BILL ANALYSIS
AB 2430
Page 1
Date of Hearing: May 12, 2004
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
AB 2430 (Wiggins) - As Amended: April 21, 2004
Policy Committee: Transportation
Vote: 13-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill exempts hot air balloon operators from California
Public Utilities Commission (PUC) regulations that require
certain liability insurance requirement for commercial air
operators. Specifically, this bill:
1)Excludes, from the PUC definition of commercial air operator,
any person who owns, controls, operates, rents, manages,
furnishes or otherwise provides transportation by hot air
balloon for entertainment or recreational purposes.
2)Excludes, from the PUC definition of aircraft, a hot air
balloon furnished or providing transportation for
entertainment or recreational purposes.
3)Requires hot air balloon operators to provide a notice, to
every passenger, that identifies the operator's liability
insurer and the amount of coverage that policy provides.
FISCAL EFFECT
Negligible minor savings to the PUC from the excluding hot air
balloon operators from PUC regulation. (PUC Transportation Rate
Account.)
COMMENTS
1)Rationale . The author contends that hot air balloon
operators, who primarily provide rides to tourists and other
persons for hire, finding it difficult to comply with the
PUC's minimum liability insurance requirements. The author
AB 2430
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also argues that hot air balloons were never intended to be
regulated as aircraft under the PUC's jurisdiction.
2)Background . There are about 40 companies in the state
offering hot air balloon rides. These companies, defined as
commercial air operators, must maintain the minimum liability
insurance coverage mandated by the PUC. Over the past three
years, the number of insurance companies providing hot air
balloon insurance has dwindled from several to two. The hot
air balloon industry contends the growing rarity of coverage
options is a direct result of the events of September 11, 2001
and recent troubles for insurance companies' investment
portfolios.
3)PUC Regulation . In 1972, the PUC adopted a general order
(G.O. 120-C) that requires commercial air operators, including
hot air balloon operators, to procure minimum liability
insurance in the following amounts:
Aircraft Passenger Bodily Injury and Death Liability -
$100,000 times the number of passenger seats in the
gondola.
Aircraft Bodily Injury and Death Liability (excluding
persons aboard the balloon) - $100,000 for one person in
one accident and $300,000 for each accident.
Aircraft Property Damage Liability - $100,000 for each
accident.
4)Federal Regulation . The Federal Aviation Administration
certifies and regulates hot air balloons, with standards
established for airworthiness, licensing of pilots and
instructors, and operating and flight.
Analysis Prepared by : Steve Archibald / APPR. / (916)
319-2081