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Amid legal questions, Florida moves forward to invalidate Disney agreements

Democrats said the amendments appeared to be singling out the company for punitive treatment.
 
The Walt Disney Co. logo appears on a screen above the floor of the New York Stock Exchange in August 2017.
The Walt Disney Co. logo appears on a screen above the floor of the New York Stock Exchange in August 2017. [ Associated Press (2017) ]
Published April 19, 2023|Updated April 19, 2023

TALLAHASSEE — Florida legislators on Wednesday quickly responded to Gov. Ron DeSantis’ call to retroactively invalidate an agreement between Walt Disney World and its special taxing district, adopting amendments despite warnings that the proposal will not withstand a constitutional challenge.

The Florida State Affairs Committee and the Senate Rules Committee each added an amendment to bills regulating land use and development regulations that requires the DeSantis-appointed board overseeing all of Disney’s parks and resorts to vote on the Disney agreement that limits the authority of the governor’s new supervisors to infrastructure and taxing issues.

The move came on the same day the Central Florida Tourism Oversight District Board of Supervisors met and announced a series of proposals that will require the governing board whose revenues come from Disney to raise taxes on itself.

Under the amendments added to SB 1604 and HB 439, special districts would be prohibited from complying with development agreements executed three months or less before new laws take effect that change how district board members are selected.

The amendment also would give new boards four months to review any development agreements and decide if they should be readopted.

“The Legislature sets up special districts and allows them, and therefore we should be able to change how we think some of those things need to happen as we move forward,” said Rep. Stan McClain, R-Ocala, the sponsor of the House amendment.

Is this constitutional?

But Democrats, who have for years criticized Republican lawmakers for their willingness to give Walt Disney World favorable treatment, said the amendments now appeared to be singling out the company for punitive treatment. They warned that if passed, the provision would violate the constitution.

“I’m all about corporate accountability, but this isn’t it,” said Rep. Anna Eskamani, D-Orlando. “And it continues to be a distraction for us to focus on real-life issues by continuing the Disney versus DeSantis drama.”

Sen. Shevrin Jones, D-West Park, said he worried the amendment would “set a very bad precedent” that “opens up the floodgates” for future legislatures. He said the Disney-backed district appears to have “operated within the law, and this shouldn’t be how we govern.”

Both McClain and the Senate sponsor, Sen. Blaise Ingoglia, R-Spring Hill, were asked if they could name other special districts to which the law would apply and how many would be affected. Neither could answer.

“I’m not sure how many, but I can think of one,” Ingoglia told the Senate Rules Committee, referring to the new Central Florida Tourism Oversight District.

The amendments come after DeSantis announced there would be “more to come” in his war against Disney, the largest single-site employer in the United States with 75,000 workers and an economic linchpin of the state’s tourism industry.

DeSantis’ first effort didn’t work

Last year, DeSantis wanted to dissolve the Reedy Creek Improvement District, the special taxing district created in 1967 to pay for municipal services to the 39-square-mile area where Disney built its theme parks, hotels and resort areas at a time when the nearest urban development was more than 16 miles away.

After Disney officials voiced opposition to the Parental Rights in Education Bill, also known as the Don’t Say Gay bill, which prohibited classroom instruction on sexual orientation and gender identity issues in certain grades, legislators rushed through a bill to dissolve the district. But, after it became law, Disney quietly pointed to another state law that requires the state to pay for any outstanding debts before a special district is dissolved and, if the district were to be dismantled as the governor wanted, it would cost Florida taxpayers nearly $1 billion.

Lawmakers returned in special session in February, repealed the law dissolving the district and replaced it with a plan to allow the governor to appoint the district’s governing board. But, before that law could take effect, Disney outmaneuvered the state by adopting a development agreement and restrictive covenants that undermined the authority of the DeSantis-appointed board.

Invalidating those agreements, however, is expected to be a lengthy legal fight. At its meeting on Wednesday, the Central Florida Tourism Oversight District board voted to void the agreements with no discussion.

But because state and federal contract law may create legal obstacles to that decision, the legislation attempts to help them achieve the goal.

In the House, McClain had difficulty explaining the amendment under questioning from Eskamani.

“The Florida Constitution says we can’t pass retroactive laws impairing contracts. Can you explain, how is your amendment constitutional?” she asked.

“Obviously, this would be a new law,” McClain answered.

He denied it would be retroactive to any special district. “The point here is the board would have a four-month opportunity to go back and look at any agreements that had been done previous to them becoming board members,” he said.

Eskamani quoted from the Florida Constitution, which states in Article 1, Section 10 that “No bill of attainder, ex post facto law or law impairing the obligation of contracts shall be passed.”

She said it appears that the amendment was a violation of contract law and other constitutional rights.

The proposal gives the district board the ability to withdraw from a contractual agreement “by creating what would be a new law,” she argued. The new law “forbids an independent special district from complying with the terms of any development agreement — if that development agreement was struck within three months before Legislature passed a law that changes how the special districts governing board is selected.”

“I really encourage folks to put this to bed,” Eskamani said, quoting the Disney movie “Frozen.” “Let it go, as the musical says.”

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