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USAA TAX EXEMPT FUND, INC.
Long-Term Fund Intermediate-Term Fund
Short-Term Fund Tax Exempt Money Market Fund
California Bond Fund California Money Market Fund
New York Bond Fund New York Money Market Fund
Virginia Bond Fund Virginia Money Market Fund
SUPPLEMENT DATED JANUARY 2, 1996
TO THE STATEMENTS OF ADDITIONAL INFORMATION
DATED AUGUST 1, 1995 AS SUPPLEMENTED DECEMBER 1, 1995
Effective January 1, 1996, M. Staser Holcomb replaced
Hansford T. Johnson as Director and Chairman of the Board of
Directors and C. Dale Briscoe retired from the Board of
Directors. The paragraph under the caption "Directors and
Officers of the Company" relating to Hansford T. Johnson is
replaced with the following information:
M. Staser Holcomb 1, 2
Director and Chairman of the Board of Directors
Age: 63
President, Chief Executive Officer, Director and Vice Chairman of
the Board of Directors of USAA Capital Corporation and several of
its subsidiaries and affiliates (1/96-present); Executive Vice
President, Chief Information Officer, United Services Automobile
Association (USAA) (2/94-12/95); Executive Vice President, Chief
Financial Officer, USAA and President, Director and Vice Chairman
of the Board of Directors, USAA Capital Corporation (9/91-1/94);
and Executive Vice President, Property & Casualty Operations,
USAA (1/90-8/91). Mr. Holcomb also will serve as a Trustee and
Chairman of the Boards of Trustees of USAA Investment Trust and
USAA State Tax-Free Trust and as a Director and Chairman of the
Boards of Directors of USAA Investment Management Company (IMCO),
USAA Mutual Fund, Inc., USAA Shareholder Account Services, USAA
Federal Savings Bank and USAA Real Estate Company.
Also effective January 1, 1996, Bradford W. Rich, Senior
Vice President, General Counsel and Secretary, USAA, replaced
William McCrae as a Director of USAA IMCO.
27810-0196
