HB2477 - 531R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 13-2314.01, Arizona Revised Statutes, is amended to read:

START_STATUTE13-2314.01. Anti-racketeering revolving fund; use of fund; reports; audit

A. The anti‑racketeering revolving fund is established. The attorney general shall administer the fund under the conditions and for the purposes provided by this section. Monies in the fund are exempt from the lapsing provisions of section 35‑190.

B. Any prosecution and investigation costs, including attorney fees, recovered for the state by the attorney general as a result of enforcement of civil and criminal statutes pertaining to any offense included in the definition of racketeering in section 13‑2301, subsection D, paragraph 4 or section 13‑2312, whether by final judgment, settlement or otherwise, shall be deposited in the fund established by this section.

C. Any monies received by any department or agency of this state or any political subdivision of this state from any department or agency of the United States or another state as a result of participation in any investigation or prosecution, whether by final judgment, settlement or otherwise, shall be deposited in the fund established by this section or, if the recipient is a political subdivision of this state, may be deposited in the fund established by pursuant to section 13‑2314.03.

D. Any monies obtained as a result of a forfeiture by any department or agency of this state under this title or under federal law shall be deposited in the fund established by this section. Any monies or other property obtained as a result of a forfeiture by any political subdivision of this state or the federal government may be deposited in the fund established by this section. Monies deposited in the fund pursuant to this section or section 13‑4315 shall accrue interest and shall be held for the benefit of the agency or agencies responsible for the seizure or forfeiture to the extent of their contribution.

E. Except as provided in subsections F and G and H of this section, the monies and interest shall be distributed within thirty days of application to the agency or agencies responsible for the seizure or forfeiture. The agency or agencies applying for monies must submit an application in writing to the attorney general that includes a description of what the requested monies will be used for. The attorney general may deny an application that requests monies for a purpose that is not authorized by this section, section 13‑4315 or federal law. Monies in the fund used by the attorney general for capital projects in excess of one million dollars are subject to review by the joint committee on capital review.

E. F. Monies in the fund may be used for the following:

1. The funding of gang prevention programs, substance abuse prevention programs, substance abuse education programs, programs that provide assistance to victims of a criminal offense that is listed in section 13‑2301 and witness protection pursuant to section 41‑196 or for any purpose permitted by federal law relating to the disposition of any property that is transferred to a law enforcement agency.

2. The investigation and prosecution of any offense included in the definition of racketeering in section 13‑2301, subsection D, paragraph 4 or section 13‑2312, including civil enforcement.

3. The payment of the relocation expenses of any law enforcement officer and the officer's immediate family if the law enforcement officer is the victim of a bona fide threat that occurred because of the law enforcement officer's duties.

F. G. On or before January 15, April 15, July 15 and October 15 of each year, each department or agency of this state receiving monies pursuant to this section or section 13‑2314.03 or 13‑4315 or from any department or agency of the United States or another state as a result of participation in any investigation or prosecution shall file with the attorney general, the board of supervisors if the sheriff received the monies and the city or town council if the city city's or town's department received the monies a report for the previous calendar quarter. The report shall be in a form that is prescribed by the Arizona criminal justice commission and approved by the director of the joint legislative budget committee. The report shall set forth the sources of all monies and all expenditures as required by subsections J and K of this section. The report shall not include any identifying information about specific investigations. If a department or agency of this state fails to file a report within forty‑five days after the report is due and there is no good cause as determined by the Arizona criminal justice commission, the attorney general shall make no expenditures from the fund for the benefit of the department or agency until the report is filed. The attorney general is responsible for collecting all reports from departments and agencies of this state and transmitting the reports to the Arizona criminal justice commission at the time that the report required pursuant to subsection G H of this section is submitted.

G. H. On or before January 25, April 25, July 25 and October 25 of each year, the attorney general shall file with the Arizona criminal justice commission a report for the previous calendar quarter. The report shall be in a form that is prescribed by the Arizona criminal justice commission and approved by the director of the joint legislative budget committee. The report shall set forth the sources of all monies and all expenditures as required by subsections J and K of this section. The report shall not include any identifying information about specific investigations. If the attorney general fails to file a report within sixty days after the report is due and there is no good cause as determined by the Arizona criminal justice commission, the attorney general shall make no expenditures from the fund for the benefit of the attorney general until the report is filed. If a political subdivision of this state fails to file a report with the county attorney pursuant to section 13‑2314.03 within forty‑five days after the report is due and there is no good cause as determined by the Arizona criminal justice commission, the attorney general shall make no expenditures from the fund for the benefit of the political subdivision until the report is filed.

H. I. On or before September 30 of each year, the Arizona criminal justice commission shall compile the attorney general report and the reports of all departments and agencies of this state into a single comprehensive report and shall submit a copy of the report to the governor, the director of the department of administration, the president of the senate, the speaker of the house of representatives, the director of the joint legislative budget committee and the secretary of state.

J. The reports that are required by subsections G and H of this section must include all of the following information if monies were obtained as a result of a forfeiture:

1. The name of the law enforcement agency that seized the property.

2. The date of the seizure.

3. The Type of property seized and a description of the property seized, including, if applicable, the make, the model and the serial number of the property.

4. The location of the seizure, including whether it was a home or business, and the street name and, if applicable, the direction the property was moving.

5. The estimated value of the seizure.

6. The criminal offense alleged that allowed the seizure.

7. Whether any criminal charges were filed and what the charges were.

8. If criminal charges were filed, the case number and the outcome of the criminal charges.

9. If the forfeiture did not proceed under state law, the reason for the federal transfer.

10. The forfeiture case number.

11. The method of final forfeiture proceeding, including whether it was criminal or civil, and if civil, whether the civil forfeiture was judicial or administrative.

12. The venue of the forfeiture action.

13. Whether a property owner filed a claim or counterclaim and, if filed, whether the person was a suspect, a titled owner, a joint owner or a third‑party owner.

14. Whether the property owner was represented by an attorney in the forfeiture case.

15. The date of the forfeiture decision.

16. Whether there was a forfeiture settlement agreement.

17. Whether the property was returned to the owner, partially returned to the owner, sold, destroyed or retained by law enforcement.

18. The date of the property disposition.

19. The gross amount of monies received from the forfeiture.

20. The estimated administrative and storage costs and any other costs, including any costs of litigation.

21. The amount of attorney fees awarded to property owners, if any.

K. The reports that are required by subsections G and H of this section must include the following information with regard to all expenditures made from the fund for:

1. Crime, gang and substance abuse prevention programs.

2. Victim reparations.

3. Witness protection.

4. Investigation costs, including informant fees and buy money.

5. Regular-time salaries, overtime pay and employee benefits of prosecutors.

6. Regular-time salaries, overtime pay and employee benefits of sworn law enforcement agency personnel other than prosecutors.

7. Regular-time salaries, overtime pay and employee benefits of unsworn law enforcement agency personnel other than prosecutors.

8. Professional or outside services, including services related to auditing, outside attorney fees, court reporting, expert witnesses and other court costs.

9. Membership fees paid to trade associations.

10. Travel and meals.

11. Entertainment.

12. Training.

13. Conferences.

14. Vehicles purchased or leased.

15. Canines, firearms and related equipment, including tactical gear.

16. Other capital expenditures, including furniture, computers and office equipment.

17. External publications and communications.

18. Other operating expenses, including office supplies, postage and printing. Expenses listed under this paragraph must be separately itemized.

L. The attorney general shall annually cause a financial audit to be made of the fund. A certified public accountant shall conduct the financial audit within one hundred twenty days after the end of each fiscal year. The attorney general shall immediately file a certified copy of the audit with the auditor general. The attorney general shall pay any fees and costs of the financial audit under this section from the fund. END_STATUTE

Sec. 2. Section 13-2314.03, Arizona Revised Statutes, is amended to read:

START_STATUTE13-2314.03. County anti-racketeering revolving fund; use of fund; reports

A. The board of supervisors of a county shall establish a county anti‑racketeering revolving fund administered by the county attorney under the conditions and for the purposes provided by this section.

B. Any prosecution and investigation costs, including attorney fees, recovered for the county as a result of enforcement of civil and criminal statutes pertaining to any offense included in the definition of racketeering in section 13‑2301, subsection D, paragraph 4 or section 13‑2312, whether by final judgment, settlement or otherwise, shall be deposited in the fund established by the board of supervisors.

C. Any monies received by any department or agency of this state or any political subdivision of this state from any department or agency of the United States or another state as a result of participation in any investigation or prosecution, whether by final judgment, settlement or otherwise, shall be deposited in the fund established by pursuant to this section or in the fund established by section 13‑2314.01.

D. Any monies obtained as a result of a forfeiture by the county attorney under this title or under federal law shall be deposited in the fund established by pursuant to this section. Any monies or other property obtained as a result of a forfeiture by any political subdivision of this state or the federal government may be deposited in the fund established by pursuant to this section or in the fund established by section 13‑2314.01. Monies deposited in the fund pursuant to this section or section 13‑4315 shall accrue interest and shall be held for the benefit of the agency or agencies responsible for the seizure or forfeiture to the extent of their contribution.

E. Except as provided in subsections F and G and H of this section, the monies and interest shall be distributed to the agency or agencies responsible for the seizure or forfeiture within thirty days of application. The agency or agencies applying for monies must submit an application in writing to the county attorney that includes a description of what the requested monies will be used for. The county attorney may deny an application that requests monies for a purpose that is not authorized by this section, section 13‑4315 or federal law. Except in an emergency, before the county attorney's office may use any monies from the fund, the county attorney shall submit an application that includes a description of what the requested monies will be used for to the board of supervisors. The board of supervisors shall approve the county attorney's use of the monies if the purpose is authorized by this section, section 13‑4315 or federal law.

E. F. Monies in the fund may be used for the funding of gang prevention programs, substance abuse prevention programs, substance abuse education programs, programs that provide assistance to victims of a criminal offense that is listed in section 13‑2301 and witness protection pursuant to section 11‑536 or for any purpose permitted by federal law relating to the disposition of any property that is transferred to a law enforcement agency. Monies in the fund may be used for the investigation and prosecution of any offense included in the definition of racketeering in section 13‑2301, subsection D, paragraph 4 or section 13‑2312, including civil enforcement.

F. G. On or before January 25, April 25, July 25 and October 25 of each year, the county attorney shall cause to be filed file with the Arizona criminal justice commission a report for the previous calendar quarter. The report shall be in a form that is prescribed by the Arizona criminal justice commission and approved by the director of the joint legislative budget committee. The report shall set forth the sources of all monies and all expenditures as required by subsections J and K of this section. The report shall not include any identifying information about specific investigations. If the county attorney fails to file a report within sixty days after it is due and there is no good cause as determined by the Arizona criminal justice commission, the county attorney shall make no expenditures from the fund for the benefit of the county attorney until the report is filed.

G. H. On or before January 15, April 15, July 15 and October 15 of each year, each political subdivision of this state receiving monies pursuant to this section or section 13‑2314.01 or 13‑4315 or from any department or agency of the United States or another state as a result of participating in any investigation or prosecution shall cause to be filed file with the board of supervisors of the county in which the political subdivision is located, each city or town council in which the political subdivision is located and the county attorney of the county in which the political subdivision is located a report for the previous calendar quarter. The report shall be in a form that is prescribed by the Arizona criminal justice commission and approved by the director of the joint legislative budget committee. The report shall set forth the sources of all monies and all expenditures as required by subsections J and K of this section. The report shall not include any identifying information about specific investigations. If a political subdivision of this state fails to file a report within forty‑five days after the report is due and there is no good cause as determined by the Arizona criminal justice commission, the county attorney shall make no expenditures from the fund for the benefit of the political subdivision until the report is filed. The county attorney shall be responsible for collecting all reports from political subdivisions within that county and transmitting the reports to the Arizona criminal justice commission at the time that the county report required pursuant to subsection F G of this section is submitted.

H. I. On or before September 30 of each year, the Arizona criminal justice commission shall compile all county attorney reports into a single comprehensive report and all political subdivision reports into a single comprehensive report and submit a copy of each comprehensive report to the governor, the president of the senate, the speaker of the house of representatives, the director of the joint legislative budget committee and the secretary of state.

J. The reports that are required by subsections G and H of this section must include all of the following information if monies were obtained as a result of a forfeiture:

1. The name of the law enforcement agency that seized the property.

2. The date of the seizure.

3. The Type of property seized and a description of the property seized, including, if applicable, the make, the model and the serial number of the property.

4. The location of the seizure, including whether it was a home or business, and the street name and, if applicable, the direction the property was moving.

5. The estimated value of the seizure.

6. The criminal offense alleged that allowed the seizure.

7. Whether any criminal charges were filed and what the charges were.

8. If criminal charges were filed, the case number and the outcome of the criminal charges.

9. If the forfeiture did not proceed under state law, the reason for the federal transfer.

10. The forfeiture case number.

11. The method of final forfeiture proceeding, including whether it was criminal or civil, and if civil, whether the civil forfeiture was judicial or administrative.

12. The venue of the forfeiture action.

13. Whether a property owner filed a claim or counterclaim and, if filed, whether the person was the suspect, a titled owner, a joint owner or a third‑party owner.

14. Whether the property owner was represented by an attorney in the forfeiture case.

15. The date of the forfeiture decision.

16. Whether there was a forfeiture settlement agreement.

17. Whether the property was returned to the owner, partially returned to the owner, sold, destroyed or retained by law enforcement.

18. The date of the property disposition.

19. The gross amount of monies received from the forfeiture.

20. The estimated administrative and storage costs and any other costs, including any costs of litigation.

21. The amount of attorney fees awarded to property owners, if any.

K. The reports that are required by subsections G and H of this section must include the following information with regard to all expenditures made from the fund for:

1. Crime, gang and substance abuse prevention programs.

2. Victim reparations.

3. Witness protection.

4. Investigation costs, including informant fees and buy money.

5. Regular-time salaries, overtime pay and employee benefits of prosecutors.

6. Regular-time salaries, overtime pay and employee benefits of sworn law enforcement agency personnel other than prosecutors.

7. Regular-time salaries, overtime pay and employee benefits of unsworn law enforcement agency personnel other than prosecutors.

8. Professional or outside services, including services related to auditing, outside attorney fees, court reporting, expert witnesses and other court costs.

9. Membership fees paid to trade associations.

10. Travel and meals.

11. Entertainment.

12. Training.

13. Conferences.

14. Vehicles purchased or leased.

15. Canines, firearms and related equipment, including tactical gear.

16. Other capital expenditures, including furniture, computers and office equipment.

17. External publications and communications.

18. Other operating expenses, including office supplies, postage and printing. Expenses listed under this paragraph must be separately itemized. END_STATUTE

Sec. 3. Section 13-4305, Arizona Revised Statutes, is amended to read:

START_STATUTE13-4305. Seizure of property

A. Property subject to forfeiture under this chapter may be seized for forfeiture by a peace officer:

1. On process issued pursuant to the Arizona rules of civil procedure or the provisions of this title, including a seizure warrant.

2. By making a seizure for forfeiture on property seized on process issued pursuant to law, including sections 13‑3911, through 13-3912, 13‑3913, 13-3914 and 13‑3915.

3. By making a seizure for forfeiture without court process if any of the following is true:

(a) The seizure for forfeiture is of property seized incident to an arrest or search.

(b) The property subject to seizure for forfeiture has been the subject of a prior judgment in favor of this state or any other state or the federal government in a forfeiture proceeding.

B. Property subject to forfeiture under this chapter may be seized for forfeiture by placing the property under constructive seizure. Constructive seizure may be made by posting notice of seizure for forfeiture on the property or by filing notice of seizure for forfeiture or notice of pending forfeiture in any appropriate public record relating to the property.

C. The court shall determine probable cause for seizure before real property may be seized for forfeiture, unless the seizure is pursuant to a constructive seizure or the filing of a racketeering lien or lis pendens. The court may make its determination ex parte if the state demonstrates that notice and an opportunity to appear would create a risk of harm to the public safety or welfare, including the risk of physical injury or the likelihood of property damage or financial loss.

D. The court shall determine probable cause for seizure before property may be seized for forfeiture as a substitute asset pursuant to section 13‑2314, subsection D, E or G, or pursuant to section 13‑4313, subsection A, unless the seizure is pursuant to a constructive seizure or the filing of a racketeering lien or lis pendens. The court may issue a seizure warrant for such property if it determines that there is probable cause to believe that the property is subject to forfeiture and is not available for seizure for forfeiture for any reason described in section 13‑4313, subsection A. The determinations shall be made ex parte unless real property is to be seized and subsection C of this section requires notice and an opportunity to appear.

E. In establishing a preponderance of the clear and convincing evidence and in determining probable cause for seizure and for forfeiture, a rebuttable presumption exists that the property of any person is subject to forfeiture if the state establishes all of the following by the standard of proof applicable to that proceeding:

1. Conduct giving rise to forfeiture occurred.

2. The person acquired the property during the period of the conduct giving rise to forfeiture or within a reasonable time after that period.

3. There is no likely source for the property other than the conduct giving rise to forfeiture.

F. In establishing a preponderance of the clear and convincing evidence and in determining probable cause for seizure and for forfeiture, the fact that money or any negotiable instrument was found in proximity to contraband or to instrumentalities of an offense gives rise to an inference that the money or instrument was the proceeds of contraband or was used or intended to be used to facilitate commission of the offense. END_STATUTE

Sec. 4. Section 13-4306, Arizona Revised Statutes, is amended to read:

START_STATUTE13-4306. Powers and duties of peace officers and agencies

A. In the event of a seizure for forfeiture under section 13‑4305, the property is not subject to replevin, conveyance, sequestration or attachment but is deemed to be in the custody of the law enforcement agency making the seizure for forfeiture. The seizing agency or the attorney for the state may authorize the release of the seizure for forfeiture of the property if forfeiture or retention is unnecessary, may transfer the property to any other state or federal agency or may transfer the action to another attorney for the state by discontinuing forfeiture proceedings in favor of forfeiture proceedings initiated by the other agency or attorney. Except as provided in subsection I of this section, the seizing agency or the attorney for the state may not transfer or refer seized property to a federal agency. An action pursuant to this chapter shall be consolidated with any other action or proceeding pursuant to this title relating to the same property on motion by the attorney for the state in either action.

B. If property is seized for forfeiture under section 13‑4305, pending forfeiture and final disposition, the seizing agency may do any of the following:

1. Remove the property to a storage area for safekeeping or, if the property is a negotiable instrument or money, deposit it in an interest bearing account.

2. Remove the property to a place designated by the court.

3. Provide for another custodian or agency to take custody of the property and remove it to an appropriate location within the jurisdiction of the court.

C. As soon as practicable after seizure for forfeiture, the seizing agency shall conduct an inventory and estimate the value of the property seized. Within twenty days the seizing agency or the attorney for the state shall make reasonable efforts to provide notice of seizure for forfeiture to all persons known to have an interest in the seized property.

D. A person who acts in good faith and in a reasonable manner to comply with an order of the court or a request of a peace officer is not liable to any person for acts done in compliance with the order or request.

E. A possessory lien of a person from whose possession property is seized is not affected by the seizure.

F. In the event of a seizure for forfeiture under section 13‑4305, the seizing agency shall send to an attorney for the state a written request for forfeiture within twenty days, which shall include a statement of facts and circumstances of the seizure, including the names of witnesses then known, the appraised or estimated value of the property and a summary of the facts relied on for forfeiture.

G. An owner of property seized for forfeiture may obtain the release of the seized property by posting with the attorney for the state a surety bond or cash in an amount equal to the full fair market value of the property as determined by the attorney for the state. The state may refuse to release the property if any of the following applies:

1. The bond or cash tendered is inadequate.

2. The property is retained as contraband or evidence.

3. The property is particularly altered or designed for use in conduct giving rise to forfeiture.

H. If an owner of property posts a surety bond or cash and the property is forfeited the court shall forfeit the surety bond or cash in lieu of the property.

I. The seizing agency or the attorney for the state may not enter into any agreement to transfer or refer seized property to a federal agency either directly, indirectly, by adoption, through an intergovernmental joint task force or by any other means for the purpose of forfeiture unless the seized property includes more than one hundred thousand dollars in United States currency. If the seized property includes more than one hundred thousand dollars in United States currency The seizing agency may, but is not required to, transfer or refer the seized property to a federal agency for forfeiture pursuant to federal law. This subsection does not restrict a seizing agency from collaborating with a federal agency to seize contraband or property that the seizing agency has probable cause to believe is property that is subject to forfeiture through an intergovernmental joint task force. END_STATUTE

Sec. 5. Section 13-4310, Arizona Revised Statutes, is amended to read:

START_STATUTE13-4310. Judicial forfeiture proceedings; general

A. In any proceeding pursuant to this chapter, the court, on application of the state, may enter any restraining order or injunction, require the execution of satisfactory performance bonds, create receiverships, appoint conservators, appraisers, accountants or trustees or take any other action to seize, secure, maintain or preserve the availability of property subject to forfeiture under this title, including a warrant for its seizure, whether prior or subsequent to the filing of a notice of pending forfeiture, complaint, indictment or information.

B. If property is seized for forfeiture without a prior judicial determination of probable cause, an order of forfeiture or a hearing pursuant to section 13‑4312, subsection D, the court, on an application filed by an owner of or interest holder in the property within fifteen days after notice of its seizure for forfeiture or actual knowledge of it, whichever is earlier, and complying with the requirements for claims in section 13‑4311, subsections E and F, may issue an order to show cause to the seizing agency for a hearing on the sole issue of whether probable cause for forfeiture of the property then exists. Notice of the order to show cause hearing must be served upon on the attorney for the state at least five working days before the hearing is held. If the court finds that no probable cause for forfeiture of the property then exists or if the state elects not to contest the issue, the property seized for forfeiture from the applicant shall be released to the custody of the applicant pending the outcome of a judicial proceeding pursuant to this chapter. If the court finds that probable cause for the forfeiture of the property then exists, the court shall not order the property released, except as provided in section 13‑4306, subsection G.

C. A defendant convicted in any criminal proceeding shall be precluded from subsequently denying the essential allegations of the criminal offense of which he was convicted in any proceeding pursuant to this chapter. For the purposes of this chapter, a conviction may result from a verdict or plea including a no contest plea.

D. In any judicial forfeiture hearing, determination or other proceeding pursuant to this chapter, the applicant, petitioner or claimant must establish by a preponderance of the evidence that he is an owner of or interest holder in the property seized for forfeiture before other evidence is taken. The burden of proving the standing of the claimant and the existence of the exemption is on the claimant or party raising the claim, and it is not necessary to negate the standing of any claimant or the existence of any exemption in any notice, application, complaint, information or indictment.

E. In hearings and determinations pursuant to this chapter:

1. The law of evidence relating to civil actions applies equally to all parties, including the state, an applicant, a petitioner, a claimant and a defendant, on all issues required to be established by a preponderance of the evidence or clear and convincing evidence.

2. The court shall receive and consider, in making any determination of probable cause or reasonable cause, all evidence and information that would be permissible in determining probable cause at a preliminary hearing, at a grand jury or by a magistrate pursuant to section 13‑3913, together with inferences from the evidence and information.

3. No evidence may be suppressed in any hearing pursuant to this chapter on the ground that its acquisition by search or seizure violated constitutional protections applicable in criminal cases relating to unreasonable searches or seizures.

F. All property, including all interests in such property, declared forfeited under this title vests in this state on the commission of the act or omission giving rise to forfeiture under this title together with the proceeds of the property after such time. Any such property or proceeds subsequently transferred to any person are subject to forfeiture and thereafter shall be ordered forfeited unless the transferee claims and establishes in a hearing pursuant to this chapter the showings set out in section 13‑4304.

G. On the motion of a party and after notice to any persons who are known to have an interest in the property and an opportunity to be heard, the court may order property that has been seized for forfeiture sold, leased, rented or operated to satisfy an interest of any interest holder who has timely filed a proper claim or to preserve the interests of any party. The court may order a sale or any other disposition of the property if the property may perish, waste, be foreclosed on or otherwise be significantly reduced in value or if the expenses of maintaining the property are or will become greater than its fair market value. If the court orders a sale, the court shall designate a third party or state property manager to dispose of the property by public sale or other commercially reasonable method and shall distribute the proceeds in the following order of priority:

1. Payment of reasonable expenses incurred in connection with the sale.

2. Satisfaction of exempt interests in the order of their priority.

3. Preservation of the balance, if any, in the actual or constructive custody of the court in an interest bearing account, subject to further proceedings under this chapter.

H. If the property is disposed of pursuant to subsection G of this section, a successful claimant may apply to the court for actual monetary damages suffered, if any, as a result of the disposal of the property, but the state, a political subdivision of the state, or an officer, employee or agent of any of them shall not in any event be liable under this chapter for incidental or consequential damages or for damages either:

1. That could have been avoided if the claimant had made full and immediate disclosure to the attorney for the state of facts or evidence known or available to the claimant.

2. In excess of the fair market value of the property seized for forfeiture at the time of its seizure plus interest from the time of its seizure for forfeiture.

I. If an indictment or information is filed alleging the same conduct as the conduct giving rise to forfeiture in a civil forfeiture proceeding, the court in the civil proceeding may stay civil discovery against the criminal defendant and against the state in the civil proceeding until the defendant's criminal trial is completed. Before staying civil discovery, the court shall make adequate provision to prevent any loss or expense to any victim or party resulting from the delay, including loss or expense due to maintenance, management, insurance, storage or preservation of the availability of the property or due to depreciation in the value of the property.

J. No person claiming to be an owner of or interest holder in property seized for forfeiture under this chapter may commence or maintain any action against the state concerning the validity of the alleged interest other than as provided in this chapter. END_STATUTE

Sec. 6. Section 13-4311, Arizona Revised Statutes, is amended to read:

START_STATUTE13-4311. Judicial in rem forfeiture proceedings

A. If a forfeiture is authorized by law, it shall be ordered by a court on an action in rem brought by the state pursuant to a notice of pending forfeiture or a verified complaint for forfeiture. The state may serve the complaint in the manner provided by section 13‑4307 or by the Arizona rules of civil procedure.

B. A civil in rem action may be brought by the state in addition to or in lieu of the civil and criminal in personam forfeiture procedures set forth in sections 13‑4312 and 13‑4313 or the uncontested civil forfeiture procedures set forth in section 13‑4309. Judicial in rem forfeiture proceedings are in the nature of an action in rem and are governed by the Arizona rules of civil procedure unless a different procedure is provided by law.

C. On the filing of a civil in rem action by the state in superior court the clerk of the court in which the action is filed shall provide, and the attorney for the state may provide, the notice of pending forfeiture required by section 13‑4307 unless the files of the clerk of the court reflect that such notice has previously been made.

D. An owner of or interest holder in the property may file a claim against the property, within thirty days after the notice, for a hearing to adjudicate the validity of his claimed interest in the property. The court shall hold the hearing shall be held by the court without a jury. An owner or interest holder may not be charged a filing fee or any other charge for filing the claim.

E. The claim shall be signed by the claimant under penalty of perjury and shall set forth all of the following:

1. The caption of the proceeding as set forth on the notice of pending forfeiture or complaint and the name of the claimant.

2. The address at which the claimant will accept future mailings from the court or attorney for the state.

3. The nature and extent of the claimant's interest in the property.

4. The date, the identity of the transferor and the circumstances of the claimant's acquisition of the interest in the property.

5. The specific provisions of this chapter relied on in asserting that the property is not subject to forfeiture.

6. All facts supporting each such assertion.

7. Any additional facts supporting the claimant's claim.

8. The precise relief sought.

F. Copies of the claim shall be mailed to the seizing agency and to the attorney for the state. No extension of time for the filing of a claim may be granted.

G. Within twenty days after service of the complaint, the claimant shall file and serve the answer to the complaint and the answers to interrogatories and requests for admission if any were served with the complaint. The answer shall be signed by the owner or interest holder under penalty of perjury, shall comply with the Arizona rules of civil procedure relating to answers and shall comply with all of the requirements for claims. If no proper answer is timely filed, the attorney for the state shall proceed as provided in sections 13‑4314 and 13‑4315 with ten days' notice to any person who has timely filed a claim that has not been stricken by the court.

H. At the time of filing its pleadings or at any other time not less than thirty days before the hearing, the state and any claimant who has timely answered the complaint may serve discovery requests on any other party, the answers or response to which shall be due in twenty days, and may take the deposition of any person at any time after the expiration of fifteen days after the filing and service of the complaint. Any party may move for summary judgment at any time after an answer or responsive pleading is served and not less than thirty days before the hearing. The state, as the party defending against the claim, may make offers of judgment at any time more than ten days before the hearing begins.

I. An injured person may submit a request for compensation from forfeited property to the court at any time before the earlier of the entry of a final judgment or an application for an order of the forfeiture of the property, or if a hearing pursuant to subsections K, L and M of this section is held, not less than thirty days before the hearing. The request shall be signed by the requestor under penalty of perjury and shall set forth all of the following:

1. The caption of the proceeding as set forth on the notice of pending forfeiture or complaint and the name of the requestor.

2. The address at which the requestor will accept future mailings from the court or parties to the action.

3. The property subject to forfeiture from which the requestor seeks compensation.

4. The nature of the economic loss sustained by the requestor.

5. All facts supporting each such assertion.

6. Any additional facts supporting the request.

7. The amount of economic loss for which the requestor seeks compensation.

J. If a proper request for compensation from forfeited property is timely filed, the court shall hold a hearing to establish whether there is a factual basis for the request. The requestor has the burden of establishing by a preponderance of the evidence that the requestor is an injured person who sustained economic loss.

K. The hearing on the claim, to the extent practicable and consistent with the interest of justice, shall be held sixty days after all parties have complied with the disclosure required by rule 26.1 of the Arizona rules of civil procedure. The court may consolidate the hearing on the claim with a hearing on any other claim concerning the same property.

L. At the hearing, the claimant may testify, present evidence and witnesses on the claimant's own behalf and cross‑examine witnesses who appear at the hearing. The state may present evidence and witnesses and cross‑examine witnesses who appear at the hearing.

M. At the hearing, the state has the burden of establishing by a preponderance of the clear and convincing evidence that the property is subject to forfeiture under section 13‑4304. Any claimant who has previously established by a preponderance of the evidence that the claimant is an owner of or interest holder in the property has the burden of establishing by a preponderance of the evidence that the claimant's interest in the property is exempt from forfeiture under section 13‑4304.

N. In accordance with its findings at the hearing:

1. The court shall order an interest in property returned or conveyed to a claimant, if any, who has established by a preponderance of the evidence that the claimant is an owner of or interest holder in the property if either of the following applies:

(a) The state has failed to establish by a preponderance of the clear and convincing evidence that the interest is subject to forfeiture under section 13‑4304.

(b) The claimant has established by a preponderance of the evidence that the interest is exempt from forfeiture under section 13‑4304.

2. The court shall order all other property, including all interests in the property, forfeited to this state and proceed pursuant to sections 13‑4314 and 13‑4315.

3. If the court finds that a requestor is an injured person the court shall determine the amount of the injured person's economic loss caused by the conduct giving rise to the forfeiture of the designated property and shall require the following:

(a) If the designated property is not contraband and is not altered or designed for use in conduct giving rise to forfeiture, the attorney for the state shall sell the property as provided in section 13‑4315, subsection A, paragraph 2, and shall apply the resulting balance to compensate the injured person's economic loss in the amount found by the court.

(b) If the balance is insufficient to compensate the economic loss of all injured persons the attorney for the state shall distribute the balance among the injured persons according to a method determined by the court.

(c) After compensation of all injured persons, the attorney for the state shall transmit ten per cent percent of the remaining balance, if any, to the Arizona criminal justice commission for deposit in the victim compensation and assistance fund established by section 41‑2407.

(d) The attorney for the state shall deposit the remainder of the balance, if any, in an appropriate anti‑racketeering revolving fund established by section 13‑2314.01 or 13‑2314.03. END_STATUTE

Sec. 7. Section 13-4312, Arizona Revised Statutes, is amended to read:

START_STATUTE13-4312. Judicial in personam forfeiture proceedings

A. If a forfeiture is authorized by law, it shall be ordered by a court on proceedings by the state in an in personam civil or criminal action pursuant to section 13‑2313 or 13‑2314 or any other law providing for a forfeiture.

B. Any complaint, information or indictment alleging or charging one or more offenses included in section 13‑2301, subsection D, paragraph 4 or a violation of section 13‑2312, or any other offense giving rise to forfeiture under this title, shall set forth with reasonable particularity property that the state seeks to forfeit pursuant to this section in that action, if any. The court shall allow the allegation that particular new or different or differently described property is subject to forfeiture in an in personam criminal or civil case to be made at any time prior to the date the case is actually tried unless the allegation is filed fewer than twenty days before the case is actually tried, and the court finds on the record that the defendant was in fact prejudiced by the untimely filing and states reasons for these findings, provided that when the allegation is filed, the state must make available to the defendant a copy of any material information concerning the allegation.

C. In any proceeding pursuant to this section, the court, on application of the state, may enter any order authorized by section 13‑4310, subsection A or take any other action to seize, secure, maintain or preserve the availability of property subject to forfeiture under this title, including a warrant for its seizure, whether before or after the filing of a complaint, indictment or information.

D. Notwithstanding subsection E of this section, a temporary restraining order under this section may be entered on application of the state without notice or an opportunity for a hearing if the state demonstrates both that:

1. There is probable cause to believe that the property with respect to which the order is sought would, in the event of final judgment or conviction, be subject to forfeiture under this title.

2. Provision of notice will jeopardize the availability of the property for forfeiture. A temporary restraining order expires within ten days after the date on which it is entered unless the party against whom it is entered consents to an extension for a longer period or unless after commencing a hearing the court enters or is considering a preliminary injunction.

E. Notice of the entry of the restraining order and an opportunity for a hearing shall be afforded to persons known to have an interest in the property, whether or not a temporary restraining order is entered without notice. The hearing, however, is limited to the issues of whether both:

1. There is a probability that the state will prevail on the issue of forfeiture and that failure to enter the order will result in the property being destroyed, conveyed, encumbered or further encumbered, removed from the jurisdiction of the court, concealed or otherwise made unavailable for forfeiture.

2. The need to preserve the availability of property through the entry of the requested order outweighs the hardship on any owner, interest holder or defendant against whom the order is to be entered.

F. A hearing requested by any owner or interest holder concerning an order entered under this section shall be held at the earliest possible time and before the expiration of a temporary order.

G. On a determination of liability or the conviction of a person for conduct giving rise to forfeiture under this title, the court shall enter a judgment of forfeiture of the property described in the forfeiture statute alleged and set out in the complaint, information or indictment, as amended, and shall also authorize the county attorney or attorney general, their agents or any peace officer to seize all property ordered forfeited that was not previously seized or is not then under seizure. Following the entry of an order declaring the property forfeited, the court, on application of the state, may enter any order authorized by section 13‑4310, subsection A or take any other action to protect the interest of this state or a political subdivision in the property ordered forfeited. The filing of the order of forfeiture in the appropriate public records perfects the interest of the state in the property described in the order as of the earlier of the date of the act or omission giving rise to forfeiture or the date that a notice of seizure for forfeiture or notice of pending forfeiture or racketeering lien was first filed in the records, which entitles the state to all rights of a secured party as to that property in addition to any other rights or remedies of the state in relation to the property. Any income accruing to, or derived from, an enterprise or any interest in an enterprise or other property interest that is forfeited under this chapter is also forfeited from the time of the conduct giving rise to forfeiture. It may be used pending procedures subsequent to a verdict or finding of liability to offset ordinary and necessary expenses of the enterprise or property as required by law or that are necessary to protect the interests of this state or a political subdivision.

H. Procedures subsequent to the verdict or finding of liability and order of forfeiture shall be as follows:

1. Following the entry of an order of forfeiture under this subsection the clerk of the court shall, and the attorney for the state may, give notice of pending forfeiture to all owners and interest holders who have not previously been given notice, if any, in the manner provided in section 13‑4307.

2. An owner of or interest holder in property that has been ordered forfeited pursuant to such action whose claim is not precluded may file a claim as described in section 13‑4311, subsections E and F in the court for a hearing to adjudicate the validity of his claimed interest in the property within thirty days after initial notice of pending forfeiture or after notice under paragraph 1 of this subsection, whichever is earlier.

3. The hearing on the claim, to the extent practicable and consistent with the interest of justice, shall be held within sixty days after the order of forfeiture. The court may consolidate the hearing on the claim with a hearing on any other claim filed by a person other than a party or defendant in the underlying action and concerning the same property.

4. The hearing shall be held by the court without a jury and conducted in the manner provided for in rem judicial forfeiture actions including the provisions of section 13‑4311, subsections J L and K M. In addition to testimony and evidence presented at the hearing, the court shall consider the relevant portions of the record of the underlying civil or criminal action that resulted in the order of forfeiture.

5. In accordance with its findings at the hearing, the court may amend the order of forfeiture if it determines that any claimant has established by a preponderance of the evidence that the claimant is an owner of or interest holder in the property if either of the following applies:

(a) The state has failed to establish by a preponderance of the clear and convincing evidence that the interest is subject to forfeiture under section 13‑4304.

(b) The claimant has established by a preponderance of the evidence that the interest is exempt from forfeiture under section 13‑4304.

I. In order to facilitate the identification or location of property declared forfeited and to facilitate the disposition of filed or subsequent claims pursuant to subsection H, paragraph 2 of this section, the court, on application of the state, may order that the testimony of any witness relating to the property forfeited or alleged to be subject to forfeiture be taken by deposition and that any designated book, paper, document, record, recording, electronic or otherwise, or other material which is not privileged be produced at the same time and place and in the same manner as that provided for the taking of depositions under the rules of civil procedure. END_STATUTE

Sec. 8. Section 13-4314, Arizona Revised Statutes, is amended to read:

START_STATUTE13-4314. Disposition by court

A. If no petitions for remission or mitigation or claims are timely filed or if no petitioner files a claim in the court within thirty days after the mailing of a declaration of forfeiture, the attorney for the state shall apply to the court for an order of forfeiture and allocation of forfeited property pursuant to section 13‑4315. On the state's written application showing jurisdiction, notice and facts sufficient to demonstrate probable cause for forfeiture, and in cases brought pursuant to section 13‑3413, subsection A, paragraph 1 or 3, probable cause to believe that the conduct giving rise to forfeiture involved an amount of unlawful substance greater than the statutory threshold amount as defined in section 13‑3401 or was committed for financial gain, the court shall order the property forfeited to the state.

B. After the court's disposition of all claims timely filed under this chapter, the state has clear title to the forfeited property and the court shall so order. Title to the forfeited property and its proceeds is deemed to have vested in the state on the commission of the act or omission giving rise to the forfeiture under this title.

C. If, in his discretion, the attorney for the state has entered into a stipulation with an interest holder that the interest holder has an interest that is exempted from forfeiture, the court, on application of the attorney for the state, may release or convey forfeited personal property to the interest holder if all of the following are true:

1. The interest holder has an interest which that was acquired in the regular course of business as a financial institution within section 13‑2301, subsection D, paragraph 3.

2. The amount of the interest holder's encumbrance is readily determinable and it has been reasonably established by proof made available by the attorney for the state to the court.

3. The encumbrance held by the interest holder seeking possession is the only interest exempted from forfeiture and the order forfeiting the property to the state transferred all of the rights of the owner prior to before forfeiture, including rights to redemption, to the state.

4. After the court's release or conveyance, the interest holder shall dispose of the property by a commercially reasonable public sale, and within ten days of disposition shall tender to the state the amount received at disposition less the amount of the interest holder's encumbrance and reasonable expense incurred by the interest holder in connection with the sale or disposal.

D. On order of the court forfeiting the subject property, the attorney for the state may transfer good and sufficient title to any subsequent purchaser or transferee, and the title shall be recognized by all courts, by this state and by all departments and agencies of this state and any political subdivision.

E. On entry of judgment for a claimant or claimants in any proceeding to forfeit property under this chapter such property or interest in property shall be returned or conveyed immediately to the claimant or claimants designated by the court. If it appears that there was reasonable cause for the seizure for forfeiture or for the filing of the notice of pending forfeiture, complaint, information or indictment, the court shall cause a finding to be entered, and the claimant is not, in such case, entitled to costs or damages, nor is the person or seizing agency that made the seizure, nor is the attorney for the state liable to suit or judgment on account of such seizure, suit or prosecution.

F. The court shall order any claimant who fails to establish that his entire interest is exempt from forfeiture under section 13‑4304 to pay the costs of any claimant who establishes that his entire interest is exempt from forfeiture under section 13‑4304 and the state's costs and expenses of the investigation and prosecution of the matter, including reasonable attorney fees may award reasonable attorney fees, expenses and damages for loss of the use of the property to any claimant who substantially prevails by an adjudication on the merits of a claim. END_STATUTE