Department of Homeland Security

Regulatory Evaluation

Notice of Proposed Rulemaking

REAL ID

6 CFR Part 37

RIN: 1601-AA37

Docket Number DHS-2006-0030

February 28, 2007

Abbreviated Table of Contents

EXECUTIVE SUMMARY...... 1 ASSUMPTIONS ...... 1 COSTS AND BENEFITS...... 2 REGULATORY SUMMARY...... 5 EXECUTIVE ORDER 12866 ASSESSMENT ...... 5 ACCOUNTING STATEMENT ...... 7 I. INTRODUCTION...... 8 II. STATUS QUO ...... 9 II.A. USE OF IDENTITY DOCUMENTS ...... 9 II.B. POPULATION...... 9 II.C. APPLICATIONS ...... 12 II.D. VERIFICATION ...... 19 II.E. CARD PRODUCTION AND ISSUANCE...... 22 II.F. DATA ...... 26 II.G. SECURITY ...... 27 III. DISCUSSION OF THE PROPOSED RULE...... 29 III.A. USE OF IDENTITY DOCUMENTS ...... 29 III.B. POPULATION ...... 30 III.C. APPLICATIONS...... 31 III.D. VERIFICATION...... 35 III.E. CARD PRODUCTION AND ISSUANCE ...... 37 III.F. DATA...... 39 III.G. SECURITY...... 40 III.H. CERTIFICATION AND COMPLIANCE ...... 41 IV. COST ESTIMATES AND ALTERNATIVES ANALYSIS...... 42 IV.A. ASSUMPTIONS AND UNCERTAINTY ...... 48 IV.B. USE OF IDENTITY DOCUMENTS ...... 58 IV.C. POPULATION ...... 65 IV.D. APPLICATIONS ...... 70 IV.E. VERIFICATION ...... 85 IV.F. CARD PRODUCTION AND ISSUANCE ...... 96 IV.G. DATA ...... 109 IV.H. SECURITY ...... 116 IV.I. CERTIFICATION AND COMPLIANCE ...... 123 V. BENEFITS ...... 125 V.A. PRIMARY BENEFIT OF REAL ID ...... 126 V.B. ANCILLARY BENEFIT OF REAL ID: IDENTITY THEFT ...... 129 V.C. ANCILLARY BENEFITS OF REAL ID: UNQUALIFIED DRIVING ...... 131 V.D. OTHER ANCILLARY BENEFITS OF REAL ID...... 132 V.E. ENABLED OPPORTUNITIES...... 133 VI. INITIAL REGULATORY FLEXIBILITY ANALYSIS ...... 134 VII. INTERNATIONAL ...... 139 VIII. UNFUNDED MANDATES ANALYSIS ...... 140 IX. REQUESTS FOR COMMENTS AND DATA ...... 141

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APPENDIX A: POPULATIONS...... 143 APPENDIX B: ACQUIRING SOURCE DOCUMENTS...... 148 APPENDIX C : CURRENT VERIFICATIONS...... 157 APPENDIX D : HOURLY COST OF COMPENSATION...... 160 APPENDIX E: DISCUSSION OF OPPORTUNITY COSTS ...... 163 APPENDIX F : MARGINAL TIME ESTIMATES FOR APPLICATIONS ...... 177 APPENDIX G : STATE RESPONSES TO AAMVA SURVEYS ...... 180 APPENDIX H: DATA REPORTED TO AAMVA BY STATE ...... 191

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EXTENDED TABLE OF CONTENTS

EXECUTIVE SUMMARY...... 1 ASSUMPTIONS ...... 1 COSTS AND BENEFITS...... 2 Economic Costs ...... 2 Estimated Benefits...... 4 REGULATORY SUMMARY...... 5 EXECUTIVE ORDER 12866 ASSESSMENT ...... 5 ACCOUNTING STATEMENT ...... 7 I. INTRODUCTION...... 8 II. STATUS QUO ...... 9 II.A. USE OF IDENTITY DOCUMENTS ...... 9 II.B. POPULATION...... 9 II.C. APPLICATIONS ...... 12 II.C.1. Pre-enrollment...... 12 II.C.2. Queuing...... 13 II.C.3. Customer ...... 14 II.C.4. Acceptable source documents...... 14 II.C.5. Validity Periods ...... 16 II.C.6. Remote re-issuance...... 17 II.C.7. Front-end application processing...... 18 II.D. VERIFICATION ...... 19 II.D.1. Identity, lawful status and SSN ...... 19 II.D.2. Address of principal residence ...... 21 II.D.3. Termination of license in other jurisdictions...... 22 II.E. CARD PRODUCTION AND ISSUANCE...... 22 II.E.1. Document Issuance ...... 22 II.E.2. Design/Layout...... 23 II.E.3. Security Features ...... 24 II.E.4. Card production costs...... 24 II.E.5. Machine Readable Technology...... 26 II.F. DATA ...... 26 II.F.1. Imaging and storage ...... 26 II.F.2. DMV Databases and connectivity...... 27 II.G. SECURITY ...... 27 II.G.1. Physical security of facilities and materials ...... 28 II.G.2. Employee background checks...... 28 II.G.3. Fraudulent document recognition training...... 29 III. DISCUSSION OF THE PROPOSED RULE...... 29 III.A. USE OF IDENTITY DOCUMENTS ...... 29 III.B. POPULATION ...... 30 III.C. APPLICATIONS...... 31 III.C.1. Pre-enrollment...... 31 III.C.2. Queuing ...... 32 III.C.3. Customer Service...... 32 III.C.4. Acceptable Source Documents ...... 32 III.C.5. Validity period...... 34 III.C.6.