bill adding crypto to civil asset forfeiture

The text as introduced · 1,643 words

89R8216 CJD-F

By: Perez of Harris
H.B. No. 3110

A BILL TO BE ENTITLED

AN ACT

relating to civil asset forfeiture of digital currency or other

similar property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Article 59.01, Code of Criminal Procedure, is

amended by amending Subdivisions (2), (7), and (9) and adding

Subdivision (3-a) to read as follows:

(2) "Contraband" means property of any nature,

including real, personal, tangible, or intangible, including a

digital currency, non-fungible token, or stablecoin, that is:

(A) used in the commission of:

(i) any first or second degree felony under

the Penal Code;

(ii) any felony under Section 15.031(b),

21.11, or 38.04 or Chapter 29, 30, 31, 32, 33, 33A, or 35, Penal

Code;

(iii) any felony under Chapter 43, Penal

Code, except as provided by Paragraph (B);

(iv) any felony under The Securities Act

(Title 12, Government Code); or

(v) any offense under Chapter 49, Penal

Code, that is punishable as a felony of the third degree or state

jail felony, if the defendant has been previously convicted three

times of an offense under that chapter;

(B) used or intended to be used in the commission

of:

(i) any felony under Chapter 481, Health

and Safety Code (Texas Controlled Substances Act);

(ii) any felony under Chapter 483, Health

and Safety Code;

(iii) a felony under Chapter 152, Finance

Code;

(iv) any felony under Chapter 20A or 34,

Penal Code;

(v) a Class A misdemeanor under Subchapter

B, Chapter 365, Health and Safety Code, if the defendant has been

previously convicted twice of an offense under that subchapter;

(vi) any felony under Chapter 32, Human

Resources Code, or Chapter 31, 32, 35A, or 37, Penal Code, that

involves a health care program, as defined by Section 35A.01, Penal

Code;

(vii) a Class B misdemeanor under Chapter

522, Business & Commerce Code;

(viii) a Class A misdemeanor under Section

306.051, Business & Commerce Code;

(ix) any offense under Section 42.10, Penal

Code;

(x) any offense under Section 46.06(a)(1)

or 46.14, Penal Code;

(xi) any offense under Chapter 71, Penal

Code;

(xii) any offense under Section 20.05,

20.06, 20.07, 43.04, or 43.05, Penal Code;

(xiii) an offense under Section 326.002,

Business & Commerce Code;

(xiv) any offense under Section 545.420,

Transportation Code; or

(xv) any offense punishable under Section

42.03(d) or (e), Penal Code;

(C) the proceeds gained from the commission of a

felony listed in Paragraph (A) or (B) of this subdivision, a

misdemeanor listed in Paragraph (B)(vii), (ix), (x), (xi), (xii),

(xiv), or (xv) of this subdivision, or a crime of violence;

(D) acquired with proceeds gained from the

commission of a felony listed in Paragraph (A) or (B) of this

subdivision, a misdemeanor listed in Paragraph (B)(vii), (ix), (x),

(xi), (xii), (xiv), or (xv) of this subdivision, or a crime of

violence;

(E) used to facilitate or intended to be used to

facilitate the commission of a felony under Section 15.031 or

Chapter 43, Penal Code; or

(F) used to facilitate or intended to be used to

facilitate the commission of an offense under Section 20.05, 20.06,

or 20.07 or Chapter 20A, Penal Code.

(3-a) "Digital currency" means a digital

representation of value recorded on a cryptographically secured

distributed ledger, including blockchain, or similar technology.

(7) "Proceeds" includes :

(A) income a person accused or convicted of a

crime or the person's representative or assignee receives from:

(i) [ (A) ] a movie, book, magazine article,

tape recording, phonographic record, radio or television

presentation, telephone service, electronic media format,

including an Internet website, or live entertainment in which the

crime was reenacted; or

(ii) [ (B) ] the sale of tangible property

the value of which is increased by the notoriety gained from the

conviction of an offense by the person accused or convicted of the

crime ; or

(B) with respect to digital currency gained from

the commission of an offense, any increase in value of the digital

currency between the date of acquisition and the forfeiture of the

digital currency .

(9) "Depository account" means the obligation of a

regulated financial institution to pay the account owner under a

written agreement, including a checking account, savings account,

money market account, time deposit, NOW account, [ or ] certificate

of deposit , or digital currency wallet, regardless of whether the

wallet is connected to an exchange or network .

SECTION 2. Article 59.023(a), Code of Criminal Procedure,

is amended to read as follows:

(a) A peace officer who identifies proceeds that are gained

from the commission of an offense listed in Article 59.01(2)(A) or

(B) shall provide the attorney representing the state with an

affidavit that identifies the amount of the proceeds and that

states probable cause that the proceeds are contraband subject to

forfeiture. On receiving the affidavit, the attorney representing

the state may file for a judgment in the amount of the proceeds in a

district court in:

(1) the county in which the proceeds were gained;

(2) the county in which any owner or possessor of the

property was prosecuted for an underlying offense for which the

property is subject to forfeiture;

(3) the county in which venue existed for prosecution

of an underlying offense for which the property is subject to

forfeiture;

(4) the county in which the proceeds were seized; [ or ]

(5) if the property is a digital currency,

non-fungible token, stablecoin, or wallet not connected to an

exchange or network, the county in which the law enforcement agency

that initiated the seizure of the property is located; or

(6) Travis County.

SECTION 3. Article 59.03(c), Code of Criminal Procedure, is

amended to read as follows:

(c) A peace officer who seizes property under this chapter

has custody of the property, subject only to replevy under Article

59.02 [ of this code ] or an order of a court. A peace officer who has

custody of property shall provide the attorney representing the

state with a sworn statement that contains a schedule of the

property seized, an acknowledgment that the officer has seized the

property, and a list of the officer's reasons for the seizure. Not

later than 72 hours after the seizure :

(1) [ , ] the peace officer shall:

(A) [ (1) ] place the property under seal;

(B) [ (2) ] remove the property to a place ordered

by the court; or

(C) [ (3) ] require a law enforcement agency of the

state or a political subdivision to take custody of the property and

move it to a proper location ; or

(2) if the property seized is a digital currency,

non-fungible token, or stablecoin, the law enforcement agency

employing the peace officer shall transfer the property to a wallet

that is:

(A) not connected to an exchange or network; and

(B) only accessible by the law enforcement agency

or the attorney representing the state .

SECTION 4. Article 59.04(b), Code of Criminal Procedure, is

amended to read as follows:

(b) A forfeiture proceeding commences under this chapter

when the attorney representing the state files a notice of the

seizure and intended forfeiture in the name of the state with the

clerk of the district court in the county in which the seizure is

made or, if the property is a digital currency, non-fungible token,

stablecoin, or wallet not connected to an exchange or network, in

the county in which the law enforcement agency that initiated the

seizure of the property is located . The attorney representing the

state must attach to the notice the peace officer's sworn statement

under Article 59.03 [ of this code ] or, if the property has been

seized under Article 59.12(b), the statement of the terms and

amount of the depository account or inventory of assets provided by

the regulated financial institution to the peace officer executing

the warrant in the manner described by Article 59.12(b). Except as

provided by Subsection (c) of this article, the attorney

representing the state shall cause certified copies of the notice

to be served on the following persons in the same manner as provided

for the service of process by citation in civil cases:

(1) the owner of the property; and

(2) any interest holder in the property.

SECTION 5. Article 59.12(b), Code of Criminal Procedure, is

amended to read as follows:

(b) A regulated financial institution, at the time a seizure

warrant issued under Chapter 18 is served on the institution, may

either:

(1) pay an account or tender assets held as security

for an obligation owed to the institution at the time of the service

of the seizure warrant; [ or ]

(2) transfer the depository account or assets to a

segregated interest-bearing account in the name of the attorney

representing the state as trustee, to remain in the account until

the time has expired for an appeal from a decision of the court

relating to the forfeiture of accounts or assets under Article

59.05 ; or

(3) transfer any digital currency, non-fungible

token, or stablecoin held by the institution to a secure wallet that

is:

(A) not connected to an exchange or network; and

(B) in the possession of a law enforcement agency

or an attorney representing the state .

SECTION 6. The changes in law made by this Act apply only to

property or proceeds seized on or after the effective date of this

Act. Property or proceeds seized before the effective date of this

Act are governed by the law in effect on the date the property or

proceeds were seized, and the former law is continued in effect for

that purpose. For purposes of this section, property or proceeds

were seized before the effective date of this Act if any portion of

the property or proceeds was seized before that date.

SECTION 7. This Act takes effect September 1, 2025.