A Travis County district court judge granted a request for a temporary injunction to block the latest rule changes to the state’s Historically Underutilized Business (HUB) program.
Judge Amy Clark Meachum ruled in favor of the temporary injunction stating that no court in the state had voided the HUB program in its more than three-decade existence, and said no executive agency had the authority to interpret the laws passed by the legislative branch of government. The decision will affect only the six businesses that filed the suit.
The Texas Comptroller of Public Accounts was sued when the agency overhauled the HUB program in 2025, with the plaintiffs in the case arguing that acting Comptroller Kely Handcock overstepped executive authority in changing state statute and financially harmed more than 15,000 small businesses.
The Texas Attorney General’s office defended the comptroller’s actions saying the HUB program violated both state and federal constitutions by utilizing race- and gender-based preferences that violate equal protection principles. Critics contend the program employs illogical stereotypes, lacks narrow tailoring, and operates without a clear end point, violating constitutional requirements for strict scrutiny and discriminate based on race and sex by providing certification preferences to specific groups.
State attorneys pointed out during cross-examination of witnesses that no existing contracts were proven to be cancelled because of the comptroller’s actions and that any projections of a loss in revenue were merely presumptions.
The HUB program was enacted by the Texas legislature in the 1990s and was designed to make the state procurement process more equitable to minorityand female-owned businesses. The program was only available to businesses that were majority-owned by groups who were “economically disadvantaged.” The state statute defined those groups as Black Americans, Hispanic Americans, women, Asian Pacific Americans, Native Americans and veterans who suffered at least 20% service-connected disability.
In December 2025, Hancock issued emergency rules that removed all categories of people from eligibility into the program except for service-disabled veterans. He subsequently renamed HUB to the VetHUB program.
Hancock said in December 2025 that to assume somebody is economically disadvantaged simply based on race or eliminate people from having this preferential treatment in the procurement process, or the contract process with the state, is discriminatory. He said the companies removed from the HUB list can still bid for publicly funded contracts.
State attorneys tried to point out during crossexamination of witnesses that no existing contracts were proven to be cancelled because of the comptroller’s actions and that any projections of a loss in revenue were merely presumptions.
Both sides of the issue agreed that the HUB program did not guarantee a company winning a publicly funded contract because state agencies are required by law to get the best value for taxpayer-funded projects.
A spokesman for the agency said it will appeal the decision. A trial date is set for Nov 9.