Phase II Board Announces 2005 Payment Rates

2005 Marks Final Payment for Phase II Program

RICHMOND (December 23, 2005) – The Virginia Tobacco Trust Certification Board, Inc. (Phase II) today announced it will distribute more than $27 million to eligible applicants who applied for the 2004 National Tobacco Grower Settlement Trust payment. The Board also announced the payment rate for this year, which will be the last year of payments for the Phase II program.

“I am pleased these payments are being released to our working tobacco farmers and quota holders,” said Governor Mark Warner, Board Chairman. “The settlement money is long overdue and is welcome news.”

The 2004 Phase II payments had been delayed due to litigation regarding the cigarette manufacturers’ obligation to make 2004 contributions after President Bush signed the Fair and Equitable Tobacco Reform Act (FETRA), commonly known as the tobacco quota buyout law. After the initial decision and an appeals process, the North Carolina Supreme Court ruled that the manufacturers were obligated to make the 2004 payments and those monies are now available for distribution to the tobacco producers and quota holders.

Checks will be released by Phase II Trustee J.P. Morgan Chase on January 6, 2006. Flue-cured tobacco quota owners and producers will receive 14.81 cents per pound. Burley tobacco producers will receive 13.01 cents per payment pound while burley quota owners will receive 9.43 cents per pound.

The Phase II payments are the result of the National Tobacco Grower Settlement Trust agreement negotiated between tobacco growing states and cigarette manufacturers. More than $107 million in Phase II payments has been distributed to more than 42,000 Virginia tobacco producers and quota owners since 1999.