Assembly Standing Committee on Military and Veterans Affairs

Good afternoon. We are going to begin the Assembly Committee on Military and Veteran affairs. And we also even have a quorum, so don't anybody go anywhere. Before we begin, I want to make a quick statement on providing testimony at this hearing.

We seek to protect the rights of all participants in this legislative process so that we can have effective deliberation and critical issues facing California. All witnesses will be testifying in person, and all testimony comments are limited to the Bill at hand. In order to facilitate the goals of the hearing as much from the public.

Within the limits of our time, we will not permit conduct that disrupts, disturbs, otherwise impedes the orderly conduct of the legislative proceedings. We will not accept disruptive behavior or behavior that incites or threatens violence. So this is, as I mentioned, a hearing on Military and Veteran affairs Committee in the Assembly.

It's called to order, and we have five bills on file today, four or on consent. So it's just one big Bill today, and our author's not here yet, so can you call the author, please? We are looking forward to seeing Senator Archuleta any minute.

Over here, the bills that are on consent are AJR 15, Alanis, SB 56, Syrto, SB 296, Archuleta, and SB 855, the Senate Military and Vets Committee. And since we do have a quorum, why don't we go ahead and have the secretary call the roll?

[Roll Call]

Thank you. And while we're at it, why don't we go ahead and do the consent calendar? Madam Secretary, if you can call the roll or make a motion. Thank you. We have a motion and a second.

[Roll Call]

So the consent calendar has five votes. It's out. And we'll leave the roll open for absent Members and the word on the street is Senator Archuleta is on his way, so we'll be getting started as soon as he gets here.

Hello, Senator, please come on down. Happy to see you.

I was waiting outside to get called in.

Oh, you're kidding.

No, I'm just kidding.

Well, we're happy you made it either way. Please proceed when you're ready.

Okay, thank you. Madam Chair and members, I am so proud and happy to be here as a veteran and to address you all who I know you love, our veterans. Thank you so much.

And I'm here to present Senate Bill 694 and California Veterans are too often targeted by unaccredited claim representatives offering to assist assist these veterans with their claims within the Department of Veterans Affairs for benefits and claims for their monies and their benefits, etc.

Some unaccredited representatives are well intentioned but operate without the protections provided by the VA Accreditation and Oversight. The key word there is accreditation. The questionable business practices of these companies, sometimes referred to as claim sharks, are generated concerns and have generated concerns at the state and national level by veteran service officers and organizations and consumer protection advocates.

As a proud veteran myself, and as chair of the Senate Military and Veterans Committee and a father of two active duty paratroopers, I will do everything I possibly can to protect them, their fellow soldiers, and men and women in uniform, brothers and sisters of arms and our veterans, and all military community members that are being or may be exploited.

In 2006, Congress amended federal law in a way that eliminated prohibitions that made it a crime to assist veterans with benefits claims without being accredited. This had the unintentional effect of driving the creation of in the industry of businesses that charge veterans for assistance with benefits claims without being accredited.

These companies charge a fee for their service equal to five times the increases of the veterans monthly benefits. You can imagine what my brother would have received or charged because it took him quite a while to get his back pay of $65,000. $65,000 back pay. But he got it all, every nickel and dime.

Didn't have to pay anyone because he stayed within the system, He was able to pay off his house and retire and go on with his life. For example, a new veteran approved for 100% disability receives about $3,800 per month from the VA and then from helping filing.

The claim and consulting company might charge as much as a one time fee of $19,000. But the VA charges nothing. American Legion VA, they charge nothing. In some cases consultants can pocket as much as $30,000 through tactics such as holding onto a claim for months and months on end.

So the filing will accumulate and the back pay will accumulate and and they will get their cut from that large check and the VA eventually awards to the veteran. In 2023 claim shark companies charged approximately $477 million to veterans in active duty military personnel for their families, according to data collected by the Federal Trade Commission.

Senate Bill 694 strengthens the oversight and consumer protections for veterans in the following ways. Requires VA accreditation in the field of veterans claims representatives.

Prohibits any person from soliciting, charging, contracting for, or receiving any fee for compensation with respect to the preparation, presentation, or prosecution of any claim for VA benefits unless they are authorized under federal law to do so.

This bill does not prevent individuals from working in the profession of assisting veterans with VA benefits claims so long as they obtain a VA accreditation and operate under the VA rules and regulations under law.

Strengthens protections to prevent unaccredited claims representatives who lack the independent access to the VA computer system from outstanding unauthorized access to to veterans personnel information through secure VA websites like Ebenefits for VA. Additionally, the measure reinforces existing fee caps on services. Our veterans earned their benefits by putting their lives on the line for our freedom.

We have the responsibility to fight for them, to defend them, protect them against these bad actors and their practices that violate our consumer protection laws. Again, that violate our consumer protection laws. Here with me today in support of the bill is David West, President of the California Association of Service Officers. And also we have.

Are you right there? Yep. And in enlisted Association of the National Guard. And Josh Baker, President of the California Enlisted Association of the California National Guard. And remember, there's the enlisted personnel and there's the officers. As an example, my two sons are West Point graduates, so they're army officers.

I was an enlisted, this man here was an enlisted. And we're the. As you know, Jeff Gonzalez knows, the enlisted are the backbone of our military and they're the ones that get exploited in reality. So in closing, members, this bill is not about limiting choices for veterans. Real choices require transparency, lawful conduct.

Veterans cannot make informed decisions when they are misled or unauthorized by unauthorized actors who operate outside the federal law. This bill aligns California with federal law and affirms the state's commitment to protecting veterans from unaccredited actors who market themselves as professional despite failing to meet federal accreditation requirements. And with this I respectfully ask for your I vote.

Good afternoon, chair, vice chair, and members of the committee. My name is David West and I proudly serve as the Veterans Service Officer for Nevada County and as President of the California Association of County Veterans Service Officers. I appreciate the opportunity to speak in strong support of Senate Bill 694.

This bill is about protecting California's 1.4 million veterans, including some of our most vulnerable, from predatory for profit companies that illegally charge fees to assist with claims to the U.S. Department of Veterans Affairs. These companies would have you believe that they're providing a service that doesn't already exist. That is simply false.

California's veterans have trusted professional and free support through our County Veterans Service Officer Network. CVSOs have been serving veterans locally for over 75 years.

We are accredited, highly trained, and deeply connected to the communities we serve, providing not only claims assistance but wraparound support that includes mental health resources, housing connections and access to critical local and state benefits. The companies opposing this bill operate outside the law because over a decade ago penalties for this illegal conduct were removed.

SB 694 restores those penalties, reestablishing accountability for business practices that have always been prohibited under federal law. It's a long overdue common sense measure to protect veterans from financial exploitation. They will claim their services match or exceed those of our CVSOs as categorically false. These for profit entities view veterans solely as a source of revenue.

They frequently require veterans and their families to gather all of their own documentation, medical records, and prior VA decisions, essentially doing 90% of the work themselves, only to be charged inflated fees for the minimal services provided, including unnecessary evaluations by company affiliated doctors.

In contrast, CVSOs meet with veterans personally and handle this work for them at no cost. We review the claims file, explained benefit eligibility, and connect them to mental health services and housing resources and community based programs through propositions.

Through Proposition 63 funding, we offer confidential free mental health services so veterans can thrive, not just survive on a check. This bill also directly supports the priorities expressed by California voters. In our last statewide election, Californians overwhelmingly approved Proposition 1, dedicating $1 billion to ending veterans homelessness.

A key requirement in this initiative is that grant applicants demonstrate collaboration with their local CVSO offices and program development. Because housing instability isn't just about a roof. It's about benefits, access, health care, and support services. For profit companies draining veterans resources undermine these statewide efforts and priorities.

These companies perpetuate harmful stereotypes, presenting veterans as broken and disabled while offering nothing to help them heal, build, or thrive. The financial resources they extract from veterans place barriers between them and the future they deserve. Whether it's overcoming debt, securing stable housing, or caring for their families.

The California Association of County Veterans Service Officers proudly support 694 because it aligns with the vision of California Department of Veterans Affairs Secretary Lindsey Sen. Ensuring every veteran in the state is connected with, protected, and respected, and with the clear will of California voters have demonstrated their commitment to supporting veterans, particularly those facing homelessness and hardship.

Good afternoon. My name is Josh Baker and I represent the California Enlisted Association of the National Guard. So that's your hometown military force. And this bill directly impacts not only me as a national guardsman, but the people I represent because U.S. national guardsmen are unique.

We can come on and off federal orders throughout our military career and because of that, we can apply for these types of benefits throughout our military career. And it just so happens that last week when I was on military duty, bumped into somebody and I talked about this bill.

They said well actually after my last mobilization, I used one of these companies. I asked him, well how did it go?

They said well I did get the percentage that I wanted, but after that lag time and that anxiety of well I gave my medical records. I had no contact with the company but eventually it turned out and I asked him how much he spent. He didn't want to share.

Asked which company he didn't want to share, which is fine, but it and I asked him well how did you get to that point? Because these benefits are free through the county VSO or any other entity. He said most like everybody else does, he went to the Google. So I did that.

I went to the Google. I said how to apply for my VA benefits. And the search result at the top of the screen, not even I had to scroll a lot, at the top of the screen was all of these for profit entities.

And it wasn't until some scrolling that I finally got to the VA and our county VSOs.

And I don't know if you went down a Reddit rabbit hole, but I did about this bill just to see what other veterans are talking about on how to apply for their benefits. And just running some of these companies names in well does it work to see what they're saying?

And just a few of them that I wanted to share was one veteran. He was put on a payment plan until he was fulfilled his plan, then the company would apply for their benefits. Another one that it cost a veteran $3200 to apply for their own benefits.

Another one of $3000, again, to apply for the benefits that they're owed to them and a few of them that they use the company and paid $3,500 and there was no change to the rating and the rating was denied.

And because they're not accredited, there is no recourse for this veteran to go do anything about recouping that $3,500.

And also in my reading I saw some questionable practices that it was very common that the instructions that were given was to ignore every phone call from the VA trying to set up an appointment to get their PNI, so any of their initial evaluations.

Another one, do not attend any CMP exam scheduled by the VA. And the last one I wanted to share was I was told specifically not to schedule or go into any exams by them.

And as I read through a lot of these there was a lot of good news stories and that's what made my heart full was I got to see these veterans that were connected with their benefits, but at what price?

And for these veterans it was a gamble for them that they had to go out and they took a risk for a non accredited with no oversight company. And that's what we're asking for in this bill is to provide some sort of oversight so there would bring some legitimacy to these claims. I thank you for your time.

Thank you. Is there anyone who would like to give support for the bill today and come up to the mic. Just a reminder, say your name, organization, if you're affiliated with one, and support.

Thank you, Madam Chair and members. Dylan Elliott on behalf of the Kern and Nevada County Boards of Supervisors both in support. Thank you.

CEO of MilitaryEngagement.com and absolutely support this bill.

Yolanda Benson with permission from RCRC, the rural counties supporting this bill.

David Kuta, Army Veteran, Commander of the VFW of California. I wholeheartedly support this bill.

Seth Reeb, Reeb Government Relations. On behalf of the American Legion Department of California, Amvets Department of California, California State Commander's Veterans Council, Military Officers Association of America, California Council of Chapters, and the Vietnam Veterans of America California State Council all in strong support. Thank you.

Steve Ansell from the Solano County Military Officers Association. Also a member of the American Legion, in support.

I'm JR Wilson, United States army veteran, airborne paratrooper, 100% service connected veteran as well, past National Service Officer for the Disabled American Veterans, past State Commander, their current Legislative Director. Here to show we actually support this bill. Thank you.

Madam Chair, Madam Master Chair, members of the board, I'd like to personally thank Senator Archuleta for writing this bill and I'd also like to thank his family to our service to our country. My name is Philip Cervantes, District 9 past commander. I wholeheartedly support this bill. Veterans of Foreign Wars.

Thank you. Thank you. In principal opposition? Testify.

Please. Yeah. Introduce yourself and go ahead and begin.

Hello, my name is John Henry Parker. I am a veteran's advocate. I'm a former Marine. My father was in the Marine in Korea and Vietnam. And I'm the father of an army combat veteran of two diplomas in Afghanistan who unfortunately didn't survive his transition back home once he got home.

And I'm here solely as a veteran's advocate and receive no compensation of any kind from companies offering assistance with veteran's disability claims, nor am I a client. I heard about, in this case, Veterans Benefit Guide from a group of veterans in Las Vegas who really were - they've been through the ringer and were really served.

And so, while they agree with virtually almost everything was stated already, there needs to be more thought and consideration. As a father, the process of navigating my son Danny's disability status to 100% service connected was a long and stressful process. Almost cost him his marriage and I just wish it would have been easier.

I'm a behavioral assessment analyst and I've been volunteering my time over the last 30 years providing support and mentoring to at risk veterans who suffer from injuries sustained while in service, post-traumatic stress, chronic pain, substance abuse and suicidal ideation.

One of the greatest challenges facing veterans is navigating the process of filing and receiving the disability benefits they have earned. Many who try file their claims and give up in frustration and spiral out of control into crisis. And that's when I typically meet them, is when at the end of their rope.

The veteran suicide rate is estimated to be 22 per day. In rural areas, veterans face a 28% higher suicidal rate than their counterparts in highly populated areas. And this is the area I focus on the most.

In addition, I believe every stakeholder involved with this bill, including every gentleman who just spoke, agree that predatory companies who charge upfront fees should be barred from providing services without exception.

But transparent, performance based, contingency based companies who only get paid when veterans receive higher benefits should be allowed to continue providing services while being held to the highest standards of accountability. And if that means accreditation of some form, that's the bigger discussion. It's not just so cut and dry as everybody is doing bad.

There are a few players that are contingency based that really differentiate themselves and I'm here to tell you I've seen this personally. So, to truly assist veterans, it's imperative we preserve choice and access to assistance while also making sure we prosecute bad actors who seek to exploit the vulnerable. Thank you.

Good afternoon. Thank you for the opportunity to speak today. My name is William Taylor. I'm a West Point graduate, a 23-year army veteran, a paratrooper with six combat deployments. I'm also the co-founder and CEO of Veterans Guardian, one of the companies that we're talking about here today. My company has about 200 employees.

Almost everyone that works for me is a veteran, a spouse of a veteran, or a spouse of active duty. We are running a close to 90% success rate with the veterans we work with. And our average veteran is getting a decision back in 85 days or less, which is significantly less than the national average.

The reason for that is we focus on doing only fully developed claims. And this is where we differentiate from some of the other services that are out there. In doing a fully developed claim, our average claim packet may be 50, 60 pages long.

We are leveraging technology, AI, expertise, and training across the board in all areas of the claims process to ensure that when we are working with the veteran that they are submitting the best claim possible with all the evidence that's necessary. And that's why we are achieving the success.

I would also like to note that 70% of the clients that come to us are coming to us after having utilized one of the free services. So, I recognize the importance of the free services. The VSOs are doing great work out there. They're a vital part of this ecosystem.

But veterans are looking for additional assistance and they're doing that for a host of different reasons. I recognize and share the concerns about predatory practices. I recognize and share the concerns about providing some oversight.

I'm coming to you today as an individual who's been working for the last six years at the national level to try and change the accreditation system to allow us to become accredited to provide that oversight.

And we're glad to say that just two months ago, the House Veteran Affairs committee forwarded the choice act out of committee and it's going to be considered by the full house which will create a path to accreditation for us.

But more importantly, put guardrails in place to provide protection protections for veterans requiring contingent fee-based operations, putting a fee cap in place, not allowing us to have in house doctors, not allowing us to utilize overseas call centers. We believe that that is a better approach to this issue.

Let's identify the practices we don't like, legislate against them, and provide the oversight for companies like ours so that we can provide an augmentation to the current system. More choice to veterans, more options to veterans. We also believe that it's fundamental that veterans understand their options.

We ensure that no veteran ever chooses to use our services without understanding the free services that are available, we go out of our way to do that. And so, we're proud of the service that we provide to our veterans. My employees are proud of it. I'm proud of it.

And when you look at the satisfaction rate from our clients, we are providing a service that veterans are looking for. The last thing that I'd like to address is this issue of whether or not we're violating federal law.

In 2006, when the law was changed, they did not only remove the civil and criminal penalties, but they rewrote the underlying statute, and the limitation was rewritten to bar anyone from acting as an agent or attorney without being recognized by the VA. We ensure that we never take that step into agency. We operate as a consultant.

The veteran is navigating the system on their own name, on their own behalf, and we are there in support, helping to prepare their claim packet, helping to put it together and helping them navigate it as they go along.

And the courts have agreed with us, particularly the Third Circuit has opined recently that you have to be acting as an agent to be in violation of federal law. And by every definition that we've seen, we are not acting as an agent.

I'll just leave with; we want to find a solution to this that preserves veterans' choice but also provides protections for veterans. And so, thank you for your time.

Thank you. Anyone in the audience in opposition can come up to the mic and again say your name, organization, if you're affiliated and oppose, and go ahead.

Hi, I'm Will Pearson from San Diego, California. I'm opposed to SB 694 unless it's amended to protect veteran choice. Thank you.

Hello. My name is Ryan Scalmanini. I'm a Coast Guard veteran. I live in San Diego, and I oppose SB 694 unless amended. Protect choice, protect our veterans. Thank you very much.

Thank you.

Hi, I'm Patrick Holmes with Veteran Benefits Guide. I urge you to oppose this bill unless amended to preserve choice and protect veterans.

Hi, ladies and gentlemen, my name is Marisa Cuevas. I'm a US military family member. Excuse me. And I oppose SB 694 as is unless amended to protect our veterans and their choices.

My name is Rafael Garganta, 100% disabled vet, US Navy. I oppose SB 694 unless amended to protect us and our choices.

Good afternoon. My name's Antonio, 100% disabled veteran as well, U.S. Navy, and I oppose unless amended SB 694 to preserve choices and protect myself along with fellow veterans.

Thank you. And any tweeners, anyone in between? No. Okay, I'll bring it back to the dais. Any questions?

First of all, let me say thank you all for your service and everyone here in this room. Thank you, guys, so much for your service. I'm greatly appreciative of the work you've done because I wouldn't be here, in all honesty. I have a question before I go into some actual comments.

And so, Senator Archuleta, when you were speaking, you were talking about the VFW. So, one question is to your, to you guys as well. For VFW, are they, are all VFWs required to provide a service or at least this particular.

Yeah, I, I, I'm sorry, I, I couldn't hear the question.

It's very hard because I don't. Let me, let me try this way.

I'm sorry.

Are all VFWs required to provide a service such as this to the members? Yes, or no?

Would you say that again?

I'll try one time. Are all VFWs required to provide this service to their - yes.

Okay. The Organization of Veterans of Foreign Wars, they have teams of people that are authorized under the umbrella of the VA to serve and represent veterans when they're making their claims.

So, it's not, if you or I were in, it wouldn't be just, but it could be this individual or that one who's been specialized and trained under the VA and under the VFW.

Okay. The reason why I was asking that is because I know a number of people, as I do represent San Diego, which is a military town, who have been instructed from the VA to go to their VFW for assistance for services such as this. And then they've gotten, gotten there and then they've been referred back.

So, they haven't been actually receiving adequate services. So, I was asking that question because things operate differently, particularly in low-income communities. So not all the services are being provided.

And there are various entities that help our veterans. The VFW, the American Legion, the County Veterans Service Officers of all the counties in the State of California, and of course the Veterans Administration, our own CalVet. Everyone jumps in to help our veterans.

And so, each one is specifically trained to do the job through the professional level in the eyes of the umbrella of the VA.

And when we have individuals who are not accredited, and I will acknowledge these two individuals or this particular company. As I said to someone today, I said there might be 100 great people and there's a thousand bad apples. Well, we have to protect all the veterans. And this is what this bill does.

And as a matter of fact, I did mention it to one of our assemblymembers that a resolution, a joint resolution from our committee and your committee asking Congress to look into accreditation of individuals and opening their doors. And I'm all for that.

But our Attorney General, Bonta...our Attorney General, our VA, and also the CalVet rely on federal law. And this is federal law. And that's - and yes, there's a need. I wish we could do things and other things that we're faced with here in California. Right now, my community is faced with things pertaining to federal law.

I wish we could change it, but it is federal law, and I can't do anything about it. But we can work together to open those doors, and I'm willing to do that. But right now, this bill pertains to protecting these veterans from the majority of bad apples that are out there.

And that's what we're trying to do here.

Okay, thank you for that. Thank you. And once again, it's hard because I'm struggling with having my voice, but once again, I was asking that question because even though you brought up the American Legion, they've also been a part of the conversation.

And so, it's been really hard for them to navigate their VA benefit process because of the lack of information that they are actually still providing to some folks who have served. So, I'm saying this to say navigating the VA benefit systems can be a really complex process.

Having been a spouse of a former army vet, a current partner of a Navy vet, right now, who is they're going through this process and have been going through this process for quite some time. This is why it is important that veterans do have freedom of choice to support services that works best for them.

And I'm saying that because I've had firsthand experience of being there and seeing the process, or should I say the lack thereof, from people who have been referred over to the VA or to some of these CVSOs.

At a recent hearing that we had, we had, I mean, we heard about important roles that were being played by the CVSO officers. And then there were some alternatives that were provided by trusted third parties after what you were just talking about right now, talking about guardrails and other things in that way.

And it highlighted the evolving landscape of how veterans access support. And the reality is different veterans have different needs, and we have to be mindful of the different needs because there cannot be a one size fit all model approach to this. There are bad actors, absolutely.

But the way the bill is written is written to, in my opinion, to remove all of the options. And that's not fair, you know, to so many who needs that. So, we should be ensuring that all options are available, whether it's ethical, effective, and also transparent.

And I'm trusting that those that are not bad actors are being transparent. And as we continue these conversations, that focus should remain on ensuring that veterans have access to timely and accurate and trustworthy assistance, no matter what path they choose. And I'm once again speaking as former spouse as well. It wasn't timely and it hasn't been accurate.

It's been misinformation across the board. And going from this person, this person, that person, and that's very frustrating. And particularly of those that are also dealing with mental health support services as well, it's very frustrating to be thrown from one end to the other.

And there's a lot of racial disparities that continue to exist in the delivery and approval of VA benefits. And I'm saying that once again, me, but from the communities that I represent. I have a diverse community, and I have a Military and Veterans Advisory Committee.

And I haven't had a chance to go back again and have a deeper conversation. But should this bill move from this committee onto Judiciary Committee, know that I will be following up with my Military and Veterans Advisory Committee to really, really assess where they would like for me to go.

Because it's all about me elevating my community's voices as we continue to move forward. But black and brown veterans, Latino veterans, and other communities of color once again have historically faced longer wait times and higher denial rates with fewer resources. So, this is a tough decision for me. As I mentioned, I live in a military town.

There's a lot of strong opinions on both sides as it pertains to this particular bill. One thing that I would point out before I stop is that we know that there's a lack of capacity for our CVSOs, and there's a lot of federal cuts that are coming down the pipe.

And should more come down the pipe, my question becomes in where would our people go? Where would they go? You know, how would they get the help that they currently need and have so desperately needing?

And if we do away with everybody, then we're going to continue to take away a lot from them as regards, they deserve to have adequate benefits, they deserve to have the supports. But if we don't have the capacity to do it, then what? They're left with nothing.

Once again, So I do have some major concerns in regard to the bill. Like I said, I'll keep conversations open to talk to my constituency in regard to this bill. But just be mindful that this, this can hurt a lot of people. It can.

Those who need the supports and have been denied based on income in the communities that they currently reside in. So, I do have heavy concerns.

And I appreciate that, Assemblymember. And I didn't share this with you, but I served in the County of Los Angeles for 24 years as the Commissioner of Military Veterans Affairs for the County of Los Angeles. And we have 10 million people in the County of Los Angeles, and we've got quite a few veterans.

And over those years, I've seen the VA, I've seen our county veterans service officers work miracles with families and in my own family, and I've seen it. I can tell you just most recently, my first cousin who served during the Vietnam era, as I did, who came back, a lot of us combat veterans still have problems.

And through the VA system, he was able to get his full benefits, and he was able now to get medical treatment. He's able to receive 100% disability. He's able to contribute to his family. And time and time again, these stories are there.

And that's why the veterans behind us, the American Legion, the VFW, who represent thousands upon thousands of veterans, are here in support of this bill. That's why they're here. And every veteran's organization that I can think of is in support of this bill.

And yes, there's things to be done and yes, we should have avenues, but this is step one to enlighten all of us that there's a need, no doubt. And that's why the resolution that I think I'm going to work with the assemblymembers and all of you, that we can do that together.

That'll open doors in the future. So, I'm hoping with this we will be able to go ahead and approve this bill and move forward to the next step. And that's why I urge the aye vote.

Mr. Carillo.

Just a question. So, is the accreditation process in place or that is yet to be determined? The accreditation process, is it already in place?

The accreditation process would be something that would be handed down from Congress and the VA. So just like all of us who graduate from high school, they have to be accredited, they have to be approved by the State of California, and rules and regulations from Department of Education. Well, the VA would do the same thing through Congress.

But it starts with something like this to seek it. And that's, that's what it's at. And when I mentioned about being a combat veteran, that's one of my problems. So, I'm sorry.

Oh, I was going to say there, there is already accreditation process in place with the VA. It already exists. The accreditation process that is in place caps what attorneys, what accredited representatives can charge. It lays out guidelines of how they can do it, blows up the business model of the companies that we're currently discussing. Right.

So, there is an accredited rate. And I just want everybody to know I'm also the Assistant National Service Director for the NACVSO, National Association of County Veterans Services Officers. And this past month, I personally accredited 135 with NACVSO with DAV. So, there is a process in place.

And now these are county veterans services officers, but there is an accreditation process still in place. And we want this bill to go through while they're discussing on the federal level, this process.

And I mean, Madam Chair, also I've been able to participate with the Governor and the VA and CalVet and everyone else that we were able to get $5 million to hire more county veteran service officers. Then we asked for more and we got 11 million. So, we are going to continue doing that.

So, but again, this is something that is the first step. And that's why I'm so, I guess, fired up that we've got to help our veterans doing it this way.

Thank you, sir. Ms. Avila Farias.

Thank you, Madam Chair and Senator, I appreciate this bill. I walked in here today fully supporting the bill, but my colleague from San Diego, you know, brings up some really valid points as well that I think should cause pauses for all of us.

So, number one, on the amendments recommended, can you speak to why there wasn't or if there was, I don't know if there wasn't, any consideration of allowing a policy that allows the good actors, you know, if we were saying it's 100 to still play in the space and be a choice and an option, why that couldn't be incorporated and accepted as a friendly amendment to your overall goal of protecting veterans? Just curious.

And that is something we'd have to look through the Attorney General with. How do we move forward because of federal law? And we would have to check with the VA how to do that. And that's the next step. But I think it starts with a resolution.

It starts with meeting with the Attorney General, and that's separate from this. As you all know, every time we present a bill. This is the bill. And there's other issues that come up, but it's this bill, this item, and this is the item that we're talking about.

But why couldn't we, I mean, right now, before your bill, they're allowed to exist. So, it doesn't prohibit.

They're not. They're not. Just to be clear. No, you need to be super clear. This is an illegal business practice. Just super clear. It is illegal based on federal law.

Well, on federal. But yeah. So, which is allowed it in. So, here's, if there's a conflict between federal and state law, there.

There's no conflict.

If there's an operation happening right now of companies providing services, a choice; so where is the clarity on - I mean, where is the legal opinion from the GA on this?

This gentleman has received several cease-and-desist letters that have gone ignored all. The Chair has these. They've responded. Here in California, we didn't allow the cannabis industry to thrive and have stores on the shops while we let people go in and legally allow them to purchase marijuana while we debated this.

This is, in effect the same thing. Last year we had this debate, and they opened up a shop in San Diego. It is still not legal on the way the laws are written right now. Cease and desist letters have been issued. Right.

So, there can't be a good actor when the federal government is telling you to stop and you keep operating at the same avenue you were before.

So, yeah. So just to be clear, it's not. They're illegally operating a business right now. And one of the reasons they're allowed to do that is because the federal penalties have been removed. They were removed. And so, there's really no penalty for operating a business in this space.

And I understand what the opposition is saying is they're kind of narrowly tailoring how they do their work to try to avoid a definition of being a - what's it called? An agent, instead of a - what was it? A guide or whatever he said. But this is illegal. It's an illegal business.

Right. It's an illegal business. But they've been threading the needle in a very gray area that.

It's not gray. I just want to be clear. It is not gray. It is illegal. They are operating illegally in California. And this is why the author is bringing this bill forward, is to make it. To make sure that we put more guardrails because the federal penalties have been removed.

I'd like to hear on the data of these violations because I think one of the testimonies was - I'd like to hear about that.

Yeah, I think that's really important. What I can tell you. So, what I can tell you is that right now they're operating, right now they're operating in the dark. So, when claims are filed, it's just, it resembles the veterans submitting a claim. Right. Because they're coaching or advising or the term that they use to help their veterans.

Okay.

Right. I, on the other hand, that's how we're able to pull out and know the technical you that California county veterans' services officers present submitted 12% of the overall claims because we're all accredited. We're all credited; we have an OGC number. Everybody knows our work. I have no doubt that they're probably doing great work on this side.

But it's a purple unicorn. Nobody can validate their data. Nobody knows what claims they're turning away. Nobody knows their success rate other than what's self-reported. And we don't trust self-reported data. You have to report, you have to trust verified data. And that does not exist with their companies.

So, any claims that they're able to say and unfortunately the only way we are allowed to find out when these things happen is when our veterans have been taken advantage of in our communities and they're coming to us, asking us to help.

"Sir, I just entered into a contract with a claim with a company in Florida who submitted a claim for individual unemployability and now I'm being reduced, and I have a bill for $5,000 and I'm being reduced. How do I do this?" This is not this gentleman's company. Right.

But there's so many companies out there taking advantage of these veterans. We have to, we have to put a blanket stop until there's an accreditation process in place that allows us to move forward. We have to protect now and again.

Assemblymember, there is no accountability here as it stands. If you wanted to inquire, you couldn't. There is no transparency.

But if you wanted to look into a claim that the County of San Bernardino or the County of Los Angeles or here in Sacramento has, you can actually pick up the data and see where they're at and so on, because you have that right.

But there is no accountability for the individuals that are doing this and that's the problem. We've got to bring them into fold.

No, Senator, I understand the problem and again I'm just as my colleague from San Diego stated, there is a vulnerable communities that are relying on these services and that impact. So, where's the data to that of the legit organizations that are delivering the services that if we remove this, this is their only option?

What is going to happen? Where's the data? If I can just finish my - where is the data on what that impact is on those communities? I think my colleague from San Diego, if I was understanding her concerns, which is not just her communities, it's throughout the State of California, especially in communities of color.

What are we doing to be able to serve those? Because those might be - sometimes those are the only options. Are they the best? Maybe not, but it's better than nothing.

Well, when you mention the word legit, are they doing it legitimately? That's what we don't know.

I don't know. That's why I was asking about the data. And we're saying there's no data.

And that's where the accountability. And according to the data that we have, there's the VA itself, CalVet itself, the credibility of the Veterans Administration and the VFW, the American Legion, all these service organizations; certainly, the County of Los Angeles, that has about a million veterans. All of them, everybody.

So, day after day, the VA is doing their work along with all the other organizations. So, the doors aren't closed to helping veterans. They're there. We just want to open more, but we want to do it correctly. So, I really do hope in the future that through our fight to open doors for them, we can help more.

But right now, this is the first one.

Okay, thank you. Can he respond? Because to your question.

I'm sorry. Ms. Davies has been waiting, and I know you wanted to say. And then we'll come back to you.

Because I know that the opposition, they were trying to respond as well to my colleague's question. I just thought that because it was still in that conversation, if opposition can -

Well, I didn't see that they had a question.

- respond to question. That's all I was asking, Chair.

Go ahead.

Thank you. I would like to say I respectfully disagree, and I respectfully disagree with the assessment that we are violating federal law. That is not clear. That has not been established. There are differences opinions on this. And we believe fundamentally, in 2006, when the law was rewritten, it wasn't just the removal of the civil and criminal penalties.

It was a fundamental rewrite of the underlying statute that made the restriction not on providing assistance without being accredited, but the restriction is on acting as an agent or attorney without being accredited.

And at that time, when the VA, when that law was passed, the VA published their rule on the law, which is something that every executive agency does when a new law is passed: they stated that an agency is defined by completing the power of attorney form and becoming the veteran's representative to the VA.

We never become the veteran's representative to the VA. We operate as a consultant to help them navigate the process. We believe, and the courts are indicating that they agree with our assessment. So recently in the Third Circuit, we are suing the State of New Jersey and Maine for a similar bill right now on First Amendment rights.

The Third Circuit, in a recent ruling, just stated three key things. One, they believe that there is a high likelihood that the New Jersey law is unconstitutional on First Amendment grounds. They also believe that there is likely that the federal law could be unconstitutional as well.

And they affirmed our belief that you have to be acting as an agent in order to be in violation of federal law. They did not opine yet whether or not we are crossing that line into agency. But at the end of the day, I am never taking the step into conduct. I am not engaging with the VA.

I don't have access to their systems. I'm not representing a client on behalf of the VA. All I am doing is exchanging information between myself and a client. And as long as I don't take that step into conduct that is speech, and speech is correct, is protected by the First Amendment.

And we believe that because of that, we are still in violation. So, it is not clearly established that we're violating federal law.

Madam Chair, if I may. We're not talking about one company. He is company ABC, whatever it is. But we're talking about a vast number of people who are hurting our veterans, gouging our veterans. And not you, sir. And I'm not saying that it's you. We're not here.

If you were stationed in California and you're trying to get a California State license to operate your business, well, there's certain steps you would take. This is not about you. This is about the vast number of people that are hurting our veterans. And that's why we're doing this.

And as you mentioned, you don't have access to the VA file. You don't have access to the information that is so vital when working on a VA case. If one doctor is working with a hospital and he's accredited and he's able, he can go in and get records that'll help that patient. You don't have that ability.

But our VFW workers do, and representatives. Our American Legion do. The County of San Bernardino or Sacramento they do. So that professional opening that you don't have, and that's the whole issue. So, others trying to skirt it and get the information only and solely from the veteran doesn't give him the full representation that he needs.

And that's the whole gist of this. We want full representation for our veterans. And this is the bill that will make sure that those who are doing it incorrectly, who - and not you, sir, but others are not able to practice in California. That's the key in California.

Thank you. Ms. Davies.

Thank you, Senator. And I appreciate this dialogue that we have going back and forth. I think that you've made it very clear that we have bad actors out there, but we also have good actors. And again, right now, this is federal law what we have here; we don't have state law.

And what this would do is actually produce state law going through the Attorney General, which then allows us to work with the Federal Government to hopefully then say, "Hey, let's put something together since there's no accountability, so that those that are professional consultants can come in and basically, you know, add actually more work, more help to our veterans."

Is this about what you're saying?

Yeah. And I also like to add, imagine if we turn the clock way ahead, and I came before you and I said, I'm representing ABC company here, who's now accredited, who's trying to obtain a California State license to practice here in California to represent veterans, and I ask to approve his license. Wouldn't that be fantastic?

But that's not what we're doing. And what we are doing, again, emphasizing over and over, is this bill is to protect veterans, the majority, and to continue having the doors open for those who represent veterans professionally, legally, and within the law.

Thank you. Thank you. Other questions.

I would like that to be my close. I respectfully ask for your aye vote. Oh, I'm sorry.

Mr. Genzo.

Thank you, Madam Chair. Just want to clarify a few, few things just so that way because there's been a lot of conversation and different points of view here. As 100% disabled veteran that has gone through the process, all the way through. The. I could see where there's some misinformation that takes place.

So when a veteran exits, or when a military member exits, exits the military and they have some type of benefits coming to them with respect to medical benefits, they are then referred to the VA within the military side on their active side.

If they choose not to do that, then they can do it post what we call end of active service.

So either before or after. Once they, once they do it, if the VA representative either before or after has a huge timeline, and that's very normal on very big basis, their next step is that VA officer should be saying, connect with your local county veteran service officer. That's the very next step.

That county veteran service officer is funded by the state, actually by the county that they are a part of. Right. They're short $14 million and we're going to be fighting for that next year. Right. But that's, that's the path. Now veterans, we are known to follow what we call barracks rules.

And that is, hey, you know, this way, you know, that way, let's follow this or let's follow that versus sometimes following the right path. It happens and I think it happens in any industry. But that's the VSO, that's the, that's the county Veteran Service Officer.

If by some crazy chance that county Veteran Service officer is like, look, I'm super packed and I can't do this right now, I can meet you in about a month or whatever. There is the potential of them reaching out to another party.

And usually they know of a VFW that's really top-notch, they're on it, or an AMVets or whomever that are, that are, that, that can work well and help support.

So the process begins with the VA, the federal side, the VA works with the VSO, the county level to make sure that they're connected for a myriad of reasons. And then if it needs to go further, then it can go to the,to a VFW, American Legion, so on, so forth.

Now that's kind of the path. The other path is I don't know anything and I'm asking somebody and someone's going to say, well, why don't you go, why don't you Google it? And there's, there's one way you can get information.

The challenge that we have as veterans is that there is so much information out there and so many people wanting to pick at us. And when I tell you it's a lot, that it becomes very convoluted.

And by the way, as someone who struggled with PTSD and 100% disabled, Look, I just want answers like, someone help me now. The right way, the right path is connecting them to their direct benefits. And that direct benefit guide is their county veteran service officer, full stop. Now, with respect to what we're talking about today, the.

Yes, absolutely good actors, absolutely bad actors. So what is the. How do, how do we, how do we thread this? And here's the reality. I'm a, I'm a business guy, right? So I want to make sure that we protect business and we protect industry, but overall, my, my duty is to protect the veteran and their family first.

Right? Protect the veteran and their family first. So there is no oversight mechanism in California for this. There isn't. It's just, it's just not there. I would love for it to be there because then we wouldn't have a conversation, hey, go get accredited through California, we call it a day.

But when we have folks that are not doing the right thing, how do we stop them? Right? How do we, how do we say, no, these are the right players and those are the wrong players when we don't have that, we just don't have that mechanism here. It's unfortunate, but it's not there.

So there is this Bill and you know, I have a Bill where we can help talk about it. And I've, and I've parked it so that way if we need to adjust some things and working with Senator Archuleta's office, I think that's the best way that we can go about doing things.

But I believe right now the best course of action is, number one, is we have to shield the veteran population. And that shielding of the veteran population is in this Bill. While we're also working with good companies to say, okay, we need you to get involved in the, what is this accreditation process?

How do we do this in California? Right. Because it can't be 10 years from now because we do need to be able to answer those things. So I think there is a solution, but we have to go in a step-by-step process. And I believe the step-by-step process begins with the Senator's Bill.

And immediately with that is, like I said, I have one parked right now, is talking about how do we find those nuances that we need so that we can make sure good actors are taken care of and that business is thriving. So that, that's, that's my comment on this from someone who's gone through it.

And I get it, everyone has different perspectives, but I, you know, overall, I'm looking at PFC, I'm not going to use that name that we use in the Marine Corps. But a, a, a young Marine or a young service member who is, they just don't know.

So we need to, we need to step in as, as people who love our veterans and say, all right, step one, protect. Step two, find a pathway. Because you're right, there is no, there is no oversight. And we need to have that oversight mechanism so that way you can thrive. But also, we protect the veterans first.

Thank you Mr. Vice Chair. Yes. Avila Farias.

Thank you. I just want to thank my colleague because I thank you for refreshing our memory of our Bill that we did see of yours as well. And I do feel that there's a space and I want to echo your sentiment that I think there is a space.

You know, this item, whether it's legal or not legal, is being litigated right now in the Federal Third Court Circuit. So I don't think that's the space to be arguing for this Bill, whether it's legal or illegal, because it is in the court system. And clearly we don't have those answers here to make that decision as well.

But I do love the ability, as my colleague said, to allow the good actors to be able to operate and provide services. And it's really on the compliance and oversight that we, which was your Bill. And so we need to still do that.

And so, and I think amendments that allow the good actors, but also, you know, piggyback on the compliance and oversight is a space that is a win, win for everyone help our veterans. But I do want to bring that to everyone's attention, is that this is being litigated at this moment.

Any other questions? Okay. So this is being litigated. And as we know, people who are operating an illegal business can't have a right to sue in our courts as well. And you know, the VA has issued letters to many of these companies, including Veterans Guardian, to immediately cease and desist in any illegal activities.

The VA has opened investigations into dozens of unaccredited claims companies during the last fiscal year alone. And the, you know, the industry keeps saying they're guiding veterans. We hear of cases where people are actually getting, the companies are getting the login to the VA of veterans and logging in as if they are the veteran.

So there is, you know, to the point of the author, a vast difference in terms of the quality of services that are being provided by these agencies.

And at the end of the day, what is, I think the most frustrating, is that veterans are seeing thousands and thousands of dollars that are due to them go to these companies that if they had gone to a CVSO, it would have all gone into the veteran's pocket. And so instead of, you know, these are huge.

These are huge, you know, amounts of money, when you get to 100% disabled, it can be 10, 13, $15,000 that these companies are getting, taking off the top of veterans who should be able to get those, those services and those benefits for free and can through the CVSO.

You know, as the Senator mentioned, we need more CVSOs. They do a lot of good work, and we need to continue to expand upon them. But those county CVSOs in my community do incredible work. And, you know, we fought to get more CVSOs because of that, because we see the difference that they're able to make.

And as the daughter of a Vietnam veteran who was disabled, I know how important it was to our family as well. So I want to thank you for bringing this Bill forward that I know ultimately the aim is around protecting veterans. We, over the past three years, we know that Veterans Guardian has allocated $1.3 million that has.

Just over a million of that has been in lobbying, which we're seeing the results of today. And those millions spent on lobbying came from disability payments of veterans. That's where this money is coming from.

All of the money that is paying for these companies is coming out of the pockets of veterans who are disabled and who have suffered injuries and PTSD and all kinds of, you know, really, really traumatic experiences through their service and are due 100% of those benefits and should get those.

So, you know, it is, federal law prohibits these fees. It prohibits, you know, this work. And unfortunately, with the change that revoked the penalties, it is allowed this illegal business to thrive and make hundreds of millions of dollars while they're at it off the backs of veterans. So with that, would you like to close, sir?

Yeah. Thank you, Madam Chair. And Members, thank you so much. As I began by saying thank you for loving our veterans. And as I mentioned, my two sons who are still serving, I believe I'm the only Senator in America, has two sons that are West Point graduates still serving.

Between the two of them, they have seven deployments, three bronze stars. They've done their time. Both paratroopers like I was. And Senator Gonzalez, thank you for your input. Because, you know, sometimes it takes a veteran to know a veteran, and I know that you know exactly what it takes and what has happened.

And that is our job, to share the information that we know of. And I will look in the future with anyone who's a good actor so that maybe we can work together and.

And work with these individuals to create the laws that will open the door that maybe one day I can come back and say, let's get a California State license to these individuals. And if we can do that, that would be fantastic. But right now, I'm eager to get this onto the next Committee.

And with that, I ask for your aye vote.

Thank you, Senator Archuleta. Thank you. Is there a second? Thank you. We have a first and a second. Madam Secretary, can you call the roll?

Senate Bill 694 by Senator Archuleta. Motion is due pass and re-referred to the Committee on Judiciary. [Roll Call]

So that Bill is out six, with six aye votes. Thank you. And are there folks who need to add on to the consent calendar? Yeah, let's. Let's call the roll for the consent calendar for absent Members, please. Got it.

We've got AJR 15 by Assembly Member Alanis. We've got Senate Bill 56 by Senator Salarto. We've got SB 296 by Senator Archuleta. And SB 855, by the way, the Senate Committee on Military and Veterans Affairs. Avila Farias. Please take conversations outside of the room. Thank you. Assembly Member Sharp Collins. Sharp Collins, aye. And Assembly Member Valencia.

The consent calendar is out eight votes. And we are adjourned.