I am finishing several chip carved plaques with stain and am aware of the spontaneous combustion danger with stain soaked rags. What is the proper way to safely dispose of them?

Temporary storage can be done in metal air tight containers.
For disposal, air them out in a well ventilated place (hang on wire cords??) till dry and then dispose of them in the regular garbage. The stains are not as likely to spontaneously combust as the drying oils (linseed, walnut, etc.) but still pose a hazard. Make SURE the oily rags are disposed of properly as they are highly suseptible to spontaneous combustion, in very short times.

I tend to burn mine in our burn barrel if I can't get them dried. I know, I'll hear from the environmentalists on this, but letting them air dry or burning still releases the hydrocarbons, and a house burning down due to a spontaneous fire makes a heck of a lot more polution. A lot of areas prohibit burn barrels so that will not apply in those areas.

Al

Use water based stain

[Randy48]

I hang the rags on the side of my trash can for a few days to let them dry and then throw them into the can.

Steve,
I think AL offered the best advice. I have a steel pail with air tite lid and over center band that I put all oily rags into until I can burn them. I will also place stirring sticks and newspapers used as drop cloth in the pail. Its a good habit. I will admit that I most often used Randy's hang to dry method until I stumbled onto the perfect pail for the task. I am very fortunate to have the house paid for so I wanna keep it and that does not even consider the set back a fire would cause in the 'Ye who dies with the most tools..' contest.
Ah Chip