Background

The Commission initiated this rulemaking by an order instituting rulemaking (OIR) issued May 8, 2000. The OIR stated that the proceeding's purpose is to implement the requirements of SB 669 with respect to the DDTP. The OIR included issues related to whether SB 669 mandated or warranted changes to the administration of the program.

Parties had the opportunity to submit opening comments on the issues set forth in the OIR on May 30, 2000, and reply comments on June 19, 2000. In September 2000, the Commission held public participation hearings in Oakland, Sacramento, Ontario, and San Diego. On October 2, 2000, the Commission held a workshop in San Francisco. In addition, individuals and groups sent e-mails and letters to the Commission in response to bill inserts describing this proceeding.

On May 3, 2001, the Commission's staff submitted its "Report to the California State Legislature by the California Public Utilities Commission Pursuant to Senate Bill 669" (SB 669 Report or Report). The SB 669 Report detailed a transition plan for the transfer into the State Treasury of six funds associated with the telecommunications public purpose programs created and operated by the Commission.

However, with respect to the DDTP, the Report identified a fundamental ambiguity in the provisions of SB 669, relating to whether the approximately 70 DDTP employees - many with specialized skills and experience -- must become state employees or may remain outside the employ of the state. The Report noted that, under state law, the State Controller may not pay employees of any entity that is not a state agency, unless those employees are working for an organization under contract to a state agency. (Report at 10.) Currently, the DDTP staff members are not employees of a state agency, but rather of a quasi-governmental non-profit corporation subject to Commission oversight. In addition, there is currently no contract between the Commission and the DDTP for the provision of services, and SB 669 does not explicitly authorize such a contract. (Report at 10, 13.) On the other hand, SB 669 codifies the existence of the DDTP Administrative Committee, which is authorized to advise the Commission regarding telecommunications programs to serve the deaf and disabled communities, as well as to "carry out" such programs under the Commission's direction, control, and approval. (Report at 11-13, citing Public Utilities Code Section 278(a)(1).) Consequently, the Report sought legislative guidance and clarification regarding whether the Legislature intends for the DDTP staff to continue to operate outside the employ of the state pursuant to a legislatively-authorized contract or whether the Legislature intends for the DDTP staff employees to become civil service employees of the Commission.¹ (Report at 13-17.)