Help - What Is This? Does it do the same thing as an expansion tank?

Hello again!
It's been awhile since I've posted anything on this board, but I still enjoy reading from time-to-time and learning from the experts.

Now for my question. We are in the market for a new water heater, and I am planning on doing the install myself. Our house was built in last 1999, and the expansion tanks were, supposedly, code at that time. However, our house does not have one. But as I explored around the water heater, I noticed a strange device that looks like a special valve of some sort on a branch of the cold water inlet running to the water heater.

I've taken a few photos of the device with my wife's Palm (sorry but the quality is not great) and was hoping someone on this board could tell me what this item is and what it does. I've attached two pictures of the item (hopefully) so perhaps you can tell me what it is. Does it, perchance, do the same thing an expansion tank does? I've noted that it is run off of the cold supply line to the water heater and it runs to the same drain line that the PRV runs to.

So do I still need an expansion tank (and did the builder rip me off by not including it), or am I ok? If it helps to know from a code perspective, I live in Georgia.

Thanks for the help!

Does that knurled knob screw in or out? Maybe it is a pressure reducing valve? Just a shot in the dark, I have never seen anything that looks like that but I am sure that someone here has.

thing

I better picture from a different angle might be better, but my initial reacion is that it is an adjustable pressure relief valve.

HJ & King - Thanks!

Thanks for the comments. The knurled knob does have some numbers on it, and it appears that it can be turned as an adjustment of sort. I couldn't get a good enough view to see what the numbers said, but perhaps it is as you've indicated, an adjustable pressure relief valve. I'll see if I can't get a better picture of it tonight.

Thanks!