Dive Brief:
- The Federal Motor Carrier Safety Administration told New York leaders Thursday that the state will lose $73.5 million in federal-aid highway funds due to noncompliance issues for commercial driver licenses and learner’s permits.
- The issue stems from a July 2025 audit that found deficiencies in the state’s standards for issuing non-domiciled CDLs and CLPs, according to a final determination letter. The designation is for people who are not U.S. citizens or lawful permanent residents, and the federal government sets regulations for states about documentation needed to issue and renew those licenses and permits.
- “This is unacceptable and a significant safety risk,” FMCSA Administrator Derek Barrs said in the letter. The funding loss is for the federal government’s 2027 fiscal year, which begins Oct. 1. FMCSA also said the state could risk decertification of its CDL program.
Dive Insight:
FMCSA has cited issues and threatened funding losses to states beyond New York, such as Illinois, North Carolina and Pennsylvania. The agency found problems with non-domiciled CDLs lasting beyond when individuals’ lawful presence documents expired.
The agency also found California in noncompliance, saying in January the state would lose $158 million for the upcoming federal fiscal year. The Golden State appealed the matter to the U.S. Court of Appeals for the District of Columbia Circuit, sending the matter into litigation.
For New York, records last year showed approximately 25,000 drivers had this non-domiciled status, and FMCSA said there are likely thousands of commercial drivers with expiring status issues.
The state has contested the findings, noting that it has not had this type of issue cited in the past, according to Barrs’ letter. The state and federal government are also clashing over what federal regulations required prior to FMCSA raising its standards in September 2025 with an interim final rule.
Barrs warned that New York could see that funding loss double in fiscal year 2028.
