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STATE OF MINNESOTA <br /> OFFICE OF THE STATE AUDITOR <br /> 4, <br /> SUITE 500 <br /> 525 PARK STREET (651)296-2551(Voice) <br /> REBECCA OTTO SAINT PAUL,MN 55103-2139 state.auditor@state?mn us(E-mail) <br /> STATE AUDITOR 1-800-627-3529(Relay Service) <br /> Statement of Position <br /> TIF's Amended Four-Year Knock-Down Rule <br /> The provision of the TIF Act referred to as the Four-Year Knock-Down Rule states that <br /> development activity must begin within four years from the date of certification of a tax <br /> increment financing (TIF) district.I The 2009 Legislature extended the Four-Year <br /> Knock-Down Rule to six years for districts certified on or after January 1, 2005, and <br /> before April 20, 2009.3 For all districts certified before January 1, 2005 or after April <br /> 20, 2009,the Four-Year Rule continues to apply. 1112_,1110 <br /> The Rule requires the development authority to certify to the county auditor evidence that <br /> development activity has occurred within four years of certification (or within six years <br /> of certification, for qualifying districts) on each parcel in the district. If demolition, <br /> rehabilitation, renovation, or other site preparation considered to be "development <br /> activity" has not begun on each parcel within four years (or six years, for qualifying <br /> districts), tax increment revenues can no longer be taken from that parcel.4 Site <br /> preparation can include qualifying street improvement adjacent to a parcel in a TIF <br /> district, but the street improvements are limited to construction or opening of a new <br /> street, relocation of a street, and substantial reconstruction or rebuilding of an existing <br /> street. Installation of utility service, including sewer or water systems, does not qualify <br /> as development activity. <br /> Certification of development activity must occur no later than February 1St of the fifth <br /> year following the year the district was certified(or seventh year, for qualifying districts). <br /> ' State law has been summarized and simplified. Minnesota Statutes should be consulted before making <br /> decisions based on this Statement. The Statement does not contain legal advice and it should not be relied <br /> upon in lieu of legal advice. It is subject to revision at any time. <br /> 2 Minn.Stat. §469.176,subd.6;id.,§§469.194 to 469.1799,inclusive,as amended. <br /> 3 In enacting this legislation,the 2009 Legislature was acknowledging how difficult it is to find developers <br /> willing to commence development activity during a recession. <br /> 4Id.,§469.176,subd.6. <br /> Reviewed: December 2010 2009-3002 <br /> Revised: June 2009 <br /> This Statement of Position is not legal advice and is subject to revision. <br /> An Equal Opportunity Employer <br />