An inquiry has been presented concerning whether a person who works full-time as an appraiser (the Requestor) may serve on a County Property Tax Assessment Appeals Board (PTAB).
The Requestor was appointed to his county's PTAB in March 1982, to fill out an unexpired term, and was reappointed to a full term in June 1982. The Property Assessment Appeals Board (the Board) was established by Act of the Legislature in 1977 (Maryland Code Annotated, Article 81, §248 et seq.). The Board consists of 24 separate Appeals Boards, one for each county and Baltimore City, which are authorized to hear all appeals in their respective jurisdictions concerning property tax assessments set by the local Supervisor of Assessments. Board members are appointed by the Governor based on recommendations from the county governing body or chief executive. They serve five-year terms and are paid an hourly fee plus expenses.
Board hearings are conducted pursuant to the Maryland Administrative Procedure Act, though according to the PTAB Administrator, the approach is that the hearings are informal and non-technical. The Board's proceedings are also subject to Maryland Open Meetings requirements. Thus, most proceedings on residential properties are open, though appeals involving commercial property may be closed because they involve business income and expense data and other information that is confidential. Section 248(e) of Article 81 sets forth conflict of interest provisions applying to Board members. These provisions deal with disclosure of data, acceptance of gifts, and disqualification as to property in which a member has an interest, and also prohibit Board members from holding any position or engaging in any business which is incompatible with the duties of their office.1
The Requestor is a full-time real estate appraiser working on a fee per property basis primarily for the federal government. He indicates that he has worked for 37 years for the Veterans' Administration (VA) and Federal Home Administration (FHA), doing residential property appraisals in connection with purchases intended to be financed through VA or FHA. This appraisal work includes significant properties in the Requestor's own county, subject to the Board's jurisdiction. In correspondence with the Governor's Appointments Office in connection with his appointment, the Requestor indicated that his appraisal work was for VA and FHA offices in Baltimore and Philadelphia. He also disclosed that he occasionally does appraisals in Southern Delaware for Union Trust Bank.
The Requestor submitted an Ethics Commission appointee exemption form in connection with both his appointments, but did not disclose any interests or employment. Also, though the Requestor's activities as an appraiser were known and were considered at the time of his appointment, his concentration of work in his own county was apparently not clearly known from his description of his relationships with the VA and FHA. The Governor's Appointments Office states that the general policy in PTAB appointments is to avoid appointment of persons who are involved in real estate transactions.
The primary issue presented here is whether the outside employment prohibitions of §3-103(a) of the Ethics Law apply to require an absolute bar of the Requestor's private appraisal work if he continues on the Board.2 This section forbids any outside financial interests or employment with an entity that is subject to the individual's authority or that of his agency, or that has or is negotiating a contract with the agency (subsection (a)(1)(i)). The section further prohibits any other employment relationship that would impair the individual's impartiality or independence of judgment (subsection (a)(1)(ii)). We have consistently held under these provisions that a sole proprietorship consultancy or private practice is an entity with which the individual has both an ownership and employment relationship. (See our Opinions No. 83-17, No. 82-16, and No. 82-3.3 We have also held that the provision of personal services to an entity can, for purposes of §3-103(a), be viewed as an employment relationship with the entity, even if the services provided through an intervening contractor or consulting business. (See Opinions No. 83-17, No. 82-36, and No. 80-18.)
Applying these principles, the Requestor's appraisal work would be in violation of §3-103(a) if it involved employment with entities under the Board's authority, or if it were viewed as inconsistent under the more general proscription of subsection (a)(1)(ii). Whether the Requestor's activities would come within the strict prohibition of subsection (a)(1)(i) is not clear. The ultimate users of his appraisal services are homeowners or other property owners who could potentially be within PTAB jurisdiction, though his immediate employers for VA and FHA appraisals would be federal agencies unlikely to be before the Board. Union Trust, on the other hand, is an entity doing business in Maryland. It could therefore own property within the Requestor's county that would bring it under the Board's jurisdiction. Application of PTAB authority over these entities is complicated further by the narrowness of the Board's jurisdiction and our view that its jurisdiction does not vest until an appeal is actually filed. (See our Opinion No. 80-19.)
We believe that even given the difficulties in determining jurisdiction with regard to each particular parties, it is possible that the Requestor's activities could be viewed as covered by subsection (a)(1)(i). However, in our view, it is unnecessary to resolve these difficult factual issues, since we think that the situation presented in this request is covered by subsection (a)(1)(ii). In interpreting this provision we have looked to the relationship between private and official activities to determine whether the outside duties are likely to impair an individual's ability to do his State job impartially and independently. There does appear to be some relationship between the Requestor's two activities, as he clearly has knowledge regarding a subject matter and process that is related, though not identical, to that conducted by his agency. (For a discussion of the approaches to assessment for tax purposes and appraisal in connection with sales and other transfer transactions, see our Opinion No. 82-27 )
We recognize that the PTAB statute does not require (or encourage) appointment of appraisers to a Board, and that the appointing authority's policy is to avoid selection of individuals involved in real estate transactions. We do not, however, believe that the existence of private knowledge and expertise need necessarily render private activity "inconsistent" for purposes of §3-103(a)(1)(ii). It is not clear, for example, that we would reach the same result were the Requestor's appraisal activities confined solely to properties outside of his county and the Board's jurisdiction. This situation involves more than general knowledge and expertise, however. It involves actions taken by the Requestor in the context of a private business, important to his economic well-being, regarding specific properties that are within the Board's geographical jurisdiction and that are likely to be at issue, directly or indirectly, in particular matters considered by the Board.
Given this involvement with properties whose appraised value could be at issue in a Board proceeding, the Requestor may raise issues in a Board proceeding based on more than his general knowledge and understanding of how a property is valued. Rather, he may present opinions or views growing out of specific conclusions drawn by him in his private appraisal of a particular property. Further, as the owner of a private appraisal business in the County, the Requestor can be expected to have a personal and economic stake in supporting the validity of his work. Though we recognize the Requestor's commitment to public service on the Board, and do not doubt his integrity, we believe that this situation reinforces our conclusion that the relationships between the Requestor's private and official activities are not remote, and also raises questions under the Ethics Law's goal of avoiding "improper influence and even the appearance of improper influence." (See §1-102(b) of the Law.) Moreover, the Administrator of the PTAB has expressed his view that the Requestor's appraisal activities would impair his impartiality.
Under these circumstances, we must conclude that the Requestor's private appraisal work in the same county served by his Board raises the kinds of serious concerns intended to be addressed by §3-103(a)(1)(ii). We therefore advise him that his continued appraisal work as currently described to us, while he stays on the Board, would be inconsistent with this provision of the Law.
Herbert J. Belgrad, Chairman
Jervis E. Finney
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: August 18, 1983
1 We wish to make it clear at the outset that our Opinion deals only with application of the Maryland Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law). We do not in any way purport to rule on the specific provisions of the PTAB law in Article 81.
2 Though some issues could also be raised under §§3-101 (disqualification), 3-104 (misuse of prestige), and 3-107 (use of information) of the Law, we believe that questions presented in this this request are fully resolved by application of §3-103(a). These other provisions of the Law are therefore not addressed.
3 Except as otherwise expressly cited to the Maryland Register, Opinion citations are to Ethics Commission Opinions published in COMAR Title 19A.