HB4513 H GO AM 2-12

Hubbard 3192

The Committee on Government Organization moves to amend the bill on page one, after the enacting clause, by striking out the enacting section in its entirety and inserting in lieu thereof the following:

“That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new

section, designated 5A-10-12 , to read as follows:

§5A-10-12. Application to purchase or renovate real property; and requiring a cost-benefit analysis report.

(a) Prior to the purchase or renovation of real property by a state department, agency, board, or commission, where the estimated cost is equal to or exceeds $500,000, the interested party shall apply and provide to the Real Estate Division a detailed proposal of the purchase or renovation plan.

(b) The applicant shall provide written justification to the Division detailing the circumstances for such purchase or renovation, the estimated cost of such purchase or renovation, the rationale for purchasing such property compared to leasing similar existing space, or the rationale for renovating an existing space compared to leasing or building such suitable space, and a description of any additional reasoning for such purchase or renovation. The applicant shall provide to the Division:

(1) A structural engineering inspection and report of the real property. The structural engineering report shall evaluate the building foundation, basement, roof, the heating, ventilation and air conditioning systems, the plumbing, electrical, and fire suppression systems. The report shall describe the structural integrity of the building and a written assessment of the building for compliance with the Americans with Disabilities Act; and

(2) No fewer than three certified real estate appraisals.

(b) Upon the receipt of an application for the purchase or renovation of real property, the Director of the Real Estate Division shall conduct a cost-benefit analysis prior to authorizing the purchase of real property where the cost of such purchase is equal to or greater than $500,000. The Director shall prepare a report describing the cost-benefit analysis, which shall be provided to the applicant. A copy of each report shall be sent to the Secretary of the Department of Administration and to the Joint Committee on Government and Finance, created pursuant chapter four of this code. A cost-benefit report required pursuant to this section shall include, at a minimum, the following:

(1) A comparison of the lot price compared to the regional market price of similar lots;

(2) A description of the value of such property, to be determined at a minimum, by averaging at least three different appraisals of such property: Provided, That where there is a difference of more than fifteen percent between the high and low appraisals the report shall describe the differences between the appraisals;

(3) A comparison of the cost of building a similar new structure to the cost of the proposed purchase with all renovations factored into the cost-benefit analysis: Provided, That the Division shall include the value of renovating a historic structure and calculate the historic value of maintaining an existing historic building after such renovations;

(4) A comparison of available state or publicly owned property with estimates for leasing similar adequate space compared to the cost of purchase and any renovations necessary to occupy such purchased property; and

(5) An evaluation of the cost or benefits of the proposed purchase or renovation that shall take into account the structural engineering inspection and report when making such determinations.

(c) The Director shall recommend the rejection of an application where the value of the purchase or renovation of a property exceeds by one hundred twenty-five percent the cost of a property of comparable new construction with similar specifications, or where the property will exceed more than one hundred and twenty percent of the fair market value of such property as renovated.”