Special Notice On The Quota Buyout

RICHMOND (October 29, 2004) - On October 11, 2004, Congress enacted legislation that appears to impact long term payments by the four tobacco companies to the Phase II settlement trust fund. The legislation was signed into law by President Bush on October 22, 2004. It specifically applies to the 2005 tobacco crop, and requires the tobacco companies in 2005 to begin paying in to a fund that will eventually pay buyout monies to eligible Virginia tobacco producers and quota holders. This buyout would do away with the Phase II payment in 2005, and beyond.

It is uncertain at this time what impact the buyout legislation will have on the scheduled 2004 Phase II payment. The issue is under study. The Virginia Tobacco Trust Certification Board, Inc., which administers Virginia's Phase II program, will continue to receive and process 2004 Phase II verification forms and applications, planning to certify a 2004 payment unless the courts or other authority disallow one. This process of resolution might take weeks, or months. Producers and quota holders are encouraged to timely complete and file their Phase II paper work so the Board can be prepared to authorize funds as they are available for distribution.

This message will be updated as more is known about the status of a 2004 Phase II payment.