ARSD 67:16:04:52. Maximum capital cost for leased facility

The maximum capital cost for leased facilities is limited to the lower of actual costs or the total capital costs per resident day established in § 67:16:04:51. The capital cost items for computing the above limit consist of rent, building insurance, building depreciation, furniture and equipment depreciation, amortization of organization and preoperating costs, capital related interest, and return on net equity. The capital cost items are allowable only if incurred and paid by the lessee. Capital costs incurred by the lessor and passed on to the lessee are not allowed in any other manner than as outlined in this section. No reimbursement is allowed for additional costs related to subleases. The maximum allowed for the rental component of the capital cost items for facilities negotiating new leases and facilities renewing, assigning, selling, transferring, or otherwise changing existing leases, is limited to the lower of actual lease costs or seventy percent of the average per diem cost of the capital cost for owner-managed facilities, excluding hospital-affiliated facilities.