On March 17, 2010, approximately 1855 Pacific daylight time, an Ultramagic S-160 balloon, N30048, sustained substantial damage when it landed hard near Rancho Santa Fe, California. The commercial pilot and five of his passengers were not injured; however, three passengers received serious injuries. Panorama Balloon Tours was operating the balloon under the provisions of 14 Code of Federal Regulations Part 91. Visual meteorological conditions prevailed for the commercial air tour flight, which originated approximately 55 minutes before the accident. A flight plan had not been filed. The pilot reported that as the flight progressed, the wind moving the balloon south-eastward gradually dissipated to a becalmed state. The pilot stated that he had selected a landing spot, but needed to cross over some high power transmission wires to reach it. However, the pilot reported that the balloon's three burners failed to produce their full power and he elected to land short of the power lines. In order to avoid drifting into the power lines, he pulled the top out of the envelope and the balloon landed hard. The envelope snagged on several trees resulting in major damage to the envelope. The pilot reported that at the time of the landing, each of the three 20-gallon fuel tanks were approximately 15 to 20 percent full. This equates to approximately 3 to 4 gallons of fuel in each tank at the time of the accident. A balloon repair station owner said burner utilization during flight is either FULL on or totally off (except for the pilot light). When the fuel level of a tank is between approximately 10 and 20 percent, the liquid propane will begin to cavitate in a vortex manner due to the rapid evacuation of the fuel through the fuel tank's liquid dip tube, which supplies each respective burner via a fuel hose. When this occurs, there is a discernible difference in the sound of a burner, a pulsing woof-woof, and the power output/thermal output is dramatically reduced. The Flight Manual for Ultramagic Hot Air Balloons suggests that each burner have two separate fuel supplies as an additional safety factor. The manufacturer also recommends, if possible, that landings should be made with burners connected to fuel tanks filled to at least 40 percent capacity. The Flight Manual states that the fuel gauges affixed to the top of each tank will not begin to register until it is at least 25 percent full of fuel. Additionally, the Flight Manual states, "Any contact with electrical power lines is extremely dangerous and should be avoided at all costs."