Senate passes bill clarifying prohibition on local caps for rental application fees and deposits

Little Rock — The Arkansas State Senate on March 4 passed Senate Bill 91, a measure clarifying that local governmental units may not regulate or control the amount charged for a rental application fee or security deposit for residential or commercial property.

Sponsor and context: Senator Jason Penzo, floor sponsor, told colleagues the bill "just adds clarity to what already exists in code," citing prior opinions requested concerning Fayettevilles attempted fee caps. Penzo said the bill is intended to prevent local ordinances that would conflict with state law.

Why it matters: Supporters said the bill reinforces property-rights protections and prevents local caps on application fees that they said are preempted by state law. Opponents argued the measure preempts local governments from addressing housing affordability and removes a local policy option.

Floor debate: Senator Love asked whether the bill responded to an actual incident; Penzo said the Fayetteville city council had attempted to cap application fees and that opinions had been requested twice indicating such ordinances could not stand. Senator Lettig spoke against the measure on the floor, describing it as "very heavy handed" and urging that communities be allowed the opportunity to try such local ordinances before the state intervenes. Penzo closed by framing the bill as a property-rights protection and asked for a favorable vote.

Vote and next steps: The roll call recorded 28 yeas, 3 nays, 1 not voting and 3 recorded present. Senate Bill 91 passed and will be transmitted to the House for consideration.

Quote: "This bill just adds clarity to what already exists in code," said Senator Jason Penzo, the bills floor sponsor.