HB 1058
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 1058 (Delegate Stewart)
Environment and Transportation Education, Health, and Environmental Affairs
Public Ethics - Disclosures, Training, and Use of Confidential Information
(Integrity in High Office Act)
This bill makes several modifications to the Maryland Public Ethics Law as it applies to
State and public officials and employees. Among other things, the bill (1) requires the
State Ethics Commission (SEC) to provide a training course on the requirements of the
Ethics Law to State officials subject to the jurisdiction of SEC; (2) establishes various
additional disclosure and reporting requirements for specified State officials; (3) expands
the types of interests attributable to an individual for purposes of financial disclosure; and
(4) prohibits former officials and employees from disclosing or using specified confidential
information for personal economic benefit or the economic benefit of another.
Fiscal Summary
State Effect: General fund expenditures increase by $190,000 in FY 2022 only, as
discussed below. Revenues are not affected.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
Revenues $0 $0 $0 $0 $0
GF Expenditure 190,000 0 0 0 0
Net Effect ($190,000) $0 $0 $0 $0
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: The bill does not directly affect local government finances or operations.
Small Business Effect: None.
 Analysis
Bill Summary/Current Law: The Ethics Law sets out requirements, prohibitions, and
procedures that affect officials in the Legislative, Executive, and Judicial branches of
government for the purpose of maintaining people’s trust in government and protecting
against the improper influence and the appearance of improper influence of government.
The Ethics Law is administered by SEC with the Joint Committee on Legislative Ethics
and the Commission on Judicial Disabilities.
Required Training Course
Under current law, SEC must provide a training course of at least two hours on the
requirements of the Ethics Law for an individual who fills a vacancy in or serves in a
position that has been identified as a public official position. “Public official,” as it applies
to the Ethics Law, means an individual determined to be a public official under § 5-103 of
the General Provisions Article and includes specified individuals in the Executive,
Legislative, and Judicial branches.
Under the bill, SEC must also provide a training course for an individual who, on or after
January 19, 2023, is a State official subject to the jurisdiction of SEC (“State official,” as
defined under current law, includes a constitutional officer or officer-elect in an executive
unit, among others.). For example, the training course requirement applies to the Governor,
Lieutenant Governor, Attorney General, and the Comptroller, and other State officials of
the Executive Branch.
Participation Restrictions
Under current law, an official or employee generally may not participate in a matter if
(1) the official or employee or a qualifying relative has an interest in the matter and the
official or employee knows of the interest or (2) if a business entity with a specified
relationship to the official or employee is a party to the matter.
An official or employee who otherwise would be disqualified from participation in a matter
must disclose the nature and circumstances of the conflict and may participate or act if
(1) the disqualification would leave a body with less than a quorum capable of acting;
(2) the disqualified official or employee is required by law to act; or (3) the disqualified
official or employee is the only individual authorized to act.
Under the bill, if the Governor, Lieutenant Governor, Attorney General, Treasurer, or
Comptroller is required to disclose a conflict of interest in a matter in which he or she
would otherwise be disqualified from participation, he or she must, as appropriate, send a
copy of the disclosure to the Presiding Officers of the General Assembly and SEC.
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The bill also establishes additional disclosure requirements that apply to the Governor,
Lieutenant Governor, Attorney General, Treasurer, Comptroller, and a secretary of a
principal department in the Executive Branch. An aforementioned official who takes
executive action that the official knows or reasonably should know would have a material
financial impact on the official or a person whose interests are attributable to the person,
must provide SEC and the Joint Ethics Committee a description of the executive action and
the circumstances of the potential impact. (“Executive action,” as defined under current
law, means an act for which the Executive Branch of State government is responsible and
that is taken by an official or employee of the Executive Branch.) The disclosure is not
required if the impact is common to (1) all members or a large class of the general public
or (2) all members of a profession or occupation of which the official is a member.
Restrictions on Employment and Financial Interests
Under current law, officials and employees are subject to specified restrictions relating to
employment and financial interests. Except for members of the General Assembly, an
official or employee generally may not be employed by or have a financial interest in (1) an
entity subject to the authority of that official or employee or of the governmental unit with
which the official or employee is affiliated or (2) an entity that is negotiating or has entered
a contract with that governmental unit, or an entity that is a subcontractor on a contract
with that governmental unit. Additionally, an official or employee generally may not hold
any other employment relationship that would impair the impartiality and independent
judgement of the official or employee.
The above prohibitions do not apply in specified circumstances. Among other exceptions,
the prohibitions do not apply to employment or a financial interest allowed by regulation
of SEC if the employment does not create a conflict of interest or the appearance of a
conflict of interest or if the financial interest is disclosed.
Under the bill, if SEC authorizes, by regulation, specified employment or a specified
financial interest by the Governor, Lieutenant Governor, Attorney General, Treasurer, or
Comptroller, SEC must promptly notify the Joint Ethics Committee and provide the
committee with a copy of any agreement or memorandum of understanding between SEC
and the State official or other summary of SEC advice associated with the exception.
However, SEC is not required to provide the committee with internal deliberative
documents that SEC staff provided to SEC. Information provided to the committee under
this provision is not subject to specified confidentiality requirements that apply to advice
provided by SEC.
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Use or Disclosure of Confidential Information
Under current law, an official or employee may not disclose or use confidential
information acquired by reason of the individual’s public position that is not available to
the public for personal economic benefit or the economic benefit of another. Under the bill,
this prohibition also applies to former officials and employees.
Reporting of Contractual Relationships to the Joint Ethics Committee
Under current law, legislators must report to the Joint Ethics Committee in writing
specified information relating to outside earned income. Among other things, a legislator
must report details of any contractual relationship with a governmental entity of the State
or a local government in the State, including the subject matter and the consideration.
Under the bill, the above reporting requirement is expanded to apply to any financial or
contractual relationship, including a financial or contractual relationship whose interests
are attributable to the legislator for purposes of financial disclosure requirements, with the
University of Maryland Medical System (UMMS) or a governmental or
quasi-governmental entity of the State or a local government in the State. The bill defines
“quasi-governmental entity” as an entity that is created by State statute, that performs a
public function, and that is supported in whole or in part by the State but is managed
privately.
Financial Disclosure Statements
Under current law, public officials, State officials, and candidates for office as a State
official must file financial disclosure statements with SEC. Statements generally must
disclose (1) interests in real property; (2) interests in corporations and partnerships;
(3) interests in and employment by business entities doing business with the State; (4) debts
owed to entities doing business with or regulated by an individual’s governmental unit;
(5) family members employed by the State; (6) sources of earned income; and (7) gifts, as
specified.
A filer must disclose an interest held by (1) a spouse or child of an individual, if the interest
was controlled, directly or indirectly, by the individual at any time during the applicable
period; (2) a business entity in which the individual held a 30% or greater interest at any
time during the applicable period; or (3) a trust or estate in which, at any time during the
applicable period, the individual held a reversionary interest, was a beneficiary, or was a
settlor, if a revocable trust.
Under the bill, an individual who is required to disclose the name of a business in a
financial disclosure statement must disclose any other names that the business is trading as
HB 1058/ Page 4
or doing business as. The statement must also include a schedule of any financial or
contractual relationship with UMMS or a governmental or quasi-governmental entity of
the State or local government in the State. For each financial or contractual relationship,
the schedule must include a description of the relationship, the subject matter of the
relationship, and the consideration. However, an individual, other than a State official or
candidate to be a State official, may not be required to disclose the individual’s
employment as a public official. The bill further specifies that SEC and the Joint Ethics
Committee may not post on the Internet information related to consideration received for
such a contractual or financial relationship that is reported in accordance with the bill.
The bill further specifies that, to the extent not already reported, a statement filed on or
after January 1, 2023, by the Governor, Lieutenant Governor, Attorney General, Treasurer,
or Comptroller must include the name of each for-profit business entity in which the
individual has a 10% or greater interest and the name of each person who owns a 10% or
greater interest in the disclosed entity.
In addition, the bill expands the types of interests that any filer generally must disclose to
include (1) a business entity in which the individual held a 10% interest or greater (under
current law, a filer must disclose a business entity in which the individual held a
30% interest or greater) and (2) a business entity in which the individual directly or
indirectly, through an interest in one or a combination of other business entities, holds a
10% interest or greater. In addition, specified interests of business entities in which the
individual has at least a 10% interest are considered interests attributable to the individual
for purposes of financial disclosure.
State Expenditures: SEC advises that the bill’s changes necessitate various modifications
to its electronic financial disclosure and ethics training systems, including the development
of new financial disclosure and training modules for certain State officials.
One-time costs related to these modifications are estimated to total $190,000. Thus, general
fund expenditures for SEC increase by $190,000 in fiscal 2022, which reflects the bill’s
October 1, 2021 effective date. Although some of the bill’s requirements, with respect to
ethics training and financial disclosure statements for specified Executive Branch officials,
do not apply until January 2023, it is assumed that all funds needed to implement the bill
are expended or encumbered in fiscal 2022 to ensure that necessary modifications are
completed in time.
HB 1058/ Page 5
 Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Maryland Department of Aging; Maryland Environmental
Service; Department of Commerce; Comptroller’s Office; Governor’s Office; Maryland
State Treasurer’s Office; Maryland State Department of Education; Maryland Department
of Agriculture; Department of Budget and Management; Maryland Department of the
Environment; Department of General Services; Maryland Department of Health;
Department of Housing and Community Development; Maryland Department of
Disabilities; Department of Human Services; Department of Juvenile Services; Department
of Natural Resources; Maryland Department of Planning; Department of Public Safety and
Correctional Services; Board of Public Works; Department of State Police; Maryland
Department of Transportation; Department of Veterans Affairs; State Ethics Commission;
Department of Legislative Services
Fiscal Note History: First Reader - February 19, 2021
rh/lgc Third Reader - March 29, 2021
Revised - Amendment(s) - March 29, 2021
Analysis by: Elizabeth J. Allison Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 1058/ Page 6


Statutes affected:
Text - First - Public Ethics - Disclosures, Training, and Use of Confidential Information (Integrity in High Office Act): 5-101 General Provisions, 5-205 General Provisions, 5-103 General Provisions, 5-301 General Provisions, 5-303 General Provisions, 5-501 General Provisions, 5-502 General Provisions, 5-507 General Provisions, 5-514 General Provisions, 5-606 General Provisions, 5-607 General Provisions, 5-608 General Provisions, 5-501 General Provisions
Text - Third - Public Ethics - Disclosures, Training, and Use of Confidential Information (Integrity in High Office Act): 5-101 General Provisions, 5-205 General Provisions, 5-103 General Provisions, 5-301 General Provisions, 5-303 General Provisions, 5-501 General Provisions, 5-502 General Provisions, 5-507 General Provisions, 5-514 General Provisions, 5-606 General Provisions, 5-607 General Provisions, 5-608 General Provisions, 5-501 General Provisions