The Attorney General of Texas 

December 31, 1982 

MARK WHITE 

Attorney General 

Supreme Court Building 

P. 0. Box 12546 

Austin. TX. 76711. 2546 

5121475-2501 

Telex 9101674.1367 

Telecopier 5121475.0266 

1607 Main St., Suite 1400 

Dallas. TX. 75201-4709 

2141742-6944 

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El Paso, TX. 79905.2793 

9151533.3464 

1220 Dallas Ave., Suite 202 

Houston, TX. 77002-6966 

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Lubbock. TX. 79401.3479 

606/747-5236 

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McAllen. TX. 76501-1685 

5121662.4547 

200 Main Plaza. Suite 400 

San Antonio, TX. 76205.2797 

512/225-4191 

An Equal Opportunity! 

Affirmative Action Employer 

Mr. E. D. Walker 

Office of the Chancellor 

University of Texas System 

601 Colorado Street 

Austin, Texas 78701 

Opinion No.MW-576 

Re: Whether tuition income 

generated by certain branches 

of the University of Texas may 

be retained locally 

Dear Mr. Walker: 

You ask the following question: 

=Y the tuition income generated at' The 

University of Texas Health Science Center at 

Dallas, The University of Texas Medical Branch at 

Galveston, The University of Texas Health Science 

Center at San Antonio be retained locally and 

accounted for annually as provided in the general 

appropriations act? 

Several provisions of the Education Code are relevant to your 

question. Section 51.002(a) provides in part: 

The governing board of each institution listed 

in Section 51.001 of this code may retain control 

of the following sums of money collected at the 

institution, subject to Section 51.008 of this 

code. 

. . . . 

(9) all other fees and local institutional 

income of a strictly local nature arising out of 

and by virtue of the educational activities, 

research, or demonstrations carried on by the 

institution.... 

The University of Texas and its branches are subject to this 

provision. - See Educ. Code 651.001. Section 51.008(b) provides in 

part: 

p. 2128 
- 

Mr. E. D. Walker - Page 2 (!JW-576) 

(b) The governing board of every state 

institution of higher education shall deposit in 

the state treasury all cash receipts accruing to 

any college or university under its control that 

may be derived from all sources except auxiliary 

enterprises, noninstructional services, agency and 

restricted funds, endowment funds, student loan 

funds, and Constitutional College Building 

Amendment funds. 

. . . . 

(e) This section prevails over Sections 

51.001-51.007 of this code to the extent of any 

conflict. 

Section 51.008(b) applies to "all cash receipts" with certain 

exceptions. Tuition is not one of those exceptions. According to the 

express statement found in subsection (e), section 51.008(b) prevails 

over contrary language found in section 51.002. Thus, section 51.008, 

taken in isolation, would require institutions of the University of 

Texas System to deposit tuition in the state treasury. 

Section 54.004 of the Education Code. however, provides as 

follows: 

All tuition, local funds, and fees collected by 

an institution of higher education shall be 

retained and expended by the institution and 

accounted for annually as provided in the general 

appropriations act. 

"Institution of higher education" is defined in a comprehensive way in 

section 61.003 of the Education Code. It includes any medical or 

dental unit. See Educ. Code §61.003(7). Section 54.004 thus appears 

to authorize medical and dental units to retain tuition and account 

for it as provided in the General Appropriations Act. The General 

Appropriations Act provides that the general academic teaching 

institutions must deposit in the state treasury certain cash receipts 

including tuition. Acts 1981, 67th Leg., ch. 875, art. 111, §lOb. 

"General academic institutions" as defined in the appropriations act, 

do not include the medical and dental branches. *, art. III, 14. 

Thus, if section 54.004 controls this question, the tuition is to be 

accounted for as provided in article III, section 10h; that is, 

tuition of the medical and dental branches would not need to be 

deposited in the state treasury but would be placed in local 

depositories. _ Cf. V.T.C.S. art. 4393c, 92. If, on the other hand, 

article 51.008 controls the question, such tuition would have to be 

deposited in the treasury. 

p. 2129 
Mr. E. D. Walker - Page 3 (MW-576) 

In order to resolve the conflict between section 51.008 and 

54.004, it is necessary to examine legislative history. The 

predecessor of section 54.004 was enacted in 1933 as section 2 of 

article 2654~. V.T.C.S. Acts 1933, 43d Leg. ch. 196, at 596. The 

predecessors of sections 51.001 through 51.007 were also enacted in 

1933 as article 2654d, V.T.C.S. Acts 1933, 43d Leg., ch. 221, at 746. 

The emergency clause of the bill provided as follows: 

The fact that under the present laws all the 

above institutions are withholding certain sums of 

money under a practice which has been established 

by them for a considerable period of time, and the 

fact that said institutions are scattered in 

various portions of the State and it would work a 

great hardship on said schools to place their 

moneys in the local funds in the State Treasury 

and the further fact that existing laws do not 

provide for security of deposits placed in local 

depositories, and the further fact that existing 

laws do not provide for any adequate system of 

accounting by which the Legislature and the people 

of the State may be apprised [sic] of the amounts 

on hand and being expended by said institutions, 

creates an emergency and an imperative public 

necessity requiring the suspension of the 

Constitutional Rule for the reading of bills on 

three several days in each House, and said Rule is 

hereby suspended, and this Act is made to take 

effect from and after passage, and it is so 

enacted. 

Thus, the intent of both 1933 enactments was to permit the 

universities to maintain tuition and other funds outside of the 

treasury. 

A statute enacted in 1951 was the predecessor of section 51.008 

of the Education Code. Acts 1951, 52d Leg., ch. 474, at 841. The 

repealer clause of this bill read as follows: 

Sec. 5. All laws or parts of laws in conflict 

herewith are hereby repealed to the extent of such 

conflict, except as herein provided in Section 2 

of this Act. Article 2654d of Vernon's Texas 

Civil Statutes is expressly repealed only insofar 

as it may conflict with the provisions of this 

Act. 

Section 2 of the enactment preserved from repeal the State Depository 

Law. It appears, however, that the 1951 enactment was intended to 

p. 2130 
Mr. E. D. Walker - Page 4 (NW-576) 

repeal section 2 of then article 2654c, V.T.C.S., presently codified 

as section 54.004 of the Education Code. Although section 2654d, now 

codified as sections 51.001-51.007, is expressly mentioned, the 

express mention is designed only to make it clear that a limited 

repeal of article 2654d was intended. 

Section 1 of article 2654c, V.T.C.S., was amended several times 

after 1951. See Acts 1953, 53d Leg. ch 351, at 866, Acts 1957, 55th 

Leg. ch. 435, at 1297, Acts 1961, 59th Leg., ch. 490, at 1003; Acts 

1969, 61st Leg., ch. 46, at 134; Acts 1971, 62d Leg., ch. 511, at 

1745. None of these amendments changed section 2 of article 2654c, 

V.T.C.S., nor was this section reprinted as part of the enacting 

legislation. However, in 1969 an amendment to article 2654c, 

V.T.C.S., added subsection (n) to that provision: 

(n) A Texas institution of higher education shall 

retain and spend all tuition, local funds, and 

fees collected and accounted for as provided in 

the General Appropriations Act. 

Acts 1969, 61st Leg., ch. 46, at 134. Section 2 of article 2654~ was 

not repealed. The 1971 codification of Title III of the Education 

Code codified section l(n) and 2 of article 2654c, V.T.C.S., as 

section 54.004. See Acts 1971, 62d Leg., ch. 1024, at 3112. We 

believe the 1969 enactment of section (n) of article 2654~ renacted a 

provision similar in substance to present section 54.004 of the 

Education Code. There has been no more recent amendment to section 

51.008 of the Education Code. The 1971 codification of the Education 

Code was not intended to effect any substantive changes. Acts 1971, 

62d Leg., ch. 1024, article 1, §2. Section 54.004, as the latest 

enacted provision, prevails over the conflicting portions of section 

51.008. See V.T.C.S. 5429b-2, 83.05(a). 

The University of Texas must therefore look to section 54.004 of 

the Education Code for the disposition of these funds. The university 

may retain them and account for them as provided by the general 

appropriations act. Since the appropriations act does not require the 

medical or dental branch or the San Antonio Health Science Center to 

deposit these funds in the state treasury, these institutions may 

retain them locally. They are to be accounted for in accordance with 

article III, section 10h of the General Appropriations Act. Acts 

1981, 67th Leg., ch. 875, art. III, 510h. 

SUMMARY 

Section 54.004 of the Education Code, read 

together with article III, sections 10b and 10h of 

the 1981 General Appropriations Act, authorizes 

the University of Texas Health Science Center at 

p. 2131 
Mr. E. D. Walker - Page 5 (MW-576) 

Dallas, the University of Texas Medical Branch at 

Galveston, the University of Texas Health Science 

Center at Houston and the University of Texas 

Health Science Center at San Antonio to retain 

tuition locally rather than depositing it in the 

State Treasury to be accounted for as provided in 

the General Appropriations Act. 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Susan L. Garrison & 

Patricia Hinojosa 

Assistant Attorneys General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Charles Black 

Patricia Hinojosa 

Jim Moellinger 

p. 2132