                        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 (Depart-
          ments 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 non-
          convertible 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 particu-
          lar 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 mean-
          ing of Article 2543c, or may they be deposi-
          ted in a bank in a foreign country where
          the program is conducted, without the pro-
          tection 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 indi-
          viduals 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 deposi-
          tory banks. 6anks so designated as special
          depository 'banksare 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 Constitu-
          tional 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 autho-
          rized to create revolving funds for the
          handling of funds of ir.stitutfonsof
          higher education, as enumerated herein,
          by making pr*ovisionin each biennial
          appropriation bill enacted by the Legis-
          lature."
          Under the facts stated in your request, the United
States Government proposes to grant to the credit of The
University of Texas a 9iLmof money 1~ foreign currency which
is to be expended in the foreign country and is non-
convertible into Us.itedStates 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 grants 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. In our opinion
I'cashreceipts" refers to legal tender in this State.
          It is further our opinion tiat the program out-
lined 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.
