24-1-7 - Hardship release of seized property.
24-1-7. Hardship release of seized property.
(1) After property is seized for forfeiture, a person or entity may not alienate, convey,sequester, or attach that property until the court issues a final order of dismissal or an order offorfeiture regarding the property.
(2) The seizing agency or the prosecuting attorney may authorize the release of propertyseized for forfeiture to its owner if retention of actual custody is unnecessary.
(3) With the consent of a court of competent jurisdiction, the prosecuting attorney maydiscontinue forfeiture proceedings and transfer the action to another state or federal agency whichhas initiated forfeiture proceedings involving the same property.
(4) Property seized for forfeiture is considered to be in the custody of the district courtand subject only to:
(a) the orders and decrees of the court having jurisdiction over the property or theforfeiture proceedings; and
(b) the acts of the seizing agency or the prosecuting attorney pursuant to this chapter.
(5) (a) An owner of property seized pursuant to this chapter may obtain release of theproperty by posting with the district court a surety bond or cash in an amount equal to the currentfair market value of the property as determined by the court or by the parties' stipulation.
(b) The district court may refuse to order the release of the property if:
(i) the bond tendered is inadequate;
(ii) the property is contraband or is retained as evidence; or
(iii) the property is particularly altered or designed for use in conduct giving cause forforfeiture.
(c) If a surety bond or cash is posted and the property seized and then released on a bondor cash is forfeited, the court shall order the forfeiture of the surety bond or cash in lieu of theproperty.
(6) (a) As soon as practicable after seizure for forfeiture, and in no case later than 30 daysafter seizure for forfeiture, the seizing agency shall conduct a written inventory of the propertyseized.
(b) The seizing agency shall deposit property that is in the form of cash or other readilynegotiable instruments into a restricted account maintained by the agency solely for the purposeof managing and protecting the property from commingling, loss, or devaluation during thependency of the forfeiture proceedings.
(c) The seizing agency shall have in place written policy for the identification, tracking,management, and safekeeping of seized property, which shall include a prohibition against thetransfer, sale, or auction of forfeited property to any employee of the seizing agency.
(d) An agency may not be awarded any funds from forfeiture through the CrimeReduction Assistance Program under Section 24-1-19 if the agency has not established ormaintained the inventory policy, restricted account, and written policies required by thisSubsection (6).
(7) An owner is entitled to the immediate release of seized property from the seizingagency pending the final determination of forfeiture if:
(a) the owner had a possessory interest in the property at the time of seizure;
(b) continued possession by the agency or the state pending the final disposition of theforfeiture proceedings will cause substantial hardship to the owner, such as:
(i) preventing the functioning of a legitimate business;
(ii) preventing any individual from working;
(iii) preventing any minor child or student from attending school;
(iv) preventing or hindering any person from receiving necessary medical care;
(v) hindering the care of an elderly or disabled dependent child or adult;
(vi) preventing an owner from retaining counsel to provide a defense in the forfeitureproceeding; or
(vii) leaving any individual homeless, or any other condition that the court determinescauses a substantial hardship;
(c) the hardship from the continued possession by the agency of the seized propertyoutweighs the risk that the property will be destroyed, damaged, lost, concealed, or transferred ifit is returned to the owner during the pendency of the proceeding; and
(d) determination of substantial hardship under this Subsection (7) is based upon theproperty's use prior to the seizure.
(8) The right to appointed counsel under Section 24-1-9 applies throughout civilforfeiture proceedings, including an owner's motion for hardship release.
(9) An owner may file a motion for hardship release:
(a) in the court in which forfeiture proceedings have commenced; or
(b) in any district court having jurisdiction over the property, if forfeiture proceedingshave not yet commenced.
(10) The motion for hardship release shall also be served upon the prosecuting attorneyor the seizing agency within 10 days after filing the motion.
(11) The court shall render a decision on a motion for hardship filed under this sectionnot later than 20 days after the date of filing, or 10 days after service upon the prosecutingattorney or seizing agency, whichever is earlier, unless this period is extended by the parties or bythe court for good cause shown.
(12) (a) If the owner demonstrates substantial hardship pursuant to this section, the courtshall order the property immediately released to the owner pending completion of proceedings bythe government to obtain forfeiture of the property.
(b) The court may place conditions on release of the property as it finds necessary andappropriate to preserve the availability of the property or its equivalent for forfeiture.
(13) The hardship release does not apply if the seized property is:
(a) contraband;
(b) currency or other monetary instrument or electronic funds, unless the property is usedto pay for the reasonable costs of defending against the forfeiture proceeding or constitutes theassets of a legitimate business; or
(c) likely to be used to commit additional illegal acts if returned to the owner.
(14) (a) The court may order property which has been seized for forfeiture to be sold asallowed by Subsection (15), leased, rented, or operated to satisfy a specified interest of any owneror interest holder, or to preserve the interests of any party on motion of that party.
(b) The court may enter orders under Subsection (14)(a) after notice to persons known tohave an interest in the property, and after an opportunity for a hearing.
(15) (a) A sale may be ordered under Subsection (14) when the property is liable toperish, waste, or be significantly reduced in value, or when the expenses of maintaining theproperty are disproportionate to its value.
(b) A third party designated by the court shall dispose of the property by commercially
reasonable public sale and distribute the proceeds in the following order of priority:
(i) first, for the payment of reasonable expenses incurred in connection with the sale;
(ii) second, for the satisfaction of any interests, including those of interest holders, in theorder of their priority as determined by Title 70A, Uniform Commercial Code; and
(iii) third, any balance of the proceeds shall be preserved in the actual or constructivecustody of the court, in an interest-bearing account, subject to further proceedings under thischapter.
Amended by Chapter 296, 2004 General Session