FOR AN ACT ENTITLED, An Act to  create a special class of alcoholic beverage licenses for full service restaurants and to provide for compensation of certain alcoholic beverage licenses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
     Section 1.  That chapter 35-4 be amended by adding thereto a NEW SECTION to read as follows:

     Notwithstanding the provisions of § §  35-4-11 and 35-4-11.1, each municipality or county may, by ordinance, issue an unlimited number of on-sale full service restaurant licenses. For purposes of this section, the term, full service restaurant, means any establishment which has facilities for the preparation and serving of food for consumption on the premises. The on-sale full service restaurant license may only be issued if the licensee derives less than fifty percent of the licensee's gross receipts from the sale of alcoholic beverages.
     Section 2.  That chapter 35-4 be amended by adding thereto a NEW SECTION to read as follows:

     An on-sale full service restaurant licensee may:

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             (1)    Not transfer the license to a location different from the location for which the license was originally issued; and

             (2)    Transfer the license to a different owner only at the same location for which the license was originally issued.
     Section 3.  That chapter 35-4 be amended by adding thereto a NEW SECTION to read as follows:

     The limitations on multiple retail alcoholic beverage licenses provided in §  35-4-4 do not apply to any license issued under the provisions of this Act.
     Section 4.  That chapter 35-4 be amended by adding thereto a NEW SECTION to read as follows:

     Any municipality or county adopting the ordinance pursuant to section 1 of this Act may issue additional on-sale licenses pursuant to subdivision 35-4-2(4) or (6). Any municipality adopting such ordinance shall charge at least one dollar for each person residing within the municipality as measured by the last preceding decennial federal census. Any county adopting such ordinance shall charge at least one dollar for each person residing within the county but outside the boundary of any municipality as measured by the last preceding decennial federal census.

     Each municipality or county shall set the on-sale license fee within ninety days of adopting the ordinance pursuant to section 1 of this Act or within thirty days after the resolution of any appeal pursuant to section 5 of this Act. After the fee for an on-sale license issued pursuant to this Act has been determined, no municipality or county may change the fee for a period of five years unless a growth in population reported by the federal decennial census requires an increase in the fee.
     Section 5.  That chapter 35-4 be amended by adding thereto a NEW SECTION to read as

follows:

     Each municipality or county adopting the ordinance pursuant to section 1 of this Act shall compensate any licensee who:

             (1)    Owns an on-sale license issued pursuant to subdivision 35-4-2(4) or (6) as of January 1, 2008; and

             (2)    Applies for the compensation within thirty days of the effective date of the ordinance provided in section 1 of this Act.

     The application for compensation shall be made under oath and shall include documents establishing the amount paid by the licensee for the on-sale license. If the transaction for the purchase of the on-sale license included real or personal property, the fair market value of the real or personal property shall be deducted from the total transaction price to determine the amount paid by the licensee for the on-sale license. The burden of establishing the amount paid for the license shall be on the applicant. Any licensee contesting the fair market value of the real and personal property may appeal the valuation to circuit court.
     Section 6.  A municipality or county may provide the compensation required by this Act from any source of revenue that the municipality or county determines appropriate. Any compensation paid by the municipality or county pursuant to this Act shall be:

             (1)    The difference between the documented amount paid by the licensee for the on-sale license, as determined pursuant to section 5 of this Act, and the fee imposed pursuant to section 4 of this Act;

             (2)    Paid within five years of date of the ordinance adopted pursuant to section 1 of this Act; and

             (3)    With interest calculated from the date the municipality or the county sets the price of the on-sale license fee pursuant to section 4 of this Act and the date of final

payment of the compensation at the Category E rate of interest as established in §  54- 3-16.