(a) General rule.--It is the intent of the General Assembly to recognize that the State-related universities provide a direct public benefit and serve the public purposes of this Commonwealth by declaring the real property of State-related universities to be public property for purposes of exemption from State and local taxation when the property is actually and regularly used for public purposes, provided that nothing in this section is intended or shall be construed to affect the title to real property of State-related universities or the power and authority of the governing bodies of State-related universities with respect to such real property. Further, nothing in this section is intended or shall be construed to affect, impair or terminate any contract or agreement in effect on or before the effective date of this section by and between a State-related university and any political subdivision wherein the State-related university pays real estate taxes, amounts in lieu of real estate taxes or other charges, fees or contributions for government services.

(b) Real property.--All real property owned by State-related universities or owned by the Commonwealth and used by a State-related university is and shall be deemed public property for purposes of the Constitution of Pennsylvania and the laws of this Commonwealth relating to the assessment, taxation and exemption of real estate and shall be exempt from all State and local taxation when actually and regularly used for public purposes.

(c) Exception.--This section shall not include the property of a State-related university the possession and control of which has been transferred to a for-profit entity not otherwise entitled to tax-exempt status, irrespective of whether that entity is affiliated with the university. The execution of a management services contract with a third party entity to provide operational services to the university which would otherwise be provided or conducted directly by the university shall not, however, be considered a transfer of possession and control of real property within the meaning of this section.

(d) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection:

“Public purposes.” All activities relating to the educational mission of State-related universities, including teaching, research, service and activities incident or ancillary thereto which provide services to or for students, employees or the public.

“State-related universities.” The Pennsylvania State University and its affiliate, the Pennsylvania College of Technology, the University of Pittsburgh, Temple University and its subsidiaries Temple University Hospital, Inc., and Temple University Children's Hospital, Inc., and Lincoln University.