Document ID: DOT-OST-2020-0251-0001
Agency: dot
Document Type: Rule
Title: Implementing Certain Provisions of the TICKETS Act and Revisions to Denied Boarding Compensation and Domestic Baggage Liability Limits
Posted Date: 2021-01-13T05:00Z

[Federal Register Volume 86, Number 8 (Wednesday, January 13, 2021)]
[Rules and Regulations]
[Pages 2534-2539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28001]

[[Page 2534]]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 250 and 254

[Docket DOT-OST-2020-0251]
RIN 2105-AE81

Implementing Certain Provisions of the TICKETS Act and Revisions 
to Denied Boarding Compensation and Domestic Baggage Liability Limits

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

ACTION: Final rule.

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SUMMARY: This final rule amends the U.S. Department of Transportation's 
(or the Department's) oversales rule by clarifying that the maximum 
amount of Denied Boarding Compensation (DBC) that a carrier may provide 
to a passenger denied boarding involuntarily is not limited, and by 
prohibiting airlines from involuntarily denying boarding to a passenger 
after the passenger's boarding pass has been collected or scanned and 
the passenger has boarded, subject to safety and security exceptions. 
Further, pursuant to existing regulations, this final rule raises the 
liability limits for denied boarding compensation that U.S. and foreign 
air carriers may impose from the current figures of $675 and $1,350 to 
$775 and $1,550. Also, in accordance with existing regulations, this 
final rule raises the liability limit U.S. carriers may impose for 
mishandled baggage in domestic air transportation, adjusting the limit 
of liability from the current amount of $3,500 to $3,800.

DATES: This rule is effective on April 13, 2021.

FOR FURTHER INFORMATION CONTACT: Clereece Kroha, Senior Attorney, 
Office of the General Counsel, Department of Transportation, 1200 New 
Jersey Ave. SE, Washington, DC 20590; 202-366-9041, 
clereece.kroha@dot.gov.

SUPPLEMENTARY INFORMATION: 

I. Clarifying That the Department's Oversales Rule Does Not Limit the 
Maximum Amount of DBC Carriers May Offer to Passengers Denied Boarding 
Involuntarily, and Related Provisions

    Section 425(e) of the FAA Reauthorization Act of 2018 (Pub. L. 115-
254, October 5, 2018), which includes the Transparency Improvements and 
Compensation to Keep Every Ticketholder Safe Act of 2018 (TICKETS Act), 
requires the Department to complete a rulemaking to clarify that (1) 
there is no maximum level of compensation an air carrier or foreign air 
carrier may pay to a passenger who is involuntarily denied boarding as 
the result of an oversold flight, and (2) the DBC compensation levels 
set forth in the regulation are the minimum levels of compensation an 
air carrier or foreign air carrier must pay to a passenger who is 
involuntarily denied boarding as the result of an oversold flight. 
``Maximum'' DBC amount and DBC ``limit'' are terms found in various 
provisions of the Department's oversales rule in 14 CFR part 250. The 
concept of ``maximum'' DBC amount that a carrier is required to pay and 
a ``limit'' imposed on DBC calculation results were intended to (1) 
ensure passengers involuntarily denied boarding receive, at a minimum, 
a DBC amount required by the regulation when the DBC calculation 
resulted in a higher amount; and (2) allow carriers to impose a limit 
on the amount that they are liable for compensating eligible passengers 
in the event of involuntary denied boarding, if carriers choose to do 
so. Part 250 was never intended to prohibit carriers from voluntarily 
paying an amount of DBC that is higher than the ``maximum'' DBC amounts 
or DBC ``limits'' set forth in part 250.
    Although during the many decades since the promulgation of the 
oversales rule, the Department has seen no evidence of industry 
confusion about the meaning of these terms, by passing the TICKETS Act, 
Congress is requiring DOT to revise the rule for clarity to avoid any 
potential public confusion about whether carriers may choose to pay a 
higher amount of DBC. Accordingly, in this final rule, the Department 
is making some editorial changes to the regulatory text in part 250 to 
make this point clear. Specifically, this final rule eliminates words 
and phrases such as ``maximum'' or ``no more than'' from Sec.  250.5 to 
clarify that carriers are permitted to pay more than the amounts set by 
the regulations. Instead of using these terms, the amended part 250 
states that carriers are required to provide to eligible passengers at 
least the lower amount of: (1) 200% of the passenger's one-way fare or 
$775 for delays of more than one hour but less than two hours for 
domestic flights and delays of more than one hour but less than four 
hours for international flights, and (2) 400% of the passenger's one-
way fare or $1550 for delays of more than two hours for domestic 
flights and delays of more than four hours for international flights. 
Further, the Department is replacing the term ``maximum denied boarding 
compensation'' and ``denied boarding compensation limit(s)'' with the 
term ``denied boarding compensation liability limit(s)'' or ``DBC 
liability limit(s).'' The new terms make clear that the monetary 
amounts prescribed by the rule are intended to allow carriers to limit 
the amount they are required to compensate passengers that are 
involuntarily denied boarding if the carriers choose to do so, and that 
the terms are not intended to impose a ceiling for the amount of 
compensation a carrier may offer and a passenger may receive. Further, 
by this final rule, the Department is adding paragraph (g) in Sec.  
250.5 to state that nothing in the rule prohibits carriers from 
offering denied boarding compensation in an amount more than the amount 
calculated according to part 250, or the denied boarding compensation 
liability limits provided by part 250. Similar amendments are made for 
the written denied boarding notice prescribed in Sec.  250.9.
    Like the denied boarding compensation liability limit, the domestic 
baggage liability limit provided in 14 CFR part 254 is intended to 
permit carriers to adopt a ceiling that caps their liability for 
delayed, lost, or damaged bags in domestic air transportation, and it 
is not intended to prohibit them from offering a compensation that is a 
higher amount than the adopted ceiling amount. As such, the Department 
is also removing the terms ``minimum limit of [baggage] liability'' and 
``minimum liability amount'' used in 14 CFR 254.6, and replacing them 
with the term ``domestic baggage liability limit.''
    The TICKETS Act also requires the Department to complete a 
rulemaking to ensure that carriers must proactively offer to pay 
compensation to a passenger who is voluntarily or involuntarily denied 
boarding on an oversold flight, rather than waiting until the passenger 
requests the compensation. The Department has carefully reviewed the 
existing rule text and its enforcement records, and believes that the 
Department's oversales rule already imposes such requirements on 
carriers. Specifically, with respect to passengers denied boarding 
voluntarily, Sec.  250.2b provides that, in the event of an oversold 
flight, carriers shall request volunteers for denied boarding before 
using any other boarding priority. The rule further defines a 
``volunteer'' as ``a person who responds to the carrier's request for 
volunteers and who willingly accepts the carrier's offer of 
compensation, at any amount, in exchange for relinquishing the 
confirmed reserved space (emphasis added).'' In other words, for a 
carrier to fulfill its obligation of soliciting for

[[Page 2535]]

volunteers before denying any passenger boarding involuntarily, 
carriers must first request volunteers with an offer of compensation. 
Further, with respect to passengers denied boarding involuntarily, 
Sec.  250.8 provides that carriers must tender to passengers DBC on the 
day and in the place the denied boarding occurs, or within 24 hours 
after the denied boarding occurs. Carriers are required to do so even 
if the eligible passenger is not aware of the entitlement to DBC and 
therefore does not make a request for compensation. Although the 
Department's Office of Aviation Consumer Protection interprets part 250 
as requiring carriers to offer, proactively, compensation to passengers 
voluntarily and involuntarily denied boarding, the Department is 
amending Sec.  250.2b to require explicitly that carriers must provide 
compensation proactively instead of waiting for passengers to request 
the compensation in an oversale situation. The Department will continue 
to enforce part 250 to ensure that passengers that have volunteered to 
be denied boarding in response to carriers' offers of compensation and 
passengers denied boarding involuntarily receive proper compensations 
due to them.
    For a carrier that imposes a liability limit to its denied boarding 
compensation and mishandled domestic baggage compensation, the limits 
must be updated to these new amounts for transportation taking place on 
or after the effective date (as opposed to tickets sold on or after the 
effective date). All notices to passengers required by parts 250 and 
254 as they pertain to the new DBC liability limits and domestic 
baggage liability limit must be updated by the effective date of this 
final rule.

II. Codifying Sections 425(b)-(d) of the TICKETS Act Prohibiting 
Removal of Passengers Who Already Boarded Flights

    Section 425(b) of the TICKETS Act contains a self-effectuating 
provision that prohibits airlines from denying boarding to a revenue 
passenger traveling on a confirmed reservation or involuntarily 
removing that passenger from a flight, if the passenger checked in 
before the check-in deadline and had a ticket or boarding pass 
collected or electronically scanned and accepted by the gate agent. 
Pursuant to sections 425(c) and (d) of the TICKETS Act, this 
prohibition is subject to safety, security, or health risk exceptions 
and it may not be construed as a limitation on the responsibility or 
authority of a pilot in command of an aircraft under 14 CFR 121.533. 
This prohibition also may not limit a penalty imposed on an individual 
for interfering with flight crew members and attendants, as provided in 
49 U.S.C. 46504. The requirements in sections 425(b)-(d) of the TICKETS 
Act became effective on October 5, 2018, the effective date of the FAA 
Reauthorization Act of 2018. This final rule codifies these 
requirements exactly as provided in the FAA Reauthorization Act of 2018 
\1\ in 14 CFR part 250, and makes it enforceable by the Department.
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    \1\ Instead of incorporating the statutory language verbatim, 
the Department made certain necessary editorial changes to the 
statutory language when codifying the statute into the rule text. 
The changes made are: (1) Deleting the effective date of the 
requirements in the statute which is ``the date of the enactment of 
this Act'' because the effective date of the requirements as 
codified in 14 CFR part 250 is the date that is 90 days from the 
publication date of this final rule; and (2) changing the lead 
sentence in the ``Limitation'' paragraph from ``The prohibition 
pursuant to subsection (b) shall not apply . . .'' to ``The 
prohibition pursuant to paragraph (a) of this section shall not 
apply. . . .''
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Covered Carriers Under the TICKETS Act

    The Department's oversales rule, 14 CFR part 250, applies to direct 
air carriers and foreign air carriers with respect to scheduled flight 
segments using an aircraft that has a designed passenger capacity of 30 
or more passenger seats, operating in interstate air transportation, or 
foreign air transportation with respect to nonstop flight segments 
originating at a point within the United States. In contrast, pursuant 
to section 402 of the FAA Reauthorization Act of 2018, ``covered air 
carrier'' as used in the TICKETS Act means an air carrier or a foreign 
air carrier as those terms are defined in 49 U.S.C. 40102. Under 49 
U.S.C. 40102, an ``air carrier'' means a citizen of the United States 
undertaking by any means, directly or indirectly, to provide air 
transportation; and a ``foreign air carrier'' means a person, not a 
citizen of the United States, undertaking by any means, directly or 
indirectly, to provide foreign air transportation. This means that more 
air carriers and foreign air carriers are covered under the TICKETS Act 
than carriers covered under the existing requirements of part 250. The 
requirement of sections (b)-(d) of the TICKETS Act apply to all direct 
and indirect air carriers and foreign air carriers that fall under the 
definitions of section 40102.\2\ As such, we are revising the 
applicability section of part 250, Sec.  250.2, to specify that the 
requirements regarding removing a revenue passenger from a flight, as 
codified under 14 CFR 250.7, has a broader scope than the other 
provisions of part 250.
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    \2\ The Department does not believe that Congress intended to 
apply the broader scope of section 40102 definitions to section (e) 
of the TICKETS Act, which relates to denied boarding compensation. 
It is our understanding that should Congress intend to require 
carriers that are not currently covered by part 250 to provide 
denied boarding compensations to passengers, it would have stated so 
specifically.
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Ticket or Boarding Pass Collected or Electronically Scanned and 
Accepted by the Gate Agent

    According to the TICKETS Act, airlines are prohibited from removing 
a passenger or denying a passenger boarding after the passenger's 
ticket or boarding pass is ``collected or electronically scanned and 
accepted by the gate agent'' (emphasis added). Therefore, a carrier 
agent's physical collection of a paper boarding pass alone does not 
indicate an acceptance of the passenger to board the aircraft. 
Similarly, when a carrier uses electronic devices of any kind to scan a 
boarding pass (e.g., a paper boarding pass, an electronic boarding pass 
on a mobile device), the scanning itself alone does not indicate that 
the carrier has accepted the passenger for boarding. After the physical 
collection or electronic scanning, the gate agent may have reasons to 
not permit a passenger to board (e.g., the agent may find out that the 
passenger was trying to board a wrong flight, or may find out that the 
passenger has been selected to be involuntarily denied boarding). In 
those situations, the carrier may legally deny the passenger boarding 
because the passenger has not been accepted by a gate agent. 
Alternatively, if the gate agent accepts a passenger for boarding after 
collecting or scanning the passenger's boarding pass, the carrier is 
prohibited from removing the passenger from the flight thereafter.

III. Revision of Carriers' Liability Limits for Denied Boarding 
Compensation

    The Department's oversales rule, 14 CFR part 250, requires that the 
DBC liability limit amounts be periodically adjusted to reflect changes 
in the Consumer Price Index for All Urban Consumers (CPI-U). 
Specifically, 14 CFR 250.5(e) provides for the review of denied 
boarding compensation every two years through a specific formula to 
calculate the revised DBC liability limit amounts. The formula is 
below:

Current DBC limit \3\ in Sec.  250.5(a)(2) multiplied by (a/b) rounded 
to the nearest $25
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    \3\ The term ``DBC limit'' in the current rule text will be 
revised to ``DBC liability limit'' to clarify that carriers are 
permitted to limit their liability to the amount provided by 
regulation, or to offer a higher amount, consistent with the 
requirement of the TICKETS Act.

[[Page 2536]]

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Where:

a = July CPI-U of year of current adjustment
b = the CPI-U figure in August 2011 when the inflation adjustment 
provision was added to part 250.

    Section 250.5(e) specifies that the DBC liability limit in Sec.  
250.5(a)(3) shall be twice the revised limit for Sec.  250.5(a)(2), the 
DBC liability limit in Sec.  250.5(b)(2) shall be the same as the 
revised limit for Sec.  250.5(a)(2), and the DBC liability limit in 
Sec.  250.5(b)(3) shall be twice the revised limit in Sec.  
250.5(a)(2).
    In a final rule issued on May 27, 2015, the Department reviewed the 
DBC liability limit amounts then in effect ($650 and $1,300). Based on 
the formula prescribed in Sec.  250.5(e), using the CPI-U for July 
2014, the Department determined that the DBC liability limit amounts 
should be raised to $675/$1,350.\4\
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    \4\ 80 FR 30144.
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    For this review, we are using the CPI-U for July 2020, which was 
issued by the Bureau of Labor Statistics on August 12, 2020. In this 
review, we apply the formula using the CPI-U from August 2011 (the 
basis month required by the formula) and July 2020. The results of this 
calculation require that the DBC liability limit amounts be raised. 
Specifically, the appropriate inflation adjustment for the amount 
provided in Sec.  250.5(a)(2) is $675 x 259.101/226.545 [$675 x 
1.1437], which yields $772. The base amount of $675 in the formula was 
the denied boarding compensation liability limit amount in Sec.  
250.5(a)(2),\5\ as adjusted by the 2015 final rule; 259.101 was the 
CPI-U for July 2020, and 226.545 was the CPI-U for August 2011. Section 
250.5(e) requires us to round the adjustment to the nearest $25, which 
is $775 in this case. Section 250.5 under paragraphs (a)(3) and (b)(3) 
provide that for passengers who are not rerouted to reach their 
destination within two hours of the planned arrival time of their 
original domestic flight (four hours for international transportation), 
the DBC liability limit amount is twice the amount provided by Sec.  
250.5(a)(2) and (b)(2); therefore, under the formula adjustment, this 
amount is twice $775, or $1,550.
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    \5\ Section 250.5(a)(2) provides that the liability limit amount 
for DBC is $675 for passengers who are denied boarding involuntarily 
on a domestic flight by a carrier who offers alternate 
transportation that is planned to arrive at the passenger's first 
stopover or final destination more than one hour but less than two 
hours after the planned arrival time of the passenger's original 
flight. Section 250.5(a)(3) provides that the liability limit amount 
for DBC is $1,350 for passengers who are denied boarding 
involuntarily on a domestic flight by a carrier who offers alternate 
transportation that is planned to arrive at the passenger's first 
stopover or final destination more than two hours after the planned 
arrival time of the passenger's original flight.
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IV. Revision of Domestic Baggage Liability Limit

    The baggage liability limit that air carriers may apply to domestic 
air service is established by 14 CFR part 254. This limit applies to a 
carrier's liabilities towards any provable direct or consequential 
damages resulting from the disappearance of, damage to, or delay in 
delivery of a passenger's baggage that was in a carrier's custody 
during domestic air transportation. Like the requirements regarding the 
provision of DBC to passengers in appropriate circumstances, this 
requirement has never limited the maximum amount of compensation a 
carrier may provide a passenger in connection with mishandled baggage. 
It merely provides a regulatory minimum liability limit that carriers 
may set. Section 254.6 requires review every two years of the limit of 
liability prescribed in part 254 and revision of the limit of 
liability, if necessary, to reflect changes in the CPI-U as of July of 
each review year through a specific formula. The formula is below:

$2500 x (a/b) rounded to the nearest $100

Where:

a = July CPI-U of year of current adjustment
b = the CPI-U figure in December 1999 when the inflation adjustment 
provision was added to part 254.

    The application of the formula during the 2014-2015 review of the 
domestic baggage liability limit raised the amount from $3,400 to the 
current amount of $3,500. The current review requires another inflation 
adjustment. Applying the formula using the consumer price index for 
December 1999 (the basis month required by the formula) and July 2020, 
the appropriate inflation adjustment is $2,500 x 259.101/168.30 [$2,500 
x 1.5395], which yields $3,848.75. The base amount of $2,500 in the 
formula was the minimum liability limit in part 254 at the time that 
this biennial indexing provision was added to the rule in 1999, 259.101 
was the CPI-U for July 2020, and 168.30 was the CPI-U for December 
1999. Section 254.6 requires rounding the adjustment to the nearest 
$100, which is $3,800.

V. Regulatory Analyses and Notices

A. Good Cause for Issuing Rule Without Prior Notice and Comment

    Section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 
553) provides that when an agency, for good cause, finds that notice 
and public procedure thereon are impractical, unnecessary, or contrary 
to the public interest, the agency may issue a final rule without 
providing notice and an opportunity for public comment (5 U.S.C. 
553(b)(3)(B)). The Department has determined that there is good cause 
to issue this final rule without notice and an opportunity for public 
comment because such notice and comment would be unnecessary.
    This rule implements section 425(e) of the TICKETS Act by making 
conforming changes to the rule text of 14 CFR part 250 to clarify that 
the Department's oversales regulation does not impose a ceiling on the 
amount of denied boarding compensation an airline may provide to a 
passenger involuntarily denied boarding. These editorial changes do not 
amend what the rule previously required and is not expected to impact 
carriers' current practice. This rule also implements sections 425(b)-
(d) of the TICKETS Act by incorporating, virtually verbatim, the 
statutory language prohibiting airlines from involuntarily denying 
boarding to a passenger after the passenger's boarding pass has been 
collected or scanned and the passenger has boarded. Since the 
Department is exercising no discretion to implement these TICKETS Act 
provisions, public comment is unnecessary.
    The Department has also determined that under 5 U.S.C. 553(b)(3)(B) 
good cause exists for dispensing with a notice of proposed rulemaking 
and public comment for the inflation adjustments herein as the 
application of this rule does not involve any agency discretion. These 
adjustments are a ministerial inflation update based on the terms and 
formulas set by 14 CFR 250.5 and 14 CFR 254.6. Those formulas were 
subject to notice and comment in the rulemaking proceedings during 
which they were added to the baggage liability and oversales rules. 
Accordingly, because this is purely a formula update, we find that 
there is good cause to dispense with notice and comment for this 
rulemaking.

B. Executive Order 12866

    This final rule has been evaluated following existing policies and 
procedures, and is considered not significant under Executive Order 
12866 and DOT's Regulatory Policies and Procedures. Therefore, the rule 
has not been reviewed by the Office of Management and Budget (OMB) 
under Executive Order 12866. This regulation conforms with the policies 
and procedures of DOT's administrative rule on rulemakings. 49 CFR part 
5.

[[Page 2537]]

Revisions Implementing the TICKETS Act
    The rule revises 14 CFR part 250 to implement certain provisions of 
the TICKETS Act, but does not impose additional costs on carriers. The 
revision clarifies the meaning of ``maximum'' DBC and DBC ``limits,'' 
but does not affect the amounts carriers must compensate passengers. 
Instead, the clarification is intended to prevent any potential 
misunderstanding from the public. The revision also prohibits removing 
passengers after their boarding passes are accepted by carriers or 
after they board aircraft, codifying a self-effectuating statutory 
provision. Removing passengers after their boarding passes are accepted 
is not a common practice among carriers, and the revision will not 
require carriers to alter their behavior meaningfully. Thus, the 
benefits and costs associated with implementing the TICKETS Act 
provisions are de minimis.
Denied Boarding Compensation Liability Limits
    The rule provides for an inflation adjustment to the DBC liability 
limit amounts that air carriers and foreign air carriers must pay 
passengers who are involuntarily denied boarding. The inflation 
adjustment is required by regulation and does not involve any exercise 
of discretion or interpretation. Because the Department does not have 
the flexibility to alter the inflation adjustment, it did not consider 
regulatory alternatives. The rule increases transfers from carriers to 
passengers to the extent that it increases compensation; any increase, 
however, would be minimal. In 2019, 20,868 passengers--24 passengers 
per 1,000,000 enplaned passengers--were involuntarily denied boarding 
on scheduled domestic and outbound international flights.\6\ Many of 
those passengers qualified for compensation amounts below the DBC 
liability limit, and their compensation would not have been affected by 
the increase in the limits.
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    \6\ Source: Air Travel Consumer Report, February 2020 edition, 
page 38. https://www.transportation.gov/individuals/aviation-consumer-protection/february-2020-air-travel-consumer-report.
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Domestic Baggage Liability
    The rule provides for an inflation adjustment to the amount of the 
minimum limit on baggage liability that air carriers may assert in 
cases of mishandled baggage. The adjustment is required by current 
regulation, with no opportunity for interpretation. The rule increases 
transfers from carriers to passengers to the extent that it increases 
mishandled baggage compensation. This increase would be limited, 
however, because the majority of mishandled baggage cases do not result 
in claims that meet the liability limit. Based on information provided 
by carriers during an inflation adjustment review to the domestic 
baggage limit in 2013, slightly more than half of one percent of 
mishandled bags qualify for the current limit.\7\
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    \7\ The information provided to the Department by carriers in 
2013 was based on the number of mishandled baggage reports (MBRs) 
filed with carriers by passengers, which was consistent with the 
reporting requirement in effect then pursuant to 14 CFR part 234. 
The number of MBRs in general is equal to the number of passengers 
who experienced mishandled bags. In 2016, the Department revised 
part 234 by requiring reporting carriers to report the number of 
mishandled bags instead of MBRs. See, Final Rule, Reporting of Data 
for Mishandled Baggage and Wheelchairs and Scooters Transported in 
Aircraft Cargo Compartments, 81 FR 76300, Nov. 2, 2016. The new 
reporting requirement became effective in 2019. As one MBR may 
contain multiple mishandled bags, the number of mishandled bags is 
in general slightly larger than the number of MBRs.
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C. 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. An air carrier or a foreign air carrier is a small business 
if it provides air transportation only with small aircraft (i.e., 
aircraft with up to 60 seats/18,000-pound payload capacity). See 14 CFR 
399.73. The revisions of the baggage liability amounts affect flight 
segments operated with large aircraft, i.e., more than 60 seats. The 
revisions of the DBC amounts affect flight segments operated with 
aircraft designed to have passenger capacity of 30 or more. 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 will be 
minimal and, in the case of baggage liability, may be covered by 
insurance. Accordingly, I hereby certify that this action will not have 
a significant economic impact on a substantial number of small 
entities.

D. Paperwork Reduction Act

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

E. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this 
proposed action pursuant to the National Environmental Policy Act of 
1969 (42 U.S.C. 4321, et seq.), and has determined that it is 
categorically excluded pursuant to DOT Order 5610.1C, Procedures for 
Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979) available 
at https://www.transportation.gov/office-policy/transportation-policy/procedures-consideringenvironmental-impacts-dot-order-56101c. 
Categorical exclusions are actions identified in an agency's NEPA 
implementing procedures that do not normally have a significant impact 
on the environment, and therefore do not require either an 
environmental assessment (EA) or environmental impact statement (EIS). 
See 40 CFR 1508.1(d). In analyzing the applicability of a categorical 
exclusion, the agency must also consider whether extraordinary 
circumstances are present that would warrant the preparation of an EA 
or EIS. Id. Paragraph 4.c.6.i of DOT Order 5610.1C provides that 
``[a]ctions relating to consumer protection, including regulations'' 
are categorically excluded. The purpose of this rulemaking is to adjust 
the amounts for denied boarding compensation and the minimum domestic 
baggage liability limit. The Department does not anticipate any 
environmental impacts, and there are no extraordinary circumstances 
present in connection with this rulemaking.

List of Subjects

14 CFR Part 250

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 254

    Air carriers, Administrative practice and procedure, Consumer 
protection, Reporting and recordkeeping requirements.

    Accordingly, the Department of Transportation amends 14 CFR parts 
250 and 254 as follows:

PART 250--OVERSALES

0
1. The authority citation for 14 CFR part 250 continues to read as 
follows:

    Authority:  49 U.S.C. 329 and chapters 41102, 41301, 41708, 
41709, and 41712

0
2. Revise Sec.  250.2 to read as follows:

Sec.  250.2  Applicability.

    Except for Sec.  250.7, this part applies to every carrier, as 
defined in Sec.  250.1, with respect to scheduled flight segments

[[Page 2538]]

using an aircraft that has a designed passenger capacity of 30 or more 
passenger seats, operating in interstate air transportation or foreign 
air transportation with respect to nonstop flight segments originating 
at a point within the United States. Section 250.7 applies to any air 
carrier or foreign air carrier as those terms are defined in 49 U.S.C. 
40102.

0
3. Amend Sec.  250.2b by adding paragraph (d) to read as follows:

Sec.  250.2b  Carriers to request volunteers for denied boarding.

* * * * *
    (d) Carriers must proactively offer to pay compensation to a 
passenger who is voluntarily or involuntarily denied boarding on an 
oversold flight, rather than waiting until the passenger requests the 
compensation.

0
4. Amend Sec.  250.5 by revising paragraphs (a)(2) and (3), (b)(2) and 
(3), and (e) and adding paragraph (g) to read as follows:

Sec.  250.5   Amount of denied boarding compensation for passengers 
denied boarding involuntarily.

    (a) * * *
    (2) Compensation shall be at least 200 percent of the fare to the 
passenger's destination or first stopover, or $775, whichever is lower, 
if the carrier offers alternate transportation that, at the time the 
arrangement is made, is planned to arrive at the airport of the 
passenger's first stopover, or if none, the airport of the passenger's 
final destination more than one hour but less than two hours after the 
planned arrival time of the passenger's original flight; and
    (3) Compensation shall be at least 400 percent of the fare to the 
passenger's destination or first stopover, or $1,550, whichever is 
lower, if the carrier does not offer alternate transportation that, at 
the time the arrangement is made, is planned to arrive at the airport 
of the passenger's first stopover, or if none, the airport of the 
passenger's final destination less than two hours after the planned 
arrival time of the passenger's original flight.
    (b) * * *
    (2) Compensation shall be at least 200 percent of the fare to the 
passenger's destination or first stopover, or $775, whichever is lower, 
if the carrier offers alternate transportation that, at the time the 
arrangement is made, is planned to arrive at the airport of the 
passenger's first stopover, or if not, the airport of the passenger's 
final destination more than one hour but less than four hours after the 
planned arrival time of the passenger's original flight; and
    (3) Compensation shall be at least 400 percent of the fare to the 
passenger's destination or first stopover, or $1,350, whichever is 
lower, if the carrier does not offer alternate transportation that, at 
the time the arrangement is made, is planned to arrive at the airport 
of the passenger's first stopover, or if not, the airport of the 
passenger's final destination less than four hours after the planned 
arrival time of the passenger's original flight.
* * * * *
    (e) The Department of Transportation will review the denied 
boarding compensation liability limit amounts prescribed in this part 
every two years except for the first review, which will take place in 
2012, to put the reviews specified in this section on the same cycle as 
the reviews of domestic baggage liability limits specified in 14 CFR 
254.6. The Department will use any increase in the Consumer Price Index 
for All Urban Consumers (CPI-U) as of July of each review year to 
calculate the increased denied boarding compensation liability limit 
amounts. The Department will use the following formula:
    (1) Current Denied Boarding Compensation liability limit in 
paragraph (a)(2) of this section multiplied by (a/b) rounded to the 
nearest $25 where a = July CPI-U of year of current adjustment and b = 
the CPI-U figure in August 2011 when the inflation adjustment provision 
was added to this part.
    (2) The Denied Boarding Compensation liability limit in paragraph 
(a)(3) of this section shall be twice the revised limit for paragraph 
(a)(2) of this section.
    (3) The Denied Boarding Compensation liability limit in paragraph 
(b)(2) of this section shall be the same as the revised limit for 
paragraph (a)(2) of this section, and the Denied Boarding Compensation 
liability limit in paragraph (b)(3) of this section shall be twice the 
revised limit for paragraph (a)(2) of this section.
* * * * *
    (g) Nothing in this part prohibits carriers from offering denied 
boarding compensations in an amount more than the amount calculated 
according to paragraphs (a) through (d) of this section, or more than 
the denied boarding compensation liability limit amounts effective at 
the time of denied boarding.

0
5. Add Sec.  250.7 to read as follows:

Sec.  250.7  Provision to implement the Transparency Improvements and 
Compensation to Keep Every Ticketholder Safe Act of 2018.

    (a) Boarded passengers. A covered air carrier may not deny a 
revenue passenger traveling on a confirmed reservation permission to 
board, or involuntarily remove that passenger from the aircraft, once a 
revenue passenger has:
    (1) Checked in for the flight prior to the check-in deadline; and
    (2) Had their ticket or boarding pass collected or electronically 
scanned and accepted by the gate agent.
    (b) Limitations. The prohibition pursuant to paragraph (a) of this 
section shall not apply when:
    (1) There is a safety, security, or health risk with respect to 
that revenue passenger or there is a safety or security issue requiring 
removal of a revenue passenger; or
    (2) The revenue passenger is engaging in behavior that is obscene, 
disruptive, or otherwise unlawful.
    (c) Rule of construction. Nothing in this section may be construed 
to limit or otherwise affect the responsibility or authority of a pilot 
in command of an aircraft under 14 CFR 121.533, or limit any penalty 
under section 46504 of title 49, United States Code.

0
6. Amend Sec.  250.9(b) in the statement under ``AMOUNT OF DENIED 
BOARDING COMPENSATION'' by revising the entries for ``Domestic 
Transportation'' and ``International Transportation'' to read as 
follows:

Sec.  250.9   Written explanation of denied boarding compensation and 
boarding priorities, and verbal notification of denied boarding 
compensation.

* * * * *
    (b) * * *

Amount of Denied Boarding Compensation

Domestic Transportation

    Passengers traveling between points within the United States 
(including the territories and possessions) who are denied boarding 
involuntarily from an oversold flight are entitled to: (1) No 
compensation if the carrier offers alternate transportation that is 
planned to arrive at the passenger's destination or first stopover not 
later than one hour after the planned arrival time of the passenger's 
original flight; (2) at least 200 percent of the fare to the 
passenger's destination or first stopover, or $775, whichever is lower, 
if the carrier offers alternate transportation that is planned to 
arrive at the passenger's destination or first stopover more than one 
hour but less than two hours after the planned

[[Page 2539]]

arrival time of the passenger's original flight; and (3) at least 400 
percent of the fare to the passenger's destination or first stopover, 
or $1,550, whichever is lower, if the carrier does not offer alternate 
transportation that is planned to arrive at the airport of the 
passenger's destination or first stopover less than two hours after the 
planned arrival time of the passenger's original flight.

 
 
 
0 to 1 hour arrival delay.........  No compensation.
1 to 2 hour arrival delay.........  200% of one-way fare (carriers may
                                     limit this amount to $775 if it is
                                     higher than $775).*
Over 2 hours arrival delay........  400% of one-way fare (carriers may
                                     limit this amount to $1,550 if it
                                     is higher than $1,550).*
 
* Nothing in the Department of Transportation's regulation prohibits
  carriers from offering denied boarding compensations in an amount more
  than the amount calculated according to the chart above, or more than
  the denied boarding compensation liability limit amounts stated in the
  chart.

International Transportation

    Passengers traveling from the United States to a foreign point who 
are denied boarding involuntarily from an oversold flight originating 
at a U.S. airport are entitled to: (1) No compensation if the carrier 
offers alternate transportation that is planned to arrive at the 
passenger's destination or first stopover not later than one hour after 
the planned arrival time of the passenger's original flight; (2) at 
least 200 percent of the fare to the passenger's destination or first 
stopover, or $775, whichever is lower, if the carrier offers alternate 
transportation that is planned to arrive at the passenger's destination 
or first stopover more than one hour but less than four hours after the 
planned arrival time of the passenger's original flight; and (3) at 
least 400 percent of the fare to the passenger's destination or first 
stopover, or $1,550, whichever is lower, if the carrier does not offer 
alternate transportation that is planned to arrive at the airport of 
the passenger's destination or first stopover less than four hours 
after the planned arrival time of the passenger's original flight.

 
 
 
0 to 1 hour arrival delay.........  No compensation.
1 to 4 hour arrival delay.........  200% of one-way fare (carriers may
                                     limit this amount to $775 if it is
                                     higher than $775).**
Over 4 hours arrival delay........  400% of one-way fare (carriers may
                                     limit this amount to $1,550 if it
                                     is higher than 1,550).**
 
** Nothing in the Department of Transportation's regulation prohibits
  carriers from offering denied boarding compensations in an amount more
  than the amount calculated according to the chart above, or more than
  the denied boarding compensation liability limit amounts stated in the
  chart.

* * * * *

PART 254--DOMESTIC BAGGAGE LIABILITY

0
7. The authority citation for 14 CFR part 254 continues to read as 
follows:

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

Sec.  254.4   [Amended]

0
8. Section 254.4 is amended by removing ``$3,500'' and adding 
``$3,800'' in its place.

Sec.  254.5  [Amended]

0
9. Section 254.5(b) is amended by removing ``$3,500'' and adding 
``$3,800'' in its place.

0
10. Section 254.6 is revised to read as follows:

Sec.  254.6   Periodic adjustments.

    The Department of Transportation will review the domestic baggage 
liability limit prescribed in this part every two years. The Department 
will use the Consumer Price Index for All Urban Consumers as of July of 
each review year to calculate the revised domestic baggage liability 
limit amount. The Department will use the following formula: $2500 x 
(a/b) rounded to the nearest $100, where a = July CPI-U of year of 
current adjustment and b = the CPI-U figure in December 1999 when the 
inflation adjustment provision was added to this part.

    Issued in Washington, DC, on this 15th day of December 2020, 
pursuant to authority delegated in 49 CFR 1.27(n).
Steven G. Bradbury,
General Counsel.
[FR Doc. 2020-28001 Filed 1-12-21; 8:45 am]
BILLING CODE 4910-9X-P