Colorado Bill to Close Federal Asset Forfeiture Loophole in Most Situations

DENVER, Colo. (April 21, 2017) – A bill introduced in the Colorado House would take big steps towards closing a federal loophole that allows state and local police to circumvent more stringent state asset forfeiture laws by passing cases off to the feds.

A bipartisan coalition of two representatives and two senators introduced House Bill 1313 (HB1313) on April 3.

The legislation primarily creates an extensive reporting system related to asset forfeiture that law enforcement agencies would have to follow. But important provisions in the bill would prohibit Colorado law enforcement agencies from transferring seized property to a federal agency unless it has a net value of more than $50,000. It would also prohibit state and local police from accepting payment or distribution from a federal agency of all, or part of, any forfeiture proceeds resulting from the adoption, a joint task force, or other multijurisdictional collaboration, unless the aggregate net equity value of the property and currency seized in the case is in excess of $50,000, the case is commenced by the federal government, and it relates to a filed criminal case.

In most situations, passage of HB1313 would slam closed a loophole that allows state and local police to get around more strict state asset forfeiture laws.

Last month, a similar Senate bill sponsored by the same coalition failed to move out of the Senate Committee on Judiciary by a vote of 2-3. The vote was along party lines, with two Democrats in favor and three Republicans opposing. With the setback in the Senate, the same coalition tweaked the language and reintroduced the legislation in the House.

While Colorado asset forfeiture laws don’t provide the level of protection they should, they are stricter than federal law. The Institute of Justice gives Colorado forfeiture laws a C. They do include a high bar to forfeit property, but they do not require a criminal conviction. They also provide relatively robust protections for innocent third-party property owners, and law enforcement can only keep up to 50 percent of proceeds.

With these relatively stringent policies in place, police have an incentive to pass cases to the feds in order to circumvent them. Unsurprisingly, the state ranks 15th in the country in the amount of federal asset forfeiture money it brings in.

The situation in California was similar until recently. The state has some of the strongest state-level restrictions on civil asset forfeiture in the country, but law enforcement would often bypass the state restrictions by partnering with a federal asset forfeiture program known as “equitable sharing.” Under these arrangements, state officials would simply hand over forfeiture prosecutions to the federal government and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice.

According to a report by the Institute for Justice, Policing for Profit, California ranked dead last of all states in the country between 2000 and 2013 as the worst offender. In other words, California law enforcement was passing off a lot of cases to the feds and collecting the loot. During the 2016 legislative session, the state closed the loophole.

Passage of HB1313 would close the federal loophole in most situations and significantly increase protections for Colorado property owners.

As the Tenth Amendment Center previously reported the federal government inserted itself into the asset forfeiture debate in California. The feds clearly want the policy to continue.

Why?

We can only guess. But perhaps the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness. After all, the federal government would find it nearly impossible to prosecute its deplorable “War on Drugs” without state and local assistance. Asset forfeiture “equitable sharing” provides a pipeline the feds use to incentivize state and local police to serve as de facto arms of the federal government by funneling billions of dollars into their budgets.

WHAT’S NEXT

HB1313 has been referred to the House Judiciary Committee where it must pass by a majority vote before moving forward in the legislative process. It is scheduled for a committee hearing on April 20, at 1:30 p.m. in room 0112.