March 2, 2026 - Delegates bopped a last-second bill incrementally lowering metallurgical coal severance taxes to the House floor.

The tax cut is being considered as metallurgical coal typically used in steel making faces challenging market forces.

Generally, the end of last week represented a legislative deadline to move bills out of committee. The House Finance Committee took up the coal tax legislation as an originating bill, meaning it didn’t yet have a number and was not available for the public to view online.

“What we’re simply doing here is saying we’ve got a legitimate rate that deals with the budget and, in fact, helps the coal industry — and we’re going to do that a little bit a time so it protects the budget while continuing to help the coal industry,” said Delegate Marty Gearheart, R-Mercer.

Current law has a 5% severance tax on the gross value of metallurgical coal. This bill, as it was constructed when the committee first took it up, would have had a stepdown to 4.5% in fiscal 2026, 4% in 2027 and 3.5% in 2028 — but then back up to 5% after 2031.

In dollars, the first year amounts to a roughly $15 million tax cut for metallurgical coal producers. Overall state revenue from severance taxes on metallurgical coal amounts to about $150 million a year, the committee agreed.

The five?year step?down period could amount to about $180 million in forgone severance tax on metallurgical coal.

But the committee approved an amendment removing the automatic increase back to 5% in 2031. Instead, the rate stays at the lower level unless a future legislature changes it by new law.

“To lower a tax and raise a tax in the same bill is an odd situation. If we’re going to lower it, let’s lower it and if the time comes and we need more money and that’s where we’re going to get it then this legislature has every opportunity to do that,” said Gearheart, who sponsored the amendment.

The tax cut is meant to provide temporary relief to the met coal industry during a difficult market period.

“I would characterize that is being very generous and very supportive,” Chris Hamilton, president of the West Virginia Coal Association, told the finance committee.

“I asked the governor to call an immediate cessation of all severance taxes on coal, both thermal and metallurgical coal, two weeks ago because of the headwinds and the hardship and all the damage that’s been done to this industry, both thermal and met over the past decade or so.”

Metallurgical coal is primarily used to produce coke, an essential fuel and carbon source for manufacturing steel in blast furnaces. Demand for that kind of coal has been stable compared to others, particularly internationally, but the sector has faced headwinds.

China has maintained high tariffs on U.S. metallurgical coal, significantly disrupting trade flows. The economic retaliation followed U.S. trade actions, causing a sharp decline in U.S. coal exports to China.

“It’s not just on the export where we find these these strong headwinds working against us with all the global trade and and tariffs and everything else, but we’re competing for a very for a shrinking domestic steel making market as well,” Hamilton said.

In mid-February, Greenbrier Minerals notified Workforce West Virginia of its decision to conduct a mass layoff at its facility in Lorado, affecting 530 employees.

Overall, Hamilton said, about 10 mines and about 1000 miners have experienced furloughs because of the current economic situation.

“We find ourselves here today, hitting such tremendous headwinds against our metallurgical coals,” Hamilton told the committee.

Delegate Sean Hornbuckle, D-Cabell, expressed full support for the tax cut bill. “I want to help,” he said.

But Hornbuckle was critical of the Trump administration’s tariff regime and the retaliation that has resulted from countries like China.

“Their tariffs and the retaliatory tariffs have caused us a lot of issues — and it cost a lot of West Virginia jobs,” he said.

“That’s why I’m standing here today to help our coal miners first, coal producers, coal owners and the industry to pick up what this federal administration has done.”

Delegate Ray Canterbury, R-Greenbrier, countered, “If the tariff strategy works effectively, we may end up reshoring our steel industry and then our coal industry will be very strong going forward because they’ll be positioned to take advantage of that.”