WASHINGTON, Feb 20 (Reuters) - Northwest Airlines (NWAC) plans to spend $550,000 to improve service for passengers with disabilities as part of an agreement to settle allegations that it negelected disabled travelers on at least 250 occasions, USA Today reported on Wednesday. The newspaper said under a settlement agreement with the U.S. Department of Transportation, Minneapolis-based Northwest would pay a $75,000 fine if it improves services for disabled travelers -- avoiding a proposed $700,000 penalty. The report said the airline originally was facing a $3 million fine, but a transportation department administrative law judge proposed slashing the penalty to $700,000, citing the industry's post-Sept. 11 financial woes. USA Today said Northwest agreed to spend up to $250,000 for more staffing to provide wheelchair help at its hub airports, $250,000 to buy and install lavatory assist bars on its new Airbus A330 aircraft and $50,000 to regularly solicit customer feedback about its services for disabled passengers. The paper said the airline must spend the money by March 2004. Last September, the Transportation Department alleged that Northwest failed to provide adequate wheelchair and other assistance to disabled travelers on at least 250 occasions.