Davis Calls Halt to Smog Impact Fee

Facing mounting pressure from thousands of motorists who paid a $300 smog impact fee when they registered out-of-state vehicles in California, Gov. Gray Davis on Tuesday suspended the controversial fee, effective immediately.

The state has until Nov. 10 to appeal a recent court ruling that the fee is unconstitutional. “The decision [whether to appeal] is still under review,” said Hilary McLean, a spokeswoman in the governor’s office.

Attorneys in the case said an appeal is unlikely, paving the way for refunds to as many as 1.2 million motorists who have registered out-of-state vehicles since 1992. The potential cost to the state is estimated at $600 million.

“This is a positive and significant step that we hope will result in a decision not to appeal and begin making full refunds to consumers,” said attorney Alan Mansfield, whose San Diego law firm represented plaintiffs in the smog fee legal fight.

After the Sacramento 3rd District Court of Appeal ruled this month that the fee violated both the Commerce Clause of the U.S. Constitution and the California Constitution, public pressure on state agencies has mounted. Some branches of the California Department of Motor Vehicles reported receiving 500 refund demands a day.

A Web site set up by attorneys in the case (https://www.smogfee.com) has received more than 140,000 hits since Oct. 4, said Mansfield, a lawyer with the firm Milberg, Weiss, Bershad, Hynes & Lerach. An additional 25,000 people, Mansfield said, have called the toll-free number (1-877-SMOGFEE) requesting refund claim forms.

Meanwhile, the Davis administration has faced a barrage of criticism led by state Assemblyman Tom McClintock (R-Northridge) attacking the government for continuing to collect a fee that had questionable constitutional basis. “The state’s conduct has been outrageous from beginning to end,” McClintock told reporters.

Davis ordered the smog fee suspension from London, where he is in the first days of a two-week trade mission.

Still left to resolve in the 8-year court case testing the smog fee is how far back the state needs to go if refunds are made. The state contends it would owe money only to motorists who filed for claims in the last three years, the statutory limit for filing claims. Plaintiffs’ attorneys contend that the state owes refunds and interest on refunds dating to 1992, affecting more than 1.2 million motorists.

Under this interpretation, for example, someone who paid the fee in 1992 would now be entitled to $600, including interest.