Historically Underutilized Business Program Temporarily Restored

Dozens of marginalized business owners, legislators, and advocates gathered at the Travis County District Court Monday morning for a long-awaited hearing on a lawsuit against acting Comptroller Kelly Hancock’s 2025 emergency regulation that dismantled the state’s Historically Underutilized Business (HUB) program, which was established in the Nineties and has allowed minority-, women-, and disabled-veteran-owned businesses to qualify for program certification and be added to a database that connected them to contractors for state projects. 

Hancock’s December rule removed all race-, ethnic-, and sex-based certifications from the HUB program, declaring that the program would focus exclusively on veteran-owned small businesses and renaming the program “VetHUB – Veteran Heroes United in Business.” The rule followed an October freeze on the issuance of new and renewed HUB certifications. 

Defendants argued that the comptroller acted in accordance with recent federal and state rulings about race- and sex-based discrimination, including Gov. Greg Abbott’s 2025 executive order prohibiting DEI policies. “These rules eliminate each classification that could be 

applied in an unconstitutional manner,” Hancock said in a March Secretary of State filing. “Unlike race, ethnic, and sex-based classifications, veteran status and disability status are subject only to rational basis scrutiny.” The defense argued that Texas still operates on a fair value basis, meaning that the most qualified bidder should win, regardless of HUB status. 

Since its creation in 1999, the HUB program has served as a “remedial” effort to help implement equity in state contract procurement processing, following a 1994 study that revealed disparity in “who receives contracts here in the state of Texas,” state Sen. Royce West, who helped draft the statute, said in his testimony. 

In the first half of 2025, the program helped provide over $2 billion to HUB-certified vendors, according to the Texas Comptroller’s HUB FY 2025 Semi-Annual Report. That same year, over 15,000 of the 15,762 registered HUBs had their status revoked via an email alert from the comptroller’s office. None of the remaining 485 disabled-veteran-owned businesses that still qualify for the program are owned by women.

The ultimate issue, however, wasn’t about the constitutionality of the statute, civil rights attorney and lead counsel Alphonso David reminded Judge Amy Clark Meachum; it was about determining the legality of the comptroller’s actions to dismantle the program. As a member of the executive branch, “It is not the comptroller’s decision or authority to change laws,” he said. 

After a full day of testimony, Judge Meachum sided with the plaintiffs, stating that “no other court in the state of Texas has voided the HUB Act,” and they wouldn’t be the first. She granted  a temporary injunction, calling for the recertification of the six plaintiffs to the program. She also ordered a reinstatement of the program’s status before the emergency ruling went into effect, therefore offering others who lost their certifications the opportunity to reapply under former eligibility. 

“It is not the purview of the executive branch that enforces the laws to change the laws,” she said; “It is also not the purview of the executive branch to interpret the law, that is the purview of courts.” She determined that Hancock’s actions, therefore, were an abuse of power. 

The plaintiffs held a press conference immediately following the ruling, celebrating the win while also emphasizing that the hearing is just the first step in a long journey of building up marginalized businesses to support Texas taxpayers and create equitable competitive landscapes for entrepreneurs. “It’s a great day for us as business owners who won today and many others who are going to be winning,” Marie-Pascale Ruberandinda, CEO of Globe Express Trucking Inc. and case plaintiff, said. 

“Today is the beginning of restoration, but it’s not over,” David added. The plaintiffs now prepare for a November hearing and await to see if the defendants file for an appeal. 

“This is not just a victory for the HUB program,” West said. “It’s a victory for our governance in the state of Texas and legislators need to continue to be mindful that, when we see overreach by one branch of the government, it’s our constitutional sworn duty to make certain that we point it out, and that we fight it.”

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