* § 421-h. Exemption of capital improvements to residential buildings.
1. Residential buildings reconstructed, altered or improved subsequent
to the effective date of a local law or resolution pursuant to this
section shall be exempt from taxation and special ad valorem levies to
the extent provided hereinafter. After a public hearing, the governing
board of a city, with a population of more than one hundred forty
thousand but less than one hundred fifty thousand as determined by the
latest decennial federal census, may adopt a local law or resolution to
grant the exemption authorized pursuant to this section. A copy of such
local law or resolution shall be filed with the commissioner and the
assessor of such city who prepares the assessment roll on which the
taxes of such city are levied.

2. (a) Such buildings shall be exempt to the extent of one hundred per
centum of the increase in assessed value thereof attributable to such
reconstruction, alteration or improvement subject to the provisions of
subdivision six of this section. Such exemption shall be limited to
forty thousand dollars in increased market value, or such other sum less
than forty thousand dollars, as may be provided by the local law or
resolution, of the property attributable to such reconstruction,
alteration or improvement and any increase in market value greater than
such amount shall not be eligible for the exemption pursuant to this
section. For the purposes of this section, the market value of the
reconstruction, alteration or improvement shall be equal to the
increased assessed value attributable to such reconstruction, alteration
or improvement divided by the class I ratio in a special assessing unit
or the most recently established state equalization rate or special
equalization rate in the remainder of the state, except where the state
equalization rate or special equalization rate equals or exceeds
ninety-five percent, in which case the increase in assessed value
attributable to such reconstruction, alteration or improvement shall be
deemed to equal the market value of such reconstruction, alteration or
improvement.

(b) No such exemption shall be granted for reconstruction, alterations
or improvements unless:

(i) such reconstruction, alteration or improvement was commenced
subsequent to the effective date of the local law or resolution adopted
pursuant to subdivision one of this section; and

(ii) the greater portion, as so determined by square footage, of the
building reconstructed, altered or improved is at least five years old.

(c) For purposes of this section the terms reconstruction, alteration
and improvement shall not include ordinary maintenance and repairs.

3. Such exemption shall be granted only upon application by the owner
of such building on a form prescribed by the commissioner. The
application shall be filed with the assessor of the city having the
power to assess property for taxation on or before the appropriate
taxable status date of such city.

4. If satisfied that the applicant is entitled to an exemption
pursuant to this section, the assessor shall approve the application and
such building shall thereafter be exempt from taxation and special ad
valorem levies as herein provided commencing with the assessment roll
prepared on the basis of the taxable status date referred to in
subdivision three of this section. The assessed value of any exemption
granted pursuant to this section shall be entered by the assessor on the
assessment roll with the taxable property, with the amount of the
exemption shown in a separate column. No such application shall be
approved after December thirty-first, two thousand five.

5. For the purposes of this section, a residential building shall mean
any building or structure designed and occupied exclusively for
residential purposes by not more than one family.

6. In the event that a building granted an exemption pursuant to this
section ceases to be used primarily for residential purposes by the
owner who was granted the exemption pursuant to this section or title
thereto is transferred to other than the spouse of the owner, the
exemption granted pursuant to this section shall cease.

7. Such city may, by its local law or resolution:

(a) reduce the per centum of exemption otherwise allowed pursuant to
this section;

(b) limit eligibility for the exemption to those forms of
reconstruction, alterations or improvements as are prescribed in such
local law or resolution;

(c) provide that the exemption shall be applicable only to those
improvements which would otherwise result in an increase in the assessed
valuation of the real property but which consist of an addition,
remodeling or modernization to an existing residential structure to
prevent physical deterioration of the structure or to comply with
applicable building, sanitary, health and/or fire codes.

* NB There are 2 § 421-h's