NinjaTMSFMCSA Withholds $73M From New York Over Non-Domiciled CDL Dispute
Federal audit found more than half of sampled non-domiciled CDLs violated lawful presence rules. State refuses corrective action, triggering 4% funding cut.
The Federal Motor Carrier Safety Administration withheld $73,502,543 in highway funding from New York on Thursday after the state refused to revoke commercial driver's licenses FMCSA says were illegally issued to non-domiciled drivers. The withheld amount represents 4% of New York's National Highway Performance Program and Surface Transportation Program Block Grant allocation.
The funding cut follows a December 2025 FMCSA audit that sampled 200 non-domiciled CDL records in New York and found 107 were issued in violation of federal law — more than 50% of the sample. According to the audit findings, New York issued CDLs to foreign drivers without verifying current lawful presence in the United States.
What the Audit Found
FMCSA administrator Derek Barrs said in a letter to New York Gov. Kathy Hochul and state motor vehicles commissioner Mark Schroeder that federal law requires states to verify lawful presence using an unexpired Employment Authorization Document or foreign passport. States must also ensure the CDL or commercial learner's permit expiration date does not exceed the expiration date on the driver's lawful presence documents.
Barrs wrote that New York's response to the December findings was to dispute the legal and procedural merits of FMCSA's determination and decline corrective action. The state called the federal determination "without merit."
"New York's arguments are without merit," Barrs countered in his letter. "This is not a new requirement."
In a prepared statement, Barrs said New York's "continued refusal to fix these failures undermines that mission, and we will not allow federal dollars to support a system that falls short of the law."
State Association Caught Between
The Trucking Association of New York released a statement Thursday that avoided directly criticizing either the federal government or the state. The association called FMCSA's decision "deeply concerning" and said the funding loss will impact infrastructure projects.
The association said New York's CDL framework already requires compliance with federal standards, including verified work authorization, completion of entry-level driver training, and adherence to safety and controlled substances regulations. But it added that "these standards must be consistently enforced, and the integrity of the CDL program must be upheld."
The association said it stands ready to work with state and federal partners to restore compliance.
Florida Drivers Sue Over Canceled CDLs
Separately, 19 drivers filed a federal lawsuit Wednesday in U.S. District Court for the Southern District of Florida seeking to reinstate non-domiciled CDLs that Florida canceled. The plaintiffs, identified in the suit only by initials, are all domiciled in foreign countries but operate commercial vehicles in Florida.
The suit names FMCSA administrator Barrs, DOT Secretary Sean Duffy, FMCSA, DOT, and Dave Kerner, executive director of Florida Highway Safety and Motor Vehicles, as defendants.
According to the lawsuit, the plaintiffs either held or had applied for new or renewed non-domiciled CDLs or commercial learner's permits in Florida. The suit cites recent changes in federal law regarding non-domiciled CDL holders and similar Florida policies that stopped processing applications from non-domiciled applicants.
"The combined effect of the Federal Defendants' and State Defendants' actions has been catastrophic for Plaintiffs: they cannot work, they cannot earn a living, they face financial ruin, and they have been deprived of vested property and liberty interests without due process of law — all without any individualized determination of fault, misconduct, or safety concern," the suit states.
What this means for drivers: If you hold a non-domiciled CDL issued by New York or Florida, check your license status with your state motor vehicles department. The federal enforcement action in New York and the Florida lawsuit signal that FMCSA is auditing state compliance with lawful presence verification requirements nationwide. Drivers whose CDLs were issued without proper Employment Authorization Document or passport verification may face license revocation. Carriers employing non-domiciled CDL holders should verify that drivers' licenses were issued in compliance with federal lawful presence documentation rules.
