[¶ 1.] Appellees brought this declaratory judgment action against the City of Brookings. They challenged the method by which Brookings set the fee for new on-sale full-service restaurant alcoholic beverage operating agreements (more commonly referred to as liquor licenses). The circuit court declared the Brookings methodology invalid and enjoined its enforcement. We affirm.
[¶ 2.] Appellees own and operate private bar and/or restaurant businesses in Brookings. These businesses are authorized to sell alcoholic beverages under operating agreements with Brookings. Appellees sought a declaration that a Brookings ordinance and resolution establishing the fee for additional full-service restaurant on-sale liquor operating agreements/licenses violated SDCL 35-4-117 because the fee was based on city population rather than the market value of existing operating agreements/licenses.
[¶ 3.] A brief history of the law authorizing municipal liquor licenses is necessary for context. Prior to 2008, municipalities were only permitted to authorize a limited number of businesses to sell or serve alcoholic beverages. In 2008, the Legislature passed statutes authorizing municipalities to issue additional on-sale "licenses" to full-service restaurants. See SDCL 35-4-110 to -119.
(Emphasis added.) The Legislature also provided for a minimum fee based on population. SDCL 35-4-116 (2008) provided in part:
[¶ 4.] In response to the 2008 legislation, Brookings decided to authorize additional on-sale liquor licenses. However, the appropriate fee to be charged for the new licenses was complicated by the fact that Brookings is a "local option community." See SDCL 35-3-7.
[¶ 5.] SDCL 35-4-19.1 was not, however, in effect at the time Brookings enacted its ordinance and resolution. Therefore, Brookings took the position that because there were no "license" sales upon which current market value could have been established under SDCL 35-4-117, the city was authorized to set the new license fee at the minimum amount based on population as provided for in SDCL 35-4-116. Accordingly, Brookings adopted an ordinance and resolution setting the new fee at $18,504, the minimum amount based on population. Appellees subsequently commenced this action.
[¶ 6.] The circuit court ruled that operating agreements were the same as licenses for purposes of determining the fee under the new statutes. The court declared the new Brookings ordinance and resolution invalid because they established the new license fee in an amount less than current fair market value as required by SDCL 35-4-117. The court did not determine whether SDCL 35-4-19.1 applied retroactively because the issue was moot under the court's interpretation of SDCL 35-4-117.
[¶ 7.] Brookings raises two issues on appeal:
[¶ 8.] The first question is a matter of statutory construction. Statutory construction is a question of law that we review de novo. Perdue, Inc. v. Rounds, 2010 S.D. 38, ¶ 7 n. 2, 782 N.W.2d 375, 377 n.2.
[¶ 9.] Brookings contends that operating agreements are more akin to leases,
[¶ 10.] SDCL 35-1-1.1 (2008) provided that "[f]or the purposes of [SDCL Title 35], . . . an entity that has entered into an operating agreement with a municipality pursuant to § 35-4-19 shall be deemed to be a licensee." Concededly, this language speaks more directly to the nature of the entity than the nature of the agreement between the city and the private business. Nevertheless, the language strongly suggests that the Legislature intended operating agreements to be treated as licenses for purposes of SDCL 35-4-116 and 35-4-117.
[¶ 11.] This conclusion is supported by SDCL 35-4-19.1, the 2009 amendment specifically providing that for the purposes of applying the new licensing statutes, an operating agreement holder is a license holder. We may consider subsequent amendments "in gleaning the legislative intendment of the law." In re Farmers State Bank of Viborg, 466 N.W.2d 158, 160 (S.D.1991). "When considering a subsequent amendment, we must decide whether the purpose of the amendment was to clarify or alter the law. . . . In making this determination, we consider the time and circumstances surrounding the enactment of the amendment." Id. at 160-61.
[¶ 12.] The Legislature's 2009 enactment of SDCL 35-4-19.1 (the amendment) occurred in the year immediately following the 2008 authorization for new licenses. The amendment was introduced and approved shortly after this litigation was started.
[¶ 13.] Because the 2009 "amendment was intended to clarify the law, we may look to it in order to determine rights under the original act." See In re Farmers, 466 N.W.2d at 160. See also Ellis v. City of Yankton, 526 N.W.2d 124, 126 (S.D. 1995) ("Subsequent amendments to a law to clarify the existing law may offer guidance to the intent of the law as initially enacted[.]"). The 2008 legislation did not specifically address how the new law would apply to operating agreements in local option communities. The 2009 amendment clarified that "[e]ach operating agreement holder [was] a license holder for the purposes of . . . applying . . . [the new licensing statutes]." SDCL 35-4-19.1. Considering this clarifying amendment together with SDCL 35-1-1.1, we conclude the Legislature originally intended that operating agreements were to be considered the same as licenses for purposes of determining the fee under SDCL 35-4-116 and 117.
[¶ 14.] We also observe that there had been a sale of an operating agreement in Brookings during the relevant period necessary
[¶ 15.] GILBERTSON, Chief Justice, and KONENKAMP, MEIERHENRY, and SEVERSON, Justices, concur.