Bill Text: HI HB1965 | 2022 | Regular Session | Amended

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Bill Title: Relating To Property Forfeiture.

Spectrum: Partisan Bill (Democrat 19-0)

Status: (Engrossed - Dead) 2022-03-11 - Referred to JDC, WAM. [HB1965 Detail]

Download: Hawaii-2022-HB1965-Amended.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	1965
THIRTY-FIRST LEGISLATURE, 2022		H.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO PROPERTY FORFEITURE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that civil asset forfeiture laws are controversial and have been evolving throughout the country over the thirty years since Hawaii passed the Hawaii omnibus criminal forfeiture act, codified as chapter 712A, Hawaii Revised Statutes, that covers civil asset forfeiture.  Hawaii's process allows law enforcement agencies to seize and keep property based on suspicion that the property is connected to criminal activity.  Property, such as vehicles, houses, cash, and jewelry, can be taken without the property owner having been convicted of a crime or even being formally accused of one.

     The legislature further finds that there is great incentive for state and county law enforcement agencies to seize property for forfeiture, as these agencies are permitted to retain proceeds from the sale of the property.  Under state law, one hundred per cent of the proceeds are divided among the state and county law enforcement agencies that were involved in the seizure and forfeiture.

     The purpose of this Act is to make the State's civil asset forfeiture process more just by:

     (1)  Restricting civil asset forfeiture to specific, limited cases;

     (2)  Adopting a higher standard of proof for property forfeiture;

     (3)  Allowing for the transfer of certain property to any local or state government entity, municipality, or law enforcement agency within the State for use for a period of no longer than twelve months, before transferring back to the attorney general;

     (4)  Directing forfeiture proceeds to certain involved state and local governments and to the general fund;

     (5)  Amending the allowable expenses for moneys in the criminal forfeiture fund;

     (6)  Requiring the attorney general to adopt rules necessary to carry out the purposes of the Hawaii omnibus criminal forfeiture act; and

     (7)  Amending the deadline for the attorney general to report to the legislature on the use of the Hawaii omnibus criminal forfeiture act.

     SECTION 2.  Section 712A-5, Hawaii Revised Statutes, is amended to read as follows:

     "§712A-5  Property subject to forfeiture; exemption.  (1)  The following is subject to forfeiture:

     (a)  Property described in a statute authorizing forfeiture;

     (b)  Property used or intended for use in the commission of, attempt to commit, or conspiracy to commit a covered offense, or [which] that facilitated or assisted such activity;

     (c)  Any firearm [which] that is subject to forfeiture under any other subsection of this section or [which] is carried during, visible, or used in furtherance of the commission, attempt to commit, or conspiracy to commit a covered offense, or any firearm found in proximity to contraband or to instrumentalities of an offense;

     (d)  Contraband or untaxed cigarettes in violation of chapter 245, which shall be seized and summarily forfeited to the State without regard to the procedures set forth in this chapter;

     (e)  Any proceeds or other property acquired, maintained, or produced by means of or as a result of the commission of the covered offense;

     (f)  Any property derived from any proceeds [which] that were obtained directly or indirectly from the commission of a covered offense;

     (g)  Any interest in, security of, claim against, or property or contractual right of any kind affording a source of influence over any enterprise [which] that has been established, participated in, operated, controlled, or conducted in order to commit a covered offense; and

     (h)  All books, records, bank statements, accounting records, microfilms, tapes, computer data, or other data [which] that are used, intended for use, or [which] that facilitated or assisted in the commission of a covered offense, or [which] that document the use of the proceeds of a covered offense.

     (2)  Except that:

     (a)  Real property, or an interest therein, may be forfeited under the provisions of this chapter only in cases in which the covered offense is chargeable as a felony offense under state law;

     (b)  No property shall be forfeited under this chapter to the extent of an interest of an owner[,] by reason of [any act or omission established by that owner to have been committed or omitted without the knowledge and consent of that owner;] the commission of any covered offense unless:

          (i)  A person exercising some degree of control over the property was charged with an offense related to the property prior to the forfeiture of the property interest;

         (ii)  All of the property owners are unknown or cannot be clearly identified; or

        (iii)  The owner has provided a law enforcement officer with assistance in a related criminal investigation and the property is otherwise subject to forfeiture pursuant to this chapter;

          provided that nothing in this paragraph shall be construed to prevent the seizure of property pursuant to section 712A-6 before the filing of the criminal charge;

     (c)  No conveyance used by any person as a common carrier in the transaction of a business as a common carrier is subject to forfeiture under this section unless it appears that the owner or other person in charge of the conveyance is a consenting party or privy to a violation of this chapter;

     (d)  No conveyance is subject to forfeiture under this section by reason of any act or omission established by the owner thereof to have been committed or omitted without the owner's knowledge or consent; [and]

     (e)  A forfeiture of a conveyance encumbered by a bona fide security interest is subject to the interest of the secured party if the secured party neither had knowledge of nor consented to the act or omission[.]; and

     (f)  This chapter shall not apply to the forfeiture of an animal prior to disposition of criminal charges pursuant to section 711-1109.2.

     (3)  This section shall not prohibit or restrict forfeitures authorized by law other than this chapter."

     SECTION 3.  Section 712A-10, Hawaii Revised Statutes, is amended to read as follows:

     "§712A-10  Administrative forfeiture.  The prosecuting attorney may initiate administrative forfeiture of property other than real property, the estimated value of which is less than $100,000, or of any vehicle or conveyance, regardless of value.  Administrative forfeiture shall be processed in the following manner:

     (1)  The prosecuting attorney shall file a petition with the attorney general, pursuant to rules adopted by the attorney general[.];

     (2)  The prosecuting attorney shall give notice of pending forfeiture by making reasonable efforts to serve a copy of the petition in a manner provided in section 712A-8(a) or [712A-8(b)] (b) on all persons known to have an interest in the property, together with instructions for filing a claim and cost or in pauperis bond, or a petition for remission or mitigation[.];

     (3)  The attorney general shall give notice of intention to forfeit the property administratively by publication in the manner provided in section 712A-8(c).  Notice by publication shall include:

          (a)  A description of the property;

          (b)  The estimated value of the property;

          (c)  The date and place of the seizure;

          (d)  The offense for which the property is subject to forfeiture;

          (e)  Instructions for filing a claim and cost or in pauperis bond, or a petition for remission or mitigation; and

          (f)  Notice that the property will be forfeited to the State if a claim and cost or in pauperis bond or petition for remission or mitigation is not filed in substantial compliance with this section[.];

     (4)  Persons claiming an interest in the property may file either a petition for remission or mitigation of forfeiture, or a claim and cost or in pauperis bond, but not both, with the attorney general, within thirty days of notice by publication or receipt of written notice, whichever is earlier.  Notwithstanding section 1-29, the thirty-day time period prescribed herein is computed by excluding the first day and including the last day, unless the last day is a Saturday, Sunday, or holiday and then it is also excluded, and the thirty-day time period runs until the end of the next day which is not a Saturday, Sunday, or a holiday.  "Holiday" includes any day designated as a holiday pursuant to section 8-1[.];

     (5)  Any person claiming seized property may seek remission or mitigation of the forfeiture by timely filing a petition with the attorney general.  A petition for remission or mitigation shall not be used to challenge the sufficiency of the evidence to support the forfeiture or the actions of any government official but shall presume a valid forfeiture and ask the attorney general to invoke the executive power to pardon the property, in whole or in part.  The petition shall be signed by the petitioner and sworn on oath before a notary public and shall contain the following:

          (a)  A reasonably complete description of the property;

          (b)  A statement of the interest of the petitioner in the property, as owner or interest-holder which may be supported by bills of sale, contracts, or mortgages, or other documentary evidence; and

          (c)  Facts and circumstances sufficient to show whether the petitioner:

              (i)  Owns or holds an interest in the seized property as defined by section 712A-1;

             (ii)  Had any knowledge that the property was or would be involved in any violation of the law;

            (iii)  Had any knowledge of the particular violation which subjected the property to seizure and forfeiture;

             (iv)  Had any knowledge that the user of the property had any record, including arrests, except when the person was acquitted or the charges dismissed due to lack of evidence, for the violation which subjected the property to seizure and forfeiture or for any crime which is similar in nature.

          Any subsequent pleadings or written communications alleging matters pertaining to [[]subparagraph[]] (b) or (c) of this [[]paragraph[] must] shall also be signed by the petitioner and sworn on oath before a notary public[.];

     (6)  If the attorney general, with sole discretion, determines that remission is not warranted, the attorney general may discretionarily mitigate the forfeiture where the petitioner has not met the minimum requirements for remission but where there are present other extenuating circumstances indicating that some relief should be granted to avoid extreme hardship.  Mitigation may also be granted where the minimum requirements for remission have been met but the overall circumstances are such that the attorney general determines that complete relief is not warranted.  Mitigation shall take the form of a money penalty imposed upon the petitioner which shall be deposited into the criminal forfeiture fund established under section 712A-16.  Extenuating circumstances include:

          (a)  Language or culture barrier;

          (b)  Humanitarian factors such as youth or extreme age;

          (c)  Presence of physical or mental disease, disorder, or defect;

          (d)  Limited or peripheral criminal culpability;

          (e)  Cooperation with the seizing agency or the prosecuting attorney; and

          (f)  Any contributory error on the part of government officials[.];

     (7)  It shall be the duty of the attorney general to inquire into the facts and circumstances alleged in a petition for remission or mitigation of forfeiture.  However, no petitioner is entitled to a hearing on the petition for remission or mitigation.  Hearings, if any, shall be held at the discretion of the attorney general[.];

     (8)  The attorney general shall provide the seizing agency and the petitioner a written decision on each petition for remission or mitigation within sixty days of receipt of the petition unless the circumstances of the case require additional time, in which case the attorney general shall notify the petitioner in writing and with specificity within the sixty-day period that the circumstances of the case require additional time and further notify the petitioner of the expected decision date[.];

     (9)  Any person claiming seized property may seek judicial review of the seizure and proposed forfeiture by timely filing with the attorney general a claim and bond to the State in the amount of ten per cent of the estimated value of the property or in the sum of $2,500, whichever is greater, with sureties to be approved by the attorney general, upon condition that if the claimant fails to prove that claimant's interest is exempt from forfeiture under section 712A-5, the claimant shall pay the State's costs and expenses, including reasonable attorneys fees incurred in connection with a judicial proceeding.  In lieu of a cost bond, a claimant may file an in pauperis bond sworn on oath before a notary public.  An in pauperis bond shall be in the form set out in the appendix to the rules of penal procedure.  The claim shall be signed by the claimant and sworn on oath before a notary public and shall comply with the requirements of section 712A-12(5).  Upon receipt of the claim and bond, the attorney general shall notify the prosecuting attorney who may discretionarily continue to seek forfeiture by petitioning the circuit court for forfeiture of the property within forty-five days of receipt of notice that a proper claim and bond has been filed.  The prosecuting attorney may also elect to honor the claim in which case the prosecuting attorney shall notify the seizing agency and authorize the release of the seizure for forfeiture on the property or on any specified interest in it[.];

    (10)  If a judicial forfeiture proceeding is instituted subsequent to notice of administrative forfeiture pursuant to paragraph (9), no duplicate or repetitive notice shall be required.  The judicial proceeding, if any, shall adjudicate all timely filed claims.  At the judicial proceeding, the claimant may testify, present evidence and witnesses on the claimant's behalf, and cross-examine witnesses who appear at the hearing.  The State may present evidence and witnesses in rebuttal and in defense of its claim to the property and cross-examine witnesses who appear at the hearing.  The State has the initial burden of showing by [a preponderance of the] clear and convincing evidence that the claimant's interest in the property is subject to forfeiture.  On such a showing by the State, the claimant has the burden of showing by [a preponderance of the] clear and convincing evidence that the claimant's interest in the property is not subject to forfeiture[.];

    (11)  In the event a claim and bond has not been filed in substantial compliance with this section, or if the attorney general, with sole discretion, determines that remission or mitigation is not warranted, the attorney general, upon a finding that the State has established by clear and convincing evidence that the property seized for forfeiture is subject to forfeiture, shall order forfeited all property seized for forfeiture.  In the event the attorney general, with sole discretion, determines that remission or mitigation is warranted, the attorney general shall notify the seizing agency and the prosecuting attorney and order the release of the seizure for forfeiture on the property or on any specified interest in it.  There shall be no appeal from the attorney general's decision or order of forfeiture or remission or mitigation[.]; and

    (12)  Administrative proceedings and the adoption of rules under this section are exempt from the requirements of chapter 91, the Hawaii administrative procedure act, and are adjudicatory functions for the purposes of applicable sections of the Hawaii Revised Statutes."

     SECTION 4.  Section 712A-12, Hawaii Revised Statutes, is amended by amending subsection (8) to read as follows:

     "(8)  The State has the initial burden of showing by [a preponderance of the] clear and convincing evidence that the claimant's interest in the property is subject to forfeiture.  On such a showing by the State, the claimant has the burden of showing by [a preponderance of the] clear and convincing evidence that the claimant's interest in the property is not subject to forfeiture."

     SECTION 5.  Section 712A-13, Hawaii Revised Statutes, is amended by amending subsection (1) to read as follows:

     "(1)  If a forfeiture is authorized by law, it shall be ordered by a court on a petition for forfeiture filed by the prosecuting attorney in an in personam civil or criminal action.  In any civil in personam action brought under this section, the owner or interest-holder may testify, present evidence and witnesses on the owner or interest-holder's behalf, and cross-examine witnesses who appear at the hearing.  The State may present evidence and witnesses in rebuttal and in defense of its claim to the property and cross-examine witnesses who appear at the hearing.  The State has the initial burden of showing by [a preponderance of the] clear and convincing evidence that the owner or interest-holder's interest in the property is subject to forfeiture.  On such a showing by the State, the owner or interest-holder has the burden of showing by [a preponderance of the] clear and convincing evidence that the owner or interest-holder's interest in the property is not subject to forfeiture."

     SECTION 6.  Section 712A-16, Hawaii Revised Statutes, is amended to read as follows:

     "§712A-16  Disposition of property forfeited.  (1)  All property forfeited to the State under this chapter shall be transferred to the attorney general, who:

     (a)  May transfer property, other than currency, [which shall be distributed in accordance with subsection (2)] to any local or state government entity, municipality, or law enforcement agency within the State[;] for use for a period of no longer than twelve months before transfer of the property back to the attorney general;

     (b)  May sell forfeited property to the public by public sale; provided that for leasehold real property:

          (i)  The attorney general shall first offer the holder of the immediate reversionary interest the right to acquire the leasehold interest and any improvements built or paid for by the lessee for the then fair market value of the leasehold interest and improvements.  The holder of the immediate reversionary interest shall have thirty days after receiving written notice within which to accept or reject the offer in writing; provided that the offer shall be deemed to be rejected if the holder of the immediate reversionary interest has not communicated acceptance to the attorney general within the thirty-day period.  The holder of the immediate reversionary interest shall have thirty days after acceptance to tender to the attorney general the purchase price for the leasehold interest and any improvements, upon which tender the leasehold interest and improvements shall be conveyed to the holder of the immediate reversionary interest[.];

         (ii)  If the holder of the immediate reversionary interest fails to exercise the right of first refusal provided in subparagraph (i), the attorney general may proceed to sell the leasehold interest and any improvements by public sale[.]; and

        (iii)  Any dispute between the attorney general and the holder of the immediate reversionary interest as to the fair market value of the leasehold interest and improvements shall be settled by arbitration pursuant to chapter 658A;

     (c)  May sell or destroy all raw materials, products, and equipment of any kind used or intended for use in manufacturing, compounding, or processing a controlled substance or any untaxed cigarettes in violation of chapter 245;

     (d)  May compromise and pay valid claims against property forfeited pursuant to this chapter; or

     (e)  May make any other disposition of forfeited property authorized by law.

     (2)  All forfeited property and the sale proceeds thereof, [up to a maximum of three million dollars per year, not previously transferred pursuant to [subsection] (1)(a) of this section, shall,] after payment of expenses of administration and sale, shall be distributed as follows:

     (a)  One quarter shall be distributed to the unit or units of state or local government [[]whose[]] officers or employees conducted the investigation and caused the arrest of the person whose property was forfeited or seizure of the property for forfeiture; and

     (b)  One quarter shall be distributed to the prosecuting attorney who instituted the action producing the forfeiture[; and

     (c)  One half shall be deposited into the criminal forfeiture fund established by this chapter.

     (3)  Property and money distributed to units of state and local government shall be used for law enforcement purposes, and shall complement but not supplant the funds regularly appropriated for such purposes].  The remainder, including reimbursement for any costs incurred by the department of the attorney general related to the seizure or storage of seized property, shall be deposited to the credit of the state general fund.

     [(4)] (3)  There is established in the department of the attorney general a special fund to be known as the criminal forfeiture fund, hereinafter referred to as the "fund" in which shall be deposited [one-half of the proceeds of a forfeiture and any penalties paid pursuant to section 712A-10(6).] a portion of the proceeds of each sale made pursuant to this section that is sufficient to cover expenses of administration and sale.  All moneys in the fund shall be expended by the attorney general and [are] shall be appropriated for [the following purposes:

     (a)  The] the payment of any expenses necessary to seize, detain, appraise, inventory, safeguard, maintain, advertise, or sell property seized, detained, or forfeited pursuant to this chapter or of any other necessary expenses incident to the seizure, detention, or forfeiture of [such] property and [such] contract services and payments to reimburse any federal, state, or county agency for any expenditures made to perform the foregoing functions[;

     (b)  The payment of awards for information or assistance leading to a civil or criminal proceeding;

     (c)  The payment of supplemental sums to state and county agencies for law enforcement purposes;

     (d)  The payment of expenses arising in connection with programs for training and education of law enforcement officers;

     (e)  The payment of expenses arising in connection with enforcement pursuant to the drug nuisance abatement unit in the department of the attorney general; and

     (f)  The payment of expenses arising in connection with the law enforcement officer independent review board in the department of the attorney general].

     [(5)] (4)  The attorney general [may], without regard to the requirements of chapter 91, [promulgate] shall adopt rules [and regulations] necessary to carry out the purposes of this chapter, including rules concerning the disposition of property, the use of the fund, and compromising and paying valid claims against property forfeited [pursuant to this chapter].

     [(6)] (5)  [Not] No less than [twenty] forty days [prior to] before the convening of each regular session, the attorney general shall provide to the legislature a report on the use of the Hawaii omnibus criminal forfeiture act during the fiscal year preceding the legislative session.  The report shall include:

     (a)  The total amount and type of property seized by law enforcement agencies;

     (b)  The total number of administrative and judicial actions filed by prosecuting attorneys and the disposition thereof;

     (c)  The total number of claims or petitions for remission or mitigation filed in administrative actions and the dispositions thereof;

     (d)  The total amount and type of property forfeited and the sale proceeds thereof;

     (e)  The total amount and type of property distributed to units of state and local government;

     (f)  The amount of money deposited into the criminal forfeiture fund; and

     (g)  The amount of money expended by the attorney general from the criminal forfeiture fund under subsection [(5)] (3) and the reason for the expenditures."

     SECTION 7.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 8.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 9.  This Act shall take effect on January 1, 2222; provided that the amendments made to section 712A-16, Hawaii Revised Statutes, by section 6 of this Act shall not be repealed when section 712A-16, Hawaii Revised Statutes, is reenacted on June 30, 2022, by section 7 of Act 161, Session Laws of Hawaii 2016.

 

 

 

Report Title:

Property Forfeiture; Disposition; Criminal Forfeiture

 

Description:

Restricts civil asset forfeiture to specific, limited cases.  Raises the burden of proof for property forfeiture to clear and convincing evidence.  Authorizes the use of certain forfeited property by local or state agencies for a limited time.  Directs forfeiture proceeds to certain involved state and local governments and to the general fund.  Amends the allowable uses of moneys in the criminal forfeiture fund.  Requires the Attorney General to adopt rules.  Advances the deadline for the Attorney General to report to the Legislature on the Hawaii omnibus criminal forfeiture act.  Effective 1/1/2222.  (HD2)

 

 

 

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