WHITE SULPHUR SPRINGS -- Bayer Corp. CEO Greg Babe told state business leaders this week that West Virginia must reform its judicial system and overhaul its business tax structure if it wants to spur economic development and attract new investments.

Babe, who oversees the company's North American operations, told those attending the West Virginia Chamber of Commerce's annual Business Summit that West Virginia's lack of an intermediate appeals court has slowed business growth and investment in the state.

The state Supreme Court is West Virginia's only appeals court. Earlier this year, the high court proposed new rules to its appellate procedures to address the issue.The proposed rules provide for a decision by the Supreme Court on the merits of every appeal.

But many, including some of the state's business groups and trade associations, say the changes will only increase the court's workload and make it harder to attract new businesses.

Many have noted that the state's Supreme Court of Appeals is one of the busiest appellate courts in the United States.

Babe agreed, telling those attending the business summit on Wednesday that the changes don't go far enough.

"There's no right of appeal, and the West Virginia Supreme Court didn't change that with its rules," said Babe, a West Virginia native who works out of Bayer's Pittsburgh office.

"I fear we won't be able to grow our manufacturing sector, or it could lead to further erosion of our manufacturing industry in West Virginia."

Supreme Court Chief Justice Robin Davis has said that an intermediate appeals court is a waste of time and money.

Also Wednesday, Babe said the state's tax on inventory and equipment penalizes businesses that want to expand and spend money to upgrade their facilities.

"It boils down to this: Unless the state modifies its tax structure, it will fail to attract significant capital investment," Babe told the crowd. "It's a 19th-century tax approach that doesn't work in a 21st-century economy."

In January, Gov. Joe Manchin introduced a bill to free businesses from taxes on inventory and equipment, but the legislation died in the state Senate. County officials opposed the bill, saying it would reduce tax revenues.

Babe said Manchin and state economic development officials have made significant progress in improving West Virginia's business climate, but "there is more work to be done."

"Let's begin now to remove the barriers," he said. "Let's redouble our determination. Bayer wants to be part of that in West Virginia."

Bayer has three plants in West Virginia: Bayer MaterialScience facilities in New Martinsville and South Charleston; and a Bayer CropScience plant in Institute. The Bayer facilities employ more than 1,000 workers.

Babe also acknowledged Wednesday that his company mishandled the aftermath of the 2008 Institute plant explosion and fire that killed two workers.

The explosion prompted new concerns about the facility's stockpile of methyl isocyanate, or MIC, the chemical building block that killed thousands of people in a 1984 lead from a Union Carbide plant in Bhopal, India.

"We did not handle the issue after it happened," Babe said, referring to the company's failure to give Kanawha County emergency officials prompt details about the explosion. "We did not handle the situation well during and after the incident."

The Chamber's annual conference was held this week at The Greenbrier resort, which has hosted the event since 1948.

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