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S.F. No. 384 - Forfeiture; Innocent Owners--Second Engrossment
 
Author: Senator Scott J. Newman
 
Prepared By: Chris Turner, Senate Fiscal Analyst (651/296-4350)
Kenneth P. Backhus, Senate Counsel (651/296-4396)
 
Date: March 18, 2015



 

Overview

This bill shifts the burden of proof from the claimant to the prosecutor in innocent owner cases involving the following forfeiture actions: DWI, designated offenses, controlled substance offenses, and fleeing, drive-by shooting, and prostitution offenses. It also provides for the return of a vehicle in DWI forfeiture to an owner who is not the offender, if the vehicle is needed for employment or dependent care purposes or the owner took reasonable steps to prevent the use of the vehicle by the offender.

The bill establishes procedures to divide joint property, conduct commercially reasonable sales, and pay off security interests. It outlines responsibility for towing, storage, and court fees if property is returned. Finally, it codifies the homestead exemption found in case law.

The bill is effective August 1, 2015, and applies to crimes committed on or after that date.

Sections 1 and 2 are technical. They move the existing definition of "family or household member" from the DWI forfeiture law where it is no longer used due to the striking in section 3 to the DWI license plate impoundment law where it is still used.

Sections 3, 4, and 11 to 14 strike language regarding innocent owner and security interest provisions found in the following forfeiture statutes: DWI, designated offenses, controlled substance offenses, and fleeing, drive-by shooting, and prostitution offenses. Cross-references new provisions that are consolidated in sections 6 and 7.

Section 5 defines “actual knowledge” and “constructive knowledge,” the latter meaning knowledge imputed to family or household members of an owner who has been adjudicated guilty three or more times for a same or similar violation in the past ten years.

Section 6 provides limitations and defenses to forfeiture; relating to ownership at the time of the crime.

Filing a Claim

Paragraph (a) establishes a process by which an innocent owner may file a claim for return of property seized for forfeiture. Cross-references offenses listed in sections 3, 4, and 11-14.

Paragraph (b) allows prosecutor to request a five-day postponement of a hearing to complete an investigation.

Paragraph (c) preserves defendant’s right against self-incrimination in the civil forfeiture trial.

Burden of Production and Proof

Paragraph (d) places the burden of production on the innocent owner claimant to show: (1) full or joint ownership or security interest in the property; and (2) claimant is not the offender.

Paragraph (e) places the burden of proof on the prosecutor to then show that the property is subject to forfeiture because the claimant: (1) had actual or constructive knowledge of the crime; or (2) consented to the act or omission of the underlying offense.

The burden of proof required is the preponderance of the evidence.

Return of Property; Jointly Owned Property

Paragraph (f) requires law enforcement to return property within a reasonable time if innocent owner claim prevails. Relinquishes the state’s rights in the property.

Paragraphs (g) and (h) establish a process by which jointly owned property may be divided and allocated to an innocent owner, including sale of the property, buy-out of the offender’s portion, or other equitable means.

Hardship Exception

Paragraph (i) provides an exception to paragraphs (e) to (h) - division of the property and innocent ownership requirements. Allows the court to return the undivided vehcile for DWI forfeitures if the claimant shows that failing to return the vehicle deprives the claimant of reasonable means to employment or to provide dependent care, or that the innocent owner claimant took reasonable steps to prevent the use of the vehicle by the offender.

Fees; Security Interests

Paragraph (j) places responsibility for towing and storage fees on the claimant if the vehicle is returned within 60 days of seizure. If the innocent owner claims are valid, the law enforcement agency must pay for fees accruing after the 60-day period.

Paragraphs (k) and (l) require any proceeds of a seized motor vehicle to be applied to a perfected security interest after deducting the agency costs. Exempts agency from liability to secured party for any amount still owing on loan if sale is conducted in a commercially reasonable manner.

Section 7 provides limitations and defenses to forfeiture; relating to ownership acquired after the crime. Creates new standards similar to those in section 6 for property acquired after the crime for a bona fide purchaser who paid valuable consideration and did not have notice of a title defect.

Section 8 requires the law enforcement and prosecuting agencies to reimburse a prevailing claimant for any court filing fees.

Sections 9 and 10 codify the Torgelson case exemption for homestead property in criminal code forfeitures. Section 10 also makes the same changes made in sections 3, 4, and 11-14.

 
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