SB 277 Alabama Senate · 2026 Regular Session

Unincorporated nonprofit associations; decentralized associations provided for

SB 277 creates a new legal framework for "decentralized unincorporated nonprofit associations" in Alabama, allowing groups to form under this structure using blockchain technology and smart contracts for governance. These associations can engage in limited profit-making activities (like selling goods or services), but all profits must serve their nonprofit purpose, and they cannot distribute earnings to members except under specific rules for compensation or dissolution. The bill directly affects nonprofit groups seeking to operate transparently via digital tools, as it defines their governance rules, member rights, and administrative duties. It does not change existing nonprofits but establishes a new category for those adopting decentralized, tech-driven models.

Issues: ✓ Technology

Bill status signed all 5 stages cleared

Introduction

Feb 2026

Committee Review

Mar 2026

Senate Passage

Feb 2026

House Passage

Mar 2026

Signed into Law

Apr 2026

Introduced Feb 10, 2026 Signed Apr 2, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

Engrossed → Enrolled · 3 edits · Apr 2, 2026

MINOR

The bill was finalized as an enrolled act, moving it from a draft version to its final legal form. The primary substantive change is the addition of a specific title for the new law, officially naming it the 'Decentralized Unincorporated Nonprofit Association Law.' Additionally, the definition of 'Distributed Ledger Technology' was expanded to explicitly include both public and private systems, as well as permissioned and permissionless networks.

Scope change

The bill's scope is now formally defined under a specific title, clarifying its legal identity. The applicability of the new law was broadened by expanding the definition of distributed ledger technology to cover a wider range of blockchain and digital network types.

DEFINITION

Added a new title clause stating that the article and related chapters shall be known as the 'Decentralized Unincorporated Nonprofit Association Law.'

Expanded the definition of 'Distributed Ledger Technology' to explicitly include public, private, permissioned, and permissionless systems, and authorized the use of digital assets as a medium of exchange.

TECHNICAL

Corrected the bill's status from 'Engrossed' (a draft version) to 'Enrolled' (the final version ready for the Governor's signature).

Introduced → Engrossed · 5 edits · Feb 24, 2026

MODERATE

The bill was updated from its initial introduction to its final engrossed version, incorporating significant substantive changes to the definitions and requirements for decentralized nonprofit associations. The most critical change is the expansion of the definition of 'Distributed Ledger Technology' to explicitly include both public and private ledgers, as well as permissioned and permissionless systems, broadening the scope of what the law covers. Additionally, the definition of 'Governing Principles' was expanded to include smart contracts and consensus algorithms, ensuring these digital governance tools are legally recognized. The bill also clarifies that these associations must consist of at least 100 members and explicitly allows them to engage in profit-making activities, provided proceeds are not distributed to members, distinguishing them from traditional nonprofits.

Scope change

The scope of the bill was broadened to explicitly cover a wider variety of blockchain and digital ledger technologies, including private and permissioned networks, and to formally recognize digital governance mechanisms like smart contracts as part of the association's governing structure.

DEFINITION

The definition of 'Distributed Ledger Technology' was modified to explicitly include public, private, permissioned, and permissionless systems, expanding the types of technologies the law regulates.

The definition of 'Governing Principles' was added/expanded to specifically include smart contracts, consensus formation algorithms, and enacted governance proposals, ensuring digital governance tools have legal standing.

The definition of 'Person' was expanded to include a comprehensive list of entities, such as trusts, estates, and government subdivisions, ensuring broad eligibility for membership.

ELIGIBILITY

The requirement for a 'Decentralized Unincorporated Nonprofit Association' was clarified to require at least 100 members and an explicit election to be formed under this new article.

SCOPE

The bill was clarified to explicitly permit these associations to engage in profit-making activities, subject to restrictions on distributing profits to members.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Mar 12, 2026

Lower · Passed

Motion to Read a Third Time and Pass - Adopted Roll Call 887

lower

Mar 4, 2026

Lower · Passed

Reported Out of Committee Second House

lower

Feb 25, 2026

Lower · Passed

Pending Committee Action in Second House (Economic Development and Tourism)

lower

Feb 24, 2026

Upper · Passed

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 561

upper

Feb 24, 2026

Upper · Passed

Bell motion to Adopt - Adopted Roll Call 560

upper

Feb 24, 2026

Upper · Passed

Bell motion to Adopt - Adopted Roll Call 559

upper

Feb 24, 2026

Introduced

Fiscal Responsibility and Economic Development 1st Amendment Offered (Fiscal Responsibility and Economic Development)

upper

Feb 24, 2026

Introduced

Fiscal Responsibility and Economic Development 2nd Amendment Offered (Fiscal Responsibility and Economic Development)

upper

Feb 18, 2026

Upper · Passed

Reported Out of Committee House of Origin

upper

Feb 18, 2026

Introduced

Fiscal Responsibility and Economic Development 2nd Amendment (Fiscal Responsibility and Economic Development)

upper

Feb 18, 2026

Introduced

Fiscal Responsibility and Economic Development 1st Amendment (Fiscal Responsibility and Economic Development)

upper

Feb 10, 2026

Upper · Passed

Pending Committee Action in House of Origin (Fiscal Responsibility and Economic Development)

upper

1 primary · 0 co-sponsors