Sec. 1. 36 MRSA §5111-C is enacted to read:

§5111-C.__Revenue targeting

1.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"Adjustment factor" means a number applicable to a tax year determined by dividing the target revenue for the numerically identical fiscal year by the tax revenue for that fiscal year, rounded to the nearest 1/1,000.

B.__"Target revenue" means $910,112,839 for fiscal year 2001-02 and $958,757,671 for fiscal years beginning on or after July 1, 2002.

C.__"Tax revenue" means undedicated General Fund individual income tax revenue arising pursuant to this Part.

2.__Rate adjustment.__Annually, by September 15th, the State Tax Assessor shall determine for the current tax year whether tax revenue for the fiscal year ending the prior June 30th exceeded the target revenue.__If target revenue was exceeded, the State Tax Assessor shall adjust the tax rates as specified in the tax rate tables in section 5111, as adjusted for the prior tax year pursuant to this section, by multiplying the percentage rates by the current tax year's adjustment factor.__The State Tax Assessor may not adjust the rates for single individuals and married persons filing separate returns with taxable income of $30,000 or more; for unmarried individuals or legally separated individuals who qualify as heads of households with taxable income of $45,000 or more; and for individuals filing married joint returns or surviving spouses permitted to file a joint return with taxable income of $60,000 or more.

3.__Revenue Targeting Fund.__The Revenue Targeting Fund, referred to in this subsection as the "fund," is established to carry out the purposes of this section.__For fiscal year 2001-02, tax revenue exceeding $910,112,839 must be deposited to the fund.__ For the fiscal year beginning July 1, 2002, and for each subsequent fiscal year up to and including the fiscal year ending during the calendar tax year in which the limitation pursuant to subsection 4 is reached, tax revenues exceeding $958,757,671 must be deposited to the fund.__The fund does not lapse but carries forward to the subsequent fiscal year.__Tax year 2004 and subsequent tax year individual income tax refunds must be paid from this fund until the fund balance carried forward from the prior fiscal year is reduced to zero.