Signed by Governor Kay Ivey

Vote Smart's Synopsis:

Vote to pass a bill that authorizes decentralized autonomous organizations legal status and limited liability protections in Alabama.

Highlights:

• Defines “decentralized unincorporated nonprofit association” as an unincorporated nonprofit association that meets the following requirements (Sec. 2):

• Consists of at least 100 members joined for a common purpose, including administering affairs of a distributed ledger technology or network of smart contracts;

• Has elected to be formed under this Act; and

• Is not formed under any other law governing the organization or operation of nonprofits.

• Defines “distributed ledger technology” as a distributed ledger protocol supporting infrastructure, including blockchain, which may include the use of digital assets for electronic exchange (Sec. 2).

• Defines “smart contract” as an automated transaction, including blockchain, that may include facilitating and instructing transfers of an asset and administering instructions for actions of a decentralized unincorporated nonprofit association in the interest of its members (Sec. 2).

• Authorizes decentralized unincorporated nonprofit associations to engage in profit-making activities (Sec. 2).

• Authorizes decentralized unincorporated nonprofit associations to acquire, hold, encumber, or transfer an estate or interest in real or personal property (Sec. 2).

• Specifies that liability of a decentralized unincorporated nonprofit association is legally separate from those of its members or administrators, and any judgments or orders against the association are not a judgment or order against an individual (Sec. 2).

• Specifies that a member is not an agent of a decentralized unincorporated nonprofit association merely by being a member (Sec. 2).

• Authorizes a decentralized unincorporated nonprofit association to provide its governance through distributed ledger technology, including smart contracts (Sec. 2).

• Authorizes a decentralized unincorporated nonprofit association to adopt algorithmic (automated) means for establishing consensus for the validation of records, the establishment of operational procedures, and for making other organizational decisions (Sec. 2).

• Specifies that this Act takes effect December 1, 2026 (Sec. 3).

Vote Smart's Synopsis:

Vote to pass a bill that authorizes decentralized autonomous organizations legal status and limited liability protections in Alabama.

Highlights:

• Defines “decentralized unincorporated nonprofit association” as an unincorporated nonprofit association that meets the following requirements (Sec. 2):

• Consists of at least 100 members joined for a common purpose, including administering affairs of a distributed ledger technology or network of smart contracts;

• Has elected to be formed under this Act; and

• Is not formed under any other law governing the organization or operation of nonprofits.

• Defines “distributed ledger technology” as a distributed ledger protocol supporting infrastructure, including blockchain, which may include the use of digital assets for electronic exchange (Sec. 2).

• Defines “smart contract” as an automated transaction, including blockchain, that may include facilitating and instructing transfers of an asset and administering instructions for actions of a decentralized unincorporated nonprofit association in the interest of its members (Sec. 2).

• Authorizes decentralized unincorporated nonprofit associations to engage in profit-making activities (Sec. 2).

• Authorizes decentralized unincorporated nonprofit associations to acquire, hold, encumber, or transfer an estate or interest in real or personal property (Sec. 2).

• Specifies that liability of a decentralized unincorporated nonprofit association is legally separate from those of its members or administrators, and any judgments or orders against the association are not a judgment or order against an individual (Sec. 2).

• Specifies that a member is not an agent of a decentralized unincorporated nonprofit association merely by being a member (Sec. 2).

• Authorizes a decentralized unincorporated nonprofit association to provide its governance through distributed ledger technology, including smart contracts (Sec. 2).

• Authorizes a decentralized unincorporated nonprofit association to adopt algorithmic (automated) means for establishing consensus for the validation of records, the establishment of operational procedures, and for making other organizational decisions (Sec. 2).

• Specifies that this Act takes effect December 1, 2026 (Sec. 3).

Full Bill Text