[Federal Register Volume 73, Number 226 (Friday, November 21, 2008)]
[Rules and Regulations]
[Pages 70591-70592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-27772]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 254

RIN 2105-AD80
[Docket DOT-OST-2008-0332]


Domestic Baggage Liability

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

ACTION: Final rule.

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SUMMARY: In accordance with Department of Transportation regulations, 
this final rule raises the minimum limit on domestic baggage liability 
applicable to air carriers to reflect inflation since July 2006, the 
basis month of the most recent previous revision to the liability 
limit. Regulations require that the Department of Transportation 
periodically revise the limit to reflect changes in the Consumer Price 
Index for All Urban Consumers. This revision adjusts the minimum limit 
of liability from the current amount of $3,000 announced by the 
Department in January 2007 to $3,300, to take into account the changes 
in consumer prices since the prior revision.

DATES: Effective Date: This rule is effective on December 22, 2008.

FOR FURTHER INFORMATION CONTACT: Tim Kelly, Aviation Consumer 
Protection Division, Office of the General Counsel, Department of 
Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590, 202-
366-5952 (voice), 202-366-5944 (fax), [email protected] (e-mail).

SUPPLEMENTARY INFORMATION:

I. Revision of Liability Limit

    Part 254 of the Department's rules (14 CFR Part 254) establishes 
minimum baggage liability limits applicable to domestic air service. 
Section 254.6 of this rule calls for the Department to periodically 
review the minimum limit of liability prescribed in Part 254 in light 
of changes in the Consumer Price Index for All Urban Consumers (CPI-U) 
and to revise the limit of liability to reflect changes in that index 
as of July of each review year. 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 2006 and July 2008, the appropriate 
inflation adjustment is $2,500 x 219.96/168.30 [$2,500 x 1.30695], 
which yields $3,267.38. (The base amount of $2,500 in the formula was 
the minimum liability limit in Part 254 at the time that this biannual 
indexing provision was added to the rule, 219.96 is the CPI-U for July 
2008, and 168.30 is the CPI-U for 1999.) Section 254.6 requires us to 
round the adjustment to the nearest $100, or to $3,300 in this case.
    We are also making an editorial clarification to the text 
describing the ``b'' in the formula in section 254.6. This text says 
that the ``b'' value in the a/b calculation is to be the ``most current 
CPI-U figure when final rule is issued.'' The ``final rule'' referenced 
here is the 1999 rule that set the limit at $2,500 and added this 
inflation adjustment procedure. The ``b'' number is therefore the CPI-U 
figure at the time the 1999 rule was issued. However, the language in 
note ``b'' may be subject to misinterpretation since this is a nine-
year-old number (at the present time) and yet the text identifies ``b'' 
as the ``most current'' CPI figure. The text does not specify clearly 
which final rule is being referred to--the 1999 rule that added the 
inflation adjustment procedure or the most recent inflation revision, 
although the preamble of the 1999 rule was clear with regard to intent 
and the two revisions since then applied the formula in line with that 
intent. Consequently, we are revising the text describing ``b'' to read 
``b = the CPI-U figure in December 1999 when the inflation adjustment 
provision was added to Part 254.'' This is merely an editorial 
clarification and does not change the calculation of the liability 
limit.

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 a 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 
the terms of 14 CFR 254.6, as most recently amended in December 1999 
(64 FR 70575, December 17, 1999) and is simply a ministerial inflation 
update based on a formula. In addition, the editorial revision noted 
above involves no substantive change. Accordingly, we find that prior 
notice and comment are unnecessary and contrary to the public interest, 
and we are issuing these revisions as a final rule.
    Although this final rule will become effective on December 22, 
2008, in order to avoid imposing an undue burden, the Department will 
defer enforcement of the notice provision in the rule (section 254.5) 
as it pertains to printed notices about the new limit for a reasonable 
time period to allow carriers to replace or update their current paper 
ticket stock and ticket jackets or inserts. Electronic notices about 
the minimum domestic liability limit, including notices that are 
printed ``on demand'' from an electronic source (e.g., Web sites, e-
mail messages, and airport kiosks) should be updated no later than the 
effective date of this final rule. Carriers are subject to enforcement 
action from the effective date of this final rule if they fail to 
provide notice of the new minimum liability limit in the manner 
described above, or if they fail to apply the new limit.

[[Page 70592]]

III. Regulatory Impact Statement

Executive Order 12866

    This final rule has been evaluated in accordance with existing 
policies and procedures and is considered not significant under both 
Executive Order 12866 and DOT's Regulatory Policies and Procedures. The 
rule has not been reviewed by the Office of Management and Budget (OMB) 
under Executive Order 12866. The provisions are required by current 
regulatory language, without interpretation.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires 
an assessment of the impact of proposed and final rules on small 
entities unless the agency certifies that the proposed regulation will 
not have a significant economic impact on a substantial number of small 
entities. This revision of 14 CFR Part 254 provides for a periodic 
inflation adjustment to the amount of the minimum limit on baggage 
liability that air carriers may incur in cases of mishandled baggage. 
It will pose minor additional costs only in those instances in which 
carriers lose, damage or delay baggage and where the amount of the 
passenger's claim in those instances exceeds the old minimum liability 
limit of $3,000. The maximum potential impact in those instances is 
$300 on each such claim. Reports filed each month with the Department 
by airlines that each account for at least one percent of total 
domestic scheduled-service passenger revenues show that, at the present 
time, less than five percent of all domestic passengers experience a 
mishandled bag. That percentage has been trending downward throughout 
this year, possibly as a result of fees for checked bags imposed by 
many airlines beginning this year. Most of the instances of mishandled 
baggage represented in the reports to DOT do not result in a claim in 
an amount that is affected by the liability limit in this rule. In 
addition, this revision affects only flight segments operated with 
large aircraft and other flight segments appearing on the same ticket 
as a large-aircraft segment. As a result, many operations of small 
entities, such as air taxis and many 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. Accordingly, we certify that this action will not have a 
significant economic impact on a substantial number of small entities.

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, Department of Transportation.

0
Accordingly, the Department of Transportation amends 14 CFR part 254 as 
follows:

PART 254--DOMESTIC BAGGAGE LIABILITY

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

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


Sec.  254.4  [Amended]


0
2. Section 254.4 is amended by removing ``$3,000'' and adding 
``$3,300'' in its place.


Sec.  254.5  [Amended]

0
3. Section 254.5(b) is amended by removing ``$3,000'' and adding 
``$3,300'' in its place.
0
4. Section 254.6 is amended by revising the last sentence in the 
formula to read as follows:


Sec.  254.6  Periodic adjustments.

* * * * *
    b = the CPI-U figure in December 1999 when the inflation adjustment 
provision was added to Part 254.

    Issued in Washington, DC on November 14, 2008.
Michael W. Reynolds,
Acting Assistant Secretary for Aviation and International Affairs.
 [FR Doc. E8-27772 Filed 11-20-08; 8:45 am]
BILLING CODE 4910-9X-P