The Greater Phoenix Chamber is championing HB 2038, an expenditure reporting bill which provides legislative clarity to charities, businesses, and other organizations who host events on how to accurately and equitably report lawmakers who attend the event as a guest.
Specifically, this legislation provides uniformity and clarity by providing clear guidelines. Current rules misrepresent the value that a lawmaker receives by attending as a guest at one of these events.
When a company hosts a lawmaker at a large event, the amount that they report varies based on the amount they paid for the event.
Imagine a nonprofit organization is hosting an event to raise funds to support cancer research. Company A sponsors an event for $10,000 to support the hosting organization. The excess revenue from this sponsorship supports the nonprofit’s mission-driven cause of funding research. They may receive speaking remarks, marketing promotions, and a table for ten guests as sponsor benefits.
Currently, Company A would report that they hosted a lawmaker for $1,000. Company B purchased a table for 10 guests at the cost of $500 at the same event, receiving no additional recognition benefits. Company B received the same meal only and would report hosting any elected officials at a $50 rate.
Company A, Company B, and the host organization all sat in the same venue, viewed the same program, had access to the same event guests, and received the same meal. However, every single one of them would report a different cost for hosting an elected official.
The proposed bill will enact statute to focus on the actual benefit received by lawmakers who attend an event as a guest, not the amount they give as a charitable contribution to the hosting organization. By focusing on real expenses, we aim to remove the amount a company is investing in the charity or providing to another organization as sponsorship in exchange for marketing benefits.
Including marketing and other intangible benefits that are only enjoyed by the sponsoring company—and not a lawmaker—severely misrepresents the value that lawmaker received. There is no special steak dinner for large investors in the front row, while general attendees receive rubber chicken. The difference in benefits that companies see at the event is focused on company exposure and other intangibles that are not reportable.
There are some who have reported that HB 2038 is an anti-transparency bill intended to reduce clarity in what lawmakers are receiving from companies. Currently, reporting is inconsistent across organizations and inflated to reflect other non-meal benefits that only the company receives; HB 2038 fixes those inconsistencies.
HB 2038 increases transparency by requiring companies to report the true cost of hosting a lawmaker. This will allow members of the public to see the true value of benefits received by the lawmaker and ensure that companies who host lawmakers at the same event are required to report in an equitable way that isn’t inflated by the charitable support they are providing to the organization to advance their mission and programs.
It’s time to update the system and level the reporting field so that companies have clarity and members of the public have accurate, reliable information.
Written by: Mike Huckins, Vice President of Public Affairs, Greater Phoenix Chamber