
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC169]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
      PART VI--ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
 
Sec. 169. Amortization of pollution control facilities


(a) Allowance of deduction

    Every person, at his election, shall be entitled to a deduction with 
respect to the amortization of the amortizable basis of any certified 
pollution control facility (as defined in subsection (d)), based on a 
period of 60 months. Such amortization deduction shall be an amount, 
with respect to each month of such period within the taxable year, equal 
to the amortizable basis of the pollution control facility at the end of 
such month divided by the number of months (including the month for 
which the deduction is computed) remaining in the period. Such 
amortizable basis at the end of the month shall be computed without 
regard to the amortization deduction for such month. The amortization 
deduction provided by this section with respect to any month shall be in 
lieu of the depreciation deduction with respect to such pollution 
control facility for such month provided by section 167. The 60-month 
period shall begin, as to any pollution control facility, at the 
election of the taxpayer, with the month following the month in which 
such facility was completed or acquired, or with the succeeding taxable 
year.

(b) Election of amortization

    The election of the taxpayer to take the amortization deduction and 
to begin the 60-month period with the month following the month in which 
the facility is completed or acquired, or with the taxable year 
succeeding the taxable year in which such facility is completed or 
acquired, shall be made by filing with the Secretary, in such manner, in 
such form, and within such time, as the Secretary may by regulations 
prescribe, a statement of such election.

(c) Termination of amortization deduction

    A taxpayer which has elected under subsection (b) to take the 
amortization deduction provided in subsection (a) may, at any time after 
making such election, discontinue the amortization deduction with 
respect to the remainder of the amortization period, such discontinuance 
to begin as of the beginning of any month specified by the taxpayer in a 
notice in writing filed with the Secretary before the beginning of such 
month. The depreciation deduction provided under section 167 shall be 
allowed, beginning with the first month as to which the amortization 
deduction does not apply, and the taxpayer shall not be entitled to any 
further amortization deduction under this section with respect to such 
pollution control facility.

(d) Definitions

    For purposes of this section--

              (1) Certified pollution control facility

        The term ``certified pollution control facility'' means a new 
    identifiable treatment facility which is used, in connection with a 
    plant or other property in operation before January 1, 1976, to 
    abate or control water or atmospheric pollution or contamination by 
    removing, altering, disposing, storing, or preventing the creation 
    or omission of pollutants, contaminants, wastes, or heat and which--
            (A) the State certifying authority having jurisdiction with 
        respect to such facility has certified to the Federal certifying 
        authority as having been constructed, reconstructed, erected, or 
        acquired in conformity with the State program or requirements 
        for abatement or control of water or atmospheric pollution or 
        contamination;
            (B) the Federal certifying authority has certified to the 
        Secretary (i) as being in compliance with the applicable 
        regulations of Federal agencies and (ii) as being in furtherance 
        of the general policy of the United States for cooperation with 
        the States in the prevention and abatement of water pollution 
        under the Federal Water Pollution Control Act, as amended (33 
        U.S.C. 466 et seq.), or in the prevention and abatement of 
        atmospheric pollution and contamination under the Clean Air Act, 
        as amended (42 U.S.C. 1857 et seq.); and
            (C) does not significantly--
                (i) increase the output or capacity, extend the useful 
            life, or reduce the total operating costs of such plant or 
            other property (or any unit thereof), or
                (ii) alter the nature of the manufacturing or production 
            process or facility.

                   (2) State certifying authority

        The term ``State certifying authority'' means, in the case of 
    water pollution, the State water pollution control agency as defined 
    in section 13(a) of the Federal Water Pollution Control Act and, in 
    the case of air pollution, the air pollution control agency as 
    defined in section 302(b) of the Clean Air Act. The term ``State 
    certifying authority'' includes any interstate agency authorized to 
    act in place of a certifying authority of the State.

                  (3) Federal certifying authority

        The term ``Federal certifying authority'' means, in the case of 
    water pollution, the Secretary of the Interior and, in the case of 
    air pollution, the Secretary of Health, Education, and Welfare.

               (4) New identifiable treatment facility

        (A) In general

            For purposes of paragraph (1), the term ``new identifiable 
        treatment facility'' includes only tangible property (not 
        including a building and its structural components, other than a 
        building which is exclusively a treatment facility) which is of 
        a character subject to the allowance for depreciation provided 
        in section 167, which is identifiable as a treatment facility, 
        and which is property--
                (i) the construction, reconstruction, or erection of 
            which is completed by the taxpayer after December 31, 1968, 
            or
                (ii) acquired after December 31, 1968, if the original 
            use of the property commences with the taxpayer and 
            commences after such date.

        In applying this section in the case of property described in 
        clause (i) there shall be taken into account only that portion 
        of the basis which is properly attributable to construction, 
        reconstruction, or erection after December 31, 1968.

        (B) Certain plants, etc., placed in operation after 1968

            In the case of any treatment facility used in connection 
        with any plant or other property not in operation before January 
        1, 1969, the preceding sentence shall be applied by substituting 
        December 31, 1975, for December 31, 1968.

(e) Profitmaking abatement works, etc.

    The Federal certifying authority shall not certify any property 
under subsection (d)(1)(B) to the extent it appears that by reason of 
profits derived through the recovery of wastes or otherwise in the 
operation of such property, its costs will be recovered over its actual 
useful life.

(f) Amortizable basis

                             (1) Defined

        For purposes of this section, the term ``amortizable basis'' 
    means that portion of the adjusted basis (for determining gain) of a 
    certified pollution control facility which may be amortized under 
    this section.

                          (2) Special rules

            (A) If a certified pollution control facility has a useful 
        life (determined as of the first day of the first month for 
        which a deduction is allowable under this section) in excess of 
        15 years, the amortizable basis of such facility shall be equal 
        to an amount which bears the same ratio to the portion of the 
        adjusted basis of such facility, which would be eligible for 
        amortization but for the application of this subparagraph, as 15 
        bears to the number of years of useful life of such facility.
            (B) The amortizable basis of a certified pollution control 
        facility with respect to which an election under this section is 
        in effect shall not be increased, for purposes of this section, 
        for additions or improvements after the amortization period has 
        begun.

(g) Depreciation deduction

    The depreciation deduction provided by section 167 shall, despite 
the provisions of subsection (a), be allowed with respect to the portion 
of the adjusted basis which is not the amortizable basis.

[(h) Repealed. Pub. L. 92-178, title I, Sec. 104(f)(2), Dec. 10, 1971, 
        85 Stat. 502]

(i) Life tenant and remainderman

    In the case of property held by one person for life with remainder 
to another person, the deduction under this section shall be computed as 
if the life tenant were the absolute owner of the property and shall be 
allowable to the life tenant.

(j) Cross reference

            For special rule with respect to certain gain derived from 
        the disposition of property the adjusted basis of which is 
        determined with regard to this section, see section 1245.

(Added Pub. L. 91-172, title VII, Sec. 704(a), Dec. 30, 1969, 83 Stat. 
667; amended Pub. L. 92-178, title I, Sec. 104(f)(2), Dec. 10, 1971, 85 
Stat. 502; Pub. L. 93-625, Sec. 3(a), Jan. 3, 1975, 88 Stat. 2109; Pub. 
L. 94-455, title XIX, Sec. 1906(b)(13)(A), title XXI, Sec. 2112(b), (c), 
Oct. 4, 1976, 90 Stat. 1834, 1906.)

                       References in Text

    The Federal Water Pollution Control Act, as amended (33 U.S.C. 466 
et seq.), referred to in subsec. (d)(1)(B), is act June 30, 1948, ch. 
758, as amended generally by Pub. L. 92-500, Sec. 2, Oct. 18, 1972, 86 
Stat. 816, which is classified generally to chapter 26 (Sec. 1251 et 
seq.) of Title 33, Navigation and Navigable Waters. The subject matter 
of section 13(a) of the act, referred to in subsec. (d)(2), is covered 
by section 1362(1) of Title 33. For complete classification of this Act 
to the Code, see Short Title note set out under section 1251 of Title 33 
and Tables.
    The Clean Air Act, referred to in subsec. (d)(1)(B), is act July 14, 
1955, ch. 360, 69 Stat. 322, as amended, which is classified generally 
to chapter 85 (Sec. 7401 et seq.) of Title 42, The Public Health and 
Welfare. For complete classification of this Act to the Code, see Short 
Title note set out under section 7401 of Title 42 and Tables.
    Section 302(b) of the Clean Air Act, referred to in subsec. (d)(2), 
formerly classified to section 1857h(b) of Title 42, was reclassified to 
section 7602(b) of Title 42 on enactment of Pub. L. 95-95.


                            Prior Provisions

    A prior section 169, act Aug. 16, 1954, ch. 736, 68A Stat. 55, 
related to amortization of grain-storage facilities, prior to the 
reorganization of part VI of subchapter B of chapter 1 of this title by 
Pub. L. 91-172.


                               Amendments

    1976--Subsecs. (b), (c). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck 
out ``or his delegate'' after ``Secretary''.
    Subsec. (d)(1). Pub. L. 94-455, Secs. 1906(b)(13)(A), 2112(b), 
substituted in provisions preceding subpar. (A) ``January 1, 1976,'' for 
``January 1, 1969,'' and ``storing, or preventing the creation or 
emission of'' for ``or storing'', struck out in subpar. (B) ``or his 
delegate'' after ``Secretary'', and added subpar. (C).
    Subsec. (d)(4). Pub. L. 94-455, Sec. 2112(c), among other changes, 
struck out provisions relating to treatment facilities placed in service 
by taxpayer before Jan. 1, 1976, and inserted provisions that in case of 
treatment facilities used in connection with any plan or other property 
not in operation before Jan. 1, 1969, Dec. 31, 1975, shall be 
substituted for Dec. 31, 1968, as the cut-off date for taking into 
account that portion of the basis which is attributable to construction, 
reconstruction, or erection.
    1975--Subsec. (d)(4)(B). Pub. L. 93-625 substituted ``January 1, 
1976'' for ``January 1, 1975''.
    1971--Subsec. (h). Pub. L. 92-178 struck out provision that 
investment credit not be allowed. See section 48(a)(8) of this title.


                    Effective Date of 1976 Amendment

    Section 2112(d)(2) of Pub. L. 94-455, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendments 
made by subsection (b) [amending this section] shall apply to taxable 
years beginning after December 31, 1975. Such amendments shall not apply 
in the case of any property with respect to which the amortization 
period under section 169 of the Internal Revenue Code of 1986 [formerly 
I.R.C. 1954] has begun before January 1, 1976.''


                             Effective Date

    Section 704(c) of Pub. L. 91-172 provided that: ``The amendments 
made by this section [enacting this section and amending sections 642, 
1082, 1245, and 1250 of this title] shall apply with respect to taxable 
years ending after December 31, 1968.''

                          Transfer of Functions

    Secretary of Health, Education, and Welfare redesignated Secretary 
of Health and Human Services by section 3508(b) of Title 20, Education.
    Functions vested in Secretary of the Interior and Secretary of 
Health, Education, and Welfare by subsec. (d)(1)(B), (3) of this section 
transferred to Administrator of Environmental Protection Agency by 
Reorg. Plan No. 3, of 1970, Sec. 2(a)(9), eff. Dec. 2, 1970, 35 F.R. 
15623, 84 Stat. 2086, set out in the Appendix to Title 5, Government 
Organization and Employees.

                  Section Referred to in Other Sections

    This section is referred to in sections 56, 291, 642, 1082, 1245, 
1250 of this title; title 33 sections 1316, 1326.
