In his last State of the Union address this week, President Obama only briefly mentioned building a "21st century transportation system."

But later this week, Secretary of Transportation (DOT) Anthony Foxx made an appearance at the auto show in Detroit, flanked by representatives from Ford, Delphi, and Google, to announce details of a $4 billion federal initiative to help usher in autonomous cars.

"We are entering a new world here, and we know it," said Foxx at the North American International Auto Show, as The New York Times reported. "We are bullish on autonomous vehicles," he added. "The actions we are taking today bring us up to speed."

Earmarking $4 billion in the President's proposed budget for the next fiscal year is a big step, and one that Obama previously took at about the same level to spur innovation in clean energy last year. Similarly, the federal money proposed for driverless car initiatives will be spent over a long period of time, 10 years, and mostly on pilot programs and research projects.

The proposal, which needs congressional approval before it's a reality, will bring federal regulators together with automakers and Silicon Valley companies to help create rules and best practices for vehicles that drive themselves. It would also set up pilot programs around the country for testing technologically advanced safety features (hybrid autonomy, if you will) that help drivers avoid crashes.

Loosening, Updating Rules

If the initiative goes forward, expect to see more autonomous vehicles on the roads near you. That's because part of the initiative involves providing car manufacturers with a direct line to the National Highway Traffic Safety Administration (NHTSA) to submit something called "rule interpretation requests."

Those requests will give car companies the chance to be granted exemptions if a vehicle safety standard currently on the books is too restrictive or misapplied to autonomous technologies.

One example cite by Foxx was the case of BMW, whose remote self-parking system didn't exactly fit the safety standards on the NHTSA books, but after review, was determined to comply.

The result could be more features being tested in the real world, along with collaboration between technology and auto companies with the government to update regulations as the technology develops.

In addition, there are already some exemptions being made by the NHTSA, like one that allows up to 2,500 fully autonomous vehicles to be tested on roads for two years, as long as the agency determines such exemptions are accelerating the development of new safety features.

Guiding Regulation, But Leaving States in Charge

Though much of the proposal involves researching and adjusting policy to help autonomous technologies make the roads safer, it doesn't involve setting national policy, per se.

The DOT instead will create policy guidelines and best practices based on the research and programs it funds, and provide those to state governments. It's the states that regulate the minutia of driving on U.S. roads, such as speed limits, licensing requirements, and so on, and under Obama's driverless car initiative, they would retain that control.

That may end up in quite a mess, especially for companies trying to test real world conditions and early pilot programs for autonomous cars.

For example, Google is rumored to be working on a limited driverless ride-sharing business to launch in northern California and Austin, Texas this year.

After California's DMV released a draft proposal for autonomous vehicles, Google may only launch in Texas. California's proposed regulations would require any autonomous vehicle to have a licensed human behind the wheel, responsible for taking control of the vehicle if necessary and also legally responsible for any traffic violations the car may commit -- defeating the purpose of a driverless car taxi service.

Though it's not law yet, the California proposal hints at a future cleaving of different states' laws on autonomous vehicles, based on how uncomfortable each set of lawmakers are with the prospect of robocars on their roads.

But the Obama autonomous car initiative hopes to provide policy guidelines quickly to nip that problem in the bud as soon as possible. The initiative sets the first deadline for the release of such guidelines at six months from now.