S. 3773: Enforce Immigration or Lose Transportation Act

This bill, known as the Enforce Immigration or Lose Transportation Act, aims to link federal highway funding to state compliance with certain federal immigration enforcement policies. Here are the key components of what the bill proposes:

Conditioning Federal Highway Funding

The bill stipulates that starting from October 1, 2026, states must comply with federal immigration laws to receive federal highway funding. If a state does not comply, it will face withholdings of its highway funds.

Compliance Requirements

A state is considered non-compliant if it:

• Prohibits or restricts communication between local officials and the Department of Homeland Security regarding an individual’s immigration status.
• Issues driver's licenses without requiring proof of lawful presence, in accordance with the REAL ID Act.
• Fails to honor detainers issued by U.S. Immigration and Customs Enforcement (ICE).

Consequences of Non-Compliance

If a state is found not to be in compliance:

• In the first year of non-compliance, 5% of the highway funds will be withheld.
• In subsequent years, the withheld percentage will increase to 10% for each year of continuing non-compliance.
• Funds will be restored only if the state comes back into compliance before the end of the fiscal year.

State Certification and Oversight

States will be required to certify their compliance annually, providing the necessary documents and data. The Secretary of Transportation will have the authority to:

• Conduct audits of state certifications.
• Implement regulations and procedures for appeals regarding non-compliance determinations.
• Provide technical assistance to help states achieve compliance.

Purpose and Findings

The bill is based on findings that federal transportation funding is essential for enhancing highway safety, and that compliance with federal immigration policies contributes to that safety. It emphasizes that states undermining these policies may compromise national security and transportation safety.

Overall Impact

The overall intention of the bill is to strengthen state compliance with federal immigration laws by threatening federal funding for highways, thereby aiming to ensure better vetting of drivers and ensuring that only legally documented individuals obtain driver's licenses.

Relevant Companies

• CSX Corp (CSX) - As a major transportation company, changes in transportation funding and state compliance with immigration laws could impact operations if states rely on transportation infrastructure improvements that may be affected by funding cuts.
• Union Pacific Corporation (UNP) - Similar to CSX, Union Pacific could feel the effects of reduced highway funding impacting freight logistics and travel times if states face funding withholdings.
• Knight-Swift Transportation Holdings Inc. (KNX) - As a logistics and transportation provider, the implications of state non-compliance with immigration standards might affect these companies' operational efficiencies by way of their reliance on licensed drivers and routes defined by state infrastructure improvements.