In this subtitle the following words have the meanings indicated. “Base year” means July 1, 1997 through June 30, 1998. “Eligible institution” means: Each public senior higher education institution identified in § 10–101(m) or § 12–101(b)(3) of this article or its affiliated foundation; and The following community college campuses or their affiliated foundations: Allegany; Anne Arundel; Baltimore City; Calvert; Carroll; Catonsville; Cecil; Charles; Chesapeake; Dundalk; Essex; Frederick; Garrett; Germantown; Hagerstown; Harford; Howard; Prince George’s; Rockville; St. Mary’s; Takoma Park; and Wor–Wic. “Eligible private donor” means an individual, corporation, partnership, or other form of business organization, public or private foundation, or other nonprofit organization. “Eligible private donor” does not include the State, a subdivision of the State, the federal government, or a foreign government. “Eligible program” means an endowment for an academic purpose that does not contain unreasonable restrictions as to use as further defined by the Maryland Higher Education Commission. “Endowment” means a donation or gift that has been provided under the condition that the principal remain intact and be invested in perpetuity for the purpose of producing income.

Except as provided in subsection (b) of this section, each eligible institution shall receive from the State, in the manner and subject to the limitations of this subtitle, with respect to the amounts pledged by eligible private donors as voluntary donations at any time during the previous fiscal year to the eligible institution for eligible programs as follows: An amount equal to the first $250,000 or any portion thereof of pledged amounts; An amount equal to one–half of the next $1,000,000 or any portion thereof of pledged amounts; and An amount equal to one–third of the amount in excess of $1,250,000 or any portion thereof of pledged amounts. Bowie State University, Coppin State University, Morgan State University, and University of Maryland Eastern Shore shall receive from the State, in the manner and subject to the limitations of this subtitle, with respect to the amounts pledged by eligible private donors as voluntary donations at any time during the previous fiscal year to the eligible institution for eligible programs as follows: For amounts pledged on or after July 1, 2001, an amount equal to $2 for every $1 of the first $250,000 or any portion thereof of pledged amounts; and For amounts pledged on or after July 1, 2001, an amount equal to the next $1,000,000 or any portion thereof of pledged amounts. Payments shall be made by the State: Only with respect to pledged amounts that are paid by the eligible private donor to: Bowie State University, Coppin State University, Morgan State University, and University of Maryland Eastern Shore before January 1, 2010; and All other eligible institutions before July 1, 2004; and To Bowie State University, Coppin State University, Morgan State University, and the University of Maryland Eastern Shore, in the fiscal year following the fiscal year during which the amounts are paid by eligible private donors; and To all other eligible institutions, in equal installments in fiscal years 2006, 2007, 2008, and 2009. Payments by the State under this subtitle may not exceed: $250,000 to each community college campus; $1,250,000 each to the University of Maryland, College Park Campus, the University of Maryland, Baltimore Campus, and the University of Maryland Baltimore County; $1,500,000 each to Bowie State University, Coppin State University, Morgan State University, and University of Maryland Eastern Shore; and $750,000 to each other eligible institution. To determine eligibility for State payments, each donation shall be compared to the amount donated during the base year. The following criteria shall be the basis for comparison: Each donation must be from a new donor; or Each donation must represent an increase over the amount given by the donor during the base year. A donation received during the base year that fulfills a pledge made prior to the base year may not be included in the determination of the amount donated during the base year. Each donation must be specifically designated as an endowment.

An affiliated foundation of an eligible institution that receives State payments shall provide to the Maryland Higher Education Commission an annual audit of all pledged and paid amounts and their sources, and a copy of the annual audit shall be provided to the Legislative Auditor.

Amounts paid by the State under this subtitle may be applied to any eligible program at the eligible institution to which the payment is made. No more than one-half of the total amount to be paid by the State under provisions of this subtitle may be appropriated in any fiscal year. The provisions of § 7-302 of the State Finance and Procurement Article do not apply to unused program funds.

Amounts paid by the State to an eligible institution under this subtitle may not directly or indirectly reduce the State General Fund or Capital Fund support for the eligible institution.

The Maryland Higher Education Commission shall: Adopt regulations necessary for the administration of this subtitle; and Submit to the Governor and, in accordance with § 2-1257 of the State Government Article, to the General Assembly an annual report summarizing the total amount of funds pledged by eligible private donors and total amount of funds raised.