On June 29, 1996, at 1206 Alaska daylight time, an amphibious float equipped Cessna 206, N5244Z, collided with a fixed float equipped Cessna 180, N5020E, over Lake Hood Seaplane base, in Anchorage, Alaska. Both airplanes were being operated as visual flight rules (VFR) cross-country personal flights when the accident occurred. Both airplanes, registered to and operated by their respective pilots, sustained substantial damage. The certificated private pilot of N5244Z and 3 passengers, and the certificated airline transport pilot, the sole occupant of N5020E, were not injured. Visual meteorological conditions prevailed. Both airplanes were departing Lake Hood Seaplane Base when the accident occurred. The Lake Hood Seaplane Base consists of Lake Hood on the west and Lake Spenard on the east and are connected by a canal. The canal is oriented south of Gull Island that lies between the two lakes. The canal is the east/west runway/water lane of the seaplane base. Lake Hood contains a north/south water lane and a southeast/northwest lane. Lake Spenard contains the departure end of the west water lane. Numerous uncontrolled areas and seaplane docking facilities are contained within both lakes. Review of the air-ground radio communications tapes maintained by the Federal Aviation Administration (FAA), Anchorage, Alaska, Lake Hood (LHD) Air Traffic Control Tower (ATCT) facility, revealed that both pilots were in radio contact with the tower. At 1203:23, the pilot of N5244Z reported to the local controller that he was entering Lake Hood at the public ramp and was water taxiing for a southeast departure on the lake. At 1204:43, the pilot of N5020E contacted the local controller and reported that he was at the east shore of Lake Spenard and requested a west departure. The controller confirmed that the pilot was requesting a west departure and advised the pilot to "...hold short of the west, advise ready." At 1205:02, the pilot of N5020E acknowledged the radio transmission. At 1205:52, the pilot of N5244Z was cleared for takeoff toward the southeast from Lake Hood. At 1206:07, the pilot of N5020E again advised the local controller that he was ready for a west departure. He was again advised to hold short; however, the pilot did not acknowledge the radio transmission. The local controller observed N5020E airborne about mid-canal in a westbound direction and N5244Z airborne in an eastbound direction. Both airplanes collided about 100 feet above the canal.. The pilot of N5244Z initially reported what he thought was a bird strike and returned for landing on Lake Hood. He then filed a mid-air collision report. Damage to the right horizontal stabilizer and elevator was verified by an FAA airworthiness inspector and the National Transportation Safety Board (NTSB) investigator-in-charge (IIC). The pilot of N5020E continued his departure. On June 30, 1996, the pilot of N5020E returned to his dock at Lake Spenard. Damage to the right wingtip and right aileron was verified by the FAA and NTSB.