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Remarks of the North Carolina Department of Motor Vehicles Commissioner to the North Carolina Joint Legislative Committee on Transportation Oversight, December 12, 2006

Review of Impact of U.S. REAL ID Act on North Carolina

Transportation Oversight Committee

December 12, 2006

 The U.S REAL ID Act was passed by Congress and signed into law in May 2005.   The law stipulates that “Beginning 3 years after the date of enactment of this Act, a federal agency may not accept, for any official purpose, a driver’s license or identification card issued by a State to any person unless the State is meeting the requirements of this section.”

Based on the law’s passage, DMV has focused on working toward substantial compliance with the requirements of the REAL ID Act by May 2008.

Our efforts to comply with the REAL ID Act are complicated by the fact that the U.S. Department of Homeland Security has not issued its proposed draft regulations laying out how the law is to be implemented. We are hopeful that these will be released for public comment in the next three months.

 

While the law provides that the Secretary of Homeland Security can provide states an extension for compliance with the law, indications by authors of the law is that no extensions should be granted.

Therefore, North Carolina is preparing as best it can to come into compliance with the law by May 2008. 

North Carolina has made many strides since early 2004 as part of Governor Easley’s Operation Stop Fraud.

On February 2, 2004 we implemented new, tougher standards for proof of identification. These new standards restricted the use of ID documents to those which could be verified as needed.  The standards restricted the acceptance of foreign documents, except for the use of valid, unexpired foreign passports.

In early 2004, the Division implemented verification of Social Security Numbers.   In 2005, we implemented fraudulent document recognition training, requiring all examiners and License and Theft inspectors to complete a nationally-certified 20-hour course.   Later that year, we implemented the use of face recognition technology, which has proven extremely valuable.  A year ago, we also began tying the expiration date of a driver license to the expiration date of the Visa for customers with visas. On August 28, we implemented the new law eliminating the use of ITINs.

We have also implemented the use of an OVD overlay on the face of the license.  Later this year, we will be the first state in the nation to implement the use of the new common security element recommended for all states. This will be an OVD patch on the back of the license.

As a result of North Carolina’s actions, there are many parts of the REAL ID law that North Carolina is already in compliance with.

However, there are a number of new requirements of the law which will have major impacts on North Carolina (and other states).

First, all customers, including renewal customers, will be required to establish their identity, establish their citizenship or lawful presence in the United States, and document their residence address.

Second, the law requires that “Before issuing a driver’s license or identification card to a person, the State shall verify, with the issuing agency, the issuance, validity, and completeness of each document required to be presented by the person.”

These are the two greatest impacts of the law that will affect all DMV customers.

There are other additional impacts.

For instance, the law says DMV must take photos of all applicants.  Today we take the customer’s photo after we have determined that the customer meets all of DMV standards.  This is done as the last step in the office.

Under this law, we will have to take the customer’s picture when he/she first presents themselves to the DMV staff requesting a license or ID card.  This will require changing our entire process and re-designing our offices to make this our first step.

The law will require us also to make photocopies or digitally image all customer documents and retain them.

The Division will have to make sure a customer is not licensed in another state, or that their license privilege is withdrawn in the other state when they become licensed in North Carolina.

The law also mandates the state be a member in the Driver License Agreement, which will replace the current Driver License Compact. This will require legislative approval.

Finally, the law mandates a variety of security procedures, to protect facilities and all production materials.

The impact of the REAL ID Act was studied by the National Conference of State Legislatures and the National Governors Association, working with the American Association of Motor Vehicle Administrators.

The executive summary of their report, released this summer, concludes that the REAL ID act could increase “visits to State Motor Vehicle agencies by over 75% annually,” depending on the final regulations issued by DHS.  For North Carolina, that would mean an annual increase in customers from approximately 2.5 million to 3.75 million, with each customer visit taking much longer to complete the transaction.

The report also concludes “Implementing REAL ID Act requirements will require additional staff, facilities, training and equipment, including the development, expansion and deployment of the five verification systems required by the Act.”  This includes an electronic system for verifying birth certificate information, verifying legal status through DHS, and checking whether a person is licensed in another state.”

Unless DHS regulations are more flexible, DMV will have to conduct many of the document verifications through a manual process – having a DMV employee verify information with a register of deeds, with a utility company, etc.  This could be an extremely labor and resource-intensive process.

As things stand now, NC DMV is moving forward to implement the REAL ID Act as best it can, based on the current consensus among the states as to the intent of the law.  This could change based on DHS regulations.

The law was passed when DMV was just starting to re-engineer its issuance process and issuing a new RFP for a vendor to provide services for issuance of driver licenses and ID cards.

In the process of drafting this RFP, we are incorporating many of the changes that we expect to result from the REAL ID Act.   We anticipate that this will be a costly process.

DMV has made tremendous strides in the past several years to reduce ID theft and ID fraud in North Carolina.    We believe we are ahead of most states as far as implementing the requirements of the REAL ID Act.  However, many more challenges face us before we reach full compliance.

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