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AB-1702 Vehicles: Smog Impact Fee: refunds.(1999-2000)

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CALIFORNIA LEGISLATURE— 1999–2000 REGULAR SESSION

Assembly Bill
No. 1702

Introduced  by  Assembly Member McClintock, Baldwin, Oller
 (Principal Coauthor(s): Senator Johannessen, Mountjoy)
 (Coauthor(s): Assembly Member Aanestad, Ackerman, Ashburn, Bates, Battin, Baugh, Brewer, Briggs, Campbell, Cox, Cunneen, Dickerson, Frusetta, Granlund, House, Kaloogian, Leach, Leonard, Maddox, Maldonado, Margett, Olberg, Robert Pacheco, Pescetti, Runner, Strickland, Thompson, Zettel)
 (Coauthor(s): Senator Haynes, Lewis, Monteith, Morrow)

January 03, 2000

An act to repeal Chapter 3.3 (commencing with Section 6261) of Part 1 of Division 2 of the Revenue and Taxation Code, and to add Section 1673 to the Vehicle Code, relating to vehicles, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 1702, as introduced, McClintock. Vehicles: Smog Impact Fee: refunds.
Existing law imposes a smog impact fee of $300 on a person making application to register a motor vehicle in this state that was previously registered outside this state, with certain exceptions.
This bill would repeal the provisions imposing the smog impact fee.
The bill would require the Department of Motor Vehicles to search its records to identify all persons who paid the smog impact fee on or after October 1, 1990, and, using funds appropriated to the department for this purpose, to provide a payment to each person identified, consisting of the amount of smog impact fee, any penalty paid to the department for late payment of the fee, and interest on the total amount. The bill would require the interest to be calculated as specified.
The bill would create the Smog Impact Fee Refund Escrow Account, a continuously appropriated account in the State Transportation Fund and would transfer $767,000,000 from the General Fund to the account to fund the specified refunds.
The bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Before the Smog Impact Fee (Chapter 3.3 (commencing with Section 6261) of Part 1 of Division 2 of the Revenue and Taxation Code) was enacted, the Legislature was aware of legal opinions that suggested that there was a possibility that the fee could be held unconstitutional by a court.
(b) Although the Department of Motor Vehicles has been litigating the constitutionality of the fee since 1995, on November 10, 1999, Governor Davis rightfully decided not to appeal the recent court decision in Jordan v. D.M.V. (1999) ___ Cal.App.4th ___; 1999 Daily Journal D.A.R. 10369, which held that imposition of the fee is unconstitutional.
(c) Citing the three-year statute of limitations for filing a tax refund, some propose to limit refunds of the unconstitutional fee to those who paid the fee within three years or less. Acquiescence to this proposal would reward the state for collecting hundreds of millions of dollars in illegal fees from those blameless persons who happened to pay the fee more than three years ago.
(d) The records of the department contain sufficient information to locate all persons who have paid the illegally imposed fee. Thus, it is within the capability of the department to mail a refund immediately to each and every one of those persons.
(e) The state charges interest on late payments of fees and taxes. Therefore, it is right and proper that the department pay interest on each refund of the three hundred dollar ($300) fee and also on refunds of any penalty imposed for late payment of the fee.

SEC. 2.

 Chapter 3.3 (commencing with Section 6261) of Part 1 of Division 2 of the Revenue and Taxation Code is repealed.

SEC. 3.

 Section 1673 is added to the Vehicle Code, to read:

1673.
 (a) The department shall do all of the following:
(1) Search its records to identify all persons who paid the smog impact fee on or after October 1, 1990.
(2) Using funds appropriated to the department for this purpose, provide a payment in the form of a check delivered by registered mail to each person identified under paragraph (1), consisting of all of the following amounts:
(A) Three hundred dollars ($300), the amount of the smog impact fee, plus the amount of any penalty fee collected from that person for late payment of the smog impact fee.
(B) An amount equal to the interest that would have been charged by the State Board of Equalization on a delinquent sales and use tax of the amount refunded under subparagraph (A), calculated for a period commencing with the date the smog impact fee and any late penalty fee was paid to the department and ending on the date the department makes the payment required under this section.
(b) The Smog Impact Fee Refund Escrow Account is hereby created in the State Transportation Fund. Notwithstanding Section 13340 of the Government Code, funds in the account are hereby continuously appropriated without regard to fiscal years for expenditure by the department only for the purposes of making the refunds required under this section.
(c) Any refund made under this section that is returned to the department because the recipient’s mailing address is incorrect shall be redeposited in the Smog Impact Fee Refund Escrow Account and retained in that account until the department is able to locate the recipient.

SEC. 4.

 The sum of seven hundred sixty-seven million dollars ($767,000,000) is hereby transferred from the General Fund to the Smog Impact Fee Refund Escrow Account in the State Transportation Fund. Funds appropriated to the account under this section shall be expended by the department only for the purposes of making the refunds required under Section 1673 of the Vehicle Code.

SEC. 5.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to provide, at the earliest possible time, a refund to the public of the unconstitutionally imposed smog impact fee, it is necessary that this act take effect immediately.