This document includes House Committee Amendments incorporated into the bill on Mon, Feb 1, 2016 at 11:33 AM by cynthiahopkin.
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CIVIL ASSET FORFEITURE - PROCEDURAL REFORMS

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2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Brian M. Greene

5     
Senate Sponsor: Howard A. Stephenson

6     

7     LONG TITLE
8     Committee Note:
9          The Judiciary Interim Committee recommended this bill.
10     General Description:
11          This bill modifies the Forfeiture and Disposition of Property Act regarding civil
12     forfeiture procedures.
13     Highlighted Provisions:
14          This bill:
15          ▸     modifies the elements of qualifying as an innocent owner regarding property subject
16     to forfeiture;
17          ▸     requires a direct nexus of the property to a specific alleged criminal exchange or
18     transaction, in order for the property to be forfeited;
19          ▸     modifies the definition of proceeds that are from an offense giving rise to a
20     forfeiture;
21          ▸     requires the prosecutor to bring an action for civil forfeiture in a timely manner;
22          ▸     provides that any person may assert an interest in seized property or file an answer
23     to a forfeiture complaint without posting bond;
24          ▸     provides that the hardship provisions include use of funds to allow an individual to
25     obtain a legal defense in the forfeiture proceeding or the related criminal proceeding
26     and assets of a legitimate business;
27          ▸     provides that prejudgment interest shall be awarded, in addition to the current
28     postjudgment interest;
29          ▸     removes the cap of 20% of the value of the property subject to forfeiture when
30     awarding legal costs and attorney fees;
31          ▸     modifies the obligations of a claimant regarding illegal use of the property subject to
32     forfeiture;
33          ▸     provides that the proceeds from civil forfeiture actions shall be placed in the
34     Uniform School Fund, and that proceeds from criminal forfeiture actions shall
35     continue to be placed in the Criminal Forfeiture Restricted Account for use by the
36     State Asset Forfeiture Program;
37          ▸     modifies the allocation of the proceeds from asset forfeiture to provide for:
38               •     victim restitution;
39               •     reimbursement of direct costs by the prosecuting agency and the law
40     enforcement agencies involved in the case; and
41               •     allocation of remaining proceeds to the Uniform School Fund; and
42          ▸     provides that if the defendant is acquitted of the criminal charge subsequent to the
43     civil forfeiture proceeding, the forfeited assets shall be returned and the defendant
44     shall be reimbursed for costs as listed.
45     Money Appropriated in this Bill:
46          None
47     Other Special Clauses:
48          None
49     Utah Code Sections Affected:
50     AMENDS:
51          24-1-102, as last amended by Laws of Utah 2014, Chapter 112
52          24-4-102, as enacted by Laws of Utah 2013, Chapter 394
53          24-4-103, as enacted by Laws of Utah 2013, Chapter 394
54          24-4-104, as last amended by Laws of Utah 2014, Chapter 112
55          24-4-107, as enacted by Laws of Utah 2013, Chapter 394
56          24-4-108, as enacted by Laws of Utah 2013, Chapter 394
57          24-4-109, as enacted by Laws of Utah 2013, Chapter 394
58          24-4-110, as last amended by Laws of Utah 2014, Chapter 112
59          24-4-115, as last amended by Laws of Utah 2014, Chapter 112
60          24-4-116, as enacted by Laws of Utah 2013, Chapter 394
61          24-4-117, as last amended by Laws of Utah 2015, Chapter 134
62     ENACTS:
63          24-4-104.5, Utah Code Annotated 1953
64     

65     Be it enacted by the Legislature of the state of Utah:
66          Section 1. Section 24-1-102 is amended to read:
67          24-1-102. Definitions.
68          As used in this title:
69          (1) "Account" means the Criminal Forfeiture Restricted Account created in Section
70     24-4-116.
71          (2) (a) "Acquittal" means a finding by a jury or a judge at trial that a claimant is not
72     guilty.
73          (b) An acquittal does not include:
74          (i) a verdict of guilty on a lesser or reduced charge;
75          (ii) a plea of guilty to a lesser or reduced charge; or
76          (iii) dismissal of a charge as a result of a negotiated plea agreement.
77          (3) "Agency" means any agency of municipal, county, or state government, including
78     law enforcement agencies, law enforcement personnel, and multijurisdictional task forces.
79          (4) "Claimant" means any:
80          (a) owner of property as defined in this section;
81          (b) interest holder as defined in this section; or
82          (c) person or entity who asserts a claim to any property seized for forfeiture under this
83     title.
84          (5) "Commission" means the Utah Commission on Criminal and Juvenile Justice.
85          (6) "Complaint" means a civil in rem complaint seeking the forfeiture of any real or
86     personal property under this title.
87          (7) "Constructive seizure" means a seizure of property where the property is left in the
88     control of the owner and the seizing agency posts the property with a notice of intent to seek
89     forfeiture.
90          (8) (a) "Contraband" means any property, item, or substance that is unlawful to
91     produce or to possess under state or federal law.
92          (b) All controlled substances that are possessed, transferred, distributed, or offered for
93     distribution in violation of Title 58, Chapter 37, Utah Controlled Substances Act, are
94     contraband.
95          (9) "Innocent owner" means a claimant who:
96          (a) (i) held an ownership interest in property at the time the conduct subjecting the
97     property to forfeiture occurred[, and:];
98          [(i) did not have actual knowledge of the conduct subjecting the property to forfeiture;
99     or]
100          [(ii) upon learning of the conduct subjecting the property to forfeiture, took reasonable
101     steps to prohibit the illegal use of the property; or]
102          (ii) did not give permission for the conduct or participate in the conduct;
103          (iii) did not directly commit the offense; and
104          (iv) did not solicit, request, command, encourage, or intentionally aid another person to
105     engage in the conduct; or
106          (b) (i) acquired an ownership interest in the property and who had no knowledge that
107     the illegal conduct subjecting the property to forfeiture had occurred or that the property had
108     been seized for forfeiture[,]; and[:]
109          [(i)] (ii) (A) acquired the property in a bona fide transaction for value;
110          [(ii)] (B) was a person, including a minor child, who acquired an interest in the
111     property through probate or inheritance; or
112          [(iii)] (C) was a spouse who acquired an interest in property through dissolution of
113     marriage or by operation of law.
114          (10) (a) "Interest holder" means a secured party as defined in Section 70A-9a-102, a
115     mortgagee, lien creditor, or the beneficiary of a security interest or encumbrance pertaining to
116     an interest in property, whose interest would be perfected against a good faith purchaser for
117     value.
118          (b) "Interest holder" does not mean a person who holds property for the benefit of or as
119     an agent or nominee for another person, or who is not in substantial compliance with any
120     statute requiring an interest in property to be recorded or reflected in public records in order to
121     perfect the interest against a good faith purchaser for value.
122          (11) "Known address" means any address provided by a claimant to the agency at the
123     time the property was seized, or the claimant's most recent address on record with a
124     governmental entity if no address was provided at the time of the seizure.
125          (12) "Legal costs" means the costs and expenses incurred by a party in a forfeiture
126     action.
127          (13) "Legislative body" means:
128          (a) (i) the Legislature, county commission, county council, city commission, city
129     council, or town council that has fiscal oversight and budgetary approval authority over an
130     agency; or
131          (ii) the agency's governing political subdivision; or
132          (b) the lead governmental entity of a multijurisdictional task force, as designated in a
133     memorandum of understanding executed by the agencies participating in the task force.
134          (14) "Multijurisdictional task force" means a law enforcement task force or other
135     agency comprised of persons who are employed by or acting under the authority of different
136     governmental entities, including federal, state, county or municipal governments, or any
137     combination of these agencies.
138          (15) "Owner" means any person or entity, other than an interest holder, that possesses a
139     bona fide legal or equitable interest in real or personal property.
140          (16) [(a)] "Proceeds" means:
141          [(i) property of any kind that is obtained directly or indirectly as a result of the
142     commission of an offense that gives rise to forfeiture; or]
143          [(ii) any property acquired directly or indirectly from, produced through, realized
144     through, or caused by an act or omission regarding property under Subsection (16)(a)(i).]
145          [(b) "Proceeds" includes any property of any kind without reduction for expenses
146     incurred in the acquisition, maintenance, or production of that property, or any other purpose
147     regarding property under Subsection (16)(a)(i).]
148          [(c) "Proceeds" is not limited to the net gain or profit realized from the offense that
149     gives rise to forfeiture.]
150          (a) property of any kind that is:
151          (i) obtained directly as a result of the commission of an offense that gives rise to
152     forfeiture; and
153          (ii) limited to only that portion of property that is obtained directly as a result of the
154     commission of the offense giving rise to the forfeiture; and
155          (b) cash received from the direct sale of, and property received from the direct transfer
156     of, property described in Subsection (16)(a).
157          (17) "Program" means the State Asset Forfeiture Grant Program established in Section
158     24-4-117.
159          (18) "Property" means all property, whether real or personal, tangible or intangible, but
160     does not include contraband.
161          (19) "Prosecuting attorney" means:
162          (a) the attorney general and any assistant attorney general;
163          (b) any district attorney or deputy district attorney;
164          (c) any county attorney or assistant county attorney; and
165          (d) any other attorney authorized to commence an action on behalf of the state under
166     this title.
167          (20) "Public interest use" means a:
168          (a) use by a government agency as determined by the legislative body of the agency's
169     jurisdiction; or
170          (b) donation of the property to a nonprofit charity registered with the state.
171          (21) "Real property" means land and includes any building, fixture, improvement,
172     appurtenance, structure, or other development that is affixed permanently to land.
173          Section 2. Section 24-4-102 is amended to read:
174          24-4-102. Property subject to forfeiture.
175          (1) Except as provided in Subsection (3), all property that has been used to directly
176     facilitate the commission of a federal or state Ĥ→ criminal ←Ĥ offense and any direct
176a     proceeds of criminal
177     activity may be forfeited under this chapter, including:
178          (a) real property, including things growing on, affixed to, and found in land; and
179          (b) tangible and intangible personal property, including money, rights, privileges,
180     interests, claims, and securities of any kind.
181          (2) If the property is used to facilitate a violation of Section 76-10-1204, 76-10-1205,
182     76-10-1206, or 76-10-1222, the property subject to forfeiture under this section is limited to
183     property, the seizure or forfeiture of which would not constitute a prior restraint on the exercise
184     of an affected party's rights under the First Amendment to the Constitution of the United States
185     or Utah Constitution, Article I, Section 15, or would not otherwise unlawfully interfere with the
186     exercise of those rights.
187          (3) A motor vehicle used in a violation of Section 41-6a-502, 41-6a-517, a local
188     ordinance that complies with the requirements of Subsection 41-6a-510(1), Subsection
189     58-37-8(2)(g), or Section 76-5-207 may not be forfeited unless:
190          (a) the operator of the vehicle has previously been convicted of a violation, committed
191     after May 12, 2009, of:
192          (i) a felony driving under the influence violation under Section 41-6a-502;
193          (ii) a felony violation under Subsection 58-37-8(2)(g); or
194          (iii) automobile homicide under Section 76-5-207; or
195          (b) the operator of the vehicle was driving on a denied, suspended, revoked, or
196     disqualified license; and
197          (i) the denial, suspension, revocation, or disqualification under Subsection (3)(b)(ii)
198     was imposed because of a violation under:
199          (A) Section 41-6a-502;
200          (B) Section 41-6a-517;
201          (C) a local ordinance that complies with the requirements of Subsection 41-6a-510(1);
202          (D) Section 41-6a-520;
203          (E) Subsection 58-37-8(2)(g);
204          (F) Section 76-5-207; or
205          (G) a criminal prohibition that the person was charged with violating as a result of a
206     plea bargain after having been originally charged with violating one or more of the sections or
207     ordinances described in Subsections (3)(b)(i)(A) through (F); or
208          (ii) the denial, suspension, revocation, or disqualification described in Subsections
209     (3)(b)(i)(A) through (G):
210          (A) is an extension imposed under Subsection 53-3-220(2) of a denial, suspension,
211     revocation, or disqualification; and
212          (B) the original denial, suspension, revocation, or disqualification was imposed
213     because of a violation described in Subsections (3)(b)(i)(A) through (G).
214          Section 3. Section 24-4-103 is amended to read:
215          24-4-103. Initiating forfeiture proceedings -- Notice of intent to seek forfeiture.
216          (1) (a) Within 30 days from the date that property is seized, an agency seeking to forfeit
217     property shall serve a notice of intent to seek forfeiture upon any claimants known to the
218     agency.
219          (b) The notice of intent to seek forfeiture shall describe Ĥ→ with particularity ←Ĥ the:
220          (i) date of the seizure;
221          (ii) property seized;
222          (iii) alleged relationship of the seized property to the conduct giving rise to forfeiture;
223          [(iii)] (iv) claimant's rights and obligations under this chapter, including the availability
224     of hardship relief in appropriate circumstances; and
225          [(iv)] (v) statutory basis for the forfeiture, including the judicial proceedings by which
226     property may be forfeited under this chapter.
227          (c) The notice of intent to seek forfeiture shall be served by:
228          (i) certified mail, return receipt requested, to the claimant's known address; or
229          (ii) personal service.
230          (d) The court may void any forfeiture made without notice under Subsection (1)(a),
231     unless the agency demonstrates:
232          (i) good cause for the failure to give notice to the claimant; or
233          (ii) that the claimant had actual notice of the seizure.
234          (2) (a) Once the agency has served each claimant with a notice of intent to seek
235     forfeiture, but no later than 60 days from the date that property is seized, the agency shall
236     present a written request for forfeiture to the prosecuting attorney.
237          (b) The written request shall:
238          (i) describe the property to be forfeited; and
239          (ii) include a copy of all reports, supporting documents, and other evidence necessary
240     for the prosecuting attorney to determine the legal sufficiency for filing a forfeiture action.
241          Section 4. Section 24-4-104 is amended to read:
242          24-4-104. Civil forfeiture procedure.
243          (1) (a) [The] A law enforcement agency shall promptly return seized property, and the
244     prosecuting attorney may take no further action to effect the forfeiture of the property, unless
245     within [75] 60 days after the property is seized the prosecuting attorney:
246          (i) files a criminal forfeiture indictment or information under Subsection 24-4-105(2);
247          (ii) obtains a restraining order under Subsection 24-4-105(3);
248          (iii) files a petition under Subsection 24-4-114(1); or
249          (iv) files a civil forfeiture complaint.
250          (b) The prosecutor shall take all reasonable steps to ensure a forfeiture proceeding
251     initiated under this section is concluded in a timely manner.
252          Ĥ→ [[(b) A] (2) The complaint for civil forfeiture under Subsection (1)(a)(iv) shall describe
253     with reasonable particularity [the]:
254          [(i)] (a) the property that is the subject of the forfeiture proceeding;
255          (b) a direct nexus between the seized property and the conduct giving rise to the
256     forfeiture under Subsection 24-4-102(2);
257          [(ii)] (c) the date and place of seizure; and
258          [(iii)] (d) the factual allegations that constitute a basis for forfeiture.
259          [(2)] (3) (a) After a complaint for civil forfeiture is filed in compliance with the
260     requirements of Subsections (1) and (2), the prosecuting attorney shall serve a copy of the
261     complaint and summons upon each claimant known to the prosecuting attorney within 30 days.
262          (b) The prosecuting attorney is not required to serve a copy of the complaint or the
263     summons upon any claimant who has disclaimed, in writing, an ownership interest in the
264     seized property.
265          (c) Service of the complaint and summons shall be by:
266          (i) personal service;
267          (ii) certified mail, return receipt requested, to the claimant's known address; or
268          (iii) service by publication, if the prosecuting attorney demonstrates to the court that
269     service cannot reasonably be made by personal service or certified mail.
270          (d) Service by publication shall be by publication of two notices, in two successive
271     weeks, of the forfeiture proceeding:
272          (i) in a newspaper of general circulation in the county in which the seizure occurred;
273     and
274          (ii) on [Utah's Public Legal Notice Website] the public legal notice website established
275     in Subsection 45-1-101(2)(b).
276          (e) Service is effective upon the earlier of:
277          (i) personal service;
278          (ii) mailing of a written notice; or
279          (iii) publication.
280          (f) Upon motion of the prosecuting attorney and a showing of good cause, the court
281     may extend the period to complete service under this section for an additional 60 days.
282          (g) An answer made by a claimant under this Subsection (3) shall be filed within 30
283     days after the complaint is served upon the claimant under this Subsection (3).] ←Ĥ
284          [(3) (a)] Ĥ→ [(4)] (2) ←Ĥ In any case where the prosecuting attorney files a
284a     complaint for civil
285     forfeiture, [a claimant may file an answer to the complaint] any person may assert an interest in
286     seized property or file an answer to a complaint for civil forfeiture without posting bond with
287     respect to the property that is the subject of the seizure or forfeiture action.
288          [(b) The answer shall be filed within 30 days after the complaint is served upon the
289     claimant as provided in Subsection (2)(b).]
290          [(4)] Ĥ→ [(5)] (3) ←Ĥ Except as otherwise provided in this chapter, forfeiture
290a     proceedings are
291     governed by the Utah Rules of Civil Procedure.
292          [(5)] Ĥ→ [(6)] (4) ←Ĥ The court shall take all reasonable steps to expedite civil forfeiture
293     proceedings and shall give these proceedings the same priority as is given to criminal cases.
294          [(6)] Ĥ→ [(7)] (5) ←Ĥ In all suits or actions brought under this section for the civil
294a     forfeiture of any
295     property, the burden of proof is on the prosecuting attorney to establish by clear and convincing
296     evidence the extent to which, if any, the property is subject to forfeiture.
297          [(7)] Ĥ→ [(8)] (6) ←Ĥ A claimant may file an answer to a complaint for civil
297a     forfeiture without
298     posting bond with respect to the property subject to forfeiture.
299          Section 5. Section 24-4-104.5 is enacted to read:
300          24-4-104.5. Acquittal of criminal charge after civil proceeding.
301          If in a subsequent criminal prosecution the defendant is acquitted of the criminal
302     conduct that provides the nexus for the civil forfeiture proceeding under Section 24-4-104, the
303     court shall:
304          (1) rescind the civil forfeiture order; and
305          (2) order full restitution to the defendant, including as applicable:
306          (a) the return of any forfeited property or proceeds in possession of the seizing agency;
307          (b) the payment of the fair market value, in accordance with Subsection 24-4-117(8), of
308     any forfeited property or proceeds;
309          (c) interest on the fair market value of all forfeited property or proceeds; and
310          (d) court costs and reasonable attorney fees incurred in defending against the civil
311     forfeiture action.
312          Section 6. Section 24-4-107 is amended to read:
313          24-4-107. Innocent owners.
314          (1) An innocent owner's interest in property may not be forfeited under any provision
315     of state law.
316          (2) In a forfeiture proceeding [under this chapter] regarding property belonging to a
317     claimant other than a person charged or convicted for a crime subjecting that property to
318     forfeiture, the prosecuting attorney has the burden of establishing by clear and convincing
319     evidence that [a] the claimant:
320          (a) is responsible for the conduct giving rise to the forfeiture, subject to Subsection (4);
321          (b) knew of the conduct giving rise to the forfeiture, and allowed the property to be
322     used in furtherance of the conduct, subject to Subsection (4);
323          (c) acquired the property with notice of its actual or constructive seizure for forfeiture
324     under this chapter;
325          (d) acquired the property knowing the property was subject to forfeiture under this
326     chapter; or
327          (e) acquired the property in an effort to conceal, prevent, hinder, or delay its lawful
328     seizure or forfeiture under any provision of state law.
329          (3) [(a)] A claimant [under this chapter is not required to] does not have an obligation
330     under this section to take steps to prevent illegal use or criminal activity regarding the seized
331     property [that the claimant reasonably believes would be likely to result in physical harm or
332     danger to any person].
333          [(b)] (4) A claimant may demonstrate that the claimant was not responsible for the
334     conduct giving rise to forfeiture or did not allow the property to be used in the furtherance of
335     the conduct by providing evidence that the claimant took reasonable action to prohibit the
336     illegal use of the property by:
337          [(i)] (a) making a timely notification to a law enforcement agency of information that
338     led the claimant to know that conduct subjecting the property to seizure would occur, was
339     occurring, or has occurred;
340          [(ii)] (b) timely revoking or attempting to revoke permission to use the property
341     regarding those engaging in the illegal conduct; or
342          [(iii)] (c) taking reasonable actions to discourage or prevent the illegal use of the
343     property.
344          [(4)] (5) If the state relies on Subsection (2)(a) to establish that a claimant is not an
345     innocent owner, and if the claimant is criminally charged with the conduct giving rise to the
346     forfeiture and is acquitted of that charge on the merits:
347          (a) the property subject to the forfeiture or the open market value of the property, if the
348     property has been disposed of under Subsection 24-4-108(13), shall be returned to the
349     claimant; and
350          (b) any payments required under this chapter regarding holding the property shall be
351     paid to the claimant.
352          [(5)] (6) A person may not assert under this chapter an ownership interest in
353     contraband.
354          [(6) Property is presumed to be subject to forfeiture under this chapter if the
355     prosecuting attorney establishes that:]
356          [(a) the claimant has engaged in conduct giving cause for forfeiture;]
357          [(b) the property was acquired by the claimant during that period of the conduct giving
358     cause for forfeiture or within a reasonable time after that period; and]
359          [(c) there was no likely source for the purchase or acquisition of the property other than
360     the conduct giving cause for forfeiture.]
361          [(7) A finding that property is the proceeds of conduct giving cause for forfeiture does
362     not require proof that the property was the proceeds of any particular exchange or transaction.]
363          Section 7. Section 24-4-108 is amended to read:
364          24-4-108. Release of property held for forfeiture on certain grounds.
365          (1) After the seizing agency gives notice that the property is to be held for forfeiture, a
366     person or entity may not alienate, convey, sequester, or attach that property until the court
367     issues a final order of dismissal or an order of forfeiture regarding the property.
368          (2) The seizing agency or the prosecuting attorney may authorize the release of
369     property held for forfeiture to a claimant if retention of actual custody is unnecessary.
370          (3) With the consent of a court of competent jurisdiction, the prosecuting attorney may
371     discontinue forfeiture proceedings and transfer the action to another state or federal agency that
372     has initiated forfeiture proceedings involving the same property.
373          (4) Property held for forfeiture is considered to be in the custody of the district court
374     and subject only to:
375          (a) the orders and decrees of the court having jurisdiction over the property or the
376     forfeiture proceedings; and
377          (b) the acts of the agency that possesses the property or the prosecuting attorney
378     pursuant to this chapter.
379          (5) (a) A claimant may obtain release of property held for forfeiture by posting with the
380     district court a surety bond or cash in an amount equal to the current fair market value of the
381     property as determined by the court or by the parties' stipulation.
382          (b) The district court may refuse to order the release of the property if:
383          (i) the bond tendered is inadequate;
384          (ii) the property is contraband or is retained as evidence; or
385          (iii) the property is particularly altered or designed for use in conduct giving cause for
386     forfeiture.
387          (c) If a surety bond or cash is posted and the court later determines that the property is
388     subject to forfeiture, the court shall order the forfeiture of the surety bond or cash in lieu of the
389     property.
390          (6) A claimant is entitled to the immediate release of property held for forfeiture
391     pending the final determination of forfeiture if:
392          (a) the claimant had a possessory interest in the property at the time of seizure;
393          (b) continued possession by the agency or the state pending the final disposition of the
394     forfeiture proceedings will cause substantial hardship to the claimant, such as:
395          (i) preventing the functioning of a legitimate business;
396          (ii) preventing any individual from working;
397          (iii) preventing any child from attending elementary or secondary school;
398          (iv) preventing or hindering any person from receiving necessary medical care;
399          (v) hindering the care of an elderly or disabled dependent child or adult;
400          (vi) leaving any individual homeless; [or]
401          (vii) preventing an owner from retaining counsel to provide a defense in the forfeiture
402     proceeding or related criminal proceeding; or
403          [(vii)] (viii) any other condition that the court determines causes a substantial hardship;
404          (c) the hardship from the continued possession of the property by the agency outweighs
405     the risk that the property will be destroyed, damaged, lost, concealed, or transferred if it is
406     returned to the claimant during the pendency of the proceeding; and
407          (d) determination of substantial hardship under this Subsection (6) is based upon the
408     property's use prior to the seizure.
409          (7) After the seizing agency gives notice that the property is to be held for forfeiture, a
410     claimant may file a motion for hardship release:
411          (a) in the court in which forfeiture proceedings have commenced; or
412          (b) in any district court having jurisdiction over the property, if forfeiture proceedings
413     have not yet commenced.
414          (8) The motion for hardship release shall also be served upon the prosecuting attorney
415     or the seizing agency within 10 days after filing the motion.
416          (9) The court shall render a decision on a motion for hardship filed under this section
417     not later than 20 days after the date of filing, or 10 days after service upon the prosecuting
418     attorney or seizing agency, whichever is earlier, unless this period is extended by the agreement
419     of both parties or by the court for good cause shown.
420          (10) (a) If the claimant demonstrates substantial hardship pursuant to this section, the
421     court shall order the property immediately released to the claimant pending completion of
422     proceedings by the government to obtain forfeiture of the property.
423          (b) The court may place conditions on release of the property as it finds necessary and
424     appropriate to preserve the availability of the property or its equivalent for forfeiture.
425          (11) The hardship release under this section does not apply to:
426          (a) contraband;
427          (b) currency or other monetary instrument or electronic funds[; or], unless any of these:
428          (i) are used to pay for the reasonable costs of defending against the forfeiture
429     proceedings or related criminal proceedings; or
430          (ii) constitute the assets of a legitimate business; or
431          (c) property that is likely to be used to commit additional illegal acts if returned to the
432     claimant.
433          (12) (a) The court may order property that is held for forfeiture to be sold, as allowed
434     by Subsection (13), leased, rented, or operated to satisfy a specified interest of any claimant, or
435     to preserve the interests of any party on motion of that party.
436          (b) The court may enter orders under Subsection (12)(a) after written notice to persons
437     known to have an interest in the property, and after an opportunity for a hearing.
438          (13) (a) A sale may be ordered under Subsection (12) when the property is liable to
439     perish, waste, or be significantly reduced in value, or when the expenses of maintaining the
440     property are disproportionate to its value.
441          (b) A third party designated by the court shall dispose of the property by commercially
442     reasonable public sale and distribute the proceeds in the following order of priority:
443          (i) first, for the payment of reasonable expenses incurred in connection with the sale;
444          (ii) second, for the satisfaction of any interests, including those of interest holders, in
445     the order of their priority as determined by Title 70A, Uniform Commercial Code; and
446          (iii) third, any balance of the proceeds shall be preserved in the actual or constructive
447     custody of the court, in an interest-bearing account, subject to further proceedings under this
448     chapter.
449          Section 8. Section 24-4-109 is amended to read:
450          24-4-109. Prejudgment and postjudgment interest.
451          In any proceeding to forfeit currency or other negotiable instruments under this chapter,
452     the court shall award a prevailing [party] claimant prejudgment and postjudgment interest on
453     the currency or negotiable instruments at the interest rate established under Section 15-1-4.
454          Section 9. Section 24-4-110 is amended to read:
455          24-4-110. Attorney fees and costs.
456          (1) In any forfeiture proceeding under [this chapter] Sections 24-4-104 and 24-4-107,
457     the court shall award a prevailing [property owner] claimant reasonable:
458          (a) legal costs; and
459          (b) attorney fees.
460          [(2) The legal costs and attorney fees awarded by the court to the prevailing party may
461     not exceed 20% of the value of the property.]
462          [(3)] (2) A [property owner] claimant that prevails only in part is entitled to recover
463     reasonable legal costs and attorney fees only on those issues on which the party prevailed, as
464     determined by the court.
465          Section 10. Section 24-4-115 is amended to read:
466          24-4-115. Disposition and allocation of forfeiture property from civil and
467     criminal forfeiture actions.
468          (1) Upon finding that property is subject to forfeiture under this chapter, the court shall
469     order the property forfeited to the state.
470          (2) (a) If the property is not currency, the seizing agency shall authorize a public or
471     otherwise commercially reasonable sale of that property that is not required by law to be
472     destroyed and that is not harmful to the public.
473          (b) If the property forfeited is an alcoholic product as defined in Section 32B-1-102, it
474     shall be disposed of as follows:
475          (i) an alcoholic product shall be sold if the alcoholic product is:
476          (A) unadulterated, pure, and free from any crude, unrectified, or impure form of ethylic
477     alcohol, or any other deleterious substance or liquid; and
478          (B) otherwise in saleable condition; or
479          (ii) an alcoholic product and its package shall be destroyed if the alcoholic product is
480     impure, adulterated, or otherwise unfit for sale.
481          (c) If the property forfeited is a cigarette or other tobacco product as defined in Section
482     59-14-102, it shall be destroyed, except that prior to the destruction of any cigarette or other
483     tobacco product seized pursuant to this part, the lawful holder of the trademark rights in the
484     cigarette or tobacco product brand shall be permitted to inspect the cigarette.
485          (d) The proceeds of the sale of forfeited property shall remain segregated from other
486     property, equipment, or assets of the seizing agency until transferred to the state in accordance
487     with this chapter.
488          (3) From the forfeited property, both currency and the proceeds or revenue from the
489     sale of the property, the seizing agency shall:
490          (a) deduct the seizing agency's direct costs and expenses of obtaining and maintaining
491     the property pending forfeiture; and
492          (b) pay the office of the prosecuting attorney the legal costs associated with the
493     litigation of the forfeiture proceeding, and up to 20% of the value of the forfeited property in
494     attorney fees.
495          (4) If the forfeiture arises from any violation relating to wildlife resources, the
496     remaining currency and the proceeds or revenue from the sale of the property shall be deposited
497     in the Wildlife Resources Account created in Section 23-14-13.
498          (5) The remaining currency and the proceeds or revenue from the sale of the property
499     shall then be transferred:
500          (a) to the Uniform School Fund if the proceeds are from a civil forfeiture proceeding
501     under this chapter; and
502          (b) to the commission and deposited into the [account] Criminal Forfeiture Restricted
503     Account, if the proceeds are from a criminal forfeiture proceeding under this chapter.
504          Section 11. Section 24-4-116 is amended to read:
505          24-4-116. Criminal Forfeiture Restricted Account.
506          (1) There is created within the General Fund a restricted account known as the
507     "Criminal Forfeiture Restricted Account."
508          (2) Proceeds from [forfeited] property and [forfeited] money forfeited through state
509     criminal Ĥ→ [forfeitures] forfeiture ←Ĥ actions under Section 24-4-105 shall be deposited
509a     into the account.
510          (3) Money in the account shall be appropriated to the commission for implementing the
511     program under Section 24-4-117.
512          Section 12. Section 24-4-117 is amended to read:
513          24-4-117. State Asset Forfeiture Grant Program.
514          (1) There is created the State Asset Forfeiture Grant Program.
515          (2) The program shall fund crime prevention, crime victim reparations, and law
516     enforcement activities that have the purpose of:
517          (a) deterring crime by depriving criminals of the profits and proceeds of their illegal
518     activities;
519          (b) weakening criminal enterprises by removing the instrumentalities of crime;
520          (c) reducing crimes involving substance abuse by supporting the creation,
521     administration, or operation of drug court programs throughout the state;
522          (d) encouraging cooperation between local, state, and multijurisdictional law
523     enforcement agencies;
524          (e) allowing the costs and expenses of law enforcement to be defrayed by the forfeited
525     proceeds of crime;
526          (f) increasing the equitability and accountability of the use of forfeited property used to
527     assist law enforcement in reducing and preventing crime; and
528          (g) providing aid to victims of criminally injurious conduct, as defined in Section
529     63M-7-502, who may be eligible for assistance under Title 63M, Chapter 7, Part 5, Utah Office
530     for Victims of Crime.
531          (3) [(a)] When property is forfeited under this chapter and transferred to the account,
532     upon appropriation the commission shall allocate and administer grants to state agencies, local
533     law enforcement agencies, multijurisdictional law enforcement agencies, or political
534     subdivisions of the state in compliance with this section and to further the program purposes
535     under Subsection (2).
536          [(b)] (4) The commission may retain up to 3% of the annual appropriation from the
537     account to pay for administrative costs incurred by the commission, including salary and
538     benefits, equipment, supplies, or travel costs that are directly related to the administration of
539     the program.
540          [(4)] (5) Agencies or political subdivisions shall apply for an award from the program
541     by completing and submitting forms specified by the commission.
542          [(5)] (6) In granting the awards, the commission shall ensure that the amount of each
543     award takes into consideration the:
544          (a) demonstrated needs of the agency;
545          (b) demonstrated ability of the agency to appropriately use the award;
546          (c) degree to which the agency's need is offset through the agency's participation in
547     federal equitable sharing or through other federal and state grant programs; and
548          (d) agency's cooperation with other state and local agencies and task forces.
549          (7) The program shall pay restitution and costs under Section 24-4-104.5 regarding
550     defendants who are acquitted of the nexus criminal charge.
551          [(6)] (8) Applying agencies or political subdivisions shall demonstrate compliance with
552     all reporting and policy requirements applicable under this chapter and under Title 63M,
553     Chapter 7, Criminal Justice and Substance Abuse, in order to qualify as a potential award
554     recipient.
555          [(7)] (9) (a) Recipient law enforcement agencies may only use award money after
556     approval by the agency's legislative body.
557          (b) The award money is nonlapsing.
558          [(8)] (10) A recipient state agency, local law enforcement agency, multijurisdictional
559     law enforcement agency, or political subdivision shall use awards only for law enforcement
560     purposes as described in this section or for victim reparations as described in Subsection (2)(g),
561     and only as these purposes are specified by the agency or political subdivision in its application
562     for the award.
563          [(9)] (11) Permissible law enforcement purposes for which award money may be used
564     include:
565          (a) controlled substance interdiction and enforcement activities;
566          (b) drug court programs;
567          (c) activities calculated to enhance future law enforcement investigations;
568          (d) law enforcement training that includes:
569          (i) implementation of the Fourth Amendment to the United States Constitution and
570     Utah Constitution, Article I, Section 7, and that addresses the protection of the individual's
571     right of due process;
572          (ii) protection of the rights of innocent property holders; and
573          (iii) the Tenth Amendment to the United States Constitution regarding states'
574     sovereignty and the states' reserved rights;
575          (e) law enforcement or detention facilities;
576          (f) law enforcement operations or equipment that are not routine costs or operational
577     expenses;
578          (g) drug, gang, or crime prevention education programs that are sponsored in whole or
579     in part by the law enforcement agency or its legislative body;
580          (h) matching funds for other state or federal law enforcement grants; and
581          (i) the payment of legal costs, attorney fees, and postjudgment interest in forfeiture
582     actions.
583          [(10)] (12) Law enforcement purposes for which award money may not be granted or
584     used include:
585          (a) payment of salaries, retirement benefits, or bonuses to any person;
586          (b) payment of expenses not related to law enforcement;
587          (c) uses not specified in the agency's award application;
588          (d) uses not approved by the agency's legislative body;
589          (e) payments, transfers, or pass-through funding to entities other than law enforcement
590     agencies; or
591          (f) uses, payments, or expenses that are not within the scope of the agency's functions.




Legislative Review Note
Office of Legislative Research and General Counsel