DMV to Issue 1st Refunds on Friday

Six hundred million dollars worth of refund checks will start flowing Friday to California motorists who registered their cars before Gov. Arnold Schwarzenegger rolled back state vehicle license fees.

The governor announced Tuesday that refunds averaging $135 would eventually go to 4.7 million vehicle owners who registered cars after Oct. 1, when the fee was tripled by former Gov. Gray Davis as a budget-balancing measure.

Schwarzenegger rolled back the highly unpopular fees on his first day in office on Nov. 17.

Motorists who paid too much, mostly those whose license tags were due for renewal in November and December, are identified in DMV computers and will receive payments automatically over the next two months.

Schwarzenegger made the repeal of the $4-billion fee hike a centerpiece of his election campaign. He personally announced Tuesday that the first 117,565 checks would be mailed Friday by the state controller’s office, calling the event “fantastic.”

The checks will be sent chiefly to Californians who paid the higher fees before Schwarzenegger acted. Those who received bills at the old rate but had not paid them by Nov. 17 were given the opportunity to recalculate their bills at the lower rate and just pay that.

Here are some questions and answers about the refunds, according to the DMV:

How soon will all motorists get their refunds?

Refunds usually will be mailed on a first-in, first-out basis. The process will start Friday and is expected to last through March.

Will the refunds include interest?

Yes. Overpayments held by the state for more than 31 days after the governor’s order will be returned with interest at the annual rate of 1.152%.

How is the vehicle license fee now calculated?

The fee is 2% of a car’s value -- the purchase price in the case of a new car -- less depreciation and a 67.5% discount.

How does this refund compare to others made by the DMV?

This is the largest. In the only other case of a wholesale refund, the department since 2000 has returned more than $450 million to motorists who paid an illegal $300 smog fee in the 1990s when they registered their out-of-state vehicles.