graph (14), by striking the period at the end of paragraph 
(15) and inserting ‘‘, or’’, and by adding at the end the 
following new paragraph: 
‘‘(16) air or water pollution control facilities.’’. 
(b) AIR OR WATER POLLUTION CONTROL FACILI-
TIES.—Section 142 of such Code is amended by adding 
at the end the following new subsection: 
‘‘(n) AIR OR WATER POLLUTION CONTROL FACILI-
TIES.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(16), the term ‘air or water pollution control fa-
cilities’ means any property— 
‘‘(A) to be used, in whole or in part, to 
abate or control water or atmospheric pollution 
or contamination by removing, altering, dis-
posing, or storing pollutants, contaminants, 
wastes, or heat, 
‘‘(B) which is either— 
‘‘(i) of a character subject to the al-
lowance for depreciation under section 167, 
or 
‘‘(ii) land, and 
‘‘(C) with respect to which either— 
‘‘(i) a Federal, State, or local agency 
exercising jurisdiction has certified that 
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the property, as designed, is in furtherance 
of the purpose of abating or controlling at-
mospheric pollutants or contaminants, or 
water pollution, as the case may be, or 
‘‘(ii) the property is designed to meet 
or exceed applicable Federal, State, and 
local requirements for the control of at-
mospheric pollutants or contaminants, or 
water pollution, as the case may be, in ef-
fect at the time the obligations, the pro-
ceeds of which are to be used to provide 
such facilities, are issued. 
‘‘(2) CERTAIN OTHER PROPERTY.—In the case 
of property to be used to control water pollution, a 
water pollution control facility includes the necessary 
intercepting sewers, pumping, power, and other 
equipment, and their appurtenances. 
‘‘(3) COSTS TAKEN INTO ACCOUNT.— 
‘‘(A) PROPERTY
WITH
NO
SIGNIFICANT 
PURPOSE OTHER THAN POLLUTION CONTROL.— 
In the case of property which is designed for no 
significant purpose other than the control of 
pollution, the total expenditure for such prop-
erty shall be taken into account for purposes of 
this subsection. 
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‘‘(B) INCREMENTAL COST WHERE SIGNIFI-
CANT PURPOSE OTHER THAN POLLUTION CON-
TROL.—In the case of property to be placed in 
service for the purpose of controlling pollution 
and for a significant purpose other than con-
trolling pollution, only the incremental cost of 
such property shall be taken into account for 
purposes of this subsection. For purposes of the 
preceding sentence, the term ‘incremental cost’ 
means the excess of the total cost of such prop-
erty over the portion of such cost expended for 
a purpose other than the control of pollution. 
‘‘(C) SIGNIFICANT
PURPOSE.—For pur-
poses of this paragraph, an expenditure has a 
significant purpose other than the control of 
pollution if such expenditure results in an in-
crease in production or capacity, or in a mate-
rial extension of the useful life, of a manufac-
turing or production facility or a part thereof.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after December 
31, 2008. 
Æ 
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