Real ID ready for prime time

The Homeland Security Department today released the 284-page final rule for implementing the Real ID Act that would standardize the handling of personal information for driver's licenses.

The release of the long-awaited final implementation regulations ? the law was passed in 2005 ? is expected to spur contracting activity on the program after months of uncertainty as federal officials were crafting the rule.

"The fact that the regulations are out is fantastic news for the industry," said Jeremy Grant, senior vice president at the investment research firm Stanford Group Co. "A lot of companies have been waiting for this."

However, the cost of the program also is expected to shrink from roughly $14 billion to $4 billion, according to DHS estimates. That suggests Real ID may present a smaller, though still substantial, opportunity for contractors in the biometrics, identity management and identification card fields.

"This is what we expected," Grant said, "It is a little smaller and a little slower."

DHS Secretary Michael Chertoff said there is $80 million in new grants available to states for implementation of the Real ID Act in fiscal 2008, and an additional $280 million may be diverted for Real ID from other DHS grant programs to states.
Homeland Security officials said today that most of the cost reduction was due to extending the deadlines for states to implement the requirements. "The 73 percent cost reduction ? from an original estimate of $14.6 billion to approximately $3.9 billion ? was achieved mainly by giving states greater flexibility in issuing licenses to older Americans," a DHS news release states.

Enrollment must be completed for all individuals under 50 years of age by Dec. 1, 2014. For all others, enrollment may be extended to Dec. 1, 2017, the new rule states.

DHS officials said they made changes from the previous Notice of Proposed Rulemaking in February 2007 with regard to information technology and processes involved, and with the privacy and security measures, to provide states with more options.

"The final rule reflects a performance-based approach to Real ID implementation, eliminating costly and prescriptive NPRM requirements and giving states the flexibility to implement solutions that maximize the security and integrity of state-issued credentials," the rule states.

The final rule also requires a 2-Dimensional Bar Code Machine Readable Zone, which DHS said is already used by 46 jurisdictions.

Under the Real ID Act of 2005, states must meet new rules for collecting, verifying, storing and publishing personal information related to driver's licenses, and they must share the personal information of license holders with other states. The law generated substantial controversy due to its high cost and possible risk of identity theft and privacy loss.

Many systems integrators and IT contractors are preparing to assist state motor vehicle departments in upgrading their infrastructures to incorporate Real ID requirements. Many state administrators have been postponing those improvements until the Real ID rule was released, Grant said.