2012 Changes to Agricultural Land Assessment

Two important changes affecting assessment of agricultural property in Colorado are being implemented for tax year 2012 and for future years.

First, Colorado House Bill No. 1146, enacted by the Colorado Legislature in 2011 and signed by the Governor on May 9, 2011, significantly changes the property tax assessment of land underlying certain agricultural residences beginning in Tax Year 2012 and for subsequent tax years. Historically, for property taxation purposes, “agricultural land,” as defined by Colorado law, has included the land underlying a residence located upon a “farm” or “ranch” as defined in the Statutes for property tax purposes. Beginning in Tax Year 2012, however, for the land underlying an agricultural residence (defined as the 2 acres or less of land upon which the residential improvement is located) to be classified as “agricultural land” for property assessment purposes, the residence must be considered “integral” to the agricultural operation being conducted on the parcel of land where the agricultural residence is located. “Integral to an agricultural operation” is defined as follows in §39-1-102(1.6)(a)(I)(B) of the Colorado Revised Statutes:

A residential improvement shall be deemed to be "integral to an agricultural operation" for purposes of sub-subparagraph (A) of this subparagraph (I) if an individual occupying the residential improvement either regularly conducts, supervises, or administers material aspects of the agricultural operation or is the spouse or a parent, grandparent, sibling, or child of the individual.

The land underlying an agricultural residence that DOES NOT qualify for agricultural classification under the revised law shall be reclassified by the Assessor as residential land, and an appropriate market value assigned to that land. This will necessarily mean that agricultural land parcels where such reclassification of land underlying the agricultural residence has occurred will see a significant change in value for Tax Year 2012 and for future tax years. Tax Year 2012 is an “intervening year” in a 2-year re-assessment cycle in Colorado. Normally, only legal or physical changes in a particular property will cause a value change in an intervening year, but this tax law change enacted by the Legislature and signed into law by the Governor is an exception to that norm.

In order for our office to correctly classify the land underlying agricultural residences, our office will be mailing an “Agricultural Residence and Land Questionnaire” to Delta County agricultural landowners. We are requesting that agricultural landowners complete and return the questionnaire to the Delta County Assessor’s office.

Second, a significant change has occurred in the crop production data collection that is done to enable us to value agricultural land. In Delta County, two “base crops” have been used to develop our valuation model—corn and all hay—with detailed data collected by the Colorado Agricultural Statistics Service (“CASS”) used to establish 10-year averages of typical production for Delta County. Unfortunately, CASS can no longer supply Colorado counties with the detailed information that has been historically used. Therefore, we are requesting that agricultural land owners who produce either corn or hay—the latter being either alfalfa hay or other hay—provide us with the production information requested on the “Agricultural Residence and Land Questionnaire” referenced above. Please note that this production information will be treated as confidential by this office to extent prescribed by law; and that this production information will be aggregated by our office and ONLY used to help verify typical hay and corn production rates for the county for the various classes of irrigated land located here.

The Assessor's Office thanks Delta County agricultural landowners in advance for their cooperation in filling out and returning the questionnaire.

Persons can download a blank Agricultural Residence and Land Questionnaire.