Bill Text: DE SB35 | 2025-2026 | 153rd General Assembly | Draft

Delaware Senate Bill 35

Draft

Bill Title: An Act To Amend Title 9 Of The Delaware Code Relating To Assessments And Taxation Of Structures Located On Land In Agricultural, Horticultural, And Forest Use.

Spectrum: Bipartisan Bill

Status: (Introduced) 2025-01-03 - Introduced and Assigned to Agriculture Committee in Senate [SB35 Detail]

Download: Delaware-2025-SB35-Draft.html

SPONSOR:	Sen. Hoffner & Sen. Wilson & Sen. Huxtable & Rep. Carson
Sens. Hansen, Lawson, Pettyjohn, Poore; Reps. Gray, Yearick

DELAWARE STATE SENATE

153rd GENERAL ASSEMBLY

SENATE BILL NO. 35

AN ACT TO AMEND TITLE 9 OF THE DELAWARE CODE RELATING TO ASSESSMENTS AND TAXATION OF STRUCTURES LOCATED ON LAND IN AGRICULTRUAL, HORTICULTURAL, AND FOREST USE.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend § 8328(2), Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8328. Purpose.

It is declared that it is in the public interest to:

(1) Encourage the preservation of farm land in order to maintain a readily available source of food and farm products close to the metropolitan areas of the State, to conserve the State’s natural resources and to provide for the welfare and happiness of the inhabitants of the State; State.

(2) Prevent the forced conversion of farm land and forest land to more intensive uses as a result of economic pressures caused by the assessment thereof for purposes of property taxation at values incompatible with their preservation as such farm land and forest land; and land, and provide for an equitable and uniform method of assessment of qualified farm structures.

(3) That the necessity of the enactment of the provisions of this section is a matter of legislative determination.

Section 2. Amend § 8329, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8329. Valuation of agricultural, horticultural and forest land use. use; valuation of qualified farm structures.

For general property tax purposes including school tax purposes, the value of land and qualified farm structures which is are actively devoted to agricultural, horticultural or forest use and which has been so devoted for at least the 2 successive years immediately preceding the tax year in issue, shall, on application of the owner, and approval thereof as provided in this section, be that value which such lands or qualified farm structures have for agricultural, horticultural or forest use; provided, that in the case of school taxes where such land is located in a public school district situated in 2 counties, the value of such land shall be that value arrived at by multiplying the value determined hereunder by the lower of the 2 general percentage rates of assessment in force in such counties for the tax year in issue.

Section 3. Amend § 8330, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8330. Agricultural use land.

Land and qualified farm structures shall be deemed to be in agricultural use when devoted to the production for sale of plants and animals useful to man, including but not limited to: including: forages and sod crops; grains and feed crops; dairy animals and dairy products; poultry and poultry products; livestock, including beef cattle, sheep, swine, horses, ponies, mules or goats, including the breeding and grazing of any or all of such animals; bees and apiary products; fur animals; trees and forest products; or when devoted to and meeting the requirements and qualifications for payments or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government.

Section 4. Amend § 8331, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8331. Horticultural use land.

Land and qualified farm structures shall be deemed to be in horticultural use when devoted to the production for sale of fruits of all kinds, including grapes, nuts and berries; vegetables; nursery, floral, ornamental and greenhouse products; or when devoted to and meeting the requirements and qualifications for payments or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government.

Section 5. Amend § 8332, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8332. Forest use land.

L and and qualified farm structures shall be deemed to be in forest use when devoted to tree growth in such quantity and so spaced and maintained as to constitute in the opinion of the State Forester a forest area.

Section 6. Amend § 8333, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8333. Criteria for agricultural, horticultural, or forestry land use.

(a) Land is and qualified farm structures are actively devoted to agricultural, horticultural, or forestry use when at least 1 of the following criteria is met:

Section 7. Amend § 8334, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8334. Eligibility for valuation under §§ 8330-8337 of this title.

(a) Land is actively devoted to agricultural, horticultural or forest use and eligible for valuation, assessment, and taxation as provided in this section when it meets all of the following qualifications:

(1) The land use meets the criteria under § 8333 of this title.

(2) [Repealed.]

(3) The owner of the land submits an application for valuation under this section and the application meets all of the following:

a. Is submitted on or before February 1 of the year immediately preceding the tax year to the assessor of the taxing district in which the land is situated. If February 1 falls on a weekend day or legal holiday, then the application must be submitted on the next official business day.

b. Is submitted on the form prescribed by the State Farmland Evaluation Advisory Committee.

c. Includes evidence in writing that the land is used for agricultural use under § 8330 of this title, horticultural use under § 8331 of this title, or forest use under § 8332 of this title.

(b) A qualified farm structure actively devoted to agricultural, horticultural or forest use and eligible for valuation, assessment, and taxation shall be a structure, including poultry houses, utilized to store, maintain or house farm implements, agricultural commodities or crops, livestock, poultry and livestock products.

Section 8. Amend § 8335, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8335. Assessment procedures.

(a) The assessor in valuing land and qualified farm structures which qualifies qualify as land actively devoted to agricultural, horticultural or forestry use under the tests prescribed by this section, and as to which the owner thereof has made timely application for valuation, assessment and taxation under this section for the tax year in issue, shall consider only those indicia of value of such land and qualified farm structures as established by the State Farmland Evaluation Advisory Committee.

(c) All structures qualified farm structures which are located on land in agricultural, horticultural or forest use and the farmhouse and the land on which the farmhouse is located, together with the additional land used in connection therewith, shall be valued, assessed and taxed by the same standards, methods and procedures as other taxable structures and other land in the taxing district. as established by the State Farmland Evaluation Advisory Committee.

(e) When a qualified farm structure in agricultural, horticultural or forest use and being valued, assessed and taxed under the provisions of this chapter, is applied to a use other than agricultural, horticultural or forest use, it shall be subject to additional taxes, hereinafter referred to as roll-back taxes, in an amount equal to the difference, if any, between the taxes paid or payable on the basis of the valuation and the assessment authorized hereunder and the taxes that would have been paid or payable had the qualified farm structure been valued, assessed and taxed as other structures in the taxing district, in the current tax year immediately preceding, in which the qualified farm structure was valued, assessed and taxed as follows:

(1) In determining the amounts of the roll-back taxes chargeable on a qualified farm structure which has undergone a change in use, the assessor shall, for each of the roll-back tax years involved, ascertain all of the following:

a. The full and fair value of such qualified farm structure under the valuation standard applicable to other structures in the taxing district.

b. The amount of the additional assessment on the qualified farm structure for the particular tax year by deducting the amount of the actual assessment on the qualified farm structure for that year from the amount of the qualified farm structure assessment determined by the assessing authority.

c. The amount of the roll-back tax for that tax year by multiplying the amount of the additional assessment determined under paragraph (e)(1)b. of this section by the general property tax rate of the taxing district applicable for that tax year.

(2) Roll-back taxes as provided herein shall become payable when the qualified farm structure is applied to a use other than agricultural, horticultural or forestry. The terms “applied to a use other than agriculture” and “change in use” for purposes of this subsection shall include any of the following:

a. The actual use of the qualified farm structure for an activity other than agricultural, horticultural or forestry.

b. The rezoning of the land to a nonagricultural category.

c. The approval of a site plan or issuance of a certificate of occupancy which allows for a nonagricultural usage.

d. The loss of eligibility for valuation under §§8330-8337 of this title.

(3) Roll-back taxes hereunder shall be paid within 90 days of their due date, and payment thereafter shall include a penalty of 6% of the amount due for the first month thereafter, and 1% of the amount due for each consecutive month until payment is made. The amount due for roll-back tax shall become a lien on the land which was subject to a change in use of a qualified farm structure other than agriculture, horticultural or forestry use as of the due date.

Section 9. Amend § 8336, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8336. Annual Review.

(c) Eligibility of qualified farm structures for valuation, assessment and taxation under this section shall be determined for each tax year separately. Application shall be submitted by the owner to the assessor of the taxing district in which such qualified farm structure is situated on or before February 1 of the year immediately preceding the tax year for which such valuation, assessment, and taxation are sought; provided however, that unless the eligibility of the qualified farm structures under this section changes, those applications which have met the provisions to qualify under this chapter shall be automatically renewed without the owner having to apply annually. With respect to new applications, eligibility of the qualified farm structures for valuation, assessment, and taxation under this section shall be conditioned upon advance execution by the landowner of a certification, in recordable form, as provided by the Delaware Agricultural Lands Preservation Foundation, which certification indicates that a roll-back tax is due and payable under the provisions of § 8335(e) of this title at such time that the qualified farm structure is subjected to a change in use or applied to a use other than agricultural, horticultural or forestry, as such terms are defined, and that a failure to pay the roll-back tax when due results in the imposition of a lien on the land for nonpayment.

(d) (1) If the eligibility of qualified farm structures under this section changes, the owner shall, on or before February 1 of the following year in which the eligibility of the qualified farm structure changes, notify the assessing authority in the taxing district, in writing, of the change in qualified farm structure use.

(2) Any owner who fails to properly notify the assessing authority in the tax district of the change in qualified farm structure use shall be assessed a penalty for such failure in an amount of 20% of the rollback taxes recoverable against the property, which penalty shall be collected by the taxing district.

Section 10. Amend § 8337, Title 9 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 8337. State Farmland Evaluation Advisory Committee.

(b) The Committee shall meet from time to time on the call of the Dean of the College of Agricultural Sciences and annually determine and publish a range of values for each of the several classifications of land and qualified farm structures in agricultural, horticultural or forest use in the various areas of the State. The primary objective of the Committee shall be the determination of the ranges in fair value of such land and qualified farm structures based upon its productive capabilities when devoted to agricultural, horticultural or forest uses. In making these annual determinations of value, the Committee shall consider available evidence of agricultural, horticultural or forest capability derived from the soil survey and such other evidence of value of land and qualified farm structures devoted exclusively to agricultural, horticultural or forest uses as it may in its judgment deem pertinent. On or before February 1 of each year, the Committee shall make these ranges of fair value available to the assessing authority in each of the taxing districts in which land and qualified farm structures in agricultural, horticultural and forest use are located. The Committee shall review at least every 2 years the formula, method or system being utilized to determine the ranges of fair values for agricultural, horticultural and forestry land and qualified farm structures and make such changes and revisions as are required to insure that the objectives of this section are met. The formula used by the Committee shall be based on not less than the preceding 20 years of land values and other indicia of fair value or appropriate assessed percentage reduction for qualified farm structures. For purposes of this section, qualified farm structures shall have the meaning ascribed to them in § 8334(b) of this title.

SYNOPSIS

Agriculture is currently the leading industry in Delaware but as housing and other development occurs less farmland becomes available. For farmers in general, but in particular the small and medium sized farm owners, the real estate taxes imposed on their farm structures imposes a significant financial impact and adversely affects their ability to survive. At least eighteen other states have recognized this problem and have through legislation provided real estate tax relief for qualified farm structures. This legislation would use the same mechanism for providing real estate tax relief for qualified farm structures as it currently exists for qualified farmlands.

Author: Senator Hoffner