Keaton PetersThe U.S. Department of Transportation (USDOT), with the objective of making sure all grant recipients are operating in line with the new administration’s priorities, sent a formal letter to all potential recipients of federal transportation funding, Transportation Secretary Sean Duffy emphasized that continued funding is contingent upon strict compliance with federal laws and regulations, with particular focus on ensuring grantees are using fully merit-based practices and following immigration orders.
The letter serves as both a reminder and warning to the thousands of state and local governments, organizations and businesses that collectively receive billions in federal transportation dollars annually. The document specifically highlights anti-discrimination requirements.
“Whether or not described in neutral terms, any policy, program or activity that is premised on a prohibited classification, including discriminatory policies or practices designed to achieve so-called ‘diversity, equity and inclusion,’ or ‘DEI,’ goals, presumptively violates Federal law,” the letter states.
The USDOT has long been a major funder for state and local projects, and over the last few years, increased infrastructure spending meant the agency had an even greater role in transforming America’s transportation systems. Many of the projects funded through the 2021 Infrastructure Investment and Jobs Act and 2022 Inflation Reduction Act highlighted benefits for historically marginalized groups. The recent USDOT directive, however, sends a clear message that this is no longer allowed. The Trump administrationplans to keep tabs on how the funding is used, and the USDOT message uses the threat of withholding federal funds to ensure The administration’s policy priorities are followed.
A Biden-era policy that included environmental and social considerations for federally funded projects has also been rolled back and it no longer exists. Additionally, the Trump administration has implemented a freeze on already-approved projects and plans to have them reviewed for mentions of climate change, environmental justice or equity.
The department letter addresses immigration enforcement, noting that recipients must cooperate with federal authorities including Immigration and Customs Enforcement (ICE). It notes that there have been instances where some federal funding recipients have reportedly hindered ICE investigations, provided driver’s licenses to individuals without legal status or otherwise obstructed federal law enforcement.
Such actions, according to USDOT, undermine federal sovereignty and compromise the safety of transportation systems supported by department funding.Recipients are explicitly told that federal transportation funding should only go to U.S. citizens, lawful permanent residents or legal entities that don’t employ undocumented immigrants.
To ensure compliance, USDOT indicates it will conduct comprehensive audits and potentially recover funds expended contrary to agreement terms. The department may terminate funding for substantial breaches or if continued funding is deemed no longer in the public interest.
For recipients concerned about compliance, the letter notes that USDOT offers technical guidance through its program offices and encourages proactive engagement with designated AGENCY representatives to prevent inadvertent noncompliance.
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