The Texas Comptroller’s Office eliminated HUB certifications tied to race, ethnicity, and gender, restructuring a decades-old program under emergency rules and sparking legal and political questions.
The Texas Comptroller’s Office announced Tuesday that it is removing minority-owned and women-owned businesses from the state’s Historically Underutilized Business (HUB) program and restructuring it entirely to focus solely on companies owned by service-disabled military veterans.
The revamped program — now called Veterans Heroes United in Business (VetHUB) — will only certify businesses owned by veterans with at least a 20% service-connected disability, according to the Comptroller’s press release.
Under the new emergency rules, all HUB certifications connected to race, ethnicity, or gender have been revoked effective immediately, and those businesses will be removed from the HUB vendor directory.
The change dramatically shrinks a program that has existed for decades to help disadvantaged businesses compete for state contracts.
IMMEDIATE IMPACT: CERTIFICATIONS REVOKED, PROGRAM FROZEN
Emails sent Tuesday notified affected vendors that their HUB certification had been revoked.
Contracts already underway will not be disrupted, according to a FAQ posted by the Comptroller.
The Comptroller’s Office had already frozen new and renewed HUB certifications in late October, citing a review to ensure compliance with executive orders from President Donald Trump and Gov. Greg Abbott banning DEI initiatives in government agencies.
Following the freeze, Comptroller Kelly Hancock posted on social media that the move was intended to eliminate what she described as “race or sex quotas” in state procurement.
COMPTROLLER HANCOCK: “Texas is restoring constitutional integrity”
In a written statement Tuesday, Hancock said:
“Veterans have always stood up for our nation. VetHUB is how Texas stands up for them — reducing bureaucracy, restoring constitutional integrity, and opening doors for the men and women who wore the uniform. These emergency rules ensure that Texas state contracting is free from gender or race discrimination.”
The office did not immediately respond to questions about what gives the Comptroller authority to alter a state program created by legislation, which typically requires action by the Legislature or a court ruling to change.
LEGAL QUESTIONS & FEDERAL LAWSUIT
The overhaul comes as a federal lawsuit moves forward against the HUB program.
A non-HUB business claims it lost state contracts due to the program’s preferences and alleges unconstitutional discrimination.
No ruling has yet been issued.
Legal experts say the Comptroller’s unilateral suspension and restructuring of the HUB program could trigger further litigation, given that the program was created by state statute.
