Texas’s Historically Underutilized Business Program, or HUB, is back in the courtroom spotlight after an Austin district judge ordered the state to temporarily reinstate rules allowing women- and minority-owned businesses to qualify for the program again, at least for now, while litigation over the comptroller’s emergency changes proceeds.
The order, issued Monday by Austin district judge Amy Meachum, comes in a lawsuit filed March 2 by four business owners and a trade association that sued the state of Texas and acting Comptroller Kelly Hancock. The plaintiffs allege the comptroller used emergency powers to restructure the HUB program in December, removing women and minority business owners from eligibility and stripping their HUB certifications.
Meachum’s temporary reinstatement covers the HUB program rules at issue in the case, restoring eligibility for businesses that say they were decertified after the comptroller’s changes. The judge’s order specifically reinstates six businesses that challenged the restructuring, including two companies that were added as plaintiffs after the lawsuit was first filed, according to the complaint described in the court proceedings.
In addition to the reinstatement, the judge directed state agencies to inform HUB businesses that have been decertified since the court ruling, the Associated Press reported. The request for public comment from the comptroller’s office about the injunction granted on Monday was not immediately answered.
The plaintiffs’ original challenge targets emergency rules they say removed women and minority owners from HUB certification and left eligibility limited to service-disabled veteran business owners. The HUB program was created through bipartisan legislation in the 1990s to give minority- and women-owned businesses an advantage when seeking state contracts, and it sets goals for state agencies rather than quotas, according to the reporting.
The companies named among the plaintiffs include Houston-based general contractors Ipsum General Contractors, LLC and Houston Construction Services; Sugar Land-based medical technology distributor Mpulse Healthcare & Technology LLC; and Burleson-based restoration firm Williams Professional Water Restoration Service LLC. The lawsuit also names the greater Houston chapter of the National Association of Minority Contractors, which represents 155 minority- and women-owned contractors.
Along with Hancock, the suit names the leadership of state agencies that implemented the comptroller’s HUB changes: Texas Department of Transportation Executive Director Marc Williams, Texas Health and Human Services Commission Executive Commissioner Stephanie Muth, and Texas Facilities Commission Executive Director Will McKerall. The case is scheduled to go to trial on Nov. 9 in Travis County district court.
The dispute traces back to what the comptroller’s office said was a review of the program: in October, Hancock announced his office would not issue new or renewed certifications while the HUB program was being reviewed. After that review, Hancock said he would restructure the program in December using emergency powers, changes that plaintiffs say shrank the program substantially and cost them opportunities for state contracting.
Plaintiffs argued that executive-branch officials overstepped their authority by rewriting a program codified by the Legislature, and that the changes also harmed their ability to compete. Alphonso David, president and CEO of the Global Black Economic Forum and lead counsel for the plaintiffs, said in a statement at the time the lawsuit was announced that members of the executive branch cannot rewrite laws passed by the state legislature, and he argued the changes were unlawful and must be reversed.
One plaintiff, Ruben Mercado Jr., founder of Ipsum General Contractors, said a contract he was drafting for a $1 million bid was withdrawn after Hancock restructured the program in December. Another plaintiff, Wendell Stamley, president of the National Association of Minority Contractors, said members in Texas saw government contracts canceled and work they expected returned to competitive bidding.
In response to the lawsuit, Hancock defended the changes earlier, citing the 2023 U.S. Supreme Court decision ending affirmative action in college admissions and a 2025 executive order by Gov. Greg Abbott that banned DEI policies in Texas agencies. Hancock wrote that every Texas business is equally eligible to compete for state contracts, and that through the Centralized Master Bidders List, agencies notify vendors of bidding opportunities so any qualified business can register and compete.
State Sen. Royce West, a Dallas Democrat who co-authored the 1999 bill that codified the HUB program into state law, said in comments accompanying the dispute that the Legislature, not the comptroller, controls changes to the program. He said the comptroller does not get to override the Legislature’s decision.
With Meachum’s temporary reinstatement order, the HUB program’s eligibility rules will operate differently for now than they did immediately after the December emergency changes—until the Nov. 9 trial date determines whether the restructuring survives the plaintiffs’ challenges.