Governor Gilmore Announces Nearly $16 million
in Relief for Virginia Tobacco Farmers

Payments from Phase 2 of the Tobacco Settlement will arrive in January

RICHMOND - Governor Jim Gilmore announced today The Virginia Tobacco Trust Certification Board, Inc., a private board on which he serves as chairman, has certified payment of approximately $16 million to Virginia tobacco farmers who applied for the 2000 National Tobacco Grower Settlement Trust payment.

"I am proud of the way Virginia's tobacco growing community has come together once again to efficiently distribute these funds to Virginia's tobacco producers and quota owners," Governor Gilmore said. "While we are heartened by the recent news that quota will not be reduced this year, we nonetheless must be vigilant to ensure that the livelihoods of Virginia's tobacco growing families will be protected. These payments aid in that endeavor by partially compensating farmers for the 45-percent decrease in the amount of tobacco they are allowed to market over the past few years."

Also today, Chase Manhattan Bank, the national trustee, mails payments to Virginia payees, which farmers can expect to receive in January.

"Farmers will begin receiving payments just after the New Year," said C.D. Bryant, Chairman of Concerned Friends for Tobacco and a member of the board. "One thing they will notice is that this year's payment is going to be a bit lower than last year's because of the way the National Trust is set up. The board anticipates that the money available for disbursement will rise next year."

This year, the board will make payments to producers and quota owners based on production in 1998 and/or the quota owned as of July 1, 1998. The board anticipates that this will be the basis of payment for the next five years. Flue-cured tobacco quota owners and producers can expect nine cents per pound. Burley tobacco producers will receive nine cents a pound while quota owners will receive four cents a pound. Payees who own quota or produce tobacco on multiple tracts of land will receive checks combining up to six payments. Settlement payments are not subject to Virginia state income taxation but are subject to federal income taxation.

The private settlement between the tobacco growing states and major cigarette manufacturers will provide nearly $340 million in aid over a period of twelve years to Virginia tobacco producers and quota owners. The Phase II settlement was reached July 19, 1999, and Governor Gilmore appointed the 14-member board July 30. The board approved payments totaling $23.7 million in 1999, the first year of the settlement.