A. Asset Forfeiture Laws in Colorado

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1 Re: ASSET FORFEITURE REFORM Included: (a) Brief summary of current asset forfeiture laws in Colorado (b) History of asset forfeiture reform in Colorado (1992-legislation) (c) Proposed asset forfeiture reform legislation (d) Summary Oregon's asset forfeiture initiative (approved by voters in 2000) (e) Summary of Utah's asset forfeiture initiative (approved by voters in 2000) A. Asset Forfeiture Laws in Colorado Colorado Public Nuisance Abatement Act (CRS et seq.) Legislative Intent: Policy of general assembly that every public nuisance shall be restrained, prevented, abated and perpetually enjoined. Proceedings are intended to be remedial and equitable in nature not punitive. Basis for Forfeiture: Permits the forfeiture of any (or part of a) building, the ground upon which it is situated, all fixtures and contents, vehicles, currency, or any real property deemed to be a Class 1 public nuisance (There are Class 1,2,3, 4--only Class 1 allows for forfeiture) Class 1 Public Nuisance when property is used for, intended for use, or are proceeds traceable to : ( ) (a) prostitution (b) gambling (c) manufacture, cultivation, growth, production, sale, storage or possession of a controlled substance or any other drug for which the possession is an offense under the laws of this state, or any imitation controlled substance (except possession of less than 8 ounces of marijuana) (e) theft by receiving (f) manufacture, sale, distribution of drug paraphernalia (g) prostitution of a child (h) sexual exploitation of a child (i) used in the commission of any felony (j) used in the commission of felony vehicular eluding (k) used in commission of hit and run with serious bodily injury or death (l) used in commission of drive-by crime Property Title: Upon seizure (probable cause), all rights, title, and interest in seized property shall immediately vest in the state Colorado Contraband Forfeiture Act (CRS , et seq.) Legislative Intent: Proceedings are remedial in nature and designed to benefit the public good by appropriating contraband property for use by law enforcement. Basis for Forfeiture: Permits the forfeiture of vehicle, currency, fixtures and contents of building, personal property or contraband property which is used, intended for use, or represent proceeds traceable to: (a) Any unlawful manufacture, cultivation, growth, production, possession, transportation, carrying, concealing, processing, or distribution for sale of, or sale of any controlled substance, imitation controlled substance or drug paraphernalia (except possession of less than 8 ounces of marijuana) Property Title: Upon seizure (probable cause), all rights, title, and interest in seized property shall immediately vest in the state Affirmative Defense: Property owner must prove by preponderance of evidence that the person took all reasonable steps to prevent the property from becoming involved in subject act Burden of Proof: Plaintiff- Preponderance of evidence that possession of property is unlawful or that the owner of the property or interest therein was involved in, knew of the subject act, or reasonably should have known of the subject act. Evidentiary Presumption: Rebuttable presumption of "substantial connection" between currency and the acts specified if: currency in the amount of $1,000 or more was seized at or close to the time of the act and current was seized, or if traces of controlled substances were discovered on the currency or if animal indicates the presence of the odor of a controlled substance on the currency. Trial to court-no jury 1

2 Affirmative Defense: If owner proves by preponderance of evidence that the person took all reasonable steps to avoid, prevent, abate improper use of property ( (5.2) Burden of Proof: Plaintiff- Preponderance of evidence that possession of property is unlawful or that the owner of the property or interest therein was involved in, knew of the subject act, or reasonably should have known of the subject act. Evidentiary Presumption: Rebuttable presumption of "substantial connection" between currency and the acts specified if: currency in the amount of $1,000 or more was seized at or close to the time of the act and current was seized, or if traces of controlled substances were discovered on the currency or if animal indicates the presence of the odor of a controlled substance on the currency. Trial to court--no jury ( ) No right to counsel (can't claim ineffective assistance of counsel People v. Cobb, 944 P.2d 574 (Colo.App.1996) Forfeiture does not require criminal conviction Sandstrom v. District Court (884 P.2d 707 Colo.1996) Disposition of proceeds: ( ) (a) Sheriff sells property-is reimbursed for costs of sale, maintenance (b) plaintiff for costs of forfeiture action (c) balance to seizing agency/agencies substantially involved with court order finding that proceeds can be used by seizing agency (either cash from sale or property in lieu of sale) (d) Any person who suffers bodily injury or property damage as a result of action deemed a nuisance if person petitions the court. Proceeds received are not considered part of normal operating budget Reporting of Forfeited Property: "each seizing agency which receives forfeiture proceeds shall conform with reporting, audit, and disposition procedures enumerated in this article." ( ) went into effect 7/1/92 No right to counsel (can't claim ineffective assistance of counsel People v. Cobb, 944 P.2d 574 (Colo.App.1996) Forfeiture does not require criminal conviction Sandstrom v. District Court (884 P.2d 707 Colo.1996) Disposition of proceeds: (in this order) (a) to sheriff for reasonable fees and costs of sale; (b) payment of the balance due on any lien (c) 10% to general fund for appropriation to judicial department for payment of costs of proceeding (d) 10% to general fund for appropriation to the department of public safety for law enforcement purposes (including, but not limited to administration of the Department of Corrections DOC) (e) 1.5% to district attorney as fees (f) Balance (1) seizing agency for costs of storage, maintenance, security and forfeiture of such action (2) to the seizing agency (cash or property in lieu of sale) (3) to any person who suffers bodily injury or property damage as a result of subject acts which resulted in forfeiture if person petitions the court. Receipt of federally forfeited property: authorizes state law enforcement to receive proceeds from any property forfeited by the federal government pursuant to 21 U.S.C. 881(e). Such revenues shall be in addition to moneys appropriated to law enforcement by general assembly. ( ) Reporting of Forfeited Property: Each seizing agency which receives any property or proceeds which have been forfeited under state or federal law shall submit a written report to the governmental body which has approval authority over the budget of such seizing agency and to the Colorado Department of Local Affairs. Such report shall include an accounting of how any forfeited moneys were expended in the fiscal year. Such information is subject to audit in accordance with CRS ( ) Reporting requirement does not apply to the attorney general, the Colorado state patrol, or CBI. B. History of asset forfeiture reform in Colorado (1992-legislation) House Bill (sponsor Reps. Jerry Kopel (D-Denver), Dyer, Reeser and Sen. Bill Owens R-Aurora) would have required law enforcement to obtain a conviction in order to keep any property, turn over the proceeds to the elected body that appropriates money for their 2

3 operations, and let crime victims, not police, be first compensated for damages/injuries. Defeated 7-5 in House Judiciary Committee. (Bulk of testimony against bill came from John Suthers, then DA for 4th Judicial District, Norm Early DA-Denver, Bob Gallagher-DA 18th Judicial District) Senate Bill (sponsored by Sen. Joan Johnson (D-Westminster) and Rep. Tim Foster (R- Grand Junction). Shifts burden of proof to government. Judge consider whether a person was the primary user or possessor of the property, whether it was conveyed to someone else to avoid forfeiture, whether it was used in criminal activity and whether the owner knew or should have known. Requires law enforcement to account for forfeiture money and established special panels in each county to oversee how the proceeds were used. Senate Bill (sponsored by Senator Meiklejohn and Rep. Adkins) passed Senate Only probable cause needed for seizure not conviction of crime; "innocent owner" must be proven by property owner; etc. (Appears to have been killed in House by vote.) C. Proposed asset forfeiture reform legislation NOTE: reforms should cover all forfeitures, (criminal, civil (both state & municipal) Require a criminal conviction prior to forfeiture (criminal conviction required in criminal forfeiture but not civil) Proceeds should not go to police or prosecutors (except reimbursement for costs of prosecution, sale, and maintenance of property ultimately forfeited). Balance (and bulk) of forfeiture moneys should be placed in general fund for allocation to Department of Human Services, Alcohol and Drug Abuse Division for drug education, treatment, and prevention. Standardized reporting requirements and deadline & penalty for noncomplying agencies. (possibly an annual audit by Local Affairs for all law enforcement agencies) Requiring Colorado State Patrol, Attorney General and CBI to also report (currently exempted from reporting requirements.) Burden of proof in civil forfeiture to "clear and convincing" standard (now it is "preponderance of evidence") Hardship release of seized property (safety valve) allows owner to petition court for use of property due to hardship Right to counsel for indigent owners Right to jury trial Proportionality review "forfeiture must be proportional to the underlying crime" Compensation for damaged property (if owner wins & property is damaged while in the control of the state Award of attorney fees for owners who win Require state court to approve seizure transfers to federal government and penalties for law enforcement that attempt to illegally divert seizures and forfeiture proceeds. One problem that inevitably occurs if a state enacts state forfeiture reforms is that the state and local police begin to transfer seizure to the federal government. Under the federal "Equitable Sharing Program", state and local police can get up to 80% of the value of the property forfeited under federal law. 3

4 D. Summary Oregon's asset forfeiture initiative (approved by voters in 2000) "Oregon Property Protection Act of 2000" (Measure 3) Constitutional amendment Requires forfeiture proceeds to be used for drug treatment services after deducting the cost of (a) satisfying any liens; (b) administering the forfeiture proceeding and property disposition. Admin costs not to exceed 25% of proceeds. (**Includes any moneys received from federal forfeitures pursuant to the "Equitable Sharing Program".) Requires criminal conviction prior to forfeiture in most cases. "Clear and convincing standard" that property was instrumental in facilitating crime or to be proceeds of crime. Innocent Owner Defense. Persons who have not been charged or convicted of a crime shall not have their property forfeited unless it is shown by "clear and convincing evidence" that the person took the property with the intent to defeat the forfeiture or a conviction is later obtained. Proportionality. Requires property forfeitures to be "substantially proportional" to the underlying offense and the value of the property. Prohibits the use of forfeiture proceeds for law enforcement purposes Prohibits transfers of seized property to the federal government unless a court determines that the case is interstate in nature and complex; the property can only be forfeited under federal law if pursuing a forfeiture under state law would be unduly burdensome. Penalties for violating provisions of this act. Any person acting under color of law, official title or position who takes any action which violates any provision of the act shall be subject to a civil penalty in an amount treble to the value of the forfeited property. Does not impair judicial immunity if otherwise applicable. Annual Audit of forfeitures. Requires all forfeiting agencies to report the nature and disposition of all property and proceeds. Creates asset forfeiture oversight committee that will review reports and publish an annual, public report. Asset forfeiture oversight committee also empowered to make recommendations to ensure that asset forfeiture proceedings are handled in a manner that is fair to innocent property owners and interest holders. E. Summary of Utah's asset forfeiture initiative (approved by voters in 2000) Initiative B "Utah Property Protection Act" Constitutional amendment Establishes uniform procedures for the civil and criminal forfeiture in Utah Requires forfeiture proceeds to be deposited into the Utah Uniform School Fund Allows victims of crime to be compensated from forfeiture proceeds Shifts the burden of proof in civil forfeiture to government Raises the standard of proof to "clear and convincing evidence" Establishes innocent owner defense 4

5 Allows for hardship release of seized property during forfeiture proceeding Provides for the appointment of counsel for indigent claimants in civil and criminal forfeiture proceedings, including third-party owners in criminal forfeiture proceedings who are not charged as criminal defendants. Civil and criminal forfeitures must be "substantially proportional". Also, property must be "instrumental" in the commission of the crime, not merely incidental Expedites civil forfeiture proceedings Allows property owners to get their property back if they are not provided with timely notice of seizure Establishes that owners shall not be required to post a bond to dispute a property seizure. Requires the government to pay pre and post judgment interest to owners who prevail in civl and criminal forfeiture Allows property owners to be compensated for property damaged during a seizure Prohibits the seizing agencies from charging a property owner with a fee for holding seized property if the owner wins the case Prohibits the use of forfeiture proceeds to be used to pay law enforcement agencies, informants, and prosecutors Requires a judge to approve of any transfers of seized property to the federal government and only under limited circumstances Establishes penalties for law enforcement agencies that illegally transfer property seizures to the federal government and that do not transfer forfeiture funds to the Uniform School Fund Requires annual state audit of the asset forfeiture, which is available to public. 5