LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington, Suite 301
Indianapolis, IN 46204
(317) 233-0696
http://www.in.gov/legislative

FISCAL IMPACT STATEMENT
NOTE PREPARED: Dec 31, 2015
BILL AMENDED:

LS 6694
BILL NUMBER: HB 1108
SUBJECT: Financing of Improvements for Carroll Stadium.
FIRST AUTHOR: Rep. Huston
FIRST SPONSOR:

BILL STATUS: As Introduced

FUNDS AFFECTED: X GENERAL
X DEDICATED
FEDERAL

IMPACT: State & Local

Summary of Legislation: The bill provides that Indiana University may issue and sell bonds to acquire,
erect, construct, reconstruct, improve, rehabilitate, remodel, repair, complete, extend, or enlarge capital
improvements at the Michael A. Carroll Track and Soccer Stadium. The bill specifies that the principal costs
of the bonds issued (excluding amounts necessary to provide money for debt service reserves, credit
enhancement, or other costs incidental to the issuance of the bonds) may not exceed $20 M. It provides that
the bonds may not be issued unless: (1) the bond issuance has been reviewed by the Budget Committee; (2)
the director of the Budget Agency has approved the bond issuance; and (3) a lease agreement has been
entered into by Indiana University and a professional soccer team concerning the use of the stadium by the
professional soccer team.
It requires the Department of State Revenue (DOR) to separately account for: (1) all state sales taxes
collected at the stadium or a specific hotel located in Indianapolis; and (2) all state income tax and County
Option Income Tax (before 2017) and the county income tax from the expenditure rate (after 2016) collected
on the wages, salaries, and contractual payments paid by a professional soccer team that plays the majority
of its home games at the stadium and all state income tax and County Option Income Tax (before 2017) and
county income tax from the expenditure rate (after 2016) collected on the wages, salaries, and contractual
payments paid by a hotel located at the southeast corner of the intersection of Illinois Street and Market
Street in Indianapolis (hotel).
It provides that such county income tax shall be deposited in the state General Fund and not distributed to
the county.
It provides that if Indiana University issues the bonds, the county Admissions Tax in Marion County is
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 imposed on the admissions to professional sports events at the stadium, and that such county Admissions Tax
revenue is deposited in the state General Fund.
It authorizes the Capital Improvement Board of Managers (CIB) to: (1) adopt a resolution to distribute
Innkeeper's Tax revenue collected from the hotel to the Treasurer of State for deposit in the state General
Fund; and (2) adopt a resolution to distribute Food and Beverage Tax (FBT) revenue collected from the
stadium and the hotel to the Treasurer of State for deposit in the state General Fund; if the CIB determines
that such tax revenue is not needed to pay obligations owed by the CIB and that the retention of such revenue
by the state will not impair the rights and remedies of holders of any bonds or other obligations.
The bill provides that after the Office of Management and Budget (OMB) certifies that the sum of: (1) all
state sales taxes collected from transactions at the stadium or the hotel; (2) all Adjusted Gross Income (AGI)
taxes and County Option Income Taxes (before 2017) and county income taxes from the expenditure rate
(after 2016) collected on the wages, salaries, and contractual payments paid by the professional soccer team
or the hotel; (3) all Admissions Taxes imposed on admission to professional sporting events at the stadium;
(4) all county Food and Beverage Taxes (FBT) collected at the stadium or the hotel that are distributed to
the Treasurer of State for deposit in the state General Fund; and (5) all county Innkeeper's taxes collected
at the hotel that are distributed to the Treasurer of State for deposit in the state General Fund; equals the total
amount of principal and interest payments to be made on the bonds issued for the capital improvements at
the stadium, the county income tax from the hotel shall not be retained by the state, the Admissions Tax
collected at the stadium shall be distributed to the CIB, and the CIB may not distribute county FBT and
Innkeeper's taxes collected at the stadium or hotel to the Treasurer of State.
It specifies that to the extent the costs of the capital improvements at the stadium exceed the sum of $20 M
plus any amounts paid or contributed by the city of Indianapolis for those costs, the professional soccer team
or the professional soccer league in which the professional soccer team competes (or both) must pay those
excess costs.
The bill appropriates $1.5 M from the state General Fund in the state fiscal year beginning July 1, 2016, to
Indiana University for fee replacement.
It also requires taxpayers operating at the stadium or the hotel to report to the DOR the information that it
considers necessary to make the accounting for state and local taxes required by the bill.
Effective Date: Upon passage; July 1, 2016.
Explanation of State Expenditures: Bonds: The bill authorizes Indiana University to issue up to $20 M in
bonds to improve Carroll Stadium. The bonds may only be issued if all the requirements in the bill are
satisfied including obtaining a 20-year lease agreement with a professional soccer team. The bill also
appropriates $1.5 M from the state General Fund for fee replacement in FY 2017. [The estimated annual debt
service on a $20 M bond issue maturing in 20 years, assuming a 4.5% interest rate, is about $1.5 M.]
Department of State Revenue (DOR): The bill requires the DOR to account for the revenue captured at the
stadium and specific hotel. The DOR's current level of staff and resources should be sufficient to implement
the provisions within the bill.
Explanation of State Revenues: The bill allows the state to capture local tax revenue attributable to taxable
events or qualifying income earned at: (1) Carroll Stadium and (2) a hotel located at the southeast corner of
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 the intersection of Illinois Street and Market Street in Indianapolis. The local revenue capture will be
deposited into the state General Fund. In addition, the bill requires the DOR to separately account for Sales
and Use Tax and Individual Adjusted Gross Income (AGI) Tax attributable to taxable events or qualifying
income earned at both facilities. The revenue from these taxes is not additional revenue. The attributable state
revenue would already be deposited in the state General Fund. The revenue capture will continue until the
Office of Management and Budget (OMB) certifies that the sum of all the attributable local revenue plus all
the attributable state revenue from the facilities exceed the total cost to issue the bonds. The table below
contains annual revenue capture estimates by tax type.
Tax Type

Annual Revenue Estimates

Local Tax Revenue Captured and Credited Towards Repayment Amount
Admission’s Tax

$220,000 - $390,000

Local Income Tax

$43,000 - $100,000

Food and Beverage Tax(FBT)*

$23,000 - $40,000

Innkeeper’s Tax*^

$430,000 - $480,000

Total Local Revenue

$720,000 - $1,020,000

State Revenue Credited Towards the Repayment Amount
Adjusted Gross Income (AGI) Tax

$150,000 - $370,000

Sales and Use Tax

$660,000 - $830,000

Total State Revenue

$810,000 - $1,210,000

Grand Total

$1,526,000 - $2,210,000

*The CIB has the option to contribute these taxes towards the total repayment amount.
^The estimate assumes the CIB will only contribute revenue from the original 6% Marion
County Innkeeper’s Tax.

The estimates are based on several factors including: attendance at Indianapolis' professional soccer games,
attendance at other sporting events held within the existing Professional Sports Development Area (PSDA)
in Marion County, the operating revenue of the franchises within the existing PSDA, the forecasted state tax
revenue captured by the existing PSDA, and data on hotel occupancy. The hotel is assumed to have 200
rooms. Actual revenue captured will depend on the number of events held at the stadium, future attendance,
and the performance of the hotel.
See Explanation of Local Revenues for additional information.
Explanation of Local Expenditures:
Explanation of Local Revenues: Summary - The bill authorizes the state to capture the Admissions Tax and
Local Income Tax revenue from attributable events or qualifying income earned at Carroll Stadium and a
specific hotel. In addition, the CIB may pass an ordinance to distribute the attributable FBT and Innkeeper’s
Tax revenue to the state. If all the attributable revenue is distributed to the state, it may reduce total local tax
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 collections by approximately $720,000 to $1,020,000 until the OMB certifies the total attributable tax
revenue exceeds to cost to issue the bonds.

Additional Information Marion County Admissions Tax: A 10% Admission Tax will be imposed on professional sporting events held
at Carroll Stadium once Indiana University issues bonds to renovate the stadium. The revenue from Carroll
Stadium will be initially deposited in the state General Fund. However, after the OMB certifies that the
combined tax revenue attributable to the facilities exceeds the debt service of the bonds, the Admission Tax
revenue will be distributed to the CIB. The amount of Admissions Tax revenue from covered events is
estimated to be between $220,000 and $390,000 beginning in FY 2017. The revenue will likely increase if
the stadium’s seating capacity is expanded and ticket prices increase.
Local Income Tax: Local income tax revenue attributable to qualifying income earned at Carroll Stadium
and the hotel will be deposited in the state General Fund instead of distributed to Marion County. This will
reduce Marion County’s local income tax distribution between $42,000 and $100,000 each year until the total
revenue capture from the various taxes exceeds the debt service of the bonds. [Only the tax revenue collected
by Marion County’s expenditure rate is captured.]
Food & Beverage Tax (FBT) and Innkeeper’s Tax: The bill allows the CIB to distribute the FBT and
Innkeeper’s Tax attributable to the stadium and the hotel to the state General Fund. This distribution is
optional. If the CIB chooses to distribute this revenue to the state, it would be credited towards the repayment
of the bonds issued to the renovate Carroll Stadium. The estimated amount of revenue that could be
distributed to the state General Fund is approximately $453,000 to $520,000 each year. Approximately
$23,000 to $40,000 may be collected from FBT and $430,000 to $480,000 may be attributable to the original
6% Marion County Innkeeper’s Tax. [The revenue collected from the additional 4% Marion County
Innkeeper’s Tax is pledged to specific obligations.]
State Agencies Affected: Office of Management and Budget; State Budget Agency; Department of State
Revenue; Treasurer of the State.
Local Agencies Affected: Marion County.
Information Sources: LSA, Fiscal Issue Brief - Indiana's Geographically Targeted Development Programs:
Professional Sports and Convention Development Areas, October, 2014.; Forbes, NFL Team Values: The
Business of Football, August 2015; Forbes, NBA Team Values: The Business of Basketball, accessed on
December 13, 2015; Forbes, Minor League Baseball's Most Valuable Teams, July 17, 2013; ESPN, NFL
Attendance - 2015, NBA Attendance - 2015, accessed on December 23, 2015. Minor League Baseball,
International League: Attendance 2015; Indy Eleven, http://www.indyeleven.com/#; Bureau of Labor
Statistics, Quarterly Census of Employment and Wages; Trustees of Indiana University, Official StatementConsolidated Revenue Bonds, Series 2015A, March 4, 2015.
Fiscal Analyst: Heath Holloway, 232-9867.

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