BILL ANALYSIS
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THIRD READING
Bill No: AB 2430
Author: Wiggins (D), et al
Amended: 8/9/04 in Senate
Vote: 27 - Urgency
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 6/8/04
AYES: Morrow, Alarcon, Battin, Dunn, Murray, Sher
NO VOTE RECORDED: Bowen, McClintock, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 5/20/04 - See last page for vote
SUBJECT : Commercial air carriers: hot air balloons
SOURCE : Author
DIGEST : This bill (1) suspends temporarily the State
Public Utilities Commissions authority over the commercial
ballooning industry, (2) requires commercial balloon
operators to carry a minimum of $1 million liability
insurance and notify passengers of their insurance
coverage, and (3) requires operators to comply with any
local government ordinances.
ANALYSIS : Current law requires every commercial air
operator, which includes hot air balloon companies, to
obtain liability insurance for the payment of damages for
personal bodily injuries and property damages. The State
Public Utilities Commission (PUC) is charged with
administering this requirement.
CONTINUED
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This bill, until January 1, 2009, excludes from the PUC
definition of "commercial air operator" and, from the PUC
definition of "aircraft," the provision of transportation
by hot air balloon for entertainment or recreational
purposes. This removes, temporarily, the hot air balloon
industry from oversight by the PUC.
The bill requires, until January 1, 2009, commercial
balloon operators to carry a minimum of $1 million
liability insurance, with additional liability coverage of
$100,000 for each passenger for any balloon carrying more
than 10 passengers.
The bill requires that a notice be provided to every
passenger that identifies the liability insurance carrier
and the amount of coverage.
This bill requires, until January 1, 2009, that commercial
balloon operators comply with any local government
ordinances.
Comments
The Federal Aviation Administration (FAA) is responsible
for licensing pilots, establishing operating rules, and
creating airworthiness standards, but the FAA doesn't
establish insurance requirements.
The PUC is responsible for establishing minimum levels of
liability insurance and assuring that such insurance is
obtained by hot air balloon companies. The PUC has no
other role in the oversight of hot air balloon companies.
There are approximately 50 companies offering balloon rides
throughout California, carrying 60,000 passengers per year.
Balloon operators are concentrated in the Napa and Sonoma
valleys, Palm Springs, Temecula, and San Diego. According
to FAA records, there have been 37 balloon accidents in
California since 1983, and only three this decade.
In general, the PUC requires hot air balloon operators to
have passenger liability insurance of at least $100,000 per
passenger seat and the insurance must be provided either by
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a company licensed to write insurance in California or by
specified non-admitted insurers. The specific provisions
are contained in PUC General Order 120-C.
Hot air balloon companies argue liability insurance has
been virtually unavailable from qualified insurers as a
consequence of the September 11, 2001 tragedy. Several
companies petitioned the PUC to amend its rules to make it
easier to obtain insurance in July 2003, the PUC adopted
some interim changes which were made permanent in an April
2004 order. In its order, the PUC noted insurance has
become available and the State Department of Insurance has
acted to widen the pool of available insurance carriers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/4/04)
Aeronaut Society
Balloons Above the Valley
Balloon Excelsior
Calistoga Balloons
Napa Valley A lot
Professional Balloon Pilots Association of Napa County
Tempest Technology
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Calderon, Campbell, Canciamilla, Chan, Chavez, Chu,
Cogdill, Cohn, Corbett, Correa, Cox, Daucher, Diaz,
Dutra, Dutton, Dymally, Firebaugh, Frommer, Garcia,
Goldberg, Hancock, Harman, Haynes, Jerome Horton, Shirley
Horton, Houston, Jackson, Keene, Kehoe, Koretz, La Malfa,
La Suer, Laird, Leno, Leslie, Levine, Lieber, Liu,
Lowenthal, Maddox, Maldonado, Matthews, McCarthy,
Montanez, Mountjoy, Mullin, Nakanishi, Nakano, Nation,
Negrete McLeod, Parra, Pavley, Plescia, Reyes, Richman,
Ridley-Thomas, Runner, Salinas, Samuelian, Simitian,
Spitzer, Steinberg, Strickland, Vargas, Wesson, Wiggins,
Wolk, Wyland, Yee, Nunez
NO VOTE RECORDED: Longville, Maze, Oropeza, Pacheco
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NC:cm 8/9/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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