§ 421-l. Exemption of capital improvements to residential buildings in
certain towns. 1. Residential buildings designed and occupied
exclusively for residential purposes by not more than three families
that are 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
town with a population of not less than sixteen thousand three hundred
fifty and not more than sixteen thousand three hundred sixty, situated
in a county with a population of not less than nine hundred nineteen
thousand and not more than nine hundred nineteen thousand one hundred,
based upon the two thousand ten federal census, may adopt a local law to
grant the exemption authorized pursuant to this section. Subsequent to
the adoption of such a local law, the county in which such town is
located, any village located within such town and any school district
all or part of which is located within such town may likewise exempt
such property from its taxation and special ad valorem levies by local
law, or in the case of a school district, by resolution in the same
manner and to the same extent as the town. A copy of such local laws or
resolutions shall be filed with the commissioner and appropriate
assessor.

2. Such residential real property shall be exempt for a period of one
year to the extent of fifty per centum of the increase in assessed value
thereof attributable to such reconstruction, alteration or improvement
and for an additional period of four years subject to the following:

(i) The extent of such exemption shall be decreased by ten per centum
of the "exemption base" each year during such additional four-year
period, such that during year two there shall be an exemption of forty
per centum of the increase in assessed value thereof attributable,
during year three there shall be an exemption of thirty per centum of
the increase in assessed value thereof attributable, in year four there
shall be an exemption of twenty per centum of the increase in assessed
value thereof attributable and in year five there shall be an exemption
of ten per centum of the increase in assessed value thereof
attributable;

(ii) The "exemption base" shall be the increase in assessed value due
to reconstruction, alterations or improvements as determined by the
assessor in the initial year of such five-year period following the
filing of an original application; and

(iii) A qualified reconstruction, alteration or improvement shall have
increased the assessed value of the real property by at least ten
thousand dollars, with a maximum permitted exemption not to exceed one
hundred fifty thousand dollars.

3. For purposes of this section, "reconstruction", "alteration" or
"improvement" shall not include ordinary maintenance and repairs.

4. Any owner of a one to three family residence may qualify for an
exemption pursuant to this section, including owners who do not occupy
such residences, individuals, partnerships and limited liability
corporations. Exemptions granted pursuant to this section are not
transferable from owner to another if the real property is sold or
transferred during the exemption period.

5. No such exemption shall be granted unless:

(a) Such reconstruction, alteration or improvement was commenced
subsequent to the effective date of the local law or resolution adopted
by a town, county, village or school district pursuant to subdivision
one of this section;

(b) The owner of real property applying for such exemption has
satisfied all outstanding town, county, village and school tax
obligations; and

(c) Such reconstruction, alteration or improvement is documented by a
building permit, if required, for the improvements or other appropriate
documentation as required by the assessor and/or code enforcement
officer.

6. Such exemption shall be granted only upon application by the owner
of such real property on a form prescribed by the commissioner. Such
application shall be filed with the assessor on or before the
appropriate taxable status date and within one year after the date of
completion of such reconstruction, alteration or improvement.

7. 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 provided in this section commencing with the
assessment roll prepared on the basis of the taxable status date
referred to in subdivision six of this section. The assessor shall enter
the assessed value of any exemption granted pursuant to this section on
the assessment roll for the taxable property, with the amount of the
exemption shown in a separate column.

8. In the event that real property granted an exemption pursuant to
this section ceases to be used primarily for eligible purposes, the
exemption granted pursuant to this section shall cease.

9. Such town, county, village or school district shall be permitted by
local law to reduce the percentage of exemption otherwise allowable by
subdivision two of this section or increase the required minimum
assessed values set forth in paragraph (iii) of subdivision two of this
section, provided that a project in the course of reconstruction,
alteration or improvement shall not be subject to such amendments.