DIRECTING THE DIRECTOR OF THE OFFICE OF STATE PLANNING COORDINATION, THE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET, THE SECRETARY OF FINANCE, THE CONTROLLER GENERAL, THE SECRETARY OF EDUCATION, AND THE SECRETARY OF THE DEPARTMENT OF TECHNOLOGY AND INFORMATION TO DEVELOP RECOMMENDATIONS FOR THE STATEWIDE UNIFORM REASSESSMENT OF REAL PROPERTY AND TO PROVIDE A REPORT OF THE RECOMMENDATIONS TO THE GOVERNOR AND THE GENERAL ASSEMBLY.

Legislation Document

SPONSOR:

Rep. Wilson-Anton & Rep. S. Moore & Rep. Phillips

Reps. Burns, Lambert, Gorman

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE JOINT RESOLUTION NO. 8

DIRECTING THE DIRECTOR OF THE OFFICE OF STATE PLANNING COORDINATION, THE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET, THE SECRETARY OF FINANCE, THE CONTROLLER GENERAL, THE SECRETARY OF EDUCATION, AND THE SECRETARY OF THE DEPARTMENT OF TECHNOLOGY AND INFORMATION TO DEVELOP RECOMMENDATIONS FOR THE STATEWIDE UNIFORM REASSESSMENT OF REAL PROPERTY AND TO PROVIDE A REPORT OF THE RECOMMENDATIONS TO THE GOVERNOR AND THE GENERAL ASSEMBLY.

WHEREAS, in 2020, the Chancery Court found that all 3 counties in Delaware violated the uniform tax requirements under Section 1 of Article VIII of the Delaware Constitution by using outdated property valuations to assess county and school taxes (

In re Delaware Public Schools Litigation

, 239 A.2d 451 (Del. Ch. 2020)); and

WHEREAS, in 2021, as part of the settlement for the Chancery Court case, each county agreed to conduct a general tax reassessment; and

WHEREAS, before the reassessments performed according to the 2021 settlement, the counties had not reassessed properties since the 1970s or 1980s; and

WHEREAS, HB 62, enacted on August 9, 2023, requires each county to reassess real property located in the county at least once every 5 years, with the first 5-year period starting when the counties completed the reassessments in progress at the time of enactment; and

WHEREAS, 30 states, including Delaware, require periodic property reassessments at least every 5 years, with most states requiring reassessments annually, every 2 years, or every 3 years; and

WHEREAS, the 144th General Assembly previously explored ways to improve the reassessment process by passing House Joint Resolution 22, which directed the Director of the Office of Management and Budget, the Secretary of Finance, the Secretary of Education and the Controller General to provide a report to the General Assembly and then-Governor Minner with recommendations to provide a mechanism for a fair and equitable reassessment of all real property within this State,

WHEREAS, to develop the recommendations required by HJR 22, the state agencies formed a 13-member committee that included representatives from the University of Delaware, the State Board of Education, the Delaware State Education Association, and 1 public school district from each county; and

WHEREAS, the committee consulted with assessment professionals in other states, researched and reviewed best practices within the assessment industry, and met with stakeholders to develop the recommendations; and

WHEREAS, the committee delivered a report to Governor Minner and the General Assembly on November 26, 2008, detailing a framework for reassessment that balanced the needs of all involved stakeholders while bringing Delaware in line with professional assessment standards; and

WHEREAS, in its report, the committee recognized that a statewide reassessment presented an array of logistical, political, and financial challenges, but the committee concluded that undertaking a statewide assessment would improve administrative efficiency and restore integrity and equity to the property tax base; and

WHEREAS, the committee considered 3 reassessment approaches and recommended a hybrid approach in which this State and counties would work together; and

WHEREAS, under the hybrid approach, the State would set the new standards for assessment practices, combine the 3 separate county property tax databases into a single statewide database to be controlled by the State, and use a private contractor to help the counties implement the new system; and

WHEREAS, the recommended approach would require the counties to conduct the physical inspection of properties, collect data, and input the data into the statewide database; and

WHEREAS, the committee recommended forming a State Assessment Practices Board, with 9 members appointed by the Governor, the counties, and the General Assembly, to oversee implementation of property tax reassessment; and

WHEREAS, the State Assessment Practices Board would serve part-time and work in conjunction with local governments, other State officials and staff, and the private contractor to manage the implementation process; and

WHEREAS, after the initial reassessment, the counties would perform subsequent revaluations and physical inspections, and the State would maintain the statewide property database, monitor the counties' assessment practices and performance and, if necessary, initiate remedial actions against counties that fail to meet accepted standards; and

WHEREAS, the committee also offered recommendations on how to manage the impact of tax increases after reassessments, including limiting aggregate local government and school revenue growth at 7.5% after the initial reassessment and 5% for subsequent reassessments and protecting homeowners from sharp increases after the initial reassessment by creating a 3-year phase-in to the updated assessed value on primary residences; and

WHEREAS, the committee also anticipated an increase in appeals after the initial reassessment and hoped to explore the feasibility of establishing a State Property Tax Court that could hear appeals from the County Boards and help ease the burden on the Superior Court; and

WHEREAS, the committee’s framework for a statewide reassessment process has not been implemented; and

WHEREAS,

property tax reassessments are a core-function of county government; and

WHEREAS,

while each county is best suited to conduct property reassessment due to its intimate knowledge of local communities, parcels, and land-use, many states have boards, departments, divisions, or offices that support the counties’ work of reassessment, including large and populous states like California and New York, neighboring states like Maryland, New Jersey, and Pennsylvania, and rural states with low populations like Iowa and Wyoming; and

WHEREAS, these boards, departments, divisions, or offices carry out a diverse range of functions, including all of the following:

(1) Assisting county assessment offices with the work of reassessment, including management of third-party contracts.

(2) Conducting ratio studies of county assessment rolls.

(3) Managing statewide tax parcel databases.

(4) Oversight of county compliance with reassessment standards.

(5) Public education efforts related to the methodology used for property assessments, appeals, and exemptions.

(6) Assisting taxpayers with applying for property tax credit programs, like the Maryland “Homeowners’ Property Tax Credit Program”,

the Maryland “Homestead Property Tax Credit”, or the Maryland “Renters’ Tax Credit Program”; and

WHEREAS, the Office of State Planning Coordination works with county parcel data daily, administers the statewide Geographic Information Systems (GIS), and functions as an advisory, consultative and coordinating office providing technical assistance to county and municipal governments; and

WHEREAS, almost every state employs sales-assessment ratio studies to compare assessed values of properties to their actual sales prices, which helps to determine the accuracy of local assessments and identify areas requiring adjustment to ensure consistency across areas within the state.

WHEREAS, many states equalize assessed values among the county assessing units for consistency and fairness in taxation across the state; and

WHEREAS, the University of Delaware Center for Applied Demography Research prepares assessment-to-sales ratio study annually; and

NOW THEREFORE:

BE IT RESOLVED by the House of Representatives and the Senate of the 153rd General Assembly of the State of Delaware, with the approval of the Governor, that under the direction of the Lieutenant Governor, the Director of the Office of State Planning Coordination, the Director of the Office of Management and Budget, the Secretary of Finance, the Controller General, the Secretary of Education, and the Secretary of the Department of Technology and Information, in collaboration with the counties and the University of Delaware Center for Applied Demography and Survey Research, develop recommendations for the reassessment of real property by doing at least all of the following:

(1) Determining if there is an existing state agency or office best suited to oversee the reassessment process, or if legislation should be enacted to establish the State Assessment Practices Board.

(2) Surveying neighboring states and states of similar size or makeup to Delaware for best practices for statewide oversight of property reassessment, including ratio studies.

(3) Determining the number of staff the State Assessment Practices Board would require to carry out the duties outlined in the November 26, 2008, report issued under HJR 22 and any additional functions necessary for the Board’s scope of work.

(4) Exploring the feasibility of adding a State Property Tax Court.

(5) Identifying existing state funding that could be re-allocated to assist in carrying out this work.

(6) Evaluating the effectiveness of the recent reassessments and ways that the counties could be better supported, in a manner that is not redundant but adds to existing support.

BE IT FURTHER RESOLVED that, not later than January 12, 2026, the Director of the Office of State Planning Coordination, the Director of the Office of Management and Budget, the Secretary of Finance, the Controller General, the Secretary of Education, and the Secretary of the Department of Technology and Information shall deliver a written report of their recommendations and findings to the Governor and the General Assembly.

SYNOPSIS

This Resolution directs the Director of the Office of State Planning Coordination, the Director of the Office of Management and Budget, the Secretary of Finance, the Controller General, the Secretary of Education, and the Secretary of the Department of Technology and Information to provide the Governor and the General Assembly with recommendations on how the State can better support future property tax reassessments, drawing upon recommendations made in the 2008 report resulting from HJR 22 and best practices from neighboring and similar states to Delaware.