* § 421-p. Exemption of capital improvements to residential new
construction involving the creation of accessory dwelling units. 1.
Residential buildings reconstructed, altered, improved, or newly
constructed in order to create one or more additional residential
dwelling units on the same parcel as a pre-existing residential building
to provide independent living facilities for one or more persons
subsequent to the effective date of a local law or resolution enacted
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 county, city, town or village may
adopt a local law and a school district, other than a school district
subject to article fifty-two of the education law, may adopt a
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 county, city, town or village who
prepares the assessment roll on which the taxes of such county, city,
town, village or school district are levied.

2. (a) Such buildings shall be exempt for a period of five years to
the extent of one hundred per centum of the increase in assessed value
thereof attributable to such reconstruction, alteration, improvement, or
new construction for such additional residential unit or units that
provide independent living facilities for one or more persons, and for
an additional period of five years subject to the following:

(i) The extent of such exemption shall be decreased by twenty-five per
centum of the "exemption base" for each of the first three years during
such additional period and shall be decreased by a further ten per
centum of the "exemption base" during each of the final two years of
such additional period. The exemption shall expire at the end of the
extended period. The "exemption base" shall be the increase in assessed
value as determined in the initial year of the term of the exemption,
except as provided in subparagraph (ii) of this paragraph.

(ii) In any year in which a change in level of assessment of fifteen
percent or more is certified for a final assessment roll pursuant to the
rules of the commissioner, the exemption base shall be multiplied by a
fraction, the numerator of which shall be the total assessed value of
the parcel on such final assessment roll (after accounting for any
physical or quantity changes to the parcel since the immediately
preceding assessment roll), and the denominator of which shall be the
total assessed value of the parcel on the immediately preceding final
assessment roll. The result shall be the new exemption base. The
exemption shall thereupon be recomputed to take into account the new
exemption base, notwithstanding the fact that the assessor receives
certification of the change in level of assessment after the completion,
verification and filing of the final assessment roll. In the event the
assessor does not have custody of the roll when such certification is
received, the assessor shall certify the recomputed exemption to the
local officers having custody and control of the roll, and such local
officers are hereby directed and authorized to enter the recomputed
exemption certified by the assessor on the roll. The assessor shall give
written notice of such recomputed exemption to the property owner, who
may, if such property owner believes that the exemption was recomputed
incorrectly, apply for a correction in the manner provided by title
three of article five of this chapter for the correction of clerical
errors.

(iii) Such exemption shall be limited to two hundred thousand dollars
in increased market value of the property attributable to such
reconstruction, alteration, improvement, or new construction 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,
improvement, or new construction as authorized by subdivision one of
this section shall be equal to the increased assessed value attributable
to such reconstruction, alteration, improvement, or new construction
divided by the class one 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, improvement, or new construction shall be
deemed to equal the market value of such reconstruction, alteration,
improvement, or new construction.

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

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

(ii) the value of such reconstruction, alteration, improvement, or new
construction exceeds three thousand dollars; and

(iii) such reconstruction, alteration, improvement, or new
construction created one or more additional residential dwelling units
on the same parcel as the pre-existing residential building to provide
independent living facilities for one or more persons.

(c) For purposes of this section the terms reconstruction, alteration,
improvement, and new construction 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, town, village
or county having the power to assess property for taxation on or before
the appropriate taxable status date of such city, town, village or
county.

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.

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 two families.

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

7. (a) A county, city, town or village may, by its local law, or
school district, by its resolution:

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

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

(b) No such local law or resolution shall repeal an exemption granted
pursuant to this section until the expiration of the period for which
such exemption was granted.

* NB There are two § 421-p's