82.05

OPINION NO. 82-5

An Opinion has been requested concerning whether the Montgomery County Housing Opportunities Commission (HOC) is a State agency as contemplated by the Maryland Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law).

This request was submitted by Counsel to the HOC, who indicated that the agency is developing personnel materials and wishes to include an accurate reference to applicable ethics provisions, especially regarding post-employment limitations affecting former employees. The HOC was established pursuant to the Housing Authorities Law in Article 44A, Annotated Code of Maryland. Section 23 of the Housing Authorities Law creates a housing authority in each county of the State, but further provides that such entities shall not transact business or exercise their powers until the local governing body determines that the county has a need for a housing authority. The HOC is specifically identified in section 8A of the Housing Authorities Law as the housing authority for Montgomery County.

Housing authorities are established as public bodies corporate and politic having as their function the provision of decent, safe, and sanitary dwellings for persons of low income. Their substantial powers are set forth in the Housing Authorities Law, and include the authority to lease, construct and operate housing projects; to revise and establish rents; to invest reserve funds; to conduct examinations and investigations; to borrow money and accept grants; to exercise the power of eminent domain; and to issue bonds. The HOC has additional powers, including the power to make mortgage loans and rent subsidy payments to eligible persons and to make construction loans. The Requestor indicates that the HOC receives some funds from the county, but is primarily funded from internal sources as well as by State and Federal funds. Its Commissioners are appointed by the County Executive for the County.

The provisions of the Ethics Law apply to officials and employees of executive agencies in State government. Section 1-201(1) defines an executive agency to be "a department, agency, commission, council, or other body in State government, which is established by law...." The question is whether the HOC is an agency in State government under this definition. Given the nature of the establishment of county housing authorities in accordance with sections 8 and 23 of the Housing Authorities Law, the HOC would appear to be an agency "established by law" as contemplated by section 1-201(1) of the Ethics Law. The authority is established and draws most of its power from a general public law enacted by the General Assembly; but these powers may be exercised only after a determination by a local governing body.

We have considered the application of these provisions in view of the enabling authority of the HOC as well as the general purposes of the Ethics Law. We have also taken into account an opinion of the Attorney General issued to a member of the General Assembly regarding the HOC's status. Opinion No. 81-036 (November 30, 1981) (unpublished). Relying on an "advice of counsel" opinion of October 13, 1981, which set forth several factors for identifying the HOC as a local agency, the Attorney General concluded that:

Officers and employees of the Montgomery County Housing Opportunities Commission are not subject to the State Public Ethics Law as "State Officials" or "public officials". Rather, under Title 6 of Article 40A, they may be properly regarded as "local officials" subject to county ethics regulation.

We find the interpretation of the Attorney General's office set forth in the letter of October 13, 1981 to be persuasive. Moreover, we believe that this approach is consistent with the policy of the Ethics Law that citizens impacted by official decisions should be assured that those conducting the public business do so with impartiality and independence of judgment. The HOC operates pursuant, in substantial part, to local enabling legislation; its members are appointed by and accountable to a locally elected official. Moreover, its activities impact, solely and directly, the lives and economic interests of local citizens. We therefore conclude that the HOC is not an executive agency in State government subject to the Ethics Law, but is a local entity, with its members and employees "local officials" who may be covered by local ethics provisions enacted in accordance with Title 6 of the Ethics Law.

Herbert J. Belgrad, Chairman
   Jervis S. Finney
   Reverend John Wesley Holland
   Betty B. Nelson
   Barbara M. Steckel

Date: February 10, 1982