1Amending the act of November 26, 1997 (P.L.508, No.55), entitled
2"An act providing for the tax exemption of institutions of
3purely public charity; exempting real property owned by
4State-related universities or Federal Government
5instrumentalities from taxation; providing for unfair
6competition; imposing penalties; and making repeals," further
7providing for definitions and for criteria for institutions
8of purely public charity.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. Section 3 of the act of November 26, 1997
12(P.L.508, No.55), known as the Institutions of Purely Public
13Charity Act, is amended by adding definitions to read:

14Section 3. Definitions.

15The following words and phrases when used in this act shall
16have the meanings given to them in this section unless the
17context clearly indicates otherwise:

18* * *

19"Restrictive covenant not to compete." An agreement between
20an employer and an employee that is designed to impede the
21ability of the employee to compete with the employer when a

1separating event occurs.

2"Separating event." An employee's discontinuance of
3employment with a current employer and move to employment with a
4different employer in the same field.

5* * *

6Section 2. Section 5(c) of the act is amended by adding a
7paragraph to read:

8Section 5. Criteria for institutions of purely public charity.

9* * *

10(c) Private profit motive.--The institution must operate
11entirely free from private profit motive. Notwithstanding
12whether the institution's revenues exceed its expenses, this
13criterion is satisfied if the institution meets all of the
14following:

15* * *

16(5) The institution shall not enter into a restrictive
17covenant not to compete and the institution shall not attempt
18to enforce a restrictive covenant not to compete.

19* * *

20Section 3. This act shall take effect in 60 days.