House Commerce Committee Takes Testimony on Crowdfunding Legislation

Today the House Commerce committee took up HB 4996, legislation to enable crowdfunding, the idea of funding projects or startups by obtaining small sums of money from many individuals.  HB 4996 will allow the sales of securities to an unlimited number of non-accredited investors, provided the issuer registers with the State of Michigan.  Any Michiganders who do not fit the federal definition of an accredited investor are given the opportunity to support their local entrepreneurs, existing small businesses, and real estate investments.

There were some concerns from some of the representatives on the committee not about the idea and intent of the legislation but regarding the level of safety built in for those investing so there may be a new draft with amendments coming forth.

We see this as a creative approach to economic development in the state of Michigan.  It is no secret that entrepreneurs are one of the keys to economic success.  Entrepreneurship is among the League’s 8 key assets to creating vibrant, successful, 21st century communities.  Studies have shown the communities with the largest growth rate are those in which entrepreneurs are flocking to.  These very entrepreneurs are finding it difficult to pull together the necessary investments to start their businesses.  The investment strategy allowed for under this legislation will help to close the gap and make the entrepreneurs dream of starting a business and having a presence in the community very real.  Entrepreneurs help to make our local municipalities flourish and helping these businesses succeed makes for strong local and regional economies. Local communities are doing their part in identifying the aspects of a community that entrepreneurs seek out in places where they want to set up shop but that doesn’t matter if there isn’t a means for them to get off the ground and running or to grow their business. This legislation will provide another avenue for other local individuals to invest in their community in a new way by supporting the businesses they know best.  Healthy local economies and healthy communities go hand in hand.

It is exciting and refreshing to be able to be supportive of such a creative and positive economic development effort at the state level.  We want to thank Rep. Jenkins for all of her work on this and for championing this issue.  Also a huge thank you to Chris Miller, city of Adrian, and his team for all of their work on this too.

Nikki Brown is a legislative associate for the League handling economic development and land use issues.  She can be reached at nbrown@mml.org or 517-908-0305.

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