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116th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {     116-273

======================================================================



 
                SHARK FIN SALES ELIMINATION ACT OF 2019

                                _______
                                

November 8, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Grijalva, from the Committee on Natural Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 737]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 737) to prohibit the sale of shark fins, and for 
other purposes, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 737 is to prohibit the domestic sale, 
possession, and purchase of shark fins and products containing 
shark fins.

                  BACKGROUND AND NEED FOR LEGISLATION

    Chondrichthyan fishes (sharks, rays, and chimaeras) face a 
significantly higher extinction risk than most other 
vertebrates.\1\ Globally, one-quarter of sharks and their 
relatives are threatened with extinction, with large-bodied, 
shallow-water species facing the highest risk.\2\ Sharks are 
caught and killed, on average, 30 percent faster than they can 
reproduce.\3\
---------------------------------------------------------------------------
    \1\Nicholas K. Dulvy et al., Extinction Risk and Conservation of 
the World's Sharks and Rays, at 1, eLife (Jan. 21, 2014), https://
elifesciences.org/articles/00590.
    \2\Id.
    \3\Boris Worm et al., Global Catches, Exploitation Rates, and 
Rebuilding Options for Sharks, 40 Marine Pol'y 194, 198 (2013), https:/
/dx.doi.org/10.1016/j.marpol.2012.12.034.
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    Sharks are important to the ocean ecosystem and local 
tourism economies. Shark tourism is a growing industry in the 
United States. In 2016, shark diving in Florida resulted in 
$221 million in direct expenditures and contributed to more 
than 3,700 jobs.\4\ The concern for declining shark populations 
and the impact this decline has on the ecosystem and tourism 
industries has led to increased efforts to conserve sharks 
globally, including through no-take marine reserves, species-
specific fishing bans, and shark fin trade bans.
---------------------------------------------------------------------------
    \4\Anthony J. Fedler, Ph.D., Oceana, The Economic Impact of Shark 
Diving in Florida 11 (2017), https://usa.oceana.org/sites/default/
files/economic_impact_of_shark_diving_in_florida_ report.pdf.
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    The greatest threat facing sharks is overfishing, which is 
driven by the incidental catch of sharks, known as bycatch, and 
the demand for their fins to fuel the global shark fin 
trade.\5\ The fins of sharks and shark-like rays are used for 
shark fin soup, a delicacy in some cuisines going back to the 
Chinese Song Dynasty.\6\ Of the fourteen most common shark 
species involved in the Hong Kong fin trade, more than 70 
percent of the species are considered to be at high or very 
high risk of extinction, such as the scalloped hammerhead and 
oceanic whitetip.\7\ The fins from 26-73 million sharks make it 
into the global shark fin trade each year.\8\ The global shark 
fin trade is often unmonitored and unregulated.\9\
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    \5\See Dulvy et al., supra note 1.
    \6\See, e.g., Lauren Smith, Shark Fin Soup: A Dangerous Delicacy 
for Humans and Sharks Alike, The Guardian (Mar. 10, 2016), https://
www.theguardian.com/science/blog/2016/mar/10/shark-fin-soup-a-
dangerous-delicacy-for-humans-and-sharks-alike.
    \7\Patrick Mustain, Mariah Pfleger & Lora Snyder, Oceana, Shark Fin 
Trade: Why It Should Be Banned In The United States 9 (2016), https://
usa.oceana.org/sites/default/files/
shark_fin_ban_announcement_report_final_low-res.pdf.
    \8\Shelley C. Clarke et al., Letter, Global Estimates of Shark 
Catches Using Trade Records from Commercial Markets, 9(10) Ecology 
Letters 1115 (2006), https://onlinelibrary.wiley.com/doi/abs/10.1111/
j.1461-0248.2006.00968.x.
    \9\See, e.g., Dulvy et al., supra note 1.
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    To address shark finning--the practice of removing a fin 
and throwing the dead or dying shark back overboard to drown--
Congress passed the Shark Finning Prohibition Act\10\ (SFPA) in 
2000 and then augmented it with the Shark Conservation Act 
(SCA) of 2010.\11\ The SFPA banned shark finning.\12\ The SFPA 
also imposed a fin-to-carcass ratio requirement, meaning that 
the weight of landed fins on a vessel had to be within a 
certain ratio of the weight of the rest of landed shark 
carcasses on board in order to avoid a presumption that the 
fins on board were detached from illegally discarded carcasses 
rather than from the legally retained carcasses still on 
board.\13\ However, enforcing the fin-to-carcass ratio was 
difficult, and the SFPA allowed American vessels to deliver 
shark fins to a foreign port for resale, so Congress passed the 
SCA to make it illegal to remove any fins (including the tail) 
from a shark at sea, transfer such a fin from one vessel to 
another vessel, or land any fin that is not naturally attached 
to the corresponding carcass.\14\
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    \10\Pub. L. No. 106-557, 114 Stat. 2772 (2000) (codified at 16 
U.S.C. Sec. 1822 note).
    \11\Pub. L. No. 111-348, tit. I, 124 Stat. 3668 (2011) (codified at 
16 U.S.C. Sec. 1801 note).
    \12\Pub. L. No. 106-557, Sec. 3, 114 Stat. 2772, 2772.
    \13\Id.
    \14\Pub. L. No. 111-348, Sec. 103(a)(1), 124 Stat. 3668, 3670 
(codified at 16 U.S.C. Sec. 1857).
---------------------------------------------------------------------------
    Although shark finning is illegal in U.S. waters, the 
buying and selling of fins is still legal, which results in 
enforcement and conservation challenges. The U.S. continues to 
import shark fins from countries that do not have regulations 
against shark finning. According to DNA tests and other genetic 
forensics techniques, fins entering and leaving the U.S. may be 
from sharks that are threatened with extinction.\15\ In 
addition, the estimates of how many shark fins are entering and 
leaving the U.S. varies greatly depending on the source. In 
2007, other countries reported to the Food and Agriculture 
Organization of the United Nations that they exported more than 
1,000 metric tons of shark fins to the U.S.,\16\ but NOAA 
reported only 29 metric tons of shark fin imports.\17\ These 
discrepancies make it difficult to monitor and enforce shark 
fin imports.
---------------------------------------------------------------------------
    \15\Debra L. Abercrombie, Shelley C. Clarke & Mahmood S. Shivji, 
Global-Scale Genetic Identification of Hammerhead Sharks: Application 
to Assessment of the International Fin Trade and Law Enforcement, 6(5) 
Conservation Genetics 775 (2005), https://doi.org/10.1007/s10592-005-
9036-2; J.E. Magnussen et al., Genetic Tracking of Basking Shark 
Products in International Trade, 10(2) Animal Conservation 199 (2007), 
https://doi.org/10.1111/j.1469-1795.2006.00088.x; Mahmood S. Shivji et 
al., Genetic Profiling Reveals Illegal International Trade in Fins of 
the Great White Shark, Carcharodon Carcharias, 6(6) Conservation 
Genetics 1035 (2006), https://doi.org/10.1007/s10592-005-9082-9.
    \16\Felix Dent & Shelley Clarke, Food & Agric. Org. of the United 
Nations, FAO Fisheries & Aquaculture Technical Paper No. 590, State of 
the Global Market for Shark Products 185 (2015), http://www.fao.org/3/
a-i4795e.pdf.
    \17\Nat'l Marine Fisheries Serv., Nat'l Oceanic & Atmospheric 
Admin., 2011 Shark Finning Report To Congress 29 (2011).
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    To address these issues and to further conserve sharks, 
twelve states and three territories passed laws banning the 
trade of shark fins, including: Hawaii, Oregon, Washington, 
California, Illinois, Maryland, Delaware, New York, 
Massachusetts, Texas, Rhode Island, Nevada, American Samoa, the 
Commonwealth of the Northern Mariana Islands, and Guam. In 
addition, more than forty airlines, including all three of 
China's state-owned airlines; twenty major international 
shipping companies, including UPS; and other corporations such 
as Amazon, Disney, Hilton, and GrubHub, all have policies in 
place to not allow the trade of shark fins.
    However, shark fins are now being imported and exported out 
of states with fin trade bans, in potential violation of state 
laws. Although the state of Texas ended the trade of shark fins 
in 2016, the National Marine Fisheries Service's Fisheries 
Statistics and Economics Division database on foreign trade 
indicates that in 2017, $473,000 worth of shark fins were 
exported from customs districts in Texas to Mexico.\18\ In 
2017, $528,000 worth of shark fins entered through customs 
districts in California from New Zealand.\19\ H.R. 737 seeks to 
address these challenges.
---------------------------------------------------------------------------
    \18\Nat'l Marine Fisheries Serv., Fisheries Stats. & Econ. Division 
(no longer available). This statistic has since been replaced on the 
division's website with a dramatically lower number, without 
explanation.
    \19\Nat'l Marine Fisheries Serv., Fisheries Stats. & Econ. 
Division, https://www.st.nmfs.noaa.gov/apex/f?p=213 (follow ``Annual 
Trade Data'' hyperlink; then follow ``Trade through All U.S. Customs 
Districts'' hyperlink; then search within 2017 for Trade Type: 
``IMPORTS'' and Products type: ``Shark'') (last visited Oct. 29, 2019).
---------------------------------------------------------------------------

                            COMMITTEE ACTION

    H.R. 737 was introduced on January 23, 2019, by 
Representative Gregorio Kilili Camacho Sablan (D-CNMI). The 
bill was referred solely to the Committee on Natural Resources, 
and within the Committee to the Subcommittee on Water, Oceans, 
and Wildlife. On March 26, 2019, the Subcommittee held a 
hearing on the bill. On September 18, 2019, the Natural 
Resources Committee met to consider the bill. The Subcommittee 
was discharged by unanimous consent. Rep. Daniel Webster (R-FL) 
offered and withdrew an amendment in the nature of a 
substitute. No additional amendments were offered, and the bill 
was adopted and ordered favorably reported to the House of 
Representatives by a roll call vote of 16 yeas and 13 nays,\20\ 
as follows:
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    \20\Rep. Darren Soto (D-FL), an original cosponsor of H.R. 737, 
requested, after the closing of the vote, that the record reflect that 
had he been present he would have voted in favor of ordering the bill 
favorably reported.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                HEARINGS

    For the purposes of section 103(i) of H.Res. 6 of the 116th 
Congress--the following hearing was used to develop or consider 
H.R. 737: legislative hearing by the Subcommittee on Water, 
Oceans, and Wildlife held on March 26, 2019.

                      SECTION-BY-SECTION ANALYSIS

    Section 2. Prohibits the domestic sale of shark fins and 
creates a violation penalty under the Magnuson-Stevens Fishery 
Conservation and Management Act.
    Section 3. Exempts possession of shark fins taken lawfully 
under a state, territory, or federal license or permit that 
meets certain requirements.
    Section 4. Exempts dogfish species and requires that the 
Secretary of Commerce report by 2027 on whether this exemption 
should be continued or terminated.
    Section 5. Defines shark and shark fin.
    Section 6. Clarifies that states and territories may adopt 
or enforce more stringent regulations or standards.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

           COMPLIANCE WITH HOUSE RULE XIII AND CONGRESSIONAL 
                               BUDGET ACT

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 27, 2019.
Hon. Raul M. Grijalva,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 737, the Shark Fin 
Sales Elimination Act of 2019.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    H.R. 737 would prohibit the sale, possession, and purchase 
of shark fins and products containing shark fins. Violators of 
this prohibition would be subject to a civil penalty pursuant 
to the Magnuson-Stevens Fishery Conservation and Management 
Act. The bill also would allow for the lawful possession of 
shark fins obtained via a state, territorial, or federal 
license or permit if the shark fin is used for noncommercial 
purposes, or used for display or research purposes by a museum, 
college, university, or any permitted researcher. The 
prohibition in the bill would not apply to Mustelus canis 
(smooth dogfish) or Squalus acanthias (spiny dogfish).
    Because H.R. 737 would prohibit the sale and purchase of 
shark fins, CBO estimates that revenues from customs duties 
collected on imported shark fin products would decline. CBO 
also estimates that penalty collections resulting from 
violations of the bill's prohibitions would increase revenues. 
However, based on information from the National Oceanic and 
Atmospheric Administration (NOAA) and from states that ban the 
possession of shark fins, CBO estimates that the net effect of 
those revenue changes would not be significant in any year or 
over the 2020-2029 period.
    H.R. 737 would impose private-sector mandates, as defined 
in the Unfunded Mandates Reform Act (UMRA), by prohibiting the 
sale of shark fins or products containing shark fins or the 
possession of shark fins for noncommercial purposes unless 
those fins were taken under a state, territorial, or federal 
license or permit. The cost of the mandates would include any 
loss of income from the sale of shark fins and products 
containing shark fins and the cost to obtain a license or 
permit for noncommercial takings.
    Based on information from NOAA about the value of shark 
fins landed in the United States, CBO estimates that the loss 
of income would total less than $3 million annually. 
Additionally, CBO estimates that the cost of obtaining a permit 
for the possession of shark fins for noncommercial purposes 
would be minimal and apply to a limited number of entities. CBO 
estimates that the cost of the mandates would fall well below 
the annual threshold established in UMRA for private-sector 
mandates ($164 million in 2019, adjusted annually for 
inflation).
    H.R. 737 contains no intergovernmental mandates as defined 
in UMRA.
    On May 23, 2019, CBO transmitted a cost estimate for S. 
877, the Shark Fin Sales Elimination Act of 2019, as ordered 
reported by the Senate Committee on Commerce, Science, and 
Transportation on April 3, 2019. The two pieces of legislation 
are similar, and CBO's estimates of their budgetary effects are 
the same.
    The CBO staff contacts for this estimate are Robert Reese 
(for federal costs) and Lilia Ledezma (for mandates). The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goals and 
objectives of this bill are to prohibit the domestic sale, 
possession, and purchase of shark fins and products containing 
shark fins.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                 UNFUNDED MANDATES REFORM ACT STATEMENT

    H.R. 737 would impose private-sector mandates, as defined 
in the Unfunded Mandates Reform Act (UMRA), by prohibiting the 
sale of shark fins or products containing shark fins or the 
possession of shark fins for noncommercial purposes unless 
those fins were taken under a state, territorial, or federal 
license or permit. The cost of the mandates would include any 
loss of income from the sale of shark fins and products 
containing shark fins and the cost to obtain a license or 
permit for noncommercial takings.
    Based on information from NOAA about the value of shark 
fins landed in the United States, CBO estimates that the loss 
of income would total less than $3 million annually. 
Additionally, CBO estimates that the cost of obtaining a permit 
for the possession of shark fins for noncommercial purposes 
would be minimal and apply to a limited number of entities. CBO 
estimates that the cost of the mandates would fall well below 
the annual threshold established in UMRA for private-sector 
mandates ($164 million in 2019, adjusted annually for 
inflation).
    H.R. 737 contains no intergovernmental mandates as defined 
in UMRA.

                           EXISTING PROGRAMS

    This bill does not establish or reauthorize a program of 
the federal government known to be duplicative of another 
program.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

               PREEMPTION OF STATE, LOCAL, OR TRIBAL LAW

    Any preemptive effect of this bill over state, local, or 
tribal law is intended to be consistent with the bill's 
purposes and text and the Supremacy Clause of Article VI of the 
U.S. Constitution.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes to existing 
law.

                            DISSENTING VIEWS

    H.R. 737 bans the possession or purchase of shark fins in 
an attempt to stop the practice of killing sharks solely for 
their fins. This practice is contemptible because of the 
obvious wanton waste of a valuable resource. But this practice 
is already illegal under U.S. law. Shark fishing is highly 
regulated to assure sustainable shark fisheries, and shark 
fishermen must already account for both the fins and the 
carcass of every shark landed. This bill actually mandates the 
shark fin be thrown away, which is the most valuable part of 
the shark. How ironic that it mandates what it purports to 
abhor: the deliberate wastage of our shark resources. It does 
nothing to enhance conservation and a great deal of harm to 
American shark fishermen.
    According to testimony provided by the National Oceanic and 
Atmospheric Administration last Congress on identical 
legislation: ``We cannot support the Shark Fin Sale Elimination 
Act because the bill's negative impact on U.S. fishermen would 
outweigh its minimal benefit to shark conservation . . . This 
would hurt U.S. fishermen who currently harvest and sell sharks 
and shark fins in a sustainable manner under strict federal 
management''.\1\
---------------------------------------------------------------------------
    \1\Written testimony of Alan Risenhoover, Director of the Office of 
Sustainable Fisheries, National Marine Fisheries Service, to the House 
Committee on Natural Resources, April 17, 2018.
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    This legislation is opposed by the Florida Fish and 
Wildlife Commission,\2\ the State of Louisiana,\3\ commercial 
fishing groups, and a number of scientists including the 
Director of Mote Laboratory's Center for Shark Research.\4\
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    \2\Politico: Florida wildlife officials won't support federal shark 
fin ban, Bruce Ritchie, July 10, 2017.
    \3\Jack Montoucet, Secretary of the Department of Wildlife and 
Fisheries for the State of Louisiana, letter to Mr. Acy Cooper, 
President of the Louisiana Shrimp Association, July 7, 2017.
    \4\Dr. Robert Hueter, Mote Laboratory, to Congressman Daniel 
Webster, April 21, 2017.
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    Opponents of this legislation argue that it ``unfairly 
[punishes] highly regulated American fishermen'' and ``rewards 
bad actors in other nations by taking sustainably sourced U.S. 
shark fins out of the global market.''\5\ Further, a 
requirement to discard shark fins before processing the shark 
for sale violates the ``full use'' directive in the Food and 
Agriculture Organization of the United Nations' International 
Plan of Action for Conservation and Management of Sharks.\6\
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    \5\U.S. Shark Fishermen and Dealers Support H.R. 5248, ``The 
Sustainable Shark Fisheries and Trade Act of 2018.''
    \6\FAO International Plan of Action for Conservation & Management 
of Sharks.
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    To the contrary, Congressman Webster (R-FL) has introduced 
H.R. 788, which improves international shark fisheries 
management by allowing imports only from countries with 
conservation management laws and enforcement measures 
comparable to the U.S. Unfortunately, Democrats refused to 
include Congressman Webster's bill in this hearing and instead 
insisted on hearing only H.R. 737, despite opposition from 
stakeholders and top scientists in the field.\7\
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    \7\Dr. Robert Hueter, Mote Laboratory, to Congressman Daniel 
Webster, April 21, 2017.
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    H.R. 737 is a misguided, albeit transparent, attempt by 
Oceana to put American fishermen out of business. Many experts 
in the field of shark management and biology have affirmed that 
this legislation would do nothing to improve U.S. or 
international shark populations. As such, we oppose this 
legislation.

                                   Tom McClintock.
                                   Daniel Webster (FL).

                                  [all]