DENVER, Colo. (Jan. 10, 2025) – A bill introduced in the Colorado House would end civil asset forfeiture in the state and impose significant new restrictions on law enforcement’s ability to bypass state laws through federal forfeiture programs.
Rep. Ken Degraaf and Rep. Mark Baisley filed House Bill 1067 (HB1067). The legislation would replace the state’s civil asset forfeiture process with a criminal procedure. Under the procedure, forfeiture could only occur “when a defendant is convicted of a crime of unlawful distribution, manufacturing, dispensing, or selling a controlled substance.”
HB1067 would also address the “policing for profit” motive inherent in civil asset forfeiture by requiring the state treasurer to deposit forfeiture proceeds into the general fund, the Behavioral Health Administrative Services Organization, and the Law Enforcement Community Services Grant Program after payment of specific allowable expenses. Under current law, law enforcement agencies can keep up to 75 percent of forfeiture proceeds in Colorado.
FEDERAL LOOPHOLE
HB1067 would take significant steps toward closing a federal loophole that allows state and local law enforcement to bypass Colorado’s stricter asset forfeiture laws through a federal program known as “Equitable Sharing.”
This program enables law enforcement to transfer cases to federal authorities via a process called “adoption,” allowing prosecutors to sidestep state limits and seize property under federal law.
Under these arrangements, state or local police investigate a case on their own and then simply hand it over to a federal agency for prosecution. Even though the feds initially didn’t participate in the investigation, they handle the prosecution under federal law – and then give up to 80 percent of the take to the state law enforcement agency that helped them out.
This allows state and local police to cash in on asset forfeiture even if state law prohibits it.
Adoption accounts for about 30 percent of equitable sharing cases and about 15 percent of the total value forfeited under equitable sharing. The rest, and the vast majority, happens through state-federal joint task forces.
REDUCING THE LOOPHOLE
A law passed in 2017 prohibits Colorado law enforcement agencies from receiving any portion of federal equitable sharing funds – whether through adoption or joint task forces – unless it has a net value of more than $50,000 and other conditions are met. According to an estimate from the Colorado Municipal League, this could represent as much as half or more of all seized assets.
Language in HB1067 would further restrict Colorado law enforcement agencies from participating in this federal program. Under the proposed law, police and prosecutors could only transfer cases to the feds through adoption or join task forces if the seizure includes currency in excess of $50,000.
It would also ban receipt of any equitable sharing funds from the federal government if the threshold isn’t met.
It’s difficult to say exactly how many cases would be eligible for transfer with that $50,000 cash threshold because only 21 states report forfeiture data. But based on analysis by the Institute for Justice, the vast majority of cases fall below that amount.
The median currency forfeiture averages just $1,276 across the 21 states with available data. Minnesota has the most transparent reporting. According to an IJ lawyer, only seven of the 3,873 cases reported in 2023 included proceeds above $50K.
NECESSARY
While some people believe the Supreme Court “ended” asset forfeiture, its opinion in Timbs v. Indiana ended nothing. The court merely held that the Eighth Amendment provisions prohibiting “expressive fines” apply to the state through the incorporation doctrine.
Without further action, state and federal law enforcement can still use the civil asset forfeiture process with few limits. Additionally, as law professor Ilya Somin noted, the Court left an important issue unresolved. What exactly counts as “excessive” in the civil forfeiture context?
“That is likely to be a hotly contested issue in the lower federal courts over the next few years. The ultimate effect of today’s decision depends in large part on how that question is resolved. If courts rule that only a few unusually extreme cases qualify as excessive, the impact of Timbs might be relatively marginal.”
Somin has been proved correct. Six years later, the SCOTUS decision still hasn’t limited asset forfeiture.
The passage of legislation that specifically limits or completely ends state participation in equitable sharing takes concrete steps toward ending it instead of waiting for more court cases.
WHAT’S NEXT
HB1067 was referred to the House Judiciary Committee where it must get a hearing and pass by a majority vote before moving forward in the legislative process.
