Bill > SB277

This bill establishes a new legal framework in Alabama for "decentralized unincorporated nonprofit associations," which are defined as nonprofit organizations with at least 100 members, joined by mutual consent for a common nonprofit purpose, and specifically electing to operate under this new law, distinct from other nonprofit association laws. Key provisions include defining terms like "administrator" (a person authorized to perform tasks at the direction of members), "digital asset" (digital representations of value), and "distributed ledger technology" (like blockchain) which can be used for governance. The bill outlines how these associations can engage in profit-making activities as long as profits further their nonprofit purpose, and clarifies that while they generally cannot distribute profits to members or administrators, they can pay reasonable compensation and reimburse expenses. It also details procedures for property transactions, including recording a "statement of authority" for real property transfers, and establishes that these associations are separate legal entities from their members, limiting member liability for the association's contracts or torts. The bill also addresses how these associations can sue and be sued, how judgments against them don't automatically apply to members, and how service of process can be made, including through an appointed agent. It provides for perpetual existence unless otherwise specified, outlines dissolution procedures, and clarifies how members join, resign, or can be expelled, noting that members generally don't owe fiduciary duties unless acting on behalf of the association. Importantly, it allows for governance through distributed ledger technology, including "smart contracts" (automated transactions based on code), and outlines how members can vote on various matters, with membership interests often tied to voting rights. The bill also details administrator roles and limitations on their liability, member access to association records (with exceptions for information readily available on a distributed ledger), and provisions for reimbursement, indemnification, and insurance for members and administrators. Finally, it specifies how dissolved associations will wind up their affairs and distribute remaining assets, and allows for mergers or conversions under existing laws.

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