This bill aims to ensure the integrity of state-issued identification documents by imposing financial penalties on states that do not verify an applicant's legal status. Specifically, it mandates that beginning October 1, 2026, the Secretary of Transportation shall withhold 10 percent of federal highway funding from any state that fails to enforce a law requiring verification of lawful presence for individuals seeking a driver's license, commercial driver's license, or personal identification card. These withheld funds would then be redistributed to states that are in compliance with the new requirements. To comply, states must implement laws that require and verify evidence of lawful presence from all applicants for these documents. The verification process, which must be approved by the Secretary of Homeland Security, includes several stringent steps. These steps involve electronic validation of biographic and biometric information, confirmation of lawful presence through background and security checks, and authentication of provided evidence by cross-referencing social security numbers or individual taxpayer identification numbers with federal agencies like the IRS, SSA, or the SAVE program.