Ruling Against Out-of-State Smog Charge Is Upheld

Don’t start counting the money yet, but if you are one of several hundred thousand California motorists who paid a $300 “smog impact fee” when registering an out-of-state vehicle in recent years, you could be eligible for a refund by mid-November.

A state appeals court in Sacramento has upheld a 1997 lower court ruling that the smog fee is unconstitutional. The California attorney general now has five weeks to decide if he will appeal the decision--potentially affecting $250 million in tax revenue--to the state Supreme Court.

“No decision has been made yet regarding appeal,” said Deputy Atty. Gen. Michael Cornez. But Cornez said motorists wanting a refund must file for it under terms of the decision handed down Friday by the 3rd District Court of Appeal in Sacramento.

“In a best-case scenario,” said Alan Mansfield, one of the attorneys representing plaintiffs in the case, “people could start getting their money in November. In a worst-case situation, if the state decides to appeal, it could take years before this is determined.”

In upholding the lower court decision, the appeals court determined that the tax violated both the Commerce Clause of the U.S. Constitution and the California Constitution. “The discrimination between interstate and local commerce is plain,” the three-judge panel wrote.

But the court reversed the lower court’s decision requiring the state to automatically file claims for refunds on behalf of all motorists who qualify--estimated at about 750,000 people. Car owners wishing to get their money back must file within three years of the date they registered the out-of-state vehicle.

According to Cornez, motorists seeking a refund can obtain a claim form from DMV offices or the department’s Web site at https://www.dmv.ca.gov. Forms are also available through a Web site established by attorneys in the case at https://www.smogfee.com or by calling toll-free at (877) SMOG-FEE.

According to the state Board of Equalization, 4,000 refund claims have been filed, totaling $1.2 million in refunds.

Department of Motor Vehicles spokesman Evan Nossoff said Tuesday that DMV offices across the state will continue to collect the $300 fee until all appeals have been exhausted. But beginning this week, Nossoff said, those registering out-of-state vehicles will be told that they may be entitled to a refund and handed a form to request one.

In 1998, the state collected $98 million in smog-impact fees.

Plaintiffs in the case, represented by the San Diego law firm Milberg, Weiss, Bershad, Hynes and Lerach, argued that the fee was discriminatory because car owners whose vehicles passed the California emissions test required for registration still had to pay the fee. The state contended that because California’s emission standards are more stringent than federal Environmental Protection Agency standards, the fee is justified.

Still undecided is the lower court decision requiring the state to pay plaintiffs’ attorneys 5% of the smog impact fees that were collected between 1995 and 1999--or about $18 million. The fees are disputed by the state.