# COMAR Title 19A — State Ethics Commission

## Subtitle 06 — Blind Trusts

### Chapter 01 — General Provisions

**Authority:** General Provisions Article, §§5-206, 5-501, 5-502, and 5-608, Annotated Code of Maryland

**Administrative History:** Effective date: May 27, 1991 (18:10 Md. R. 1118)

**Administrative History:** Regulations .01—.03 amended effective April 7, 1997 (24:7 Md. R. 554)

**Administrative History:** Regulation .03A amended effective January 16, 2017 (44:1 Md. R. 12)

#### Regulation .01 Purpose and Scope.

*COMAR 19A.06.01.01*

A. General Provisions Article, §5-501, Annotated Code of Maryland, establishes nonparticipation requirements for employees and officials of the State when the official matter is one in which they have an interest or which involves as a party a business entity with which they have certain economic relationships. General Provisions Article, §5-502, prohibits these officials and employees from having a financial interest in an entity that is subject to their authority or that of an agency with which they are affiliated or that has or is negotiating a contract with the agency. Exception from the prohibitions of General Provisions Article, §§5-501 and 5-502, Annotated Code of Maryland, is provided for persons under the authority of the State Ethics Commission pursuant to regulations of the Commission where it determines that there is no conflict or appearance of conflict, and where the exception would not be inconsistent with the purposes of the Law.

B. The purpose of this subtitle is to define the circumstances under which a certified blind trust or an excepted blind trust would be viewed by the Commission as meeting the statutory criteria for exception from these conflict of interest provisions. An underlying concept is that, in situations where a trust is created by an independent third party or there are diversified holdings in a trust created by a government official or employee, and where the official or employee does not know the identity of the financial interests and does not control these interests, then his or her official actions would not be influenced or appear to be influenced by private interests. Thus, the general public policy goal to be achieved through reliance on a blind trust is an actual “blindness” or lack of knowledge or control by the official or employee with respect to the interests held in trust.

#### Regulation .02 Applicability and Definitions.

*COMAR 19A.06.01.02*

A. The regulations in this subtitle apply to an individual serving as an official or employee in State government, as defined in §G of this regulation.

B. In addition to §§C—H of this regulation, the definitions set forth in COMAR 19A.01.02.02 have the meanings indicated where they appear in this subtitle.

C. “Certified blind trust” means a blind trust arrangement for the management of interests held by an official or employee that is determined by the Commission to meet the criteria for certification under COMAR 19A.06.02.

D. “Excepted blind trust” means a trust that is determined by the Commission to qualify for exception pursuant to COMAR 19A.06.02.05.

E. “Holding” includes shares of stock or similar securities or interests.

F. “Interested party” means an official or employee covered by these regulations, and a member of the official's or employee's household as defined in COMAR 19A.01.01.02R.

G. “Official or employee” includes State employees, public officials, and State officials, except State officials in the Legislative and Judicial branches of State government.

H. “Trustee” includes a financial institution or other qualifying entity named in a trust instrument and also any officer, director, or employee of the institution or entity.

#### Regulation .03 Effect of Blind Trust Certification.

*COMAR 19A.06.01.03*

A. An interest is not viewed as held by an official or employee for purposes of General Provisions Article, Title 5, Annotated Code of Maryland, if the interest of the official or employee is included in a certified blind trust as set forth in this subtitle.

B. An interest covered by §A of this regulation is excepted from:

  (1) The requirements and limitations of the disqualification requirement of General Provisions Article, §5-501, Annotated Code of Maryland, and the interest ownership prohibitions of General Provisions Article, §5-502, Annotated Code of Maryland; and

  (2) The financial disclosure requirements of General Provisions Article, Title 5, Subtitle 6, Annotated Code of Maryland.