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Arthur G. Baggett, Jr. • December 23, 2002 Page 5 of 7 deed of trust. The Division Chiefs argument that the Trust in this case "never intended on purchasing the property" is simply untrue. The very purpose of a deed of trust is to allow the lender to acquire legal title to the property upon default. B. The Lender Liability Rules are Inapplicable Here The Division Chief s determination appears to reflect a hesitance to find the Claimant in this case an"owner" for purposes of eligibility for the Fund for fear of creating new precedent that insinuates that all lenders are UST owners for the purposes of liability for corrective action. The Division Chief even cites to the federal lender liability rules to support her position that this claimant cannot be an"owner" for purposes of the Fund. Her reliance on these federal regulations is misplaced. First, the California code section that defines "owner" for purposes of eligibility for the Fund does not reference the Federal Lender Liability regulations. Health and Safety Code section 25299.21. Second, the Federal Lender Liability regulations specify exactly what they apply to—and this specification does not include California's Underground Storage Tank Fund eligibility requirements. 43 CFR section 280.220 explains: "A holder is not an "owner" of a petroleum UST or UST system or facility or property on which a petroleum UST or UST system is located for purposes of compliance with the UST technical standards as defined in §280.200(a), the UST corrective action requirements under§§280.251 through 280.67, and the UST financial responsibility requirements under§§280.90 through 280.111..." While is it is clear that Congress tried to provide lenders some protection from liability under Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) through section 101(20)(A) of that Act, and the subsequent Asset Conservation Act [Pub. L. No. 104-208, H.R. Rep. No. 3610 (1996) (Ch. 2 Sub E)] and the resultant federal regulations, it is also clear that this protection does not extend to liability under other federal laws, state law, or local law. Hence, the situation we have here—San Joaquin County is pursuing this Claimant as a responsible party and this Claimant cannot rely on any of the protections afforded by the federal lender liability law. One must also look at the purpose of these federal regulations—they were intended to facilitate the economic transition and financing of real property by ensuring lenders that they would not be sought after by the EPA or third parties to fund corrective work under CERCLA. These rules were not established to thwart access to California's UST Cleanup Fund once a lender has been found liable for corrective action under another law and has decided to commence the corrective action. The federal lender liability rules have no applicability to this situation and a finding that this Claimant is eligible for the Fund in no way conflicts with them. \\nt_oas\prolaw\documents\1818-001\JI S\27036.doc