BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 443 (Mitchell) - Forfeiture: controlled substances
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|Version: April 6, 2015 |Policy Vote: PUB. S. 5 - 2 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 4, 2015 |Consultant: Jolie Onodera |
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This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 443 would revise the civil asset forfeiture
process, as follows:
Requires a criminal conviction for forfeiture of alleged
cash drug proceeds and assets in excess of $25,000;
Reduces the percentage of forfeiture proceeds distributed to
prosecutors, law enforcement, and the General Fund, and
redirect those proceeds to the courts and public defense;
Requires that state standards be met before federal
forfeiture proceeds can be distributed to a state or local
law enforcement agency through equitable sharing;
Requires forfeiture proceeds received through equitable
sharing to be distributed according to the allocation
percentages specified in state law;
Grants a right to counsel for indigent defendants in civil
drug forfeiture matters;
Prohibits adoption by federal authorities of a state
forfeiture matter;
Requires the Department of Justice (DOJ) annual asset
forfeiture report to include specified data on forfeitures
initiated under state and federal law, as specified.
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Fiscal
Impact:
Potentially major revenue losses in the millions of dollars
(Local) annually to local law enforcement and prosecutorial
agencies due to the restricted use of federal asset
forfeiture and the reduced distribution percentages applied
to both state and federal asset forfeiture proceeds.
Potentially significant annual revenue losses (General
Fund) to state agencies, including the DOJ and CHP, due to
the restricted use of federal forfeiture and the reduced
distribution percentages applied to both state and federal
forfeiture proceeds.
Potentially significant net General Fund revenue gains to
the extent a greater number of asset forfeitures are
executed prospectively under state versus federal law and/or
to the extent asset forfeiture proceeds authorized under
federal law are distributed according to state law.
Potentially significant increase in trial court workload
and costs for court-appointed counsel (General Fund*),
offset in part by the specified 10 percent distribution of
forfeiture proceeds (Special Fund**) to the court in the
jurisdiction where the proceedings are initiated.
Minor ongoing costs to the DOJ to include additional data
elements in its annual report.
*Trial Court Trust Fund
**Judicial Asset Forfeiture Fund
Background: Existing state law establishes an asset forfeiture procedure
for drug-related cases and 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. Under existing state law, a conviction
is generally required on an underlying criminal case, except
where the property seized on an underlying drug offense is cash
in excess of $25,000, as specified.
Existing law also requires the distribution of funds from
forfeitures and seizures after the distribution to any innocent
owners and reimbursement of expenditures as follows: 65 percent
of proceeds to the participating law enforcement agencies, 10
percent to the prosecutorial agency, 24 percent to the General
Fund, and one percent to law enforcement training. According to
the DOJ's 2013 Annual Report: Asset Forfeiture (reflecting data
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for the state forfeiture process), 3,293 forfeiture cases were
completed and $28 million in assets were disbursed.
Federal asset forfeiture law is less stringent than state
forfeiture law in a number of respects related to requirements
for conviction and the burden of proof, restrictions on the use
of forfeited assets, eligible exemptions, and other limitations.
Additionally, under federal law, up to 80 percent of forfeiture
proceeds are distributed to the seizing agencies (in comparison
to 65 percent under state law), with at least 20 percent to the
federal government. As there is overlapping jurisdiction in
drug-related crimes, law enforcement agencies may transfer
seized assets to federal authorities through federal adoption or
equitable sharing agreements.
According to the U.S. DOJ's Fiscal Year 2014 Asset Forfeiture
Report to Congress, California state and local agencies received
approximately $77.4 million in federal asset forfeiture
proceeds. State agencies (DOJ, CHP, CDCR, Department of Fish and
Wildlife) received approximately $1.7 million in equitable
sharing proceeds from these federal asset forfeitures. The
following table reflects the level of disbursements through the
use of federal and state forfeiture for the last ten years for
which both state and federal information was available:
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| Year |Federal Forfeiture | State Forfeiture |
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| | Disbursed Assets | Disbursed Assets |
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| 2004 | $31 million | $22 million |
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| 2005 | $27 million | $20 million |
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|-------+-------------------+-------------------|
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| 2006 | $42 million | $26 million |
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| 2007 | $43 million | $28 million |
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| 2008 | $52 million | $26 million |
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| 2009 | $60 million | $39 million |
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| 2010 | $76 million | $16 million |
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| 2011 | $79 million | $18 million |
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| 2012 | $83 million | $15 million |
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| 2013 | $86 million | $28 million |
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On January 16, 2015, U.S. Attorney General Eric Holder issued a
new policy order for all U.S. Attorney offices. While the policy
prohibits wholesale federal adoption of property seized by state
or local law enforcement under state law, the order did not
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limit equitable sharing in cases involving a joint federal-state
task force or investigations. As a result, many seizures of
property by state and local authorities are still subject to
forfeiture under federal law through the equitable sharing
process.
Proposed Law:
This bill would revise the process for use of civil asset
forfeiture as follows:
Requires a criminal conviction for forfeiture of alleged
cash drug proceeds and assets in excess of $25,000;
Reduces the percentage of forfeiture proceeds distributed to
prosecutors, law enforcement, and the General Fund, and
redirect those proceeds to the courts and public defense, as
follows:
o State and local law enforcement: from 65% to
60% of proceeds;
o Prosecutorial agency: from 10% to 5% of
proceeds;
o General Fund: from 24% to 20% of proceeds;
o DA training: from 1% to no distribution of
proceeds;
o Courts: new distribution of 10% of proceeds to
be deposited in the newly created Judicial Asset
Forfeiture Fund, to be available upon appropriation;
o Public defender: new distribution of 5% of
proceeds.
Requires that state standards be met before federal
forfeiture proceeds can be distributed to a state or local
law enforcement agency through equitable sharing;
Requires forfeiture proceeds received through equitable
sharing to be distributed according to the allocation
percentages specified in state law;
Grants a right to counsel for indigent defendants in civil
drug forfeiture matters'
Prohibits adoption by federal authorities of a state
forfeiture matter;
Adds the following components to the DOJ annual asset
forfeiture report:
o The number of forfeiture actions initiated and
administered by state or local agencies under State
law, the number of cases adopted by the federal
government, and the number of cases initiated by a
joint federal-state action that was prosecuted under
federal law.
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o The number of suspects charged with a
controlled substance violation.
o The number of alleged criminal offenses that
were under federal or state law.
o The disposition of cases, including no charge,
dropped charges, acquittal, plea agreement, jury
conviction, or other.
Prior
Legislation: AB 639 (Norby) 2012 was would have prohibited a law
enforcement agency from transferring assets subject to drug
asset forfeiture to federal authorities unless a court made a
finding that the transfer was appropriate. Usage of federal
forfeiture in violation of the provisions of the bill would have
made an agency liable for a fine of up to 24 percent of the
value of the forfeiture to be deposited in the General Fund.
This bill was held on the Suspense File of this Committee.
SB 1866 (Vasconcellos) 2000 was similar to AB 639 (Norby) and
was vetoed by the Governor with the following message:
I am returning Senate Bill No. 1866 without my signature. This
bill would make various changes in drug asset forfeiture law.
This bill would require law enforcement agencies to obtain a
court order prior to transferring seized assets to a federal
agency for forfeiture. The court would be required to make
certain findings prior to permitting the transfer to the federal
agency. This bill would provide that a law enforcement agency
that violates these provisions would be liable for a fine of up
to 24% of the amount illegally transferred. The bill would
provide that property is "seized" as soon as the agency takes
control or possession of it.
While I support the additional due process protections that were
added to California's asset forfeiture laws in 1994, I do not
believe that it is appropriate to require judges to interfere
with the ability of California law enforcement officers' ability
to make use of federal law provisions when they deem that it is
appropriate to do so. In other contexts, we encourage state and
local law enforcement to make use of tougher federal law
provisions. Additional due process protections have recently
been added to federal forfeiture laws, and I do not believe that
it is appropriate to take away law enforcement's discretionary
powers to make use of these laws.
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Staff
Comments: By requiring state standards be met before federal forfeiture
proceeds can be distributed through equitable sharing, and by
revising the allocation of asset forfeiture proceeds distributed
in state and federal forfeiture cases, this bill could result in
significant reductions in asset forfeiture revenues to both
state and local agencies. To the extent many cases that
previously resulted in federal forfeiture revenue would not meet
the state standards required by this measure due to the less
restrictive provisions of federal asset forfeiture law, there
will not be a dollar-for-dollar redirection of federal equitable
sharing proceeds to the state forfeiture program. Further, for
those federal forfeitures that do meet state standards, the
requirement to disburse proceeds pursuant to state law will
result in less revenue to state and local agencies.
Staff notes this bill is keyed as a state-mandated local
program. To the extent local agencies incur additional costs
associated with distributing funds received under equitable
sharing agreements according to state law, and those costs
qualify as a reimbursable state mandate, local agencies could
submit claims for reimbursement of those costs (General Fund).
Staff notes, however, that to the extent local agencies are
opting to participate with federal agencies in joint
federal-state task forces or investigations, it does not appear
that these costs would be subject to state reimbursement.
To the extent a greater number of asset forfeitures are executed
under state law, and to the extent federal forfeiture proceeds
are distributed according to the allocation provisions in state
law, a net increase in revenues to the General Fund could result
despite the reduced General Fund allocation from 24 percent to
20 percent of state forfeiture proceeds. According to the 2014
U.S. DOJ report on federal asset forfeiture disbursements,
California state agencies received approximately $1.7 million in
equitable sharing proceeds from these federal asset forfeitures,
and in 2011, the DOJ received $4.5 million under equitable
sharing disbursements.
For illustrative purposes, assuming state law enforcement agency
revenues of $2 million from equitable sharing proceeds in any
one year that would meet state standards, under state forfeiture
distribution requirements, law enforcement would only receive
$1.2 million (60% of total), or $800,000 less in revenues. The
General Fund would be distributed 20 percent, or $400,000 (no
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share under equitable sharing), and the courts would receive
$200,000. To the extent only 50 percent of the $2 million in
equitable sharing proceeds met state standards, law enforcement
would only receive $600,000, or $1.4 million less in revenues.
The General Fund would be distributed $200,000.
To the extent the provisions of this bill significantly
increase trial court workload and costs for court-appointed
counsel (General Fund*), costs would be offset in part by the
specified 10 percent distribution of forfeiture proceedings to
the court in the jurisdiction where the proceedings are
initiated.
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