Florida showed its interest in keeping property assessed clean energy (PACE) programs for residents through a new state law signed by Gov. Ron DeSantis on Friday.  

The law, SB 770, expands the PACE program to include septic-to-sewer connections, but the Florida Legislature also clarifies the program parameters—closing loopholes that have caused several lawsuits and open cases before the Florida Supreme Court.  

Alachua County and the Alachua County Tax Collector have two separate lawsuits pending before the Supreme Court. Other counties are included in the lawsuit with Alachua County, including Leon, Brevard, Orange, Collier, Palm Beach, Hendry, Pinellas, Lee, Hernando, St. Lucie, Volusia and Lake counties.  

Mark Floyd, CEO of Renew Financial, praised the new law in a press release. The company provides residential PACE programs in Florida, and the release said SB 770 modernizes the 14-year-old law that established the program.   

“This new law ensures [residential PACE] will continue to operate with interlocal agreements in place, reinforcing home rule and the important role local governments play in deciding if [residential PACE] is the right fit for homeowners in their communities seeking financing options to make critical home improvements,” Floyd said in the release. “These key partnerships with local governments allow for greater collaboration and the ability to foster more sustainable communities.”      

Starting early in 2023, a separate PACE provider called the Florida PACE Funding Agency began operating in counties without interlocal agreements. The agency used a bond validation order from a Leon County judge as backing, but local county commissions and tax collectors disagreed with the agency’s interpretation of the bond validation.  

“Please be advised that Alachua County disagrees with any such interpretation of that order and maintains that FPFA does not possess the ability to operate independent of the County’s regulation or cooperation,” Alachua County attorney Sylvia Torres wrote in a cease-and-desist letter to the agency in May 2023.  

SB 770 broadens what home improvements can be financed through PACE programs, adding connections to sewer systems and flood resiliency. 

Customers pay for the improvements through the tax assessment, but counties have worried about consumer protections and whether homeowners are aware of the potential ramifications.  

The law requires PACE administrators, like Renew Financial and Florida PACE Funding Agency, to get written consent from customers on a series of disclosures that include the potential impacts of falling behind on payments—like losing the property.  

The administrators must also record a phone call where they explain the disclosures listed. 

The administrators must include the following information:  

• The estimated total amount to be financed, including the total and itemized cost of the qualifying improvement, program fees, and capitalized interest. 

• The estimated annual non-ad valorem assessment. 

• The term of the financing agreement and the schedule for the non-ad valorem assessments. 

• The interest charged and estimated annual percentage rate. 

• A description of the qualifying improvement. 

• The total estimated annual costs that will be required to be paid under the assessment contract, including program fees. 

• The total estimated average monthly equivalent amount of funds that would need to be saved in order to pay the annual costs of the non-ad valorem assessment, including program fees. 

• The estimated due date of the first payment that includes the non-ad valorem assessment. 

• A disclosure that the financing agreement may be canceled within three business days after signing the financing agreement without any financial penalty for doing so. 

• A disclosure that the property owner may repay any remaining amount owed, at any time, without penalty or imposition of additional prepayment fees or fines other than nominal administrative costs. 

• A disclosure that if the property owner sells or refinances the residential property, the property owner may be required by a mortgage lender to pay off the full amount owed under each financing agreement under this section. 

• A disclosure that the assessment will be collected along with the property owner’s property taxes and will result in a lien on the property from the date the financing agreement is recorded. 

SB 770 also requires PACE administrators to annually update the number of home improvements financed, the average amount of the tax assessments that homeowners must pay, the total number of defaulted assessments and number of properties in default. 

In a press release, the Florida PACE Funding Agency said the expanded program will better help businesses and homeowners ready for storms.  

“The Florida PACE program will continue to help Florida families and businesses hurricane-harden their property with the Florida Legislature expanding the program to now include financing septic-to-sewer connections,” the agency said. “The Florida Senate approved SB 770 with bipartisan support voting 34-2 to expand the program.” 

However, the new law and required interlocal agreements might be too late for the lawsuits already filed.

In Alachua County, as of September 2023, the tax collector refused to put 52 assessments on the roll. These assessments were projects that the Florida PACE Funding Agency started and finished without an interlocal agreement in place.  

Without an assessment on the tax roll, the money can’t be collected.  

Besides the Florida Supreme Court cases, the Florida PACE Funding Agency is also involved in lawsuits in the lower courts. Only Florida, California and Missouri offer residential PACE programs, according to PACENation.