Texas VetHUB Program Faces Court Challenge After HUB Decertifications

A group of minority- and women-owned businesses have filed suit in Travis County, arguing Texas unlawfully used emergency rulemaking to end eligibility for the state’s Historically Underutilized Business program (HUB) and replace it with a version limited to service-disabled veteran-owned companies.

The petition, dated March 2, names Acting Texas Comptroller Kelly Hancock, the Office of the Texas Comptroller of Public Accounts and leaders of the Texas Department of Transportation, the Texas Health and Human Services Commission and the Texas Facilities Commission as defendants.

At the center of the dispute is an emergency regulation issued Dec. 2, 2025, that restructured the HUB program into Veteran Heroes United in Business (VetHUB).

The petition alleges the emergency approach bypassed standard notice and comment processes and resulted in a mass decertification of minority-owned and women-owned firms on Jan. 6, regardless of whether a firm received an email notice.

The complaint says the number of certified firms fell from more than 15,000 to about 500 after the emergency regulation took effect, with remaining certifications tied to service-disabled veteran ownership. According to the Global Black Economic Forum's (GBEF) announcement of the lawsuit, more than $4 billion in Texas state contracts went to Historically Underutilized Business firms in Fiscal Year 2024 and that the three agencies named in the suit spent more than $1.6 billion on Historically Underutilized Business contracts last year alone.

The release argues that after the January decertifications, that contracting pipeline is now closed to the minority-owned and women-owned firms that lost certification.

The filing also alleges public entities reduced utilization goals in the wake of the change, citing examples that Texas A&M lowered its goals to 1 percent across categories and The University of Texas System lowered goals to 1.75 percent or less.

The legal challenge argues the acting comptroller lacked authority to narrow the statutory definition of who qualifies, improperly relied on constitutional analysis the plaintiffs say is reserved for courts and failed to meet procedural requirements for emergency rulemaking.

The suit also raises due process claims tied to the cancellation of certifications and asks the court to stop the named agencies from altering their compliance with Historically Underutilized Business requirements “to deny benefits to minority- and women-owned” firms.

In the requested relief, plaintiffs ask the court to declare the emergency regulation “null and void,” issue temporary and permanent injunctions blocking enforcement, order reinstatement of their certifications and require notice to state agencies and prime contractors that the rule is invalid and certifications have been restored.

The GBEF said the lawsuit seeks immediate court action to block the emergency rules and restore the legislatively enacted program, while also providing fiscal year spending figures tied to Historically Underutilized Business participation and to the three named agencies.

During a March 4 webinar discussing the litigation, an attorney involved in the case said the legal team was seeking a temporary injunction and anticipated a hearing in March, though timing would depend on service, assignment of a civil action number and the court’s calendar.