SF 446 (LSB 2284SV (1) 87)

SENATE FILE 446

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO SSB 1148)

A BILL FOR

An Act relating to asset forfeiture by prohibiting civil asset forfeiture for property valued at less than a minimum amount, raising the standard of proof for asset forfeiture, prohibiting the transfer of certain seized property to the federal government for forfeiture, requiring a proportionality review for property to be forfeited, and requiring law enforcement agencies to retain certain records related to asset forfeiture and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 809A.1, Code 2017, is amended by adding the following new subsections:
   NEW SUBSECTION.  01.  “Convicted” or “conviction” includes a finding of guilt, a plea of guilty, deferred judgment, deferred or suspended sentence, adjudication of delinquency, or circumstances where a person is not charged with a criminal offense that is a serious or aggravated misdemeanor or felony related to the action for forfeiture based in whole or in part on the person’s agreement to provide information regarding the criminal activity of another person.
   NEW SUBSECTION.  001.  “Instrumentality” means property otherwise lawful to possess that is used in or intended to be used in a public offense.
   NEW SUBSECTION.  1A.  “Minimum civil forfeiture amount” means fifteen thousand dollars, as adjusted under this subsection. Beginning January 1, 2019, the minimum civil forfeiture amount shall be annually increased or decreased by applying the percentage change in the consumer price index for all urban consumers for the twelve-month period ending in September of the prior year published in the federal register by the United States department of labor, bureau of labor statistics. The attorney general shall calculate the new amount and publish it on the attorney general’s internet site, and such calculation and publication is exempt from the provisions of chapter 17A.
    Sec. 2.  Section 809A.5, subsection 2, paragraph b, Code 2017, is amended to read as follows:
   b.  The owner or interest holder is criminally responsible for the conduct giving rise to its forfeiture, whether or not the owner or interest holder is prosecuted or convicted.  If the forfeiture is for property valued at less than the minimum civil forfeiture amount, the owner or interest holder must also be convicted of the criminal offense for the conduct giving rise to forfeiture.
    Sec. 3.  NEW SECTION.  809A.6A  Limitation on transfer of seized property to federal law enforcement.
   A law enforcement agency or prosecuting authority in this state shall not directly or indirectly transfer or refer any property seized by the agency or authority to any federal law enforcement authority or other federal agency for purposes of forfeiture under federal law unless the value of the seized property exceeds one hundred thousand dollars, excluding the potential value of the sale of contraband, or the property is being transferred or referred for federal criminal forfeiture proceedings.
    Sec. 4.  Section 809A.8, subsection 1, paragraph a, subparagraph (2), Code 2017, is amended to read as follows:
   (2)  File a judicial forfeiture proceeding within ninety days after notice of pending forfeiture of property upon which a proper claim has been timely filed pursuant to section 809A.11, or, if the value of the property is less than the minimum civil forfeiture amount, file a judicial forfeiture proceeding within ninety days after the conclusion of the criminal prosecution.
    Sec. 5.  Section 809A.8, subsection 1, paragraph d, unnumbered paragraph 1, Code 2017, is amended to read as follows:
   If a petition is timely filed, the prosecuting attorney may delay filing a judicial forfeiture proceeding for one hundred eighty days after the notice of pending forfeiture, or, if the value of the property is less than the minimum civil forfeiture amount, one hundred eighty days after the conclusion of the criminal prosecution, and the following procedures shall apply:
    Sec. 6.  Section 809A.12, subsections 6, 7, and 14, Code 2017, are amended to read as follows:
   6.  A defendant convicted in any whose criminal proceeding results in a conviction is precluded from later denying the essential allegations of the criminal offense of which the defendant was convicted in any proceeding pursuant to this section. For the purposes of this section, a conviction results from a verdict or a plea of guilty. A defendant whose conviction is overturned on appeal may file a motion to correct, vacate, or modify a judgment of forfeiture under this subsection.
   7.  In any proceeding under this chapter, if a claim is based on an exemption provided for in this chapter, the burden of proving the existence of the exemption is on the claimant. However, once the claimant comes forward with some evidence supporting the existence of the exemption, the state prosecuting attorney must provide some evidence to negate the assertion of the prove by clear and convincing evidence that the exemption does not apply. The state’s evidence must be substantial, though not necessarily rising to the level of a preponderance of the evidence, and more than a simple assertion of the claimant’s interest in the property. The agency or political subdivision bringing the forfeiture action shall pay the reasonable attorney fees and costs, as determined by the court, incurred by a claimant who prevails on a claim for exemption in a proceeding under this chapter.
   14.  An acquittal or dismissal in a criminal proceeding shall not preclude civil proceedings under this chapter if the value of the property to be forfeited is equal to or exceeds the minimum civil forfeiture amount.
    Sec. 7.  Section 809A.12, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  7A.  The prosecuting attorney must prove by clear and convincing evidence that the property is property subject to forfeiture.
    Sec. 8.  Section 809A.12, subsection 10, paragraph a, Code 2017, is amended to read as follows:
   a.  The If the property to be forfeited is equal to or exceeds the minimum civil forfeiture amount, that the person has engaged in the conduct giving rise to forfeiture.  If the property to be forfeited is less than the minimum civil forfeiture amount, that the person was convicted for the conduct giving rise to forfeiture.
    Sec. 9.  NEW SECTION.  809A.12A  Limitations on civil forfeiture.
   1.  If the total value of the property seized for forfeiture is less than the minimum civil forfeiture amount, a judicial forfeiture proceeding shall not be brought unless one of the following applies:
   a.  The conduct giving rise to forfeiture resulted in a conviction.
   b.  The property owner is deceased.
   c.  Charges have been filed against the property owner, a warrant was issued for the arrest of the property owner, and either of the following applies:
   (1)  The property owner is outside the state and is unable to be extradited or brought back to the state for prosecution.
   (2)  Law enforcement has made reasonable efforts to locate and arrest the property owner, but the property owner has not been located.
   d.  The property owner has not claimed the property subject to forfeiture or asserted any interest in the property at any time during or after the seizure of the property, and all claims brought under section 809A.11 have been denied.
   2.  The prosecuting attorney has the burden to prove by clear and convincing evidence that the value of the property is or exceeds the minimum civil forfeiture amount in any civil action.
    Sec. 10.  NEW SECTION.  809A.12B  Proportionality review.
   1.  Property shall not be forfeited as an instrumentality under this chapter to the extent that the amount or value of the property is disproportionate to the severity of the offense. The prosecuting attorney shall have the burden to prove by clear and convincing evidence that the amount or value of the property subject to forfeiture is proportionate to the severity of the offense.
   2.  Contraband and any proceeds obtained from the offense are not subject to proportionality review under this section.
   3.  In determining the severity of the offense for purposes of forfeiture of an instrumentality, the court shall consider all relevant factors including but not limited to the following:
   a.  The seriousness of the offense and its impact on the community, including the duration of the activity and the harm caused or intended by the person whose property is subject to forfeiture.
   b.  The extent to which the person whose property is subject to forfeiture participated in the offense.
   c.  Whether the offense was completed or attempted.
   d.  The extent to which the property was used in committing the offense.
   e.  The sentence imposed for committing the offense that is the basis of the forfeiture, if applicable.
   4.  In determining the value of the property that is an instrumentality and that is subject to forfeiture, the court shall consider relevant factors including but not limited to the following:
   a.  The fair market value of the property.
   b.  The value of the property to the person whose property is subject to forfeiture, including hardship to the person or to innocent persons if the property were forfeited. The burden shall be on the person whose property is subject to forfeiture to show the value of the property to that person and any hardship to that person.
    Sec. 11.  Section 809A.13, subsections 7 and 8, Code 2017, are amended to read as follows:
   7.  The forfeiture hearing shall be held without a jury and within sixty days after service of the complaint unless continued for good cause. The prosecuting attorney shall have the initial burden of proving by clear and convincing evidence that the property is subject to forfeiture by a preponderance of the evidence. If the state so proves the property is subject to forfeiture, the claimant has the burden of proving may assert that the claimant has an interest in the property which is exempt from forfeiture under this chapter by a preponderance of the evidence.  If the claimant asserts the existence of the exemption, the prosecuting attorney has the burden of proving by clear and convincing evidence that the exemption does not apply.
   8.  The court shall order the interest in the property returned or conveyed to the claimant if the prosecuting attorney fails to meet the state’s burden or the claimant establishes by a preponderance of the evidence that the claimant has an interest that is exempt from forfeiture. The court shall order all other property forfeited to the state and conduct further proceedings pursuant to sections 809A.16 and 809A.17.
    Sec. 12.  Section 809A.14, subsection 7, paragraph d, Code 2017, is amended to read as follows:
   d.  In accordance with the findings made at the hearing, the court may amend the order of forfeiture if it determines that any claimant has established by a preponderance of the evidence that the claimant has properly petitioned for recognition of exemption under section 809A.11 and that the prosecuting attorney has not shown, by clear and convincing evidence, that the claimant does not have an interest in the property which is exempt under the provisions of section 809A.5.
    Sec. 13.  Section 809A.15, subsection 1, unnumbered paragraph 1, Code 2017, is amended to read as follows:
   The court shall order the forfeiture of any other property of a person, including a claimant, up to the value of that person’s property found by the court to be subject to forfeiture under this chapter, if the prosecuting attorney proves by clear and convincing evidence that any of the following applies to the person’s forfeitable property:
    Sec. 14.  Section 809A.16, subsection 2, Code 2017, is amended to read as follows:
   2.  Within one hundred eighty days of the date of a declaration of forfeiture, an owner or interest holder in property declared forfeited pursuant to subsection 1 may petition the court to have the declaration of forfeiture set aside, after making a prima facie showing that the state failed to serve proper notice as provided by section 809A.13. Upon such a showing the court shall allow the state to demonstrate by a preponderance of the clear and convincing evidence that notice was properly served. If the state fails to meet its burden of proof, the court may order the declaration of forfeiture set aside. The state may proceed with judicial proceedings pursuant to this chapter.
    Sec. 15.  NEW SECTION.  809A.18A  Recordkeeping.
   1.  Each law enforcement agency that has custody of any property that is subject to this chapter shall adopt and comply with a written internal control policy that does all of the following:
   a.  Provides for keeping detailed records as to the amount of property acquired by the agency and the date property was acquired.
   b.  Provides for keeping detailed records of the disposition of the property, which shall include but not be limited to all of the following:
   (1)  The manner in which the property was disposed, the date of disposition, detailed financial records concerning any property sold, and the name of any person who received the property. The record shall not identify or enable identification of the individual officer who seized any item of property.
   (2)  An itemized list of the specific expenditures made with amounts that are gained from the sale of the property and that are retained by the agency, including the specific amount expended on each expenditure, except that the policy shall not provide for or permit the identification of any specific expenditure that is made in an ongoing investigation.
   2.  The records kept under the internal control policy shall be open to public inspection during the agency’s regular business hours. The policy adopted under this section is a public record open for inspection under chapter 22.
    Sec. 16.  APPLICABILITY.  This Act applies to forfeiture proceedings that begin on or after the effective date of this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to asset forfeiture and includes a prohibition on civil asset forfeiture for property valued at less than a minimum amount, increases the standard of proof required for asset forfeiture to clear and convincing evidence, prohibits the transfer of seized property to the federal government for forfeiture for property valued at less than a minimum amount, requires a proportionality review with regard to property to be forfeited, and requires law enforcement agencies to retain certain records related to asset forfeiture.
   CIVIL ASSET FORFEITURE. Asset forfeiture is a process by which contraband and proceeds or instrumentalities related to criminal activity may be seized by the state and sold. Under current law, conduct giving rise to forfeiture is an act or omission which is a public offense that is a serious or aggravated misdemeanor or felony. However, forfeiture proceedings are not precluded if the state fails to convict, indict, or charge the person whose conduct gave rise to forfeiture.
   Under the bill, asset forfeiture for property valued at less than $15,000 is prohibited unless the conduct giving rise to forfeiture resulted in a conviction, the property owner is deceased, charges were filed and an arrest warrant was issued but law enforcement is not able to execute the arrest due to the property owner being out of state or not locatable, or the property owner has not claimed the property subject to forfeiture or asserted any interest in the property.
   “Conviction” is defined to include a finding of guilt, a plea of guilty, deferred judgment, deferred or suspended sentence, adjudication of delinquency, or circumstances where a person is not charged with a criminal offense that is a serious or aggravated misdemeanor or felony related to the action for forfeiture based in whole or in part on the person’s agreement to provide information regarding the criminal activity of another person.
   The bill provides that the minimum threshold of $15,000 is to be annually increased or decreased in accordance with the consumer price index.
   BURDEN OF PROOF. Under current law, a prosecuting attorney must prove by a preponderance of the evidence that property is subject to forfeiture and that the defendant’s conduct gave rise to forfeiture. The bill provides that the prosecuting attorney must prove these elements by clear and convincing evidence.
   Under current law, if a property claimant comes forward with some evidence supporting the existence of an exemption for forfeiture, the state must provide some evidence to negate the assertion, which must be substantial, though may be less than a preponderance of the evidence. The bill provides that if a claimant asserts the existence of an exemption, the prosecuting attorney has the burden of proving by clear and convincing evidence that the exemption does not apply.
   Under current law, a presumption arises that property of a person is subject to forfeiture if the state establishes that the person has engaged in conduct giving rise to forfeiture. The bill provides that if the property to be forfeited is less than the minimum civil forfeiture amount, such a presumption only arises if the person was convicted for the conduct giving rise to forfeiture.
   Under current law, a court may order the forfeiture of substitute assets if the forfeitable property cannot be located; has been transferred or conveyed to, sold to, or deposited with a third party; is beyond the jurisdiction of the court; has been substantially diminished in value while not in the actual physical custody of the court, the seizing agency, the prosecuting attorney, or their designee; has been commingled with other property that cannot be divided without difficulty; or is subject to any interest of another person which is exempt from forfeiture under Code chapter 809A. The bill requires the prosecuting attorney to prove one of the above conditions of the property by clear and convincing evidence.
   EQUITABLE SHARING. Under current law, there is no limitation on a law enforcement agency or prosecuting authority with regard to the transfer of seized property to a federal law enforcement agency or authority, a process referred to as equitable sharing. Under equitable sharing, property seized by state authorities is transferred to federal authorities for forfeiture, and the state and federal authorities then share the proceeds. The bill provides that a state law enforcement agency or prosecuting authority shall not participate in equitable sharing unless the value of the seized property exceeds $100,000 or the property is being transferred or referred for federal criminal forfeiture proceedings.
   PROPORTIONALITY REVIEW. Under current Code chapter 809A, there is no requirement that the value of an instrumentality forfeited be proportionate to the crime committed, though the Iowa supreme court has held that forfeiture can be unconstitutional under the Eighth Amendment’s prohibition on excessive fines if the defendant can show that the value of the property is grossly disproportionate to the crime. The bill provides that property shall not be forfeited as an instrumentality to the extent that the amount or value of the property is disproportionate to the severity of the offense and that the prosecuting attorney has the burden of showing proportionality by clear and convincing evidence. Contraband and proceeds are not subject to proportionality review.
   RECORDKEEPING. The bill provides that each law enforcement agency that has custody of any property that is subject to Code chapter 809A shall adopt and comply with a written internal control policy that provides for keeping detailed records as to the amount of property acquired by the agency, the date property was acquired, and the disposition of the property, including the manner in which it was disposed, the date of disposition, detailed financial records concerning any property sold, and the name of any person who received the property. The records kept under the internal control policy shall be open to public inspection during the agency’s regular business hours, and the adopted policy is a public record open for inspection under Code chapter 22.
   The bill applies to forfeiture proceedings that begin on or after the effective date of the bill.