State House and Senate negotiators agreed yesterday to prohibit the possession, sale and distribution of shark fins, a victory for Native Hawaiians, who see the shark as a cultural deity, and for animal rights activists who believe shark finning is a cruel practice that threatens the ocean's ecosystem.

Restaurants that make shark fin soup would have until July 2011 to use shark fins in their inventory as of this July.

Under the agreement, which now goes before the full House and Senate for final approval, the administrative fine for the first offense would be $5,000 to $15,000; the fine for a second offense would be $15,000 to $35,000 and commercial marine licenses and fishing vessels would be subject to seizure and forfeiture; and the fine for a third offense would be $35,000 to $50,000 and up to a year in jail along with possible seizure and forfeiture of commercial marine licenses and fishing vessels.

The draft also includes an exemption that would allow shark fins to be used for state-permitted research and educational purposes.

Many Native Hawaiians consider sharks 'aumakua — a protective spirit that can take animal form — and object to the nature of shark finning, which involves cutting the fins from captured sharks and then releasing them back into the water to suffer and die.

Shark finning is illegal in Hawai'i. Animal rights advocates contend that sharks are being harvested around the world for their fins because of the popularity of shark fin soup in Chinese restaurants.

"This is a bill that sets Hawai'i apart," said state Sen. Clayton Hee, D-23rd (Kāne'ohe, Kahuku), a Senate negotiator, adding that the international community has been watching the bill.

"It is a cultural issue for Native Hawaiians. It is a small acknowledgement of that aspect of the culture," he said. "It's something, like other cultural issues, that Hawaiians have been silent about. But they have never, in my opinion, relented on the belief in the 'aumakua, and the shark is but one of many."

State Rep. Jon Riki Karamatsu, D-41st (Waipahu, Village Park, Waikele), a House negotiator, said negotiators were looking for a compromise and ended up siding more with environmentalists.

"They can still serve shark fin soup for one more year, basically," he said of local restaurants.

Inga Gibson, the Hawai'i state director of The Humane Society of the United States, said the bill sets a precedent. She described it as a "wonderful day for Hawai'i's sharks."

"Hawai'i has the opportunity to really be the leader in the nation, if not the world, in shark and ocean protection," she said.