Minimum Standards for Driver's Licenses and Identification Cards Acceptable by Federal Agencies for Official Purposes; Phased Approach for Card-Based Enforcement

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

DHS invites interested persons to participate in this NPRM by submitting written comments, including relevant data. Comments that will provide the most assistance to DHS will reference a specific portion of this proposed rule, explain the reason for any suggestion or recommended change, and include data, information, or authority that supports such suggestion or recommended change.

Submitting Comments

DHS will review all comments received on this proposed rule, but may choose not to post off-topic, inappropriate, or duplicative comments. To submit a comment:

• Go to https://www.regulations.gov and follow the instructions for submitting comments for docket number TSA-2023-0003. If your material cannot be submitted using https://www.regulations.gov, contact the persons listed in the FOR FURTHER INFORMATION CONTACT section of this document for alternative instructions.
• All submissions received must include the agency name and docket number for this rulemaking.
• Comments posted to https://www.regulations.gov are posted without change and will include any personal information provided. For more information about privacy and submissions in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

Abbreviations and Terms Used in This Document

DHS—U.S. Department of Homeland Security

DL/IDs—Driver's Licenses and Identification Cards

NPRM—Notice of Proposed Rulemaking

TSA—Transportation Security Administration

Table of Contents

I. Executive Summary

A. Purpose of the Regulatory Action

B. Overview of the Proposed Rule

II. Background

A. The REAL ID Act and Implementing Regulations

B. Progress Towards Full Implementation

C. Factors Impacting REAL ID Adoption Rates

III. Summary of the Proposed Rule

A. Phased Enforcement Plans

B. Consideration of Further Extending the Card-Based Enforcement Deadline

C. Broad DHS Approach

D. Phased Enforcement Guidance

IV. Regulatory Analyses

A. Paperwork Reduction Act

B. Economic Impact Analyses

C. Executive Order 13132 (Federalism)

D. Executive Order 13175 (Tribal Consultation)

E. Environmental Analysis

F. Energy Impact Analysis

I. Executive Summary

A. Purpose of the Regulatory Action

Secure driver's licenses and identification documents are a vital component of our national security framework. The REAL ID Act, passed by Congress in 2005, enacted the 9/11 Commission's recommendation that the Federal Government “set standards for the issuance of . . . sources of identification, such as drivers licenses.” The requirements of the REAL ID Act and its implementing regulations set minimum security standards for the issuance of DL/IDs, which are designed to improve the reliability of those State-issued documents. These requirements allow Federal agencies that accept State-issued DL/IDs for official purposes to determine with greater accuracy whether individuals presenting a DL/ID are who they say they are.

Pursuant to the current REAL ID regulations, after REAL ID card-based enforcement begins on May 7, 2025, Federal agencies may only accept State-issued driver's licenses and identification cards (DL/IDs) for official purposes, as defined in the REAL ID Act and regulation, if that DL/ID is issued in accordance with REAL ID requirements by a REAL ID-compliant State. In order to fully realize the enhanced security provided by the REAL ID requirements, DHS is committed to beginning card-based enforcement on May 7, 2025. However, as of January 2024, only approximately 56 percent of DL/IDs in circulation nationally are REAL ID-compliant. In 34 States, less than 60 percent of DL/IDs in circulation are REAL ID-compliant, and in 22 States less than 40 percent are REAL ID-compliant. Further, because of the history of extensions related to REAL ID enforcement, DHS believes that the public may continue to expect that additional extensions are likely and not feel urgency to obtain a REAL ID. DHS believes this pattern is likely to delay increased adoption in many States despite best efforts to inform the public, potentially leading to last-minute surges in demand for REAL IDs leading up to the deadline.

DHS believes this surge could overwhelm States and result in backlogs and delays in REAL ID issuance. In light of this, DHS anticipates that a significant number of individuals seeking to use their DL/ID for a REAL ID official purposes on and after May 7, 2025, may not have a compliant DL/ID. DHS recognizes that this could result in a situation where individuals are unable to present a compliant DL/ID to access a Federal facility or board a federally regulated commercial aircraft on a large scale. For some agencies, this scenario may raise serious concerns related to security, agency operations, and potential impact to the public. While these concerns are especially acute in an airport security environment, DHS anticipates that other Federal agencies that operate facilities visited frequently by the general public may also face similar concerns. This proposed rule recognizes these concerns and would provide flexibility by permitting agencies to, for a period of up to 2 years, implement REAL ID card-based enforcement using a phased approach tailored to their specific operations.

DHS believes that this approach will be more effective at achieving full enforcement than further extensions of the enforcement deadline. By demonstrating that the government is preparing for and planning to begin enforcement, the proposed rule reiterates for the public that REAL ID card-based enforcement will start on May 7, 2025, and provides an opportunity for States and the public to prepare for full enforcement. After May 7, 2025, when agencies begin full enforcement or implement a phased enforcement plan, as appropriate, the public will be further incentivized to obtain a REAL ID as they anticipate consequences for presenting a non-compliant DL/ID. At the same time, the proposed rule is intended to allow a transition to full enforcement that mitigates the potential negative impact to agencies and the public if full enforcement began immediately on the card-based enforcement date. Given the current percentage of REAL ID-compliant DL/IDs that have been issued (as a percentage of all DL/IDs), the challenges many States are experiencing as they seek to increase adoption of compliant DL/ID, and the resulting concerns of Federal agencies, the proposed rule would provide important flexibility to agencies to ensure a smooth transition to card-based enforcement. The proposed rule balances the increased security benefits of beginning card-based enforcement with an understanding of the significant risks that some Federal agencies may experience as a result of the transition to full enforcement.

B. Overview of the Proposed Rule

Under current regulations, Federal agencies may not accept non-compliant DL/IDs for REAL ID official purposes when card-based enforcement is required on May 7, 2025. While Federal agencies would still be required to commence REAL ID card-based enforcement on May 7, 2025, this proposed rule would provide agencies, for a period of up to 2 years, flexibility to determine that a phased approach to card-based enforcement is appropriate after considering relevant factors including security, operational feasibility, and impact to the public offered by their agency. The proposed rule seeks to provide an enforcement approach that allows agencies to maximize security gains in contexts where a swift transition to full enforcement poses little risk, while minimizing the risks in contexts where large numbers of individuals seeking to use noncompliant DL/IDs raises serious concerns.

To ensure that agencies' phased enforcement plans consistently and appropriately advance the objectives of the REAL ID regulations, this proposed rule would require agencies to coordinate their phased enforcement plans with DHS and begin full enforcement no later than May 5, 2027. To ensure transparency and public visibility, the proposed rule would require agencies that use a phased enforcement plan to make their plan publicly available on their web page and require DHS to make publicly available a list of agencies that have coordinated phased enforcement plans with DHS. Finally, the proposed rule's preamble provides guidance to Federal agencies on types of phased enforcement plans that agencies may consider.

II. Background

A. The REAL ID Act and Implementing Regulations

All but one of the September 11, 2001, terrorist hijackers acquired some form of identification document, some by fraud, and used these forms of identification to assist them in boarding commercial flights, renting cars, and other necessary activities leading up to the attacks. Consequently, the 9/11 Commission recommended that the Federal Government set standards for the issuance of more secure sources of identification for use in, among other activities, boarding aircraft and accessing vulnerable facilities.

The REAL ID Act of 2005 (the REAL ID Act) addressed the 9/11 Commission's recommendation that the Federal Government “set standards for the issuance of . . . sources of identification, such as drivers licenses.” The REAL ID Act sets minimum security requirements for the issuance and production of DL/IDs issued by the States, territories, and the District of Columbia in order for Federal agencies to accept these documents for official purposes. Official purposes include: (1) accessing Federal facilities, (2) boarding federally regulated commercial aircraft, (3) entering nuclear power plants, and (4) any other purposes that the Secretary of Homeland Security shall determine.

On January 29, 2008, DHS published a final rule implementing the REAL ID Act's requirements. The regulations include both a deadline for State compliance with the REAL ID requirements and a separate deadline after which individuals must present a REAL ID-compliant license or identification card in order for Federal agencies to accept the document for official purposes. DHS refers to these deadlines as “state-based” and “card-based” enforcement, respectively. Under existing regulations, card-based enforcement is scheduled to begin on May 7, 2025. On this date, Federal agencies may not accept for official purposes a license or identification card issued by a State unless that license or card was issued in accordance with the REAL ID standards by a REAL ID-compliant jurisdiction.

In addition to compliant licenses and identification cards, States may issue noncompliant licenses and identification cards, which will not be acceptable by Federal agencies for official purposes after the card-based deadline, to individuals who are unable or unwilling to present the documents and information necessary to obtain a REAL ID-compliant license or card. These noncompliant licenses and cards must (1) clearly state that the card is not acceptable for official purposes, and (2) have a unique design or color indicator that clearly distinguishes them from compliant licenses and identification cards. The REAL ID regulations authorize, but do not require, Federal agencies to accept these noncompliant cards until card-based enforcement begins.

B. Progress Towards Full Implementation

Since its enactment in 2005, DHS has worked with the States to implement the requirements of the REAL ID Act. DHS has provided funding, technical assistance, outreach, and engagement. DHS has awarded over $263 million in grant funding to assist in enhancements to drivers' license security programs. These efforts have yielded significant progress towards full REAL ID implementation. All 56 licensing jurisdictions subject to REAL ID have achieved REAL ID certification. DHS also completed one phase of a nationwide REAL ID advertising campaign (“Be Your REAL ID Self”) and produced an advertising toolkit available for free to all DHS stakeholders. DHS continues to work with stakeholders to reach full implementation of the REAL ID Act and regulations.

Considering the impact of the COVID-19 pandemic on State and local government operations and the desire to reduce further spread by encouraging continued social distancing, DHS extended the card-based enforcement deadline three times during the pandemic. In April 2020, DHS issued a final rule extending the REAL ID card-based enforcement date for 1 year until October 1, 2021; in May 2021, DHS further extended the card-based enforcement date until May 3, 2023, through the issuance of an interim final rule (IFR) requesting comments; and, on March 9, 2023, DHS issued a final rule finalizing the May 2021 IFR and extending the card-based enforcement deadline to May 7, 2025.

C. Factors Impacting REAL ID Adoption Rates

The U.S. has 56 different jurisdictions that issue DL/IDs and are subject to REAL ID requirements, including the 50 States, the District of Columbia, and the territories of Puerto Rico, U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa. All but five States offer their residents the option to obtain a noncompliant DL/ID for various reasons including State privacy requirements, implementation costs to the State and residents, and to provide the opportunity to obtain a DL/ID to residents who may not be able to obtain a REAL ID-compliant DL/ID.

Based on REAL ID data compiled by compliant licensing jurisdictions, as of January 2024, DHS estimates that compliant States, territories, and the District of Columbia have issued approximately 162 million REAL ID-compliant DL/ID, which represent approximately 56 percent of the population possessing a State-issued DL/ID. Data from the States also indicates that the States have approximately 110 million noncompliant marked DL/IDs and approximately 14 million legacy licenses without any markings (issued before a State's REAL ID compliance determination) still in circulation.

There are a number of factors that impact the REAL ID adoption rate in any given State resulting in significant variability in adoption rates from State to State. These factors include: (1) the date a State became REAL ID certified and began issuing REAL ID-compliant DL/IDs, (2) whether the State offers a noncompliant DL/ID, (3) the number of legacy cards (DL/IDs issued before a State became REAL ID certified) still in circulation, (4) the validity period of DL/IDs issued by a State, (5) the disruption to Department of Motor Vehicles (DMV) operations and ability to provide services during the COVID-19 pandemic, and (6) State resource constraints, including budgetary and staffing constraints.

Generally, States that have become REAL ID certified more recently are more likely to have a lower REAL ID adoption rate than States that were certified earlier, as their populations have had less time to obtain a REAL ID-compliant DL/ID. While some licensing jurisdictions have been issuing REAL ID-compliant cards for many years and have high adoption rates, nearly half (27) of the jurisdictions have only been certified since 2018. States that issue cards with longer validity periods generally have lower adoption rates than States that issue cards with shorter validity periods, as it takes longer for legacy cards to cycle through their validity period. REAL ID adoption rates are also influenced by whether a State offers its population the option to receive a noncompliant card. There are many reasons States choose to offer residents the option to obtain a noncompliant card when an individual's DL/ID is due for renewal, including the ability to meet eligibility requirements for a compliant DL/ID, potential greater monetary and time costs associated with obtaining a compliant DL/ID, and the convenience of renewing a legacy or existing noncompliant DL/ID online instead of travelling in person to the DMV (this became particularly relevant during the extended COVID-19 pandemic). In States that offer noncompliant cards, a substantial number of individuals choose to obtain a noncompliant card, rather than a compliant DL/ID, when they seek to renew an existing legacy or noncompliant DL/ID. DHS understands that individuals may choose to obtain a noncompliant card for a number of reasons including lower monetary costs, reduced time burden of collecting necessary documents, and avoiding in-person visits to physical DMV locations.

As a result of the COVID-19 pandemic, most State licensing agencies were forced to close branches or operate at a reduced capacity for extended periods of time, limiting the ability of their residents to obtain REAL ID-compliant DL/IDs. The impact of pandemic-related mitigation measures on REAL ID adoption was accentuated by two additional factors. First, 27 jurisdictions were certified between 2018 and 2022, meaning they had very little or no time to issue REAL ID-compliant DL/IDs prior to the mitigation measures implemented during the pandemic. As a result, these States had only issued a relatively low number of REAL ID-compliant DL/IDs when adoption rates started falling during, and continuing after, the pandemic. The combination of low numbers of compliant DL/IDs issued pre-pandemic and the decreased rate of adoption during the pandemic suggests that the current number of compliant DL/IDs issued in these States is unlikely to be significantly higher than the pre-pandemic number. Second, REAL ID-compliant DL/IDs cannot be issued without the physical presence of the applicant, but during the pandemic many States extended license expiration dates and offered individuals the ability to obtain noncompliant DL/IDs without an in-person visit to the DMV (through an online or mail process, for example). To avoid visiting the DMV many individuals who might have otherwise obtained a REAL ID likely chose to obtain a noncompliant card instead.

DHS observed widespread decreases in REAL ID adoption rates coupled with significant increases in noncompliant card issuance rates during, and immediately after, the pandemic. This trend resulted in reduced adoption rates. Prior to the pandemic, the national REAL ID adoption rate was approximately 2.5 percent per month, however, this rate dropped to less than 0.5 percent in April and May of 2020. As of January 2024, the national adoption rate has not reached its pre-pandemic level and continues to stand at approximately 0.56 percent per month. As detailed in the regulatory analyses (section IV(b)(2)(e) Adoption of REAL ID-Compliant DL/IDs ), DHS estimates that only about 61.2 percent of DL/IDs in circulation would be REAL ID-compliant by the card-based enforcement deadline of May 7, 2025.

The significant increase in the issuance of noncompliant cards to individuals renewing existing noncompliant and legacy DL/IDs will also likely continue to depress adoption rates for several years. All States provide their residents with the opportunity to obtain a REAL ID-compliant DL/ID when their current DL/ID comes up for renewal or if they are seeking their first driver's license in the State. Depending on the State, DL/IDs may be valid anywhere from 3 to 8 years. Because REAL ID adoption has been strongly tied to the renewal cycle and period of validity of existing DL/IDs, DHS expected adoption rates to rise as residents in States with long validity periods needed to renew their DL/IDs. However, the significant increase in issuance of noncompliant DL/IDs during the pandemic in States where this option was offered as a less burdensome alternative for individuals to renew their DL/IDs disrupted this expected effect, as a substantial number of individuals chose to obtain a noncompliant DL/ID rather than a compliant DL/ID. The impact of the pandemic is then two-fold; it not only drove down adoption rates by limiting opportunities for individuals to obtain a compliant DL/ID, but also delayed the strongest catalyst for REAL ID adoption, the renewal of a legacy DL/ID. As a result, many individuals have been issued noncompliant DL/IDs with full validity periods, and thus would not be incentivized to obtain a REAL ID based upon renewal until their noncompliant DL/ID expires, which depending on the State validity period could be years away.

III. Summary of Proposed Rule

A. Phased Enforcement Plans

DHS believes that beginning card-based enforcement on May 7, 2025, is the most effective path to achieve full implementation of the REAL ID Act and regulations. The requirements of the REAL ID Act and regulations provide significant security benefits by improving the accuracy of identity verification processes. Beginning card-based enforcement will accelerate the timeline for full realization of these increased security standards. The most recent card-based enforcement extension until May 7, 2025, was intended to provide sufficient time for individuals to obtain a REAL ID and for DMVs across the country to fully accommodate the demand for REAL ID-compliant DL/IDs. This proposed rule recognizes the importance of retaining the May 7, 2025, deadline to begin enforcement while recognizing that for some agencies an immediate transition to full enforcement may not be appropriate in light of relevant factors.

Today, the REAL ID adoption rate continues to remain well below the pre-pandemic rate. DHS recognizes that without a significant increase in the adoption rate leading up to the May 7, 2025, deadline millions of noncompliant cards will still be in circulation on that date. Even assuming a substantial increase in the adoption rate, it is difficult to predict the number of people who will seek to use non- REAL ID-compliant IDs for Federal official purposes when enforcement begins on May 7, 2025. The population-wide adoption rate will likely differ from the adoption rate of specific populations who will need to present a REAL ID for official purposes including boarding federally-regulated commercial aircraft or entering a Federal facility. The adoption rate is also likely to differ across geographic areas with certain regions having relatively higher or lower concentrations of individuals without a REAL ID-compliant DL/ID.

DHS also acknowledges the possible risks to Federal agencies and public impact should a significant number of individuals seek to use non-REAL ID-compliant DL/IDs for REAL ID official purposes when enforcement begins. In some cases, this may impact how agencies provide certain services or conduct business with the public. If many individuals seek to use noncompliant DL/IDs at the same location, this could result in significant backlogs at access points to Federal facilities and TSA security checkpoints with the potential to result in significant negative downstream outcomes and poor customer experience. In TSA's example, if a large number of individuals arrived at an airport security checkpoint with noncompliant DL/IDs, they would not be able use that DL/ID to proceed through screening, potentially resulting in missed flights. Additionally, long lines, confusion, and frustrated travelers at the checkpoint may significantly increase security risks both to passengers and TSA personnel by drawing the resources and attention of TSA personnel away from other passengers, including those known to pose an elevated risk. Although DHS is most engaged with the REAL ID official purpose of boarding federally-regulated commercial aircraft and TSA's operations, other Federal agencies may also experience an impact if they begin full enforcement May 7, 2025.

Given that approximately 56 percent of DL/IDs in circulation are REAL ID-compliant as of January 2024 and the low current adoption rates, there is a real possibility of disruptions like those described above that could occur if all agencies begin full enforcement on May 7, 2025. Using the compounded monthly growth rate for the last 12 months (0.56 percent), DHS estimates that 61.2 percent of REAL IDs, relative to all DL/IDs in circulation, would be REAL ID-compliant. Additionally, even if population-wide adoption rates are significantly higher than they are currently, these outcomes may nonetheless unfold if adoption rates remain low in specific States or amongst specific groups of individuals. Operational disruptions could still occur at locations in areas that have a high concentration of individuals without REAL IDs or during times of the year when large numbers of people who do not fly frequently, and who may not possess a REAL ID or other acceptable form of identification, seek to travel. DHS anticipates that other agencies that operate facilities nationwide or experience significant shifts in the number of individuals presenting identification for official purposes throughout the year may have similar concerns about the possibility of disruption based on the current trend in REAL ID adoption rates.

Recognizing these challenges and the uncertainty in the number of individuals Federal agencies may encounter who do not have a REAL ID or other acceptable identification on May 7, 2025, Federal agencies would benefit from added flexibility to implement enforcement of the REAL ID regulations in a manner that takes into account relevant factors including security, operational feasibility, and public impact. This proposed rule would permit agencies to make a determination that phased enforcement is appropriate, in consideration of these factors. The rulemaking would allow individual agencies to use their own expertise to structure enforcement plans in such a manner that will lead to successful enforcement of the REAL ID regulations while mitigating potential risks of immediately transitioning to full enforcement on May 7, 2025.

The ability to implement the card-based requirements under a phased approach after the deadline, for a two-year period, would allow Federal agencies to start card-based enforcement in a manner that reduces potential disruption to operations, reduces negative public impact, and supports a smooth transition to full card-based enforcement and the increased security benefits of REAL ID. For example, agencies would have the ability to begin enforcement by issuing warning notices or through progressive consequences if they determine that those measures would most effectively mitigate the risks of an immediate transition to full enforcement. Without this flexibility, and especially if the adoption rate remains low leading up to May 7, 2025, DHS believes Federal agencies could face a serious risk of operational disruption, negative public impact, and potential security vulnerabilities.

Further, implementation of card-based enforcement through a phased approach is consistent with DHS' approach to State-based enforcement. Beginning in January 2013, DHS incrementally enforced the State-based regulatory deadline prohibiting agencies from accepting licenses and cards issued by States that were not compliant with the REAL ID standards. The enforcement schedule began with DHS headquarters and other Federal facilities in 2014 with the final phase, boarding a Federally regulated commercial aircraft, going into effect in 2018. This phased enforcement period allowed States to continue to build the infrastructure and institutional capacity to issue REAL ID-compliant DL/IDs before enforcement began in the most impactful context (boarding federally regulated commercial aircraft).

DHS' approach to State-based enforcement demonstrated that phased enforcement can be effective in achieving compliance with REAL ID requirements. This proposed rule would provide Federal agencies the flexibility to determine whether a phased plan to implement the REAL ID card-based enforcement requirements beginning on May 7, 2025, is appropriate for its particular circumstances. Such flexibility would allow agencies to begin card-based enforcement as part of measured, responsible, and achievable plan leading to full enforcement of the REAL ID regulations.

Additionally, permitting agencies to begin enforcement using a phased approach may facilitate increased adoption of REAL ID-compliant DL/IDs. It would allow agencies to reiterate that further extensions of the May 7, 2025, enforcement deadline are unlikely by demonstrating that the government is planning and preparing to begin enforcement. DHS anticipates that agencies announcing concrete plans for commencing enforcement on May 7, 2025, could likely incentivize individuals to obtain a REAL ID- compliant DL/ID and result in increased demand at State DMVs. Increased demand leading up to and after the deadline may outpace the ability of licensing jurisdictions to meet that demand. The TSA REAL ID Program has been working with States in preparation for the beginning of REAL ID enforcement. During this engagement, some States have expressed concern with ability to meet potential demand. Using a phased approach may also allow agencies to provide licensing jurisdictions the opportunity to make adjustments to alleviate potential backlogs.

This proposed rule also recognizes that individual Federal agencies are in the best position to determine how to ensure successful implementation of the REAL ID requirements within their operational context. In making a determination of whether phased enforcement instead of an immediate transition to full enforcement is appropriate, agencies must, at a minimum, consider three relevant factors that will inform their decision. DHS identified the three factors it believes are most likely to impact efficient and successful implementation of card-based enforcement: security, operational feasibility, and public impact.

In considering security, agencies should weigh both the security benefits that card-based enforcement provides as well as potential security vulnerabilities that an immediate transition to full enforcement might create. For many agencies, DHS anticipates that the increased security provided by card-based enforcement weigh in favor of an immediate transition to full enforcement. However, in certain contexts, an immediate transition to full enforcement may result in security vulnerabilities. For example, no longer accepting noncompliant DL/IDs may lead to long lines and crowding at access points to Federal facilities or airport security checkpoints creating soft targets for terrorists or violent extremists. Additionally, an atmosphere of confusion and frustrated individuals who are denied access risks distracting security personnel from correctly executing their procedures. Agencies should take a holistic approach in evaluating the security implications of transitioning to full card-based enforcement.

Regarding operational feasibility, agencies should consider any implications that transitioning to full enforcement may have on their ability to continue effectively carrying out operations in support of their mission. DHS anticipates that in many cases, immediately transitioning to full enforcement would have little to no impact on agencies' ability to execute their missions and would enhance security. Agencies may have limited interactions with the public that necessitate members of the public seeking to access Federal facilities that require proof of identity for entry. In cases where agencies currently interact with members of the public at such facilities, agencies may be able to easily adjust the manner in which they interact with the public or provide a service to alleviate the need for individuals to use their DL/ID for a REAL ID official purpose. For example, agencies may be able to hold meetings in facilities that do not require the presentation of identification documents or hold virtual meetings. For certain agencies whose missions include operations requiring frequent use of identification documents for a REAL ID official purpose, an immediate transition to full enforcement may challenge an agency's ability to effectively carry out its mission if a significant number of individuals seek to use noncompliant DL/IDs after the May 7, 2025, deadline. For these agencies, implementing card-based enforcement through a phased approach would allow the opportunity to observe changes in the number of noncompliant cards they encounter after the deadline and transition to full enforcement in a manner that ensures continuity of operations.

Finally, agencies should assess whether an immediate transition to full enforcement would negatively impact the public and the provision of services to the public. The requirements of the REAL ID Act and regulation apply only in contexts where individuals must present an identification document to Federal agencies for REAL ID official purposes. Card-based enforcement should not impact access to Federal facilities that do not require identification (for example, public areas of the Smithsonian museums). Card-based enforcement also should not impact public services that require identification for purposes other than an official purpose as defined by the Act and regulation (for example, applying for or receiving Federal benefits is not a REAL ID official purpose). However, in cases where a government function impacting the public does involve a REAL ID official purpose (for example, boarding a federally-regulated commercial aircraft or providing a public service that necessitates members of the public accessing a Federal facility that requires proof of identity for entry), agencies should consider the extent to which an immediate transition to full enforcement would impact their ability to provide that service.

In addition to these factors, agencies may consider other factors they deem relevant and necessary to make their determination. Agencies' consideration of all relevant factors will be informed by changes in the adoption rate leading up to the card-based enforcement deadline. Certain factors may be given more or less weight depending on the number of REAL ID noncompliant DL/IDs agencies are likely to encounter on and after the deadline. For agencies that determine that beginning full card-based enforcement on May 7, 2025, would not pose significant risks after considering security, operational feasibility, public impact, and other relevant factors, the proposed rule maintains the current regulatory default of an immediate transition to full enforcement. Agencies that determine that commencing full card-based enforcement on May 7, 2025, is not appropriate after considering the relevant factors, may utilize a phased approach that would allow them to facilitate continued secure and orderly operations and minimize impacts to the public while implementing enforcement phases that lead to full REAL ID enforcement. This flexibility would allow these agencies to maintain operational efficiency; reduce security risks born from long lines, incidents, and distractions caused by additional identity verification procedures or turning away individuals who do not have acceptable identification; decrease potential public backlash to security personnel enforcing REAL ID; and limit potential negative impacts to the public.

Should an agency determine that phased enforcement is appropriate, DHS also recognizes that the individual agency is best positioned to structure its enforcement plan to account for its particular operational setting. The proposed rule would allow agencies to develop a phased enforcement best suited to ensuring a successful transition to phased enforcement in their specific context. Although this proposed rule does not prescribe the form that phased enforcement plans must take in incrementally implementing enforcement of the requirements, DHS does provide some options that agencies may consider. For example, agencies' plans may include an initial phase during which warning notices are issued and/or a phase involving progressive enforcement measures—like a “three-strikes” system or other methods—that enable agencies to begin enforcement without immediately denying access to individuals with noncompliant identification on the card-based enforcement deadline.

In order to ensure that agencies' enforcement plans appropriately advance the objectives of the REAL ID regulations and maintain consistent progress towards full enforcement, the plans must be coordinated with DHS. The REAL ID Act charges DHS with authority to implement the Act's requirements. Requiring agencies that make a determination to implement the REAL ID regulations through a phased enforcement plan to coordinate their plan with DHS ensures consistency, as appropriate, and DHS oversight of successful implementation of the Act and regulatory requirements. Agencies seeking to use a phased enforcement plan would be required to coordinate with DHS through the TSA REAL ID Program Office. DHS expects and strongly encourages agencies to make a determination on whether a phased enforcement plan is appropriate and, where appropriate, develop their plan in advance of the May 7, 2025, deadline. However, DHS recognizes that agencies may seek to begin full enforcement on the deadline and encounter unanticipated challenges or agencies may encounter unforeseen issues in implementing the plan they developed. In such cases, agencies may coordinate a new or modified phased enforcement plan with DHS after the enforcement deadline. Additional information regarding how agencies should coordinate with DHS will be provided on the DHS REAL ID web page.

DHS acknowledges the potential for some confusion resulting from the possibility of various agencies implementing different phased enforcement plans. This proposed rule seeks to mitigate that potential confusion by (1) requiring agencies using a phased approach to make their plan publicly available on their web page, and (2) requiring DHS to post a list of agencies that have coordinated phased enforcement plans with DHS on the DHS REAL ID web page to provide public notice of the agencies implementing phased approaches. Agencies should also clearly provide their policies for access control, including other acceptable forms of identification. Ultimately, even with the risk of some confusion, DHS believes this approach is preferable to full enforcement on May 7, 2025, with the potential to cause significant disruption or another extension of the deadline, which is unlikely to incentivize increased REAL ID adoption.

The proposed rule also would require that any agency that chooses to implement card-based enforcement under a phased approach must fully enforce the card-based requirements no later than May 5, 2027. On and after that date, agencies may not accept noncompliant marked DL/IDs or legacy DL/IDs for official purposes. As mentioned above, DHS anticipates that shortly before, and as REAL ID card-based enforcement begins on May 7, 2025, individuals' urgency to obtain a compliant DL/ID will likely increase as they realize that they will need a compliant DL/ID when they seek to use their DL/ID for REAL ID official purposes. In States with low adoption rates, large numbers of individuals may rapidly seek to obtain REAL ID-compliant DL/IDs. This potential rapid increase in demand may challenge the capacity of licensing jurisdictions and may create backlogs in issuance of REAL ID-compliant cards. The two-year window during which agencies may implement enforcement in phases is designed, in part, to provide States sufficient additional time to meet increases in demand for REAL ID-compliant cards. Agencies who decide to use a phased enforcement plan may choose to implement plans that reach full enforcement in less than 2 years, but all phased plans must conclude, reaching full card-based enforcement, no later than May 5, 2027.

DHS chose a two-year period during which agencies may implement phased enforcement plans to balance delay in fully realizing the security benefits of REAL ID with allowing sufficient time for Federal agencies to encourage greater adoption rates and limit negative enforcement impacts, where appropriate, and for States to meet the increased demand as individuals seek to obtain compliant DL/IDs. DHS also considered phased enforcement periods of one, three, four, or five years' duration. DHS chose 2 years as it believes this time period provides sufficient opportunity for individuals to obtain a compliant DL/IDs, while maintaining an impending need (incentive) to do so, and for States to process them ( e.g., time to budget any short term ramp up that may be necessary) but also requests public comment on the length of the phased enforcement period.

DHS did not select 1 year because DHS believes this timeframe would not provide enough time for the anticipated effects of the enforcement deadline and phased enforcement plans to be realized and reflected in adoption rates. Many individuals may only seek to use their DL/ID for official purposes once or twice a year (for example, boarding a commercial flight to travel for a holiday or vacation). In a one-year phased enforcement period, individuals who learn of the need to obtain a REAL ID-compliant DL/ID towards the end of that one-year period—possibly through a warning notice as part of an agency's phased enforcement plan—may not have sufficient time to obtain a compliant DL/ID before full enforcement begins. Additionally, if increased demand for compliant DL/IDs leading up to and right after the deadline results in backlogs at State DMVs, DHS believes 1 year may not be sufficient time for States to make any necessary adjustments to process potential backlogs. Although a one-year phased enforcement period would provide a shorter delay in obtaining the full security benefits of REAL ID as described in the 2008 rule, DHS does not believe it is a long enough period for individuals and States to both apprehend the need for action as a result of card-based enforcement and take action to obtain or make adjustments needed to issue REAL ID-compliant DL/IDs.

DHS did not select three, four, or five years because DHS believes a time period longer than 2 years would further delay the security benefits of REAL ID and is unlikely to provide the same incentive for individuals to obtain a complaint DL/ID. DHS believes that 2 years after the card-based enforcement deadline is a sufficient amount of time for individuals to obtain and States to provide REAL ID-compliant DL/IDs to any eligible individual who seeks to obtain one. DHS believes that allowing more time for phased enforcement beyond 2 years is unlikely to offer a meaningful additional opportunity for individuals and States to take necessary action and could further delay the security benefits of REAL ID. Additionally, allowing for phased enforcement for more than 2 years may discourage individuals and States from prioritizing necessary action.

Finally, to avoid any confusion about the ability of Federal agencies to continue to accept noncompliant marked DL/IDs issued under § 37.71, the proposed rule would clarify that Federal agencies may continue to accept these licenses past May 7, 2025, if they are doing so pursuant to an enforcement plan coordinated with DHS. Although some agencies may accept noncompliant marked DL/IDs for official purposes as part of a phased enforcement plan, other agencies may choose not to accept noncompliant marked DL/IDs as part of their phased enforcement plan, may determine that phased enforcement is not appropriate, or currently do not accept noncompliant marked DL/IDs for official purposes. Individuals who need to visit a Federal facility should check in advance whether the agency requires identification for access purposes and, if they do, review the agency's access control policies.

B. Consideration of Further Extending the Card-Based Enforcement Deadline

As an alternative to the approach this rule proposes, DHS also considered further extending the REAL ID card-based enforcement deadline to allow for more time for the adoption rate to increase. However, DHS believes that maintaining the deadline of May 7, 2025, while providing agencies the flexibility to make a determination that phased enforcement is appropriate will allow for a faster and smoother transition to full card-based enforcement than another extension of the deadline.

DHS prefers the approach proposed in this rule rather than an extension for several reasons. First, by maintaining the current deadline, agencies that do not determine that phased enforcement is appropriate will immediately transition to full card-based enforcement on May 7, 2025. This allows the security benefits of REAL ID to be fully realized in contexts where full enforcement poses little risk of creating other security risks, interfering with operational feasibility, or disrupting public services. If the deadline is extended, agencies that could immediately transition to full enforcement are unlikely to do so before the new deadline, delaying security benefits that would otherwise be available. DHS expects that a significant number of agencies will begin full enforcement on the deadline because doing so is appropriate within their operational context.

Second, DHS believes that the approach provided by this rulemaking is likely to have a positive impact on the REAL ID adoption rate, but that an extension would not incentivize an increase in demand for REAL ID-compliant DL/IDs. Because of the history of extensions related to REAL ID enforcement, DHS expects that there is some confusion, lack of awareness, and apathy associated with the May 7, 2025, deadline. Given the prior history, DHS believes that the public may continue to expect that additional extensions are likely and not feel urgency to obtain a REAL ID until DHS demonstrates that another extension is unlikely. Further, since the most recent extension in March 2023, DHS has observed the rate of growth in adoption of compliant DL/IDs remains very low (0.56 percent). As a result, DHS believes that further extensions of the card-based enforcement date are not an effective means of incentivizing changed behavior.

Instead, DHS expects that allowing agencies to enforce the May 7, 2025, deadline through a phased approach will incentivize increased demand for REAL IDs in at least two ways. First, it will incentivize increased adoption rates as the deadline approaches. In part due to concerns related to low adoption rates, DHS has previously extended the card-based deadline several months before the enforcement date, limiting the effect of urgency to obtain a compliant DL/ID related to the deadline. As the deadline approaches, and DHS does not issue an extension, DHS expects individuals that were otherwise relying on another extension to obtain a compliant DL/ID.

Second, DHS expects individuals who may not be aware of the deadline to be incentivized to obtain a compliant DL/ID when they experience the consequences of enforcement. During the phased enforcement period individuals will experience varying levels of consequences including warning notices and progressive enforcement (as part of a phased enforcement plan), or full enforcement (where agencies transition to full enforcement on the deadline). These consequences will incentivize individuals who experience them to obtain a REAL ID. Further, because the individuals who most frequently use their DL/ID for REAL ID purposes will be the most likely to experience consequences, DHS expects that phased enforcement will especially incentivize increased adoption amongst this population. This will in turn lessen the likelihood of disruption when agencies transition to full enforcement because the individuals who most often use State-issued DL/IDs for REAL ID official purposes will have been motivated to obtain a REAL ID during the phased enforcement period. Additionally, individuals may share their experience with personal contacts, potentially incentivizing others to obtain a compliant DL/ID. DHS expects that as awareness that REAL ID is being enforced becomes widespread, individuals who intend to use their DL/ID for official purposes will be motivated to obtain a compliant DL/ID.

C. Broad DHS Approach

This proposed rule represents one aspect of DHS' broad approach towards transitioning to enforcement of the REAL ID requirements on May 7, 2025. Although this proposed rulemaking is critical to providing agencies with the necessary flexibility to ensure a smooth transition to full card-based enforcement, DHS is engaged in a number of efforts to improve adoption rates. This layered approach includes heavy engagement with States that have low REAL ID adoption rates, a public advertising campaign raising awareness of upcoming REAL ID enforcement and the benefits of obtaining a REAL ID,⁴³ and engagement with the travel industry. This proposed rule, in combination with these other efforts, works to lay the necessary foundation for transitioning the nation to enforcement of REAL ID requirements on May 7, 2025.

D. Phased Enforcement Guidance

Under this proposed rule, agencies would have broad discretion to determine the structure of their phased enforcement plan so long as they comply with the requirements in the rule to:

(1) Make a determination that a phased enforcement plan is appropriate in consideration of relevant factors including security, operational feasibility, and public impact;

(2) Coordinate the phased enforcement plan with DHS;

(3) Make the phased enforcement plan publicly available on the agency's web page; and

(4) Achieve full enforcement of the carb-based REAL ID requirements no later than May 5, 2027.

The required coordination with DHS will provide DHS with visibility on government-wide implementation of REAL ID as well as allow DHS to serve in liaison role between agencies where there may be overlapping equities. During the coordination process, DHS seek to provide agencies guidance on how best to use their phased plan to transition to full enforcement. DHS may offer feedback or suggestions related to an agency's plan during this process. However, as long as agencies comply with the proposed requirements in this rule, they would have broad discretion to structure their plans.

As guidance to Federal agencies and to promote consistency, DHS provides the below discussion and examples of enforcement models as options agencies may consider if they determine that a phased approach to REAL ID card-based enforcement on May 7, 2025, is appropriate. DHS anticipates that informed compliance would be the enforcement model best suited for most agencies that determine phased enforcement is appropriate. Federal agencies that do not make a determination that phased enforcement is appropriate and do not coordinate a phased enforcement plan with DHS must begin full card-based enforcement on May 7, 2025. Under full card-based enforcement, Federal agencies may only accept a State-issued DL/ID for official purposes if that DL/ID is issued in accordance with REAL ID requirements by a REAL ID-compliant State.

Informed Compliance Model. Under an informed compliance model, agencies would provide written and verbal notice to any individual that seeks to use a valid, unexpired, noncompliant DL/ID for an official purpose on or after the card-based enforcement date of May 7, 2025. Individuals would then be permitted to continue the process for accessing a Federal facility or boarding a commercial aircraft. The written notice agencies provide should inform the individual that their DL/ID is noncompliant with REAL ID requirements, that they should contact their DMV for further information regarding obtaining a REAL ID, the date on which the agency will either begin fully enforcing REAL ID requirements or will proceed to a subsequent enforcement phase, and what to expect if the individual presents a noncompliant DL/ID and no other acceptable form of identification after that date. An accompanying verbal notice should briefly summarize the written notification and, at a minimum, inform the individual they are not in compliance with REAL ID requirements and direct the individual to reference the written notice. Under this model, agencies would not maintain a record of individuals who have presented a noncompliant DL/ID and have been issued a notice. Individuals who present an alternate acceptable form of identification (for example, a passport at the TSA checkpoint) would not receive a noncompliance notification. Under this model, agencies would continue to employ existing security and identity verification processes to confirm the authenticity and validity of the noncompliant DL/ID presented.

DHS has previously utilized an informed compliance model to balance the need to begin enforcement of an identity verification-related mandate while minimizing the impact of enforcement on commerce. DHS effectively employed Informed Compliance as an enforcement mechanism for 6 months after it began enforcing the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). SAFETEA-LU mandated that all foreign commercial hazardous materials (hazmat) licensed drivers were required to pass a background check that was comparable to that required under the USA PATRIOT Act for U.S. commercial hazmat drivers. DHS determined that the background check required to obtain the U.S. Customs and Border Protection Free and Secure Trade (FAST) card was comparable to that required for U.S. licensed commercial drivers. However, DHS estimated that at the start of enforcement, a large number of drivers would not have accomplished the background check process, and there was risk of significant impact to cross-border commerce. DHS implemented a 6-month period of Informed Compliance at the start of enforcement. At border checkpoints, foreign commercial drivers who did not have the FAST background check were provided a written notice that they were not in compliance and had until a final enforcement date to achieve compliance, but were allowed to drive in the United States in the interim. After the period of Informed Compliance, drivers without the appropriate background check were not allowed into the United States.

Informed Compliance with Limits. Under an Informed Compliance with Limits model, agencies would limit the number of times an individual may present a noncompliant DL/ID for an official purpose. Once an individual exceeds the prescribed number of allowable attempts, they would be denied the ability to use their noncompliant DL/ID for the REAL ID official purpose ( e.g., use the noncompliant DL/ID for purposes of accessing a Federal facility) if they have no other acceptable form of identification. Employing this model would likely create significant requirements and obligations for the agency. Specifically:

1. The agency would collect personally identifiable information (PII), including name, DL/ID State, and DL/ID number, as well as other information necessary to identify and communicate reliably with the individual. This PII would need to be collected, maintained, and used in accordance with all applicable Federal guidelines and requirements related to collection of PII. This may require agencies to obtain an Office of Management and Budget (OMB)-approved Paperwork Reduction Act (PRA) information collection and prepare a Privacy Impact Analysis, System of Record Notice, and other documentation for collection, storage, and use of PII.

2. The individual would attest that the PII provided is theirs and accurate.

3. The agency would need to be able to demonstrate that they delivered a notification of noncompliance to the individual ( i.e., email, text, or other record of transmittal to address acknowledged by individuals).

4. The agency would need to obtain the individual's acknowledgement of receipt of the noncompliance notification at the time the individual presents the noncompliant DL/ID.

5. The agency would need to develop a system to track the number of instances the individual presented a noncompliant DL/ID and no other acceptable ID (violations).

6. The agency would need to determine a limit on the number of times an individual may be authorized access after presenting a noncompliant DL/ID and no other acceptable form of identification.

7. The agency would need to define an appropriate period of time (in days/weeks) during which the individual may continue to use a noncompliant DL/ID for purposes of accessing the agency, after which the applicant would be given another notification of noncompliance if they again presented a noncompliant DL/ID (in other words, how long individuals may continue to use their noncompliant DL/ID on the same “strike” before incurring a subsequent “strike”).

Agencies would need to choose an appropriate time period during which individuals can continue to use the noncompliant DL/ID without it being treated as an additional instance of noncompliance (“strike”). Agencies should choose a time period appropriate to their operations. For agencies where the identity verification for official purposes is rare or isolated, it may be appropriate to treat each time an individual presents a noncompliant DL/ID as an instance of noncompliance. However, DHS believes that in certain cases individuals may need to use their DL/ID for a REAL ID official purpose for multiple instances within a short period of time ( e.g., boarding a return flight from a destination or returning to a Federal facility to follow-up on the purpose of the initial visit). Individuals may not be able to obtain a REAL ID in between such related instances, so in these cases agencies may choose a time period that allows for multiple uses of a noncompliant DL/ID as part of the same instance of noncompliance. After the allotted time period expires, the presentation of a noncompliant DL/ID would be treated as another instance of noncompliance.

Agencies employing an Informed Compliance with Limitations model should provide individuals who present a noncompliant DL/ID with specific notice whenever an instance is being counted towards that individual's limit. The notice should reference the agency's overall policy and how the particular instance would affect the individual in the future. Agencies may choose to adopt different nomenclature for initial and subsequent instances of an individual presenting a noncompliant DL/ID. DHS recommends that the language and consequences of subsequent notifications under this model should progress in seriousness. For example, assume an agency chooses to permit access on the first two instances of noncompliance and deny access on the third (and any subsequent instance). Agencies may choose to refer to the notice issued to an individual presenting a noncompliant card for the first time as a “warning” and a notice issued on a subsequent instance counting against that individual's limit as “counseling.” Upon the third instance, the individual would be issued a “final” notification that their State-issued DL/ID is noncompliant and can no longer be used for the REAL ID official purpose. The Federal agency would deny access to the individual at that time and on all future instances unless the individual obtains a REAL ID or presents an alternative, acceptable form of identification.

DHS acknowledges that an Informed Compliance with Limitations enforcement plan would likely demand significant agency resources. DHS expects many agencies to begin full enforcement on the May 7, 2025, deadline. Of the agencies that do determine a phased approach is appropriate, DHS expects most will use a simple plan that provides a time-limited warning period ( i.e., “Informed Compliance”). Given the resources required, including the need for secure systems, DHS expects very few agencies to choose an enforcement plan that tracks individual instances of noncompliance.

Additional Considerations. Agencies may determine to implement a phased approach that employs one of these models followed by full enforcement. For example, an agency may choose to begin enforcement with an Informed Compliance Phase or Informed Compliance with Limits Phase for a set period of time ( e.g., 3 months, 6 months, 1 year) followed by a transition to full enforcement at the end of that period. Alternatively, agencies may develop a plan that combines both models before transitioning to full enforcement. For example, an agency may begin enforcement with an initial Informed Compliance Phase for a set period of time, followed by an Informed Compliance with Limits Phase for an additional period of time, before beginning full enforcement. Agencies would have the flexibility to determine the model(s) and timing that best suit their operational environment.

Although DHS believes the models discussed above are likely to be the most common and effective, they are not exclusive. Agencies may develop plans based on other models. However, all phased enforcement plans, whether based on the above models or a different model must be coordinated with DHS and must conclude, and agencies must fully enforce REAL ID card-based requirements, no later than May 5, 2027. For agencies that make a determination that phased enforcement is appropriate, the same factors that they considered to make that determination should inform their determination of how to structure their plan.

Finally, although REAL ID adoption rates should inform agencies when developing their enforcement plans, agencies' plans should be consistent across all States and territories. In other words, agencies should have a consistent national policy and individuals should not be subject to different consequences based on the adoption rate of a particular jurisdiction. To reduce the potential for confusion, ensure fair and equitable treatment of residents of all States, and ensure operational consistency, agencies that have operations or facilities spanning multiple States and territories should have one plan for all their facilities. Agencies' plans may make distinctions based on the types of facilities they operate ( e.g., agencies may wish to begin full enforcement at certain types of facilities but use a phased approach at another type of facility) as long as the same policies apply to the same types of facilities nationwide and treat all DL/ID holders similarly. For example, agencies may choose to begin full enforcement at their headquarters facility while implementing a phased approach at field offices where the public more frequently seeks to use DL/IDs for official purposes, but (in this example) the same phased enforcement policy should apply to all field offices no matter where they are located. Agencies should provide information regarding their plans on their website and take other appropriate measures to inform the public and provide notice regarding their plan.

DHS acknowledges that some agencies may maintain offices in or conduct operations out of leased facilities or multi-tenant facilities where the agency does not have direct control over the access control policies of the facility. Agencies leasing space in their facilities to other agencies and lead tenants as part of facility security committees determining physical security polices for multi-tenant facilities should develop plans that take into account the operations of tenant agencies and potential public impact associated with those operations when developing phased enforcement plans. As previously discussed, agencies may make distinctions based on the types of facilities they operate. Depending on the context, it may be appropriate for an agency developing a phased enforcement plan to draw a distinction between facilities that are shared by with agencies and facilities that are used solely by the agency developing the plan.

IV. Regulatory Analyses

A. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) requires that DHS consider the impact of paperwork and other information collection burdens imposed on the public and, under the provisions of 44 U.S.C. 3507(d), obtain approval from the OMB for each collection of information it conducts, sponsors, or requires through regulations. This proposed rule itself does not directly call for new collection of information under the PRA as the rulemaking relates to Federal agency submission of phased enforcement plans which are not covered under the PRA. However, agencies that utilize a phased enforcement plan, depending on the requirements associated with their respective plan, may need to submit or modify an OMB information collection request.

B. Economic Impact Analyses

1. Regulatory Impact Analysis Summary

Changes to Federal regulations must undergo several economic analyses. First, Executive Order (E.O.) 12866 of October 4, 1993(Regulatory Planning and Review), as supplemented by E.O. 13563 of January 21, 2011 (Improving Regulation and Regulatory Review), and E.O. 14094 of April 6, 2023 (Modernizing Regulatory Review) directs each Federal agency to propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (RFA) requires agencies to consider the economic impact of regulatory changes on small entities. Third, the Unfunded Mandates Reform Act of 1995 (UMRA) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million ($183 million in 2023 dollars) or more annually (adjusted for inflation).

2. Executive Orders 12866, 13563, and 14094 Assessment

Under the requirements of E.O. 12866, as amended by E.O. 14094, agencies must assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). These requirements were supplemented by E.O. 13563, which emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

DHS summarizes the findings:

• In accordance withE.O. 12866, the Office of Management and Budget (OMB) has designated this rulemaking a “significant regulatory action” as defined under section 3(f) of E.O. 12866, as amended by E.O. 14094 but not significant under section 3(f)(1). Accordingly, the proposed rule has been reviewed by OMB.
• The Secretary, pursuant to5 U.S.C. 605(b), certifies that the proposed rule would not have a significant economic impact on a substantial number of small entities. The proposed rule would only be applicable to Federal Government agencies, who under the RFA are not considered small entities.
• This proposed rule is not likely to result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million ($183 million in 2023 dollars) or more annually (adjusted for inflation) such that a written statement would not be required under UMRA.

a. OMB A-4 Statement

The OMB A-4 Accounting Statement presents the annualized costs and benefits, as well as the qualitative benefits of the proposed rule.