Enacted with little fanfare in May 2005, the REAL ID Act doesn't become fully effective until 2008 but it is already causing consternation among state officials, who say it will be a major financial and resource drain at a time when many states are already short of funds.

Its backers say the measure toughens standards for getting a driver's license and thus provides protection against illegal immigrants and terrorists. Privacy advocates say the law's establishment of a national database of American drivers' information makes it a gold standard for identity thieves.

Authored by Rep. James Sensenbrenner (R-WI), the REAL ID act slipped through Congress as part of a spending bill authorizing money for the military forces in Iraq and relief from the tsunami of 2004.

"Giving state drivers licenses to anyone, regardless of whether they are here legally or illegally, is an open invitation for terrorists and criminals to exploit. States will now have to require proof of lawful presence in the U.S. before issuing drivers licenses, he said in a statement after the May 5 vote.

Sensenbrenner's other recent legislative activity includes voting against the emergency Hurricane Katrina relief bill in the House. He said the $52 billion measure "lacks accountability."

REAL ID mandates uniform federal standards for drivers' licenses, including what type of information can be included on a license, and what documentation must be provided to apply for or renew licenses in your state.

However, the legislation is an "unfunded mandate," meaning that states will have to come up with the money to implement the new directives on their own. This has led privacy advocates and consumer groups to warn that cash-strapped state governments may have to cut corners and use cheap measures to ensure the card readers are in place.

The REAL ID act will create a unified database of driver information to share between states, "which will create an enormous repository of identification documents that will be an identity thief's dream," according to a recent article in DMNews. "A DMV clerk in another state may provide copies of your documents to an identity thief who works overseas," the article warned.

Many states have already seen their motor vehicle agencies come under attack from identity thieves and scam artists. Several employees of the Virginia Department of Motor Vehicles were arrested and charged with fraud for selling drivers' licenses to illegal immigrants in July of 2005.

Another vulnerability created by the REAL ID act comes from the usage of "common machine-readable technology" for verifying drivers' identities. The leading candidate for the new technology is the RFID (Radio Frequency Identifier) tag, to be embedded in drivers' licenses.

Technology pundits and privacy organizations alike have derided the usage of RFID tagging for important documents or identification as a violation of personal privacy, and an invitation to steal one's information.

A Government Accountability Office (GAO) report from May 2005 on the use of RFID tags in other government agencies noted that "Without effective security controls, data on the tag can be read by any compliant reader; data transmitted through the air can be intercepted and read by unauthorized devices; and data stored in the databases can be accessed by unauthorized users."

Internet security expert Bruce Schneier commented on the government's desire to use RFID tagging in October 2004 when discussing the REAL ID law.

"The administration is deliberately choosing a less secure technology without justification. If there were a good reason to choose that technology, then it might make sense. But there isn't," Schneier said in an article on his Web site.

Privacy advocates are also alarmed by the REAL ID prohibition against using P.O. Boxes. This could cause people who may not have a permanent residence to be ineligible to get a drivers' license,or endanger victims of domestic abuse or previous identity theft who have stopped giving out their primary addresses.

In the words of law professor Anita Ramastry: "There needs to be a procedure to ensure these persons' safety and welfare. The REAL ID Act has none."

Critics say the reality of REAL ID will be even longer lines at your state's motor vehicle agency, higher state and local taxes to cover the costs of implementing the program (estimated at $80 to $100 million), and a rash of new identity theft incidents.