North Dakota Bill Would End Civil Asset Forfeiture, Effectively Shut Federal Loophole

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A bill introduced in the North Dakota House 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.

A coalition of 12 Republicans, including Senate President Pro Tempore and Majority Caucus Leader David Hogue, introduced House Bill 1286 (HB1286) on Jan. 3. Under the proposed law, the state could not proceed with asset forfeiture until the owner of the property has been convicted of or pled guilty to a criminal offense in most cases. HB1286 would also raise the standard of proof necessary in forfeiture cases to “clear and convincing evidence.”

The bill would also fully close the federal “equitable sharing” loophole in North Dakota with the following language.

A law enforcement agency may not refer or initiate a transfer of property seized under state law to a federal agency by way of adoption or equitable sharing of seized property for the purpose of the property’s forfeiture under federal law. All proceeds received by a law enforcement agency from equitable sharing, adoption, or other transfer of seized property to a federal agency for the purpose of the property’s forfeiture must be added to the state school fund as provided under section 29 – 27 – 02.1.

The proposed law would require asset forfeiture proceeds to be deposited in the school fund, eliminating the “policing for profit” motive in the current law. As it stands, North Dakota law enforcement agencies can keep 100% of proceeds up to $200,000.

HB1286 also includes detailed reporting requirements.

According to the Institute for Justice, North Dakota has some of the worst asset forfeiture laws in the country. Law enforcement only needs to meet the lowest possible standard of proof—probable cause—to forfeit property. When property has been used for illegal activity without the owner’s knowledge, the burden falls upon owners to prove their innocence in order to recover their property.

Passage of HB1286 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.

The proposed law would not bar state or local police from partnering with federal law enforcement in asset forfeiture cases initiated under federal 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

HB1286 was referred to the House Judiciary Committee where it must pass by a majority vote before moving forward in the legislative process.

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