FMCSA's Non-Domiciled CDL Rule Will Push Out About 194,000 Truckers as California's $160 Million Penalty Goes to Court
The Federal Motor Carrier Safety Administration’s rule on non-domiciled commercial driver’s licenses has been in force since March 16. It ends eligibility for about 194,000 current holders as their licenses come up for renewal.
Two appeals cases heard in September will test it. On September 11 the DC Circuit heard California’s challenge to the Transportation Department’s decision to withhold about $160 million of its highway money. On September 15 the same court heard the challenge to the rule itself. Neither has ruled.
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What the rule does
A non-domiciled CDL lets someone who lives in a state but isn’t a permanent resident drive a truck or bus commercially. Until last year states could issue one to anyone with a work permit, known as an employment authorization document. That covered asylum seekers, refugees and people with temporary protected status.
The final rule, published on February 13, limits eligibility to three visa categories: H-2A seasonal farm workers, H-2B seasonal non-farm workers and E-2 treaty investors. Licenses can’t run longer than a year or past the end of the holder’s lawful stay. FMCSA expects to issue about 6,000 a year under the new terms.
The agency’s case rests on how states ran the old system. Its audits found more than 30 states had issued licenses contrary to federal rules, often valid for years after the driver’s legal status ran out. It cites 17 fatal crashes in 2025 involving drivers who would now be ineligible, with 30 deaths. An earlier interim rule, issued in September 2025 after a fatal crash in Florida, leaned harder on safety. The DC Circuit stayed it in November 2025. The final rule shifted its reasoning to the states’ processing failures, and in May the court declined to stay it.
The challengers are Jorge Rivera Lujan, a truck owner-operator, backed by unions including the AFL-CIO. They argue FMCSA’s reasoning doesn’t hold and that non-citizen drivers aren’t less safe. Twenty-three states with Republican governors filed a brief backing the rule. States with Democratic governors filed on the other side.
The money
FMCSA’s lever over states is their federal highway funding. California was told in late 2025 that about a quarter of its non-domiciled licenses were improperly issued and agreed to cancel about 17,000 of them within 60 days. When it missed the January 5 deadline, FMCSA issued a final determination on January 7 and said it would withhold about $160 million from California’s National Highway Performance Program and Surface Transportation Block Grant money. That came on top of about $40.7 million in motor carrier safety grants pulled in October 2025 over English-language enforcement, which California has also challenged in court.
New York faces the same process. In April FMCSA moved to withhold $73.5 million, about 4% of its two main highway formula programs, after an audit found 107 of 200 sampled licenses issued in breach of federal rules. New York has sued.
Meanwhile a California state court ordered the state DMV to let affected drivers reapply. The DMV says it can’t reissue licenses the federal rule now bars.
English proficiency and the records fight
The license rule is one part of a wider push. An executive order in April 2025 told FMCSA to enforce the existing requirement that commercial drivers read and speak English. From June 25, 2025, inspectors could take drivers who failed off the road. Between then and March 19, 2026, they recorded 60,399 English proficiency violations, and 19,045 drivers were placed out of service. In the first half of 2025, before the change, 33 were.
An FMCSA proposal published on August 10 would write that practice into federal regulations. Drivers stopped in the commercial zones along the Mexican border would still be cited but not taken off the road, as long as they stay inside the zone. Comments closed on October 9.
The department has also tried to get the national CDL database, which holds about 17 million drivers’ records, to investigate driving schools and license fraud. Twenty-one states and DC sued. On September 17 a federal judge in Virginia blocked the transfer and barred the department from penalizing states for refusing.
What’s at stake in the rulings
If the DC Circuit upholds the license rule, the 194,000 figure becomes a timetable: drivers leave the industry as their licenses expire. If it strikes the rule down, FMCSA has to write a third one, and Congress may step in. A bill introduced in March, Dalilah’s Law, would put the three-visa limit into statute and set penalties of up to 8% of a state’s main highway funding in the first year of non-compliance. The California case decides something wider: how far the Transportation Department can use highway money to make states follow its licensing rules.