Gov. Susana Martinez signed a bill Friday virtually ending the practice of civil forfeiture, making the state a leader in sharply restricting a contentious policy that critics say deprives citizens of due process and gives law enforcement a profit motive. “This is landmark legislation to protect people’s property and due process rights,” said Lee McGrath, a lawyer with the Institute for Justice, a libertarian civil rights group that has long campaigned against the practice. The law preserves criminal forfeiture, in which assets tied to crime can be taken if the owner is convicted. In a letter to lawmakers, Governor Martinez said the law improved constitutional protections even as she said that forfeiture funds had helped “in keeping our communities safe and in protecting our officers from harm.” Only one other state, North Carolina, does not permit civil forfeiture, but law enforcement officials there can still profit from forfeitures by cooperating with federal agents, Mr. McGrath said. The New Mexico law seeks to end such profit-sharing in cases where the assets are valued at less than $50,000. Civil forfeiture, in which law enforcement officials can take possession of property they believe is tied to criminal activity without filing charges or winning a conviction, has come under fire as abuses have been widely chronicled in the news media and the federal government has taken steps to curb the process.