HB0284

HOUSE BILL 284

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Andy Nunez and Rod Montoya

AN ACT

RELATING TO FORFEITURE; REVISING PROCEDURES RELATED TO THE RETURN OF SEIZED PROPERTY FOR DEFENDANTS' USE IN HIRING LEGAL COUNSEL; REVISING CERTAIN DEADLINES IN FORFEITURE PROCEEDINGS; LIMITING FACTORS CONSIDERED TO ESTABLISH THE VALUE OF FORFEITED PROPERTY; REMOVING ABANDONED PROPERTY FROM PROCEDURES RELATED TO FORFEITED PROPERTY; PROVIDING THAT INNOCENT OWNERS AND SECURED PARTIES DO NOT NEED ACTUAL KNOWLEDGE OF THE CRIME RELATED TO SEIZED PROPERTY; REVISING DISTRIBUTIONS OF PROCEEDS FROM THE SALE OF FORFEITED PROPERTY AND FORFEITED CURRENCY; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 31-27-3 NMSA 1978 (being Laws 2002, Chapter 4, Section 3, as amended) is amended to read:

"31-27-3. DEFINITIONS.--As used in the Forfeiture Act:

[A. "abandoned property":

(1) means personal property the rights to which and the control of which an owner has intentionally relinquished; and

(2) does not mean real property;

B. "actual knowledge" means a direct and clear awareness of information, a fact or a condition;

C.] A. "contraband" means goods that may not be lawfully imported, exported or possessed, including drugs that are listed in Schedule I, II, III, IV or V of the Controlled Substances Act and that are possessed without a valid prescription;

[D.] B. "conveyance" means a device used for transportation and:

(1) includes a motor vehicle, trailer, snowmobile, airplane, vessel and any equipment attached to the conveyance; but

(2) does not include property that is stolen or taken in violation of a law;

[E.] C. "conviction" or "convicted" means that a person has been found guilty of a crime in a trial court whether by a plea of guilty or nolo contendere or otherwise and whether the sentence is deferred or suspended;

[F.] D. "crime" means a violation of a criminal statute for which property of the offender is subject to seizure and forfeiture;

[G.] E. "instrumentality" means all property that is otherwise lawful to possess that is used in the furtherance or commission of an offense to which forfeiture applies and includes land, a building, a container, a conveyance, equipment, materials, a product, a computer, computer software, a telecommunications device, a firearm, ammunition, a tool, money, a security and a negotiable instrument and other devices used for exchange of property;

[H.] F. "law enforcement agency" means the employer of a law enforcement officer [that] who is authorized to seize or has seized property pursuant to the Forfeiture Act;

[I.] G. "law enforcement officer" means:

(1) a state or municipal police officer, county sheriff, deputy sheriff, conservation officer, motor transportation enforcement officer or other state employee authorized by state law to enforce criminal statutes; but

(2) does not mean a correctional officer;

[J.] H. "owner" means a person who has a legal or equitable ownership interest in property;

[K.] I. "property" means tangible or intangible personal property or real property;

[L.] J. "property subject to forfeiture" means property or an instrumentality [described and] declared to be subject to forfeiture by the Forfeiture Act or a state law outside of the Forfeiture Act; and

[M.] K. "secured party" means a person with a security or other protected interest in property, whether the interest arose by mortgage, security agreement, lien, lease or otherwise; the purpose of which interest is to secure the payment of a debt or protect a potential debt owed to the secured party."

SECTION 2. Section 31-27-4.1 NMSA 1978 (being Laws 2015, Chapter 152, Section 5) is amended to read:

"31-27-4.1. RECEIPT FOR SEIZED PROPERTY--REPLEVIN HEARING.--

A. When a law enforcement officer seizes property [that is] subject to forfeiture, the officer shall provide an itemized receipt to the person possessing the property or, in the absence of a person to whom the receipt could be given, shall leave the receipt in the place where the property was found, if possible.

B. Following the seizure of property, the defendant in the related criminal matter or another person who claims an interest in seized property may, at any time before [sixty] ninety days prior to a related criminal trial, claim an interest in seized property by a motion [to] requesting the court to issue a writ of replevin. A motion filed pursuant to this section shall include facts to support the person's alleged interest in the seized property.

C. A person who makes a timely motion pursuant to this section shall have a right to a hearing on the motion before the resolution of any related criminal matter or forfeiture proceeding and within thirty days of the date on which the motion is filed.

D. At least ten days before a hearing on a motion filed pursuant to this section, the state shall file an answer or responsive motion that shows probable cause for the seizure.

E. A court shall grant a claimant's motion if the court finds that:

(1) it is likely that the final judgment will require the state to return [the] property that was seized without a court order to the claimant;

(2) the property is not reasonably required to be held for investigatory reasons; or

(3) the property is the only reasonable means for a defendant to pay for legal representation in a related criminal or forfeiture proceeding and the defendant made a prima facie showing that the property was not used in the furtherance or commission of a crime.

F. In its discretion, the court may order the return of funds or property sufficient for a defendant to obtain legal counsel but less than the total amount seized [and it may]. If the court makes such an order, it shall require an accounting. An accounting report held before the resolution of the relevant criminal and forfeiture proceedings shall be held in camera. If the court finds in the state's favor in both the criminal and forfeiture proceedings, the court shall:

(1) disclose the accounting report;

(2) hear arguments by the parties as to what portion of the funds or property should be paid to the defendant's counsel and what portion should be forfeited; and

(3) issue an order on how the funds or property shall be distributed.

G. In lieu of ordering the issuance of [the] a writ of replevin, a court may order:

(1) the state to give security or written assurance for satisfaction of any judgment, including damages, that may be rendered in a related forfeiture action; or

(2) any other relief the court deems to be just."

SECTION 3. Section 31-27-6 NMSA 1978 (being Laws 2002, Chapter 4, Section 6, as amended) is amended to read:

"31-27-6. FORFEITURE PROCEEDINGS--DETERMINATION--SUBSTITUTION OF PROPERTY--CONSTITUTIONALITY--APPEAL.--

A. A person who claims an interest in seized property shall file an answer to the complaint of forfeiture within thirty days of the date of service of the complaint. The answer shall include facts to support the claimant's alleged interest in the property.

B. The district courts have jurisdiction over forfeiture proceedings, and venue for a forfeiture proceeding is in the same court in which venue lies for the criminal matter related to the seized property.

C. The forfeiture proceeding shall begin after the conclusion of the trial for the related criminal matter in an ancillary proceeding that relates to a defendant's property before the same judge and jury, if applicable, and the court, and the jury, if applicable, may consider the forfeiture of property seized from other persons at the same time or in a later proceeding. If the criminal defendant in the related criminal matter is represented by the public defender department, the chief public defender or the district public defender may authorize department representation of the defendant in the forfeiture proceeding.

D. Discovery conducted in an ancillary forfeiture proceeding is subject to the rules of criminal procedure.

E. An ancillary forfeiture proceeding that relates to the forfeiture of property valued at less than twenty thousand dollars ($20,000) shall be held before a judge only.

F. If the state fails to prove, by clear and convincing evidence, that a person whose property is alleged to be subject to forfeiture is an owner of the property:

(1) the forfeiture proceeding shall be dismissed and the property shall be delivered to the owner, unless the owner's possession of the property is illegal; and

(2) the owner shall not be subject to any charges by the state for storage of the property or expenses incurred in the preservation of the property.

G. The court shall enter a judgment of forfeiture and the seized property shall be forfeited to the state if the state proves by clear and convincing evidence that:

(1) the seized property is subject to forfeiture;

(2) the criminal prosecution of the owner of the seized property resulted in a conviction; and

(3) the value of the property to be forfeited does not unreasonably exceed:

(a) the pecuniary gain derived or sought to be derived by the crime;

(b) the pecuniary loss caused or sought to be caused by the crime; or

H. A court shall not accept a plea agreement or other arrangement by which a defendant contributes or donates property to a person, charity or other organization in full or partial fulfillment of responsibility established in the court's proceeding.

I. Following a person's conviction, the state may make a motion for forfeiture of substitute property owned by the person that is equal to but does not exceed the value of property that is subject to forfeiture but that the state is unable to seize. The court shall order the forfeiture of substitute property only if the state proves by a preponderance of the evidence that the person intentionally transferred, sold or deposited property with a third party to avoid the court's jurisdiction and the forfeiture of the property.

J. A person is not jointly and severally liable for orders for forfeiture of another person's property. When ownership of property is unclear, a court may order each person to forfeit the person's property on a pro rata basis or by another means the court deems equitable.

K. [At any time] Within thirty days following the conclusion of a forfeiture proceeding, the person whose property was forfeited may petition the court to determine whether the forfeiture was unconstitutionally excessive pursuant to the state or federal constitution.

L. At a non-jury hearing on the petition, the petitioner has the burden of establishing by a preponderance of the evidence that the forfeiture was grossly disproportional to the seriousness of the criminal offense for which the person was convicted.

M. In determining whether the forfeiture is unconstitutionally excessive, the court may consider all relevant factors, including:

(1) the seriousness of the criminal offense and its impact on the community, the duration of the criminal activity and the harm caused by the defendant;

(2) the extent to which the defendant participated in the offense;

(3) the extent to which the property was used in committing the offense;

(4) the sentence imposed for the commission of the crime that relates to the property that is subject to forfeiture; and

(5) whether the criminal offense was completed or attempted.

N. In determining the value of the property subject to forfeiture, the court may consider relevant factors, including the [(1)] fair market value of the property

[(2) value of the property to the defendant, including hardship that the defendant will suffer if the forfeiture is realized; and

(3) hardship from the loss of a primary residence, motor vehicle or other property to the defendant's family members or others if the property is forfeited].

O. The court shall not consider the value of the property to the state when it determines whether the forfeiture of property is constitutionally excessive.

P. A party to a forfeiture proceeding may appeal a district court's decision regarding the seizure, forfeiture and distribution of property pursuant to the Forfeiture Act."

SECTION 4. Section 31-27-7 NMSA 1978 (being Laws 2002, Chapter 4, Section 7, as amended) is amended to read:

"31-27-7. TITLE TO SEIZED PROPERTY--DISPOSITION OF FORFEITED PROPERTY AND PROCEEDS.--

A. The state acquires provisional title to seized property at the time the property was used or acquired in connection with an offense that subjects the property to forfeiture. Provisional title authorizes the state to hold and protect the property. Title to the property shall vest with the state when a trier of fact renders a final forfeiture verdict and the title relates back to the time when the state acquired provisional title; provided that the title is subject to claims by third parties that are adjudicated pursuant to the Forfeiture Act.

B. Unless possession of the property is illegal or a different disposition is specifically provided for by law and except as provided in this section, forfeited property that is not currency shall be delivered [along with any abandoned property] to the state treasurer for disposition at a public auction. Forfeited currency and all [sale] proceeds of the sale of forfeited [or abandoned] property shall be distributed as follows:

(1) first, to pay any reasonable expenses related to the investigation, seizure, storage, protection and transfer of the property;

(2) second, to pay any reasonable expenses incurred by the state treasurer's office to dispose of the property;

(3) third, to reimburse law enforcement agencies for any costs incurred to prepare reports required by the provisions of Subsection A of Section 31-27-9 NMSA 1978; and

(4) finally, any remaining balance shall be deposited in the general fund.

C. Proceeds from the sale of forfeited property received by the state from another jurisdiction [shall] may be deposited in the general fund of the governing body of the law enforcement agency that seized the property, and the proceeds shall be used for drug abuse prevention and education programs and treatment services, for other substance abuse or demand reduction initiatives or for the enforcement of drug-related laws.

D. A property interest forfeited to the state pursuant to the Forfeiture Act is subject to the interest of a secured party unless, in the forfeiture proceeding, the state proves by clear and convincing evidence that the secured party [had actual knowledge] knew or should have known of the crime that relates to the seizure of the property."

SECTION 5. Section 31-27-7.1 NMSA 1978 (being Laws 2015, Chapter 152, Section 9) is amended to read:

"31-27-7.1. INNOCENT OWNERS.--

A. The property of an innocent owner, as provided in this section, shall not be forfeited.

B. A person who claims to be an innocent owner has the burden of production to show that the person:

(1) holds a legal right, title or interest in the property seized; and

(2) held an ownership interest in the seized property at the time the illegal conduct that gave rise to the seizure of the property occurred or was a bona fide purchaser for fair value.

C. The state shall immediately return property to an established innocent owner who has an interest in homesteaded property, a motor vehicle valued at less than ten thousand dollars ($10,000) or a conveyance that is encumbered by a security interest that was perfected pursuant to state law or that is subject to a lease or rental agreement, unless the secured party or lessor [had actual knowledge] knew or should have known of the criminal act upon which the forfeiture was based.

D. If a person establishes that the person is an innocent owner pursuant to Subsection B of this section [31-27-7.1 NMSA 1978] and the state pursues a forfeiture proceeding with respect to that person's property, other than property described in Subsection D of Section 31-27-7 NMSA 1978, to successfully forfeit the property, the state shall prove by clear and convincing evidence that the innocent owner [had actual knowledge] knew or should have known of the underlying crime giving rise to the forfeiture.

E. A person who acquired an ownership interest in property subject to forfeiture after the commission of a crime that gave rise to the forfeiture and who claims to be an innocent owner has the burden of production to show that the person has legal right, title or interest in the property seized under this section.

F. If a person establishes that the person is an innocent owner as provided in Subsection B of this section and the state pursues a forfeiture proceeding against the person's property, to successfully forfeit the property, the state shall prove by clear and convincing evidence that at the time the person acquired the property, the person:

(1) [had actual knowledge] knew or should have known that the property was subject to forfeiture; or

(2) was not a bona fide purchaser who was without notice of any defect in title and who gave valuable consideration.

G. If the state fails to meet its burdens as provided in Subsections C and D of this section, the court shall find that the person is an innocent owner and shall order the state to relinquish all claims of title to the innocent owner's property."

SECTION 6. Section 31-27-8 NMSA 1978 (being Laws 2002, Chapter 4, Section 8, as amended) is amended to read:

"31-27-8. SAFEKEEPING OF SEIZED PROPERTY PENDING DISPOSITION [SELLING OR RETAINING SEIZED PROPERTY PROHIBITED].--

A. Seized currency alleged to be subject to forfeiture shall be deposited with the clerk of the district court in an interest-bearing account.

B. Seized property other than currency or real property, not required by federal or state law to be destroyed, shall be:

(1) placed under seal; and

(2) removed to a place designated by the district court; or

(3) held in the custody of a law enforcement agency.

C. Seized property shall be kept by the custodian in a manner to protect it from theft or damage and, if ordered by the district court, insured against those risks.

[D. A law enforcement agency shall not retain forfeited or abandoned property.]"

SECTION 7. Section 31-27-9 NMSA 1978 (being Laws 2015, Chapter 152, Section 11) is amended to read:

"31-27-9. REPORTING.--

A. Every law enforcement agency shall prepare an annual report of the agency's seizures and forfeitures conducted pursuant to the Forfeiture Act, and seizures and forfeitures conducted pursuant to federal forfeiture law, and the report shall include:

(1) the total number of seizures of currency and the total amount of currency seized in each seizure;

(2) the total number of seizures of property and the number and types of items seized in each seizure;

(3) the market value of each item of property seized; [and]

(4) the total number of occurrences of each class of crime that resulted in the agency's seizure of property;

(5) the costs incurred by the agency for storage, maintenance and transportation of seized property; and

(6) any costs incurred by the agency to prepare its report in accordance with this subsection.

B. A law enforcement agency shall submit its annual reports to the department of public safety and to the district attorney's office in the agency's district. An agency that did not engage in seizure or forfeiture pursuant to the Forfeiture Act or federal forfeiture law, or both, shall report that fact in its annual report.

C. The department of public safety shall compile the reports submitted by each law enforcement agency and issue an aggregate report of all forfeitures in the state.

D. By April 1 of each year, the department of public safety shall publish on its [web site] website the department's aggregate report and individual law enforcement agency reports submitted for the previous year."

SECTION 8. Section 31-27-11 NMSA 1978 (being Laws 2015, Chapter 152, Section 13) is amended to read:

"31-27-11. TRANSFER OF FORFEITABLE PROPERTY TO THE FEDERAL GOVERNMENT.--[A.] A law enforcement agency shall not directly or indirectly transfer seized property to a federal law enforcement authority or other federal agency unless:

[(1)] A. the value of the seized property exceeds [fifty thousand dollars ($50,000)] twenty-five thousand dollars ($25,000), excluding the potential value of the sale of contraband; [and

(2)] B. the law enforcement agency determines that the criminal conduct that gave rise to the seizure is interstate in nature and sufficiently complex to justify the transfer of the property; [or

(3)] C. the seized property may only be forfeited under federal law; or

[B. The law enforcement agency shall not transfer property to the federal government if the transfer would circumvent the protections of the Forfeiture Act that would otherwise be available to a putative interest holder in the property]

D. the seized property includes firearms, ammunition, explosives, property associated with child pornography or other property that directly relates to public safety concerns."

SECTION 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2016.

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