Senate passes ESC overhaul

The Senate approved its version of reform for the troubled state Employment Security Commission on Wednesday, agreeing to move the agency to a Cabinet-style form of government led by a governor-appointed director.

Along with House-passed legislation approved last week, the Senate's move means significant changes for the agency that manages South Carolina's jobless benefits.

Under the bill approved by the Senate Wednesday, the three commissioners that now oversees the agency would be reduced to hearing officers, at a lesser salary yet to be determined.

The three would stay on until new hearing officers are named next year. The commissioners could seek those slots.

The agency's new head, an executive director, would take over the agency a year from now, in March 2011, meaning the agency's chief would be selected by the state's next governor.

The Senate, after nearly a year of haggling over the agency's well-publicized problems, almost hit a fatal roadblock after slogging through almost 30 amendments Wednesday.

"At the end of the day, reform was needed for this agency, and this compromise is a good compromise," said Sen. Greg Ryberg, R-Aiken, chairman of the Senate Labor, Commerce and Industry Committee, who led the Senate reform effort.

Ryberg touted several features of the legislation he deemed transformative, including the provision that sets the director's service at the will of the governor, meaning the governor has the power to remove the director at his discretion.

"It's going to foster greater accountability -- there's no question about that," Ryberg said.

The Senate bill will be tacked on to the House bill today, undergo a third reading and any technical changes that necessary, then go back to the House next week, where several options are available to deal with it.

The Employment Security Commission, which oversees job placement in the state and administers unemployment benefits for displaced workers, among other tasks, has been under fierce criticism.

Commissioners there failed to notify the General Assembly that the trust fund used to pay unemployment benefits was depleting at an unsustainable rate, even as the state's jobless rate climbed exponentially, according to recent audit findings.

That trust fund is nearly $800 million in the red now.

The agency was found to be paying out $171 million in benefits to workers fired for cause. One of the biggest changes in the Senate proposal is the agency's right to deny unemployment benefits to workers who are fired for illegal drug use. Workers also could be denied benefits for gross misconduct, which includes a laundry list of offending behavior, including reckless damage to employer property, employee theft, and criminal assault or battery against a fellow employee.

There is widespread bipartisan agreement in both the House and Senate the agency needed change.

"About every year since I've been here, one state agency or another has been under attack, and we have to come cure it of its ills," said Sen. John Land, D-Clarendon, the Senate minority leader.

The Employment Security Commission clearly was not executing its responsibilities correctly, Land said, and had the misfortune of many things going wrong at the same time.