New York Consolidated Laws, Public Authorities Law - PBA § 3035. Exchange of notes or bonds of the corporation for short-term obligations of the city

2. (a) Upon or at any time after receipt of the short-term obligations of the city exchanged in accordance with subdivision one hereof, the corporation may deliver any or all of such short-term obligations to the city for cancellation, without receiving payment of principal or interest in respect thereof, in which event the city shall thereupon cancel such obligations without making any payment of principal amount or accrued interest thereon and the city shall have no further liability with respect thereto.  Notwithstanding the foregoing, the corporation shall not deliver at any time bond anticipation notes received pursuant to subdivision one to the city for cancellation without receiving payment of principal or interest in respect thereof unless the mayor and the city comptroller shall have requested in writing that such short-term obligations be delivered for cancellation.

(b) Upon or at any time after receipt of the short-term obligations of the city exchanged in accordance with subdivision one hereof the corporation may exchange any or all of such short-term obligations for other short-term obligations issued by the city pursuant to the local finance law and the corporation may exchange any or all of such bond anticipation notes included in such short-term obligations for bonds of the city issued pursuant to the local finance law, all on such terms and conditions as the corporation may deem proper.