Kansas Attorney General Opinion 1992-020

ROBERT T. STEPHAN
ATTORNEY GENERAL
February 12, 1992
ATTORNEY GENERAL OPINION 92- 20
J. Stanley Hill
Counselor for Reno County
Education Cooperative #610
Suite 802, First National Center
P.O. Box 2027
Hutchinson, Kansas 67504-2027
Re: Taxation--Property Exempt from Taxation--Property
Acquired by School District Education Cooperatives
Pursuant to Lease Purchase Agreement
Synopsis: The property of a cooperative created pursuant to
K.S.A. 1991 Supp. 72-8230 is not entitled to a
property tax exemption under K.S.A. 79-201 First
or K.S.A. 79-201a Second during the term of a
lease purchase agreement. Cited herein: K.S.A.
10-1101; 12-105a; 12-1218; 12-1679; 17-2339;
31 - 132; 36-501; K.S.A. 1991 Supp. 65-6113; K.S.A.
68-589; 68-2101; K.S.A. 1991 Supp. 72-8230;
K.S.A. 75-1117; 75-3038; 79-201 First; 79-201a
Second.
*
Dear Mr. Hill:
As attorney for Reno county education cooperative #610, you
request our opinion regarding the tax status of property
acquired by that entity. Specifically you inquire whether
property acquired pursuant to a lease purchase agreement is
exempt from property taxes pursuant to K.S.A. 79-201 First
or K.S.A. 79-201a Second.
K.S.A. 79-201 First provides in part:

"The following described property, to the
extent herein specified, shall be and is
hereby exempt from all property or ad
valorem taxes levied under the laws of the
state of Kansas:
"First . . . all buildings used
exclusively by school districts organized
under the laws of this state. . . ."
Reno county education cooperative #610 was created pursuant
to K.S.A. 72-8230. This provision authorizes the boards of
education of two or more school districts to enter into
cooperative agreements to jointly provide special education
and other services. In Attorney General Opinion No. 91-4 we
stated:
"[E]ntities created pursuant to K.S.A.
1990 Supp. 72-8230 are not school
districts. Rather, they are entities
created pursuant to the authority of
school districts. While they perform many
of the functions of a school district and
act on behalf of school districts, they
were not created in the same manner as
school districts nor do they have the
broad authority granted to such districts."
Thus, since Reno county education cooperative #610 is not a
school district, the above-quoted exemption would not apply to
it.
K.S.A. 79-201 Second provides in part:
"The following described property, to the
extent herein specified, shall be exempt
from all property or ad valorem taxes
levied under the laws of the state of
Kansas:
"Second. All property used exclusively
by the state or any municipality or
political subdivision of the state. All
property owned, being acquired pursuant to
a lease-purchase agreement or operated by
the state or any municipality or political

subdivision of the state which is used or
is to be used for any governmental or
proprietary function and for which bonds
may be issued or taxes levied to finance
the same, shall be considered to be 'used
exclusively' by the state, municipality or
political subdivision for the purposes of
this section."
In Attorney General Opinion No. 91-4, we concluded that " a
school district service center created pursuant to the
authority set forth at K.S.A. 12-2901 et seq. and K.S.A.
1990 Supp. 72-8230 does not qualify as a political or taxing
subdivision of the state." Similarly, we do not believe
cooperatives created under K.S.A. 1991 Supp. 72-8230 are
political subdivisions of the state. The question remains
whether such a cooperative is a municipality for purposes of
the K.S.A. 79-201a Second tax exemption.
The Kansas Supreme Court has established the following rules
and legal principles to be used when construing a statute
exempting property from ad valorem taxes:
"'Whether particular property is exempt
from ad valorem taxation is a question of
law if the facts are agreed upon. T-Bone
Feeders, Inc. v. Martin, 236 Kan. 641,
645, 693 P.2d 1187 (1985); [citation
omitted]. Taxation is the rule, and
exemption from taxation the exception
under the Kansas Constitution and
statutes. T-Bone Feeders, Inc. v.
Martin, 236 Kan. at 645; City of
Arkansas City v. Board of County
Commissioners, 197 Kan. 728, Syl. f
1, 420 P.2d 1016 (1966); [citations
omitted]. Constitution and statutory
provisions exempting property from
taxation are to be strictly construed
against the one claiming exemption, and
all doubts are to be resolved against
exemption. In re Application of Int'l
Bhd. of Boilermakers, 242 Kan. 302,
305, 747 P.2d 781 (1987); [citations
omitted]. Where the language of a
statute, in particular, is relied upon as
creating an exemption from taxation, it
must be strictly construed against the

party claiming the exemption, and he must
bring himself clearly within the
exemption. Meadowlark Hill, Inc. v.
Kearns, 211 Kan. 35, 41 (505 P.2d
1127 (1973); [citation omitted]. Strict
construction, however, does not warrant
unreasonable construction. Trustees of
The United Methodist Church v.
Cogswell, 205 Kan. 847, Sy. T 2 [,
473 P.2d 1 (1970)].'"
Attorney General Opinion No. 91-4 concluded that an entity
created by two or more school districts pursuant to K.S.A.
1990 Supp. 72-8230 was a municipality for purposes of the
tort claims act. However, the tort claims act specifically
defines municipality to include "any agency, authority,
institution or other instrumentality" of a school district.
There is no such definition of municipality for purposes of
K.S.A. 79-201a Second. The term municipality is defined
broadly enough in some statutes to arguably include entities
such as the one in question. See K.S.A. 75-1117; 75-3038;
12-105a. Other statutory definitions of the term municipality
would not include entities of this sort. See K.S.A.
10-1101; 12-1218; 12-1679; 17-2339; 31-132; 36-501; 68-589;
68-2101; K.S.A. 1991 Supp. 65-6113. Since it is not clear
whether Reno county education cooperative #610 is a
municipality for purposes of K.S.A. 79-201a Second and all
doubts must be resolved against exemption, we must conclude
that the cooperative is not entitled to exemption under K.S.A.
79-201a Second for property it acquires pursuant to a lease
purchase agreement.
Very truly yours,
Robert T. Stephan
Attorney General
JuleneL.Miller
Deputy Attorney General
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