taxable financing
(3) Certain property treated as new property Solely for purposes of determining under paragraph (2)(A) whether the 1st use of property is pursuant to tax-exempt financing— (A) In general If— (i) the 1st use of property is pursuant to taxable financing, (ii) there was a reasonable expectation (at the time such taxable financing was provided) that such financing would be replaced by tax-exempt financing, and (iii) the taxable financing is in fact so replaced within a reasonable period after the taxable financing was provided, then the 1st use of such property shall be treated as being pursuant to the tax-exempt financing. (B) Special rule where no operating State or local program for tax-exempt financing If, at the time of the 1st use of property, there was no operating State or local program for tax-exempt financing of the property, the 1st use of the property shall be treated as pursuant to the 1st tax-exempt financing of the property. (C) Definitions For purposes of this paragraph— (i) Tax-exempt financing The term “tax-exempt financing” means financing provided by tax-exempt bonds. (ii) Taxable financing The term “taxable financing” means financing which is not tax-exempt financing.