OF EXAS

September 21, 1961

Honorable ThorntonHardie OpinionNo. W-1148 Chairman,Board of Regents University of Texas Re: Whether Article 2543~ Austin, Texas of Vernon's Civil Statutes requires theUniversity of Texas to deposit In the State Treasury or in the specialdepositorybanks 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:

"TheUnited StatesDepartment of State conducts a program of educational and cultural exchange. This program was recently extended to permit the use of "softor blocked" currencies (Departments of State and Justice, the Judiciary and Related Agencies AppropriationAct of 1961).

"Werequestyour 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 foreignnation whose currency is used. The University of Texas will be selected
as one of the educational institutionsto carry out the Government'sobligation 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 intoUnited Statesdollars. 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 willbe made through a designated representativeHonorable Thornton Hardie,page 2 (~~-1148)

in a foreign country who shallhave the authority to accept the payment on behalf of the University from the United States Embassy in the countrywherein the program is conducted. In many instances the representativewillbe someone from the University, but this will vary according to the terms of the contract in a particular country.

"Theprimary question to be determined insofar as the participation of theUniversity in the Educationaland CulturalExchange Program is whether the funds received from the United StatesGovernmentmust be deposited in specialdepositorybanks 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 securitiesas 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 agreemententered 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:

"TheGoverning Boards of the State Institutionsof higher education of this State are directed to designate special depositorybanks, subject to the approval of the State Treasurer, for the purpose of receiving and keeping certain receipts of the institutionsof higher education of this State separateand apart from funds now deposited in the Treasury.

. . . The State Treasurer Is authorized to promulgate rules and regulationsto require collateral security for the protection of such fundspursuant 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 facilitatingthe clearance and collection of the receiptsherein enumerated, the State Treasurer Is hereby authorized to deposft such receipts in any State DepositoryBank and transfer funds representing such receipts enumerated herein to the respective specialdepository banks. 6anks so designated as special depository 'banks

are hereby authorized to pledge their securitiesto protect such funds.

"TheGoverning 3oards of the State institutions of higher learning shall deposit in the State Treasury all cash receipts accruing to ang college z universityunder && control that mas be derived from all sources except auxiliam enterwrises,non-instructional services, agencpand restricted funds, endowment funds, studentw funds,and Constitutional College Building Amendment funds. The State Treasurer is directed to credit such receiptsdeposited by each such institution to a separate fund account for the institutiondepositing the receipts, but he shallnot be required to keep separateaccounts of types of fundsdeposited by each institution. (Emphasisadded)

"The Legislature is hereby authorized to create revolving funds for the handling of funds of ir.stitutfons of higher education,as enumeratedherein, by making pr*ovision in each biennial appropriationbill enactedby the Legislature."

Under the facts stated in your request, theUnited States Governmentproposes 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.itedStates dollars and is never permitted to be expended outside of OP transferred from such country. Allocationswill 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 grants by the United StatesGovernmentdoes not constitute cash receipts to The University of TexasHonorable ThorntonHardie, page 4 (~~-1148)

within the meaning of Article 2543~ since such grant is non-convertible intoUnited 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 constitutesan auxiliary enterprise" of The University of Texas within the meaning of Article 2543~. You are therefore advised thatArticle 2543~does not require The University of Texas to deposit the outlined grants in specialdepositorybanks.

It follows thatyour second question is answered in the affirmative.

SUMMARY

The University of Texas is not required to deposit in special depositorybanks grants of foreign currency allocated to The University of Texas by the United States Government in the StudentExchange Program.

Yours very truly,

WILL WILSON AttorneyGeneral 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 ATTORNEYGENERAL BY: Houghton Brownlee, Jr.