August 3, 1995

ATTORNEY GENERAL OPINION NO. 95- 79

The Honorable Shari Weber

State Representative, 68th District

3 West Walnut

Herington, Kansas 67449

Re:	Schools--School District Finance and Quality Performance--Local Option Budget; Supplemental General Fund; Use of Funds

Synopsis:	Funds raised through adoption of a local option budget are deposited in the supplemental general fund of the unified school district and may be expended for those purposes for which expenditures from the general fund of a unified school district may be made. Payments on the lease of a privately-owned building which the unified school district intends to use for school district purposes may, pursuant to K.S.A. 1994 Supp. 72-6433, as amended by L. 1995, ch. 160, sec. 6, be made from the supplemental general fund of the unified school district. Cited herein: K.S.A. 10-1116b; 72-6405; K.S.A. 1994 Supp. 72-6409; 72-6430; 72-6433, as amended by L. 1995, ch. 160, sec. 6; K.S.A. 72-6435; 72-7034 (repealed); 72-
7064 (repealed); 72-8157; 72-8225; 72-8801; 72-8803; 72-8804.

*	*	*

Dear Representative Weber:

As representative for the sixty-eighth district, you request our opinion regarding the use of funds received by a unified school district from adoption of a local option budget. Specifically, you ask whether such funds may be used for payments on the lease of a privately-owned building which the school district intends to use as a middle school.

Funds utilized by a unified school district are raised through various assessments and may be used only for the purposes designated for the specific assessment. For example, funds received from a capital outlay levy assessed pursuant to K.S.A. 72-8801 et seq. must be deposited in the school district's capital outlay levy fund, K.S.A. 72-8803, with expenditures from such fund to be made only for those purposes set forth in K.S.A. 72-8804. See Joint Consolidated School District No. 2 v. Johnson, 163 Kan. 202, 208 (1947). Unified school districts are authorized under K.S.A. 1994 Supp. 72-6433, as amended by L. 1995, ch. 160, sec. 6, to adopt a local option budget. An ad valorem tax may then be levied on the taxable tangible property of the district, the funds raised by such levy to be deposited in the supplemental general fund of the district. K.S.A. 72-6435. Subsection (b) of K.S.A. 1994 Supp. 72-6433, as amended, establishes the purposes for which funds raised through a local option budget may be expended:

"There is hereby established in every district that adopts a local option budget a fund which shall be called the supplemental general fund. The fund shall consist of all amounts deposited therein or credited thereto according to law. Amounts in the supplemental general fund may be expended for any purpose for which expenditures from the general fund are authorized or may be transferred to the general fund of the district or to any program weighted fund or categorical fund of the district. Any unexpended and unencumbered cash balance remaining in the supplemental general fund of a district at the conclusion of any school year in which a local option budget is adopted shall be disposed of as provided in this subsection. . . ." K.S.A. 1994 Supp. 72-6433, as amended (emphasis added).

Therefore, in order to determine whether funds in the supplemental general fund may be expended for payments on the lease of a privately-owned building, it is necessary to determine whether general fund moneys may be expended for such purpose.

The board of education of a unified school district may, as lessee or lessor, enter into written contracts for the use of real or personal property or lease-purchase agreements as provided in K.S.A. 10-1116b. K.S.A. 72-8225; see also K.S.A. 72-8157. While payments for lease of a building may be made from funds in a school district's capital outlay levy fund [VI Attorney General Opinions 587 (1973)]. The board of education is not restricted to making lease payments from such fund; the board may also make such payments from the school district's general fund. See Attorney General Opinion No. 84-112. Legislative inaction is viewed as an implied endorsement of executive construction of an act when the legislature, with knowledge of the executive construction, reenacts the statute in question in the same or substantially the same terms, or makes detailed changes in related statutes. Gorup v. Kansas Public Employees Retirement System, 3 Kan. App. 2d 676, syl. para. 4 (1979). The state department of education permitted such payments under K.S.A. 72-7034 (repealed, L. 1992, ch. 280, sec. 68) and 72-7064 (repealed, L. 1992, ch. 280, sec. 68). Although the statutes were repealed upon enactment of the school district finance and quality performance act, K.S.A. 72-6405 et seq., similar provisions are set forth in K.S.A. 1994 Supp. 72-6409 and 72-6430. By enacting similar provisions, the legislature accepted the interpretation given the provisions by the state department of education. Therefore, payments on the lease of a privately-owned building which the unified school district intends to use for school purposes may be made from the general fund of the unified school district. Because such payments may be made from the general fund of a unified school district, such payments may pursuant to K.S.A. 1994 Supp. 72-6433, as amended, be made from the supplemental general fund of the unified school district.

In review, funds raised through adoption of a local option budget are deposited in the supplemental general fund of the unified school district and may be expended for those purposes for which expenditures from the general fund of a unified school district may be made. Payments on the lease of a privately-owned building which the unified school district intends to use for school district purposes may pursuant to K.S.A. 1994 Supp. 72-6433, as amended, be made from the supplemental general fund of the unified school district.

Very truly yours,

Carla J. Stovall

Attorney General of Kansas

Richard D. Smith

Assistant Attorney General

CJS:JLM:RDS:jm