California to Lose $160 Million After Delaying Cancellation of Thousands of Commercial Licenses

California will forfeit approximately $160 million in federal transportation funding after failing to promptly revoke thousands of commercial driver’s licenses that were issued improperly to noncitizens, federal officials said Wednesday.

Transportation Secretary Sean Duffy said the funding penalty follows the state’s decision to delay canceling about 17,000 commercial licenses after a federal review found widespread violations. An additional $40 million had already been withheld earlier over concerns that California was not enforcing English-language requirements for commercial drivers.

Federal auditors determined that many of the licenses remained active long after visa or work authorization had expired. Others were issued to Canadian and Mexican nationals who did not meet eligibility standards. Investigators said more than a quarter of the licenses examined in a sample review were not legally valid.

California had initially agreed to revoke the licenses by early January. However, state officials later postponed the action until March after immigrant advocacy groups filed lawsuits alleging discriminatory enforcement.

Duffy criticized the delay, saying the state failed to follow through on its commitment and placed public safety at risk. Federal officials say California was required to complete the revocations earlier this week under corrective plans submitted last year.

The Transportation Department intensified oversight last summer following a series of deadly truck crashes involving drivers who were not authorized to work in the United States. One fatal incident in Florida killed three people and triggered renewed scrutiny of state licensing systems.

The Federal Motor Carrier Safety Administration said California also postponed the cancellation of roughly 4,700 additional licenses discovered after the initial audit. Agency leaders said allowing unqualified drivers to continue operating heavy commercial vehicles violates federal safety standards.

Trucking industry organizations welcomed the enforcement measures, arguing that licensing loopholes have endangered road safety for years. They also supported federal efforts to investigate questionable commercial driving schools.

Civil rights groups representing immigrant drivers, including Sikh organizations, have pushed back against the crackdown, claiming certain communities are being unfairly targeted. Immigrants make up roughly one-fifth of the U.S. trucking workforce, though licenses issued to non-domiciled drivers represent a much smaller share of total commercial permits.

Federal officials said more enforcement actions could follow if states fail to comply with licensing regulations tied to public safety funding.