To direct the Secretary of Transportation to carry out a pilot program to improve the security of State drivers' licenses and identification cards, and for other purposes.

Summary: Driver's License Improvement and Security Act of 2004 - Directs the Secretary of Transportation to carry out a pilot program to assist States in developing and implementing a driver's license and identification card program that meets certain requirements.

Requires a State to: (1) embed computer chips in licenses and cards it issues; (2) obtain biometric data for the identification of individuals to whom the State issues a new or renewed driver's license or identification card; (3) participate in a program to link State motor vehicle databases in order to provide electronic access by a State to information contained in the motor vehicle databases of other States; (4) include on each new or renewed driver's license or identification card multiple tamper-resistant security features or optical image layers, such as biometric scans, barcodes, 3D, flip, or motion imaging; and (5) adopt and implement procedures to document accurately the identity and residence of an individual before issuing him or her a driver's license or identification card.

Authorizes the Secretary to make a grant to assist a State in developing and implementing a driver's license and identification card program that meets the requirements of this Act.

Requires the Director of the National Institute of Standards and Technology to study and report to the Secretary of Transportation on which on-card biometric technology is most effective and usable for the pilot program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Driver's License Improvement and 
Security Act of 2004''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The terrorist attacks of September 11, 2001, 
        illuminated many flaws in the Nation's domestic security, 
        especially in its identification system.
            (2) Drivers' licenses and identification cards issued by 
        States have become the favored form of identity verification in 
        the United States and are used by government agencies and 
        private entities alike.
            (3) Inconsistent requirements between the States for 
        initial identity verification and insufficient verification of 
        identity documents have made the identification systems of 
        States a prime target for fraud and identity theft.
            (4) Different designs on drivers' licenses and 
        identification cards issued by States have created a market, 
        including sales on the Internet, for fake cards that look real 
        to those who are unfamiliar with the official designs.
            (5) The use of new technologies will improve the security 
        of State identification systems.
            (6) Identification card technologies that accommodate other 
        government and private applications create a Federal benefit 
        that justifies Federal assistance.
            (7) Improving the security of drivers' licenses and 
        identification cards issued by the States will eliminate 
        multiple licensing of individuals who commit fraud, impede the 
        purchase of alcohol and tobacco products by underage 
        individuals, and severely reduce identity theft.
            (8) The report of the Markle Foundation Task Force on 
        National Security in the Information Age, published in December 
        2003, recommended that the Federal Government develop standards 
        for State drivers' licenses and identification cards and 
        examine the application of smart card and biometric information 
        technologies to such drivers' licenses and identification 
        cards.
            (9) The Final Report of the National Commission on 
        Terrorist Attacks Upon the United States (also known as the 
        ``9/11 Commission'') described the potential for biometric 
        identifiers in reducing identity fraud and specifically 
        recommended that the Federal Government set standards for the 
        issuance of drivers' licenses.

SEC. 3. STATE DRIVER'S LICENSE AND IDENTIFICATION CARD PILOT PROGRAMS.

    (a) Definitions.--In this section, the following definitions apply:
            (1) Driver's license.--The term ``driver's license'' means 
        a license issued by the motor vehicle agency of a State to an 
        individual that authorizes the individual to operate a motor 
        vehicle on highways.
            (2) Identification card.--The term ``identification card'' 
        means an identification card issued by the motor vehicle agency 
        of a State to an individual.
            (3) Participating state.--The term ``participating State'' 
        means a State that is participating in the pilot program 
        established under this section.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
    (b) Establishment of Voluntary Pilot Program.--
            (1) In general.--The Secretary shall carry out a pilot 
        program to assist States in developing and implementing a 
        driver's license and identification card program that meets the 
        requirements of this section.
            (2) Applications.--In order to be eligible to participate 
        in the pilot program, a State shall submit to the Secretary an 
        application in such form and containing such information as the 
        Secretary may require.
            (3) Number of participating states.--The Secretary may 
        select not more than 6 States for participation in the pilot 
        program.
    (c) State Driver's License and Identification Card Programs.--In 
order to be eligible to participate in the pilot program, a State shall 
provide assurances satisfactory to the Secretary that the State will 
develop and implement a driver's license and identification card 
program under which the State meets the following requirements:
            (1) Computer chips in drivers' licenses and id cards.--
                    (A) In general.--A participating State shall embed 
                a computer chip in each new or renewed driver's license 
                or identification card issued by the State.
                    (B) Requirements for computer chips.--A computer 
                chip embedded in a driver's license or identification 
                card under this paragraph shall--
                            (i) contain, in electronic form, all text 
                        data written on the license or card;
                            (ii) contain encoded biometric data 
                        matching the holder of the license or card;
                            (iii) contain encryption and security 
                        software or hardware (or both) that prevents 
                        access to data stored on the chip without the 
                        express consent of the individual to whom the 
                        data applies, other than access by a Federal, 
                        State, or local agency (including a court or 
                        law enforcement agency) in carrying out its 
                        functions, or by a private entity acting on 
                        behalf of a Federal, State, or local agency in 
                        carrying out its functions;
                            (iv) accept data or software written to the 
                        license or card by non-governmental devices if 
                        the data transfer is authorized by the holder 
                        of the license or card; and
                            (v) conform to any other standards issued 
                        by Secretary.
            (2) Biometric data.--
                    (A) In general.--A participating State shall obtain 
                biometric data for the identification of each 
                individual to whom the State issues a new or renewed 
                driver's license or identification card and shall 
                maintain such data.
                    (B) Requirement for biometric data.--Biometric data 
                obtained by a State under this paragraph shall be of a 
                type that can be matched to the license or card holder 
                only with the express cooperation of the license or 
                card holder.
            (3) Participation in linking of databases.--
                    (A) In general.--A participating State shall 
                participate in a program to link State motor vehicle 
                databases in order to provide electronic access by a 
                State to information contained in the motor vehicle 
                databases of other States. Such program shall be 
                established by the Secretary, subject to the 
                consultation requirements contained in subsection 
                (d)(3).
                    (B) Requirements for information.--A motor vehicle 
                database of a participating State shall contain, at a 
                minimum, the following information:
                            (i) All data fields printed on drivers' 
                        licenses and identification cards issued by the 
                        State, other than the encoded biometric data 
                        stored on such licenses and cards under 
                        paragraph (1).
                            (ii) Biometric data obtained under 
                        paragraph (2) from each individual to whom the 
                        State issues a new or renewed driver's license 
                        or identification card.
                            (iii) Motor vehicle drivers' histories, 
                        including motor vehicle violations, 
                        suspensions, and points on licenses.
            (4) Tamper-resistant security features.--A participating 
        State shall include on each new or renewed driver's license or 
        identification card issued by the State, multiple tamper-
        resistant security features or optical image layers, such as 
        biometric scans, barcodes, 3D, flip, or motion imaging, to 
        assist in visual verification that the license or card is 
        valid.
            (5) Documentation.--A participating State shall adopt and 
        implement procedures for accurately documenting the identity 
        and residence of an individual before issuing a driver's 
        license or identification card to the individual.
    (d) Guidelines.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this section, the Secretary shall issue guidelines 
        to assist participating States in complying with the 
        requirements of subsection (c).
            (2) Contents.--The guidelines issued under this subsection 
        shall contain, at a minimum, the following:
                    (A) Standards for the computer chip technology 
                required for compliance with subsection (c)(1), 
                including--
                            (i) standards to ensure interoperability 
                        and the ability to store multiple applications 
                        created by government agencies and private 
                        entities and transmitted to the license or card 
                        with the express consent of the license or card 
                        holder; and
                            (ii) standards for the encoded biometric 
                        data that must be contained on each computer 
                        chip and requirements to ensure that such 
                        biometric data will be used only for matching 
                        the license or card to the presenter.
                    (B) Standards for biometric data to be obtained 
                from applicants for new or renewed State drivers' 
                licenses and identification cards under subsection 
                (c)(2) and standards for maintaining such data.
                    (C) Standards for linking State motor vehicle 
                databases under subsection (c)(3) and standards for the 
                information to be contained in the databases.
                    (D) Standards for security features or optical 
                image layers to be placed on State drivers' licenses 
                and identification cards under subsection (c)(4).
                    (E) Standards for documentation of the identity and 
                residence of an individual under subsection (c)(5), 
                including a list of acceptable documents for 
                establishing the identity and residence of an 
                individual and procedures for verifying the 
                authenticity of the documents.
                    (F) Standards for a numbering system for State 
                drivers' licenses and identification cards that 
                prevents duplication between States and does not make 
                use of the license or card holder's social security 
                number.
            (3) Consultation.--Guidelines issued by the Secretary under 
        this subsection shall be developed in consultation with the 
        American Association of Motor Vehicle Administrators, the 
        General Services Administration, and the National Institute of 
        Standards and Technology.
            (4) Administrative procedures.--The Secretary may issue 
        guidelines under this subsection without regard to subchapter 
        II of chapter 5 of title 5, United States Code.
    (e) Grants.--
            (1) In general.--The Secretary may make grants to each 
        participating State to assist the State in developing and 
        implementing a driver's license and identification card program 
        that meets the requirements of subsections (b) and (c).
            (2) Federal share.--The Federal share of the cost of 
        activities funded using amounts from a grant received by a 
        State under this subsection shall be 100 percent or a lesser 
        percentage determined by the Secretary.
            (3) Reports.----
                    (A) State reports.--The Secretary shall require a 
                State that receives a grant under this subsection to 
                submit to the Secretary a report on the activities 
                carried out by the State using amounts from the grant.
                    (B) Report to congress.--Not later than one year 
                after the date on which the Secretary first makes 
                grants under the pilot program, the Secretary shall 
                transmit to Congress a report on the results of the 
                program, including an assessment of the technology, 
                reliability, effectiveness, and cost of the driver's 
                license and identification card programs of 
                participating States.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated $100,000,000 to carry out this section. Such sums shall 
remain available until expended.

SEC. 4. NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY.

    (a) Study.--The Director of the National Institute of Standards and 
Technology, in consultation with the States and the American 
Association of Motor Vehicle Administrators, shall conduct a study of 
on-card biometric technologies to determine which technology is most 
effective and usable for purposes of the pilot program established 
under section 3.
    (b) Determinations.--In conducting the study, the Director shall 
shall determine--
            (1) what type of biometric identifier, or combination of 
        biometric identifiers, when captured and stored on the card in 
        the form of a numeric algorithm is least prone to error; and
            (2) what combination of technologies and information 
        sharing arrangements will prevent individuals from possessing 
        multiple concurrent State drivers' licenses or identification 
        cards.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Director shall submit to the Secretary of Transportation 
a report on the results of the study.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.