Now In Effect: New Arizona Law Takes on State, Federal Asset Forfeiture

PHOENIX, Ariz. (Aug. 11, 2017) – On Tuesday, a new Arizona law reforming the state’s civil asset forfeiture process went into effect. The new law also takes on federal forfeiture programs by banning prosecutors from circumventing state laws by passing cases off to the feds.

Rep. Eddie Farnsworth (R-Gilbert) introduced House Bill 2477 (HB2477) on Feb. 7. The new law requires prosecutors to establish a higher evidentiary standard for asset forfeiture. Under the old process, the law only requires a preponderance of the evidence. HB2477 raises that, requiring police and prosecutors to provide “clear and convincing evidence” the property was linked to a crime. While the new law does not require a criminal conviction before proceeding with asset forfeiture, it takes a step toward reforming Arizona’s forfeiture laws under that essential standard.

An AZCIR analysis in January found that Arizona agencies seized nearly $200 million in property between 2011 and 2015 from people who may never have been charged or convicted of a crime.

HB2477 also drastically increases transparency. It establishes stringent asset forfeiture reporting requirements law enforcement agencies now must follow. Additionally, police will have to detail how seized funds are spent. Under the new law, prosecutors must receive county board of supervisor approval before spending forfeiture proceeds.

Provisions in the new law relating to participation in the federal program are particularly important in light of a new policy directive issued last month by Attorney General Jeff Sessions for the Department of Justice (DOJ).

FEDERAL LOOPHOLE

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. For example, California previously had some of the strongest state-level restrictions on civil asset forfeiture in the country, but law enforcement would often bypass these restrictions by claiming cases were federal in nature. Under these arrangements, state officials would simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice.

The new 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. However, when states merely withdraw from participation, the federal directive loses it impact.

According to the IJ 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 32nd 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.

HB2477 effectively closes this loophole. It 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 already shown that 85 percent of  seizures received by law enforcement agencies through the federal equitable sharing program did not event meet a $50,000 threshold, so HB2477’s higher requirement is seen by supporters as significant.

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

OPPOSITION

While the reforms are modest in comparison with those under consideration in many states, law enforcement and prosecutors aggressively lobbied against the bill. Activists obtained letters sent to representatives from at least three police departments opposing the bill. (click here to read the documents)

Despite the opposition, HB2477 passed the House with a 60-0 vote in February. In April, the Senate approved an amended version 30-0. The House concurred with the Senate amendments by a 55-1 vote, Rep. Becky Nutt (R) was the lone no-vote.

“Civil forfeiture is perhaps the greatest threat to private property rights in Arizona today,” Institute for Justice attorney Paul Avelar told ABC 15. “HB 2477 makes incremental but important reforms to Arizona’s forfeiture laws to protect innocent property owners and ensure that government powers are not abused.”

Grassroots activists in the state, including Arizona Tenth Amendment Center volunteers Joel Alcott and Michael Gibbs, put in long hours opposing law enforcement lobbying efforts and nursing the bill through the process. Boldin called the grassroots efforts “a difference maker.”

“The law enforcement lobby in Arizona is extremely powerful. I believe the volunteers and activists on the ground in Arizona were the difference between this billing passing and failing. There were a couple of times it looked dead. I can’t praise them enough for what they pulled off. It goes to show just how effective grassroots activism is at the state level.”

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