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Wednesday, November 16, 2016

Repeal of Property Tax Rebate Not a Taking


A resident sued the City claiming that the City's repeal of a previous ordinance that provided a 25% tax rebate to qualifying homeowners (and failure to pay the rebates) was an unconstitutional "taking" of her property in violation of the Fifth Amendment of the U.S. Constitution. Both the district court and the Seventh Circuit Court of Appeals rejected her claims, and dismissed her case in Bell v. City of Country Club Hills, (7th Cir. Nov. 8, 2016).

In 2012, the City had adopted an ordinance providing homeowners with a 25% rebate of 2010 city property taxes paid in 2011, subject to the filing of an application by the homeowner and approval by the city clerk. The City processed the applications, prepared the rebate checks, but never distributed them to homeowners. The resident filed a lawsuit to enforce the rebate ordinance, and shortly thereafter, the City repealed the ordinance. When objections were raised to the legality of the meeting at which the repeal vote was taken, the City approved a second repeal ordinance at a later meeting.

The Seventh Circuit rejected the resident's "takings" claim, finding that she had no property interest in the rebate. "To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it." Here, the resident could not establish any vested right to the rebate. Also, no state law or ordinance guaranteed anyone an entitlement to the rebate. Instead, plaintiff had a mere expectation that she would receive the rebate when she filed her application, which does not rise to a constitutionally protected property right required to establish a takings claim. The court rejected the resident's due process claim on the same basis.

Post Authored by Julie Tappendorf

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