Section 734.870  Increase in Maximum Payment Amounts

The maximum payment amounts set forth in this Subpart H must be adjusted annually by an inflation factor determined by the annual Implicit Price Deflator for Gross National Product as published by the U.S. Department of Commerce in its Survey of Current Business.

a)         The inflation factor must be calculated each year by dividing the latest published annual Implicit Price Deflator for Gross National Product by the annual Implicit Price Deflator for Gross National Product for the previous year.  The inflation factor must be rounded to the nearest 1/100^th.  In no case must the inflation factor be more than five percent in a single year.

b)         Adjusted maximum payment amounts must become effective on July 1 of each year and must remain in effect through June 30 of the following year.  The first adjustment must be made on July 1, 2006, by multiplying the maximum payment amounts set forth in this Subpart H by the applicable inflation factor.  Subsequent adjustments must be made by multiplying the latest adjusted maximum payment amounts by the latest inflation factor.

c)         The Agency must post the inflation factors on its website no later than the date they become effective.  The inflation factors must remain posted on the website in subsequent years to aid in the calculation of adjusted maximum payment amounts.

d)         Adjusted maximum payment amounts must be applied as follows:

1)         For costs approved by the Agency in writing prior to the date the costs are incurred, the applicable maximum payment amounts must be the amounts in effect on the date the Agency received the budget in which the costs were proposed.  Once the Agency approves a cost, the applicable maximum payment amount for the cost must not be increased (e.g. by proposing the cost in a subsequent budget).

2)         For costs not approved by the Agency in writing prior to the date the costs are incurred, including, but not limited to, early action costs, the applicable maximum payment amounts must be the amounts in effect on the date the costs were incurred.

3)         Owners and operators must have the burden of requesting the appropriate adjusted maximum payment amounts in budgets and applications for payment.