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(CNN) --
The Florida legislature approved a bill Thursday that would eliminate the special legal setup that allows Disney to operate as an independent government at its Orlando-area theme parks.
The move comes as Florida's Republican-led administration singled out Disney — the state's largest single-site employer — for its opposition to a law restricting LGBTQ education in schools.
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However, the removal of Disney's special purpose district — known as Reedy Creek — could have far greater implications for the company and state taxpayers.
Here's a look at the history of Reedy Creek, why it has become a focus of this special session, and what removing its special status would mean for Disney and Florida taxpayers.
What is Reedy Creek?
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Reedy Creek is the name of the Reedy Creek Improvement District, a special purpose district created by state law in May 1967 giving The Walt Disney Company government control over the land in and around its central Florida theme parks.
The district is located southwest of Orlando.
At the time, the land was little more than uninhabited grass and swampland, according to the Reedy Creek website.
With the special purpose district, Disney took on the responsibility of providing municipal services such as power, water, roads, and fire protection, but also freed itself from dealing with legal red tape or paying taxes for services that benefited the general public.
According to Richard Foglesong, author of the book "Married to the Mouse: Walt Disney World and Orlando," Disney had been in trouble with the government of Anaheim, California, over its Disneyland park, completed a decade earlier.
With those issues in mind, Disney pushed through a special-purpose district in Florida that would give the company the ability to self-govern.
In exchange, Florida became the base of operations for Disney World and its dozens of tourists.
"Florida needed Disney more than Disney needed Florida," Foglesong told CNN.
Today, the Reedy Creek Special District encompasses about 25,000 acres in Orange and Osceola counties, including four theme parks, two water parks, a sports complex, 175 miles of road, 65 miles of waterway, and the cities of Bay Lake. and Lake Buena Vista, says its website.
"The cooperation and commitment between the Reedy Creek Improvement District and the Walt Disney World Company is as strong today as it was when the District was created in 1967," states the Reedy Creek website.
"The result is an example of how a working partnership between business and government can be successful for both parties."
Why is this a problem now?
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The bill passed by the Florida legislature is a form of political retaliation against Disney for its criticism of the "Parental Rights in Education" bill, which critics have dubbed the "Don't Say Bill". Gay".
That state legislation, enacted last month, prohibits schools from teaching children about sexual orientation or gender identity "in a way that is not age or developmentally appropriate."
The legislation also allows parents to file lawsuits against a school district for possible violations.
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The vague language of the law and the threat of lawsuits by parents have raised fears that it will lead to discrimination against LGBTQ students and have a chilling effect on classroom discussion.
However, Gov. Ron DeSantis's spokeswoman, Christina Pushaw, said the legislation would protect children from "
groomers
," a term used to refer to pedophiles, describing those who oppose the law as "probably
groomers
."
The CEO of Disney, which employs 75,000 people in Florida, initially refused to condemn the law but changed course after facing criticism from employees.
A company spokesman issued a statement last month saying his goal is to have the law struck down by the legislature or struck down in court.
"Florida's bill HB 1557, also known as the 'Don't Say Gay' bill, should never have been passed and should never have been signed into law," the statement said.
The company said it was "dedicated to defending the rights and safety of LGBTQ+ members of the Disney family, as well as the LGBTQ+ community in Florida and across the country."
Earlier this week, DeSantis challenged lawmakers to unravel the 55-year-old Reedy Creek Improvement Act as part of a special legislative session.
Disney has not issued a statement on the matter.
What does the bill do?
(Tristan Wheelock/Bloomberg)
The bill declares that any special district created before November 1968 will be dissolved on June 1, 2023. The text is just over a page long and offers few details.
What that means for Disney and for Florida taxpayers is not entirely clear.
Republican sponsors were unable to provide detailed answers to questions about the financial and legal implications of the legislation during discussions Thursday.
They suggested the legislature could work out the logistics of dissolution over the next year.
Dissolution of the special district would mean that Orange and Osceola counties would assume the assets and liabilities of Reedy Creek.
That could lead to higher taxes for those residents to pay Reedy Creek's debts and take care of roads, policing, fire protection, waste management and more.
State Sen. Gary Farmer, a Democrat, was one of several Democratic lawmakers who criticized the bill for what he called "shoot first, ask questions later."
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"Reedy Creek's debt service alone is over a billion dollars," Farmer said Wednesday.
“This bill does not foresee how this debt service will be assumed.
Local government entities must collect the assets and liabilities of any special district that dissolves.”
Still, the bill passed the Florida Senate on Wednesday by a vote of 23-16 and the House on Thursday by a vote of 70-38. It now goes to DeSantis' desk for his signature.
Thursday's vote occurred without any final debate and came as several black Democratic members were staging a protest over the congressional redistricting map.
For his part, Foglesong said that the extension of the bill indicates that "there has not been much study and reflection" on the consequences of this movement.
"Somebody is still going to have to pay for the bonds that were bought to build that infrastructure. A lot of roads. Somebody is going to have to do those building inspections. It's going to take a lot of those inspectors with a lot of experience," he said. "Someone is going to have to pay for that. If that burden falls on taxpayers, that's not going to look good for Governor Desantis. This is going to sound crazy."
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