The bill amends Arkansas law to establish regulations for short-term rentals by local governments. It introduces a new section, 14-1-111, which defines key terms such as "short-term rental," "local government," and "short-term rental marketplace." The bill prohibits local governments from effectively prohibiting short-term rentals, imposing jurisdiction-wide bans, or setting numerical limits on such rentals. However, it allows local governments to require permits for operating short-term rentals, which may include fees and the collection of safety information, as well as the remittance of applicable taxes.

Additionally, the bill outlines conditions under which a permit may be revoked or suspended, including repeated violations of local ordinances or the occurrence of felonious acts at the rental property. It clarifies that short-term rentals are classified as residential land use for zoning purposes and must comply with local health and safety codes. Importantly, the bill does not override existing homeowners' association agreements, deed restrictions, or covenants, and it preserves the initiative powers of the people to enact regulations on short-term rentals. Furthermore, local governments are prohibited from regulating short-term rental marketplaces.