Under California law, Vehicle Code 38750, the DMV is required to develop regulations that cover testing and public use of autonomous vehicles.
California's existing regulations, which require a human driver behind the wheel even when completely driverless cars are being tested, have been criticized by industry leaders and some politicians as too strict.
California has had rules in place for driverless vehicles since 2014. The regulations will be sent to the state government after a 15-day comment period, and should be in force by the middle of next year.
That distinction is held by Florida, which remains "the only state to expressly allow a truly driverless auto", according to Law360. States could set rules on registration, licensing, liability, insurance and safety inspections, but not performance standards.
"The new California DMV proposal wrongly relies on the federal government, when there are absolutely no federal motor vehicle safety standards applying specifically to autonomous vehicle technology", John Simpson, spokesman for the nonprofit Consumer Watchdog, said in a statement.
"Responsibility for motor vehicle safety resides at the federal level", said Brian Soublet, the DMV's chief lawyer. In addition, manufacturers must also certify their vehicles are created to operate in compliance with state traffic laws.
Consumer Watchdog also supported a provision of the regulations that would prohibit manufacturers from using language to advertise a vehicle that would lead people to believe it is more capable of self-driving than is actually the case. As of this writing, 42 different companies have been approved for permits to test autonomous vehicles on Californian public roads, and that number is likely to grow as the tech grows closer to production.
The new rules represent a compromise with automotive and technology companies, which had objected to numerous requirements previously proposed by the state. Currently, nearly 1,000 safety drivers are licensed to test those cars, but once the new rules go into effect in 2018 these members of staff will no longer be required for testing.
Currently, 285 self-driving cars are being tested on California roadways by 42 permit holders, a lot of them auto manufacturers or technology companies, according to the DMV.
The Senate version of the proposed law would not allow large driverless trucks.
"The department looks forward to seeing those companies and additional companies advance the technology under these new regulations", DMV Director Jean Shiomoto said.