The proposed bill amends Arkansas law regarding municipal regulations by establishing specific guidelines for the regulation of accessory dwelling units (ADUs). It introduces a new section, 14-56-205, which defines key terms related to ADUs, such as "accessory dwelling unit," "by right," and "regulatory requirements." The bill stipulates that municipalities cannot adopt policies that restrict or prohibit the use of at least one ADU on a lot containing a single-family dwelling. It also outlines the conditions under which ADUs can be constructed, including size limitations and the types of regulations that municipalities cannot impose, such as additional parking requirements or design matching with the primary dwelling.

Furthermore, the bill allows municipalities to charge a review fee for applications to create ADUs, capped at $250, while also permitting the collection of standard building fees. It specifies that any existing municipal policies that conflict with the new regulations will be void after January 1, 2026. However, municipalities retain the authority to regulate short-term rentals and can require a will-serve letter from municipal water and sewer systems for ADUs. Overall, the bill aims to facilitate the development of ADUs while limiting the regulatory power of municipalities in this area.