J. Justin Wilson
J. Justin Wilson · June 9, 2017

With an hour remaining before his deadline to act, Colorado Gov. John Hickenlooper signed HB 17-1313, a bill that bolsters transparency for civil forfeiture and closes a federal loophole that has generated millions in forfeiture revenue for law enforcement. Under civil forfeiture, law enforcement agencies can seize and then take title to cash, cars and other valuables without charging anyone with—let alone convicting them of—a crime.

“Colorado now has the best laws in the nation, hands-down, for seizure and forfeiture transparency,” said Institute for Justice Senior Legislative Counsel Lee McGrath. “Through its comprehensive disclosure requirements, this law will play a vital role in keeping both the public and legislators well-informed about civil forfeiture in Colorado.”

Sponsored by Reps. Leslie Herod and Stephen Humphrey and Sens. Daniel Kagan and Tim Neville, the bill passed the House and the Senate by wide margins and was backed by the state chapter of the ACLU. HB 17-1313 will:

  • Implement new biannual reporting requirements, including the type of property seized, place of the seizure (e.g. which direction on a highway), if any criminal charges were filed in relation to the seizure, if the forfeiture was contested, and the final disposition of the property;
  • Oblige agencies to report their forfeiture expenditures, including spending on salaries, overtime, victim services, drug abuse programs, travel, meals, as well as capital and operating expenses. This provision is particularly important because Colorado law lets agencies keep half of what they confiscate, enabling them to self-finance outside the legislature’s power of the purse;
  • Require that all forfeiture reporting be posted to a public, searchable database, to be created and maintained by the Department of Local Affairs, and require that those reports be aggregated; and
  • Impose $500 fines for failure to comply with the reporting requirements. If an agency has not complied within 75 days of the due date, it must pay either a $500 fine or 50 percent of the forfeiture proceeds it received during the reporting period, whichever is greater. This new penalty is likely to induce better agency compliance than has been previously observed.

“Colorado has created an exemplary model for other states to follow, particularly in shining a light on forfeiture spending and making seizure and forfeiture activity readily available online,” said Jennifer McDonald, an IJ research analyst, who co-authored a report on forfeiture transparency and accountability. “The state should ensure that these requirements are properly implemented in the months to come.”

In addition, the new law prevents agencies from receiving federal forfeiture funds through the “equitable sharing” program, unless the forfeited property is worth more than $50,000 and relates to a federal criminal case. Under equitable sharing, police and prosecutors can collaborate with a federal agency or joint task force, forfeit property under federal law, and receive up to 80 percent of the proceeds—dramatically higher than what state law authorizes.

An IJ report found that between 2000 and 2013, Colorado agencies received more than $47 million through the U.S. Department of Justice’s equitable sharing program. By comparison, that is nearly four times more than what was forfeited under state law during the same period.

In recent years, 92 percent of Colorado’s equitable sharing forfeitures involved property valued at less than $50,000, according to IJ’s analysis of DOJ data. Yet those forfeitures accounted for 36 percent of the total value of forfeited property. The stark difference in percentages means that the federal government is involved in many relatively small cases.

“By closing this loophole, HB 17-1313 will protect the property and due process rights of Coloradans and preserve the state’s sovereignty from federal overreach,” McGrath noted. “Colorado agencies will be able to continue to collaborate with the federal government but the law wisely limits that collaboration to major cases.”

Colorado is now the seventh state to close the equitable-sharing loophole. Nationwide, Colorado joins 21 other states and Washington, D.C., which have tightened their forfeiture laws since 2014, including Nebraska and New Mexico, which outright abolished the practice of civil forfeiture and replaced it with criminal forfeiture. Further legislative efforts are currently pending in at least six other states.