BILL ANALYSIS SB 318 Page 1 Date of Hearing: June 30, 2009 Counsel: Gabriel Caswell ASSEMBLY COMMITTEE ON PUBLIC SAFETY Juan Arambula, Chair SB 318 (Calderon) - As Amended: May 28, 2009 SUMMARY : Provides for forfeiture procedures for certain property acquired through the crime of dog fighting, as specified. Specifically, this bill : 1)Provides that any property interest, whether tangible or intangible, acquired through the commission of any of specified dog fighting crimes shall be subject to forfeiture, including both personal and real property, profits, proceeds, and the instrumentalities acquired, accumulated, or used by dog fighting participants, organizers, transporters of animals and equipment, breeders and trainers of fighting dogs, and persons who steal or illegally obtain dogs or other animals for fighting, including bait and sparring animals. 2)States that the prosecuting agency in a criminal proceeding in which the defendant has been charged with the commission of any specified dog fighting crime, in conjunction with the criminal proceeding, file a petition for forfeiture. If the prosecuting agency has filed a petition for forfeiture and the defendant is convicted of any of the specified dog fighting crimes, the specified assets shall be subject to forfeiture upon proof of the required legal elements. 3)Excepts the following property from forfeiture under this section: a) Property solely owned by a bona fide purchaser for value, who was without knowledge that the property was intended to be used for a purpose which would subject it to forfeiture under this section, or is subject to forfeiture under this section; and, b) Property used as a family residence and owned by two or more inhabitants, one of whom had no knowledge of its unlawful use. SB 318 Page 2 4)Requires that the prosecuting agency shall make service of process of a notice regarding that petition upon every individual who may have a property interest in the alleged proceeds, which notice shall state that any interested party may file a verified claim with the superior court stating the amount of the party's claimed interest and an affirmation or denial of the prosecuting agency's allegation. a) Provides that if the notices cannot be served by registered mail or personal delivery, the notices shall be published for at least three consecutive weeks in a newspaper of general circulation in the county where the property is located. b) States that if the property alleged to be subject to forfeiture is real property, the prosecuting agency shall, at the time of filing the petition for forfeiture, record a lis pendens in each county in which real property alleged to be subject to forfeiture is located. 5)Provides that the judgment of forfeiture shall not affect the interest of any third party in real property that was acquired prior to the recording of the lis pendens. 6)States that all notices shall set forth the time within which a claim of interest in the property seized is required to be filed pursuant to this section. 7)Provides any person claiming an interest in the property or proceeds seized may, at any time within 30 days from the date of the first publication of the notice of seizure, or within 30 days after receipt of the actual notice, file with the superior court of the county in which the action is pending a verified claim stating his or her interest in the property or proceeds. A verified copy of the claim shall be given by the claimant to the Attorney General, or the district or city attorney, whichever is the prosecuting agency of the underlying crime. 8)States that if, at the end of the specified time set forth, an interested person, other than the defendant, has not filed a claim, the court, upon a motion, shall declare that the person has defaulted upon his or her alleged interest, and that interest shall be subject to forfeiture upon proof of the SB 318 Page 3 specified legal elements. 9)Provides that the defendant may admit or deny that the property is subject to forfeiture pursuant to this section. If the defendant fails to admit or deny, or fails to file a claim of interest in the property or proceeds, the court shall enter a response of denial on behalf of the defendant. 10)Requires that the forfeiture proceeding be set for hearing in the superior court in which the underlying criminal offense will be tried. If the defendant is found guilty of the underlying offense, the issue of forfeiture shall be promptly tried, either before the same jury or before a new jury in the discretion of the court, unless waived by the consent of all parties. 11)States that at the forfeiture hearing, the prosecuting agency shall have the burden of establishing beyond a reasonable doubt that the defendant was engaged in any of the specified dog fighting crimes and that the property comes within the specified provisions. 12)Provides that concurrent with, or subsequent to, the filing of the petition, the prosecuting agency may move the superior court for the following pendente lite orders to preserve the status quo of the property alleged in the petition of forfeiture: a) An injunction to restrain all interested parties and enjoin them from transferring, encumbering, hypothecating, or otherwise disposing of that property. b) Appointment of a receiver to take possession of, care for, manage, and operate the assets and properties so that the property may be maintained and preserved. 13)States that no preliminary injunction may be granted or receiver appointed without notice to the interested parties and a hearing to determine that the order is necessary to preserve the property, pending the outcome of the criminal proceedings, and that there is probable cause to believe that the property alleged in the forfeiture proceedings are proceeds or property interests forfeitable. However, a temporary restraining order may issue pending that hearing pursuant to the specified provisions of Code of Civil SB 318 Page 4 Procedure. 14)Provides that if the trier of fact at the forfeiture hearing finds that the alleged property or proceeds are forfeitable, and that the defendant was convicted of a specified crime, the court shall declare that property or proceeds forfeited to the state or local governmental entity, subject to the specified distribution scheme. 15)States that if the trier of fact at the forfeiture hearing finds that the alleged property is forfeitable but does not find that a person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract acquired that interest with actual knowledge that the property was to be used for a purpose for which forfeiture is permitted, and the amount due to that person is less than the appraised value of the property, that person may pay to the state or the local governmental entity that initiated the forfeiture proceeding the amount of the registered owner's equity, which shall be deemed to be the difference between the appraised value and the amount of the lien, mortgage, security interest, or interest under a conditional sales contract. Upon that payment, the state or local governmental entity shall relinquish all claims to the property. 16)States that if the holder of the interest elects not to make that payment to the state or local governmental entity, the property shall be deemed forfeited to the state or local governmental entity. 17)Provides the appraised value shall be determined as of the date judgment is entered either by agreement between the legal owner and the governmental entity involved, or if they cannot agree, then by a court-appointed appraiser for the county in which the action is brought. 18)States that if the amount due to a person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract is less than the value of the property and the person elects not to make payment to the governmental entity, the property shall be sold at public auction by the Department of General Services (DGS) or by the local governmental entity which shall provide notice of that sale by one publication in a newspaper published and circulated in the city, community, or locality where the sale SB 318 Page 5 is to take place. Proceeds of the sale shall be distributed pursuant to the specified distribution scheme. 19)States that in all cases where property is forfeited pursuant to this section and is sold by the DGS or a local governmental entity, the property forfeited or the proceeds of the sale shall be distributed by the state or local governmental entity, as follows: a) To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage, or security interest, if any, up to the amount of his or her interest in the property or proceeds, when the court declaring the forfeiture orders a distribution to that person. The court shall endeavor to discover all those lien holders and protect their interests and may, at its discretion, order the proceeds placed in escrow for a period not to exceed 60 additional days to ensure that all valid claims are received and processed. b) To the DGS or local governmental entity for all expenditures made or incurred by it in connection with the sale of the property, including expenditures for any necessary repairs, storage, or transportation of any property seized under this section. c) To local, nonprofit organizations exempt, as specified, of the Internal Revenue Code, the primary activities of which include ongoing rescue, foster, or other care of animals that are the victims of dog fighting, and to law enforcement entities, including multi-agency task forces, that actively investigate and prosecute animal fighting crimes. d) Any remaining funds not fully distributed to organizations or entities shall be deposited in an escrow account or restricted fund to be distributed as soon as possible. 20)States that the intent of the Legislature in enacting this act is to seek the eradication of dog fighting by systematically reducing the economic resources available to those criminals who facilitate and support the crime of dog fighting. SB 318 Page 6 21)Finds and declares the following: a) That dog fighting is an insidious underground organized crime and, notwithstanding its absolute prohibition in America, this crime has reached epidemic proportions in all urban communities and continues to thrive in many rural areas as well. b) That many communities have been morally, socially, and culturally scarred by the continuing presence of dog fighting. Children who are exposed to the unfathomable violence of dog fighting are conditioned to believe that violence is normal and are systematically desensitized to the consequential suffering. c) That dog fighters are violent criminals who engage in a whole host of peripheral criminal activities. Many are heavily involved in organized crime, racketeering, drug distribution, and gang-related criminal activity, and they arrange and attend the fights as a forum for gambling and drug trafficking. These activities, both individually and collectively, present a clear and present danger to public order and safety and are not constitutionally protected. d) That an effective means of punishing and deterring the criminal activities of dog fighters is through forfeiture of the property, both personal and real, profits, proceeds, and the instrumentalities acquired, accumulated, or used by dog fighting participants, organizers, transporters of animals and equipment, property owners who allow their premises to be used for dog fighting and other activities in support of dog fighting, and breeders and trainers of fighting dogs, and persons who steal and illegally obtain dogs and other animals for fighting, including bait and sparring animals. e) That dog fighting not only encourages and furthers antisocial values and violence but also results in the anti-socialization of dogs, thereby making them a danger to the community at large. Police officers, firefighters, utility, and other municipal workers are at increasing risk in the course of their employment on both public and private property because of the epidemic number of dogs that have been bred and trained to fight each other, as are other animals, small children, and adults. SB 318 Page 7 f) That public animal shelters, humane societies, and nonprofit animal rescue and adoption groups that rescue and care for animals bear much of the social, economic, and moral burden caused by dog fighting. Specialized multi-agency law enforcement entities, such as anticruelty task forces comprised of municipal animal control, local police, sheriff, and city and district attorneys investigating, arresting, and prosecuting dog fighting and other crimes against animals, are a critical component of the goal of reducing and eliminating this heinous crime in California, yet these agencies suffer from limited resources. g) That forfeited property, profits, proceeds, and instrumentalities acquired, accumulated, or used by dog fighting participants and others acting in support of dog fighting should be sold to support efforts to care for abused animals and the law enforcement entities specially formed to address dog fighting and animal cruelty, wherever possible. Distribution of the above should be determined by the state or local governing bodies, depending upon which is responsible for the prosecution as a result of which the proceeds were seized. EXISTING LAW : 1)States that if any person owning or having custody and control of a mischievous animal, knowing its propensities, willfully suffers the animal to go at large, or keeps the animal without ordinary care, and the animal, while at large or while not kept with ordinary care, kills any human being who has taken all precautions that the circumstances permitted or which a reasonable person would ordinarily take in a similar situation, is guilty of a felony. [Penal Code Section 399(a).] 2)Provides that if any person owning or having custody of a mischievous animal, knowing its propensities, willfully suffers it to go at large, or keeps the animal without ordinary care, and the animal, while at large or while not kept with ordinary care, causes serious bodily injury to any human being who has taken all the precautions that circumstances permitted, or which a reasonable person would ordinarily take in the same situation, is guilty of a SB 318 Page 8 misdemeanor or a felony. [Penal Code Section 399(b).] 3)Provides that any person owning or having custody or control of a dog trained to fight, attack, or kill is guilty of an alternate misdemeanor/felony, punishable by imprisonment in the state prison for two, three or four years; in the county jail not to exceed one year; by a fine not exceeding $10,000; or by both such fine and imprisonment if, as a result of the human being on two separate occasions or on one occasion causing substantial physical injury. Existing law also states that no person shall be criminally liable under this section unless he or she knew or reasonably should have known of the vicious and dangerous nature of the dog, or if the victim failed to take all the precautions that a reasonable person would ordinarily take in the same situation. [Penal Code Section 399.5(a).] 4)States that following a conviction under this section, a court shall hold a hearing to determine whether conditions of the treatment or confinement of the dog or other circumstances existing at the time of the bite or bites have changed so as to remove the danger to other persons presented by the animal. Existing law also provides that the court, after the hearing, may make any order it deems appropriate to prevent the recurrence of such an incident including, but not limited to, the removal of the animal from the area or destruction if necessary. [Penal Code Section 399.5(b).] 5)States that nothing in this section shall be construed to affect the liability of the owner of a dog under Penal Code Section 399 or any other provision of law. [Penal Code Section 399.5(d).] 6)States that this section shall not apply to a veterinarian or an on-duty animal control officer while in the performance of his or her duties or to a peace officer, as defined, if he or she is assigned to a canine unit. [Penal Code Section 399.5(e).] 7)Provides that any person, who for amusement or gain, causes any bull, bear, or other animal, not including any dog, to fight with the like kind of animal or creature, or causes any animal, including any dog, to fight with a different kind of animal or creature, or with any human being; or who, for amusement or gain, worries or injures any bull, bear, dog, or SB 318 Page 9 other animal, or causes any bull, bear or other animal, not including any dog, to worry or injure each other; any person who permits the same to be done on any premises under his or her charge or control; and any person who aids, abets, is guilty of a misdemeanor punishable by up to one year in jail and/or a fine of $5,000. [Penal Code Section 597b(a).] 8)Makes it a misdemeanor to cause, for amusement or gain, an animal to fight a like or different animal. The penalty for a first offense is up to one year in county jail and/or a fine of $5,000. A second or subsequent violation of this section or Penal Code Sections 597c or 597j is a misdemeanor with a penalty of up to one year in county jail and/or a fine up to $25,000. [Penal Code Section 597b(b).] 9)Provides that any person who is knowingly present as a spectator at any place, building, or tenement for an exhibition of animal fighting, or who is knowingly present where preparations are being made for animal fighting is guilty of a misdemeanor. (Penal Code Section 597c.) 10)Makes it a misdemeanor for any person to own, possess, keep or train any bird or animal with the intent that it be used in an exhibition of fighting. The penalty for a first offense is up to one year in county jail and/or a fine of $5,000. A second or subsequent violation of this section or Penal Code Sections 597b or 597c is a misdemeanor with a penalty of up to one year in county jail and/or a fine up to $25,000. (Penal Code Section 597j.) 11)Provides that peace officers do not need a warrant to enter a building where there is an exhibition of the fighting of birds or animals, or where preparations are being made for such an exhibition and may arrest all persons present. (Penal Code Section 597d.) 12)Provides that every owner, driver, or possessor of any animal who permits the animal to be in any building, enclosure, lane, street, square or lot, of any city, city and county, or judicial district without proper care and attention, shall, on conviction, be guilty of a misdemeanor. [Penal Code Section 597f(a).] 13)Provides that an officer making an arrest at an animal fight may take possession of all birds or animals and all SB 318 Page 10 paraphernalia, implements or other property related to the animal fighting. (Penal Code Section 599aa.) 14)Provides that any person who does any of the following is guilty of a felony and is punishable by imprisonment in the state prison for 16 months, two years or three years or by a fine not exceeding $50,000 [Penal Code Section 597.5(a)]: a) Owns, possesses, keeps, or trains any dog, with the intent that the dog shall be engaged in an exhibition of fighting with another dog. b) For amusement or gain, causes any dog to fight with another dog, or causes any dogs to injure each other. c) Permits either of the above to be done on any premises under his or her charge or control, or aids, or abets that act. 15) Provides that any person who is knowingly present, as a spectator, at any place, building, or tenement where preparations are being made for an exhibition of the fighting of dogs, with the intent to be present at those preparations, or is knowingly present at the exhibitions or at any other fighting or injuring with the intent to be present at that exhibition, fighting or injuring, is guilty of a misdemeanor. [Penal Code Section 597.5 (b).] 16) Provides that any officer making an arrest under specified animal protection statute may lawfully take possession of all birds or animals and all paraphernalia, implements or other property or things used or employed or about to be employed in the violation of any of the provisions of this code relating to the fighting of birds or animals that can be used in animal or bird fighting, in training animals or birds to fight, or to inflict pain or cruelty upon animals or birds in respect to animal or bird fighting and sets forth the care of the animals and paraphernalia seized. Upon conviction, all property seized shall be adjudged by the court to be forfeited and shall then be destroyed or otherwise disposed of as the court may order. The court may also order the person to make payment to the appropriate public entity for the costs incurred in the housing, care and feeding of the birds or animals. (Penal Code Section 599aa.) SB 318 Page 11 17)Establishes the "California Control Profits of Organized Crime Act." (Penal Code Section 186.) 18)Fails to list "dog fighting" as a "criminal profiteering activity." [Penal Code Section 186.2(a).] 19)States that the following assets of any person who is convicted a specified underlying offense and of engaging in a pattern of criminal profiteering activity are subject to forfeiture (Penal Code Section 186.3): a) Any property interest whether tangible or intangible, acquired through a pattern of criminal profiteering activity. b) All proceeds of a pattern of criminal profiteering activity, which property shall include all things of value that may have been received in exchange for the proceeds immediately derived from the pattern of criminal profiteering activity. 20)States that, notwithstanding that no response or claim has been filed, in all cases where property is forfeited, as specified, and, if necessary, sold by DGS or local governmental entity, the money forfeited or the proceeds of sale shall be distributed by the state or local governmental entity as follows (Penal Code Section 186.8): a) To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage, or security interest, if any, up to the amount of his or her interest in the property or proceeds, when the court declaring the forfeiture orders a distribution to that person. The court shall endeavor to discover all those lien holders and protect their interests and may, at its discretion, order the proceeds placed in escrow for up to an additional 60 days to ensure that all valid claims are received and processed. b) To DGS or local governmental entity for all expenditures made or incurred by it in connection with the sale of the property, including expenditures for any necessary repairs, storage, or transportation of any property seized, as specified. SB 318 Page 12 c) To the State's General Fund or local governmental entity, whichever prosecutes. FISCAL EFFECT : Unknown COMMENTS : 1)Author's Statement : According to the author, "[d]og fighting is an insidious underground, organized crime and that has reached epidemic proportions in urban communities and thrives in many rural areas as well. Many communities have been morally, socially and culturally scarred by the continuing presence of dog fighting. Children who are exposed to the unfathomable violence of dog fighting are conditioned to believe that violence is normal and are systematically desensitized to the consequential suffering. Dog fighters are often violent criminals that engage in a whole host of peripheral criminal activities, such as gangs, racketeering and drug trafficking. These activities present a clear and present danger to public order and safety and are not constitutionally protected. "In order to seek eradication of dog fighting by systematically reducing the economic resources available to these criminals who facilitate and support the crime of dog fighting, Senator Calderon has introduced SB 1775. "The measure is a means of punishing and deterring the criminal activities of dog fighters is through forfeiture of the property, both personal and real, profits, proceeds and the instrumentalities acquired, accumulated or used by dog fighting participants, organizers, transporters of animals and equipment, property owners who allow their premises to be used for dog fighting and other activities in support of dog fighting, breeders of, trainers of, and persons who steal and illegally obtain dogs and other animals for fighting, including bait and sparring animals. "Proceeds acquired through the post-conviction forfeiture process will be distributed to law enforcement agencies to help reimburse the costs associated with investigating and prosecuting dog fighting cases and animal-welfare organization that care for and rehabilitate animals rescued from dog fighters." SB 318 Page 13 2)Criminal Profiteering Generally : Criminal profiteering asset forfeiture is a criminal proceeding held in conjunction with the trial of the underlying criminal offense. Often, the same jury that heard the criminal charges also determines whether the defendant's assets were the ill-gotten gains of criminal profiteering. As a practical matter, the prosecution must assemble its evidence for the forfeiture matter simultaneously with the evidence of the crime. In contrast, drug asset forfeiture is a separate civil action. Except where the property forfeited is cash of value of at least $25,000, a conviction for an underlying drug offense is required. However, the rules of civil discovery and procedure apply. The prosecution can conduct substantial civil discovery to determine the extent of the defendant's assets. Pursuant to Public Resources Code Section 14591, it is a crime to defraud the State's Recycling Fund. However, in order for the asset forfeiture laws to apply in a recycling fraud case, the prosecutor must argue that the violation of Public Resources Code Section 14591 is "grand theft" as defined in Penal Code Section 487. The crime of grand theft is currently included in the definition of criminal profiteering contained in Penal Code Section 186.2. This bill removes the second step of proving that the recycling fraud is grand theft in an asset forfeiture case. By listing fraud of the California Beverage Container Recycling and Letter Reduction Act in Penal Code Section 186.2, a prosecutor can seek asset forfeiture without proving grand theft. Dog fighting crimes are not listed within the criminal profiteering section. One alternative to this bill is to include dog fighting crimes within this section, where the law is settled and established, rather than creating an entirely new section specifically for dog fighting crimes. 3)Criminal Profiteering Proceeds : Under existing law, the forfeited proceeds of criminal profiteering are placed in the county general fund with no directions for use. There is an exception for forfeiture in child pornography cases. In such cases, the money is deposited in the county or State Children's Trust Fund for child abuse and neglect prevention and intervention. (Penal Code Section 186.8 and Welfare and Institutions Code Sections 18966 and 18969.) In California drug asset forfeiture, law enforcement receives SB 318 Page 14 65% of forfeiture proceeds. (Health and Safety Code Sections 11469 et seq.) Of this amount, 15% must be placed in a special county or city fund used "to combat drug abuse and divert gang activity." Under federal forfeiture law allowing "adoption" of state seizures of drug proceeds, the agency seizing that property may receive as much as 80% of these proceeds. This money must be used according to guidelines set by the United States Department of Justice and require that the money be used largely for law enforcement. 4)Forfeiture for Dog Fighting : Existing law permits forfeiture for any property interest whether tangible or intangible acquired through a pattern of criminal profiteering activity. Criminal profiteering activity includes any act committed or attempted or any threat made for financial gain or advantage which act or threat may be charged as a crime under specified enumerated felony sections. (Penal Code Sections 186.2; 186.3.) The law establishes procedures for forfeiture upon a conviction of a pattern of criminal profiteering. (Penal Code Section 186 et seq.) "A pattern of criminal profiteering" is defined as engaging in at least two incidents of criminal profiteering. [Penal Code Section 186.2(b).] Existing law also permits the seizure of any animals used in fighting, as well as all paraphernalia, implements or other property or things used or employed, or about to be employed, in violation of any bird or animal fighting statute. Upon conviction, the items seized shall be deemed forfeited. (Penal Code Section 599aa.) 5)Eliminates the Requirement of a Pattern of Criminal Profiteering : This bill takes procedures established for forfeiture for criminal profiteering and applies those procedures to forfeiture of property acquired through the commission of felony dog fighting-related crimes. The only distinction between this bill and what would exist if dog fighting felonies were added to the list of criminal profiteering crimes is that no "pattern of criminal profiteering" must be shown under this bill. Under the criminal profiteering statute, the law requires that at least two incidents of the specified criminal activity must be shown prior to forfeiture of assets or property. This bill fails to require a showing of a pattern of criminal profiteering. 6)Distribution of Funds : The existing forfeiture for criminal SB 318 Page 15 profiteering statutes specifies how the funds shall be distributed. This bill copies that existing scheme but also includes the distribution of funds to "local non-profits whose primary activities include ongoing rescue, foster, or other care of animals that are the victims of dog fighting; and to law enforcement entities, including multiagency task forces, that actively investigate and prosecute animal fighting crimes." Supporters of this bill point out that having part of the forfeiture money distributed to nonprofits will assist in their burden of rescuing and caring for the animals. A question could be raised, however, about whether having part of the proceeds distributed to law enforcement investigating and prosecuting these crimes could lead to an overbroad reach of what items are forfeitable in a statute where what is used to "facilitate" the crime could be interpreted quite broadly. 7)Argument in Support : According to the California State Sheriffs' Association , "SB 318 authorizes the forfeiture of specified property that is used in the commission of certain dog fighting crimes. With the existence and practice of organized dog fighting in California, we consider asset forfeiture an effective means of deterring and punishing these criminal activities and believe it is a responsible means to address this growing trend." 8)Prior Legislation : SB 1775 (Calderon), 2007-08 Legislative Session, would have provided for the forfeiture of any property interest that was either acquired through the commission of dog fighting or being a spectator at a dog fight or used to promote, further or facilitate dog fighting. SB 1775 failed passage in the Senate Public Safety Committee. REGISTERED SUPPORT / OPPOSITION : Support California State Sheriffs' Association Los Angeles District Attorney's Office Opposition None SB 318 Page 16 Analysis Prepared by : Gabriel Caswell / PUB. S. / (916) 319-3744