Texas’ Historically Underutilized Business program (HUB) has abruptly stopped after an emergency rule change from the Texas Comptroller’s Office.
Now, thousands of minority and women-owned firms are no longer eligible for the certification that once boosted their competitiveness. The state replaced HUB with a dramatically narrowed version of the program, now called the Veteran Heroes United in Business program, or VetHUB. Only veterans with a 20% or higher service-connected disability are eligible, according to the Comptroller’s Office. Any business previously certified based on the race, ethnicity, or sex of its owners will lose its status.
The HUB program was created to give minority-and women-owned businesses a foothold when seeking state contracts. The certification does not guarantee awards, but it helps businesses gain exposure in a competitive marketplace and sets “good-faith effort” goals that state agencies generally strive to meet.
Interim Comptroller Kelly Hancock said the change was necessary to “restore constitutional integrity” and ensure state contracting is “free from gender or race discrimination.”
“Our nation’s veterans have always stepped up for us. VetHUB is Texas’ way of stepping up for them,” Hancock said in a statement. “These emergency rules ensure Texas’ state contracting is free from gender or race discrimination and keep the program centered on those who earned this support through their service.”
For the women and minority business owners who relied on HUB as a lifeline, the question now is simple — and urgent: What happens next?
Businesses face uncertainty, lawmakers cry foul
State Sen. Royce West, D-Dallas, one of the architects who codified HUB into state law in 1999, said the comptroller’s move represents an unprecedented rollback.
“Where we are is that the HUB program is threatening to be dismantled,” West said in an interview with The Defender. “I’ve attempted to get the interim comptroller to sit down and visit with me about this. For some strange reason, he has been reluctant to do so.”
West said he believes the Legislature must review whether Hancock overstepped his authority by effectively repealing and renaming a statutory program.
“In my tenure, I’ve never seen an executive branch agency repeal a statute and rename a program specifically designated in law,” West said. “This is not how state government works.”
State Rep. Ron Reynolds, D–Missouri City, also blasted the move, calling it “an attack on fairness and equal access.”
“I am outraged by this reckless decision,” Reynolds said. “The State of Texas has chosen to turn its back on fairness and equal access, and in doing so, it has turned its back on the hardworking Texans who make this state what it is.”
Reynolds said stripping away HUB support disproportionately harms entrepreneurs who have historically faced systemic barriers.
“Since the comptroller won’t meet with the groups, they have no other choice but to seek a judicial remedy. We’ve got to quit saying what we can’t do and do what needs to be done. Ain’t nobody gonna save us but us.”
Senator Royce West
“When the state dismantles programs that help level the playing field, it sends a painful message to countless small business owners that their dreams matter less than the comfort of the well-connected,” he said. “Texas cannot claim to be the land of opportunity while stripping opportunity away from those who need it most.”
A push toward legal action
With state leaders unlikely to intervene soon, West said affected businesses and chambers of commerce must consider litigation.
“Since the comptroller won’t meet with the groups, they have no other choice but to seek a judicial remedy,” West said.
He urged business owners to “come together, establish a legal defense fund, and take this matter to court.”
West acknowledged concerns about cost but said unity is essential.
“We’ve got to quit saying what we can’t do and do what needs to be done,” West said. “Ain’t nobody gonna save us but us.”
Reynolds echoed that sentiment, invoking civil rights leaders.
“Dr. Martin Luther King Jr. warned us that injustice anywhere is a threat to justice everywhere,” he said. “And as John Lewis taught us, there comes a time to get into good trouble — necessary trouble — for the soul of your community. This is one of those moments.”
State Sen. Borris Miles, D-Houston, said the comptroller’s decision represents a direct assault on opportunities for Texas’ diverse business community.
“Let’s call this what it is: an attack on our community,” Miles said in a statement. “Texas is a majority-minority state, but business opportunities do not reflect our diverse population. Removing women- and minority-owned businesses from the HUB program will have dire consequences on the fabric of our state’s economy.”
Miles, who has long worked with state agencies to strengthen participation of minority- and women-owned firms, said the comptroller must reverse course. “I am calling on Acting Texas State Comptroller Kelly Hancock to reinstate the HUB program and ensure that women- and minority-owned businesses are included,” he said.
How we got here
The changes follow a months-long freeze on HUB certifications and come amid a national wave of challenges to diversity, equity, and inclusion efforts. In Texas, the shift accelerated after Gov. Greg Abbott issued an executive order in January banning DEI programs across state agencies, mirroring federal efforts under the Trump administration.
The comptroller’s Office cited a lawsuit filed by Aerospace Solutions, a non-HUB company, which argued the program violated equal-protection standards. No court, state, or federal, has ruled the HUB statute unconstitutional.
HUB certification was previously available to businesses majority-owned by women, Black Americans, Hispanic Americans, Asian Pacific Americans, Native Americans, and service-disabled veterans.
According to the state’s fiscal year 2025 semi-annual report, 2,995 HUB businesses received about 11% of statewide expenditures — a number West warns will plummet.
“It’s not like we were getting an outsized share,” he said. “Now you’re going to see that number go down.”
Beyond policy: Real-world economic impact
The freeze affects more than 11,000 HUB-certified businesses across the state. Julie Irvin Hartman, co-founder of B2G Victory and a HUB certificate holder, said the effects ripple far beyond individual companies.
“This matters because it’s an economic issue,” Irvin Hartman said. Her firm has helped businesses secure more than $4.5 billion in government contracts over 20 years. “The program freeze and the U.S. government shutdown create different challenges for businesses. It’s slowed down the procurement process for state and county jobs tied to federal dollars.”
She recommends that businesses pivot immediately.
“Continue to diversify your business — whether that’s doing business with a K-12 school district, higher education, or one of the 200-plus counties in the state of Texas,” she said.
She also advises close monitoring of existing contracts.
“Read your agreements, reach out to your prime contractor, reach out to the government agency if you’re impacted by the federal shutdown,” she said. “There may even be informal opportunities available, even while the HUB program is frozen.”
The road ahead
For now, the comptroller’s Office says existing state contracts held by former HUB firms will be honored. But for thousands of businesses whose certifications are expiring or whose pipeline depends on HUB visibility, the future remains uncertain.
Houston-area chambers, legal organizations, and minority-business advocates are exploring next steps, including potential legal challenges.
“There’s nothing solidified yet,” West said. “But we need to get in court and get this matter heard, because clearly the comptroller exceeded his authority.”
Reynolds agreed, calling it a defining moment for the state’s identity.
“Texas is strongest when every Texan has the chance to rise,” he said. “This moment requires courage. This moment requires action. I am prepared to meet it.”
Until then, lawmakers warn that the consequences will be felt statewide.
“HUBs strengthened our economy, created jobs, and allowed all entrepreneurs a chance to succeed,” Miles said. “Dismantling it sets us back decades.”
