HB 592

02-20 08:50  H.B. 592
1Municipal Incorporation Amendments
                                        2026 GENERAL SESSION
                                             STATE OF UTAH
                                  Chief Sponsor: Michael L. Kohler
                                               Senate Sponsor:
2
3   LONG TITLE
4   General Description:
5This bill amends provisions relating to the incorporation of a preliminary municipality.
6   Highlighted Provisions:
7This bill:
8▸ provides that:
9●   a person may not apply to incorporate an area as a preliminary municipality after
10   February 1, 2026; and
11●   a person who applies to incorporate an area as a preliminary municipality by filing a
12   feasibility request on or before February 1, 2026, may proceed in accordance with
13   Title 10, Chapter 2a, Part 5, Incorporation of a Preliminary Municipality, after
14   February 1, 2026;
15▸ requires:
16●   a proposed preliminary municipality to agree that initial landowners will fully
17   compensate the county for damages to county property or infrastructure before the
18   preliminary municipality can transition into a town;
19●   a preliminary municipality to comply with terms, conditions, or restrictions that were
20   established in a development agreement between the initial landowners and the
21   county before the feasibility request was filed; and
22●   that a petition to transition a preliminary municipality into a town shall certify that
23   damages to county property or infrastructure have been paid in full; and
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24▸ makes technical and conforming changes.
25   Money Appropriated in this Bill:
26None
27   Other Special Clauses:
28This bill provides retrospective operation.
29   Utah Code Sections Affected:
30   AMENDS:
H.B. 592  02-20 08:50
31      10-2a-502, as enacted by Laws of Utah 2024, Chapter 534
32      10-2a-507, as enacted by Laws of Utah 2024, Chapter 534
33      10-2a-509, as enacted by Laws of Utah 2024, Chapter 534
34      10-2a-510, as enacted by Laws of Utah 2024, Chapter 534
35
36  Be it enacted by the Legislature of the state of Utah:
37Section 1. Section 10-2a-502 is amended to read:
3810-2a-502 . Incorporation of a preliminary municipality -- Feasibility request --
39  Requirements.
40  (1)(a) [A ] Except as provided in Subsection (1)(b), a person may apply to incorporate an
41      area as a preliminary municipality by filing a feasibility request in accordance with
42      this section.
43      (b) A person may not file a feasibility request to incorporate an area as a preliminary
44municipality after February 1, 2026.
45      (c) Subject to Subsection (6)(b), a person who, on or before February 1, 2026, files a
46feasibility request under this section may:
47(i) modify the request after February 1, 2026, in accordance with Section 10-2a-505;
48or
49(ii) proceed in accordance with this part after February 1, 2026.
50  (2) Subject to [Subsection] Subsections (1) and (6), a person may file a feasibility request in
51      relation to an area that the person seeks to incorporate as a preliminary municipality if:
52      (a) the area is contiguous;
53      (b) no part of the area is within a county of the first class or second class;
54      (c) no part of the area is within, or within .25 miles of, a municipality;
55      (d) on the day on which the person files the feasibility request:
56(i) the area is owned by no more than three persons, all of whom consent to
57incorporation as a preliminary municipality; and
58(ii) at least 50% of the area is undeveloped;
59      (e) the persons who sign the feasibility request intend to develop the area to the point
60that:
61(i) at least 100 individuals reside in the area;
62(ii) the area will have an average population density of no less than seven individuals
63per square mile, unless:
64(A) a population density of less than seven individuals per square mile is
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65necessary in order to connect separate areas that share a demonstrable
66community interest; and
67(B) the average population of the area has a population density of no less than
68seven individuals per square mile if the land necessary to connect the separate
69areas described in Subsection (2)(e)(ii)(A) is not included in the calculation;
70and
71(iii) at least 10% of the housing in the preliminary municipality is affordable housing;
72(f) the area does not include land owned by the United States government unless:
73(i) the area, including the land owned by the United States government, is
74contiguous; and
75(ii)(A) incorporating the land is necessary to connect separate areas that share a
76demonstrable community interest; or
77(B) excluding the land from the area would create an unincorporated island within
78the proposed preliminary municipality;
79(g) the area is entirely within one county; and
80(h) the feasibility request complies with Subsection (3).
81   (3)(a) A proposed preliminary municipality area may not include all or part of a pending
82annexation area, unless:
83(i) the portion of the pending annexation area included in the proposed preliminary
84municipality area does not exceed 20% of the proposed preliminary municipality
85area; and
86(ii) the feasibility request would comply with the requirements of this section
87regardless of whether the portion of the pending annexation area included in the
88proposed preliminary municipality area is excluded from, or remains included in,
89the proposed preliminary municipality area.
90(b) A proposed preliminary municipality area may not include all or part of an area that
91is the subject of a completed feasibility study or supplemental feasibility study that
92qualifies to proceed under Subsection 10-2a-205(5)(a), unless:
93(i) the proposed incorporation that is the subject of the completed feasibility study or
94supplemental feasibility study has been defeated by the voters at an election under
95Section 10-2a-210; or
96(ii) the time described in Subsection 10-2a-208(1) for filing an incorporation petition
97based on the completed feasibility study or supplemental feasibility study has
98elapsed without the sponsors filing an incorporation petition under Section
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9910-2a-208.
100      (c) A proposed preliminary municipality area may not include all or part of an area that
101is the subject of a completed feasibility study or supplemental feasibility study whose
102results comply with Subsection 10-2a-504(4), unless the time described in Subsection
10310-2a-507(1) for filing a petition for incorporation based on the completed feasibility
104study or supplemental feasibility study has elapsed without the sponsors filing a
105petition for incorporation under Section 10-2a-507.
106  (4) Except as provided in Section 10-2a-505, the lieutenant governor shall consider each
107      feasibility request that includes an area described in Subsection (3)(a) as if the request
108      does not include the area described in Subsection (3)(a).
109  (5) A person who files a feasibility request under this section shall file the feasibility
110      request with the lieutenant governor, including in the feasibility request:
111      (a) the signatures of all owners of real property included in the proposed preliminary
112municipality area, showing that the owners consent to including the real property in
113the proposed preliminary municipality area;
114      (b) the name, address, and phone number of each owner signing the feasibility request;
115      (c) a designation of one individual who signs the feasibility request as the primary
116sponsor contact for the feasibility request;
117      (d) a description of the proposed preliminary municipality area;
118      (e) an accurate map or plat, prepared by a licensed surveyor, showing:
119(i) a legal description of the boundaries of the proposed preliminary municipality area
120and each phase of the proposed preliminary municipality area;
121(ii) all development planned for the proposed preliminary municipality area; and
122(iii) that the first phase of the proposed preliminary municipality area is projected to
123have at least 100 residents when completed; and
124      (f) a request that the lieutenant governor commission a study to determine the feasibility
125of incorporating the area as a preliminary municipality.
126  (6)(a) The provisions of this part, providing for the incorporation of a preliminary
127      municipality, is a pilot project that ends on January 1, 2031.
128      (b) Except as provided in Subsection (7), a person may not file a feasibility request
129under this part in a calendar year during which two or more requests have already
130been filed in the state.
131  (7) A feasibility request does not count towards the limit described in Subsection (6)(b) if:
132      (a) the sponsors who file the request withdraw the request;
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133(b) the lieutenant governor rejects the feasibility request under Subsection 10-2a-503(4)
134or (5)(b), and the sponsors:
135(i) do not timely amend the feasibility request under Subsection 10-2a-503(7)(b); or
136(ii) are prohibited from amending the feasibility request under Subsection
13710-2a-503(7)(c); or
138(c) the process to incorporate is prohibited from proceeding under Subsection
13910-2a-504(5)(a) and the sponsors:
140(i) do not timely file a modified feasibility request under Subsection
14110-2a-505(1)(b)(i); or
142(ii) are prohibited from filing a modified feasibility request under Subsection
14310-2a-505(3).
144Section 2. Section 10-2a-507 is amended to read:
14510-2a-507 . Petition for incorporation -- Requirements and form.
146   (1) At any time within one year after the day on which the lieutenant governor completes
147the public hearings required under Section 10-2a-506, the owners of the property who
148filed the feasibility request under Section 10-2a-502 for the proposed preliminary
149municipality area may proceed with the incorporation process by filing a petition for
150incorporation of the proposed preliminary municipality that:
151(a) includes the typed or printed name, signature, address, and phone number of the
152initial landowners;
153(b) describes the proposed preliminary municipality area, as described in the feasibility
154request or the modified feasibility request;
155(c) demonstrates compliance with Subsection 10-2a-504(4);
156(d) states the proposed name for the proposed preliminary municipality;
157(e) designates the primary sponsor contact for the proposed preliminary municipality;
158(f) designates the board chair and three of the four board members who will serve as a
159five member council form of government for the preliminary municipality, described
160in Section 10-3b-402, for the preliminary municipality;
161(g) is accompanied by an accurate map or plat, prepared by a licensed surveyor, showing:
162(i) the boundaries of the proposed preliminary municipality; and
163(ii) a single development plan for the proposed municipality, depicting each phase of
164the development;
165(h) is accompanied by a bond, cash deposit, or letter of credit that:
166(i) is posted by the initial landowners;
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167(ii) is in favor of the proposed preliminary municipality, to guarantee that the initial
168landowners will complete the system infrastructure no later than six years after the
169day on which the initial landowners file the petition for incorporation described in
170this section; and
171(iii) will be refunded to the initial landowners in percentages that reflect the progress
172toward completing the system infrastructure; [and]
173      (i) is accompanied by payment in full, from the initial landowners, of the costs incurred
174by the lieutenant governor for the feasibility study, the public notices, the hearings,
175and the other expenses incurred by the lieutenant governor to comply with the
176requirements of this part in relation to the proposed preliminary municipality[.] ; and
177      (j) is accompanied by an agreement executed by the initial landowners providing that,
178before the preliminary municipality can transition into a town, the county will be
179fully compensated for any damages to county property or infrastructure that are
180directly attributable to development of the preliminary municipality area.
181  (2) If, within six years after the day on which the initial landowners file a petition for
182      incorporation under Subsection (1), the system infrastructure for the preliminary
183      municipality is not completed, the portion of the bond, cash deposit, or letter of credit
184      described in Subsection (1)(h) that has not been refunded to the initial landowners shall
185      forfeit to the preliminary municipality.
186  (3) If, within four years after the day on which the first residential certificate of occupancy
187      is issued for the development described in [Subsection 10-2a-503(5)(e)] Subsections
188      10-2a-502(5)(d) and (e), or six years after the day on which the initial landowners file a
189      petition for incorporation under Subsection (1), the preliminary municipality has not
190      transitioned to a town:
191      (a) the lieutenant governor shall issue a certificate dissolving the preliminary
192municipality;
193      (b) all roads and infrastructure within the preliminary municipality revert to the county
194in which the preliminary municipality is located;
195      (c) the area within the proposed municipality falls under the jurisdiction of the county
196and is no longer incorporated; and
197      (d) the initial landowners are liable to the county for damages caused to the county due
198to the dissolution of the preliminary municipality.
199Section 3. Section 10-2a-509 is amended to read:
20010-2a-509 . Governance of preliminary municipality -- Utilities -- Road
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201   maintenance.
202   (1)(a) Within 30 days after the day on which the lieutenant governor issues a certificate
203of incorporation described in Subsection 10-2a-508(1)(b)(i), the county in which the
204preliminary municipality is located shall appoint one board member for the
205preliminary municipality.
206(b) If the county fails to timely comply with Subsection (1)(a), the board chair and the
207three board members appointed under Subsection 10-2a-508(1)(b)(i) shall, by
208majority vote, appoint the final board member.
209   (2) The board chair and board members, described in Subsection (1), of a preliminary
210municipality:
211(a) are not required to be residents of the preliminary municipality; and
212(b) shall serve as the board for the preliminary municipality until replaced by election
213under Section 10-2a-510.
214   (3)(a) Within 14 days after the day on which the first residential certificate of occupancy
215is issued for the development described in [Subsection 10-2a-503(5)(e)] Subsections
21610-2a-502(5)(d) and (e), the engineer described in Subsection [10-2a-509(6)] (7),
217shall notify the county and the lieutenant governor, in writing:
218(i) that the first residential certificate of occupancy has been issued for the
219preliminary municipality;
220(ii) of the date on which the first residential certificate of occupancy was issued; and
221(iii) of the physical address for which the first residential certificate of occupancy
222was issued.
223(b) No later than the next municipal general election, or regular general election, that is
224at least 30 days after the date described in Subsection (3)(a)(ii), the initial landowners
225shall:
226(i) replace the board chair or a board member with an individual who is a resident of
227the preliminary municipality; and
228(ii) notify the county and the lieutenant governor of the appointment, in writing.
229   (4)(a) Subject to Subsection (4)(b), a preliminary municipality has all the powers and
230duties of a municipality.
231(b) A preliminary municipality:
232(i) may not impose a tax;
233(ii) may enter into an interlocal agreement with a special district to provide utility
234services to the preliminary municipality;
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235(iii) has the same authority as another municipality to make decisions regarding
236zoning and land use;
237(iv) may not receive an allocation of sales tax or gas tax;[ and]
238(v) may not exercise eminent domain authority[.] ;
239(vi) shall comply with terms, conditions, or restrictions that were established in a
240development agreement, if any, between the initial landowners and the county
241before the feasibility request was filed; and
242(vii) may not modify or terminate any terms, conditions, or restrictions described in
243Subsection (4)(b)(vi) without the county's approval.
244  (5) As needed, the county shall provide all services and utility connections to the
245      preliminary municipality that the county provides other areas in the county if the
246      preliminary municipality:
247      (a) pays the uniformly assessed rates for the services and utilities and reasonable
248connection fees; and
249      (b) complies with the county's established regulations and specifications for the
250construction and connection of the local improvements.
251  (6) The preliminary municipality shall maintain and repair any roadway that, on the day on
252      which the individual filed the feasibility request under Section 10-2a-502:
253      (a) existed within the preliminary municipality;
254      (b) was within a public right of way that abuts the preliminary municipality; or
255      (c) was within 1/2 mile of the preliminary municipality and connected to, or was
256proposed in the feasibility request to be connected to, the preliminary municipality.
257  (7) Before the preliminary municipality submits a petition to transition to a town, the
258      preliminary municipality shall select an independent third-party engineer to review and
259      approve all building permit applications within the preliminary municipality to ensure
260      compliance with the law.
261  (8) Chapter 2, Classification, Boundaries, Consolidation, and Dissolution of Municipalities,
262      does not apply to a preliminary municipality.
263Section 4. Section 10-2a-510 is amended to read:
26410-2a-510 . Transitioning from a preliminary municipality to a town -- Petition --
265  Election of officers.
266  (1) Within 30 days after the day on which the population of a preliminary municipality
267      exceeds 99 people, a person who filed the application to incorporate as a preliminary
268      municipality or a resident of the preliminary municipality shall file with the lieutenant
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269governor a petition to transition the preliminary municipality into a town.
270   (2) A petition to transition a preliminary municipality into a town shall include:
271(a) a request that the lieutenant governor certify the transition of the preliminary
272municipality to, and the incorporation of the preliminary municipality as, a town;
273(b) the name, address, and phone number of the person filing the request;
274(c) the map or plat of the preliminary municipality;
275(d) a legal description of the boundaries of the preliminary municipality;
276(e) information regarding the preliminary municipality, including:
277(i) the number of residences in the preliminary municipality;
278(ii) the population of the preliminary municipality;
279(iii) the number of adults and the number of children who reside in the preliminary
280municipality; and
281(iv) information regarding the providers of municipal services and emergency
282services to the preliminary municipality;
283(f) the proposed name for the town;[ and]
284(g) a signature sheet containing the names, addresses, and signatures of a majority of the
285adult residents of the preliminary municipality, supporting the proposed name for the
286town[.] ;
287(h) certification that:
288(i) all damages to county property or infrastructure resulting from development of the
289area have been assessed and paid in full; or
290(ii) no damages described in Subsection (2)(h)(i) exist; and
291(i) an agreement by the initial landowners to accept liability for any damages to county
292property or infrastructure that:
293(i) occurred before the preliminary municipality's transition into a town but are
294discovered after the transition; and
295(ii) are directly attributable to development of the area.
296   (3) Within 30 days after the day on which a person files a petition to transition a
297preliminary municipality into a town, the lieutenant governor shall:
298(a) determine whether the preliminary municipality has a population of more than 99
299people;
300(b) examine the petition to determine whether the petition complies with Subsection (2);
301(c) if the lieutenant governor determines that the preliminary municipality has a
302population of more than 99 people and that the petition complies with Subsection (2),
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303proceed to transition the preliminary municipality as a town in accordance with
304Subsection (4);
305      (d) if the lieutenant governor determines that the preliminary municipality has a
306population of less than 100 people, deny the petition, inform the person who filed the
307petition of the determination, and request that the person refile the petition when the
308population exceeds 99 people; and
309      (e) if the lieutenant governor determines that the petition fails to comply with Subsection
310(2), deny the petition, inform the person who filed the petition of the denial and the
311reason for the denial, and request that the person correct and refile the petition.
312  (4) After making the determination described in Subsection (3)(c), the lieutenant governor
313      shall:
314      (a) inform the person who filed the petition of the determination;
315      (b) inform the county in which the preliminary municipality is located of the
316determination; and
317      (c) direct the county to conduct an election for mayor and city council of the future
318town, to be held on the date of the next regular general election described in Section
31920A-1-201, or the next municipal general election described in Section 20A-1-202,
320that is at least 65 days after the day on which the lieutenant governor directs the
321county to hold the election.
322  (5) The county shall:
323      (a) comply with the direction given by the lieutenant governor under Subsection (4)(c);
324      (b) determine the initial terms of the mayor and municipal council members to ensure
325that:
326(i) the mayor and two of the municipal county members are elected in the next
327municipal general election;
328(ii) the remaining municipal council members are elected at elections that result in
329the staggering of council member terms; and
330(iii) the council members who receive the highest number of votes are assigned the
331longer initial terms; and
332      (c) provide notice of the election for the preliminary municipality as a class B notice
333under Section 63G-30-102, for at least three weeks before the day of the election.
334  (6) The notice described in Subsection (5)(c) shall include:
335      (a) a statement of the contents of the petition to transition the preliminary municipality
336to a town;
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337(b) a description of the area to be incorporated as a town;
338(c) the name of the town;
339(d) information about the deadline for an individual to file a declaration of candidacy to
340become a candidate for mayor or municipal council;
341(e) information about the initial terms of office;
342(f) a statement of the date and time of the election and the location of polling places; and
343(g) a statement that the purpose of the election is to elect a mayor and a council to
344govern the town upon the town's incorporation.
345   (7)(a) In addition to the notice described in Subsection (6), the county clerk shall publish
346and distribute, before the election is held, a voter information pamphlet:
347(i) in accordance with the procedures and requirements of Section 20A-7-402;
348(ii) in consultation with the lieutenant governor; and
349(iii) in a manner that the county clerk determines is adequate.
350(b) The voter information pamphlet described in Subsection (7)(a):
351(i) shall inform the public of the election and the purpose of the election; and
352(ii) may include additional information regarding the election of the elected officials
353and the incorporation of the town.
354   (8) An individual may not vote in the election described in this section unless the individual
355is a registered voter who is a resident, as defined in Section 20A-1-102, within the
356boundaries of the preliminary municipality.
357   (9) The town, incorporated under Subsection (10)(b), shall pay to the county the cost of
358running the election described in this section.
359   (10) On the day after the day on which the canvass for the election is completed:
360(a) the elected mayor and council members shall take office and replace the board chair
361and board members of the preliminary municipality;
362(b) the lieutenant governor shall issue a certification that the preliminary municipality
363has transitioned to, and is incorporated as, a town; and
364(c) subject to Subsection (14), the town holds all authority and power of a town.
365   (11) The former mayor and council members for the preliminary municipality shall assist
366the newly-elected mayor of the town and the newly-elected council members of the
367town with the transition to a town and the transfer of power to the elected government of
368the town.
369   (12) The initial government of a town incorporated under this section is the five member
370council form of government described in Chapter 3b, Part 4, Five-Member Council
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371      Form of Municipal Government, with the mayor and counsel members elected at large.
372  (13) Within 30 days after the day on which the mayor takes office under Subsection (10)(a),
373      the mayor shall record the certification described in Subsection (10)(b), and a copy of
374      the plat for the municipality, with the county recorder.
375  (14) Until the mayor complies with Subsection (13), the municipality may not:
376      (a) levy or collect a property tax on property within the municipality;
377      (b) levy or collect an assessment on property within the municipality; or
378      (c) charge or collect a fee for a service provided to property within the municipality.
379  (15) Section 10-2a-220 applies to a town incorporated under this section.
380Section 5. Effective Date.
381  This bill takes effect on May 6, 2026.
382Section 6. Retrospective operation.
383  This bill has retrospective operation to February 1, 2026.
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