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hb505_01_RH
As Reported by the House Technology and Innovation Committee
136th
General Assembly
Regular
Session
Sub. H. B. No. 505
2025-2026
Representatives Odioso, Abrams
To
enact sections 1716.30, 1716.301, 1716.302, 1716.303, 1716.304,
1716.305, 1716.306, 1716.307, 1716.308, and 1716.309 of the Revised
Code
to
prohibit the use of funds collected through crowdfunding for
fraudulent or misleading purposes and to require crowdfunding
platforms to register with the Attorney General.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections
1716.30
,
1716.301
,
1716.302
,
1716.303
,
1716.304
,
1716.305
,
1716.306
,
1716.307
,
1716.308
,
and
1716.309
of the Revised Code be enacted to read as follows:
Sec.
1716.30.
As
used in sections 1716.30 to 1716.309 of the Revised Code:
(A)
"Crowdfunding" means the practice of obtaining funding by
soliciting and receiving donated funds or virtual currency from
individuals, organizations, or companies for a noncommercial purpose
described in the solicitation.
"Crowdfunding"
does not include any of the following:
(1)
The practice of obtaining funding by soliciting funds in exchange for
a stake, share, or partial ownership in any company, organization,
real or personal property, or other financial asset;
(2)
The practice of obtaining funding by soliciting funds in exchange for
participation in any transaction conducted under Chapter 1308.,
1309., or 1321. of the Revised Code;
(3)
The practice of obtaining funding by soliciting funds to develop a
product or service, or in exchange for future delivery of, or access
to, that product or service;
(4)
The practice of soliciting or obtaining funds for the benefit of a
political campaign, political candidate, or political action
committee;
(5)
The practice of soliciting or obtaining funds for the benefit of a
charitable organization or charitable purpose.
(B)
"Crowdfunding organizer" means any individual or entity
that conducts a crowdfunding solicitation.
(C)
"Crowdfunding platform" means any publicly available web
site, software application, or online service specifically designed
or offered for use by a crowdfunding organizer to solicit or receive
donated funds.
Sec.
1716.301.
Every
crowdfunding platform shall include in its terms of service a
prohibition against crowdfunding organizers using funds raised via
crowdfunding for either of the following:
(A)
Promoting or supporting an offense of violence, as defined by section
2901.01 of the Revised Code;
(B)
An act prohibited by the laws of this state.
Sec.
1716.302.
(A)
A crowdfunding platform shall terminate a campaign for a violation
under section 1716.301 of the Revised Code.
(B)
If a crowdfunding platform terminates a campaign for a violation of
section 1716.301 of the Revised Code, the crowdfunding organizer or
beneficiary, as applicable, shall return any withdrawn funds to the
payment service provider.
(C)
A crowdfunding platform shall use commercially reasonable efforts to
facilitate the refund of the funds as described in division (B) of
this section, including by providing operational support to the
crowdfunding organizer or beneficiary to refund such funds to donors
in amounts equal to the donors' respective donations.
Sec.
1716.303.
Crowdfunding
platforms shall keep complete and accurate records of all facts and
circumstances surrounding the fundraising and disposition of those
funds and virtual currency for at least three years.
Sec.
1716.304.
On
or before the thirty-first day of January each year and beginning in
the second calendar year following the effective date of this
section, every crowdfunding platform operating in this state shall
submit to the charitable law section of the office of the attorney
general a report that contains all of the following information with
respect to the prior calendar year:
(A)
The number of crowdfunding campaigns that were created by an
individual in this state and that raised over ten thousand dollars
through the platform;
(B)
The total dollar amount donated for all such crowdfunding campaigns;
(C)
The total dollar amount withdrawn for use by all crowdfunding
campaigns;
(D)
The number of crowdfunding campaigns terminated by the crowdfunding
platform for noncompliance with the requirements of section 1716.301
of the Revised Code;
(E)
The reason for which each crowdfunding campaign was terminated by the
crowdfunding platform;
(F)
The total dollar amount refunded to donors for terminated
crowdfunding campaigns.
Sec.
1716.305.
(A)
No crowdfunding platform shall engage in any crowdfunding unless it
has complied with the requirements of sections 1716.30 to 1716.309 of
the Revised Code and any rules adopted in accordance with those
sections.
(B)(1)
Every crowdfunding platform, before facilitating any crowdfunding on
and after the effective date of this section, shall register with the
attorney general.
(2)
Applications for registration or renewal of registration shall be in
writing, under oath, and in the form prescribed by the attorney
general.
(3)(a)
Each application shall be accompanied by a fee in the amount of five
thousand dollars.
(b)(i)
Any corporation, partnership, association, or other entity that
intends to act as a crowdfunding platform may register for and pay a
single fee of five thousand dollars on behalf of all its members,
officers, employees, and agents.
(ii)
In that case, except as provided in section 1716.306 of the Revised
Code, the names and addresses of all the corporate officers of the
crowdfunding platform shall be listed in the application or furnished
to the attorney general.
(4)
The application shall contain any other information that the attorney
general may require.
(C)
The registration shall be for a period of one year or part of one
year and expires on the thirty-first day of March each year. Upon
application and payment of the fee specified in this section, the
registration may be renewed for additional one-year periods.
(D)
All fees prescribed in this section shall be paid into the state
treasury to the credit of the charitable law fund established under
section 109.32 of the Revised Code.
Sec.
1716.306.
The
attorney general may exchange any information with respect to
crowdfunding organizers or crowdfunding platforms with the
appropriate authority of any other state or of the United States. The
attorney general may accept any information filed by a crowdfunding
platform with the appropriate authority of another state or of the
United States in lieu of the information that the crowdfunding
platform is required to file pursuant to sections 1716.30 to 1716.309
of the Revised Code if the information substantially meets all of the
requirements of sections 1716.30 to 1716.309 of the Revised Code.
Sec.
1716.307.
The
attorney general may adopt such reasonable rules pursuant to Chapter
119. of the Revised Code as may be necessary to implement sections
1716.30 to 1716.309 of the Revised Code.
Sec.
1716.308.
(A)
If, by the attorney general's own inquiries or as a result of
complaints, the attorney general has reasonable cause to believe that
a crowdfunding platform has violated section 1716.301 of the Revised
Code or has failed to comply with section 1716.302 or 1716.305 of the
Revised Code, the attorney general may investigate.
(B)
In any investigation conducted pursuant to this section, the attorney
general may administer oaths, subpoena witnesses, adduce evidence,
and subpoena the production of any book, document, record, or other
relevant matter.
(C)
If the attorney general under division (B) of this section subpoenas
the production of any relevant matter that is located outside this
state, the attorney general may designate a representative, including
an official of the state in which that relevant matter is located, to
inspect the relevant matter on the attorney general's behalf. The
attorney general may carry out similar requests received from
officials of other states.
(D)
Any person who is subpoenaed to produce relevant matter pursuant to
division (B) of this section shall make that relevant matter
available at a convenient location within this state or the state of
the representative designated under division (C) of this section.
(E)
Any person who is subpoenaed as a witness or to produce relevant
matter pursuant to division (B) of this section may file in the court
of common pleas of Franklin county, the county in this state in which
the person resides, or the county in this state in which the person's
principal place of business is located a petition to extend for good
cause shown the date on which the subpoena is to be returned or to
modify or quash for good cause shown that subpoena. The person may
file the petition at any time prior to the date specified for the
return of the subpoena or within twenty days after the service of the
subpoena, whichever is earlier.
(F)
Any person who is subpoenaed as a witness or to produce relevant
matter pursuant to division (B) of this section shall comply with the
terms of the subpoena unless the court orders otherwise prior to the
date specified for the return of the subpoena or, if applicable, that
date as extended. If a person fails without lawful excuse to obey a
subpoena, the attorney general may apply to the court of common pleas
for an order that does one or more of the following:
(1)
Compels the requested discovery;
(2)
Adjudges the person in contempt of court;
(3)
Grants injunctive relief to restrain the person from failing to
comply with section 1716.301 of the Revised Code;
(4)
Grants other relief that may be required until the person obeys the
subpoena.
Sec.
1716.309.
(A)
The attorney general shall impose on a crowdfunding platform an
administrative penalty of ten thousand dollars for each time the
platform violates section 1716.301 of the Revised Code.
(B)
The attorney general may bring a civil action in a court of common
pleas for appropriate relief under this section, including a
temporary restraining order and preliminary or permanent injunction,
for violations of section 1716.301 of the Revised Code. If a
crowdfunding platform has violated that section more than once in a
two-year period, the attorney general may seek a civil penalty of ten
thousand dollars per violation in addition to the administrative
penalties imposed by division (A) of this section.
(C)
The attorney general may bring a civil action in a court of common
pleas for appropriate relief under this section, including a
temporary restraining order, preliminary or permanent injunction, and
a civil penalty of up to ten thousand dollars for failure to comply
with section 1716.305 of the Revised Code.
(D)
Any penalty collected that was imposed under this section shall be
paid into the state treasury to the credit of the charitable law fund
established under section 109.32 of the Revised Code.