Assembly Panel Approves Refund of Smog Fee

SACRAMENTO â€”  A bill to refund $665 million to motorists who paid a “smog impactâ€� fee to register out-of-state vehicles in California won unanimous approval Monday of an Assembly committee.

Under the fast-track proposal, an estimated 1.7 million motorists could start receiving payments of $300 each, plus interest, from the Department of Motor Vehicles as early as this year.

A court declared the fee illegal last year.

The bill (SB 215) by Sen. Betty Karnette (D-Long Beach) sailed out of the Assembly Transportation Committee on a bipartisan 19-0 vote and went to the Appropriations Committee.

At the conclusion of the hearing, an elated Karnette thanked the committee for its support and declared that “this is how democracy should work.�

But the election-conscious committee members clearly sensed the mammoth refund as a popular election-year issue. Every member eagerly signed on as an instant co-author of the bill, including Assemblyman Tom McClintock (R-Northridge), who launched a rebate bill last fall.

In his proposed state budget, Gov. Gray Davis, who two months ago ordered the Department of Motor Vehicles to quit collecting the fee, has set aside $665 million for the refunds and interest. He also has asked for implementation legislation to pay out the funds as quickly as possible.

The state started collecting the $300 fee in 1990 from out-of-state motorists when they first registered their cars in California.

Theoretically, the fee was intended to offset the extra costs associated with vehicles that did not meet California’s strict exhaust emission rules. But as a practical matter, the funds have been spent to help balance the state budget with little earmarked for anti-smog purposes.

Last year, the 3rd District Court of Appeal in Sacramento struck down the fee as a violation of the commerce clause of both the federal and state constitutions.

The court indicated that because of a statute of limitation on such claims, only motorists who had paid the fee during the previous three years would be eligible for a refund. But attorneys challenging the law said it should be applied at least as far back as 1992.

The Karnette bill ignores such barriers and would make refunds available to anyone who paid the fee, starting in 1990, provided they could verify, under penalty of perjury, that they made the payment.

A companion bill (AB 809) by Assemblyman Alan Lowenthal (D-Long Beach) would require the DMV to administer the rebate program, which would operate for one to three years, and possibly longer.

Under the Lowenthal bill, the DMV would examine its records, identify who paid the fee and track them down. In return, a qualified motorist would return the notification form and be sent a $300 rebate, plus interest and reimbursement for any fees charged for late registration.

However, identifying the person who should get the refund may not always be a clear-cut matter, testimony at the committee showed. For instance, some used car dealers made the payment to the DMV but included the extra cost in the sale price of the vehicle.

Some committee members wondered who was entitled to the refund, the dealer or the purchaser. In another case, one member asked who would receive the rebate if the original registrant had died.

Karnette and Lowenthal conceded that their bills do not deal with such issues, but told the committee they will attempt to find answers and make appropriate amendments as the legislation progresses.