.06 Institutional Approval Process.

A. A prospective in-State institution may not operate, do business, recruit or enroll students, or begin instruction until it obtains approval from the Commission in accordance with this regulation.

B. An existing associate degree-granting institution seeking approval to offer baccalaureate or higher degrees may not recruit or enroll students, or begin instruction for the proposed new degree program until it obtains approval from the Commission in accordance with this regulation.

C. An application for institutional approval shall be submitted in two stages in a format prescribed by the Secretary and accompanied by additional information as required. A prospective in-State institution shall complete the two stages before the Commission may grant approval.

D. A prospective in-State institution shall submit two separate non-refundable application [fee] fees for a Stage One Application and a Stage Two Application in the amount of:

(1) $7,500 for up to two degree programs; and

(2) An additional $850 for each degree program over two programs.

E. Application for Approval at Stage One.

(1) A prospective in-State institution shall provide a Stage One application to the Secretary that includes the following items in a form and manner prescribed by the Secretary:

(a) Evidence of a critical and compelling regional or Statewide need and demand for specific academic degree programs in a specific geographic region of the State in accordance with Regulation .05 of this chapter;

(b) Evidence of adequate financial resources to establish and maintain an institution of higher education as provided in Regulation .07 of this chapter;

(c) Financial information in a form and manner prescribed by the Secretary to include:

(i) For an existing in-State institution, financial statements for each of the past 3 years or fewer, if the institution has operated for fewer than 3 years, or for an institution owned by a parent institution, organization, corporation, or other entity, separate financial statements for the institution and the parent institution, organization, corporation, or entity, and any intermediate subsidiaries; and

(ii) For both existing and prospective in-State institutions, a 4-year projection of anticipated income and expenditures that demonstrates that tuition and other sources of income shall be sufficient to provide a sound financial operation and assure diversity of intellectual interest and resources; and

(d) A detailed and accurate description of the prospective in-State institution's proposed programs and operations to include:

(i) All degree and certificate programs to be offered by the institution;

(ii) A description of the objectives of each degree and certificate program including the modes of instructional delivery;

(iii) The specific address, if known, or the geographic location of the institution to include at a minimum the county or city, with the specific address to be provided when known;

(iv) A description of the student population to be served;

(v) The curriculum for each program to be offered; and

(vi) The nature of faculty and resources required to support the degree programs.

(2) Elements of the projection under §E(1)(c)(ii) of this regulation shall demonstrate that the institution:

(a) Possesses financial resources sufficient to realize its mission;

(b) Has a long-range financial plan including income sources in addition to tuition; and

(c) Plans its expenditures by budgeting for approved programs and courses in the State.

F. Additional Information.

(1) If the Secretary determines that conditions warrant, the Secretary may require a prospective in-State institution to submit any additional information that the Secretary determines necessary to obtain a Stage One decision.

(2) The Secretary may require an independent market analysis performed by a firm or individual whose name appears on a prequalified list approved by the Secretary.

G. Notice and Period for Comments and Objections.

(1) Upon receipt of a completed Stage One proposal, the Secretary shall inform all institutions of higher education and segments of higher education of the proposal.

(2) A 30-day period for comments and objections shall be allowed.

(3) Any institution of higher education or segment of higher education desiring to raise an objection shall do so during the 30-day comment period.

(4) The Secretary shall consider all comments and objections received prior to making the final Stage One decision.

(5) The Secretary may not consider an objection raised after the 30-day period.

(6) The Secretary may ask the prospective in-State institution for additional information in response to comments and objections received.

H. Secretary's Decision.

(1) If the Secretary determines to approve the Stage One proposal, the Secretary shall make public the Secretary's final decision of approval on the Stage One proposal of the prospective in-State institution at a regularly scheduled meeting of the Commission.

(2) After the Secretary has approved the Stage One proposal, the Secretary shall notify the institution that it may proceed to Stage Two.

(3) If the Secretary is not satisfied that a prospective in-State institution has met the criteria set forth in §E of this regulation, the Secretary shall issue a notice of deficiencies and deny approval to the institution.

I. Appeals.

(1) Within 20 days of receipt of a notice of deficiencies, the prospective in-State institution may request a hearing before the Commission as provided in Education Article, §11-202(f), Annotated Code of Maryland.

(2) Within 20 days of the public announcement of an approval, an institution of higher education or segment of higher education that timely objected under §G of this regulation may request a hearing before the Commission.

(3) If any party requests a hearing, the hearing before the Commission shall be conducted in accordance with the Administrative Procedure Act, State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland, and COMAR 13B.04.01.

(4) After the hearing provided for in §I(3) of this regulation, the Commission may grant approval for Stage One or deny approval for Stage One.

(5) If a timely request for a hearing is not filed, the Secretary's decision becomes final.

J. Application for Approval at Stage Two.

(1) Upon notice from the Secretary that a prospective in-State institution has met the requirements of Stage One, the institution shall provide:

(a) Documentation required for Stage Two in a form and manner prescribed by the Secretary;

(b) Documentation indicating how the institution shall satisfy Regulations .13—.22 of this chapter;

(c) Evidence that the institution has sufficient insurance or self-insurance to maintain the solvency of the institution in case of loss by fire or other causes, to protect the institution in instances of personal or public liability, and to ensure continuity of the institution;

(d) If applicable, the required financial guarantee provided in accordance with Regulation .07 of this chapter; and

(e) A license to operate as a business entity in the State issued by the State Department of Assessments and Taxation or other appropriate State office.

(2) On-Site Visit.

(a) If the Secretary is satisfied that the documentation submitted by the prospective in-State institution satisfies the requirements of Stage Two, the Secretary shall appoint an evaluation team to conduct an on-site visit to the institution to ensure that the institution complies with the regulations of this chapter.

(b) The evaluation team shall be advisory to the Secretary.

(c) At least 1 member of the evaluation team shall be affiliated with an out-of-State institution.

(d) The appropriate segmental executive or segmental executive's designee shall serve ex-officio as an observer.

(e) During the on-site visit, the team shall conduct a detailed review of the institution's programs.

(f) The team shall prepare a report to the Secretary on the extent to which the institution is compliant with the regulations of this chapter.

(g) The institution shall be responsible for all financial obligations related to the on-site visit.

K. Completed Application.

(1) An application is complete as of the day on which a prospective in-State institution submits documentation satisfactory to the Secretary that it has completed the application process, including completion of the on-site visit, and evidence of the financial guarantee as provided for in Regulation .07 of this chapter.

(2) If the Secretary has issued neither a certificate of approval nor a written notice of deficiencies within 6 months of the submission of the application, the institution may request a hearing before the Commission to determine whether a certificate of approval shall be issued.

(3) The request shall be made within 20 days of the expiration of the 6-month period.

(4) The hearing shall be conducted in accordance with the Administrative Procedure Act, State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland, and COMAR 13B.04.01.

L. Secretary's Grant of Approval to Operate.

(1) If, based on the evaluation team report and other available information, the Secretary is satisfied that the prospective in-State institution is in compliance with this chapter and the minimum requirements of the chapter are met, the Secretary shall grant approval to operate.

(2) The Secretary shall issue a certificate of approval to operate and grant degrees on any condition and for a period of time as may be considered appropriate.

(3) The Secretary shall specify in the certificate of approval the degrees, formal awards, instructional programs, and location approved by the Secretary.

M. Secretary's Denial of Approval to Operate.

(1) If the Secretary is not satisfied that a prospective in-State institution is in compliance with this chapter, the Secretary shall issue a notice of deficiencies and deny approval to the institution.

(2) Within 20 days of receipt of a notice of deficiencies, the institution denied approval may request a hearing before the Commission as provided in Education Article, §11-202(f), Annotated Code of Maryland.

(3) The hearing before the Commission shall be conducted in accordance with the Administrative Procedure Act, State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland, and COMAR 13B.04.01.

(4) If the institution requests a hearing, the Commission may refer the hearing to the Office of Administrative Hearings.

(5) After the hearing provided for in §M(3) of this regulation, the Commission may take the following action:

(a) Grant approval to operate;

(b) Deny approval to operate; or

(c) Remand the case to the Secretary for further action as directed by the Commission.

(6) If the institution does not file a timely request for a hearing on the notice of deficiencies, the Secretary's recommendation becomes the final action of the Commission.

N. Judicial Review.

(1) A prospective in-State institution that is denied approval for Stage One or a certificate of approval by the Commission after a hearing granted under §I, K, or M of this regulation has the right to judicial review provided by State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland.

(2) The decision of the Commission is considered correct and the institution has the burden of proving otherwise.

(3) The Commission shall be a party to the proceeding.

O. Post-Approval Review.

(1) The Secretary shall appoint an evaluation team to conduct an on-site visit to the in-State institution at the end of an institution's first instructional year to ensure that the institution is in compliance with the requirements of this chapter and any other condition upon which the Commission based the institution's approval to operate.

(2) The institution shall be responsible for all financial obligations related to the on-site visit.

(3) If, on the basis of available documentation, the Secretary has reason to believe that an institution is not in compliance with this chapter or the terms of the institution's approval, the Secretary may institute the procedures in Regulations .08 and .09 of this chapter.

(4) The post-approval evaluation team shall serve as the evaluation team for the purposes of Regulation .08 of this chapter.