Civil forfeiture reform passes General Assembly

A bill to reform many aspects of Indiana’s civil forfeiture proceedings is headed to Gov. Eric Holcomb after receiving unanimous support on final passage from the House of Representatives on Monday.

Senate Bill 99 sailed through each committee and chamber that heard it without opposition or amendment. The bill, authored by Sen. Rod Bray, R-Martinsville, was designed to increase due process protections for property owners whose property is seized as part of a civil forfeiture action.

Among the most significant changes SB 99 makes is its requirement for a court to find probable cause to support a property seizure within seven days of law enforcement seizing the property. The bill also builds in hardship provisions for “innocent owners,” or people who lend their property to someone else without knowing it will be used for illegal purposes.

The common example of an innocent owner hardship given during discussion of SB 99 has been seizure of “grandma’s car” — that is, a grandmother lends her vehicle to a grandchild, who engages in illegal activity resulting in the car’s seizure. Referencing those situations prior to Monday’s House vote, Evansville Democrat Ryan Hatfield said depriving a grandmother of her property could create hardships for her family — such as a loss of transportation or property kept in a seized vehicle — even though she had nothing to do with illegal activity.

“I think even the prosecutors acknowledge that too often we’re holding too much property that probably doesn’t have much to do with the crime that’s alleged, and we’re holding it for too long and it’s really placing a burden on these families,” Hatfield told the House. “So for those purposes I think we’re headed in the right direction.”

But Rep. Matt Pierce, D-Bloomington, reminded his colleagues of an issue that has been a frequent sticking point in civil forfeiture reform discussions — how forfeiture proceeds should be disbursed.

The bill provides for a disbursement mechanism that begins with attorney fees, trickles down to prosecutors’ offices and law enforcement, and ends with all remaining funds going into the Common School Fund. However, Article 8, Section 2 of the Indiana Constitution requires all forfeiture proceeds to be deposited into the Common School Fund, a constitutional mandate Pierce said the General Assembly cannot get around. 

“It doesn’t say ‘after expenses,’” Pierce said. “So what we’re really trying to do with this bill … is hope that if we say it’s reimbursement of expenses that the courts will let us get away with not putting it in the Common School Fund, which the Constitution says we ought to do in the first place. So we need to deal with that issue at some point.”

The constitutional question Pierce raised is the subject of a Marion County lawsuit brought by the Institute for Justice, Jeana M. Horner, et al. v. Terry R. Curry, et al., 49D06-1602-PL-004804, which is scheduled for a summary judgment hearing on March 16. Despite those concerns, Pierce voted in favor of SB 99 because he said it resolves the due process shortcomings that were identified in part of Indiana’s civil forfeiture framework that was struck down in Leroy Washington v. Marion County Prosecutor, et al., 1:16-cv-02980.

A spokeswoman for Holcomb said civil forfeiture reform is not part of the governor's agenda, but he will "consider it carefully" before deciding whether to sign SB 99 into law.