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.

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.