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Argued: December 4, 2000

The Commonwealth of Pennsylvania, Department of Environmental Protection (DEP) appeals an order of the Environmental Hearing Board (Board) allowing additional interest expenses of Peters Township Sanitary Authority (PTSA) for 1994 to be claimed in 1997, as a cost to be subsidized under the “Contribution by Commonwealth to Costs of Abating Pollution Act” (Act 339).*fn1

Act 339 provides an annual subsidy equal to two percent of the cost incurred in the acquisition and construction of publicly owned sewage treatment facilities. 35 P.S. �701. An application for the subsidy is filed with DEP following completion of the construction setting forth the costs of construction, 25 Pa. Code �103.22, including the interest that was incurred during construction. 25 Pa. Code ��103.32 and 103.36. Based upon the application, DEP determines the costs that are allowed, 25 Pa. Code �103.24a, and pays 2% of those allowed costs annually, 25 Pa. Code �103.22, over the life of the facility. Costs that were previously undeclared in the initial application may be added in a subsequent year, 25 Pa. Code �103.28, but the recalculated subsidy payment is not retroactive, and the new amount is effective only toward future subsidy payments.

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