SPECIAL ETHICS LAW MEMO #9

 

RE:    FINANCIAL DISCLOSURE - APPLICATION OF COMPENSATION AND DUTIES CRITERIA

 

            Maryland Code Annotated, State Government Article Subtitle 6 requires all public officials and candidates for office as State officials to file financial disclosure statements.  You must submit your initial disclosure statement within 30 days after appointment to a position or office covered by the Law and on or before April 30th each year thereafter.  If you leave your position as a public or State official, you must submit a termination statement within 60 days after leaving a position.  Judicial officials, including judges, masters, examiners, commissioners, auditors and referees of the Judicial Branch, file as required by the Court of Appeals.  All others (including judicial employees) file with the State Ethics Commission.

            "State Official" includes a members or member-elect of the General Assembly, a judge or judge-elect of a court created by Article IV, Section 1 of the Constitution and a person defined in Rule 11 of the Maryland Rule No. 1232 or a constitutional officer or officer-elect in the executive branch of the State government.  "State Official" also means a person holding office as a State's Attorney, Clerk of the Circuit Court, Register of Wills and Sheriff. (See Md. Code Ann., State Gov’t § 15-102 (ll) (Supp. 2001).

 

            “Public Official," as defined in Md. Code Ann., State Gov’t § 15-103 (Supp. 2001) includes: an individual who receives compensation at a rate equivalent to at least State grade level 16, or who is appointed to a board, if the Ethics Commission determines that the individual, acting alone or as a member of an executive unit, has decision making authority or acts as a principal advisor to one with authority in making State policy in an executive unit or in exercising quasi-judicial, regulatory, licensing, inspecting or auditing functions and the individual’s duties are not essentially administrative and ministerial.  Public official also includes any other individual in an executive unit, if the Ethics Commission determines that the individual, acting alone or as a member of the executive unit, has decision making authority or acts as a principal advisor to one with that authority in drafting specifications for, negotiating, or executing contracts that commit the State or an executive unit to spend more than $10,000 in a year.  Public official also includes a member, appointee, or employee of the Maryland Stadium Authority; a member, appointee, or employee of the Canal Place Preservation and Development Authority; and a member of the Emergency medical Services Board. 

 

Questions and Answers

 

1.         Are grades lower than Grade 16 required to file if they are currently compensated at a figure equal to or above a Grade 16 base?

 

Answer:  No.  The legislation is directed toward people with certain duties or discretion.  People in grades below 16 generally have less discretion, impact, and responsibility than those at Grade 16 although salaries in the higher steps of the lower grades tend to reflect seniority in a position rather than qualitatively different duties.  Based on the Law and past practice, those in Grades 13, 14 and 15 are thus not included, even though they may be at a high step and actually receive more than $41,074.  Therefore, individuals in State Grades 13, 14 and 15 are not being requested to file financial disclosure reports unless they meet the contractual criteria that apply regardless of salary. 

 

The State of Maryland Salary Structure, as of July 1, 2008 for graded employees is as follows:

 

Grade 16                     $41,074   to   65,568

Grade 15                     $38,594   to   61,427

Grade 14                     $36,280   to   57,567

Grade 13                     $34,113   to   53,944

 

As can be seen in the above salary analysis, a Grade 13 may be earning more than a Grade 16 base.

 

2.         Do people who are not in the graded pay system (classified or compensated at a pay grade) have to file?

 

Answer:  There are people compensated on a flat rate or slope basis rather than in accordance with the pay grade system.  State employees with flat or slope pay rates equal to a Grade 16 base or above meet the criteria in the definition and are required to file financial disclosure statements if they perform the duties specified in the definition of public official.

 

3.         What about people who may be in State or local pay systems (either graded, flat rate or classified) different from the Maryland Grades 1 to 26 program?

 

Answer:  If the base of the grade is at or above a State Grade 16 base, then the individual is must file; if below, he or she is not required to file.  Flat rate employees under local or other special personnel systems meet the criteria if their pay rates are equal to or higher than the base of a State Grade 16.  Specific questions involving comparability of positions and pay should be referred to the Ethics Commission.

 

4.         Are part‑time employees required to file financial disclosures if they fill positions carrying a rate that would be covered but do not actually work enough hours to get the full amount?

 

Answer:  In general, part-time employees are subject to the same rules as regular full-time employees even if the amount they actually receive is less than a full year's pay.   The Commission is guided by the pay rate or pay grade, not by the amount received.  Specific questions involving the applicability of the Ethics Law to part-time personnel should be referred to the Ethics Commission.

 

5.         How are individuals involved in State contracts to be identified for purposes of determining if they must file financial disclosures?

 

Answer:  The Commission follows written guidelines and considers opinions offered by the Department of Budget & Management.

 

6.         What "principal advisors" are required to file financial disclosures?

 

Answer:  The Ethics Law requires that principal advisors to the following categories of people file financial disclosure statements:

1.         Principal advisor to persons making State policy in an executive unit.

2.         Principal advisor to a person exercising quasi-judicial, regulatory, licensing, inspecting, or auditing functions.

 

To be identified as a public official under this provision an individual should meet the following standards:

1.         Fit within the compensation standard.

2.                   Provide advice on a regular basis to the person with decision-making authority in making policy, or in exercising quasi-judicial, regulatory, licensing, inspecting or auditing functions.

3.         Have advisory duties that are significant, and involve discretion.

4.         If the person is a full-time or part-time faculty member at a State institution of higher education, in addition to having decision making authority or being a principal advisor as outlined above, the person must also directly procure, directly influence, or otherwise directly affect the formation or execution of any State contract or sale as established by guidelines of the State Ethics Commission (see Question #7 below).

 

7.         How will decisions be made regarding impact on procurement, contracts and sales by those faculty members who meet the salary and duties criteria discussed in Question #6?

 

Answer:  Faculty members who meet the duties and salary criteria outlined in this memorandum should be further evaluated in accordance with the criteria in Commission Information Memorandum #11.

 

8.         What should a person do if he or she has questions regarding financial disclosure or other provisions of the Public Ethics Law?

 

Answer:  If you need information regarding the application of the Ethics Law or the decisions to be made by the State Ethics Commission, consult your Financial Disclosure Filer Identification Manual, or call the State Ethics Commission at 410-260-7770.  If you do not have a copy of this Manual, it can be obtained by calling the Ethics Commission.    

 

(7/1/08)