If a Kansas school district wants to lease out a closed school building instead of selling it, does it have to give the state legislature a chance to claim it first?

Plain-English summary

Newton USD 373's counsel asked the Attorney General to interpret a brand-new 2023 law requiring school districts to notify the Legislature before disposing of a closed school building, giving the state 45 days to claim a right of acquisition and, if it does, 180 days to complete the purchase. The district wanted to know whether that process applies only to sales, or also to leasing out a vacant building, and how a sale price would be set if the state did step in.

The Attorney General concluded "dispose of" means permanently and conclusively giving up all interest in the building, like a sale or gift, not a lease, which by definition only conveys a temporary right to use the property while the district (as landlord) keeps its underlying ownership. So an ordinary lease, and renewals or extensions of one, do not trigger the legislative notice and first-refusal process. The analysis changes, though, if a lease includes an option to buy the building: the opinion concluded that triggers the statute at the moment the purchase option is actually exercised, while a lease-purchase agreement with a mandatory (not optional) buyout is covered from the moment the parties sign it, since a change in ownership is already guaranteed. Gifting a building counts the same as selling it, since both permanently transfer title. On price, the statute itself is silent, but the opinion read the Legislature's own summary describing this as a "right of first refusal" to mean the state must pay whatever amount a ready, willing, and able buyer had already offered, not seize the building for free, reasoning that taking locally-funded property without fair compensation would be an inequitable result the Legislature would have had to say explicitly if it intended it.

What this means for you

School boards and administrators considering what to do with a closed building: the opinion holds that leasing the building out, even long-term, does not require notifying the Legislature or offering the state a right of first refusal; only a sale, a gift, or a lease containing (and later exercising) a purchase option triggers that process.

School district attorneys drafting a lease or lease-purchase agreement for a vacant building: the opinion flags that an optional purchase clause becomes relevant only when exercised, but a mandatory buyout provision brings the statute into play immediately upon signing, so the type of purchase clause you draft changes when the legislative notice obligation kicks in.

State agencies interested in acquiring a surplus school building: the opinion confirms that if the Legislature exercises its right to acquire a building being sold, the acquiring state agency must pay the same price a private buyer had offered, not a token amount or nothing, absent explicit statutory language saying otherwise.

Common questions

Does renting out a closed school gym or classroom building require legislative notice?
No, according to the opinion, as long as it is a genuine lease without a purchase option; the district retains its ownership interest, so there is no "disposal" under the statute.

What if the lease has an option for the tenant to eventually buy the building?
The opinion says the statute is triggered only once that option is actually exercised, assuming the statute is still in effect at that time; until exercised, the lease itself does not require legislative notice.

If the state exercises its right of first refusal on a building being sold, does it get the building for free?
No, according to the opinion; the state agency acquiring the building must pay the price a ready, willing, and able buyer had offered, since the statute does not explicitly authorize the state to take locally-funded property without compensation.

Background and statutory framework

2023 House Substitute for S.B. 113 added new provisions, codified at K.S.A. 72-1439 and K.S.A. 72-3216(d), requiring a school board that votes to dispose of a school building to notify the Clerk of the Kansas House and the Secretary of the Kansas Senate within 30 days, describing the building, the reason for disposal, its legal description, and the board's resolution. If received while the Legislature is in session, lawmakers then have 45 days to adopt a concurrent resolution declaring the state's intent to acquire the building; if received out of session, the 45-day clock starts at the next session. If the Legislature acts, the named state agency has 180 days (extendable up to 60 more days) to complete the acquisition, and the school district is barred from selling, gifting, leasing, or otherwise conveying the building, or diminishing its value, during that window.

Because the statute's key operative term, "dispose of," is undefined, the opinion applied ordinary dictionary meaning ("to deal with conclusively," "to give away or sell," "to get rid of") and contrasted it with the legal definition of a "lease," which conveys only a possessory interest for a period less than permanent while the lessor retains an underlying interest. On the compensation question left silent by the statute, the opinion relied on the Kansas Legislative Research Department's own contemporaneous summary describing the mechanism as a "right of first refusal," a term that implies paying the market price a genuine buyer offered, and on the general principle that a legislature intending to seize locally-funded property without full compensation would need to say so explicitly.

Citations and references

Statutes:
- K.S.A. 72-1439 (incl. (a), (b), (d))
- K.S.A. 72-3216(d)
- K.S.A. 72-5143; 72-5457

Cases:
- Tecumseh Sch. Dist. No. 7 v. Throckmorton, 195 Kan. 144, 403 P.2d 102 (1965)

Source

• Landing page: https://www.ag.ks.gov/reports-resources/ag-opinions
• Original PDF: https://www.ag.ks.gov/home/showpublisheddocument/10508/638460984376570000

Original opinion text

December 11, 2023

ATTORNEY GENERAL OPINION NO. 2023-12

Mr. John S. Robb
Somers, Robb and Robb
110 E. Broadway
Newton, Kansas 67114-2222

Re: Schools—Provisions Relating to the Use of School District Property—
Disposition of closed school buildings; notice to legislature; adoption of
concurrent resolution for state agency to acquire the school building;
requirements

           Synopsis: "Dispose of" (and like phrases) in 2023 House Sub. for S.B.
           113, sections 4 and 11 (to be codified at K.S.A. 2023 Supp. 72-1439 and
           K.S.A. 2023 Supp. 72-3216(d)) means to deal with conclusively, give
           away or sell, or to get rid of a school district building. It does not
           include leasing or renting a building.

Dear Mr. Robb:

As counsel for Newton Unified School District No. 373, you ask, on behalf of the
board of education, our opinion concerning the interpretation of sections 4 and 11 of
2023 House Substitute for S.B. 113, as it might impact the sale or lease of a school
building. In your letter, you propound six questions:

  1. "Does a school district need to go through the procedures outlined in H sub
     SB 113 Sections 4 and 11 if the district intends to lease out a building rather
     than sell a building?"

  2. "Does the phrase 'dispose of a school district building' in H Sub SB 113,
     Section 4 include leasing or renting out a building?"

3. "If leasing is included in 'disposing of a school district building,' are renewals
   or extensions of a pre-existing lease also included?"

4. "If leasing is not included in 'disposing of a school building,' but the lease
   contained an option to purchase, does that bring the lease into the statutorily
   required procedure?"

5. "Does the phrase 'dispose of a school district building' in H Sub SB 113,
   Section 4 include gifting a building?"

6. "In the event a school district intends to dispose of a building by selling it,
   and the procedures set forth in H Sub for SB 113, Sections 4 and 11 are thus
   implicated, does the statutory procedure contemplate that the state acquire
   the building for free or does the statute contemplate a 'right of first refusal'
   process where the state agency would acquire the building by paying the
   amount that another buyer is ready, willing, and able to pay for the building
   or yet some other amount?"

Answering your questions requires us to engage in statutory interpretation. The
rules guiding statutory interpretation are well established.

First, we must try to ascertain legislative intent through the statutory language
enacted, giving common words their ordinary meanings. When a statute is plain
and unambiguous, we should not speculate about the legislative intent behind that
clear language, and should refrain from reading something into the statute that is
not readily found in its words.1 Only if the statute's language or text is unclear or
ambiguous do we resort to legislative history to construe the legislature's intent.2

When construing statutes to determine legislative intent, we must consider various
provisions of an act in pari materia with a view of reconciling and bringing the
provisions into workable harmony.3 Moreover, we are to avoid unreasonable or
absurd results and "presume the legislature does not intend to enact useless or
meaningless legislation."4

1 Montgomery v. Saleh, 311 Kan. 649, 654, 466 P. 3d 902 (2020).
2 In re M.M., 312 Kan. 872, 874, 482 P.3d 583 (2021). We recognize (and mostly agree with) the well-

known criticisms of using legislative history in statutory interpretation. See generally Conroy v.
Aniskoff, 507 U.S. 511, 518-19 (1993) (Scalia, J., concurring). Nonetheless, Kansas courts continue to
at least theoretically accept the use of legislative history under certain circumstances.
3 Miller v. Bd. of Cty. Comm'rs, 305 Kan. 1056, 1066, 390 P.3d 504 (2017).
4 In re Marriage of Traster, 301 Kan. 88, 98, 339 P.3d 778 (2014).

As you stated in your letter, 2023 House Substitute for S.B. 113 was passed by the
legislature on April 28, 2023. Significantly, the relevant portions of the bill,
specifically sections 4 and 11, were added in the conference committee without the
benefit of committee hearings that might have shed light on legislative intent.
These provisions are to be codified at K.S.A. 2023 Supp. 72-1439 and K.S.A. 2023
Supp. 72-3216(d).

In summary, this new legislation requires that within 30 days after the board of a
local school district votes to dispose of a school district building, the school district
must provide notice to the Clerk of the Kansas House of Representatives and the
Secretary of the Kansas Senate. The notice must include a description of the school
building's use, the reason for the building's disuse and disposal, the legal
description of the real property to be disposed of, and a copy of the resolution
adopted by the school board.5

If the notice is received during the legislative session, then the legislature has 45
days to adopt a concurrent resolution stating the intent of the state to acquire the
school district building. If the notice is received when the legislature is not in
session, then the legislature shall have 45 days from the commencement of the next
regular session to adopt a concurrent resolution stating the intent of the state to
acquire the building. If the legislature does not adopt a concurrent resolution within
the 45-day period, then the school district may then proceed to dispose of the
building.6

Once the concurrent resolution is adopted, the state agency named in the resolution
shall have 180 days to complete its acquisition of the school district building. Upon
request of the acquiring state agency, the legislative coordinating council may
extend the 180-day period for not more than 60 days. Importantly, the "school
district shall not sell, gift, lease, or otherwise convey such building or any of the real
property described in the written notice" or take any action that would diminish the
value of the property during the 180-day period or any extension thereof. If the
state agency does not take title to the property within this time period, the school
district may dispose of the school district building in accordance with state law and
any written agreements entered into between such state agency and the school
district.7

With this background, we now turn to your questions:

5 K.S.A. 2023 Supp. 72-1439(a).
6 K.S.A. 2023 Supp. 72-1439(b).
7 K.S.A. 2023 Supp. 72-1439(d).

1. Does a school district need to go through the procedures outlined in
   K.S.A. 2023 Supp. 72-1439 and K.S.A. 2023 Supp. 72-3216(d) if the
   district intends to lease out a building rather than sell a building?
   Unfortunately, many of the operative terms of this legislation are undefined. In
   particular, nowhere does the statute define "dispose of." Webster's Dictionary
   describes "dispose of" as "to deal with conclusively; settle" or "to give away or sell" or
   "to get rid of; throw away."8 Thus, in our view, the term "dispose of" means a
   permanent divesting of all interests in the school district building.
   A lease is commonly known as "[a] contract by which a rightful possessor of real
   property conveys the right to use and occupy the property in exchange for
   consideration. . . . The lease term can be for life, for a fixed period, or for a period
   terminable at will"9 but, ultimately, a lease ends and the lessor retains some right
   in the property. In other words, a lease conveys a possessory interest that is less
   than the entire interest in the property, and for a period of time that is less than
   permanent. A lease, therefore, would not constitute a disposal of the property.
   Accordingly, the procedures outlined in K.S.A. 2023 Supp. 72-1439 need not be
   utilized when a school district merely leases out a school district building.
2. Does the phrase "dispose of a school district building" in K.S.A. 2023
   Supp. 72-1439 include leasing or renting out a building?
   Given our answer to question one, the phrase "dispose of a school district building"
   would not include leasing or renting such a building, unless (as will be more fully
   discussed below) the leasing or rental agreement included an option to buy the
   property or some other rent-to-own arrangement.
3. If leasing is included in "disposing of a school district building," are
   renewals or extensions of a pre-existing lease also included?
   Given that the leasing of a school district building is not a disposal of the building,
   any extensions or renewals of such a lease would also not be implicated by H. Sub.
   for S.B. 113.
4. If leasing is not included in "disposing of a school building," but the
   lease contained an option to purchase, does that bring the lease into
   the statutorily required procedure?
   Given that a change in ownership is achieved at the end of a lease-purchase
   agreement, our view is that such a lease-purchase agreement that provided for an

8 Dispose Of, Webster's New World College Dictionary (5th ed. 2020).
9 Lease, Black's Law Dictionary (11th ed. 2019)

option to purchase a school district building would implicate the provisions of H.
Sub. for S.B. 113 at the time the purchase option was exercised, provided this option
was exercised after the effective date of the statute and provided the statute as
currently written was still in effect. If the lease-purchase agreement contained a
mandatory purchase provision, then it would be subject to the provisions of H. Sub.
for S.B. 113 at the time the lease-purchase agreement was signed.
5. Does the phrase "dispose of a school district building" in K.S.A. 2023
Supp. 72-1439 include gifting a building?"
Since gifting, like selling, results in the conclusive transfer of title to another entity,
gifting a school district building to another person or entity would only be allowed
after following the provisions of H. Sub. for S.B. 113.
6. In the event a school district intends to dispose of a building by
selling it, and the procedures set forth in K.S.A. 2023 Supp. 72-1439
and K.S.A. 2023 Supp. 72-3216(d) are thus implicated, does the
statutory procedure contemplate that the state acquire the building
for free or does the statute contemplate a "right of first refusal"
process where the state agency would acquire the building by paying
the amount that another buyer is ready, willing, and able to pay for
the building or yet some other amount?"
Unfortunately, this issue is unaddressed in the legislation. We note that the Kansas
Legislative Research Department's summary of H. Sub. for S.B. 113 describes the
provisions allowing the state to acquire a school district building as a "right of first
refusal." We agree with this interpretation, as it would prevent a school district
from suffering an unanticipated loss from the state's acquisition of the building.
The lack of specificity in the statute leaves open the possibility that the legislature
could merely set its own purchase price (or even take the building for free) at the
time it passes its resolution. School districts are ultimately creatures of the State
itself, not independent entities; and the legislature can deal with them as it
wishes.10

10 Tecumseh Sch. Dist. No. 7 v. Throckmorton, 195 Kan. 144, 145-46, 403 P.2d 102 (1965); see also

Kan. Const. art. 6, § 1 (granting legislature authority to "maintain[] public schools . . . which may be
organized and changed in such manner as may be provided by law"); Burk v. Unified Sch. Dist. No.
329, 646 F. Supp. 1557, 1564 (D. Kan. 1986) ("A school district is an arm of the state 'existing only as
a creature of the legislature to operate as a political subdivision of the state.'" (quoting Wichita Pub.
Schs. Empls. Union v. Smith, 194 Kan. 2, 4, 397 P.2d 357 (1964)); Att'y Gen. Op. 81-216 (school
district has no authority beyond that expressly or impliedly granted by legislature in statute).

However, school districts do not receive all of their funding from state monies.11
Allowing the state to acquire a school building that was paid for with local funds
strikes us as inequitable and likely unintended. It seems to us that if the legislature
wanted to take such a drastic route, i.e., taking school district property without
compensation, or merely at whatever price the legislature felt like paying, the
statute would have said so explicitly.12
Thus, should a school district decide to dispose of a school district building at a
particular price, and the legislature timely passes a concurrent resolution
authorizing a state agency to acquire the property, the state agency would have to
acquire the property at the same price the willing buyer had offered to purchase the
property. However, should a school district decide to gift a school district building,
assuming the legislature timely acts, the state agency could also receive the school
district building as a gift.
Sincerely,

                                            /s/ Kris W. Kobach

                                            Kris W. Kobach
                                            Attorney General

                                            /s/ Anthony J. Powell

                                            Anthony J. Powell
                                            Solicitor General

11 See generally K.S.A. 72-5143 (local option budget authority); K.S.A. 72-5457 (school district

bonding authority).
12 Cf. Biden v. Nebraska, 143 S.Ct. 2335, 2378-84 (Barrett, J., concurring) (discussing similar

principle with regard to the federal "major questions doctrine").