HB2508

Regular Session

Relating to an exemption from ad valorem taxation of the residence homestead of the surviving spouse of a veteran who died as a result of a qualifying condition or disease.

ModeratePlan for compliance

Low Cost

Effective:2025-06-20

Enforcing Agencies

County Appraisal Districts (Chief Appraisers) • Texas Comptroller of Public Accounts

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: January 1, 2026 (Contingent on passage of Constitutional Amendment HJR 133 in the November 5, 2025 election).
Compliance Deadline: Mortgage servicers must update escrow logic by December 31, 2025, to prevent over-collection for the 2026 tax year.
Agency Rulemaking: The Texas Comptroller will update Form 50-114 (Residence Homestead Exemption Application) following the November election. Expect a "regulatory gray zone" between November 2025 and January 2026 regarding the specific medical documentation Appraisal Districts will accept.

Immediate Action Plan

1. Audit Servicing Portfolios: Immediately query loan data for borrowers flagged as "Surviving Spouse." Prepare a sub-list for potential PACT Act eligibility outreach if the amendment passes.
2. Update System Logic: Configure loan servicing software to accept a "100% Exemption – PACT Act" code that overrides standard tax rate calculations effective 1/1/2026.
3. Monitor November Election: Set a calendar alert for November 6, 2025. If HJR 133 passes, immediately deploy updated Form 50-114 guidance to clients.
4. Review Vendor Contracts: Confirm your tax service vendors are prepared to report this specific exemption code starting in the 2026 tax cycle.

Operational Changes Required

Contracts

Tax Service Vendor Agreements: Amend scopes of work with third-party tax monitors. They must be contractually obligated to flag Section 11.136 exemptions specifically, distinguishing them from standard homestead exemptions.
Closing/Sales Contracts: For transactions closing in late 2025/early 2026 involving surviving spouses, special provisions regarding tax proration adjustments pending exemption approval are necessary.

Hiring/Training

Loan Servicing Staff: Train escrow analysis teams to recognize "PACT Act" status. They must understand that this exemption applies retrospectively to deaths occurring before the law's passage, meaning long-standing accounts may suddenly revert to $0.00 tax liability.
Escrow Officers: Train staff on Portability Math. When a surviving spouse moves, the exemption transfers as a *dollar amount*, not a percentage. Staff must be able to calculate partial tax liability for the new property to estimate PITI accurately.

Reporting & Record-Keeping

Documentation Standards: County Appraisal Districts (CADs) are not medical experts. Your teams must require a VA Rating Decision or Dependency and Indemnity Compensation (DIC) award letter explicitly linking the cause of death to a PACT Act condition. A standard death certificate is insufficient for your files.
Portability Certificate: Lenders must mandate the "Certificate of Transfer" from the Chief Appraiser of the borrower's *former* county before closing on a new loan to justify reduced escrow collections.

Fees & Costs

Escrow Refund Liability: Failure to recognize this exemption triggers RESPA requirements. Servicers will bear the administrative cost of processing refunds for over-collected tax escrow if systems are not updated by Jan 1, 2026.

Strategic Ambiguities & Considerations

The "Medical Nexus" Gap:

The law relies on the federal PACT Act definition of "qualifying condition," but CADs lack the expertise to adjudicate medical causes of death.

*Watch For:* Inconsistent application across counties. Some CADs may demand a specific VA letter, while others may accept a death certificate listing a presumptive condition.
*Business Logic:* Do not rely on CAD discretion. Require the federal VA adjudication letter for your internal compliance files to ensure the exemption is durable and will not be revoked, causing an escrow shortage later.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsDisabilities, Persons With Health Health--other Diseases & Medical Conditions Military & Veterans Property Interests Property Interests--homestead Taxation Taxation--property-appraisals & Appraisal Districts Taxation--property-exemptions

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

H.B. 2508

By: Turner

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

According to a 2024 study on veterans in Texas prepared by the Texas Workforce Investment Council, approximately 1.5 million individuals 18 years of age and older in Texas were veterans in 2021. Current state law entitles a veteran who is rated as 100 percent disabled due to a service‑connected disability to an exemption from property taxation of the total appraised value of the veteran's residence homestead, and when a 100 percent disabled veteran passes away, a qualifying surviving spouse is entitled to the same residence homestead exemption for the property to which the veteran's exemption applied. However, the bill author has informed the committee that a gap exists in current law with respect to veterans who pass away due to a condition or disease for which the federal Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act of 2022 establishes a presumption of service connection but who are not yet rated as 100 percent disabled at the time of the veteran's death, in which case the surviving spouse is not entitled to a residence homestead exemption. H.B. 2508 seeks to address this issue by entitling the surviving spouse of a veteran who died as a result of a qualifying condition or disease presumed to be service-connected under the Honoring our PACT Act, regardless of the veteran's disability rating at the time of the veteran's death, to certain exemptions from property taxation.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 2508 amends the Tax Code to entitle the surviving spouse of a qualifying veteran who was married to the veteran at the time of the veteran's death and has not remarried since that time to an exemption from property taxation of the total appraised value of the surviving spouse's residence homestead, defined by reference to statutory provisions relating to residence homestead property tax exemptions. The bill defines "qualifying veteran" as a veteran of the U.S. armed services who died as a result of a qualifying condition or disease, regardless of the veteran's disability rating at the time of the veteran's death, and defines "qualifying condition or disease" as a condition or disease for which the federal Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022 or a regulation adopted under that act establishes a presumption of service connection. The bill makes this exemption applicable regardless of the date of the veteran's death if the surviving spouse otherwise meets the qualifications for the exemption.

H.B. 2508 also entitles a surviving spouse who receives such an exemption and who has not remarried since the death of the veteran to receive an exemption from taxation of a property that the spouse subsequently qualifies as the spouse's residence homestead in an amount equal to the dollar amount of the exemption the spouse received for the first property under the bill's provisions in the last year in which the spouse received that exemption. The bill further entitles the surviving spouse to receive from the chief appraiser of the appraisal district in which the first property for which the spouse claimed the exemption was located a written certificate providing the information necessary to determine the amount of the exemption to which the spouse is entitled on the subsequently qualified homestead.

H.B. 2508 makes an exemption authorized by the bill's provisions effective as of January 1 of the tax year in which the person qualifies for the exemption and applicable to the entire tax year. The bill subjects such an exemption to statutory provisions that provide for the following:

·the continued application of an exemption without claiming the exemption in subsequent years until the property changes ownership or the person's qualification for the exemption changes;

·the calculation of the tax due against a former residence homestead when the appraisal roll shows that the residence homestead property tax exemption applicable to a property on January 1 of a year terminated during the year and the owner of the property qualifies a different property for the exemption during the same year; and

·the calculation of taxes on the residence homesteads of qualifying elderly or disabled adults and qualifying surviving spouses of members of the U.S. armed services and first responders who were killed in the line of duty.

H.B. 2508 amends the Government Code to establish that, for purposes of the study conducted by the comptroller of public accounts to determine the total taxable value of all property in each public school district, a residence homestead that receives an exemption under the bill's provisions in the year that is the subject of the study is not considered to be taxable property.

H.B. 2508 makes its provisions providing property tax exemptions to certain surviving spouses of qualifying veterans applicable only to property taxes imposed for a tax year that begins on or after the bill's effective date and establishes that it is the intent of the legislature that the bill's provisions be harmonized with another act of the 89th Legislature, Regular Session, 2025, relating to nonsubstantive additions to and corrections in enacted codes.

EFFECTIVE DATE

January 1, 2026, if the constitutional amendment authorizing the legislature to provide for an exemption from property taxation of all or part of the market value of the residence homestead of the surviving spouse of a veteran who died as a result of a condition or disease that is presumed under federal law to have been service-connected is approved by the voters.

Bill Text(with markup)

H.B. No. 2508

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to an exemption from ad valorem taxation of the residence
	homestead of the surviving spouse of a veteran who died as a result
	of a qualifying condition or disease.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
	adding Section 11.136 to read as follows:
	Sec. 11.136. RESIDENCE HOMESTEADS OF SURVIVING SPOUSES OF
	CERTAIN QUALIFYING VETERANS. (a) In this section:
	(1) "Qualifying condition or disease" means a
	condition or disease for which the Sergeant First Class Heath
	Robinson Honoring our Promise to Address Comprehensive Toxics Act
	of 2022 (Pub. L. No. 117-168) or a regulation adopted under that Act
	establishes a presumption of service connection.
	(2) "Qualifying veteran" means a veteran of the armed
	services of the United States who died as a result of a qualifying
	condition or disease, regardless of the veteran's disability rating
	at the time of the veteran's death.
	(3) "Residence homestead" has the meaning assigned by
	Section 11.13.
	(4) "Surviving spouse" means the individual who was
	married to a qualifying veteran at the time of the veteran's death.
	(b) The surviving spouse of a qualifying veteran is entitled
	to an exemption from taxation of the total appraised value of the
	surviving spouse's residence homestead if the surviving spouse has
	not remarried since the death of the veteran.
	(c) The exemption provided by this section applies
	regardless of the date of the veteran's death if the surviving
	spouse otherwise meets the qualifications of this section.
	(d) A surviving spouse who receives an exemption under
	Subsection (b) for a residence homestead is entitled to receive an
	exemption from taxation of a property that the surviving spouse
	subsequently qualifies as the surviving spouse's residence
	homestead in an amount equal to the dollar amount of the exemption
	from taxation of the first property for which the surviving spouse
	received the exemption under Subsection (b) in the last year in
	which the surviving spouse received that exemption if the surviving
	spouse has not remarried since the death of the veteran. The
	surviving spouse is entitled to receive from the chief appraiser of
	the appraisal district in which the first property for which the
	surviving spouse claimed the exemption was located a written
	certificate providing the information necessary to determine the
	amount of the exemption to which the surviving spouse is entitled on
	the subsequently qualified homestead.
	SECTION 2. Section 11.42(c), Tax Code, is amended to read as
	follows:
	(c) An exemption authorized by Section 11.13(c) or (d),
	11.132, 11.133, [or] 11.134, or 11.136 is effective as of January 1
	of the tax year in which the person qualifies for the exemption and
	applies to the entire tax year.
	SECTION 3. Section 11.43(c), Tax Code, is amended to read as
	follows:
	(c) An exemption provided by Section 11.13, 11.131, 11.132,
	11.133, 11.134, 11.136, 11.17, 11.18, 11.182, 11.1827, 11.183,
	11.19, 11.20, 11.21, 11.22, 11.23(a), (h), (j), (j-1), or (m),
	11.231, 11.254, 11.27, 11.271, 11.29, 11.30, 11.31, 11.315, 11.35,
	or 11.36, once allowed, need not be claimed in subsequent years, and
	except as otherwise provided by Subsection (e), the exemption
	applies to the property until it changes ownership or the person's
	qualification for the exemption changes. However, except as
	provided by Subsection (r), the chief appraiser may require a
	person allowed one of the exemptions in a prior year to file a new
	application to confirm the person's current qualification for the
	exemption by delivering a written notice that a new application is
	required, accompanied by an appropriate application form, to the
	person previously allowed the exemption. If the person previously
	allowed the exemption is 65 years of age or older, the chief
	appraiser may not cancel the exemption due to the person's failure
	to file the new application unless the chief appraiser complies
	with the requirements of Subsection (q), if applicable.
	SECTION 4. Section 26.10(b), Tax Code, is amended to read as
	follows:
	(b) If the appraisal roll shows that a residence homestead
	exemption under Section 11.13(c) or (d), 11.132, 11.133, [or]
	11.134, or 11.136 applicable to a property on January 1 of a year
	terminated during the year and if the owner of the property
	qualifies a different property for one of those residence homestead
	exemptions during the same year, the tax due against the former
	residence homestead is calculated by:
	(1) subtracting:
	(A) the amount of the taxes that otherwise would
	be imposed on the former residence homestead for the entire year had
	the owner qualified for the residence homestead exemption for the
	entire year; from
	(B) the amount of the taxes that otherwise would
	be imposed on the former residence homestead for the entire year had
	the owner not qualified for the residence homestead exemption
	during the year;
	(2) multiplying the remainder determined under
	Subdivision (1) by a fraction, the denominator of which is 365 and
	the numerator of which is the number of days that elapsed after the
	date the exemption terminated; and
	(3) adding the product determined under Subdivision
	(2) and the amount described by Subdivision (1)(A).
	SECTION 5. Section 26.112, Tax Code, is amended to read as
	follows:
	Sec. 26.112. CALCULATION OF TAXES ON RESIDENCE HOMESTEAD OF
	CERTAIN PERSONS. (a) Except as provided by Section 26.10(b), if
	at any time during a tax year property is owned by an individual who
	qualifies for an exemption under Section 11.13(c) or (d), 11.133,
	[or] 11.134, or 11.136, the amount of the tax due on the property
	for the tax year is calculated as if the individual qualified for
	the exemption on January 1 and continued to qualify for the
	exemption for the remainder of the tax year.
	(b) If an individual qualifies for an exemption under
	Section 11.13(c) or (d), 11.133, [or] 11.134, or 11.136 with
	respect to the property after the amount of the tax due on the
	property is calculated and the effect of the qualification is to
	reduce the amount of the tax due on the property, the assessor for
	each taxing unit shall recalculate the amount of the tax due on the
	property and correct the tax roll. If the tax bill has been mailed
	and the tax on the property has not been paid, the assessor shall
	mail a corrected tax bill to the person in whose name the property
	is listed on the tax roll or to the person's authorized agent. If
	the tax on the property has been paid, the tax collector for the
	taxing unit shall refund to the person who was the owner of the
	property on the date the tax was paid the amount by which the
	payment exceeded the tax due.
	SECTION 6. Section 403.302(d-1), Government Code, is
	amended to read as follows:
	(d-1) For purposes of Subsection (d), a residence homestead
	that receives an exemption under Section 11.131, 11.133, [or]
	11.134, or 11.136, Tax Code, in the year that is the subject of the
	study is not considered to be taxable property.
	SECTION 7. Section 11.136, Tax Code, as added by this Act,
	applies only to ad valorem taxes imposed for a tax year that begins
	on or after the effective date of this Act.
	SECTION 8. It is the intent of the 89th Legislature, Regular
	Session, 2025, that the amendments made by this Act be harmonized
	with another Act of the 89th Legislature, Regular Session, 2025,
	relating to nonsubstantive additions to and corrections in enacted
	codes.
	SECTION 9. This Act takes effect January 1, 2026, but only
	if the constitutional amendment proposed by the 89th Legislature,
	Regular Session, 2025, authorizing the legislature to provide for
	an exemption from ad valorem taxation of all or part of the market
	value of the residence homestead of the surviving spouse of a
	veteran who died as a result of a condition or disease that is
	presumed under federal law to have been service-connected is
	approved by the voters. If that amendment is not approved by the
	voters, this Act has no effect.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 5, 2025

TO:	Honorable Morgan Meyer, Chair, House Committee on Ways & Means

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2508 by Turner (Relating to an exemption from ad valorem taxation of the residence homestead of the surviving spouse of a veteran who died as a result of a qualifying condition or disease.), As Introduced

No significant fiscal implication to the State is anticipated.

Contingent on the passage of HJR 133, this bill would exempt from property tax the total appraised value of the residence homestead of the surviving spouse of a qualifying veteran who died as a result of a qualifying condition or disease recognized under the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022 (PACT Act).

The bill would provide definitions and limit the eligibility to surviving spouses who have not remarried. The exemption would apply regardless of the date of the qualifying veteran's death if the surviving spouse otherwise meets the qualifications.

A qualified surviving spouse would be entitled to receive the exemption on a subsequently qualified residence homestead in an amount equal to the dollar amount of the exemption of the first property the surviving spouse qualified if the surviving spouse has not remarried. The surviving spouse would be entitled to receive from the chief appraiser a written certificate providing the information necessary to determine the amount of the exemption to which the surviving spouse is entitled on the subsequently qualified residence homestead.

The PACT Act expanded benefit claim eligibility to veterans of the armed forces (and their survivors) related to toxic exposure, burn pits and more. This bill would grant a total residence homestead exemption to surviving spouses of veterans who have died as a result of a qualifying condition or disease recognized under the PACT Act.

In the United States there were 27,996 completed PACT claims by surviving family members as of February 2025. Based on a PACT Act review through August 2024, 11.1 percent of claims granted were listed for Texas. Thus around 3,000 potential surviving spouses might be eligible for this new residence homestead exemption. It is unknown how many surviving spouses (based on the PACT Act) own a qualifying residence homestead and could apply for the new exemption. The exemption proposed by the bill would reduce taxable value and the associated property tax revenue for school districts. As a result, state costs would increase through the operation of the school finance formula. However, these costs are not expected to be significant.

Local Government Impact

Contingent upon passage of a constitutional amendment authorizing the exemption, passage of the bill would would exempt from property tax the total appraised value of the residence homestead of the surviving spouse of a qualifying veteran who died as a result of a qualifying condition or disease recognized under the PACT Act. As a result, taxable property values for local governments could be reduced. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code could be higher as a consequence of the reduced taxable value. If cities, counties, and special districts did not adopt higher rates, local levies would be reduced. If those jurisdictions adopted higher tax rates, the initial revenue loss from the exemption would be offset by increased tax levies from owners of non-exempt property and slightly reduced tax savings from owners of exempt property.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JMc, KK, SD, BRI

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Frequently Asked Questions

Common questions about HB2508

What does Texas HB2508 do?

HB2508 creates a total property tax exemption for surviving spouses of veterans who died from PACT Act-related conditions (toxic exposure), contingent upon voter approval in November 2025. While this is a tax benefit for individuals, it creates immediate liability for mortgage servicers and title companies, who must adjust escrow analysis and closing prorations to accommodate zero-tax scenarios or face RESPA violations and closing delays. Implementation Timeline Effective Date: January 1, 2026 (Contingent on passage of Constitutional Amendment HJR 133 in the November 5, 2025 election).

Who authored HB2508?

HB2508 was authored by Texas Representative Chris Turner during the Regular Session.

When was HB2508 signed into law?

HB2508 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB2508?

HB2508 is enforced by County Appraisal Districts (Chief Appraisers) and Texas Comptroller of Public Accounts.

How urgent is compliance with HB2508?

The compliance urgency for HB2508 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB2508?

The cost impact of HB2508 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB2508 address?

HB2508 addresses topics including disabilities, persons with, health, health--other diseases & medical conditions, military & veterans and property interests.

Legislative data provided by LegiScanLast updated: November 25, 2025

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