Arizona Senate Committee Passes Bill to Require a Criminal Conviction for Asset Forfeiture

PHOENIX, Ariz. (March 22, 2021) – On Monday, an Arizona Senate Committee passed a bill that would reform the state’s asset forfeiture laws and prohibit the state from taking a person’s property without a criminal conviction in most cases. The proposed legislation would build on important reforms signed into law in 2017 that opted Arizona out of a federal forfeiture program.

A coalition of 12 Republicans introduced House Bill 2810 (HB2810) on Feb. 8. The legislation would require a criminal conviction before the prosecutors could begin forfeiture proceedings in most cases. The bill also includes provisions that would increase protections for property owners involved in the forfeiture process, including requiring an arrest before property could be received and prompt return of property if no criminal case exists.

On March 11, the Senate Justice Committee passed HB2810 by an 8-0 vote with no amendments. Today, the Senate Rules committee approved the bill as “Proper for Consideration,” (PFC), sending the bill to the full Senate. The House previously passed the measure 57-2.

The Arizona House killed a similar reform bill last year.

Arizona has some of the most onerous civil asset forfeiture laws in the country. Although prosecutors claim that drug kingpins and white-collar criminals are their primary targets, three-quarters of forfeiture cases involve property valued at less than $10,000.

“The median cash forfeiture in Arizona was $1,000,” said Paul Avelar, managing attorney for the Institute for Justice’s Arizona office. “When half of your cash forfeitures are less than $1,000, it is not a tool that is ‘targeting’ cartels. And this is such a low figure that most people will, rightly, realize the costs of fighting back are prohibitive. But lots of small forfeitures can mean big money: Agencies took in $24 million in fiscal year 2019 alone.”

Originally intended to counter organized racketeering, the process of bringing civil charges against property rather than criminal charges against humans has proven very lucrative for law enforcement. This is largely due to the ease with which seizures can be carried out since property has no civil rights and the standards for evidence are much lower in non-criminal actions. Accuse a piece of property of involvement in a crime and it can be taken, sold, and the money used for just about any purpose. Property owners are often unwilling or unable to petition for its return due to the expense and effort involved.

For years, various groups have worked to add protections against unreasonable seizures, political corruption, and prosecutorial indiscretion but have faced strong opposition from prosecutors and other law-enforcement officials. The most significant progress towards reforming forfeiture laws in the state was made in 2017 when house bill 2477 was enacted into law.

Introduced by then-representative Eddie Farnsworth, HB 2477 required detailed reporting of collections, allocations, and the purpose for each use of funds taken, and placed oversight of each county’s forfeiture operations with the board of supervisors rather than prosecutors. The idea was to shed some light on the massive scale of assets being seized in the state and to remove the conflict of interest prosecutors had to enhance their budgets at the expense of private citizens. Its biggest weakness, supporters say, was that there was still no requirement for a conviction in order to seize property, so forfeitures could be processed even when the state could not prove a crime had been committed by the property owner.

Passage of HB2810 would build on previous reforms and address that weakness.

NECESSARY

While some people believe the Supreme Court “ended asset forfeiture, its opinion in Timbs v. Indiana ended nothing. Without further action, civil asset forfeiture remains. Additionally, as law professor Ilya Somin noted, the Court left an important issue unresolved. What exactly counts as “excessive” in the civil forfeiture context?

“That is likely to be a hotly contested issue in the lower federal courts over the next few years. The ultimate effect of today’s decision depends in large part on how that question is resolved. If courts rule that only a few unusually extreme cases qualify as excessive, the impact of Timbs might be relatively marginal.”

Going forward, opponents of civil asset forfeiture could wait and see how lower federal courts will address this “over the next few years,” or they can do what a number of states have already taken steps to do, end the practice on a state level, and opt out of the federal equitable sharing program as well.

FEDERAL LOOPHOLE

The news isn’t all bad in Arizona. The 2017 reforms took a big step toward closing a loophole that allows state and local police to get around more strict state asset forfeiture laws in a vast majority of situations. This is particularly important in light of a policy directive issued in July 2017 by then-Attorney General Jeff Sessions for the Department of Justice (DOJ) that remains in effect today.

A federal program known as “Equitable Sharing” allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government through a process known as adoption. The DOJ directive reiterates full support for the equitable sharing program, directs federal law enforcement agencies to aggressively utilize it, and sets the stage to expand it in the future.

Law enforcement agencies can circumvent more strict state forfeiture laws by claiming cases are federal in nature. Under these arrangements, state officials simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds. However, when states merely withdraw from participation, the federal directive loses its impact.

Until recently, California faced this situation. The state has some of the strongest state-level restrictions on civil asset forfeiture in the country, but state and local police were circumventing the state process by passing cases to the feds. According to a report by the Institute for Justice, Policing for Profit, California ranked as the worst offender of all states in the country between 2000 and 2013. In other words, California law enforcement was passing off a lot of cases to the feds and collecting the loot. The state closed the loophole in 2016.

According to an Institute for Justice report, Arizona has been one of the worst offenders of this program:

Arizona law enforcement’s use of the Department of Justice’s equitable sharing program results in a ranking of 32^nd nationally. In calendar years 2000 to 2013, Arizona law enforcement agencies received nearly $70 million in DOJ equitable sharing proceeds, averaging just under $5 million per year.

The 2017 reforms effectively closed this loophole. The law reads in part:

The seizing agency or the attorney for the state may not enter into any agreement to transfer or refer seized property to a federal agency for the purpose of forfeiture if the property was seized pursuant to an investigation that either:

1.  Did not involve a federal agency.

2.  Involves a violation of a state law and no violation of a federal law is alleged.

Property that is seized in a joint investigation may not be transferred or referred to a federal agency for the purpose of forfeiture unless the gross estimated value of the seized property is more than seventy‑five thousand dollars.

Reporting in some areas has revealed that 85 percent of seizures received by law enforcement agencies through the federal equitable sharing program did not meet a $50,000 threshold. Supporters view the law’s higher requirement as significant.

“While we’d like to see Arizona and every other state completely opt-out of this federal program, an 80-85 percent reduction in seizures through this federal scheme is a huge step forward to nullify it in practice and effect,” Tenth Amendment Center executive director Michael Boldin said.

Requiring a criminal conviction is the next logical step. With the federal loophole closed, the passage of HB2810  would make it virtually impossible for police to take a person’s assets without first establishing their guilt.

WHAT’S NEXT

HB2810 now moves to the full Senate, where it must pass by a majority vote before moving forward in the legislative process.

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