(a) Except as otherwise provided in this Part pursuant to determination by the commissioner, allowable depreciation shall be determined by the application of the principles of reimbursement developed for determining rates of payment under title XVIII of the Social Security Act.

(b) Reported depreciation based on historical cost is recognized as a proper element of cost. Useful lives shall be the higher of the reported useful life or those useful lives consistent with provisions of title XVIII of the Social Security Act.

(c) Depreciation shall be calculated on a straight-line basis for all depreciable assets.

(d) Effective July 1, 1992, capital construction projects for newly certified beds in operation after October 1, 1989, shall be reimbursed interest and principal in accordance with the debt repayment amortization schedule up to the amount of the financing approved under Part 551 of this Title. That part of the total project cost approved under Part 551 of this Title, but not approved for financing, shall be reimbursed allowable depreciation expense.

(e) Effective July 1, 1989, residential treatment facilities with existing funded depreciation accounts shall have their capital reimbursement rate reduced to offset the amount of the funded depreciation which should have been funded as of July 1, 1992. Withdrawals from existing funded depreciation accounts no longer require prior approval from the commissioner, and may be utilized to offset the above capital rate reduction. The amount of the capital rate reduction shall be equal to the amount of funded depreciation which should be in the provider's funded depreciation account. Upon depletion of the funded depreciation account, the capital rate shall be adjusted in accordance with subdivision (d) of this section.