On Friday, September 26, 2025, the United States Department of Transportation (DOT) and Federal Motor Carrier Safety Administration (FMCSA) announced an emergency interim final rule to address what the DOT characterized as "an imminent hazard on America's roadways" caused by the unlawful issuance and lack of oversight of non-domiciled commercial drivers licenses (non-domiciled CDL) by state drivers licensing agencies (SDLA). The regulation imposes a new, stricter process for obtaining or renewing non-domiciled CDLs, instructs SDLAs to revoke all current non-domiciled CDLs that have been unlawfully issued, and imposes financial penalties, in the form of withheld federal highway funding, on states that fail to amend their non-domiciled CDL issuing practices. Published on Monday, September 29, the regulation took immediate effect.

The emergency regulation, titled Restoring Integrity to the Issuance of Non-Domiciled Commercial Drivers Licenses, will have an near-immediate, significant impact on the trucking and logistics industry. In addition to potentially affecting approximately five percent of current interstate CDL holders, the regulation casts doubt on the legitimacy of the entire licensing system increasing risk to those companies that work with such drivers.

This legal alert explains the current non-domiciled CDL licensing framework, details what this regulation means for the future of non-domiciled CDLs, offers insight on the impact for the trucking and logistics industry, and forecasts what the industry can expect in the months ahead.

Explaining Non-Domiciled CDLs and the Application Process

Non-domiciled CDLs, mostly unknown to those outside the transportation and logistics industry and often overlooked by those within, have been a meaningful component of the driver labor pool. Under 49 U.S.C. Section 31311(a)(12)(A), a state may issue a commercial drivers license to an individual that is not domiciled (i.e., a person who is neither a citizen nor permanent resident) within the United States.¹ This opportunity was specifically intended to enable individuals, from countries that do not have commercial motor vehicle driver testing and licensing standards consistent with those of the United States, to obtain a CDL. Accordingly, Mexico- and Canada-issued CDL holders are prohibited from obtaining a non-domiciled CDL.² 

Up until the emergency regulation, in order to obtain a non-domiciled CDL, the applicant must complete an application, pass a driving/skills test, and provide an unexpired employment authorization form issued by U.S. Citizenship and Immigration Services (USCIS) or an unexpired foreign passport accompanied by an approved I-94 form.³ For these individuals, no proof of domicile is required.

Today, there are as many as 200,000 such non-domiciled CDLs active within the United States, which represents approximately five percent of the CDL holders operating interstate.

New Requirements for Non-Domiciled CDLs and Enforcement Initiative

Identifying what the DOT characterized as a "catastrophic pattern of states issuing licenses illegally to foreign drivers," Secretary of Transportation Duffy announced an emergency interim final rule to impose stricter standards for issuing non-domiciled CDLs and requiring states to increase their oversight of their respective licensing practices.

Under the emergency regulation, the following requirements will be imposed on all new non-domiciled CDL issuances and renewals of existing non-domiciled CDLs;⁴

• Non-domiciled CDLs will be limited to individuals that can provide an unexpired Form I-94/94A indicating one of the specific employment-based nonimmigrant categories (specifically H2B, H2-A, and E-2 visa) at every issuance and renewal. No other immigration categories will be eligible;
• Applicants will also be forced to provide an unexpired foreign passport at every issuance and renewal;
• Applicant must be present in-person at each renewal; and
• SDLAs will be required to utilize USCIS's Systematic Alien Verification for Entitlements (SAVE) database to verify the immigration status and employment-based nonimmigrant category information provided by the applicant.

SDLAs will also be required to maintain the documents submitted by an applicant for a non-domiciled CDL for at least two years, and must provide copies of these documents and proof of the SAVE verification to FMCSA upon request.

Furthermore, when a SDLA becomes aware of or receives notification — including from FMCSA, Department of Homeland Security, Department of State, or other Federal agencies with jurisdiction — that a non-domiciled CDL holder has an improperly issued license or no longer has proper lawful working status, the SDLA must initiate the removal of the individual's commercial privilege within 30 days.

Secretary Duffy made clear that the DOT would continue and expand its ongoing audit, fully expecting to identify states with unlawfully issued non-domiciled CDLs in addition to those states (California, Washington, Texas, Colorado, Pennsylvania, and South Dakota) already named in the emergency regulation.⁵ Similarly, he expects states to conduct their own audits. SDLAs will be further incentivized to conduct their own audits to prevent any withholding of federal highway funds.⁶

Mitigating Risk for the Transportation and Logistics Industry

By casting doubt on the legitimacy of all current non-domiciled CDLs⁷, the emergency regulation has exposed trucking and logistics companies to an increased risk of liability. If an accident were to occur, plaintiffs' attorneys would likely argue that logistics and trucking companies are now on notice that non-domiciled CDLs may be operating unlawfully and are insufficiently qualified. And non-domiciled CDL holders may find their licenses revoked in real time as the DOT and SDLAs conduct audits of current non-domiciled CDLs, which could result in a driver behind the wheel who lacks a commercial license.

Trucking and logistics companies should take immediate steps to mitigate their increased expose to liability, particularly during this transition as the emergency regulation is implemented and enforced. Those steps should include:

• Audit all existing employee or contract drivers to determine whether any are holding non-domiciled CDLs. As a logistics or brokerage company, engage with frequently used carriers to determine the scope of their exposure to non-domiciled CDLs.
• If employee or contract drivers are identified, work with legal counsel to determine how to assess whether these individuals have the sufficient records to demonstrate that their CDLs will not be revoked based on ongoing and forthcoming audits.
• Begin a process to limit utilization of these drivers until they have their non-domiciled CDLs confirmed or renewed.
• Incorporate new or reinforce existing contractual language making clear that drivers must be properly licensed, have a lawful employment status, and qualified to operate a commercial motor vehicle.

By taking these steps, logistics and trucking companies can mitigate liability during this period of uncertainty.

This emergency regulation is only the latest in a series of steps the Trump administration has taken regarding the transportation and logistics industry. Companies in this industry should anticipate further regulatory developments that could significantly impact operations and profitability. Hanson Bridgett's Transportation and Logistics Practice is ready to help support companies navigate this new, dynamic regulatory environment.

---

¹ A non-domiciled CDL may also be offered to an individual who residence is another U.S. state provided that the state within which the individual resides has had its CDL licensing program decertified. See 49 CFR § 384.405. At this time, no state's CDL licensing program has been decertified.

² 49 CFR § 383.23, fn 1.

³ 49 CFR § 383.71(f)(2).

⁴ 90 Fed. Reg. 46509, 46516, available at https://www.govinfo.gov/content/pkg/FR-2025-09-29/pdf/2025-18869.pdf.

⁵ Id. at 46512.

⁶ See id. at 46522.

⁷ Id. at 46514.