Lawmakers: Current liquor license law hurting small towns, American Legion posts

Law intended to halt speculators in larger cities

Courtney Steffen, South Dakota American Legion commander

PIERRE – South Dakota lawmakers find themselves in the land of unintended consequences.

Several years ago, the Legislature enacted a law that requires cities to revoke an on-sale liquor license if it hadn’t been put to use at least 60 days a year in the preceding two years. At the time, speculators in Sioux Falls were buying the licenses – which are capped by state law, based on population – and then sitting on them with the hope of reselling them at a profit.

By requiring those licenses be put in use, lawmakers hoped to end speculation and spur economic growth that accompanies new restaurants.

The intent worked in places, like Sioux Falls, where demand for licenses is high. But for smaller municipalities, not so much.

Sen. Jean Hunhoff, R-Yankton, is leading an effort with Senate Bill 148 to get the law changed so that cities would have flexibility to reissue an on-sale license, even if a business did not put it into use for a full 60 days a year.

That’s important, she said, because many of South Dakota’s smaller communities might only have an American Legion post with an on-sale license. And they might not be open 60 days a year because of declining membership.