Non-Domiciled CDL: California Pushback Tied to $160M Funding

California Lawmakers Push USDOT to Reverse Non-Domiciled CDL Restrictions

A group of California lawmakers is urging the U.S. Department of Transportation (USDOT) to reverse recent restrictions on the Non-Domiciled CDL program. They are also asking the agency to release approximately $160 million in federal transportation funding withheld from the state.

The request comes after federal officials tightened eligibility requirements for a Non-Domiciled CDL and penalized California for failing to cancel thousands of CDLs identified during a federal audit.

Lawmakers argue the restrictions could reduce the trucking workforce, increase supply chain pressures, and make it harder for some legally authorized workers to obtain a CDL.

Why California Lost $160 Million

The funding dispute stems from a federal review of California’s Non-Domiciled CDL program.

Earlier this year, USDOT announced it would withhold approximately $160 million in transportation funding after California failed to meet a January deadline to cancel thousands of CDLs that federal officials said did not meet federal eligibility requirements.

According to federal officials, the audit found that some licenses remained active after the driver’s authorized period of stay in the U.S. had expired. The federal government said California was required to take corrective action but did not complete the process by the deadline.

California later canceled thousands of licenses, but federal officials maintained that the action came too late to avoid the funding penalty.

What Is a Non-Domiciled CDL?

A Non-Domiciled CDL is a commercial driver’s license issued to individuals who are legally authorized to work in the U.S. but do not meet the standard residency requirements for a traditional CDL.

The issue has received increased attention in recent months after FMCSA limited eligibility for a Non-Domiciled CDL to certain visa categories, including H-2A, H-2B, and E-2 visa holders.

Lawmakers Say the Non-Domiciled CDL Rules Could Reduce the Driver Pool

In a letter sent to Transportation Secretary Sean Duffy, more than 20 California lawmakers argued that the new Non-Domiciled CDL restrictions could significantly reduce the number of available commercial drivers.

They estimate that approximately 194,000 drivers with legal work authorization could be affected by the rule. The lawmakers argue that many of these drivers have years of experience operating commercial vehicles and could lose access to the Non-Domiciled CDL program despite being legally authorized to work.

The rule’s eligibility requirements exclude several categories of workers who were previously able to participate in Non-Domiciled CDL programs. Those groups include some asylum applicants, DACA recipients, and TPS holders.

Lawmakers Warn of Broader Economic Impact of Non-Domiciled CDL Rule

The lawmakers argue that the effects of the Non-Domiciled CDL rule could extend far beyond the drivers directly affected. According to the letter, California accounts for approximately 25% of the nation’s drayage capacity, making the state a critical link in moving cargo from ports to warehouses and distribution centers.

Industry estimates suggest the rule could reduce the trucking workforce in some areas by 15% to 25%. They warn that reduced driver availability could create freight bottlenecks at a time when roughly 65% of domestic freight moves by truck.

The letter also argues that carriers may face significant recruitment and training expenses to replace experienced drivers. Lawmakers say those additional costs could eventually flow through the supply chain, increasing shipping costs and placing upward pressure on the prices of everyday goods.

Disagreement Over Safety Concerns

Federal officials have defended the restrictions. They say all states must follow the same federal CDL standards. They also argue that states must properly verify a driver’s eligibility before issuing a commercial license.

According to USDOT and FMCSA, the rule is designed to create a consistent national standard. Federal officials say the goal is to ensure the same Non-Domiciled CDL requirements apply across the country, rather than allowing states to use different approaches.

California lawmakers disagree. They argue that available crash data does not show that Non-Domiciled CDL holders are involved in serious crashes at higher rates than other commercial drivers. In their letter, the lawmakers noted that non-domiciled CDL holders make up about 5% of interstate CDL holders. However, FMCSA identified only 17 fatal crashes involving those drivers out of an estimated 2,399 fatal truck and bus crashes reported through September 2025.

The lawmakers also pointed to California’s truck safety record. According to the letter, California recorded 10.25 fatal large-truck crashes per million residents in 2022. The national rate was 15.84, while Texas reported 23.01.

The dispute comes down to two different views. Federal officials say the rule is needed to enforce the same CDL standards in every state. California lawmakers argue the rule removes experienced drivers from the workforce without clear evidence that it will improve highway safety.

Why Truck Drivers Are Watching

For truck drivers, the debate goes beyond California.

The current dispute could influence how Non-Domiciled CDL programs are administered across the country and may affect who is eligible to enter the commercial driving workforce in the future.

The outcome could also determine whether California regains the $160 million in federal transportation funding being withheld by USDOT.

For now, lawmakers are asking USDOT to restore the funding and reconsider the current Non-Domiciled CDL restrictions. Federal officials have not indicated whether they plan to change the policy.

What Happens Next?

The lawmakers’ request adds new pressure on USDOT to revisit both the funding penalty and the current Non-Domiciled CDL eligibility rules.

In their letter, the lawmakers argued that California contributes significantly more to the federal government than it receives in return. They noted that California paid approximately $275.6 billion more to the federal government than it received in 2024.

The lawmakers are asking USDOT to restore the $160 million in transportation funding, rescind the current Non-Domiciled CDL rule, and reinstate non-domiciled CDL programs nationwide.

Whether federal officials agree to reverse either decision remains unclear, but the debate is likely to continue as states, trucking groups, and lawmakers weigh the impact of the restrictions on the commercial driving workforce.

As the discussion moves forward, the future of the Non-Domiciled CDL program will remain a closely watched issue throughout the trucking industry.