SDCL § 35-4-19: Licensed municipalities permitted to issue certain licenses--Operating agreements permitted.

Any municipality that has obtained a license under this title may issue licenses pursuant to subdivisions 35-4-2(12) and (16). If a municipality has been issued an off-sale license only, the governing body may approve or disapprove applications for on-sale licenses issued pursuant to subdivision 35-4-2(4). If a municipality has been issued an on-sale and off-sale license, the governing body may, by resolution, enter into an operating agreement with any person for the specific purpose of operating an on-sale establishment or an off-sale establishment, or both for the municipality.