WASHINGTON -(Dow Jones)- Tobacco companies have given about $1 billion to 14 states to help offset tobacco growers' losses due to the 1998 tobacco legal settlement, the General Accounting Office said Wednesday.

The GAO, the investigative arm of Congress, said 92% of the funds in 2001 were intended as direct payments to tobacco growers and quota holders, or people granted tobacco-growing rights by the federal government. The states kept 2.4% of the funds for administrative expenses and the rest was placed into reserve accounts for future payments to growers, the GAO said. The payments come from a 1999 agreement between tobacco growing states and four tobacco companies - Philip Morris Cos. , R.J. Reynolds Tobacco Co. , Brown & Williamson Tobacco Corp. and Lorillard Tobacco Co. (XLOR). The agreement is an offshoot of the landmark 1998 tobacco master settlement agreement, the largest civil settlement in U.S. history, which reimbursed states for health care costs related to tobacco use. The four tobacco companies agreed to pay up to $5.15 billion into the National Tobacco Grower Settlement Trust over 12 years to help tobacco farmers and quota holders harmed by the 1998 tobacco settlement. North Carolina is the largest recipient of the growers' funds, receiving $ 375.3 million since 1999, the GAO said. Kentucky was No. 2, receiving $293.3 million, followed by Tennessee, receiving $74.9 million, GAO said.

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