SOUTH PORTLAND – Gov. John Baldacci was joined by business and legislative leaders Tuesday in marking enactment of legislation to spare Maine companies from taxes they have long viewed as detrimental to business investment in the state.

Baldacci traveled to the National Semiconductor plant to ceremonially sign a bill that prospectively gets rid of personal property taxes on business equipment. The new law exempts new equipment to be installed after April 1, 2007, from local personal property taxes.

Personal property already registered in the state’s decade-old business equipment tax reimbursement program will remain taxable by municipalities with tax payments to businesses still eligible for state reimbursement. Storefront retail property remains taxable and eligible for reimbursement.

The bill, LD 2056, was passed before lawmakers recessed in late April and signed into law May 4.

“Maine is on the right track for economic growth, and this legislation moves us much further down that path,” Baldacci said. “This bill will generate jobs for Maine businesses big and small.”

The Legislature’s Taxation Committee has debated ways of easing the tax burden for businesses for the entire two-year legislative session that is near its end. Baldacci, a Democrat, said the compromise legislation was forged with bipartisan cooperation.

House Republican Leader David Bowles of Sanford challenged the legislators to be elected over the next two terms and the governor to be elected in November to leave the compromise legislation intact and see if it works as intended.

Directing remarks to businesses, Bowles said lawmakers acknowledged that the personal property tax has been a significant impediment to investment and responded by passing the legislation. Bowles said corporate boardrooms now need to get the word that Maine is more business-friendly.

House Speaker John Richardson, D-Brunswick, said businesses need to invest in new technologies and people in order to compete in global markets.

“More than just the passage of this legislation, today we are acknowledging and celebrating an investment in the successful future of our communities, the successful future of our businesses, and the successful future of Mainers seeking good-paying jobs,” Richardson said in a prepared statement.

Steve Linne of Blacksmith’s Winery in Casco called the personal property tax “a significant burden to small business.” But he said that many businesses will not simply pocket the savings the new legislation will bring.

“This money is going to directly come back in employee raises, employee benefits, hiring more people, investing in more equipment and I think that is how you really build an economy,” Linne said.

Several other businesses and business groups, including the Maine State Chamber of Commerce and Maine Pulp and Paper Association, attended Tuesday’s event.