January 5, 1977

Mr. Eugene Jones 
Mellette County State's Attorney 
White River, South Dakota 57579

Official Opinion No. 77-2

Action of municipal governing body on low-point beer application is referable

Dear Mr. Jones:

In Memorandum Opinion 76-87, I gave my opinion as to the proper procedure for a municipality to follow on an application for a 3.2 beer license.  You have also requested an opinion as to whether the action of the governing body on such application is referable.

In my opinion the answer to your question is YES.  Article III, section 1, of the South Dakota Constitution provides in part: 

Section 1.  The legislative power of the state shall be vested in a Legislature which shall consist of a senate and house of representatives, except that the people expressly reserve to themselves the right to propose measures, which measures the Legislature shall enact and submit to a vote of the electors of the state, and also the right to require that any laws which the Legislature may have enacted shall be submitted to a vote of the electors of the state before going into effect, except such laws as may be necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions: . . . .  This section shall apply to municipalities.

The Legislature has implemented this constitutional provision, with regard to municipalities, in SDCL 9-20.  The specific statutes refer to both ordinances and resolutions when prescribing the procedure for referendum. SDCL 9-19-13 also provides: 

. . . Except such resolutions or ordinances as may be necessary for the immediate preservation of the public peace, health, or safety, or support of the municipal government and its existing public institutions, or which provide for an election or for hearing on an improvement or assessment or which call for bids, which take effect upon the passage and publication thereof, every resolution or ordinance passed by the governing body shall take effect on the twentieth day after its publication unless suspended by operation of a referendum.

The South Dakota Supreme Court in State ex rel. Wagner v. Summers, 144 N.W. 730, has interpreted the above provisions as applying to the action of a governing body in passing a resolution granting a liquor permit.

The Court reached this conclusion based largely on the fact that the approval of a liquor license does not fall within the exceptions in the South Dakota Constitution and SDCL 9-19-13.

Case law in other jurisdictions has uniformly held that referendum is restricted to legislative matters as opposed to those involving only administrative acts.  Stated another way, the test is whether the action is to make new laws (i.e., discretionary acts) or merely to execute or implement existing law (i.e., ministerial acts).  McQuillin, MUNICIPAL CORPORATIONS, Vol. 5, § 16.55.

In McAthie v. Frieberg, 280 N.W. 871, the South Dakota Supreme Court dismissed a mandamus action against a municipal governing body to compel issuance of a liquor license, stating that the approval or disapproval of a liquor license application is not a ministerial act but an act involving discretion.  (See also In re Doerr, 150 N.W. 625.)  Although the McAthie case did not address the referendum issue, it is supportive of and consistent with the decision in Summers.  Therefore, in my opinion, the present state of the law is such that the official action of a municipal sovereign body, pursuant to SDCL 35-2-1.2, on a liquor license application is subject to referendum.  To the extent that this opinion conflicts with the opinion at 1943-44 AGR 197, the latter is superseded.

I realize that such a result is not without its practical problems, since the Department of Revenue must ultimately issue the license (SDCL 35- 2-2), and confusion could result if the action approving an application were referred and the Department was not informed prior to issuing the license. However, the Department is vested with rule-making authority and can adopt procedural rules dealing with such problems.

Respectfully submitted,

William J. Janklow
Attorney General

WJJ:LLV:pk