The Department of Motor Vehicles is refunding about $10,000 a day because legislation limiting auto-registration rebates failed to pass the 2001 Legislature.
DMV Administrative Services Chief Dennis Colling said Wednesday a 1997 law allows people who cancel their vehicle registration before it expires to get a pro-rated refund.
He said when DMV officials discovered it was costing far more than anticipated, they asked lawmakers to repeal or limit it.
Assembly Bill 246 repealing the rebate made it through the Assembly, but got tied up in the Senate Transportation Committee and never made it through the Legislature.
Colling said since then, DMV has been refunding an average of about $300,000 a month to motorists. That works out to about 250 checks totaling $10,000 a day.
He said if that continues, the rebates will cost about $3.6 million a year.
According to Colling's estimates, the state will lose about $1 million of that. He said the rest will come out of county budgets because local governments - not the state - get the vehicle privilege tax money.
The law has always allowed people to roll a pro-rated share of one vehicle's registration onto the registration payment for their new vehicle. But the 1997 legislation sponsored by Republican senators Maurice Washington of Sparks and Bill O'Donnell of Las Vegas allowed vehicle owners to ask for a rebate check instead.
He said more than 700 checks each month are for more than $100 and that the average check is about $44. Reports generated by DMV show that about 1,000 of those checks each month are for $5 or less - which is less than it costs to issue the check.
Deputy DMV Director Ginny Lewis said, when presenting the problem to lawmakers in April, no one ever anticipated the demand.
The money, however, is only a small portion of the total collected each year by DMV in licensing, registration and sales taxes. Total revenues brought in by DMV for fiscal 2000 were more than $461 million.