Court Opinion

ID: 9851336
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:10:52.913208+00
Date Added: 2024-06-11T09:20:53.752475
License: Public Domain

HOWE, Justice
(dissenting):
I dissent. The views of the majority on charitable hospitals are without precedent in the jurisprudence of this country. The majority introduces confusion and mischief into an area of the law that has been well settled in this state for at least 50 years and strips from all nonprofit hospitals the exemption they have had over that span of time. The result will be that each hospital seeking an exemption must demonstrate ultimately to this Court the extent of its almsgiving. We will then be required to weigh and measure that almsgiving against sufficiency standards which the majority declines now to articulate. Courts do a disservice to the people they serve by leaving the state of the law in such uncertainty-
The majority fails (1) to accord to the legislature its rightful role in defining a constitutional term and to give the presumption of constitutionality to its definition, (2) to recognize the overwhelming legal authority that the property of hospitals, such as the two involved in this case, is used for charitable purposes, and (3) to recognize the gift made by these hospitals to their patients and the communities they serve.
The majority violates at least two well-recognized rules of appellate review: It asserts as fact matters not contained in the record, e.g., that there is no difference between the rates of for-profit hospitals and nonprofit hospitals and that for-profit hospitals treat without charge those patients who cannot pay. The majority ignores un-contradicted evidence and disregards findings of fact made by the Tax Commission that are supported by competent evidence and makes its own findings to the contrary, e.g., that the rates or services of the two hospitals in question would not change if they were required to pay property taxes and that the Utah Valley Hospital refuses to treat patients unless they can pay. In a reckless attempt to find support for what appears to be its novel personal ideas, buttressed by references to “literature” by writers whose credentials are not established, the majority indulges in totally irrelevant arguments, e.g., that the two hospitals have not demonstrated that they would “suffer any operating losses or have to discontinue any services if they are ineligible for exemption from property taxes.”
I.
In U.C.A., 1953, § 59-2-31, the legislature has declared that property used exclusively for hospital purposes, which use complies with the requirements of section 59-2-30 (nonprofit status), shall be deemed to be used for charitable purposes within the exemption granted by article XIII, section 2 of the Constitution of Utah. That section exempts lots with buildings thereon used exclusively for charitable purposes. Neither article XIII nor any other part of the Constitution contains a definition of what constitutes a “charitable purpose.” County assessors, county boards of equalization, and the Utah State Tax Commission are frequently confronted with requests for exemptions by property owners who claim that their property is being used exclusively for charitable purposes. This is attested to by the many cases that have come to this Court as the final arbiter of that question. In 1973, the legislature enacted sections 59-2-30 and 59-2-31 in an *295attempt to “clarify the scope” of the religious and charitable purpose exemption found in section 2 of article XIII. The legislature was careful to state that it did not intend thereby to expand or limit the scope of such exemptions or to defeat exemptions not specifically enumerated which may be found within the purview of the constitutional exemption. See Foulger Equipment Co. v. State Tax Commission, 16 Utah 2d 165, 397 P.2d 298 (1964), and Judge v. Spencer, 15 Utah 242, 48 P. 1097 (1897) (statutes struck down that exempted from taxation property not included in the constitutional exemption).
This legislative attempt to clarify the term “charitable purpose” was proper. Charitable purpose cannot be determined adcademically alone. Nor is it the sole prerogative of this Court in the first instance to identify each and every charitable purpose. We have recognized that charity involves a contribution to the “common good” that is not subject to precise definition but is “subject to judgment in light of changing community mores,” Salt Lake County v. Tax Commission ex rel. Greater Salt Lake Recreational Facilities, Utah, 596 P.2d 641, 643 (1979), and that acts of charity may assume multifarious forms. Eyring Research Institute, Inc. v. Tax Commission, Utah, 598 P.2d 1348, 1351 (1979). It is therefore entirely appropriate that the representatives of the people be heard on this subject and that they give expression to it. The Supreme Court of California in Methodist Hospital of Sacramento v. Saylor, 5 Cal.3d 685, 97 Cal.Rptr. 1, 488 P.2d 161 (1971), recognized a “strong presumption” in favor of the legislature’s interpretation of a California constitutional provision. It quoted with approval from an earlier case, Delaney v. Lowery, 25 Cal.2d 561, 154 P.2d 674 (1944), where that court referred to the presumption of constitutionality and the rule of strict construction of constitutional limitations on the legislature and concluded at page 578, 154 P.2d 674:
Those principles indicate the latitude and effect to be given a legislative construction or interpretation of the Constitution. When the Constitution has a doubtful or obscure meaning or is capable of various interpretations, the construction placed thereon by the Legislature is of very persuasive significance.
Again, the same court said in Pacific Indemnity Co. v. Industrial Accident Commission, 215 Cal. 461, 464, 11 P.2d 1, 2 (1932): “For the purpose of determining constitutionality, we cannot construe a section of the Constitution as if it were a statute, and adopt our own interpretation without regard to the legislative construction. Where more than one reasonable meaning exists, it is our duty to accept that chosen by the Legislature.”
In accordance with this principle of according the legislature a role in defining terms used in a constitution, legislative attempts to statutorily define what constitutes a charitable use of property have been upheld in Jasper v. Mease Manor, Inc., Fla., 208 So.2d 821 (1968), Samarkand of Santa Barbara, Inc. v. County of Santa Barbara, 216 Cal.App.2d 341, 31 Cal.Rptr. 151 (1963), and Lundberg v. County of Alameda, 46 Cal.2d 644, 298 P.2d 1 (1956). In the Florida case, a statute provided that the operation of a home for the aged, under certain conditions, constituted a “charitable purpose.” In Lund-berg v. County of Alameda, the challenged statute exempted property, under certain conditions, used exclusively for schools of less than collegiate grade that were owned and operated by religious, hospital, or charitable funds, foundations, and corporations. In upholding the constitutionality of the statutes, it was recognized in both cases that such enactments carry a presumption in favor of their constitutionality, and they will not be invalidated by the courts except upon a clear and unquestionable showing that they are unconstitutional.
This Court has heretofore recognized the role of the legislature in defining terms that appear in the constitution but are undefined there. In Highland Boy Gold Mining Co. v. Strickley, 28 Utah 215, 78 P. 296 (1904), a challenge was made to a statute that authorized the use of the right of *296eminent domain by a mining company to acquire a right-of-way to operate an aerial tramway to transport ore and other materials across private property. The contention was made that the statute conflicted with section 22, article I of the Constitution of Utah, which authorized the condemnation of private property only if it was taken for a public use. This Court noted that there was an irreconcilable conflict among the authorities as to what constituted a public use and that what would be a public use in one jurisdiction would not necessarily be one in another jurisdiction. We stated that what should be considered a public use often depended on the locality, the wants and necessities of the people, the conditions with which they were surrounded, and the nature and character of the natural resources of the locality. We observed that the legislature could determine, in the first instance, whether a given use was a public use. We further held that when the legislature had made such a declaration, it would be respected and followed by the courts unless the act was clearly and palpably unconstitutional. However, we recognized that the legislative declaration was not final and that it was ultimately for the courts to determine whether a particular use was a public use.
In commenting on the legislative construction of the Utah Constitution, this Court in State ex rel. Breeden v. Lewis, 26 Utah 120, 123, 72 P. 388, 389 (1903), said:
So, an enactment of the Legislature embraces within itself, by implication, a construction by a co-ordinate branch of the government, of the constitutional provisions relating to the subject of the legislation. Therefore a court, in construing the enactment, where the question of its constitutionality is involved in difficulty and doubt, will be strongly inclined to resolve such doubt in favor of its validity, ....
The majority pays only lip service to these rules and makes no attempt to employ them in its analysis. To the contrary, the burden on every question raised by the majority is shifted to the two hospitals without any recognition that the legislature, in enacting the statutes, resolved those issues in favor of granting the exemption. The approach taken is as if the legislature had never spoken. The collective judgment of the 104 legislators is subverted to the views of the majority, which are not supported by the citation of a single case.
Sections 59-2-30 and 59-2-31, being expressions of what the legislature in this state finds to be charitable purposes, are therefore entitled to a presumption of constitutionality. Murray City v. Hall, Utah, 663 P.2d 1314 (1983).
II.
In the only case ever before this Court where a hospital sought a charitable exemption from ad valorem taxation, William Budge Memorial Hospital v. Maughan, 79 Utah 516, 3 P.2d 258 (1931), we held that the test which determined whether a hospital was charitable was whether it was maintained for gain, profit, or advantage. That question, we declared, was to be determined from its powers as defined in its charter and from the manner in which the hospital was conducted. Id. at 523, 3 P.2d 258. We pointed out that the mere fact that the property was used for hospital purposes was not sufficient to exempt it since not all hospitals were charitable institutions. “They may be and often are maintained and conducted for pecuniary profit.” Id. at 525, 3 P.2d 258. We denied the exemption in that ease because the hospital was organized as a corporation for pecuniary profit, even though no dividends were ever declared or paid to the stockholders. We remarked that we were unable to find a single distinctive charitable feature of the hospital. The implication of that decision was that nonprofit hospitals which are open to the public without restriction are charitable. For over 50 years, counties have accordingly exempted such hospitals. Today, the majority sweeps away Budge and a half century of practice and recognition on the basis of its own determination, made dehors the record, that there is no *297difference between a profit and a nonprofit hospital and therefore neither should be granted an exemption.
In decisions of other states, hospital property has often been found to be used exclusively for charitable purposes within the meaning of statutory or constitutional exemptions. See the annotations and cases collected therein at 144 A.L.R. 1483, 108 A.L.R. 284, 62 A.L.R. 328, and 34 A.L.R. 634. The vast majority1 of cases hold that hospital property is used for charitable purposes if the hospital is not organized for profit and no private gain is in fact derived from its earnings or upon dissolution; all earnings are used to maintain the hospital facility; the hospital is open to the public without restriction to race, color, or creed; and admission is not predicated upon ability to pay. Jackson County v. State Tax Commission, Mo., 521 S.W.2d 378 (1975); Community Memorial Hospital v. City of Moberly, Mo., 422 S.W.2d 290 (1967); Vick v. Cleveland Memorial Medical Foundation, 2 Ohio St.2d 30, 206 N.E.2d 2 (1965); Elder v. Henrietta Egleston Hospital for Children, 205 Ga. 489, 53 S.E.2d 751 (1949); People ex rel. Cannon v. Southern Illinois Hospital Corp., 404 Ill. 66, 88 N.E.2d 20 (1949); Scripps Memorial Hospital v. California Employment Commission, 24 Cal.2d 669, 151 P.2d 109, 155 A.L.R. 360 (1944); O’Brien v. Physicians’ Hospital Association, 96 Ohio St. 1, 116 N.E. 975 (1917). The cases consistently hold that a hospital is not disqualified from receiving a charitable exemption merely because patients who are able to pay are required to do so so long as the funds derived in this manner are devoted to the charitable purposes of the institution. See the annotation on this subject at 37 A.L.R.3d 1223-27. The annotator there states:
It is a usual practice for a hospital to charge patients who are able to pay for the services rendered in order to maintain the institution, pay off the indebtedness on its buildings, expand its facilities, or improve its services, while not denying treatment and care to patients who are unable to pay anything. In many cases the paying patients vastly outnumber charity patients and their payment constitutes the main source of the hospital’s income, but such receipt of pay has been held not to destroy the institution’s charitable character and the consequent tax exemption....
(Footnote omitted.)
That principle is exemplified by People ex rel. Cannon v. Southern Illinois Hospital Corp., supra, where the court referred to its earlier decision in Sisters of Third Order of St. Francis v. Board of Review of Peoria County, 231 Ill. 317, 83 N.E. 272 (1907), and reaffirmed a statement made there that the great disparity between the number of patients who paid and those who did not pay was immaterial,
so long as charity was dispensed to all who needed it and those who applied therefor, and so long as no private gain or profit came to any person connected with the institution, and so long as it does not appear that any obstacle, of any character, was by the corporation placed in the way of those who’ might need charity of the kind dispensed by this institution, calculated to prevent such persons making application or obtaining admission to the hospital.
Id., 231 Ill. at 322, 83 N.E. at 274. See also West Allegheny Hospital v. Board of Property Assessment, 500 Pa. 236, 455 A.2d 1170 (1982). However, a hospital that consistently admits paying patients in such numbers as to exhaust its accommodations and prevent the admission of charity patients may lose its tax exemption as a charitable institution. O’Brien v. Physicians’ Hospital Association, supra; Community Memorial Hospital v. City of Moberly, supra. The latter case also held that it was not fatal to a charitable tax exemption that the institution was in some competition with private business.
*298III.
Thus, the legislature in exempting nonprofit hospitals in sections 59-2-BO and 59-2-31 did so in light of and with the support of overwhelming precedent. The majority rejects this great body of law, claiming that it is based on hospital practices long abandoned. They assert that commencing late in the 19th century and running up until the 1920s, nonprofit hospitals were transformed from institutions that provided custodial care for the poor-sick to institutions where most patients sought and were able to pay for medical treatment. American courts, the majority continues, have been oblivious to this transformation and on the strength of “unexamined assumptions” of the past have continued to grant charitable exemptions, not realizing until noticed by. the majority today that modern hospitals are quite different from the almshouses of the past. This condemnation is unwarranted. Nothing could be further from fact. Even a cursory examination of the cases reveals that for well over 100 years, courts in this country have been well aware that most patients in charitable hospitals pay for all or part of their care, but have held that this fact does not rob the institution of its charitable character. For example, in 1876 (109 years ago) the Supreme Judicial Court of Massachusetts in McDonald v. Massachusetts General Hospital, 120 Mass. 432, held that the fact that most patients are able to pay in full for the care they receive does not render the hospital any less a charity. Similarly, in 1881, in State ex rel. Alexian Brothers Hospital v. Powers, 10 Mo.App. 263, affirmed in 74 Mo. 476, and in 1907 in Sisters of the Third Order of St. Francis v. Board of Review of Peoria County, 231 Ill. 317, 83 N.E. 272, the courts specifically noted that many or most patients paid for their care. In the latter case, only five percent were charity patients. These early cases refute the theme of the majority opinion that in 1895, when the people of the Territory of Utah approved a constitution for their new state containing an exemption for property put to a charitable use, they had in mind, so far as hospitals are concerned, almshouses filled with only poor, sick persons, receiving little or no medical attention, but receiving humane custodial care until they passed on.
The annotation at 37 A.L.R.3d 1223 contains cases spanning from the last century to the present time where the issue of paying patients was raised, but in which it was held not disqualifying as a charity. Courts long ago fully considered and firmly rejected the notion now advanced by the majority that the charitable character of a hospital is determined by the quantity of its almsgiving. They do not cite a single case where an exemption was denied for insufficiency in quantity of free care. Utah will now stand alone with that antiquated concept as its law. A charitable exemption does not rest on the quantity of free care — but only on its availability. The cases contain frequent reference to the fact that no hospital could long keep its doors open to everyone unless most patients were able to pay for their care. Paying patients help make charity possible for nonpaying patients. St. Joseph's Hospital Association v. Ashland County, 96 Wis. 636, 72 N.W. 43 (1897); State ex rel. Alexian Brothers Hospital v. Powers, supra. The majority asserts that for-profit hospitals also admit patients without regard to their ability to pay, but the record before us is entirely devoid of any such evidence. Not even Utah County makes such a claim.
Courts have not been oblivious, as the majority charges, that insurance, government programs such as Medicare, and third-party payors now pay for the care of many persons who formerly were called poor. Again, this criticism is ill-founded. In the following cases, the courts made specific mention of the changes that have occurred in the health care field. While I am not advocating that we go as far as some of them, since we are dealing in the instant case with two traditional nonprofit hospitals that admit everyone without regard to ability to pay, these cases illustrate how the courts perceive charity in health care as much broader than simply the pro*299viding of free services to the needy and destitute.
In Harvard Community Health Plan, Inc. v. Board of Assessors of Cambridge, 384 Mass. 536, 427 N.E.2d 1159 (1981), a nonprofit health clinic that provided prepaid comprehensive health care services for its subscribers sought a charitable exemption on its building. The court remarked:
However, we recognize too that major changes in the area of health care, especially in modes of operation and financing, have necessitated changes as well in definitional predicates. The term “charitable,” as applied to health care facilities, has been broadened since earlier times, when it was limited mainly to almshouses for the poor. As a result, the promotion of health, whether through the provision of health care or through medical education and research, is today generally seen as a charitable purpose. A. Scott [Trusts §§ 368, 372]; G.T. Bogert, Trusts & Trustees § 374 (rev. 2d ed. 1977). Such a purpose is separate and distinct from the relief of poverty, and no health organization need engage in “almsgiving” in order to qualify for exemption.
Id., 384 Mass. at 542-43, 427 N.E.2d at 1163 (citations omitted).
In a similar vein, the Supreme Court of Montana in Bozeman Deaconess Foundation v. Ford, 151 Mont. 143, 439 P.2d 915, 37 A.L.R.3rd 558 (1968), in addressing a claim for an exemption on a home for the aged, noted that the “modern view” of charity is that it is not confined to the relief of the destitute, but includes care and attention for aged people apart from financial assistance, and that the supplying of this care and attention is as much a charitable and benevolent purpose as the relief of their financial wants. Further, the court said,
It may be that appellants feel the standard of care, the excellence of accommodations, and the mode of life accorded by this facility, all reflected by the size of the occupancy and maintenance fees, and the physical plant and facilities available are inconsistent with the usual concept of charity. But “charity” to the law has a much broader meaning than that accorded it in common speech (15 Am. Jur.2d, p. 8). The scope of charity and the standards under which it is administered are not frozen by the past, but keep pace with the times and the new conditions and wants of society. (Zoll-man, American Law of Charities, pp. 121, 123).
Id., 151 Mont. at 149, 439 P.2d at 918 (emphasis added). In commenting on changes that have occurred in recent years in the health care field, the Supreme Court of Nebraska in Evangelical Lutheran Good Samaritan Society v. County of Gage, 181 Neb. 831, 151 N.W.2d 446 (1967), said:
Formerly all institutions furnishing services of this nature, including both hospitals and nursing homes, were providing care for many patients without compensation and extended charity in the sense of almsgiving or free services to the poor. With the advent of present day social security and welfare programs, this type of charity is not often found because assistance is available to the poor under these programs. Yet, “ * * * the courts have defined ‘charity’ to be something more than mere alms-giving or the relief of poverty and distress, and have given it a significance broad enough to include practical enterprises for the good of humanity operated at a moderate cost to those who receive the benefits.”
Id., 181 Neb. at 836, 151 N.W.2d at 449 (citations omitted). The District of Columbia Circuit Court similarly expressed in Eastern Kentucky Welfare Rights Organization v. Simon, 506 F.2d 1278 (D.C.Cir.1974), vacated on other grounds, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976), that the term “charitable” as used in the I.R.S. Code was not intended by Congress to always remain limited to providing free or below-cost care for indigents, but was flexible enough to “recognize the changing economic, social and technological precepts and values of contemporary society.” Id. *300at 1288. The Missouri Supreme Court in Jackson County v. State Tax Commission, supra, noted that modern-day social legislation has resulted in providing more citizens with assistance in paying for hospital care. The court there found it unnecessary to consider the percentages of patients who pay for none or only part of their care. So long as nonprofit hospitals are open to the rich and poor alike, said the court, they qualify for a charitable tax exemption.
In the law of trusts, it is well recognized that a charitable trust may be created for the promotion of health, although the benefits are not limited to the poor. Restatement (Second) of Trusts § 372; Scott on Trusts § 372 (3rd ed.); Bogert, Trusts and Trustees § 374 (2d ed. rev.). In the latter treatise, the author states:
In order that a trust to relieve sickness, prevent disease, and promote the public health be regarded as charitable it is not necessary that it be limited to assistance to the poor. It is to the advantage of the state to have as many agencies as possible operating to bring about health for the entire community. Society is interested in having all its members, rich and poor, in good physical condition, capable of being productive and of caring for themselves and enjoying life.
(Citations omitted.)
The majority opinion maintains that Utah cases may be unique in mandating substantial almsgiving before charity can be found. Our cases do no such thing. Our cases are not in discord with those of other American state courts. For example, the majority rejects Community Memorial Hospital v. City of Moberly, supra, because the Missouri court did not discuss whether the hospital made a gift to its patients or the community. Thus, the majority states that that decision is out of harmony with Utah law. While it is true that no such discussion appears, to have included it would have been “reinventing the wheel.” It has been established law in Missouri since at least 1881 (State ex rel. Alexian Brothers Hospital v. Powers, supra) that nonprofit hospitals with an open admission policy are charitable institutions in that they comport with one of the definitions of “charity” by making a “gift” to the sick “by relieving their bodies from disease, suffering, or constraint.”
This Court’s previous cases in no way mandate the denial of the exemption that might be granted in other states. We, like other courts, have recognized that since “charitable purpose” has no static, definite, and fixed or exclusive meaning, the identification of charitable institutions may change from time to time. Justice Wilkins of this Court recognized this when he wrote for the Court in Salt Lake County v. Tax Commission ex rel. Greater Salt Lake Recreational Facilities, supra, that charity is not subject to precise definition, but is subject to judgment in light of changing community mores. We found charity in Youth Tennis Foundation v. Tax Commission, Utah, 554 P.2d 220 (1976), where we exempted from sales tax a nonprofit corporation organized for sponsoring, promoting, and encouraging amateur tennis. We held the Foundation to be a charity, giving that word a broad meaning. We said:
Charity in the broad sense is the giving of something of benefit to others without expectation of gain. Considering it in more direct focus under this statute, it means providing something for the public welfare, which includes not only material, educational and cultural, but also extends to physical and recreational needs.
Id. at 221 (footnotes omitted). No substantial almsgiving as now required by the majority opinion was ever identified.
The majority recognizes and seemingly approves that some courts use the rationale that charitable entities by “their activities enhance beneficial community values or goals.” They also recognize that “charity is the contribution or dedication of something of value to the common good.” Further, the majority concedes that the “care of the sick” has traditionally been regarded as charitable. But the majority, clinging to *301the concept of almshouses that vanished years before the Utah Constitution was adopted, is too myopic to see the charity of the two hospitals in question.
IV.
After careful review of the record made by the parties before the Tax Commission, I am satisfied that the two hospitals in their structure and operation complied with everything necessary to be classified as charitable institutions and thus are entitled to exemption from ad valorem taxation on their land and buildings. This is true even under the narrow view of charity taken by the majority, i.e., that there must be a substantial imbalance between the value of the services provided and the remuneration received. IHC is a nonprofit corporation governed by a board of trustees who serve without pay as do the board members of each individual hospital. No dividends or distributions of any type, either direct or indirect, can be or are paid to them or to the incorporators. On dissolution, all remaining assets are required to be distributed to a nonprofit foundation or corporation that is organized and operated exclusively for charitable, educational, religious, or scientific purposes. The attempt of the majority to equate profit corporations with nonprofit corporations is on its face so legally unsound and repugnant to William Budge Memorial Hospital v. Maughan, 79 Utah 516, 3 P.2d 258 (1931), that nothing more need be said here on that subject.
The Utah Valley Hospital, which is located at Provo, Utah, furnishes to patients tertiary care that is more specialized and sophisticated than the primary services available in smaller community hospitals. Utah Valley Hospital serves central and southern Utah and is the only such institution between Provo, Utah, and Las Vegas, Nevada, a distance of about 400 miles. There are no privately owned tertiary care hospitals in Utah, and thus no attempt was made by either party to make a specific comparison of its rates with a for-profit tertiary hospital in Utah. However, the president of IHC testified that its rates were lower than for-profit hospitals. The majority ignores this testimony and would like to make the lack of comparison fatal to a case for exemption, but it cites no case or authority that a charitable hospital must offer lower rates to its paying patients. This writer, in examining scores of cases, has found no such requirement.
American Fork Hospital offers primary care to persons living in six small communities in northern Utah County. It is the only public service that is open 24 hours each day. From its switchboard, ambulances and firefighting equipment are dispatched at night in several of the communities.
The two hospitals are open to all members of the public irrespective of race, col- or, or creed. The Tax Commission specifically found that admission and treatment is not conditioned on ability to pay. Utah County does not seriously contend otherwise.2 The majority, in derogation of the most fundamental of appellate rules of review, has chosen to disregard this finding of the Commission, although it is supported by competent evidence, and make their own finding to the contrary. The fact that these hospitals do not advertise that they render free service is inconsequential. The court in Corporation of Sisters of Mercy v. Lane County, 123 Or. 144, 261 P. 694 (1927), did not disqualify a charitable hospital for giving a bill to each patient so as not to be imposed upon by those who might want to overstay. Emergency care is customarily rendered and much of the non-emergency care is well under way before financial arrangements are made between the patient and the hospital. The hospitals endeavor to collect for their services from each patient, in whole or in part, according to his financial resources. A large majority of the patients are able to pay in full *302from their own means or through their hospital insurance. Others are eligible for participation in government programs such as Medicare or Medicaid or are under industrial accident insurance, which does not always pay the hospital’s full cost, causing it to absorb a partial loss.
Most of the land and buildings comprising the Utah Valley Hospital were donated to IHC by the Church of Jesus Christ of Latter-Day Saints with the charge to operate it for the benefit of the residents of the area it serves. It is also highly significant that IHC promotes fund-raising drives in the communities served by its hospitals. It and the individual hospitals are the recipients of charitable donations, bequests, and endowments. Those donors would be surprised to know that their gift was not to charity. When the Utah Valley Hospital was recently enlarged and its services expanded, over four million dollars were raised toward that construction from the residents of the communities it serves. Government assistance was not sought. Thus all patients, including those who pay for their care in full, are beneficiaries of these gifts. See Missouri United Methodist Retirement Homes v. State Tax Commission, Mo., 522 S.W.2d 745 (where gifts, bequests, and donations from two conferences of the Methodist Church were used to defray part of the cost of operating a retirement house, the home was entitled to a charitable exemption).
IHC reviews its rates annually and attempts to make them cover its costs, plus a margin for expansion of services and replacement of equipment and facilities. Contrary to the assertion in the majority opinion that there is no “earmarking” of this margin, the chairman of the board of trustees testified that the difference between its income and expenditures was “totally and exclusively” devoted to capital improvements. To argue, as does the majority, that it was not demonstrated that IHC would suffer any operating loss if subjected to property taxation is both irrelevant and unrealistic. In the first place, a charitable exemption is not based on a showing of absolute need. Secondly, the taxes on the Utah Valley Hospital amounted to more than $377,000 in 1980 and, according to the president’s testimony, would be a cost that would have to be covered in the annual setting of rates. It is of no consequence that IHC operates outside of Utah. Our constitutional exemption applies to real property in this state used for charitable purposes, irrespective of whether the owner has property also devoted to charitable purposes in another state. The American Red Cross is such an example.
The legislature acted within proper bounds in exempting hospitals organized and operated in the manner of the two hospitals involved in this case. Their existence and operation contribute immeasurably to the inhabitants of the area they serve. Because these hospitals are nonprofit and are open to all persons regardless of their ability to pay, they are quite different from the “countless private enterprises” they are compared to in the majority opinion. The fact that most patients have the resource through their private insurance or other means or are eligible for Medicare or Medicaid and can pay in whole or in part is a tribute to their preparedness and to the wisdom of federal programs that make insurance for the elderly readily available. It does not detract from the fact that these hospitals stand as bulwarks in their communities with their doors always open to assist the rich and poor alike. In the case of catastrophic illness or disaster, even the seemingly well-prepared may need hospital care long after their resources are depleted. In such an event, the free care provided by these hospitals may well exceed that care which is paid for. In a reckless argument, the majority asserts that the two hospitals have not demonstrated that they would “have to discontinue any services if they are ineligible for exemption from property taxes.” They also decry that exempt hospitals “use tax-supported public services, including road construction and maintenance, police protection, fire protection, water and sewer maintenance, and waste removal, to name a few,” at the “expense of nonexempt health care providers and other taxpayers, commercial and individual.” It is obvious that *303such statements are wholly irrelevant. In demonstrating their lack of understanding, their argument is comparable to a statement made by the trial judge in his memorandum denying a hospital a tax exemption in Jackson County v. State Tax Commission, supra. That statement was that the hospitals had never paid “as much as one cent of tax on their fine, expensive and beautifully equipped hospital properties for the support of the schools, the roads, the streets, the fire and police departments, or any other governmental functions.... ” The Supreme Court of Missouri, in denouncing the statement as irrelevant, observed that by authorizing a tax exemption in their constitution, the citizens of the state expressed that the very result complained of take place. So it is here. As the majority well knows, neither the lack of ability to pay taxes nor the non-use of governmental services has ever been the basis for a charitable exemption.
CONCLUSION
I am in agreement with the majority that exemptions from taxation should be strictly construed. All jurisdictions so hold. However, we have also pointed out that in so doing we should give a reasonable meaning to the language of the constitutional exemption and not construe it so narrowly that no institution can qualify, thereby choking off the charitable enterprises the exemption was meant to encourage. Benevolent and Protective Order of Elks No. 85 v. Tax Commission, Utah, 536 P.2d 1214 (1975). The Supreme Court of Missouri recently wrote on this point:
“Taxation is the rule. Exemption therefrom is the exception. Claims for exemption are not favored in the law.” However, Missouri has declared as its public policy that property actually and regularly used exclusively for charitable purposes shall be exempt from taxation, and the taxing authorities are not to be permitted to defeat that announced public policy by unreasonable or unrealistic application of the “strict construction” rule.
Missouri United Methodist Retirement Homes v. State Tax Commission, Mo., 522 S.W.2d 745, 751 (1975) (citation omitted).
I would uphold the constitutionality of sections 59-2-30 and 59-2-31. The overwhelming case law both from this Court and from other jurisdictions supports the legislature’s determination. Certainly, the presumption of constitutionality of the statutes has not been overcome. I would affirm the decision of the Tax Commission granting an exemption to the two hospitals. I also concur in Justice Stewart’s dissenting opinion.
ZIMMERMAN, J., does not participate herein; SAM, District Judge, sat.

. One court has declared that hospitals operated as nonprofit institutions are universally classed as charitable institutions. Evangelical Lutheran Good Samaritan Society v. County of Gage, 181 Neb. 831, 151 N.W.2d 446 (1967).

. In the two instances cited in the majority opinion, the patients were not refused admission. Indeed, they were in the Utah Valley Hospital and later moved to another facility with the concurrence of Utah County where their intoxication and drug addiction could be better treated.