The new tax was proposed by governor Joe Manchin in an attempt to overhaul and reform legislation related to workers comp. Businesses are pushing for workers comp to be privatized in the hope premiums will reduce. Before that can happen the huge debt has to be paid.

The Coal Association, along with the natural gas and timber industries, had agreed earlier to tax increases amounting to about $80 million of the $230 million needed for revenue bonds to pay down the unfunded liability.

Earlier in the week Massey Energy chief Don Blankenship sent letters to the governor and all legislators opposing charging coal producers the increase on the grounds it would significantly disadvantage their business compared with neighboring states.

Massey is the state's largest producer and the proposal would cost the company about $17 million more a year, Blankenship said.

The industry currently pays severance taxes on the amount of coal it produces or on gross receipts. As production and prices increase, the industry pays more taxes.

Rising prices mean severance tax collections this fiscal year will exceed projections. The coal industry wants that surplus paid to the workers compensation problem.

Meanwhile the Manchin administration is opposed to using an employer/employee payroll tax to make up the difference.

The Senate Judiciary Committee passed the workers comp bill Tuesday, sending it to the Finance Committee to work out the funding. It is likely a final solution will be tabled by Saturday.