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PROVISIONS GENERALLY APPLICABLE TO HIGHER EDUCATIONSUBCHAPTER A. The provisions of this subchapter apply to each institution of higher education, as that term is defined by Section 61.003 of this code, including each public junior college to the extent possible.

No part of any of the funds listed in Section 51.002 of this code shall ever be used to increase any salary beyond the sum fixed by the legislature in the general appropriations act; provided, however, that the use of such funds by an institution for this purpose may be specifically authorized by the legislature in general law or the general appropriations act.

(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.

Section 501(f)), as that section may be amended.(c) If a governing board has under its control at least million in book value of endowment funds, such governing board may invest all funds described in this section under prudent person standards.(c-1) If a governing board does not have under its control at least million in book value of endowment funds, the governing board may contract to pool its funds described in this section with another institution that meets the million in book value of endowment funds threshold established under Subsection (c), and have its funds invested by that governing board under prudent person standards.(d) As used in this section, "prudent person standard" is the standard of care described in Article VII, Section 11b, of the Texas Constitution, and means that standard of judgment and care that prudent investors, exercising reasonable care, skill, and caution, would acquire or retain in light of the purposes, terms, distribution requirements, and other circumstances of the fund then prevailing, taking into consideration the investment of all the assets of the fund rather than a single investment.

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.

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(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.

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