SUMMARY

PART A

Part A establishes a property tax exemption for property that would have been first subject to property tax after April 1, 2004 in the absence of this exemption. Property placed in service on or before April 1, 2004 will remain eligible for the Business Equipment Tax Reimbursement, or "BETR," program for the duration of the 12-year window for BETR program entitlement, after which it will be exempt. Property placed in service on or before April 1, 1995, the date after which property placed into service is eligible under BETR, will remain subject to property taxation as long as it continues to be otherwise subject to personal property taxation in the State.

It establishes a procedure for the State Tax Assessor to value business equipment entitled to the personal property tax exemption. Continuing valuation of this class of property will be required in order to provide the required 50% state reimbursement to municipalities for lost property tax revenue. Valuation by the State Tax Assessor will help ensure uniform determinations of just value and relieve municipalities of the burden of continuing to value exempt property.

It establishes a penalty for a taxpayer's failure to comply on a timely basis with reporting requirements. The penalty is set at $25,000 or 10% of the tax liability, whichever is less. The penalty may be waived for good cause.

It requires the establishment of a fund for economic development and job creation in municipalities affected by the prospective property tax exemption for business equipment and machinery and in economically distressed communities. The savings to the State from the elimination of BETR reimbursement for business equipment and machinery put into service after the exemption will be used to create the fund.

PART B

Part B repeals the homestead property tax exemption program for property tax years beginning on or after April 1, 2004,