The solid waste association of North America (SWANA) recently announced that it would support legislation providing tax incentives for buying recycling equipment if those financial benefits are extended to the public sector.
Specifically, SWANA proposed amendments to the Recycling Investment Saves Energy (RISE) Act of 2007. Among the suggested inclusions are a definition of recycling that includes composting, a tax credit option as an alternative to accelerated depreciation and a mechanism for the public sector to directly benefit from the financial incentives.
“We believe that local and state governments are responsible for the management of municipal solid waste, and they must therefore have the tools and financial resources to manage waste responsibly,” said John Skinner, executive director and CEO of SWANA, in a press release.
Chaz Miller, state programs director for the National Solid Wastes Management Association (NSWMA), says the organization is not actively endorsing the RISE Act because many companies think the accelerated depreciation wouldn't impact their decisions to buy more equipment. “It's just not a big incentive,” Miller says.
U.S. Sens. Olympia Snowe, R-Maine, and Tom Carper, D-Del., introduced the RISE Act in June to promote recycling and thereby reduce the energy demand of manufacturing new materials. “As high energy costs persist, it is essential that we foster recycling policies that improve both the quality and quantity of recycled products,” said Snowe, in a press release.
Currently, the bill has not been put to a vote and is awaiting insertion in the next round of energy tax legislation, says Patrick Woodcock, a legislative correspondent for Snowe's office.
As it stands, the RISE Act is an amendment to the Internal Revenue Code that would allow companies to invest in new recycling equipment and update facilities by taking advantage of a 50 percent accelerated depreciation allowance. It also would provide tax-exempt financing for recycling equipment.
The list of eligible equipment would include equipment that handles plastic, glass, textiles, rubber, packaging, recovered fiber, metals and electronic scrap. According to SWANA, the list should also include equipment that handles compostable materials such as food waste, yard and garden waste, and mixed, soiled packaging paper that make up one-third of the waste stream. Compostable materials have a 10 percent recycling rate while the rate for metals is more than 70 percent. Composting converts waste into a soil amendment that could be used in agriculture, forestry and landscaping.
SWANA also has pushed for an optional tax credit as an alternative to the accelerated depreciation because it would give its members more flexibility in terms of the types of equipment they can buy. A credit was included in the RISE Act of 2005 and was incorporated into the Energy Policy Act of 2005, but was left out of the 2007 proposal.
According to SWANA, the exclusion of the public sector from the current bill not only means the sector misses out on the proposed financial incentives, but also is less competitive in the industry. The association proposes a mechanism that would allow the public sector to directly benefit from the tax savings.
SWANA suggests this could be done by making the tax savings assignable through a contract, applying the incentives to suppliers instead of the purchaser to ensure lower prices for both sectors. Alternatively, instituting a government bonds program modeled after the Clean Renewable Energy Bonds Program would serve as a companion to the accelerated depreciation and would provide interest-free loans to governmental bodies for buying equipment.
Skinner says adoption of these amendments would win SWANA's full endorsement of the RISE Act.