Michael Reynolds
Jason Orr
In a statement, Governor Snyder touted Michigan as “the global center for automotive technology and development.” Governor Snyder’s message may have been directed at California, where Silicon Valley’s “disruptors” have challenged Detroit’s Big Three in the development of the next generation of vehicle technologies.
This year, the California Department of Motor Vehicles (DMV) sought public comment on draft regulations that would allow driverless cars to be deployed on public roads. While these draft regulations are more permissive than an earlier draft released in 2015, the DMV has taken a more cautious approach than that set up by the Michigan legislature.
In particular, the draft regulations would require extensive certification and reporting by automakers, and would force automated vehicles testers to interface with local municipal and law enforcement agencies.
At present, there are few states with laws that expressly allow automated vehicles to operate on public roads. Most state law is silent on the issue. The new Michigan law and California’s regulations present two competing approaches to balancing the desire for innovation with concerns about public safety.
With a few exceptions, Michigan’s legislature has taken a more permissive approach that creates fewer barriers for automakers and other developers of automated vehicle technology to experiment with different technologies and business models.
By contrast, the California DMV has proposed a more tightly regulated regime where any deployment of automated vehicles could be vetted and scrutinized by state officials prior to vehicles hitting the road.
As competing laboratories of democracy, Michigan and California may serve as templates for other states considering automated vehicle regulations. Then again, states may adopt neither approach, and simply continue their regulatory silence to allow the technology to develop further.
Michigan’s New Law Promises Room To Innovate
Prior to the passage of the new automated vehicles legislation, Michigan law had permitted only the testing of autonomous vehicles and only with a human driver present at all times. The new legislation removes these limitations, which had been criticized by manufacturers and developers of autonomous vehicle technology.
Senate Bill 995 explicitly authorizes the operation of “an automated motor vehicle ... on a street or highway in this state” and removes the prior requirement that an automated vehicle have a human driver present in the vehicle ready to take control. In a press release, Governor Snyder promised that “[a]ll safety requirements that pertain to the testing of autonomous vehicles will apply to autonomous vehicle operation.”
The law contains several other key provisions:
On-Demand Networks
The legislation provides for two types of on-demand networks. The first, called a “SAVE project,” is operated by an eligible motor vehicle manufacturer. The second may be operated by non-manufacturers but must include vehicles that are “supplied or controlled” by a manufacturer.
Though somewhat ambiguous, the new legislation potentially limits on-demand automated vehicle networks to established automakers or companies who partner with them. The legislation also precludes local authorities from imposing fees or regulations on on-demand networks — at least through 2022.
Vehicle Platooning
The law allows for vehicle "platoons” — a group of vehicles (such as commercial trucks) that travel “in a unified manner at electronically coordinated speeds.” Laws requiring safe following distances will not apply to “platoons” under the new legislation, but platoon operators would have to ensure “reasonable access for other vehicles to afford those vehicles safe movement among lanes or exit or enter the highway.”
A platoon operator must submit a general plan for platoon operations with the Michigan Department of State Police and the State Transportation Department. However, the legislation does not specify any criteria or standards by which such platooning plans will be evaluated.
Automated Sysem As Driver
The law clarifies that, for the purposes of applying existing traffic and motor vehicle laws, the “automated driving system” (when engaged) is considered the “driver” or “operator” of an automated vehicle. It also clarifies that “texting-while-driving” bans do not apply to people using licensed automated vehicles or on-demand automated vehicle networks.
No Liability For Third-Party Modifications
The law immunizes manufacturers of automated driving technology from liability arising out of modifications to a vehicle or its automated driving system that are made without the manufacturer’s consent. While the scope and effect of the immunization are not entirely clear, the legislation aims to provide some assurances to manufacturers that they will not be held liable for aftermarket modifications performed by consumers or third parties.
Council On Future Mobility
The law establishes a “Michigan council on future mobility” for providing policy recommendations to the legislature and state government agencies “to ensure that [Michigan] continues to be the world leader in autonomous, driverless, and connected vehicle technology.”
The council will consist of individuals representing local governments, industry, academia, insurance interests, the legislature and state agencies, and will submit its initial recommendations by March 31, 2017.
On balance, the Michigan legislation allows a wide variety of automated vehicle applications, and it removes some of the barriers in the state’s traffic laws that could have prevented, for instance, truck platooning. These changes remove, for operations in Michigan, much of the uncertainty that exists in other states where no automated vehicles regulations exist.
The Michigan law may create new barriers, however, to the extent that on-demand automated vehicle networks are restricted to legacy automakers.
California Draft Regulations Seek Control And Oversight
At present, automated vehicles can only operate on California roads for testing purposes and only with an authorized test driver sitting in the driver’s seat.
But on Sept. 30, 2016, the California DMV released a revised draft of regulations that would potentially pave the way for manufacturers to market and deploy autonomous vehicles on California roads, including truly driverless cars with no steering wheel, accelerator or brake pedal.
The new draft regulations incorporate the extensive public comment received in response to the agency’s December 2015 draft, as well as the NHTSA’s federal guidance on automated vehicles. While potentially a step towards more innovation-friendly rules, the draft regulations are far from becoming binding rules.
The draft regulations are not a formal rulemaking, but rather, as the DMV characterizes them, “the next step in an iterative process” to collect feedback that “will be used to inform a future rulemaking by the DMV.”
The DMV has already received extensive public comment on the new draft, and it will take those comments into consideration in creating a new draft or an official proposed rule. The DMV has not issued a timeline for promulgating a formal rulemaking.
Compared with the previous draft, the DMV’s new draft regulations display a more permissive approach to regulating autonomous vehicles:
- The regulations no longer require a driver behind the wheel of every autonomous vehicle, allowing for the testing and deployment of vehicles that are not equipped with steering wheels, manual brakes or other devices that would allow a human driver to take control.
- The DMV no longer contemplates developing its own vehicle performance or testing standards, instead incorporating NHTSA’s Automated Vehicle Performance Guidance.
- The revised draft regulations would not create a special driver’s license certificate for anyone operating an autonomous vehicle.
Under the draft regulations, manufacturers would still be required to apply for and obtain special permits from the DMV before testing or deploying autonomous vehicles on public roadways.
The proposed permitting regime envisions a slightly different process depending on whether the manufacturer seeks to test or deploy vehicles, and on whether those vehicles would have a driver present at all times or no driver at all. For post-testing deployment of autonomous vehicles, the DMV’s draft regulations also envision a continuing role for manufacturers after their products have been sold, requiring regular software updates to deployed autonomous vehicles.
The California draft regulations’ paperwork-intensive permitting regime creates barriers for any operator seeking to deploy automated vehicles on public roads. For these would-be operators, obtaining a government permit before opening for business means additional delay, legal fees and potentially restrictions on how the business or its services are structured.
If the final regulations adopt the same basic approach as the draft regulations, California would be among the most regulation-heavy states for automated vehicles.
Conclusion
States are competing to become a locus of the automated vehicle industry and the economic growth that might accompany that industry.
The Michigan legislation and California’s proposed regulations may signal divergent approaches: Michigan’s permissive approach invites businesses to try out new technologies and business models, while California’s restrictive approach prioritizes certainty in the safety of the technology.
Of course, neither approach is guaranteed success, and other states may well attract automated vehicle developers without adopting any regulatory regime at all.
Michael W. Reynolds, counsel at O’Melveny Myers LLP, and Jason A. Orr, an associate at the firm, are both based in Los Angeles.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.