California is officially embracing the self-driving car

The state DMV issued proposed rules for the testing and deployment of fully self-driving vehicles Friday. The news appears to clear the way for cars with an empty driver's seat to operate on state roads by year's end.

"This is a big deal," said Jason Orr, an attorney who follows autonomous vehicle law at O'Melveny & Myers. "Despite being more sensitive than other states, at the end of the day, it will potentially result in widescale deployment of autonomous vehicles."

California's DMV had long frustrated the self-driving car industry, which felt state regulators were holding back innovation that could improve public safety. The DMV previously missed a deadline for autonomous vehicle rules. And when it released rules in December 2015, it excluded fully self-driving vehicles, citing safety concerns.

Over the years, some companies, such as Google (GOOGL, Tech30) and Uber, resorted to shifting tests outside their home state.

TechnologyMarqx: 11Uber