The first draft rules, released Wednesday by the state Department of Motor Vehicles, aims to address the thorny questions involving autonomous vehicles around licensing, registration, certification, safety—even cybersecurity and privacy. In the process, the DMV has placed strict limits on the emerging technology and angered companies hoping to profit from it.

The rules prohibit the use of fully autonomous driverless cars that don’t have a steering wheel or a brake pedal—like the prototype that Google (GOOG) has developed. A licensed operator must be present inside the vehicle and be capable of taking control at all times if the technology fails or there is another emergency.

Google and other companies are working to perfect self-driving car technology, considered by many to be the future of travel. The tech giant is creating a test fleet of gumdrop shaped autonomous vehicles in hope of commercializing them by 2020, pitching them as a safer and more convenient alternative to traditional cars.

“We’re gravely disappointed that California is already writing a ceiling on the potential for fully self-driving cars to help all of us who live here,” Google said in a statement Wednesday.

The DMV argued in its rules that manufacturers must further testing driverless vehicles on public roads prior to making this technology available to the general public. More rules will be come later, the DMV said.

The state also banned manufacturers from selling autonomous vehicles, creating a potentially huge problem for carmakers. Instead, companies would only be able to lease self-driving cars, the DMV said without explaining why.

The regulations, if approved, affect more than just Google. A strict interpretation of the rules would prevent companies working on driverless self-parking features like Tesla Motors (TSLA) and Mercedes-Benz from deploying its technology. It could also force Google—and any other company working on the same technology—to test fully autonomous vehicles in other states like Texas or Nevada.

Tesla issued a statement saying it’s “reviewing the draft and will continue to work with officials to ensure that any necessary new regulations support continued innovation in new beneficial technologies.”

The DMV will host two public forums on Jan. 28 in Northern California; and Feb. 2 in Southern California.

Other key points in the rules:

• The regulations place responsibility for traffic violations on the car’s operator, even when the vehicle is driving itself.
• Manufacturers must certify that their autonomous vehicles comply with specific vehicle safety and performance requirements, including functional safety and behavioral competency. A third-party testing organization must verify the vehicle can perform key driving maneuvers that are typically encountered in real-world driving conditions.
• Manufacturers approved for deployment will initially be issued a three-year deployment permit. As a condition of this provisional permit, autonomous vehicles can only be operated by the manufacturer or made available to the public on no more than a leased basis.
• Manufacturers must submit monthly reports on the performance, safety, and usage of their autonomous vehicles. Manufacturers must also report accidents that occurred while the vehicle was in autonomous mode and any safety-related defects in their autonomous technology. [Google already shares an accident and progress report with the public every month.]

The rules also place restrictions on how manufacturers collect data from self-driving cars. Manufacturers not only have to provide consumers written disclosure of any information collected by the autonomous technology that isn’t related to safety, they also will have to obtain written approval to gather this data.

The autonomous vehicles will also have to be able to detect, respond, and alert the operator to cyber attacks. In the event of such an alert, the autonomous vehicle operator will have the capability to override the autonomous technology, the DMW says.

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For more on Google’s self-driving cars, check out this video:

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