LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington, Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6509 NOTE PREPARED: Jan 10, 2022
BILL NUMBER: HB 1074 BILL AMENDED:
SUBJECT: Youth Sports and Tourism Development Areas.
FIRST AUTHOR: Rep. Heine BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill allows the legislative body of a city to adopt an ordinance establishing
a Youth Sports and Tourism Development Area (YSTDA). The bill requires the YSTDA to include a facility
or complex of facilities used by youth sports teams and organizations for practice or competitive sporting
events. It requires the legislative body to make findings when adopting an ordinance. It also requires the
legislative body to submit an ordinance establishing a tax area to the Budget Committee and Budget Agency
for review and approval.
The bill allows a YSTDA to receive incremental state and local income tax revenue and incremental sales
tax revenue attributable to the tax area. It requires a city that establishes a tax area to establish a YSTDA
fund. The bill limits the amount of incremental tax revenue that may be allocated to: (1) $1 M per tax area
per year; and (2) a total of $10 M per tax area. It provides that a tax area terminates not later than 20 years
after incremental tax revenues are first allocated to the tax area.
Effective Date: July 1, 2022.
Explanation of State Expenditures: Department of State Revenue (DOR): A YSTDA fund will be
established and administered by the DOR for each approved YSTDA. The DOR will incur additional
expenses to compute the tax capture and make the required distributions. The DOR’s current level of staff
and resources should be sufficient to implement the provisions within the bill.
Budget Committee and State Budget Agency (SBA): The terms of governing a YSTDA must be reviewed by
the Budget Committee and approved by the SBA. The bill requires certain findings that the Budget
Committee and the SBA must make. These provisions are routine administrative functions and should be able
HB 1074 1 to be implemented with no additional appropriations, assuming near customary agency staffing and resource
levels.
Explanation of State Revenues: The bill allows a common council of a city to establish YSTDAs within
the boundaries of a city that includes a facility or complex of facilities used by youth teams and organizations
for practice or competitive sporting events. The YSTDAs are authorized to capture the incremental Sales and
Use Tax, Individual Adjusted Gross Income (AGI) Tax, and local income taxes attributable to taxable events,
earned within the area, or derived from activities within the area beginning in FY 2023. The bill limits the
total amount of state Sales and Use Tax, Individual AGI tax, and local income tax deposited in each
incremental tax financing fund established for a tax area to: (1) $1 M per tax area during any state fiscal year;
and (2) a total of $10 M per tax area. The reduction to state revenue will depend on the number of areas
established and the incremental economic activity occurring in the area.
Additional Information: Sales Tax revenue is deposited in the General Fund (99.838%), Commuter Rail
Service Fund (0.131%), and Industrial Rail Service Fund (0.031%). Income Tax revenue is deposited in the
state General Fund.
Explanation of Local Expenditures: With the exception of Lake County, Allen County, and Hamilton
County, there may not be more than one tax area in a county. The tax areas must be terminated not later than
20 years after the first incremental revenues are allocated. Funds deposited into the city’s youth sports and
tourism development area fund may be used to:
• acquire, improve, prepare, construct, maintain, repair, operate, furnish, and equip capital
improvements and facilities in the area;
• pay the principal and interest on any obligations, including leases;
• establish, augment, or restore a debt service reserve for obligations; or
• pay capital expenses incurred by the city for capital improvements or facilities.
Explanation of Local Revenues: The bill authorizes the state to capture the incremental local income taxes
from attributable events and deposit them in a tax increment finance fund.
State Agencies Affected: Department of State Revenue; State Budget Agency; Budget Committee.
Local Agencies Affected: Municipalities.
Information Sources:
Fiscal Analyst: Seth Payton, 317-233-3546.
HB 1074 2