HB 5687 West Virginia House of Delegates · 2026 Regular Session

Relating to reducing the tax rate imposed on the gross value of metallurgical coal produced in this state

This bill reduces the severance tax rate on metallurgical coal produced in West Virginia, affecting coal mining companies that extract this type of coal. The new rates will take effect in stages starting July 1, 2026, lowering the tax from 5% to 4.5% for the first year, then to 4% the following year, and finally to 3.5% beginning July 1, 2028. Metallurgical coal is defined as coal used for making steel and other metals, distinct from thermal coal used for electricity generation. The tax reduction applies to the gross value of coal produced and includes additional local taxes that are normally part of the total severance tax.

Bill status passed both 4 of 5 stages cleared

Introduction

Mar 2026

Committee Review

Mar 2026

House of Delegates Passage

Mar 2026

Senate Passage

Mar 2026

Governor

Introduced Mar 2, 2026 Last action Mar 13, 2026

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What changed between versions

Engrossed Version → hb5687 s fin am _1 3-11 adopted.htm · 5 edits

MODERATE

The bill was significantly amended to update the effective dates for metallurgical coal tax reductions from 2026 to 2027, add a new section imposing a tax on natural gas and oil production, and restructure the distribution of oil and gas severance tax revenues to counties and municipalities. These changes expand the state's revenue base to include fossil fuels beyond coal and adjust the timeline for tax relief on metallurgical coal.

Scope change

The bill's scope expanded from solely addressing coal severance taxes to also include the imposition and revenue distribution of taxes on natural gas and oil production.

TIMELINE

The effective date for reducing the metallurgical coal tax rate was delayed by one year, moving from July 1, 2026, to July 1, 2027, with subsequent rate reductions also pushed back accordingly.

SCOPE

A new section was added to impose a 5% severance tax on the gross value of natural gas and oil produced in the state, with specific rate reductions for new wells drilled after June 30, 2027.

FISCAL

New provisions were added to dedicate specific percentages of the oil and gas severance tax to counties and municipalities, including a new fund for the Office of Oil and Gas in the Department of Environmental Protection.

The distribution formula for oil and gas tax revenues was updated to include a new well provision that temporarily increases the share of revenue going to counties and municipalities for a 24-month period following the first sale from a new well.

ELIGIBILITY

Exemptions were added for natural gas provided to surface owners and for wells producing below specific daily volume thresholds (5,000 cubic feet for gas and 0.5 barrels for oil).

Floor votes · Senate Mar 13, 2026 · House of Delegates Mar 4, 2026

How they voted

30–0

Passed · 3 other

Total votes 33

Mar 13, 2026

D Democratic2

2 Yea

100% Yea

R Republican31

28 Yea 3

90% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 13, 2026

Upper · Passed

Passed Senate (Roll No. 578)

upper

Mar 12, 2026

Upper · Passed

Committee amendment adopted (Voice vote)

upper

Mar 11, 2026

Upper · Passed

Reported do pass, with amendment

upper

Mar 5, 2026

Committee

To Finance

upper

Mar 5, 2026

Introduced

Introduced in Senate

upper

Mar 4, 2026

Lower · Passed

Passed House (Roll No. 341)

lower

Mar 2, 2026

Lower · Passed

Do pass

lower

Mar 2, 2026

Introduced

Introduced in House

lower

1 primary · 10 co-sponsors