Local Rule Rule 67: Deposit of Registry Funds in Interest-Bearing Accounts

Rule 67 Deposit of Registry Funds in Interest-Bearing Accounts The following procedures apply to deposits into the registry of the Court.

(a) Proposed Order Required A party seeking a court order directing the Clerk to deposit money in an interest-bearing account must deliver to the Clerk a proposed order specifying the amount to be invested by the Clerk or financial administrator. The Clerk will review the proposed order for compliance with this rule prior to signature by a judge.

(b) Receipt of Funds

(1) Order Required. No money may be sent to the Court or its officers for deposit in the registry except by order of the Court.

(2) Delivery to the Clerk. The party making the deposit or transferring funds to the Court's registry must electronically serve the order permitting the deposit or transfer on the Clerk.

(3) Duties of the Clerk. Unless the order provides otherwise, the Clerk will deposit all funds received with the Treasurer of the United States (Treasury) in the name and to the credit of this Court under 28 U.S.C. § 2041.

(c) Investment of Registry Funds

(1) Court Registry Investment System. Funds required under Federal Rule of Civil Procedure 67 to be placed in an interest-bearing account or invested in a Court-approved, interest-bearing instrument must be placed in the Court Registry Investment System (CRIS), administered by the Administrative Office of the United States Courts (Administrative Office) under 28 U.S.C. § 2045.

(2) Custodian. The Director of the Administrative Office is designated as custodian for all CRIS funds. The Director or the Director's designee will perform the duties of custodian. Funds held in the CRIS remain subject to the control and jurisdiction of the Court.

(3) Pooling of Funds. Money deposited in the CRIS under this rule will be pooled with money on deposit with the Treasury to the credit of other courts in the CRIS and used to purchase Government Account Series securities through the Bureau of Public Debt. The Treasury will hold the money in an account in the name and to the credit of the Director of the Administrative Office. The pooled funds will be invested in accordance with the principles of the CRIS Investment Policy as approved by the Registry Monitoring Group.

(4) Disputed Ownership Funds. IRS regulations require special handling for interpleader funds deposited under 28 U.S.C. § 1335 or Federal Rule of Civil Procedure 22, as defined in 26 C.F.R. § 1.468B-9 (Disputed Ownership Funds). Those funds that meet the IRS definition of a Disputed Ownership Fund (DOF) require tax administration. Unless the Court orders otherwise, the Clerk will deposit interpleader funds in the DOF established within the CRIS and administered by the Administrative Office, which will be responsible for meeting all DOF tax administration requirements.

(5) Case-Specific DOF Accounts. For each case in which money is invested as a DOF account, the CRIS DOF will establish an account in the name of that case. Income generated from fund investments will be distributed to each case after applying the DOF fee and deducting federal tax withholdings. Reports showing the interest earned and the principal amounts contributed in each case will be made available to litigants or their counsel. On appointment of an administrator authorized to incur expenses on behalf of the DOF in a case, the Court will issue an order directing that case's DOF funds to be transferred to another investment account.

(6) Case-Specific Non-DOF Accounts. For non-DOF case funds, an account will be established in the CRIS Liquidity Fund in the name of that case. Income generated from fund investments will be distributed to each case based on the ratio of each account's principal and earnings to the aggregate principal and income total in the fund after applying the CRIS fee. Reports showing the interest earned and the principal amounts contributed in each case will be prepared and distributed to each court participating in the CRIS and made available to litigants or their counsel.

(d) Fees and Taxes

(1) Custodian's Authority to Deduct CRIS Fee. For the management of investments in the CRIS, the custodian must deduct the CRIS fee, which is an annualized 10 basis points on assets on deposit for all CRIS funds, excluding the case funds held in the DOF. Under the Court's Miscellaneous Fee Schedule, the CRIS fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to court cases.

(2) Custodian's Authority to Deduct DOF Fee. For the management of investments and tax administration, the custodian must deduct the DOF fee, which is an annualized 20 basis points on assets on deposit in the DOF. Under the Court's Miscellaneous Fee Schedule, the DOF fee is assessed from interest earnings to the pool before a pro rata distribution of earnings is made to court cases.

(3) Custodian's Authority to Pay Federal Taxes. The custodian must withhold and pay federal taxes due on behalf of the DOF.

(e) Withdrawal of Deposit To withdraw money deposited with the Court under Federal Rule of Civil Procedure 67 and this rule, a party must file a motion and a proposed order for disbursement of funds along with a completed IRS Form W-9.