Real ID costs rising

The cost of implementing federal provisions that are expected to strengthen the security of driver's licenses nationwide could be higher than initially estimated.

Earlier this year, Congressional Budget Office officials said nationwide implementation of the Real ID Act would cost $100 million in five years. The act requires minimum national standards and physical features, including biographic and biometric data, for machine-readable driver's licenses and personal identification cards within three years.

But Larry Dzieza, budget director of the Department of Licensing in Washington state, estimated that the state might need to spend $97 million in the next two years to implement the mandated provisions. He added that Pennsylvania estimates spending $100 million, while Virginia's cost could be $232 million, including a one-time expense of $167 million and $66 million in ongoing annual costs.

Dzieza said the biggest costs include verification of documents and Department of Motor Vehicles employees' salaries. Under the law, an applicant must submit three documents, such as passports or birth certificates, as proof of identity before he or she can obtain a license. Motor vehicle agency officials must authenticate those documents.

Attendees of the recent National Conference of State Legislatures (NCSL) in Seattle debated the new law's provisions.

Dzieza said he is not sure everyone wants to comply with measures for getting a driver's license under the new law. But if a state does not comply with the strengthened requirements, federal officials could bar anyone carrying a license or ID card from that state from entering a federal facility or taking a flight.

Compliance could be expensive. Agency officials would need professional experts or contractors to verify documents, Dzieza said. It could cost up to $5 per verification using another source, and those costs could be passed on to applicants, he added.

In addition, states would have to assume costs for scanning and retaining those documents for up to 10 years. However, some costs are dependent on factors and regulations that the Homeland Security Department must determine. The department is responsible for managing the initiative.

Reed Stager, vice president of corporate licensing, marketing and public policy at Digimarc, which provides secure identity products and services, said Washington state has conducted some of the most complete analyses of Real ID Act costs. Officials still won't know what operational changes will be required until DHS comes out with proposed regulations, he added.

"The state of Washington assumes the types of machine-readable technology on the credential will be the same as what states are already using," Stager said. "But until the standards are released, the real final cost analysis can't be done."

Jonathan Frankel, DHS' law enforcement policy director, told several state lawmakers at the conference that the department plans to meet with state officials in September.

Frankel said DHS takes its responsibility seriously and isn't pretending to know all the answers or all the state systems. DHS will seek help from organizations such as the Transportation Department and the American Association of Motor Vehicle Administrators.

The Real ID Act has been controversial since it was introduced and enacted this spring without a public hearing.

Privacy representatives say they are afraid the new law will lead to a national database formed by interlinked state information databases. They worry that thousands of state employees could gain access to personal information, and if proper security measures are not in place, hackers could access personal data about millions of motorists.

"This is the sweetest honey pot for an identity thief," said Tim Sparapani, legislative counsel at the American Civil Liberties Union.

State officials also are concerned that the federal government might not provide enough money to help pay for the act's provisions. The House has proposed $100 million for fiscal 2006 to help pay for some costs. The Senate has proposed $40 million.

"There is some federal money coming," said Cheye Calvo, NCSL's transportation committee director. But "it's not going to be enough."