BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                                     SB 443


                                                                     Page A


          Date of Hearing:   July 14, 2014


          Counsel:               David Billingsley








                         ASSEMBLY COMMITTEE ON PUBLIC SAFETY


                                  Bill Quirk, Chair





          SB  
                        443(Mitchell) - As Amended June 2, 2015


                       As Proposed to be Amended in Committee








          SUMMARY:  Requires additional due process protection in cases  
          where the State of California seeks to forfeit assets in  
          connection with specified drug offenses.  Changes the process  
          concerning how money or property forfeited under federal  
          forfeiture law is distributed to state or local law enforcement.  











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           Specifically, this bill:  



          1)States that it shall be necessary to obtain a criminal  
            conviction for the unlawful manufacture or cultivation of any  
            controlled substance or its precursors in order to recover law  
            enforcement expenses related to the seizing or destroying of  
            illegal drugs.  

          2)Specifies that state and local law enforcement authorities  
            shall not refer, or otherwise transfer, property seized under  
            state law to a federal agency seeking the adoption of the  
            seized property.  



          3)Clarifies that language of this bill does not prohibit the  
            federal government from seeking forfeiture under federal law,  
            or sharing proceeds from federal forfeiture proceedings with  
            state and local law enforcement in those situations where  
            there are joint investigations.



          4)States that all property, money, 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  
            forfeited property to a state or local law enforcement agency  
            shall be promptly transferred, sold, and distributed through  
            the State Asset Forfeiture Fund for Law Enforcement Purposes.



          5)Creates the State Asset Forfeiture Fund for Law Enforcement  
            Purposes where money or property received by state or local  
            law enforcement based on any federal law that authorizes  
            sharing of forfeited property will be deposited.  Money from  
            the fund will be distributed primarily for criminal justice  











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            purposes and the courts.



          6)Provides that the money in the State Asset Forfeiture Fund for  
            Law Enforcement Purpose shall be distributed as follows:


             a)   To the state agency or local government for costs  
               incurred by it in connection with the sale of the property,  
               including expenditures for any necessary costs for public  
               notice, hearings, or for any necessary repairs, storage, or  
               transportation of any property lawfully forfeited;


             b)   The remaining funds shall be distributed as follows:


               i)     Twenty four percent (24%) to the General Fund; and,


               ii)    Seventy six percent (76%) to the State Asset  
                 Forfeiture Fund for Courts and Criminal Justice Purposes  
                 to be made available, upon appropriation by the  
                 Legislature, for purposes of criminal and civil court  
                 functions, prosecution, public defense and indigent  
                 defense, law enforcement, crime prevention including  
                 afterschool programs for adolescents and drug treatment  
                 for adolescents and adults, and victim services.




          7)Provides that a state or local law enforcement agency may not  
            receive forfeited property or proceeds from property forfeited  
            pursuant to federal law unless a defendant is convicted in an  
            underlying or related criminal action of a specified offense,  
            or any offense under federal law that includes all of the  
            elements of a specified California offense.











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          8)Requires a conviction on the related, specified criminal  
            charge to forfeit property in every case in which a claim is  
            filed to contest the forfeiture of property, unless the  
            defendant in the related criminal case willfully fails to  
            appear for court.



          9)Requires proof beyond a reasonable doubt in all forfeiture  
            cases which are contested.


          10)States that 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. 



          11)Specifies that in any forfeiture proceeding 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. 



          12)Allows forfeiture of property less than $25,000 if notice of  
            the forfeiture has been provided, as specified, and no claims  
            have been made.



          13)Specifies that property less than $25,000, which has been  
            forfeited because no claim has been made on the property, will  
            be disposed of in the manner required by State Asset  
            Forfeiture Fund for Law Enforcement Purposes.












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          14)Allows more time to make a claim contesting forfeiture.



          15)Allows property of $25,000 or more to be forfeited through a  
            judicial process when no claim to the forfeited property has  
            been made within the specified time.  Requires property  
            forfeited in this manner will be disposed as directed by State  
            Asset Forfeiture Fund for Law Enforcement Purposes.



          16)Any property forfeited after a contested forfeiture hearing  
            with be disposed of with 40% going to state and local law  
            enforcement groups that participated in the seizure, 24% to  
            the general fund, 34% to the State Asset Forfeiture Fund for  
            Courts and Criminal Justice Purposes, 1% to nonprofit group of  
            prosecutors to provide forfeiture education, 1% to nonprofit  
            group of criminal defense attorney to educate on forfeiture.



          17) 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:



             a)   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; 

             b)   The number of cases and the administrative number or  
               court docket number of each case for which forfeiture was  
               ordered or declared;











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             c)    The number of suspects charged with a controlled  
               substance violation;



             d)    The number of alleged criminal offenses that were under  
               federal or state law;



             e)   The disposition of cases, including no charge, dropped  
               charges, acquittal, plea agreement, jury conviction, or  
               other;



             f)   The value of the assets forfeited; and,



             g)   The recipients of the forfeited assets, the amounts  
               received, and the date of the disbursement.





          EXISTING LAW: 



          1)Establishes an asset-forfeiture procedure for drug-related  
            cases.  (Health & Saf. Code, §§ 11469-11495.)














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          2)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.)



          3)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 in cases  
            where the value of the forfeited property is under $25,000.   
            (Health & Saf. Code, § 11488.4, subd. (i)(3).)



          4)Specifies that forfeiture 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).)



          5)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).)



          6)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, 24% to the General Fund, and  
            1% to nonprofit group of prosecutors to provide forfeiture  
            education.  (Health & Saf. Code § 11489.)











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          7)Requires the Department of Justice (DOJ) to publish an annual  
            report detailing specified information on forfeiture actions.   
            (Health & Saf. Code, § 11495, subd. (c).)
            
          FISCAL EFFECT:  Unknown.





          COMMENTS:  



          1)Author's Statement:  According to the author, "SB 443 will  
            reign in abuses surrounding the practice to civil asset  
            forfeiture, and reestablish the most basic tenets of  
            Constitutional law and values, requiring that in most cases, a  
            defendant be convicted of an underlying crime before cash or  
            property can be permanently seized. This bill will require  
            that more drug asset forfeiture cases be handled under state  
            law, rather than transferred to federal courts, and that  
            seized assets are dispersed to local law enforcement agencies,  
            courts, defenders, prosecutors and the General Fund, pursuant  
            to state law."

          2)Differences in California and Federal Forfeiture Law:    
            Compared to California law, Federal law gives law enforcement  
            more power and puts fewer burdens on the government before  
            property is forfeited. Some ways in which California and  
            federal provisions differ are:

             a)   Administrative forfeiture:  While state law limits cases  
               involving personal property worth $25,000 or less, under  
               federal law administrative forfeiture is available for any  
               amount of currency and personal property valued at $500,000  











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               or less, including cars, guns, and boats.  [19 U.S.C.  
               Section 1607(a).]

             b)   Burden of proof:  Under federal civil forfeiture law,  
               the government's burden of proof is "preponderance of the  
               evidence."  [18 U.S.C. Section 983(c)(1).]  This is a lower  
               standard than the "beyond a reasonable doubt" standard used  
               in California.

             c)   Conviction:  In contrast to California law, federal  
               civil forfeiture law does not require a conviction in any  
               cases.  (18 U.S.C. Section 981.)

             d)   Use of forfeited assets:  Under federal law, a seizing  
               agency can use the seized asset or transfer it to a state  
               or local agency that participated in the proceedings.  [18  
               U.S.C. Section 881(e)(1)(A).]  Direct use of the forfeited  
               asset is disallowed under state law.

          3)Three Exceptions to the California Requirement that Forfeiture  
            Action Must Have a Conviction:  
          
             a)   The forfeiture of cash or negotiable instruments whose  
               value is at least $25,000. (Health & Saf. Code 11488.4,  
               sud. (i)(4)-(5).)

             b)   When the defendant in the underlying criminal case is  
               also the claimant in the forfeiture action and willfully  
               fails to appear in the criminal case.  Application for  
               forfeiture must be approved by a judge.  The prosecution  
               must provide notice of its application for entry of default  
               to the defense attorney and make a showing of due diligence  
               to locate the defendant.  (Health & Saf. Code 11488.4, sud.  
               (k).) 

             c)   When no one files a claim contesting the forfeiture.  
               (Health & Saf. Code 11488.4, sud. (i)(1)-(3).) 













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          4)Federal Law on Sharing Forfeiture Proceeds with State and  
            Local Law Enforcement Agencies:  Section 881(e)(3) of Title  
            21, United States Code, provides that: The Attorney General  
            shall assure that any property transferred to a State or local  
            law enforcement agency? (A) has a value that bears a  
            reasonable relationship to the degree of direct participation  
            of the State or local agency in the law enforcement effort  
            resulting in the forfeiture, taking into account the total  
            value of all property forfeited and the total law enforcement  
            effort as a whole; and with respect to the violation of law on  
            which the forfeiture is based; and (B) will serve to encourage  
            further cooperation between the recipient State or local  
            agency and Federal law enforcement agencies

          5)The New Federal Policy on Adoption of State Forfeiture Actions  
            will have Limited Effects:  On January 16, 2015, United States  
            Attorney General Holder issued a new policy order for all  
            United States Attorney offices.  The policy was widely  
            described as effectively ending equitable sharing of federal  
            forfeiture proceeds with local law enforcement agencies.   
            However, the order did not limit equitable sharing in cases  
            involving a joint federal-state task forces or investigations.  
             The policy prohibits wholesale "adoption" of what would  
            otherwise solely be a state or local seizure and forfeiture.   
            Adoptions - counted as a subset of equitable sharing - account  
            for about 3% of forfeiture deposits.  Total equitable sharing  
            amounts to about 22% of forfeiture deposits.  Thus,  
            approximately 85% of the proceeds of federal forfeiture that  
            goes to state and local agencies is unaffected by the new  
            policy.<1> 



          ---------------------------
          <1>


            
          http://www.washingtonpost.com/news/the-watch/wp/2015/01/20/how-much-civil-asset-forfeiture-will-holders-new-policy-actually-preve 
          nt/










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          The policy provides: 

          Federal adoption of property seized by state or local law  
            enforcement under state law is prohibited, except for property  
            that directly relates to public safety concerns, including  
            firearms. Ammunition, explosives and property associated with  
            child pornography.  To the extent that seizures of property  
            other than these?categories are ? considered for federal  
            adoption?such seizures [must be approved by] the Assistant  
            Attorney General for the Criminal Division.  The prohibition ?  
            includes?seizures by state or local law enforcement of  
            vehicles, valuable, and cash, [including currency, checks]  
            stored value cards" and specified other categories

          The policy order allows equitable sharing as follows:   

          This order does not apply to (1) seizures by state and local  
            authorities working together with federal authorities in a  
            joint task force; (2) seizures?that are the result of joint  
            federal-state investigations or that are coordinated with  
            federal authorities as part of ongoing federal investigations;  
            or (3) seizures pursuant to federal search warrant, obtained  
            from federal courts to take custody of assets originally  
            seized under state law.  
            It thus appears that many seizures of property by state  
            and local authorities are still subject to forfeiture  
            under federal law through the equitable sharing process.   
            It appears that joint task forces and federal-state  
            cooperation in investigations is relatively common.  Just  
            concerning joint task force operations, the Drug  
            Enforcement Administration website<2> explains:





            In 2013, the DEA State and Local Task Force Program managed  
            259 state and local task forces, which included Program  



            --------------------------
          <2> http://www.dea.gov/ops/taskforces.shtml










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            Funded, Provisional, HIDTA, and Tactical Diversion Squads. The  
            difference between funded and provisional state and local task  
            forces is that the financial support for funded task forces is  
            provided by DEA headquarters and includes additional resources  
            for state and local overtime. Provisional task forces are  
            supported by the operating budgets of DEA field division  
            offices, without resources from DEA headquarters, and do not  
            include state and local overtime. These task forces are  
            staffed by over 2,190 DEA special agents and over 2,556 state  
            and local officers. Participating state and local task force  
            officers are deputized to perform the same functions as DEA  
            special agents.  (Italics added.)

          6)Proposed Amendments:  The proposed amendments attempt to  
            address some of the concerns that have been articulated by  
            district attorney offices and other stakeholders.

          The proposed amendments permit forfeiture in cases where the  
            defendant willfully fails to appear in his or her criminal  
            court proceedings.

          The proposed amendments eliminate earlier language which would  
            have provided that 5% of the proceeds of forfeited property go  
            to the public defender  office in county in which the  
            forfeiture proceeding was initiated.   Concerns had been  
            articulated that if public defender offices received money  
            directly connected to their defense of forfeiture actions,  
            there would be a conflict of interest.  The proposed  
            amendments also eliminate money going directly to the district  
            attorney offices that processes the forfeiture action, to  
            remove any similar conflict of interest.  Similar concerns  
            have been raised regarding law enforcement agencies who are  
            currently the direct beneficiary of any successful forfeiture  
            action in which they are involved.

          As an alternative, the proposed amendments create the State  
            Asset Forfeiture Fund for Law Enforcement Purposes.  The  
            proposed amendments direct that money and property forfeited  
            through federal law which is shared with state and local law  











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            enforcement agencies be distributed through that fund. The  
            proposed amendments also direct that money or property  
            forfeited because no person makes a claim to challenge the  
            forfeiture, will go through the same fund.  

          Forfeited property and money received by state or local law  
            enforcement from federal authorities as part of equitable  
            sharing or other federal program will be deposited in the  
            State Asset Forfeiture Fund for Law Enforcement Purposes to be  
            distributed to law enforcement agencies statewide based on the  
            population of the jurisdiction they serve. 

          Forfeited property and proceeds obtained through California  
            forfeiture process when no individual files a claim with  
            distributed through the State Asset Forfeiture Fund for Law  
            Enforcement Purposes in the following manner:   Reimburse law  
            enforcement agencies and local government for any costs  
            related to the forfeited property;  remaining money in the  
            fund will to distributed to the General Fund (24%) and to the  
            State Asset Forfeiture Fund for Courts and Criminal Justice  
            Purposes (76%) to fund law enforcement, criminal and civil  
            courts, prosecution and public defense, crime prevention, drug  
            treatment and victim services.

          7)Argument in Support:  According to Drug Policy Alliance, "SB  
            443 would reestablish the most basic tenets of Constitutional  
            law and values, requiring that in most cases, a defendant be  
            convicted of an underlying crime before cash or property can  
            be permanently seized.  It will require that more drug asset  
            forfeiture cases be handled under state law, rather than  
            transferred to federal courts, and that seized assets are  
            dispersed to local law enforcement agencies, courts,  
            defenders, prosecutors and the General Fund, pursuant to state  
            law.

          "From 2002 to 2013, the vast majority of assets seized by law  
            enforcement agencies in California were steered into the  
            federal courts.  From 2002 to 2013, the annual revenue from  
            asset forfeiture to law enforcement coffers in California  











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            pursuant to state actions, state laws and through state  
            courts, remained stable at approximately 18.3 million dollars.  
             However, assets seized from California residents and revenue  
            provided to California law enforcement agencies through  
            federal courts and pursuant to federal laws more than tripled  
            from 2002 to over $100 million dollars per year in 2012 and  
            2013.  SB 43 by Senator Mitchell will create conditions  
            whereby most cases will remain in our state courts and be  
            prosecuted according to the laws of California, which have  
            superior due process standards and property rights  
            protections, including protection of guiltless spouses and  
            family members.  And importantly, Senator Mitchell's bill  
            provides that in state law, there will be no permanent loss of  
            property or cash without a conviction for the underlying  
            criminal case.

          "Furthermore, SB 443 will eliminate the current fiscal  
            incentives offered by the federal government that rewards  
            California law enforcement agencies for steering cases into  
            the federal process.  Under current law, the federal  
                                                                            Department of Justice of Department of Treasury may seize  
            property and cash, and force permanent forfeiture without  
            charging a person with any crime, or seeking a conviction.   
            And under federal law and so-called "equitable sharing," the  
            local law enforcement gets an 80% slice of the forfeiture,  
            even when there was no criminal conviction.  Under Senator  
            Mitchell's bill, local law enforcement entities will only  
            receive revenue from seizure and forfeiture, if the federal  
            government convicts the defendants.

          "Whatever its original intent, there is a growing bipartisan  
            consensus that civil asset forfeiture has turned into  
            government run amok and that reform is urgently needed to  
            protect common people from unconstitutional overreach.  Civil  
            asset forfeiture was originally conceived as a way to drain  
            resources away from drug 'kingpins', these programs have been  
            perverted into an ongoing attack on low-income individuals and  
            families who are unable to afford to fight the federal  
            government in civil court.  Furthermore, despite federal laws  











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            and guidelines that intended to insure non-supplantation,  
            civil asset forfeiture has become a relied upon source of  
            funding for law enforcement agencies all across the state.   
            Civil asset seizure was never intended to be a primary funding  
            source for law enforcement, and the fact that it has evolved  
            into such has not only led to greater abuses, but also an  
            unhealthy and growing overreliance on it."

          8)Argument in Opposition:  According to the Los Angeles County  
            District Attorney's Office, "SB 443 would require that  
            federally received asset forfeiture monies be distributed  
            according to state rather than federal law.  The language  
            contradicts federal law and policy relative to the US  
            Department of Justice (DOJ) Equitable Sharing Program.  Our  
            county participates in numerous coordinated efforts to address  
            large scale unlawful narcotics operations. These efforts  
            involve federal, state and local law enforcement.  We believe  
            that the conflict of law created by SB 443 may jeopardize our  
            ability to share in the proceeds of recovered assets and to  
            participate in these important anti-drug task forces.

          "Current law does not require a criminal conviction for drug  
            asset forfeiture where the property to be forfeited is cash or  
            a negotiable instrument worth $25,000 or more.  SB 443 would  
            require a criminal conviction in these cases.  This is  
            problematic as many criminals fail to file a claim for large  
            amounts of drug money in order to  avoid  criminal prosecution.   
            In these cases, it is fairly clear that the seized asset is  
            drug money but asset forfeiture would no longer be available  
            in cases where the defendant cannot be prosecuted (possibly  
            because he or she has fled the jurisdiction or witnesses are  
            unavailable to testify).

          "SB 443 reduces the amount of forfeited assets that may be  
            distributed to law enforcement and prosecutors, thus hurting  
            our ability to fund future anti-drug efforts.  Loss of these  
            funds could make it difficult to investigate and prosecute  
            major illicit drug operations in California.












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          "SB 443 provides for a portion of asset forfeiture proceeds to  
            go to public defenders offices and provides for the  
            appointment of the public defender to represent the claimants  
            when they have been appointed in the related criminal case.   
            This will create a conflict for public defenders as they will  
            financially benefit from forfeitures that they will now be  
            tasked with opposing.

          "SB 443 provides for payment of attorney fees to the prevailing  
            party in asset forfeiture cases.  However, there is no source  
            of revenue identified to pay these fees.  This could result in  
            a drain upon county general funds or, alternatively, result in  
            a reluctance to pursue valid cases, due to the risk to the  
            county budget."

          9)Prior Legislation:  

             a)   AB 639 (Norby), Legislative Session of 2011-2012,  would  
               have changed drug asset forfeiture law to discourage  
               federal adoption of such cases.   AB 639 died in Senate  
               Appropriations Committee.

             b)   SB 1866 (Vasconcellos), Legislative Session of  
               1999-2000, would have made changes in asset forfeiture  
               transfers, shifts distribution of money from forfeited  
               property and required the Attorney General to publish  
               electronic reports.  SB 1866 was vetoed.

             c)   AB 114 (Burton), Chapter 314, Statutes of 1994, provided  
               guidelines for the use of asset forfeiture.




          REGISTERED SUPPORT / OPPOSITION:















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          Support


          


          American Civil Liberties Union of California (Co-Sponsor)


          Drug Policy Alliance (Co-Sponsor)
          Institute for Justice (Co-Sponsor) 
          A New Path
          Alpha Project
          Americans for SafeAccess


          Amity Foundation
          Asian Americans Advancing Justice
          Asian American Drug Abuse Program
          Broken No More
          California State Conference of the NAACP
          California Prison Focus


          California Public Defenders Association
          Californians United for a Responsible Budget
          Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA)
          Courage Campaign
          Dignity and Power Now
          FACTS Education Fund
          Friends Committee on Legislation of California
          Further The Work
          Immigrant Legal Resource Center
          Inland Empire Immigrant Youth Coalition
          Justice Fellowship
          Justice Not Jails
          Law Enforcement Against Prohibition
          Lawyers Committee for Civil Rights of the San Francisco Bay Area











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          Legal Services for Prisoners with Children
          LIUNA Locals 777 & 792
          Los Angeles Regional reentry Partnership
          Marijuana Policy Project
          National Organization for the Reform of Marijuana Laws
          New Way of Life Re-Entry Project
          R Street Insitute
          San Diego Organizing Project
          Tarzana Treatment Centers, Inc.
          Western Center on Law and Poverty
          Westward Liberty
          William C. Velasquez Institute
          20 Law Professors

          Opposition


          


          Association of Deputy District Attorneys


          Association of Los Angeles Deputy Sheriffs
          California Association of Code Enforcement Officers
          California College and University Police Chiefs Association
          California District Attorneys Association 
          California Police Chiefs Association
          California Narcotic Officers Association
          California State Lodge, Fraternal Order of Police
          California State Sheriffs' Association
          George Gascon, District Attorney, City and County of San  
          Francisco
          Nancy O'Malley, District Attorney, Alameda County
          Los Angeles County District Attorney's Office
          Los Angeles County Professional Police Officer Association
          Los Angeles Police Protective League
          Long Beach Police Officers Association
          Riverside Sheriff's Association











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          Sacramento County Deputy Sheriffs' Association
          San Diego County District Attorney
          Ventura County District Attorney



          Analysis Prepared by:David Billingsley / PUB. S. / (916)  
          319-3744