Earlier this month, Colorado Gov. John Hickenlooper signed a controversial bill that, he says, begins to reform the state’s civil asset forfeiture system.

The legislation mandated new reporting requirements for law-enforcement agencies involved in forfeiture activities, and new limits on the practice.

Civil asset forfeiture is a legal process in which law enforcement officers seize assets from people suspected of involvement with crime or illegal activity even though those people may never be charged with a crime.

In order to battle the asset seizure, individuals must prove they were not involved in criminal activity – a reversal of the “innocent until proven guilty” presumption that guides judicial criminal proceedings.

Supporters applauded, saying the new law will provide more due-process protections to individuals who are in danger of having assets seized.

Opponents say it will shrink law-enforcement budgets across the state. One feature of the law prohibits local law enforcement from receiving forfeiture proceeds from the federal government in cases where the value of the items seized is less than $50,000. Most seizures fall below that threshold.

According to The Denver Post, that provision is intended to steer forfeitures toward Colorado’s more stringent process, which is more protective of property rights. Under the state process, agencies also receive funds.

At issue are not only abuses – for example, seizure of assets from an individual who is carrying large amounts of cash simply because drug dealers carry large amounts of cash – but also mistakes. Besides cash, authorities can seize a wide range of other items that could be related to criminal activity, including vehicles and real estate.

Issues arise when one member of a household is suspected of criminal activity but other members may be unaware of and not involved in that activity, or whose involvement may be involuntary. In other words, people, including children, may be thrust into poverty through no fault of their own.

The practice has three primary justifications, according to the Department of Justice: To punish and deter criminal activity, to enhance cooperation among law enforcement agencies through asset sharing, and to provide revenue for law enforcement.

Colorado’s reforms seem sensible. They don’t deprive law enforcement entirely of a tool that has valid uses, but they do provide legal protections for those whose assets are forfeited, and the increased transparency is one of the best protections against abuse in a free society.