As Introduced

136th General Assembly

Regular Session H. B. No. 505

2025-2026

To enact sections 1349.07, 1349.071, 1349.072, 1349.073, 1349.074, 1349.075, 1349.076, and 1349.08 of the Revised Code to restrict the use of funds collected through crowdfunding for purposes other than those solicited.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1349.07, 1349.071, 1349.072, 1349.073, 1349.074, 1349.075, 1349.076, and 1349.08 of the Revised Code be enacted to read as follows:

Sec. 1349.07. As used in sections 1349.07 to 1349.08 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.

(B) "Crowdfunding organizer" means any individual that conducts a crowdfunding solicitation.

(C) "Crowdfunding platform" means any publicly available web site, software application, or online service, or money transmitter through which a crowdfunding organizer solicits and receives donated funds through crowdfunding.

Sec. 1349.071. Every crowdfunding platform shall include in its terms of service both of the following provisions:

(A) A prohibition against crowdfunding organizers using funds raised via crowdfunding for any of the following:

(1) Any purpose other than the purpose specified when soliciting or campaigning to obtain the funds;

(2) Promoting or supporting acts of violence;

(3) An unlawful purpose.

(B) A requirement that a crowdfunding organizer do both of the following if it possesses excess donated funds or virtual currency after the stated purpose of the crowdfunding campaign has been realized:

(1) Sell or convert any virtual currency to United States dollars;

(2) Remit all excess funds to the donors for the crowdfunding campaign in amounts proportional to the donors' respective donations.

Sec. 1349.072. A crowdfunding platform shall terminate a campaign for a violation under division (A) or (B) of section 1349.071 of the Revised Code. If a crowdfunding platform terminates a campaign, the crowdfunding organizer shall refund or remit the funds in accordance with division (B) of section 1349.071 of the Revised Code and section 1349.073 of the Revised Code.

Sec. 1349.073. If funds remitted to a donor under division (B) of section 1349.071 of the Revised Code or section 1349.072 of the Revised Code are unable to be delivered to that donor, the following apply:

(A) If the donor's name and personal information are known, the funds shall be paid to the director of commerce, to be deposited as unclaimed funds into the unclaimed funds trust fund created under section 169.05 of the Revised Code.

(B) If the donation was made anonymously and the donor's identity cannot be ascertained, the crowdfunding organizer shall pay the funds to the attorney general for deposit into the crime victims recovery fund created under section 2929.32 of the Revised Code.

Sec. 1349.074. 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. 1349.075. (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 1349.071 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 section 1349.076 of the Revised Code 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 section 1349.076 of the Revised Code 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 section 1349.076 of the Revised Code 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 section 1349.076 of the Revised Code 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 sections 1349.071 and 1349.073 of the Revised Code;

(4) Grants other relief that may be required until the person obeys the subpoena.

Sec. 1349.076. (A) The attorney general shall impose on a crowdfunding platform an administrative penalty of ten thousand dollars for each time the platform violates section 1349.071 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 1349.071 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) 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.

Sec. 1349.08. 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 consumer protection 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 initiated through the platform;

(B) The total dollar amount received for all crowdfunding campaigns;

(D) The number of crowdfunding campaigns terminated by the crowdfunding platform for noncompliance with the crowdfunding platform's terms of service;

(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;

(G) The total dollar amount from terminated crowdfunding campaigns deposited into the unclaimed funds trust fund created under section 169.05 of the Revised Code;

(H) The total dollar amount deposited into the crime victims recovery fund created under section 2929.32 of the Revised Code from terminated crowdfunding campaigns;

(I) The percentage of funds collected through the crowdfunding platform that were paid to the intended recipient or utilized for the intended purpose.