The Florida Supreme Court affirmed circuit court orders denying motions filed by multiple governmental entities seeking to vacate a final judgment that validated $5 billion in bonds for Property Assessed Clean Energy (PACE) qualifying improvements. In a decision issued Dec. 18, 2025, Justice Sasso wrote for the court that Florida Rule of Civil Procedure 1.540 does not apply in bond validation proceedings, effectively ending the consolidated challenge brought by state attorneys and county governments.
The case originated as a bond validation proceeding under chapter 75 of Florida Statutes, with the Florida PACE Funding Agency (FPFA) filing a complaint in Florida's Second Judicial Circuit. The agency sought judicial validation for the issuance of $5 billion in bonds to fund PACE qualifying improvements, which typically include energy efficiency and renewable energy projects for residential and commercial properties.
FPFA complied with statutory notice requirements by providing notice to the State Attorneys for the Second, Seventh, and Ninth Judicial Circuits. Following standard procedure in bond validation cases, the circuit court issued an order to show cause why the bonds should not be validated and scheduled a hearing where the state attorneys were represented.
The consolidated appeals involved four separate cases before the Florida Supreme Court. The appellants included State Attorneys for the Second, Seventh and Ninth Judicial Circuits in case No. SC2024-0652, Alachua County Tax Collector and others in case No. SC2024-0656, Palm Beach County and others in case No. SC2024-0664, and Alachua County and others in case No. SC2024-0681.
All appellants had filed motions under Florida Rule of Civil Procedure 1.540 seeking to vacate the final judgment that validated the bonds. Rule 1.540 generally allows courts to relieve parties from final judgments under specific circumstances, including mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, or fraud. However, the circuit court denied these motions, prompting the appeals to the state's highest court.
The Florida Supreme Court's decision centered on whether Rule 1.540 applies to bond validation proceedings. Justice Sasso, writing for the court, concluded that the rule does not apply in such proceedings. This determination effectively ended the governmental entities' attempts to challenge the bond validation through this particular procedural mechanism.
Bond validation proceedings in Florida follow a specific statutory framework designed to provide legal certainty for municipal and agency bond issuances. Under chapter 75 of Florida Statutes, entities seeking to issue bonds can petition circuit courts for validation, which provides legal protection and marketability for the bonds. The process includes notice requirements, opportunities for objections, and judicial review of the proposed bond issuance.
The PACE program allows property owners to finance energy efficiency, renewable energy, and other qualifying improvements through assessments on their property tax bills. The improvements are typically paid for upfront by a PACE financing entity, and property owners repay the costs over time through annual assessments. The financing is secured by a lien on the property and transfers to new owners if the property is sold.
The $5 billion bond validation represents a significant financing mechanism for PACE programs in Florida. These bonds would provide capital for the Florida PACE Funding Agency to finance qualifying improvements across multiple properties and jurisdictions throughout the state.
The involvement of multiple state attorneys and county governments as appellants suggests concerns about the scope and impact of the PACE financing program. State attorneys from three different judicial circuits joined the challenge, along with county-level officials including tax collectors who would be involved in collecting PACE assessments.
Palm Beach County and Alachua County were among the local governments that opposed the bond validation. Their participation indicates that some local jurisdictions had concerns about how the PACE program would operate within their boundaries or affect their residents and property owners.
The Supreme Court's affirmation of the circuit court orders means the bond validation stands, allowing FPFA to proceed with the $5 billion bond issuance. This provides the agency with substantial capital to expand PACE financing throughout Florida, potentially affecting thousands of property owners who seek to make qualifying energy improvements.
The decision also establishes important precedent regarding the application of Rule 1.540 to bond validation proceedings. By ruling that the rule does not apply in such cases, the court has clarified the procedural limitations for challenging bond validations after final judgment is entered.
The ruling affects the broader legal framework surrounding municipal and agency financing in Florida. Bond validation proceedings are designed to provide finality and legal certainty, and the court's decision reinforces these protections by limiting post-judgment challenges through Rule 1.540.
For property owners considering PACE financing, the decision ensures continued availability of this financing option throughout Florida. The validated bonds provide the capital foundation for FPFA to offer PACE financing to residential and commercial property owners seeking to invest in energy efficiency and renewable energy improvements.