LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
SENATE, No. 1297
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 3, 2025
SUMMARY
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Synopsis: |
Requires MVC to create digital driver’s licenses and digital non-driver identification cards. |
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Type of Impact: |
Annual State expenditure increase; annual State revenue increase. |
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Agencies Affected: |
New Jersey Motor Vehicle Commission. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Years 1-3 |
Year 4 and After |
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State Expenditure Increase |
Indeterminate |
Indeterminate |
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State Revenue Increase |
No Impact |
Indeterminate |
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· The Office of Legislative Services (OLS) finds that the State will incur indeterminate start-up costs to create digital driver’s licenses or digital non-driver identification cards, including the costs to design these electronic documents and other costs associated with information technology changes that such electronic documents will require. Because the OLS is unable to predict how the program will be implemented, does not have information about associated information technology hardware and software costs, and notes that the bill will not take effect until three years after enactment, the cost and revenue estimates for the bill, as well as their timing, are indeterminate.
· Beginning three years after the date of enactment, the bill would also result in indeterminate costs for the issuance of the digital driver’s licenses or digital non-driver identification cards as well as any continuing information technology costs associated with the maintenance of the digital driver’s license or digital non-driver identification card system. These costs will be offset to a certain degree by annual revenues collected by the New Jersey Motor Vehicle Commission for the electronic documents. The OLS is unable to determine the likely amounts of these revenues because the bill gives the commission discretion in setting fees for the digital driver’s licenses or digital identification cards, so long as the fees are reasonable.
BILL DESCRIPTION
This bill requires the Motor Vehicle Commission to create and issue a digital driver’s license or digital non-driver identification card to any individual who requests such electronic documentation in addition to the printed, hard-copy version. The commission is authorized to charge and collect a reasonable fee for the issuance of digital driver’s licenses or digital non-driver identification cards.
The bill requires the commission to prescribe a process for the issuance of digital driver’s licenses and digital non-driver identification cards to prevent and detect the alteration, duplication, counterfeiting, photographing, forging, or other modification of the digital driver’s license and digital non-driver identification card. The bill also requires digital driver’s licenses, digital non-driver identification cards, and the motor vehicle records associated with such documentation to comply with certain provisions of current law concerning basic driver’s licenses and identification cards.
Under the provisions of the bill, a verifier is prohibited from taking certain action as provided in the bill. A verifier that violates the bill’s provisions is to be subject to civil penalties that are permitted to be enforced by the Office of the Attorney General in a summary proceeding. Additionally, the Office of the Attorney General is permitted to issue guidance or directives, or promulgate rules and regulations, as it deems necessary to effectuate the purposes and enforcement of the bill.
The bill allows the holders of a digital driver’s license or digital identification card to update motor vehicle records and provides that the changes are to immediately become part of their motor vehicle record.
The bill is to take effect 36 months after enactment.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the creation of digital driver’s licenses and digital non-driver identification cards by the commission will result in an indeterminate one-time design cost and annual issuance and information technology costs as well as indeterminate annual State revenues. Under the bill, it is possible that the commission would not begin to issue the mobile licenses and identification cards until three years after the date of enactment. Accordingly, while the commission would incur increased up-front implementation costs before this time, annual increases in commission expenses and revenues are not expected to occur until after the third year following the date of enactment.
The cost of creating the digital driver’s licenses and digital non-driver identification cards cannot be determined without more information about how the program will be implemented and how much implementation of the program may cost three years after enactment. The annual administrative cost of the program is similarly unable to be determined and will also depend on the number of individuals applying for a digital driver’s license or digital non-driver identification card. Notably, the bill authorizes the commission to charge and collect a reasonable fee for the issuance of digital driver’s licenses or digital non-driver identification cards.
The State may experience additional revenue increases attributable to collections of civil penalties for verifiers who violate certain actions outlined in the bill. Per the bill, a first violation carries a $2,500 civil penalty with subsequent violations carrying a $5,000 civil penalty.
The bill includes a requirement that the commission include features that ensure the security and integrity of the electronic documents and that a process be in place to prevent and detect certain alterations, counterfeiting, and other modifications of the electronic documents. These requirements will result in an indeterminate one-time cost to design and produce documents with the required security features as well as ongoing annual costs to ensure the security and integrity of the documents as well as detection of various modifications of the documents.
A number of other states have implemented or started to consider digital driver’s licenses with costs varying for each state. For example, Iowa sought to implement digital driver’s licenses in 2018 with an estimated cost at that time of $3.5 million. It is also reported that Florida has a $1.8 million contract with a company to develop a smartphone identification application. It is unclear if these are final costs for development and implementation of these programs or whether they would be comparable to the costs the State would incur under the bill.
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Section: |
Authorities, Utilities, Transportation and Communications |
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Analyst: |
Associate Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).