Rule 15-1001. IOLPPTA.
(a)A licensed paralegal practitioner or a licensed paralegal practitioner firmshall create and maintain an interest or dividend-bearing trust account forclient funds ("IOLPPTA account"). All client funds shall be placedinto this account except those funds which can earn net income for the clientin excess of the costs to secure such income, except as provided in paragraph(g).
(b)In determining whether a client's funds can earn net income in excess of thecosts of securing that income for the benefit of the client, the licensedparalegal practitioner or licensed paralegal practitioner firm shall considerthe following factors:
(b)(1)the amount of the funds to be deposited;
(b)(2)the expected duration of the deposit, including thelikelihood of delay in the matter for which funds are held;
(b)(3)the rates of interest or yield at financialinstitutions where the funds are to be deposited;
(b)(4)the costs of establishing and administering non-IOLPPTA accounts for theclient's benefit, including service charges, and the costs of preparing any taxreports required for income accruing to the client's benefit; and
(b)(5)the capability of financial institutions, licensedparalegal practitioners, or their firms to calculate and pay income toindividual clients and any other circumstances that may affect the ability ofthe client's funds to earn net income.
(c)The licensed paralegal practitioner, or the licensed paralegal practitionerfirm, shall review the IOLPPTA account at reasonable intervals, but not lessthan annually, to determine whether changed circumstances require furtheraction with respect to the funds of a particular client.
(d)The licensed paralegal practitioner, or the licensed paralegal practitionerfirm shall:
(d)(1)not allow earnings from an IOLPPTA account to be madeavailable to a licensed paralegal practitioner, or licensed paralegalpractitioner firm;
(d)(2)place in the IOLPPTA account all client funds whichcannot earn net income for the client in excess of the costs of securing thatincome;
(d)(3)establish an IOLPPTA account with an eligiblefinancial institution that has voluntarily chosen to offer and maintain IOLPPTAaccounts, and:
(d)(3)(A)is authorized by federal or state law to do businessin Utah;
(d)(3)(B)is insured by the Federal Deposit InsuranceCorporation or its equivalent;
(d)(3)(C)complies with Rule 1.15 (a) of the Utah Rules ofLicensed Paralegal Practitioner Professional Conduct; and
(d)(4)direct the depository institution where the IOLPPTAaccount is established:
(d)(4)(A)to remit all interest or dividends, net of allowable reasonable service chargesor fees, if any, on the average monthly balance in the account, or as otherwisecomputed in accordance with the institution's standard practice, at leastquarterly, solely to the Utah Bar Foundation ("Foundation"). Whenfeasible, the depository institution shall remit the interest or dividends onall of its IOLPPTA accounts in a lump sum, however, the depository institutionmust provide, for each individual IOLPPTA account, the information to theFoundation required by subparagraphs (d)(4)(B) and (d)(4)(C) of this rule;
(d)(4)(B)to report in a form and through any manner of transmission approved by theFoundation showing the name of the licensed paralegal practitioner, or licensedparalegal practitioner firm, and the amount of the remittance attributable toeach, account number for each account, the rate and type of interest ordividend applied, the amount and type of allowable reasonable service chargesor fees deducted, the average account balance for the reporting period and suchother information as is reasonably required by the Foundation;
(d)(4)(C)to report in accordance with normal procedures forreporting to depositors;
(d)(4)(D)that allowable reasonable service charges or fees in excess of the interestearned on the account for any period shall not be taken from interest earned onother IOLPPTA accounts or any principal balance of the accounts; and
(d)(4)(E)to comply with all other administrative rules forIOLPPTA accounts as promulgated by the Foundation or the Supreme Court.
(e)The determination of whether an institution is an eligible institution andwhether it is meeting the requirements of this rule shall be made by the UtahBar Foundation. The Foundation shall maintain a list of participating eligiblefinancial institutions, and shall provide a copy of the list to any Utahlicensed paralegal practitioner upon request.
(f)Licensed paralegal practitioners may only maintain IOLPPTA accounts in eligiblefinancial institutions. Eligible financial institutions are those thatvoluntarily offer IOLPPTA accounts and comply with the requirements of thisrule, including maintaining IOLPPTA accounts which pay the highest interestrate or dividend generally available from the institution to its non-IOLPPTAaccount customers when IOLPPTA accounts meet or exceed the same minimum balanceor other account eligibility qualifications, if any. In determining the highestinterest rate or dividend generally available from the institution to itsnon-IOLPPTA accounts, eligible institutions may consider factors, in additionto the IOLPPTA account balance, customarily considered by the institution whensetting interest rates or dividends for its customers, provided that such factorsdo not discriminate between IOLPPTA accounts and accounts of non-IOLPPTAcustomers, and that these factors do not include that the account is an IOLPPTAaccount.
(f)(1)An eligible financial institution may satisfy these comparability requirementsby electing one of the following options:
(f)(1)(A)establish the IOLPPTA account as the comparable rateproduct; or
(f)(1)(B)pay the comparable rate on the IOLPPTA checkingaccount in lieu of actually establishing the comparable highest interest rateor dividend product;
(f)(1)(C)pay an amount on funds that would otherwise qualifyfor the investment options noted at (f)(3) equal to 70% of the federal fundstargeted rate as of the first business day of the month or other IOLPPTAremitting period, which is deemed to be already net of allowable reasonableservice charges or fees. The safe harbor yield rate may be adjusted once per yearby the Foundation, upon 90 days? written notice to financial institutionsparticipating in the IOLPPTA program; or
(f)(1)(D)pay a yield rate specified by the Foundation, if theFoundation so chooses, which is agreed to by the financial institution. The ratewould be deemed to be already net of allowable reasonable fees and would be ineffect for and remain unchanged during a period of no more than twelve monthsfrom the inception of the agreement between financial institution and theFoundation.
(f)(2)IOLPPTA accounts may be established as:
(f)(2)(A)a business checking account with an automated investment feature, such as anovernight and investment in repurchase agreements or money market fundsinvested solely in or fully collateralized by U.S. government securities,including U.S. Treasury obligations and obligations issued or guaranteed as toprincipal and interest by the United States or any agency or instrumentthereof;
(f)(2)(B)a checking account paying preferred interest rates,such as money market or indexed rates;
(f)(2)(C)a government interest-bearing checking account such asaccounts used for municipal deposits;
(f)(2)(D)an interest-bearing checking account such as anegotiable order of withdrawal (NOW) account, or business checking account withinterest;
(f)(2)(E)any other suitable interest-bearing deposit accountoffered by the institution to its non-IOLPPTA customers.
(f)(3)A daily financial institution repurchase agreement shall be fullycollateralized by United States Government Securities and may be establishedonly with an eligible institution that is "well capitalized" or"adequately capitalized" as those terms are defined by applicablefederal statutes and regulations. An open-end money-market fund shall be investedsolely in the United States Government Securities or repurchase agreementsfully collateralized by United States Government Securities, shall hold itselfout as a "money-market fund" as that term is defined by federalstatutes and regulations under the Investment Company Act of 1940 and, at thetime of the investment, shall have total assets of at least two hundred fiftymillion dollars ($250,000,000).
(f)(4)Nothing in this rule shall preclude a participating financial institution frompaying a higher interest rate or dividend than described above or electing towaive any service charges or fees on IOLPPTA accounts.
(f)(5)Interest and dividends shall be calculated in accordance with the participatingfinancial institution's standard practice for non-IOLPPTA customers.
(f)(6)"Allowable reasonable service charges or fees" for IOLPPTA accountsare defined as per check charges, per deposit charges, a fee in lieu of minimumbalances, sweep fees, FDIC insurance fees, and a reasonable IOLPPTA accountadministrative fee.
(f)(7)Allowable reasonable service charges or fees may be deducted from interest ordividends on an IOLPPTA account only at the rates and in accordance with thecustomary practices of the eligible institution for non-IOLPPTA customers. Nofees or service charges other than allowable reasonable fees may be assessedagainst the accrued interest or dividends on an IOLPPTA account. Any fees andservice charges other than allowable reasonable fees shall be the soleresponsibility of, and may be charged to, the licensed paralegal practitioneror licensed paralegal practitioner firm maintaining the IOLPPTA account.
(g)Any IOLPPTA account which has or may have the net effect of costing the IOLPPTAprogram more in fees than earned in interest over a period of any time, may atthe discretion of the Foundation, be exempted from and removed from the IOLPPTAprogram. Exemption of an IOLPPTA account from the IOLPPTA program revokes thepermission to use the Foundation's tax identification number for that account.Exemption of such account from the IOLPPTA program shall not relieve thelicensed paralegal practitioner and/or licensed paralegal practitioner firmfrom the obligation to maintain the property of client funds separately, asrequired above, in a non-interest bearing account and also will not relieve thelicensed paralegal practitioner of the annual IOLPPTA certification.
(h)In the event a licensed paralegal practitioner determines that funds placed inan IOLPPTA account should have been placed in an interest bearing account forthe benefit of the client, the licensed paralegal practitioner, licensedparalegal practitioner firm shall:
(h)(1)make a request for a refund in writing, in a timelymanner, to the Foundation on firm letterhead within a reasonable period of timeafter the interest was remitted to the Foundation; and
(h)(2)provide verification from the financial institution ofthe interest amount. In no event will the Foundation refund more than theamount of net interest it received; remittance shall be made to the financialinstitution for transmittal to the licensed paralegal practitioner, or licensedparalegal practitioner firm, after appropriate accounting and reporting.
(i) On or before September 1 of each year, any licensedparalegal practitioner licensed in Utah shall certify to the Foundation, insuch form as the Foundation shall provide ("IOLPPTA CertificationForm"), that the licensed paralegal practitioner is in compliance with, oris exempt from, the provisions of this rule. If the licensed paralegal practitioner,or licensed paralegal practitioner firm, maintains an IOLPPTA account, thelicensed paralegal practitioner shall certify the manner in which the licensedparalegal practitioner accounts for the interest on clients' trust accounts.The IOLPPTA Certification Form shall include the financial institution, accountnumbers, name of accounts and such other information as the Foundation shallrequire. If the licensed paralegal practitioner is exempt from the IOLPPTAprogram, the licensed paralegal practitioner must still submit an IOLPPTACertification Form annually to certify to the Foundation that he or she isexempt from the provisions in this Rule. Each licensed paralegal practitionershall keep and maintain records supporting the information submitted in theIOLPPTA Certification Form. The licensed paralegal practitioner shall maintainthese records for a period of five years from the end of the period for whichthe IOLPPTA Certification Form is filed, and these records shall be submittedto the Foundation upon written request. Failure by the licensed paralegalpractitioner to produce such records within thirty days after written requestby the Foundation constitutes a rebuttable presumption that the licensedparalegal practitioner has not complied with these rules.
(i)(1) If the IOLPPTA CertificationForm is timely filed, indicating compliance, there will be no acknowledgement.Should an IOLPPTA Certification Form filed by a licensed paralegal practitionerfail to evidence compliance, the Foundation shall contact the licensedparalegal practitioner and attempt to resolve the non-complianceadministratively.
(i)(2) The Foundation shall furnishannually to the Utah Supreme Court a list of all licensed paralegalpractitioners who have not timely filed an IOLPPTA Certification Form and anylicensed paralegal practitioners with whom the Foundation has been unable toadministratively resolve an impediment to the proper filing of an IOLPPTACertification Form or the proper compliance with Rule 15-1001, IOLPPTA.
(i)(3) Any licensed paralegalpractitioner who is not in compliance with IOLPPTA or who has failed tocomplete the IOLPPTA Certification Form by September 1 will be sent, bycertified mail, return receipt requested, a non-compliance notice. Should thelicensed paralegal practitioner fail or refuse to rectify the situation withinthirty (30) days of such notice, the Foundation shall petition the Utah SupremeCourt for the licensed paralegal practitioner?s suspension from the practice oflaw.
(i)(4) A licensed paralegalpractitioner suspended by the Utah Supreme Court under the provisions of thisrule may be reinstated by the Court upon motion of the Foundation showing thatthe licensed paralegal practitioner has cured the noncompliance issue for whichthe licensed paralegal practitioner has been suspended. If a licensed paralegalpractitioner has been suspended by the Utah Supreme Court for non-compliancewith these rules, the licensed paralegal practitioner must then comply with allapplicable rules to be eligible to return to active or inactive status.
(j)A licensed paralegal practitioner may be exempt from having to maintain anIOLPPTA account for the following reasons:
(j)(1)the licensed paralegal practitioner, or law firm's client trust account has beenexempted and removed from the IOLPPTA program by the Foundation pursuant toparagraph (g) of this rule; or
(j)(2)the licensed paralegal practitioner has certified inhis or her most recent annual IOLPPTA Certification Form that the licensedparalegal practitioner:
(j)(2)(A)is not engaged in the private practice of law or doesnot manage or handle client trust funds and does not have a client trustaccount;
(j)(2)(B)does not have an office within Utah and has theclient's permission to hold the funds out of state; or
(j)(2)(C)has been exempted by an order of general or specialapplication of this Court which is cited in the certification;
(j)(3)the licensed paralegal practitioner, or licensed paralegal practitioner firmpetitions for and receives a written exemption from the Foundation thatcompliance with this rule would create an undue hardship on the licensedparalegal practitioner and would be extremely impractical, based on geographicdistance between the licensed paralegal practitioner?s principal office and theclosest depository institution which is participating in the IOLPPTA program.
(k)Licensed paralegal practitioners must notify the Foundation in writing withinthirty (30) days of any change in IOLPPTA status, including the opening orclosing of any IOLPPTA accounts.
(l)The Foundation is the only entity authorized to receive and administer IOLPPTAfunds in Utah.
(l)(1)The Foundation shall have general supervisory authority over the administrationof the IOLPPTA funds, subject to the continuing jurisdiction of the SupremeCourt.
(l)(2)The Foundation shall receive the net earnings from all IOLPPTA accounts andshall make appropriate investments of IOLPPTA funds. The Foundation shallmaintain proper records of all IOLPPTA receipts and disbursements, whichrecords shall be audited or reviewed annually by a certified public accountant.The Foundation shall annually present to the Supreme Court a reviewed or auditedfinancial statement of the IOLPPTA receipts and expenditures for the prior yearand a summary thereof shall be made available to anyone requesting copies.
(l)(3)The Foundation shall be responsible to present annually to the Supreme Court astatus report on activities of the Foundation and compliance with these rules.
(l)(4)The Foundation shall be responsible to make disbursements from the IOLPPTAprogram funds, including current and accumulated net earnings, by grants,appropriations and other appropriate measures, as outlined in the articles andby-laws for the organization.
(l)(5)The Foundation shall promulgate such other rules, procedures, reports and formsthat are necessary or advisable for the proper implementation of the foregoingrules.
(m) Every licensed paralegalpractitioner, shall, as a condition thereof, be conclusively deemed to haveconsented to the reporting requirements mandated by this rule.
Effective November 1, 2018