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A federal appeals court ruled Friday that the Trump administration overstepped its statutory powers in April by withholding $73.5 million in highway money from New York over a driver licensing conflict.
The US Transportation Department withheld the aid, citing an audit claiming the state routinely issued commercial driver licenses to foreign drivers illegally.
The 2nd US Circuit Court of Appeals stated USDOT's decision exceeded its legal boundaries and "runs afoul of fair notice principles, departs from the regulatory text, and underestimates the complexity of its supposedly 'common sense' requirement."
Spokespeople for Transportation Secretary Sean Duffy and New York Governor Kathy Hochul did not immediately comment.
New York sued after USDOT halted the funding when the state rejected federal orders to revoke specific licenses.
The state warned that losing aid imperiled residents, while USDOT threatened to freeze another $147 million yearly. New York noted revoking licenses "would disrupt key industries that rely on commercial drivers and could lead to bus driver shortages affecting schools and families."
New York, California and other states have repeatedly sued the Trump administration over blocked transportation funds, citing political bias.
A court previously mandated USDOT to continue funding the $16 billion Hudson Tunnel rail project connecting New York…
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