BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 443  


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          Date of Hearing:  August 19, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 443  
          (Mitchell) - As Amended July 16, 2015


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          Yes


          SUMMARY:


          This bill requires additional due process protection in cases  
          where the State of California seeks to forfeit assets in  
          connection with specified drug offenses and changes the process  








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          concerning how money or property forfeited under federal  
          forfeiture law is distributed to state or local law enforcement.  
           Specifically, this bill:


          1)Requires additional due process protection in cases where the  
            State of California seeks to forfeit assets in connection with  
            specified drug offenses, such as:


             a)   Prohibiting the transfer of property seized under state  
               law to a federal agency.


             b)   Requiring a conviction in the underlying criminal case  
               before assets can be seized.


             c)   Requiring representation by court appointed counsel in  
               an asset forfeiture proceeding if a court appointed counsel  
               was provided in the underlying criminal case.


             d)   Requiring claimants to be reimbursed for attorneys' fee  
               if the claimant substantially prevails in a forfeiture  
               proceeding.   


          1)Creates the State Asset Forfeiture Fund for Law Enforcement  
            Purposes (SAFFFLEP ) 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.   
            Upon appropriation by the Legislature, requires that the money  
            in the SAFFFLEP be distributed based on population.


          2)Requires all property, moneys (under $25,000) and things of  
            value seized and not claimed to be distributed as follows: 









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             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 are to 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.

          FISCAL EFFECT:


          1)An unquantifiable revenue loss, in the millions, to state and  
            local agencies by:


              a)    Requiring a conviction of the underlying crime prior  
                to asset forfeiture, and prohibiting local agency  
                participation in federal asset distribution if there is no  
                conviction.  


              b)    Prohibiting the transfer of property to federal  
                agencies; thus preventing local and state agencies from  








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                receiving equitable share of seized property


              c)    Reducing from 65% to 40% the share of seized assets  
                that are distributed to state and local entities based on  
                their proportionate contribution to the case and  
                eliminating the 10% allocation to the prosecutorial agency  
                which process the forfeiture action.  This loss is  
                somewhat mitigated by providing 34% share to the newly  
                created SAFFFLEP - a fund for specific activities, such as  
                criminal and  civil court functions, prosecution, public  
                defense, law enforcement, crime prevention, etc. 


          2)Federal law does not allow for the transfer of asset  
            forfeiture revenue to the General Fund, and it appears that  
            the proposed per capita distribution of the SAFFFLEP  is  
            inconsistent with federal law.  This provision may jeopardize  
            California's ability to participate in the federal "equitable  
            sharing" program.  


          3)A redistribution of reduced asset forfeiture revenue by  
            distributing a specific asset forfeiture revenue based on  
            population, instead of the law enforcement's agency's  
            contribution to the case.   


          4)Increased reimbursable mandated costs in the hundreds of  
            thousands of dollars (GF) to local public defenders' offices  
            to provide legal representation in civil proceedings related  
            to forfeitures.   


          5)Increased costs to state and local prosecuting agencies for  
            attorneys' fees where the claimant substantially prevails in a  
            forfeiture proceeding.  










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          COMMENTS:


          1)Purpose.  According to the author, "SB 443 will reign in  
            abuses surrounding the practice of 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."


            The intent of this bill is to remove the financial incentive  
            for California law enforcement agencies to transfer seized  
            assets to federal agencies, and to participate in criminal  
            cases where there is "financial reward" for participation.  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.


          2)Background.  Compared to California law, Federal law gives law  
            enforcement more power and puts fewer burdens on the  
            government before property is forfeited.  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 or less, including cars, guns, and boats.


            Under federal law, 20% of revenue from forfeited assets is  
            retained by the federal agency involved, and 80% is allocated  
            to the local agencies involved in the seizure in proportion to  
            their involvement in the case.  Under state law, 24% of  
            revenue from forfeited assets is deposited in the General  








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            Fund, after specified expenses are covered, and the remaining  
            76% is allocated as specified.


          3)Argument in Support:  According to Drug Policy Alliance, "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  
            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."


          4)Argument in Opposition:  According to the Los Angeles County  
            District Attorney's Office, 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)."








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          "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."
            "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."




          Analysis Prepared by:Pedro R. Reyes / APPR. / (916)  
          319-2081