[Federal Register Volume 72, Number 18 (Monday, January 29, 2007)]
[Rules and Regulations]
[Pages 3942-3943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-1101]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 254

RIN 2105-AD62
[Docket OST-2007-27020]


Domestic Baggage Liability

AGENCY: Department of Transportation (DOT), Office of the Secretary 
(OST).

ACTION: Final Rule.

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SUMMARY: In accordance with the provisions of 14 CFR 254.6, this final 
rule revises the minimum limit on domestic baggage liability applicable 
to air carriers to reflect inflation since July 2004, the year of the 
most recent revision to the liability limit. Section 254.6 requires 
that the Department periodically revise the limit to reflect changes in 
the Consumer Price Index. The rule adjusts the minimum limit of 
liability from the current amount of $2,800, set by the Department in 
2004, to $3,000, to take into account the changes in consumer prices 
since the prior revision.

EFFECTIVE DATE: This rule is effective on February 28, 2007.

FOR FURTHER INFORMATION CONTACT: Nicholas Lowry, Senior Attorney, 
Office of Aviation Enforcement and Proceedings (C-70), Department of 
Transportation, 400 Seventh St., SW., Washington, DC 20590; (202) 366-
9351.

SUPPLEMENTARY INFORMATION: 

I. Supplementary Information

    14 CFR Part 254 establishes minimum baggage liability limits 
applicable to domestic air service, currently $2,800 per passenger (See 
69 FR 56693, September 22, 2004). Provisions of 14 CFR 254.6 require 
that the Department periodically review the minimum limit of liability 
prescribed in Part 254 in light of changes in the Consumer Price Index 
for Urban Consumers and directs the Department to revise the limit of 
liability to reflect changes in the price index that have occurred in 
the interim. Section 254.6 prescribes the use of a specific formula to 
calculate the revised minimum liability amount when making these 
periodic adjustments. Applying the formula to price index changes 
occurring between July 2004 and July 2006, the appropriate inflation 
adjustment is $2,500 x 203.5/168.3, or $3022.87. The provision requires 
us to round the adjustment to the nearest $100, or to $3,000.

II. Waiver of Rulemaking Procedural Requirements

    With this final rule, we are waiving the usual notice of proposed 
rulemaking and public comment procedures set forth in the 
Administrative Procedure Act (APA) (5 U.S.C. 553). The APA allows 
agencies to dispense with such procedures on finding of good cause when 
they are impracticable, unnecessary or contrary to the public interest. 
We have determined that under 5 U.S.C. 553 (b)(3)(B) good cause exists 
for dispensing with the notice of proposed rulemaking and public 
comment procedures for this rule. This rulemaking is required by 
regulation, based on a formula, and provides for no discretion. 
Accordingly, we believe comment is unnecessary and contrary to the 
public interest, and we are issuing this revision as a final rule.
    Although this final rule will become effective in 30 days, the 
Department will defer enforcement of the notice provision in the 
revised rule, as it pertains to written notice of the new limit, for a 
reasonable time period to allow carriers to replace or correct their 
current paper ticket stock and envelopes so as to provide proper 
written notice of the increased minimum liability limit without 
imposing an undue burden. Carriers are, however, subject to enforcement 
action from the effective date of this final rule if they otherwise 
fail to provide proper notice of the $3,000 liability limit or fail to 
apply the new limit, as appropriate.

III. Regulatory Impact Statement

Executive Order 12866

    This final rule has been evaluated in accordance with the existing 
policies and procedures and is considered not significant under both 
Executive Order 12866 and DOT's Regulatory Policies and Procedures. It 
was not reviewed by the Office of Management and Budget. Based on the 
limited data available to the Department, the increase in the minimum 
baggage liability limit from $2,800 to $3,000 per passenger may result 
in U.S. carriers paying total additional reimbursements to consumers of 
approximately $2.6 million per year.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) does not 
apply to this rulemaking because we are not required to issue a notice 
of proposed rulemaking. However, we note that this revision of 14 CFR 
Part 254 provides for a minimal increase in the amount of the minimum 
baggage liability limit that air carriers may incur in cases of lost or 
damaged baggage. It will pose minor additional costs only in those 
instances in which carriers lose or damage baggage, or delay delivering 
baggage to the traveler, and it affects only carriers operating large 
aircraft or those carriers operating small aircraft interlining with 
such carriers. As a result, many operations of small entities, such as 
small air taxis and commuter air carriers, are not covered by the rule. 
Moreover, any additional costs for small entities associated with the 
rule should be minimal and may be covered by insurance.

[[Page 3943]]

Paperwork Reduction Act

    This final rule imposes no new reporting or recordkeeping 
requirements necessitating clearance by OMB.

List of Subjects in 14 CFR Part 254

    Air carriers, Administrative practice and procedure, Consumer 
protection.

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Accordingly, the Department of Transportation revises 14 CFR Part 254, 
Domestic Baggage Liability, to read as follows:

PART 254--DOMESTIC BAGGAGE LIABILITY

0
1. The authority citation for part 254 continues to read:

    Authority: 49 U.S.C. 40113, 41501, 41501, 41504, 41510, 41702 
and 41707.


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2. Section 254.4 is revised to read as set forth below:


Sec.  254.4  Carrier liability.

    On any flight segment using large aircraft, or on any flight 
segment that is included on the same ticket as another flight segment 
that uses large aircraft, an air carrier shall not limit its liability 
for provable direct or consequential damages resulting from the 
disappearance of, damage to, or delay in delivery of a passenger's 
personal property, including baggage, in its custody to an amount less 
than $3,000 for each passenger.

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3. Section 254.5 is revised to read as set forth below:


Sec.  254.5  Notice requirement.

    In any flight segment using large aircraft, or on any flight 
segment that is included on the same ticket as another flight segment 
that uses large aircraft, an air carrier shall provide to passengers, 
by conspicuous written material included on or with its ticket, either:
    (a) Notice of any monetary limitation on its baggage liability to 
passengers; or
    (b) The following notice: ``Federal rules require any limit on an 
airline's baggage liability to be at least $3,000 per passenger.''

Andrew B. Steinberg,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. E7-1101 Filed 1-26-07; 8:45 am]
BILLING CODE 4910-9X-P