2005 California Health and Safety Code Sections 25548-25548.7 FIDUCIARIES

25548.  (a) The Legislature hereby finds and declares all of the
following:
   (1) There is uncertainty in the law of this state with regard to
the liability of lenders for hazardous material contamination
involving property that is owned or used by borrowers, whether or not
the property is collateral for the loan or obligation.
   (2) There is also uncertainty in the law of this state with regard
to the liability of trustees, executors, and other fiduciaries for
hazardous material contamination involving property that is part of
the fiduciary estate.  Fiduciaries understand that the fiduciary
estate may have that liability, but are concerned that a fiduciary
may have independent personal liability, despite the absence of
personal culpability for the contamination.
   (3) The uncertainty as to liability or potential liability is
attributable to the failure of existing law, except for the security
interest exemption incorporated by reference in Section 25323.5, to
recognize that usually the credit or fiduciary relationship is not
sufficiently related to the hazardous material contamination to
warrant, as a policy matter, the imposition of liability on lenders
and fiduciaries.
   (b) It is the intent of the Legislature, in enacting this chapter,
to specify the type of lender and fiduciary conduct that will not
incur liability for hazardous material contamination.  However, the
liability exemption has appropriate boundaries.  For example, the
exemption will not protect lenders or fiduciaries in transactions
that are structured for the purpose of evading liability for
hazardous material contamination if the lender or fiduciary is not
acting within its respective capacity, or if the contamination is
caused by the lender or fiduciary.
   (c) This chapter does not apply to judicial actions filed, or
administrative orders issued, before January l, 1997, or to
proceedings to enforce judicial or administrative orders issued
before January 1, 1997.
25548.1.  As used in this chapter, the following terms have the
following meaning:
   (a) "Actual benefit" means the amount, if any, realized by the
lender upon the disposition of property acquired through foreclosure
or its equivalent as a direct result of a removal or remedial action
undertaken by another person, not to exceed the amount, if any, by
which the disposition proceeds exceed the sum of the balance of all
of the following:
   (1) The loan or obligation or the amount of the lien, evidenced by
the loan or obligation outstanding at foreclosure or its equivalent.
   (2) The costs, including attorneys' fees, incurred by the lender
in connection with the foreclosure or its equivalent, subsequent
ownership, any removal or remedial action, and disposition of the
property.
   (b) "Borrower, debtor or obligor" means a person who is obligated
to a lender under a loan or obligation, whether or not the lender
maintains a security interest in that person's property.
   (c) "Damages" includes compensatory damages, exemplary damages,
punitive damages, and costs of every kind and nature, including, but
not limited to, costs of a removal or remedial action.
   (d) "Fiduciary" means a person who is acting in any of the
following capacities:
   (1) As trustee for a trust described in paragraph (1) or (2) of
subdivision (a) of Section 82 of the Probate Code.
   (2) As a fiduciary in any arrangement described in paragraphs (1)
to (3), inclusive, or paragraphs (5) to  (14), inclusive, of
subdivision (b) of Section 82 of the Probate Code.
   (3) A trustee appointed in proceedings under any state or federal
bankruptcy law.
   (4) An assignee or a trustee acting under an assignment made for
the benefit of creditors.
   (5) A court-appointed receiver.
   (e) "Finance lease" means a transaction with respect to which both
of the following apply:
   (1) The lessor does not select or manufacture the goods or does
not supply the goods, except in the case of a re-lease, whether it is
created by a new transaction or substitution of the lessee.
   (2) The lessor acquires the goods or right to possession and use
of the goods in connection with the lease or a prior lease
transaction.
   (f) "Foreclosure or its equivalent" means the acquisition of
property by a lender through any of the following:
   (1) Judicial or nonjudicial foreclosure of the lender's security
interest in the property or acceptance of a deed or other conveyance
in satisfaction thereto.
   (2) Acceptance of a deed in lieu or other conveyance in
satisfaction of a loan or obligation previously contracted.
   (3) Termination of a finance lease by consent or default.
   (4) Any other formal or informal manner, whether pursuant to law
or under warranties, covenants, conditions, representations or
promises from the borrower, by which the lender acquires, for
subsequent disposition, actual possession of the property subject to
a security interest.
   (g) "Hazardous material" has the same meaning as defined in
subdivision (d) of Section 25260.
   (h) (1) "Indicia of ownership" means evidence of a security
interest, evidence of an interest in a security interest, or evidence
of an interest in real or personal property securing a loan or other
obligation, including, but not limited to, any legal or equitable
title to real or  personal property acquired incident to foreclosure
or its equivalent.
   (2) "Evidence of an interest" includes, but is not limited to, all
of the following:
   (A) Mortgages.
   (B) Deeds of trust.
   (C) Liens.
   (D) Surety bonds and guarantees of obligations.
   (E) Title held pursuant to a finance lease in which the lessor
does not select initially the leased property.
   (F) Legal or equitable title obtained pursuant to foreclosure or
its equivalent.
   (G) Assignments, pledges, or other rights to, or other forms of,
encumbrance against property that are held primarily to protect a
security interest.
   (3) A person is not required to hold title or a security interest
to maintain indicia of ownership.
   (i) "Lender" means a person to the extent of the capacity in which
that person maintains indicia of ownership primarily to protect a
security interest or makes, acquires, renews, modifies, or holds a
loan or obligation from a borrower.  "Lender" includes either of the
following persons:
   (1) Any person who acts as, or on behalf of, a lender in
connection with any aspect of the solicitation, negotiation,
consummation, disbursement, administration, servicing, collection,
enforcement, or foreclosure or its equivalent of a loan or obligation
or security interest in property such as a surety, escrow, or title
company.
   (2) Any person who makes, secures, acquires, or holds a loan or
obligation or security interest by assignment, sale, pledge,
subrogation, succession, or operation of law, or becomes the receiver
for the holder of a loan or obligation or security interest.
   (j) "Loan or obligation" means a loan, revolving or nonrevolving
line of credit, finance lease, sale-leaseback that provides for a
purchase option in favor of the lessee, installment sale contract,
sale on account, or other credit sale, letter of credit, forbearance
or guaranty, collateral pledge, or other suretyship obligation, and
any extension, renewal, or modification thereof.  A loan or
obligation may or may not involve a security interest in property.
   (k) (1) Except as provided in paragraphs (3) and (4), "participate
(or participation) in the management of the property" means actual
participation in the management or operational affairs of the
property by the lender while the borrower, under the loan or
obligation, is in possession of the property, and the lender
exercises decisionmaking control over the environmental compliance by
the borrower, so that the lender assumes responsibility for the
hazardous material handling or disposal practices of the borrower, or
exercises control at a level comparable to that of a manager of the
enterprise of the borrower, so that the lender assumes or manifests
responsibility for the overall management of the enterprise
encompassing the day-to-day decisionmaking of the enterprise with
respect to either of the following:
   (A) Environmental compliance.
   (B) All, or substantially all, of the operational, as opposed to
financial or administrative, aspects of the enterprise other than
environmental compliance.
   (2) For purposes of paragraph (1), the following terms have the
following meaning:
   (A) "Operational aspects of the enterprise" includes, but is not
limited to, functions such as that of facility or plant manager,
operations manager, chief operating officer, or chief executive
officer.
   (B) "Financial or administrative aspects" includes, but is not
limited to, functions such as that of a credit manager, accounts
payable/receivable manager, personnel manager, controller, or chief
financial officer.
   (3) Notwithstanding paragraph (1), "participation in the
management of the property" does not include an act or omission by a
prospective lender prior to making, acquiring, or holding a loan or
obligation.  "Participation in the management of the property" also
does not include the actions taken by a prospective lender who
undertakes or requires an environmental inspection of property prior
to making, acquiring, or holding a loan or obligation.  A lender or
prospective lender does not "participate in the management of the
property" if the lender or prospective lender requires the borrower
to clean up the property or requires the borrower to comply or come
into compliance with any applicable law or regulation.  This chapter
does not require a lender to conduct or require an inspection prior
to foreclosure or its equivalent to qualify for the exemption
provided by this chapter, and the liability of a lender shall not be
based on or affected by whether the lender conducts or requires an
inspection prior to foreclosure or its equivalent.
   (4) Loan policing and work out activities, as specified in
paragraphs (5) and (6), that are consistent with holding ownership
indicia primarily to protect a security interest and consistent with
a loan or obligation made, acquired, or held primarily for purposes
other than investment purposes, do not constitute participation in
the management of the property.  The authority for the lender to take
those actions may, but are not required to, be contained in
contractual or other documents specifying requirements for financial,
environmental, and other warranties, covenants, conditions,
representations, or promises from the borrower.  Loan policing and
work out activities include all activities up to foreclosure or its
equivalent.
   (5) A lender who engages in loan policing activities prior to
foreclosure or its equivalent is exempt from liability pursuant to
this chapter if the lender does not, by those actions, participate in
the management of the property.  Those actions include, but are not
limited to, all of the following:
   (A) Requiring the borrower to conduct a removal or remedial action
during the term of the security interest or loan or obligation.
   (B) Requiring the borrower to comply or come into compliance with
applicable federal, state, and local environmental and other laws
during the term of the security interest or loan or obligation.
   (C) Securing or exercising authority to monitor or inspect the
property, including onsite inspections, or the business or financial
condition of the borrower during the term of the security interest or
loan or obligation.
   (D) Taking other actions to adequately police the loan,
obligation, or security interest, such as requiring the borrower to
comply with any warranties, covenants, conditions, representations,
or promises in connection with the security interest or loan or
obligation.
   (6) (A) A lender who engages in work out activities prior to
foreclosure or its equivalents is exempt from liability pursuant to
this chapter if the lender does not, by those actions, participate in
the management of the property.
   (B) "Work out" means those actions by which a lender, at any time
prior to foreclosure or its equivalent, seeks to prevent, cure, or
mitigate a default by the borrower, or to preserve or prevent the
diminution of the value of the property, security interest, or loan
or obligation.
   (C) Work out activities include, but are not limited to, all of
the following:
   (i) Restructuring or renegotiating the terms of the loan,
obligation, or security interest.
   (ii) Requiring payment of additional rent or interest.
   (iii) Exercising rights pursuant to an assignment of accounts or
other amounts owing to a lender.
   (iv) Requiring or exercising rights pursuant to an escrow
agreement pertaining to amounts owing to a lender.
   (v) Exercising forbearance.
   (vi) Providing specific or general financial or other advice,
suggestions, counseling, or guidance.
   (vii) Exercising any right or remedy the lender is entitled to by
law or under any warranties, covenants, conditions, representations,
or promises from the borrower.
   (7) A lender does not participate in the management of the
property by taking any response action under Section 107(d)(1) of the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (42 U.S.C. Sec.  9607(d)(1)).  However, the lender may be
liable for damages, as defined by this chapter, that occur as a
result of the gross negligence or willful misconduct of the lender in
his or her performance of a response action under Section 107 (d)(1)
of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Sec. 9607(d)(1)).
   (l) "Person" means any entity, including, but not limited to, an
individual, estate, trust, firm, business trust, joint stock company,
corporation, partnership, joint venture, limited liability company,
association, or government.  "Person" includes, but is not limited
to, any city, county, district, the state, or the federal government,
or any department, subdivision, or agency thereof.
   (m) (1) "Primarily to protect a security interest" means that the
indicia of ownership of a lender are held primarily for the purpose
of securing payment or performance of an obligation.
   (2) "Primarily to protect a security interest" does not include
indicia of ownership held primarily for investment purposes or
indicia of ownership held primarily for purposes other than as
protection for a security interest.  A lender may have other,
secondary reasons for maintaining indicia of ownership, but the
primary reason that any indicia of ownership are held shall be as
protection for a security interest.
   (n) "Property" means any real or personal property where hazardous
materials are or were generated, handled, managed, deposited,
stored, disposed of, placed, released, or otherwise have come to be
located.  In the context of a loan or obligation, "property" includes
any real or personal property in which the obligor has or had an
ownership, leasehold, or possessory interest, whether or not it was
the subject of a security interest for the loan or obligation.
   (o) "Release" has the same meaning as defined in Section 25320.
   (p) "Remedial action" has the same meaning as defined in
subdivision (g) of Section 25260.
   (q) "Removal" means the cleanup or removal of released hazardous
materials from the environment or the taking of other actions that
may be necessary to prevent, minimize, or mitigate damages that may
otherwise result from a release or threatened release, as further
defined in Section 101(23) of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. Sec. 9601
(23)).
   (r) "Security interest" means an interest in a property created or
established for the purpose of securing a loan or obligation.
Security interests include, but are not limited to, mortgages, deeds
of trust, liens, and title pursuant to a finance lease.  Security
interests may also arise from transactions such as sale and
leasebacks, conditional sales, installment sales, trust receipt
transactions, certain assignments, factoring agreements, and accounts
receivable financing arrangements and consignments if the
transaction creates or establishes an interest in a property for the
purpose of securing a loan or other obligation.
25548.2.  (a) (1) Except as provided in Sections 25548.4 and
25548.5, a person, by reason of acting in the capacity of a lender,
shall not be liable under any state or local statute, regulation, or
ordinance to the extent of either of the following:
   (A) To the extent that the statute, regulation, or ordinance
requires the person to take a removal or remedial action, pay a
penalty, fine, imposition, or assessment, or to forfeit the property
specified in paragraph (2), and that liability arises from the
release or threatened release of hazardous materials, at, from, or in
connection with the property.
   (B) To the extent that the statute, regulation, or ordinance
authorizes damages arising from the release or threatened release of
hazardous materials, at, from, or in connection with the property
specified in paragraph (2).
   (2) The exemption from liability provided by paragraph (1) shall
apply to the following property:
   (A) Property in which the lender maintains indicia of ownership
primarily to protect a security interest.
   (B) Property that was acquired by the lender through foreclosure
or its equivalent.
   (C) Property that is owned, leased, possessed, or used by a person
who is obligated to the lender under a loan or obligation and in
which the lender holds no security interest.
   (b) A lender who did not participate in the management of the
property prior to foreclosure or its equivalent may sell, re-lease
property held pursuant to a finance lease, whether by a new finance
lease or by substitution of the lessee, liquidate, maintain business
activities, wind up operations, undertake any response action under
Section 107(d)(1) of the Comprehensive Environmental Response
Compensation and Liability Act of 1980 (42 U.S.C. Sec.  9607(d)(1))
and take measures to preserve, protect, or prepare the property prior
to sale or other disposition.  The lender may conduct those
activities without voiding the exemption set forth in subdivision
(a), subject to the requirements of subdivision (a) of Section
25548.5.  However, the lender may be liable for damages, as defined
by this chapter, that occur as a result of the lender's gross
negligence or willful misconduct in the lender's performance of a
response action under Section 107(d)(1) of the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42
U.S.C. Sec. 9607(d)(1).
25548.3.  (a) Except as provided in Sections 25548.4 and 25548.5 of
this code, and in Sections 18001 and 18002 of the Probate Code, the
liability of a fiduciary to any person under any state or local
statute, regulation, or ordinance, to the extent that the statute,
regulation, or ordinance requires or permits a removal or remedial
action as a result of, or authorizes the recovery of damages, payment
of a penalty, fine, imposition, or assessment arising from, the
release or threatened release of hazardous material at, from, or in
connection with any property held at any time by the fiduciary as
part of the fiduciary estate, shall be limited to, and satisfied only
from, the assets held in the fiduciary estate.
   (b) This section does not expand the applicability of any state or
local statute, regulation, or ordinance to a substance or material
that is not otherwise subject to that statute, regulation, or
ordinance.
25548.4.  This chapter does not do any of the following:
   (a) Affect any rights, defenses, or immunities that are available
to any lender or fiduciary under any applicable law.
   (b) Create any liability for any lender or fiduciary.
   (c) Create any private right of action against any lender or
fiduciary.
   (d) Exempt or excuse a lender or fiduciary who operates or directs
the operation, or maintains the operation, of the property from
compliance with the operational requirements of applicable laws.
Those operational requirements include, but are not limited to,
permitting, reporting, monitoring, emission limitation, corrective
action, financial responsibility and assurance requirements,
requirements to take removal or remedial action to respond to a
release or threatened release of hazardous materials caused by the
lender or fiduciary and the requirements of Division 26 (commencing
with Section 39000) of this code or of Division 7 (commencing with
Section 13000) of the Water Code.  Operational requirements include
the payment of fees, fines, and penalties, and compliance with any
other enforcement provisions that are applicable as a result of the
operation, or the direction of the operation, or the maintenance of
the operation, of the property by the lender or fiduciary.
   (e) Affect any liability of a fiduciary to a beneficiary of a
fiduciary estate for breach of trust under Chapter 4 (commencing with
Section 16400) of Part 4 of Division 9 of the Probate Code.
   (f) Affect any liabilities of a fiduciary estate.
   (g) Exempt a lender from liability imposed by Chapter 6.8
(commencing with Section 25300) for a removal or remedial action or
the recovery of damages relating to a release or threatened release
of hazardous material, to the extent that the lender is a responsible
party pursuant to Section 107(a)(3) or (4) of the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42
U.S.C. Sec. 9607(a)(3) or (4)).
   (h) Exempt a lender or fiduciary from any liability imposed by
Chapter 6.5 (commencing with Section 25100).
   (i) Exempt or excuse a lender from liability under any state or
local statute, regulation, or ordinance for a known or suspected
release or known or suspected threatened release of hazardous
materials caused by events or conditions occurring prior to
foreclosure or its equivalent, unless, after taking possession of the
property, the lender promptly takes each of the following actions in
accordance with applicable law:
   (1) Suspends operations with respect to that portion of the
property where the known or suspected release or known or suspected
threatened release occurred or may occur.
   (2) Removes from the suspended operations and affected areas on
the property, all hazardous material not released into the
environment and secures the suspended operations.
   (3) Reports any known or suspected releases of hazardous material.
   (j) Limit the application or enforcement of Section 25359.4 or
25359.5 or other state or local fencing, posting, securing,
notification, or reporting laws with regard to property that is
acquired by a lender through foreclosure or its equivalent, to the
extent that those requirements are otherwise applicable to the
property.
   (k) Exempt a lender from compliance with an administrative order
requiring immediate and temporary measures to prevent, abate, or
minimize an emergency caused by a release or threatened release of
hazardous material at, from, or in connection with, any property that
has been acquired by the lender through foreclosure or its
equivalent, when all of the following circumstances exist:
   (1) The release or threatened release presents an imminent and
substantial endangerment to the public health or welfare or the
environment.
   (2) No other person who is viable and potentially responsible for
the release or threatened release has been identified and located by
the agency issuing the order, following a reasonable effort by the
agency to identify and locate any such person.
   (3) The costs and expenses incurred by the lender to comply with
the administrative order do not exceed twenty-five thousand dollars
($25,000).
   (4) If the lender complies with the administrative order, the
compliance would not, in and of itself, subject the lender to
liability for a removal or remedial action or damages, fines,
penalties, impositions, or assessments relating to the release or
threatened release under any federal law.
   (l) (1) Exempt a lender who has acquired title to property through
foreclosure or its equivalent from operation and maintenance
requirements that were established on the property as a result of a
removal or remedial action conducted on the property.
   (2) "Operation and maintenance requirements" include, but are not
limited to, deed restrictions and requirements to maintain passive
exposure controls and to perform monitoring.  If there are
requirements other than operation and maintenance requirements, which
are applicable to the property to maintain the effectiveness of the
removal or remediation action, the lender shall comply with those
requirements unless the lender, upon foreclosure or its equivalent,
notifies the appropriate agency that it does not intend to comply
with the requirements and the agency concurs.
   (m) Require a lender to conduct, or require a lender to direct the
taking of, an inspection of the property after foreclosure or its
equivalent to qualify for the exemption provided by this chapter, and
the liability of a lender shall not be based on, or affected by, the
lender not conducting, or not requiring, an inspection of the
property after foreclosure or its equivalent.
   (n) Require a fiduciary to conduct or require an inspection of the
property in a fiduciary estate to qualify for the exemption provided
by this chapter and the liability of the fiduciary shall not be
based on, or affected by, the fiduciary not conducting or not
requiring an inspection prior to holding the property as part of the
fiduciary estate.
25548.5.  The exemptions set forth in Sections 25548.2 and 25548.3
shall not apply:
   (a) If, after foreclosure or its equivalent is conducted, the
lender does not undertake to sell, re-lease property held pursuant to
a finance lease, whether by a new finance lease or by substitution
of the lessee, or otherwise undertake to be divested of the property
in a reasonably expeditious manner, using whatever commercially
reasonable means are relevant or appropriate with respect to the
property, taking all facts and circumstances into consideration.  For
purposes of establishing that a lender is seeking to sell, re-lease
property held pursuant to a finance lease, whether by a new finance
lease or substitution of the lessee, or be divested of property in a
reasonably expeditious manner, the lender may use whatever
commercially reasonable means as are relevant or appropriate with
respect to the property, or may employ the following means:
   (1) For purposes of this subdivision, the exemption set forth in
subdivision (a) of Section 25548.2 shall apply following foreclosure
or its equivalent, if, within 12 months following foreclosure or its
equivalent, the lender does either of the following:
   (A) Lists the property for sale, re-lease, or other disposition
with a broker, dealer, or agent who deals with that type of property.
   (B) Advertises the property for sale, re-lease, or other
disposition on at least a monthly basis in either of the following:
   (i) A real estate publication or trade or other publication
suitable for advertising the property.
   (ii) A newspaper of general circulation, which is a newspaper with
a circulation over 10,000 or one suitable under any applicable
federal, state, or local rules of court for publication required by
court order or rules of civil procedure, covering the area where the
property is located.
   (2) For purposes of this subdivision, the 12-month period shall
begin to run from the date that the lender acquires marketable title
to the property if the lender, after the expiration of any redemption
or other waiting period provided by law, has acted diligently to
acquire marketable title.  If the lender has failed to act diligently
to acquire marketable title, the 12-month period shall begin to run
on the date of foreclosure or its equivalent.
   (b) If, after foreclosure or its equivalent, the lender does not
comply with all applicable statutes, regulations, or ordinances that
require the disclosure of information or conditions regarding the
property to any person.
   (c) If the fiduciary's negligent or intentional or reckless
conduct causes or contributes to the release or threatened release of
a hazardous material at, from, or in connection with a property held
by the fiduciary as part of the fiduciary estate.
   (d) With respect to liability that arises from a voluntary removal
or remedial action taken by a fiduciary if, prior to initiating a
voluntary removal or remedial action, the fiduciary does not notify
the appropriate agency of the fiduciary's intent to conduct that
action.
   (e) With respect to liability that arises from conduct of, or
ownership of the property by, the lender or fiduciary, other than in
its capacity as a lender or fiduciary.
   (f) Where the loan or obligation or fiduciary relationship or
fiduciary transaction is structured for the purpose of evading
liability for a release or threatened release of hazardous materials.
   (g) If the fiduciary is both a beneficiary and fiduciary with
respect to the same fiduciary estate, or as a fiduciary, receives
benefits that exceed customary or reasonable compensation for the
administration of the property permitted under other applicable law.
   (h) To the extent of the actual benefit, if any, realized by a
lender upon the disposition of property acquired through foreclosure
or its equivalent as a result of a removal or remedial action
undertaken by another person.
   (i) If the lender participated in the management of the property
before foreclosure or its equivalent, except that the lender's
liability shall be limited to any release or threatened release which
occurred while the lender participated in the management of the
property.
   (j) If the lender, by an act or failure to act caused or
contributed to the release or threatened release of the hazardous
material.
   (k) If the lender made, secured, held, or acquired the loan or
obligation primarily for investment purposes.
   (l) If the lender outbids, rejects, or fails to act upon an offer
of fair consideration for the property acquired through foreclosure
or its equivalent, unless the lender is required, to avoid liability
under federal or state law, to make a higher bid, to obtain a higher
offer, or to seek or obtain an offer in a different manner.  For
purposes of this subdivision, the following terms shall have the
following meaning:
   (1) (A) "Fair consideration" means the sum of all of the following
less the amounts specified in subparagraph (B):
   (i) The value of the security interest or loan or obligation
calculated as an amount equal to or in excess of, the sum of the
outstanding principal, or comparable amount in the case of a finance
lease, owed to the lender immediately preceding the acquisition of
full title pursuant to foreclosure or its equivalent.
   (ii) Any unpaid interest, rent, or penalties, whether arising
before or after foreclosure or its equivalent.
   (iii) All reasonable and necessary costs, fees, or other charges
incurred by the lender incident to workout, foreclosure or its
equivalent, retention, maintaining the business activities of the
enterprise, preserving, protecting, and preparing the property prior
to sale, re-leasing the property held pursuant to a finance lease,
whether by a new finance lease or substitution of the lessee, or
other disposition.
   (iv) The lender's costs incurred for any removal or remedial
action, including but not limited to, response costs for response
action taken by the lender under Section 107(d)(1) of the
Comprehensive Environmental Response Compensation and Liability Act
of 1980 (42 U.S.C. Sec. 9607(d)(1)).
   (B) In determining fair consideration, the following amounts shall
be subtracted from the sum calculated pursuant to subparagraph (A):
   (i) Any amounts received by the lender in connection with any
partial disposition of the property.
   (ii) Net revenues received as a result of maintaining the business
activities of the enterprise.
   (iii) Any amounts paid by the borrower subsequent to the
acquisition of full title pursuant to foreclosure or its equivalent.
   (C) In the case of a lender holding a junior security interest,
junior loan, or junior obligation, "fair consideration" is the value
of all outstanding higher priority security interests, loans or
obligations plus the value of the security interest, loan or
obligation held by the junior holder, calculated as set forth in this
paragraph.
   (2) "Outbids, rejects, or fails to act upon an offer of fair
consideration" means that the lender outbids, rejects, or fails to
act upon within 90 days from the date of receipt of a written, bona
fide and firm offer of fair consideration for the property received
at any time after six months following foreclosure or its equivalent.
  That six-month period shall begin to run from the date that the
lender acquires marketable title, if the lender, after the expiration
of any redemption or other waiting period provided by law, has acted
diligently to acquire marketable title.  If the lender has failed to
act diligently to acquire marketable title, the six-month period
shall begin to run on the date of foreclosure or its equivalent.
   (3) "Written, bona fide and firm offer" means a legally
enforceable, commercially reasonable, cash offer solely for the
property, including all material terms of the transaction, from a
ready, willing, and able purchaser who demonstrates to the lender's
satisfaction the ability to perform.
25548.6.  A lender's compliance with the requirements of this
chapter with regard to property that has been acquired by the lender
through foreclosure or its equivalent shall not, in and of itself
subject the lender to liability under any law for a removal or
remedial action or damages, penalties, fines, impositions, or
assessments relating to the release or threatened release of
hazardous materials, as defined in subdivision (g) of Section
25548.1.
25548.7.  (a) If a provision of this chapter would result in any of
the actions specified in subdivision (b), the provision shall be
deemed inoperative.  However, the inoperation of a provision shall
not affect other provisions or applications of this chapter which can
be given effect without the inoperative provision and to this end
the provisions of this chapter are severable.
   (b) Subdivision (a) shall apply if any provision of this chapter
is inconsistent with federal law and the use or application of the
provision would result in any of the following actions:
   (1) The imposition of a penalty by a federal agency on the state
or any local agency.
   (2) A loss of federal authorization or loss of federal approval of
a program conducted by the state or local agency.
   (3) A loss of federal funding to the state or any local agency for
a program.