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PA Bulletin, Doc. No. 04-1538

THE COURTS

Title 204--JUDICIAL SYSTEM GENERAL PROVISIONS

PART V. PROFESSIONAL ETHICS AND CONDUCT

[204 PA. CODE CH. 81]

Establishment of the Minor Judiciary Interest on Trust Accounts Program; No. 209; Magisterial Doc. No. 1

[34 Pa.B. 4553]

Order

Per Curiam:

   And Now, this 3rd day of August, 2004, it is hereby ordered pursuant to Article V, Section 10, of the Constitution of Pennsylvania that:

   1.  To the extent that notice of proposed rulemaking would be required by Rule 103 of the Pennsylvania Rules of Judicial Administration or otherwise with respect to the rules adopted hereby, the immediate adoption of such rules is hereby found to be required in the interests of justice.

   2.  The Interest on Trust Account Program for the Minor Judiciary hereafter referred to as MJ-IOTA Program is hereby established by amending Pennsylvania Code Title 204, Chapter 81 with the addition of paragraphs (a)--(e) as set forth in Annex A.

   3.  The MJ-IOTA Program shall be administered by the IOLTA Board of the Supreme Court of Pennsylvania.

   4.  The IOLTA Board shall, to the extent consistent with the provisions of this Order and the rules adopted by the IOLTA Board, administer the MJ-IOTA Program to the extent practicable as a supplement to the IOLTA program administered by the IOLTA Board pursuant to Rule of Professional Conduct 1.15, and shall draft for review and approval of the Supreme Court regulations regarding the handling of funds by judiciary affected by this Order.

   5.  This Order, and the code changes promulgated hereby, shall take effect on the 3rd day of August, 2004.

Annex A

TITLE 204. JUDICIAL SYSTEM GENERAL PROVISIONS

PART V. PROFESSIONAL ETHICS AND CONDUCT

Subpart A. PROFESSIONAL RESPONSIBILITY

CHAPTER 81. RULES OF PROFESSIONAL CONDUCT

Subchapter C. MINOR JUDICIARY INTEREST ON TRUST ACCOUNTS

Sec.

81.301. Minor Judiciary Interest on Trust Accounts Program.

§ 81.301. Minor Judiciary Interest on Trust Accounts Program.

   (a)  All qualified funds received by a judge, magistrate or district justice (hereinafter judicial official) in the administration of his/her duties shall be placed in a Minor Judiciary Interest on Trust Account (MJ-IOTA) Account. This rule does not change existing practices with respect to funds (other than qualified funds) received by a judicial official in the administration of his/her duties.

   (b)  Qualified funds are monies received by a judicial official in a custodial capacity that, in the good faith judgment of the judicial official, are nominal in amount or are reasonably expected to be held for such a short period of time that sufficient interest income will not be generated to justify the expense of earning interest to benefit the owner of the funds.

   (c)  A MJ-IOTA is an unsegregated interest-bearing account with a depository institution for the deposit of qualified funds maintained by a judicial official. An account shall not be considered an MJ-IOTA Account unless the depository institution at which the account is maintained shall:

   (1)  Remit monthly any interest earned on the account to the IOLTA Board, or if that is not possible, remit the interest earned at least quarterly.

   (2)  Transmit to the IOLTA Board with each remittance a statement showing at least the name of the account, account number, service charges or fees deducted, if any, the amount of interest remitted from the account, and if available, the average daily collected balance in the account for the period reported.

   (3)  Compute the rate of interest paid on MJ-IOTA Accounts at no less than the highest rate of interest generally available from the depository institution to non-MJ-IOTA depositors when MJ-IOTA Accounts meet or exceed the same minimum balance or other account eligibility qualifications as other non-MJ-IOTA depositors. In no event shall the rate of interest payable on MJ-IOTA accounts be less than the rate paid by the depository institution on negotiable order of withdrawal accounts or super negotiable order of withdrawal accounts.

   (4)  The accounts must be collateralized by the assets of the banks in accordance with Act 72 of 1971.

   (d)  The MJ-IOTA Program shall be administered by the IOLTA Board. Disbursement and allocation of MJ-IOTA funds shall be subject to the prior approval of the Supreme Court. A copy of the IOLTA Board's proposed annual budget will be provided to the Court, designating the uses to which MJ-IOTA Funds are recommended. The IOLTA Board shall submit to the Supreme Court a copy of its audited statement of financial affairs, clearly setting forth in detail all funds previously approved for disbursement under the MJ-IOTA Program.

   Interest earned on MJ-IOTA Accounts may be used only for the following purposes:

   (1)  educational legal clinical programs and internships administered by law schools located in Pennsylvania, with emphasis given to providing grants to these programs such that the total funding they receive from the IOLTA Board is relatively stable and reasonably predictable from year to year in accordance with the allocation plan approved by the Court:

   (2)  delivery of civil legal assistance to the poor and disadvantaged in Pennsylvania by non-profit corporations described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and

   (3)  administration and development of the MJ-IOTA program in Pennsylvania.

   (e)  The IOLTA Board shall hold the beneficial interest in MJ-IOTA Funds. Monies received in the MJ-IOTA program are not state or federal funds and are not subject to Article VI of the Act of April 9, 1929 (P. L. 177, No. 175) known as the Administrative Code of 1929, or the Act of June 29, 1976 (P. L. 469, No. 117).

[Pa.B. Doc. No. 04-1538. Filed for public inspection August 20, 2004, 9:00 a.m.]


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