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• mean all expenditures of the authority other than land acquisition and relocation costs and costs "directly connected with the physical development of the real property in the district." Note: the County auditor may assess each TIF District for the county's cost of administering the district, and the fee may be paid from tax increment. 3. Increment may not be used to finance buildings that are used "primarily and regularly for conducting the business" of any unit of government, except for parking structures, a commons area used as a public park, or a facility used for social, recreational or conference purposes.' 1993 Change: If a TIF-financed social, recreational or conference facility is operated by an entity other than the authority, the authority's governing body must approve operating policies for the facility. This would apply, for example, when an HRA finances a city community center. 4. 1993 Change: Guaranty Fund: An authority may establish a guaranty fund to indemnify a person for liability for remediation costs under state or federal environmental law. The maximum term of the indemnity is 25 years, and the maximum amount is one- half of the remediation costs. The authority may deposit tax increments in the fund, and the municipality may also appropriate money for deposit in the fund. C. Geographic Restrictions. 1. For districts created after April 30, 1990, no more than 25% of the increment may be • spent outside the boundaries of the TIF District (except in the case of housing districts, from which increment may be spent to finance "housing projects" located anywhere in the broader Project area). Administrative costs are considered spent outside the district. • 2. Increment from older districts may be spent anywhere within the Project boundaries, which permits "pooling" of increment from more than one district. D. Time Restrictions (other than duration). 1. 3-year rule: within three years after the date of certification, one of three things must happen for the district to remain alive: bonds are issued to aid the Project (excluding industrial development revenue bonds); the authority acquires property within the TIF District; or the authority causes public improvements to be constructed within the TIF- District. 2. 4-year knock down rule: increment will not be collected from a particular parcel unless, within four years after the date of certification, demolition, rehabilitation or renovation of property or other site improvements has taken place by either the authority or the owner in accordance with the TIF Plan. Construction or major reconstruction of an adjacent street qualifies as an improvement to a parcel, but utility improvements do not. If the parcel is "knocked-down" and later improved, it is re-instated in the TIF District but at the market value at the time of the reinstatement. 3. 5-year rule: for increment to be considered a spent expenditure within the TIF District. 1111 one of the following must occur within five years after certification of the district: (1) increment is paid to a "third party" for a TIF-eligible "activity"; (2) bonds, the proceeds 5264549 FIRM-2 -5-