[Code of Federal Regulations]
[Title 15, Volume 3]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 15CFR904.108]

[Page 46-47]
 
                  TITLE 15--COMMERCE AND FOREIGN TRADE
 
CHAPTER IX--NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, DEPARTMENT 
                               OF COMMERCE
 
PART 904_CIVIL PROCEDURES--Table of Contents
 
                        Subpart B_Civil Penalties
 
Sec. 904.108  Factors considered in assessing penalties.

    (a) Factors to be taken into account in assessing a penalty, 
depending upon the statute in question, may include the nature, 
circumstances, extent, and gravity of the alleged violation; the 
respondent's degree of culpability, any history of prior offenses, and 
ability to pay; and such other matters as justice may require. NOAA will 
take into account a respondent's ability to pay when assessing a civil 
penalty for a violation of any of the statutes NOAA administers.
    (b) NOAA may, in consideration of a respondent's ability to pay, 
increase or decrease a penalty from an amount that would otherwise be 
warranted by the other relevant factors. A penalty may be increased if a 
respondent's ability to pay is such that a higher penalty is necessary 
to deter future violations, or for commercial violators, to make a 
penalty more than a cost of doing business. A penalty may be decreased 
if the respondent establishes that he or she is unable to pay an 
otherwise appropriate penalty amount.
    (c) Except as provided in paragraph (g) of this section, if a 
respondent asserts that a penalty should be reduced because of an 
inability to pay, the respondent has the burden of proving such 
inability by providing verifiable, complete, and accurate financial 
information to NOAA. NOAA will not consider a respondent's inability to 
pay unless the respondent, upon request, submits such financial 
information as Agency counsel determines is adequate to evaluate the 
respondent's financial condition. Depending on the circumstances of the 
case, Agency counsel may require the respondent to complete a financial 
information request form, answer written interrogatories, or submit 
independent verification of his or her financial information. If the 
respondent does not submit the requested financial information, he or 
she will be presumed to have the ability to pay the penalty.
    (d) Financial information relevant to a respondent's ability to pay 
includes, but is not limited to, the value of respondent's cash and 
liquid assets, ability to borrow, net worth, liabilities, income, prior 
and anticipated profits, expected cash flow, and the respondent's 
ability to pay in installments over time. A respondent will be 
considered able to pay a penalty even if he or she must take such 
actions as pay in installments over time, borrow money, liquidate 
assets, or reorganize his or her business. NOAA's consideration of a 
respondent's ability to pay does not preclude an assessment of a penalty 
in an amount that would cause or contribute to the bankruptcy or other 
discontinuation of the respondent's business.
    (e) Financial information regarding respondent's ability to pay 
should be submitted to Agency counsel as soon after receipt of the NOVA 
as possible. If a respondent has requested a hearing on the offense 
alleged in the NOVA and

[[Page 47]]

wants his or her inability to pay considered in the initial decision of 
the Judge, verifiable financial information must be submitted to Agency 
counsel at least 15 days in advance of the hearing. In deciding whether 
to submit such information, the respondent should keep in mind that the 
Judge may assess de novo a civil penalty either greater or smaller than 
that assessed in the NOVA.
    (f) Issues regarding ability to pay will not be considered in an 
administrative review of an initial decision if the financial 
information was not previously presented by the respondent to the Judge 
at the hearing.
    (g) Whenever a statute requires NOAA to take into consideration a 
respondent's ability to pay when assessing a penalty, NOAA will take 
into consideration information available to it concerning a respondent's 
ability to pay. In such case, the NOVA will advise, in accordance with 
section 904.102 of this part, that respondent may seek to have the 
penalty amount modified by Agency counsel on the basis that he or she 
does not have the ability to pay the penalty assessed. A request to have 
the penalty amount modified on this basis must be made in accordance 
with Sec. 904.102 of this part and should be accompanied by supporting 
financial information. Agency counsel may request the respondent to 
submit such additional verifiable financial information as Agency 
counsel determines is necessary to evaluate the respondent's financial 
condition (such as by responding to a financial request form or written 
interrogatories, or by authorizing independent verification of 
respondent's financial condition). A respondent's failure to provide the 
requested information may serve as the basis for inferring that such 
information would not have supported the respondent's assertion of 
inability to pay the penalty assessed in the NOVA If the respondent has 
requested a hearing on the offense alleged in the NOVA, the Agency must 
submit information on the respondent's financial condition so that the 
Judge may consider that information, along with any other factors 
required to be considered, in the Judge's de novo assessment of a 
penalty. Agency counsel may obtain such financial information through 
discovery procedures under Sec. 904.240 of this part, or otherwise. A 
respondent's refusal or failure to respond to such discovery requests 
may serve as the basis for inferring that such information would have 
been adverse to any claim by respondent of inability to pay the assessed 
penalty, or result in respondent being barred from asserting financial 
hardship.

[52 FR 10325, Mar. 31, 1987, as amended at 58 FR 58485, Nov. 2, 1993]