Understanding Alabama House Bill 248
During the 2026 Alabama Legislative Session, the Alabama Legislature passed House Bill 248 (HB 248), legislation that updates the Alabama Business and Nonprofit Entities Code. The bill is intended to clarify statutory requirements, address technical issues, and codify certain principles already recognized under Alabama common law.
For nonprofits, HB 248 is not a sweeping rewrite of nonprofit governance law. Instead, it clarifies several areas of governance and compliance, including conflict-of-interest transactions, member rights, corporate opportunities, and registered-agent requirements.
AAN spoke with Representative David Faulkner and Jim Naftel, Deputy Director of the Alabama Law Institute, both of whom worked on the legislation. Based on those conversations and our review of the law, HB 248 is best understood as an effort to align and clarify existing policy rather than a major overhaul of Alabama nonprofit law.
The most immediate consideration for nonprofit leaders is determining whether any action is needed before the December 31, 2026 opt-out deadline.
Recommended Next Steps
AAN encourages nonprofit leaders to use HB 248 as an opportunity to review their governance and compliance practices. Before the December 31, 2026 deadline, organizations should consider:
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Consulting qualified Alabama nonprofit legal counsel to determine whether HB 248 requires action and whether the opt-out provision is appropriate for your organization.
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Reviewing and updating key policies and procedures, including:
- Conflict-of-interest policies
- Board governance procedures
- Member records and inspection policies (if applicable)
- Registered-agent information
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Reviewing organizational bylaws and governance practices to identify any provisions that may need attention in light of the statutory changes.
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Monitoring additional guidance and best practices as legal interpretations and implementation practices continue to develop.
AAN members are encouraged to reach out to Mandla Moyo, Director of Advocacy, for a detailed briefing of next steps and list of legislative and additional resources. We're grateful to our members who make his work possible. Reach him at 205.963.7969 or by e-mail.
Members received access to the more detailed document in their September eNews.