Minnesota Could Lose $30M After Feds Find Illegal Commercial Driver’s License Approvals

ST. PAUL, MN — The U.S. Department of Transportation has issued a warning to Minnesota over how the state "recklessly" issued commercial driver’s licenses to non-U.S. residents, saying that some were issued illegally and that longstanding procedural failures left the state out of compliance with federal law.

In a letter sent Monday to Gov. Tim Walz, the Federal Motor Carrier Safety Administration (FMCSA) said its audit found that one-third of the 75 sampled non-domiciled commercial driver’s licenses (CDLs) were issued improperly.

A non-domiciled CDL is a commercial driver’s license issued to someone who is legally in the United States but does not live in the state or in the U.S. permanently.

The federal letter documents errors, including licenses issued past drivers’ lawful presence dates, licenses issued without lawful presence verification, licenses issued to individuals ineligible for a non-domiciled CDL due to their citizenship status, and licenses issued to lawful permanent residents who should have received standard CDLs.

The federal agency said the findings reflect "systemic" policy and programming failures and warned that Minnesota could lose up to $30.4 million in federal highway funding if it does not correct the problems within 30 days.

"Our audit exposes yet another example of foreigners taking advantage of Minnesota services under Governor Walz’s watch," said U.S. Transportation Secretary Sean P. Duffy.

"Minnesota failed to follow the law and illegally doled out trucking licenses to unsafe, unqualified non-citizens – endangering American families on the road. That abuse stops now under the Trump Administration. The Department will withhold funding if Minnesota continues this reckless behavior that puts non-citizens gaming the system ahead of the safety of Americans."

State Pushes Back

Driver and Vehicle Services (DVS) Director Pong Xiong said Minnesota "takes our role in issuing commercial driver’s licenses and keeping Minnesota roads safe very seriously" and noted that Minnesota already reviewed its own processes earlier this year.

Xiong said DVS identified administrative errors, notified ineligible customers that their CDL privileges were canceled, and corrected issues before the federal audit began.

He also emphasized that:

• Minnesota has 212,327 standard CDL holders and 2,117 non-domiciled CDL holders
• Federal law allows non-domiciled CDLs
• All applicants take the same English-language tests and skills exams
• The agency has no evidence that non-domiciled CDL holders compromised public safety

DVS also said it "contests what we believe are inaccuracies" in parts of the FMCSA findings and is seeking clarity on requirements tied to new CDL rules issued this fall, rules that are currently under a court-ordered stay.

Minnesota Pauses Non-Domiciled CDLs

As required by USDOT, Minnesota has paused all issuance of non-domiciled CDLs. The state has also launched an additional internal review and will submit a corrective action plan to FMCSA.

The federal government is requiring Minnesota to:

• Identify all unexpired non-compliant non-domiciled CDLs
• Void or rescind those licenses
• Reissue corrected credentials for eligible drivers
• Conduct a comprehensive internal audit
• Fix procedural, training, policy, and system errors in the CDL program
• Resume issuance only after FMCSA approves the state’s corrective plan and implementation

If Minnesota does not come into compliance, FMCSA may begin withholding a portion of the state’s National Highway Performance Program and Surface Transportation Block Grant funding starting in 2027.