| 47 | | - | 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. Additionally, the legislature 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 legislature notes that the Institute for Justice, a nonprofit civil liberties law firm, recommends abolishing civil forfeiture entirely, as at least three states Nebraska, New Mexico, and North Carolina have done. Fifteen states now require a criminal conviction for most or all forfeiture cases. Additionally, the legislature takes note of the Institute of Justice's "D-" rating of Hawaii's civil forfeiture laws and the characterization that the State's laws "are among the nation's worst". Furthermore, the Institute for Justice recommends other reforms to make the forfeiture process fairer, beginning with eliminating financial incentives for law enforcement to seize and keep forfeited property and, instead, directing any proceeds to the general revenue fund or other neutral fund. Eight jurisdictions now prohibit law enforcement from keeping the proceeds from forfeited property. A second reform is to adopt a high standard of proof, such as beyond a reasonable doubt, in order to forfeit property in civil proceedings. Eighteen jurisdictions have a standard higher than Hawaii's preponderance of the evidence standard, and for ten of those jurisdictions, it is equivalent to beyond a reasonable doubt. The third suggested reform, which a number of jurisdictions have already made, involves requiring law enforcement to prove that owners consented to or possessed knowledge of the crime that led to the seizure of their property, restoring the presumption of innocence used in criminal proceedings. The legislature finds that none of these recommendations have been implemented in Hawaii. Accordingly, the purpose of this Act is to make the State's civil asset forfeiture process more just by: (1) Restricting civil asset forfeiture to cases involving the commission of a felony offense where the property owner has been convicted of an underlying felony offense; (2) Directing any forfeiture proceeds to the general fund; (3) Amend the allowable expenses for moneys in the criminal forfeiture fund; (4) Require the attorney general to adopt rules necessary to carry out the purpose of the Hawaii omnibus criminal forfeiture act; and (5) 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;]: (i) The commission of any covered offense unless: (A) The covered offense is chargeable as a felony offense under state law; and (B) The owner has been convicted of the covered offense by a verdict or plea, including a no contest plea or a deferred acceptance of guilty plea or no contest plea; or (ii) Any act or omission established by that owner to have been committed or omitted without the knowledge and consent of that owner; provided that nothing in this paragraph shall be construed to prevent the seizure of property before conviction pursuant to section 712A-6; (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-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; (b)] (a) 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)] (b) 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)] (c) May compromise and pay valid claims against property forfeited pursuant to this chapter; or [(e)] (d) 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, [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; (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.] 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 revolving 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 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 purpose 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)] (4) and the reason for the expenditures." SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 3021; provided that the amendments made to section 712A-16, Hawaii Revised Statutes, by section 3 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. |
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| 47 | + | 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 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. Additionally, the legislature 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 legislature notes that the Institute for Justice, a nonprofit civil liberties law firm, recommends abolishing civil forfeiture entirely, as at least three states Nebraska, New Mexico, and North Carolina have done. Fifteen states now require a criminal conviction for most or all forfeiture cases. Additionally, the legislature takes note of the Institute of Justice's "D-" rating of Hawaii's civil forfeiture laws and the characterization that the State's laws "are among the nation's worst". Furthermore, the Institute for Justice recommends other reforms to make the forfeiture process fairer, beginning with eliminating financial incentives for law enforcement to seize and keep forfeited property and, instead, directing any proceeds to the general revenue fund or other neutral fund. Eight jurisdictions now prohibit law enforcement from keeping the proceeds from forfeited property. A second reform is to adopt a high standard of proof, such as "beyond a reasonable doubt", in order to forfeit property in civil proceedings. Eighteen jurisdictions have a standard higher than Hawaii's "preponderance of the evidence" standard, and for ten of those jurisdictions, it is equivalent to "beyond a reasonable doubt". The third suggested reform, which a number of jurisdictions have already made, involves requiring law enforcement to prove that owners consented to or possessed knowledge of the crime that led to the seizure of their property, restoring the presumption of innocence used in criminal proceedings. The legislature finds that none of these recommendations have been implemented in Hawaii. Accordingly, the purpose of this Act is to make the State's civil asset forfeiture process more just by: (1) Restricting civil asset forfeiture to cases involving the commission of a felony offense where the property owner has been convicted of an underlying felony offense; and (2) Directing any forfeiture proceeds to the general fund. 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 facilitated or assisted such activity; (c) Any firearm which 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, 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 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 has been established, participated in, operated, controlled, or conducted in order to commit a covered offense; (h) All books, records, bank statements, accounting records, microfilms, tapes, computer data, or other data which are used, intended for use, or which facilitated or assisted in the commission of a covered offense, or which 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;]: (i) The commission of any covered offense unless: (A) The covered offense is chargeable as a felony offense under state law; and (B) The owner has been convicted of the covered offense by a verdict or plea, including a no contest plea or a deferred acceptance of guilty plea or no contest plea; or (ii) Any act or omission established by that owner to have been committed or omitted without the knowledge and consent of that owner; provided that nothing in this paragraph shall be construed to prevent the seizure of property prior to conviction pursuant to section 712A-6; (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 under other chapters." SECTION 3. 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; (b)] (a) 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)] (b) 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)] (c) May compromise and pay valid claims against property forfeited pursuant to this chapter; or [(e)] (d) 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, [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; (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.] 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 revolving 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 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 purpose 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 less than [twenty] forty days prior to 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)] (4) and the reason for the expenditures." SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect upon its approval; provided that the amendments made to section 712A-16, Hawaii Revised Statutes, by section 3 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. |
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