AT A GLANCE
- Texas wiped out decades of support for women and minority-owned businesses overnight.
- The state’s HUB program has been rebranded “VetHUB” and is now only for service-disabled veterans.
- Thousands of businesses lost their certification instantly through emergency rules.
- Legal authority for the change is murky, and challenges are expected.
HUB No More: Texas Restricts Program to Disabled Veterans Only
Texas has upended its state contracting system with a sudden rule change that strips women and minority-owned businesses of long-standing support and reserves the program exclusively for service-disabled veterans. The announcement landed Tuesday, immediately dissolving a system that had been in place for decades and reshaping the landscape for thousands of small businesses across the state.
The Comptroller’s office confirmed the rollback on Dec. 2, revealing that the Historically Underutilized Business (HUB) program will no longer consider gender, race, or ethnicity as qualifying factors. The new version, rebranded as Veteran Heroes United in Business, or VetHUB, will be limited to veterans with at least a 20 percent service-connected disability.
The shift was enacted through emergency rules with no transition period. Certifications held by women and minority business owners were revoked the same day, with vendors receiving emails notifying them that their HUB status was canceled and that their companies would be removed from the state directory. Contracts already in motion will continue, but any new or renewed certifications under the previous criteria are gone.
The HUB program never set quotas, but it established participation goals that encouraged agencies to seek out and work with underrepresented vendors. For many small businesses, HUB certification served as critical visibility in a competitive state procurement system. Under the new rules, that foothold disappears.
Comptroller Kelly Hancock defended the overhaul by framing it as both a constitutional reset and a gesture toward veterans. “Our nation’s veterans have always stepped up for us. VetHUB is Texas’ way of stepping up for them — cutting red tape, restoring constitutional integrity and opening doors for the men and women who wore our nation’s uniform,” Hancock said in a written statement. He added that the emergency rules ensure state contracting is “free from gender or race discrimination.”
The change follows a freeze on new and renewed HUB certifications at the end of October while the agency reviewed compliance with executive orders from President Donald Trump and Gov. Greg Abbott banning diversity, equity, and inclusion measures in government. Hancock also suggested on social media that the pause was aimed at ending what he described as “race or sex quotas” in contracting.
The move arrives as a related lawsuit from a non-HUB-certified business progresses through federal court. The company claims it lost state contracts because of the HUB system. No ruling has been issued.
What remains unclear is whether the Comptroller has the legal authority to unilaterally rewrite a program created by the Legislature. Significant changes to state-mandated initiatives typically require legislative approval or a court decision. So far, the agency has not publicly explained how it justified bypassing that process.
For now, Texas’ small-business landscape has been redrawn overnight. A program once designed to broaden access for underserved communities now narrows its reach to a single group, leaving thousands of entrepreneurs scrambling and a new round of legal questions beginning to take shape.
