Changes to Texas’ HUB Program: What Businesses Need to Know

The Texas Comptroller’s office has recently issued emergency rules that significantly change who is qualified for the state’s Historically Underutilized Business (HUB) Program. For around 30 years, the HUB program has supported minority-owned, women-owned, disabled veterans and certain disadvantaged small businesses competing for state contracts. The new rule shifts eligibility solely to disabled veteran–owned businesses.

Many Texas cities and counties operate their own HUB programs, which are currently separate and unaffected by recent state-level changes but could potentially be reevaluated by local authorities in the future.

What Changed?

Under the Comptroller’s Emergency Rule:

• The HUB program is being renamed “Veteran Heroes United in Business” (VetHUB).
• Eligibility is now limited to veterans with a service-connected disability of 20% or higher.
• Minority-owned and women-owned businesses, which is around 15,000 previously certified HUB businesses statewide, would no longer qualify for HUB certification or renewal.
• Reports indicate that fewer than 500 disabled veteran–owned businesses currently meet eligibility for the new VetHUB program, and none are women-owned under the new criteria.

This follows a freeze placed on all new and renewed HUB certifications in late October.
Because the HUB program is created in statute, major changes traditionally require either Legislative approval or court direction.

What Happens Next?

The Comptroller posted emergency rules in the Texas Register, which took effect in December. Emergency rules do not include a public comment period. A formal 30-day public comment period will only begin if and when the Comptroller files proposed permanent rules.

Lawmakers, including Sen. Royce West who authored the original HUB statute in 1999, have publicly questioned whether an agency can repeal or redefine a legislative program without legislative action.

Until the comment period ends and a final vote occurs, the freeze on HUB certifications remains in place.

Why This Matters

The shift may affect:

• Eligibility for certain state and local contracts.
• Participation in procurement programs that give evaluation preference to HUB-certified businesses.
• Long-term business planning for firms that have relied on HUB designation for three decades.

Texas’ small-business landscape has shifted overnight, and thousands of entrepreneurs across industries are now navigating uncertainty regarding their certification status.

What TNLA Is Watching

TNLA will continue to monitor:

• Developments during the public comment period.
• Modifications or clarifications offered by the Comptroller.
• Any legislative activity related to restoring, redefining, or replacing the HUB program.
• How contract-issuing state agencies interpret and implement the rule during the freeze.

Our goal is to ensure members have factual, timely information so they can plan accordingly.

Are You Affected?

If your business is currently holding, or planning to apply for a HUB certification, we want to hear from you. Understanding how these changes impact TNLA members will help us determine whether additional resources, education, or clarification efforts are needed.

Contact TNLA’s Legislative & Regulatory Affairs Team
Curtis Smith – Director – [email protected]
Karan Mehta – Manager – [email protected]