Can a Florida school district use its capital outlay millage money to pay workers' compensation insurance premiums?

Plain-English summary

A lawyer for the Santa Rosa County School District asked two related questions about a specific pot of school money. Section 1011.71(5)(b) lets a district spend certain capital-outlay millage revenue on "premiums for property and casualty insurance necessary to insure school district educational and ancillary plants." The lawyer wanted to know what counts as a "premium" under that subsection and whether the district could use that money to pay its workers' compensation insurance premiums.

Attorney General Bill McCollum answered both. On the first question, since section 1011.71 does not define "premium," he borrowed the definition from the Florida Insurance Code in section 627.403, which says a premium is the consideration for insurance by whatever name called. Both statutes deal with insurance and should be read together, so a "premium" under the school statute is simply the price paid for insurance. On the second question, the answer was no. Workers' compensation is a form of casualty insurance under section 624.605, but section 1011.71(5)(b) does not authorize casualty premiums generally. It only allows them for insurance that protects the district's educational and ancillary plants, meaning the physical school buildings and facilities. Workers' compensation covers employees, not buildings, so the district could not pay those premiums from this funding source. It remained limited to using the money for casualty insurance on its physical plants.

Currency note

This opinion was issued in 2009. 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.

Common questions

Q: Could the school district pay workers' comp premiums out of its capital outlay millage?
A: No. The opinion concluded that section 1011.71(5)(b) authorizes casualty insurance premiums only to insure the district's educational and ancillary plants, the physical buildings, and workers' compensation insures employees, so it falls outside that authority.

Q: What does "premium" mean for this school funding statute?
A: The opinion adopted the Florida Insurance Code's definition in section 627.403: a premium is the consideration paid for insurance, by whatever name called, including assessments or service fees charged as consideration for the contract.

Q: Isn't workers' compensation a type of casualty insurance?
A: Yes. Section 624.605 classifies workers' compensation and employer's liability as casualty insurance. But the school statute limited casualty premiums to insuring physical plants, so the casualty label alone did not make workers' comp payable from this fund.

Q: What could the district spend this money on instead?
A: The opinion identified property and casualty insurance premiums for the district's educational and ancillary plants, alongside the statute's other listed capital purposes like vehicles, construction, maintenance, buses, and equipment.

Background and statutory framework

Section 1011.71 lets each district school board levy a local capital-outlay millage up to a cap set annually by the Legislature, and subsection (5), as amended by Chapter 2009-59, spells out specific permitted expenditures. Among them, paragraph (5)(b) allows paying premiums for property and casualty insurance necessary to insure the district's educational and ancillary plants. The statute does not define "premium," and nothing elsewhere in Part II of Chapter 1011 supplies one.

To fill that gap, the opinion turned to the Florida Insurance Code. Section 624.01 lists the chapters making up the Code, section 627.413 requires every policy to specify its premium, and section 627.403 defines "premium" as the consideration for insurance. Section 624.6011 sets out the recognized kinds of insurance, and section 624.605 defines casualty insurance to include workers' compensation and employer's liability. Reading the school statute and the insurance statutes together, as the Florida Supreme Court has directed for related laws (Wakulla County v. Davis; Garner v. Ward; Ideal Farms Drainage District v. Certain Lands; State v. Haddock), the premium definition carried over, but the plant-insurance limitation kept workers' compensation out.

Citations and references

Statutes:

• Section 1011.71, Florida Statutes (district school capital outlay millage)
• Section 627.403, Florida Statutes (definition of premium)
• Section 624.605, Florida Statutes (definition of casualty insurance)
• Section 627.413, Florida Statutes (policy must specify premium)
• Section 624.01, Florida Statutes (Florida Insurance Code)
• Section 624.6011, Florida Statutes (kinds of insurance)
• Ch. 2009-59, Laws of Fla. (amendment to s. 1011.71(5))

Cases:

• Wakulla County v. Davis, 395 So. 2d 540 (Fla. 1981), reading related statutes together
• Garner v. Ward, 251 So. 2d 252 (Fla. 1971), same
• Ideal Farms Drainage District v. Certain Lands, 19 So. 2d 234 (Fla. 1944), same
• State v. Haddock, 140 So. 2d 631 (Fla. 1st DCA 1962), same

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/schools-payment-of-workers-compensation-premiums
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/1733

Original opinion text

Mr. Paul R. Green

Johnson & Green, P.A.

Post Office Box 605

Milton, Florida 32572

RE: SCHOOL DISTRICTS – INSURANCE – WORKERS' COMPENSATION – payment of insurance premiums by school districts. ss. 624.605, 627.403, and 1011.71, Fla. Stat.

Dear Mr. Green:

As attorney for and on behalf of the Santa Rosa County School District, you have asked for my opinion on substantially the following questions:

1. What is a "premium" within the scope of section 1011.71(5)(b), Florida Statutes?

2. Is the Santa Rosa County School District authorized to expend funds available pursuant to section 1011.71(5)(b), Florida Statutes, for workers' compensation insurance premiums?

In sum:

1. A "premium" is the consideration paid for insurance.

2. The Santa Rosa County School District is not authorized to expend funds available pursuant to section 1011.71(5)(b), Florida Statutes, for workers' compensation insurance premiums.

Section 1011.71, Florida Statutes, authorizes each district school board to "levy on the taxable value for school purposes of the district," a local effort millage. The Legislature is required to establish in the annual appropriations act the maximum amount of millage a district may levy.[1]

Subsection (5) of the statute, as amended by section 33, Chapter 2009-59, Laws of Florida, makes specific provision for expenditures by the school district for the following identified purposes:

"(a) The purchase, lease-purchase, or lease of driver's education vehicles; motor vehicles used for the maintenance or operation of plants and equipment; security vehicles; or vehicles used in storing or distributing materials and equipment.

(b) Payment of the cost of premiums for property and casualty insurance necessary to insure school district educational and ancillary plants. Operating revenues that are made available through the payment of property and casualty insurance premiums from revenues generated under this subsection may be expended only for nonrecurring operational expenditures of the school district."[2]

The statute also recognizes that additional expenditures may include those set forth in paragraphs (2)(a)-(j) which include such things as new construction and remodeling projects; maintenance, renovation, and repair of existing school plants; the purchase or lease of school buses; and the purchase or lease of new or replacement equipment, and software applications.[3]

Question One

Section 1011.71(5)(b), Florida Statutes, authorizes the payment of premiums for certain types of insurance purchased by the school district. You have asked what may constitute a "premium" within the scope of the statute. Nothing in section 1011.71, Florida Statutes, defines the term "premium," nor is any direction provided elsewhere in Part II, Chapter 1011, Florida Statutes, providing for the funding of school districts.

The contents of Florida insurance policies must, by statute, conform to the requirements of the Florida Insurance Code,[4] which requires that every policy shall specify the premium to be paid.[5] Section 627.403, Florida Statutes, defines the term "[p]remium" for purposes of insurance contracts issued in Florida:

"'Premium' defined.--'Premium' is the consideration for insurance, by whatever name called. Any 'assessment,' or any 'membership,' 'policy,' 'survey,' 'inspection,' 'service' or similar fee or charge in consideration for an insurance contract is deemed part of the premium."

While section 1011.71(5)(b), Florida Statutes, does not define the term "premium" for purposes of that section, it is my opinion that the definition contained in the Florida Insurance Code at section 627.403, Florida Statutes, would control. Both of these statutes relate to insurance and should be read together to achieve a consistent result.[6] Thus, a "premium," within the scope of section 1011.71(5)(b), Florida Statutes, is the consideration paid for insurance.

Question Two

You have specifically asked whether workers' compensation insurance premiums may be paid by the Santa Rosa County School District pursuant to section 1011.71(5)(b), Florida Statutes. The statute authorizes "[p]ayment of the cost of premiums for property and casualty insurance necessary to insure school district educational and ancillary plants."

Pursuant to the "Florida Insurance Code,"[7] insurance in this state is classified into the following "kinds of insurance:" life; health; property; casualty; surety; marine; and title insurance.[8] A comprehensive definition of each of these kinds of insurance is provided subsequently in Part V, Chapter 624, Florida Statutes. "Casualty insurance" is defined in section 624.605, Florida Statutes, to include:

"(c) Workers' compensation and employer's liability.--Insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees."

Thus, the Florida Insurance Code considers workers' compensation insurance to be a type of casualty insurance. However, payment of casualty insurance premiums is qualified by section 1011.71(5)(b), Florida Statutes, with the requirement that such payment be used to "insure school district educational and ancillary plants." The statute does not authorize the payment of premiums for casualty insurance for employees of the district, but for physical plants.

Therefore, it is my opinion that the Santa Rosa County School District is limited to expending funds available pursuant to section 1011.71(5)(b), Florida Statutes, on casualty insurance premiums for the physical plants of educational facilities not for workers’ compensation insurance premiums.

Sincerely,

Bill McCollum

Attorney General

BM/tgh

[1] Section 1011.71(1), Fla. Stat.

[2] Section 1011.71(5), Fla. Stat.

[3] Section 1011.71(2)(a), (b), (c), and (d), Fla. Stat.

[4] See s. 624.01, Fla. Stat., which provides that "[c]hapters 624-632, 634, 635, 636, 641, 642, 648, and 651 constitute the "Florida Insurance Code."

[5] Section 627.413, Fla. Stat.

[6] See Wakulla County v. Davis, 395 So. 2d 540 (Fla. 1981), Garner v. Ward, 251 So. 2d 252 (Fla. 1971), Ideal Farms Drainage District et al. v. Certain Lands, 19 So. 2d 234 (Fla. 1944); State v. Haddock, 140 So. 2d 631 (Fla. 1st DCA 1962).

[7] See s. 624.01, Fla. Stat., which provides that "[c]hapters 624-632, 634, 635, 636, 641, 642, 648, and 651 constitute the "Florida Insurance Code."

[8] See s. 624.6011, Fla. Stat.