Texas H-1B Grant Ban: Agriculture Agency Targets Employers

The Texas Department of Agriculture says it will stop awarding certain state grants to businesses that employ H-1B visa holders, a Texas H-1B grant ban that moves the state’s push against the visa program from public payrolls toward private employers. Agriculture Commissioner Sid Miller announced the change on Oct. 28, saying companies seeking eligible department grants must meet new requirements “tied to employing H-1B visa holders.” The department has not published those requirements, and its own release describes them as proposed.

Texas’s earlier moves aimed at public employers. Gov. Greg Abbott’s Jan. 27 directive froze new H-1B petitions at state agencies and public universities through May 31, 2027, and his August proposal would bar public schools from employing H-1B workers at all. Abbott’s freeze actually exempted agencies run by statewide elected officials, the Department of Agriculture among them, Axios reported. Miller’s step runs in a different direction: instead of limiting whom the state hires, it uses public money to shape whom private companies hire.

“Texas workers should come first. Period,” Miller said in the release, which also urged Abbott and other statewide officials to review their own grant and economic incentive programs. That invitation is the part with reach: the same condition attached to state economic development incentives would touch far more employers than agriculture grants do.

What the Texas H-1B grant ban covers so far

Included: “eligible” grants the department administers. The release does not name the programs.
Excluded: grants the department runs for independent boards, commissions or entities that set their own eligibility rules; federal grant funds; and state-funded loan programs the department administers.
Not yet answered: the effective date, whether one H-1B employee anywhere in a company disqualifies it, and how compliance will be checked.

Because federal funds are excluded, the condition reaches only money the department controls itself, a fraction of a two-year budget of $1.8 billion that also covers school lunches and other nutrition programs, according to The Texas Tribune. The workforce in the background is large: Texas had more than 41,000 H-1B visa recipients in fiscal 2025, Axios reported, citing federal data.

A policy from an outgoing commissioner

Miller lost the March 3 Republican primary to Nate Sheets, who faces Democrat Clayton Tucker on Nov. 3, The Texas Tribune reported. Whoever wins takes office in January and can keep, rewrite or drop the requirements. If the department handles the change as formal rulemaking, Texas law generally requires publishing a proposed rule in the Texas Register and waiting at least 30 days before adopting it, which would push final action close to the handover.

Where a legal challenge would start

H-1B workers lose nothing directly, since their status is federal. The exposure comes if an employer cuts H-1B staff to qualify. An employer that ends H-1B employment early must notify USCIS and offer the worker the reasonable cost of return transportation, and the worker generally has up to a 60-day grace period to find a new sponsor or change status, the same clock H-1B workers weighing the Microsoft buyout face.

Challengers would face uphill ground. The anti-discrimination provision of the Immigration and Nationality Act bars citizenship-status discrimination only against “protected individuals,” a group that includes citizens, many green card holders, refugees and asylees but not H-1B workers. And in Texas’s own federal circuit, the Fifth Circuit held in LeClerc v. Webb (2005) that nonimmigrants are not a suspect class under the Equal Protection Clause, upholding Louisiana’s rule keeping them out of the bar under the most lenient standard of review. The stronger argument for opponents is likely preemption: Congress decides who may work in the United States, and H-1B workers are federally authorized to work for their sponsors. Whether a state may penalize employers for hiring workers Washington has approved is the open question this policy would test.

Employers that rely on the program say they use it to fill shortages. When Abbott floated the school ban in August, Dallas ISD told The Texas Tribune it hires teachers abroad only for critical shortage areas identified by the Texas Education Agency. Supporters counter that taxpayer money should not reward companies that turn to foreign labor, the case Miller makes now and Florida Gov. Ron DeSantis made in urging other states to copy the H-1B university hiring freeze. The debate has reached Iowa’s governor race too, and for Indian professionals, who hold most H-1B approvals, each state rule stacks on top of the federal changes.

The next things to watch are the department’s written requirements, any Texas Register filing, and the governor’s response. The Legislature, which meets in January 2027, could also write grant conditions like these into law.

This article is for general information and is not legal advice.

Sources

Vasanth Vaidyanathan, Esq.

Administrator

Vasanth Vaidyanathan is an immigration attorney with over 20 years of experience focused exclusively on U.S. immigration and nationality law. He holds a LL.M. from California Western School of Law, San Deigo and advises individuals and businesses on employment and family-based immigration matters, including H-1B, PERM, EB categories, and adjustment of status. He has also been a featured speaker at immigration seminars across the U.S. To reach Vasanth visit: https://www.vnathan.com/

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