J. MILLARD TAWES, GOVERNOR                          1233

half of the agency in such transaction, providing criminal penalties
for failure to make the required disclosure of such interest, estab-
lishing procedures for avoidance of transactions consummated in
violation of this Article, and defining certain terms contained
herein.

Section 1. Be it enacted by the General Assembly of Maryland,
That a new Article be and it is hereby added to the Annotated Code
of Maryland (1957 Edition), said new Article to be known as Article
19A, to be entitled "Conflicts of Interest", to follow immediately
after Article 19 of said Code, and to read as follows:

Article 19 A
CONFLICTS OF INTEREST

1.   Direct Interest of Members, Agents or Employees in Trans-
actions. It shall be unlawful for any member, agent or employee of
any Department, Board, Commission, Authority or other public
agency of the State of Maryland to have any direct financial interest
in any transaction in which such agency is or may be in any way
concerned, in which he knows, or may reasonably be expected to
know, that he has such a direct interest; provided, however, that
when there has been compliance with the disclosure and disqualifi-
cation requirements of Sections 2 and 3 hereof, this section shall
not apply to:

(i) contracts entered into with such agency which are awarded
as a result of competitive bidding, and where it is no part of the
responsibility of such interested member, agent or employee to
formulate, approve, or participate in the formulation of the specifi-
cations therefor or in the award of such contract;

(ii) transactions between such agency and public utilities for the
rendition of public utility services; or

(III) DEPOSITS BY SUCH AGENCY IN ANY BANKING IN-
STITUTION.

(iii) (IV) transactions entered into with such agency for the pur-
pose of composing threatened or actual litigation.

2.   Indirect Interest of Members, Agents of Employees in Trans-
actions. It shall be unlawful for any member, agent or employee of
any Department, Board, Commission, Authority or other public
agency of the State of Maryland to have any indirect financial
interest in any transaction in which such agency is or may BE in any
way concerned, in which he knows, or may reasonably be expected
to know, that he has such indirect interest, unless he shall make
prompt written disclosure of such interest to the agency of which
he is a member and to the Board of Public Works.

3. Disqualification. Every member, agent or employee of any
Department, Board, Commission, Authority or other public agency
of the State of Maryland who knows, or may reasonably be expected
to know, that he has any financial interest of any kind, either direct
or indirect, in any transaction in which the agency of which he is
a member is or may be in any way concerned, shall disqualify him-