Indiana Bill Would Reform State Asset Forfeiture Laws, Effectively Shut Federal Loophole

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A bill prefiled in the Indiana Senate would reform the state’s asset forfeiture laws to prohibit the state from taking a person’s property without a criminal conviction in most situations. Passage of the bill would also effectively close a federal loophole that allows police to circumvent more strict state forfeiture laws by passing cases off to the feds.

Sen. Phil Boots (R-23) prefiled Senate Bill 97 (SB97) for introduction in the 2019 legislative session. The legislation would require prosecutors to obtain a conviction of the person who possessed or used the seized property before moving forward with civil asset forfeiture proceedings in all contested cases.

Under current law, the state can seize property simply by establishing it was connected to a crime by “a preponderance of the evidence,” a very low legal bar. To win an innocent owner claim, property owners bear the burden of proving their innocence in most cases, flipping due process on its head.

Passage of SB97 would also take a big step toward closing a loophole that allows state and local police to get around more strict state asset forfeiture laws in a vast majority of situations. This is particularly important in light of a policy directive issued in July 2017 by then-Attorney General Jeff Sessions for the Department of Justice (DOJ).

FEDERAL LOOPHOLE

A federal program known as “Equitable Sharing” allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government through a process known as adoption. The DOJ directive reiterates full support for the equitable sharing program, directs federal law enforcement agencies to aggressively utilize it, and sets the stage to expand it in the future.

Law enforcement agencies can circumvent more strict state forfeiture laws by claiming cases are federal in nature. Under these arrangements, state officials simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds. However, when states merely withdraw from participation, the federal directive loses its impact.

Until recently, California faced this situation. The state has some of the strongest state-level restrictions on civil asset forfeiture in the country, but state and local police were circumventing the state process by passing cases to the feds. According to a report by the Institute for Justice, Policing for Profit, California ranked as the worst offender of all states in the country between 2000 and 2013. In other words, California law enforcement was passing off a lot of cases to the feds and collecting the loot. The state closed the loophole in 2016.

SB97 would close the loophole in most situations by repealing a provision of the current law that permits the state to turn over seized property to the federal government. It would strike the following language from the current statute.

“Upon motion of a prosecuting attorney under IC35-33-5-5(j), property seized under this chapter must be transferred, subject to the perfected liens or other security interests of any person in the property, to the appropriate federal authority for disposition under 18 U.S.C. 981(e), 19 U.S.C. 1616a, or 21 U.S.C. 881(e) and any related regulations adopted bythe United States Department ofJustice.”

This would eliminate the option of passing state cases to the feds and require prosecutors to pursue forfeiture cases under the stricter state law.

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 unconstitutional “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

SB97 will be officially introduced when the Indiana legislature convenes for its 2019 regular session on Jan. 3, 2019. At that time, the bill will be referred to the Committee on Corrections and Criminal Law where it will have to pass by a majority vote before moving forward in the legislative process.

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