The Car and Truck Fleet and Leasing Management Magazine

Governors Fear DMV Costs Will Increase With Implementation of Real ID Act of 2005

July 2005, by Mike Antich - Also by this author

House Rep. F. James Sensenbrenner Jr. (R-WI) sponsored the act in response to the terrorist attacks of Sept. 11. Eighteen of the 19 hijackers used state-issued identification cards or driver’s licenses to board the aircraft they crashed that day. The Real ID Act (HR418) passed the U.S. House of Representatives in February 2005 after being attached to the $82 billion emergency supplemental appropriations bill for military expenses in Iraq and Afghanistan. It passed unanimously in the U.S. Senate, and President Bush signed the bill into law May 11.

There are concerns that DMV costs may increase because of the mandated implementation of new security and digital scanning technology. There is also concern that the processing time for license renewals may lengthen due to the additional identity verification required. A few fleet managers wonder whether there might be unanticipated license renewal delays if employees had recently changed their names, moved, or if the federal database, with which this data is crosschecked, contains old or inaccurate information. Also, will multi-national companies find it more difficult to get driver’s licenses for expatriate employees working temporarily in the U.S? How will these new procedures impact the issuance of Commercial Driver’s Licenses (CDL)?
Very Expensive for State DMVs to Implement
In 2008, when the law becomes effective, the minimum standards for issuing a driver’s license will be a photo ID, birth certificate, Social Security card with current name, verification of home address, and proof of insurance. States will have to retain paper copies of these identity documents for seven years and digital copies for 10 years. State DMVs will have to verify that these identity documents are legitimate, plus photocopy and digitize them. In addition, Social Security numbers must be verified with the Social Security Administration. Once all of this is confirmed by a state DMV, using a crosschecking federal database, a driver’s license will be issued.

In addition, the Federal Motor Carrier Safety Administration (FMCSA) is required to formulate new regulations for the issuance of CDLs to comply with the Real ID Act. Annette Sandberg, FMCSA administrator, said new regulations that comply with the Act would be completed sometime in 2006.

The new law places an expensive unfunded mandate on state DMVs to check millions of documents, from birth certificates to Social Security cards. Many governors worry about the cost to implement these new DMV requirements.
“This is going to drive the cost of driver’s licenses through the roof,” said Iowa Governor Tom Vilsack. The Congressional Budget Office estimates it will cost $100 million to implement and run the Real ID program between 2005-2010.

“The requirement for states to meet the new federal guidelines could certainly impact their costs, although there is a provision to assist states in the allocation of funds,” said Susan Stiles, manager, customer services for PHH Arval. “The act states that the Secretary of Homeland Security may make grants to a state to assist the state in conforming to the minimum standards set forth in the title, and these are authorized to be appropriated for each of the fiscal years 2005 through 2009.”
Creation of a New National Database
The law also mandates that state driver’s licenses must include “a common machine-readable technology,” as determined by Homeland Security. The technologies being considered range from biometric identification, such as a thumbprint or a digital image of the cardholder’s face, to magnetic strips, enhanced bar codes, or radio frequency identification (RFID) chips. In addition, Homeland Security is permitted to add additional requirements – such as a fingerprint or retinal scan – on top of those.
The Real ID Act mandates that to get federal monies, states must merge their data on drivers into a new national database, creating a de facto national ID. All state DMV databases will be required to electronically link and share information with other state DMVs. This massive database, in addition to DMV data, will also store scanned copies of all issued passports and visas.
Who Will Foot the Bill?
Will state DMVs seek to pay for these increased (and ongoing) costs by passing them on to consumers and fleets by increasing the costs for vehicle titles, title renewals, and other services?
“Whether the feds will provide adequate support to the states to enable the new standards to be met without an increase in cost to citizens remains to be seen,” said Stiles.
Let me know what you think.
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