Untitled Texas Attorney General Opinion ( 1961 )

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.