The Driver's License Modernization Act of 2002, sponsored by Reps. Jim Moran, D-Va., and Tom Davis, R-Va., also directs that the chip be capable of accepting software for other applications, including those of private companies.
The objective of the legislation is to prevent identity fraud and enhance national security by making driver's licenses a better way to establish identity. The use of a fingerprint, for example, would make it harder for someone to steal and use the card.
The bill would also mandate the establishment of standards for documents accepted by states to better establish the identity of the person applying for a driver's license or non-driver ID card.
"The intent of this legislation is to correct flaws in the driver's license standard that states currently have," Moran's spokesman, Dan Drummond, told United Press International.
"Right now there are inconsistent requirements between the states for initial identity verification. There's also insufficient verification of identity documents that people present when they go to get a license."
The bill would also earmark $315 million in federal funds to help pay for the transition to the new licenses and to set up links between state computer systems. Linking the computers is necessary, proponents say, so that states can check if the person applying for a driver's license was denied a license in another state.
These provisions in the bill track closely with a proposal by the American Association of Motor Vehicle Administrators, which has long supported standardized licenses and has been pushing to set criteria for "breeder" documents like birth certificates and to link state computer systems.
The total cost of the links and other enhancements could be substantial. In 1997 the Social Security Administration published a report saying that the cost to issue an enhanced Social Security card, an idea similar in many ways to the enhanced driver's licenses, would range from $3.8 million to $9.2 billion, depending on the type of card.
Issuing a Social Security card with a computer chip and a biometric identifier to 277 million people was estimated to cost $7.3 billion, a figure deemed "reasonable" by the General Accounting Office in 1998.
The AAMVA proposal would cover some 250 million people, including Canadians, in the system.
One aspect of the new bill that may not mesh well with AAMVA's vision, however, is the use of the driver's license for other than driver identification.
Jay Maxwell, AAMVA executive director, told UPI at a mid-April conference, that dual-use cards can create a problem with who owns the license and its use for driving enforcement.
What would happen, said Maxwell if a policeman had to take your driver's license and it was also your ATM and credit card?
Such a problem would only impact the worst drivers, stressed Shane Ham, a senior policy analyst at the Washington-based Progressive Policy Institute, who said that this was a very small number of users. He added that there might be other ways around the problem.
"In theory the cards could also be structured in such a way that revoking your driving privileges is just a change that is downloaded onto the chip itself without actually yanking the card back," said Ham.
He also stressed that use of the enhanced driver's license for private-sector services is strictly voluntary.
"It would be completely optional if the card holder wanted to put something else on their driver's license," said Ham. "As far as anyone's concerned, you could pretend that the chip was not there."
"If the purpose of this card is domestic security or it is national security or it is to screen terrorists, then there is no reason for it to be designed from the beginning to be interoperable with private sector entities," pointed out Lee Tien, senior staff attorney with the San Francisco-based Electronic Frontier Foundation.
"The real thrust of the private-sector interoperability is so that the ID card or driver's license will be even more useful to commercial entities in terms of tracking consumers, doing consumer profiling, telemarketing -- all those kinds of things that people currently consider to be an invasion of privacy," Tien said.
The density of information on the cards makes them a target, a "honey pot" for people trying to steal data, said Ari Schwartz, associate director at the Washington-based Center for Democracy and Technology. Supposedly secure chips on smart cards have already been hacked, said Schwartz.