On August 12, 1995, at 0726 central daylight time, a General Balloon Corp., Newport AX8, N1384E, sustained substantial damage during a hard landing near Houston, Texas. The commercial pilot and one passenger sustained minor injuries, while another passenger was seriously injured. Visual meteorological conditions prevailed for the paid passenger flight. A complete weather briefing was received prior to the local flight. Following a preflight inspection and a normal inflation, the balloon ascended normally to 500 feet AGL. The pilot stated that at approximately 10 minutes after takeoff, he heard the sound of Velcro separating on one of the panels on the balloon's envelope. The pilot further stated that he alerted his two passengers that the balloon "was going down" as he immediately began to add heat to the envelope to control the rate of descent. The pilot added that the balloon landed hard without rebound in the middle of an open field, approximately a quarter of a mile from the point of takeoff. Witnesses near the accident site observed the balloon making a rapid descent and landing hard in an open field. The Velcro strip that separated in flight had been inspected and tested during the last annual inspection, approximately 7 flight hours prior to the accident.