The bill only applies to cities and towns that currently have different tax classifications for commercial and residential properties. Currently, according to state law, the commercial rate cannot be more than 175% of the residential rate.

Boston and approximately 40 cities and towns across the state have reached the maximum rate and Menino proposed that the rate be allowed to go up to 200%. Boston has the most to gain from changes to the law as 70% of its property tax base is paid by commercial space.

The panel came up with a compromise in which the rate would start at 200% and be reduced 7.5% every year for the next four years resulting in 170% rate as a maximum. In addition, any changes to the legislation would require a two/thirds vote rather than the standard majority. David Begelfer of the National Association of Industrial and Office Properties notes that this measure was put in to quell any concerns that the rate will remain at the highest level.