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.
HB505 would regulate crowdfunding campaigns and platforms in Ohio by requiring platforms to include terms of service that prohibit organizers from using donated funds for any purpose other than the one stated in the solicitation, as well as for unlawful activity or promoting violence. It also requires organizers to return excess funds to donors once a campaign goal has been met, after converting any virtual currency to U.S. dollars.
The bill creates a framework for platform compliance and state oversight. Crowdfunding platforms would have to keep detailed records for three years, terminate campaigns that violate the required terms, and file annual reports with the Attorney General describing campaign activity, terminations, refunds, and the disposition of funds. The Attorney General would be authorized to investigate suspected violations, issue subpoenas, seek injunctive relief, and impose administrative penalties of $10,000 per violation, with additional civil penalties available for repeat violations.
The bill also specifies where undeliverable refunded funds go: identified donors’ funds would be sent to the state’s unclaimed funds trust fund, while anonymous-donor funds would be deposited into the crime victims recovery fund. Any penalties collected under the bill would go to the charitable law fund. In effect, the measure would add a consumer-protection and enforcement regime to crowdfunding activity in Ohio and would amend the Revised Code to create new sections governing these practices.
Because the bill was introduced and no committee vote or transcript is available, there is no recorded legislative debate or formal vote history to indicate broad support or opposition. The bill’s stated purpose suggests a consumer-protection focus, but the absence of discussion means sentiment can only be inferred as neutral at this stage. The main likely point of contention is the regulatory burden on crowdfunding platforms and organizers, including mandatory terms, reporting, recordkeeping, and exposure to penalties and attorney general enforcement.
A notable issue is that the bill text provided uses section numbers in Chapter 1349, while the bill caption references Chapter 1716 and adds platform registration requirements not reflected in the introduced text. That discrepancy may indicate drafting changes, but based on the text provided, the bill primarily addresses misuse of crowdfunding proceeds rather than platform registration.
HB505 would add new provisions to the Revised Code governing crowdfunding platforms and organizers, creating enforceable duties related to how donated funds are used, how excess funds are returned, and how campaigns are monitored and reported. It would give the Attorney General new investigative and penalty authority and would direct certain unclaimed or anonymous refunded funds into existing state funds. The bill would affect crowdfunding platforms, campaign organizers, donors, and the Attorney General’s consumer protection enforcement role.
There is no recorded committee testimony or vote history in the provided materials, so the bill’s sentiment cannot be measured from legislative debate. Based on the text alone, the measure appears to be framed as a consumer-protection and anti-misuse bill, suggesting a generally favorable policy rationale, but no formal support or opposition is documented in the available record.
The main potential contention is the scope of state regulation over crowdfunding platforms, including mandatory terms of service, recordkeeping, annual reporting, campaign termination duties, and significant penalties for noncompliance. Platform operators may view these requirements as burdensome, while supporters would likely emphasize donor protection and preventing fraud or misuse of solicited funds. Another possible issue is the handling of excess or undeliverable funds, especially the transfer of anonymous donations to the crime victims recovery fund.