On February 28, 1999, about 1330 mountain standard time, a Hiller UH-12E, N2239, registered to and operated by Valley Helicopter Service, was substantially damaged after it collided with terrain while landing at Taylor Ranch airstrip, located 28 nautical miles northeast of Yellow Pine, Idaho. A company visual meteorological conditions flight plan was filed for the 14CFR135 aerial observation flight. The commercial pilot and his two passengers were uninjured. The flight originated from Taylor Ranch approximately ten minutes prior to the accident. The operator was contracted by the State of Idaho Department of Fish and Game, to survey for elk in the Frank Church Wilderness Area. Prior to the accident, the operator had completed 50 hours of the 70 hour survey contract. The pilot, accompanied by two observers, departed the airport for the second surveillance flight of the day. Shortly after departure, the pilot was contacted by a ground crew member and informed that during the helicopter's departure, a 55 gallon fuel barrel was knocked over. It is not known if the helicopter made contact with the barrel or if it was blown over by the helicopter's rotor wash. The pilot elected to return to the airport and inspect the helicopter for possible damage that may have occurred. The pilot made a normal approach to the airport and was established in a hover taxi, about 20 feet above ground level (AGL), when the helicopter suddenly began to descend. The pilot stated that he increased up collective without a response. The pilot stated that he then pulled full up-collective, however the helicopter continued to descend and impacted terrain in a slightly nose-low attitude. The pilot stated the descent was similar to settling with power. After contacting the ground, the pilot released the collective and the main rotor blades struck and severed the tail boom assembly. The helicopter canted to the left and partially rolled to one side. At the time of the accident, the helicopter was operating near gross weight at an elevation of 3,835 feet mean sea level (MSL). The pilot stated the engine was producing rated power and there were no indications of a powerplant failure. The weather at the accident site, as reported by the pilot, was temperature 50 degrees Fahrenheit, winds calm, and a visibility of 15 miles. The aircraft wreckage was retrieved by personnel from Specialty Aircraft Services, Redmond, Oregon, and secured at their facility. The wreckage was inspected by National Transportation Safety Board investigators after it was moved to storage. The main cabin area was intact, but sustained substantial impact damage. The left skid was partially collapsed. The tail boom was severed and leading edge damage was noted to the main rotor blades. Control continuity was established from the cyclic to the cyclic pylon assembly and from the collective to the control rotor assembly. Four bolts that secure the ballast plate to the rotor assembly were found fractured. The assembly was removed and shipped to the National Transportation Safety Board materials lab for inspection. A Senior Metallurgist form the lab reported that the all four bolts displayed features that are consistent with overstress separation. At the completion of the inspection, the rotor head and ballast assembly were released to Specialty Aircraft.