USDOT follows through on threat to yank $158 million from California for failure to revoke 17,000 CDLs
California will face signifiant consequences for failure to respond to the U.S. Department of Transportation’s (USDOT) demand that the state cancel thousands of improperly issued Commercial Driver’s Licenses (CDLs) by the given deadline, officials say.
On January 7, 2026, USDOT announced that the Federal Motor Carrier Safety Administration (FMCSA) is withholding approximately $158 million in transportation funding from California for failure to cancel approximately 17,000 non-domiciled CDLs by the given deadline of January 5, 2026.
According to an FMCSA Final Determination of Substantial Noncompliance Notice, the total amount to be withheld from California is $158,318,508.
“Federal regulations are clear: states must correct safety deficiencies on a schedule mutually agreed upon by the Agency, and California failed to meet its commitment to rescind these unlawfully-issued licenses by January 5,” said FMCSA Administrator Derek D. Barrs. “We will not accept a corrective plan that knowingly leaves thousands of drivers holding noncompliant licenses behind the wheel of 80,000-pound trucks in open defiance of federal safety regulations.”
USDOT Calls “Time’s Up” On California
According to USDOT, the decision to withhold the funding comes after an FMCSA audit found that “more than 25% of non-domiciled CDLs issued by California were issued unlawfully – including with licenses extending as many as four years beyond the expiration date of their lawful presence documentation.”
In November 2025, USDOT gave California a 60 day deadline to revoke improperly issued on-domiciled CDLs or risk losing approximately $160 million in transportation funding.
However, the California Department of Motor Vehicles pushed back the revocation of non-domiciled CDLs until March 2025 due to a lawsuit brought by the Sikh Coalition and the San Francisco-based Asian Law Caucus claiming the USDOT policies unfairly target immigrant truck drivers.
“It’s reckoning day for Gavin Newsom and California. Our demands were simple: follow the rules, revoke the unlawfully-issued licenses to dangerous foreign drivers, and fix the system so this never happens again,” said U.S. Transportation Secretary Sean P. Duffy. “Gavin Newsom has failed to do so – putting the needs of illegal immigrants over the safety of the American people. While Gavin may not care about protecting you and your family on our roads, the Trump Administration does. We’re pulling this funding to ensure federal tax dollars don’t fund this charade.”
Truckers Cheer USDOT
Trucking groups, including the Owner Operator Independent Drivers Association (OOIDA), spoke out in favor of USDOT’s actions.
“The days of exploiting cheap labor on the basis of false ‘driver shortage’ claims are over. OOIDA and truckers across America support the Trump Administration’s actions to crack down on the issuance of non-domiciled CDLs. For too long, loopholes in this program have allowed unqualified drivers onto our highways, putting professional truckers and the motoring public at risk. Secretary Duffy and FMCSA Administrator Barrs are embracing policies that prioritize the needs of professional truckers and roadway safety,” said Todd Spencer, President of the OOIDA.