Requires the Secretary of Transportation to withhold 10% of a state's apportionment of certain federal-aid highways funds in any fiscal year after FY2009 if such state does not require verifiable evidence of lawful presence in the United States or its territories from each applicant for a driver's license or personal identification card issued by the state. Grandfathers states that have such a requirement in effect before the later of: (1) October 1, 2009; or (2) 10 days after the end of the first session the state's legislature convenes after enactment of this Act.
Redistributes withheld funds to states that satisfy the requirements of this Act.