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AB-1035 Forfeiture: obscenity.(1999-2000)

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AB1035:v96#DOCUMENT

Amended  IN  Assembly  April 22, 1999
Amended  IN  Assembly  January 03, 2000
Amended  IN  Assembly  January 11, 2000

CALIFORNIA LEGISLATURE— 1999–2000 REGULAR SESSION

Assembly Bill
No. 1035

Introduced  by  Assembly Member House

February 25, 1999

An act relating to asset forfeiture. An act to add Section 312.4 to the Penal Code, relating to forfeiture, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 1035, as amended, House. Forfeiture: obscenity.
Under existing law, in any case in which a person is alleged to have been engaged in a pattern of criminal profiteering activity, upon a conviction of the underlying offense, including, but not limited to, any felony offense relating to child pornography or exploitation, obscene matter, or harmful matter, any property interest acquired through, and all proceeds of, the pattern of criminal profiteering activity shall be subject to forfeiture upon proof that the defendant engaged in a pattern of criminal profiteering activity and that the property interest or proceeds are forfeitable.

This bill would declare the intent of the Legislature to enact civil forfeiture provisions applicable in cases of obscenity or child pornography that are consistent with and identical to the civil forfeiture provisions relating to obscenity or child pornography under federal law with the same penalties imposed under federal law.

This bill would, in any case in which a person is alleged to have violated any specified provision relating to obscenity or child pornography, subject to forfeiture any property interest acquired through, and all proceeds of, the violation of the provision, upon proof that the defendant violated the provision and that the property interest or proceeds are forfeitable. The bill would require the prosecuting agency, among other things, to file a petition of forfeiture with the superior court of the county in which the defendant has been charged with the underlying criminal offense, and to make service of process of a notice regarding that petition upon every individual who may have a property interest in the alleged property or proceeds.
The bill would require the issue of forfeiture to be promptly tried at a hearing if the defendant is found guilty of the underlying offense. The bill would require the court, if the trier of fact finds that the alleged property or proceeds is forfeitable and that the defendant violated any of the specified provisions, to declare the property or proceeds forfeited to the state or local governmental entity, subject to a specified scheme of distribution, including the county children’s trust fund, or if the county has no children’s trust fund, to the State Children’s Trust Fund, a continuously appropriated fund. By providing a new source of revenue to a continuously appropriated fund, the bill would make an appropriation.
By imposing new duties on the prosecuting agency and other local entities with respect to the seizure, sale, and distribution of sale proceeds, the bill would create a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

It is the intent of the Legislature to enact civil forfeiture provisions applicable in cases of obscenity or child pornography that are consistent with and identical to the civil forfeiture provisions relating to obscenity or child pornography under federal law with the same penalties imposed under federal law.

SECTION 1.

 Section 312.4 is added to the Penal Code, to read:

312.4.
 (a) In any case in which a person is alleged to have violated subdivision (b) of Section 311.2 and subdivision (b) of Section 311.4 upon conviction of the underlying offense, the following assets shall be subject to forfeiture upon proof of the provisions of subdivision (f):
(1) Any property interest, whether tangible or intangible, acquired through violation of subdivision (b) of Section 311.2 and subdivision (b) of Section 311.4.
(2) All proceeds of the violation of subdivision (b) of Section 311.2 and subdivision (b) of Section 311.4, which property shall include all things of value that may have been received in exchange for the proceeds immediately derived from the violation of any provision of this chapter.
(b) The prosecuting agency shall, in conjunction with the criminal proceeding, file a petition of forfeiture with the superior court of the county in which the defendant has been charged with the underlying criminal offense, which shall allege that the defendant has violated any provision of this chapter. The prosecuting agency shall make service of process of a notice regarding that petition upon every individual who may have a property interest in the alleged property or proceeds, which notice shall state that any interested party may file a verified claim with the superior court stating the amount of their claimed interest and an affirmation or denial of the prosecuting agency’s allegation. If the notices cannot be given by registered mail or personal delivery, the notices shall be published for at least three successive weeks in a newspaper of general circulation in the county where the property is located. If the property alleged to be subject to forfeiture is real property, the prosecuting agency shall, at the time of filing the petition of forfeiture, record a lis pendens in each county in which the real property is situated which specifically identifies the real property alleged to be subject to forfeiture. The judgment of forfeiture shall not affect the interest in real property of any third party which was acquired prior to the recording of the lis pendens. All notices shall set forth the time within which a claim of interest in the property seized is required to be filed pursuant to subdivision (c).
(c) Any person claiming an interest in the property or proceeds may, at any time within 30 days from the date of the first publication of the notice of seizure, or within 30 days after receipt of actual notice, file with the superior court of the county in which the action is pending a verified claim stating his or her interest in the property or proceeds. A verified copy of the claim shall be given by the claimant to the Attorney General or district attorney, as appropriate.
(d) (1) If, at the end of the time set forth in subdivision (c), an interested person, other than the defendant, has not filed a claim, the court, upon motion, shall declare that the person has defaulted upon his or her alleged interest, and it shall be subject to forfeiture upon proof of the provisions of subdivision (f).
(2) The defendant may admit or deny that the property is subject to forfeiture pursuant to the provisions of this chapter. If the defendant fails to admit or deny or to file a claim of interest in the property or proceeds, the court shall enter a response of denial on behalf of the defendant.
(e) (1) The forfeiture proceeding shall be set for hearing in the superior court in which the underlying criminal offense will be tried.
(2) If the defendant is found guilty of the underlying offense, the issue of forfeiture shall be promptly tried, either before the same jury or before a new jury in the discretion of the court, unless waived by the consent of all parties.
(f) At the forfeiture hearing, the prosecuting agency shall have the burden of establishing beyond a reasonable doubt that the defendant violated subdivision (b) of Section 311.2 and subdivision (b) of Section 311.4 of this chapter and that the property alleged in the petition comes within the provisions of subdivision (a).
(g) (1) Concurrent with, or subsequent to, the filing of the petition, the prosecuting agency may move the superior court for the following pendente lite orders to preserve the status quo of the property alleged in the petition of forfeiture:
(A) An injunction to restrain all interested parties and enjoin them from transferring, encumbering, hypothecating, or otherwise disposing of that property.
(B) Appointment of a receiver to take possession of, care for, manage, and operate the assets and properties so that the property may be maintained and preserved.
(2) No preliminary injunction may be granted or receiver appointed without notice to the interested parties and a hearing to determine that such an order is necessary to preserve the property, pending the outcome of the criminal proceedings, and that there is probable cause to believe that the property alleged in the forfeiture proceedings are proceeds or property interests forfeitable under subdivision (a). However, a temporary restraining order may issue pending that hearing pursuant to the provisions of Section 527 of the Code of Civil Procedure.
(3) Notwithstanding any other provision of law, the court in granting these motions may order a surety bond or undertaking to preserve the property interests of the interested parties.
(4) The court shall, in making its orders, seek to protect the interests of those who may be involved in the same enterprise as the defendant, but who were not involved in the violation of any provision of this chapter.
(h) If the trier of fact at the forfeiture hearing finds that the alleged property or proceeds is forfeitable pursuant to subdivision (a) and the defendant violated any provision of this chapter, the court shall declare that property or proceeds forfeited to the state or local governmental entity, subject to distribution as provided in subdivision (k). No property solely owned by a bona fide purchaser for value shall be subject to forfeiture.
(i) If the trier of fact at the forfeiture hearing finds that the alleged property is forfeitable pursuant to subdivision (a) but does not find that a person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract acquired that interest with actual knowledge that the property was to be used for a purpose for which forfeiture is permitted, and the amount due to that person is less than the appraised value of the property, that person may pay to the state or the local governmental entity which initiated the forfeiture proceeding, the amount of the registered owner’s equity, which shall be deemed to be the difference between the appraised value and the amount of the lien, mortgage, security interest, or interest under a conditional sales contract. Upon that payment, the state or local governmental entity shall relinquish all claims to the property. If the holder of the interest elects not to make that payment to the state or local governmental entity, the property shall be deemed forfeited to the state or local governmental entity and the ownership certificate shall be forwarded. The appraised value shall be determined as of the date judgment is entered either by agreement between the legal owner and the governmental entity involved, or if they cannot agree, then by a court-appointed appraiser for the county in which the action is brought. A person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract shall be paid the appraised value of his or her interest.
(j) If the amount due to a person holding a valid lien, mortgage, security interest, or interest under a conditional sales contract is less than the value of the property and the person elects not to make payment to the governmental entity, the property shall be sold at public auction by the Department of General Services or by the local governmental entity which shall provide notice of that sale by one publication in a newspaper published and circulated in the city, community, or locality where the sale is to take place.
(k) Notwithstanding that no response or claim has been filed pursuant to subdivision (c), in all cases where property is forfeited pursuant to this section and, where necessary, sold by the Department of General Services or local governmental entity, the money forfeited or the proceeds of sale shall be distributed by the state or local governmental entity as follows:
(1) To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage, or security interest, if any, up to the amount of his or her interest in the property or proceeds, when the court declaring the forfeiture orders a distribution to that person. The court shall endeavor to discover all of these lienholders and protect their interests and may, at its discretion, order the proceeds placed in escrow for up to an additional 60 days to ensure that all valid claims are received and processed.
(2) To the Department of General Services or local governmental entity for all expenditures made or incurred by it in connection with the sale of the property, including expenditures for any necessary repairs, storage, or transportation of any property seized under this chapter.
(3) For deposit in the county children’s trust fund, established pursuant to Section 18966 of the Welfare and Institutions Code, of the county which filed the petition of forfeiture. If the county does not have a children’s trust fund, the funds shall be deposited in the State Children’s Trust Fund, established pursuant to Section 18969 of the Welfare and Institutions Code.

SEC. 2.

 Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.