ANCHORAGE, Alaska (AP) — The Alaska Supreme Court is set to hear arguments in September in a case challenging the constitutionality of a plan to use bonding to pay Alaska’s oil and gas tax credit obligations.

A state court judge dismissed a challenge brought by resident Eric Forrer to former Gov. Bill Walker’s bonding plan. Forrer is appealing.

Lawmakers last year approved establishing a state corporation that would be empowered to sell up to $1 billion in bonds to pay remaining tax credit obligations to small explorers and producers. The Alaska Journal of Commerce reports the budget approved last year included $100 million in case no bond sale happened or companies holding credits didn’t want to participate in the bond plan.

State Revenue Commissioner Bruce Tangeman estimates the current credit obligation around $700 million.