Sec. 1. 36 MRSA §4062, sub-§1-A, ķA, as amended by PL 2003, c. 673, Pt. D, §1, is further amended to read:

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 adjusted federal taxable estate is to be determined using the applicable Code as of the date of the decedent's death, except that the state death tax deduction contained in the Code, Section 2058 is to be disregarded. The unified credit is to be determined under the Code, Section 2010 as of December 31, 2000; and:

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

(2)__In the case of any property eligible to be treated as qualified terminable interest property under the Code, Section 2056(b)(7) and for which no election allowable under the Code, Section 2056(b)(7) is made with respect to the federal estate tax, the personal representative may elect, on a timely filed return in the form prescribed by the State Tax Assessor, to treat the property as qualified terminable interest property for purposes of the tax imposed by this chapter, and if such an election is made, the federal taxable estate must be decreased by an amount equal to the value of the property as finally determined by the assessor in accordance with the Code and, in the case of estates that do not incur a federal estate tax, as if the estate had incurred a federal estate tax, subject to the following:

(a)__For decedents dying in 2004, the amount may not exceed $650,000;

(b)__For decedents dying in 2005, the amount may not exceed $550,000;

(c)__For decedents dying in 2006, 2007 or 2008, the amount may not exceed $1,000,000; and

(d)__For decedents dying in 2009, the amount may not exceed $2,500,000;