sc14-1618-florida-bankers-association-v-florida-development-finance ( 2015 )


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  •           Supreme Court of Florida
    ____________
    No. SC14-1603
    ____________
    FLORIDA BANKERS ASSOCIATION, etc.,
    Appellant,
    vs.
    FLORIDA DEVELOPMENT FINANCE CORPORATION, etc., et al.,
    Appellees.
    ____________
    No. SC14-1618
    ____________
    ROBERT REYNOLDS,
    Appellant,
    vs.
    FLORIDA DEVELOPMENT FINANCE CORPORATION, etc., et al.,
    Appellees.
    [October 15, 2015]
    LABARGA, C.J.
    In these consolidated cases, the Florida Bankers Association (FBA) and
    Robert Reynolds appeal the judgment of the Circuit Court of the Second Judicial
    Circuit, in and for Leon County, validating bonds proposed to be issued by the
    Florida Development Finance Corporation (FDFC), a public body corporate and
    politic in the State of Florida. We have jurisdiction. See art. V, § 3(b)(2), Fla.
    Const. The purpose of the bonds is to finance qualifying improvements pursuant
    to the Property Assessed Clean Energy Act (PACE Act), established by the
    Legislature in section 163.08, Florida Statutes (2014).1
    The PACE Act provides for issuance of bonds to finance the retrofitting of
    existing improved properties with qualifying improvements for energy
    conservation, renewable energy, clean energy, and hurricane protection. Under the
    program, FDFC and participating local governments enter into interlocal
    agreements that will provide the PACE program benefits in those localities.
    Participation in the program by local governments and by property owners is
    completely voluntary. Participating property owners enter into financing
    agreements to provide for repayment of the cost of the improvements by way of
    voluntary non-ad valorem assessments imposed upon the benefitted property. As
    we explain below, we affirm the amended final judgment of the circuit court, but
    1. Although section 163.08, Florida Statutes, does not use the terms
    “PACE” or “Property Assessed Clean Energy,” these terms are commonly used to
    refer to programs providing for retrofitting improved properties with energy and
    wind protection improvements, such as Florida’s program. See FHFA Statement
    on Certain Energy Retrofit Loan Programs, Federal Housing Finance Agency,
    July 6, 2010; see also Victor M. Hanna, Stop, Think, Build, Repeat: Using
    Behavioral Economics to Better Design Energy Efficiency Policies for Our Cities’
    Buildings, 69 (U. of Miami L. Rev.) 241, 283 (2014).
    -2-
    remand with directions to the circuit court to require FDFC to amend and approve
    the amended bond documents and submit the amended documents to the circuit
    court as directed herein. We turn first to discuss the appeal by FBA.
    I. FLORIDA BANKERS ASSOCIATION
    Appellant FBA, an association of Florida banks, did not intervene or appear
    in the circuit court proceedings below. Only after the circuit court entered its
    amended final judgment on July 18, 2014, did FBA file an appeal, arguing that the
    PACE Act is an unconstitutional impairment of contracts. FDFC has challenged
    the standing of FBA to appear in this appeal. To support its claim of standing
    notwithstanding its failure to appear in the bond validation proceeding below, FBA
    relies on Meyers v. City of St. Cloud, 
    78 So. 2d 402
    (Fla. 1955), in which this
    Court allowed citizens, taxpayers, and property owners who had not appeared in
    the trial court to appear for the first time on appeal in a bond validation proceeding.
    
    Id. at 404.
    We recently receded from Meyers in Reynolds v. Leon County Energy
    Improvement District, SC14-710, slip op. at 4 (Fla. Oct. 1, 2015), because its
    reasoning was not in accord with the statutory scheme governing bond validation
    proceedings. However, even our decision in Meyers would not have conferred
    standing upon FBA. Meyers “dealt with the right of property owners and
    taxpayers.” Rich v. State, 
    663 So. 2d 1321
    , 1324 (Fla. 1995). As FDFC correctly
    -3-
    argues, FBA has never shown that it is a citizen, taxpayer, or property owner in
    any jurisdiction where the FDFC bonds will support PACE improvements.
    Moreover, FBA presented no evidence that it suffered any specific injury or has a
    stake in the matter sufficient for standing. That showing had to occur in the circuit
    court. Accordingly, the appeal brought by FBA is dismissed. We turn next to the
    claims of Robert Reynolds in this appeal.
    II. REYNOLDS’ CLAIMS
    Appellant Reynolds, a property owner in Leon County, appeared in the
    circuit court and raised several objections to the bond validation proceeding. In
    this appeal, he raises three claims which he contends require reversal of the
    amended final judgment of validation entered by the circuit court. Reynolds
    contends in his first claim that the circuit court erred in allowing an amended
    financing agreement to be submitted by FDFC, and that the matter was not ripe for
    determination. Second, he contends that the judgment must be reversed because
    some of the bond documents approved by FDFC and submitted with the complaint
    for validation refer to judicial foreclosure as a remedy in violation of the PACE
    Act. Third, he contends that the judgment must be reversed because some of the
    bond documents would authorize FDFC to levy the special non-ad valorem
    assessments when those assessments should be levied by the participating local
    -4-
    government, and because there is no executed interlocal agreement in place calling
    for that procedure, the bond validation should have been denied.
    Before discussing Reynolds’ claims in detail, we set forth the facts and
    procedural background against which Reynolds filed his objections to the bond
    validation and the standard of review in this appeal. We then discuss each of
    Reynolds’ claims in turn.
    III. FACTUAL AND PROCEDURAL BACKGROUND
    FDFC is a corporate and political entity created by the Florida Development
    Finance Corporation Act of 1993 initially to engage in activities conducive to
    economic development in Florida. See § 288.9604, Fla. Stat. (1993);
    § 288.9604(1), Fla. Stat. (2010). In addition to activities enhancing economic
    development, FDFC has express statutory authority to issue bonds for programs
    authorized under the PACE Act, as set forth in section 163.08, Florida Statutes
    (2014). See § 288.9606(7)(c), Fla. Stat. (2014). On February 27, 2014, the FDFC
    filed its complaint in the circuit court of the Second Judicial Circuit in Leon
    County seeking to determine the validity of a series of bonds proposed to be issued
    under the PACE Act. The bond funds are to be used to pay for qualifying
    improvements under section 163.08, Florida Statutes, which improvements are
    carried out by approved private contractors. The repayment obligations for the
    bonds are tied to the properties and not to the individuals, and repayment is
    -5-
    collected through voluntary special non-ad valorem assessments placed on the
    property. The special non-ad valorem assessments are to be collected by the tax
    collector, similar to the method for collecting taxes and other non-ad valorem
    assessments.
    The Complaint sought validation of bonds not exceeding $2 billion in
    aggregate principal at any one time of “Florida Development Corporation Special
    Assessment Revenue Bonds (Florida HERO Program), in various series.”2 The
    bond validation complaint also sought determination of the validity of the pledge
    of revenues for the repayment of the bonds, the validity of the non-ad valorem
    assessments that would constitute all or part of the revenues pledged, the lien
    priority of the assessments, and other proceedings related to the issuance of bonds.
    Attached to the complaint was a master bond resolution approved by the governing
    board of FDFC, a form master indenture agreement, a list of local governments
    that have executed prior but unrelated interlocal agreements with FDFC, a form
    interlocal agreement for this PACE Act bond issue, and a form financing
    2. “HERO” stands for “Home Energy Renovation Opportunity.” See Smart
    Growth and Green Buildings, 2012 ABA Environment, Energy, and Resources
    Law: The Year in Review 371, 375 (noting that a Home Energy Renovation
    Opportunity program “provides low-cost financing to homeowners” for
    retrofitting).
    -6-
    agreement to be executed by the property owners for the PACE improvements and
    assessments.
    The master bond resolution states that FDFC’s HERO Program bonds shall
    serve the public purposes described in the Florida PACE Act, section 163.08(1),
    Florida Statutes, and promote economic development in the state, thereby
    benefitting the citizens. The resolution further states that the proceeds of the bonds
    shall be used for purposes of funding qualifying improvements pursuant to the
    PACE Act, as well as capitalized interest, costs of issuance, fund reserves,
    administrative expenses, and recurring costs relating to the program and the
    issuance of the bonds.
    A. Reynolds’ Response to the Bond Validation Complaint
    An order to show cause was issued by the circuit court and published as
    required by section 75.06, Florida Statutes (2014). The order directed the State
    Attorneys of any circuit in which an interlocal agreement had been entered, as well
    as taxpayers, property owners and citizens of Leon County, and any other persons
    having or claiming an interest in the bonds to appear at a hearing on June 11, 2014,
    to show cause why the validation judgment should not be granted. Reynolds filed
    a response to the order to show cause alleging that he is a property owner in Leon
    County, Florida, and thus a party-defendant to the action who may intervene
    pursuant to section 75.07, Florida Statutes (2014).
    -7-
    Reynolds further alleged that although chapter 288, Florida Statutes, which
    created FDFC as a public instrumentality, provides certain enumerated powers to
    FDFC which relate to bond financing for PACE programs, the statute does not
    provide FDFC with the power to levy non-ad valorem assessments on real
    property, and that only local governments possess the power to impose such
    assessments. He further contended that a local government cannot delegate to
    FDFC the power to assess real property. The impetus for this objection was the
    fact that the model financing agreement attached to the complaint, as well as
    certain other bond documents, provided that the local government will delegate to
    FDFC the right to impose the non-ad valorem assessments on the real property that
    is improved with PACE improvements.
    As a second objection to the validation, Reynolds claimed in his response to
    the order to show cause that the assessment scheme in the bond documents
    includes an unlawful remedy, in that the financing agreement includes language
    allowing for judicial foreclosure as a remedy for nonpayment of the special non-ad
    valorem assessments. Section 163.08, Florida Statutes, under which FDFC seeks
    to pledge the assessments for repayment, sets forth specific requirements for
    collection of assessments limited to the “uniform method” of collection in section
    197.3632, Florida Statutes. That statute prescribes a method for collection of non-
    ad valorem assessments on the same bill as taxes and in the same manner in which
    -8-
    delinquent taxes are collected, and does not allow for the assessment to be
    collected through a judicial foreclosure action.
    B. The Bond Validation Hearing
    A show cause hearing was held on the bond validation complaint of FDFC
    in the circuit court of the Second Judicial Circuit on the date set forth in the order
    to show cause. FDFC presented FDFC Executive Director William Spivey, who
    explained that FDFC is governed by a five-member board of directors appointed
    by the Governor. Spivey identified a form interlocal agreement and explained that
    FDFC has authority under section 288.9605(2), Florida Statutes (2014), to enter
    into such interlocal agreements and that it would be the local government and not
    FDFC that would impose the non-ad valorem assessments on the property
    improved under the PACE program. At the show cause hearing, counsel for FDFC
    also stipulated that FDFC does not have authority to—and does not intend to—
    impose the non-ad valorem assessments. However, no amended documents were
    submitted reflecting this fact.
    Spivey also identified a form financing agreement, which he explained
    differed from the form financing agreement approved by the FDFC board and
    attached to the complaint. The amended form financing agreement had been
    modified to provide that the assessments would be collected in conformity with the
    “uniform method” for the levy, collection, and enforcement of non-ad valorem
    -9-
    assessments under chapter 197, Florida Statutes, as the PACE Act itself requires.
    The modification removed reference to the remedy of judicial foreclosure from
    section 4 of the agreement, and Spivey testified that FDFC is “willing to use” this
    modified language in the financing agreements to be entered into during
    implementation of the program under this bond issue. Reynolds’ attorney did not
    object to admission of this document or testimony, but asked only to be allowed to
    inquire into the document on cross-examination.
    Even though an amended form financing agreement was submitted with a
    change to section 4, Spivey agreed that section 14 of the amended financing
    agreement continued to refer to judicial foreclosure by stating that no action by the
    property owner will be competent “to impair in any way FDFC’s rights, including,
    but not limited to, the right to pursue judicial foreclosure of the Assessment lien or
    the right to enforce the collection of the Assessment or any installment thereof
    against the property.” When questioned about this language in section 14, Spivey
    testified that “we need to take that out as well, because we are going to do it per the
    uniform collection.” He stated, “If there [are] any other changes in here that need
    to be made to make that clear, then we can certainly make that since it is the form
    of the document itself.” Spivey also explained that the FDFC board had not
    - 10 -
    formally adopted the modified financing agreement form, and that “the exhibits to
    that master bond resolution will have to come back to the board for final approval.”
    The circuit court judge announced at the conclusion of the show cause
    hearing that he would grant the relief requested in the complaint and validate the
    bonds “under the proviso that assessment collection has to be in accordance with
    law, which as I understand it, Chapter 197, and that there be no statement in the
    documents that can be interpreted to mean that the Plaintiff can impose
    assessments.” In addition, the court ruled that Reynolds would be granted
    intervenor status.
    On June 16, 2014, the circuit court issued a final judgment in the case
    validating the PACE bonds. In the judgment, the court found that FDFC may
    finance “qualifying improvements” under the PACE Act, which shall serve a
    public purpose. The final judgment further stated that “[t]he form of the Financing
    Agreement, as modified to clarify that the Program Special Assessments shall be
    collected through the Uniform Collection method, was introduced into evidence as
    Exhibit ‘5.’ ” Section Twenty-One of the final judgment reiterated that the
    assessments must be collected pursuant to the “Uniform Collection method as set
    forth in Sections 197.3632 and 197.3635, Florida Statutes,” and will be collected
    annually on the same bill as property taxes.
    - 11 -
    As to the authority for imposition of assessments, the final judgment stated,
    “The imposition of the Program Special Assessments shall be pursuant to the
    authority of the local governments that are parties to the Interlocal Agreements”
    and that FDFC “is authorized pursuant to the Interlocal Agreement to perform such
    administrative and procedural acts as may be agreed to between the parties to assist
    in [ ] facilitating the imposition of the Program Special Assessments.”
    C. Motion for Rehearing and Amended Final Judgment
    Reynolds filed a motion for rehearing alleging that the final judgment did
    not comport with the judge’s rulings at the hearing in which the judge indicated
    that the bonds would be validated if the supporting documentation reflected that
    FDFC had no authority to impose non-ad valorem assessments, and that any such
    assessments must be imposed by the local government that is the party to the
    interlocal agreement. The motion for rehearing also alleged for the first time that
    the circuit court’s admission of the amended financing agreement at the show
    cause hearing violated due process. Finally, the motion alleged that the circuit
    court lacked jurisdiction to validate the bonds because FDFC has not yet entered
    into any interlocal agreements with entities that have the power to impose
    assessments. Thus, the motion alleged, the complaint sought nothing more than an
    advisory opinion on an issue that is unripe for review.
    - 12 -
    A hearing on the motion for rehearing was held on July 15, 2014, after
    which the circuit court entered an amended final judgment. As to Reynolds’
    objection that the final judgment did not make clear that it would be the local
    government and not FDFC that has the power to, and will, impose the assessments,
    the circuit court concluded that the language in Section 28 of the original final
    judgment made that clear when it said, “The imposition of the Program Special
    Assessments shall be pursuant to the authority of the local governments that are
    parties to the Interlocal Agreements.” With this background in mind, we set forth
    the standard of review in this bond validation appeal.
    IV. ANALYSIS
    Our review of this bond validation proceeding is limited to three issues:
    (1) whether the public body has authority to issue the subject bonds; (2) whether
    the purpose of the obligation is legal; and (3) whether bond issuance complies with
    the requirements of law. See, e.g., Strand v. Escambia Cnty., 
    992 So. 2d 150
    , 154
    (Fla. 2008) (citing City of Gainesville v. State, 
    863 So. 2d 138
    , 143 (Fla. 2003)).
    We remain mindful that the circuit court’s order comes to the Court with a
    presumption of correctness and, thus, “[t]he appellant has the burden of
    demonstrating that the record and evidence [fail] to support the [bond issuer] and
    the trial court’s conclusions.” Donovan v. Okaloosa Cnty., 
    82 So. 3d 801
    , 805
    (Fla. 2012) (quoting State v. Osceola Cnty., 
    752 So. 2d 530
    , 533 (Fla. 1999)). We
    - 13 -
    will review the trial court’s findings of fact for competent, substantial evidence and
    review its conclusions of law de novo. 
    Strand, 992 So. 2d at 154
    . “Subsumed
    within the inquiry as to whether the public body has the authority to issue the
    subject bond is the legality of the financing agreement upon which the bond is
    secured.” Keys Citizens for Responsible Gov’t, Inc. v. Fla. Keys Aqueduct Auth.,
    
    795 So. 2d 940
    , 946 (Fla. 2001) (quoting State v. City of Port Orange, 
    650 So. 2d 1
    , 3 (Fla. 1994)). We next discuss Reynolds’ claims in this appeal.
    A. Due Process and Ripeness
    In his first issue, Reynolds argues that he was denied due process when
    FDFC offered and the court accepted an amended financing agreement that
    removed language allowing judicial foreclosure as a remedy from section 4 of the
    original form financing agreement that had been attached to the complaint. This
    objection was not sufficiently preserved. At the bond validation hearing, when
    FDFC offered the amended financing agreement during the testimony of FDFC
    Executive Director William Spivey, Reynolds’ attorney did not object to admission
    of this document or testimony about it, but asked only to be allowed to inquire into
    the document on cross-examination. In the motion for rehearing filed by
    Reynolds, he did object at that time to acceptance of the amended financing
    agreement, primarily citing the rights of parties not before the court.
    - 14 -
    Even if this issue had been sufficiently preserved, it lacks merit. In Keys
    Citizens, we held that constructive notice of the complaint was sufficient even
    though it did not mention that the court would also consider the validity of the
    mandatory sewer connection 
    ordinance. 795 So. 2d at 949
    . We noted in Keys
    Citizens that the bond notification statutes do not require the specificity in the
    published notice that was urged by the citizens in that case. 
    Id. Reynolds relies
    on
    our decision in Ingram v. City of Palmetto, 
    112 So. 861
    (Fla. 1927). However, in
    Ingram, the City filed a petition for bond validation that “clearly did not comply
    with the affirmative requirements of the statute” that set forth what facts and
    allegations were to be in the petition. 
    Id. at 862.
    The trial court permitted the
    petition to be amended to meet the requirements of the statute, but on review this
    Court found the procedure followed was improper. 
    Id. We held,
    “If the
    amendments made the petition sufficient in law, the intervener (sic) was given no
    opportunity to take issue on the facts alleged. . . . Even if such proceeding may be
    regarded as due process of law, it is not such as is contemplated by the statute.” 
    Id. In this
    case, the intervenor—Reynolds—did have an opportunity both at the show
    cause hearing and at the hearing on his motion for rehearing to raise objections to
    the amended financing agreement and bring those objections and arguments to the
    court’s attention.
    - 15 -
    We have explained that “[t]he specific parameters of the notice and the
    opportunity to be heard required by procedural due process are not evaluated by
    fixed rules of law, but rather by the requirements of the particular proceeding.”
    Sch. Bd. of Palm Beach Cnty. v. Survivors Charter Sch., Inc., 
    3 So. 3d 1220
    , 1236
    (Fla. 2009) (quoting Keys 
    Citizens, 795 So. 2d at 948
    ). The notice and opportunity
    to be heard given to Reynolds were sufficient for the requirements of this particular
    proceeding, especially in light of his failure to object to the amended document at
    the hearing. Further, the amendment to the model financing agreement was in
    accord with the law argued by Reynolds concerning the issue of judicial
    foreclosure, and provides no basis for this Court to reverse and require initiation of
    an entirely new proceeding.
    Reynolds also contends that the bond validation judgment must be reversed
    because the issue was not ripe for determination due to the fact that FDFC had not
    yet entered into any interlocal agreements under the program and did not, itself,
    have the ability to impose the assessments required for repayment of the bonds.
    We disagree that this case was not ripe for bond validation or that the court lacked
    jurisdiction. Section 75.01, Florida Statutes (2014), confers jurisdiction on the
    circuit courts to determine the validity of bonds and certificates of indebtedness.
    Section 75.02, Florida Statutes, expressly states that the plaintiff in a bond
    validation proceeding “may determine its authority by law to issue bonds.” This
    - 16 -
    presupposes that the bonds will not be issued and specific payment provisions
    enacted until after the validation proceeding. See also Boatright v. City of
    Jacksonville, 
    158 So. 42
    , 55 (Fla. 1934) (Whitfield, J., concurring) (noting that a
    bond validation proceeding allows the rights and immunities of the taxpayers and
    citizens to be determined before the bonds are issued). FDFC has statutory
    authority and a properly enacted resolution to issue the bonds and to seek a
    determination of the validity of the bond issue before it does so. Moreover, the
    record established that FDFC intends to execute interlocal agreements to provide
    for implementation of the PACE program in localities that choose to participate,
    and those local governments will levy and collect the non-ad valorem special
    assessments at issue here. Section 163.08(3) specifically states that the local
    government may impose the PACE assessments. Nowhere does the Legislature
    require that, before a PACE bond issue may be validated, the documents show
    specific, executed interlocal agreements or any specific assessments to be
    reviewed. Accordingly, relief is denied on this claim.
    B. Authority to Levy Non-ad Valorem Assessments
    Reynolds next contends that the bond validation must be reversed because
    the assessment scheme set forth in the bond documents, which provides in several
    places that FDFC will impose the special assessments necessary to fund repayment
    of the bonds, is illegal because FDFC was not given express statutory authority to
    - 17 -
    levy the special assessments. Reynolds contends that FDFC’s attempt to remedy
    this by stipulating at the hearing that it would not levy assessments, and that the
    local governments that will be parties to the interlocal agreements will levy the
    assessments, cannot support the validation of the bond issue. He further contends
    that the trial court’s attempt to remedy this, by declaring that in any documents
    used in the bond program, FDFC will delete references to FDFC imposing
    assessments, does not eliminate the fatal flaw in the bond documents that were
    approved by the FDFC board and attached to the complaint.
    We agree with Reynolds, and with FDFC, that FDFC does not have
    authority under the PACE Act to levy the special non-ad valorem assessments
    called for under the Act. First, and foremost, section 163.08(3), Florida Statutes
    (2014), specifically authorizes the local government to levy the non-ad valorem
    assessments. Second, section 288.9605(2)(e) states that FDFC may enter into
    interlocal agreements pursuant to section 163.01(7) with public agencies for the
    exercise of “any power, privilege, or authority consistent with the purposes of this
    act.” That statutory authority, although broad, does not expressly grant FDFC the
    authority to levy the special non-ad valorem assessments. Third, collection of the
    special assessments on a combined tax notice, and enforcement of payment for the
    special assessments by sale of tax certificates and tax deeds, is performed by the
    local government.
    - 18 -
    Although we agree with Reynolds that the PACE Act does not authorize
    FDFC to levy the non-ad valorem assessments, we disagree that inclusion of that
    language in the bond documents is a basis to reverse the trial court’s amended final
    judgment. The trial court agreed that the assessments would be collected by the
    local government and opined that section 28 of the amended final judgment made
    that fact clear. We conclude, however, that the language of the amended final
    judgment is subject to misinterpretation so long as any of the bond documents
    continue to contain references to FDFC imposing the special assessments. For that
    reason, we direct that on remand, the circuit court shall require FDFC to amend all
    bond documents that refer to FDFC having, or being delegated, authority to levy
    the non-ad valorem special assessments, in order to remove those references and to
    make clear that it is the local government that will levy such assessments.3
    3. The model interlocal agreement approved by the FDFC and attached to
    the complaint states in section 4(A) that the public agency executing the interlocal
    agreement with FDFC “hereby delegates to FDFC the power to impose the
    Assessments . . . .” Section 4(B) refers to the power of FDFC to levy assessments.
    Section 6 of the master bond resolution provides that the interlocal agreements
    “shall provide the Corporation the authority to levy non-ad valorem assessments on
    property owners . . . .” Section 2(H) of the master bond resolution states in
    pertinent part that “[i]f required by law, it is the Corporation’s intention to enter
    into interlocal agreements . . . pursuant to which such local governments shall
    provide the Corporation the authority to levy non-ad valorem assessments . . . .”
    The amended form financing agreement states in the “Recitals” section that the
    local government has consented to “FDFC conducting assessment proceedings.”
    Exhibit B to the amended form financing agreement, relating to the schedule of
    annual assessment installments, states that the “program administrator will adjust
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    C. Judicial Foreclosure as a Remedy for Non-Payment
    Finally, Reynolds contends correctly, and the circuit court agreed, that the
    only collection method authorized by the Legislature for the special assessments is
    the “uniform method” set forth in chapter 197, Florida Statutes. Although the
    amended final judgment makes no express reference to removing the word
    “foreclosure” from the documents, the circuit court did state in the amended final
    judgment that “[t]he Program Special Assessments levied and imposed against
    affected real property must be collected pursuant to the Uniform Collection method
    as set forth in Sections 197.3632 and 197.3635, Florida Statutes, pursuant to which
    non-ad valorem assessments are collected annually over a period of years on the
    same bill as property taxes.” The master bond resolution also states that the
    assessments shall be collected pursuant to the “Uniform Assessment Collection
    Act.” Reference to the uniform method of collection also appears in the form
    interlocal agreement.
    Section 163.08(4), Florida Statutes, expressly provides in pertinent part that
    “[c]osts incurred by the local government for such purpose may be collected as a
    non-ad valorem assessment. A non-ad valorem assessment shall be collected
    pursuant to s. 197.3632 . . . .” § 163.08(4), Fla. Stat. (2014) (emphasis added).
    the assessment and estimated maximum annual assessment installments, if
    necessary.”
    - 20 -
    Thus, the assessments in this bond validation are mandated by statute to be
    collected under the “uniform method” provided in chapter 197, Florida Statutes.
    Section 197.3632(8)(a), Florida Statutes, does not provide for judicial
    foreclosure as a remedy, but states that non-ad valorem assessments collected
    pursuant to the section shall be subject to all collection provisions of the chapter,
    “including . . . penalty for delinquent payment, and issuance and sale of tax
    certificates and tax deeds for nonpayment.” § 197.3632(8)(a), Fla. Stat. (2014)
    (emphasis added). Thus, there is no doubt that collection of the assessments is
    required to be by the uniform method of collection set forth in chapter 197, and not
    by judicial foreclosure.
    The amended financing agreement removed one reference to foreclosure as a
    remedy, but still refers to foreclosure in section 14, which states that a property
    owner will not be competent to impair FDFC’s rights, including “the right to
    pursue judicial foreclosure of the Assessment lien.” In addition, section 18 of the
    amended financing agreement also refers to foreclosure; and the master indenture
    refers to foreclosure in the definition of administrative expenses. All parties
    agreed at the show cause hearing, and now in this appeal, that the special PACE
    non-ad valorem assessments may not be collected by way of judicial foreclosure,
    and the bonds were validated under the condition that the collection of the
    assessments be pursuant to chapter 197. The circuit court anticipated that the bond
    - 21 -
    documents would be corrected to remove the references to foreclosure. However,
    to fully accomplish this, we direct that on remand, the circuit court shall require
    amendment of the documents to remove all references to judicial foreclosure, and
    that such amendments be approved by the governing board of FDFC.
    V. CONCLUSION
    For the foregoing reasons, we dismiss the appeal of Florida Bankers
    Association for lack of standing. We affirm the circuit court’s amended final
    judgment validating the Florida Development Finance Corporation special
    assessment revenue bonds. However, because additional steps are required to
    implement the circuit court’s rulings and the rulings of this Court, we remand to
    the circuit court with instructions to require FDFC to amend the bond documents to
    remove all references to judicial foreclosure as a remedy and remove all references
    to the FDFC having, or being delegated, authority to levy the non-ad valorem
    assessments. We direct that the amended documents be filed in the circuit court
    following approval of the amendments by the governing board of the FDFC.
    It is so ordered.
    PARIENTE, QUINCE, CANADY, POLSTON, and PERRY, JJ., concur.
    LEWIS, J., concurs in result only with an opinion.
    NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
    IF FILED, DETERMINED.
    - 22 -
    LEWIS, J., concurring in result only.
    I recognize that the majority is correct in its determination as to what the
    Legislature has the power and authority to accomplish. Nevertheless, due to the
    limited review of the Court in bond validation proceedings, and because I have
    great concern with regard to the far-reaching impact of today’s decision, I concur
    in result only. This government plan utilizes bonds to obtain funds for the purpose
    of providing what appears to be individual home improvement loans to private
    property owners to finance certain qualifying improvements to their homes—
    specifically, improvements that involve energy conservation and efficiency,
    renewable energy, and wind resistance (i.e., hurricane mitigation). See §
    163.08(2)(b), Fla. Stat. (2014). The loans are then to be repaid through the levy of
    “special assessments” on the improved properties. I do not dispute that local
    governments can impose special assessments upon properties that receive a
    specific benefit from general improvements or services; however, there is no
    precedent in Florida that expressly holds a special assessment can be levied upon
    an individual property under circumstances such as these.
    In Sarasota County v. Sarasota Church of Christ, 
    667 So. 2d 180
    (Fla. 1995),
    this Court explained that
    special assessments must confer a specific benefit on the land
    burdened by the assessment and are imposed under the theory that the
    portion of the community that bears the cost of the assessment will
    - 23 -
    receive a special benefit from the improvement or service for which
    the assessment is levied.
    Although a special assessment is typically imposed for a
    specific purpose designed to benefit a specific area or class of
    property owners, this does not mean that the costs of services can
    never be levied throughout a community as a whole. Rather, the
    validity of a special assessment turns on the benefits received by the
    recipients of the services and the appropriate apportionment of the
    cost thereof. This is true regardless of whether the recipients of the
    benefits are spread throughout an entire community or are merely
    located in a limited, specified area within the community.
    
    Id. at 183
    (citation omitted). Consistent with this description, special assessments
    have been historically and exclusively directed toward improvements or services
    that benefit a general area of real property within communities or specific areas.
    See, e.g., Morris v. City of Cape Coral, 
    163 So. 3d 1174
    , 1177 (Fla. 2015) (special
    assessment for fire protection services levied on all real property); Donovan v.
    Okaloosa Cnty., 
    82 So. 3d 801
    , 805 (Fla. 2012) (special assessment for beach
    restoration and renourishment levied on properties within a Municipal Service
    Benefit Unit); Citizens Advocating Responsible Envtl. Sols., Inc. v. City of Marco
    Island, 
    959 So. 2d 203
    , 204-05 (Fla. 2007) (special assessment for expansion of
    wastewater collection and treatment system imposed on users not served by the
    current system); Sarasota Church of 
    Christ, 667 So. 2d at 182
    (special assessment
    for stormwater improvements and services imposed on all developed property);
    Workman Enters., Inc. v. Hernando Cnty., 
    790 So. 2d 598
    , 600 (Fla. 5th DCA
    2001) (special assessment for fire and rescue services levied on the five categories
    - 24 -
    of property within a county district);4 see also 70C Am. Jur. 2d Special or Local
    Assessments § 1 (2011) (“Special or local assessments . . . are charges imposed on
    property owners within a limited area to help pay the cost of a local improvement
    which specially benefits property within that area.”). In my view, it is not a proper
    use of special assessments, as they have been described by this Court and are
    commonly understood, to repay funds that were loaned for home improvements to
    only a specific individual home.
    Moreover, because special assessments are to be fairly and reasonably
    apportioned in accordance with the benefits received, Sarasota Church of 
    Christ, 667 So. 2d at 183
    , it is implicit that more than one property will benefit from the
    improvement. See Black’s Law Dictionary 121 (10th ed. 2014) (defining
    apportionment as “Division into proportionate shares; esp., the division of rights
    and liabilities among two or more persons or entities.” (emphasis supplied)). For a
    single property to be subject to one hundred percent of a special assessment
    because it is the only property that benefitted from a qualifying improvement is
    completely inconsistent with the concept of apportionment and how special
    assessments have been traditionally applied.
    4. This Court has also indicated that a special assessment can be levied
    throughout an entire taxing district, provided it confers a special benefit on the
    properties assessed and is properly apportioned. See Harris v. Wilson, 
    693 So. 2d 945
    , 947 (Fla. 1997).
    - 25 -
    The decision of the Legislature to allow what are essentially home
    improvement loans to be repaid through special assessments presents significant
    ramifications because these loans receive priority over existing mortgages, which I
    find troublesome. See § 170.09, Fla. Stat. (2014) (noting that special assessments
    “shall remain liens, coequal with the lien of all state, county, district, and
    municipal taxes, superior in dignity to all other liens, titles, and claims, until paid .
    . . .” (emphasis supplied)); compare Gailey v. Robertson, 
    123 So. 692
    , 692-93 (Fla.
    1929) (holding that a lien on property that was the result of a special assessment
    took priority over a preexisting mortgage, and rejecting claim that the result
    constituted an impairment of the vested right of the mortgagee) with First
    Nationwide Mortg. Corp. v. Brantley, 
    851 So. 2d 885
    , 887 (Fla. 4th DCA 2003)
    (holding that a city lien arising from a loan for home repairs was not superior to a
    preexisting mortgage because it was not the result of municipal services, a special
    assessment, or any type of lien covered by the city code of ordinances). I am
    inclined to agree with the specially concurring opinion in Brantley that to allow
    individual home repair loans to take precedent over preexisting mortgages would
    present significant constitutional concerns. 
    See 851 So. 2d at 887-88
    (Fleet, A.J.,
    specially concurring) (“To accept the proposition that governmental assistance to
    an individual, natural or corporate, for residential improvement automatically
    - 26 -
    becomes superior in dignity to a previously recorded mortgage simply fails to pass
    constitutional muster.”).
    As explained by the Court of Appeals for the Eleventh Circuit, mortgage
    holders possess a constitutionally protected property right:
    In Sarasota County v. Andrews, 
    573 So. 2d 113
    (Fla. 2d DCA 1991),
    the court found that a county’s attempt to assert that a lien created by
    an ordinance was superior in right to a prior recorded mortgage, was a
    substantial impairment of the first mortgage lien for federal and state
    constitutional purposes. 
    Id. at 115.
    Although Sarasota was decided
    under a contract impairment analysis, it nevertheless stands for the
    proposition that a mortgagee, who is in essence a party to a security
    contract, has a property right in preservation of its mortgage interest.
    See also Mailman Development Corp. v. Segall, 
    403 So. 2d 1137
    ,
    1138 (Fla. 4th DCA 1981) (holding that a “mortgagee should not be
    required to accept a substituted security interest since a mortgagee lien
    is a property right . . . .”).
    Moreover, Florida law gives a mortgagee the right to foreclose
    and reforeclose its liens. Fla. Stat. § 697.01 (1993). Therefore, a
    mortgage is a cause of action creating a lien on property. See United
    of Florida, Inc. v. Illini Federal Savings & Loan Association, 
    341 So. 2d
    793, 794 (Fla. 2d DCA 1977). The Supreme Court has specifically
    held that “a cause of action is a species of property protected by the
    Fourteenth Amendment’s Due Process Clause.” Logan v.
    Zimmerman Brush Co., 
    455 U.S. 422
    , 428, 
    102 S. Ct. 1148
    , 1154, 
    71 L. Ed. 2d 265
    (1982).
    Zipperer v. City of Fort Myers, 
    41 F.3d 619
    , 623 (11th Cir. 1995). Yet, the bonds
    under consideration can be issued, and special assessments levied by local
    governments, without input from mortgage holders because the majority has
    determined that they do not have standing to participate in these proceedings.
    - 27 -
    In the probate context, the United States Supreme Court has held that a
    nonclaim statute that only required notice by publication (which is the only notice
    to mortgagees here) was insufficient to protect the property interest of a creditor
    under the Due Process Clause of the Fourteenth Amendment to the United States
    Constitution. Tulsa Prof’l Collection Servs., Inc. v. Pope, 
    485 U.S. 478
    , 481, 484-
    85 (1988). Instead, the Supreme Court determined that where the protected
    property interest of a known or reasonably ascertainable creditor will be adversely
    impacted by state action, due process requires actual notice of the government
    action that will impact a property interest. 
    Id. at 487-88,
    491. The general notice
    that was condemned by the Supreme Court in Pope is analogous to what has
    occurred here with regard to the special assessments, which clearly qualify as state
    action. The property interests of mortgage holders will unquestionably be
    adversely impacted due to the priority given to special assessments under Florida
    law, but those mortgage holders receive no actual notice of the bond validation
    proceedings and lack standing to challenge the designation of the loan repayments
    as superior to the property interests of prior mortgage holders. The rights of
    mortgage holders are also adversely impacted by the legislation after a property
    owner elects to participate in this loan process.
    You may call a donkey a thoroughbred, but that donkey is going to remain a
    donkey. These home improvement projects stand out on an island by themselves
    - 28 -
    and, although they are very well intended, constitute an unprecedented expansion
    of the concept of “special assessments.” It may be commendable for the
    government to assist citizens with renovations to their homes. However, by
    affirming the amended final judgment of the circuit court, it seems there will be no
    limit to the purposes for which special assessments can be levied. Future
    expansions will only further minimize and diminish mortgage holders’
    constitutional property rights.5 These issues have not been fully briefed, nor have
    they been fully argued.
    Despite my deep concerns, I recognize that it appears that precedent does not
    expressly address the use of special assessments in this fashion, and the decision as
    to what is to be labelled a “special assessment” may fall within the discretion of the
    Legislature. However, based upon the troublesome and far-reaching implications
    of this case, I concur in result only.
    Two Cases:
    An Appeal from the Circuit Court in and for Leon County – Bond Validations
    John C. Cooper, Judge – Case No. 372014CA000548XXXXXX
    5. I do recognize some limitations to the concerns that I have expressed. If,
    for example, a property presents a public nuisance, and the local government levies
    a special assessment to correct or remove it for the benefit of a community or a
    specific area, it would be logical for such an assessment to take priority over a
    mortgage.
    - 29 -
    Ceci Culpepper Berman of Brannock & Humphries, Tampa, Florida, on behalf of
    Florida Bankers Association; and James C. Dinkins of Mark G. Lawson, P.A.,
    Tallahassee, Florida, on behalf of Robert Reynolds,
    for Appellants
    Gregory Thomas Stewart, Lynn Miyamoto Hoshihara, and Carly J. Schrader of
    Nabors, Giblin & Nickerson, P.A., Tallahassee, Florida, on behalf of Florida
    Development Finance Corporation; Raoul G. Cantero, III, Thomas Neal McAliley,
    and Jesse Luke Green of White & Case LLP, Miami, Florida, on behalf of Florida
    Development Finance Corporation; Jane Kreusler-Walsh, Rebecca Mercier Vargas,
    and Stephanie L. Serafin of Kreusler-Walsh, Compiani & Vargas, P.A., West Palm
    Beach, Florida, on behalf of Florida Development Finance Corporation; L. Thomas
    Giblin of Nabors, Giblin, et al., Tampa, Florida, on behalf of Florida
    Development Finance Corporation; Gerald Paul Hill, State Attorney, and Victoria
    Jacquelyn Avalon, Assistant State Attorney, Tenth Judicial Circuit, Bartow,
    Florida, on behalf of the State of Florida; Ralph Larizza, State Attorney, and
    Phillip Dale Havens, Assistant State Attorney, Seventh Judicial Circuit, Daytona
    Beach, Florida, on behalf of the State of Florida; and Philip Glen Archer, State
    Attorney, and Laura Michelle Moody, Assistant State Attorney, Eighteenth
    Judicial Circuit, Viera, Florida, on behalf of the State of Florida,
    for Appellees
    Erin Lee Deady of Erin L. Deady, P.A., Lantana, Florida,
    for Amicus Curiae PACENow
    Keith W. Davis of Corbett, White and Davis, P.A., Lantana, Florida,
    for Amicus Curiae Florida Green Finance Authority
    George Steve Cavros, Fort Lauderdale, Florida,
    for Amicus Curiae Southern Alliance for Clean Energy, Inc.
    Edward George Guedes and Chad Stuart Friedman of Weiss Serota Helfman Cole
    Bierman & Popok, P.L., Coral Gables, Florida,
    - 30 -
    for Amicus Curiae Green Corridor Property Assessment Clean Energy
    District
    Richard Watson, Tallahassee, Florida,
    for Amicus Curiae Associated Builders and Contractors of Florida, Inc.
    Jody Lamar Finklea and Amanda L. Swindle, Tallahassee, Florida,
    for Amicus Curiae Florida Municipal Electric Association, Inc.
    Joshua Douglas Smith and Travis Ritchie, San Francisco, California,
    for Amicus Curiae Sierra Club
    Elizabeth Wilson Neiberger and Susan Hamilton Churuti of Bryant Miller Olive
    P.A., Tallahassee, Florida; Virginia Saunders Delegal, General Counsel, Florida
    Association of Counties, Tallahassee, Florida; Harry Morrison, Jr. and Kraig
    Armantrout Conn, Florida League of Cities, Inc., Tallahassee, Florida; Herbert
    William Albert Thiele, Leon County Attorney, Tallahassee, Florida; and Daniel
    Scott McIntyre, St. Lucie County Attorney, Fort Pierce, Florida,
    for Amici Curiae The Florida Association of Counties, The Florida League
    of Cities, Inc., Leon County, Florida, and St. Lucie County, Florida
    - 31 -