PIERRE - A bill that seeks to remove limits on the number of on-sale liquor licenses that cities and counties can issue has been given new life in the South Dakota Legislature.

The Senate rejected the measure last week after opponents said the proposal would not completely cover the losses of bar and restaurant owners who paid high prices to get existing licenses. Senators later agreed to reconsider the measure.

The Senate decided Wednesday to send SB126 back for additional committee hearings after changing the language to protect the value of existing licenses.

The bill's main sponsor, Sen. Ed Olson, R-Mitchell, said the amendment sets the sale price of new licenses at the market rate. Before a new license could be sold, holders of existing licenses would get a chance to sell to the buyer, he said.

"It will definitely uphold the value of the license," Olson said.

State law now uses population as the basis for capping the number of licenses available in a community, but some cities have extra licenses because they have annexed areas with businesses that received licenses from counties.

Because licenses are capped in some areas, the only way a business can get a license is to buy it from an existing license holder. The price for those licenses has skyrocketed to $250,000 or more in both Sioux Falls and Rapid City, lawmakers have said.

The bill would allow cities and counties to issue additional on-sale liquor licenses. Supporters have said it is intended to create new licenses for restaurants and convention centers that would help boost economic development.