BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair A
2011-2012 Regular Session B
6
3
9
AB 639 (Norby)
As Amended May 27, 2011
Hearing date: July 5, 2011
Health and Safety Code
JM:mc
DRUG ASSET FORFEITURE
HISTORY
Source: Institute for Justice
Prior Legislation: SB 1866 (Vasconcellos) - 2000, Vetoed
SB 1255 (Hughes) - Ch. 1022, Stats. 1994
AB 114 (Burton) - Ch. 664, Stats. 1994
Support: American Civil Liberties Union; Americans for
Forfeiture Reform; California Alliance to Protect
Private Property Rights; California National
Organization for the Reform of Marijuana Laws; Drug
Policy Alliance; Forfeiture Endangers American Rights,
Inc.; Law Enforcement Against Prohibition; Libertarian
Party; Small Business & Entrepreneurship Council
Opposition:California District Attorneys Association; Attorney
General of California; California State Sheriffs'
Association; California Police Chiefs Association;
California Narcotic Officers Association; Los Angeles
County District Attorney's Office; Association for Los
Angeles Deputy Sheriffs; Riverside Sheriffs'
Association
Assembly Floor Vote: Ayes 67 - Noes 7
(More)
AB 639 (Norby)
PageB
KEY ISSUES
WHERE A CALIFORNIA LAW ENFORCEMENT AGENCY SEIZES ASSETS SUBJECT
TO DRUG ASSET FORFEITURE, SHOULD THE AGENCY BE PROHIBITED FROM
TRANSFERRING THE ASSETS TO FEDERAL AUTHORITIES FOR FORFEITURE,
UNLESS A COURT MAKES A FINDING THAT THE TRANSFER IS APPROPRIATE,
AS SPECIFIED?
(CONTINUED)
WHERE AN AGENCY USES FEDERAL FORFEITURE IN VIOLATION OF THIS BILL,
SHOULD THE AGENCY BE LIABLE FOR A FINE OF UP TO 24% OF THE VALUE OF
THE FORFEITURE TO BE DEPOSITED IN THE STATE GENERAL FUND?
PURPOSE
The purpose of this bill is to 1) prohibit a California law
enforcement agency from transferring seized drug assets to
federal authorities for forfeiture unless a California court
finds that the federal forfeiture is necessary or appropriate,
as specified; 2) state that drug assets are "seized" when the
agency takes control of the property; 3) require payment of a
fine of up to 24% of the value of the forfeited assets if the
property is transferred to federal authorities in violation of
this bill; and 4) require the Attorney General to post its
annual forfeiture report on-line for public access and to
require that the report include data on federal forfeitures, as
specified.
Existing law establishes an asset-forfeiture procedure for
drug-related cases. (Health & Saf. Code §§ 11469-11495.)
Existing law provides that the principal objective of forfeiture
is law enforcement and that forfeiture shall be conducted with
due process. (Health & Saf. Code § 11469, subd. (a).)
(More)
AB 639 (Norby)
PageC
Existing law sets out detailed procedures for a drug forfeiture
action, including: the filing of a petition for forfeiture
within one year of seizure, notice of seizure, publication of
notice, the right to a jury trial, and a motion for return of
property. (Health & Saf. Code § 11488.4.)
Existing law requires a conviction in an underlying criminal
case and provides that the burden of proof in the (civil)
judicial forfeiture action shall be beyond a reasonable doubt.
(Health & Saf. Code § 11488.4, subd. (i)(3).)
Existing law does not require a conviction on an underlying
drug offense where the property sought to be forfeited is cash
or negotiable securities over $25,000, and allows forfeiture
upon a burden of proof of "clear and convincing evidence" under
these circumstances. (Health & Saf. Code § 11488.4, subd.
(i)(4).)
Existing law allows for administrative (nonjudicial) forfeiture
for cases involving personal property worth $25,000 or less. A
full hearing is required if a claim as to the property is filed,
as specified. (Health & Saf. Code § 11488.4, subd. (j).)
Existing law provides a scheme for the distribution of fund from
forfeitures and seizures. Specifically, after distribution to
any bona fide innocent owners and reimbursement of expenses, 65%
of proceeds go to participating law enforcement agencies, 10% to
the prosecutorial agency, and 24% to the General Fund. (Health
& Saf. Code § 11489.)
Existing law requires the Department of Justice (DOJ) to publish
an annual report detailing specified information on forfeiture
actions. (Health & Saf. Code § 11495, subd. (c).)
This bill provides that property subject to drug asset
forfeiture is "seized" as soon as the agency takes control or
possession of it.
(More)
AB 639 (Norby)
PageD
This bill prohibits state law enforcement, except by court
order, from turning over seized assets to the Federal
Government, or seizing them jointly with federal officers,
thereby making seized property subject to federal civil
forfeiture law rather than state law.
This bill prohibits the court from entering an order authorizing
a transfer to federal authorities unless:
It reasonably appears the criminal conduct is interstate
in nature and sufficiently complex to justify transfer;
The seized property is only subject to forfeiture under
federal law; or,
The pursuit of state forfeiture would unduly burden
state prosecutors or law enforcement.
This bill requires the court to provide the owner of property a
right to be heard before a case is transferred to federal
authorities.
This bill provides that if assets are transferred in violation
of these provisions, the transferring agency shall be liable to
the state for a fine of up to 24% of the amount illegally
transferred.
This bill provides that the report to be generated by the DOJ
about forfeiture actions be published in book form and also be
made available to the public via electronic reports.
This bill requires DOJ to include the following additional
information in its annual report:
The number of forfeiture actions initiated under federal
law in which a state or local agency had a role and a
description of the role served in each action by each state
or local agency, including the following, as specified:
o The date property was seized, the date the
(More)
AB 639 (Norby)
PageE
forfeiture was transferred and the date forfeiture was
ordered.
o The federal case number, if known.
o Whether the state or local agency originated
the seizure or forfeiture.
o Whether the state or local agency supplied
unique or indispensable assistance in the federal
forfeiture action.
o The number of hours expended by the state or
local agency on the case.
o Whether a federal agency has classified the
federal forfeiture case as a "joint" seizure and
forfeiture action, or as an "adoption" by federal
authorities of a case initiated by a state or local
agency.
The value of assets forfeited under federal law in each
case in which a state or local agency had a role.
The value of all shares of assets forfeited under
federal law that are returned to a state or local agency
and the date of receipt of the shares.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation.
As these cases have progressed, prison conditions have
continued to be assailed, and the scrutiny of the federal courts
over California's prisons has intensified.
On June 30, 2005, in a class action lawsuit filed four years
earlier, the United States District Court for the Northern
District of California established a Receivership to take
control of the delivery of medical services to all California
state prisoners confined by the California Department of
Corrections and Rehabilitation ("CDCR"). In December of 2006,
plaintiffs in two federal lawsuits against CDCR sought a
court-ordered limit on the prison population pursuant to the
(More)
AB 639 (Norby)
PageF
federal Prison Litigation Reform Act. On January 12, 2010, a
three-judge federal panel issued an order requiring California
to reduce its inmate population to 137.5 percent of design
capacity -- a reduction at that time of roughly 40,000 inmates
-- within two years. The court stayed implementation of its
ruling pending the state's appeal to the U.S. Supreme Court.
On May 23, 2011, the United States Supreme Court upheld the
decision of the three-judge panel in its entirety, giving
California two years from the date of its ruling to reduce its
prison population to 137.5 percent of design capacity, subject
to the right of the state to seek modifications in appropriate
circumstances.
In response to the unresolved prison capacity crisis, in early
2007 the Senate Committee on Public Safety began holding
legislative proposals which could further exacerbate prison
overcrowding through new or expanded felony prosecutions.
This bill does not appear to aggravate the prison overcrowding
crisis described above.
COMMENTS
1. Need for This Bill
According to the author:
Law enforcement is ignoring California's asset
forfeiture laws. Instead, it is too often opting out
of state law and instead collaborating with federal
officials to prosecute Californians under federal law.
Law enforcement is motivated to prefer federal
prosecution of certain crimes, particularly drug
offenses, because, under federal law, it reaps a
higher percentage of proceeds from the sale of
forfeited assets under federal law than the percentage
(More)
AB 639 (Norby)
PageG
in state law. Specifically, compared to most other
states, California's forfeiture laws provide better
protections to property owners and do not provide as
strong of a profit incentive to law enforcement to
take property. For the government to forfeit property
in California, it must have, at a minimum, clear and
convincing evidence for cash associated with criminal
activity and requires a beyond a reasonable doubt
standard for forfeiting real property. Furthermore,
when an innocent person with an interest in the
property seeks to protect that interest, the
burden is on the government to show that the owner
knew about the property's illegal use. Law
enforcement in California keeps 65 percent of all
revenues generated through civil forfeiture.
Given that California places greater limits on state
and local governments in forfeiting property, it
should not be surprising that California law
enforcement officials are aggressively participating
in "equitable sharing" with the federal government,
collecting $305 million in an eight-year period from
2000 to 2008. In 2000, California legislators voted to
forbid state and local agencies from using the federal
equitable sharing loophole except in limited
circumstances, but then-Governor Gray Davis vetoed the
measure. "Equitable sharing" is a loophole provided
by federal law that allows state law enforcement to
turn over seized assets to the federal government, or
they may seize them jointly with federal officers. The
property is then subject to federal civil forfeiture
law-not state law. Federal law provides as much as 80
percent of the proceeds to state law enforcement and
stacks the deck against property owners. Thus, the
equitable sharing loophole provides a way for state
and local law enforcement to profit from forfeitures
that they may not be able to under California law.
2. Major Differences Between California and Federal Forfeiture
Law
(More)
AB 639 (Norby)
PageH
Federal forfeiture law is less burdensome for law enforcement
and gives law enforcement more benefits that state law. Some
ways in which California and federal provisions differ are:
Conviction:
o California: Conviction generally required.
(Health & Saf. Code §11488.4, subd. (i)(3)
o Federal: No conviction required. (18 U.S.C. §
981.)
Burden of proof:
o California: Beyond a reasonable doubt for most
cases. The burden is clear and convincing evidence
(with no underlying conviction) in cases involving at
least $25,000 in cash. (Health & Saf. Code §11488.4,
subd. (i)(4).)
o Federal: Preponderance of the evidence. (18
U.S.C. § 983 (c)(1).)
Administrative forfeiture (limited or no court
hearings):
o California: Only available for cases involving
personal property worth $25,000 or less. (Health &
Saf. Code §11488.4, subd. (i)(4).)
o Federal: Available for any amount of currency
and personal property valued at $500,000 or less,
including cars, guns, and boats. (19 U.S.C. § 1607
(a).)
Use of forfeited assets:
o California: No direct use of seized assets,
such as vehicles or planes. (Health & Saf. Code §
11489.)
o Federal: Seizing agency can use the asset or
transfer it to a state or local agency that
participated in the proceedings. (18 U.S.C. § 881
(e)(1)(A).)
Disbursement of Forfeited Assets:
(More)
AB 639 (Norby)
PageI
o California: 65% to law enforcement agency, 10%
to prosecuting agency, 24% to general fund, 1% to law
enforcement training. (Health & Saf. Code § 11489,
subd. (b).)
o Federal: 80% (maximum) of seized proceeds to
the agency or agencies involved in the seizure of the
assets. (21 U.S.C. § 881 (e); U.S. DOJ, Guide to
Equitable Sharing, p. 12.)<1>
Exemptions for Family Property, other Limitations:
o California: No forfeiture of family residence
partly owned by innocent party and
no forfeiture of vehicle necessary for family
transportation. (Health & Saf. Code §11470, subds. (e)
and (g).
o Federal: No family exemption
o California: If property subject to seizure is
a boat, vehicle or other conveyance, the drugs
associated with the vehicle must be of a specified
weight or volume. (Health & Saf. Code §1147, subd.
(e).)
o Federal law: No weight or volume limits apply
under federal law. (21 U.S.C. § 881 (a)(4).)
3. Basis of Federal Forfeiture - Policy Issues Raised by Transfer
by California Law Enforcement of Forfeiture Cases to Federal
Authorities
(More)
---------------------------
<1> http://www.justice.gov/usao/ri/projects/esguidelines.pdf
Because there is overlapping jurisdiction in drug-related
crimes, California law enforcement agencies can circumvent
relatively stringent state forfeiture laws by transferring
seized assets to federal authorities. This process is referred
to as federal adoption or equitable sharing. To participate in
equitable sharing and federal adoption, a California law
enforcement agency must execute an agreement with U.S. DOJ. DOJ
promulgates guidelines for forfeiture adoption, including that
the district attorney in the county of seizure must consent to
the transfer. Procedurally, the local or state agency files a
request to federal authorities to adopt a state seizure.
Minimum value amounts apply and vary by district.<2>
The amount of money and property disbursed to local or state law
enforcement is based on "the degree of direct law enforcement
effort" by the state or local agency. (21 U.S.C. §881 (e)(3).)
State and local and agencies can receive up to 80% of the
proceeds of an adopted forfeiture case.<3>
Given the much stricter standards for California forfeiture, it
can be argued that state and local agencies have substantial
incentives to avoid California law and work with federal
agencies instead. This bill requires a court to determine if
transfer is appropriate, arguably limiting inducements for law
enforcement to make decisions based on financial, not law
enforcement, considerations. The court can order transfer of a
seizure to federal authorities if the case is complex and
interstate in nature, or if forfeiture is only available under
federal law, or if state forfeiture would be unduly burdensome
for law enforcement.
4. Likely Amount of Additional State Forfeiture Proceeds Under
This Bill
---------------------------
<2> (See, California District Attorneys Association Seminar
Material - Intro. to Fed. Forfeiture, Janet Hudson, Asst. U.S.
Attorney, May 1999.)
<3>.Guide to Equitable Sharing, 2009, p. 12
http://www.justice.gov/usao/ri/projects/esguidelines.pdf
(More)
AB 639 (Norby)
PageK
This bill would not result in a simple redirection of federal
equitable sharing proceeds to the state forfeiture program.
Many cases that will produce federal forfeiture revenue would
not produce state forfeiture revenue because the requirements
for state forfeiture are much stricter than federal forfeiture.
Under federal law, the prosecutor need not even file criminal
charges, let alone obtain a conviction. In the forfeiture
action, the prosecutor need only prove by a preponderance of the
evidence that the seized assets were the proceeds or
instrumentalities of drug crime. Under state law, the
prosecutor must generally obtain a conviction for an underlying
drug offense. He or she must then prove beyond a reasonable
doubt that the assets were derived from or supported the drug
crime. Thus, some number of cases that would result in a
successful forfeiture proceeding under federal law could not be
maintained under state forfeiture law.
5. Federal Asset Forfeiture Proceeds Disbursed to California
Agencies
The use of federal asset forfeiture - through adoption and
equitable sharing - has increased fairly significantly over the
past decade, as demonstrated by the following table.
California and Federal Forfeiture Disbursed to California Law
Enforcement, 2000-2010
SHOULD CALIFORNIA LAW ENFORCEMENT BE REQUIRED TO OBTAIN A COURT
ORDER BEFORE SEIZED DRUG ASSETS CAN BE TRANSFERRED TO FEDERAL
AUTHORITIES FOR FORFEITURE, OR PAY A FINE OF 24% OF THE PROCEEDS
RECEIVED BY THE AGENCY?
SHOULD DOJ BE REQUIRED TO INCLUDE DATA ABOUT FEDERAL ASSET
FORFEITURE CASES, AS SPECIFIED, IN THE ANNUAL REPORT ON DRUG
ASSET FORFEITURE?
AB 639 (Norby)
PageL
***************