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State Overview: New Mexico Politics The legislature meets annually and will convene the 1997 session on January 23st. The session will last 60 days. There are 42 Senators that serve for 4 year terms; the 70 House members serve 2 year terms. Both houses are expected to remain democrat controlled with the same leadership. This is not a favorable state for many of our issues. This is a strong local government control state. AG Udall has indicated that he will seek $900 thousand/year from the legislature to support Medicaid liability lawsuits. State Objectives Introduce AAA/Youth Access bill Defeat possible smoking bans in legislature and local communities Proactively work on OSHA. Assist Washington office on federal issues. Defeat proposed 40 cents/pack and all other cigarette excise tax increase proposals. Defeat advertising bans. Support PM FDA activities. II. Strategies/Tactics Continue to build coalitions to support PM objectives. Hire Public Relations firm to focus on FDA, AG lawsuit issues and governmental affairs issues. III. Recommended Activities/Tools Need continuous development of coalition for AAA, AG lawsuit issues, FDA, local activities and other issues as they develop. Need updated arguments and state specific materials re Medicaid lawsuit, FDA, and local issues. Possibly, 2 statewide general and an undetermined number of local mobilizations on smoking/marketing issues. Continue to partner with the sales force on state and local objectives. Need to establish direct mail contact with members of coalition partners.

STATE PLAN: 1997 NEVADA I. STATE OVERVIEW A. Politics The legislature meets in odd years, and will convene on January 20. No limit on length of session. Biennial budget state.iii Committees meet during the interim in even years. The Assembly is currently tied at 21-21. D's may take over in November by several seats. Assembly members serve 2 year terms. The 20 Senate members serve 4 year terms, and will remain in R. control. Leadership will likely change in the Assembly due to control, and R leadership in the Senate will remain the same. No statewide office holders are up for re-election. Political climate favorable for business. II. State Objectives A. Defend AAA/Youth Access law passed in 95. B. Assist Washington office on Federal Initiative C. Monitor AG/Medicaid Liability D. Defend against tax legislation. Medicaid shortfall may hurt budget. E. Defend preemption. F. Continue proactive PR support on federal OSHA issue III. Strategies and Tactics A. Continue participation in Nevada Taxpayers Coalition B. Continue participation with all retail assn. and trade member assn. C. Continue education of retailers through WE CARD D. Continue to support AG's enforcement of youth access legislation E. Legal support on Medicaid/liability issue/possible bill. F. Mobilizations: House/ 2 committee, 1 floor, Senate 2 committee, 1 floor

STATE PLAN: 1997 NEVADA I. STATE OVERVIEW A. Politics The legislature meets in odd years, and will convene on January 20. No limit on length of session. Biennial budget state.iii Committees meet during the interim in even years. The Assembly is currently tied at 21-21. D's may take over in November by several seats. Assembly members serve 2 year terms. The 20 Senate members serve 4 year terms, and will remain in R. control. Leadership will likely change in the Assembly due to control, and R leadership in the Senate will remain the same. No statewide office holders are up for re-election. Political climate favorable. II. State Objectives A. Defend AAA/Youth Access law passed in 95. B. Assist Federal office on Federal Initiative C. Monitor AG/Medicaid Liability D. Defend against tax legislation. Medicaid shortfall may hurt budget. E. Defend smoking preemption. III. Strategies and Tactics A. Continueparticipation in Nevada Taxpayers Coalition B. Continue participation with all retail assn. and trade member assn. C. Continue education of retailers through WE CARD D. Continue to support AG's enforcement of youth access legislaiton E. Legal support on medicaid/liability issue/possible bill. F. Mobs: House/ 2committee, 1 floor, Senate 2 committee, 1 floor

Draft Oklahoma State Plan I. State Overview: • Politics The legislature meets every year and will convene the 1997 session on February 3rd and will run through May 30th. There is no limit on the number of days they can meet. The 101 House members serve two-year terms and the 48 Senators serve four year terms. The interim study period is mid-summer through December. Democrats currently control the House 65-36, and the Senate, 37-11. The political environment is somewhat favorable. The legislature remains balanced. However, leadership and executive branch are less favorable towards business. Governor Keating (R) maintains his task force on youth smoking composed of 95 percent anti-tobacco appointees. Representative Cozert, the leader of this task force (our one strong ally) will not be returning to the legislature for the '97 session. Speaker Glen Johnson has abdicated his position to Lloyd Benson who supports preemption, but generally not with us on other issues. Attorney General Drew Edmondson has filed a Medicaid liability suit. Oklahoma currently has sales/marketing preemption. In '96 strong attempts failed to reverse this and expect similar attempts in'97. The revenue stream has show good growth in '96, any tax threat will be for earmarked funds (breast cancer, prostate cancer etc...). • State Objectives 1. Protect accommodation uniformity 2. Protect sales and marketing uniformity. 3. Defeat any excise tax on tobacco products. 4. Support legal in Medicaid liability suit. 5. Defeat any attempt to allow Attorney General to collect fees in addition to judgments. 6. Support the Washington Relations office at the Federal level (i.e. FDA initiative, OSHA etc...). 7. Look for opportunity to move medical liability and defense bill (i.e. North Carolina language), Medicaid offset language and prohibition of contingency fee arrangements. 8. Broaden existing coalitions and increase personal contact with coalition and state legislative leadership. ra 9. Seize any opportunity to implement objectives of AAA program. m 10 - Suspension/Revocation o' - Line of Sight A r~

Draft Oklahoma State Plan II. Strategies • Add minority (R) party lobbyist to support Oklahoma team. Emphasis will be to gain access to the Governor's office. • Use public relation consultants and media affairs to support attainment of objectives by developing the right public atmosphere. Identify and develop spokespeople to talk about successes of preemption and accommodation. • Continue to actively support and strengthen already strong coalition membership and use membership to effectively lobby against repeal of preemption. Provide funding and public relation expertise to ally leadership. • Use public relation consultant in developing coalition support to actively/publicly diffuse public relation attempts by Attorney General's office to foster Medicaid liability suit position. • Retail allies to work with Governor's office on replacing legislative leadership on Governor's youth and smoking task force with legislator is pro-business. • Meet with House and Senate legislative leadership to educate them on the values of preemption and Philip Morris's commitment to the prevention of youth access to cigarettes (Seek partnership opportunities). Ill. Recommended Activities/Tools Arpuments/Talking Points/Studies Need updated arguments and state specific materials from issues management and talking points from media affairs team and legal. - Excise Tax - Medicaid Liability - Sales/Marketing and Use Preemption Mobilizations Possibly, three targeted phone bank mobilizations and 2 targeted letter writing campaigns. - Sales/Marketing & Use Preemption (smokers, retailers, & restaurant owners) Accommodation

Draft Oklahoma State Plan TAP to aggressively market program in Oklahoma City and Tulsa (advertising, exhibits and recruitment). Sales Force Ask PMUSA sales force to assist in getting information out to the retail community and to identify other potential allies/spokespeople (Preemption, FDA, Accommodation etc....) We Card Program Need to identify Oklahoma association willing to promote use of We Card program.

STATE PLAN: 1997 OREGON I. STATE OVERVIEW A. Politics The legislature meets in odd years, and will convene its 1997 session on January 13, 1997. There is no limit to the length of the session. The 60 House members serve 2 year terms, and the 30 Senate members serve 4 year terms. There will be a new Attorney General. Can no longer give corporate dollars in OR. There will be a now speaker in the House and a new President in the Senate. II. Key Issues In The State A. Pass select components of AAA/Youth Access B. Assist Federal office on Federal Initiative C. Monitor AG/Medicaid Liability D. Tax threat major if the ballot measure for 30 cents is defeated. E. Local marketing/smoking Activity - major (antis just got a$lmillion grant) F. Smoking ban threat - major Ill. Strategies & Tactics A. AOI support for AAA legislation, as well other allies partners, including Oregon Grocers, OR Petroleum Marketers Assn. B. Education of legislators regarding WE CARD/industry support. C. Media support for retailerlindustry efforts regarding WE CARD D. PR program on liability issue E. Support Northwest Business and Labor Alliance on local activity: marketing and smoking statewide legislation. IV. Resources A. Sales force: for AAA legislation support with retailers and possible tax threat B. Northwest Business & Labor Alliance for smaking/marketing restrictions statewide and local. C. Sponsorship of allied coalition efforts. D. Media support E. Expert testimony for smoking issue F. Legal support on Medicaid liability issue