First Regular Session Sixty-seventh General Assembly STATE OF COLORADO INTRODUCED LLS NO. 09-0489.01 Michael Dohr HOUSE BILL 09-1238 HOUSE SPONSORSHIP Rice, SENATE SPONSORSHIP Shaffer B., House Committees Senate Committees Judiciary A BILL FOR AN ACT Concerning civil forfeiture. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Adds a building knowingly used for housing or place of employment for a victim of human trafficking to the list of buildings that may be forfeited. Repeals specific requirements for forfeiture actions, including but not limited to the following: That a conviction must be obtained in the same jurisdiction as the jurisdiction in which the forfeiture action is brought; That in specified circumstances a forfeiture action may proceed and judgment may be entered without a criminal conviction of the owner; and That all forfeiture actions shall proceed in state district court if the property was seized by a local or state law enforcement agency as a result of an ongoing state criminal investigation. Allows a court to order any property subject to forfeiture to be sold by a sheriff in the manner provided for sales on execution. States how the proceeds of the sale shall be applied, including providing funding for mental health treatment and a victim notification network. Repeals the requirement that an annual forfeiture report be filed with the department of local affairs. Makes conforming amendments. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Repeal. 16-13-301 (2.1), Colorado Revised Statutes, is repealed as follows: 16-13-301. Definitions. As used in this part 3, unless the context otherwise requires: (2.1) "Conviction" means a verdict of guilty by a judge or jury or a plea of guilty or nolo contendere that is accepted by the court or adjudication for an offense that would constitute a criminal offense if committed by an adult. SECTION 2. 16-13-303 (1) (m) (III) and (1) (n), Colorado Revised Statutes, are amended, and the said 16-13-303 (1) is further amended BY THE ADDITION OF A NEW PARAGRAPH, to read: 16-13-303. Class 1 public nuisance. (1) Every building or part of a building including the ground upon which it is situate and all fixtures and contents thereof, every vehicle, and any real property shall be deemed a class 1 public nuisance when: (m) (III) Used for the unlawful manufacture, production, sale, distribution, or for storage or possession for any unlawful manufacture, sale, or distribution of any gaming device, as defined in section 12-47.1-103 (10), C.R.S., or any other gaming device, equipment, key, electronic or mechanical device, slot machine, bogus chips, counterfeit chips, cards, coins, gaming billets, cheating device, thieving device, tools, drills, or wires used in violation of article 47.1 of title 12, C.R.S., or in violation of article 20 of title 18, C.R.S.; or (n) Used in committing, attempting to commit, or conspiring to commit against an elderly person any felony set forth in part 4 of article 4 of title 18, C.R.S., in part 1, 2, 3, or 5 of article 5 of title 18, C.R.S., article 5.5 of title 18, C.R.S., or section 11-51-603, C.R.S. For purposes of this paragraph (n), an "elderly person" means a person sixty years of age or older; or (o) Used as housing or as a place of employment for a victim of trafficking in adults as described in section 18-13-127, C.R.S., or smuggling of humans as described in section 18-13-128, C.R.S. SECTION 3. 16-13-303 (5.1) (b) (II) and (5.2) (d), Colorado Revised Statutes, are amended to read: 16-13-303. Class 1 public nuisance. (5.1) (b) As used in paragraph (a) of this subsection (5.1), an owner was a "party to the creation of the public nuisance" if it is established that: (II) The owner knew or reasonably should have known of the public nuisance act or had notice of the acts creating the public nuisance or prior similar conduct; (5.2) (d) A person who is convicted of a criminal offense arising from the same activity giving rise to the forfeiture proceedings in accordance with section 16-13-307 (1.5) shall not be eligible to assert an innocent owner defense. SECTION 4. Repeal. 16-13-307 (1.5) and (1.6), the introductory portion to 16-13-307 (1.7), and 16-13-307 (1.7) (a) (II), (1.7) (b), (1.7) (c), (1.7) (d), (1.7) (e), (1.7) (f), (1.8), and (2.5), Colorado Revised Statutes, are repealed as follows: 16-13-307. Jurisdiction - venue - parties - process. (1.5) No judgment of forfeiture of property in any forfeiture proceeding shall be entered unless and until an owner of the property is convicted of an offense listed in section 16-13-301 or 16-13-303, or a lesser included offense of an eligible offense if the conviction is the result of a negotiated guilty plea. Nothing in this section shall be construed to require the conviction to be obtained in the same jurisdiction as the jurisdiction in which the forfeiture action is brought. In the event criminal charges arising from the same activity giving rise to the forfeiture proceedings are filed against any individual claiming an interest in the property subject to the forfeiture proceeding, the trial and discovery phases of the forfeiture proceeding shall be stayed by the court until the disposition of the criminal charges. A stay shall not be maintained during an appeal or post-conviction proceeding challenging a criminal conviction. Nothing in this section shall be construed to prohibit or prevent the parties from contemporaneously resolving criminal charges and a forfeiture proceeding arising from the same activity. (1.6) Upon acquittal or dismissal of a criminal action against a person named in a forfeiture action related to the criminal action, unless the forfeiture action was brought pursuant to one or more of paragraphs (a) to (f) of subsection (1.7) of this section, the forfeiture claim shall be dismissed and the seized property shall be returned as respects the subject matter property or interest therein of that person, if the case has been adjudicated as to all other claims, interests, and owners, unless possession of the property is illegal. If the forfeiture action is dismissed or judgment is entered in favor of the claimant, the claimant shall not be subject to any monetary charges by the state for storage of the property or expenses incurred in the preservation of the property, unless at the time of dismissal the plaintiff shows that those expenses would have been incurred to prevent waste of the property even if it had not been seized. (1.7) Notwithstanding the provisions of subsection (1.5) of this section: (a) (II) If a person lacks standing pursuant to this paragraph (a), the forfeiture action may proceed and a judgment of forfeiture may be entered without a criminal conviction of an owner, upon motion and notice as provided in the rules of civil procedure. (b) If, following notice to all persons known to have an interest, or who have asserted an interest in the property subject to forfeiture, an owner fails to file an answer or other appropriate pleading with the court claiming an interest in the subject matter property, or no person establishes standing to contest the forfeiture action pursuant to section 16-13-303 (5), a forfeiture action may proceed and a judgment of forfeiture may be entered without a criminal conviction of an owner. (c) If the plaintiff proves by clear and convincing evidence that the property was instrumental in the commission of an offense listed in section 16-13-303 (1) or that the property is traceable proceeds of the offense or related criminal activity by a nonowner and the plaintiff proves by clear and convincing evidence that an owner is not an innocent owner pursuant to section 16-13-303 (5.2) (a), a judgment of forfeiture may be entered without a criminal conviction of an owner. (d) If an owner of the property who was involved in the public nuisance act or conduct giving rise to the claim of forfeiture subsequently dies, and was not an innocent owner pursuant to section 16-13-303 (5.2) (a), a judgment of forfeiture may be entered without a criminal conviction of an owner. (e) If an owner received a deferred judgment, deferred sentence, or participated in a diversion program, or in the case of a juvenile a deferred adjudication or deferred sentence or participated in a diversion program for the offense, a judgment of forfeiture may be entered without a criminal conviction. (f) A defendant or claimant shall be permitted to waive the requirement of a criminal conviction in order to settle a forfeiture action. (1.8) Nothing in this section shall be construed to limit the temporary seizure of property for evidentiary, investigatory, or protective purposes. (2.5) All forfeiture actions shall proceed in state district court if the property was seized by a local or state law enforcement agency as a result of an ongoing state criminal investigation and the owner is being prosecuted in state court. Unless directed by an authorized agent of the federal government, no state or local law enforcement agency may transfer any property seized by the state or local agency to a federal agency for forfeiture under federal law unless an owner of the property is being prosecuted in federal court. SECTION 5. 16-13-308 (1) (f), Colorado Revised Statutes, is amended to read: 16-13-308. Temporary restraining order - preliminary injunction - when to issue. (1) (f) Any person with an ownership interest adversely affected by a temporary restraining order issued pursuant to this subsection (1) may file a motion to vacate the temporary restraining order. Such The motion shall be filed within ten days of after the time said person is served with or otherwise has notice of the temporary restraining order. The motion shall be set for hearing within ten days after its filing. At said hearing, the court shall determine whether the various provisions of the temporary restraining order should remain in effect pending final determination of the action. No part of the temporary restraining order shall be vacated unless the proponent of the motion demonstrates that there is no probable cause to believe that a public nuisance exists or that the public nuisance acts underlying the action occurred, or that the proponent has a reasonable likelihood of prevailing on the merits of the case with respect to the temporary seizure or closure of the property. No issue regarding the forfeiture of the property shall be raised at the hearing on the motion, except the court may consider an innocent owner defense pursuant to section 16-13-303 (5.2) by a proponent who has not been charged in a parallel criminal action arising from the same activity giving rise to the forfeiture proceedings. When the innocent owner defense is raised as grounds for vacating the order, the issues at the hearing shall be limited to modifying the order to provide for the use of the property during the pendency of the action by an innocent owner, but only if such use is consistent with preserving it for forfeiture as to any other interest. Such a modifying order may include, without limitation, reasonable provisions for the continued occupancy of a residence, or the operation of a business and the sale or disposition of business inventory. However, no such modifying order shall include the release of currency. The determination of the facts by the court at the hearing is independent of and shall not be considered in the determination of the same or similar facts in the adjudication of any criminal charges arising out of the same occurrences. Any motion to vacate a temporary restraining order shall state specifically the factual and legal grounds upon which it is based, and only those grounds may be considered at the hearing. Until vacated, the temporary restraining order shall remain in full force and effect. SECTION 6. 16-13-311 (3), Colorado Revised Statutes, is REPEALED AND REENACTED, WITH AMENDMENTS, to read: 16-13-311. Disposition of seized personal property - county jail mental health aftercare - victim notification network fund. (3) (a) Except as otherwise provided in this section, the court may order the property sold by the sheriff in the manner provided for sales on execution. The proceeds of the sale shall be applied as follows: (I) To the fees and costs of removal and sale; (II) To the allowance and cost of closing and keeping closed the building or place where the property was seized pursuant to the provisions of this part 3; and (III) To the payment of the plaintiff's costs in such action. (b) The balance of the sale proceeds remaining after distribution pursuant to paragraph (a) of this subsection (3), if any, shall be distributed as follows: (I) Forty percent to the seizing agency if the court finds that the agency can use the proceeds to cover the costs associated with the investigation of the forfeiture action. An advisory committee shall review and approve the seizing agency's expenditure of the proceeds received pursuant to this subparagraph (I). The advisory committee shall consist of the chief judge of the judicial district that serves the seizing agency's jurisdiction, a chief of police or sheriff from the judicial district that serves the seizing agency's jurisdiction appointed by the chief judge, and the district attorney for the judicial district that serves the seizing agency's jurisdiction. An independent auditor shall audit the seizing agency's expenditure of the proceeds on an annual basis. (II) Twenty percent to the county in which the forfeiture was made. The county shall direct the proceeds received pursuant to this subparagraph (II) as follows: (A) Half to the community mental health center in the county in which the forfeiture was made to provide assistance for the mental health needs of offenders leaving that county jail; and (B) Half to be divided equally among any mental health crisis triage centers located in the county or, if the county does not have a mental health crisis triage center, half to a triage center that serves a group of counties that includes the county in which the forfeiture was made. If the county is not served by an active mental health crisis triage center, the proceeds that would have been directed to triage centers pursuant to this sub-subparagraph (B) shall be directed to a mental health center in the county in which the forfeiture was made to provide assistance for the mental health needs of consumers at risk of incarceration or reincarceration. (III) Twenty percent to the district attorney for actual and reasonable expenses related to the costs of prosecuting the forfeiture proceeding and title transfer; and (IV) Twenty percent to the state treasurer, who shall credit the same to the victim notification network fund, which fund is hereby created and referred to in this subparagraph (IV) as the "fund". The moneys in the fund shall be subject to annual appropriation by the general assembly to the office of information technology created in section 24-37.5-103, C.R.S., for the direct and indirect costs associated with the implementation and maintenance of a statewide victim notification network. Any moneys in the fund not expended for the purpose of this subparagraph (IV) may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of moneys in the fund shall be credited to the fund. Any unexpended and unencumbered moneys remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or another fund. (c) In lieu of ordering the sale of the seized property, the court shall, if it finds that the property can be used by the agency that seized it, order the property delivered to the agency for its use. SECTION 7. 16-13-311 (4), Colorado Revised Statutes, is amended to read: 16-13-311. Disposition of seized personal property. (4) It is the intent of the general assembly that moneys allocated to a seizing agency or district attorney pursuant to subsection (3) of this section shall not be considered a source of revenue to meet normal operating needs. SECTION 8. Repeal. 16-13-502 (1.5), Colorado Revised Statutes, is repealed as follows: 16-13-502. Definitions. As used in this part 5, unless the context otherwise requires: (1.5) "Conviction" means a verdict of guilty by a judge or jury or a plea of guilty or nolo contendere that is accepted by the court or adjudication for an offense that would constitute a criminal offense if committed by an adult. SECTION 9. Repeal. 16-13-505 (1.5) and (1.6), the introductory portion to 16-13-505 (1.7), and 16-13-505 (1.7) (a) (II), (1.7) (b), (1.7) (c), (1.7) (d), (1.7) (e), (1.7) (f), and (2.5), Colorado Revised Statutes, are repealed as follows: 16-13-505. Forfeiture proceedings. (1.5) No judgment of forfeiture of property in any forfeiture proceeding shall be entered unless and until an owner of the property is convicted of an offense involving the conduct listed in section 16-13-503, or a lesser included offense of an eligible offense if the conviction is the result of a negotiated guilty plea. Nothing in this section shall be construed to require the conviction to be obtained in the same jurisdiction as the jurisdiction in which the forfeiture action is brought. In the event criminal charges arising from the same activity giving rise to the forfeiture proceedings are filed against any individual claiming an interest in the property subject to the forfeiture proceeding, the trial and discovery phases of the forfeiture proceeding shall be stayed by the court until the disposition of the criminal charges. A stay shall not be maintained during an appeal or post-conviction proceeding challenging a criminal conviction. Nothing in this section shall be construed to prohibit or prevent the parties from contemporaneously resolving criminal charges and a forfeiture proceeding arising from the same activity. (1.6) Upon acquittal or dismissal of a criminal action against a person named in a forfeiture action related to the criminal action, unless the forfeiture action was brought pursuant to one or more of paragraphs (a) to (f) of subsection (1.7) of this section, the forfeiture claim shall be dismissed and the seized property shall be returned as respects the subject matter property or interest therein of that person, if the case has been adjudicated as to all other claims, interests, and owners, unless possession of the property is illegal. If the forfeiture action is dismissed or judgment is entered in favor of the claimant, the claimant shall not be subject to any monetary charges by the state for storage of the property or expenses incurred in the preservation of the property, unless at the time of dismissal the plaintiff shows that those expenses would have been incurred to prevent waste of the property even if it had not been seized. (1.7) Notwithstanding the provisions of subsection (1.5) of this section: (a) (II) If a person lacks standing pursuant to this paragraph (a), the forfeiture action may proceed and a judgment of forfeiture may be entered without a criminal conviction of an owner, upon motion and notice as provided in the rules of civil procedure. (b) If, following notice to all persons known to have an interest or who have asserted an interest in the property subject to forfeiture, an owner fails to file an answer or other appropriate response with the court claiming an interest in the subject matter property, or no person establishes standing to contest the forfeiture action pursuant to section 16-13-504 (2), a forfeiture action may proceed and a judgment of forfeiture may be entered without a criminal conviction of an owner. (c) If the plaintiff proves by clear and convincing evidence that the property was instrumental in the commission of an offense listed in section 16-13-503 (1) or that the property is traceable proceeds of the offense or related criminal activity by a nonowner and the plaintiff proves by clear and convincing evidence that an owner is not an innocent owner pursuant to section 16-13-504 (2.2), a judgment of forfeiture may be entered without a criminal conviction of an owner. (d) If an owner of the property who was involved in the public nuisance act or conduct giving rise to the claim of forfeiture subsequently dies, and was not an innocent owner pursuant to section 16-13-504 (2.2), a judgment of forfeiture may be entered without a criminal conviction of an owner. (e) If an owner received a deferred judgment, deferred sentence, or participated in a diversion program, or in the case of a juvenile a deferred adjudication or deferred sentence or participated in a diversion program for the offense, a judgment of forfeiture may be entered without a criminal conviction. (f) A defendant or claimant shall be permitted to waive the requirement of a criminal conviction in order to settle a forfeiture action. (2.5) All forfeiture actions shall proceed in state district court if the property was seized by a local or state law enforcement agency as a result of an ongoing state criminal investigation and the owner is being prosecuted in state court. Unless, directed by an authorized agent of the federal government, no state or local law enforcement agency may transfer any property seized by the state or local agency to a federal agency for forfeiture under federal law unless an owner of the property is being prosecuted in federal court. SECTION 10. 16-13-601, Colorado Revised Statutes, is amended to read: 16-13-601. Receipt of federally forfeited property. Any agency charged with the enforcement of the laws of this state, including the Colorado National Guard when participating in operations pursuant to the drug interdiction and enforcement plan required by part 13 of article 3 of title 28, C.R.S., is authorized to accept, receive, dispose of, and expend the property or proceeds from any property forfeited to the federal government and allocated to such agency by the United States attorney general pursuant to 21 U.S.C. sec. 881 (e). Such revenues shall be in addition to the moneys appropriated to such law enforcement agency by the general assembly or any unit of local government. Said property or proceeds may be credited to any lawfully created fund designated to receive proceeds of forfeitures. Any proceeds received pursuant to this section are exempt from the distribution requirements of section 16-13-311 (3) (a). SECTION 11. Repeal. 16-13-701 (2), (3), (4), and (5), Colorado Revised Statutes, are repealed as follows: 16-13-701. Reporting of forfeited property. (2) The report required in this section shall be filed with the department of local affairs and shall constitute a public record and shall be open to inspection as provided in part 2 of article 72 of title 24, C.R.S., commonly known as the "Public Records Act". (3) Any state or local law enforcement agency or multijurisdictional task force that receives proceeds from federal forfeiture actions shall submit a copy to the department of local affairs of any accounting report filed by such agency pursuant to federal law or regulation. The federal annual accounting report shall constitute a public record and shall be open to inspection as provided in part 2 of article 72 of title, 24, C.R.S., commonly known as the "Public Records Act". Such information shall be subject to audit in accordance with part 6 of article 1 of title 29, C.R.S. (4) The alcohol and drug abuse division in the department of human services shall prepare an annual accounting report of moneys received by the managed service organization pursuant to section 16-13-311 (3) (a) (VII) (B), including revenues, expenditures, beginning and ending balances, and services provided. The alcohol and drug abuse division shall provide this information in its annual report pursuant to section 25-1-210, C.R.S. (5) Any report submitted pursuant to this section shall be subject to audit in accordance with part 6 of article 1 of title 29, C.R.S. SECTION 12. 18-17-106 (5), Colorado Revised Statutes, is amended, and the said 18-17-106 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 18-17-106. Civil remedies. (5) The attorney general or district attorney may institute civil proceedings under this section. Any action instituted under this section shall conform to the procedures set forth in part 3 or part 5 of article 13 of title 16, C.R.S. In any action brought under this section, the district court shall proceed as soon as practicable to the hearing and determination. Pending final determination, the district court may, at any time, enter such injunctions, prohibitions, or restraining orders or take such actions, including the acceptance of satisfactory performance bonds, as the court may deem proper. (13) An action may be commenced and heard pursuant to this section even if the defendant has not been charged or convicted in a criminal prosecution under this article. SECTION 13. 27-1-204 (5.5), Colorado Revised Statutes, is amended to read: 27-1-204. Types of services purchased - limitation on payments - offender mental health services fund. (5.5) The offender mental health services fund is hereby created in the state treasury. The principal of the fund shall consist of tobacco litigation settlement moneys transferred by the state treasurer to the fund in accordance with section 24-75-1104.5 (1.5) (a) (II), C.R.S., and moneys transferred by the state treasurer to the fund in accordance with section 16-13-311 (3) (b) (II), C.R.S., for the purchase of mental health services for juvenile and adult offenders who have mental health problems and are involved in the criminal justice system. The division of mental health in the department of human services, subject to annual appropriation by the general assembly, shall distribute the principal of the fund to the community mental health centers; except that, at the end of the 2007-08 fiscal year and at the end of each fiscal year thereafter, all unexpended and unencumbered principal of the fund shall be transferred to the short-term innovative health program grant fund created in section 25-36-101 (2), C.R.S., in accordance with section 24-75-1104.5 (1.5) (b), C.R.S. Interest and income earned on the deposit and investment of moneys in the offender mental health services fund shall be credited to the fund and shall remain in the fund until the end of the fiscal year in which credited, when it shall be transferred to the short-term innovative health program grant fund. SECTION 14. Effective date - applicability. This act shall take effect July 1, 2009, and shall apply to all forfeiture actions filed on or after said date. SECTION 15. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.