                          IN THE

 SUPREME COURT OF THE STATE OF ARIZONA
              SOLARCITY CORPORATION, ET AL.,
                   Plaintiffs/Appellants,

                             v.

             ARIZONA DEPARTMENT OF REVENUE,
                    Defendant/Appellee.


              SOLARCITY CORPORATION, ET AL.,
                    Plaintiffs/Appellees,

                             v.

            ARIZONA DEPARTMENT OF REVENUE,
                  Defendant/Appellant.


                    No. CV-17-0231-PR
                    Filed March 16, 2018



     Appeal from the Superior Court in Maricopa County
       The Honorable Christopher T. Whitten, Judge
                    No. TX2014-000129
AFFIRMED IN PART, REVERSED IN PART, REMANDED WITH
                     INSTRUCTIONS

        Opinion of the Court of Appeals, Division One
                  242 Ariz. 395 (App. 2017)
                         VACATED
              SOLARCITY CORPORATION ET AL. V. ADOR
                       Opinion of the Court


COUNSEL:

Mark Brnovich, Arizona Attorney General, Dominic E. Draye, Solicitor
General, Kenneth J. Love, Jerry A. Fries (argued), Macaen F. Mahoney,
Assistant Attorneys General, Phoenix, Attorneys for Arizona Department
of Revenue

Paul J. Mooney (argued), Bart S. Wilhoit, Mooney, Wright & Moore, PLLC,
Mesa; Mark S. Davies, Rachel G. Shalev, Orrick, Herrington & Sutcliffe,
LLP, Washington DC; Paul D. Meyer, Orrick, Herrington & Sutcliffe, San
Francisco, CA, Pro Hac Vice Attorneys for Solarcity Corporation; Court S.
Rich, Logan V. Elia, Rose Law Group, PC, Scottsdale, Attorneys for Sunrun,
Inc.

Roberta S. Livesay, Joshua W. Carden, Helm, Livesay, Worthington, LTD,
Tempe, Attorneys for Amicus Curiae Arizona Association of Counties

Jason Pistiner, Singer Pistiner, P.C., Scottsdale; Michael S. Dicke, Casey
O’Neill and Nair Diana Chang, Fenwick & West LLP, San Francisco, CA,
Pro Hac Vice Attorneys for Amicus Curiae Arizona Solar Energy Industries
Association

Douglas S. John, Frazer Ryan Goldberg & Arnold, LLP, Phoenix, Attorneys
for Amicus Curiae NRG Energy, Inc.

Maureen Beyers, Beyers Farrell PLLC, Phoenix, Attorneys for Amicus
Curiae Jewish Community Campus, LLC



JUSTICE TIMMER authored the opinion of the Court, in which CHIEF
JUSTICE BALES, VICE CHIEF JUSTICE BRUTINEL, and JUSTICES
PELANDER, BOLICK, GOULD, and LOPEZ joined.

JUSTICE TIMMER, opinion of the Court:

¶1            With exceptions, all property in Arizona is “subject to
taxation to be ascertained as provided by law.” Ariz. Const. art. 9, § 2(13);



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               SOLARCITY CORPORATION ET AL. V. ADOR
                        Opinion of the Court


A.R.S. § 42-11002.1 Property is valued for tax purposes either “centrally”
by the Arizona Department of Revenue (“ADOR”) or “locally” by county
assessors. See A.R.S. §§ 42-13002 to -13501; 42-14001 to -14503. Valuation is
based on the “full cash value” of the property as directed by statute. Id.
§ 42-11001(6). Unless a statute prescribes otherwise, full cash value
corresponds to market value, determined by applying standard appraisal
methods and techniques set by ADOR. Id. §§ 42-11001(6), -11054(A)(1).

¶2            The issues here are whether ADOR or county assessors are
authorized to value solar panels owned by SolarCity Corporation and
Sunrun, Inc. (collectively, “Taxpayers”) and leased to residential and
commercial property owners; what valuation methodology applies; and,
assuming a zero-value provision in § 42-11054(C)(2) applies, whether it
violates the Arizona Constitution’s Exemptions Clause or Uniformity
Clause. See Ariz. Const. art. 9, §§ 1–2. We hold that ADOR is not authorized
to value the leased solar panels. We remand to the tax court to decide the
remaining issues.

                              BACKGROUND

¶3             Taxpayers lease solar panels to homeowners and commercial
property owners. The panels are installed on or around a building (e.g., on
a rooftop) to capture solar energy, convert it to electricity in a self-contained
“inverter,” and use it to power the property. Although the panels operate
“behind the . . . meter” — meaning they operate independently of a utility
company’s power grid — they transfer any excess energy to the utility
company through the grid for others’ use. The utility company gives the
lessee property owner credit for the retail value of the excess energy. See
Ariz. Admin. Code R14-2-2306(D).

¶4            For years, Taxpayers’ leased solar panels were neither valued
nor taxed. That changed when ADOR issued a “notice of value” for tax
year 2015, which notified Taxpayers that their panels had been assigned full
cash values, and taxes would be assessed. Taxpayers responded by filing
this lawsuit. They sought a declaratory judgment that (1) the panels are
“considered to have no value” pursuant to § 42-11054(C)(2) and therefore

1     Although the legislature has amended some statutes cited in this
opinion since this lawsuit began, we cite the current versions because the
amendments do not affect the issues presented.
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              SOLARCITY CORPORATION ET AL. V. ADOR
                       Opinion of the Court


are not subject to valuation or assessment for property tax purposes, and
(2) the panels are not subject to valuation under §§ 42-14151 and -14155,
which authorize ADOR to value “renewable energy equipment” used by
taxpayers in the operation of an “electric generation facility.” ADOR
responded that it properly valued the panels under those statutes. It
alternately asserted that applying § 42-11054(C)(2)’s “zero value” provision
to the panels would violate the Exemptions Clause and the Uniformity
Clause of the Arizona Constitution. See Ariz. Const. art. 9, §§ 1–2.

¶5            On cross-motions for summary judgment, the tax court
agreed in part with each party. The court agreed with Taxpayers that
§§ 42-14151 and -14155 do not authorize ADOR to value leased solar panels.
Instead, the court ruled that the panels are “general property” that must be
valued by county assessors pursuant to § 42-13051(A), which concerns real
property valuation. On the other hand, the court agreed with ADOR that
the zero-value provision of § 42-11054(C)(2) violates both the Exemptions
Clause and the Uniformity Clause of the Arizona Constitution. The tax
court therefore ruled that county assessors must value Taxpayers’ leased
solar panels and, in doing so, cannot assign a zero value.

¶6            The court of appeals affirmed in part and reversed in part.
SolarCity Corp. v. Ariz. Dep’t of Revenue, 242 Ariz. 395, 399 ¶ 4 (App. 2017).
It agreed with the tax court that §§ 42-14151 and -14155 do not authorize
ADOR to value Taxpayers’ panels. Id. But it found that § 42-11054(A)’s
directive that ADOR prescribe appraisal guidelines, together with
§ 42-11054(C)(2)’s zero-value provision, authorizes ADOR, not the
counties, to value the solar panels. Id. at 408 ¶ 40. Finally, the court
concluded that § 42-11054(C)(2) violates neither the Exemptions Clause nor
the Uniformity Clause. Id. at 405–07 ¶¶ 29–39. The court of appeals thus
decided that ADOR must value Taxpayers’ solar panels but give them a
zero value.

¶7              We granted review to determine whether ADOR is
authorized to value Taxpayers’ leased solar panels for taxation purposes, a
recurring issue of statewide importance. We have jurisdiction pursuant to
article 6, section 5(3), of the Arizona Constitution and A.R.S. § 12-120.24.




                                      4
               SOLARCITY CORPORATION ET AL. V. ADOR
                        Opinion of the Court


                                DISCUSSION

              I. ADOR’s authority to value the solar panels

¶8             We review de novo the tax court’s grant of summary
judgment and its interpretation of Arizona’s tax statutes. See Delgado v.
Manor Care of Tucson AZ, LLC, 242 Ariz. 309, 312 ¶ 10 (2017). Our goal in
statutory interpretation is to effectuate the legislature’s intent. State ex rel.
DES v. Pandola, 243 Ariz. 418, 419 ¶ 6 (2018). The best indicator of that intent
is the statute’s plain language, which we read in context with other statutes
relating to the same subject or having the same general purpose, and when
that language is unambiguous, we apply it without resorting to secondary
statutory interpretation principles. See id.

                      A. A.R.S. §§ 42-14151, -14155

¶9              Section 42-14151(A) broadly authorizes ADOR to value
property owned or leased by gas, water, electric, sewer, and wastewater
utilities, including “all property, owned or leased, and used by taxpayers
in the following businesses . . . (4) [o]peration of an electric generation
facility.” ADOR is required to annually determine the full cash values of
these properties in each taxing district and transmit the valuations to the
respective county assessor. A.R.S. § 42-14153. The legislature prescribed
valuation methods for the utilities described in § 42-14151(A). See A.R.S.
§§ 42-14154 to -14159. As relevant here, § 42-14155 provides the method for
determining the “full cash value of taxable renewable energy equipment,”
which includes “electric generation facilities” used to generate, store,
transmit, or distribute solar energy “not intended for self-consumption.”
Id. § 42-14155(A), (C)(3).

¶10           ADOR argues that Taxpayers use their solar panels to operate
an “electric generation facility,” and § 42-14151(A)(4) therefore authorizes
ADOR to value the solar panels. And because Taxpayers do not use the
solar energy generated from the panels for “self-consumption,” the panels
must be valued using the method prescribed by § 42-14155(A) for
“renewable energy equipment.”

¶11         ADOR’s authority to value Taxpayers’ solar panels depends
on whether Taxpayers operate electric generation facilities under
§ 42-14151(A). A facility generates electricity if it “tak[es] a source of

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               SOLARCITY CORPORATION ET AL. V. ADOR
                        Opinion of the Court


energy . . . and convert[s] the energy into electricity to be delivered to
customers through a transmission and distribution system.” See A.R.S.
§ 42-14151(B) (defining “generation of electricity”); see also id. § 42-
14156(B)(1) (defining “electric generation facility” for use in applying
valuation methodologies as “all land, buildings and personal property . . .
used or useful for the generation of electric power”). ADOR argues that
because Taxpayers’ solar panels convert solar energy into electricity, and
excess energy is transmitted on a utility’s power grid for use by the utility’s
customers, § 42-14151(A)(4) applies. We disagree.

¶12             ADOR ignores that § 42-14151(A)(4) applies to businesses that
operate an electric generation facility. Taxpayers are in the business of
leasing solar panels. They themselves do not operate a facility to convert
solar energy into electricity. See id. § 42-14151(B). Nor do they deliver
electricity to their customers “through a transmission and distribution
system.” See id. Instead, they lease panels to customers to enable those
customers to generate electricity for self-use. Although utilities take excess
electricity to transmit it to their customers, Taxpayers have no part in these
transmissions and receive no benefit from them.

¶13           Because Taxpayers do not operate electric generation
facilities, ADOR lacks authority under § 42-14151(A) to value the solar
panels. And because § 42-14151(A) does not apply, the valuation method
set forth in § 42-14155(A) for renewable energy equipment is likewise
inapplicable. Thus, we affirm the tax court’s ruling that neither § 42-14151
nor § 42-14155 authorizes ADOR to centrally assess and tax Taxpayers’
leased solar panels.

                     B. A.R.S. § 42-11054

¶14          The court of appeals concluded that § 42-11054 authorizes
ADOR to value Taxpayers’ leased solar panels because subsection (A)
charges ADOR with prescribing guidelines for applying standard appraisal
methods and techniques and subsection (C)(2) provides that “[i]n applying
prescribed standard appraisal methods and techniques,” solar energy
devices and systems designed “primarily for on-site consumption” must be
given a zero value. See SolarCity, 242 Ariz. at 400 ¶ 40. “Thus, the statute
provides a method for [ADOR], not the counties, to value the solar panels.”
Id. (ADOR does not press § 42-11054 as a basis of authority to value
Taxpayers’ solar panels.)

                                      6
              SOLARCITY CORPORATION ET AL. V. ADOR
                       Opinion of the Court


¶15          The court of appeals misconstrued § 42-11054. That provision
does not authorize ADOR to value any property but instead addresses
standard appraisal methods and techniques prescribed by ADOR. And
while the statute gives ADOR sole authority to “prescribe guidelines for
applying standard appraisal methods and techniques,” it also provides that
these methods “shall be used by [ADOR] and county assessors in
determining the valuation of property.” A.R.S. § 42-11054(A)(1) (emphasis
added). Thus, § 42-11054(C)(2) does not apply exclusively to ADOR and
does not authorize it to value Taxpayers’ solar panels.

             II. County assessors’ authority to value solar panels

¶16          The legislature established classes of property for the
common tax treatment of real and personal property. See A.R.S.
§ 42-12010(A). Whether Taxpayers’ leased solar panels constitute real or
personal property impacts whether § 42-11054(C)(2)’s zero-value provision
applies.

                    A. Valuation as real property

¶17            The tax court ruled without explanation that Taxpayers’
leased solar panels must be locally assessed pursuant to § 42-13051(A),
which provides that “each year the county assessor shall identify by
diligent inquiry and examination all real property in the county that is
subject to taxation and that is not otherwise valued by [ADOR] as provided
by law.” Under this provision, the assessor then determines the full cash
value of this property “using the manuals furnished and procedures
prescribed by [ADOR].” Id. § 42-13051(B)(2). Thus, if the leased panels are
“real property,” the assessor would determine their value by applying
ADOR’s standard appraisal methods and techniques, which are
constrained by § 42-11054(C)(2)’s zero-value provision.             See id.
§§ 42-11001(6), -11054(A).

¶18           But leased solar panels are not “real property,” and neither
ADOR nor Taxpayers assert otherwise. Although § 42-13051(A) uses the
term “real property,” the term is synonymous with “real estate” because,
for tax purposes, property is either “real estate” or “personal property.”
“Real estate” is “the ownership of, claim to, possession of or right of
possession to lands or patented mines,” while “personal property” is every
other kind of tangible and intangible property “not included in the term

                                    7
                SOLARCITY CORPORATION ET AL. V. ADOR
                         Opinion of the Court


real estate.” A.R.S. § 42-11001(10), (13); see also Sw. Airlines Co. v. Ariz. Dep’t.
of Revenue, 217 Ariz. 451, 455 ¶ 23 (App. 2008) (noting that it is an
“unassailable proposition” under Arizona law that personal property is
anything other than what is included in the term “real estate”). Solar panels
are neither land nor mines, and no one contends that the panels, which
remain the Taxpayers’ and not the homeowners’ property, are fixtures,
taxable as part of the real property. Thus, the panels must be “personal
property.” Section 42-13051(A) is inapplicable here, and we reverse the tax
court’s ruling concluding otherwise.

                      B. Valuation as personal property

¶19           ADOR maintains that Taxpayers’ leased solar panels fall
within the tax code’s business personal property classification. As such,
ADOR asserts that county assessors are authorized to assess value pursuant
to § 42-13054. Section 42-13054(A) provides that “[t]he taxable value of
personal property that is valued by the county assessor is the result of
acquisition cost less any appropriate depreciation as prescribed by tables
adopted by [ADOR]. The taxable value shall not exceed the market value.”
Because § 42-13054(A) provides a valuation methodology, ADOR argues
that county assessors would not use standard appraisal methods and
techniques, and therefore § 42-11054(C)(2)’s zero-value provision would
not apply. Taxpayers urge us to refrain from deciding the counties’
authority to value the leased solar panels and attendant issues because the
counties have not sought to tax the panels, the counties are not parties, and
Taxpayers sought relief only against ADOR.

¶20           The solar panels are business personal property under
§ 42-12001(13).    That provision includes within class one property
“[p]ersonal property that is devoted to any other commercial or industrial
use, other than property that is specifically included in another class
described in this article, and that is valued at full cash value.” By leasing
the solar panels to its customers for a profit, Taxpayers use them for a
commercial purpose.

¶21          The remaining issues before us concern whether § 42-13054
authorizes county assessors to value Taxpayers’ solar panels and, if so,
whether § 42-11054(C)(2) nevertheless applies to mandate a zero-value
assessment. Also, if § 42-11054(C)(2) applies, we are asked to decide


                                         8
               SOLARCITY CORPORATION ET AL. V. ADOR
                        Opinion of the Court


whether its application to the leased solar panels would violate the Arizona
Constitution’s Exemptions Clause or Uniformity Clause.

¶22             We agree with Taxpayers that we should refrain from
deciding these issues and instead remand for the tax court to address them
in the first instance. Neither the tax court nor the court of appeals decided
the statutory issues as now framed. See supra ¶ 21. Although the tax court
has decided the constitutional issues, if it determines that § 42-11054(C)(2)
is inapplicable, those issues would be rendered moot.

¶23            We are also mindful that as this case has progressed, the
arguments have become untethered from the questions originally
presented to the tax court. Specifically, Taxpayers’ complaint sought
declaratory relief concerning ADOR’s assessment authority, not the
counties’ authority. Because we have determined that ADOR is not
authorized to centrally value and tax the leased solar panels, the counties,
which are not parties to this lawsuit, have a substantial interest in arguing
their authority to value the solar panels. Remanding to the tax court will
permit the counties an opportunity to join the case. Cf. Bennett v. Brownlow,
211 Ariz. 193, 196 ¶ 16 (2005) (noting in the context of standing the
desirability that “issues be fully developed between true adversaries”).

                               CONCLUSION

¶24           We affirm the tax court’s judgment to the extent it concludes
that ADOR lacks statutory authority to value Taxpayers’ leased solar
panels. We reverse the remainder of the judgment. We remand for the tax
court to determine whether § 42-13054 authorizes county assessors to value
the solar panels and, if so, whether § 42-11054(C)(2) nevertheless requires a
zero valuation. If the court determines that § 42-11054(C)(2) applies, then
it should determine whether that provision violates the Arizona
Constitution’s Exemptions Clause or Uniformity Clause as applied here.
We vacate the court of appeals’ opinion. Finally, we deny Taxpayers’
request for an award of attorney fees pursuant to § 12-348(B), without
prejudice to their reasserting the request if they prevail before the tax court.




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