                         Docket No. 107328.


                        IN THE
                   SUPREME COURT
                          OF
                 THE STATE OF ILLINOIS



PROVENA COVENANT MEDICAL CENTER et al., Appellants,
   v. THE DEPARTMENT OF REVENUE et al., Appellees.

                   Opinion filed March 18, 2010.

   JUSTICE KARMEIER delivered the judgment of the court, with
opinion.
   Chief Justice Fitzgerald and Justice Thomas concurred in the
judgment and opinion.
   Justice Burke concurred in part and dissented in part, with
opinion, joined by Justice Freeman.
   Justices Kilbride and Garman took no part in the decision.

                              OPINION

    The central issue in this case is whether Provena Hospitals
established that it was entitled to a charitable exemption under section
15–65 of the Property Tax Code (35 ILCS 200/15–65 (West 2002))
for the 2002 tax year for various parcels of real estate it owns in
Urbana. The Director of Revenue determined that it had not and
denied the exemption. Provena Hospitals then filed a complaint for
administrative review in the circuit court of Sangamon County.
Following a hearing, the circuit court determined that Provena
Hospitals was entitled to both a charitable and religious exemption
(35 ILCS 200/15–40(a)(1) (West 2002)). The Department of Revenue
appealed. The appellate court found the Department’s arguments to
be meritorious and reversed the judgment of the circuit court. 384 Ill.
App. 3d 734. We granted Provena Hospitals’ petition for leave to
appeal. 210 Ill. 2d R. 315. We subsequently allowed the American
Hospital Association, the Illinois Hospital Association, and the
Catholic Health Association of the United States and related
organizations to file friend of the court briefs in support of Provena
Hospitals. We also granted leave to the Center for Tax and Budget
Accountability and the Legal Assistance Foundation of Metropolitan
Chicago to file friend of the court briefs in support of the Department
of Revenue. For the reasons that follow, we now affirm the judgment
of the appellate court upholding the decision by the Department of
Revenue to deny the exemption.

                           BACKGROUND
    The appellant property owner and taxpayer in this case is Provena
Hospitals. Provena Hospitals is one of four subsidiaries of Provena
Health, a corporation created when the Servants of the Holy Heart
and two other groups affiliated with the Roman Catholic Church
merged their health-care operations.1 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 is exempt from federal income tax under
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. §501(c)(3)


   1
     According to Provena Health’s table of organization, its other three
units are Provena Senior Services, which operates numerous nursing homes
and adult care facilities; Provena Home Care; and Provena Ventures, which
consists of Provena Properties and Provena Enterprises. Provena
Enterprises, in turn, is comprised of Medicentre Laboratories and Bennett
Operating Company.

                                  -2-
(1988)). The Illinois Department of Revenue has also determined that
the corporation is exempt from this state’s retailers’ occupation tax
(see 35 ILCS 120/1 et seq. (West 2002)), service occupation tax (see
35 ILCS 115/1 et seq. (West 2002)), use tax (see 35 ILCS 105/1 et
seq. (West 2002)), and service use tax (see 35 ILCS 110/1 et seq.
(West 2002)). In addition, the Illinois Attorney General has concluded
that the corporation “meets the qualifications of Section 3(a) of ‘An
Act to Regulate Solicitation and Collection of Funds for Charitable
Purposes’ [225 ILCS 460/3(a) (West 2002)] and Section 4 of ‘The
Charitable Trust Act’ [760 ILCS 55/1 (West 2002)]” and constitutes
a religious organization exempt from filing annual financial reports
under those statutes.
     Provena Hospitals owns and operates six hospitals, including
Provena Covenant Medical Center (PCMC), a full-service hospital
located in the City of Urbana. PCMC was created through the merger
of Burnham City Hospital and Mercy Hospital. It is one of two
general acute care hospitals in Champaign/Urbana and serves a 13-
county area in east central Illinois. The services it provides include a
24-hour emergency department; a birthing center; intensive care,
neonatal intensive care, and pediatrics units; surgical, cardiac care,
cancer treatment, rehabilitation and behavioral health services; and
home health care, including hospice. It offers case management
services to assist older persons to remain in their homes and runs
various support groups and health-related classes. It also provides
smoking cessation clinics and screening programs for high cholesterol
and blood pressure as well as pastoral care.
     PCMC maintains between 260 and 268 licensed beds. Each year
it admits approximately “10,000 inpatients and 100,000 outpatients.”
Some 60% of its inpatient admissions originate through the hospital’s
emergency room, which treats some 27,000 visitors annually.
     PCMC provides an emergency department because it is required
to do so by the Hospital Emergency Service Act (210 ILCS 80/0.01
et seq. (West 2002)). Where emergency room services are offered, a
certain level of health care is required to be provided to every person
who seeks treatment there. That is so as a matter of both state (210
ILCS 80/1 (West 2002); see also 210 ILCS 70/1 (West 2002)) and
federal (42 U.S.C. §1395dd) law.
     Staffing PCMC are approximately 1,000 employees, 400

                                  -3-
volunteers and 200 physicians. The physicians are not employed or
paid by the hospital. They are merely credentialed to provide services
there in exchange for paying $50 per year in dues to the hospital’s
library fund, and agreeing to serve on hospital committees and to be
on call to attend patients without their own physicians. With respect
to the emergency department, PCMC contracts with a for-profit
private company to provide the necessary physicians. The company,
not the hospital, bills patients and any third-party payors directly for
emergency room services. The company likewise pursues payment of
those bills independently from PCMC.
     Just as PCMC relies on private physicians to fill its medical staff,
it utilizes numerous third-party providers to furnish other services at
the hospital. Among these are pharmacy, laundry, MRI/CT and lab
services, and staffing for the rehabilitation and cardiovascular surgery
programs. The company providing lab services is one of the
businesses owned by Provena Enterprises, a Provena Health
subsidiary. It is operated for profit.
     Provena Hospitals’ employees do not work gratuitously. Everyone
employed by the corporation, including those with religious
affiliations, are paid for their services. Compensation rates for senior
executives are reviewed annually and compared against national
surveys. Provena Health “has targeted the 75th percentile of the
market for senior executive total cash compensation.”
     According to the record, PCMC’s inpatient admissions
encompass three broad categories of patients: those who have private
health insurance, those who are on Medicare or Medicaid, and those
who are “self pay (uninsured).” PCMC has agreements with some
private third-party payers which provide for payment at rates different
from “its established rates.” The payment amounts under these
agreements cover the actual costs of care. The amounts PCMC
receives from Medicare and Medicaid are not sufficient to cover the
costs of care. Although PCMC has the right to collect a certain
portion of the charges directly from Medicare and Medicaid patients
and has exercised that right, there is still a gap between the amount of
payments received and the costs of care for such patients. For 2002,
PCMC calculated the difference to be $7,418,150 in the case of
Medicare patients and $3,105,217 for Medicaid patients.
     PCMC was not required to participate in the Medicare and

                                  -4-
Medicaid programs, but did so because it believed participation was
“consistent with its mission.” Participation was also necessary in
order for Provena Hospitals to qualify for tax exemption under federal
law. In addition, it provided the institution with a steady revenue
stream.
    During 2002, Provena Hospitals’ “net patient service revenue”
was $713,911,000, representing approximately 96.5% of the
corporation’s total revenue. No findings were made regarding the
precise source of the remainder of its revenue. Provena Hospitals’
“expenses and losses” exceeded its “revenue and gains” during this
period by $4,869,000. In other words, the corporation was in the red.
The following year, this changed. The corporation’s revenue and
gains exceeded its expenses and losses by $10,548,000.
    Of Provena Hospitals’ “net patient service revenue” for 2002,
$113,494,000, or approximately 16%, was generated by PCMC.
Unlike its parent, PCMC realized a net gain of income over
“expenses and losses” of $2,165,388 for that year. This surplus
existed even after provision for uncollectible accounts receivable (i.e.,
bad debt) in the amount of $7,101,000. Virtually none of PCMC’s
income was derived from charitable contributions. The dollar amount
of “unrestricted donations” received by PCMC for the year ending
Dec. 31, 2002, was a mere $6,938.
    PCMC experienced a modest net loss in 2003. The record
discloses, however, that Provena Hospitals’ auditors showed accrued
property tax liabilities in the amount of $1.1 million per year for both
2002 and 2003 in the accounts payable and accrued expenses portions
of the 2003 balance sheet. Had only the 2003 property tax been
posted against the revenue and gains for 2003, that year would also
have shown a net gain for PCMC.
    In years when PCMC realizes a net gain, the gain is “reinvested
in order to sustain and further [the corporation’s] charitable mission
and ministry.” No findings were made regarding how much of the
reinvestment occurs at PCMC and how much is allocated to other
aspects of Provena Hospitals’ operations. Nor were specific findings
made regarding the particular purposes to which the reinvested funds
were put. The record indicates, however, that PCMC “generally needs
approximately two to four million dollars in margin each year to
replace broken items and fix non-operating equipment.”

                                  -5-
    In 2002, PCMC budgeted $813,694 for advertising and advertised
in newspapers, phone directories, event playbills, and Chamber of
Commerce publications; on television and radio; and through public
signage. Its also advertised using “booths, tables, and/or tents at
community health or nonprofit fundraising events; sponsorship of
sports teams and other community events; and banner advertisements
at sponsored community events.” The ads taken out by PCMC in
2002 covered a variety of matters, including employee want ads.
None of its ads that year mentioned free or discounted medical care.2
    While not mentioned in PCMC’s advertisements, a charity care
policy was in place at the hospital, and the parties stipulated that
PCMC’s staff made “outreach efforts to communicate the availability
of charity care and other assistance to patients.” The charity care
policy, which was shared with at least one other hospital under
Provena Hospitals’ auspices, provided that the institution would
“offer, to the extent that it is financially able, admission for care or
treatment, and the use of the hospital facilities and services regardless
of race, color, creed, sex, national origin, ancestry or ability to pay for
these services.”3
    The charity policy was not self-executing. An application was
required. Whether an application would be granted was determined
by PCMC on a case-by-case basis using eligibility criteria based on
federal poverty guidelines. A sliding scale was employed. Persons
whose income was below the guidelines were eligible for “a 100%


   2
     In subsequent years, Provena Hospitals altered its advertisements and
increased its efforts to communicate the availability of charity care to
patients. The case before us is concerned only with the situation as of 2002.
With respect to that time period, the Director of Revenue bluntly concluded
that “the record does not show that [PCMC] made any material effort to
publicize the availability of charity care to those who were most in need of
it.”
   3
    Of course, to the extent this policy addresses racial and other forms of
noneconomic discrimination, it does not concern “charity” at all as we use
that term today. Treating all persons equally regardless of such factors as
race, religion or gender is no longer considered a matter of grace. In most
situations, it is a legal requirement.

                                    -6-
reduction from the patient portion of the billed charges.” Persons
whose income was not more than 125% of the guidelines could
qualify for a 75% reduction. With an income level not more than
150% of the guidelines the discount fell to 50%. At an income level
not more than 200% of the guidelines, the potential reduction was
25%.4 Eligibility was also affected by the value of an applicant’s
assets. Patients who qualified based on low income might
nevertheless be rendered ineligible if the equity in their principal
residence exceeded $10,000 or they held other assets valued at more
than $5,000.
     PCMC’s policy specified that the hospital would give a charity
care application to anyone who requested one, but it was the patient’s
responsibility to provide all the information necessary to verify
income level and other requested information. To verify income, a
patient was required to present documentation “such as check stubs,
income tax returns, and bank statements.”
     PCMC believed that its charity care program should be the payer
of last resort. It encouraged patients to apply for charity care before
receiving services, and if a patient failed to obtain an advance
determination of eligibility under the program, normal collection
practices were followed. PCMC would look first to private insurance,
if there was any; then pursue any possible sources of reimbursement
from the government. Failing that, the hospital would seek payment
from the patient directly.
     Short-term collection matters were handled by Provena Hospitals’
“Extended Business Office.” Staffed by a small group of employees
in Joliet, the Extended Business Office would typically make three or
four phone calls and send three or four statements to patients owing
outstanding balances.5 If a balance remained unpaid following such


   4
     Uninsured patients appear to have been billed for services at PCMC’s
full “established” rates. Using Provena Hospitals’ figures, its actual cost of
service was only about 47% of the price it charged such patients. As a
result, the corporation could still garner a surplus in cases where it
conferred discounts at the 25% and 50% levels.
   5
     Provena Hospitals’ explanation for utilizing collection agencies was
that its own financial system “[did] not have a mechanism for sending

                                     -7-
efforts, which typically did not extend beyond three months, Provena
Hospitals would treat the account as “bad debt” and refer it to a
collection agency. From time to time, the collection agencies would
seek and were given authorization to pursue legal action against an
account “on which, over the course of several months, the agency had
not received any response, cooperation or payment from the patient.”
Provena Hospitals’ decision as to whether to pursue legal action
against a patient depended on review of the particular account. During
2002, it did not have a blanket policy requiring referral to a collection
attorney in every case.
    The fact that a patient’s account had been referred to collection
did not disqualify the patient from applying to the charity care
program. Applications would be considered “[a]t any time during the
collection process.” PCMC had financial counselors to assist patients
with paying outstanding balances and review all payment options
with them. The counselors helped patients seek and qualify for
financial assistance from other sources. Where a patient was given an
application for charity care but failed to return it, the counselors
would send letters and call the patients to remind them to do so.
    During 2002, the amount of aid provided by Provena Hospitals to
PCMC patients under the facility’s charity care program was modest.
The hospital waived $1,758,940 in charges, representing an actual
cost to it of only $831,724. This was equivalent to only 0.723% of
PCMC’s revenues for that year and was $268,276 less than the $1.1
million in tax benefits which Provena stood to receive if its claim for
a property tax exemption were granted.6
    The number of patients benefitting from the charitable care
program was similarly small. During 2002, only 302 of PCMC’s


statements to patients on a long-term basis.”
  6
    The disparity between the amount of free or discounted care dispensed
and the amount of property tax that would be saved through receipt of a
charitable exemption is in no way unique to the case before us here.
Excluding bad debt, “the amount of uncompensated care provided by as
many as three-quarters of nonprofit hospitals is less than their tax benefits.”
J. Colombo, Federal and State Tax Exemption Policy, Medical Debt and
Healthcare for the Poor, 51 St. Louis L.J. 433, 433 n.2 (2007).

                                     -8-
10,000 inpatient and 100,000 outpatient admissions were granted
reductions in their bills under the charitable care program. That figure
is equivalent to just 0.27% of the hospital’s total annual patient
census.
     The PCMC complex is comprised of 43 separate real estate
parcels. The main PCMC hospital building consists of parcels bearing
the parcel identification numbers 91-21-07-404-001 through 91-21-
07-404-010 and measures 395,685 square feet. Of this, 795 square
feet (0.2% of the total) are used for the outpatient pharmacy; 1,592
square feet (0.4%) are devoted to the gift shop; 3,933 square feet
(0.99%) are leased to the Board of Trustees of the University of
Illinois; and 9,319 square feet (2.4%) are occupied by the hospital’s
emergency department. An additional 22,065 square feet (5.6%) is
leased to for-profit entities or otherwise used for purposes which, the
parties agree, render the space ineligible for any real estate tax
exemption.
     In addition to the main hospital building, the PCMC complex
includes a parking garage, which consists of parcels numbered 91-21-
07-408-001 through 91-21-07-408-011; a cancer center, consisting of
parcels 91-21-07-403-006 through 91-21-07-403-009; the cancer
center’s parking lot, which includes parcels 91-21-07-403-001
through 91-21-07-403-005; the Crisis Nursery of Champaign/Urbana,
which occupies parcels 91-21-07-407-001 through 91-21-07-407-003;
and the Crisis Center’s parking lot, situated on parcel 91-21-07-407-
004. The complex also includes six additional parking lots: B, which
is on parcel 46-21-07-336-001; C, which consists of parcel 46-21-07-
338-006; D, which is located on parcel 46-21-07-337-006; E, which
is on a parcel identified as 91-21-07-408-012; H, which includes
parcels numbered 46-21-07-336-002 and 46-21-07-336-003; and a lot
for PCMS employees covering parcels 91-21-07-409-18, 91-21-07-
409-19, and 91-21-07-409-23.
     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 2002. Exemption was requested under section
15–65(a) of the Property Tax Code (35 ILCS 200/15–65(a) (West
2002)) on the grounds that the parcels were owned by an institution
of public charity and that the property was “actually and exclusively
used for charitable or beneficent purposes, and not leased or

                                  -9-
otherwise used with a view to profit.” The board of review
recommended this application be denied. The Illinois Department of
Revenue agreed and denied the application in February of 2004,
ruling that the property “was not in exempt ownership” and “not in
exempt use.”
      As suggested earlier in this opinion, the tax to which the disputed
property was subject totaled approximately $1.1 million. In March of
2004, PCMC paid that sum, under protest, to the treasurer of
Champaign County. 7 It then filed a timely petition for a hearing on the
exemption decision pursuant to section 8–35(b) of the Property Tax
Code (35 ILCS 200/8–35(b) (West 2002)). The parties subsequently
realized that because PCMC itself is not a legal “person,” the
exemption request should be treated as if it had been submitted by
Provena Hospitals, which holds title to the 43 parcels at issue here.
Because the parties agree that Provena Hospitals is the proper party
to seek the exemption, we shall consider it to be the true applicant, as
did the appellate court. 384 Ill. App. 3d 734.
      In requesting a hearing on denial of the exemption, counsel for
Provena Hospitals asserted that it could provide “clear evidence that
it is a charitable organization entitled to charitable exemptions for the
subject properties in accordance with section 15–65 of the Property
Tax Code (35 ILCS 200/15–65 (West 2002)), Illinois case law and
exemption determinations made by [the Department of Revenue] for
other charitable institutions.” Initially, no claim was made that any of
the 43 subject properties might also qualify for exemption under
section 15–40 of the Property Tax Code (35 ILCS 200/15–40 (West
2002)), which pertains to property used exclusively for “religious
purposes,” “school and religious purposes,” or “orphanages,” or that
they might be exempt from property tax under any other provision of
Illinois law. Later in the proceedings, however, Provena Hospitals
asserted that the evidence “also conclusively establishes that [the]
property also qualifies for exemption based on religious use.”



   7
    Provena Hospitals subsequently managed to obtain a refund of the tax
pending this appeal. The propriety of that refund is the subject of a separate
appeal, and Provena has acknowledged that it could be ordered to repay any
taxes legally levied against it.

                                    -10-
    After a lengthy hearing at which voluminous evidence was
presented, the administrative law judge (ALJ) assigned to the case
recommended that 94.4% of the subject parcels be granted a
charitable exemption. She did not address and made no findings
regarding Provena Hospitals’ alternate claim for a religious
exemption.
    The Director of Revenue rejected the ALJ’s recommendation. He
believed that under the evidence and the law, Provena Hospitals had
failed to meet its burden of establishing that the property at issue here
qualified for a charitable exemption. The Director further concluded
that the property did not qualify for a religious exemption under
section 15–40 of the Property Tax Code (35 ILCS 200/15–40 (West
2002)).8
    The circuit court of Sangamon County disagreed with the Director
on both counts. In a written order entered on administrative review
pursuant to the Administrative Review Law (735 ILCS 5/3–101 et
seq. (West 2002)), the circuit court held that Provena Hospitals was
entitled to both a charitable tax exemption and a religious tax
exemption for the subject parcels. As noted earlier in this opinion, the
appellate court subsequently reversed. Rejecting the circuit court’s
view, it held that the Director’s decision to deny Provena Hospitals
either a charitable or religious exemption for the disputed property
was not clearly erroneous. 384 Ill. App. 3d 734. It is in this posture
that the matter now comes before our court.

                           ANALYSIS
   The parcels of real estate at issue in this case are all located in
Champaign County, which has fewer than 3 million inhabitants. In


  8
   In turning down Provena Hospitals’ claim for a religious exemption, the
Director wrote that he was concurring “with the ALJ’s recommendation
that the property does not qualify for the religious purpose exemption.”
Because the ALJ did not address the religious purpose exemption, this was
obviously a misstatement by the Director. It is evident, however, that the
Director did not believe that the hospital complex was entitled to a property
tax exemption under any of the bases claimed, including use for religious
purposes, and his decision is the one under review.

                                    -11-
such counties, applications for exemption from property tax are made,
in the first instance, to the county board of review or board of appeals.
See 35 ILCS 200/15–5, 16–70 (West 2002). The county board’s
decision, however, is not final except as to homestead exemptions.
With applications for all other exemptions, the matter is forwarded to
the Department of Revenue for a determination as to “whether the
property is legally liable to taxation.” 35 ILCS 200/16–70 (West
2002). The Department of Revenue’s procedures with respect to
exemption decisions are governed by section 8–35 of the Property
Tax Code (35 ILCS 200/8–35 (West 2002)), and such decisions by
the Department are subject to judicial review in accordance with the
Administrative Review Law (735 ILCS 5/3–101 et seq. (West 2002)).
35 ILCS 200/8–40 (West 2002).
     When an appeal is taken to the appellate court following entry of
judgment by the circuit court on administrative review, it is the
decision of the administrative agency, not the judgment of the circuit
court, which is under consideration. See Anderson v. Department of
Professional Regulation, 348 Ill. App. 3d 554, 560 (2004). Similarly,
when we grant leave to appeal from a judgment of the appellate court
in an administrative review case, as we did here, it is the final
decision of the administrative agency, not the judgment of the circuit
court or the appellate court, which is before us. Wade v. City of North
Chicago Police Pension Board, 226 Ill. 2d 485, 504 (2007);
Sangamon County Sheriff’s Department v. Illinois Human Rights
Comm’n, 233 Ill. 2d 125, 136 (2009).
     Judicial review of administrative decisions is subject to important
constraints regarding the issues and evidence that may be considered.
If an argument, issue, or defense was not presented in the
administrative proceedings, it is deemed to have been procedurally
defaulted and may not be raised for the first time before the circuit
court. Cinkus v. Village of Stickney Municipal Officers Electoral
Board, 228 Ill. 2d 200, 213 (2008). In addition, “[t]he findings and
conclusions of the administrative agency on questions of fact shall be
held to be prima facie true and correct” and “[n]o new or additional
evidence in support of or in opposition to any finding, order,
determination or decision of the administrative agency shall be heard
by the court.” 735 ILCS 5/3–110 (West 2002). Consistent with these
statutory mandates, we have held that “it is not a court’s function on

                                  -12-
administrative review to reweigh evidence or to make an independent
determination of the facts.” Kouzoukas v. Retirement Board of the
Policemen's Annuity & Benefit Fund, 234 Ill. 2d 446, 463 (2009).
When an administrative agency’s factual findings are contested, the
court will only ascertain whether such findings of fact are against the
manifest weight of the evidence. Cook County Republican Party v.
Illinois State Board of Elections, 232 Ill. 2d 231, 244 (2009).
     The standard of review is different when the only point in dispute
is an agency’s conclusion on a point of law. There, the decision of the
agency is subject to de novo review by the courts.9 Yet a third
standard governs when the dispute concerns the legal effect of a given
set of facts, i.e., where the historical facts are admitted or established,
the rule of law is undisputed, and the issue is whether the facts satisfy
the statutory standard. In such cases, which we have characterized as
involving a mixed question of law and fact, an agency’s decision is
reviewed for clear error. Exelon Corp. v. Department of Revenue, 234
Ill. 2d 266, 273 (2009).
     In the case before us now, the historical facts are not disputed and
the governing legal principles are well established. The sole question
is whether, under the facts present here, the real property at issue in
this case qualifies for an exemption from taxation under the Property
Tax Code (35 ILCS 200/1–1 et seq. (West 2002)). Under the
standards just discussed, this presents a mixed question of law and
fact and will therefore be set aside only if clearly erroneous. See
Swank v. Department of Revenue, 336 Ill. App. 3d 851, 861 (2003);
Metropolitan Water Reclamation District of Greater Chicago, 313 Ill.
App. 3d at 475. This standard is “significantly deferential.” See
LeaderTreks, Inc. v. Department of Revenue, 385 Ill. App. 3d 442,
446 (2008). An administrative decision will be set aside as clearly


   9
     Even where review is de novo, an agency’s construction is entitled to
substantial weight and deference. Courts accord such deference in
recognition of the fact that agencies make informed judgments on the issues
based upon their experience and expertise and serve as an informed source
for ascertaining the legislature’s intent. See Metropolitan Water
Reclamation District of Greater Chicago v. Department of Revenue, 313
Ill. App. 3d 469, 475 (2000).


                                   -13-
erroneous only when the reviewing court is left with the definite and
firm conviction that a mistake has been committed. Exelon Corp.,
234 Ill. 2d at 273. For reasons we shall now explain, this is not such
a case.
     Under Illinois law, taxation is the rule. Tax exemption is the
exception. All property is subject to taxation, unless exempt by
statute, in conformity with the constitutional provisions relating
thereto. Statutes granting tax exemptions must be strictly construed
in favor of taxation (Board of Certified Safety Professionals of the
Americas, Inc. v. Johnson, 112 Ill. 2d 542, 547 (1986)), and courts
have no power to create exemption from taxation by judicial
construction (City of Chicago v. Illinois Department of Revenue, 147
Ill. 2d 484, 491 (1992)).
     The burden of establishing entitlement to a tax exemption rests
upon the person seeking it. City of Chicago v. Illinois Department of
Revenue, 147 Ill. 2d at 491. The burden is a very heavy one. The party
claiming an exemption must prove by clear and convincing evidence
that the property in question falls within both the constitutional
authorization and the terms of the statute under which the exemption
is claimed. See Streeterville Corp. v. Department of Revenue, 186 Ill.
2d 534, 539-40 (1999) (Harrison, J., dissenting, joined by
McMorrow, J.). A basis for exemption may not be inferred when
none has been demonstrated. To the contrary, all facts are to be
construed and all debatable questions resolved in favor of taxation
(Follett’s Illinois Book & Supply Store, Inc. v. Isaacs, 27 Ill. 2d 600,
606 (1963)), and every presumption is against the intention of the
state to exempt property from taxation (Reeser v. Koons, 34 Ill. 2d 29,
36 (1966)). If there is any doubt as to applicability of an exemption,
it must be resolved in favor of requiring that tax be paid. Streeterville
Corp. v. Department of Revenue, 186 Ill. 2d at 539 (Harrison, J.,
dissenting, joined by McMorrow, J.).
     As noted earlier in this opinion, Provena Hospitals has been
granted a tax exemption by the federal government. There is no
dispute, however, that tax exemption under federal law is not
dispositive of whether real property is exempt from property tax
under Illinois law. See Eden Retirement Center, Inc. v. Department
of Revenue, 213 Ill. 2d 273, 291 (2004). Similarly, the fact that
Provena Hospitals is exempt from state retailers’ occupation, service

                                  -14-
occupation, use and service use taxes does not mean that the
corporation must likewise be granted an exemption from paying tax
on the real property it owns. People ex rel. County Collector v.
Hopedale Medical Foundation, 46 Ill. 2d 450, 464 (1970); Willows
v. Munson, 43 Ill. 2d 203, 209 (1969); see Institute of Gas
Technology v. Department of Revenue, 289 Ill. App. 3d 779, 785
(1997).
     Authority to exempt certain real property from taxation emanates
from article IX, section 6, of the 1970 Illinois Constitution (lll. Const.
1970, art. IX, §6). Section 6 provides that the General Assembly may,
by law, exempt from taxation property owned by “the State, units of
local government and school districts” and property “used exclusively
for agricultural and horticultural societies, and for school, religious,
cemetery and charitable purposes.” Ill. Const. 1970, art. IX, §6.
     Section 6 is not self-executing. It merely authorizes the General
Assembly to enact legislation exempting certain property from
taxation. Chicago Patrolmen’s Ass’n v. Department of Revenue, 171
Ill. 2d 263, 269 (1996). The General Assembly is not required to
exercise that authority. Where it does elect to recognize an
exemption, it must remain within the limitations imposed by the
constitution. No other subjects of property tax exemption are
permitted. The legislature cannot add to or broaden the exemptions
specified in section 6. Chicago Bar Ass’n v. Department of Revenue,
163 Ill. 2d 290, 297 (1994).
     While the General Assembly has no authority to grant exemptions
beyond those authorized by section 6, it “may place restrictions,
limitations, and conditions on [property tax] exemptions as may be
proper by general law.” North Shore Post No. 21 of the American
Legion v. Korzen, 38 Ill. 2d 231, 233 (1967). In accordance with this
power, the legislature has elected to impose additional restrictions
with respect to section 6’s charitable exemption. Pursuant to section
15–65 of the Property Tax Code (35 ILCS 200/15–65 (West 2002)),
eligibility for a charitable exemption requires not only that the
property be “actually and exclusively used for charitable or beneficent
purposes, and not leased or otherwise used with a view to profit,” but
also that it be owned by an institution of public charity or certain
other entities, including “old people’s homes,” qualifying not-for-
profit health maintenance organizations, free public libraries and

                                  -15-
historical societies. Chicago Patrolmen’s Ass’n v. Department of
Revenue, 171 Ill. 2d at 270.
     In Methodist Old Peoples Home v. Korzen, 39 Ill. 2d 149, 156-57
(1968), we identified the distinctive characteristics of a charitable
institution as follows: (1) it has no capital, capital stock, or
shareholders; (2) it earns no profits or dividends but rather derives its
funds mainly from private and public charity and holds them in trust
for the purposes expressed in the charter; (3) it dispenses charity to all
who need it and apply for it; (4) it does not provide gain or profit in
a private sense to any person connected with it; and (5) it does not
appear to place any obstacles in the way of those who need and would
avail themselves of the charitable benefits it dispenses. Methodist Old
Peoples Home v. Korzen, 39 Ill. 2d at 157. For purposes of applying
these criteria, we defined charity as “a gift to be applied *** for the
benefit of an indefinite number of persons, persuading them to an
educational or religious conviction, for their general welfare–or in
some way reducing the burdens of government.” Methodist Old
Peoples Home v. Korzen, 39 Ill. 2d at 156-57.
     This court has held, on several occasions, that a “hospital not
owned by the State or any other municipal corporation, but which is
open to all persons, regardless of race, creed or financial ability,”
qualifies as a charitable institution under Illinois law provided certain
conditions are satisfied. See People ex rel. Cannon v. Southern
Illinois Hospital Corp., 404 Ill. 66, 69-70 (1949). There is, however,
no blanket exemption under the law for hospitals or health-care
providers. Whether 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. See Coyne Electrical School
v. Paschen, 12 Ill. 2d 387, 394 (1957).
     Provena Hospitals clearly satisfies the first of the factors
identified by this court in Methodist Old Peoples Home v. Korzen for
determining whether an organization can be considered a charitable
institution: it has no capital, capital stock, or shareholders. Provena
Hospitals also meets the fourth Korzen factor. It does not provide gain
or profit in a private sense to any person connected with it. While the
record focused on PCMC rather than Provena Hospitals, it was
assumed by all parties during the administrative proceedings that
Provena Hospitals’ policies in this regard were the same as those of

                                  -16-
PCMC, and it was stipulated that PCMC diverted no profits or funds
to individuals or entities for their own interests or private benefit.
    The Director correctly points out that PCMC subcontracted many
of its operations to third-party providers, including pharmacy,
laboratory, laundry and MRI/CT services; the entire emergency
department; and the management, administration, and staffing of
rehabilitation and cardiovascular surgery programs. One of those
third-party providers, the one which furnished lab services to PCMC,
was actually owned by Provena Health, Provena Hospitals’ parent,
and was operated on a for-profit basis. While all of the third-party
providers were subject to a conflict of interest policy designed “to
prevent private inurement and other conduct that may be inimical to
[the organization’s] mission,” no evidence was presented that any of
them were themselves charities or operated on anything other than a
for-profit basis. This, however, is not dispositive.
    The fact that an organization contracts with third-party, for-profit
providers for ancillary services does not, in itself, preclude the
organization from being characterized as an institution of charity
within the meaning of section 15–65 of the Property Tax Code (35
ILCS 200/15–65 (West 2002)). Virtually all charities must contract
with for-profit vendors to one degree or another in order to carry on
their operations and perform their charitable functions. See J.
Colombo, Hospital Property Tax Exemption in Illinois: Exploring the
Policy Gaps, 37 Loy. U. Chi. L.J. 493, 521-22 (2006). The real
concern is whether any portion of the money received by the
organization is permitted to inure to the benefit of any private
individual engaged in managing the organization. The authority cited
by the Korzen case with respect to the prohibition against private gain
or profit so holds. See Sisters of the Third Order of St. Francis v.
Board of Review, 231 Ill. 317, 321 (1907). No private enrichment of
that type is evident in this case.
    While Korzen factors one and four thus tilt in favor of
characterizing Provena Hospitals as a charitable institution,
application of the remaining factors demonstrates that the
characterization will not hold. Provena Hospitals plainly fails to meet
the second criterion: its funds are not derived mainly from private and
public charity and held in trust for the purposes expressed in the
charter. They are generated, overwhelmingly, by providing medical

                                 -17-
services for a fee. While the corporation’s consolidated statement of
operations for 2002 ascribes $25,282,000 of Provena Hospitals’
$739,293,000 in total revenue to “other revenue,” that sum represents
a mere 3.4% of the Provena’s income, and no showing was made as
to how much, if any, of it was derived from charitable contributions.
The only charitable donations documented in this case were those
made to PCMC, one of Provena Hospitals’ subsidiary institutions,
and they were so small, a mere $6,938, that they barely warrant
mention.
     Provena Hospitals likewise failed to show by clear and
convincing evidence that it satisfied factors three or five, namely, that
it dispensed charity to all who needed it and applied for it and did not
appear to place any obstacles in the way of those who needed and
would have availed themselves of the charitable benefits it dispenses.
While the record is filled with details regarding PCMC’s operations,
PCMC is but one of numerous institutions owned and operated by
Provena Hospitals. It does not hold title to any of the property for
which an exemption is sought. The actual owner is Provena
Hospitals. As the Director of Revenue expressly concluded, however,
“the record contains no information as to Provena Hospitals’
charitable expenditures in 2002.” Department of Revenue v. Provena
Covenant Medical Center, No. 04-PT-0014, slip op. at 15 (2004). The
Director reasoned that without such information, it is simply “not
possible to conclude that the true owner of the property is a charitable
institution as required by Illinois law.” Department of Revenue v.
Provena Covenant Medical Center, No. 04-PT-0014, slip op. at 15
(2004). We fully agree. The appellate court was therefore correct
when it concluded that this aspect of the Department’s decision was
not clearly erroneous. See 384 Ill. App. 3d at 750.
     As detailed earlier in this opinion, eligibility for a charitable
exemption under section 15–65 of the Property Tax Code (35 ILCS
200/15–65 (West 2002)) requires not only charitable ownership, but
charitable use. Specifically, an organization seeking an exemption
under section 15–65 must establish that the subject property is
“actually and exclusively used for charitable or beneficent purposes,
and not leased or otherwise used with a view to profit.” 35 ILCS
200/15–65 (West 2002). When the law says that property must be
“exclusively used” for charitable or beneficent purposes, it means that

                                  -18-
charitable or beneficent purposes are the primary ones for which the
property is utilized. Secondary or incidental charitable benefits will
not suffice, nor will it be enough that the institution professes a
charitable purpose or aspires to using its property to confer charity on
others. “[S]tatements of the agents of an institution and the wording
of its governing legal documents evidencing an intention to use its
property exclusively for charitable purposes will not relieve such
institution of the burden of proving that its property actually and
factually is so used.” Methodist Old Peoples Home v. Korzen, 39 Ill.
2d at 157.
    In rejecting Provena Hospitals’ claim for exemption, the
Department determined that the corporation also failed to satisfy this
charitable use requirement. As with the issue of charitable ownership,
the appellate court concluded that this aspect of the Department’s
decision was not clearly erroneous. Again we agree.
    In explaining what constitutes charity, Methodist Old Peoples
Home v. Korzen, 39 Ill. 2d at 156-57, applied the definition adopted
by our court more than a century ago in Crerar v. Williams, 145 Ill.
625 (1893). We held there that
             “ ‘charity, in a legal sense, may be more fully defined as
         a gift, to be applied consistently with existing laws, for the
         benefit of an indefinite number of persons, either by bringing
         their hearts under the influence of education or religion, by
         relieving their bodies from disease, suffering or constraint, by
         assisting them to establish themselves for life, or by erecting
         or maintaining public buildings or works, or otherwise
         lessening the burthens of government.’ ” Crerar v. Williams,
         145 Ill. at 643, quoting Jackson v. Phillips, 96 Mass. 539, 556
         (1867).
    Following Crerar, we explained that “[t]he reason for exemptions
in favor of charitable institutions is the benefit conferred upon the
public by them, and a consequent relief, to some extent, of the burden
upon the State to care for and advance the interests of its citizens.”
People v. Young Men’s Christian Ass’n of Chicago, 365 Ill. 118, 122
(1936). See also People ex rel. Carr v. Alpha Pi of Phi Kappa Sigma
Educational Ass’n of the University of Chicago, 326 Ill. 573, 578
(1927) (“The reason for exempting certain property from public taxes
arises from the fact that such property, in its use for charitable

                                  -19-
purposes, tends to lessen the burdens of government and to affect the
general welfare of the public”). Our court continues to apply this
rationale. See Quad Cities Open, Inc. v. City of Silvis, 208 Ill. 2d 498,
509-10 (2004).
    Conditioning charitable status on whether an activity helps relieve
the burdens on government is appropriate. After all, each tax dollar
lost to a charitable exemption is one less dollar affected governmental
bodies will have to meet their obligations directly. If a charitable
institution wishes to avail itself of funds which would otherwise flow
into a public treasury, it is only fitting that the institution provide
some compensatory benefit in exchange. While Illinois law has never
required that there be a direct, dollar-for-dollar correlation between
the value of the tax exemption and the value of the goods or services
provided by the charity, it is a sine qua non of charitable status that
those seeking a charitable exemption be able to demonstrate that their
activities will help alleviate some financial burden incurred by the
affected taxing bodies in performing their governmental functions.
    Our state and federal governments have both undertaken to
provide health care for individuals meeting various criteria. To the
extent Provena Hospitals’ operations help reduce the burdens faced
by those levels of government in providing health care, it may
therefore be appropriate for Provena Hospitals to qualify for state and
federal tax exemptions. Those taxes, however, are not at issue here,
and we make no ruling regarding them. The case before us is
concerned solely with Provena Hospitals’ eligibility for a property tax
exemption for the 43 parcels of real estate in the PCMC complex. If
permitted, that exemption would result in the loss of tax revenue by
the following taxing districts: Champaign County, Champaign
County Forest Preserve District, Community College District 505,
Unit School District 116, Urbana Corporation, Cunningham
Township, Urbana-Champaign Sanitary District, Urbana Park
District, Champaign-Urbana Mass Transit District, and Champaign-
Urbana Public Health District. The record is devoid of findings
regarding any of these taxing bodies or the services and support they
provide to Champaign County residents. As a result, we have no way
to judge how, if at all, Provena Hospitals’ use of its PCMC property
in 2002 lessened the burdens those bodies would otherwise have been


                                  -20-
required to bear.10
    We further note that even if there were evidence that Provena
Hospitals used the PCMC property to provide the type of services
which the local taxing bodies might find helpful in meeting their
obligations to the citizenry of Champaign County, that still would not
suffice, in itself, to meet this requirement. The terms of the service
also make a difference. As the appellate court correctly recognized,
“ ‘services extended *** for value received *** do not relieve the
[s]tate of its burden.’ ” 384 Ill. App. 3d at 744, quoting Willows v.
Munson, 43 Ill. 2d 203, 208 (1969).
    The situation before us here stands in contrast to People ex rel.
Cannon v. Southern Illinois Hospital Corp., 404 Ill. 66 (1949). In that
case, the hospital seeking the charitable exemption adduced 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. Moreover, because the
hospital was the only one in the area, the court reasoned that its
acceptance of relief patients relieved the government from having to
transport and pay for the treatment of those patients elsewhere.
People ex rel. Cannon, 404 Ill. at 73-74. 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 this case.
    Even if Provena Hospitals were able to clear this hurdle, there was
ample support for the Department of Revenue’s conclusion that
Provena failed to meet its burden of showing that it used the parcels
in the PCMC complex actually and exclusively for charitable
purposes. As our review of the undisputed evidence demonstrated,
both the number of uninsured patients receiving free or discounted
care and the dollar value of the care they received were de minimus.

   10
     In reaching this conclusion, we do not mean to suggest that Provena
Hospitals’ entitlement to a charitable property tax exemption was
dependent on its ability to show that its use of the PCMC parcels reduced
the burden on each of the affected taxing districts. It was, however,
required to demonstrate that its use of the property helped alleviate the
financial burdens faced by the county or at least one of the other entities
supported by the county’s taxpayers.

                                   -21-
With very limited exception, the property was devoted to the care and
treatment of patients in exchange for compensation through private
insurance, Medicare and Medicaid, or direct payment from the patient
or the patient’s family.
    To be sure, Provena Hospitals did not condition the receipt of care
on a patient’s financial circumstances. Treatment was offered to all
who requested it, and no one was turned away by PCMC based on
their inability to demonstrate how the costs of their care would be
covered. The record showed, however, that during the period in
question here, Provena Hospitals did not advertise the availability of
charitable care at PCMC. Patients 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 no insurance coverage, was not eligible
for Medicare or Medicaid, lacked the resources to pay the bill
directly, and could document that he or she qualified for participation
in the institution’s charitable care program. As a practical matter,
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. Under similar circumstances, our appellate
court has consistently refused to recognize a medical facility’s actions
as the bestowal of charity within the meaning of section 15–65 of the
Property Tax Code (35 ILCS 200/15–65 (West 2002). See Riverside
Medical Center v. Department of Revenue, 342 Ill. App. 3d 603, 608-
09 (2003); Alivio Medical Center v. Department of Revenue, 299 Ill.
App. 3d 647, 651-52 (1998); Highland Park Hospital v. Department
of Revenue, 155 Ill. App. 3d 272, 280-81 (1987). The appellate
court’s decision in the present case is in accord with this line of
precedent.
    The minimal amount of charitable care dispensed by Provena
Hospitals at the PCMC complex cannot be rationalized on the
grounds that the area’s residents did not require additional services.
For one thing, the argument that there really was no demand for
additional charitable care in Champaign County is one that Provena
Hospitals cannot comfortably make. That is so because such a
contention, if true, would bring into question the veracity of the
corporation’s claim that it is committed to the values of the Catholic
health-care ministry PCMC was purportedly obligated to advance.

                                 -22-
One of those values was that the institution was to
        “distinguish itself by service to and advocacy for those people
        whose social condition puts them at the margins of our
        society and makes them vulnerable to discrimination: the
        poor[,] the uninsured and the underinsured.”
If the number of poor, uninsured and underinsured residents of
Champaign County was as insignificant as PCMC’s charitable care
program reflects, the opportunities for Provena Hospitals to further its
mission there would be virtually nonexistent. And if the opportunites
were so limited, it is difficult to understand why Provena Hospitals
would continue to devote its resources to serving that community.
The only plausible explanation would be that its principle purposes
in operating PCMC were, in reality, more temporal than it professes.
    The argument is problematic for other reasons as well. Federal
census figure show that approximately 13.4% of Champaign County’s
more than 185,000 residents have incomes below the federal poverty
guidelines. That amounts to nearly 25,000 people. In addition, nearly
20,000 county residents are estimated to be without any health-care
coverage. There is no reason to believe that these groups of indigent
and/or uninsured citizens are any healthier than the population at
large. To the contrary, experience teaches that such individuals are
likely to have significant unmet health-care needs. If Provena
Hospitals were truly using the PCMC complex exclusively for
charitable purposes, one would therefore expect to see a significant
portion of its annual admissions served by Provena Hospitals’
charitable care policy. Instead, as we have noted, a mere 302 of its
110,000 admissions received reductions in their bills based on
charitable considerations.
    Further undermining Provena Hospitals’ claims of charity is that
even where it did offer discounted charges, the charity was often
illusory. As described earlier in this opinion, uninsured patients were
charged PCMC’s “established” rates, which were more than double
the actual costs of care. When patients were granted discounts at the
25% and 50% levels, the hospital was therefore still able to generate
a surplus. In at least one instance, the discount was not applied until
after the patient had died, producing no benefit to that patient at all.
Moreover, it appears that in every case when a “charitable” discount
was granted or full payment for a bill was otherwise not received, the

                                 -23-
corporation expected the shortfall to be offset by surpluses generated
by the higher amounts it was able to charge other users of its facilities
and services. Such “cross-subsidies” are a pricing policy any fiscally
sound business enterprise might employ. We cannot fault Provena
Hospitals for following this strategy, and there is no question that an
institution is not ineligible for a charitable exemption simply because
those patients who are able to pay are required to do so. Sisters of the
Third Order of St. Francis v. Board of Review, 231 Ill. 317, 321
(1907). We note merely that such conduct is in no way indicative of
any form of charitable purpose or use of the subject property. 11
    The minimal amount of free and discounted care provided at the
PCMC cannot be excused under the theory that aid to indigent
persons is not a prerequisite to charity. In the context of municipal
taxation, we recently reaffirmed that, under Illinois law, charity “is
not confined to the relief of poverty or distress or to mere almsgiving”
but may also include gifts to the general public use from which the
rich as well as to the poor may benefit. Quad Cities Open, Inc. v. City
of Silvis, 208 Ill. 2d 498, 510-11 (2004), quoting People v. Young
Men’s Christian Ass’n of Chicago, 365 Ill. 118, 122 (1936). It is a
fundamental principle of law, however, that a gift is “a voluntary,
gratuitous transfer of property by one to another,” and that “[i]t is
essential to a gift that it should be without consideration.” Martin v.
Martin, 202 Ill. 382, 388 (1903). When patients are treated for a fee,
consideration is passed. The treatment therefore would not qualify as
a gift. If it were not a gift, it could not be charitable.
    Provena Hospitals argues that the amount of free and discounted
care it provides to self-pay patients at the PCMC complex is not an
accurate reflection of the scope of its charitable use of the property.
In its view, its treatment of Medicare and Medicaid patients should
also be taken into account because the payments it receives for


      11
        Some commentators have been more pointed in assessing the
charitable nature of this practice. See M. Bloche, Health Policy Below the
Waterline: Medical Care and the Charitable Exemption, 80 Minn. L. Rev.
299, 355 (1995) (“the imagery of charity rings hollow when it comes to
hospitals” because, most obviously, “the free care provided by nonprofit
hospitals is financed largely by private payers, who are hardly inspired by
donative benevolence”).

                                   -24-
treating such patients do not cover the full costs of care. As noted
earlier in this opinion, however, participation in the Medicare and
Medicaid is not mandatory. Accepting Medicare and Medicaid
patients is optional. While it is consistent with Provena Hospitals’
mission, it also serves the organization’s financial interests. In
exchange for agreeing to accept less than its “established” rate, the
corporation receives a reliable stream of revenue and is able to
generate income from hospital resources that might otherwise be
underutilized. Participation in the programs also enables the
institution to qualify for favorable treatment under federal tax law,
which is governed by different standards.
    Mindful of such considerations, our appellate court has held that
discounted care provided to Medicare and Medicaid patients is not
considered charity for purposes of assessing eligibility for a property
tax exemption. See Riverside Medical Center v. Department of
Revenue, 342 Ill. App. 3d at 610; see also Alivio Medical Center v.
Department of Revenue, 299 Ill. App. 3d at 651-52 (charitable real
estate exemption denied to medical center where, inter alia, most of
the center’s revenue was derived from patient fees and the majority
of those fees were Medicaid payments). Similarly, the Catholic
Health Association of the United States, one of the signatories to a
friend of the court brief filed in this case in support of Provena
Hospitals, does not include shortfalls from Medicaid and Medicare
payments in its definition of charity. Provena Health itself adopted
this view. The consolidated financial statements and supplementary
information it prepared for itself and its affiliates for 2001 and 2002
did not identify any costs or charges incurred by PCMC in connection
with subsidizing Medicaid or Medicare patients in its explanation of
“charity care.” That being so, it can scarcely complain that such costs
and charges should have been included by the Department in
evaluating Provena Hospitals’ charitable contributions.12


   12
      It would, in fact, be anomalous to characterize services provided to
Medicare and Medicaid patients as charity. That is so because, as the
Department correctly points out, charity is, by definition, a type of gift and
gifts, as we have explained, must, by definition, be gratuitous. Hospitals do
not serve Medicare and Medicaid patients gratuitously. They are paid to do
so.

                                    -25-
     Provena Hospitals asserts that assessment of its charitable
endeavors should also take into account subsidies it provides for
ambulance service, its support of the crisis nursery, donations made
to other not-for-profit entities, volunteer initiatives it undertakes, and
support it provides for graduate medical education, behavioral health
services, and emergency services training. This contention is
problematic for several reasons. First, while all of these activities
unquestionably benefit the community, community benefit is not the
test. Under Illinois law, the issue is whether the property at issue is
used exclusively for a charitable purpose.13
     Provena Hospitals’ decision to make charitable contributions to
other not-for-profit entities does not demonstrate an exclusively
charitable use of the PCMC complex. Indeed, it tells us nothing about
the use of the property at all. It is relevant only with respect to the
question of how Provena Hospitals elected to disburse funds
generated by the facility. That, however, is not dispositive. The
critical issue is the use to which the property itself is devoted, not the
use to which income derived from the property is employed. See City
of Lawrenceville v. Maxwell, 6 Ill. 2d 42, 49 (1955); see also People
ex rel. Goodman v. University of Illinois Foundation, 388 Ill. 363,


   13
     Illinois’ charity requirements distinguish our property tax exemption
standards from the requirements a hospital must meet in order to qualify for
tax-exempt status under the Internal Revenue Code. When the Medicare
and Medicaid programs were being established in the late 1960s, there was
concern that many hospitals would lose their federal tax exempt status
because there would no longer be sufficient demand for charity care to
satisfy IRS requirements. In response, the IRS loosened its previous
standards, under which hospitals were required to provide financial
assistance to those who could not afford to pay for services, and began to
measure a hospital’s eligibility for tax exemption by utilizing other
“community benefit” factors. Adoption of this community benefit standard
“abandoned charity care as the touchstone of exemption at the federal
level.” See 37 Loy. U. Chi. L.J. at 497. Illinois has not adopted this
approach. Although our General Assembly now requires certain hospitals
in Illinois to file annual “community benefits plans” with the Illinois
Attorney General’s office (see 210 ILCS 76/1 et seq (West 2006)) that
requirement is not part of the Property Tax Code and does not purport to
alter Illinois law with respect to property tax exemptions.

                                   -26-
374 (1944) (“the test [is] the present use of the property rather than
the ultimate use of the proceeds derived from the property sought to
be exempted”).14
     With respect to the ambulance subsidy, the costs for most patients
who were transported by ambulance appear to have been covered by
third-party insurers. The deficit claimed by Provena may therefore
result primarily from the reduced rates insurers are allowed to pay,
something which clearly would not qualify as charitable in nature.
How much, if any, is attributable to free or discounted service
provided to those who could not afford to pay is not apparent from
the record.15 We further note (1) that there is no evidence that any of
the 43 parcels for which an exemption is sought was ever used
directly or indirectly for the ambulance service, and (2) that the
ambulance service provided noncharitable benefits to the institution.
It complemented PCMC’s emergency room, which it was required by
law to provide and which was operated by a for-profit corporation,
and enhanced PCMC’s ability to fill its beds and cover its fixed costs.
     The volunteer classes and services cited by Provena Hospitals
included such items as free health screenings, wellness classes, and
classes on handling grief. Again, while beneficial to the community,
they were not necessarily charitable. Private for-profit companies
frequently offer comparable services as a benefit for employees and
customers and a means for generating publicity and goodwill for the
organization.16
     The behavioral health subsidy listed by Provena Hospitals


  14
    Even as to the nature of Provena Hospitals, the donations tell us little.
Charitable contributions, after all, can be made by anyone. They are not the
exclusive or even the primary domain of charitable organizations.
       15
      We do know from testimony presented by PCMC’s chief financial
officer at the administrative hearing that none of it involved Medicaid or
Medicaid patients.
  16
    That such programs can serve as an effective advertising tool was well
understood by PCMC’s management, which explained that part of the
reason for the programs they offered was to let the community know
“where they can go for services if they need more health care.”

                                    -27-
involved operation of two shelters, one primarily for adult men and
the other for runaway teens. These shelters do not appear to have been
located on the PCMC complex, and the connection between the
medical services offered at PCMC and the operation of the shelters
was not explained. So far as we can tell, the only relationship between
the PCMC complex and the shelters is that PCMC’s owner helped
support the shelters financially. As in the case of donations to other
charitable organizations, however, that does not demonstrate that the
subject property is used exclusively for charitable purposes.
     The amount Provena Hospitals devoted to emergency medical
services suffers from similar problems. These services, which were
described as training “prehospital responders and providers in how to
most effectively respond to patients in need as they are responding
and transporting those patients to the hospital,” are furnished to
“about 175 different agencies throughout Central Illinois.” There is
no indication that any of that training actually occurs on the premises
of the PCMC complex. Indeed, from the record before us, we cannot
tell whether any of this training even occurs in Champaign County.
     Provena Hospitals’ reliance on this expense is problematic for
other reasons as well. None of the taxing bodies affected by the
exemption sought by Provena here is claimed to be responsible for
training health-care professionals, and they are certainly not
responsible for training health-care professionals outside their
jurisdictions. As a result, Provena Hospitals’ decision to support this
training does not relieve any of these taxing bodies of any burden they
would otherwise be required to bear. Another key element for charity
eligibility is therefore absent. We further note that the decision to
train “prehospital responders and providers” is not necessarily
altruistic. In a competitive health-care environment, it may be an
effective means for increasing awareness of the hospital, encouraging
others outside the immediate community to use its services.
     Provena Hospitals’ reliance on expenses associated with the
medical residency program is also problematic. The record indicates
that the program is run by the University of Illinois and that Provena
Hospitals receives reimbursement for participating in it. Although the
corporation apparently does not believe that the reimbursement
covers the full actual costs of its affiliation with the residency
program, PCMC’s president and chief operating officer, who testified

                                 -28-
about this item at the administrative hearing, did not explain how the
claimed shortfall was computed. We note, moreover, that in addition
to generating direct payments from the University, 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. While we cannot exclude the possibility
that there is some charity in this relationship, it is difficult to know in
which direction such charity flows, from Provena Hospitals to the
University of Illinois or vice versa.
    That leaves only the $25,851 Provena Hospitals attributes to crisis
nursery services and support. The nursery services to which Provena
Hospitals refers are provided by the Crisis Nursery in Urbana. Crisis
Nursery is a separate not-for-profit entity. Although some PCMC
employees serve on its board of directors, it has no corporate
affiliation with PCMC or Provena Health. Crisis Nursery paid to
construct the facilities it uses and maintains its own staff. The land on
which its facilities are situated is, however, owned by Provena
Health. Provena Health allows Crisis Nursery use of the land under
a long-term lease for a nominal rent of $1 per year. Provena also
furnishes various in-kind services to the nursery including telephone
service, utilities, building and grounds maintenance, laundry, meals,
occasional medical consultations for children using the nursery, and
meeting space at PCMC for meetings and other events. In addition,
Provena Hospitals periodically helps sponsor fund raising events held
by the Crisis Nursery.
    As its name implies, the Crisis Nursery provides a temporary
haven for young children whose families are experiencing some form
of crisis. When parents reach the point, for whatever reason, that they
are incapable of caring for their children or pose a threat to their
children’s well-being, the Crisis Nursery will take the child in
temporarily. It sometimes also admits children when mothers who are
making the transition from welfare to the work force need child
assistance in order to manage their work schedules. The goal, always,
is to protect children from situations in which they may be at
heightened risk of abuse or neglect.
    The Crisis Nursery is designed for infants and children up to age
five. The facility allows children to stay overnight, if necessary, for
up to three days, though longer stays are sometimes permitted. During

                                   -29-
these stays, the Crisis Nursery feeds and bathes the children and
provides them with “developmentally appropriate activities.” Post-
visit family support services are offered in order to help improve
parenting skills and stabilize children’s home environments. The
Crisis Nursery also serves as a conduit for various social services for
poor families and children in need.
    Of the 43 real estate parcels involved in this, the four utilized by
the Crisis Nursery may have the strongest claim on being used
exclusively for charitable purposes. Even if we assume an exclusive
charitable use to have been established, however, it would not aid
Provena Hospitals’ position. Charitable use of these four parcels
would not, under any legal theory, be sufficient to also confer a
charitable exemption on the remaining 39 parcels comprising the
PCMC complex. Moreover, even as to these four parcels, the claim
for exemption must fail. That is so because a critical qualification for
the exemption is absent. For the reasons set forth earlier in this
opinion, Provena Hospitals, the actual owner of the four parcels,
failed to meet its burden of establishing that it is a charitable
institution. Without charitable ownership as well as charitable use, no
exemption is permitted. The Department of Revenue was therefore
correct when it denied Provena Hospitals’ request for a charitable
exemption as to any of the 43 parcels comprising the PCMC
complex.
    We likewise find no error in the Department of Revenue’s
rejection of Provena Hospitals’ request for a religious exemption
under section 15–40(a)(1) of the Property Tax Code (35 ILCS
200/15–40(a)(1) (West 2002)). To qualify for an exemption under
that statute, the property in question must be used exclusively for
religious purposes. There is no all-inclusive definition of religious
purpose for tax cases. Whether an entity has been organized and
operated exclusively for religious purposes is determined from its
charter, bylaws, and actual method and facts relating to its operation.
See Fairview Haven v. Department of Revenue, 153 Ill. App. 3d 763,
774 (1987), citing Scripture Press Foundation v. Annunzio, 414 Ill.
339, 349 (1953). As with the claim for a charitable exemption, it was
Provena Hospitals’ burden to show, by clear and convincing
evidence, that it satisfied these requirements. As with its claim for a
charitable exemption, it failed to do so.

                                 -30-
     Provena Hospitals’ claim to a religious exemption is founded
largely on the proposition that it is, itself, a ministry of the Catholic
Church. A threshold problem with this argument is that the facts cited
to support it pertain to PCMC, not Provena Hospitals. According to
evidence presented in the administrative proceeding, which we cited
earlier in this opinion, the articles of consolidation adopted when
Provena Hospitals was formed state that its purpose 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.” While there is plainly a religious
component to this mission, advancing religion is not identified as the
corporation’s dominant purpose.
     Provena Hospitals suggests that we cure this evidentiary problem
by imputing the religious values underlying the church’s support of
PCMC to Provena Hospitals itself. But we can no more do that than
we could deem the corporation a charity based on what PCMC alone
did. Such a course would require that we resolve facts and debatable
questions in favor of exemption. The law requires just the opposite.
     Even if Provena Hospitals could overcome this obstacle, its claim
to a religious exemption for the 43 parcels at issue in this case would
fail. Religious purpose is not determined solely by the professed
motives or beliefs of the property’s owner. A court must also take
into account the facts and circumstances regarding how the property
is actually used. See People ex rel. McCullough v. Deutsche
Evangelisch Lutherische Jehovah Gemeinde Ungeaenderter
Augsburgischer Confession, 249 Ill. 132, 136 (1911). As the appellate
court recently observed, intentions are not enough. We must ask
whether, in actuality or practice, the building is used primarily for a
religious purpose. “In a sense, everything a deeply devout person does
has a religious purpose,” the court explained,
         “[b]ut if that formulation determined the exemption from
         property taxes, religious identity would effectively be the sole
         criterion. A church could open a restaurant, for instance, and
         because waiters attempted to evangelize customers while
         taking their orders, the restaurant would be exempt. But the
         operation of a restaurant is not necessary for evangelism and

                                  -31-
         religious instruction, although, like any other social activity,
         it can provide the occasion for those religious purposes.” See
         Faith Builders Church, Inc. v. Department of Revenue, 378
         Ill. App. 3d 1037, 1046 (2008) (denying a religious exemption
         for property used by a church group for a fee-based day-care
         center serving infants, toddlers and preschool children).
     In this case, the record clearly established that the primary
purpose for which the PCMC property was used was providing
medical care to patients for a fee. Although the provision of such
medical services may have provided an opportunity for various
individuals affiliated with the hospital to express and to share their
Catholic principles and beliefs, medical care, while potentially
miraculous, is not intrinsically, necessarily, or even normally
religious in nature. We note, moreover, that no claim has been made
that operation of a fee-based medical center is in any way essential to
the practice or observance of the Catholic faith.
     Provena Hospitals argues that religious institutions alone have the
right to assess the religious nature of their activities and that courts
may not second-guess those assessments without violating
constitutional guarantees regarding the free exercise of religion (see
Ill. Const. 1970, art. I, §3; U.S. Const., amend. I). If Provena
Hospitals’ argument were valid, it would mean that the church rather
than the judiciary is the ultimate arbiter of when and under what
circumstances church property is exempt from taxation under the
constitution and statutes of the State of Illinois. Provena Hospitals has
not cited any authority to support such a claim, nor was it raised by
Provena Hospitals in its petition for leave to appeal. It is therefore not
properly before us. See Vine Street Clinic v. HealthLink, Inc., 222 Ill.
2d 276, 301 (2006); People v. Whitfield, 228 Ill. 2d 502, 509 (2007).

                           CONCLUSION
     For the foregoing reasons, the Department of Revenue properly
denied the charitable and religious property tax exemptions requested
by Provena Hospitals in this case. The judgment of the appellate court
reversing the circuit court and upholding the Department’s decision
is therefore affirmed.



                                  -32-
                                                               Affirmed.

   JUSTICES KILBRIDE and GARMAN took no part in the
consideration or decision of this case.

    JUSTICE BURKE, concurring in part and dissenting in part:
    I join that portion of the plurality opinion which holds that
Provena Hospitals failed to demonstrate it was entitled to a religious
exemption based on the lack of sufficient evidence. See slip op. at 30-
32.
    I also join the plurality opinion’s conclusion that Provena
Hospitals failed to establish it is a charitable institution. The defining
characteristics of a charitable institution include, inter alia, that the
institution dispenses charity to all who need it and apply for it, and
that it does not appear to place any obstacles in the way of those who
need and would avail themselves of the charitable benefits it
dispenses. Methodist Old Peoples Home v. Korzen, 39 Ill. 2d 149,
157 (1968). There is evidence in the record detailing Provena
Covenant Medical Center’s (PCMC) charity care policy, evidence
that PCMC’s staff engaged in outreach efforts to communicate the
availability of charity care and encouraged patients to apply, and
evidence that charitable care would be considered by PCMC at any
time. However, there is no such evidence in connection with Provena
Hospitals, the actual owner of the subject property. Accordingly, the
record in the case at bar is inadequate to establish that Provena
Hospitals is a charitable institution, a necessary prerequisite to
receiving a charitable exemption. For this reason alone, I agree with
the plurality that Provena Hospitals is not entitled to a charitable
exemption in this case.
    I do not join that portion of the plurality opinion which addresses
the doctrine of charitable use. Without citation to authority, the
plurality holds that Provena Hospital’s use of the property in 2002
was not a “charitable use” because the charity care provided was de
minimus. Specifically, the plurality concludes that “there was ample
support for the Department of Revenue’s conclusion that Provena
failed to meet its burden of showing that it used the parcels in the
PCMC complex actually and exclusively for charitable purposes. As

                                  -33-
our review of the undisputed evidence demonstrated, both the number
of uninsured patients receiving free or discounted care and the dollar
value of the care they received were de minimus.” Slip op. at 21. I
disagree with this rationale. By imposing a quantum of care
requirement and monetary threshold, the plurality is injecting itself
into matters best left to the legislature.
    The legislature did not set forth a monetary threshold for
evaluating charitable use. We may not annex new provisions or add
conditions to the language of a statute. Hines v. Department of Public
Aid, 221 Ill. 2d 222, 231 (2006). Yet, this is exactly what the plurality
does. The Michigan Supreme Court in Wexford Medical Group v.
City of Cadillac, 474 Mich, 192, 713 N.W.2d 734 (2006), aptly set
out this principle. In Wexford, the court held that “there can be no
threshold [dollar amount of free medical services provided] imposed
under the statute. The Legislature provided no measuring device with
which to gauge an institution’s charitable composition, and we cannot
presuppose the existence of one. To say that an institution must
devote a certain percentage of its time or resources to charity before
it merits a tax exemption places an artificial parameter on the
charitable institution statute that is unsanctioned by the Legislature.”
Wexford, 474 Mich. at 213, 713 S.W.2d at 745.
    Not only did the Wexford court reject a monetary threshold
because it was not provided for in the statute, the court also believed
it would be unwise to impose such a requirement, finding that such
a requirement “would be, by its very nature, quite arbitrary.” Wexford,
474 Mich. at 213, 713 S.W.2d at 745. In addition, the court stated:
             “As petitioner aptly pointed out, there are multiple reasons
        why inventing legislative intent in this regard would be
        ill-advised and most unworkable. In fact, the difficulties with
        formulating a monetary threshold illuminate why setting one
        is the Legislature’s purview, not the courts’. To set such a
        threshold, significant questions would have to be grappled
        with. For instance, a court would have to determine how to
        account for the indigent who do not identify themselves as
        such but who nonetheless fail to pay. A court would have to
        determine whether facilities that provide vital health care
        should be treated more leniently than some other type of
        charity because of the nature of its work, or even if a health

                                  -34-
        care provider in an underserved area, such as petitioner, is
        more deserving of exemption than one serving an area of
        lesser need. A court would need to consider whether to
        premise the exemption on whether the institution had a
        surplus and whether providing below-cost care constitutes
        charity. Clearly, courts are unequipped to handle these and
        many other unanswered questions. Simply put, these are
        matters for the Legislature.” Wexford, 474 Mich. at 214, 713
        S.W.2d at 745-46.
The Wexford court concluded: “[I]t does not follow that an institution
must present evidence of a particular level of charitable care because
there is no such threshold level contained in the statute. And we
refuse to create one.” (Emphasis omitted.) Wexford, 474 Mich. at 220,
713 S.W.2d at 748.
    Similarly, in Medical Center Hospital of Vermont, Inc. v. City of
Burlington, 152 Vt. 611, 566 A.2d 1352 (1989), the Vermont
Supreme Court, in rejecting the taxing authority’s argument that the
amount of free care dispensed must exceed revenues, concluded there
was nothing in any Vermont case that required an institution to
dispense any free care to qualify as charitable for purposes of the
charitable property tax exemption. Medical Center Hospital of
Vermont, 152 Vt. at 616, 566 A.2d at 1354. In fact, the court had
previously held that “ ‘[t]he fact that none of its patients are cared for
without charge does not deprive [an institution] of its charitable
feature.’ [Citation.]” (Emphasis omitted.) Medical Center Hospital of
Vermont, 152 Vt. at 616, 566 A.2d at 1355. The court further
concluded, “[T]his state has never required a certain percentage of
free care to be rendered before finding an organization to be a
tax-exempt charity ***.” Medical Center Hospital of Vermont, 152
Vt. at 616, 566 A.2d at 1355. The court declared: “In our opinion,
pegging charitability to a stated amount of free care rendered would
not be workable in determinating an organization’s taxable status.
Instead, uncertainty would reign ***.” Medical Center Hospital of
Vermont, 152 Vt. at 616, 566 A.2d at 1355. Rather, “[t]he better
inquiry, it seems to us, is the one used by the trial court in this case:
whether health care was made available by the plaintiff to all who
needed it, regardless of their ability to pay.” Medical Center Hospital
of Vermont, 152 Vt. at 617, 566 A.2d at 1355.

                                  -35-
    In addition to the difficulties in formulating a monetary threshold
pointed out by the Wexford court, the Medical Center court noted
another problem that would be encountered if a quantum approach is
imposed–uncertainty. Specifically, taxability would necessarily be
determined on a year to year basis, depending upon economic factors
which are not in the control of an organization. Medical Center
Hospital of Vermont, 152 Vt. at 617, 566 A.2d at 1355. The court
stated: “As plaintiff pointed out at trial, if the economy in the
Burlington area were to fall off dramatically and unemployment to
soar, fewer people would be covered by health care insurance through
employers and, consequently, more free care would be rendered to
those in need. Should the economy make a turnaround the following
year, the amount of free care given might fall again should
unemployment levels drop.” Medical Center Hospital of Vermont,
152 Vt. at 617 n.3, 566 A.2d at 1355 n.3. See also City of Richmond
v. Richmond Memorial Hospital, 202 Va. 86, 90, 116 S.E.2d 79, 81-
82 (1960) (“A tax exemption cannot depend upon any such vague and
illusory concept as the percentage of free service actually rendered.
This would produce chaotic uncertainty and infinite confusion,
permitting a hodgepodge of views on the subject. Thus there would
be no certainty nor uniformity in the application of the section
involved”).
    I find these authorities persuasive. I do not believe this court can,
under the plain language of section 15–65, impose a quantum of care
or monetary requirement, nor should it invent legislative intent in this
regard. Setting a monetary or quantum standard is a complex decision
which should be left to our legislature, should it so choose. The
plurality has set a quantum of care requirement and monetary
requirement without any guidelines. This can only cause confusion,
speculation, and uncertainty for everyone: institutions, taxing bodies,
and the courts. Because the plurality imposes such a standard, without
any authority to do so, I cannot agree with it.
    I also disagree with the plurality’s conclusion that Provena
Hospitals was “required to demonstrate that its use of the property
helped alleviate the financial burdens faced by the county or at least
one of the other entities supported by the county’s taxpayers.” Slip
op. at 20 n.10. Alleviating some burden on government is the reason
underlying the tax exemption on properties, not the test for

                                  -36-
determining eligibility. Despite acknowledging this (slip op. at
19-20), the plurality converts this rationale into a condition of
charitable status. I neither agree with this, nor do I believe that
Provena Hospitals failed to show it alleviated some burden on
government.
    In Wexford, the court, similar to the plurality, defined charity as:
             “ ‘[Charity] *** [is] a gift, to be applied consistently with
         existing laws, for the benefit of an indefinite number of
         persons, either by bringing their minds or hearts under the
         influence of education or religion, by relieving their bodies
         from disease, suffering or constraint, by assisting them to
         establish themselves for life, or by erecting or maintaining
         public buildings or works or otherwise lessening the burdens
         of government.’ ” Wexford, 474 Mich. at 211, 713 N.W.2d at
         744, quoting Retirement Homes of the Detroit Annual
         Conference of the United Methodist Church, Inc. v. Sylvan
         Township, 416 Mich. 340, 348-49, 330 N.W.2d 682, 686
         (1982), quoting Jackson v. Phillips, 96 Mass. 539, 556
         (1867).
See slip op. at 19, quoting Crerar v. Williams, 145 Ill. at 643, quoting
Jackson v. Phillips, 96 Mass. 539, 556 (1867).
    The Michigan court then concluded: “Implicit in the definition is
that relieving bodies from disease or suffering is lessening the burden
of government.” (Emphasis omitted.) Wexford, 474 Mich. at 219, 713
N.W.2d at 748. That court specifically held that “petitioner does not
have to prove that its actions lessen the burden of government.
Rather, it has to prove, as it did, that it ‘reliev[es] their bodies from
disease, suffering or constraint,’ which is, by its nature, a lessening of
the burden of government.” Wexford, 474 Mich. at 219, 713 N.W.2d
at 748. I believe the Michigan Supreme Court’s conclusion is correct.
While “lessening the burden of government” is a component of the
definition of charity, it is inextricably tied to the public policy
justifying the exemption itself and is not a requirement for
demonstrating entitlement to the exemption. The plurality here errs
in requiring Provena Hospitals to specifically demonstrate some
burden of government it relieved. There is no such requirement.
    For the above reasons, I cannot join in the charitable use portion


                                  -37-
of the plurality opinion. I note that the discussion of charitable use
does not command a majority of the court and, therefore, is not
binding under the doctrine of stare decisis.

    JUSTICE FREEMAN joins in this partial concurrence and partial
dissent.




                                -38-
