Can an Arkansas school district use its buses to take students to a summer youth program run by an outside organization?

Plain-English summary

Representative Carlton Wing asked four questions about school district use of school buses for purposes beyond regular transportation to and from school. The triggering scenario was a summer youth program run by an outside entity. He asked: can the district use its buses to take students to that program; does it matter if some of the kids being transported aren't district students; under what circumstances generally can buses be used for non-school-day purposes; and would non-school use cause the buses to lose their tax exemption under Ark. Code Ann. § 6-19-112?

Attorney General Leslie Rutledge answered Question 1 with a qualified "likely yes." School boards have broad discretion under Ark. Code Ann. § 6-13-620 to do what they deem "necessary" for "a general, suitable and efficient system of free public schools." The Arkansas Supreme Court in Gray v. Mitchell defined "necessary" as "convenient, useful, appropriate, suitable, proper or conducive to the proper maintenance of the schools." Courts will not interfere absent abuse of discretion (Safferstone v. Tucker). On the facts of a typical summer-program-run-by-an-outside-entity scenario, the AG considered the answer to be yes.

Questions 2, 3, and 4 the AG declined to address in the abstract, treating the answers as fact-dependent. Some flags she did raise:

• Transporting non-district students (Question 2) is not impermissible per se, but Ark. Code Ann. § 6-19-102 requires Department of Education consent if buses are used to transport pupils in another district. Public School Choice Act transfers may depend on a written agreement under § 6-18-1904. Free transportation of private school students could raise Article 14 constitutional concerns.

• Tax exemption (Question 4) is governed by Ark. Code Ann. § 6-19-112(a) (motor vehicles owned and operated by public school districts and "used exclusively for school purposes" are exempt) and Ark. Const. art. 16, § 5 (which exempts "school buildings and apparatus … used exclusively for school purposes"). The "exclusively" test, per Arkansas Conference of Seventh Day Adventists v. Benton County, looks at the property's primary use. A secondary or incidental use, even if for a non-exempt purpose, does not defeat the exemption if the primary use is exempt. The local tax assessor decides this on the facts.

Currency note

This opinion was issued in 2018. 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 current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Arkansas school districts have wide statutory authority to determine what counts as a "necessary" school activity. Ark. Code Ann. § 6-13-620 lists the powers and duties of school district boards, including entering into contracts for goods and services necessary to operate the district, ensuring district properties are managed for the district's benefit, and "[doing] all other things necessary and lawful for the conduct of efficient free public schools."

The constitutional anchor is Ark. Const. art. 14, § 1, which directs that "the State shall ever maintain a general, suitable and efficient system of free public schools." Ark. Const. art. 14, § 2 prohibits using public school money or property "for any other than for the respective purposes to which it belongs," and § 3 limits school taxes to school maintenance and operations. Together these provisions create the boundary: school resources can be used for things related to the educational mission, but not for non-school purposes.

The tax exemption framework is parallel. Ark. Code Ann. § 6-19-112(a) exempts "[a]ll motor vehicles owned and operated by public school districts in Arkansas and used exclusively for school purposes" from state, county, and municipal taxation. Ark. Const. art. 16, § 5 exempts "school buildings and apparatus … used exclusively for school purposes." The phrase "used exclusively" is key: it does not require that the property never be used for any other purpose, only that the primary use be a school purpose.

Why "primary use" matters more than the literal word "exclusively"

The Arkansas Supreme Court has long applied a primary-use test to "exclusively used" tax exemptions. Arkansas Conference of Seventh Day Adventists v. Benton County put it directly: "If the primary use is one allowed under the exemption, a secondary or incidental use, even if for a purpose not within the exemption, is irrelevant." Earlier cases like Burgess v. Four States Memorial Hospital and Missouri Pacific Hospital Ass'n v. Pulaski County developed the same rule for hospital property.

For school buses, the primary use is school-day transportation. If a district lends or uses buses occasionally for an outside summer program tied to its students, that probably remains an incidental use that does not defeat the exemption. But if the buses are used substantially for non-district commercial purposes, the calculus shifts. The local tax assessor decides this on the specific record.

Important practical considerations

The opinion flagged several practical-but-not-determinative issues:

• Ethics constraints (Ark. Code Ann. §§ 6-24-101 et seq.). School board members, administrators, and employees must disclose any interest in transactions and cannot accept gratuities or offers of employment in connection with a public educational entity's contract. If the outside summer program is connected to a board member or employee, those rules apply.

• Interdistrict bus use (§ 6-19-102). A district's buses cannot be used to transport pupils in another district without Department of Education consent. So if the summer program draws students from multiple districts, the consent requirement is in play.

• Public School Choice transfers (§ 6-18-1904(d)(1), (2)). When a student transfers to a nonresident district, transportation responsibility falls on the student or parent unless a written agreement provides otherwise.

• Article 14 limits. Free transportation of private school students likely raises constitutional concerns under Ark. Const. art. 14, §§ 2 and 3, which restrict the use of school money and property to school purposes.

Common questions

Can a school district use its buses to take students to a summer program run by someone else?

The opinion concluded that yes, this is likely permissible, because school boards have broad statutory discretion to determine what activities serve the educational mission. The answer is fact-dependent, however; an arbitrary decision could be challenged.

What if some kids on the bus aren't from this district?

The answer turns on facts. Transporting students from another district typically requires Department of Education consent under § 6-19-102. Transporting private school students free of charge could violate Article 14's restrictions on use of school property.

Does using a school bus for non-school purposes destroy its tax exemption?

Not necessarily. The "used exclusively" standard in § 6-19-112(a) and Ark. Const. art. 16, § 5 turns on primary use. A secondary or incidental non-school use does not defeat the exemption if the primary use remains transporting students. The local tax assessor makes this determination on the facts.

Who decides whether a particular bus use is "primary" or "incidental"?

The local tax assessor in the first instance, under Ark. Code Ann. § 26-26-1001, subject to review under §§ 26-27-317 and -318. The board cannot certify its own bus tax exemption unilaterally.

Can a school district lease its buses to a private nonprofit?

The opinion notes there is "no absolute bar against the leasing of school property to private persons or entities" (citing prior AG opinions including 2006-164 and 90-155). But the lease must comply with Article 14's limits on diversion of school property to non-school purposes, and must not be at below-market rates that effectively transfer school resources for non-school benefit.

Citations

Ark. Code Ann. §§ 6-13-102, 6-13-620, 6-18-1904(d)(1), (2), 6-19-102, 6-19-112(a), 6-24-101 et seq., 6-24-112(a), 26-26-1001, 26-27-317, -318; Ark. Const. art. 14, §§ 1, 2, 3, art. 16, § 5; Gray v. Mitchell, 373 Ark. 560, 285 S.W.3d 222 (2008); Bd. of Educ. of Lonoke County v. Lonoke County, 181 Ark. 1046, 29 S.W.2d 268 (1930); Safferstone v. Tucker, 235 Ark. 70, 357 S.W.2d 3 (1962); Pugsley v. Sellmeyer, 158 Ark. 247, 250 S.W. 538 (1923); Springdale Board of Education v. Bowman, 294 Ark. 66, 740 S.W.2d 909 (1987); Leola School District v. McMahan, 289 Ark. 496, 712 S.W.2d 903 (1986); Evans v. McKinley, 234 Ark. 465, 352 S.W.2d 829 (1962); Isgrig v. Srygley, 210 Ark. 580, 197 S.W.2d 39 (1946); Burgess v. Four States Memorial Hospital, 250 Ark. 485, 465 S.W.2d 696 (1971); Missouri Pacific Hospital Ass'n v. Pulaski County, 211 Ark. 9, 100 S.W.2d 329 (1947); Arkansas Conference of Seventh Day Adventists v. Benton County, 304 Ark. 95, 800 S.W.2d 426 (1990); prior AG opinions Ops. Att'y Gen. 2018-030, 2010-134, 2006-164, 90-155.

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2018-078
October 22, 2018
The Honorable Carlton Wing
State Representative
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
2513 McCain Boulevard, Suite 208
North Little Rock, AR 72116-7606
Dear Representative Wing:

This is in response to your request for an opinion on the following questions:

1) May a school district use its school buses to provide transportation for its students to attend a summer youth program operated by an outside entity?

2) Would your answer to Question 1 be different if some of the children being transported to the summer youth program operated by an outside entity are not students of the school district?

3) Under what circumstances may a school district use its school buses for purposes other than transporting its students to and from school and extracurricular activities?

4) If a school district uses its school buses for a purpose other than transporting its students to and from school and extracurricular activities, such as the purpose under Question 1 or 2, will the use of the school buses in that manner cause a school district to lose its exemption from taxation under § 6-19-112 for those school buses?

RESPONSE

The answer to your first question is likely "yes," but the factual nature of the question prevents thorough analysis in the abstract. Your remaining questions cannot be satisfactorily addressed in the abstract because the answers will likely be affected by a number of factual variables.

DISCUSSION

Question 1: May a school district use its school buses to provide transportation for its students to attend a summer youth program operated by an outside entity?

I have no specific information regarding the referenced program or its operation, and consequently, I will focus my analysis on the relevant legal principles surrounding your question. Generally, the boards of directors of local school districts have broad discretion concerning the transportation of students. They also exercise considerable discretion in pursuing their statutory powers and duties to provide "no less than a general, suitable and efficient system of free public schools." Their specific powers and duties in this regard include "[e]ntering into contracts for goods and services necessary to operate the school district," "[ensuring] that … all properties belonging to the district are managed and maintained for the benefits of the school district," and "[doing] all other things necessary and lawful for the conduct of efficient free public schools in the school district."

The Arkansas Supreme Court has clarified the scope of what may be deemed "necessary" in a system of "free public schools," in terms of the constitutional restrictions upon school district expenditures. In Gray v. Mitchell, the Court defined the term "necessary," and the alternative coinage "absolutely necessary," which it sometimes uses in its pronouncements on this subject, as meaning "convenient, useful, appropriate, suitable, proper or conducive to the proper maintenance of the schools."

As a guide to the practical application of this standard, the Court observed that "exactly which expenditures should be made to benefit a school district is a matter for the School Board to determine." Indeed, the Court has long interpreted Ark. Code Ann. § 6-13-620 (defining a school district board's powers) as allowing school boards wide latitude in governing their districts. As stated in Safferstone v. Tucker, "'[c]ourts will not interfere in matters of detail and government of schools, unless the officers refuse to perform a clear, plain duty, or unless they unreasonably and arbitrarily exercise the discretionary authority conferred upon them.'"

In sum, absent a showing that the school board abused its discretion to determine the necessity of the transportation and the program's operation by an "outside entity," I believe the answer to your first question is likely "yes." Because this ultimately requires factual determinations, it is impossible to provide a more thorough analysis in the abstract.

Question 2: Would your answer to Question 1 be different if some of the children being transported to the summer youth program operated by an outside entity are not students of the school district?

Depending on the factual circumstances, the answer might be different. A district's transportation of non-district students is not impermissible per se. But, for instance, the consent of the state Department of Education may be required if the district is transporting students in another district. Or in the case of a student transfer under the Public School Choice Act, the answer may depend upon the existence of a "written agreement" to provide the transportation.

As another example, it may be important to know whether the students who are not students of the district are private school students and whether such students are being transported free-of-charge. If the district is providing transportation to private school students, and particularly if such transportation is provided free-of-charge, this likely raises constitutional issues because, as noted above, Article 14 of the Arkansas Constitution prohibits the diversion of school property or funds to non-school purposes. But whether the school district's action is a legally objectionable expenditure of school funds or use of school property can only be definitively decided with reference to all the surrounding facts and circumstances.

Question 3: Under what circumstances may a school district use its school buses for purposes other than transporting its students to and from school and extracurricular activities?

I believe it is clear from my responses to your first two questions that this question cannot be satisfactorily addressed in the abstract. The answer may be affected by a number of factual variables, and I cannot speculate further in this regard.

Question 4: If a school district uses its school buses for a purpose other than transporting its students to and from school and extracurricular activities, such as the purpose under Question 1 or 2, will the use of the school buses in that manner cause a school district to lose its exemption from taxation under § 6-19-112 for those school buses?

The statute you have cited provides in pertinent part:

All motor vehicles owned and operated by public school districts in Arkansas and used exclusively for school purposes shall be exempt from taxation by the state, county, or municipality.

This statute echoes Article 16, section 5 of the Arkansas Constitution, which controls exemption from ad valorem taxes. This constitutional provision, in relevant part, exempts "school buildings and apparatus; libraries and grounds used exclusively for school purposes."

Questions concerning the tax-exempt status of particular property cannot be addressed in the hypothetical because they are necessarily fact-intensive. I, therefore, cannot offer an opinion on the tax-exempt status of the particular school buses at issue in your question. Additionally, the authority to determine whether property is being used "exclusively for school purposes" lies in the first instance with the local tax assessor, subject to review as provided by law. The assessor must decide the matter on a case-by-case basis following a review of all pertinent facts.

As for the general, guiding legal framework, however, I can state that the most pertinent question concerning a property's taxable status is the use to which the property is put. As stated by the Arkansas Supreme Court in Arkansas Conference of Seventh Day Adventists v. Benton County, with respect to the exemption for property "used exclusively for school purposes":

Arkansas limits its exemption to property 'exclusively' used for school purposes…. To determine whether property is used 'exclusively' for a particular purpose, generally it is necessary to look to the primary use to which the property is put and not to secondary use. [Citation omitted.] If the primary use is one allowed under the exemption, a secondary or incidental use, even if for a purpose not within the exemption, is irrelevant.

CONCLUSION

In sum, absent a showing that the school board abused its discretion to determine the necessity of the transportation and the program's operation by an "outside entity," the answer to your first question is likely "yes," in my opinion. Your remaining questions cannot be satisfactorily addressed in the abstract because the answers will undoubtedly be affected by a number of factual variables.

Sincerely,
LESLIE RUTLEDGE
Attorney General