KENNETH L. BUETTNER, Judge.
T1 Plaintiffs/Appellants GDT CGI, LLC (Property Owner), Ministries of Jesus, Inc. (MJT), and Transformation Fitness Center, LLC (Fitness Center) (collectively, Appellants) appeal from summary judgment entered in favor of Defendants/Appellees Board of Equalization of Oklahoma County and Oklahoma County Assessor (collectively, County) which affirmed County's ruling that Appellants were not entitled to an ad valo-rem tax exemption. The question presented is whether a non-profit fitness center, which charges most users a fee comparable to other fitness centers in the area, but which offers free services to persons referred by its charitable free health clinic owner, is used exclusively for charitable purposes and thus qualifies for exemption from ad valorem taxation pursuant to 68 O.S8.Supp.2004 § 2887. The record shows that MJI purchased Fitness Center to further its purpose of ministering to the physical, emotional, and spiritual needs of its clients, without charge. Although Fitness Center charges membership fees to some clients, it also offers free services to MJI patients, and free sports programs to those unable to pay, and is therefore part of MJT's charitable operation. Fitness Center is therefore exempt from ad valorem taxation. We reverse and remand with directions to enter judgment in favor of Appellants.
T2 Appellants filed their Application for Ad Valorem Tax Exemption in April 2006. County denied the exemption based on its finding that Appellants were operating a commercial business (Fitness Center) on the property. Appellants appealed the denial to County's Board of Equalization, pursuant to 68 0.98.2001 § 2877(A), which denied the exemption after holding two hearings on the
matter. Appellants then challenged the Board's denial by seeking trial de novo in the District Court pursuant to 68 0.8.2001 § 2880.1(A).
13 In their appeal to the District Court, Appellants claimed Property Owner owns the real property at issue and leases it without cost
to Fitness Center, which uses the property to operate a not-for-profit fitness center. Appellants averred that as a single member limited liability company owned by MJI, a § 501(c)8) publicly supported charity, Fitness Center is treated as an activity of MJL.
Appellants argued that the IRS treats organizations like Fitness Center as charitable programs where they are dedicated exclusively to the charitable purposes of the tax-exempt owner. Appellants asserted that the IRS treats not-for-profit, tax-exempt fitness centers as charitable programs under the "community benefit" doctrine because they contribute to education and health of the community. Appellants asserted further that Fitness Center qualifies for the exemption because it is "dedicated exclusively to the charitable purposes of its owner," MJL
14 Appellants claimed Fitness Center was accessible and affordable to a significant segment of the community, charged comparable or lower fees than similar facilities, was equipped for those with special needs, and offered occupational and physical therapy, nutritional and educational programs, and offered scholarships for those unable to afford its services. Appellants asserted the primary focus of Fitness Center was to meet the healthcare needs of MJT's patients and to provide health, recreation, and education to the community.
15 Appellants asserted that in denying their ad valorem exemption, County relied on an opinion issued by the District Attorney, which Appellants claimed was factually and legally erroneous. Appellants claimed the District Attorney erred in presuming MJI is a church and in labeling Fitness Center as a commercial entity. Appellants asserted the District Attorney also assumed that they sought an exemption because funds generated by Fitness Center are used to support MJI's free medical clinic, but Appellants asserted that the activities and programs conducted by Fitness Center are in and of themselves exempt activities as recognized by the IRS. Appellants asserted that the real property and personal property at issue are used exclusively and directly for charitable purposes and that Appellants are therefore enti
tled to an exemption from ad valorem taxes according to 68 0.8.2001 § 2887(9). Appellants asked the District Court for judgment declaring their right to exemption from ad valorem tax on the property.
T6 In its Answer, filed June 80, 2006, County generally denied the allegations of Appellants' Petition. County asserted Appellants relied on authority related to the IRS, which County claimed differs from the law applicable to ad valorem taxation. County denied any inference that the property at issue was exempt from ad valorem taxes. County requested judgment in its favor.
T7 Appellants filed their Motion for Summary Judgment November 7, 2006. Appellants listed 7 undisputed facts in support of their motion.
County responded with a Cross-Motion for Summary Judgment. County disputed only one of Appellants' facts (the claim that Fitness Center charged lower fees than other fitness centers), and County listed 7 additional facts it contended proved it was entitled to summary judgment against Appellants.
T8 In Appellants' Response to County's Cross-Motion for Summary Judgment, Appellants noted that County had disputed only whether Fitness Center charges fees comparable to other fitness centers in the area. Appellants asserted, however, that the fees generated had yet to exceed the cost of operating Fitness Center, and that any profits in the future would be put into the operation of MJI, and that the purpose for which Fitness Center operates is charitable. Appellants further responded to each of County's undisputed facts.
Appellants added
four additional undisputed facts in their Response.
T9 County filed a Reply to Appellants' Response, but County did not dispute Appellants' additional facts. County urged that the undisputed facts failed to show that Appellants operated Fitness Center exclusively for a charitable purpose. County further asserted IRS regulations are not applicable to determination of ad valorem tax exemption.
10 In its Order granting summary judgment to County, the trial court found that "the real property at issue is not used exelu-sively for a charitable purpose." The trial court held therefore that the property did not qualify for exemption from ad valorem tax.
111 Summary judgment proceedings are governed by Rule 13, Rules for District Courts, 12 0.9.2001, Ch. 2, App.1. Summary judgment is appropriate where the record establishes no substantial controversy of material fact and the prevailing party is entitled to judgment as a matter of law. Brown v. Alliance Real Estate Group, 1999 OK 7, 976 P.2d 1048, 1045. Summary judgment is not proper where reasonable minds could draw different inferences or conclusions from the undisputed facts. Id. Further, we must review the evidence in the light most favorable to the party opposing summary judgment. Vance v. Fed. Natl. Mortg. Assn., 1999 OK 73, 988 P.2d 1275.
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KENNETH L. BUETTNER, Judge.
T1 Plaintiffs/Appellants GDT CGI, LLC (Property Owner), Ministries of Jesus, Inc. (MJT), and Transformation Fitness Center, LLC (Fitness Center) (collectively, Appellants) appeal from summary judgment entered in favor of Defendants/Appellees Board of Equalization of Oklahoma County and Oklahoma County Assessor (collectively, County) which affirmed County's ruling that Appellants were not entitled to an ad valo-rem tax exemption. The question presented is whether a non-profit fitness center, which charges most users a fee comparable to other fitness centers in the area, but which offers free services to persons referred by its charitable free health clinic owner, is used exclusively for charitable purposes and thus qualifies for exemption from ad valorem taxation pursuant to 68 O.S8.Supp.2004 § 2887. The record shows that MJI purchased Fitness Center to further its purpose of ministering to the physical, emotional, and spiritual needs of its clients, without charge. Although Fitness Center charges membership fees to some clients, it also offers free services to MJI patients, and free sports programs to those unable to pay, and is therefore part of MJT's charitable operation. Fitness Center is therefore exempt from ad valorem taxation. We reverse and remand with directions to enter judgment in favor of Appellants.
T2 Appellants filed their Application for Ad Valorem Tax Exemption in April 2006. County denied the exemption based on its finding that Appellants were operating a commercial business (Fitness Center) on the property. Appellants appealed the denial to County's Board of Equalization, pursuant to 68 0.98.2001 § 2877(A), which denied the exemption after holding two hearings on the
matter. Appellants then challenged the Board's denial by seeking trial de novo in the District Court pursuant to 68 0.8.2001 § 2880.1(A).
13 In their appeal to the District Court, Appellants claimed Property Owner owns the real property at issue and leases it without cost
to Fitness Center, which uses the property to operate a not-for-profit fitness center. Appellants averred that as a single member limited liability company owned by MJI, a § 501(c)8) publicly supported charity, Fitness Center is treated as an activity of MJL.
Appellants argued that the IRS treats organizations like Fitness Center as charitable programs where they are dedicated exclusively to the charitable purposes of the tax-exempt owner. Appellants asserted that the IRS treats not-for-profit, tax-exempt fitness centers as charitable programs under the "community benefit" doctrine because they contribute to education and health of the community. Appellants asserted further that Fitness Center qualifies for the exemption because it is "dedicated exclusively to the charitable purposes of its owner," MJL
14 Appellants claimed Fitness Center was accessible and affordable to a significant segment of the community, charged comparable or lower fees than similar facilities, was equipped for those with special needs, and offered occupational and physical therapy, nutritional and educational programs, and offered scholarships for those unable to afford its services. Appellants asserted the primary focus of Fitness Center was to meet the healthcare needs of MJT's patients and to provide health, recreation, and education to the community.
15 Appellants asserted that in denying their ad valorem exemption, County relied on an opinion issued by the District Attorney, which Appellants claimed was factually and legally erroneous. Appellants claimed the District Attorney erred in presuming MJI is a church and in labeling Fitness Center as a commercial entity. Appellants asserted the District Attorney also assumed that they sought an exemption because funds generated by Fitness Center are used to support MJI's free medical clinic, but Appellants asserted that the activities and programs conducted by Fitness Center are in and of themselves exempt activities as recognized by the IRS. Appellants asserted that the real property and personal property at issue are used exclusively and directly for charitable purposes and that Appellants are therefore enti
tled to an exemption from ad valorem taxes according to 68 0.8.2001 § 2887(9). Appellants asked the District Court for judgment declaring their right to exemption from ad valorem tax on the property.
T6 In its Answer, filed June 80, 2006, County generally denied the allegations of Appellants' Petition. County asserted Appellants relied on authority related to the IRS, which County claimed differs from the law applicable to ad valorem taxation. County denied any inference that the property at issue was exempt from ad valorem taxes. County requested judgment in its favor.
T7 Appellants filed their Motion for Summary Judgment November 7, 2006. Appellants listed 7 undisputed facts in support of their motion.
County responded with a Cross-Motion for Summary Judgment. County disputed only one of Appellants' facts (the claim that Fitness Center charged lower fees than other fitness centers), and County listed 7 additional facts it contended proved it was entitled to summary judgment against Appellants.
T8 In Appellants' Response to County's Cross-Motion for Summary Judgment, Appellants noted that County had disputed only whether Fitness Center charges fees comparable to other fitness centers in the area. Appellants asserted, however, that the fees generated had yet to exceed the cost of operating Fitness Center, and that any profits in the future would be put into the operation of MJI, and that the purpose for which Fitness Center operates is charitable. Appellants further responded to each of County's undisputed facts.
Appellants added
four additional undisputed facts in their Response.
T9 County filed a Reply to Appellants' Response, but County did not dispute Appellants' additional facts. County urged that the undisputed facts failed to show that Appellants operated Fitness Center exclusively for a charitable purpose. County further asserted IRS regulations are not applicable to determination of ad valorem tax exemption.
10 In its Order granting summary judgment to County, the trial court found that "the real property at issue is not used exelu-sively for a charitable purpose." The trial court held therefore that the property did not qualify for exemption from ad valorem tax.
111 Summary judgment proceedings are governed by Rule 13, Rules for District Courts, 12 0.9.2001, Ch. 2, App.1. Summary judgment is appropriate where the record establishes no substantial controversy of material fact and the prevailing party is entitled to judgment as a matter of law. Brown v. Alliance Real Estate Group, 1999 OK 7, 976 P.2d 1048, 1045. Summary judgment is not proper where reasonable minds could draw different inferences or conclusions from the undisputed facts. Id. Further, we must review the evidence in the light most favorable to the party opposing summary judgment. Vance v. Fed. Natl. Mortg. Assn., 1999 OK 73, 988 P.2d 1275.
112 The facts are not in dispute; the issue here is one of law which we review de movo. All real and personal property, except that which is specifically exempt by law, is subject to ad valorem taxation. 68 ©.8.2001 § 2804. The exemption statute applicable here is 68 0.8.8upp.2004 § 2887(9). That statute provides, in pertinent part:
The following property shall be exempt from ad valorem taxation:
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9. All property used exclusively and directly for charitable purposes within this state, provided the charity using said property does not pay any rent or remuneration to the owner thereof unless the owner is a charitable institution described in Seetion 501(c)8) of the Internal Revenue Code, 26 U.S.C., Section 501(c)@8), or a veterans' organization described in Section 501(c)(19) of the Internal Revenue Code, 26 U.S.C., Section 501(c)(19);
Additionally, the Oklahoma Constitution provides that certain property is exempt from taxation:
§ 6. Property exempt from taxation-Property exempt under territorial law-Certain property exempted for limited time-Special election to determine whether certain property exempt
A. Except as otherwise provided in subsection B of this section, all property used for free public libraries, free museums, public cemeteries, property used exclusively for nonprofit schools and colleges, and all property used exclusively for religious
and charitable purposes, ... shall be exempt from taxation: Provided, that all property not herein specified now exempt from taxation under the laws of the Territory of Oklahoma, shall be exempt from taxation until otherwise provided by law.
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Okla. Const. Art. 10, § 6 (Emphasis supplied). The burden is on the party claiming the exemption to prove the property is exempt from ad valorem taxation. Board of Com'rs of Comanche County v. Central Baptist Church, 1929 OK 166, 276 P. 726, 727, 136 Okla. 99, abrogated on other grounds in Baptist Bldg. Corp. v. Barnes, 1994 OK CIV APP 71, 874 P.2d 68.
« 13 The parties dispute whether the property is exempt from ad valorem taxation under § 2887(9).
It is undisputed that Fitness Center does not pay rent to Property Owner. Accordingly, the only issue regarding the applicability of § 2887(9) is whether the property is "used exclusively and directly for charitable purposes" as that phrase has been interpreted in Oklahoma.
114 The test for whether property is exempt from taxation under § 2887(9) is the physical use for which the property is dedicated; whether that use exempts it from taxation is a question of fact to be determined from the evidence. State v. Alumnae of Tau Beta Chapter of Chi Omega Fraternity, 1936 OK 221, 55 P.2d 134, 176 Okla. 186; Phi Kappa Psi v. State, 1936 OK 68, 53 P.2d 1130, 175 Okla. 605; Board of Com'rs of Tulsa County v. Sisters of the Sorrowful Mother, 1930 OK 5, 283 P. 984, 141 Okla. 32, overruled on other grounds in Oklahoma County v. Queen City Lodge No. 197, I. O. O. F., 1945 OK 55, 156 P.2d 340; Beta Theta Pi Corporation v. Board of Com'rs of Cleveland County, 1925 OK 176, 284 P. 354, 108 Okla. 78.
15 We note the definition of "charitable" for purposes of § 501(c)(8) includes advancement of religion and relief of the poor and distressed, and promotion of social welfare.
Appellants attached to their Motion for Summary Judgment an IRS Technical Advice Memorandum which indicates that certain health clubs may be exempt based on promotion of health in the community. 1984
WL 270630.
The record on appeal in this case shows Fitness Center's activities are open to the community and are substantially related to MJI's exempt purposes. An organization which does not extend some of its benefits to individuals financially unable to make the required payments reflects a commercial activity rather than a charitable one. Courts have denied tax-exempt status to a hospital which provided only a de minimis amount of free care. "A charitable hospital may impose charges or fees for services rendered, and indeed its charity record may be comparatively low depending upon all the facts ... but a serious question is raised where its charitable operation is virtually inconsequential." Federation Pharmacy Services, Inc. v. CLR., 625 F.2d 804, 807 (8th Cir.1980). The court in Federation Pharmacy noted several factors relevant to a finding of charitable purpose or use: if an organization is an adjunct of a non-profit, exempt organization, has a plan for soliciting charitable contributions, and offers services to some for free or below cost, all suggest a charitable purpose; on the other hand, where the claimed charitable organization is in direct competition with other commercial enterprises or is organized or operated for the benefit of private interests, these facts go against a finding of charitable purpose. Id.
T 16 County asserts that Fitness Center is a commercial enterprise. The Oklahoma Supreme Court has noted that Federation Pharmacy roughly defined commercial as being associated with profit. Massengale v. Oklahoma Bd. of Examiners in Optometry, 2001 OK 55, 29 P.3d 558, 563. Nothing in the record indicates that Fitness Center is a for-profit enterprise.
T17 Additionally, Appellants note that the Oklahoma Supreme Court and Oklahoma Court of Civil Appeals have previously found the promotion of health is itself a charitable
purpose. Those cases require more than promotion of health; there must be some charitable component. See Baptist Health Care Corp. v. Okmulgee County Bd. of Equalization, 1988 OK 11, 750 P.2d 127 (holding that a church retirement home, open to all regardless of ability to pay, is exempt even where some residents pay rent. "Property which produces income for private profit, or which is not available to all regardless of ability to pay, or which itself is income property, cannot be property which is used "exclusively" for religious or charitable purpose.")
William K. Warren Medical Research Center, Inc. v. Payne County Bd. of Equalization, 1994 OK CIV APP 167, 905 P.2d 824 (reasoning that a health clinic which charged patients fees for services, but which wrote off charges to certain patients who were unable to pay, was a charitable, exempt enterprise).
T 18 The record includes Fitness Center's Operating Agreement, which shows that it is not operated for the benefit of any private interests. David Minyard, the executive director of MJT, testified by deposition about the formation of MJI and Fitness Center.
Minyard explained that in January 2002 Henderson Hills Baptist Church in Edmond started MJI as a free health clinic open to anyone in the community. The purpose of MJI, as explained by Minyard is to "take a holistic approach to health care doing spirit, soul and body health care to the community." He explained MJI offers Christian counseling, prayer services, "encourager services," and that physician volunteers provide free health care. Minyard testified that MJI is open to anyone, regardless of income, and MJI does not accept payment for its services. Minyard testified that the philosophy of MJI is that a person cannot be healthy "unless they're spiritually, emotionally, relationally and physically healthy. So anybody that comes in receives an assessment in all ... areas ... And a treatment plan is developed based on those four areas."
119 Minyard explained how MJI decided to acquire Fitness Center:
It was a vision that I had that I thought that a fitness facility would fit very well with what the clinic was doing. So that the indigent clients with blood pressure problems and diabetes, obesity, variety of illnesses, depression, for instance, that we're treating with people needed (sic) physical activity and would benefit from physical activity.
And so I wrote up a business plan to try to raise funds to build, ... a fitness center to function as this physical piece to aid the clinic. In addition to which, it could funetion as a fitness center selling memberships much as the Y [YMCA] does to be able to, A, pay its own bills to pay its
way.... And then any excess revenues could be put back into the clinic to facilitate the health care.
One of Hobby Lobby's employees saw the business plan. They were buying the fitness center which was having trouble, I guess.... And then through that they approached me, asking if we could use this if they donated this to the-to the ministry,... ©
So they bought the real estate and own the building And then (MJD bought the business ... and then changed it to become (Fitness Center). And so we own the business and then rent the facility from (Property Owner).
120 Minyard also explained that part of his job is fund-raising for MJI, and that Fitness Center has not yet produced funds for MJT's use.
121 Minyard testified 'about how people become members of Fitness Club. Paying members join after touring the facility. Min-yard estimated there were 2,500 to 2,700 members, but Minyard did not know how many of those were paying or non-paying members. Minyard also was unsure how many members had been members before Fitness Center purchased the business. As for non-paying members, Minyard testified:
Q: How does ... Fitness Center determine who doesn't have to pay a membership?
A: The members that are scholarshipped in for different things either come in through the free clinic (sic). (MII), in other words, refers them over. People that are indigent that need help with fitness and it's a part of their health benefit or from the Transformation Counseling Center. People, for instance, that are depressed are sent or referred over through the physicians or through the LPCs refer them over (sic).
The we also have, for instance, in our basketball program, in our swim program, there are children that come in through those programs normally that are known to the people running the programs that are indigent and can't afford it. And those people then are scholarshipped into those-those programs.
Q: How many individuals has (MJT) referred to (Fitness Center)?
A: I don't know.
* * *
Q: How does ... Fitness Center provide for indigents to become members?
A: The indigents from (MJT) are referred there.
Q: But do you have to be referred by (MJI) to use the Fitness Center if you're indigent?
* * *
A: You mean if somebody just showed up and said "I can't pay."
Q: (Yes).
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A: What he would do is he would be referred to the clinic to go through (MJT) and sent to (MJT). And then there they're (sic) who qualifies any individual. We have a form that we qualify those individuals through with income sheets, family income. And then they would be referred back through to (Fitness Center).
Q: ... So nonpaying members or a nonpaying individual couldn't use (Fitness Center) unless he was actually referred by (MJD)?
A: Or if he was in through a basketball program. I mean, there's programs that we do that you don't have to be a member of the center that they participate in.... The coaches come in and tell us, you know, "These kids can pay. These kids can't." And we scholarship the ones that can't in (sic).
Q: But what about for adults?
A: Most of the adults come through either Transformation Christian Counseling Center or it (sic) comes from (MJT) clinic.
The fact that non-members must go through MJI shows Fitness Center is a related ad-junet or extension of MJT's charitable work. And, as noted above, MJI has no requirement for minimum or maximum income for its services. The undisputed evidence shows Fitness Center is open to all so long as they are referred to Fitness Center as part of their free treatment from MJL.
122 Minyard testified that in addition to its exercise machines, classes, and sports programs, Fitness Center also offers nutrition programs, dietary counseling, and personal training. Minyard explained how Fitness Center differs from other fitness clubs in the area:
(W)e offer scholarship programs for some of the programming that we do with basketball, with swimming. Also with performance athletics and the summer programs with them. We offer free memberships to the (MJT) clinic clientele and the Transformation Christian Counseling personnel that need it.
We're developing a program for obese youth that's epidemic in our society. So we're trying to work with kids starting as early as 6 up to about 13 to develop nutritional programming for them. LPCs are volunteering to come in and do that programming and then the personal trainers....
And then (MJT) will be able to take its overweight child population and refer them into that program so that those will be scholarshipped into the program to be able to facilitate those kids.
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We also work with Special Olympics. They do their weight training and some of their speed training and agility training. And they're not charged.
23 Minyard later described more precisely how MJI began referring its patients to Fitness Center:
Q: You don't know how many people were referred to ... Fitness Center from (MJT)?
A: The way that comes about is I set the program up. So I know that for the first eight people, I have a meeting with my doctors. I tell them what's available, what we can do. The clinic triage nurses understand what's available. And then I set the program up.
So I followed the first probably eight or ten clients to make sure that if, for lack of a better term, that the wheel is greased, that I ... that is working.
So I know that those first ... were the first two sent over. And they were sent in because they were having problems with ... diabetes, with blood pressure and ... weight issues....
And so then what they do is they receive on a prescription from the physician. He refers them to the club. And then the club has their name. So then they have to show up at the club. They fill out the membership application. They go through the tour. They do everything just like a normal member would do.
Then they're given their visits, their free visits with the personal trainer who sets them up on a training regimen. Then they have a month's free membership. They check in with a card reader every time that they come in just like every other member.
The difference is those clients' names that are referred from the clinic then are sent back to the clinic that says, "(client) came X number of times this month." Then the clinic requires them to show up at the clinic to have blood pressure taken, have weight gain checked to see where they are and monitor their health to see how they're doing,. ...
And then ... that membership's renewed for that ... next month. If they don't show up at the clinic, then the clinic calls them and says, "Joe and Mary you didn't show up here. What's the problem?" And Joe and Mary then either have to show up or what we tell them is, you know, "We're sorry. We need you in here for us to check your blood pressure, for us to check your weight gain, weight loss to
check on your health issues before we can renew this membership."
So it's the clinic that's kind of in control of their well-being, ... in the clinic.
Minyard testified that the personal trainers at Fitness Center have also referred paying members of Fitness Center to MJL when those members have appeared to be in need of health care.
1 24 Finally, Minyard testified that Fitness Center is operated according to Christian principles. Minyard explained the purpose of Fitness Center "is to provide a place for fitness and physical fitness and welfare for (MJT)'s clients and then to benefit the fitness and health and welfare of the community in general."
125 Minyard's testimony established that Fitness Center has a charitable purpose and use. Fitness Center offers free fitness facilities and training to anyone referred by MJI and offers free programs to children who are unable to pay and to Special Olympics participants. Fitness Center's Operating Agreement expressly states that it may not benefit private interests, and Fitness Center is an adjunct of the charitable MJI. We next consider whether that use may be considered exclusive for purposes of the ad valorem exemption statute.
126 The Oklahoma Supreme Court's most recent pronouncement on this question is In re Real Property of Integris Realty Corporation, 2002 OK 85, 58 P.3d 200. In that case, the district court held that certain Integris-related property was exempt from ad valo-rem taxation and the county appealed. Although the majority and dissenting opinions disagree as to whether there were disputes of fact, the majority decision affirmed summary judgment. The facts noted in the majority decision showed that IPI, a charitable organization, owned certain real property which it leased to BMPA, a for-profit limited partnership. BMPA built offices on the property and leased about .one third of the space to IRC, which "sublet the leased space to various Integris nonprofit entities who used the space for charitable, educational and scientific purposes." Id. at 12.
127 In Integris, the county denied the exemption because BMPA was not a charitable organization and because it leased part of the building, for profit, to non-charitable groups. Id. at 18. The county noted that Oklahoma courts had previously focused on "the use to which the property is dedicated and devoted" as the test for whether it was exempt, but it argued that test failed to adequately consider "exclusivity of use." Id. The county claimed that because BMPA leased some of the space to Integris nonprofit groups, but also leased other space in the same building to for-profit organizations, then the charitable use was not exclusive. Id. at 1 7.
128 After noting that the relevant use is the physical use, and not the economic use (or profits) of a building that matters in determining ad valorem tax exempt status, the court recognized its previous holding that real property that was used only partly for charitable purposes could be taxed in proportion to its respective uses so that the charitable use is exempt. Id. at T11, citing Queen City Lodge, supra.
T 29 The majority decision in Integris concluded that the physical use of the non-profit leased space was charitable and that the trial court therefore correctly found that part of the building was exempt. The dissent indicates that the leased premises were for Integris-related entities which included engineering, education and training, facility planning, physician services, legal, hotel, and various centers for medical care. As noted by the dissent, these entities, particularly engineering, legal, and the hotel, are at most related to the hospital's charitable purpose. The majority found "that the portions of the involved building for which tax exemption is sought were used for hospital-related services in furtherance of the charitable, educational, and scientific purpose of various Integris non-profit entities, and that the facilities occupying the space for which exemption is sought were open to the public without discrimination regardless of ability to pay." 58 P.3d at 208, fn. 11 (emphasis in original). This holding applies equally to the Fitness Center at issue here.
130 In this case, the record shows that the undisputedly charitable MJI organized Fitness Center as a related entity to augment the free health care offered by MJL. The fact that some patrons pay for memberships at Fitness Center does not negate the charitable character of the activity.
The undisputed evidence shows that the doors to Fitness Center are open to all, regardless of ability to pay. As noted by the dissent in Integris, that is the test for charitable use of property, citing In re Farmers' Union Hospital Assoc. of Elk City, 1942 OK 128, 126 P.2d 244, 190 Okla. 661. Indeed, those unable to pay receive not only free fitness training but free care in all aspects of physical, emotional, and spiritual health by virtue of the required MJI assessment. And as noted above, Fitness Center is not organized for profit, nor for any other private benefit. Integris teaches that exelusive use allows for an exemption for entities related to a charitable purpose. We are constrained to follow that holding and we therefore find the undisputed evidence here shows that Fitness Center is used exclusively for charitable purposes and is exempt from ad valorem taxation.
REVERSED AND REMANDED WITH DIRECTIONS TO GRANT THE EXEMPTION.
HANSEN, P.J., concurs in result, and BELL, J., concurs.