AL SB277

Creates a new legal framework for "Decentralized Unincorporated Nonprofit Associations" in Alabama, requiring at least 100 members joined by mutual consent for digital activity under a common nonprofit purpose, including administering distributed ledger technology or smart contract networks

Establishes the association as a separate legal entity from its members, shielding members and administrators from personal liability for the association's contracts, torts, and debts solely by virtue of membership or management participation

Allows governance through distributed ledger technology and smart contracts, with voting procedures for member proposals on software upgrades, governance changes, and organizational decisions requiring majority approval of participating membership interests

Permits profit-making activities but prohibits distributions to members or administrators, except for reasonable compensation, expense reimbursement, repurchase of membership interests, or distributions upon dissolution

Effective October 1, 2026, and provides that associations falling below 100 members automatically transition to standard Alabama unincorporated nonprofit associations unless governing principles specify otherwise