Signed By Governor: Arizona Law Takes on State, Federal Asset Forfeiture

PHOENIX, Ariz. (April 13, 2017) – Last week, Arizona Gov. Doug Ducey signed a bill into law reforming the state’s civil asset forfeiture laws. The bill also takes on federal forfeiture programs by banning prosecutors from circumventing state laws by passing cases off to the feds in most situations.

Rep. Eddie Farnsworth (R-Gilbert) introduced House Bill 2477 (HB2477) on Feb. 7. The new law will require prosecutors to establish a higher evidentiary standard for asset forfeiture. Currently, 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 will not require a criminal conviction before proceeding with asset forfeiture, it takes a step toward reforming Arizona’s forfeiture laws under that essential standard.

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

Ducey said the bill strikes a “proper balance” between allowing law enforcement to do its job and upholding civil liberties.

“I commend Representative Eddie Farnsworth for his work on this legislation, and lawmakers on both sides of the aisle for supporting it. This bill will allow law enforcement to take appropriate action against drug cartels and other criminal enterprises, while ensuring citizens do not have their property seized without proper due process.”

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. Last week, the Senate approved an amended version 30-0. The House concurred with the Senate amendments earlier this week 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. Public policy analyst Michael 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.”

ADDRESSES FEDERAL PROGRAMS

HB2477 also close a loophole that would have allowed prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government under its Equitable Sharing forfeiture program.

"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."

A Senate amendment lowered the threshold for allowable transfers form $100,000 to $75,000. Despite the reduction in dollar value, this provision will still stop the transfer of the vast majority of cases to the feds.

The inclusion of provisions barring state and local law enforcement agencies from passing off cases to the feds is particularly important. In several states with strict asset forfeiture laws, prosecutors have done just that. By placing the case under federal jurisdiction, law enforcement can bypass the need for a conviction under state law and collect up to 80 percent of the proceeds from forfeited assets via the federal Equitable Sharing Program.

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 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. During the 2016 legislative session, the state closed the loophole.

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

The new law will go into effect 90 days after the legislature adjourns.