Nebraska Stands Up to the Feds When It Comes to Property Rights

On Tuesday, Nebraska abolished the practice of civil asset forfeiture after Governor Pete Ricketts signed a bill that passed by a wide margin through Nebraska’s state legislature. The new law requires a criminal conviction before property can be seized and limits the set of crimes for which people can have their cash, vehicles, firearms, or real estate seized by the state. In order for such property to be seized, the owner’s conviction must involve illegal drugs, child pornography, or illegal gambling. This change to the law places Nebraska on the short list of nine states that require a criminal conviction before assets can be seized in most cases and among only three states where civil asset forfeiture has largely been abolished.

The practice of civil asset forfeiture has increasingly come under scrutiny because of the perverse incentives it creates for law enforcement. Because civil asset forfeiture law typically allows the vast majority of proceeds from forfeitures to go directly into law enforcement budgets, law enforcement is incentivized to aggressively pursue asset seizures rather than prevent or solve crime. Furthermore, under existing forfeiture law, seizing someone’s property requires less proof than convicting that person of a crime.

Once an asset is seized, the burden of proof typically rests on the owner to show its innocence. This requires litigation—which can be difficult, time-consuming, and expensive—to get property back. For many asset owners, it simply isn’t worth the cost to do so. The changes to the law in Nebraska were made after a variety of abuses of the practice in that state came to light, including a pastor having $14,000 seized during a traffic stop and a decorated Air Force veteran losing $63,000 to the state despite never having been convicted of a crime.

One area in particular where Nebraska lawmakers scored a major victory for the property rights of the state’s residents was in getting the federal government out of state-level asset forfeitures. Previously, under a U.S. Department of Justice program known as equitable sharing, the federal government could litigate state asset forfeiture cases in return for 20 percent of the proceeds. The remaining funds would be reserved for state law enforcement budgets, thus circumventing state requirements as to the use of the funds.

State law enforcement authorities would simply have to find a basis for federal involvement in a case, and seizures could proceed under the equitable sharing program—even if the seizures were contrary to reforms made by state lawmakers. In Nebraska, more than $48 million of proceeds from forfeitures came from the federal government from 2000 to 2013. The new law significantly curtails this practice, limiting the use of the equitable sharing program for seizures valued under $25,000.

While the Nebraska bill is a positive reform overall, the specific aspect treating equitable sharing shows that Nebraska lawmakers were sensitive to the problems the program creates for innocent asset owners facing an uphill battle litigating to get their property back from the federal government. Nebraskans concerned with the strength of individual liberties such as due process and property rights should be thankful to their legislators for this development, and states that are currently considering reform to their asset forfeiture laws would be wise to follow Nebraska’s example.

Until the equitable sharing program is abolished once and for all, law enforcement in other states can be expected to evade reforms by processing their seizures through the Department of Justice. State lawmakers and ordinary citizens alike should be troubled by this federal loophole and the perverse incentives it creates.

It is for the purpose of discussing the Department of Justice’s equitable sharing program that the Charles Koch Institute is sponsoring an event in Washington, DC, on April 27. All of the participating panelists have backgrounds in law enforcement, and their remarks, based on practical experience, will emphasize the range of consequences associated with the equitable sharing program.

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