NJ Stalls Plan to Turn Licenses Into Smart Cards

Two New Jersey state senators will wait until fall to introduce legislation that would turn state driver's licenses into smart cards.

The bill, S. 1158, was passed last month by the Senate Transportation Committee, but Republicans Andrew Ciesla and Robert Littell pulled it from the Senate board list because of negative reaction from privacy advocates, banks and credit-card companies.

The bill, dubbed AccessNJ, would allow standard driver's licenses to be replaced with electronic smart cards, which look like credit cards but are embedded with microchips that can perform a myriad of functions — from storing and transferring cash to holding entire credit and medical histories. The legislation said residents would receive smart cards when they renewed their licenses starting next July. The card would cost $35 and would expire in 10 years, instead of the current four.

At first, the cards would only contain standard license information, including name, address and eye color. Starting in 2000, however, New Jersey would offer space on the cards to government agencies and private companies such as banks and credit-card companies. Other state licenses — such as fishing or hunting licenses — could be stored in addition to unemployment benefits or welfare-assistance benefits. Instead of waiting in line to cash checks, welfare recipients could get their money from ATMs. Eventually, drivers could include all of their personal credit-card numbers or ATM numbers.

For residents not interested in taking advantage of these services, Ciesla said, they could simply use the card as a driver's license with no other information coded in.

Smart cards are about to explode in popularity, according to a study by Dreifus Associates Ltd., Orlando, a consulting company that analyzes emerging technologies. Dreifus predicted that the U.S. smart-card market will grow from 10.8 million last year to 280 million cards in 2000, the majority being used in government sectors. Marketers are eager to see smart cards come into use because of the ability to track consumer purchases and preferences.

According to Ralph Hahn, a spokesman for Ciesla, the bill was pulled because of objections: Consumers and privacy advocates said the cards could threaten their privacy by making it easier for the government and businesses to collect and share personal information. Banks and credit-card issuers said it would reduce the number of credit cards and ID cards that individuals would carry and, thus, reduce their customer base.

“We are trying to clean up the language as far as what could be allowed on the card and what shouldn't be,” Hahn said.

Ciesla said the bill needs to be sold to the public differently and consumers must be educated that this is not “Big Brother” taking over. The cards would only contain information that consumers choose to put on them.

Many groups supported the bill and said it would be an efficient and convenient use of technology.

“I think the New Jersey initiative is a great idea,” said Jonathan Baldwin, a consultant with Dreifus. “The technology is there. If procedures are followed, confidentiality and privacy issues are not issues anymore.” In fact, Baldwin said, one of the main features of smart-card technology is that individuals can't access information without using a personal identification number.

Many government-oriented, smart-card initiatives are taking place already. For example, Ohio and Wyoming have an Electronic Benefit Transfer program in which residents can receive electronic benefits through their driver's licenses. In addition, 18 states are testing health information as part of the Western Governors' Association Health Passport Project. If successful, Baldwin said, these states could use smart cards to share information between government programs.

“[It doesn't] change the way in which these programs use the information in terms of the confidentiality agreements they have with their clients and what they can or can't do with that data,” he said. “On the contrary, it makes it a lot easier for the client to be able to go in someplace and quickly get access to different things.”

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