Sec. 1. 36 MRSA §5122, sub-§2, śL, as amended by PL 1999, c. 708, §35 and c. 731, Pt. S, §2 and affected by §4 and amended by c. 790, Pt. A, §49, is repealed and the following enacted in its place:

L.__For income tax years beginning on or after January 1, 2000, an amount equal to the total premiums spent for qualified long-term care insurance contracts as defined in the Code, Section 7702B(b), as long as the amount subtracted is reduced by the long-term care premiums claimed as an itemized deduction pursuant to section 5125;

Sec. 2. 36 MRSA §5122, sub-§2, śM, as enacted by PL 1999, c. 708, §36 and c. 731, Pt. S, §3 and affected by §4, is repealed and the following enacted in its place:

M.__For income tax years beginning on or after January 1, 2001, an amount equal to the lesser of:

(1)__Seventeen thousand five hundred dollars for a single individual and $35,000 for a married couple filing a joint return reduced by the total amount of social security benefits and railroad retirement benefits paid by the United States and included in federal adjusted gross income, but not less than $0; or

(2)__The aggregate of the following:

(a)__Total pensions and annuities to the extent included in federal adjusted gross income;

(b)__For a taxpayer at least 65 years of age, taxable interest to the extent included in federal adjusted gross income;

(c)__For a taxpayer at least 65 years of age, ordinary dividends to the extent included in federal adjusted gross income; and

(d)__For a taxpayer at least 65 years of age, capital gains or losses to the extent included in federal adjusted gross income.

For purposes of divisions (b), (c) and (d), a taxpayer who is at least 65 years of age during the tax year for which a return is being filed qualifies for the subtraction pursuant to those divisions.