NASHVILLE — The Tennessee House Commerce Committee on March 26 approved House Bill 342 as amended, a bill that would add state guardrails for for-profit companies that help veterans prepare or file disability claims.

Sponsor Representative Clark Moon said the bill preserves veterans’ choice while adding consumer-protection provisions to limit deceptive or exploitative practices. The measure passed after the committee attached amendment 4247 that sponsors said clarifies scope and creates enforcement mechanisms.

Why it matters: Committee members and witnesses described an unregulated for-profit industry that, they said, sometimes takes advantage of veterans seeking disability compensation. Proponents told the committee that state rules are needed to require transparency, to prohibit upfront or refundable fees and to create civil penalties enforceable by the attorney general under the Tennessee Consumer Protection Act.

What the bill would do: The text advanced in committee includes several provisions sponsors summarized on the floor:
- Require fees to be contingent on a successful outcome and limited to a one-time fee; prohibit refundable or upfront fees and referral fees;
- Mandate that veterans be informed of free options available from county veteran service officers and congressionally-chartered nonprofit organizations;
- Restrict certain practices during a veteran’s first 365-day presumptive period without written notice and waiver;
- Prohibit overseas call or data centers from processing veterans’ personal information and require background checks for employees;
- Add civil and criminal penalties for violations, with enforcement by the Tennessee Attorney General under the state Consumer Protection Act (as the bill references enforcement through state authority).

Public testimony: The committee heard two witnesses during the public-comment period. Justin Johnson, a combat veteran from Collierville who identified himself for the record, described an industry of “claims sharks” that he said profits from veterans while veterans wait for overstretched Veterans Service Officers (VSOs). Johnson said the federal expansion of benefits after the PACT Act and the removal of criminal penalties at the federal level have contributed to a marketplace in which for-profit actors pursue veterans with aggressive marketing. He said: "These companies are making millions and millions of dollars," and argued the bill would protect veterans from fraudulent or misleading claims.

Peter O’Rourke, president of the National Association for Veterans Rights and a former acting official at the U.S. Department of Veterans Affairs, testified in support. O’Rourke told the committee that the industry has both reputable firms and bad actors and that state-level rules can help differentiate legitimate services from those that exploit veterans. He said the proposed guardrails align with standards his association and federal officials have discussed for years.

Committee discussion: Members from both parties said they supported protecting veterans while preserving access to assistance. Several members praised local VSOs but said the current unregulated private market creates problems. Leader Cochran and Chairman Moon asked and received clarifications that the bill does not replace federal accreditation requirements and that enforcement would proceed through state law and the attorney general’s office.

Vote and next steps: The committee attached amendment 4247 and approved the bill. Clerk tally: 19 ayes, 0 nos, 2 present not voting. The sponsor was reported as forwarded to calendar and rules as amended. The committee noted the bill may interact with federal accreditation requirements and with staffing levels at state and county veteran services offices.

Ending: Supporters said the bill creates transparency and consumer protections without removing veterans’ right to choose representation. The committee’s approval advances the measure for further consideration on the calendar.