(a) Receipt of Funds
(1) No money shall be sent to the Court or its officers for deposit in the
Court’s registry without a court order signed by the presiding judge in the
case or proceeding.
(2) The party making the deposit or transferring funds to the Court’s registry
shall serve the order permitting the deposit or transfer on the Clerk of
Court.
(3) Unless provided for elsewhere in this Local Rule, all monies ordered to be
paid to the Court or received by its officers in any case pending or
adjudicated shall be deposited with the Treasurer of the United States in
the name and to the credit of this Court pursuant to 28 U.S.C. § 2041
through depositories designated by the Treasury to accept such deposit on
its behalf.
(b) Investment of Registry Funds Return to Top
(1) Where, by order of the Court, funds on deposit with the Court are to be
placed in some form of interest-bearing account or invested in a court-
approved, interest-bearing instrument in accordance with Rule 67 of the
Federal Rules of Civil Procedure, the Court Registry Investment System
(“CRIS”), administered by the Administrative Office of the United States
Courts under 28 U.S.C. § 2045, shall be the only investment mechanism
authorized.
(2) Interpleader funds deposited under 28 U.S.C. § 1335 meet the Internal
Revenue Service definition of a “Disputed Ownership Fund” (DOF), a
taxable entity that requires tax administration. Unless otherwise ordered
by the Court, interpleader funds shall be deposited in the DOF established
within the CRIS and administered by the Administrative Office of the
United States Courts, which shall be responsible for meeting all DOF tax
administration requirements.
(3) The Director of the Administrative Office of the United States Courts is
designated as custodian for all CRIS funds. The Director or the
Director’s designee shall perform the duties of custodian. Funds held in
the CRIS remain subject to the control and jurisdiction of the Court.
(4) Money from each case deposited in the CRIS shall be “pooled” together
with those on deposit with Treasury to the credit of other courts in the
CRIS and used to purchase Government Account Series securities through
the Bureau of Public Debt, which will be held at Treasury, in an account in
the name and to the credit of the Director of the Administrative Office of
the United States Courts. The pooled funds will be invested in
accordance with the principles of the CRIS Investment Policy as approved
by the Registry Monitoring Group.
(5) An account will be established in the CRIS Liquidity Fund titled in the
name of the case giving rise to the deposit invested in the fund. Income
generated from fund investments will be distributed to each case based on
the ratio each account’s principal and earnings has to the aggregate
principal and income total in the fund after the CRIS fee has been applied.
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 and/or their counsel.
(6) For each interpleader case, an account shall be established in the CRIS
Disputed Ownership Fund, titled in the name of the case giving rise to the
deposit invested in the fund. Income generated from fund investments
will be distributed to each case after the DOF fee has been applied and tax
withholdings have been deducted from the fund. Reports showing the
interest earned and the principal amounts contributed in each case will be
available through the FedInvest/CMS application for each court
participating in the CRIS and made available to litigants and/or their
counsel.
(c) Fees and Taxes Return to Top
(1) The custodian is authorized and directed by this Local Rule to deduct the
CRIS fee of an annualized 10 basis points on assets on deposit for all
CRIS funds, excluding the case funds held in the DOF, for the
management of investments in the CRIS. According to 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) The custodian is authorized and directed by this Local Rule to deduct the
DOF fee of an annualized 20 basis points on assets on deposit in the DOF
for management of investments and tax administration. According to 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. The custodian is further authorized and directed by
this Local Rule to withhold and pay federal taxes due on behalf of the
DOF.
(d) Transition from Former Investment Procedure Return to Top
(1) Deposits to the CRIS DOF will not be transferred from any existing CRIS
Funds. Only new deposits pursuant to 28 U.S.C. § 1335 from the
effective date of this Local Rule will be placed in the CRIS DOF.
(2) This Local Rule supersedes and abrogates all prior orders and Local Rules
of this Court regarding the deposit and investment of registry funds.
(3) The effective date of this Local Rule is the date the CRIS DOF begins
accepting deposits.
