In a significant ruling that underscores the limits of executive authority in Texas, a state district court judge has temporarily blocked proposed changes to the state’s Historically Underutilized Business (HUB) program, a longstanding initiative designed to increase participation of minority- and women-owned businesses in state contracting.
Judge Amy Clark Meachum of the Travis County District Court issued the temporary injunction on April 14, 2025, halting enforcement of emergency rule changes introduced by Texas Comptroller Glenn Hegar in December 2024. The decision came in response to a lawsuit filed by a coalition of modest business owners and advocacy groups who argued the comptroller exceeded his statutory authority by altering core provisions of the program through administrative rulemaking rather than legislative action.
The court’s order centers on a fundamental principle of state governance: while the executive branch is responsible for implementing laws passed by the Legislature, it does not possess the authority to unilaterally modify or reinterpret those laws through regulatory changes. Judge Meachum’s ruling emphasized that the comptroller “lacks the power to determine the constitutionality or applicability of statutes” and cannot use rulemaking to effectively rewrite legislation.
The HUB program, established by the Texas Legislature in 1987 under Chapter 2161 of the Texas Government Code, sets participation goals for state agencies when contracting with businesses owned by historically disadvantaged groups, including Black, Hispanic, Asian American, Native American and women entrepreneurs. Over the past three decades, the program has directed billions of dollars in state contracts toward certified HUB vendors, playing a critical role in reducing disparities in public procurement.
According to data from the Texas Comptroller’s office, HUB-certified businesses received approximately $4.2 billion in state spending during fiscal year 2023, representing about 12.7% of all eligible contract expenditures. These figures are publicly reported in the state’s annual disparity study, which evaluates the effectiveness of inclusion initiatives across various industries.
The legal challenge, formally styled as Globe Express Trucking Inc., et al. V. Hegar, was filed in January 2025 after the comptroller’s office issued emergency rules that revised eligibility criteria, reduced reporting requirements, and altered goal-setting methodologies for state agencies. Plaintiffs contended these changes would weaken oversight and diminish opportunities for small, disadvantaged businesses to compete for state work.
In her ruling, Judge Meachum found that the plaintiffs were likely to succeed on their claim that the comptroller violated the Texas Administrative Procedure Act by implementing substantive changes without proper legislative authorization. The judge also concluded that the plaintiffs would suffer irreparable harm if the rules remained in effect, noting that many small businesses rely on HUB certification as a prerequisite for bidding on state contracts in sectors such as construction, transportation, and professional services.
The injunction applies specifically to the six named plaintiffs in the case, though legal experts suggest the ruling could have broader implications if upheld on appeal. Should the decision stand, it may constrain how state agencies approach the implementation of equity-focused programs, particularly those established by statute rather than executive order.
This case arrives amid a national reassessment of race- and gender-conscious policies in government contracting and education. While the U.S. Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard ended race-based affirmative action in college admissions, programs like Texas’ HUB initiative operate under a different legal framework, grounded in disparity studies and legislative findings of past discrimination in public contracting.
Nonetheless, critics of the HUB program have increasingly argued that such initiatives constitute unlawful preferences, prompting legal challenges in multiple states. Supporters counter that the program remains narrowly tailored to address documented disparities and is subject to regular review and adjustment through the legislative process.
Representing the plaintiffs, civil rights attorney Alphonso David, president and CEO of the Global Black Economic Forum, praised the ruling as a affirmation of constitutional governance. “This decision reaffirms that no state official, regardless of office, can sidestep the Legislature to rewrite the law,” David said in a statement issued through his organization. “It protects not only the rights of small business owners but the integrity of our democratic process.”
The state has indicated its intention to appeal the injunction. A spokesperson for the Texas Comptroller’s office confirmed that the agency is reviewing the court’s order and will pursue appropriate legal remedies to defend the rule changes, which the comptroller maintains were necessary to streamline administration and reduce burdens on small businesses.
The case is scheduled for a full trial on November 9, 2025, in the 201st Judicial District Court of Travis County. Unless overturned on appeal, the temporary injunction will remain in effect until a final judgment is issued, preserving the HUB program’s pre-December 2024 structure for the named plaintiffs.
Advocacy groups including the Texas Association of Mexican American Chambers of Commerce and the Women’s Business Enterprise Alliance have said they will continue to monitor the litigation, viewing it as a pivotal test of how far executive authority can extend in reshaping statutorily mandated equity programs.
As the legal proceedings continue, the outcome may influence similar initiatives across the country, particularly in states where administrative adjustments to diversity and inclusion efforts have faced scrutiny. For now, the ruling offers a temporary reprieve to HUB-certified businesses navigating an evolving regulatory landscape.
Those seeking updates on the case can access docket information through the Travis County District Court’s online case management system or review official filings via the Texas Judicial Branch website.
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