H.R. 4466: Cultivating Investment in Recycling and Circular Local Economies Act of 2025

This bill, known as the Cultivating Investment in Recycling and Circular Local Economies Act of 2025 (CIRCLE Act), aims to introduce a new tax incentive focused on enhancing recycling efforts and infrastructure in the United States. Here are the main components of the bill summarized in reader-friendly terms:

Purpose and Goals

The main goals of the CIRCLE Act are:

• To improve the U.S. recycling rate, which is currently around 30%, aiming to meet a national goal of 50% set by the Environmental Protection Agency by 2030.
• To stimulate investment in both existing and new recycling facilities, thereby upgrading operations and increasing the supply of domestically recycled materials.
• To create domestic markets for recycled materials that are competitive against international sources, which may offer less reliable recycling standards.

Recycling Property Investment Credit

The key feature of this bill is the introduction of a new tax credit, specifically the Recycling Property Investment Credit. Here’s how it works:

• The tax credit would allow qualifying entities to claim a credit equal to 30% of their investment in eligible recycling property during a taxable year.
• Qualified investments must include new or upgraded recycling equipment that meets specific criteria and is placed in service during the taxable year.

Eligibility Criteria

To qualify for the tax credit, the property must meet several conditions:

• The property must be qualified recycling property, which refers to facilities and systems specifically used for recycling tasks.
• Depreciation or amortization must be allowed on the property for tax purposes.
• Construction or acquisition of the property must be completed by the taxpayer or the original use of the property must begin with the taxpayer.

Special Provisions for Credits

There are certain conditions outlined in the bill that apply to the tax credit:

• There is a provision for a "Domestic Content Bonus," which means the tax credit could increase by 10 percentage points for investments that fulfill specific domestic sourcing requirements.
• No double benefit is allowed; if a credit is taken, the property's tax basis must be reduced accordingly.
• The bill establishes a credit phase-out schedule, where the percentage of the credit would decrease depending on when eligible property is put into service, gradually reducing from 100% in 2026 to 0% by 2037.

Implementation and Guidance

The Secretary of the Treasury is tasked with issuing regulations necessary for the implementation of this new tax credit. This includes guidance on recordkeeping and information reporting requirements to ensure compliance with the provisions of the bill.

Definitions

Several terms are defined within the bill to clarify eligibility and operations:

• "Qualified recycling property" refers to specific facilities or equipment associated with the recycling processes outlined in the tax code.
• Terms related to "qualified reuse and recyclable materials" are expanded to include various electronics and their components.
• The terms for recycling processes and materials are also defined to ensure clarity in what constitutes an eligible activity under the credit.

Effective Date

The provisions of this bill would become effective for recycling property that is either completed or placed in service after December 31, 2025.

Relevant Companies

• WM (Waste Management, Inc.): As a leading provider of comprehensive waste management services, this company could benefit from increased potential for business in recycling if investment credits encourage facility upgrades.
• RSG (Republic Services, Inc.): This firm is involved in waste management and recycling services and may benefit from enhanced recycling infrastructure supported by this tax credit.
• SYY (Sysco Corporation): While primarily a food service distributor, Sysco has initiatives around sustainability and waste reduction that might align with enhanced recycling activities promoted by the bill.