at protecting certain groups of fishery participants. For facilitating new entry into IFQ fisheries, the methods principally fall into three categories: (1) adopting quota transfer rules that promote new entry, (2) setting aside quota for new entrants, and (3) providing economic assistance to potential new entrants. Concerns have developed in the United States and in other countries about the potential for IFQ programs to harm the economic viability of fishing communities. Many fishery experts and participants are concerned that individual quota holders will sell their quota outside of the fishing community or sell their quota to large companies. If this were to occur, fishing jobs could leave the community and larger companies could consolidate their quota holdings and dominate the fishery. Fishing communities that lose fishing jobs may have few alternative employment options, particularly if they depend primarily on fishing and no other industry replaces fishing. Allowing communities to hold quota is the easiest and most direct way under an IFQ program to help protect fishing communities. According to fishery experts and participants, fishery managers can give each community control over how to use the quota in ways that protect the community’s economic viability, such as selling or leasing quota to fishermen who reside in the community. Community quota could be held by municipalities, regional organizations, or other groups representing the community—unlike traditional individual fishing quota, which is generally held by individual boat owners, fishermen, or fishing firms. Of the three U.S. IFQ programs, only one allows communities to buy and hold quota— the Alaskan halibut and sablefish program. Communities allowed to hold quota can obtain it through allocation when the program begins or at any time thereafter. For example: The North Pacific Fishery Management Council (North Pacific Council) is considering allocating quota to community not-for-profit entities as it develops a proposal for managing the Gulf of Alaska groundfish fishery. New Zealand fishery managers allocated quota to a Chatham Islands community trust several years after the IFQ program was implemented. The trust leases out annual fishing privileges to Chatham Islands-based fishermen to help keep fishing and fishing-related employment in the community. Similarly, fishery managers can incorporate rules into existing IFQ programs or into the design of new programs to allow communities to make quota purchases. For example, in 2002, the North Pacific Council amended the Alaskan halibut and sablefish IFQ program to allow communities along the Gulf of Alaska to purchase quota. The council is considering including a similar provision in the proposed plan to manage the Gulf of Alaska groundfish fishery. In addition to allowing communities to hold quota, fishery managers can establish rules governing who is eligible to hold and trade quota as well as other rules to manage quota as a means of protecting certain groups of fishery participants. Specific rules may vary by program and change over time, depending on which members or groups a council wants to protect. In terms of eligibility to hold quota, for example, the North Pacific Council initially restricted allocations of Alaskan halibut and sablefish quota to individual vessel owners in part to protect the fisheries’ owner-operator fleet. The council later expanded eligibility to allow crew members to hold quota without owning a vessel. We also identified several different types of quota transfer restrictions used in foreign IFQ programs that were aimed at protecting communities.