“(a) Definitions.—In this section:

“(1) DRIVER’S LICENSE.—The term ‘driver’s license’ means a motor vehicle operator’s license (as defined in section 30301(5) of title 49, United States Code).

“(2) PERSONAL IDENTIFICATION CARD.—The term ‘personal identification card’ means an identification document (as defined in section 1028(d)(3) of title 18, United States Code) that has been issued by a State.

“(b) Standards for acceptance by Federal agencies.—

“(1) IN GENERAL.—

“(A) LIMITATION ON ACCEPTANCE.—No Federal agency may accept, for any official purpose, a driver’s license or personal identification card newly issued by a State more than 2 years after the promulgation of the minimum standards under paragraph (2) unless the driver’s license or personal identification card conforms to such minimum standards.

“(B) DATE FOR CONFORMANCE.—The Secretary of Transportation, in consultation with the Secretary of Homeland Security, shall establish a date after which no driver’s license or personal identification card shall be accepted by a Federal agency for any official purpose unless such driver’s license or personal identification card conforms to the minimum standards established under paragraph (2). The date shall be as early as the Secretary determines it is practicable for the States to comply with such date with reasonable efforts.

“(C) STATE CERTIFICATION.—

“(i) IN GENERAL.—Each State shall certify to the Secretary of Transportation that the State is in compliance with the requirements of this section.

“(ii) FREQUENCY.—Certifications under clause (i) shall be made at such intervals and in such a manner as the Secretary of Transportation, with the concurrence of the Secretary of Homeland Security, may prescribe by regulation.

“(iii) AUDITS.—The Secretary of Transportation may conduct periodic audits of each State’s compliance with the requirements of this section.

“(2) MINIMUM STANDARDS.—Not later than 18 months after the date of the enactment of this Act, the Secretary of Transportation, in consultation with the Secretary of Homeland Security, shall establish, by regulation, minimum standards for driver’s licenses or personal identification cards issued by a State for use by Federal agencies for identification purposes that shall include—

“(A) standards for documentation required as proof of identity of an applicant for a driver’s license or personal identification card;

“(B) standards for the verifiability of documents used to obtain a driver’s license or personal identification card;

“(C) standards for the processing of applications for driver’s licenses and personal identification cards to prevent fraud;

“(D) standards for information to be included on each driver’s license or personal identification card, including—

“(i) the person’s full legal name;

“(ii) the person’s date of birth;

“(iii) the person’s gender;

“(iv) the person’s driver’s license or personal identification card number;

“(v) a digital photograph of the person;

“(vi) the person’s address of principal residence; and

“(vii) the person’s signature;

“(E) standards for common machine-readable identity information to be included on each driver’s license or personal identification card, including defined minimum data elements;

“(F) security standards to ensure that driver’s licenses and personal identification cards are—

“(i) resistant to tampering, alteration, or counterfeiting; and

“(ii) capable of accommodating and ensuring the security of a digital photograph or other unique identifier; and

“(G) a requirement that a State confiscate a driver’s license or personal identification card if any component or security feature of the license or identification card is compromised.

“(3) CONTENT OF REGULATIONS.—The regulations required under paragraph (2)—

“(A) shall facilitate communication between the chief driver licensing official of a State, an appropriate official of a Federal agency and other relevant officials, to verify the authenticity of documents, as appropriate, issued by such Federal agency or entity and presented to prove the identity of an individual;

“(B) may not infringe on a State’s power to set criteria concerning what categories of individuals are eligible to obtain a driver’s license or personal identification card from that State;

“(C) may not require a State to comply with any such regulation that conflicts with or otherwise interferes with the full enforcement of State criteria concerning the categories of individuals that are eligible to obtain a driver’s license or personal identification card from that State;

“(D) may not require a single design to which driver’s licenses or personal identification cards issued by all States must conform; and

“(E) shall include procedures and requirements to protect the privacy rights of individuals who apply for and hold driver’s licenses and personal identification cards.

“(4) NEGOTIATED RULEMAKING.—

“(A) IN GENERAL.—Before publishing the proposed regulations required by paragraph (2) to carry out this title, the Secretary of Transportation shall establish a negotiated rulemaking process pursuant to subchapter IV of chapter 5 of title 5, United States Code (5 U.S.C. 561 et seq.).

“(B) REPRESENTATION ON NEGOTIATED RULEMAKING COMMITTEE.—Any negotiated rulemaking committee established by the Secretary of Transportation pursuant to subparagraph (A) shall include representatives from—

“(i) among State offices that issue driver’s licenses or personal identification cards;

“(ii) among State elected officials;

“(iii) the Department of Homeland Security; and

“(iv) among interested parties.

“(C) TIME REQUIREMENT.—The process described in subparagraph (A) shall be conducted in a timely manner to ensure that—

“(i) any recommendation for a proposed rule or report is provided to the Secretary of Transportation not later than 9 months after the date of enactment of this Act and shall include an assessment of the benefits and costs of the recommendation; and

“(ii) a final rule is promulgated not later than 18 months after the date of enactment of this Act.

“(c) Grants to States.—

“(1) ASSISTANCE IN MEETING FEDERAL STANDARDS.—Beginning on the date a final regulation is promulgated under subsection (b)(2), the Secretary of Transportation shall award grants to States to assist them in conforming to the minimum standards for driver’s licenses and personal identification cards set forth in the regulation.

“(2) ALLOCATION OF GRANTS.—The Secretary of Transportation shall award grants to States under this subsection based on the proportion that the estimated average annual number of driver’s licenses and personal identification cards issued by a State applying for a grant bears to the average annual number of such documents issued by all States.

“(3) MINIMUM ALLOCATION.—Notwithstanding paragraph (2), each State shall receive not less than 0.5 percent of the grant funds made available under this subsection.

“(d) Extension of effective date.—The Secretary of Transportation may extend the date specified under subsection (b)(1)(A) for up to 2 years for driver’s licenses issued by a State if the Secretary determines that the State made reasonable efforts to comply with the date under such subsection but was unable to do so.

“(e) Authorization of appropriations.—There are authorized to be appropriated to the Secretary of Transportation for each of the fiscal years 2005 through 2009, such sums as may be necessary to carry out this section.”.