Sec. 13b.01.01.04. School Approval Process

A. Delegation to Secretary on Approvals.

(1) The Maryland Higher Education Commission has delegated to the Secretary of Higher Education the responsibility and authority to act on its behalf on applications for the operation of private career schools in the State, including but not limited to initial approvals, renewals of approval, changes of ownership, approvals of additional locations and new programs, denials of approval, and withdrawals of approval.

(2) The Secretary shall prepare and present a report to the Commission summarizing actions taken under this delegation since the last report.

B. Initial Approval to Operate.

(1) Application for initial approval of a school shall be made to the Secretary on an application form provided by the Secretary, and accompanied by additional information as may be required.

(2) In addition to documents required by the application form, the application shall include the following items:

(a) A detailed and accurate description of the school's proposed program or programs and operation of the school;

(b) A financial statement described in §B(11) of this regulation or a financial guarantee described in Regulation .19 of this chapter;

(c) A projection of anticipated revenues and expenditures for the proposed school for the first year of operation;

(d) A nonrefundable application fee in the amount of:

(i) $300 for schools seeking approval for up to three programs; or

(ii) $300 plus $100 for each program over three, for schools seeking approval for more than three programs; and

(e) A plan for maintaining the proposed school as a workplace and educational institution free of drug and alcohol abuse.

(3) Completed Application. Within 30 days of receipt of the application, the Secretary shall inform the applicant whether the application is complete or not complete. If the application is not complete, it shall be returned to the applicant. The applicant may resubmit a completed application.

(4) On-Site Visit.

(a) A detailed review of the school's proposed program or programs and operation shall be made by an on-site visit by staff of the Maryland Higher Education Commission or by an individual or a team authorized by the Secretary to assess and recommend whether the Commission should issue a certificate of approval to the school.

(b) In the case of an applicant who has not previously been approved to operate a private career school in Maryland but who operates a private career school outside Maryland, the Secretary:

(i) Shall request information on the approval status of the applicant from the responsible postsecondary approval agency having proper jurisdiction over the out-of-State school.

(ii) May require an on-site visit by the staff of the Maryland Higher Education Commission be made to the out-of-State school. The staff member or members making the visit shall file a report with the Secretary concerning the extent to which the out-of-State school visited is in compliance with these minimum requirements. The applicant shall bear the cost of the on-site visit.

(5) Initial approval to operate a school may not be given until all required local, State, and federal approvals are obtained.

(6) Financial Requirement. Before receiving initial approval, each school shall:

(a) Make a payment to the Guaranty Student Tuition Fund in accordance with the schedule in Regulation .18E(4) of this chapter; and

(b) Provide a financial guarantee in accordance with Regulation .19 of this chapter.

(7) Certificate of Approval.

(a) Advisory Council.

(i) The Secretary shall appoint an advisory council to review all new school applications and make recommendations to the Secretary before a school is given initial approval to operate.

(ii) The Secretary may refer issues related to new program applications and program modifications to the Advisory Council for its review, comment, or recommendation.

(iii) A member of the Advisory Council may not participate in the voting on any issue which may present a conflict of interest for that member. When an issue which presents a conflict of interest for a member is to be voted upon, that member shall exit the room, and the member's departure shall be noted in the minutes.

(b) If the Secretary is satisfied, based on all the information available to the Secretary, that the minimum requirements set forth in these regulations are met, the Secretary shall issue a certificate of approval to operate on the conditions and for a period of time, not to exceed 5 years, as the Secretary may consider appropriate. The Secretary may grant interim approval for the school to operate, specifying the conditions and the duration of the interim approval.

(c) The Secretary may accept, as appropriate, the findings of an agency or department of the State that has concurrent approval authority over a school if that agency's standards are substantially similar to these minimum requirements.

(d) A certificate of approval for each school location shall be issued in the name of the applicant. Certificates of approval are valid for the period specified by the Secretary, unless surrendered by the school or revoked by action of the Secretary. In the event of the death of any individual certificate holder, the certificate may become void. However, the Secretary may grant interim approval for the school to operate, specifying the conditions and the duration of the interim approval.

(8) The approval of a school is limited to the location and programs for which application has been made and approval granted. Application shall be made to the Secretary for additional locations as well as changes in locations and programs as provided by these regulations.

(9) If the Secretary has not provided the applicant with either a certificate of approval or a notice of deficiencies within 6 months of the receipt by the Commission of that applicant's completed application, the applicant may request within 20 days a hearing before the Commission to determine if the certificate of approval should be issued. 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.

(10) An applicant may not advertise a program or school, enroll students, or solicit enrollments in any way until approval to operate is granted by the Secretary.

(11) A financial statement under §B(2)(b) of this regulation shall:

(a) Be reviewed by a certified public accountant;

(b) Demonstrate that the applicant has adequate resources and assets to protect the interest of students to be enrolled;

(c) Contain comparative financial data for the previous 3 fiscal years, when available; and

(d) Be certified as true and correct by a responsible official on behalf of the applicant.

C. Renewal of Approval to Operate.

(1) At least 6 months before the expiration of a school's approval to operate, the school shall make application for a renewal of approval to operate on forms provided by the Secretary. The application shall be accompanied by a self-evaluation of the school in a format provided by the Secretary, and by additional information as may be required by the Secretary.

(2) On-Site Visit. A detailed review of the school's programs and operation shall be made by an on-site visit by staff of the Maryland Higher Education Commission or by a team authorized by the Secretary to assess and recommend whether the Commission should renew the authority of the school to operate.

(3) Financial Statement. An application for renewal of approval to operate shall be accompanied by a financial statement reviewed by a certified public accountant which provides a detailed and accurate picture of the financial status of the school.

(4) Drug-Free Workplace. An application for renewal to operate shall include a plan for maintaining a workplace and educational institution free of drug and alcohol abuse.

(5) A certificate of approval may be issued by the Secretary for a period not to exceed 5 years. If the certificate of approval is issued for less than a 5-year period, the Secretary shall specify what actions or steps the school shall be required to take to attain a certificate of approval for a 5-year period. Failure to meet specified requirements within the time allotted by the Secretary constitutes a violation of these regulations. An approval issued before the effective date of these regulations remains valid for the period set by the Secretary at the time of issuance, provided that no provisions of these regulations are violated.

(6) Financial Requirement. The Secretary shall require a school to forward a financial guarantee described in Regulation .19 of this chapter.

(7) The Secretary may accept, as appropriate, the findings of an agency or department of the State that has concurrent approval authority over a school if that agency's standards are substantially similar to these minimum requirements.

D. Change of Ownership.

(1) The certificate of approval of a school may not be sold, transferred, or pledged.

(2) The certificate of approval of a school is automatically revoked upon a change of ownership, by whatever means, of that school.

(3) If an approved school is being sold, pledged, or otherwise transferred, the school and its prospective transferees shall apply for approval for the school before the transfer is consummated. The application shall be made in accordance with regulations governing initial approval. If an approved school is sold, pledged, or otherwise transferred without the approval of the Secretary, the initial approval is automatically revoked.

(4) For continued operation, the Secretary may grant an interim approval for the school to operate and specify the conditions and the duration of the interim approval.

(5) Financial Requirement. The Secretary shall require a prospective owner of a school to forward a financial guarantee described in Regulation .19 of this chapter.

E. New Locations - Additional Locations and Changes in Location.

(1) Instruction may not begin at an additional location, additional separate classroom, or changed location before the Secretary approves the location.

(2) Additional Locations. An additional location of an approved school shall be approved pursuant to §B of this regulation for initial approval for 3 years, and shall meet all requirements for initial approval, including the financial requirement.

(3) Separate Classrooms. A school shall submit to the Secretary an application for approval of the use of a separate classroom or classrooms on forms and in a format provided by the Secretary at least 30 days before the proposed use of the classroom or classrooms.

(4) Change of Location. A school shall submit to the Secretary an application for approval for a change of location of an approved school on forms and in a format provided by the Secretary at least 60 days before the proposed use of the new location.

(5) Satellite Classrooms.

(a) In this subsection, “satellite classroom” means an additional instructional space geographically separated from a real estate school’s approved location.

(b) A real estate school approved to offer a real estate salesperson prelicensing program may establish one or more satellite classrooms to offer its approved program in the approved manner with qualified instructors without the prior approval of the Secretary.

(c) A satellite classroom shall be:

(i) Located only in an established real estate office or other recognized place of business conducive to classroom instruction; and

(ii) Used only for the purpose of instruction.

(d) Each real estate school establishing a satellite classroom shall:

(i) Maintain a complete list of all satellite classrooms, identifying each classroom by business name and address;

(ii) Submit the complete list with the school’s annual report each year, stating whether the satellite classroom was used during the reporting year;

(iii) Limit total student enrollment at its approved location and all satellite classrooms to the maximum enrollment approved by the Secretary; and

(iv) Maintain all student records from its satellite classrooms at the school’s approved location.