WASHINGTON -- The final version of the Internal Revenue Service's sewage facility regulations includes some, but not all, of the liberalizations to the proposed rules that had been sought by the tax-exempt bond industry, lawyers said last week.

The sources said the most important change in the rules was the IRS' decision to expand the types of treatment that qualify a plant for tax-exempt financing to include tertiary and advanced treatment of wastewater. But despite the industry's urging, the service declined to also include pretreatment as an eligible function.

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