South Dakota passed a law that bars renewing a liquor license held by someone who has not used it for two years. Does that two-year clock run backward from the law's effective date, or does it only start counting forward from when the law took effect?
Plain-English summary
In the 1975 legislative session South Dakota took chapter 227 of the 1945 laws and codified its substance as SDCL 35-2-5.3. The provision said that a liquor license that had gone unused for two years could not be reissued to the same person for a renewal year. The question Secretary Wendell asked AG William Janklow was whether that two-year clock looked backward: could a license unused for two years before July 1, 1975 be denied renewal as of the 1976 renewal cycle?
Janklow said no. The statute had no clear expression of legislative intent to apply retrospectively, and under South Dakota's settled rule any doubt about retrospective application defaults to prospective construction. The Janklow opinion cited State ex rel. Strenge v. Wrestling (S.D. 1964) for that proposition. A different rule (procedural-only statutes can apply to pending and future actions) does not control where the statute touches a substantive right. The new rule did more than set procedure; it altered the basic entitlement and qualification for a liquor license. So it had to be prospective only.
The practical effect: a licensee whose license had gone idle before July 1, 1975, did not lose renewal eligibility under SDCL 35-2-5.3 on that pre-effective-date inactivity. The two-year clock started running on July 1, 1975. Earliest possible denial under the new rule would be July 1, 1977 for someone whose license sat idle through the entire two-year post-effective-date window.
Currency note
This opinion was issued in 1975 during AG William Janklow's tenure. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. South Dakota's liquor licensing regime has been overhauled multiple times since 1975. SDCL 35-2-5.3 may have been amended or recodified; the modern unused-license rule (if any) should be confirmed before relying on this opinion's reasoning.
What the opinion meant at the time
For liquor licensees who had let licenses sit idle pre-1975, the opinion was protective. The new rule could not be used to strip their renewal eligibility based on past inactivity. They had until July 1977 (at the earliest) to either start using the license or face the new bar.
For state alcohol regulators, the opinion delivered a clear administrative guideline. Reissue decisions for the January 1976 cycle could not consider pre-1975 inactivity under the new rule. Inactivity tracking should start July 1, 1975.
For the liquor industry generally, the opinion reaffirmed the prospective-only default for substantive rule changes. Licensing statutes affecting eligibility were not procedural, even if the implementing mechanism looked procedural.
Common questions
Q: What is the difference between procedural and substantive for retroactivity purposes?
A: Procedural statutes affect the means by which a right is enforced (rules of evidence, filing deadlines, form requirements). They generally apply to pending and future cases without violating retroactivity rules. Substantive statutes alter the underlying right or obligation. They are presumed prospective unless the legislature clearly says otherwise. The two-year unused-license rule altered the substantive eligibility, not procedure.
Q: Could the legislature have made the rule retrospective?
A: It could have tried, by including clear language to that effect. The opinion said the rule must apply prospectively "since it does not clearly require a retrospective effect." A clear legislative direction would have been respected, subject to other constitutional limits (such as impairment-of-contract or vested-rights issues, which could arise if licensees relied on prior law).
Q: What does "unused" mean for these purposes?
A: The opinion did not parse the term. Presumably it referred to actual non-operation under the license, but boundary cases (intermittent operation, temporary closure for renovation, etc.) would have required separate analysis or a regulation.
Q: Was Janklow making a constitutional argument or a statutory-interpretation argument?
A: Mostly statutory interpretation under the prospective-construction default. The constitutional dimension (vested-rights protection) lurked in the background but was not the primary reasoning.
Q: What happened to the two pre-effective-date years?
A: Wiped from the calculation. A license unused for the entire decade prior to July 1, 1975 still had a clean slate as of July 1, 1975 for purposes of the new rule. Two years of post-July-1975 inactivity were required.
Background and statutory framework
South Dakota's prospective-construction default came from a long line of cases including Dakota Central Telephone Company v. Mitchell Power Company (S.D. 1922) and State ex rel. Strenge v. Wrestling (S.D. 1964). The general principle: ambiguity about retroactivity is resolved against retroactive application. The legislature must be clear if it wants a backward-looking rule.
The procedural-versus-substantive distinction was the operative second step. Procedural changes often apply to pending and future actions. Substantive changes do not, absent clear direction. The fundamental qualification to hold a liquor license is substantive.
Liquor licensing in South Dakota historically was tightly regulated through both state and municipal channels. The 1945-era statute on which the 1975 codification was based had aimed to keep speculation and parking out of the license market: a licensee who was not actively using the license could not hoard it indefinitely. The two-year rule was a use-it-or-lose-it mechanism. Janklow's prospective-only reading let the legislature implement that policy without disturbing existing licensee expectations.
Citations and references
Statutes:
- SDCL 35-2-5.3 (the codified two-year unused-license rule)
- Chapter 227, Laws of 1945 (the originating provision)
Cases:
- State ex rel. Strenge v. Wrestling, 81 S.D. 34, 130 N.W.2d 109 (1964) (prospective-construction default)
- Dakota Central Telephone Company v. Mitchell Power Company, 45 S.D. 462, 188 N.W. 750 (1922) (procedural statutes apply to all actions)
Prior AG opinions:
- Official Opinion 75-176 (also referenced for the procedural/substantive principle)
Source
Original opinion text
Retroactive effect of chapter 227, laws of 1945, waiting period where liquor license not issued
Dear Secretary Wendell:
You have requested my official opinion as to whether or not chapter 227, laws of 1945 (35-2-5.3), is retroactive to the extent that licenses not used by the holders thereof for two years prior to July 1, 1975 may not be reissued to the same person for a one-year period commencing with the renewal of licenses on January 1, 1976.
The statute in question definitely impinges upon the right of a holder of a liquor license to make application if he has not actively used that license for a two-year period. The rule in South Dakota is that where there is no clear expression of legislative intent as to prospective or retrospective effect any doubt must be resolved against the retrospective effect and in favor of the prospective construction only of a statute. State ex rel. Strenge v. Wrestling, 81 S.D. 34, 130 N.W.2d 109 (1964). Also as stated in Official Opinion 75-176, in quoting from Dakota Central Telephone Company v. Mitchell Power Company, 45 S.D. 462, 188 N.W. 750 (1922), "When a new statute deals with procedure only prima facie it applies to all actions - those which have occurred or are pending and future action."
The statute in question deals with much more than a mere procedure for applying for or issuing of liquor licenses. It deals with a basic entitlement and qualification for a liquor license and it is therefore my opinion that since it does not clearly require a retrospective effect it must be given prospective application only and that therefore the two-year period commenced on July 1, 1975.
Respectfully submitted,
William Janklow
Attorney General
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