San Marcos businesses face uncertainty after Texas Comptroller Kelly Hancock stripped Historically Underutilized Business (HUB) certifications from minority and women-owned businesses.
The changes to the HUB program began on Dec. 2, 2025, when a decision by the Texas Comptroller’s Office to remove HUB certifications from women and minority owned businesses took place statewide. This was decided to align with Gov. Greg Abbott’s ban on Diversity, Equity and Inclusion initiatives (DEI).
Hancock stated in a Feb. 26 press release that the Comptroller’s Office used emergency powers to act, arguing the HUB program was in favor of diversity, equity and inclusion (DEI) initiatives over merit based contracting.
The change eliminated eligibility for a program designed to expand state contracting opportunities for disadvantaged businesses. In San Marcos, there are 16 HUB certified businesses affected by ongoing changes.
“Texas has ended DEI-based preferences in state contracting and replaced them with a program that is fair, focused and constitutional,” Hancock stated in the Feb. 26 press release. “We eliminated race and sex-based classifications, reduced layers of bureaucracy and placed responsibility for certification within one accountable office. Most importantly, we made service-disabled veterans the focus of this program.”
The HUB program was signed into Texas law in 1999 to address discrimination in state procurement by increasing business opportunities for women, minorities and service-disabled veterans determined by the Veterans Affairs to have a service-connected injury or medical condition that limits their ability to function in daily life.
According to the Office of the Attorney General, state agencies are not required to contract HUB certified businesses, but must determine if subcontracting opportunities exist and require bidders to submit a HUB Subcontracting Plan when the contract is expected to exceed more than $100,000.
The Comptroller’s Office rebranded the program to VetHUB, and changed the program guidelines so that only veterans disabled
Cheryl Halla, owner of San Marcos Interpreting, LLC, said she first learned about the removal of her HUB certification while attempting to renew it online.
“I didn’t even get an email that I was decertified,” Halla said. “I went online to renew my certificate because it was that time of year, and next thing I know I’m getting messages that I no longer qualify for the program.”
Halla’s company provides sign language interpreting services across Central Texas. She said the sudden change left her unsure on how the decision would affect competition for contracts.
The sign language interpreting industry is very niche and mostly includes women and minority owned firms, according to Halla.
Halla said she believes contracts should be awarded based on quality and experience, but she’s concerned that removing HUB certifications could put some businesses at a disadvantage when competing with larger firms.
“I would certainly hope that someone looking for a contract doesn’t discount my experience and tenure just because I’m a woman owned or previous HUB pesticide business,” Halla said.
Travis County district judge Amy Meachum temporarily reinstated HUB program rules and restored eligibility for previously certified businesses on March 2, 2026, but the uncertainty surrounding the program’s future remains.
Suzanne Holman, owner of SSSULIVAN PUBLICATIONS , focuses on graphic design with an eye for readability and accessibility. The company specialises in forms, documents, reports, infographic design and web/social media graphics. Holman said the uncertainty surrounding the decision has created challenges for business owners trying to plan for the future.
“The uncertainty is definitely an issue, especially for businesses that have built their models around access to state contracts,” Holman wrote in an email to The Star. “Since I haven’t yet started building my client base, I’m much less affected and can still easily revise my business plan.”
Holman said the decision to change the HUB program reflects broader political dynamics in Texas, calling the change an example of state leaders bypassing the legislative process.
“This is an example of leaders so confident in their power that they’re willing to make sweeping changes by decree when they can’t get them through legislature,” Holman said.
Businesses in Houston, Sugarland and Burleson have filed lawsuit against the Comptroller’s Office, arguing that the agency acted without holding a public hearing or consulting state lawmakers before making sweeping changes to a long-standing law, according to a San Antonio Hispanic Chamber of Commerce press release from April 14.
Nov. 9, 2026 is the final trial date Judge Meachum set to determine the legality of the Comptroller’s Office changes to the HUB program.
