Session of 2000
July 1, 2000

HOUSE BILL No. 2596
An Act concerning counterfeiting; relating to criminal penalties; concerning civil forfeiture;    amending K.S.A. 60-4104, 60-4105 and 60-4116 and repealing the existing sections.


Be it enacted by the Legislature of the State of Kansas:

      New Section  1. (a) Counterfeiting is intentionally manufacturing, us-
ing, displaying, advertising, distributing, offering for sale, selling or pos-
sessing with intent to sell or distribute any item or services bearing or
identified by a counterfeit mark.

      (b) A person having possession, custody or control of more than 25
items bearing a counterfeit mark shall be presumed to possess such items
with intent to sell or distribute.

      (c) Any state or federal certificate of registration of any intellectual
property shall be prima facie evidence of the facts stated therein.

      (d) As used in this section:

      (1) "Counterfeit mark" means:

      (A) Any unauthorized reproduction or copy of intellectual property;
or

      (B) intellectual property affixed to any item knowingly sold, offered
for sale, manufactured or distributed, or identifying services offered or
rendered, without the authority of the owner of the intellectual property.

      (2) "Intellectual property" means any trademark, service mark or
trade name as such terms are defined in K.S.A. 1999 Supp. 81-202, and
amendments thereto.

      (3) "Retail value" means the counterfeiter's regular selling price for
the item or service bearing or identified by the counterfeit mark. In the
case of items bearing a counterfeit mark which are components of a fin-
ished product, the retail value shall be the counterfeiter's regular selling
price of the finished product on or in which the component would be
utilized.

      (4) The quantity or retail value of items or services shall include the
aggregate quantity or retail value of all items bearing, or services identi-
fied by, every counterfeit mark the defendant manufactures, uses, dis-
plays, advertises, distributes, offers for sale, sells or possesses.

      (e)  (1) Counterfeiting of the retail value of less than $500 is a class
A nonperson misdemeanor.

      (2) Counterfeiting of the retail value of at least $500 but less than
$25,000; that involves more than 100 but less than 1,000 items bearing a
counterfeit mark; or on a second violation is a severity level 9, nonperson
felony.

      (3) Counterfeiting of the retail value of $25,000 or more; that involves
1,000 or more items bearing a counterfeit mark; or on a third or subse-
quent violation is a severity level 7, nonperson felony.

      (f) This section shall be part of and supplemental to the Kansas crim-
inal code.

      Sec.  2. K.S.A. 60-4104 is hereby amended to read as follows: 60-
4104. Conduct and offenses giving rise to forfeiture under this act,
whether or not there is a prosecution or conviction related to the offense,
are:

      (a) All offenses which statutorily and specifically authorize forfeiture;

      (b) violations of the uniform controlled substances act, K.S.A. 65-
4101 et seq., and amendments thereto;

      (c) theft which is classified as a felony violation pursuant to K.S.A.
21-3701, and amendments thereto, in which the property taken was live-
stock;

      (d) unlawful discharge of a firearm, K.S.A. 21-4219, and amendments
thereto;

      (e) money laundering, K.S.A. 65-4142, and amendments thereto;

      (f) gambling, K.S.A. 21-4303, and amendments thereto, and com-
mercial gambling, K.S.A. 21-4304, and amendments thereto;

      (g) counterfeiting, section 1, and amendments thereto;

      (h) an act or omission occurring outside this state, which would be a
violation in the place of occurrence and would be described in this section
if the act occurred in this state, whether or not it is prosecuted in any
state;

      (h) (i) an act or omission committed in furtherance of any act or
omission described in this section including any inchoate or preparatory
offense, whether or not there is a prosecution or conviction related to the
act or omission;

      (i) (j) any solicitation or conspiracy to commit any act or omission
described in this section, whether or not there is a prosecution or con-
viction related to the act or omission.

      Sec.  3. K.S.A. 60-4105 is hereby amended to read as follows: 60-
4105. The following property is subject to forfeiture:

      (a) Property described in a statute authorizing forfeiture;

      (b) all property, including the whole of any lot or tract of land and
any appurtenances or improvements to real property that is either:

      (1) Furnished or intended to be furnished by any person in an
exchange that constitutes conduct giving rise to forfeiture; or

      (2) used or intended to be used in any manner to facilitate conduct
giving rise to forfeiture;

      (c) all proceeds of any conduct giving rise to forfeiture;

      (d) any property derived from any proceeds which were obtained
directly or indirectly from the commission of an offense listed in K.S.A.
60-4104, and amendments thereto;

      (e) all weapons possessed, used, or available for use in any manner
to facilitate conduct giving rise to forfeiture;

      (f) ownership or interest in real property that is a homestead, to the
extent the homestead was acquired with proceeds from conduct giving
rise to forfeiture;

      (g) contraband, which shall be seized and summarily forfeited to the
state without regard to the procedures set forth in this act; and

      (h) all controlled substances, raw materials, controlled substance an-
alogs, counterfeit substances, or imitation controlled substances that have
been manufactured, distributed, dispensed, possessed, or acquired in vi-
olation of the laws of this state.; and

      (i) any items bearing a counterfeit mark.

      Sec.  4. K.S.A. 60-4116 is hereby amended to read as follows: 60-
4116. (a) If no proper claims are timely filed in an action in rem, or if no
proper answer is timely filed in response to a complaint, the plaintiff's
attorney may apply for an order of forfeiture and allocation of forfeited
property pursuant to K.S.A. 60-4117, and amendments thereto. Upon a
determination by the court that the seizing agency's written application
established the court's jurisdiction, the giving of proper notice, and facts
sufficient to show probable cause for forfeiture, the court shall order the
property forfeited to the seizing agency.

      (b) After final disposition of all claims timely filed in an action in rem,
or after final judgment and disposition of all claims timely filed in an
action in personam, the court shall enter an order that the seizing agency
has clear title to the forfeited property interest. Title to the forfeited
property interest and such property's proceeds shall be deemed to have
vested in the seizing agency on the commission of the conduct giving rise
to forfeiture under this act.

      (c) If, in the discretion of the plaintiff's attorney, such plaintiff's at-
torney has recognized in writing that an interest holder has an interest
that is exempt from forfeiture, the court, on application of the plaintiff's
attorney, may release or convey forfeited personal property to a regulated
interest holder on all of the following conditions:

      (1) The interest holder has an interest which was acquired in the
regular course of business as an interest holder.

      (2) The amount of the interest holder's encumbrance is readily de-
terminable and the amount has been reasonably established by proof
made available by the plaintiff's attorney to the court.

      (3) The encumbrance held by the interest holder seeking possession
is the only interest exempted from forfeiture and the order forfeiting the
property to the seizing agency transferred all of the rights of the owner
prior to forfeiture, including rights of redemption to the seizing agency.

      (4) After the court's release or conveyance, the interest holder shall
dispose of the property by a commercially reasonable public sale, and
within 10 days of disposition shall tender to the seizing agency the amount
received at disposition less the amount of the interest holder's encum-
brance and reasonable expense incurred by the interest holder in con-
nection with the sale or disposal.

      (d) On order of the court forfeiting the subject property, the seizing
agency may transfer good and sufficient title to any subsequent purchaser
or transferee, unless satisfied and released earlier, subject to all mort-
gages, deeds of trust, financing statements or security agreements of rec-
ord prior to the forfeiture held by an interest holder and the title shall
be recognized by all courts, by this state, and by all agencies of and any
political subdivision. Likewise on entry of judgment in favor of a person
claiming an interest in the property that is subject to proceedings to forfeit
property under this act, the court shall enter an order that the property
or interest in property shall be released or delivered promptly to that
person free of liens and encumbrances under this act and the person's
cost bond shall be discharged.

      (e) Upon motion by the plaintiff's attorney, if it appears after a hear-
ing there was reasonable cause for the seizure for forfeiture or for the
filing of the notice of pending forfeiture or complaint, the court shall
cause a finding to be entered that reasonable cause existed, or that any
such action was taken under a reasonable good faith belief that it was
proper, and the claimant is not entitled to costs or damages, and the
person or seizing agency who made the seizure, and the plaintiff's attor-
ney, are not liable to suit or judgment on account of the seizure, suit or
prosecution.

      (f) The court shall order a claimant who fails to establish that a sub-
stantial portion of the claimant's interest is exempt from forfeiture under
K.S.A. 60-4105, and amendments thereto, and to pay the reasonable costs
and expenses of any claimant who established such claimant's interest is
exempt from forfeiture under K.S.A. 60-4105 and to pay the reasonable
costs and expenses of the seizing agency for the investigation and litigation
of the matter, including reasonable attorney fees, in connection with that
claimant.

      (g) If more than one law enforcement agency is substantially involved
in effecting a forfeiture pursuant to this act, and no interagency agree-
ment exists, the court shall equitably distribute the proceeds among such
agencies.

      (h) Notwithstanding any other provision of law, upon the request of
the intellectual property owner, all seized items bearing a counterfeit mark
shall be released to the intellectual property owner for destruction or
disposition. If the intellectual property owner does not request release of
seized items bearing a counterfeit mark, such items shall be destroyed
unless the intellectual property owner consents to another disposition.

      Sec.  5. K.S.A. 60-4104, 60-4105 and 60-4116 are hereby repealed.

      Sec.  6. This act shall take effect and be in force from and after its
publication in the statute book.