Conclusions of Law

1. The petition for modification of GO 120-C should be granted to the extent set forth below.

2. The modification of GO 120-C set forth below should replace the Modified Interim Plan authorized by the Commission in D.03-07-047.

3. These proceedings should be closed.

O R D E R

IT IS ORDERED that:

1. Petition (P.) 03-05-040 for amendment of General Order (GO) 120-C is granted to the extent set forth below.

2. The Modified Interim Plan authorized in Application (A.) 03-05-039 by Interim Decision 03-07-047 is terminated and replaced by the amendment to GO 120-C set forth below.

3. GO 120-C is amended by adding the following Section 11:

"11. This section applies only to lighter-than-air aircraft that is not engine-driven and that sustains flight through the use of either gas buoyancy or an airborne heater (manned balloon).

"(A) As an alternative to providing an insurance policy with three separate limits as set forth in Section 1(A) - i.e., $100,000 per passenger seat per accident; $300,000 per accident for those on the ground, and $100,000 per accident for property damage liability - a manned balloon operator may meet the liability requirement of this general order through a combined single limit policy that provides a minimum of $100,000 per passenger seat per accident and a combined single limit minimum of $1 million applicable to all claims per accident.

"(B) As an alternative to the requirement of Section 8 (requiring that evidence of coverage shall apply to any and all commercial flights operated by the insured), a manned balloon operator may file an insurance policy or policies with the Commission that cover only specifically listed aircraft. Any manned balloon operator that elects this option will have its operating authority limited to the balloon or balloons specifically named in the policy or policies on file with the Commission until it files proof of additional insurance.

"(C) As an alternative to the requirement of Section 1(A)(1) (requiring a minimum liability of $100,000 per seat for all aircraft flown), a manned balloon operator may limit its operations by filing with this Commission an affidavit describing the limits on the number of passengers it will carry in each of its manned balloons so that the insurance it has on file with the Commission will continue to provide $100,000 per passenger aircraft passenger bodily injury and death liability coverage, as well as $300,000 liability coverage for injuries on the ground and $100,000 property damage liability. Any

manned balloon operator that elects this option will have its operating authority limited accordingly until it increases its coverage."

4. A.03-05-039 and P.03-05-040 are closed.

Dated , at San Francisco, California.