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Interim Study
Committee Legislation
To:
Licensed
Beverage Dealers of SD
From:
Tim Dougherty
Date:
April 6, 2010
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The legislature adjourned
sine die on Tuesday, March 30, 2010, after a late
night debate over the general appropriations bill.
The Legislature waited until the last day of the
session to complete and pass the appropriations
bill because it wanted to see whether Congress
would pass legislation to provide additional
federal matching funds to the states for Medicaid
programs. If Congress had approved the additional
funding for Medicaid, South Dakota would have
received more than $30 million.
The appropriation bill passed
both houses along party lines after republican
legislators reached an agreement with the governor
on spending cuts instead of using reserve funds to
fill a $43 million hole in the state’s $1.2
billion budget. At the beginning of session,
Rounds proposed spending about $32 million in
reserve funds to balance the budget. Republican
and democrat legislators, on the other hand, vowed
to balance the budget without using reserves. They
wanted to save the reserves so that the funds
would be available next year when the budget
deficit is projected to be almost $107 million.
Their budget proposal included a two percent
across-the-board cut in state government spending.
Rounds objected to across-the-board cuts and
insisted that legislators identify cuts to
specific programs.
After several hours of
negotiations, republican legislative leaders
reached a budget agreement with the governor which
did not require dipping into reserve funds or
making across-the-board cuts. Their agreement
included about $19 million in specific cuts and
revised revenue forecasts, and additional $14.5
million in new revenues by decreasing the sales
tax refunds for large construction projects. Among
the biggest cuts were $4.2 million from the Board
of Regents’ budget, 1.3 million from the
Department of Education’s budget and $1.5 from the
tobacco prevention and cessation program. Democrat
voted against the budget plan because they
objected to the cuts in education spending.
If Congress eventually
provides additional federal matching funds to the
states for Medicaid programs, Rounds said he may
call a special session of the Legislature to
reverse some of the spending cuts.
During the final two days of
session, the legislature also overrode three of
the governor’s vetoes and sustained three.
Below is a brief summary of
the bills that were of interest to LBDSD which
passed both houses of the legislature and were
signed by the governor. Unless otherwise noted,
the bills become effective July 1, 2010.
HB
1001 - An Act to allow municipalities and counties
to issue certain special alcoholic beverage
licenses and to repeal certain special alcoholic
beverage licenses.
This bill
revises
the statutes that allow local governments to issue
temporary alcoholic beverage licenses for special
events. It would allow a municipality or county to
issue a special malt beverage, wine or liquor
license in conjunction with a special event. The
special license may only be issued to a nonprofit
organization or a licensee who holds a similar
license. For example, a person who holds a beer
license may apply for a special events malt
beverage license but not a special events liquor
license. The special events license may not be
issued for a period longer than fifteen
consecutive days.
HB
1002 - An Act to revise certain provisions
regarding the days and hours that alcoholic
beverages may be sold on a licensed premise and
who may sell, serve, or dispense alcohol on a
licensed premise.
This bill allows all on-sale and off-sale
licensees to sell alcoholic beverages between the
hours of 7:00 a.m. and 2:00 p.m., and it provides
that any
municipality or county may, by ordinance, allow
the sale of alcoholic beverages on Sundays and
Memorial Day.
The
bill also provides that if alcoholic beverage
sales constitute less than fifty percent of the
gross business transacted by the establishment,
the licensee may permit persons eighteen years old
or older to sell, serve, or dispense alcoholic
beverages.
HB 1069 - An Act to revise certain provisions
relating to the transportation of alcoholic
beverages and to authorize transportation by
religious organizations under certain
circumstances.
This
bill allows established religious organizations to
transport alcoholic beverages for sacramental use
only.
HB 1180 - An Act to provide for the issuance of
an on-sale license and malt beverage license for
the county fairgrounds and to authorize
municipalities and counties to issue an additional
on-sale license. This bill allows a
municipality or county to issue an on-sale license
to be operated at a county fairgrounds. The
license shall be issued without regard to the
population quota on licenses. The selling,
serving, or dispensing of any alcoholic beverage
at the county fairgrounds may not occur more than
one hour before the commencement of any event at
the county fairgrounds or at any time after the
event is concluded. A license issued pursuant to
this section may not be transferred.
SB
2 - An Act to revise certain provisions regarding
alcoholic beverage control and licensing laws.
This bill simply makes form and style changes to
certain sections of Title 35. Most of the changes
are non-substantive.
SB
4 - An Act to revise certain rule-making authority
regarding the sale of certain alcoholic beverage
container sizes to on-sale licensees.
This bill prohibits the department of revenue from
placing any restrictions upon the distribution of
1.75 liter containers to any on-sale licensee.
SB 136 - An Act to allow municipalities to
maintain the same number of on-sale alcoholic
beverage licenses when certain on-sale alcoholic
beverage licenses are not reissued. This bill
allows a municipal owned on-sale license that was
not reissued by the municipality because it had
not been actively used for two years to be issued
to a new on-sale licensee even though the
issuance of the license would cause the
municipality to exceed its maximum number of
allowable licenses.
SB 186 - An Act to change
the unemployment insurance wage base and
contribution rates
and to declare an
emergency. This bill will reduce the
Unemployment Insurance surcharge amount for 2010
and 2011, increase the wage base and create a new
tax-rate table with higher rates for employers
with negative account balances. Under current law,
employers will pay a 1.5 percent surcharge rate on
base wages, with a maximum payment of $142.50 per
employee this year and $150 per employee in both
2010 and 2011. SB186 will cap the surcharge rate
at one percent, or $100 maximum per employee in
2010, and 0.75 percent, or $82.50 per employee in
2011. SB186 will also increase the wage base by
$1,000 per year through 2015. South Dakota’s
current $10,000 wage base is one of the lowest in
the region. The legislation also ends the current
tax-rate table, as of 2009. The new table will
increase the maximum tax rate from 8.5 percent to
9.5 percent, with higher rates for employers with
negative account balances. In addition, employers
will need higher balances in their unemployment
accounts for the various tax rates. The zero
percent tax rate will still remain available to
employers. To receive a zero percent tax rate
under the bill, employers must have $675 per
worker in their accounts in 2010. Currently, that
amount is set at $432. The proposed changes are
projected to provide $74.4 million for the UI
Trust Fund, bringing the balance to $1.8 million
at the end of 2010.
SB 186 passed the Senate and
the House.
SB 188 - An Act to revise
certain provisions relating to the sale and
display of alcoholic beverages in certain
establishments. This bill changes the law so
that an off-sale licensee that derives less than
50 percent of its gross receipts from the sale of
alcoholic beverages (e.g., grocery store) is
required to display its liquor in one area that is
separated by a physical barrier from the rest of
the establishment but is not required to sell its
liquor in the separated area. Under current law,
the licensee must display and sell its liquor in
the separated area.
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