BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 639 (Norby) - Asset forfeiture.
Amended: August 6, 2012 Policy Vote: Public Safety 4-2
Urgency: No Mandate: No
Hearing Date: August 6, 2012
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 639 would do the following: 1) prohibit law
enforcement from transferring seized drug assets to federal
authorities for forfeiture unless a 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, and 3) require payment of a fine of up to 24
percent of the value of the forfeited assets if the property is
transferred to federal authorities in violation of the
provisions of this bill.
Fiscal Impact:
Potentially significant revenue loss to the DOJ (General
Fund) and local law enforcement agencies, as well as
potentially significant General Fund revenue gains in the
millions of dollars to the extent more forfeitures are
executed under state versus federal law.
Ongoing significant costs (General Fund) to the courts for
new causes of action prompted by the provisions of this
bill. Costs would be dependent on the number of actions and
complexity of cases brought against agencies for alleged
violations of the provisions of this bill. Costs for 100 to
250 new unlimited civil filings would be in the range of
$150,000 to $380,000 (General 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. Existing law also requires the
distribution of funds from forfeitures and seizures after the
distribution to any innocent owners and reimbursement of
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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
Asset Forfeiture Report for 2010 (reflecting data for the state
forfeiture process), 3,066 forfeiture cases were completed and
$16.5 million in assets were disbursed (24 percent, or $4
million to the General Fund).
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 2011 Asset Forfeiture Report, California state and local
agencies received approximately $79 million in federal asset
forfeiture proceeds. The DOJ received approximately $4.5 million
in equitable sharing proceeds from these federal asset
forfeitures.
Proposed Law: This bill would provide that any property seized,
deemed whenever an agency takes possession or control of it, by
the state or local law enforcement officers who are detached to,
deputized or commissioned by, or working in conjunction with, a
federal agency, shall remain subject to the following
provisions:
Provides that seizing agencies or prosecuting attorneys
authorized to bring civil forfeiture proceedings shall not
directly or indirectly transfer seized property to any
federal agency or any governmental entity not created under
and subject to state law, unless the court enters an order,
upon petition of the prosecuting attorney, authorizing the
property to be transferred.
Where a state or local agency transfers seized property to
any federal agency for forfeiture, directly or indirectly, in
violation of the provisions of this bill, the state or local
agency would be liable to the state in any action brought by
the Attorney General or a private attorney in an amount equal
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to 24 percent of the proceeds received by the state or local
agency from the federal agency.
Provides that any moneys awarded in the action are to be
deposited in the General Fund, to be allocated consistent
with existing state asset forfeiture laws.
Provides that the Attorney General or private attorney may
recover the cost of suit in this type of action.
Provides that the court may not enter an order authorizing a
transfer unless one of the following conditions applies:
o It reasonably appears that the activity giving
rise to the investigation or seizure is interstate in
nature and sufficiently complex to justify a transfer.
o The seized property may only be forfeited
under federal law.
o Pursuing forfeiture under state law would
unduly burden prosecuting attorneys or state law
enforcement agencies.
Requires the court to provide the owner of the property a
right to be heard with respect to the transfer of property
prior to entering any order to transfer property pursuant to
the provisions of this bill.
Related Legislation: SB 1866 (Vasconcellos) 2000 was similar to
this measure 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
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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.
Furthermore, I am vetoing this bill because it would restrict
the availability of revenues which would otherwise accrue to the
General Fund for a purpose that should be evaluated in light of
competing General Fund priorities.
Staff Comments: This bill would require a court order prior to
transferring seized assets to a federal agency before a law
enforcement agency would be authorized to use federal asset
forfeiture law. The court would be required to determine if the
transfer to federal authorities is appropriate, if the case is
interstate in nature and sufficiently complex, if the seized
property may only be forfeited under federal law, or if pursuing
forfeiture under state law would unduly burden law enforcement
or prosecuting attorneys. Any violations of the process so
described would result in the state or local agency being liable
for 24 percent of the proceeds which would be deposited into the
General Fund.
By restricting the use of federal forfeiture proceedings and
adding the additional step of requiring a court order prior to
the use of federal asset forfeiture procedures, this bill could
result in significant reductions in asset forfeiture revenues to
law enforcement and the DOJ. Since many cases that result in
federal forfeiture revenue would not produce state forfeiture
revenue due to the less restrictive provisions of federal asset
forfeiture law, the provisions of this bill will not result in a
dollar-for-dollar redirection of federal equitable sharing
proceeds to the state forfeiture program. To the extent more
asset forfeitures are executed under provisions of state law,
increased revenue to the General Fund could result, however,
given the more stringent provisions under state law, it is
unknown to what degree the number of asset forfeitures performed
would increase.
To the extent agencies transfer assets in violation of these
provisions, the bill provides that the agency would be liable to
the state in any action brought by the AG or a private attorney
for a fine of up to 24 percent of the amount illegally
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transferred. It is unknown how many cases would be subject to
such actions by the AG or private attorneys, and as such, the
amount of potential revenue to the General Fund resulting from
such actions is also unknown.
The Judicial Council has indicated the provisions of this bill
could result in new causes of action, resulting in increased
workload for the trial courts that would exacerbate current
backlogs many courts experience in civil case processing. The
potential number of equitable sharing cases in the state that
would require prior court approval is unknown at this time.
Staff notes at the time of this analysis, a data request is
pending a response from the U.S. DOJ on the number of equitable
sharing cases annually in California. The number of cases that
may be filed against agencies for violations of the bill's
provisions is also unknown. To the extent the provisions of this
bill result in 100 to 250 new unlimited civil filings,
additional costs to the courts of $150,000 to $380,000 (General
Fund) could result. Costs would be significantly higher
commensurate with an increased number of filings.