Could a Maryland county school board lease public school land to a private nonprofit school serving special-education students, like the Harbour School?

Plain-English summary

Members of the Anne Arundel County Council asked the county Board of Education to consider a long-term lease of a parcel of board-owned property to the Harbour School, a nonprofit, non-public educational institution fully accredited by the Maryland State Department of Education to serve special-education students. More than half of the Harbour School's roughly 47 students at the time received full funding from the Anne Arundel County public school system, and all but four or five of them were county residents; the proposed site sat next to the county's own Central Special School, which also served handicapped students, raising the possibility that the two campuses could share facilities and programs. Earlier that year the office had expressed doubt that a local board could let a private day care provider build its own building on public school property, so the acting State Superintendent of Schools asked whether the same doubt applied to a lease supporting the Harbour School's special-education mission.

The opinion concluded that the Anne Arundel County Board of Education could lease the property to the Harbour School if the board reasonably determined that the school's expansion on the leased land would produce direct benefits to the board in carrying out its educational responsibilities, and if the Harbour School's activities kept providing those benefits throughout the lease term. The analysis rested on the local board's role as trustee of school property under ED §4-113(a)(1), which holds property granted or devised for a particular school "in trust" for that school system's benefit. A trustee may lease trust property when the lease is reasonable given the trust's purposes and the property's best uses, drawing on the Restatement (Second) of Trusts and Sweeney v. Hagerstown Trust Co. Because local boards also carried a special statutory obligation under ED §8-402 to provide a free educational program to handicapped children, and ED §8-409 let boards place a child in a non-public program when the public system could not meet that child's needs, the opinion reasoned that leasing property to a school serving that same population could be consistent with, rather than a breach of, the board's trust duties. The opinion conditioned its conclusion on the lease being terminable whenever the arrangement stopped serving the school system's needs and on the lease not amounting to a full disposition of the property, since only the county governing body, acting on the local board's determination and with State Superintendent approval that the land was no longer needed for school purposes, could dispose of school property outright under ED §4-114(c).

Currency note

This opinion was issued in 1991. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify the current text of ED §4-113, ED §4-114, ED §8-402, ED §8-409, and any newer statutory or regulatory guidance on school property leases and special-education placements before relying on any specific rule described here.

Common questions

Could a Maryland school board lease public school land to a private nonprofit special-education school? According to this 1991 opinion, yes, so long as the board reasonably determined that the arrangement would produce direct benefits to the board in carrying out its educational responsibilities, and the private school's use of the property kept providing those benefits for the life of the lease.

Did leasing school property to a private institution count as giving away public school land? No, according to the opinion. It distinguished a lease from a full disposition of property, noting that only the county governing body, acting on the local board's determination and with the State Superintendent's approval that the land was no longer needed for school purposes, could dispose of school property outright under ED §4-114(c). A lease conditioned on continued benefit to the school system was not treated as that kind of disposition.

Did this opinion apply to any private institution a school board wanted to partner with? No. The opinion limited its conclusion to the circumstances presented, involving a nonprofit institution accredited for special education and serving a student population substantially drawn from and funded by the county's own public school system. It expressly said it was not addressing whether the analysis would change if the institution operated for profit or if competing private institutions in a county sought similar arrangements.

Background and statutory framework

The Board of Education of Anne Arundel County had been asked by members of the county council to consider a long-term lease of board property to the Harbour School, a non-public, non-profit educational institution fully accredited by the Maryland State Department of Education for providing services to special-education students. More than half of the Harbour School's students at the time received full funding from the Anne Arundel County public school system, and all but four or five of the 47 students then enrolled were county residents (Howard County had funded one additional student, and other Maryland counties were considering placing and funding students there as well). The proposed lease site sat next to the county's Central Special School, which also served handicapped students, and the opinion noted the potential for shared facilities and cooperative programs between the two. Earlier the same year, the office had expressed doubt that a local board had authority to let a private day care provider construct a building for its own use on public school property, 76 Opinions of the Attorney General 144 (1991), and had suggested the General Assembly supply an explicit grant of authority, which it later did, Chapter 26 of the Laws of Maryland 1991. The acting State Superintendent asked whether the same reasoning barred a lease supporting the Harbour School's special-education mission.

Property granted, conveyed, devised, or bequeathed for the use of a particular public school or school system is held "in trust" by the local board for that school or system's benefit, ED §4-113(a)(1), and local boards have broad authority under ED §§4-101 and 4-107 to operate the school system, including managing school property, though a board may dispose of real property only if it is "no longer ... needed for school purposes," ED §4-114(c)(1). Local boards also carry a special obligation under ED §8-402 to provide a free educational program to every handicapped child, including severely handicapped children, in their districts (citing 67 Opinions of the Attorney General 163 (1982) and 62 Opinions of the Attorney General 314 (1977)), and ED §8-409 lets a board place a child in a non-public program when the public system cannot meet that child's needs, reflecting a legislative sanction for public-private cooperation in educating handicapped children.

Applying general trust-law principles, the opinion reasoned that a trustee may lease trust property where the lease is reasonable in light of "the purposes of the trust" and "the nature of the property and the uses to which it may advantageously be put," Restatement (Second) of Trusts §189 comment b (1959), citing generally Sweeney v. Hagerstown Trust Co., 144 Md. 612, 620, 125 A. 522 (1924). It found that leasing school property to a private institution serving special-education students could be consistent with the local board's trust obligation, with the ultimate assessment of the relevant factors left to the local board itself; if the lease would let the board secure appropriate, lower-cost placements for a substantial number of handicapped students, the benefit to the school system would be clear. A footnote noted the opinion did not need to decide whether the lease would separately be authorized under ED §4-121, governing agreements for the cooperative or joint administration of programs with other educational institutions, since it had doubts that provision could be read as a grant of authority to lease property to private institutions at all.

The opinion conditioned its conclusion on two safeguards reflecting the board's role as trustee: the lease had to be terminable at any time the private institution's use of the property ceased to be compatible with the school system's needs, and the lease could not be tantamount to a complete disposition of the property, since only the county governing body could dispose of school property, and only after the local board determined, with the State Superintendent's approval, that the property was no longer needed for school purposes, ED §4-114(c), citing Opinion No. 89-041 (October 20, 1989) (unpublished). The opinion's conclusion was expressly limited to these circumstances, noting it did not address whether a different analysis might apply if the private institution operated for profit or if two or more competing private institutions in a county sought similar programs.

Citations and references

Statutes:

• ED §4-113(a)(1), holding property granted or devised for a particular school "in trust" for that school or school system's benefit
• ED §§4-101 and 4-107, local board authority to operate the school system, including managing school property
• ED §4-114(c)(1), permitting disposal of real property only when no longer needed for school purposes
• ED §8-402, the local board's obligation to provide a free educational program to handicapped children
• ED §8-409, authority to place a handicapped child in a non-public program when public system needs cannot be met
• ED §4-121, authority for cooperative or joint administration agreements with other educational institutions
• ED §4-114(c), requiring county governing body action, local board determination, and State Superintendent approval to dispose of school property
• Restatement (Second) of Trusts §189 comment b (1959), on a trustee's authority to lease trust property

Cases:

• Sweeney v. Hagerstown Trust Co., 144 Md. 612, 620, 125 A. 522 (1924), cited generally on a trustee's authority to lease trust property

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1991/Volume76_1991.pdf (this opinion appears at printed pages 190-193 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Education - Public Schools - Lease of Public School Property to Nonpublic School Serving Special Education Students Permissible Under Certain Conditions

July 12, 1991

Dr. Bonnie S. Copeland
Acting State Superintendent of Schools

Your predecessor. Dr. Joseph L. Shilling, requested our opinion concerning the authority of the Anne Arundel County Board of Education to lease school property to a nonpublic educational institution, the Harbour School, for the purpose of constructing a school building that will serve special education students.

For the reasons stated below, we conclude that the Anne Arundel County Board of Education may lease property to the Harbour School if (i) the board reasonably determines that the expansion of the Harbour School on the leased land would result in direct benefits to the board in carrying out its educational responsibilities and (ii) during the term of the lease, the activities of the Harbour School continue to provide such direct benefits to the board.

I

Background

The Board of Education of Anne Arundel County has been asked by members of the Anne Arundel County Council to consider a long-term lease of a parcel of board property to the Harbour School, a non-public, non-profit educational institution that is fully accredited by the Maryland State Department of Education for providing services to special education students. It is our understanding that more than half of the students attending the school receive full funding from the Anne Arundel County public school system. In fact, all but four or five of the 47 students currently enrolled are Anne Arundel County residents.1 We are told that if some of these students were not at Harbour School, they would likely have to be placed in a more expensive residential facility, probably out of state.

The site contemplated for the proposed lease is adjacent to the County's Central Special School, which also serves handicapped students. We understand that this arrangement potentially offers significant benefits to both school populations through the sharing of facilities and cooperative programs.

Earlier this year, we expressed doubt that a local board of education had the authority to permit a private day care provider to construct a building for its own use on public school property and suggested that the General Assembly be asked to provide an appropriate grant of authority. 76 Opinions of the Attorney General 144 (1991).2 You ask whether we reach the same conclusion about a lease to a private corporation to construct a building on public school property for the educational purposes set out above.

II

Analysis

"All property granted, conveyed, devised, or bequeathed for the use of a particular public school or school system ... [s]hall be held in trust" by the local board "for the benefit of [that] school or school system .... "
§4-113(a)(1) of the Education Article ("ED" Article). In carrying out this trusteeship, local boards of education have broad authority to operate the school system, including managing school property. See, e.g., ED §§4-101 and 4-107. However, a local board may dispose of real property only if it "no longer is needed for school purposes." ED
§4-114(c)(1).

1
In addition, the Howard County public school system has funded one student, and other Maryland counties are considering placing and funding students at the Harbour School next year.
2
The General Assembly has done so. See Chapter 26 of the Laws of Maryland 1991.

Local school boards also have a special obligation to provide a free educational program to each handicapped child, including each severely handicapped child, in their school districts. ED §8-402. See also 67 Opinions of the Attorney General 163 (1982); 62 Opinions of the Attorney General 314 (1977). When a handicapped child's needs cannot be provided for in a public program, the local board is authorized to place the child in a non-public program that offers appropriate special education services. ED §8-409. The General Assembly has, therefore, sanctioned public-private cooperation for the purpose of educating handicapped children whose needs cannot be met in public programs.

In our view, the lease of school property to a private non-public educational institution that provides services to special education students might well be consistent with the local board's trust obligation. In general, a trustee may lease trust property if the lease is reasonable, considering, among other factors, "the purposes of the trust" and "the nature of the property and the uses to which it may advantageously be put." Restatement (Second) of Trusts §189 comment b (1959). See generally Sweeney v. Hagerstown Trust Co., 144 Md. 612, 620, 125 A. 522 (1924).

The assessment of the pertinent factors in this context is for the local board. If, for example, the lease and consequent expansion of Harbour School would enable the local board to secure an appropriate and yet lower-cost placement for a substantial number of handicapped students, the benefit to the school system would be very clear. Should the local board determine that this or a comparable benefit would result, the lease of public school property would be consistent with the local board's trust obligation to use school property for the benefit of the public school system and to provide a free appropriate education to handicapped children.3

However, any lease should be made subject to some limitations. In order to reflect the local board's duties as trustee of school property, the lease should be terminable at any time that the private institution's use

3
In light of this conclusion, we need not decide whether the lease would be authorized under ED §4-121, which allows a county board to "enter into an agreement for the cooperative or joint administration of programs with one or more ... other educational institutions ..." We have some doubt whether this language may be construed as a grant of authority to county boards to lease public school property to private educational institutions.

of the school property ceases to be compatible with the needs of the school system. In addition, the lease may not be tantamount to a complete disposition of the public school property. Only the county governing body has been granted authority to dispose of school property, and it may do so only after the local board has determined, with approval of the State Superintendent of Schools, that the property is no longer needed for school purposes. ED §4-114(c). See also Opinion No. 89-041 (October 20, 1989) (unpublished).

III

Conclusion

In summary, it is our opinion that a local board of education may enter into a lease of school property to a private non-profit educational institution serving handicapped students, if the local board reasonably determines that the lease would result in direct benefits to the board in the conduct of its educational responsibilities.4 Authorization for the lease, however, would exist only so long as the private institution's use of the school property is consistent with the local board's obligation as trustee to hold the property for the benefit of the public school system.

J. Joseph Curran, Jr.
Attorney General

Caroline E. Emerson
Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions and Advice

4
Our conclusion is limited to these circumstances. We intimate no view whether factors not present in this case - if, for example, the educational institution were operated for profit, or if two or more private institutions in a county offered competing programs - might change the analysis in any respect.