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The city of Des Moines will go to court for a third time Monday, Oct. 27, to protect a 5 percent franchise fee on utilities that generates about $12 million a year in general fund revenues.

So far, a Polk County district judge and the Iowa Supreme Court have said the fee, as it is currently assessed, is an illegal tax.

The Supreme Court ordered a trial to determine the actual costs of administering the fee.

At issue is a fee the city imposed in 2004 to compensate for the state of Iowa’s elimination of a sales tax on utilities.

A Des Moines woman filed a lawsuit challenging the fee in 2004 after it appeared on her utility bill. MidAmerican Energy Co. collects the fee from residents and businesses and forwards it to the city. Manufacturers are eligible for a partial rebate.

In January 2006, Polk County District Judge Michael Huppert said the fee constituted an illegal tax. The city appealed that ruling to the Iowa Supreme Court, which remanded the case for trial to determine the city’s actual and incidental costs.