IRS Proposes New Regulations on Solid Waste Disposal Facilities

Originally published June 8, 2004

Tax-exempt financing is permitted under Sections 103 and 142(a) of the Internal Revenue Code of 1986 for "solid waste disposal facilities," including facilities that dispose of solid waste by recycling it into material that is not waste. On May 5, 2004, the IRS issued proposed regulations to guide state and local governments in issuing tax-exempt bonds to finance such facilities (the "Proposed Solid Waste Regulations"). Placed on the Treasury priority guidance plan two years ago, the Proposed Solid Waste Regulations are intended to replace the existing solid waste regulations, which have been the subject of controversy due to the difficulties of applying these rules in light of the reality of modern recycling industry operations.