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The budget shall be prepared within the limits of legislatively appropriated general revenue and estimated educational and general funds.

The governing board of each institution shall approve on or before September 1 of each year an itemized budget covering the operation of the institution for the fiscal year beginning on September 1 of each year.

(a) The governing board of every state institution of higher education is directed to designate special depository banks, subject to the approval of the comptroller, for the purpose of receiving and keeping certain receipts of the institution separate and apart from funds now deposited in the state treasury.

CERTAIN RECEIPTS TO BE DEPOSITED IN STATE TREASURY.

Venue for a suit to recover an amount claimed by the state to be due on a surety bond is in Travis County.(f) Notwithstanding any other provision of this section, the governing board of each institution may maintain unsecured deposits in a foreign bank as necessary to support the institution's academic and research operations in the foreign country in which the bank is located, provided that no appropriated or tuition funds other than those collected from students enrolled in the affected programs are deposited.

The depository banks selected may pledge their securities to protect the funds.(d) A depository shall pay interest on the deposits at a rate agreed on by the depository and the governing board.(e) Any surety bond furnished under the provisions of this section shall be payable to the governor and his successors in office.

On request of the institution, the secretary of state or the secretary of state's representative shall assign a classification number to the colonia.

If a colonia does not have a classification number, the institution of higher education may contact the secretary of state or the secretary of state's representative to obtain the classification number.

The comptroller is authorized to promulgate rules and regulations to require collateral security for the protection of such funds pursuant to the provisions of Chapter 404, Government Code.

(a) 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:(1) student fees of all kinds;(2) charges for use of rooms and dormitories;(3) receipts from meals, cafes, and cafeterias;(4) fees on deposit refundable to students under certain conditions;(5) receipts from school athletic activities;(6) income from student publications and other student activities;(7) receipts from the sale of publication products and miscellaneous supplies and equipment;(8) students' voluntary deposits of money for safekeeping;(9) all other fees and local or institutional funds arising out of and by virtue of the educational activities, research, or demonstrations carried on by the institution; and(10) donations and gifts to the institution.(b) The provisions of this subchapter do not apply to any income derived from the permanent university fund.

The foreign bank must:(1) be licensed and supervised by a central bank;(2) be audited annually by an accounting firm that follows international financial reporting standards; and(3) maintain a capital to total assets ratio that is not less than the greater of four percent or the minimum tier 1 capital to total assets ratio required for depository institutions insured by the Federal Deposit Insurance Corporation.

Notwithstanding a pledge of those revenues made or to be made in the proceedings approved by the governing board of an institution of higher education authorizing the issuance or incurrence of bonds, the deposit of those revenues in the treasury to the credit of an account in the general revenue fund does not:(1) affect in any manner the pledge of the revenues or the governing board's ability to pledge the revenues to secure and pay bonds issued or incurred by the governing board in accordance with law;(2) cause the bonds to constitute a debt of the state or be payable from the full faith and credit of the state;(3) change the character of the revenues as separate revenue of the institution collecting the revenue; or(4) cause the revenue to be considered general revenue for purposes of Sections 17 and 18, Article VII, Texas Constitution.

An institution of higher education that has adopted a pay-for-performance program that is in effect when an across-the-board salary increase for state employees made by an appropriation act of the legislature takes effect is entitled to receive any appropriation made for purposes of the across-the-board salary increase, and may use the amount appropriated for an across-the-board salary increase or for increases in compensation under the institution's pay-for-performance program. Section 403.094(h), Government Code, does not apply to funds described in this section.(h) Tuition revenues and revenue collected under Section 34.017, Natural Resources Code, that are deposited in the treasury pursuant to this section, and the interest earned on those revenues, shall be treated as designated funds in the general revenue fund.

These funds may be only used for the support, maintenance, and operation of the institution as provided for by law.

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