Supreme Court held that a hospital was not entitled to a charitable-use exemption from

Transcription

1 Journal of Multistate Taxation and Incentives Volume 23, Number 6, September 2013 Department: PROPERTY TAXES New Legislation Seeks to Clarify Property Tax Exemption for Nonprofit Health Care Institutions 1 A nonprofit hospital may qualify for a property tax exemption if the value of certain charitable services or activities provided by the hospital at least equals the hospital's estimated property tax liability for the year. By: JORDAN M. GOODMAN JORDAN M. GOODMAN is a partner with the law firm of Horwood Marcus & Berk Chartered, in Chicago, Illinois, where he co-chairs the firm's state and local tax practice. He plans for and resolves state and local tax controversies for multistate and multinational corporations, and has successfully resolved state tax controversies in virtually every state. He lectures and writes frequently on numerous state and local tax topics, is a member of The Journal's editorial advisory board (and a frequent contributor), and also is a Certified Public Accountant. He thanks Nick Kamenjarin, a summer associate with the firm, for his substantial assistance with this article. In 2010, in Provena Covenant Medical Center v. Department of Revenue, 1 the Illinois Supreme Court held that a hospital was not entitled to a charitable-use exemption from property tax when the hospital, which operated primarily for profit, failed to provide evidence of charitable expenditures or of more than a minimal amount of free or discounted care. In response, the Illinois legislature passed, and the governor signed, two relevant pieces of legislation (S.B. 2194, 6/14/12, Public Act ; and S.B. 3261, 6/14/12, Public Act ) that established new standards for the hospital property tax exemption and increased the requirements for hospitals to provide charity care to uninsured persons for medically necessary treatment. The following discussion reviews the Illinois Supreme Court's decision in Provena and the legislative response, and examines the rationale behind both. Introduction: The institution in question. The appellant property owner and taxpayer in Provena is Provena Hospitals. It is exempt from federal income tax under 1 This article appears in and is reproduced with the permission of the Journal of Multistate Taxation and Incentives, Vol. 23, No. 6, September Published by Warren, Gorham & Lamont, an imprint of Thomson Reuters. Copyright (c) 2013 Thomson Reuters/Tax & Accounting. All rights reserved.

2 IRC Section 501(c)(3) and also is exempt from various Illinois state taxes. Provena Hospitals was formed through the consolidation of four Catholic-related health-care organizations and is organized as a not-for-profit corporation under the laws of Illinois. The articles of consolidation for Provena Hospitals state that the purpose of the corporation is to "coordinate the activities of Provena Hospitals' subsidiaries or other organizations that are affiliated with Provena Hospitals as they pursue their religious, charitable, educational and scientific purposes" and "to offer at all times high quality and cost effective healthcare and human services to the consuming public." Provena Hospitals owns and operates six hospitals, including Provena Covenant Medical Center (PCMC), a full-service hospital located in the city of Urbana, Illinois. The PCMC complex is comprised of 43 separate real estate parcels. Provena Hospitals applied to the Champaign County Board of Review to exempt all 43 of the parcels in the PCMC complex from property taxes for Supreme Court's Jurisprudence: Two Requirements for Charitable Exemption In Provena, the court explained that to be entitled to a charitable exemption as stated under the relevant Illinois law, of the Property Tax Code (or 35 ILCS 200/15-65), a property owner must be an "institution of public charity" and the property for which it claims the exemption must be "actually and exclusively used for charitable or beneficent purposes, and not leased or otherwise used with a view to profit." Therefore, according to the court, the analysis has two prongs: that is, eligibility for the exemption "requires not only charitable ownership, but [also] charitable use." The first prong standard: charitable ownership is a fivefactor, case-by-case analysis. Under the first prong of the analysis, the property owner must be an "institution of public charity." In expanding upon this legal term, the court stated that there is no blanket exemption under Illinois law for hospitals or healthcare providers. Rather, the issue of "[w]hether a particular institution qualifies as a charitable institution and is exempt from property tax is a question which must be determined on a case-by-case basis." In other words, there is no clear rule or standard that the court will apply in determining whether or not a property owner is eligible for the

3 exemption. Instead, the outcome of a case will turn on the specific facts and circumstances presented by each individual property owner claiming the exemption. Despite the fact that the analysis takes place on a case-by-case basis, in determining whether an exemption applies courts do have several factors to weigh. The relevant authority on which the Provena court relied in citing those factors was Methodist Old Peoples Home v. Korzen, 2 where the Illinois Supreme Court "identified the distinctive characteristics of a charitable institution" as follows. A charitable institution: (1) has no capital, stock, or shareholders; (2) earns no profits or dividends but, rather, derives its funds mainly from private and public charity; (3) dispenses charity to all who need and apply for it; (4) does not provide a private gain or profit to any person connected with it; and (5) does not appear to place any obstacles in the way of those who need and would avail themselves of the charitable benefits it dispenses. The first prong outcome in Provena: no charitable ownership. In the case at hand, the court found that Provena Hospitals was not an institution of public charity. Proceeding through each of the Korzen factors, the court found that although the first and fourth factors tilted in favor of Provena, the remaining factors demonstrated that the charitable exemption status could not be satisfied. The first factor was met because Provena had no capital, stock, or shareholders. And the fourth factor was satisfied because Provena did not provide private gain or profit to any person connected with it. This was the case despite the fact that Provena had contracted with third-party, for-profit providers for services ancillary to its own operations. The court stated that the real issue was whether any of the money received by Provena was used to benefit a private individual engaged in managing Provena, which was not the case. Therefore, the fact that an organization contracts with such third-parties is not dispositive as to whether the organization is a charitable institution under the law because, in order to function successfully, nearly all charitable organizations are required to outsource some of their ancillary services. The remaining factors were not as favorable to Provena's cause. Under the court's analysis, the hospital "plainly" failed to meet the second factor because Provena had derived the overwhelming majority of its funds not through private and public charity but, rather, by

4 charging for its medical services. In fact, only 3.4% of Provena's total 2002 revenues were attributed to "other revenue" in its statement of operations, and no evidence was provided to indicate how much, if any, of that sum was derived from charitable contributions. Provena also failed to meet the third and fifth factors, according to the court, which fully agreed with the Department of Revenue's conclusion that because there was no evidence in the record that Provena made charitable expenditures, it was simply impossible to find that Provena was a charitable institution. Therefore, the court found that Provena was not a charitable organization under the relevant law. The second prong standard: charitable use affects general welfare and lessens state burdens. Under the second prong of the analysis, the property at issue must be "actually and exclusively used for charitable or beneficent purposes, and not leased or otherwise used with a view to profit." In expanding upon this legal phrase, the court stated that "exclusively used" means that the charitable purposes must be the primary ones for which the property at issue is used, and not some secondary or incidental purpose or some purpose merely professed in an organization's statements (e.g., the wording of its governing legal documents). Despite that expansion, the issue still remained as to what constitutes "charity." In clearing up that issue, the court again relied upon Korzen, which had itself relied upon the court's definition of charity as explained in its 1893 opinion in Crerar v. Williams. 3 According to the Crerar court, as well as later courts that followed it, "charity" is to be defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons. That gift (i.e., charity) could serve the purpose of, for example, relieving bodies of disease, or any other purpose that otherwise affected the general welfare of the public while lessening the burden on the state to care for and advance the interests of its citizens. In Provena, the court stated that although there need not be a "direct, dollar-for-dollar correlation" between the value of the tax exemption and the value of the charity's good or services, it was essential to the charitable status that a party seeking the charitable exemption be able to demonstrate that their activities will help alleviate some of the state's financial burden.

5 The second prong outcome in Provena: no charitable use. In the instant case, the court found that Provena's property was not put to a charitable use. The court did note that both the state and federal governments have undertaken to provide health care for individuals meeting various criteria and, thus, to the extent Provena's operations help reduce the burdens faced by those levels of government in providing health care, it may be appropriate for Provena to qualify for state and federal tax exemptions. But, the court explained, "[t]hose taxes, however, are not at issue here, and we make no ruling regarding them." Rather, this case is concerned solely with Provena's "eligibility for a property tax exemption for the 43 parcels of real estate" in the hospital complex. (Emphasis in original.) If permitted, that exemption would result in the loss of tax revenue by about ten local taxing districts. The court quickly concluded that because the record was "devoid of findings regarding any of these taxing bodies or the services and support they provide to [local] residents," it was unable to assess whether or not Provena's use of its property "lessened the burdens those bodies would otherwise have been required to bear." In other words, an organization must first set forth the burdens that a taxing body faces in order to later show that the organization's operations somehow lessen those burdens. If the court has no evidence as to what those burdens may be, it has no way of determining whether or not they are affected by the organization's charitable operations. Beyond this quick conclusion, the court went on to discuss several hypotheticals had Provena been able to move past this initial hurdle. For example, the court went on to discuss the fact that even if Provena were able to set forth evidence that it used the property at issue to provide the type of services that would be beneficial to the local taxing bodies, it still must demonstrate also that the terms of the services would help alleviate the burden on the taxing body. Here, the services provided by Provena were simply rendered for value received. According to the court's prior precedent, such terms of services do not relieve the taxing bodies of their burdens. 4 Furthermore, the court made note of the fact that under Provena's charity care program, the number of uninsured patients that received free or discounted care, as well as the dollar value of that care, were minimal. As the court noted in the background section of its opinion, under Provena's charity care program, the hospital waived a very small portion of

6 its charges, equivalent to 0.723% of its 2002 revenues. In addition, the number of patients benefiting from Provena's charity care program was similarly small. In 2002, only 302 of PCMC's 10,000 inpatient and 100,000 outpatient admissions (about 0.27% of the hospital's total annual patient census) were served under the charitable care program. Thus, rather than granting free or discounted care under its charity care program, Provena was overwhelmingly relying upon rendering services in exchange for compensation through three avenues: private insurance, Medicaid and Medicare, or direct payment from patients. In addition, the court mentioned several other factors not favorable to Provena's cause. For example, PCMC spent substantial sums on advertising, with a 2002 budget of more than $813,000, yet wholly failed to advertise the availability of charitable care. Rather, while Provena did not condition the receipt of care on a patient's financial circumstances, "[p]atients were billed as a matter of course, and unpaid bills were automatically referred to collection agencies." Hospital charges were discounted or waived only after it was determined that a patient had neither insurance nor other resources to pay the bill directly, and could document that he or she qualified for participation in the institution's charitable care program. Thus, the court said, "there was little to distinguish the way in which Provena Hospitals dispensed its charity from the way in which a for-profit institution would write off bad debt." Moreover, the court equated several other of Provena's actions to practices that a for-profit enterprise would pursue. For example, Provena's pricing strategy was such that its discounted revenues in some areas were offset by surpluses generated by the higher amounts it was able to charge other users of its facilities and services. And while Provena Hospitals asserted that assessment of its charitable endeavors should also take into account, e.g., volunteer initiatives it undertakes and the support it provides for graduate medical education, the court, in considering the "used exclusively for a charitable purpose" standard, observed that Provena's volunteer services also were "a means for generating publicity and goodwill for the organization." As for the medical residency program, it "is run by the University of Illinois and... Provena Hospitals receives reimbursement for participating in it." In addition, the court noted, "Provena Hospitals' participation in the program unquestionably adds to PCMC's prestige and enables it to supplement its medical staff with well-trained, if inexperienced, physicians."

7 Furthermore, the court drew a line between the use of income generated by the property and the use of the property itself for charity. The former, which for example could include donations to other nonprofits, did not constitute a charitable use. While such expenditures "unquestionably benefit the community,... [t]he critical issue is the use to which the property itself is devoted, not the use to which income derived from the property is employed." In sum, the court's mood under this part of the analysis was to dispose of Provena's arguments by stating that the practices set forth by Provena in support of its position were not all that altruistic but, rather, were practices that many for-profit firms employ in order to improve upon their organization. In the end, despite the fact that one Provena program (support for a "crisis nursery" facility that provides a temporary haven for young children whose families are experiencing some form of crisis) made for a strong case under the charitable-use analysis, it was insufficient for two reasons: (1) the property used for the program comprised only four of the 43 parcels of land for which Provena sought an exemption; and more fundamentally, (2) even though there was a case for these four parcels to qualify under the charitable use analysis, Provena Hospitals, as the owner and operator of the property, still failed to satisfy the first prong of the analysis: charitable ownership. The court's conclusion: no charitable exemption for Provena. The court found that Provena failed to qualify as a charitable owner and also failed to put any noteworthy portion of its property to charitable use. Therefore, the court upheld the Department of Revenue's decision to deny Provena Hospitals' claim to the charitable exemption from property taxes. Nonprofit Hospital Property Tax Exemption: The Legislature Reacts As noted above, in response to the Courts decision in Provena, the Illinois legislature passed two pieces of legislation: S.B. 2194, 6/14/12, Public Act , and S.B. 3261, 6/14/12, Public Act

8 S.B Senate Bill 2194 establishes that Illinois nonprofit hospitals may qualify for a property tax exemption if the value of certain "qualified services or activities" provided by the nonprofit hospital at least equals the hospital's estimated property tax liability, as determined by an impartial third party. For example, if a nonprofit hospital's property tax assessment is $10 million, that hospital must provide at least $10 million in charity care to receive the tax exemption. This test is applied on a hospital-by-hospital basis solely with respect to the property and activities located within the state of Illinois. The question remains, however, as to just what are "qualified services or activities." Two types of "qualified services or activities." In establishing what meets the requirements for "qualified services or activities," S.B can be read as setting forth two broad sets of activities that are sufficient: (1) activities that benefit the health of low-income individuals, and (2) activities that lessen the government's responsibility for the health care of low-income individuals. Further, S.B expands upon those categories by providing more specific examples of services or activities that qualify under each. Activities that benefit the health of low-income individuals. Two primary subsets of services fall under activities that benefit the health of low-income individuals: (1) charity care, and (2) health services provided to low-income and underserved individuals. The former includes free and/or discounted hospital care provided to those in need of financial assistance, while the latter includes either providing services without charge, paying for services altogether, or subsidizing goods, activities, or services for the purpose of addressing the health of low-income or underserved individuals. More specific examples of the latter type of service or activity include the following: Providing financial or in-kind support to affiliated or unaffiliated hospitals, hospital affiliates, community clinics, or programs that treat low-income or underserved individuals. Paying for or subsidizing health care professionals who care for low-income or underserved individuals.

9 Providing or subsidizing outreach and education services to low-income or underserved individuals for disease management and prevention. Providing free or subsidized goods, supplies, or services needed by low-income or underserved individuals because of their medical condition. Providing prenatal or childbirth outreach to low-income or underserved individuals. Activities that lessen the government's responsibility. Under S.B. 2194, activities that lessen the government's responsibility for the health care of lowincome individuals include providing at no cost, paying for, or subsidizing goods, activities, or services that relieve the government's burden with regard to low-income individuals. Examples of such activities include: Subsidizing state or local governments. Supporting state health care programs for low-income individuals. Providing emergency, trauma, burn, neonatal, psychiatric, rehabilitation or other special services. Providing medical education. Conducting medical research or training of health care professionals. [pg. 29] Lastly, S.B further emphasizes that eligible services or activities are not limited to those specifically cited in the legislation. Rather, any other hospital-provided activity that the Department of Revenue determines relieves the burden of government or addresses the health of low-income or underserved individuals may qualify. S.B Senate Bill 3261, a companion bill to S.B. 2194, strengthens the obligations for hospitals to provide charity care. More specifically, S.B establishes that all hospitals will be required to provide at no charge any medically necessary health care services that exceed $300 in any one inpatient admission or outpatient encounter to any uninsured individual who applies for the discount and who has family income of not more than (1) for hospitals

10 in urban areas, 200% of the federal poverty income guidelines, and (2) for hospitals in rural areas, 125% of the federal poverty income guidelines in rural areas. To put those percentages into perspective, at the time this legislation was enacted that cap was $46,100 for a family of four in urban areas and $28,800 for a family of four in rural areas. In addition, S.B directs the Illinois Attorney General to promulgate rules that will (1) establish standard language to be included in hospital financial assistance application forms, and (2) adopt appropriate methodologies for the determination of presumptive eligibility for financial assistance. The deadline for the promulgation of these rules was set at 6/30/13. Conclusion Whereas in Provena, the court used charitable ownership as a major focus in determining eligibility for a property tax exemption, along with application of the five-factor analysis, the new legislation focuses more on the other prong of the Provena analysis: charitable use. To be sure, the legislation mentions nothing of capital, stock, shareholders, profits, or the like. Rather, the legislation focuses on a hospital's charitable activities. Furthermore, while Provena failed to recognize the efficacy of applying a "direct, dollar-fordollar correlation" test, opting instead for a more subjective test of charitable use, the new legislation does measure eligibility for the exemption in terms of a dollar-to-dollar comparison between the cost of charitable services provided and the value of a hospital's property tax liability. Therefore, a great deal of subjectivity is drawn from the test. Rather than deciding what constitutes alleviating "some" level of the state's burden, the determination rests upon the dollar-to-dollar comparison. Despite those dissimilarities, the legislation does define charity in much the same manner as did the Provena court. Both concepts include two primary elements: (1) activities that benefit the health of low-income individuals, and (2) activities that lessen the government's burden to care for such individuals. Despite this initial similarity, however, the legislation departs from the Provena court's lack of clarity in defining what constitutes a charitable use. Rather than analyzing the "type" and "terms" of services, or drawing a distinction between the use of income generated by a property and the use of the property itself, the legislation

11 provides specific examples of qualifying charitable services and activities, such as paying for or subsidizing health care professionals who care for low-income or underserved individuals. In conclusion, while one can point to some level of facial similarity between the Illinois Supreme Court's Provena case and the Illinois legislature's Senate Bills 2194 and 3261, the legislative response marks a distinct departure from the subjective tests used in the Provena case. With the new legislation, the legislature has provided clarity not only to hospitals seeking to claim a property tax exemption, but also to the Department of Revenue in its review of those claims. [] Practice Note: Tax Exemptions and Other Benefits for Hospitals As discussed in the accompanying article, the Illinois legislature enacted S.B. 2194, 6/14/12 (Public Act ) in response to the state high court's decision in Provena Covenant Medical Center v. Department of Revenue, 925 NE2d 1131 (Ill., 2010). The legislation established new standards for the hospital property tax exemption, and created other incentives for hospitals to provide charity care to uninsured persons for medically necessary treatment. The following discussion provides some additional details regarding this legislation. Property tax exemption. The new rules regarding the property tax exemption related to access to hospital and health care services by low-income and underserved individuals were codified in amendments to 35 ILCS 200/15-10 and in new 35 ILCS 200/15-86 (see S.B. 2194, 5-55). As explained in 200/15-86(a)(5): "It is the intent of the General Assembly to establish a new category of ownership for charitable property tax exemption to be applied to not-for-profit hospitals and hospital affiliates in lieu of the existing ownership category of institutions of public charity. It is also the intent of the General Assembly to establish quantifiable standards for the issuance of charitable exemptions for such property. It is not the intent of the General Assembly to declare any property exempt ipso facto, but rather to establish criteria to be applied to the facts on a case-by-case basis."

12 Some relevant definitions. "Hospital" is "any institution, place, building, buildings on a campus, or other health care facility located in Illinois that is licensed under the Hospital Licensing Act and has a hospital owner." "Hospital owner" is "a not-for-profit corporation that is the titleholder of a hospital, or the owner of the beneficial interest in an Illinois land trust that is the titleholder of a hospital." "Hospital applicant" is "a hospital owner or hospital affiliate that files an application for a property tax exemption" "Relevant hospital entity" is "(A) the hospital owner, in the case of a hospital applicant that is a hospital owner, and (B) at the election of a hospital applicant that is a hospital affiliate, either (i) the hospital affiliate or (ii) the hospital system to which the hospital applicant belongs, including any hospitals or hospital affiliates that are related by common control or ownership." "Hospital year" is "the fiscal year of the relevant hospital entity, or the fiscal year of one of the hospital owners in the hospital system if the relevant hospital entity is a hospital system with members with different fiscal years, that ends in the year for which the exemption is sought." Value of services provided. As discussed in the accompanying article, the legislation provides a charitable exemption for hospital property if the value of the specified services or activities provided by the hospital at least equals the hospital's estimated property tax liability for the year for which the exemption is sought. In making the necessary calculations, the hospital applicant may, for each year, elect to use either: (1) the value of the services or activities for the hospital year; or (2) the average value of those services or activities for the three fiscal years ending with the hospital year. If the relevant hospital entity is a hospital owner that owns more than one hospital, the value of the services or activities must be calculated on the basis of only those services and activities relating to the hospital that includes the property for which the exemption is sought, and the relevant hospital entity's estimated property tax liability must be calculated

13 with respect to only the properties comprising that hospital. In the case of a multistate hospital system or hospital affiliate, the value of the services or activities must be calculated on the basis of only those services and activities that occur in Illinois and the relevant hospital entity's estimated property tax liability must be calculated with respect to only its property located in Illinois. Any parcel or portion thereof, that is owned by a for-profit entity, whether part of the hospital system or not, or that is leased, licensed, or operated by a for-profit entity regardless of whether health care services are provided on that parcel, will not qualify for exemption. If a parcel has both exempt and nonexempt uses, an exemption may be granted for the qualifying portion of that parcel. Parking lots and common areas serving both exempt and nonexempt uses may qualify for an exemption in proportion to the amount of qualifying use. Tax credit for for-profit hospitals. Under new 35 ILCS 5/223 (added by S.B. 2194, 5-5), for tax years ending on or after 12/31/12, an owner of a hospital licensed under the Illinois Hospital Licensing Act (but not including an organization that is exempt from federal income taxes under the Internal Revenue Code) is entitled to an income tax credit in an amount equal to the lesser of (1) the real property taxes paid during the tax year on real property used for hospital purposes during the prior tax year, or (2) the cost of free or discounted services provided during the tax year pursuant to the hospital's charitable financial assistance policy, measured at cost. This credit may be transferred by the taxpayer earning the credit within one year after the credit is earned. If the credit exceeds the tax liability for the year, the excess credit may be carried forward and applied to the tax liability of the five tax years following the excess credit year. The credit must be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, the earliest credit must be applied first. In no event can the credit reduce the taxpayer's liability to less than zero. Hospital sales and use tax exemption. The legislation also provides that tangible personal property sold to or used by a hospital owner that owns one or more hospitals licensed under the Hospital Licensing Act or operated under the University of Illinois Hospital

14 Act, or a hospital affiliate that is not already exempt under another sales and use tax provision, is eligible for a sales and use tax exemption. (See S.B. 2194, 5-10, adding new 35 ILCS 105/3-8 (use tax exemption); 5-15, adding new 35 ILCS 110/3-8 (service use tax exemption); 5-20, adding new 35 ILCS 115/3-8 (service occupation tax exemption); and 5-25, adding new 35 ILCS 120/2-9 (retailers' occupation tax exemption).) This exemption applies to a hospital owner or hospital affiliate if the value of qualified charitable services or activities (similar to those under the property tax exemption) for the hospital year equals or exceeds the relevant hospital entity's estimated property tax liability, without regard to any property tax exemption granted under 35 ILCS 200/15-86 (the property tax exemption discussed above) for the calendar year in which the exemption is sought. In making the necessary calculations, as with the property tax exemption, the hospital applicant may, for each year, elect to use either: (1) the value of the services or activities for the hospital year; or (2) the average value of those services or activities for the three fiscal years ending with the hospital year. Assessments on hospital providers. Under 305 ILCS 5/5A-2(b-5) (added by S.B. 2194, 5-60), subject to certain exemptions and limitations in 5/5A-3 and 5/5A-10, for state fiscal years 2013 through 2014, and now extended from 7/1/14 through 12/31/14, an annual assessment on outpatient services is imposed on each hospital provider in an amount equal to multiplied by the hospital's "outpatient gross revenue." Under 305 ILCS 5/5A-1 (as amended by S.B. 2194, 5-60), "outpatient gross revenue" means, "for each hospital, its total gross charges attributed to outpatient services as reported on the Medicare cost report at Worksheet C, Part I, Column 7, line 101, less the sum of lines 45, 60, 63, 64, 65, 66, 67, and 68 (and any subsets of those lines)." And 305 ILCS 5/5A- 2(a) (as amended by S.B. 2194, 5-60), subject to 5A-3 and 5A-10, extends the annual assessment on each hospital provider's inpatient services from 7/1/14 through 12/31/14. That assessment is $ multiplied by the difference of the hospital's occupied bed days less the hospital's Medicare bed days.

15 END NOTES N.E.2d 1131 (Ill., 2010), aff'g 384 Ill. App. 3d 734, 894 N.E.2d 452 (4th Dist., 2008) N.E.2d 537 (Ill., 1968) N.E. 467 (Ill., 1893). 4 On this point, the court contrasted the instant case with People ex rel. Cannon v. Southern Illinois Hospital Corp., 88 N.E.2d 20 (Ill., 1949). In that case, the hospital seeking the charitable exemption produced evidence showing that the county in question did undertake to provide treatment for indigent residents. The hospital charged the county deeply discounted rates to treat those patients. Furthermore, because the hospital was the only one in the area, the court reasoned that its acceptance of such patients relieved the government from having to transport and pay for the treatment of those patients elsewhere. As a result, the hospital's operations could be said to reduce a burden on the local taxing body. No such conclusion was made or could be made based on the record in Provena. END OF DOCUMENT Thomson Reuters/RIA. All rights reserved.