JUNEAU — Governor Bill Walker Thursday signed legislation ending Alaska’s unsustainable system of cash payments to oil companies. House Bill 111 passed the legislature with broad, bipartisan support, and converts cashable oil tax credits into tax deductions. With oil prices hovering around $50 per barrel, HB 111 was a necessary step to protect the state’s treasury.

“I’m pleased the Legislature came together across chambers and party lines to pass this bill in the spirit of compromise,” Governor Walker said. “This legislation is a small, but meaningful step towards addressing Alaska’s fiscal crisis. I thank Representatives Geran Tarr and Andy Josephson, and Senator Cathy Giessel for leading negotiations that resulted in the final product, and look forward to seeing this kind of collaboration continue.”

Under HB 111, the state will cease offering transferrable or cashable tax credit certificates for work done on the North Slope. Instead, companies will be required to carry forward their losses until such time as they owe a tax liability to the state, at which time they could be used to offset the company’s oil and gas production taxes.

The bill also creates a legislative working group to recommend potential tax changes in advance of the 2018 legislative session.

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