1. A. An institution of higher education shall be determined to be a private nonprofit institution of higher education under §10-101 of the Education Article if it:

   1. (1) Benefits no person or entity through any part of its net earnings;
   2. (2) Is legally authorized to operate as a nonprofit organization by each state in which it is physically located;
   3. (3) Has been determined by the IRS to be an organization to which contributions are tax deductible in accordance with 26 U.S.C. §501(c)(3);

   4. (4) Had no reportable incidents in the previous calendar year that:

      1. (a) Are determined by the Secretary to constitute private inurement; and
      2. (b) Were not satisfactorily corrected prior to the submission of the report in Regulation .05 of this chapter; and
   5. (5) Timely files the report required under Regulation .05 of this chapter.

2. B. An institution shall be determined to be a for-profit institution of higher education under Education Article, §10-101, Annotated Code of Maryland, if it:

   1. (1) Does not request classification as a private nonprofit institution of higher education by filing the report required under Regulation .05 of this chapter;
   2. (2) Benefits any person or entity through any part of its net earnings;
   3. (3) Is not legally authorized to operate as a nonprofit organization by each state in which it is physically located;
   4. (4) Has not been determined by the IRS to be an organization to which contributions are tax deductible in accordance with 26 U.S.C. §501(c)(3);

   5. (5) Had any reportable incidents in the previous calendar year that:

      1. (a) Are determined by the Secretary to constitute private inurement; and
      2. (b) Were not satisfactorily corrected prior to the submission of the report in Regulation .05 of this chapter;
   6. (6) Knowingly fails to disclose a reportable incident in the report required under Regulation .05 of this chapter; or
   7. (7) Does not timely file the report required under Regulation .05 of this chapter.

Authority: Education Article, §§11-105(u) and 11-407.1, Annotated Code of Maryland; Ch. 515, Acts of 2019

Effective date: February 24, 2020 (47:4 Md. R. 262)