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HB 3573

Relating to certain prohibited considerations in contracting by governmental entities and the elimination of the state's historically underutilized business program.

89th Legislature (2025) Introduced by Don McLaughlin

Texas bill would eliminate the Historically Underutilized Business program and restrict governmental contracting preferences, fundamentally changing state procurement practices.

Referred to State Affairs
#historicallyunderutilizedbusinesses(s0076) #humanrelations(i0410) #legislativebudgetboard(v0161) #purchasing--state(i0643)
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Bill Summary · HB 3573

Legislative bill overview

HB 3573 would prohibit Texas governmental entities from considering certain factors in their contracting decisions and would eliminate the state's Historically Underutilized Business (HUB) program. The bill restricts how state agencies can evaluate and award contracts to vendors, potentially removing preferences or set-asides currently given to historically underutilized businesses.

Why is this important

The HUB program has been a cornerstone of Texas procurement policy for decades, designed to increase contracting opportunities for women, minorities, and disadvantaged business owners. Eliminating it would significantly alter how state agencies allocate billions in annual spending and could reshape the competitive landscape for small and minority-owned businesses seeking state contracts.

Potential points of contention

  • Impact on minority and women-owned businesses: Removal of HUB protections could reduce contracting opportunities for historically disadvantaged groups, affecting business growth and generational wealth building in those communities
  • Definition of "prohibited considerations": The bill's language about what contracting factors are prohibited isn't fully detailed in available summaries, making it unclear whether it targets affirmative action, diversity goals, or broader procurement criteria
  • Economic efficiency vs. equity debate: Supporters may argue merit-based contracting reduces costs; opponents contend the program corrects historical market discrimination and provides important economic opportunity

Compiled from official sources — confirm details with the bill’s official record.

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