If the taxpayer is reimbursed pursuant to chapter 915 916 for 100% of the property taxes assessed during the taxable year against all of the machinery and equipment that constitutes eligible property as defined in section 6651 6672, subsection 1 2, that machinery and equipment may not be included in the investment credit base for that taxable year. The term "taxable year" means the taxable year for income tax purposes of the taxpayer.

Sec. 4. 36 MRSA c. 915, as amended, is repealed.

Sec. 5. 36 MRSA c. 916 is enacted to read:

CHAPTER 916

LOCAL OPTION BUSINESS EQUIPMENT TAX REIMBURSEMENT

§6671.__Local option tax reimbursement

1.__Municipalities authorized to adopt program.__If the legal voters of a municipality give their approval in a referendum vote, the legislative body of that municipality may adopt a local option business equipment tax reimbursement program, referred to in this chapter as "a reimbursement program," as specified in this chapter.

§6672.__Organization of reimbursement program

A municipality that adopts a reimbursement program must do so according to this section.

1.__Percentage of reimbursement. The municipality may adopt a reimbursement program that provides for a maximum reimbursement of 100% of the personal property taxes levied pursuant to this Part and paid to that municipality on eligible business equipment.

2.__Eligible business equipment.__Business equipment that is eligible for reimbursement is tangible personal property that:

A.__Is used or held for use exclusively for a business purpose by the person in possession of it or, in the case of construction in progress or inventory parts, is intended to