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Draft Texas State Plan 1. State Overview: • Politics The legislature meets in regular session in odd-numbered years. The 1997 regular session will convene on January 14 for 140 calendar days. One U.S. Senator and all members of the U. S. House of Representatives will be up for election in November, 1996. All seats in the state House of Representatives will be up for election and one-half of the state Senate. Four seats on the Supreme Court, including the position of Chief Justice, will also be up for election. No other major state elected offices or legislative seats will be on the ballot again until 1996. The Senate is currently comprised of 17 Democrats and 14 Republicans. The House of Representatives has 85 Democrats and 65 Republicans. Governor George W. Bush, who is serving his first term in office, is a Republican. Lt. Governor Bob Bullock, presiding officer in the Senate, is a Democrat, as is House Speaker Pete Laney. It is likely that, for the first time in over a century, Republicans will be the majority in the Texas Senate in 1997. However, because the legislature is not organized along party lines, changes in the legislative leadership are not expected in either house. • State Objectives Achieve tort objectives, i.e., pass proactive legislation; defend the 1993 product liability statute and retain the comment (i) provision from the 2nd Restatement of Torts; defeat legislation which would permit the state to recover in Medicaid reimbursement cases without having to prove causation and actual damages for individual claims; and defeat the legislative agenda of the state trial bar. Defeat excise taxes or limit the increase to a single digit if a tax bill is introduced. Pass statewide marketing legislation which prevent minors from purchasing tobacco products, minimizes government interference in the marketing of cigarettes to adult smokers, protects share growth of PM brands and is consistent with the AAA program. Defeat legislation to enact severe smoking restrictions or bans. Defeat divestment legislation. II. Strategies Enlist the support of anti - tax groups to oppose excise taxes. Strengthen coalition of wholesalers, retailers, convenience store owners, oil marketers, etc., to fight excise taxes and unreasonable marketing restrictions.

Draft Texas State Plan Increase participation in the Texas Association of Taxpayers and key state business and public policy organizations to augment issue representation. Strengthen business coalition on liability issues. Increase general visibility of Philip Morris as a major business force in the state. Utilize political/media consultants and allies, in addition to the Regional Director, to increase direct representation and articulation of PM point of view to all branches of state government, business and trade organizations, and other interested parties. Increase monitoring and intervention ability by effectively utilizing strong PM and industry lobby team. Utilize organizational contributions to improve relationships with allied groups. III. Recommended Activities/Tools Arguments/falking Points/Studies Update arguments and state specific materials from issues management and talking points from media affairs and legal on Medicaid liability and divestment. If tax legislation is introduced, update cross border and regressivity studies and polling data. Publicize such studiesipolls/research on tax issue via press releases, etc. Mobilizations Possible use of mass mobilizations on tax issue. Sales Force Educate retail and wholesale accounts on excise taxes and other key state issues. Additional Resources Add state lobbyists and a public relations consultant. Possible use of LTE's and OPED's on tax issue.