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

(a) The governing board of each institution may select one or more depositories as places of deposit for the funds enumerated in Section 51.002 of this code. 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. (a) Separate accounts shall be kept on the books of the institution showing the sources of all sums collected and the purposes for which disbursements are made.(b) All trust funds, including gifts, grants, and bequests received, establishing or adding to endowment funds, loan and scholarship funds, and funds for other current restricted purposes, shall be credited to separate accounts and shall not be commingled with other local or institutional funds.(c) If the governing board so elects, deposits of all funds not specifically required to be deposited to special accounts may be deposited in a single bank account if the records of the institution clearly reflect the balances attributable to general funds and various categories of trust funds.(d) Interest received from depository banks for funds on deposit may be credited to an appropriate account in either general funds or trust funds in relation to the sources of temporary investments in time deposits, if the disposition of the earnings was not specified by the grantor. Each institution of higher education shall prepare a complete annual financial report as prescribed by Section 2101.011, Government Code. These funds may be only used for the support, maintenance, and operation of the institution as provided for by law.

However, the limitation of deposits contained in Article 2532, Revised Civil Statutes of Texas, 1925, as amended, shall not apply insofar as the specific funds enumerated in this section are concerned.(e) This section prevails over Sections 51.001-51.007 of this code to the extent of any conflict.(f) Interest earned on the receipts deposited under this section to an institution's separate fund account in the state treasury shall be credited to that separate fund account.(g) Revenues collected at institutions of higher education and deposited in the state treasury pursuant to this section and Section 34.017, Natural Resources Code, and the interest earned thereon, are dedicated to the institution which collected and deposited the funds irrespective of the year the funds were collected, deposited, or earned.

For the purpose of facilitating the clearance and collection of the receipts herein enumerated, the comptroller is hereby authorized to deposit such receipts in any state depository bank and transfer funds representing such receipts enumerated herein to the respective special depository banks.

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.

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(a) A governing board may deposit funds under its control as provided in Section 51.003 of this code, may invest funds under its control in accordance with Chapter 2256, Government Code and, with regard to donations, gifts, and trusts, may establish endowment funds that operate as trusts and are managed under prudent person standards.(b) Funds described in this section may also be invested in cash management and fixed income funds held by organizations exempt from federal taxation under Section 501(f) of the Internal Revenue Code of 1986 (26 U.

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