(a) The Connecticut Health and Educational Facilities Authority may establish a subsidiary which shall be deemed a quasi-public agency for purposes of chapter 12, for the purpose of improving access to high-quality child care in the state by coordinating expertise in finance, government, architecture, construction and child care, and may transfer to such subsidiary any moneys, real or personal property, of any child care or child development center financed by the authority and acquired as a result of a foreclosure or otherwise. Such subsidiary shall have all the privileges, immunities, tax exemptions and other exemptions of the authority. Such subsidiary shall be subject to suit and liability solely from the assets, revenues and resources of the subsidiary and without recourse to the general funds, revenues, resources or any other assets of the authority. Such subsidiary is authorized to assume or take title to any real property, including a child care or child development center, subject to any existing mortgage and to mortgage, convey or dispose of its assets and pledge its revenues in order to secure any borrowing, for the purpose of developing, acquiring, constructing, refinancing, rehabilitating or improving its assets, provided each such borrowing or mortgage, unless otherwise provided by the board or the subsidiary, shall be a special obligation of the subsidiary, which obligation may be in the form of bonds, bond anticipation notes or other obligations which evidence an indebtedness to the extent permitted under this chapter to fund, refinance and refund the same and provide for the rights of holders thereof, and to secure the same by pledge of revenues, notes and mortgages of others, and which shall be payable solely from the assets, revenues and other resources of the subsidiary and in no event shall such bonds be secured by a special capital reserve fund of any kind which is in any way contributed to by the state. The subsidiary shall have the purposes as provided by resolution of the authority's board of directors, which purposes shall be consistent with this chapter. No further action is required for the establishment of the subsidiary, except the adoption of a resolution for the subsidiary.

(b) The board of directors of the subsidiary shall be the board of directors of the authority.

(c) To the extent necessary or appropriate to assure that the interest on any of its bonds, notes or other obligations are or continue to be excluded from the gross income of the recipients for federal income tax purposes, the authority or subsidiary shall take such actions to comply with the provisions of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, if necessary, to qualify and maintain such subsidiary as a corporation exempt from taxation under said Internal Revenue Code.

(P.A. 97-259, S. 13, 41.)

History: P.A. 97-259 effective July 1, 1997.