HB-5233, As Passed House, October 2, 2014HB-5233, As Passed Senate, October 2, 2014

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5233

     A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

by amending sections 4702, 4703, 4704, 4705, 4706, 4707, and 4708

(MCL 600.4702, 600.4703, 600.4704, 600.4705, 600.4706, 600.4707,

and 600.4708), section 4702 as amended by 2012 PA 350, sections

4703, 4704, 4705, and 4708 as amended by 2006 PA 128, and sections

4706 and 4707 as added by 1988 PA 104.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4702. (1) Except as otherwise provided in this section,

the following property is subject to seizure by, and forfeiture to,

a local unit of government or this state under this chapter:

     (a) All personal property that is the proceeds of a crime, the

substituted proceeds of a crime, or an instrumentality of a crime.

     (b) All real property that is the proceeds of a crime, or the

substituted proceeds of a crime, or an instrumentality of a crime,

except real property that is the primary residence of the spouse or

a dependent child of the owner, unless that spouse or dependent

child had prior knowledge of, and consented to the commission of,

the crime.

     (c) In the case of a crime that is a violation of section 49,

chapter LXVIIA, or chapter LXXXIII-A of the Michigan penal code,

1931 PA 328, MCL 750.49, 750.462a to 750.462h, and 750.543a to

750.543z, all property described in subdivisions (a) and (b), and

all real property or personal property that performed 1 of the

following functions:

     (i) Contributed directly and materially to the commission of

the crime.

     (ii) Was used to conceal the crime.

     (iii) Was used to escape from the scene of the crime.

     (iv) Was used to conceal the identity of 1 or more of the

individuals who committed the crime.

     (2) Property is not subject to seizure or forfeiture if either

of the following circumstances exists:

     (a) The owner of the property did not have prior knowledge of,

or consent to the commission of, the crime, if the lack of prior

knowledge is not the result of the owner's willful blindness.

     (b) The Upon learning of the commission of the crime, the

owner of the property served written and timely notice of the

commission of the crime upon an appropriate law enforcement agency,

and served a written and timely notice to quit upon the person who

committed the crime.

     (3) The forfeiture of property encumbered by a security

interest is subject to the interest of the holder of the security

interest who did not have prior knowledge of, or consent to the

commission of, the crime.

     (4) The forfeiture of property encumbered by an unpaid balance

on a land contract is subject to the interest of the land contract

vendor, if the vendor did not have prior knowledge of, or consent

to the commission of, the crime.

     (5) The forfeiture of the substituted proceeds of a crime is

limited to the value of the proceeds of the crime plus the in

addition to both of the following:

     (a) The amount by which any restitution or damages owed to the

victim of the crime exceeds the value of the proceeds of the crime.

     (b) The amount by which any reasonable expenses of the

forfeiture proceedings and sale, including, but not limited to,

expenses for maintaining custody of the property, as well as

advertising and prosecution costs, exceeds the value of the

proceeds of the crime.

     Sec. 4703. (1) Personal property subject to forfeiture under

this chapter may be seized pursuant to an order of seizure issued

by the court having jurisdiction over the property upon a showing

of probable cause that the property is subject to forfeiture.

     (2) Personal property subject to forfeiture under this chapter

may be seized without process under any of the following

circumstances:

     (a) The property is the proceeds of a crime, the substituted

proceeds of a crime, or an instrumentality of a crime and the

seizure is incident to a lawful arrest.

     (b) The seizure is pursuant to a valid search warrant.

     (c) The seizure is pursuant to an inspection under a valid

administrative inspection warrant.

     (d) There is probable cause to believe that the property is

directly or indirectly dangerous to health or safety.

     (e) Exigent circumstances exist that preclude the obtaining of

a court order, and there is probable cause to believe that the

property is the proceeds of a crime or an instrumentality of a

crime.subject to forfeiture under this chapter.

     (f) The property is the subject of a prior judgment in favor

of this state in a forfeiture proceeding.

     (3) The attorney general, or the prosecuting attorney or the

city or township attorney for the local unit of government in which

the property is located, may apply ex parte for an order

authorizing the filing of a lien notice against real property

subject to forfeiture under this chapter. The application shall be

supported by a sworn affidavit setting forth probable cause for a

forfeiture action pursuant to this chapter. An order authorizing

the filing of a lien notice may be issued upon a showing of

probable cause to believe that the property is the proceeds of a

crime or the substituted proceeds of a crime.subject to forfeiture

under this chapter.

     (4) Property that belongs to the victim of a crime shall

promptly be returned to the victim, except in the following

circumstances:

     (a) If the The property is contraband.

     (b) If the The ownership of the property is disputed until the

dispute is resolved.

     (c) If the The property is required to be retained as evidence

pursuant to under section 4(4) of the crime victim's rights act,

1985 PA 87, MCL 780.754.

     (5) Personal property seized under this chapter is not subject

to any other action to recover personal property, but is considered

to be in the custody of the seizing agency subject only to

subsection (4) and sections 4705 to 4707, or to an order and

judgment of the court having jurisdiction over the forfeiture

proceedings. Except as provided in subsection (6), when property is

seized under this chapter, the seizing agency may do either or both

of the following:

     (a) Place the property under seal.

     (b) Remove the property to a place designated by the court.

     (6) The seizing agency may deposit money seized under this

chapter into an interest-bearing account in a financial

institution. As used in this subsection, "financial institution"

means a state or nationally chartered bank or a state or federally

chartered savings and loan association, savings bank, or credit

union whose deposits are insured by an agency of the United States

government and that maintains a principal office or branch office

located in this state under the laws of this state or the United

States.

     (7) Title to all property subject to forfeiture under this

chapter vests in the plaintiff upon the commission of the conduct

giving rise to forfeiture, together with the proceeds of the

property after the property vests under this subsection. Any

subsequent property transfer that occurs before the final

disposition of the forfeiture proceeding is void against the

plaintiff unless the transferee claims and establishes all of the

following:

     (a) The transferee has an interest of record in the property.

     (b) The transferee purchased the property in good faith and

for fair value.

     (c) The property interest was acquired without notice of the

forfeiture proceeding or the facts that gave rise to the

proceeding.

     Sec. 4704. (1) Within 7 28 days after personal property is

seized or a lien notice is filed against real property under

section 4703, the seizing agency or, if the property is real

property, the attorney general, the prosecuting attorney, or the

city or township attorney shall give notice of the seizure of the

property and the intent to forfeit and dispose of the property

according to this chapter to each of the following persons:

     (a) If charges have been filed against a person for a crime,

the person charged.

     (b) Each person with a known ownership interest in the

property.

     (c) Each mortgagee, person holding a security interest, or

person having a lien that appears on the certificate of title or is

on file with the secretary of state or appropriate register of

deeds, if the property is real property, a mobile home, motor

vehicle, watercraft, or other personal property.

     (d) Each holder of a preferred ship mortgage of record in the

appropriate public office pursuant to 46 USC 30101, 31301-31343, if

the property is a watercraft more than 28 feet long or a watercraft

that has a capacity of 5 net tons or more.

     (e) Each person whose security interest is recorded with the

appropriate public office pursuant to the federal aviation act of

1958, Public Law 85-726, if the property is an aircraft, aircraft

engine, or aircraft propeller, or a part of an aircraft, aircraft

engine, or aircraft propeller.

     (f) Each person with a known security interest in the

property.

     (g) Each victim of the crime.

     (2) The notice required under subsection (1) shall be a

written notice delivered to the person or sent to the person by

certified mail. If the name and address of the person are not

reasonably ascertainable or delivery of the notice cannot

reasonably be accomplished, the notice shall be published in a

newspaper of general circulation in the county in which the

personal property was seized or the real property is located for 10

successive publishing days. Proof of written notice or publication

shall be filed with the court having jurisdiction over the seizure

or forfeiture.

     (3) If personal property was seized, the seizing agency shall

immediately notify the prosecuting attorney for the county in which

the property was seized or, if the attorney general is actively

handling a case involving or relating to the property, the attorney

general of the seizure of the property and the intent to forfeit

and dispose of the property according to this chapter.

     (4) An attorney for a person described in subsection (1)(a)

shall be afforded a period of 60 56 days within which to examine

money seized under section 4703. This 60-day 56-day period shall

begin to run after notice is given under subsection (1) but before

the money is deposited into a financial institution.

     Sec. 4705. (1) A person who did not have prior knowledge of,

or consent to the commission of, the crime, or a transferee under

section 4703(7), may move the court having jurisdiction to return

the property or discharge the lien on the grounds that the property

was illegally seized, that the property is not subject to

forfeiture under this chapter, or that the person has an ownership

or security interest in the property and did not have prior

knowledge of, or consent to the commission of, the crime, or

acquired an ownership or security interest by a transfer that is

not void under section 4703(7). The court shall hear the motion

within 30 28 days after the motion is filed.

     (2) At the hearing on the motion filed under subsection (1),

the attorney general, or the prosecuting attorney or the city or

township attorney for the local unit of government in which the

property was seized or the lien was filed, shall establish the

following:

     (a) Probable cause to believe that the property is subject to

forfeiture under this chapter and that the person filing the motion

had prior knowledge of, or consented to the commission of, the

crime, or acquired his or her interest by a transfer that is void

under section 4703(7). Prior written notice of illegal use of the

property to the interest holder constitutes prima facie evidence of

knowledge of the crime.

     (b) If the person filing the motion claims the property was

illegally seized, that the property was properly seized.

     (3) If the attorney general, prosecuting attorney, or city or

township attorney fails to sustain his or her burden of proof under

subsection (2), the court shall order the return of the property,

including any interest earned on money deposited in a financial

institution as described defined in section 4703(6), or the

discharge of the lien.

     (4) If a motor vehicle is seized under section 4703, the owner

of the vehicle may move the court having jurisdiction over the

forfeiture proceedings to require the seizing agency to file a lien

against the vehicle and to return the vehicle to the owner. The

court shall hear the motion within 7 days after the motion is

filed. If the owner of the vehicle establishes at the hearing that

he or she holds the legal title of the vehicle and that it is

necessary for him or her or his or her family to use the vehicle

pending the outcome of the forfeiture action, the court may order

the seizing agency to return the vehicle to the owner. If the court

orders the return of the vehicle to the owner, the court shall

order the seizing agency to file a lien against the vehicle and the

owner to post a bond in an amount equal to the value of the

vehicle.

     (5) The testimony of a person at a hearing held under this

section is not admissible against him or her in any criminal

proceeding except in a criminal prosecution for perjury. The

testimony of a person at a hearing held under this section does not

waive the person's constitutional right against self-incrimination.

     Sec. 4706. (1) Except as otherwise provided by law, personal

property seized pursuant to under section 4703 shall be returned to

the owner, or a lien filed against real property under section 4703

or against a motor vehicle under section 4705 shall be discharged,

within 7 days after the occurrence of any of following:

     (a) A warrant is not issued against a person for the

commission of a crime within 7 28 days after the property is seized

or, if the property is real property, within 7 28 days after the

lien is filed.

     (b) All charges against the consenting legal owner relating to

the commission of a crime are dismissed.

     (c) The consenting legal owner charged with committing a crime

is acquitted of the crime.

     (d) In the case of multiple defendants, all persons charged

with committing a crime are acquitted of the crime.

     (e) Entry of a court order pursuant to under this chapter for

the return of the property or the discharge of the lien.

     (2) Before the expiration of period of time prescribed under

section (1)(a), the prosecuting attorney, attorney general, or the

city or township attorney of the local unit of government where the

property is seized or located may petition the court ex parte for

not more than an additional 28 days to complete its investigation

and issue charges or return the property. The court shall grant an

extension under this subsection to the extent necessary upon

determining that there is good cause shown for the extension.

     Sec. 4707. (1) If property subject to forfeiture under this

chapter has a total value of less than $100,000.00, within 7 28

days after the conviction of a person of a crime, the state or

local unit of government seeking forfeiture of the property shall

give notice of the seizure of the property or, if a lien has been

filed, the filing of the lien, and the intent to begin proceedings

to forfeit and dispose of the property according to this chapter to

each of the persons to whom notice is required to be given under

section 4704. Notice shall be given in the same manner as required

under section 4704.

     (2) Within 21 28 days after receipt of the notice or of the

date of the first publication of the notice under subsection (1), a

person claiming an interest in property subject to the notice may

file a claim with the local unit of government or the state

expressing his or her interest in the property and any objection to

forfeiture. The objection shall be written, verified, and signed by

the claimant, and include a description of the property interest

asserted. The verification shall be notarized and include a

certification stating that the undersigned has examined the claim

and answer and believes it to be, to the best of his or her

knowledge, true and complete.

     (3) If Except in the case of real property, if no claim is

filed within the 21-day 28-day period as described in subsection

(2), the local unit of government or the state shall declare the

property forfeited and shall dispose of the property according to

section 4708.

     (4) If a claim is filed within the 21-day 28-day period as

described in subsection (2), the local unit of government or the

state shall transmit the claim with a list and description of the

property to the attorney general or to the prosecuting attorney or

the city or township attorney for the local unit of government in

which the personal property was seized or the real property is

located. The attorney general, the prosecuting attorney, or the

city or township attorney shall institute a civil action for

forfeiture within 7 28 days after the expiration of the 21-day 28-

day period.

     (5) If property subject to forfeiture under this chapter has a

total value of more than $100,000.00 or is real property, the

attorney general, or the prosecuting attorney or the city or

township attorney for the local unit of government in which the

personal property was seized or the real property is located, shall

institute a civil action for forfeiture within 7 28 days after the

conviction of a person of a crime.

     (6) At the forfeiture proceeding, the plaintiff shall prove

all the following by a preponderance of the evidence:

     (a) If the property is personal property, that That the

property is the proceeds of a crime, the substituted proceeds of a

crime, or an instrumentality of a crime.

     (b) If the property is real property, that the property is the

proceeds of a crime or the substituted proceeds of a crime.

(b) (c) If a person, other than the person convicted of the

crime, claims an ownership or security interest in the property,

that the person claiming the interest in the property had prior

knowledge of, or consented to the commission of, the crime.

     (c) If a person, other than the person convicted of the crime,

claims an ownership or security interest in the property under

section 4703(7), that the transfer occurred subsequent to the

criminal conduct that gave rise to forfeiture.

     (7) If the plaintiff carries the burden of proof described in

subsection (6)(c), the burden of proof shifts to the claimant to

prove by a preponderance of the evidence that the transfer was not

void under section 4703(7).

(8) (7) If the plaintiff fails to meet the burden of proof

under subsection (6), the property shall be returned to the owner

within 7 days after the court issues a dispositive order.

     Sec. 4708. (1) When property is forfeited under this chapter,

the unit of government that seized or filed a lien against the

property may sell the property that is not required to be destroyed

by law and that is not harmful to the public and may dispose of the

proceeds and any money, including any interest earned on money

deposited in a financial institution as described in section

4703(6), negotiable instrument, security, or other thing of value

that is forfeited pursuant to under this chapter in the following

order of priority:

     (a) Pay any outstanding security interest of a secured party

who did not have prior knowledge of, or consent to the commission

of, the crime, or did not acquire his or her interest as the result

of a transfer that is void under section 4703(7).

     (b) Satisfy any order of restitution in the prosecution for

the crime.

     (c) Pay the claim of each person who shows that he or she is a

victim of the crime to the extent that the claim is not covered by

an order of restitution.

     (d) Pay any outstanding lien against the property that has

been imposed by a governmental unit.

     (e) Pay the proper expenses of the proceedings for forfeiture

and sale, including, but not limited to, expenses incurred during

the seizure process and expenses for maintaining custody of the

property, advertising, as well as reasonable prosecution and court

costs.

     (f) The balance remaining after the payment of restitution,

the claims of victims, outstanding liens, and expenses shall be

distributed by the court having jurisdiction over the forfeiture

proceedings to the unit or units of government substantially

involved in effecting the forfeiture. Seventy-five percent of the

money received by a unit of government under this subdivision shall

be used to enhance enforcement of the criminal laws and 25% of the

money shall be used to implement the William Van Regenmorter crime

victim's rights act, 1985 PA 87, MCL 780.751 to 780.834. A unit of

government receiving money under this subdivision shall report

annually to the department of management and budget the amount of

money received under this subdivision that was used to enhance

enforcement of the criminal laws and the amount that was used to

implement the William Van Regenmorter crime victim's rights act,

1985 PA 87, MCL 780.751 to 780.834.

     (2) In the course of selling real property pursuant to under

subsection (1), the court that enters an order of forfeiture, on

motion of the unit of government to whom the property is forfeited,

may appoint a receiver to dispose of the real property forfeited.

The receiver is entitled to reasonable compensation. The receiver

has authority to do all of the following:

     (a) List the forfeited real property for sale.

     (b) Make whatever arrangements are necessary for the

maintenance and preservation of the forfeited real property.

     (c) Accept offers to purchase the forfeited real property.

     (d) Execute instruments transferring title to the forfeited

real property.

     (3) If any property included in the order of forfeiture under

this chapter cannot be located or has been sold to a bona fide

purchaser for value, placed beyond the jurisdiction of the court,

substantially diminished in value by the conduct of the defendant,

or commingled with other property that cannot be divided without

difficulty or undue injury to innocent persons, the court may order

forfeiture of any other reachable property of the owner up to the

value of the property that is unreachable as described in this

subsection. This subsection only applies against an owner that is

also the person convicted of the crime underlying the forfeiture

action.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.

     Enacting section 2. This amendatory act does not take effect

unless House Bill No. 5234 of the 97th Legislature is enacted into

law.