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<br />* For the remainder of this paper, in the context of TIF, "cities" or lithe city" will stand for all of <br /> <br />these. <br /> <br />Among the eligible uses of TIF are redevelopment of blighted areas, construction of low- <br /> <br />and moderate-income housing, public infrastructure improvements, decontamination of polluted <br /> <br />land, demolition and site preparation, and stimulation of economic activity. <br /> <br />TIF is a very popular financing tool among Minnesota municipalities. According to the <br /> <br />Office of the Legislative Auditor, 357 Minnesota cities used TIF in 1995, up from 181 cities in <br /> <br />1985 (Legislative Auditor, 1996). <br /> <br />Prior to the mid-1970s, the federal government financially assisted in many urban <br /> <br />renewal and redevelopment projects. Since the phase-out of many of these Federal programs, <br /> <br />local governments have been the leaders in the redevelopment process, and have used TI F to <br /> <br />fund much of this development. As a result, tax increment financing is one of the most widely- <br /> <br />used local development policies in the United States. As of April 2002, 48 states had passed <br /> <br />legislation authorizing the use of TIF by local governments. Only North Carolina and Delaware <br /> <br />have not yet authorized the use of TIF (Man, 1999). <br /> <br />Local Governments That Can Use TlF. Tax increment financing is used by counties, <br /> <br />cities, andlor other jurisdictions and entities that are subject to direct or indire>et control by a city <br /> <br />or county. These separate entities include housing and redevelopment authorities (HRAs), port <br /> <br />authorities (with industrial development district powers), economic development authorities <br /> <br />(EDAs), and rural development finance authorities. Cities and counties can E~xercise tax <br /> <br />increment powers directly, but generally one of these separate entities is created to carry out tax <br /> <br />increment development activity that is not part of a city or county's normal operations (Michael, <br /> <br />1990). <br /> <br />Financing Options for TlF. Cities can finance the up-front development costs related to <br /> <br />tax increment financing projects in a variety of ways, including general obligation bonds of the <br /> <br />city or the development authority, revenue bonds, internal city financing, and pay-as-you-go <br /> <br />..., <br />.J <br />