The dispute over non-domiciled commercial driver’s licences in the United States intensified this week, with the Department of Transportation moving to withhold roughly $73 million in federal funding from New York State.
DOT Secretary Sean Duffy said the action follows findings by the Federal Motor Carrier Safety Administration that New York failed to revoke commercial learner’s permits and CDLs that the agency says were issued illegally to non-domiciled drivers.
The federal move comes after an audit conducted last December. At the time, DOT said FMCSA had reviewed a sample of 200 records and found that 107 had been issued in violation of federal law. According to the agency, more than half of the non-domiciled CDLs issued in New York were improperly granted.
Among the problems identified was the issuing of licences to foreign drivers without evidence that the state had verified their current lawful presence in the United States.
FMCSA administrator Derek Barrs said New York’s refusal to address the failures undermines the agency’s safety mission and that federal funding should not support a system that does not comply with the law.
In a letter sent to Governor Kathy Hochul and Motor Vehicles Commissioner Mark Schroeder, Barrs said New York had rejected the December findings and refused to take corrective action, arguing that the federal determination lacked legal and procedural merit. Barrs rejected that position, stating that states are required to verify lawful presence through unexpired documentation such as an Employment Authorization Document or foreign passport, and must ensure that licence validity does not exceed the validity of those documents.
As a result, FMCSA said it would withhold $73,502,543 from New York’s National Highway Performance Program and Surface Transportation Program Block Grant funding, representing 4% of the state’s allocation.
The Trucking Association of New York responded cautiously, describing the decision as deeply concerning and warning that the loss of funding could affect infrastructure projects. At the same time, the association said New York’s legal framework already requires compliance with strict federal standards, including work authorization checks, entry-level driver training and safety rules related to behaviour and controlled substances. It added, however, that those standards must be consistently enforced and that strong oversight is essential to maintain fairness, public safety and economic opportunity. The association said it is ready to work with both state and federal partners to restore compliance and confidence.
The issue is also playing out in Florida. A federal lawsuit filed in the Southern District of Florida by 19 plaintiffs identified only by their initials seeks to reinstate CDLs that had been cancelled for drivers considered non-domiciled in the state. The suit names Barrs, Duffy, FMCSA, DOT and Florida Highway Safety and Motor Vehicles executive director Dave Kerner among the defendants.
According to the filing, the plaintiffs either held or had applied for new or renewed non-domiciled CDLs or commercial learner’s permits in Florida. All are domiciled in foreign countries but operate commercial vehicles in the state.
The lawsuit argues that recent federal and state policy changes stopping the processing of such licences have had devastating consequences. It says the combined actions of federal and state authorities have left the plaintiffs unable to work, unable to earn a living and exposed to financial ruin, while depriving them of property and liberty interests without due process or any individualised finding of misconduct or safety risk.
