California faces $160M loss after refusing to revoke 20,000 wrongly issued non-domiciled CDLs

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Updated Jan 7, 2026

Monday, Jan. 5, the state of California hit a deadline set by the U.S. DOT and now faces losing major funding, perhaps even its ability to issue non-domiciled CDLs to non-citizens on a longterm basis. 

The deadline came after a long, sometimes heated back and forth between California Governor Gavin Newsom and DOT Secretary Sean Duffy, two lawsuits, and a laundry list of alleged wrongdoings from the Golden State's Department of Motor Vehicles. 

Here's a timeline of events leading up to California's outright refusal to revoke 17,000 non-domiciled CDLs. 

  • Sept. 26, DOT issued an emergency rulemaking pausing the issuance of non-domiciled CDLs across the country.
  • That action included a special callout for California for "egregious" licensing violations impacting about 25% of some 65,000 non-domiciled CDLs issued by the state. DOT gave California 30 days to come into compliance with federal regulations or face losing $160 million in funding.
  • A month later, California responded at length, disputing many of DOT's findings with regard to CDL credentialing. California said that issuing CDLs for non-citizens that remain valid long past the applicant's length of legal stay in the country did not violate federal law, but it did violate California law. Still, the state refused to revoke 20,000 such non-domiciled CDLs.
  • In early November, after some cajoling from DOT, California eventually did send out notice to some 17,000 non-domiciled CDL holders whose licenses had been issued improperly, noting their licenses would be revoked on January 5. It would later issue notice to another 3,000 similarly situated drivers.
  • On Dec. 10, California DMV said it had succeeded in complying with DOT's orders and would "resume issuing non-domiciled CLPs and CDLs on December 17."
  • Dec. 15: California sued DOT over losing $40 million in federal funding due to the state not enforcing English language proficiency regs.
  • The very next day, DOT shut down California's attempt to re-issue the CDLs. DOT's initial order in September specifically told California to revoke all wrongly issued non-domiciled CDLs.
  • On Dec. 23, the Sikh Coalition and Asian Law Caucus filed a class-action lawsuit against California, saying the state canceling non-domiciled CDLs on U.S. DOT orders was unlawful.
  • Dec. 30: California once again defied DOT by issuing notice to the 20,000 non-domiciled CDL holders that it had extended the deadline for revocation from January 5 to March 6, 2026.
  • The same day, Secretary Duffy wrote "Gavin Newsom is lying" on X/Twitter. "The deadline to revoke illegally issued, unvetted foreign trucker licenses is still January 5. California does NOT have an 'extension' to keep breaking the law and putting Americans at risk on the roads."

Reached for comment early in the New Year, California DMV indicated it would barrel through the Jan. 5 deadline, citing discussions with the Federal Motor Carrier Safety Administration. 

“FMCSA and DMV collectively discussed extending the January 5 cancellation date to give FMCSA time to further review DMV’s updates," a California DMV spokesperson told Overdrive. "DMV will continue to work collaboratively with FMCSA to seek a resolution."

But DOT has not budged on Duffy's December 30 tweet -- the state still faces the Jan. 5 deadline and will now face a loss of funding. 

California DMV stressed the vital role non-domiciled CDL holders play in the state's economy, but has not responded directly to lapses in CDL issuance, including upgrading a non-citizen's intrastate-only non-domiciled CDL to full interstate privileges just three days before that driver caused a deadly crash.

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Secretary Duffy has repeatedly said he does not want to cut funding to California, but that the state must comply or face losing funding and potentially losing the ability to issue CDLs at all. 

DOT has called out Colorado, New York, Pennsylvania and Minnesota for similar lapses in CDL issuance procedures and given those states 30 days to come into compliance. 

The FMCSA's nationwide emergency rulemaking from September was paused by a court in November, but the orders to individual states demanding they halt non-domiciled CDL issuance and revoke all wrongly issued CDLs were not subject to the court's jurisdiction and thus remain in effect. 

California has an annual budget of about $300 billion, including a "rainy day" fund with about $11 billion. The funding at risk from U.S. DOT goes to maintaining highways and facilities as well as training law enforcement. 

California's interpretation of federal regulations on CDL issuance remains totally unique, even among other states called out by DOT. The state also remains the only one in the union that refuses to enforce ELP regs at roadside. 

California's DMV repeatedly stressed that non-domiciled CDL applicants have legal presence in the U.S. and had been granted work authorization by the federal government, as confirmed by the the Department of Homeland Security. The DHS has recently changed work authorizations, adding fees and shortening the standard terms from five years to 18 months

California also says that its CDL holders are involved in fatal crashes at a rate far below the national average, and that CDL holders with Texas-issued licenses have a 50% higher rate of fatal crashes. 

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