Indicates Matter Stricken

Indicates New Matter

 

Committee Report

April 28, 2026

 

S. 853

 

Introduced by Senators Davis, Hutto, Sutton, Graham, Turner, Stubbs, Matthews, Zell, Campsen, Kimbrell and Walker

 

S. Printed 4/28/26--H.

Read the first time February 26, 2026

 

________

 

The committee on House Ways and Means

To whom was referred a Bill (S. 853) to amend the South Carolina Code of Laws by amending Section 12-67-120, relating to the Abandoned Buildings Revitalization Act definitions, so as to clarify that, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass:

 

B.W. BANNISTER for Committee.

 

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This bill amends the Abandoned Buildings Revitalization Act by clarifying that the income-producing use of the building prior to abandonment is not a requirement for the tax credit eligibility and eliminating the current state-owned abandoned building specifications. The bill requires that taxpayers file a Notice of Intent to Rehabilitate with DOR before obtaining a building permit and excludes rehabilitation expenses incurred before the approval of the notice from qualifying for the tax credit. DOR indicates that the bill will have no expenditure impact on the agency, as the requirements of the bill can be implemented with existing staff and resources.

 

State Revenue

This bill amends the Abandoned Buildings Revitalization Act by clarifying that the income-producing use of the building prior to abandonment is not a requirement for the tax credit eligibility and eliminating the current state-owned abandoned building specifications. The bill requires that taxpayers file a Notice of Intent to Rehabilitate with DOR before obtaining a building permit and excludes rehabilitation expenses incurred before the approval of the notice from qualifying for the tax credit. Also, the bill stipulates that abandoned buildings tax credits  may not be used as security for debt. 

The act currently allows a taxpayer to claim a non-refundable state tax credit equal to 25 percent of actual rehabilitation expenses of an abandoned building that is to be put into operation for income producing purposes. In Revenue Ruling #26-1, DOR provided an updated advisory opinion on the Abandoned Buildings Act and answered additional questions related to the abandoned building tax credits. The ruling notes that the credit requires that the building to be rehabilitated must be income producing. Further, the Act currently provides separate qualifications for state-owned buildings.

This bill removes the requirement that the building must have been income-producing and eliminates the current state-owned buildings definition. Therefore, all buildings or other similar facilities that were not income producing previously but that otherwise meet the qualifications in the Act will now qualify for the credit. This bill clarifies the statutory language to conform to previous interpretations of the Act and, therefore, is not expected to impact revenues.

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

_______

 

 

 

 

 

 

 

 

A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 12-67-120, RELATING TO THE ABANDONED BUILDINGS REVITALIZATION ACT DEFINITIONS, SO AS TO CLARIFY THAT THE EXISTENCE OF AN INCOME-PRODUCING USE PRIOR TO THE PERIOD OF ABANDONMENT IS NOT A REQUIREMENT FOR ELIGIBILITY; BY AMENDING SECTION 12-67-130, RELATING TO APPLICABILITY, SO AS TO MAKE A CONFORMING CHANGE; BY AMENDING SECTION 12-67-140, RELATING TO ELIGIBILITY FOR THE CREDIT, SO AS TO CLARIFY CERTAIN TIMING CONSIDERATIONS RELATED TO THE FILING OF A NOTICE OF INTENT TO REHABILITATE AN ABANDONED BUILDING AND TO CLARIFY THAT ABANDONED BUILDING TAX CREDITS MAY NOT SERVE AS COLLATERAL FOR ANY DEBT; AND BY AMENDING SECTION 12-67-160, RELATING TO THE CERTIFICATION OF ABANDONED BUILDING SITES, SO AS TO REMOVE A REQUIREMENT FOR CERTAIN CERTIFICATIONS OF STATE-OWNED ABANDONED BUILDING SITES.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Section 12-67-120 (1), (2), (6), and (8) of the S.C. Code is amended to read:

 

    (1) "Abandoned building" means a building or structure, which clearly may be delineated from other buildings or structures, at least sixty-six percent of the space in which has been closed unoccupied continuously to business or otherwise nonoperational for income producing purposes for a period of at least five years immediately preceding the date on which the taxpayer files a "Notice of Intent to Rehabilitate". For purposes of this item, a building or structure that otherwise qualifies as an "abandoned building" may be subdivided into separate units or parcels, which units or parcels may be owned by the same taxpayer or different taxpayers, and each unit or parcel is deemed to be an abandoned building site for purposes of determining whether each subdivided parcel is considered to be abandoned. For purposes of this item, an abandoned building is not a building or structure with an immediate preceding use as a single-family residence. For purposes of this item, use of any portion of a building or structure listed on the National Register for Historic Places when used solely for storage or warehouse purposes is considered nonoperational for income producing purposes; provided, however, that the credit provided under Section 12-67-140(B) is further limited by disqualifying for credit purposes the portion of the building or structure that was operational and used as a for storage or warehouse for income producing purposes. This limitation is calculated based on the actual percentage of the space which has been closed unoccupied continuously to business or otherwise nonoperational for income producing purposes for a period of at least five years immediately preceding the date on which the taxpayer files a "Notice of Intent to Rehabilitate" divided by one hundred percent.

    (2) "Building site" means the abandoned building together with the parcel of land upon which it is located and other improvements located on the parcel. However, the area of the building site is limited to the land upon which the abandoned building is located and the land immediately surrounding such building used for parking and other similar purposes directly related to the building's income producing use.

 

    (6) "Rehabilitation expenses" means the expenses or capital expenditures incurred in the rehabilitation, demolition, renovation, or redevelopment of the building site, including without limitations, the renovation or redevelopment of existing buildings, environmental remediation, site improvements, and the construction of new buildings and other improvements on the building site, but excluding the cost of acquiring the building site or the cost of personal property located at the building site. For expenses associated with a building site to qualify for the tax credit, the abandoned buildings on the building site must be either renovated or redeveloped. Rehabilitation expenses associated with a building site that increases the amount of square footage on the building site in excess of two hundred percent of the amount of square footage of the buildings that existed on the building site as of the filing of the Notice of Intent to Rehabilitate shall not be considered a rehabilitation expense for purposes of calculating the amount of the credit. Notwithstanding any other provision of this section, demolition expenses shall not be considered a rehabilitation expense for purposes of calculating the amount of the credit if the abandoned building is demolished and the building being demolished is on the National Register for Historic Places.

 

    (8) "State-owned abandoned building" means an abandoned building and its ancillary service buildings or a project consisting of one or more abandoned buildings, the aggregate size of which is greater than fifty thousand square feet, that has been abandoned for more than five years, and, prior to the taxpayer's acquisition of such building, was most recently owned by the State, or an agency, instrumentality, or political subdivision of the State. For purposes of this definition, the taxpayer shall include any entity under common control or common ownership with the taxpayer. Reserved.

 

SECTION 2.  Section 12-67-130(B) of the S.C. Code is amended to read:

 

    (B) This chapter only applies to abandoned building sites or phases or portions thereof put into operation for income producing purposes and that meet the purpose of this chapter set forth in Section 12-67-110 otherwise meet the requirements of this chapter. The construction or operation of a charter school, private or parochial school, or other similar educational institution does meet the purpose of this chapter. The construction of a single-family residence is not an income producing purpose and does not meet the purpose of this chapter.

 

SECTION 3.  Section 12-67-140(B)(1) and (5) of the S.C. Code is amended to read:

 

    (1) The taxpayer shall file with the department a Notice of Intent to Rehabilitate before incurring its first rehabilitation expenses obtaining a building permit at the building site. Failure to provide the Notice of Intent to Rehabilitate prior to obtaining a building permit results in qualification of only those rehabilitation expenses incurred after the notice is provided.

 

       (5)(a) If the taxpayer leases the building site, or part of the building site, the taxpayer may transfer any applicable remaining credit associated with the rehabilitation expenses incurred with respect to that part of the site to the lessee of the site. If a taxpayer sells or otherwise transfers the building site, or any phase or portion of the building site, the taxpayer may transfer all or part of the remaining credit, associated with the rehabilitation expenses incurred with respect to that phase or portion of the site, to the purchaser or transferee of the applicable portion of the building site.

           (b) To the extent that the taxpayer transfers the credit, the taxpayer shall notify the department of the transfer in the manner the department prescribes.

           (c) The taxpayer may not pledge, assign, hypothecate, or otherwise collateralize any portion of the credit earned pursuant to this chapter as security for debt in any way.

 

SECTION 4.  Section 12-67-160 of the S.C. Code is amended to read:

 

    Section 12-67-160. (A) Notwithstanding any other provision of law, the taxpayer may apply to the municipality or county in which the abandoned building is located for a certification of the abandoned building site made by ordinance or binding resolution of the governing body of the municipality or county. The certification must include findings that the:

       (1) building or buildings situated on the abandoned building site or sites was is an abandoned building as defined in Section 12-67-120(1); and

       (2) geographic area of the abandoned building site or sites is consistent with Section 12-67-120(2).

    (B) The taxpayer may apply to the municipality or county in which the state-owned abandoned building is located for a certification of the state-owned abandoned building site made by ordinance or binding resolution of the governing body of the municipality or county. The certification must include findings that the:

       (1) state-owned abandoned building site was a state-owned abandoned building as defined in Section 12-67-120(8);  and

       (2) geographic area of the state-owned abandoned building site is consistent with Section 12-67-120(8).

    (C)(B) The taxpayer conclusively may rely upon the certification in determining the credit allowed; provided, however, that if the taxpayer is relying upon the certification, the taxpayer shall include a copy of the certification on the first return for which the credit is claimed.

 

SECTION 5.  This act takes effect upon approval by the Governor.

----XX----