BILL NUMBER: SB 443	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 2, 2015
	AMENDED IN SENATE  APRIL 6, 2015

INTRODUCED BY   Senator Mitchell

                        FEBRUARY 25, 2015

   An act to amend Sections 11470.1, 11488.4, 11489, and 11495 of,
and to add Sections 11471.2 and 11488.7 to, the Health and Safety
Code, relating to forfeiture.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 443, as amended, Mitchell. Forfeiture: controlled substances.
   Existing law subjects certain property to forfeiture, such as
controlled substances and equipment used to process controlled
substances. Existing law allows peace officers, under specified
circumstances, to seize property that is subject to forfeiture.
Existing law authorizes specified public agencies to bring an action
to recover expenses of seizing, eradicating, destroying, or taking
remedial action with respect to any controlled substance. In a
forfeiture action with regards to cash or negotiable instruments of a
value of not less than $25,000, existing law requires the state or
local agency to prove by clear and convincing evidence that the
property is subject to forfeiture. Existing law requires seized
property or the proceeds from the sale of that property to be
distributed among specified entities. Existing law requires the
Attorney General to publish a yearly report on forfeiture within the
state.
   This bill would require a prosecuting agency to seek or obtain a
criminal conviction for the unlawful manufacture or cultivation of
any controlled substance or its precursors prior to an entry of
judgment for recovery of expenses of seizing, eradicating,
destroying, or taking remedial action with respect to any controlled
substance. The bill would prohibit maintaining an action for recovery
of expenses against a person who has been acquitted of the
underlying criminal charges.
   The bill would prohibit state or local law enforcement agencies
from transferring seized property to a federal agency seeking
adoption by the federal agency of the seized property. The bill would
also require that any property seized pursuant to any federal law
that authorizes the sharing or transfer of forfeited property be
distributed according to state law, thereby imposing a state-mandated
local program. The bill would further prohibit state or local
agencies from receiving specified seized property if a conviction for
the underlying offenses is not obtained or if federal law prohibits
distributing the proceeds or property received in accordance with
state law.
   The bill would require notices of a forfeiture action to contain
additional details, such as the rights of an interested party at a
forfeiture hearing. The bill would require the court to appoint
counsel for the defendant in the forfeiture proceeding if a defendant
in a related criminal matter is represented by court-appointed
counsel, thereby creating a state-mandated local program. The bill
would change the burden of proof that a state or local law
enforcement agency must meet to succeed in a forfeiture action with
regards to cash or negotiable instruments of a value not less than
$25,000, from a clear and convicting standard to beyond a reasonable
doubt.
   The bill would allow recovery of attorney's fees for defendants or
claimants in a forfeiture action who substantially prevail. The bill
would make specified changes to the distribution of proceeds from
forfeiture actions under state law, including reducing distributions
to seizing law enforcement agencies and prosecutor's offices, and
providing distributions to  courts and public defenders in
the jurisdiction of the proceedings.   courts, public
defenders, and a specified nonprofit organization providing training
in the use of laws permitting seizure and forfeiture of assets. 
The bill would also require the Attorney General to include
additional information on forfeiture actions in the yearly report.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 11470.1 of the Health and Safety Code is
amended to read:
   11470.1.  (a) The expenses of seizing, eradicating, destroying, or
taking remedial action with respect to, any controlled substance or
its precursors shall be recoverable from:
   (1) Any person who manufactures or cultivates a controlled
substance or its precursors in violation of this division.
   (2) Any person who aids and abets or who knowingly profits in any
manner from the manufacture or cultivation of a controlled substance
or its precursors on property owned, leased, or possessed by the
defendant, in violation of this division.
   (b) The expenses of taking remedial action with respect to any
controlled substance or its precursors shall also be recoverable from
any person liable for the costs of that remedial action under
Chapter 6.8 (commencing with Section 25300) of Division 20 of the
Health and Safety Code.
   (c) It shall be necessary to seek or obtain a criminal conviction
for the unlawful manufacture or cultivation of any controlled
substance or its precursors prior to the entry of judgment for the
recovery of expenses. If criminal charges are pending against the
defendant for the unlawful manufacture or cultivation of any
controlled substance or its precursors, an action brought pursuant to
this section shall, upon a defendant's request, be continued while
the criminal charges are pending.
   (d) The action may be brought by the district attorney, county
counsel, city attorney, the State Department of Health  Care
 Services, or Attorney General. All expenses recovered pursuant
to this section shall be remitted to the law enforcement agency which
incurred them.
   (e) (1) The burden of proof as to liability shall be on the
plaintiff and shall be by a preponderance of the evidence in an
action alleging that the defendant is liable for expenses pursuant to
paragraph (1) of subdivision (a). The burden of proof as to
liability shall be on the plaintiff and shall be by clear and
convincing evidence in an action alleging that the defendant is
liable for expenses pursuant to paragraph (2) of subdivision (a). The
burden of proof as to the amount of expenses recoverable shall be on
the plaintiff and shall be by a preponderance of the evidence in any
action brought pursuant to subdivision (a).
   (2) Notwithstanding paragraph (1), for any person convicted of a
criminal charge of the manufacture or cultivation of a controlled
substance or its precursors there shall be a presumption affecting
the burden of proof that  that   the 
person is liable.
   (f) Only expenses which meet the following requirements shall be
recoverable under this section:
   (1) The expenses were incurred in seizing, eradicating, or
destroying the controlled substance or its precursors or in taking
remedial action with respect to a hazardous substance. These expenses
may not include any costs incurred in use of the herbicide paraquat.

   (2) The expenses were incurred as a proximate result of the
defendant's manufacture or cultivation of a controlled substance in
violation of this division.
   (3) The expenses were reasonably incurred.
   (g) For purposes of this section, "remedial action" shall have the
meaning set forth in Section 25322.
   (h) For the purpose of discharge in bankruptcy, a judgment for
recovery of expenses under this section shall be deemed to be a debt
for willful and malicious injury by the defendant to another entity
or to the property of another entity.
   (i) Notwithstanding Section 526 of the Code of Civil Procedure,
the plaintiff may be granted a temporary restraining order or a
preliminary injunction, pending or during trial, to restrain the
defendant from transferring, encumbering, hypothecating, or otherwise
disposing of any assets specified by the court, if it appears by the
complaint that the plaintiff is entitled to the relief demanded and
it appears that the defendant may dispose of those assets to thwart
enforcement of the judgment.
   (j) The Legislature finds and declares that civil penalties for
the recovery of expenses incurred in enforcing the provisions of this
division shall not supplant criminal prosecution for violation of
those provisions, but shall be a supplemental remedy to criminal
enforcement.
   (k) Any testimony, admission, or any other statement made by the
defendant in any proceeding brought pursuant to this section, or any
evidence derived from the testimony, admission, or other statement,
shall not be admitted or otherwise used in any criminal proceeding
arising out of the same conduct.
   (  l  ) No action shall be brought or maintained pursuant
to this section against a person who has been acquitted of criminal
charges for conduct which may be the basis for an action under this
section.
  SEC. 2.  Section 11471.2 is added to the Health and Safety Code, to
read:
   11471.2.  (a) State or local law enforcement authorities shall not
refer or otherwise transfer property seized under state law to a
federal agency seeking the adoption by the federal agency of the
seized property. Nothing in this section shall be construed to
prohibit the federal government, or any of its agencies, from seeking
forfeiture under federal law.
   (b) All property, moneys, negotiable instruments, securities, or
other things of value received by any state or local law enforcement
agency pursuant to any federal law that authorizes the sharing or
transfer of all or a portion of forfeited property or the proceeds of
the sale of forfeited property to a state or local law enforcement
agency shall be promptly transferred, sold, and deposited as set
forth in Section 11489.
   (c) A state or local law enforcement agency may not receive all or
a portion of the forfeited property or proceeds from property
forfeited pursuant to federal law unless a defendant is convicted in
an underlying or related criminal action of an offense specified in
Section 11470 or any offense under federal law that includes all of
the elements of an offense specified in Section 11470. If federal law
prohibits compliance with Section 11489 or if a conviction in the
underlying or related criminal action is not obtained, state law
enforcement authorities shall not receive forfeited property or
proceeds from the sale of forfeited property shared or transferred
pursuant to federal law.
  SEC. 3.  Section 11488.4 of the Health and Safety Code is amended
to read:
   11488.4.  (a) (1) Except as provided in subdivision (j), if the
Department of Justice or the local governmental entity determines
that the factual circumstances do warrant that the moneys, negotiable
instruments, securities, or other things of value seized or subject
to forfeiture come within the provisions of subdivisions (a) to (g),
inclusive, of Section 11470, and are not automatically made
forfeitable or subject to court order of forfeiture or destruction by
another provision of this chapter, the Attorney General or district
attorney shall file a petition of forfeiture with the superior court
of the county in which the defendant has been charged with the
underlying criminal offense or in which the property subject to
forfeiture has been seized or, if no seizure has occurred, in the
county in which the property subject to forfeiture is located. If the
petition alleges that real property is forfeitable, the prosecuting
attorney shall cause a lis pendens to be recorded in the office of
the county recorder of each county in which the real property is
located.
   (2) A petition of forfeiture under this subdivision shall be filed
as soon as practicable, but in any case within one year of the
seizure of the property which is subject to forfeiture, or as soon as
practicable, but in any case within one year of the filing by the
Attorney General or district attorney of a lis pendens or other
process against the property, whichever is earlier.
   (b) Physical seizure of assets shall not be necessary in order to
have that particular asset alleged to be forfeitable in a petition
under this section. The prosecuting attorney may seek protective
orders for any asset pursuant to Section 11492.
   (c) The Attorney General or district attorney shall make service
of process regarding this petition upon every individual designated
in a receipt issued for the property seized. In addition, the
Attorney General or district attorney shall cause a notice of the
seizure, if any, and of the intended forfeiture proceeding, as well
as a notice stating that any interested party may file a verified
claim with the superior court of the county in which the property was
seized or if the property was not seized, a notice of the initiation
of forfeiture proceedings with respect to any interest in the
property seized or subject to forfeiture, to be served by personal
delivery or by registered mail upon any person who has an interest in
the seized property or property subject to forfeiture other than
persons designated in a receipt issued for the property seized.
Whenever a notice is delivered pursuant to this section, it shall be
accompanied by a claim form as described in Section 11488.5 and
directions for the filing and service of a claim.
   (d) An investigation shall be made by the law enforcement agency
as to any claimant to a vehicle, boat, or airplane whose right,
title, interest, or lien is of record in the Department of Motor
Vehicles or appropriate federal agency. If the law enforcement agency
finds that any person, other than the registered owner, is the legal
owner thereof, and that ownership did not arise subsequent to the
date and time of arrest or notification of the forfeiture proceedings
or seizure of the vehicle, boat, or airplane, it shall forthwith
send a notice to the legal owner at his or her address appearing on
the records of the Department of Motor Vehicles or appropriate
federal agency.
   (e) When a forfeiture action is filed, the notices shall be
published once a week for three successive weeks in a newspaper of
general circulation in the county where the seizure was made or where
the property subject to forfeiture is located.
   (f) All notices shall set forth the time within which a claim of
interest in the property seized or subject to forfeiture is required
to be filed pursuant to Section 11488.5. The notices shall explain,
in plain language, what an interested party must do and the time in
which the person must act to contest the forfeiture in a hearing. The
notices shall state what rights the interested party has at a
hearing. The notices shall also state the legal consequences for
failing to respond to the forfeiture notice.
   (g) Nothing contained in this chapter shall preclude a person,
other than a defendant, claiming an interest in property actually
seized from moving for a return of property if that person can show
standing by proving an interest in the property not assigned
subsequent to the seizure or filing of the forfeiture petition.
   (h) (1) If there is an underlying or related criminal action, a
defendant may move for the return of the property on the grounds that
there is not probable cause to believe that the property is
forfeitable pursuant to subdivisions (a) to (g), inclusive, of
Section 11470 and is not automatically made forfeitable or subject to
court order of forfeiture or destruction by another provision of
this chapter. The motion may be made prior to, during, or subsequent
to the preliminary examination. If made subsequent to the preliminary
examination, the Attorney General or district attorney may submit
the record of the preliminary hearing as evidence that probable cause
exists to believe that the underlying or related criminal violations
have occurred.
   (2) Within 15 days after a defendant's motion is granted, the
people may file a petition for a writ of mandate or prohibition
seeking appellate review of the ruling.
   (i) (1) With respect to property described in subdivisions (e) and
(g) of Section 11470 for which forfeiture is sought and as to which
forfeiture is contested, the state or local governmental entity shall
have the burden of proving beyond a reasonable doubt that the
property for which forfeiture is sought was used, or intended to be
used, to facilitate a violation of one of the offenses enumerated in
subdivision (f) or (g) of Section 11470.
   (2) In the case of property described in subdivision (f) of
Section 11470, for which forfeiture is sought and as to which
forfeiture is contested, the state or local governmental entity shall
have the burden of proving beyond a reasonable doubt that the
property for which forfeiture is sought meets the criteria for
forfeiture described in subdivision (f) of Section 11470.
   (3) In the case of property described in paragraphs (1) and (2), a
judgment of forfeiture requires as a condition precedent thereto,
that a defendant be convicted in an underlying or related criminal
action of an offense specified in subdivision (f) or (g) of Section
11470 which offense occurred within five years of the seizure of the
property subject to forfeiture or within five years of the
notification of intention to seek forfeiture. If the defendant is
found guilty of the underlying or related criminal offense, the issue
of forfeiture shall be tried before the same jury, if the trial was
by jury, or tried before the same court, if trial was by court,
unless waived by all parties. The issue of forfeiture shall be
bifurcated from the criminal trial and tried after conviction unless
waived by all the parties. If the defendant in the related criminal
matter is represented by court-appointed counsel, the trial court
shall appoint counsel for the defendant in the forfeiture proceeding.

   (4) If there is an underlying or related criminal action, and a
criminal conviction is required before a judgment of forfeiture may
be entered, the issue of forfeiture shall be tried in conjunction
therewith. Trial shall be by jury unless waived by all parties. If
there is no underlying or related criminal action, the presiding
judge of the superior court shall assign the action brought pursuant
to this chapter for trial.
   (j) The Attorney General or the district attorney of the county in
which property is subject to forfeiture under Section 11470 may,
pursuant to this subdivision, order forfeiture of personal property
not exceeding twenty-five thousand dollars ($25,000) in value. The
Attorney General or district attorney shall provide notice of
proceedings under this subdivision pursuant to subdivisions (c), (d),
(e), and (f), including:
   (1) A description of the property.
   (2) The appraised value of the property.
   (3) The date and place of seizure or location of any property not
seized but subject to forfeiture.
   (4) The violation of law alleged with respect to forfeiture of the
property.
   (5) (A) The instructions for filing and serving a claim with the
Attorney General or the district attorney pursuant to Section 11488.5
and time limits for filing a claim and claim form.
   (B) If no claims are timely filed, the Attorney General or the
district attorney shall prepare a written declaration of forfeiture
of the subject property to the state and dispose of the property in
accordance with Section 11489. A written declaration of forfeiture
signed by the Attorney General or district attorney under this
subdivision shall be deemed to provide good and sufficient title to
the forfeited property. The prosecuting agency ordering forfeiture
pursuant to this subdivision shall provide a copy of the declaration
of forfeiture to any person listed in the receipt given at the time
of seizure and to any person personally served notice of the
forfeiture proceedings.
   (C) If a claim is timely filed, then the Attorney General or
district attorney shall file a petition of forfeiture pursuant to
this section within 30 days of the receipt of the claim. The petition
of forfeiture shall then proceed pursuant to other provisions of
this chapter, except that no additional notice need be given and no
additional claim need be filed.
   (k) If in any underlying or related criminal action or proceeding,
in which a petition for forfeiture has been filed pursuant to this
section, and a criminal conviction is required before a judgment of
forfeiture may be entered, the defendant willfully fails to appear as
required, forfeiture shall be ordered as against the defendant and
judgment entered upon default, upon application of the state or local
governmental entity. In its application for default, the state or
local governmental entity shall be required to give notice to the
defendant's attorney of record, if any, in the underlying or related
criminal action, and to make a showing of due diligence to locate the
defendant. In moving for a default judgment pursuant to this
subdivision, the state or local governmental entity shall be required
to establish a prima facie case in support of its petition for
forfeiture.
  SEC. 4.  Section 11488.7 is added to the Health and Safety Code, to
read:
   11488.7.  In any forfeiture proceeding under this chapter in which
the defendant or claimant substantially prevails, the defendant or
claimant shall be entitled to recover reasonable attorneys' fees and
other litigation costs reasonably incurred by the defendant or
claimant. Any final award of fees and costs shall be paid directly to
the defendant's or claimant's attorney.
  SEC. 5.  Section 11489 of the Health and Safety Code is amended to
read:
   11489.  Notwithstanding Section 11502 and except as otherwise
provided in Section 11473, in all cases where the property is seized
pursuant to this chapter and forfeited to the state or local
governmental entity and, where necessary, sold by the Department of
General Services or local governmental entity, the money forfeited or
the proceeds of 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 mortgagee of the property, if any, up to the amount of his
or her interest in the property, when the court declaring the
forfeiture orders a distribution to that person.
   (b) The balance, if any, to accumulate, and to be distributed and
transferred quarterly in the following manner:
   (1) To the state agency 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 costs of
notice required by Section 11488.4, and for any necessary repairs,
storage, or transportation of any property seized under this chapter.

   (2) The remaining funds shall be distributed as follows:
   (A)  Sixty   Fifty-four  percent to the
state, local, or state and local law enforcement entities that
participated in the seizure distributed so as to reflect the
proportionate contribution of each agency.
   (i) Fifteen percent of the funds distributed pursuant to this
subparagraph shall be deposited in a special fund maintained by the
county, city, or city and county of any agency making the seizure or
seeking an order for forfeiture. This fund shall be used for the sole
purpose of funding programs designed to combat drug abuse and divert
gang activity, and shall wherever possible involve educators,
parents, community-based organizations and local businesses, and
uniformed law enforcement officers. Those programs that have been
evaluated as successful shall be given priority. These funds shall
not be used to supplant any state or local funds that would, in the
absence of this clause, otherwise be made available to the programs.
   It is the intent of the Legislature to cause the development and
continuation of positive intervention programs for high-risk
elementary and secondary schoolage students. Local law enforcement
should work in partnership with state and local agencies and the
private sector in administering these programs.
   (ii) The actual distribution of funds set aside pursuant to clause
(i) shall be determined by a panel consisting of the sheriff of the
county, a police chief selected by the other chiefs in the county,
and the district attorney and the chief probation officer of the
county.
   (B) Five percent to the prosecutorial agency that processes the
forfeiture action.
   (C) Ten percent to the court in the jurisdiction where the
forfeiture proceedings are initiated.
   (D) Five percent to the public defender's office or provider of
court-appointed counsel in the jurisdiction where the forfeiture
proceedings were initiated.
   (E)  Twenty   Twenty-four  percent to
the General Fund. Notwithstanding Section 13340 of the Government
Code, the moneys are hereby continuously appropriated to the General
Fund. Commencing January 1, 2016, all moneys deposited in the General
Fund pursuant to this subparagraph, in an amount not to exceed ten
million dollars ($10,000,000), shall be made available for school
safety and security, upon appropriation by the Legislature, and shall
be disbursed pursuant to Senate Bill 1255 of the 1993-94 Regular
Session, as enacted. 
   (F) One percent to a private nonprofit organization composed of
local prosecutors, which shall use these funds for the exclusive
purpose of providing a statewide program of education and training
for prosecutors and law enforcement officers in ethics and the proper
use of laws permitting the seizure and forfeiture of assets under
this chapter.  
   (G) One percent to a private nonprofit organization composed of
local criminal defense attorneys, which shall use these funds for the
exclusive purpose of providing a statewide program of education and
training in the use of laws permitting the seizure and forfeiture of
assets under this chapter. 
   (c) Notwithstanding Item 0820-101-469 of the Budget Act of 1985
(Chapter  111 of the   111,  Statutes of
1985), all funds allocated to the Department of Justice pursuant to
subparagraph (A) of paragraph (2) of subdivision (b) shall be
deposited into the Department of Justice Special Deposit Fund-State
Asset Forfeiture Account and used for the law enforcement efforts of
the state or for state or local law enforcement efforts pursuant to
Section 11493.
   All funds allocated to the Department of Justice by the federal
government under its Federal Asset Forfeiture program authorized by
the Comprehensive Crime Control Act of 1984  (Public Law 98-473)
 may be deposited directly into the Narcotics Assistance and
Relinquishment by Criminal Offender Fund and used for state and local
law enforcement efforts pursuant to Section 11493.
   Funds that are not deposited pursuant to the above paragraph shall
be deposited into the Department of Justice Special Deposit
Fund-Federal Asset Forfeiture Account.
   (d) All funds distributed to the courts pursuant to subparagraph
(C) of paragraph (2) of subdivision (b) shall be deposited into the
Judicial Asset Forfeiture Fund, which is hereby created in the State
Treasury. The moneys in the Judicial Asset Forfeiture Fund, upon
appropriation by the Legislature, shall be expended for the purpose
of administering the courts in the jurisdiction where the forfeiture
proceeding occurred.
   (e) All the funds distributed to the state or local governmental
entity pursuant to subparagraphs (A) and (B) of paragraph (2) of
subdivision (b) shall not supplant any state or local funds that
would, in the absence of this subdivision, be made available to
support the law enforcement and prosecutorial efforts of these
agencies.
   The court shall order the forfeiture proceeds distributed to the
state, local, or state and local governmental entities as provided in
this section.
   For the purposes of this section, "local governmental entity"
means any city, county, or city and county in this state.
  SEC. 6.  Section 11495 of the Health and Safety Code is amended to
read:
   11495.  (a) The funds received by the law enforcement agencies
under Section 11489 shall be deposited into an account maintained by
the Controller, county auditor, or city treasurer. These funds shall
be distributed to the law enforcement agencies at their request. The
Controller, auditor, or treasurer shall maintain a record of these
disbursements which records shall be open to public inspection,
subject to the privileges contained in Sections 1040, 1041, and 1042
of the Evidence Code.
   (b) Upon request of the governing body of the jurisdiction in
which the distributions are made, the Controller, auditor, or
treasurer shall conduct an audit of these funds and their use. In the
case of the state, the governing body shall be the Legislature.
   (c) Each year, the Attorney General shall publish a report which
sets forth the following information for the state, each county, each
city, and each city and county:
   (1) The number of forfeiture actions initiated and administered by
state or local agencies under California law, the number of cases
adopted by the federal government, and the number of cases initiated
by a joint federal-state action that were prosecuted under federal
law.
   (2) The number of cases and the administrative number or court
docket number of each case for which forfeiture was ordered or
declared.
   (3) The number of suspects charged with a controlled substance
violation.
   (4) The number of alleged criminal offenses that were under
federal or state law.
   (5) The disposition of cases, including no charge, dropped
charges, acquittal, plea agreement, jury conviction, or other.
   (6) The value of the assets forfeited.
   (7) The recipients of the forfeited assets, the amounts received,
and the date of the disbursement.
   (d) The Attorney General shall develop administrative guidelines
for the collection and publication of the information required in
subdivision (c).
   (e) The Attorney General's report shall cover the calendar year
and shall be made no later than March 1 of each year beginning with
the year after the enactment of this law.
  SEC. 7.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.