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TITLE 26-INTERNAL REVENUE CODE (11) Certain tangible property constructed during suspension period and leased new thereafter Tangible personal property constructed or reconstructed by a person shall not be sus- pension period property if- (A) such person leases such property after the close of the suspension period and the original use of such property commences after the close of such period, (B) such construction or reconstruction, and such lease .transaction, was not pursu- ant to an order placed durifig the suspen- sion period, and (C) an election is made under subr.ection (d) with respect to such property which sat- isfies the requirements of such subsection. (12) Water and air pollution control facilities (A) In general Any water pollution control facility or air pollution control facility shall be treated as property which is not suspension period property. (B) Water pollution control facility For purposes of subparagraph (A), the term "water pollution control facility" means any section 38 property which- (i) is used primarily to control water pollution by removing, altering, or dispos- ing of wastes, including the necessary in- tercepting sewers, outfall sewers, pump- ing, power, and other equipment, and their appurtenances; and (ii) is certified by the State water pollu- tion control agency (as defined in section 13(a) of the Federal Water Pollution Con- trol Act) as being in conformity with the State program or requirements for control of water pollution and is certified by the Secretary of Interior as being in compli- ance with the applicable regulations of Federal agencies and the general policies of the United States for cooperation with the States in the prevention and abate- ment of water pollution under the Feder- al Water Pollution Control Act. (C) Air pollution control facility For purposes of subparagraph (A), the term "air pollution control facility" means any section 38 property which- (I) is used primarily to control atmo- spheric pollution or contamination by re- moving, altering, or disposing of atmo- spheric pollutants or contaminants; and (ii) is certified by the State air pollution control agency (as defined in section 302(b) of the Clean Air Act) as being in conformity with the State program or re- quirements for control of air pollution and is certified by the Secretary of Health, Education, and Welfare as being in compliance with the applicable regula- tions of Federal agencies and the general policies of the United States for coopera- tion with the States in the prevention and abatement of air pollution under the Clean Air Act. (D) Standards for facility Subparagraph (A) shall apply in the case of any facility only if the taxpayer con- structs, reconstructs, erects, or acquires such facility in furtherance of Federal, State, or local standards for the control of water pollution or atmospheric pollution or contaminants. (13) Certain replacement property Section 38 property const" icted, recon- structed, erected, or acquired by the taxpayer shall be treated as property w~hich is not sus- pension period property to the extent such property is placed in service to replace prop- erty which was- (A) destroyed or damaged by fire, storm, shipwreck, or other casualty, or (B) stolen, but only to the extent the basis (in the case of new section 38 property) or cost (in the case of used section 38 property) of such sec- tion 38 property does not exceed the adjusted basis of the property destroyed, damaged, or stolen. (i) Exemption from suspension of $20,000 of invest- ment (1) In general In the case of property acquired by the tax- payer by purchase for use in his trade or busi- ness which would (but for this subsection) be suspension period property, the taxpayer may select items to which this subsection applies, to the extent of an aggregate cost, for the suspension period, of $20,000. Any item so se- lected shall be treated as property which is not suspension period property for purposes of this subpart (other than for purposes of paragraphs (4), (5), (6), (7), (8), (9), and (10) of subsection (h)). (2) Applicable rules Under regulations prescribed by the Secre- tary, rules similar to the rules provided by paragraphs (2) and (3) of subsection (c) shall be applied for purposes of this subsection. Subsection (d) shall not apply with respect to any Item to which this subsection applies. (j) Suspension period For purposes of this subpart, the term "sus- pension period" means the period beginning on October 10, 1966, and ending on March 9, 1967. (k) Movie and television films (1) Entitlement to credit (A) In general A credit shall be allowable under section 38 to a taxpayer with respect to any motion picture film or video tape- (i) only if such film or tape-is new sec- tion 38 property (determined without regard to useful life) which is a qualified film, and (ii) only to the extent that the taxpayer has an ownership interest in such film or tape. (B) Qualified film defined For purposes of this subsection, the term "qualified film" means any motion picture film or video tape created primarily for use as public entertainment or for educational purposes. Such term does not include any film or tape the market for which is primar- Page 74