Can’t say I’ve seen this before. Can someone tell me what it is and it’s purpose. It is on the inlet side of the heater (cold line), clear hose at shut off and runs to floor drain. I thought maybe it’s a pressure relief of some kind.
May be a thermal expansion valve. Did you get any information on the valve?
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Nope. There was no writing on it or tag of any sort. I figured it could be an expansion valve or pressure relief but wasn’t sure. Thanks Martin!!!
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Maybe the plastic is too close to single wall vent pipe?
There was at least 3" clearance at the closest point.
And 6" is needed for single wall vent pipe to combustibles.
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But Larry, the hose had moisture in it, making it only partially flammable. 
Then we have another problem, Michael… 
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I had issues loading and editing pictures for the report so I will look at that again in the morning. Thanks Larry.
The tubing was only flammable on the outside.
The plastic tube is protected by the copper pipe and brass shutoff valve?
Better remove that paper label from that water line along with the plastic handle cover on the water valve.
These great clearances are mostly to minimize pyrolysis. While even being as close as 1 inch to a single wall gas-fired vent won’t melt the plastic tubing right-away, the clearances should be respected, especially for pressurized PEX.