§712A-16 - Disposition of property forfeited.

§712A-16 Disposition of property
forfeited. (1) All property forfeited to the State under this chapter
shall be transferred to the attorney general who:

(a) May transfer property, other than currency, which
shall be distributed in accordance with subsection (2) to any local or state
government entity, municipality, or law enforcement agency within the State;

(b) May sell forfeited property to the public by
public sale; provided that for leasehold real property:

(i) The attorney general shall first offer the
holder of the immediate reversionary interest the right to acquire the
leasehold interest and any improvements built or paid for by the lessee for the
then fair market value of the leasehold interest and improvements. The holder
of the immediate reversionary interest shall have thirty days after receiving
written notice within which to accept or reject the offer in writing; provided
that the offer shall be deemed to be rejected if the holder of the immediate
reversionary interest has not communicated acceptance to the attorney general
within the thirty-day period. The holder of the immediate reversionary
interest shall have thirty days after acceptance to tender to the attorney
general the purchase price for the leasehold interest and any improvements,
upon which tender the leasehold interest and improvements shall be conveyed to
the holder of the immediate reversionary interest.

(ii) If the holder of the immediate
reversionary interest fails to exercise the right of first refusal provided in
subparagraph (i), the attorney general may proceed to sell the leasehold
interest and any improvements by public sale.

(iii) Any dispute between the attorney general
and the holder of the immediate reversionary interest as to the fair market
value of the leasehold interest and improvements shall be settled by
arbitration pursuant to chapter 658A;

(c) May sell or destroy all raw materials, products,
and equipment of any kind used or intended for use in manufacturing,
compounding, or processing a controlled substance or any untaxed cigarettes in
violation of chapter 245;

(d) May compromise and pay valid claims against
property forfeited pursuant to this chapter; or

(e) May make any other disposition of forfeited
property authorized by law.

(2) All forfeited property and the sale
proceeds thereof, up to a maximum of three million dollars per year, not
previously transferred pursuant to [subsection] (1)(a) of this section, shall,
after payment of expenses of administration and sale, be distributed as follows:

(a) One quarter shall be distributed to the unit or
units of state or local government [whose] officers or employees conducted the
investigation and caused the arrest of the person whose property was forfeited
or seizure of the property for forfeiture;

(b) One quarter shall be distributed to the
prosecuting attorney who instituted the action producing the forfeiture; and

(3) Property and money distributed to units of
state and local government shall be used for law enforcement purposes, and
shall complement but not supplant the funds regularly appropriated for such
purposes.

(4) There is established in the department of
the attorney general a revolving fund to be known as the criminal forfeiture
fund, hereinafter referred to as the "fund" in which shall be
deposited one-half of the proceeds of a forfeiture and any penalties paid
pursuant to section 712A-10(6). All moneys in the fund shall be expended by the
attorney general and are hereby appropriated for the following purposes:

(a) The payment of any expenses necessary to seize,
detain, appraise, inventory, safeguard, maintain, advertise, or sell property
seized, detained, or forfeited pursuant to this chapter or of any other
necessary expenses incident to the seizure, detention, or forfeiture of such
property and such contract services and payments to reimburse any federal,
state, or county agency for any expenditures made to perform the foregoing
functions;

(b) The payment of awards for information or
assistance leading to a civil or criminal proceeding;

(d) The payment of expenses arising in connection
with programs for training and education of law enforcement officers; and

(e) The payment of expenses arising in connection
with enforcement pursuant to the drug nuisance abatement unit in the department
of the attorney general.

(5) The attorney general may, without regard
to the requirements of chapter 91, promulgate rules and regulations concerning
the disposition of property, the use of the fund, and compromising and paying
valid claims against property forfeited pursuant to this chapter.

(6) Not less than twenty days prior to the
convening of each regular session, the attorney general shall provide to the
legislature a report on the use of the Hawaii omnibus criminal forfeiture act
during the fiscal year preceding the legislative session. The report shall
include:

(a) The total amount and type of property seized by
law enforcement agencies;

(b) The total number of administrative and judicial
actions filed by prosecuting attorneys and the disposition thereof;

(c) The total number of claims or petitions for
remission or mitigation filed in administrative actions and the dispositions
thereof;

(d) The total amount and type of property forfeited
and the sale proceeds thereof;

(e) The total amount and type of property distributed
to units of state and local government;

(f) The amount of money deposited into the criminal
forfeiture fund; and

(g) The amount of money expended by the attorney
general from the criminal forfeiture fund under subsection (5) and the reason
for the expenditures. [L 1988, c 260, pt of §1; am L 1990, c 197, §2; am L
1991, c 166, §8; am L 1992, c 112, §2; am L 2000, c 249, §§12, 20(2); am L
2001, c 265, §4; am L 2002, c 16, §31 as superseded by c 94, §3; am L 2003, c
63, §2]

Note

Transfer of certain interest earnings to general fund until
June 30, 2015. L 2009, c 79, §30(a)(41).

COMMENTARY ON §712A-16

Act 197, Session Laws 1990, amended this section to require
the attorney general to prepare a report to the legislature on the use of the
Hawaii omnibus criminal forfeiture act. The legislature felt it was important
to be kept well informed about the use of this powerful tool. Senate Standing
Committee Report No. 2900.

Act 112, Session Laws 1992, amended this section to provide
that the holder of the immediate reversionary interest in leasehold real
property forfeited to the State under chapter 712A is to be offered the first
opportunity to acquire the remaining leasehold interest and any improvements on
the property built or paid for by the lessee. The legislature felt that this
amendment adequately protects the rights of innocent property owners and other
interest holders while facilitating the disposition of forfeited leasehold
properties. Senate Standing Committee Report No. 2482.

Act 249, Session Laws 2000, amended this section by adding to
the list of property which the attorney general is authorized to sell or
destroy under subsection (1)(c) any untaxed cigarettes forfeited to the State
and transferred to the attorney general for violating the cigarette tax and
tobacco tax law under chapter 245.

Act 94, Session Laws 2002, by making the cigarette tax stamp
law permanent, amended this and other sections. The legislature sought to
ensure compliance with and enforcement of the cigarette tax stamp laws. House
Standing Committee Report No. 502-02.

Act 63, Session Laws 2003, amended this section by providing
that the drug nuisance abatement unit expenses be paid out of the criminal
forfeiture fund in the department of the attorney general. Conference
Committee Report No. 31.