Sec. M-2. Application. That section of this Part that amends the Maine Revised Statutes, Title 36, section 4064 applies to estates of decedents dying on or after January 1, 2005.

PART N

Sec. N-1. 36 MRSA §4062, sub-§1-A, as amended by PL 2003, c. 673, Pt. D, §1, is repealed and the following enacted in its place:

1-A.__Federal credit.__"Federal credit" has the following meanings:

A. For the estates of decedents dying after December 31, 2002, "federal credit" means the maximum credit for state death taxes determined under the Code, Section 2011 as of December 31, 2002 exclusive of the reduction of the maximum credit contained in the Code, Section 2011(b)(2); the period of limitations under the Code, Section 2011(c); and the termination provision contained in the Code, Section 2011(f). The federal taxable estate is to be determined using the applicable Code as of the date of the decedent's death, except that:

(1) The state death tax deduction contained in the Code, Section 2058 is to be disregarded;

(2) The unified credit is to be determined under the Code, Section 2010 as of December 31, 2000;

(3) For the estates of decedents dying after December 31, 2004, the federal taxable estate must be decreased by an amount equal to the value of Maine qualified terminable interest property in the estate of the decedent; and

(4) For the estates of decedents dying after December 31, 2004, the federal taxable estate must be increased by an amount equal to the value of Maine elective property in respect of the decedent; and

B.__For the estates of all other decedents, "federal credit" means the maximum credit for state death taxes determined under the Code, Section 2011.