Authorizes proportional property tax exemption for honorably discharged veterans having a service-connected disability and requires State to reimburse municipalities for cost of exemption.

This bill would create a property tax exemption for New Jersey veterans who are honorably discharged and have a service-connected disability rated at least 25% by the U.S. Department of Veterans Affairs, with the exemption amount matching the disability percentage (e.g., 50% disability equals 50% tax exemption) but capped at $15,000 for disabilities below 100%. It also ensures veterans with a service-connected disability making them unemployable receive a full 100% exemption, aligning with current benefits for 100% disability ratings. The bill requires the state to reimburse municipalities 102% of the tax exemption cost annually - including administrative expenses - and removes specific medical conditions from eligibility criteria, allowing any VA-recognized service-connected disability to qualify. The exemption extends to surviving spouses of eligible veterans under the same conditions as the veteran.