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(d) The adoption of the guidelines and criteria by the governing body of a taxing unit does not: (1) limit the discretion of the governing body to decide whether to enter into a specific tax abatement agreement; (2) limit the discretion of the governing body to delegate to its employees the authority to determine whether or not the governing body should consider a particular application or request for tax abatement; or (3) create any property, contract, or other legal right in any person to have the governing body consider or grant a specific application or request for tax abatement. Granting large numbers of residential tax abatements would create difficulties in raising the revenue needed to maintain the streets and public improvements related to the abated properties in an era when the Texas Legislature has made it increasingly difficult to raise revenue through property taxes on existing properties. In addition, some developments may be best served through public improvements that recent legislative changes have made more difficult to pass the cost of which on to developers. Such improvements are especially amenable to alternative funding initiatives such as a Tax Increment Reinvestment Zone (TIRZ). If the homes in a new subdivision are all the basis of tax abatements, it would be extremely difficult to use a TIRZ structure, in which a percentage of the ad valorem taxes attributable to the improvements made in the zone after it's created are designated to fund improvements in the zone, particularly in the first two years when the abatement is at 100%. On the other hand, repealing the program will be of little consequence given how little the program has been used in the last 12 years. City Council discussed this issue at a workshop on May 29, 2025 and gave staff direction to prepare a resolution to repeal the current program. The attached resolution does this by repealing Resolution No. 2025-010. Repeal of Resolution No. 2025-010 will not repeal the 5 in 5 program, including the tax abatements offered therein, because that program has its own criteria and guidelines adopted by a separate resolution. Nor will it affect the existence of Reinvestment Zone 2025-1 which was created by ordinance (and would thus have to be repealed by ordinance) and which enables the abatements in the 5 in 5 program. Council also requested that staff work on a reformulation on the residential tax abatement program at a later date. Staff anticipates that prior to bringing new guidelines to City Council for approval, possible revisions would be discussed in another workshop. BUDGET: Retention of the program and applying it to new subdivisions could result in substantial loss of revenue based on ad valorem taxes. Repeal of the program will have no budgetary impact.