Committee rejects bill to regulate private companies that help veterans file VA claims

The House State, Civic, Military and Veterans Affairs Committee voted to postpone indefinitely House Bill 12‑33, a measure that would have placed state-level “guardrails” on for‑profit companies that assist veterans who file their own disability claims with the U.S. Department of Veterans Affairs (VA).

The measure’s sponsors, Representative (Rep.) Richardson and Rep. Carter, said the bill was intended to protect veterans who choose private help while preserving free options and accredited representation. “This bill ensures that veterans can have access to private for‑profit support if that's the route they choose. But it also ensures they're protected from bad actors if they may exist,” Richardson said.

Supporters said the bill would limit fees, require clearer disclosures, set minimum data‑security and training requirements for companies, and ban certain compensation practices. The text put a cap on contingency compensation tied to a five‑month net increase and included a numeric ceiling (cited in testimony as $12,500). The draft also classified violations as deceptive trade practices enforceable under state consumer‑protection law and included a civil penalty (up to $20,000 per violation to the state general fund).

Opponents — including accredited veterans service organizations and VA‑accredited attorneys — said the bill would collide with federal law that limits who may prepare VA claims. “If this law is passed, it will authorize under state law in Colorado for these businesses to operate, but they're clearly prevented from operating under federal law,” said John Ellis, an attorney who represents veterans before the VA. Several witnesses noted federal accreditation rules (cited in testimony as Title 38 and corresponding VA accreditation regulations) and argued that only VA‑accredited agents or attorneys have the access and training necessary to represent a claimant properly.

Representatives of the Disabled American Veterans (DAV), Veterans of Foreign Wars (VFW) and the United Veterans Committee of Colorado testified against the bill. Scott Felt, a DAV national service officer in Colorado, said non‑accredited representatives risk submitting incomplete or incorrect information that can reduce a veteran’s combined disability rating. “This bill allows non‑accredited representation that have no ability to properly support a veteran by accurately reviewing the veteran's VA file,” Felt said.

Proponents who testified included operators of private assistance firms who said they do not purport to act as accredited agents and who urged state regulation to protect veterans from predatory actors. William Taylor, chief operating officer of Veterans Guardian VA Claims Consulting, said his firm focuses on initial claims and that the current federal accreditation rules preclude charging for initial‑claim assistance. “We are trying to get that changed,” Taylor said, noting federal counsel and pending federal proposals he said might change accreditation rules.

The committee debated technical fixes and accepted an amendment (L001) that clarified how fee caps and certain disclosures would be computed and presented. After extended questioning about federal preemption, accreditation, fee caps and whether the state penalty structure would compensate harmed veterans, the panel took a roll‑call vote. The bill failed in committee and was postponed indefinitely, recorded as failing on a vote of 6‑4.

Ending: The hearing illuminated a longstanding tension: veterans and advocates want timely, accurate access to VA benefits, while accredited service officers and VA‑accredited attorneys warn that unaccredited commercial providers can run afoul of federal rules and harm claimants. Sponsors and proponents said they will continue stakeholder conversations about accreditation, fee limits and federal alignment.