Owners See Red on Smog-Tax Refund Claims


When Byron A. McBride moved to California from Wisconsin in 1990, he was hit with $300 in smog-impact fees on each of his three cars--a $900 welcome note.

Years later, state courts would declare the tax an unconstitutional blunder by the Legislature and then-Gov. George Deukmejian. Belatedly, the Legislature agreed last year to fully refund all the taxes and penalties collected during a 10-year period, plus interest. It set up a $665-million fund to pay for the mess.

But McBride said he is still waiting for refunds on two of his cars. It seems the Department of Motor Vehicles, which administered the tax and is handling the refunds, cannot locate McBride's paperwork.

His is hardly an isolated case. The DMV acknowledges that more than 72,600 refund claims are hung up by the agency's inability to verify to its satisfaction that the smog tax was paid on the vehicles in question at some time in the last decade. As a result, there are 72,600 more reasons for Californians to bristle at the DMV.

"It is this mindless failure to exercise any human intelligence to problem-solve that puzzles me," McBride wrote to the DMV. "As a retired government employee myself, this confirms the stereotypical view that the public has of government services."

Of course, nobody ever said the DMV is perfect, and the agency is getting the vast majority of the refund claims resolved without a hitch.


The smog-impact fee was enacted by the Legislature in 1990 during desperate financial times, assessing anybody who moved to California a $300 tax for the supposed pollution their out-of-state vehicles would cause--even new cars and trucks that would pass California's tough smog test.

The fee faced little opposition at first, because drivers already living here did not have to pay it, but it was ruled unconstitutional by a state appeals court in 1999 and Gov. Gray Davis and the Legislature ultimately directed the DMV to issue refunds.

The agency has since logged 1.25 million refund claims. In the last year, the DMV has issued 992,609 checks averaging about $400. About 20,000 claims were denied because the agency determined no smog tax was paid. And there are those claims in bureaucratic limbo.

Given the challenge of tracking down taxes paid as long as 10 years ago, compounded by individuals moving or dying, DMV officials assert that they are doing a great job with the refund program. The individuals waiting for refunds aren't sold on that assessment.

"I don't understand the half of it," said Gerhard Maschkowski, a Los Angeles retiree who is seeking refunds on three cars but is being dunned by the DMV for more documentation.

The agency will not pay a claim if its computer records do not demonstrate conclusively that a motorist paid the smog tax on a specific vehicle. DMV officials told The Times that in some cases the agency's database contains inadequate information. (The officials would speak only if they were not identified by name, citing an agency public-affairs policy.)

For example, a personalized plate may be transferred repeatedly. Without a vehicle identification number, the DMV cannot track down the original tax payment, said officials in the smog-impact fee refund unit.

McBride's problem is his lack of a VIN. He discarded his vehicle records after he sold his cars, and his insurer threw away its records years ago, he discovered.

DMV officials said that in about 6,600 of the cases in limbo, the claimant lacks a VIN or license plate number, and a name search failed to turn up proof of payment in the agency's computers.

The 66,000 remaining claims have a VIN or license plate number a motorist submitted with a refund claim form, but the DMV was unable to verify that the tax was paid. So it is asking such claimants to provide canceled checks or DMV receipts to prove they paid the tax. Do any of us keep our canceled checks for 10 years?

The DMV does have an appeal process, though the same people who turn down claims are in charge of considering appeals. In response to written questions from The Times, the agency said individuals who have been denied refunds can discuss their cases with the smog-impact fee refund unit and request reviews in writing through the unit manager.

The matter of disputed or denied claims is minor when compared with the number of people who have never even applied for refunds.


When Davis signed the bill granting the refunds last year, it was estimated that 1.7 million motorists had paid the fee. Thus, nearly half a million people who paid the tax have not yet filed claims.

"It is unfortunate, because there were clearly 1.7 million people who paid money they never should have paid," said Bill Dato, a lawyer at Milberg, Weiss, Bershad, Hynes & Lerach, a San Diego firm that helped handle the legal case against the DMV.

Based on his experience in other complex class-action cases with claims that date back many years, Dato said, the percentages of disputed claims and motorists who have not filed for refunds are typical.

Dato said the DMV did not provide outside attorneys with information about how it would attempt to contact potential claimants, so he could not comment on the agency's performance.

"We have never been included in that process," he said.

DMV officials said they do not plan additional efforts to contact or notify motorists about their potential eligibility for refunds. As much as a quarter-billion dollars remain in DMV coffers awaiting drivers who have yet to file claims.

Two years remain before the window closes on filing.

For information on smog tax refunds, call (916) 229-0369 or write to DMV, Smog Impact Fee Refund Unit, P.O. Box 825391, Sacramento, CA 94232-5391. Starting soon, motorists will be able to track the status of refund claims on the DMV Web site, http://www.dmv.ca.gov.


Ralph Vartabedian cannot answer mail personally. Please do not telephone. Write to Your Wheels, Business Section, Los Angeles Times, 202 W. 1st St., Los

Angeles, CA 90012. E-mail: ralph.vartabedian@latimes.com.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World