vacation rentals; maximum number; distance

SB1076 - 572R - I Ver

PREFILED��� DEC 29 2025

REFERENCE TITLE:
vacation rentals; maximum number; distance

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1076

Introduced by

Senator
Finchem

AN
ACT

Amending section 9-500.39, arizona
revised statutes; relating to vacation rentals and short-term rentals.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 9-500.39, Arizona Revised
Statutes, is amended to read:

START_STATUTE
9-500.39.

Limits on regulation of vacation rentals and short-term
rentals; state preemption; civil penalties; transaction privilege tax license
suspension; definitions

A. A city or town may not prohibit vacation rentals
or short-term rentals.

B. A city or town may not restrict the use of or
regulate vacation rentals or short-term rentals based on their
classification, use or occupancy except as provided in this section.� A city or
town may regulate vacation rentals or short-term rentals as follows:

1. To protect the public's health and safety,
including rules and regulations related to fire and building codes, health and
sanitation, transportation or traffic control and solid or hazardous waste and
pollution control, if the city or town demonstrates that the rule or regulation
is for the primary purpose of protecting the public's health and safety.

2. To adopt and enforce use and zoning ordinances,
including ordinances related to noise, protection of welfare, property
maintenance and other nuisance issues, if the ordinance is applied in the same
manner as other property classified under sections 42-12003 and 42-12004.

3. To limit or prohibit the use of a vacation rental
or short-term rental for the purposes of housing sex offenders, operating
or maintaining a sober living home, selling illegal drugs, liquor control or
pornography, obscenity, nude or topless dancing and other adult-oriented
businesses.

4. To require the owner of a vacation rental or
short-term rental to provide the city or town with emergency contact
information for the owner or the owner's designee who is responsible for
responding to complaints or emergencies in a timely manner in person if
required by public safety personnel, over the phone or by email at any time of
day before offering for rent or renting the vacation rental or short-term
rental. In addition to any other penalty imposed pursuant to this
section, the city or town may impose a civil penalty of up to $1,000 against
the owner for every thirty days the owner fails to provide contact information
as prescribed by this paragraph. The city or town shall provide
thirty days' notice to the owner before imposing the initial civil penalty.

5. To require the owner of a vacation rental or
short-term rental to obtain and maintain a local regulatory permit or
license.� As a condition of issuance of a permit or license, the application
for the permit or license may require an applicant to provide only the
following:

(a) The name, address, telephone number and email
address for the owner or owner's agent.

(b) The address of the vacation rental or short-term
rental.

(c) Proof of compliance with section 42-5005.

(d) Contact information required pursuant to
paragraph 4 of this subsection.

(e) Acknowledgment of an agreement to comply with
all applicable laws, regulations and ordinances.

(f) A fee not to exceed the actual cost of issuing
the permit or license or $250, whichever is less.

6. To require, before offering a vacation rental or
short-term rental for rent for the first time, the owner or the owner's
designee of a vacation rental or short-term rental to notify all single-family
residential properties adjacent to and directly and diagonally across the
street from the vacation rental or short-term rental. Notice shall
be deemed sufficient in a multifamily residential building if given to
residents on the same building floor. A city or town may require
additional notification pursuant to this paragraph if the contact information
previously provided changes. Notification provided in compliance
with this paragraph shall include the permit or license number if required by
the city or town, the address of the vacation rental or short-term rental
and the information required pursuant to paragraph 4 of this
subsection. The owner or the owner's designee shall demonstrate
compliance with this paragraph by providing the city or town with an
attestation of notification compliance that consists of the following
information:

(a) The permit or license number of the vacation
rental or short-term rental, if required by the city or town.

(b) The address of each property notified.

(c) A description of the manner in which the owner
or owner's designee chose to provide notification to each property subject to
notification.

(d) The name and contact information of the person
attesting to compliance with this paragraph.

7. To require the owner or owner's designee of a
vacation rental or short-term rental to display the local regulatory
permit number or license number, if any, on each advertisement for a vacation
rental or short-term rental that the owner or owner's designee
maintains.� A city or town that does not require a local regulatory permit or
license may require the owner or owner's designee of a vacation rental or short-term
rental to display the transaction privilege tax license number required by
section 42-5042 on each advertisement for a vacation rental or short-term
rental that the owner or owner's designee maintains.

8. To require the vacation rental or short-term
rental to maintain liability insurance appropriate to cover the vacation rental
or short-term rental in the aggregate of at least $500,000 or to
advertise and offer each vacation rental or short-term rental through an
online lodging marketplace that provides equal or greater coverage.

9. To require the owner of a vacation rental or
short-term rental to reside on the property if the property contains an
accessory dwelling unit and if a certificate of occupancy, certificate of
completion or similar final approval for the accessory dwelling unit was issued
by the municipality on or after September 14, 2024.� This paragraph does not
apply to an owner of a vacation rental or short-term rental if the
property contains an accessory dwelling unit and the certificate of completion,
the certificate of occupancy or a similar final approval for the accessory
dwelling unit was issued on or before September 13, 2024.

C. A city or town that requires a local regulatory
permit or license pursuant to this section shall issue or deny the permit or
license within seven business days of receipt of the information required by subsection
B, paragraph 5 of this section and otherwise in accordance with section 9-835,
except that a city or town may deny issuance of a permit or license only for
any of the following:

1. Failure to provide the information required by
subsection B, paragraph 5, subdivisions (a) through (e) of this section.

2. Failure to pay the required permit or license
fee.

3. At the time of application the owner has a
suspended permit or license for the same vacation rental or short-term
rental.

4. The applicant provides false information.

5. The owner or owner's designee of a vacation
rental or short-term rental is a registered sex offender or has been
convicted of any felony offense that resulted in death or serious physical
injury or any felony use of a deadly weapon within the past five years.

D. A city or town that requires a local regulatory
permit or license pursuant to this section shall adopt an ordinance to allow
the city or town to initiate an administrative process to suspend a local
regulatory permit or license for a period of up to twelve months for the
following verified violations associated with a property:

1. Three verified violations within a twelve-month
period, not including any verified violation based on an aesthetic, solid waste
disposal or vehicle parking violation that is not also a serious threat to
public health and safety.

2. One verified violation that results in or
constitutes any of the following:

(a) A felony offense committed at or in the vicinity
of a vacation rental or short-term rental by the vacation rental or short-term
rental owner or owner's designee.

(b) A serious physical injury or wrongful death at
or related to a vacation rental or short-term rental resulting from the
knowing, intentional or reckless conduct of the vacation rental or short-term
rental owner or owner's designee.

(c) An owner or owner's designee knowingly or
intentionally housing a sex offender, allowing offenses related to adult-oriented
businesses, sexual offenses or prostitution, or operating or maintaining a
sober living home, in violation of a regulation or ordinance adopted pursuant
to subsection B, paragraph 3 of this section.

(d) An owner or owner's designee knowingly or
intentionally allowing the use of a vacation rental or short-term rental
for a special event that would otherwise require a permit or license pursuant
to a city or town ordinance or a state law or rule or for a retail, restaurant,
banquet space or other similar use.

3. Notwithstanding paragraphs 1 and 2 of this
subsection, any attempted or completed felony offense, arising from the
occupancy or use of a vacation rental or short-term rental, that results
in a death, or actual or attempted serious physical injury, shall be grounds
for judicial relief in the form of a suspension of the property's use as a
vacation rental or short-term rental for a period of time that shall not
exceed twelve months.

E. A city or town that requires sex offender
background checks on a vacation rental or short-term rental guest shall
waive the requirement if an online lodging marketplace performs a sex offender
background check of the booking guest.

F. Notwithstanding any other law, a city or town may
impose a civil penalty of the following amounts against an owner of a vacation
rental or short-term rental if the owner receives one or more verified
violations related to the same vacation rental or short-term rental
property within the same twelve-month period:

1. Up to $500 or up to an amount equal to one
night's rent for the vacation rental or short-term rental as advertised,
whichever is greater, for the first verified violation.

2. Up to $1,000 or up to an amount equal to two
nights' rent for the vacation rental or short-term rental as advertised,
whichever is greater, for the second verified violation.

3. Up to $3,500 or up to an amount equal to three
nights' rent for the vacation rental or short-term rental as advertised,
whichever is greater, for a third and any subsequent verified violation.

G. A vacation rental or short-term rental that
fails to apply for a local regulatory permit or license in accordance with
subsection B, paragraph 5 of this section, within thirty days of the local
regulatory permit or license application process being made available by the
city or town issuing such permits or licenses, must cease operations.� In
addition to any civil penalties imposed pursuant to subsection F of this
section, a city or town may impose a civil penalty of up to $1,000 per month
against the owner if the owner or owner's designee fails to apply for a
regulatory permit or license within thirty days after receiving written notice
of the failure to comply with subsection B, paragraph 5 of this section.

H. If multiple verified violations arise out of the
same response to an incident at a vacation rental or short-term rental,
those verified violations are considered one verified violation for the purpose
of assessing civil penalties or suspending the regulatory permit or license of
the owner pursuant to this section.

I. If the owner of a vacation rental or short-term
rental has provided contact information to a city or town pursuant to
subsection B, paragraph 4 of this section and if the city or town issues a
citation for a violation of the city's or town's applicable laws, regulations
or ordinances or a state law that occurred on the owner's vacation rental or
short-term rental property, the city or town shall make a reasonable
attempt to notify the owner or the owner's designee of the citation within
seven business days after the citation is issued using the contact information
provided pursuant to subsection B, paragraph 4 of this section.� If the owner
of a vacation rental or short-term rental has not provided contact
information pursuant to subsection B, paragraph 4 of this section, the city or
town is not required to provide such notice.

J. This section does not exempt an owner of a
residential rental property, as defined in section 33-1901, from
maintaining with the assessor of the county in which the property is located
information required under title 33, chapter 17, article 1.

K. A vacation rental or short-term rental may
not be used for nonresidential uses, including for a special event that would
otherwise require a permit or license pursuant to a city or town ordinance or a
state law or rule or for a retail, restaurant, banquet space or other similar
use.

L. Notwithstanding any other law, a
city or town with a population of less than seventy thousand persons may:

1. SEt a maximum number of vacation
rental or short-term rental regulatory permits or LICENSES that may be
issued within the city or town.

2. Set a minimum distance between
vacation rentals or short-term rentals.

L.

m.
For
the purposes of this section:

1. "Accessory dwelling unit" has the same
meaning prescribed in section 9-461.18.

2. "Online lodging marketplace" has the
same meaning prescribed in section 42-5076.

3. "Transient" has the same meaning
prescribed in section 42-5070.

4. "Vacation rental" or "short-term
rental":

(a) Means any individually or collectively owned
single-family or one-to-four-family house or dwelling
unit or any unit or group of units in a condominium or cooperative that is also
a transient public lodging establishment or owner-occupied residential
home offered for transient use if the accommodations are not classified for
property taxation under section 42-12001.�

(b) Does not include a unit that is used for any
nonresidential use, including retail, restaurant, banquet space, event center
or another similar use.

5. "Verified violation" means a finding of
guilt or civil responsibility for violating any state law or local ordinance
relating to a purpose prescribed in subsection B, D, F or K of this section
that has been finally adjudicated.
END_STATUTE