§ 81.304. Custodial Funds.
(a) Custodial Funds must be deposited in a Custodial Account.
(b) Qualified Funds are Custodial Funds 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 income will not be generated to justify the expense of earning income to benefit the Beneficial Owner of the funds. With few exceptions, Custodial Funds handled by Judicial Officials will be Qualified Funds.
(c) The Judicial Official, in the exercise of Good Faith judgment, should apply an economic benefits test to determine whether particular Custodial Funds are not Qualified Funds and hence the Beneficial Owner of the funds should receive the income on those funds.
(1) If the anticipated cost of administering a segregated account for the benefit of the Beneficial Owner of the funds is more than the income expected to be generated on the funds, then the funds are Qualified Funds.
(2) Custodial Funds that when considered alone are not large enough to earn income for the Beneficial Owner thereof are Qualified Funds.
(3) Funds which are not expected to be held for a sufficient time to provide income for the Beneficial Owner are Qualified Funds.
(d) Factors which should be used to determine whether Custodial Funds are Qualified Funds include:
(1) the cost of establishing and maintaining separate account(s) benefiting Beneficial Owners;
(2) the account and bank service charges of the Depository Institution in which the account is maintained;
(3) the minimum deposit requirements of the Depository Institution in which the account is maintained;
(4) accounting fees incurred in connection with the funds;
(5) tax reporting requirement costs incurred in connection with the funds; and
(6) the length of time the funds are expected to be on deposit and the rate of interest or dividend that will be earned on the funds.
(e) Examples of Qualified Funds include:
(1) funds collected which represent fines and costs that are awaiting payment to the appropriate governmental entity;
(2) funds collected which represent posting of collateral by individuals who plead not guilty to a charged offense, unless those funds are of such a magnitude that the costs of administering a separate account for those funds, including service charges and other charges, will be less than the income anticipated to be earned;
(3) funds collected which represent posting of bail by or on behalf of an individual awaiting a hearing, unless those funds are of such a magnitude that the costs of administering a separate account for those funds, including service charges and other charges, will be less than the income anticipated to be earned;
(4) funds collected which represent restitution to victims pending the payment of the funds to the victims; and
(5) funds collected which represent payment of filing fees and other costs pending payment to the appropriate persons or entities.
Source The provisions of this § 81.304 adopted January 6, 2005, effective February 1, 2005, 35 Pa.B. 497; amended August 7, 2017, effective immediately, 47 Pa.B. 4802. Immediately preceding text appears at serial pages (309495) to (309496).
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