Senate Bill No. 452

(By Senator Buckalew)

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[Introduced February 19, 1996; referred to the

Committee on the Judiciary; and then

to the Committee on Finance.]

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A BILL to amend and reenact sections seven hundred four, seven hundred six and seven hundred seven, article seven, chapter sixty-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to allowing seized or forfeited assets to be deposited into interest bearing depositories insured by an agency of the federal government.

Be it enacted by the Legislature of West Virginia:
That sections seven hundred four, seven hundred six and seven hundred seven, article seven, chapter sixty-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 7. WEST VIRGINIA CONTRABAND FORFEITURE ACT.

§60A-7-704. Procedures for seizure of forfeitable property.
(a) Seizure of property made subject to forfeiture by the provisions of this article may be made upon process issued by any court of record having jurisdiction over the property.
(b) Notwithstanding, the provisions of subsection (a) of this section, seizure of property subject to forfeiture by the provisions of this article may be made without process if:
(1) The seizure is incident to a lawful arrest or pursuant to a search under a search warrant or an inspection warrant;
(2) The property subject to seizure has been the subject of a prior judgment in favor of the state in a forfeiture proceeding based upon this article;
(3) The appropriate person has probable cause to believe that the property is directly or indirectly dangerous to health or safety; or
(4) The appropriate person has probable cause to believe that the property was used or intended for use in violation of this chapter.
(c) In the event of seizure pursuant to subsection (b) of this section, forfeiture proceedings shall be instituted within ninety days of the seizure thereof.
(d) Property taken or detained under this section shall not be subject to replevin, but is deemed to be in the custody of the appropriate person, subject only to the orders and decrees of the court having jurisdiction over the forfeiture proceedings. When property is seized under this article, the appropriate person may:
(1) Place the property under seal;
(2) Remove the property to a place designated by him; or
(3) Require the appropriate law-enforcement agency to take custody of the property and remove it to an appropriate location for disposition in accordance with law; or
(4) In the case of seized moneys, securities or other negotiable instruments, place the assets in any interest bearing depository insured by an agency of the federal government.
The requirements of this subsection pertaining to the removal of seized property are not mandatory in the case of real property and appurtenances thereto.
§60A-7-706. Disposition of forfeited moneys, securities or other negotiable instruments; distribution of proceeds.

(a) Whenever moneys, securities or other negotiable instruments are forfeited under the provisions of this article, such proceeds shall be distributed as follows:
(1) Ten percent of such the proceeds shall be tendered to the office of the prosecuting attorney which initiated the forfeiture proceeding;
(2) The balance shall be deposited in a special law- enforcement investigation fund. The fund may be placed in any interest-bearing depository insured by an agency of the federal government. Such The fund shall be administered by the chief of the law-enforcement agency that seized the forfeited property.
(b) No funds shall be expended from the special law- enforcement investigation fund except as follows:
(1) In the case of the funds belonging to the department of public safety, such the funds shall only be expended at the direction of the superintendent of such the department and in accordance with the provisions of section fifteen, article two, chapter five-a of this code and the provisions of subsection (j), section two, article two, chapter twelve of this code;
(2) In the case of funds belonging to the office of either the sheriff or prosecuting attorney of any county in which such the special fund has been created, the funds therein may only be expended in the manner provided in sections four and five, article five, chapter seven of this code; and
(3) In the case of funds belonging to the police department of any municipality in which such the special fund has been created, the funds therein may only be expended in the manner provided in section twenty-two, article thirteen, chapter eight of this code.
§60A-7-707. Disposition of other forfeited property; distribution of proceeds.

(a) When property other than that referred to in section seven hundred six of this article is forfeited under this article, the circuit court ordering such the forfeiture, upon application by the prosecuting attorney or the chief of the law- enforcement agency that seized said forfeited property, may direct that:
(1) Title to the forfeited property be vested in the law- enforcement agency so petitioning; or
(2) The law-enforcement agency responsible for the seizure retain the property for official use; or
(3) The forfeited property shall be offered at public auction to the highest bidder for cash. Notice of such public auction shall be published as a Class III legal advertisement in accordance with article three, chapter fifty-nine of this code. The publication area shall be the county where the public auction will be held.
(b) When a law-enforcement agency receives property pursuant to this section, the court may, upon request of the prosecuting attorney initiating the forfeiture proceeding, require the law- enforcement agency to pay unto the office of said prosecuting attorney, a sum not to exceed ten percent of the value of the property received to compensate said office for actual costs and expenses incurred.
(c) The proceeds of every public sale conducted pursuant to this section shall be paid and applied as follows: First, to the balance due on any security interest preserved by the court; second, to the costs incurred in the storage, maintenance and security of the property; third, to the costs incurred in selling the property.
(d) Any proceeds of a public sale remaining after distribution pursuant to subsection (c) of this section shall be distributed as follows:
(1) Ten percent of such proceeds shall be tendered to the office of the prosecuting attorney who initiated the forfeiture proceeding.
(2) The balance shall be deposited in a special law- enforcement investigation fund. Such fund shall be administered by the chief of the law-enforcement agency that seized the forfeited property sold and shall take the form of an interest- bearing account with any interest earned to be compounded to the fund. Any funds deposited in the special law-enforcement investigative fund pursuant to this article shall be expended only to defray the costs of protracted or complex investigations, to provide additional technical equipment or expertise, to provide matching funds to obtain federal grants or for such other law-enforcement purposes as the chief of the law-enforcement agency may deem appropriate; however, these funds may not be utilized for regular operating needs.
(e) If more than one law-enforcement agency was substantially involved in effecting the seizure and forfeiture of property, the court wherein the petition for forfeiture was filed shall equitably distribute the forfeited property among the law- enforcement agencies. In the event of a public sale of such property pursuant to subsection (a) of this section, the court shall equitably distribute any proceeds remaining after distribution pursuant to subsection (c) and subdivision (1), subsection (d) of this section among such law-enforcement agencies for deposit into their individual special law- enforcement investigative fund. Equitable distribution shall be based upon the overall contribution of the individual law- enforcement agency to the investigation which led to the seizure.
(f) Upon the sale of any forfeited property for which title or registration is required by law, the state shall issue a title or registration certificate to any bona fide purchaser at a public sale of such the property conducted pursuant to subsection (a) of this section. Upon the request of the law-enforcement agency receiving, pursuant to the order of the court, or electing to retain, pursuant to subsection (a) of this section, any forfeited property for which title or registration is required by law, the state shall issue a title or registration certificate to the appropriate governmental body.
(g) Any funds expended pursuant to the provisions of this section, shall only be expended in the manner provided in subsection (b), section seven hundred five of this article.
(h) Every prosecuting attorney or law-enforcement agency receiving forfeited property or proceeds from the sale of forfeited property pursuant to this article shall submit an annual report to the body which has budgetary authority over such agency. Such report shall specify the type and approximate value of all forfeited property and the amount of proceeds from the sale of forfeited property received in the preceding year. No county or municipality may use anticipated receipts of forfeited property in their budgetary process.
(i) In lieu of the sale of any forfeited property subject to a bona fide security interest preserved by an order of the court, the law-enforcement agency receiving the forfeited property may pay the balance due on any security interest preserved by the court from funds budgeted to the office or department or from the special fund and retain possession of the forfeited property for official use pursuant to subsection (a) of this section.
(j) In every case where property is forfeited, disposition of the forfeited property, in accordance with this article, shall be made within six months of the date upon which the court of jurisdiction orders such forfeiture. Should the office or agency receiving the property fail either to place the property in official use or dispose of the property in accordance with law, the court of jurisdiction shall cause disposition of the property to be made with any proceeds therefrom to be awarded to the state.
(k) No such disposition shall occur until all applicable periods for filing a notice of intent to appeal has expired and no party in interest shall have filed such notice. The filing of such the notice of intent to appeal shall stay any such disposition until the appeal has been finally adjudicated or until the appeal period of one hundred eighty days has expired without an appeal having actually been taken or filed, unless a valid extension of such the appeal has been granted by the circuit court under the provisions of section seven, article four, chapter fifty-eight of this code.
(l) The special law-enforcement investigative funds of each law-enforcement agency may be placed in an interest-bearing depository insured by the federal government
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(NOTE: The purpose of this bill is to allow seized or forfeited assets to be deposited into interest bearing depositories insured by an agency of the federal government.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.)