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PIERRE | Businesses making alcohol or selling it wholesale might get to reach agreements on sponsorships and advertising again with groups and public facilities in South Dakota.

The state Department of Revenue cracked down in the past year. Revenue officials declared such promotions violated state law. Now the Legislature is considering a proposal that would make them legal.

The Senate Local Government Committee voted 6-0 Friday to recommend passage of HB 1157.

Sen. Kris Langer, R-Dell Rapids, said the deals were “a common practice that’s already in effect.” She is the lead Senate sponsor.

The measure now heads to the Senate for a debate and a roll-call vote. If the bill gets through without change, it goes to Gov. Dennis Daugaard for his review and decision.

The House of Representatives voted 40-27 for the current version Feb. 7.

The House decision came after an amendment from Rep. Wayne Steinhauer, R-Hartford, that some beer distributors didn’t like.

Steinhauer deleted the sentence: “No sponsorship or advertising agreement authorized pursuant to this section may include a requirement to exclusively purchase the licensed manufacturer's or wholesaler's products.”

The legislation would allow manufacturers, wholesalers or their agents reach agreements with a licensed retailer who is a civic, charitable, educational, fraternal, or veterans organization, a public entity or an operator of a property owned by a public entity.

The bill’s prime sponsor is Rep. Doug Barthel, R-Sioux Falls. He said Friday the practice had been a South Dakota tradition for at least 20 years until state officials cracked down.

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“This reduces the need for public funds at public events and facilities,” Barthel told the senators. “This helps supplement that. The taxpayers don’t need to provide that funding instead.”

Justin Bell, a Pierre lawyer, testified in favor of the measure as a lobbyist for SMG. The company operates Denny Sanford Premier Center at Sioux Falls.

“This is not groundbreaking,” Bell said.

Bob Riter, a Pierre lawyer, spoke against the bill in its current form. He represented South Dakota Beer Distributors Association.

Riter asked for non-exclusivity to be restored.

Bell disagreed in his rebuttal: “We think the bill in its current form is in its best form.”

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