❌ HB505
Restrict use of crowdfunding money for other purposes
Current Status: In House Committee (Technology and Innovation)
Summary
The bill restricts the use of funds collected through crowdfunding to only the purposes specified in the solicitation. It mandates crowdfunding platforms to include terms of service that prohibit misallocation of funds and requires the return of excess funds to donors. Additionally, it establishes penalties for violations and reporting requirements for crowdfunding platforms.
Rationale
The bill imposes government restrictions on the use of funds and mandates compliance from crowdfunding platforms, which conflicts with the Libertarian principles of minimal government intervention and the freedom to contract. Both the LP and LPO platforms emphasize individual rights and economic liberty, which this bill undermines.
Risks and Concerns
- Increases government control over private transactions
- Restricts individual freedom to manage personal funds
- Imposes penalties that could deter crowdfunding initiatives