(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. The receipts here referred to are described in Subsection (b) of this section. The comptroller is directed to deposit the receipts, or funds representing such receipts, enumerated herein, in the special depository bank or banks nearest the institution credited with the receipts, so far as is practicable, and is authorized to withdraw such funds on drafts or checks prescribed by the comptroller. 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. 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. Banks so designated as special depository banks are hereby authorized to pledge their securities to protect such funds.
(b) The governing board of every state institution of higher education shall deposit in the state treasury all cash receipts accruing to any college or university under its control that may be derived from all sources except auxiliary enterprises, noninstructional services, agency, designated, and restricted funds, endowment and other gift funds, student loan funds, funds retained under Chapter 145 of this code, and Constitutional College Building Amendment funds. The comptroller 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. For the purpose of facilitating the transferring of such institutional receipts to the state treasury, each institution shall open in a local depository bank a clearing account to which it shall deposit daily all such receipts, and shall, not less often than every seven days, make remittances therefrom to the comptroller of all except $500 of the total balance in said clearing account, such remittances to be in the form of checks drawn on the clearing account by the duly authorized officers of the institution, and no disbursements other than remittances to the state treasury shall be made from such clearing account. All money so deposited in the state treasury shall be paid out on warrants drawn by the comptroller as provided by law.

(c) The legislature is authorized to create revolving funds for the handling of funds of institutions of higher education, as enumerated herein, by making provision in each biennial appropriation bill enacted by the legislature.
(d) Nothing in this section affects the provisions of Title 47, Revised Civil Statutes of Texas, 1925, usually referred to as the State Depository 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 § 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. These funds may be only used for the support, maintenance, and operation of the institution as provided for by law. Section 403.094(h), Government Code, does not apply to funds described in this section.
(h) Tuition revenues and revenue collected under § 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. 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 §§ 17 and 18, Article VII, Texas Constitution.