On August 5, 1995, at 0810 eastern daylight time, a Fantasy Sky Promotions Fantasy 6 Balloon, N304FB was substantially damaged following a collision with trees and electrical lines during a balloon race near Kingsport, Tennessee. The commercial pilot and his passenger were both seriously injured in the accident. The aircraft was being operated under the provisions of 14 CFR Part 91 at the time. Visual meteorological conditions existed at the time, and no flight plan had been filed for the local flight. The pilot stated that he was participating in a balloon "Hare and Hound" race. He was approaching the target area, and descending to drop the bean bag. He stated that he did not see the power line, which was in the tree tops, until the aircraft struck the lines. The aircraft contacted the power lines during the descent, and both occupants received burns from the power lines.