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.