OF EXAS 

September 21, 1961 

Honorable Thornton Hardie Opinion No. W-1148 

Chairman, Board of Regents 

University of Texas Re: Whether Article 2543~ 

Austin, Texas of Vernon's Civil Statutes 

requires the University of 

Texas to deposit In the 

State Treasury or in the 

special depository banks 

grants of foreign currency 

non-convertible into 

United States currency 

Dear Mr. Hardie: under the facts submitted. 

Your request for an opinion on the above subject 

matter reads in part as follows: 

"The United States Department of 

State conducts a program of educational 

and cultural exchange. This program 

was recently extended to permit the use 

of "soft or blocked" currencies (Departments of State and Justice, the Judiciary 

and Related Agencies Appropriation Act 

of 1961). 

"We request your opinion as to whether 

The University of Texas may participate in 

these programs where the soft currencies 

are deposited to our credit in banks within 

the foreign nation whose currency is used. 

The University of Texas will be selected 

as one of the educational institutions to 

carry out the Government's obligation 

under the Educational and Cultural Exchange 

Program, for which the Department of State 

will grant to the University a designated 

sum of foreign currency which is nonconvertible into United States dollars. 

This sum will be deposited in a bank of a 

foreign country to the credit of The 

University of Texas without collateral 

securing the deposit. Payments will be 

made through a designated representative 
Honorable Thornton Hardie, page 2 (~~-1148) 

in a foreign country who shall have the 

authority to accept the payment on behalf 

of the University from the United States 

Embassy in the country wherein the program 

is conducted. In many instances the 

representative will be someone from the 

University, but this will vary according 

to the terms of the contract in a particular country. 

"The primary question to be determined 

insofar as the participation of the University 

in the Educational and Cultural Exchange 

Program is whether the funds received from 

the United States Government must be deposited 

in special depository banks as cash receipts 

accruing to the University within the meaning of Article 2543c, or may they be deposited in a bank in a foreign country where 

the program is conducted, without the protection of pledging eligible securities as 

collateral. There is no definition of 'cash 

receipts' in the provisions of Article 2543~ 

or any related statute. 

"Also, may University authorized individuals disburse said funds in a foreign 

currency in the name of The University of 

Texas if such funds are expended in accordance 

with the terms of the agreement entered into 

between The University of Texas and an agency 

of the United States Government?" 

Article 25&3c, Vernon's Civil Statutes, reads in 

part as follows: 

"The Governing Boards of the State 

Institutions of higher education of this 

State are directed to designate special 

depository banks, subject to the approval 

of the State Treasurer, for the purpose 

of receiving and keeping certain receipts 

of the institutions of higher education 

of this State separate and apart from 

funds now deposited in the Treasury. 

. . . The State Treasurer Is authorized 

to promulgate rules and regulations to 

require collateral security for the 

protection of such funds pursuant to 

the provisions of Article 2529 and Article 

2530 of Vernon's Texas Civil Statutes. 
Honorable Thornton Hardie, page 3 (~-1148) 

For the purpose of facilitating the clearance 

and collection of the receipts herein 

enumerated, the State Treasurer Is hereby 

authorized to deposft such receipts in any 

State Depository Bank and transfer funds 

representing such receipts enumerated 

herein to the respective special depository banks. 6anks so designated as special 

depository 'banks are hereby authorized 

to pledge their securities to protect 

such funds. 

"The Governing 3oards of the State 

institutions of higher learning shall 

deposit in the State Treasury all cash 

receipts accruing to ang college z 

university under && control that mas be 

derived from all sources except auxiliam 

enterwrises, non-instructional services, 

agencp and restricted funds, endowment 

funds, student w funds, and Constitutional College Building Amendment funds. 

The State Treasurer is directed to credit 

such receipts deposited by each such 

institution to a separate fund account 

for the institution depositing the receipts, 

but he shall not be required to keep 

separate accounts of types of funds deposited 

by each institution. (Emphasis added) 

"The Legislature is hereby authorized to create revolving funds for the 

handling of funds of ir.stitutfons of 

higher education, as enumerated herein, 

by making pr*ovision in each biennial 

appropriation bill enacted by the Legislature." 

Under the facts stated in your request, the United 

States Government proposes to grant to the credit of The 

University of Texas a 9iLm of money 1~ foreign currency which 

is to be expended in the foreign country and is nonconvertible into Us.ited States dollars and is never permitted 

to be expended outside of OP transferred from such country. 

Allocations will be made through a designated representative 

in the foreign country where the program is conducted. 

Under the facts submitted, it is our" opinion that 

such allocation of grant s by the United States Government does 

not constitute cash receipts to The University of Texas 
Honorable Thornton Hardie, page 4 (~~-1148) 

within the meaning of Article 2543~ since such grant is 

non-convertible into United States currency. 

I'cash receipts" 

In our opinion 

refers to legal tender in this State. 

It is further our opinion tiat the program outlined in your request constitutes an auxiliary enterprise" 

of The University of Texas within the meaning of Article 

2543~. You are therefore advised that Article 2543~ does 

not require The University of Texas to deposit the outlined 

grants in special depository banks. 

It follows that your second question is answered 

in the affirmative. 

SUMMARY 

The University of Texas is not 

required to deposit in special 

depository banks grants of foreign 

currency allocated to The University 

of Texas by the United States 

Government in the Student Exchange 

Program. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

JR:dhs:lgh AZ-G 

ohn Reeves 

Assistant 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Pat Bailey 

Thomas Burrus 

Gordon C. Cass 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: Houghton Brownlee, Jr.