COLUMBIA - It's time to ditch some facets of the state workers' compensation system and overhaul others, according to a report released Monday by a panel Gov. Mark Sanford appointed to address soaring workers' comp rates.

Changing the system is the key to making the state a better place to grow businesses and create jobs, the Republican governor said.

In June, the National Council on Compensation Insurance said a key part of workers' compensation rates would rise by nearly 33 percent.

A few weeks later, the South Carolina Second Injury fund said workers' comp insurers and self-insured employers would see assessment rise by 38 percent.

Sanford said the rising trend in workers' comp costs "is simply not sustainable for South Carolina's businesses, and especially our small businesses."

Sanford spokesman Joel Sawyer said the governor will review the report.

Report recommendations include:

--Increasing fraud penalties for employers who lie about what type of work their employees do and benefit through lower workers' comp premiums. Employers that save $10,000 through fraud could be sent to prison for three years and fined $10,000.

--Eliminating the Second Injury Fund, set up to help workers with previous workplace injuries return to payrolls.

--Developing guidelines to limit how much employers would have to pay for injuries tied to previous injuries.

--Barring reimbursements for using doctors who are not approved by employers to treat workers' comp injuries.

--Limiting awards for mental stress disabilities by requiring people to prove that more than half of that disability came from a workplace injury.

--Using American Medical Association guidelines to determine how much disability a person has.

--Limiting claims for repetitive trauma. The panel said injuries would have to be tied to a specific event that occurs during a single day's work and can't be tied to aging or other "normal activities of day-to-day living."

--Changing the way the South Carolina Workers' Compensation operates, including who serves on the board and how claim appeals are handled.