This bill proposes to allow certain municipalities in New Jersey to implement a land-based property tax system, where improvements (such as buildings) are taxed at a lower rate than the land itself. This system aims to discourage land speculation and promote the redevelopment of vacant urban land, drawing on successful examples from neighboring Pennsylvania. The bill specifically allows municipalities that are currently or were previously designated as urban enterprise zones to adopt this system without needing to apply for approval. Other municipalities will be able to apply for approval to implement the system seven years after the bill's operative date, with the Director of the Division of Taxation responsible for establishing the necessary rules and standards for approval.

Additionally, the bill outlines that the tax rates for improvements can be phased in gradually, allowing municipalities to adjust the difference between the rates over time. It also provides a mechanism for municipalities to revert to a single-rate property tax system if desired, with a similar phased approach for adjusting rates. The bill will only take effect upon the adoption of a constitutional amendment by New Jersey voters that permits such a property tax system.