California risks $160 million as dispute grows over trucker licensing laws
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A growing dispute between the US transportation secretary and the state of California over how commercial driver’s licenses are issued has escalated, with Transportation Secretary Sean Duffy warning that the federal government will withhold $160 million in transportation funding. At the center of the conflict is the question of whether California has unlawfully issued licenses to non-citizen truck drivers, a move federal officials claim violates recently tightened regulations.
Appearing on Fox News earlier this week, Duffy said California failed to comply with updated Department of Transportation (DOT) rules introduced after a series of fatal crashes involving immigrant drivers. He accused the state of issuing tens of thousands of commercial driver’s licenses (CDLs) to individuals who should not have qualified under federal law.
“So, one, I’m about to pull $160 million from California,” Duffy said. “And, as we pull more money, we also have the option of pulling California’s ability to issue commercial driver’s licenses.”
The controversy represents a broader test of how far states can go in interpreting and implementing federal transportation policy. For California, which holds one of the largest commercial trucking sectors in the country, the implications are significant.
A challenge to California’s regulatory record
California officials argue that the state is already in compliance with federal law. According to the California Department of Motor Vehicles (DMV), the state has ceased issuing CDLs to most non-citizen applicants as required by emergency federal regulations enacted in late September.
“The federal government previously allowed commercial driver’s licenses for asylum seekers and refugees,” said Eva Spiegel, a spokesperson for the DMV. “California is in compliance with these regulations and will remain in compliance with federal law.”
Governor Gavin Newsom’s administration has defended the integrity of California’s licensing system. A spokesperson cited data showing that CDL holders in California have a lower rate of crashes than the national average and significantly lower than those in Texas, the only state with more commercial drivers.
However, the Department of Transportation says its nationwide audit, launched following a deadly crash in Florida, found that 25 percent of the 145 California-issued licenses it reviewed were improperly granted. In some cases, licenses remained valid even after a driver’s work permit had expired. According to the department, four such licenses were still active years after their legal expiration.
The audit also uncovered similar licensing issues in Colorado, Pennsylvania, South Dakota, Texas and Washington. But Duffy has focused his attention on California, stating that the state has become “the only one failing to enforce English-language requirements for truckers,” a separate regulatory concern that earlier led to a $40 million federal funding freeze.
Tightened rules and federal enforcement
The rule changes announced on September 26 narrowed eligibility for CDLs to a limited group of visa holders. States are now required to verify immigration status through a federal database, and all commercial licenses issued under these rules are valid for a maximum of one year or until the applicant’s visa expires, whichever comes first.
This regulatory shift followed executive orders first introduced during the Trump administration, now being implemented more aggressively. California, according to Duffy, was given 30 days to present a plan to align its licensing practices with federal rules. That deadline has now passed, prompting the federal threat to cut funding.
Critics argue that the targeting of California reflects political motivations as much as regulatory ones. The state has long had more inclusive licensing policies, allowing undocumented residents to apply for certain types of driver’s licenses, though not commercial ones. The recent moves by federal officials raise questions about the balance of state versus federal control over commercial transportation policy.
Industry and immigration policy collide
The commercial trucking industry faces ongoing labor shortages, a fact that has led some states to consider broader inclusion of non-citizen workers. California’s diverse labor market and its role as a major hub for logistics and freight have made it a key player in these discussions.
But the federal government’s enforcement strategy, particularly under Duffy’s leadership, emphasizes national security and roadway safety over workforce supply. The link between licensing and recent crash investigations has given federal officials momentum in pushing stricter rules.
Supporters of the new regulations argue that they bring much-needed standardization and accountability, especially in verifying immigration status. Critics, however, point to the potential disruption to supply chains and argue that many non-citizen truck drivers have established safe, reliable careers under previous rules.
As the situation unfolds, California must weigh the cost of defiance against the impact of compliance. Losing $160 million in federal transportation funding could stall major infrastructure projects, while the potential loss of authority to issue CDLs would introduce significant bureaucratic challenges.
For now, the standoff continues, with both sides holding firm. California insists it is following the law, while the Department of Transportation maintains that public safety and rule of law are non-negotiable. The clash may set a precedent for how other states navigate commercial driver’s license laws amid shifting political and regulatory landscapes.
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