Immigration compliance for transportation funding

(a) In general Chapter 1 of title 23, United States Code, is amended by inserting after section 154 the following: 155. Immigration compliance for transportation funding (a) Definition of driver's license In this section, the term driver's license has the meaning given the term in section 201 of the REAL ID Act of 2005 (49 U.S.C. 30301 note; Public Law 109–13). (b) Withholding of funds for noncompliance (1) In general On October 1, 2026, and each October 1 thereafter, the Secretary shall withhold from a State the applicable percentage described in paragraph (2) of the amounts required to be apportioned to the State under paragraphs (1) and (2) of section 104(b) if the Secretary determines that the State is not in compliance, as described in subsection (c). (2) Applicable percentage (A) First year For the first fiscal year in which a State is determined to be not in compliance, the percentage shall be 5 percent. (B) Subsequent years For each subsequent fiscal year in which a State is determined to be not in compliance, the percentage shall be 10 percent. (3) Duration If, before the last day of the fiscal year for which funds are withheld under this section, the Secretary determines that the State is in compliance under this section, the Secretary shall, on the first day on which the Secretary makes that determination, apportion to the State the funds withheld from that State for that fiscal year under this section. (4) Effect of withholding Except as provided in paragraph (3), no funds withheld under this section from apportionment to a State shall be available to that State. (c) Compliance requirements A State is not in compliance under this section if the State— (1) has in effect a statute, regulation, policy, or practice that prohibits or restricts State or local officials from sending to, or receiving from, the Department of Homeland Security information regarding the citizenship or immigration status, lawful or unlawful, of any individual, in violation of section 642 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1373); (2) issues driver's licenses or identification cards to individuals without requiring evidence of lawful status as described in section 202(c)(2)(B) of the REAL ID Act of 2005 (49 U.S.C. 30301 note; Public Law 109–13); or (3) fails to cooperate with detainers issued by U.S. Immigration and Customs Enforcement under section 287(d) of the Immigration and Nationality Act (8 U.S.C. 1357(d)), including by refusing to honor such detainers for individuals in State custody. (d) Certification Each State shall annually certify to the Secretary the compliance of the State with subsection (c), including submission of relevant statutes, policies, and data on driver's license issuance practices. (e) Enforcement and audits The Secretary may— (1) conduct audits of State certifications and practices to verify compliance with subsection (c); (2) issue regulations to implement this section, including procedures for appeals of noncompliance determinations; and (3) provide technical assistance to States to achieve compliance.. (b) Conforming amendment The analysis for chapter 1 of title 23, United States Code, is amended by inserting after the item relating to section 154 the following: 155. Immigration compliance for transportation funding..