Disney (DIS) to Lose Self-Governing Status in Florida

Bill passes Florida legislature handily, awaits governor's signature

The Walt Disney Company (DIS) is set to lose the self-governing status enjoyed by its Walt Disney World theme park in Orlando, Florida. Pursuant to a 1967 Florida statute, Disney can collect taxes and provides emergency services on its roughly 25,000 acre (39 square mile) footprint in the Orlando area. It also can build new structures and pay impact fees for this construction without the approval of a local planning commission.

The bill eliminating Disney's self-governing status awaits signature by Governor Ron DeSantis after passing the Florida Senate by a vote of 23-16 on April 20, 2022, and the Florida House by a vote of 68-38 on April 21. The bill will eliminate Disney's special district, called the Reedy Creek Improvement District, with an effective date of June 1, 2023.

Key Takeaways

  • The Florida legislature has voted to strip Disney (DIS) of its self-governing status in that state.
  • The bill awaits the signature of Governor Ron DeSantis, who supports it.
  • The bill comes in the wake of a political fight between Disney and the governor over a bill blocking gender identity and sexual orientation instruction for younger children.
  • Disney's special exemption to a law about big tech censorship also is about to be withdrawn.

Political Issues

The bill (FL SB 4-C), supported by DeSantis, was passed after Disney officials criticized legislation that he recently signed into law that would prevent classroom instruction on gender identity and sexual orientation in kindergarten through the third grade. DeSantis had stated in recent weeks that he does not "support special privileges in law just because a company is powerful."

The Florida House, also on April 21, delivered a 70-38 vote in favor of a bill (FL SB 6-C) that would remove Disney's exemption in a 2021 law about big tech censorship. This bill previously passed the Florida Senate and thus also awaits DeSantis' signature. The exemption also applies to other theme parks in Florida and is being challenged in federal court.

Potential Impacts

Florida Republicans contend that Reedy Creek grants Disney too much power compared to other theme parks in Florida, including the authority to construct its own nuclear plant. Disney is Florida's largest employer, and eliminating its special district could lead to four central Florida municipalities assuming some $1 billion of the company’s debt and control of its services such as fire departments and water.

The larger bill that will strip Disney of its special district status (FL SB 4-C) affects five other special districts as well. By giving Disney a year's advance notice, Republicans say that the company could return to the legislature with a new plan to run its operations.

Article Sources
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  1. NBC News. "Florida House Passes Bill to Dissolve Disney's Special Self-Governing Status."

  2. Politico. "Florida Lawmakers Vote to Dismantle Disney's Special Privileges Over 'Don't Say Gay'."

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