A1969

An Act concerning the veterans’ property tax exemption and amending P.L.1948, c.259.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1948, c.259 (C.54:4-3.30) is amended to read as follows:

1. a. The dwelling house and the lot or curtilage whereon the same is erected, of any citizen and resident of this State, now or hereafter honorably discharged or released under honorable circumstances, from active service, in time of war, in any branch of the Armed Forces of the United States, who has been or shall be declared by the United States Veterans Administration or its successor to have a service-connected disability from paraplegia, sarcoidosis, osteochondritis resulting in permanent loss of the use of both legs, or permanent paralysis of both legs and lower parts of the body, or from hemiplegia and has permanent paralysis of one leg and one arm or either side of the body, resulting from injury to the spinal cord, skeletal structure, or brain or from disease of the spinal cord not resulting from any form of syphilis; or from total blindness; or from amputation of both arms or both legs, or both hands or both feet, or the combination of a hand and a foot; or from other service-connected disability declared by the United States Veterans Administration or its successor to be a total or 100% permanent disability, and not so evaluated solely because of hospitalization or surgery and recuperation, sustained through enemy action, or accident, or resulting from disease contracted while in such active service, shall be exempt from taxation, on proper claim made therefor, and such exemption shall be in addition to any other exemption of such person's real and personal property which now is or hereafter shall be prescribed or allowed by the Constitution or by law but no taxpayer shall be allowed more than one exemption under this act.

b. (1) The surviving spouse of any such citizen and resident of this State, who at the time of death was entitled to the exemption provided under this act, shall be entitled, on proper claim made therefor, to the same exemption as the deceased had, during the surviving spouse's widowhood or widowerhood, as the case may be, and while a resident of this State, for the time that the surviving spouse is the legal owner thereof and actually occupies the said dwelling house or any other dwelling house thereafter acquired.

(2) The surviving spouse of any citizen and resident of this State who was honorably discharged and, after the citizen and resident's death, is declared to have suffered a service-connected disability as provided in subsection a. of this section, shall be entitled, on proper claim made therefor, to the same exemption the deceased would have become eligible for. The exemption shall continue during the surviving spouse's widowhood or widowerhood, as the case may be, and while a resident of this State, for the time that the surviving spouse is the legal owner thereof and actually occupies the dwelling house or any other dwelling house thereafter acquired.

c. The surviving spouse of any citizen and resident of this State, who died in active service in time of war in any branch of the Armed Forces of the United States, shall be entitled, on proper claim made therefor, to an exemption from taxation on the dwelling house and lot or curtilage whereon the same is erected, during the surviving spouse's widowhood or widowerhood, as the case may be, and while a resident of this State, for the time that the surviving spouse is the legal owner thereof and actually occupies the said dwelling or any other dwelling house thereafter acquired.

d. The surviving spouse of any citizen and resident of this State who died prior to January 10, 1972, that being the effective date of P.L.1971, c.398, and whose circumstances were such that, had said law become effective during the deceased's lifetime, the deceased would have become eligible for the exemption granted under this section as amended by said law, shall be entitled, on proper claim made therefor, to the same exemption as the deceased would have become eligible for upon the dwelling house and lot or curtilage occupied by the deceased at the time of death, during the surviving spouse's widowhood or widowerhood, as the case may be, and while a resident of this State, for the time that the surviving spouse is the legal owner thereof and actually occupies the said dwelling house on the premises to be exempted.

e. Nothing in this act shall be intended to include paraplegia or hemiplegia resulting from locomotor ataxia or other forms of syphilis of the central nervous system, or from chronic alcoholism, or to include other forms of disease resulting from the veteran's own misconduct which may produce signs and symptoms similar to those resulting from paraplegia, osteochondritis, or hemiplegia.

f. The State shall annually reimburse each taxing district for the full amount of any veterans' property tax exemptions permitted by that taxing district in the current tax year.

(cf: P.L.2007, c.317, s.1)

2. This act shall take effect immediately.

STATEMENT

This bill would provide municipalities with annual reimbursement of the cost of a State mandate that preceded the approval by the voters of an amendment (Article VII, Section I, paragraph 5) to New Jersey’s Constitution prohibiting the imposition of unfunded mandates on local units of government after January 17, 1996.

Under current law, 100% permanently and totally disabled war veterans, and their surviving spouses, are exempt from the payment of real property taxes assessed against their principal residence. However, the State does not reimburse municipalities for the revenue lost from this exemption from property taxes. Essentially, the property tax revenue that would have been raised in a municipality from these tax-exempt, 100% permanently and totally disabled veterans, and their surviving spouses, is instead raised from all other property taxpayers in the municipality. The State currently reimburses municipalities for revenue lost due to the $250 property tax deduction for war veterans and their surviving spouses, as well as the $250 deduction for senior citizens and disabled persons having annual incomes not in excess of $10,000; however, the State has never reimbursed municipalities for revenue lost due to the veterans’ property tax exemption. The financial impact of this property tax exemption on municipalities is substantial. In 2007, there were 5,972 100% permanently and totally disabled veterans and surviving spouses who received this property tax exemption. According to the Division of Taxation in the Department of the Treasury, the amount of property tax revenue foregone in 2007 by the municipalities in which these 5,972 residents resided was $33,964,551.67. In 2008, there were 6,327 100% permanently and totally disabled veterans and surviving spouses who received this property tax exemption. According to the Division of Taxation, the amount of property tax revenue foregone in 2008 by the municipalities in which these 6,327 residents resided was $37,501,168.82.

This bill would require the State to annually reimburse each taxing district for the full amount of any veterans' property tax exemptions permitted by that taxing district in the current tax year.