1.1 	A bill for an act
1.2 	relating to taxation; individual income; imposing a progressive surtax;amending 
1.3 	Minnesota Statutes 2008, section 290.06, by adding a subdivision.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. Minnesota Statutes 2008, section 290.06, is amended by adding a 
1.6 	subdivision to read:
1.7 		Subd. 2g.Income surtax. (a) In addition to the tax computed under subdivision 
1.8 	2c and section 290.091, there is a surtax imposed on individuals, estates, and trusts. The 
1.9 	surtax is computed by applying the following rates to the tax computed under subdivision 
1.10 	2c and section 290.091:
1.11 	(1) for taxpayers with adjusted gross income for the taxable year less than $30,000, 
1.12 	six percent;
1.13 	(2) for taxpayers with adjusted gross income of at least $30,000 but not more than 
1.14 	$80,000, eight percent;
1.15 	(3) for taxpayers with adjusted gross income of at least $80,000 but not more than 
1.16 	$250,000, ten percent; and
1.17 	(4) for taxpayers with adjusted gross income of at least $250,000, 12 percent.
1.18 	(b) For purposes of this section, "adjusted gross income" has the meaning given in 
1.19 	section 62 of the Internal Revenue Code.
1.20 	(c) The adjusted gross income thresholds in paragraph (a) must be adjusted for 
1.21 	inflation. For tax years beginning after December 31, 2009, the commissioner shall 
1.22 	annually adjust the adjusted gross income thresholds by the percentage determined 
1.23 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
1.24 	section 1(f)(3)(B) of the Internal Revenue Code, the word "2008" shall be substituted for 
2.1 	the word "1992." For 2010, the commissioner shall then determine the percent change 
2.2 	from the 12 months ending on August 31, 2008, to the 12 months ending on August 31, 
2.3 	2009, and in each subsequent year, from the 12 months ending on August 31, 2008, to 
2.4 	the 12 months ending on August 31 of the year preceding the taxable year. The adjusted 
2.5 	gross income thresholds as adjusted for inflation must be rounded to the nearest $10. If the 
2.6 	amount ends in $5, the amount is rounded up to the nearest $10. The determination of the 
2.7 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.
2.8 	(d) On October 1, 2011, the commissioner of finance shall determine the amount of 
2.9 	the state's unrestricted general fund balance at the close of the 2010-2011 biennium. If this 
2.10 	amount is more than $700,000,000, the commissioner shall reduce the rate of the surtax in 
2.11 	effect for taxable years beginning after December 31, 2010, and before January 1, 2012, 
2.12 	so that the amount of revenue raised by the surtax results in a fund balance of no more 
2.13 	than $700,000,000, provided that the rate so determined shall be rounded upward to the 
2.14 	next one-tenth of one percent and no adjustment shall be required if the change in the rate 
2.15 	of the surtax would be less than one-tenth of one percent.

2.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.17 	December 31, 2008.