<PAGE> PAGE 1
000 B000000 06/30/96
000 C000000 0000702133
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 STATE BOND MUNICIPAL FUNDS, INC.
001 B000000 811-3454
001 C000000 5025827900
002 A000000 515 WEST MARKET, 8TH FLOOR
002 B000000 LOUISVILLE
002 C000000 KY
002 D010000 40202
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 STATE BOND TAX EXEMPT FUND
007 C030100 N
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 ARM CAPITAL ADVISORS, INC.
008 B00AA01 A
008 C00AA01 801-47942
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10166
011 A00AA01 SBM FINANCIAL SERVICES, INC.
011 B00AA01 8-14810
011 C01AA01 NEW ULM
011 C02AA01 MN
011 C03AA01 56073
011 C04AA01 0069
012 A00AA01 ARM TRANSFER AGENCY, INC.
012 B00AA01 84-5602
012 C01AA01 NEW ULM
012 C02AA01 MN
012 C03AA01 56073
<PAGE> PAGE 2
013 A00AA01 ERNST & YOUNG LLP
013 B01AA01 KANSAS CITY
013 B02AA01 MO
013 B03AA01 64105
014 A00AA01 MORGAN STANLEY AND COMPANY
014 B00AA01 8-15869
015 A00AA01 INVESTORS FIDUCIARY TRUST COMPANY
015 B00AA01 C
015 C01AA01 KANSAS CITY
015 C02AA01 MO
015 C03AA01 64105
015 E01AA01 X
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 6
019 C00AA00 ARMCAPITAL
020 C000001 0
020 C000002 0
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 0
022 A000001 FORD CREDIT CORPORATION
022 B000001 38-1612444
022 C000001 82318
022 D000001 2500
022 A000002 SEARS ROEBUCK ACCEPTANCE CORPORATION
022 B000002 51-0080535
022 C000002 47940
022 D000002 0
022 A000003 GE CAPITAL CORPORATION
022 B000003 13-1500700
022 C000003 10746
022 D000003 0
022 A000004 SMITH BARNEY
022 B000004 13-1912900
022 C000004 6360
022 D000004 3713
022 A000005 AMERICAN EXPRESS CREDIT CORPORATION
022 B000005 11-1988350
022 C000005 5595
022 D000005 0
022 A000006 PAINE WEBBER
022 B000006 13-2638166
022 C000006 3064
022 D000006 542
<PAGE> PAGE 3
022 A000007 PRUDENTIAL BACHE
022 B000007 22-2347336
022 C000007 834
022 D000007 0
022 A000008 CIT GROUP
022 B000008 13-2994534
022 C000008 794
022 D000008 0
022 A000009 BENEFICIAL FINANCIAL CORPORATION
022 B000009 51-0003820
022 C000009 475
022 D000009 0
022 C000010 0
022 D000010 0
023 C000000 158126
023 D000000 6755
024 00AA00 N
025 D00AA01 0
025 D00AA02 0
025 D00AA03 0
025 D00AA04 0
025 D00AA05 0
025 D00AA06 0
025 D00AA07 0
025 D00AA08 0
026 A000000 N
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A01AA00 243
028 A02AA00 242
028 A03AA00 0
028 A04AA00 196
028 B01AA00 216
028 B02AA00 311
028 B03AA00 0
028 B04AA00 331
028 C01AA00 280
028 C02AA00 242
028 C03AA00 0
028 C04AA00 470
028 D01AA00 308
028 D02AA00 249
028 D03AA00 0
028 D04AA00 770
<PAGE> PAGE 4
028 E01AA00 168
028 E02AA00 272
028 E03AA00 0
028 E04AA00 502
028 F01AA00 132
028 F02AA00 327
028 F03AA00 0
028 F04AA00 644
028 G01AA00 1347
028 G02AA00 1643
028 G03AA00 0
028 G04AA00 2913
028 H00AA00 1258
029 00AA00 Y
030 A00AA00 94
030 B00AA00 4.50
030 C00AA00 0.00
031 A00AA00 27
031 B00AA00 0
032 00AA00 0
033 00AA00 67
034 00AA00 N
035 00AA00 0
036 B00AA00 0
037 00AA00 N
038 00AA00 0
039 00AA00 N
040 00AA00 Y
041 00AA00 Y
042 A00AA00 0
042 B00AA00 0
042 C00AA00 100
042 D00AA00 0
042 E00AA00 0
042 F00AA00 0
042 G00AA00 0
042 H00AA00 0
043 00AA00 204
044 00AA00 0
045 00AA00 Y
046 00AA00 N
047 00AA00 Y
048 00AA00 0.500
048 A01AA00 0
048 A02AA00 0.000
048 B01AA00 0
048 B02AA00 0.000
048 C01AA00 0
048 C02AA00 0.000
048 D01AA00 0
048 D02AA00 0.000
<PAGE> PAGE 5
048 E01AA00 0
048 E02AA00 0.000
048 F01AA00 0
048 F02AA00 0.000
048 G01AA00 0
048 G02AA00 0.000
048 H01AA00 0
048 H02AA00 0.000
048 I01AA00 0
048 I02AA00 0.000
048 J01AA00 0
048 J02AA00 0.000
048 K01AA00 0
048 K02AA00 0.000
049 00AA00 N
050 00AA00 N
051 00AA00 N
052 00AA00 N
053 A00AA00 N
054 A00AA00 Y
054 B00AA00 N
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 Y
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 N
055 A00AA00 N
055 B00AA00 N
056 00AA00 Y
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 250
062 A00AA00 Y
062 B00AA00 0.0
062 C00AA00 0.0
062 D00AA00 0.0
062 E00AA00 0.0
062 F00AA00 0.0
062 G00AA00 0.0
062 H00AA00 0.0
<PAGE> PAGE 6
062 I00AA00 3.5
062 J00AA00 0.0
062 K00AA00 0.0
062 L00AA00 0.0
062 M00AA00 0.0
062 N00AA00 0.0
062 O00AA00 95.2
062 P00AA00 0.0
062 Q00AA00 0.0
062 R00AA00 0.0
063 A00AA00 0
063 B00AA00 5.9
064 A00AA00 Y
064 B00AA00 N
066 A00AA00 N
067 00AA00 N
068 A00AA00 N
068 B00AA00 N
069 00AA00 N
070 A01AA00 Y
070 A02AA00 N
070 B01AA00 N
070 B02AA00 N
070 C01AA00 N
070 C02AA00 N
070 D01AA00 N
070 D02AA00 N
070 E01AA00 N
070 E02AA00 N
070 F01AA00 N
070 F02AA00 N
070 G01AA00 N
070 G02AA00 N
070 H01AA00 N
070 H02AA00 N
070 I01AA00 N
070 I02AA00 N
070 J01AA00 N
070 J02AA00 N
070 K01AA00 N
070 K02AA00 N
070 L01AA00 N
070 L02AA00 N
070 M01AA00 N
070 M02AA00 N
070 N01AA00 Y
070 N02AA00 N
070 O01AA00 Y
070 O02AA00 N
070 P01AA00 N
070 P02AA00 N
<PAGE> PAGE 7
070 Q01AA00 N
070 Q02AA00 N
070 R01AA00 N
070 R02AA00 N
071 A00AA00 12420
071 B00AA00 13812
071 C00AA00 78215
071 D00AA00 16
072 A00AA00 12
072 B00AA00 5042
072 C00AA00 0
072 D00AA00 0
072 E00AA00 0
072 F00AA00 408
072 G00AA00 0
072 H00AA00 0
072 I00AA00 31
072 J00AA00 30
072 K00AA00 0
072 L00AA00 18
072 M00AA00 0
072 N00AA00 0
072 O00AA00 0
072 P00AA00 0
072 Q00AA00 0
072 R00AA00 10
072 S00AA00 10
072 T00AA00 204
072 U00AA00 0
072 V00AA00 0
072 W00AA00 25
072 X00AA00 736
072 Y00AA00 0
072 Z00AA00 4306
072AA00AA00 83
072BB00AA00 43
072CC01AA00 64
072CC02AA00 0
072DD01AA00 4306
072DD02AA00 0
072EE00AA00 0
073 A01AA00 0.5732
073 A02AA00 0.0000
073 B00AA00 0.0000
073 C00AA00 0.0000
074 A00AA00 0
074 B00AA00 0
074 C00AA00 2839
074 D00AA00 77192
074 E00AA00 0
074 F00AA00 0
<PAGE> PAGE 8
074 G00AA00 0
074 H00AA00 0
074 I00AA00 0
074 J00AA00 0
074 K00AA00 0
074 L00AA00 1350
074 M00AA00 0
074 N00AA00 81381
074 O00AA00 0
074 P00AA00 46
074 Q00AA00 0
074 R01AA00 0
074 R02AA00 0
074 R03AA00 0
074 R04AA00 240
074 S00AA00 0
074 T00AA00 81095
074 U01AA00 7522
074 U02AA00 0
074 V01AA00 10.78
074 V02AA00 0.00
074 W00AA00 0.0000
074 X00AA00 1944
074 Y00AA00 0
075 A00AA00 0
075 B00AA00 82125
076 00AA00 0.00
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 N
077 Q020000 N
077 Q030000 N
078 000000 N
080 A00AA00 NATIONAL UNION FIRE INSURANCE COMPANY
080 C00AA00 5000
081 A00AA00 Y
081 B00AA00 6
082 A00AA00 Y
<PAGE> PAGE 9
082 B00AA00 100
083 A00AA00 N
083 B00AA00 0
084 A00AA00 N
084 B00AA00 0
085 A00AA00 Y
085 B00AA00 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
SIGNATURE KEVIN HOWARD
TITLE SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT TO SHAREHOLDERS FOR THE STATE BOND TAX EXEMPT FUND AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000702133
<NAME> STATE BOND MUNICIPAL FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> STATE BOND TAX EXEMPT FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 76,707,103
<INVESTMENTS-AT-VALUE> 80,031,332
<RECEIVABLES> 1,350,043
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 81,381,375
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 286,813
<TOTAL-LIABILITIES> 286,813
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77,730,196
<SHARES-COMMON-STOCK> 7,522,296
<SHARES-COMMON-PRIOR> 7,578,854
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 40,137
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,324,229
<NET-ASSETS> 81,094,562
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5,041,950
<OTHER-INCOME> 0
<EXPENSES-NET> 736,413
<NET-INVESTMENT-INCOME> 4,305,537
<REALIZED-GAINS-CURRENT> 40,206
<APPREC-INCREASE-CURRENT> 64,146
<NET-CHANGE-FROM-OPS> 4,409,889
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,305,537
<DISTRIBUTIONS-OF-GAINS> 38,789
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 290,245
<NUMBER-OF-SHARES-REDEEMED> 636,574
<SHARES-REINVESTED> 289,771
<NET-CHANGE-IN-ASSETS> (547,809)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 38,720
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 407,880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 736,413
<AVERAGE-NET-ASSETS> 81,576,000
<PER-SHARE-NAV-BEGIN> 10.77
<PER-SHARE-NII> 0.57
<PER-SHARE-GAIN-APPREC> 0.01
<PER-SHARE-DIVIDEND> 0.57
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.78
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
