A Texas comptroller quietly rewrote a 35-year-old law over the holidays. Now he’s getting sued for it.
A coalition of minority- and women-owned businesses filed a lawsuit this week against acting Texas Comptroller Kelly Hancock and several state agencies, challenging an emergency rule he issued in December that effectively dismantled the state’s Historically Underutilized Business (HUB) program — stripping certification from roughly 15,000 businesses and replacing the initiative with one focused almost exclusively on veterans. The legal fight raises urgent questions about executive overreach, due process, and who gets a seat at the table when billions of dollars in state contracts are on the line.
A Program Decades in the Making, Gone in a Stroke
The HUB program wasn’t some obscure bureaucratic footnote. It was signed into law in the 1990s by then-Governor George W. Bush and has spent more than three decades helping minority- and women-owned businesses compete for state contracts — work that, collectively, amounts to billions of dollars annually. The program represented a long-standing policy commitment by the state of Texas to level a playing field that, without intervention, tends to tilt sharply in one direction.
Hancock’s emergency rule changed all of that. Under his directive, the program was renamed the Veteran Heroes United in Business program, and the roughly 15,000 previously certified minority- and women-owned firms were decertified. What remained? About 500 disabled veteran-owned businesses. That’s not a reform. That’s a replacement.
Who’s Suing — and Why
The plaintiffs aren’t abstract entities. They’re businesses with addresses, payrolls, and contracts at stake. The lawsuit was brought by four companies — Ipsum General Contractors LLC and Houston Construction Services, both based in Houston; Mpulse Healthcare & Technology LLC out of Sugarland; and Williams Professional Water Restoration Service LLC from Burleson — along with the Houston chapter of the National Association of Minority Contractors, which represents 155 minority- and women-owned contractors. Together, they’re demanding reinstatement and arguing that Hancock’s actions violated both due process protections and the Texas Constitution itself.
The legal argument is straightforward, even if the politics aren’t. Hancock, the plaintiffs contend, didn’t tweak the program — he gutted it and rebuilt it from scratch, all without the legislative authority to do so. That’s not rulemaking. That’s lawmaking. And in Texas, that’s supposed to require the Legislature.
The Comptroller’s Authority — Or Lack Thereof
That’s the crux of it, really. Emergency rulemaking authority exists for a reason — genuine emergencies, not policy overhauls. The lawsuit’s language doesn’t mince words. “Acting Comptroller Hancock took a program created by statute and rewrote it without any legal authority,” the plaintiffs argued. “His actions are baseless and unlawful and must be reversed.”
Still, Hancock hasn’t shown any public sign of backing down. The emergency rule stands — for now — and thousands of businesses that built their growth strategies around HUB certification are left in limbo, unable to compete for state contracts the way they could just a few months ago. Some of these firms have been certified for years. They structured bids, hired staff, and planned futures around access that has now been unilaterally revoked.
What Comes Next
The case will almost certainly hinge on whether a court agrees that Hancock exceeded his authority — and whether emergency rulemaking can be used as a vehicle for what amounts to a wholesale statutory rewrite. Texas courts will have to weigh in on a question with real consequences: can a single appointed official, acting without a legislative mandate, effectively erase a program that has existed for over three decades?
It’s a question that matters well beyond this particular program. If the answer is yes, it sets a precedent that emergency powers can be stretched to cover sweeping policy changes — a prospect that should unsettle people across the political spectrum, regardless of how they feel about the HUB program itself.
Thirty-five years of policy, undone by a December rule. The courts will decide whether it stays that way.
