AZ HB2308

Adds exemption allowing current vacation rental or short-term rental permit holders in good standing to be exempt from new municipal ordinances that limit the number of vacation rentals within a city or town, provided the exemption does not apply if public health and safety requires it or if the permit is revoked or suspended.

Enables cities and towns to adopt ordinances limiting vacation rentals by setting maximum permits issued, requiring specific distances between properties, or capping rentals within designated areas.

Preserves existing regulatory authority for cities and towns to require permits, emergency contact information, liability insurance, neighbor notification, and compliance with fire/building codes and zoning ordinances.

Maintains civil penalty structure ranging from $500 to $3,500 per violation, with penalties potentially calculated as multiples of nightly rental rates for subsequent violations.

Clarifies that vacation rentals cannot be used for nonresidential purposes, special events requiring permits, retail, restaurants, banquet spaces, or similar commercial uses.