SECTIONS 25548-25548.7

25548.  (a) The Legislature hereby finds and declares all of thefollowing: (1) There is uncertainty in the law of this state with regard tothe liability of lenders for hazardous material contaminationinvolving property that is owned or used by borrowers, whether or notthe property is collateral for the loan or obligation. (2) There is also uncertainty in the law of this state with regardto the liability of trustees, executors, and other fiduciaries forhazardous material contamination involving property that is part ofthe fiduciary estate. Fiduciaries understand that the fiduciaryestate may have that liability, but are concerned that a fiduciarymay have independent personal liability, despite the absence ofpersonal culpability for the contamination. (3) The uncertainty as to liability or potential liability isattributable to the failure of existing law, except for the securityinterest exemption incorporated by reference in Section 25323.5, torecognize that usually the credit or fiduciary relationship is notsufficiently related to the hazardous material contamination towarrant, as a policy matter, the imposition of liability on lendersand fiduciaries. (b) It is the intent of the Legislature, in enacting this chapter,to specify the type of lender and fiduciary conduct that will notincur liability for hazardous material contamination. However, theliability exemption has appropriate boundaries. For example, theexemption will not protect lenders or fiduciaries in transactionsthat are structured for the purpose of evading liability forhazardous material contamination if the lender or fiduciary is notacting within its respective capacity, or if the contamination iscaused by the lender or fiduciary. (c) This chapter does not apply to judicial actions filed, oradministrative orders issued, before January l, 1997, or toproceedings to enforce judicial or administrative orders issuedbefore January 1, 1997.25548.1.  As used in this chapter, the following terms have thefollowing meaning: (a) "Actual benefit" means the amount, if any, realized by thelender upon the disposition of property acquired through foreclosureor its equivalent as a direct result of a removal or remedial actionundertaken by another person, not to exceed the amount, if any, bywhich the disposition proceeds exceed the sum of the balance of allof the following: (1) The loan or obligation or the amount of the lien, evidenced bythe loan or obligation outstanding at foreclosure or its equivalent. (2) The costs, including attorneys' fees, incurred by the lenderin connection with the foreclosure or its equivalent, subsequentownership, any removal or remedial action, and disposition of theproperty. (b) "Borrower, debtor or obligor" means a person who is obligatedto a lender under a loan or obligation, whether or not the lendermaintains 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, butnot limited to, costs of a removal or remedial action. (d) "Fiduciary" means a person who is acting in any of thefollowing capacities: (1) As trustee for a trust described in paragraph (1) or (2) ofsubdivision (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, ofsubdivision (b) of Section 82 of the Probate Code. (3) A trustee appointed in proceedings under any state or federalbankruptcy law. (4) An assignee or a trustee acting under an assignment made forthe benefit of creditors. (5) A court-appointed receiver. (e) "Finance lease" means a transaction with respect to which bothof the following apply: (1) The lessor does not select or manufacture the goods or doesnot supply the goods, except in the case of a re-lease, whether it iscreated by a new transaction or substitution of the lessee. (2) The lessor acquires the goods or right to possession and useof the goods in connection with the lease or a prior leasetransaction. (f) "Foreclosure or its equivalent" means the acquisition ofproperty by a lender through any of the following: (1) Judicial or nonjudicial foreclosure of the lender's securityinterest in the property or acceptance of a deed or other conveyancein satisfaction thereto. (2) Acceptance of a deed in lieu or other conveyance insatisfaction 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 lawor under warranties, covenants, conditions, representations orpromises from the borrower, by which the lender acquires, forsubsequent disposition, actual possession of the property subject toa security interest. (g) "Hazardous material" has the same meaning as defined insubdivision (d) of Section 25260. (h) (1) "Indicia of ownership" means evidence of a securityinterest, evidence of an interest in a security interest, or evidenceof an interest in real or personal property securing a loan or otherobligation, including, but not limited to, any legal or equitabletitle to real or personal property acquired incident to foreclosureor its equivalent. (2) "Evidence of an interest" includes, but is not limited to, allof 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 lessordoes not select initially the leased property. (F) Legal or equitable title obtained pursuant to foreclosure orits equivalent. (G) Assignments, pledges, or other rights to, or other forms of,encumbrance against property that are held primarily to protect asecurity interest. (3) A person is not required to hold title or a security interestto maintain indicia of ownership. (i) "Lender" means a person to the extent of the capacity in whichthat person maintains indicia of ownership primarily to protect asecurity interest or makes, acquires, renews, modifies, or holds aloan or obligation from a borrower. "Lender" includes either of thefollowing persons: (1) Any person who acts as, or on behalf of, a lender inconnection with any aspect of the solicitation, negotiation,consummation, disbursement, administration, servicing, collection,enforcement, or foreclosure or its equivalent of a loan or obligationor security interest in property such as a surety, escrow, or titlecompany. (2) Any person who makes, secures, acquires, or holds a loan orobligation or security interest by assignment, sale, pledge,subrogation, succession, or operation of law, or becomes the receiverfor the holder of a loan or obligation or security interest. (j) "Loan or obligation" means a loan, revolving or nonrevolvingline of credit, finance lease, sale-leaseback that provides for apurchase option in favor of the lessee, installment sale contract,sale on account, or other credit sale, letter of credit, forbearanceor guaranty, collateral pledge, or other suretyship obligation, andany extension, renewal, or modification thereof. A loan or obligationmay 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 actualparticipation in the management or operational affairs of theproperty by the lender while the borrower, under the loan orobligation, is in possession of the property, and the lenderexercises decisionmaking control over the environmental compliance bythe borrower, so that the lender assumes responsibility for thehazardous material handling or disposal practices of the borrower, orexercises control at a level comparable to that of a manager of theenterprise of the borrower, so that the lender assumes or manifestsresponsibility for the overall management of the enterpriseencompassing the day-to-day decisionmaking of the enterprise withrespect to either of the following: (A) Environmental compliance. (B) All, or substantially all, of the operational, as opposed tofinancial or administrative, aspects of the enterprise other thanenvironmental compliance. (2) For purposes of paragraph (1), the following terms have thefollowing meaning: (A) "Operational aspects of the enterprise" includes, but is notlimited to, functions such as that of facility or plant manager,operations manager, chief operating officer, or chief executiveofficer. (B) "Financial or administrative aspects" includes, but is notlimited to, functions such as that of a credit manager, accountspayable/receivable manager, personnel manager, controller, or chieffinancial officer. (3) Notwithstanding paragraph (1), "participation in themanagement of the property" does not include an act or omission by aprospective lender prior to making, acquiring, or holding a loan orobligation. "Participation in the management of the property" alsodoes not include the actions taken by a prospective lender whoundertakes or requires an environmental inspection of property priorto making, acquiring, or holding a loan or obligation. A lender orprospective lender does not "participate in the management of theproperty" if the lender or prospective lender requires the borrowerto clean up the property or requires the borrower to comply or comeinto compliance with any applicable law or regulation. This chapterdoes not require a lender to conduct or require an inspection priorto foreclosure or its equivalent to qualify for the exemptionprovided by this chapter, and the liability of a lender shall not bebased on or affected by whether the lender conducts or requires aninspection prior to foreclosure or its equivalent. (4) Loan policing and work out activities, as specified inparagraphs (5) and (6), that are consistent with holding ownershipindicia primarily to protect a security interest and consistent witha loan or obligation made, acquired, or held primarily for purposesother than investment purposes, do not constitute participation inthe management of the property. The authority for the lender to takethose actions may, but are not required to, be contained incontractual or other documents specifying requirements for financial,environmental, and other warranties, covenants, conditions,representations, or promises from the borrower. Loan policing andwork out activities include all activities up to foreclosure or itsequivalent. (5) A lender who engages in loan policing activities prior toforeclosure or its equivalent is exempt from liability pursuant tothis chapter if the lender does not, by those actions, participate inthe management of the property. Those actions include, but are notlimited to, all of the following: (A) Requiring the borrower to conduct a removal or remedial actionduring the term of the security interest or loan or obligation. (B) Requiring the borrower to comply or come into compliance withapplicable federal, state, and local environmental and other lawsduring the term of the security interest or loan or obligation. (C) Securing or exercising authority to monitor or inspect theproperty, including onsite inspections, or the business or financialcondition of the borrower during the term of the security interest orloan or obligation. (D) Taking other actions to adequately police the loan,obligation, or security interest, such as requiring the borrower tocomply with any warranties, covenants, conditions, representations,or promises in connection with the security interest or loan orobligation. (6) (A) A lender who engages in work out activities prior toforeclosure or its equivalents is exempt from liability pursuant tothis chapter if the lender does not, by those actions, participate inthe management of the property. (B) "Work out" means those actions by which a lender, at any timeprior to foreclosure or its equivalent, seeks to prevent, cure, ormitigate a default by the borrower, or to preserve or prevent thediminution of the value of the property, security interest, or loanor obligation. (C) Work out activities include, but are not limited to, all ofthe 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 orother amounts owing to a lender. (iv) Requiring or exercising rights pursuant to an escrowagreement 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 bylaw or under any warranties, covenants, conditions, representations,or promises from the borrower. (7) A lender does not participate in the management of theproperty by taking any response action under Section 107(d)(1) of theComprehensive Environmental Response, Compensation and Liability Actof 1980 (42 U.S.C. Sec. 9607(d)(1)). However, the lender may beliable for damages, as defined by this chapter, that occur as aresult of the gross negligence or willful misconduct of the lender inhis or her performance of a response action under Section 107 (d)(1)of the Comprehensive Environmental Response, Compensation andLiability Act of 1980 (42 U.S.C. Sec. 9607(d)(1)). ( l) "Person" means any entity, including, but not limited to, anindividual, 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, orany department, subdivision, or agency thereof. (m) (1) "Primarily to protect a security interest" means that theindicia of ownership of a lender are held primarily for the purposeof securing payment or performance of an obligation. (2) "Primarily to protect a security interest" does not includeindicia of ownership held primarily for investment purposes orindicia of ownership held primarily for purposes other than asprotection for a security interest. A lender may have other,secondary reasons for maintaining indicia of ownership, but theprimary reason that any indicia of ownership are held shall be asprotection for a security interest. (n) "Property" means any real or personal property where hazardousmaterials are or were generated, handled, managed, deposited,stored, disposed of, placed, released, or otherwise have come to belocated. In the context of a loan or obligation, "property" includesany real or personal property in which the obligor has or had anownership, leasehold, or possessory interest, whether or not it wasthe 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 insubdivision (g) of Section 25260. (q) "Removal" means the cleanup or removal of released hazardousmaterials from the environment or the taking of other actions thatmay be necessary to prevent, minimize, or mitigate damages that mayotherwise result from a release or threatened release, as furtherdefined in Section 101(23) of the Comprehensive EnvironmentalResponse, Compensation and Liability Act of 1980 (42 U.S.C. Sec. 9601(23)). (r) "Security interest" means an interest in a property created orestablished for the purpose of securing a loan or obligation.Security interests include, but are not limited to, mortgages, deedsof trust, liens, and title pursuant to a finance lease. Securityinterests may also arise from transactions such as sale andleasebacks, conditional sales, installment sales, trust receipttransactions, certain assignments, factoring agreements, and accountsreceivable financing arrangements and consignments if thetransaction creates or establishes an interest in a property for thepurpose of securing a loan or other obligation.25548.2.  (a) (1) Except as provided in Sections 25548.4 and25548.5, a person, by reason of acting in the capacity of a lender,shall not be liable under any state or local statute, regulation, orordinance to the extent of either of the following: (A) To the extent that the statute, regulation, or ordinancerequires the person to take a removal or remedial action, pay apenalty, fine, imposition, or assessment, or to forfeit the propertyspecified in paragraph (2), and that liability arises from therelease or threatened release of hazardous materials, at, from, or inconnection with the property. (B) To the extent that the statute, regulation, or ordinanceauthorizes damages arising from the release or threatened release ofhazardous materials, at, from, or in connection with the propertyspecified in paragraph (2). (2) The exemption from liability provided by paragraph (1) shallapply to the following property: (A) Property in which the lender maintains indicia of ownershipprimarily to protect a security interest. (B) Property that was acquired by the lender through foreclosureor its equivalent. (C) Property that is owned, leased, possessed, or used by a personwho is obligated to the lender under a loan or obligation and inwhich the lender holds no security interest. (b) A lender who did not participate in the management of theproperty prior to foreclosure or its equivalent may sell, re-leaseproperty held pursuant to a finance lease, whether by a new financelease or by substitution of the lessee, liquidate, maintain businessactivities, wind up operations, undertake any response action underSection 107(d)(1) of the Comprehensive Environmental ResponseCompensation and Liability Act of 1980 (42 U.S.C. Sec. 9607(d)(1))and take measures to preserve, protect, or prepare the property priorto sale or other disposition. The lender may conduct thoseactivities without voiding the exemption set forth in subdivision(a), subject to the requirements of subdivision (a) of Section25548.5. However, the lender may be liable for damages, as defined bythis chapter, that occur as a result of the lender's grossnegligence or willful misconduct in the lender's performance of aresponse action under Section 107(d)(1) of the ComprehensiveEnvironmental Response Compensation and Liability Act of 1980 (42U.S.C. Sec. 9607(d)(1).25548.3.  (a) Except as provided in Sections 25548.4 and 25548.5 ofthis code, and in Sections 18001 and 18002 of the Probate Code, theliability of a fiduciary to any person under any state or localstatute, regulation, or ordinance, to the extent that the statute,regulation, or ordinance requires or permits a removal or remedialaction as a result of, or authorizes the recovery of damages, paymentof a penalty, fine, imposition, or assessment arising from, therelease or threatened release of hazardous material at, from, or inconnection with any property held at any time by the fiduciary aspart of the fiduciary estate, shall be limited to, and satisfied onlyfrom, the assets held in the fiduciary estate. (b) This section does not expand the applicability of any state orlocal statute, regulation, or ordinance to a substance or materialthat is not otherwise subject to that statute, regulation, orordinance.25548.4.  This chapter does not do any of the following: (a) Affect any rights, defenses, or immunities that are availableto 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 orfiduciary. (d) Exempt or excuse a lender or fiduciary who operates or directsthe operation, or maintains the operation, of the property fromcompliance with the operational requirements of applicable laws.Those operational requirements include, but are not limited to,permitting, reporting, monitoring, emission limitation, correctiveaction, financial responsibility and assurance requirements,requirements to take removal or remedial action to respond to arelease or threatened release of hazardous materials caused by thelender or fiduciary and the requirements of Division 26 (commencingwith Section 39000) of this code or of Division 7 (commencing withSection 13000) of the Water Code. Operational requirements includethe payment of fees, fines, and penalties, and compliance with anyother enforcement provisions that are applicable as a result of theoperation, or the direction of the operation, or the maintenance ofthe operation, of the property by the lender or fiduciary. (e) Affect any liability of a fiduciary to a beneficiary of afiduciary estate for breach of trust under Chapter 4 (commencing withSection 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 orthe recovery of damages relating to a release or threatened releaseof hazardous material, to the extent that the lender is a responsibleparty pursuant to Section 107(a)(3) or (4) of the ComprehensiveEnvironmental Response Compensation and Liability Act of 1980 (42U.S.C. Sec. 9607(a)(3) or (4)). (h) Exempt a lender or fiduciary from any liability imposed byChapter 6.5 (commencing with Section 25100). (i) Exempt or excuse a lender from liability under any state orlocal statute, regulation, or ordinance for a known or suspectedrelease or known or suspected threatened release of hazardousmaterials caused by events or conditions occurring prior toforeclosure or its equivalent, unless, after taking possession of theproperty, the lender promptly takes each of the following actions inaccordance with applicable law: (1) Suspends operations with respect to that portion of theproperty where the known or suspected release or known or suspectedthreatened release occurred or may occur. (2) Removes from the suspended operations and affected areas onthe property, all hazardous material not released into theenvironment 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 or25359.5 or other state or local fencing, posting, securing,notification, or reporting laws with regard to property that isacquired by a lender through foreclosure or its equivalent, to theextent that those requirements are otherwise applicable to theproperty. (k) Exempt a lender from compliance with an administrative orderrequiring immediate and temporary measures to prevent, abate, orminimize an emergency caused by a release or threatened release ofhazardous material at, from, or in connection with, any property thathas been acquired by the lender through foreclosure or itsequivalent, when all of the following circumstances exist: (1) The release or threatened release presents an imminent andsubstantial endangerment to the public health or welfare or theenvironment. (2) No other person who is viable and potentially responsible forthe release or threatened release has been identified and located bythe agency issuing the order, following a reasonable effort by theagency to identify and locate any such person. (3) The costs and expenses incurred by the lender to comply withthe administrative order do not exceed twenty-five thousand dollars($25,000). (4) If the lender complies with the administrative order, thecompliance would not, in and of itself, subject the lender toliability for a removal or remedial action or damages, fines,penalties, impositions, or assessments relating to the release orthreatened release under any federal law. ( l) (1) Exempt a lender who has acquired title to propertythrough foreclosure or its equivalent from operation and maintenancerequirements that were established on the property as a result of aremoval or remedial action conducted on the property. (2) "Operation and maintenance requirements" include, but are notlimited to, deed restrictions and requirements to maintain passiveexposure controls and to perform monitoring. If there arerequirements other than operation and maintenance requirements, whichare applicable to the property to maintain the effectiveness of theremoval or remediation action, the lender shall comply with thoserequirements unless the lender, upon foreclosure or its equivalent,notifies the appropriate agency that it does not intend to complywith the requirements and the agency concurs. (m) Require a lender to conduct, or require a lender to direct thetaking of, an inspection of the property after foreclosure or itsequivalent to qualify for the exemption provided by this chapter, andthe liability of a lender shall not be based on, or affected by, thelender not conducting, or not requiring, an inspection of theproperty after foreclosure or its equivalent. (n) Require a fiduciary to conduct or require an inspection of theproperty in a fiduciary estate to qualify for the exemption providedby this chapter and the liability of the fiduciary shall not bebased on, or affected by, the fiduciary not conducting or notrequiring an inspection prior to holding the property as part of thefiduciary estate.25548.5.  The exemptions set forth in Sections 25548.2 and 25548.3shall not apply: (a) If, after foreclosure or its equivalent is conducted, thelender does not undertake to sell, re-lease property held pursuant toa finance lease, whether by a new finance lease or by substitutionof the lessee, or otherwise undertake to be divested of the propertyin a reasonably expeditious manner, using whatever commerciallyreasonable means are relevant or appropriate with respect to theproperty, taking all facts and circumstances into consideration. Forpurposes of establishing that a lender is seeking to sell, re-leaseproperty held pursuant to a finance lease, whether by a new financelease or substitution of the lessee, or be divested of property in areasonably expeditious manner, the lender may use whatevercommercially reasonable means as are relevant or appropriate withrespect to the property, or may employ the following means: (1) For purposes of this subdivision, the exemption set forth insubdivision (a) of Section 25548.2 shall apply following foreclosureor its equivalent, if, within 12 months following foreclosure or itsequivalent, the lender does either of the following: (A) Lists the property for sale, re-lease, or other dispositionwith a broker, dealer, or agent who deals with that type of property. (B) Advertises the property for sale, re-lease, or otherdisposition on at least a monthly basis in either of the following: (i) A real estate publication or trade or other publicationsuitable for advertising the property. (ii) A newspaper of general circulation, which is a newspaper witha circulation over 10,000 or one suitable under any applicablefederal, state, or local rules of court for publication required bycourt order or rules of civil procedure, covering the area where theproperty is located. (2) For purposes of this subdivision, the 12-month period shallbegin to run from the date that the lender acquires marketable titleto the property if the lender, after the expiration of any redemptionor other waiting period provided by law, has acted diligently toacquire marketable title. If the lender has failed to act diligentlyto acquire marketable title, the 12-month period shall begin to runon the date of foreclosure or its equivalent. (b) If, after foreclosure or its equivalent, the lender does notcomply with all applicable statutes, regulations, or ordinances thatrequire the disclosure of information or conditions regarding theproperty to any person. (c) If the fiduciary's negligent or intentional or recklessconduct causes or contributes to the release or threatened release ofa hazardous material at, from, or in connection with a property heldby the fiduciary as part of the fiduciary estate. (d) With respect to liability that arises from a voluntary removalor remedial action taken by a fiduciary if, prior to initiating avoluntary removal or remedial action, the fiduciary does not notifythe appropriate agency of the fiduciary's intent to conduct thataction. (e) With respect to liability that arises from conduct of, orownership of the property by, the lender or fiduciary, other than inits capacity as a lender or fiduciary. (f) Where the loan or obligation or fiduciary relationship orfiduciary transaction is structured for the purpose of evadingliability for a release or threatened release of hazardous materials. (g) If the fiduciary is both a beneficiary and fiduciary withrespect to the same fiduciary estate, or as a fiduciary, receivesbenefits that exceed customary or reasonable compensation for theadministration of the property permitted under other applicable law. (h) To the extent of the actual benefit, if any, realized by alender upon the disposition of property acquired through foreclosureor its equivalent as a result of a removal or remedial actionundertaken by another person. (i) If the lender participated in the management of the propertybefore foreclosure or its equivalent, except that the lender'sliability shall be limited to any release or threatened release whichoccurred while the lender participated in the management of theproperty. (j) If the lender, by an act or failure to act caused orcontributed to the release or threatened release of the hazardousmaterial. (k) If the lender made, secured, held, or acquired the loan orobligation primarily for investment purposes. ( l) If the lender outbids, rejects, or fails to act upon an offerof fair consideration for the property acquired through foreclosureor its equivalent, unless the lender is required, to avoid liabilityunder federal or state law, to make a higher bid, to obtain a higheroffer, or to seek or obtain an offer in a different manner. Forpurposes of this subdivision, the following terms shall have thefollowing meaning: (1) (A) "Fair consideration" means the sum of all of the followingless the amounts specified in subparagraph (B): (i) The value of the security interest or loan or obligationcalculated as an amount equal to or in excess of, the sum of theoutstanding principal, or comparable amount in the case of a financelease, owed to the lender immediately preceding the acquisition offull title pursuant to foreclosure or its equivalent. (ii) Any unpaid interest, rent, or penalties, whether arisingbefore or after foreclosure or its equivalent. (iii) All reasonable and necessary costs, fees, or other chargesincurred by the lender incident to workout, foreclosure or itsequivalent, retention, maintaining the business activities of theenterprise, preserving, protecting, and preparing the property priorto sale, re-leasing the property held pursuant to a finance lease,whether by a new finance lease or substitution of the lessee, orother disposition. (iv) The lender's costs incurred for any removal or remedialaction, including but not limited to, response costs for responseaction taken by the lender under Section 107(d)(1) of theComprehensive Environmental Response Compensation and Liability Actof 1980 (42 U.S.C. Sec. 9607(d)(1)). (B) In determining fair consideration, the following amounts shallbe subtracted from the sum calculated pursuant to subparagraph (A): (i) Any amounts received by the lender in connection with anypartial disposition of the property. (ii) Net revenues received as a result of maintaining the businessactivities of the enterprise. (iii) Any amounts paid by the borrower subsequent to theacquisition 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 valueof all outstanding higher priority security interests, loans orobligations plus the value of the security interest, loan orobligation held by the junior holder, calculated as set forth in thisparagraph. (2) "Outbids, rejects, or fails to act upon an offer of fairconsideration" means that the lender outbids, rejects, or fails toact upon within 90 days from the date of receipt of a written, bonafide and firm offer of fair consideration for the property receivedat any time after six months following foreclosure or its equivalent.That six-month period shall begin to run from the date that thelender acquires marketable title, if the lender, after the expirationof any redemption or other waiting period provided by law, has acteddiligently to acquire marketable title. If the lender has failed toact diligently to acquire marketable title, the six-month periodshall begin to run on the date of foreclosure or its equivalent. (3) "Written, bona fide and firm offer" means a legallyenforceable, commercially reasonable, cash offer solely for theproperty, including all material terms of the transaction, from aready, willing, and able purchaser who demonstrates to the lender'ssatisfaction the ability to perform.25548.6.  A lender's compliance with the requirements of thischapter with regard to property that has been acquired by the lenderthrough foreclosure or its equivalent shall not, in and of itselfsubject the lender to liability under any law for a removal orremedial action or damages, penalties, fines, impositions, orassessments relating to the release or threatened release ofhazardous materials, as defined in subdivision (g) of Section25548.1.25548.7.  (a) If a provision of this chapter would result in any ofthe actions specified in subdivision (b), the provision shall bedeemed inoperative. However, the inoperation of a provision shall notaffect other provisions or applications of this chapter which can begiven effect without the inoperative provision and to this end theprovisions of this chapter are severable. (b) Subdivision (a) shall apply if any provision of this chapteris inconsistent with federal law and the use or application of theprovision would result in any of the following actions: (1) The imposition of a penalty by a federal agency on the stateor any local agency. (2) A loss of federal authorization or loss of federal approval ofa program conducted by the state or local agency. (3) A loss of federal funding to the state or any local agency fora program.