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IIIIIIIIIII1998 Private Enterprise BoardOfficersChairFirst Vice ChairSecond Vice ChairTreasurerSecretaryImmediate Past ChairAllan E . Auger, Coors Brewing CompanyMichael K . Morgan, Koch IndustriesHarry Winters, United Parcel ServiceLes Goldberg, American ExpressEdward D . Failor, Sr., Iowans for Tax ReliefRonald F . Scheberle, GTE Telephone OperationsPrivate Enterprise BoardJane Cahill, U .S . Generating CompanyMarie Chelli, Joseph E . Seagram & Sons, Inc .Richard Costigan, Pfizer IncBarry Coughlin, Ford Motor CompanyJohn Del Giorno, Glaxo Wellcome Inc.Scott Fisher, Philip Morris Management Corp .Kip Howlett, Chlorine Chemistry CouncilJeffrey Lane, Procter & GambleKurt Malmgren, PhRMAFrank Messersmith, Skelding, l .abasky, Cony, et alRoger Mozingo, R .J. Reynolds Tobacco CompanyPete Poynter, BellSouth Telecommunications, Inc .J . Patrick Rooney, Golden Rule Insurance CompanyRay Thompson, AmocoJerry Watson, NABIC1998 National Chairman's CouncilIIIIIIOfficersChairViceSpeaker Bobby HogueChair Rep . Bonnie Sue CooperMembersSen. Ray PowersSpeaker Harold BrubakerSen . William RaggioSen. Owen JohnsonSen . Jim DunlapRep . Dale Van Vyven Victoria Hughes, Charles G . Koch CharitableAl Auger, Coors Brewing Company FoundationJoanne Beyer, Allegheny Foundation Victor Porlier, Council on CultureRonald F . Scheberle, GTE & 0d00/pdfPageS

IIIIManagementThe Executive Director serves as the chief administrator, and directs all the activities of ALECaccording to the policies set by the Board of Directors . In addition, a management team, comprisedof six Department Directors, oversees the program functions of the organization . While most of themanagement team is in place, a Director of Development is needed to complete the team .Candidates for this positioned are being interviewed . Resources permitting, additional support staffmay be needed in Public Affairs, Development, and Policy .IIIIManagement TeamExecutive DirectorDirector of FinanceDirector of Membership/ConferencesDirector of PolicyDirector of Public AffairsDirector of Project DevelopmentDirector of ProgramsOffice Manager/DISDuane A . PardeBeverlee A . LeeBrad BoutilierJohn ShanahanNoel CardRoop MohunlallLining BurnetDenise id/ccl40d00/pdfPage6

IIMARKEYANALYSISI.Market DefinitionFor 25 years, ALEC has been providing America's conservative state legislators with policy analysis,IIIIIIIIresearch and model legislation intended to promote the Jeffersonian principles of free markets,limited government, federalism and individual liberty . Today, ALEC is the nation's largestindividual membership organization of state legislators ; forty percent of all state legislators inAmerica belong to ALEC.StrengthsWith 3,000 state legislator members from both political parties in all 50 states, joined by 280 privatesector members, ALEC is uniquely positioned as a legislative network that crosses geographic,political, and economic lines . As a membership/policy organization dealing with state-federalrelations, ALEC's influence reaches into all levels of government and business .No other organization in America has as many valuable assets, in both people and ideas, in as manykey decision-making positions as does ALEC . Among the leadership of America's state legislatures,ALEC members have an impressive presence : 48 Speakers and Speaker Pro Tems ; 28 SenatePresidents and Senate Pro Tems ; 31 Senate Majority and Minority Leaders ; and 41 House Majorityand Minority Leaders . In addition, twelve sitting governors are alumni of ALEC, as are more than80 Members of Congress .ALEC is the perfect conduit to advocate policy solutions developed in the states to the nationallevel . Since its founding in 1973, ALEC has amassed an unmatched record of accomplishingground breaking changes in public policy . Why? Because unlike most other think tanks and publicpolicy institutes, which are largely academic in nature, ALEC members are the decision makers intheir respective states . When ALEC develops policy proposals and model legislation, they areintroduced by our members, laws are passed or repealed, and real change occurs .Today, ALEC is the most effective delivery mechanism for conservative policy alternatives at thestate level . In this regard, the last complete legislative cycle was by far the most successful inALEC's history for its model legislation . The number of bills introduced in the states consistentwith ALEC model legislation totaled 1,647, with 365 achieving enactment, for a success rate of 22percent .As we approach a new century, ALEC is positioned to play an even more important role in shapingour nation's future. Indeed, ALEC's potential is virtually unlimited . Devolution of power from thefederal government to the states is a political reality . Regardless of whether the federal government'is run by liberals who want to mandate programs to the states, or by conservatives who want toreturn control of programs to the states, one thing is clear : The role of state legislators in managrngthe public policy challenges of the 11 st century will only increase ge7

IIIIIIIPrograms and ServicesALEC is the most dynamic public-private partnership in America today . Because ALEC legislativemembers are dedicated to economic growth and less government intervention in the marketplace,they see business as an ally rather than an adversary . With the nation's economic competitivenesschallenged as never before, ALECs public-private partnership, dedicated to encouraging economicgrowth, is setting the nation's agenda for the 21 st century .National Task ForcesALEC's nine National Task Forces serve as public policy laboratories where model legislation andpolicies are discussed and approved for dissemination to legislators across the country . The TaskForces also commission and publish research, write issue papers, and sponsor workshops at ALECmeetings . Unique to the Task Forces is their public-private partnership, a synergistic alliance thatidentifies issues and then responds with common-sense, results oriented policies . State legislatorswelcome their private sector counterparts to the table as equals, which allows both groups to workin unison developing policies that benefit all Americans . ALEC's nine Task Forces are listed below : Civil Justice Commerce and Economic Development Criminal JusticeI IIIIIEducationEnergy, Environment, Natural Resources and AgricultureHealth and Human ServicesTax and Fiscal Policy Telecommunications and Information Technology Trade and TransportationConferencesALEC will convene two national conferences in 1998, with workshops on current issues featuringleading experts, public figures and elected officials . These conferences are a great opportunity forstate legislators and business leaders to meet and exchange ideas and policies that effectivelypromote the free enterprise system .III/ 25th Annual Meeting, August 18-22, Chicago, Illinoisattended by 3,000 state legislators, senior business executives, and renownedpolicy experts, the Annual Meeting is the largest gathering of common senseconservatives held each year. States and Nadon Policy Summit, Decem6er 2-5, Washington, DCHundreds of newly elected and veteran state lawmakers will meet to be briefed byexperts on the issues facing the country prior to the start of the new legislativesessions cl40d00/pdfP w

IIIPublicationsALEC's publications are the showcase for innovative and in-depth analyses and policies producedby ALEC's National Task Forces and members . The issue papers, books and model legislationprovide legislators and policy makers with a comprehensive legislative agenda to advance policiesbased on Jeffersonian principles .IIIII/ FYIA news magazine published 16 times per year containing news briefs and in-deptharticles on state and national issues . Beginning in 1998, FYI will include conferencepre-registration and member renewal information ./ The State FactorWhite papers on the critical issues facing America's lawmakers . Recent issuesinclude tort reform, electric utility industry restructuring, and telecommunicationsderegulation and taxation ./ The Source Book ofAmerican State LegislationPublished every other year, the Source Book contains 344 model bills on a widerange of issues.I/ Issue Brief.eConcise briefing papers on 258 key topics .I/ Issue AnalysisBrief policy analyses on specific issues important to ALEC members .III/ ALEC AlertBriefing papers on a critical and timely issue ./ Legislative UpdateSummaries of bill introductions and enactments in the states, by issuearea ., / Report Cards and Special StudiesState-by-state analysis of critical issues, including crime and education .II/ ALEC WebsiteA home page containing issue updates, publications, and a calendar of events .The website can be reached through the Internet at http ://www .alec .org . ALEC'swebsite will be expanded and managed in-house in 1998 40d00/pdf

IIIIIIIIIResource CenterMembers have access to ALEC's Resource Center for information and networking needs . ALEC'sexpert staff provide data, research, analysis, model legislation, scholarly articles, reference lists andexpert testimony on a wide spectrum of issues .Media RelationsALEC provides its members with a variety of media relations services, including guestcommentaries, news releases, and special announcements . These services encompass :/ View from the StatesCommentaries prepared which discuss a timely issue as part of a special project .Distributed nationally or to targeted states or regions . Media Member ServicesNews releases for members are routinely prepared and distributed announcingspecial awards and appointments, and general news releases on ALEC events . News ConferencesALEC holds a number of news conferences each year either highlighting a policyissue or event ./ NET CommentariesIIWeekly three minute television commentaries on important state and national issuesfeaturing ALEC members and staff./ Talk Radio OutreachOutreach project to talk radio, including an Annual Meeting Radiothon .IIInternet PrQjectsBeginning in 1998, ALEC will greatly expand its Internet capabilities, thereby making ourIto more than 60 million Internet users in the United States . This will not only widen accessibilityto ALEC activities geometrically, but also allow for updates and additions to our publicationsIIIpublications, special reports, Task Force schedules, and conference information instantly availablethroughout the year in a timely and cost efficient basis . We will also expand our e-mail and faxback services to improve our ability to deliver information electronically at reduced costs .To accomplish this goal, ALEC must make major investments in Internet infrastructure andconsulting to develop and maintain its website . This investment will not only create short-termsavings in printing, publication and postage costs, but will also reap significant savings in the future .We will be working with our members in the telecommunications and information technologyindustry to develop our Internet d00/pdfPagelO

IIIIIIIThe goals for this program in 1998 include :1) The development and maintenance of an ALEC in-house website by the end of the year .2) The Source Book of American State Legislation will be instantly accessible to thepublic through the ALEC website or through the Heartland Institute's PolicyFax system(which would be linked with the ALEC website) . The Source Book would cease tobe published as a book, offering savings of approximately 85,000 over the normal2-year publishing cycle . In addition, with Issue Briefs on the website it would preclude everpublishing this in book form again . All ALEC publications and policy 'statements could beupdated instantly .The majority of state legislatures are now connected with the Internet . ALEC members, orinterested parties, will be able to receive information electronically directly from their offices atthe push of a button . Among other services, as the Internet project develops we will add dedicatedweb pages for conference information and Task Force activities 40d00/pdfPagell

1IIIIIIIIIIIIIIIMISSION and GOALSThe mission of the American Legislative Exchange Council is to advance the Jeffersonian principlesof free markets, limited government, federalism, and individual liberty among Americq's statelegislators.Goals1998 marks ALEC's 25th Anniversary . Throughout the year, ALEC will grow as a highly visibleorganization recognized as the nation's premiere non-partisan, public-private membershipassociation of conservative state legislators and America's leading corporations, associations andfoundations . We will have hosted two successful major national conferences, conducted more than20 productive Task Force meetings, hosted 2 national issue summits, published 25 policy papers,reports and issue updates, implemented a pilot program to improve member services by creatingleadership teams in five states, and vastly expanded our .Interrtet communications program andmedia relations operations . We also will have increased revenue, met our financial obligations, andplaced the organization in a positive financial position for future growth and expansion .Objectives and StrategiesTo meet these goals, the following objectives and strategies need to be achieved by December 31,1998 . The means to achieve these objectives and strategies are presented in the 1998 budget, andare identified by a corresponding business plan (BP) number .A . Development . Develop and maintain revenue streams to support the budgeted activitiesof ALEC, and provide resources for future growth .A 1 . Increase the private sector member base by 40 corporate and foundation supporters .A2. Identify foundations to support projects that are essential to the furtherance ofALEC's mission,A3. Work with ALEC leaders, Task Forces and utilize conferences to attract newprivate sector members .A4 . Work with ALEC members and staff to identify new fund raising opportunities .A5. Increase corporate member base by targeting companies that are active in otherstate government affairs organizations, but not ALEC .A6 . Increase the corporate donor base by networking through existing member tradeassociations .A7 . Add additional professional and support staff in Development to improveALEC's fund raising potential .B. Public Affairs . Conduct an on-going communications program that integrates alldepartments of ALEC to promote policies based on Jeffersonian principles amongelected officials, the private sector, and the general public, and ALEC's institutional goalsand objectives fPage12

IIIB 1 . Increase the size and scope of FYI by expanding the standard page count from 16to 24 pages, increasing the numbei of editions from .12 to 16, increasing advertisingrevenue to meet budgeted parameters, and including conference pre-registrationsections and member renewals in the publication .B2 . Expand the publications fulfillment service to generate more subscriptions andpromote ALEC's visibility .Iprojects for meetings and conferences, special events and member services, andproactive/general media campaigns.IIIiIIIIIIIB3 . Maximize media outreach through a comprehensive media relations operation, mediaB4 . Develop a communications program using the Internet, e-mail, and fax back servicesto greatly expand ALEC's ability to deliver information electronically at a reducedcost (i .e., Source Book) .B5 . Create and maintain an ALEC website in-house .B6. Write speeches, talking points, and scripts for ALEC events which effectivelycommunicate ALEC's mission and policies.B7 . Develop video productions to provide promotional and policy information tomembers and prospects at meetings and events, including the 25th Annual Meeting,States and Nations Policy Summit, and a special video "Serving America's StateLegislators ."B8 . Manage general printing operations to achieve cost savings .C. Membershin . Enlist state legislators from all parties and members of the private sectorwho share ALEC's mission .Cl . Recruit and enlist state legislators that share ALEC's Mission .C2. Develop and provide services to ALEC members, including managing statescholarship accounts, maintaining accurate member rosters, scheduling membershipevents, generating attendance and participation in ALEC events, and promoting thebenefits of belonging to the organization .C3 . Continue to enhance the quality, accuracy, and flexibility of the database in order toprovide improved services in terms of generating and maintaining current data onthe status of members, dues, and addresses .C4 . Develop and utilize demographic and related survey responses to provideimproved services .C5 . Create leadership teams in 5 states to improve member services and enhanceleadership opportunities .C6. Develop and enhance the capability of communicating with/and among theBoard, the State Chairs, Task Forces, and individual members.C7. Implement an alumni membership program and enhance communications with thosewho hold elected offices, including Members of Congress and governors, to improveALEC's visibility .C8. Work with the State Chairs and ALEC Development staff to recruit/retain privatesector members (2 new per state) gel3

IIIIIIIIIII1IIIIID. Task Forces. Conduct a policy making program that unites members of the public andprivate sectors in a dynamic partnership to support research, policy development, anddissemination activities, and prepare the next generation of political leadership througheducational programs on the principles of Jeffersonian democracy .Dl . Ensure that each Task Force holds productive meetings, with an average of 20legislators attending each meeting .D2 . Identify key issues that are not addressed in current model legislation or policystatements

ALEC is classified by the Internal Revenue Service as a 501(cX3) non-profit public policy and educational organization. The business location of ALEC is 910 17th Street, NW, Fifth Floor, Washington, D.C. Governance/Management ALEC is governed by a National Board of Directors, which