Austin City Hall just lost its seat at the table in one of Texas' key small-business programs.
On Feb. 26, 2026, the Texas Comptroller of Public Accounts formally ended the City of Austin’s authority to certify businesses under the state's Historically Underutilized Business (HUB) program. The move centralizes certification at the state level and follows a months-long overhaul that rebranded the program as Veteran Heroes United in Business, or VetHUB. Local minority- and women-owned firms that had relied on city certification for visibility in state contracting now face a new certification process focused on service-disabled veterans.
The change was formalized when the Comptroller’s office signed a memorandum of agreement with the City of Austin and issued 60-day termination notices to regional partners, according to a press release from the Texas Comptroller's Office. The agency said it had “eliminated race- and sex-based classifications” and centralized certification under VetHUB, which the office says lists 1,075 active VetHUB-certified businesses (547 were SDV-enrolled at relaunch). As reported by KXAN, the move ends the city's role in state HUB certification.
The shake-up follows a freeze on new and renewed HUB certifications late last year and emergency rules issued in December that narrowed program eligibility, as reported by the Austin American-Statesman. That sequence set the stage for the Comptroller’s decision to end outside memoranda of agreement and handle certifications directly.
What VetHUB Means
VetHUB, short for Veteran Heroes United in Business, requires that at least 51 percent of a business be owned, managed, and controlled by service-disabled veterans with a 20 percent or greater service-connected disability, according to the Texas Comptroller's Office. The emergency rules also remove previous statewide numeric utilization goals and instruct agencies to set procurement goals based on the pool of active VetHUB firms and the needs of each solicitation.
What This Means For Austin Firms
City of Austin officials have long used local certification to increase exposure for minority- and women-owned businesses, and the city's Small and Minority Business Resources office posted guidance for vendors after the HUB suspension last fall. Those guidance notes state that municipal M/WBE certifications remain available for city projects even as the state centralizes HUB certification. For state opportunities, businesses will now apply through the Comptroller's VetHUB system rather than through a city memorandum of agreement.
Reaction And Numbers
Business groups and some lawmakers have criticized the change as a sweeping rollback of long-standing support for underrepresented firms and questioned whether the Comptroller exceeded his authority. The Houston Chronicle has reported that HUBs historically represented a meaningful share of state procurement and warned many minority- and women-owned businesses could lose visibility under the new VetHUB rules.
Legal And Policy Questions
Supporters of the overhaul cite recent court rulings and Gov. Greg Abbott’s Executive Order GA-55 as justification for removing DEI-style classifications, while opponents say the Comptroller has effectively rewritten a program established by statute and that the changes could invite legal challenges, as reported by Spectrum News. Procurement officers and vendors will be watching how agencies adjust outreach, subcontracting plans, and solicitations under the new VetHUB framework.
State and city officials did not immediately publish a step-by-step playbook for businesses that lose HUB status under the new rules, and local vendors say they will be monitoring procurement notices and agency guidance in the coming weeks. We will update this story as more details and official responses arrive.
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