Arlington, VA– Today, California Governor Jerry Brown signed SB 443, a major overhaul of the state’s civil forfeiture laws. The bill marks one of the nation’s most significant reforms of its kind.

“Civil forfeiture is one of the most serious assaults on due process and private property rights in America today,” said Institute for Justice Legislative Counsel Lee McGrath. “By generally requiring a criminal conviction, SB 443 would go far in curbing this abuse of power.”

For over two decades, California state law has required a criminal conviction before real estate, vehicles, boats and cash under $25,000 could be forfeited to the government. But those requirements are missing under federal law.

“For too long, local and state law enforcement agencies have exploited a loophole in forfeiture law: the federal ‘equitable sharing’ program,” McGrath explained. “Because the federal government does not require a criminal conviction and pays a greater percentage of forfeiture proceeds back to state and local law enforcement than happens under state law, California agencies have routinely participated in equitable sharing.”

Last year, a report by the Institute for Justice found that between 2000 and 2013, the Justice Department paid local and state agencies in California more than $696 million in equitable-sharing proceeds, or nearly $50 million a year on average. By comparison, agencies on average received $23 million in forfeiture proceeds under state law. Half of all properties forfeited under equitable sharing were valued at less than $8,920.

To curb “policing for profit,” SB 443 will:

Require a criminal conviction before agencies can receive equitable-sharing payments from the federal government on forfeited real estate, vehicles, boats and cash valued at under $40,000. This will mostly close the equitable-sharing loophole.

Raise the threshold to forfeit seized cash under state law, from $25,000 to $40,000.

Last month, the California State Legislature overwhelmingly voted in favor of SB 443. The bill has earned the support of a bipartisan coalition that includes the ACLU of California, the Drug Policy Alliance, the Ella Baker Center for Human Rights, and the Institute for Justice.

California now joins a growing forfeiture reform movement. In the past two years alone, 17 other states have reformed their forfeiture laws, ranging from enacting better transparency requirements to Nebraska and New Mexico outright abolishing civil forfeiture. Similar to what California has done with SB 443, three states and the District of Columbia have also taken action to close the equitable-sharing loophole.