BILL REQ. #:  H-3656.1 

Prefiled 12/07/09. Read first time 01/11/10.   Referred to Committee on Judiciary.

     AN ACT Relating to property used to facilitate a criminal street gang-related offense; and adding a new chapter to Title 7 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   Unless the context clearly requires otherwise, the definition in this section applies throughout this chapter. "Criminal street gang-related offense" has the same meaning as in RCW 9.94A.030.

NEW SECTION.  Sec. 2   (1) Except as provided in subsections (2) through (5) of this section, all real and personal property is subject to seizure and forfeiture and no property right exists in them if used, or intended for use, in any manner to facilitate a criminal street gang-related offense.
     (2)(a) No conveyances, including aircraft, vehicles, or vessels, may be forfeited under this section:
     (i) If used by any person as a common carrier in the transaction of business as a common carrier, unless it appears that the owner or other person in charge of the conveyance is a consenting party or privy to a criminal street gang-related offense; or
     (ii) By reason of any act or omission committed or omitted without the owner's actual or constructive knowledge or consent.
     (b) A forfeiture of a conveyance encumbered by a bona fide security interest is subject to the interest of the secured party if the secured party neither had actual or constructive knowledge of nor consented to the act or omission.
     (c) When the owner of a conveyance has been arrested for a criminal street gang-related offense, the conveyance in which the person is arrested may not be subject to forfeiture unless it is seized or process is issued for its seizure within ten days of the owner's arrest.
     (3) A forfeiture of money, negotiable instruments, securities, or other tangible or intangible property encumbered by a bona fide security interest is subject to the interest of the secured party if, at the time the security interest was created, the secured party neither had actual or constructive knowledge of nor consented to the act or omission.
     (4) No personal property may be forfeited under this section, to the extent of the interest of an owner, by reason of any act or omission which the owner establishes was committed or omitted without the owner's actual or constructive knowledge or consent.
     (5)(a) All real property, including any right, title, and interest in the whole of any lot or tract of land, and any appurtenances or improvements that are being used with the actual or constructive knowledge of the owner for a criminal street gang-related offense may be forfeited if the offense is not less than a class C felony and a substantial nexus exists between the criminal street gang-related offense and the real property;
     (b) No real property may be forfeited under this subsection, to the extent of the interest of an owner, by reason of any act or omission which the owner establishes was committed or omitted without the owner's actual or constructive knowledge or consent; and
     (c) A forfeiture of real property encumbered by a bona fide security interest is subject to the interest of the secured party if the secured party, at the time the security interest was created, neither had actual or constructive knowledge of nor consented to the act or omission.

NEW SECTION.  Sec. 3   (1) Real or personal property subject to forfeiture under this chapter may be seized by any law enforcement officer of this state upon process issued by any superior court having jurisdiction over the property.
     (2) When real property is seized under this chapter:
     (a) The seizing agency shall file a lis pendens;
     (b) The property may be transferred or conveyed to any person or entity who acquires title by foreclosure or deed in lieu of foreclosure of a security interest; and
     (c) Except as provided in (b) of this subsection, the property must not be transferred or otherwise conveyed until ninety days after seizure or until a judgment of forfeiture is entered, whichever is later.
     (3) The seizure of personal property without process may be made if:
     (a) The seizure is incident to an arrest, a search under a search warrant, or an inspection under an administrative inspection warrant;
     (b) The property subject to the seizure has been the subject of a prior judgment in favor of the state in a criminal injunction or forfeiture proceeding based upon this section;
     (c) A law enforcement officer has probable cause to believe that the property is directly or indirectly dangerous to health or safety; or
     (d) A law enforcement officer has probable cause to believe that the property was used or is intended to be used for a criminal street gang-related activity.

NEW SECTION.  Sec. 4   In the event of seizure under this chapter, proceedings for forfeiture are deemed commenced by the seizure.

NEW SECTION.  Sec. 5   (1) The law enforcement agency under whose authority the seizure was made shall cause notice to be served within fifteen days following the seizure on the owner of the property seized and the person in charge thereof and any person having any known right or interest therein, including any community property interest, of the seizure and intended forfeiture of the seized property.
     (2) Service of notice of seizure of real property must be made according to the rules of civil procedure. However, the state may not obtain a default judgment with respect to real property against a party who is served by substituted service absent an affidavit stating that a good faith effort has been made to ascertain if the defaulted party is incarcerated within the state, and that there is no present basis to believe that the party is incarcerated within the state.
     (3) Notice of seizure in the case of property subject to a security interest that has been perfected by filing a financing statement in accordance with chapter 62A.9A RCW, or a certificate of title, must be made by service upon the secured party or the secured party's assignee at the address shown on the financing statement or the certificate of title.
     (4) The notice of seizure in other cases not covered under subsections (2) and (3) of this section may be served by any method authorized by law or court rule including, but not limited to, service by certified mail with return receipt requested. Service by mail is deemed complete upon mailing within the fifteen-day period following the seizure.

NEW SECTION.  Sec. 6   (1) A person shall notify the seizing law enforcement agency in writing of the person's claim of ownership or right to possession of real or personal property seized under this chapter within:
     (a) Forty-five days of the service of notice from the seizing agency in the case of personal property; or
     (b) Ninety days of the service of notice from the seizing agency in the case of real property.
     (2) If no person notifies the seizing law enforcement agency in writing of the person's claim of ownership or right to possession of real or personal property seized under this chapter within the time period required under subsection (1) of this section the item seized is deemed forfeited.
     (3) The community property interest in real property of a person whose spouse or domestic partner committed a violation giving rise to seizure of the real property may not be forfeited if the person did not participate in the violation.

NEW SECTION.  Sec. 7   (1) If any person notifies the seizing law enforcement agency in writing of the person's claim of ownership or right to possession of real or personal property seized under this chapter within the time period specified under section 6(1) (a) or (b) of this act, the person or persons must be afforded a reasonable opportunity to be heard as to the claim or right.
     (2) The notice of claim may be served by any method authorized by law or court rule including, but not limited to, service by first-class mail. Service by mail is deemed complete upon mailing within the:
     (a) Forty-five day period following service of the notice of seizure in the case of personal property; or
     (b) Ninety-day period following service of the notice of seizure in the case of real property.

NEW SECTION.  Sec. 8   (1) The hearing must be before the chief law enforcement officer of the seizing agency or the chief law enforcement officer's designee, except where the seizing agency is a state agency as defined in RCW 34.12.020(4), the hearing must be before the chief law enforcement officer of the seizing agency or an administrative law judge appointed under chapter 34.12 RCW, except that any person asserting a claim or right may remove the matter to a court of competent jurisdiction.
     (2)(a) Removal of any matter involving personal property may only be accomplished according to the rules of civil procedure.
     (b) The person seeking removal of the matter must serve process against the state, county, political subdivision, or municipality that operates the seizing agency, and any other party of interest, in accordance with RCW 4.28.080 or 4.92.020, within forty-five days after the person seeking removal has notified the seizing law enforcement agency of the person's claim of ownership or right to possession.
     (c) The court to which the matter is to be removed must be the district court when the aggregate value of personal property is within the jurisdictional limit set forth in RCW 3.66.020.
     (3) A hearing before the seizing agency and any appeal therefrom must be under Title 34 RCW.
     (4) In all cases, the burden of proof is upon the law enforcement agency to establish, by a preponderance of the evidence, that the property is subject to forfeiture.
     (5) The seizing law enforcement agency shall promptly return the real or personal property to the claimant upon a determination by the administrative law judge or court that the claimant is the present lawful owner or is lawfully entitled to possession of the property.
     (6)(a) In any proceeding to forfeit property under this chapter, where the claimant substantially prevails, the claimant is entitled to reasonable attorneys' fees.
     (b) In a court hearing between two or more claimants to the property involved, the prevailing party is entitled to a judgment for costs and reasonable attorneys' fees.

NEW SECTION.  Sec. 9   (1) When property is forfeited under this chapter, the seizing law enforcement agency may:
     (a) Retain it for official use or upon application by any law enforcement agency of this state release the property to the agency for the exclusive use of enforcing the provisions of this chapter;
     (b) Sell that which is not required to be destroyed by law and which is not harmful to the public; or
     (c) Request the appropriate sheriff or director of public safety to take custody of the property and remove it for disposition in accordance with law.
     (2)(a) When property is forfeited, the seizing agency shall:
     (i) Keep a record indicating the identity of the prior owner, if known, a description of the property, the disposition of the property, the value of the property at the time of seizure, and the amount of proceeds realized from disposition of the property;
     (ii) Retain records of forfeited property for at least seven years;
     (iii) File a report including a copy of the records of forfeited property with the state treasurer each calendar quarter. The quarterly report need not include a record of forfeited property that is still being held for use as evidence during the investigation or prosecution of a case or during the appeal from a conviction; and
     (iv) By January 31st of each year, remit to the state treasurer an amount equal to ten percent of the net proceeds of any property forfeited during the preceding calendar year. Money remitted shall be deposited in the state general fund.
     (b) For the purposes of this subsection:
     (i) The net proceeds of forfeited property is the value of the forfeitable interest in the property after deducting the cost of satisfying any bona fide security interest to which the property is subject at the time of seizure; and in the case of sold property, after deducting the cost of sale, including reasonable fees or commissions paid to independent selling agents, and the cost of any valid landlord's claim for damages under section 10 of this act.
     (ii) The value of sold forfeited property is the sale price.
     (iii) The value of retained forfeited property is the fair market value of the property at the time of seizure, determined when possible by reference to an applicable commonly used index, such as the index used by the department of licensing for valuation of motor vehicles. A seizing agency may use, but need not use, an independent qualified appraiser to determine the value of retained property. If an appraiser is used, the value of the property appraised is net of the cost of the appraisal.
     (iv) The value of destroyed property and retained firearms or illegal property is zero.
     (3) Forfeited property and net proceeds not required to be paid to the state treasurer must be retained by the seizing law enforcement agency exclusively for the expansion and improvement of criminal street gang-related law enforcement activity. Money retained under this section may not be used to supplant preexisting funding sources.
     (4) Upon the entry of an order of forfeiture of real property, the court shall forward a copy of the order to the assessor of the county in which the property is located. Orders for the forfeiture of real property shall be entered by the superior court, subject to court rules. The order shall be filed by the seizing agency in the county auditor's records in the county in which the real property is located.

NEW SECTION.  Sec. 10   (1) A landlord may assert a claim against proceeds from the sale of assets seized and forfeited under section 9(1)(b) of this act, only if:
     (a) A law enforcement officer, while acting in his or her official capacity, directly caused damage to the complaining landlord's property while executing a search of a tenant's residence; and
     (b) The landlord has applied any funds remaining in the tenant's deposit, to which the landlord has a right under chapter 59.18 RCW, to cover the damage directly caused by a law enforcement officer prior to asserting a claim under the provisions of this section, only if the:
     (i) Funds applied under (b) of this subsection are insufficient to satisfy the damage directly caused by a law enforcement officer, may the landlord seek compensation for the damage by filing a claim against the governmental entity under whose authority the law enforcement agency operates within thirty days after the search;
     (ii) Governmental entity denies or fails to respond to the landlord's claim within sixty days of the date of filing, may the landlord collect damages under this subsection by filing within thirty days of denial or the expiration of the sixty-day period, whichever occurs first, a claim with the seizing law enforcement agency. The seizing law enforcement agency must notify the landlord of the status of the claim by the end of the thirty-day period. Nothing in this section requires the claim to be paid by the end of the sixty-day or thirty-day period.
     (2) For any claim filed under subsection (1)(b) of this section, the law enforcement agency shall pay the claim unless the agency provides substantial proof that the landlord either:
     (a) Knew or consented to the criminal street gang-related offense; or
     (b) Failed to respond to a notification of the illegal activity, provided by a law enforcement agency under RCW 59.18.075, within seven days of receipt of notification of the illegal activity.
     (3) The landlord's claim for damages under subsection (1) of this section may not include a claim for loss of business and is limited to:
     (a) Damage to tangible property and clean-up costs;
     (b) The lesser of the cost of repair or fair market value of the damage directly caused by a law enforcement officer;
     (c) The proceeds from the sale of the specific tenant's property seized and forfeited under section 9(1)(b) of this act; and
     (d) The proceeds available after the seizing law enforcement agency satisfies any bona fide security interest in the tenant's property and costs related to sale of the tenant's property as provided by section 9(2)(b)(i) of this act.
     (4) Subsections (1) through (3) of this section do not limit any other rights a landlord may have against a tenant to collect for damages. However, if a law enforcement agency satisfies a landlord's claim under subsection (1) of this section, the rights the landlord has against the tenant for damages directly caused by a law enforcement officer under the terms of the landlord and tenant's contract are subrogated to the law enforcement agency.

NEW SECTION.  Sec. 11   If real or personal property subject to seizure and forfeiture under this chapter may also be subject to seizure and forfeiture under RCW 9.68A.120 or chapter 69.50 RCW, the seizing law enforcement agency may designate which chapter applies to the forfeiture proceedings.

NEW SECTION.  Sec. 12   Sections 1 through 11 of this act constitute a new chapter in Title 7 RCW.