COLUMBIA - With Hilton Head Island and Myrtle Beach at the end of rivers that nearly dried up during last year's drought, South Carolina can't afford to reach that precipice again.

The state needs to negotiate an agreement with Georgia on the use of Savannah River water, demand protection in federal relicensing of dams on upstream lakes in North Carolina and consider tighter regulation of its own water, a group of experts decided Tuesday.

The Water Law Review Committee, appointed by Gov. Mark Sanford, suggested several major changes in how the state deals with water issues. The final draft of the report will be completed in January. Then it's up to Sanford and state legislators to act on the suggestions.

Committee Chairman Steve Spitz noted the need for the governor and the General Assembly to take action soon. Officials in the fast-growing Atlanta area already have begun talking about importing water from the Savannah. The relicensing process already has begun for some N.C. dams. And the four-year drought that ended last year showed the state's water supply isn't unlimited.

The committee suggested Sanford begin work on a formal compact with Georgia and the federal government, which through the U.S. Army Corps of Engineers manages lakes Thurmond, Russell and Hartwell on the Savannah.

"We need to take the initiative to make that happen, because if we don't take the initiative, it's not going to happen," said Dean Moss, general manager of the Beaufort-Jasper Water and Sewer Authority.

The compact could address such issues as how much water either state could pipe to communities or industries and how much pollution could be released into the river. A major concern is whether utilities would be allowed to sell the Savannah River water to other areas, such as Atlanta.

"We share 300 miles of river that's a state line," Moss said.

"The opportunity for conflict exists on every one of those miles."

While the committee left open the possibility of a compact with North Carolina regarding the Yadkin-Pee Dee and Catawba river basins, the focus in that area will be the Federal Energy Regulatory Commission's relicensing of dams on those rivers in North Carolina.

"It's critically important for the state of South Carolina to use all of its agencies and all of its regulatory powers" to convince the federal agency to ensure a sufficient flow of water from those dams, Spitz said.

During the recent drought, N.C. officials agreed to release enough water from the dams to prevent salt water from the Atlantic from entering Myrtle Beach's water supply. S.C. officials want those sorts of emergency release requirements built into new licenses approved over the next few years.

To help make the case for cooperation in North Carolina and Georgia, the committee recommended making S.C. regulations more compatible with our neighbors' rules.

Currently, the state has few regulations on how much water a utility or industry can withdraw from a river or lake unless drought restrictions are in place.

Georgia and North Carolina have withdrawal permit systems.