Regulation of Commercial Balloon Companies Stays Local

Commercial hot air balloon operators won’t be returning to regulation by the state Public Utilities Commission In January, thanks to legislation signed by Gov. Jerry Brown.

The measure – AB 1524 by Assemblyman Michael Allen, a Santa Rosa Democrat — permanently exempts the balloon companies from PUC jurisdiction as long as the companies carry a minimum of $1 million in liability insurance.

“(This law) will ensure that hot air balloon operators have access to affordable and adequate … insurance,” Allen said in a statement.

Although primarily regulated by the Federal Aviation Administration, which requires pilot certificates for balloonists, the state’s estimated 55 commercial balloon operators – a number of them in the Napa and Sonoma valleys – were also regulated by the PUC until 2004. 

In 2002, balloon companies complained that liability insurance was becoming both harder to find and more expensive. The situation was worsened, the balloon companies said, by the commission requiring they carry the same liability coverage as operators of other aircraft.

The Legislature passed a bill in 2004 setting minimum liability insurance coverage — $1 million for balloons carrying up to 10 passengers and $100,000 more for each additional passenger.

Proof of the coverage is required before a local government can grant a commercial balloon operator a business license. Passengers must also be told of the coverage.

The 2004 law also ended PUC oversight of commercial balloonists, placing it in the hands of local government. That change was slated to sunset January 1, 2013, restoring PUC oversight.

However, the commission, which supported Allen’s bill, told lawmakers it has no staff assigned to commercial ballooning.

Allen’s bill removes the sunset clause, maintaining the status quo.

The National Transportation and Safety Board reports 12 ballooning accidents in California since 2000 with two fatalities.

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