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1 Industrial Development/Industrial Revenue Bonds The Minnesota Municipal Industrial Development Act (M.S . 474 ) , initially adopted by the Minnesota Legislature in 1967 , is a measure designed to enable cities to attract new commercial and industrial development and keep existing businesses in the city. The Act authorizes a city to issue Industrial Development/ Industrial Revenue Bonds ( IDB/IRB ) . and use the proceeds to acquire and construct commercial/industrial sites and facilities . These facilities are then leased to private industry and the rents are used to retire the bonds . The Act does not authorize a city to engage- in business . IDBs may be issued without public referendum, and the full faith and credit of a community cannot be pledged as security to these bonds . They are used by many communities 'to stimulate economic development, create new employment opportunities and broaden local tax bases . The law enables communities - Including counties , redevelopment agencies and port authorities - to finance health care facilities, abatement of air and water pollution , the disposal of solid waste , the development of industry and manufacturing , the redevelopment and/or development of commercial enterprises such as retail stores , restaurants , hotels and motels , and office buildings and multi-family housing projects . Among the advantages IDB financing offers businesses are financing of 100% of project costs and lower interest rates . Interest rates are lower because interest paid to the holders of bonds is tax-exempt under current Federal Law. However, this tax exempt status is currently being considered for elimination by Congress. , Since IRBs do not pledge the full faith and credit of the community, property owners may not be taxed to pay principal and interest on them. In 1980 the Mounds View City Council adopted Resolution No . 1125 , "Setting Guidelines for the Issu- - . . - is Development Bonds or Loans By the City" . On December 17, 1984 Resolution No . 1847 , copy attached , was adopted repealing Resolution No. 1125 and establishing a new set of guidelines for the issuance of IRBs . Also in 1984 the Minnesota Legislature in response to action taken by the Federal Government to limit the total value of IRBs issued by individual states on an annual basis, established guidelines for the distribution of the state ' s allocation to the various governmental jurisdictions eligible to issue IRBs . These guidelines were revised in 1986 to provide that in 1987 the allocation for use by the non-entitlement units of government would be based upon awards being made each month from the list of eligible applicants . Eligibility will be determined by the 1111 Minnesota Department of Energy and Economic Development ( DEED) using the 15 criteria established by the Legislature . The Legislature also provided that issuance authority shall be allocated in the following priority order . 4 7