Can a Texas prosecutor use civil asset forfeiture money to buy insurance on a forfeited house while the case is on appeal?

Plain-English summary

The District Attorney for the 216th Judicial District asked the AG a practical money question that comes up after a forfeiture trial. The State had won a civil asset forfeiture judgment against a house in Kerr County, the property was ordered forfeited as contraband, and the trial court let the State take possession while the former owner appealed. The court's order said the State could insure the property against loss during the appeal. The DA wanted to know whether she could pay for that insurance out of the civil asset forfeiture funds her office holds under article 59.06(c)(1) of the Code of Criminal Procedure, or whether insurance was the kind of expense those funds could not cover.

The AG concluded a court would likely say the funds may be used this way. Article 59.06(c)(1) lets forfeiture proceeds go into a special county-treasury fund for the prosecutor's office, to be used "solely for the official purposes of his office." A related provision says an expenditure is for an official purpose if it relates to the preservation, enforcement, or administration of state law, and then gives examples such as facility costs. The DA worried that buying insurance was not on that list. The AG pointed out that the words "includes" and "including" are terms of enlargement, not limitation, under Government Code section 311.005(13), so an expense left off the list is not automatically disqualified.

Turning to what the insurance actually does, the AG reasoned that it protects the State's interest either way the appeal comes out. If the State wins, the prosecutor must dispose of the property under article 59.05(e), and insurance protects the property in the meantime. If the State loses and the owner gets the property back, the owner has to reimburse the premiums, and the insurance limits the State's liability exposure while it held the property. The prosecutor also remains a party during the appeal. On those facts, the AG concluded a court would likely find the insurance purchase sufficiently related to administering the State's forfeiture laws to be paid from forfeiture funds.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The requesting District Attorney (and prosecutors holding forfeiture funds): The opinion told the DA that, on the AG's reading, the forfeiture funds in the article 59.06(c)(1) account could be used to buy property insurance on a forfeited residence during the appeal, because the expense related to administering the State's forfeiture laws even though insurance was not one of the statute's listed example uses.

Trial courts handling forfeiture appeals (as the opinion described them): The opinion took the trial court's order, which let the State insure the property and required the owner to reimburse premiums if the owner prevailed, as the backdrop for its analysis and treated the insurance as protecting the State's interest under both appeal outcomes.

Common questions

What is article 59.06(c)(1) money?
It is the special fund a prosecutor's office holds from the sale of forfeited contraband, kept in the county treasury and usable, in the statute's words, "solely for the official purposes of his office." It exists where there is a local agreement between the prosecutor and law enforcement agencies.

Why does insurance count as an "official purpose" if it is not on the statute's list?
Because the list is illustrative. The statute says an expense qualifies if it relates to the preservation, enforcement, or administration of state law, and gives examples like facility costs. Under Government Code section 311.005(13), "includes" and "including" enlarge rather than limit, so leaving insurance off the examples does not rule it out.

How does insuring the house relate to administering forfeiture law?
The AG reasoned it protects the State whichever way the appeal goes. If the State wins, the prosecutor still has to dispose of the property under article 59.05(e), and insurance guards it until then. If the State loses, the owner reimburses the premiums and the insurance limits the State's liability for the period it held the property.

Background and statutory framework

The civil asset forfeiture provisions of the Code of Criminal Procedure govern this area. A trial court may make orders to preserve and maintain the value of seized property until final disposition (Tex. Code Crim. Proc. art. 59.02(e)), and on a final judgment the attorney representing the State acts as the agent for the State and must dispose of the property as article 59.06 requires (id. art. 59.05(e)). Article 59.06(c)(1) channels proceeds from the sale of contraband into a special county-treasury fund for the prosecutor's office, restricted to the official purposes of that office.

The definition of "official purpose" appears in article 59.06(d-4), which treats an expenditure as official if it relates to the preservation, enforcement, or administration of state law, then lists examples including facility costs such as building purchase, lease payments, remodeling, maintenance, and utilities (id. art. 59.06(d-4)(7)). The AG read that list as non-exclusive by applying the rule that "includes" and "including" are "terms of enlargement and not of limitation" (Tex. Gov't Code § 311.005(13)). The opinion also noted that the prosecutor stays a party during the appeal, citing the requirement to serve a notice of appeal on all parties to the trial court's final judgment (Tex. R. App. P. 25.1(e)).

Citations

Statutes and rules:

• Tex. Code Crim. Proc. arts. 59.02(e), 59.04(g), 59.05(e), 59.06, 59.06(c)(1), 59.06(d-4), 59.06(d-4)(7)
• Tex. Gov't Code § 311.005(13)
• Tex. R. App. P. 25.1(e)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0200
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2018/kp0200.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

May 16, 2018

The Honorable Lucy Wilke Opinion No. KP-0200
District Attorney
216th Judicial District Re: Use of civil asset forfeiture funds to
200 Earl Garrett Street, Suite 202 purchase property insurance pending appeal
Kerrville, Texas 78028 (RQ-0195-KP)

Dear Ms. Wilke:

    You ask whether an attorney representing the State may use civil asset forfeiture funds accrued under article 59.06(c)(1) of the Texas Code of Criminal Procedure to insure real property forfeited to the State. [1] See TEX. CODE CRIM. PROC. art. 59.06. You explain that the State filed a civil asset forfeiture action in Kerr County against a piece of real property with a residence ("Property"). See Request Letter at 1; see also TEX. CODE CRIM. PROC. art. 59.04(g). You tell us that after a trial on the merits, the court ordered the Property forfeited to the State as contraband. Request Letter at 1. In granting the State's motion to possess the Property pending the defendant's appeal of the forfeiture judgment, the court ordered "that the State may insure the Property against loss for the entire period of the pendency of this appeal." [2] Id. at 2 (quotation marks omitted); Attachment at 2. You ask whether the attorney may use civil asset forfeiture funds accrued under article 59.06(c)(1) to purchase the property insurance pending appeal. [3] Request Letter at 1.

    Article 59.06(c)(1) permits civil asset forfeiture funds from the sale of contraband to be deposited into a special fund in the county treasury "for the benefit of the office of the attorney representing the state, to be used by the attorney solely for the official purposes of his office." TEX. CODE CRIM. PROC. art. 59.06(c)(1) (applicable if a local agreement exists between the attorney representing the State and law enforcement agencies). "[A]n expenditure of proceeds ... is considered to be for an official purpose of an attorney's office if the expenditure is made for an activity of an attorney ... that relates to the preservation, enforcement, or administration of the laws of this state, including an expenditure made for" certain listed items, such as "facility costs, including building purchase, lease payments, remodeling and renovating, maintenance, and utilities." Id. art. 59.06(d-4)(7) (emphasis added). You are concerned that the "expenditure of funds for the insurance coverage does not fit squarely with the enumerated uses" listed as examples of activities that relate to the preservation, enforcement, or administration of state laws. Request Letter at 2. However, the words "includes" and "including" are "terms of enlargement and not of limitation or exclusive enumeration, and use of the terms does not create a presumption that components not expressed are excluded." TEX. GOV'T CODE § 311.005(13). So long as the activity of the attorney "relates to the preservation, enforcement, or administration" of a state law, the fact that a particular expenditure is omitted from the examples listed in article 59.06(d-4) is not dispositive. TEX. CODE CRIM. PROC. art. 59.06(d-4).

    We turn our focus to the activity of the attorney in the situation you present. The property insurance, in the words of the court, is necessary to adequately "protect the [State] against loss or damage that the appeal may cause." Attachment at 1. If the State wins the appeal, then the attorney representing the State resumes his or her ultimate role with respect to the Property, which is to "dispose of the property in the manner required by Article 59.06" on a final judgment of forfeiture. TEX. CODE CRIM. PROC. art. 59.05(e). In that instance, the insurance protects the interest of the State in fulfilling its statutory duty. If the State loses the appeal and the owner regains ownership and possession of the Property, in which case the owner must reimburse the State for the premiums it paid, [4] the insurance mitigates the State's risk of liability during its possession of the Property. Both scenarios relate to the attorney's role in the administration of the State's forfeiture laws. In addition, during an appeal of the forfeiture judgment, the attorney representing the State does not discontinue his or her role as a party to the proceedings. See id. art. 59.05(e) (providing for forfeiture of property "to the state, with the attorney representing the state as the agent for the state"); Tex. R. App. P. 25.1(e) (requiring service of the notice of appeal "on all parties to the trial court's final judgment"). Therefore, a court would likely conclude that the purchase of property insurance is sufficiently related to the attorney's administration of the State's forfeiture laws such that it may be made with civil asset forfeiture funds.

                                  SUMMARY

                  A court would likely conclude that an attorney representing the State may use civil asset forfeiture funds accrued under article 59.06(c)(1) of the Texas Code of Criminal Procedure to purchase property insurance protecting real property that is the subject of an appeal from a forfeiture judgment under article 59.05(e).

                                        Very truly yours,

                                        KEN PAXTON
                                        Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

BECKY P. CASARES
Assistant Attorney General, Opinion Committee

[1] See Letter and Attachment from Honorable Lucy Wilke, 216th Judicial Dist. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Nov. 27, 2017), https://www.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter" and "Attachment," respectively).

[2] See TEX. CODE CRIM. PROC. art. 59.02(e) (authorizing a court to "make appropriate orders to preserve and maintain the value of the property until a final disposition of the property is made").

[3] The source of the funds at issue is presumably from previous civil asset forfeitures, as the Property itself has not been disposed of pending appeal.

[4] See Request Letter at 2 (quoting from the court's order that "if the Defendant is successful on appeal and regains ownership or possession of the Property, then the Defendant shall reimburse the State for all insurance premiums paid by the State with respect to the Property").