WHAT VOTERS APPROVED IN 2006 FOR DISABLED VETERAN PROPERTY TAX EXEMPTION

BUT WE DIDN'T GET IT!

What needs to be fixed to comply with Colorado's Constitution Article X Section 3.5?

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Easy. Everyone swore an oath to uphold the Constitution and we can count on our public servants to correct legislation offensive to the Constitution. Their oaths, plus the clear knowledge that inaction by the Legislature fails Colorado's disabled veterans by denying us our Constitution's protection, make the Legislature's duty obvious.

Easy because it is so very clear. Current defective statutes addressing Article X Section 3.5 so clearly offend the Constitution we can easily summarize what's needed.

Corrective Action:

1. Military service total disability retirements must have enabling statute
2. All barriers to VA's total disability individual unemployability (TDIU) permanent ratings must be removed, but do not need corrective legislation. Regulatory correction suffices because each element of TDIU already satisfies constitutional requirement NOTE: RECOMMENDED: correct the defect in the entire program's failure to accommodate widows of service members who die on active duty, without a chance to qualify for veteran's status 

Justification:

1. Military service total disability retirements are clearly specified in Article X Section 3.5 and must be made acceptable to CDMA
2. The electorate exercised its power to amend the Constitution and approved Referendum E. Voter guidance from Colorado Legislative Council described unemployable disabled veterans, and each specific in Article X Section 3.5 as well as subsequent legislation detailed "permanent, service-connected, 100% total" as qualifying elements. The US Department of Veterans Affairs Veterans Benefits Administration confirmed each element is also an element of the VA permanent TDIU disability rating, and VA has offered to brief CDMA and other Colorado agencies.

DISCOVERED – A 2010 DOLA Reference to "Unemployability"

DOLA brochure           

Days and days have been spent trying to pin down how the state's basis for its current barrier to VA permanent and total disabled unemployability (TDIU) ratings and just how it grew into policy. Perhaps one such source document was found this evening, published in 2010 by the Department of Legislative Analysis (DOLA.) But nothing so far any earlier than 2010.

We learned that the 2006 Referendum E voter summary specifically described unemployability issues for the electorate to approve in this constitutional amendment. ("Veterans are rated 100-percent permanently disabled when a mental or physical injury makes it impossible for the average person to hold a job and the disability is lifelong.") That's what the voters were asked to consider. They approved, but the Legislature dropped from statutes along with military 100% disability retirements. Ge3.5t the point? The Legislature in effect changed the Constitution by statues which failed to encompass the full range of Article X Section, leaving CMDVA unable to follow the Constitution's provisions and stuck with the flawed statute instead.

Article X Section 3.5 simply mentioned "permanent, 100% service connected, total disability" VA ratings with nothing at all to eliminate or somehow disqualify TDIU. We learned that CDMVA said the department had "legislative guidance" to exclude VA TDIU, despite the Constitution and the subsequent enabling legislation passed in 2007. In the 2006 ballot information, voters were told Referendum E was to address vets who were "100-percent permanently disabled when a mental or physical injury makes it impossible for the average person to hold a job." The voters did not vote to bar unemployability ratings but specifically to include that rating for property tax exemption.

Did the legislators decide to override the electorate after Article X Section 3.5 was added to the Constitution? Why did CMDVA end up with its rules being 180º away from what voters approved? How did the Constitution's provision for CDMVA to recognize military service total disability retirements disappear from subsequent statute ?

Exemption application forms, county web pages and various unofficial sources mention that VA unemployability awards were unacceptable to CMDVA, but nothing on a state form. CallinguCMDVA yields the same negative answer - "not acceptable." We found nothing else from the State Until this evening, discovered on the Colorado Legislative Council web page.

Tonight, the earliest info we've been able to dig up is a 2010 DOLA-published two-page flyer titled "PROPERTY TAX EXEMPTION FOR DISABLED VETERANS IN COLORADO." Now, there's nothing official about this and it is an information-only type document, and it came out four years after the Constitution's change.

DOLA wrote, "VA employability awards do not meet the eligibility requirements." This 2010 brochure is the earliest document we can find addressing unemployability, and the only state document. We've found nothing more official on which CMDVA policy was based.

Will Politics Play a Role Against Veterans' Needs?

Maybe the question should be – will legislators find a way to use veterans' rights and needs to attack the opposing party? With veterans' issues founded in the Constitution, we think not. Especially not, because we've seen leaders in the Senate and the House, from opposite parties, push for late bills.

Folks in the know about Colorado politics remind us that corrections in our disabled veteran property tax exemption face hurdles, especially if legislation is involved rather than a constitutional challenge at the Supreme Court.

Too often, perfectly worthy bills are assigned to committees which have nothing to do with the bill so that failure is certain. For instance, automobile safety bills assigned by the president of the Senate or the speaker of the House to the Committee on State, Veterans and Military Affairs. That's known as referring bills to a "kill" committee.

So, not only do we have to hope leadership in Denver will obey their oaths of office to support the Constitution and bring statues into accord with it, but we have to hope they don't find in the process a way to attack the opposite party and use "kill" committees. Finally, we have to hope the Legislature views veterans' rights under Article X Section 3.5 to be something they will permit us to finally enjoy by passing essential legislation. Too much to hope for? Perhaps.

The problem is felt heavily by the electorate. Bills might be important problem-fixers, but legislative in-fighting makes it far more important for parties to find ways to hurt each other rather than serve the electorate. The worst of these abuses comes when really important legislation is introduced by one party but blocked by the other only to keep the introducing party from getting credit for good legislation.

Finally, the problem can be that this is the veterans' problem, not our legislators'. Their disinterest might just leave us abandoned.

What is the value of Colorado's disabled veteran property tax exemption?

Very simply, a totally disabled veteran's property is given a $100,000 exemption from the appraised value. A veteran's widow(er) also receives the exemption if the veteran was receiving the exemption before death. Sadly, no combat deaths qualify because the servicemember wasn't receiving the benefit at death, obviously.

Referendum E was explained to voters as an effort to thank Colorado's veterans whose service left them 100% permanently and totally disabled, about one percent of all veterans.

Vets still pay property tax but that burden is lessened on average about $466. Total cost to the state was estimated at $1,000,000 for extending the benefit to an estimated 2000 veterans.

There is also a benefit to the entire state in encouraging and supporting voluntary military service.

Referendum E, which became Article X Section 3.5 of our state constitution, is Colorado's largest benefit for qualified disabled veterans, although not to be compared to other states like New Hampshire or New Jersey where all property taxes are excused. The public expressed the intent of a little tax help so that totally disabled veterans might get and keep their homes, although the benefit applies only to homeowners. Other states provide different property tax relief. Oregon, for instance, exempts only $18,000 of the assessed value. Connecticut and a few other states offer 100% tax exemption. Colorado wrongly considers itself "somewhat above average" in disabled veterans' benefits. Remember: disabled veterans and military retirees are combat- proven good citizens and also economically beneficial to their states. Their pensions and retirements are huge injections of cash to local economies. Because of federal benefits, they are not burdens, and many states actively target these folks as new residents by offering such things as property and income tax relief.  Colorado can do so much more, especially with free state park camping, tax-exempt military retirement, and more significant property tax exemptions.

A little history - Colorado's Disabled Veteran Property Tax Exemption

Let's look at history...

"Unemployability" is specifically cited by CMDVA and the county governments as an unacceptable VA disability rating. While nothing in the Constitution or the 2007 enabling legislation bars VA unemployability ratings for permanent and total 100% service-connected veterans, CMDVA staff reports this has resulted from casual, unofficial legislative guidance after the statute was on the books. Today, the only written basis for barring unemployability ratings are some counties' application forms (hardly a legal foundation) and the CMDVA web site. It is barred because CMDVA says so, not because of any statute or Constitutional provision.

But history tells a fuller story. Colorado's referendum measures are described in detail by the Legislature at their web site, Colorado Ballot Analysis. Amazingly, there we read that unemployability was a substantive issue specifically provided for in the various drafts, the Blue Book and the final ballot analysis given the electorate to consider:

"Who qualifies for the tax reduction? Homeowners who have served on active duty in the U. S. Armed Forces and are rated 100-percent permanently disabled by the federal government due to a service-connected disability qualify for the tax reduction in Referendum E. Colorado National Guard members injured while serving in the U.S. Armed Forces also qualify. Veterans are rated 100-percent permanently disabled when a mental or physical injury makes it impossible for the average person to hold a job and the disability is lifelong. Nationally, less than one percent of veterans have a 100-percent permanent disability rating. About 2,200 veterans are expected to qualify for the property tax reduction in Colorado.
What are the fiscal implications? Referendum E affects property taxes paid beginning in 2008. The average property tax savings for those who qualify will be about $466. The total reduction in property taxes is estimated to be about $1 million in the first year. The state is required to reimburse local governments for the reduction in property tax revenue resulting from Referendum E."

When Referendum E was finally referred to the electorate to vote on, there was no unemployability language like the voter summary contained, and Article X Section 3.5 simply mentioned the specific qualifiers. The words "100% percent (1) permanently (2) and totally service-connected disabled (3)" were used. These are what the Constitution's Article X Section 3.5 requires CMDVA to require of veterans seeking the disabled veteran property tax exemption. "Unemployability" does not appear in the Constitution and that VA rating doesn't conflict at all with the Constitution's specifications.

The US Department of Veterans Affairs Veterans Benefits Administration confirmed that it has two such ratings. One is for 100% service-connected illnesses or injuries, and the other is for permanent and totally disabled 100% service-connected unemployability. VA generally refers to the latter as "TDIU" or "PDIU." Nothing in the Constitution or the subsequent statutes bars CMDVA from accepting claims of both groups but the state only accepts the first category. 

In doing this, about half of the eligible veterans are barred from the protection intended for them by the electorate who approved Referendum as Article X of the Constitution.

What the people approved should be the law of the land. If unemployability, or enlisted, or commissioned, or value of property, or age, or kind of injury, or type retired, or any other qualifier is to be applied in evaluating a veteran's application for the disabled veteran property tax exemption, that should be spelled out in law which reflects the Constitution. Only permanent, total, 100% service-connected and disabled are the words of our Constitution.

Permanent VA unemployability ratings were described by DOLA in the Blue Book for approval by the people and should not be disqualified by the state.

Finally – A comprehensive (though disappointing) answer about the conflict between Colorado's constitution and statutes on disabled vet property tax exemption

I asked...and she answered very completely. Now I have something to work with going forward.

From: Groff - DOLA, JoAnn <j>

Dear Mr. Carter: 

Renee Bridges and Stan Gueldenzopf on the staff here at the Division of Property Taxation, Department of Local Affairs have both contacted me about your concerns. To clarify, I understand your issue is that you have a different opinion of the wording of the Colorado Constitution from how it is interpreted by Colorado Statute and subsequently applied by the Division of Veterans Affairs in the Department of Military and Veterans Affairs. Renee Bridges suggested that you contact your legislators, but perhaps didn't offer enough explanation as to the "why" you should contact them. I hope to add some clarity here.

When there is a question regarding an interpretation of the constitutionality of statute there are two governing authorities. The first is the Colorado General Assembly. The presumption is that their interpretation through law IS constitutional. Subsequently, the Administrative staff who interprets and then enforces the statutes (read Division of Veterans Affairs, Division of Property Taxation and our respective Departments) does not have the authority to question whether the law is in conflict with the Constitution, we must assume all statutes are constitutional. If there is a question of whether a statute is constitutional, the second governing authority is the Colorado Supreme Court. If the Court says it is NOT constitutional then that part of the law becomes null and void and the General Assembly starts over. 

Short of bringing a lawsuit, individual legislators do have the ability to ask Legislative Legal Services, the office that acts as the attorneys for the General Assembly, for a legal interpretation of whether a part of the statute is constitutional. The legislators also can introduce legislation, even without an opinion of their lawyers, if the legislator feels the current statutory interpretation is incorrect, OR if they feel the language of the constitution might support a more broad interpretation than that which is currently in statute. 

For your circumstances, rather than initiating a costly and protracted legal review through the courts, my staff thought the best place to start is to see if your individual legislators agree with your argument and feel a change in the statute is appropriate. The interpretation you propose cannot be enacted independently by the administrative departments responsible for the program. I hope this offers clarity to our earlier response. 

All the best. JoAnn

JoAnn Groff 

Property Tax Administrator

P 303-864-7776  I  M 303-864-7777 I  F 303-864-7799

1313 Sherman St., Suite 419, Denver, CO 80203 

  I www.dola.colorado.gov/dpt

Code of Federal Regulations on Unemployability

Following is the Code of Federal Regulations governance of VA unemployability ratings. Note that VA considers Permanent and Total Unemployability awards (TDIU) to be "a rating of 100 percent service-connected disability based on individual unemployability"

§3.340   Total and permanent total ratings and unemployability.

(a) Total disability ratings—(1) General. Total disability will be considered to exist when there is present any impairment of mind or body which is sufficient to render it impossible for the average person to follow a substantially gainful occupation. Total disability may or may not be permanent. Total ratings will not be assigned, generally, for temporary exacerbations or acute infectious diseases except where specifically prescribed by the schedule.

(2) Schedule for rating disabilities. Total ratings are authorized for any disability or combination of disabilities for which the Schedule for Rating Disabilities prescribes a 100 percent evaluation or, with less disability, where the requirements of paragraph 16, page 5 of the rating schedule are present or where, in pension cases, the requirements of paragraph 17, page 5 of the schedule are met.

(3) Ratings of total disability on history. In the case of disabilities which have undergone some recent improvement, a rating of total disability may be made, provided:

(i) That the disability must in the past have been of sufficient severity to warrant a total disability rating;

(ii) That it must have required extended, continuous, or intermittent hospitalization, or have produced total industrial incapacity for at least 1 year, or be subject to recurring, severe, frequent, or prolonged exacerbations; and

(iii) That it must be the opinion of the rating agency that despite the recent improvement of the physical condition, the veteran will be unable to effect an adjustment into a substantially gainful occupation. Due consideration will be given to the frequency and duration of totally incapacitating exacerbations since incurrence of the original disease or injury, and to periods of hospitalization for treatment in determining whether the average person could have reestablished himself or herself in a substantially gainful occupation.

(b) Permanent total disability. Permanence of total disability will be taken to exist when such impairment is reasonably certain to continue throughout the life of the disabled person. The permanent loss or loss of use of both hands, or of both feet, or of one hand and one foot, or of the sight of both eyes, or becoming permanently helpless or bedridden constitutes permanent total disability. Diseases and injuries of long standing which are actually totally incapacitating will be regarded as permanently and totally disabling when the probability of permanent improvement under treatment is remote. Permanent total disability ratings may not be granted as a result of any incapacity from acute infectious disease, accident, or injury, unless there is present one of the recognized combinations or permanent loss of use of extremities or sight, or the person is in the strict sense permanently helpless or bedridden, or when it is reasonably certain that a subsidence of the acute or temporary symptoms will be followed by irreducible totality of disability by way of residuals. The age of the disabled person may be considered in determining permanence.

(c) Insurance ratings. A rating of permanent and total disability for insurance purposes will have no effect on ratings for compensation or pension.

[26 FR 1585, Feb. 24, 1961, as amended at 46 FR 47541, Sept. 29, 1981]

§3.341   Total disability ratings for compensation purposes.

(a) General. Subject to the limitation in paragraph (b) of this section, total-disability compensation ratings may be assigned under the provisions of §3.340. However, if the total rating is based on a disability or combination of disabilities for which the Schedule for Rating Disabilities provides an evaluation of less than 100 percent, it must be determined that the service-connected disabilities are sufficient to produce unemployability without regard to advancing age.

(Authority: 38 U.S.C. 1155)

(b) Incarcerated veterans. A total rating for compensation purposes based on individual unemployability which would first become effective while a veteran is incarcerated in a Federal, State or local penal institution for conviction of a felony, shall not be assigned during such period of incarceration. However, where a rating for individual unemployability exists prior to incarceration for a felony and routine review is required, the case will be reconsidered to determine if continued eligibility for such rating exists.

(Authority: 38 U.S.C. 5313(c))

(c) Program for vocational rehabilitation. Each time a veteran is rated totally disabled on the basis of individual unemployability during the period beginning after January 31, 1985, the Vocational Rehabilitation and Employment Service will be notified so that an evaluation may be offered to determine whether the achievement of a vocational goal by the veteran is reasonably feasible.

(Authority: 38 U.S.C. 1163)

[46 FR 47541, Sept. 29, 1981, as amended at 50 FR 52774, Dec. 26, 1985; 55 FR 17271, Apr. 24, 1990l; 58 FR 32445, June 10, 1993; 68 FR 34542, June 10, 2003]