(3) The amount has not been previously used as a modification pursuant to this subsection; and

Sec. 9. 36 MRSA §5200-A, sub-§2, ¶M, as repealed and replaced by PL 2003, c. 479, §6, is amended to read:

M. A fraction of any amount previously added back by the taxpayer to federal taxable income pursuant to subsection 1, paragraph N.

(1) With respect to property first placed in service during taxable years beginning in 2002, the adjustment under this paragraph is available for each year during the recovery period, beginning 2 years after the beginning of the taxable year during which the property was first placed in service. The fraction is equal to the amount added back under subsection 1, paragraph N with respect to the property, divided by the number of years in the recovery period minus 2.

(2) With respect to all other property, for the taxable year immediately following the taxable year during which the property was first placed in service, the fraction allowed by this paragraph is equal to 5% of the amount added back under subsection 1, paragraph N with respect to the property. For each subsequent taxable year during the recovery period, the fraction is equal to 95% of the amount added back under subsection 1, paragraph N with respect to the property, divided by the number of years in the recovery period minus 2.

In the case of property expensed pursuant to Section 179 of the Code, the term "recovery period" means the recovery period that would have been applicable to the property had Section 179 not been applied.; and

Sec. 10. 36 MRSA §5200-A, sub-§2, ¶P is enacted to read:

P.__The amount of contributions made by the taxpayer during the taxable year to individual medical savings accounts established on behalf of the taxpayer's employees pursuant to chapter 923 to the extent that the contributions are not deductible under the Code.

Sec. 11. 36 MRSA c. 923 is enacted to read: