File Nos. 2-77767
811-3481
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 28 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]
Amendment No. 28 [X]
(Check appropriate box or boxes.)
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b)
----
X on April 1, 1998 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 4
3 Condensed Financial Information 5
4 General Description of Registrant 8
5 Management of the Fund 12
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 24
7 Purchase of Securities Being Offered 13
8 Redemption or Repurchase 19
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents B-2
2 General Information and History B-1, B-39
13 Investment Objectives and Policies B-3
14 Management of the Fund B-16
15 Control Persons and Principal B-20
Holders of Securities
16 Investment Advisory and Other B-21
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-38
18 Capital Stock and Other Securities B-39
19 Purchase, Redemption and Pricing B-23, B-28,
of Securities Being Offered B-34
20 Tax Status *
21 Underwriters B-1, B-20
22 Calculations of Performance Data B-36
23 Financial Statements B-40
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
______________________________________________________________________________
COMBINED PROSPECTUS April 1, 1998
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
CLASS A SHARES
______________________________________________________________________________
General Government Securities Money Market Fund, Inc. (the
"Government Money Fund"), General Money Market Fund, Inc. (the "Money Fund"),
General California Municipal Money Market Fund (the "California Municipal
Fund"), General Municipal Money Market Fund, Inc. (the "National Municipal
Fund") and General New York Municipal Money Market Fund (the "New York
Municipal Fund") are open-end management investment companies, known as money
market mutual funds. Each Fund seeks to provide you with as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. In addition, each of the California Municipal Fund,
the National Municipal Fund and the New York Municipal Fund seeks to provide
current income exempt from Federal income tax and, in the case of the
California Municipal Fund, exempt from State of California income taxes, and,
in the case of the New York Municipal Fund, exempt from New York State and
New York City income taxes.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Since each of the California Municipal Fund and the New York
Municipal Fund may invest a significant portion of its assets in a single
issuer, an investment in these Funds may involve greater risk than
investments in certain other types of money market funds.
(cover page continued on next page)
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT EACH FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION, DATED APRIL 1, 1998, WHICH MAY
BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS
IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUNDS. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO A FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________________________________________________________________
(CONTINUED FROM COVER PAGE)
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY A FUND.
FUND SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS AS
DESCRIBED HEREIN. BY THIS PROSPECTUS, EACH FUND IS OFFERING CLASS A SHARES.
ANOTHER CLASS OF FUND SHARES - CLASS B SHARES - ARE OFFERED BY THE FUNDS
PURSUANT TO A SEPARATE PROSPECTUS AND ARE NOT OFFERED HEREBY. CLASS A AND
CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO, AND THE
EXPENSES BORNE BY, EACH CLASS WHICH MAY AFFECT PERFORMANCE. IF YOU WOULD LIKE
TO OBTAIN INFORMATION ABOUT CLASS B SHARES, PLEASE WRITE TO THE ADDRESS OR
CALL THE NUMBER SET FORTH ON THE COVER PAGE.
EACH FUND IS A SEPARATE ENTITY WITH A SEPARATE PORTFOLIO. THE
OPERATIONS AND RESULTS OF ONE FUND ARE UNRELATED TO THOSE OF EACH OTHER FUND.
THIS COMBINED PROSPECTUS HAS BEEN PREPARED FOR YOUR CONVENIENCE TO PROVIDE
YOU THE OPPORTUNITY TO CONSIDER FIVE INVESTMENT CHOICES IN ONE DOCUMENT.
______________________________________________________________________________
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses................... 4
Condensed Financial Information.................. 5
Yield Information................................ 7
Description of the Funds......................... 8
Management of the Funds.......................... 12
How to Buy Shares................................ 13
Shareholder Services............................. 17
How to Redeem Shares............................. 20
Service Plan..................................... 22
Shareholder Services Plan........................ 23
Dividends, Distributions and Taxes............... 23
General Information.............................. 25
Appendix......................................... 27
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
GOVERNMENT
MONEY MONEY
FUND FUND
__________- _______
Management Fees.................................................. .50% .50%
12b-1 Fees....................................................... .20% .20%
Other Expenses................................................... .12% .18%
Total Fund Operating Expenses.................................... .82% .88%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 8 $ 9
3 YEARS $ 26 $ 28
5 YEARS $ 46 $ 49
10 YEARS $101 $108
CALIFORNIA NATIONAL NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
________- _________ _________
<S> <C> <C> <C>
Management Fees............................................ .50% .50% .50%
12b-1 Fees................................................... None None None
Other Expenses............................................... .20% .12% .16%
Total Fund Operating Expenses............................... .70% .62% .66%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 7 $ 6 $ 7
3 YEARS $22 $20 $21
5 YEARS $39 $35 $37
10 YEARS $87 $77 $82
</TABLE>
_______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
_______________________________________________________________________________
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing tables does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Certain Service Agents (as defined below) may charge their clients
direct fees for effecting transactions in Fund shares; such fees are not
reflected in the foregoing table. See "Management of the Funds," "How to Buy
Shares," "Service Plan" and "Shareholder Services Plan."
[Page 4]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst &
Young LLP, each Fund's independent auditors. Further financial data, related
notes and report of independent auditors for each Fund accompany the
Statement of Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Government Money Fund _ Contained below is per share operating performance
data for a Class A share of Common Stock outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the Government Money
Fund's financial statements.
<TABLE>
GOVERNMENT MONEY FUND
________________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
________________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income-net.... .058 .068 .082 .072 .053 .033 .027 .038 .052 .047 .040
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
DISTRIBUTIONS:
Dividends from investment
income-net.......... (.058) (.068) (.082) (.072) (.053) (.033) (.027) (.038) (.052) (.047) (.040)
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
Net asset value, end
of period...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN 5.96% 6.99% 8.56% 7.42% 5.46% 3.36% 2.69% 3.90% 5.35% 4.75% 4.84%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.......... .83% .87% .87% .86% .82% .82% .81% .83% .84% .82% .82%(2)
Ratio of net investment income
to average net assets 5.80% 6.74% 8.23% 7.14% 5.27% 3.28% 2.66% 3.82% 5.22% 4.65% 4.78%(2)
Net Assets, end of period
(000's omitted)... $292,204 $263,130 $306,610 $408,817 $609,015 $725,419 $536,884 $513,345 $530,054 $519,861 $510,289
______________________________
(1)Effective February 1, 1997, the Fund has changed its fiscal year end from January 31 to November 30.
(2)Annualized.
Money Fund _ Contained below is per share operating performance data for a Class A share of Common Stock outstanding, total
investment return, ratios to average net assets and other supplemental data
for each period indicated. This information has been derived from the Money
Fund's financial statements.
</TABLE>
<TABLE>
MONEY FUND
_____________________________________________________________________________________________
TEN MONTHS
FISCAL YEAR ENDED ENDED
JANUARY 31, NOVEMBER 30,
______________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
Investment Operations:
Investment income_net.. .060 .069 .085 .074 .055 .032 .025 .037 .053 .047 .041
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
Distributions:
Dividends from investment
income_net.......... (.060) (.069) (.085) (.074) (.055) (.032) (.025) (.037) (.053) (.047) (.041)
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
Net asset value, end
of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN... 6.15% 7.10% 8.80% 7.64% 5.61% 3.26% 2.56% 3.75% 5.42% 4.81% 4.99%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets.. .95% .97% .93% .91% .92% .95% .94% .94% .86% .84% .88%(2)
Ratio of net investment
income to average net
assets....... . 6.00% 6.84% 8.43% 7.39% 5.44% 3.22% 2.53% 3.68% 5.28% 4.71% 4.89%(2)
Decrease reflected in
above expense ratios due
to undertakings by The
Dreyfus Corporation.... __ __ __ __ __ __ .02% .04% .01% __ _
Net Assets, end of period
(000's omitted)..... $763,441 $710,810 $915,548 $677,257 $845,690 $688,785 $616,072 $572,116 $654,581 $764,119 $903,313
__________________________________________________
(1)Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(2)Annualized.
</TABLE>
[Page 5]
CALIFORNIA MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class A share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the California
Municipal Fund's financial statements.
<TABLE>
CALIFORNIA MUNICIPAL FUND
_____________________________________________________________________________________________
FOUR MONTHS
FISCAL YEAR ENDED ENDED
JULY 31, NOVEMBER 30,
_____________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1997(1)
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income_net.. .045 .053 .058 .052 .036 .024 .023 .031 .029 .029 .010
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
DISTRIBUTIONS:
Dividends from investment
income_net......... (.045) (.053) (.058) (.052) (.036) (.024) (.023) (.031) (.029) (.029) (.010)
_____ _____ _____ _____ _____ ______ _____ _____ _____ _____ _____
Net asset value, end
of period..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN.. 4.62% 5.46% 5.93% 5.29% 3.65% 2.46% 2.27% 3.14% 2.94% 2.95%(2) 2.96%(2)
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets..... .50% .76% .07% .02% .20% .33% .33% .52% .65% .64%(2) .70%(2)
Ratio of net investment income
to average net assets.. 4.48% 5.29% 5.78% 5.08% 3.59% 2.43% 2.24% 3.07% 2.91% 2.91%(2) 2.97%(2)
Decrease reflected in
above expense
ratios due to undertakings by
The Dreyfus Corporation.. .21% __ .65% .59% .41% .30% .28% .11% __ __ __
Net Assets, end of period
(000's omitted)..... $109,037 $77,372 $281,909 $538,978 $549,383 $608,534 $699,105 $463,404 $390,155 $327,226 $361,102
_________________________________________________
(1)Effective August 1, 1997, the Fund has changed its fiscal year end from
July 31 to November 30.
(2)Annualized.
</TABLE>
NATIONAL MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class A share of Common Stock outstanding, total investment
return, ratios to average net assets and other supplemental data for each
year indicated. This information has been derived from the National Municipal
Fund's financial statements.
<TABLE>
NATIONAL MUNICIPAL FUND
_______________________________________________________________________________________________
FISCAL YEAR ENDED
NOVEMBER 30,
_______________________________________________________________________________________________
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income_net...... .046 .057 .054 .043 .027 .021 .023 .034 .029 .031
DISTRIBUTIONS:
Dividends from investment
income _ net............ (.046) (.057) (.054) (.043) (.027) (.021) (.023) (.034) (.029) (.031)
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
Net asset value, end
of year...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN....... 4.68% 5.89% 5.51% 4.36% 2.74% 2.10% 2.27% 3.41% 2.97% 3.14%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets ......... .62% .64% .62% .62% .64% .63% .64% .66% .66% .62%
Ratio of net investment income
to average net assets....... 4.55% 5.74% 5.39% 4.30% 2.71% 2.08% 2.22% 3.35% 2.93% 3.09%
Net Assets, end of year
(000's omitted)........ $394,583 $343,917 $352,320 $342,595 $397,912 $352,147 $294,711 $294,379 $256,862 $273,058
</TABLE>
[Page 6]
New York Municipal Fund _ Contained below is per share operating performance
data for a Class A share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each
year indicated. This information has been derived from the New York Municipal
Fund's financial statements.
<TABLE>
NEW YORK MUNICIPAL FUND
__________________________________________-
FISCAL YEAR ENDED
NOVEMBER 30,
__________________________________________-
PER SHARE DATA: 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
INVESTMENT OPERATIONS:
Investment income-net..... .043 .052 .056 .044 .028 .020 .023 .032 .028 .029
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
DISTRIBUTIONS:
Dividends from investment
income-net............. (.043) (.052) (.056) (.044) (.028) (.020) (.023) (.032) (.028) (.029)
_____ _____ _____ _____ _____ _____ _____ _____ _____ _____
Net asset value, end
of year............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN..... 4.34% 5.36% 5.76% 4.45% 2.78% 2.00% 2.34% 3.28% 2.84% 2.98%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets....... .50% .75% __ .09% .25% .32% .34% .58% .68% .66%
Ratio of net investment income
to average net assets....... 4.22% 5.97% 5.58% 4.44% 2.99% 1.98% 2.33% 3.23% 2.80% 2.94%
Decrease reflected in above
expense ratios due to
undertakings by The
Dreyfus Corporation.. .27% .15% .66% .55% .38% .35% .32% .05% __ __
Net Assets, end of year
(000's omitted).......... $62,140 $49,335 $500,947 $586,933 $630,899 $612,441 $689,918 $636,013 $507,537 $440,750
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in such Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the California Municipal Fund, the National Municipal Fund and
the New York Municipal Fund (collectively, the "Municipal Funds"), tax
equivalent yield is calculated by determining the pre-tax yield which, after
being taxed at a stated rate (in the case of the California Municipal Fund
and New York Municipal Fund typically the highest combined Federal and
California, or New York State and New York City, respectively, personal
income tax rates), would be equivalent to a stated yield or effective yield
calculated as described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
[Page 7]
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund ReportTM, Morningstar, Inc. and other industry publications.
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the Municipal Funds is to maximize current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity and, in the case of the California Municipal Fund,
exempt from State of California income taxes, and, in the case of the New
York Municipal Fund, exempt from New York State and New York City income
taxes. Each Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of such Fund's outstanding voting shares. There
can be no assurance that a Fund's investment objective will be achieved. Each
Fund pursues its investment objective in the manner described below.
Securities in which a Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
each Municipal Fund, which are rated in one of the two highest rating
categories for debt obligations by at least two nationally recognized
statistical rating organizations (or one rating organization if the
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and each Municipal
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co., Fitch IBCA,
Inc. ("Fitch") and Thomson BankWatch, Inc., and their rating criteria are
described in the "Appendix" to the Statement of Additional Information. This
discussion concerning investment ratings does not apply to the Government
Money Fund because it invests exclusively in U.S. Government securities and
repurchase agreements in respect thereof. For further information regarding
the amortized cost method of valuing securities, see "Determination of Net
Asset Value" in the Statement of Additional Information. There can be no
assurance a Fund will be able to maintain a stable net asset value of $1.00
per share.
Each of the Government Money Fund, the Money Fund and the National
Municipal Fund, is classified as a diversified investment company. Each of
the California Municipal Fund and the New York Municipal Fund is classified
as a non-diversified investment company.
GOVERNMENT MONEY FUND _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."
[Page 8]
MONEY FUND _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, domestic
and foreign branches of foreign banks and thrift institutions, repurchase
agreements, asset-backed securities, and high quality domestic and foreign
commercial paper and other short-term corporate obligations, including those
with floating or variable rates of interest. The Fund may invest in U.S.
dollar denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix _ Certain Portfolio Securities." During normal market conditions,
at least 25% of the value of the Fund's total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
NATIONAL MUNICIPAL FUND _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix_Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
money market instruments ("Taxable Investments") of the quality described
under "Appendix _ Certain Portfolio Securities _ Taxable Investments."
CALIFORNIA MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
California personal income taxes (collectively, "California Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not California Municipal Obligations and therefore may be
subject to California income taxes. To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of California income tax and in Taxable Investments. See
"Investment Considerations and Risks_Investing in California Municipal
Obligations" below, "Dividends, Distributions and Taxes" and "Appendix _
Certain Portfolio Securities."
[Page 9]
NEW YORK MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of New York, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal, New York
State and New York City income taxes (collectively, "New York Municipal
Obligations").The remainder of the Fund's assets may be invested in
securities that are not New York Municipal Obligations and therefore may be
subject to New York State and New York City income taxes. To the extent
acceptable New York Municipal Obligations are at any time unavailable for
investment by the Fund, the Fund will invest temporarily in other Municipal
Obligations which may be subject to New York State and New York City income
tax and in Taxable Investments. See "Investment Considerations and Risks _
Investing in New York Municipal Obligations" below, "Dividends, Distributions
and Taxes" and "Appendix _ Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
FOREIGN SECURITIES (MONEY FUND ONLY) _ Since the Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, which industry also is
subject to the effects of competition within the banking industry as well as
with other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
INVESTING IN MUNICIPAL OBLIGATIONS (MUNICIPAL FUNDS) _ Each of the Municipal
Funds may invest more than 25% of the value of its total assets in Municipal
Obligations which are related in such a way that an economic, business or
political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects. As a result, each of these Funds
may be subject to greater risk as compared to a fund that does not follow
this practice.
[Page 10]
Certain municipal lease/purchase obligations in which each of the
Municipal Funds may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus Corporation
will consider, on an ongoing basis, a number of factors including the
likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in any of the
Municipal Funds. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the Municipal Funds so as to
adversely affect Fund shareholders, each Municipal Fund would reevaluate its
investment objective and policies and submit possible changes in the Fund's
structure to shareholders for their consideration. If legislation were
enacted that would treat a type of Municipal Obligation as taxable, the
Municipal Funds would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS (CALIFORNIA MUNICIPAL FUND
ONLY) _ Since the California Municipal Fund is concentrated in securities
issued by California or entities within California, an investment in the Fund
may involve greater risk than investments in certain other types of money
market funds. You should consider carefully the special risks inherent in
investing principally in California Municipal Obligations. These risks result
from certain amendments to the California Constitution and other statutes
that limit the taxing and spending authority of California governmental
entities, as well as from the general financial condition of the State of
California. A severe recession from 1990 through fiscal 1994 reduced revenues
and increased expenditures for social welfare programs, resulting in a period
of budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94 fiscal
year, the accumulated budget deficit was so large that it was impractical to
budget to retire it in one year, so a two-year program was implemented, using
the issuance of revenue anticipation warrants to carry a portion of the
deficit over the end of the fiscal year. When the economy failed to recover
sufficiently, a second two-year plan was implemented in 1994-95, again using
cross-fiscal year revenue anticipation warrants to partly finance the deficit
into the 1995-96 fiscal year. As a consequence of the accumulated budget
deficits, the State's cash resources available to pay its ongoing obligations
were significantly reduced causing the State to rely increasingly on external
debt markets to meet its cash needs. Future budget problems or a
deterioration in California's general financial condition may have the effect
of impairing the ability of the issuers of California Municipal Obligations
to pay interest on, or repay the principal of, such California Municipal
Obligations. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS (NEW YORK MUNICIPAL FUND ONLY) _
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in New York Municipal Obligations. These risks result from the
financial condition of New York State, certain of its public
[Page 11]
bodies and municipalities, and New York City. Beginning in early 1975,
New York State, New York City and other New York State entities faced serious
financial difficulties which jeopardized the credit standing and impaired the
borrowing abilities of such entities and contributed to high interest rates
on, and lower market prices for, debt obligations issued by them. A
recurrence of such financial difficulties or a failure of certain financial
recovery programs could result in defaults or declines in the market values
of various New York Municipal Obligations in which the Fund may invest. If
there should be a default or other financial crisis relating to New York
State, New York City, a State or City agency, or a State municipality, the
market value and marketability of outstanding New York Municipal Obligations
in the Fund's portfolio and the interest income to the Fund could be
adversely affected. Moreover, the national recession and the significant
slowdown in the New York and regional economies in the early 1990's added
substantial uncertainty to estimates of the State's tax revenues, which, in
part, caused the State to incur cash-basis operating deficits in the General
Fund and issue deficit notes during the fiscal periods 1989 through 1992. New
York State's financial operations have improved, however, during recent
fiscal years. For its fiscal years 1993 through 1997, the State recorded
balanced budgets on a cash basis, with positive fund balances in the General
Fund. New York State ended its 1996-97 fiscal year on March 31, 1997 in
balance on a cash basis, with a cash surplus in the General Fund of
approximately $1.4 billion. There can be no assurance that New York State
will not face substantial potential budget gaps in future years. You should
obtain and review a copy of the Statement of Additional Information which
more fully sets forth these and other risk factors.
NON-DIVERSIFIED STATUS (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL
FUND) _ The classification of each of these Funds as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act.
A "diversified" investment company is required by the 1940 Act generally,
with respect to 75% of its total assets, to invest not more than 5% of such
assets in the securities of a single issuer. Since a relatively high
percentage of each of these Funds' assets may be invested in the obligations
of a limited number of issuers, the Fund's portfolio may be more sensitive to
changes in the market value of a single issuer. However, to meet Federal tax
requirements, at the close of each quarter each Fund may not have more than
25% of its total assets invested in any one issuer and, with respect to 50%
of total assets, not more than 5% of its total assets invested in any one
issuer. These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Year 2000 Risks _ Like other mutual funds, financial and business
organizations and individuals around the world, each Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on a Fund.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
[Page 12]
Corporation ("Mellon"). As of February 28, 1998, The Dreyfus Corporation
managed or administered approximately $99 billion in assets for approximately
1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under a separate Management Agreement with
the Fund, subject to the authority of the Fund's Board in accordance with
applicable State law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$305 billion in assets as of December 31, 1997, including approximately $104
billion in proprietary mutual fund assets. As of December 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.532 trillion in
assets, including approximately $60 billion in mutual fund assets.
For the fiscal year ended November 30, 1997, each Fund paid The
Dreyfus Corporation a monthly management fee at the effective annual rate of
.50 of 1% of the value of such Fund's average daily net assets. From time to
time, The Dreyfus Corporation may waive receipt of its fees and/or
voluntarily assume certain expenses of a Fund, which would have the effect of
lowering the expense ratio of such Fund and increasing yield to investors. No
Fund will pay The Dreyfus Corporation at a later time for any amounts it may
waive, nor will a Fund reimburse The Dreyfus Corporation for any amounts it
may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
DISTRIBUTOR _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your
[Page 13]
written request. No certificates are issued for fractional shares. It is not
recommended that the Municipal Funds be used as a vehicle for Keogh, IRA or
other qualified plans. Each Fund reserves the right to reject any purchase
order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
For the Government Money Fund and Money Fund only, however, the minimum
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular
IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and rollover
IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
each Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund accounts, the
minimum initial investment is $50. The Government Money Fund and Money Fund
reserve the right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to
such Fund. Each Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and Money Fund, to "The
Dreyfus Trust Company, Custodian." Payments to open new accounts which are
mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class A shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE RELEVANT FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Other purchase procedures may be in
effect for clients of certain Service Agents.
Wire payments may be made, if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund, Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052163/General California Municipal Money Market Fund
DDA # 8900052376/General Municipal Money Market Fund, Inc.
DDA # 8900052171/General New York Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by
[Page 14]
wire, please call 1-800-645-6561 after completing your wire payment to obtain
your Fund account number. Please include your Fund account number on the
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. Each Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with
a convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit and
will not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus and, to the extent permitted by
applicable regulatory authority, may charge their clients direct fees. You
should consult your Service Agent in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Government Money Fund and Money Fund _ Each of these Funds' net asset value
per share is determined twice each day the New York Stock Exchange or the
Funds' Transfer Agent is open for business: as of 5:00 p.m., New York time,
and as of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
[Page 15]
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed
with the Distributor or its designee in New York will become effective at the
price determined at 5:00 p.m., New York time, and the shares purchased will
receive the dividend on Fund shares declared on that day, if such order is
placed with the Distributor or its designee in New York by 5:00 p.m., New
York time, and Federal Funds are received by 6:00 p.m., New York time, on
that day. A telephone order placed with the Distributor or its designee in
New York after 5:00 p.m., New York time, but by 8:00 p.m., New York time, on
a given day will become effective at the price determined at 8:00 p.m., New
York time, on that day, and the shares purchased will begin to accrue
dividends on the next business day, if Federal Funds are received by 11:00
a.m., New York time, on the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds $1,000,000
("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family of Funds
then held by Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
Municipal Funds _ Each of the Municipal Funds' net asset value per share is
determined twice each day the New York Stock Exchange or the Funds' Transfer
Agent is open for business: as of 12:00 Noon, New York time, and as of 8:00
p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 12:00
Noon, New York time, on a given day, and the shares purchased will receive
the dividend on Fund shares declared on that day, if the telephone order is
placed with the Distributor or its designee by 12:00 Noon, New York time, and
Federal Funds are received by 4:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee after 12:00 Noon,
New York time, but by 8:00 p.m., New York time, on a given day will become
effective at the price determined at 8:00 p.m., New York time, on that day,
and the shares purchased will begin to accrue dividends on the next business
day, if Federal Funds are received by 11:00 a.m., New York time, on the next
business day.
TELETRANSFER PRIVILEGE (California Municipal Fund and New York Municipal Fund
only) _ You may purchase shares (minimum $500, maximum $150,000 per day) by
telephone if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred between the
bank account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Each of these Funds may
modify or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
[Page 16]
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
such client's state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given
to shareholders of each Fund automatically, unless you check the applicable
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-645-6561. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares _ Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, TeleTransfer
Privilege, and the dividend/capital gain distribution option (except for
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
[Page 17]
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of a Fund, in shares of certain other funds in
the Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each Fund
may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll
free 1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization form
with the Transfer Agent. You may obtain the necessary authorization form from
your Service Agent or by calling 1-800-645-6561. You may cancel your
participation in this Privilege or change the amount of your purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427, and the notification will be effective
three business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
PAYROLL SAVINGS PLAN _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not
[Page 18]
the Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Payroll Savings Plan.
Each Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS _ Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any, paid by a Fund
in shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject to the contingent deferred sales charge, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if any,
from a Fund to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing House member
may be so designated. Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS (GOVERNMENT MONEY FUND AND MONEY FUND ONLY) _ Each of these
Funds offers a variety of pension and profit-sharing plans, including Keogh
Plans, IRAs (including regular IRAs, spousal IRAs for a non-working spouse,
Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs), 401(k) Salary
Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
[Page 19]
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive on behalf of the Funds, your Fund will redeem the
shares at the next determined net asset value.
No Fund imposes a charge when shares are redeemed. Service Agents may
charge their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the respective Fund's then-current
net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, YOUR REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, EACH FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Check Redemption Privilege and Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege or, with respect to the California Municipal Fund
and New York Municipal Fund, the TELETRANSFER Privilege, if you have checked
the appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. If you are a client of a Selected Dealer, you may redeem Fund shares
through the Selected Dealer. Other redemption procedures may be in effect for
clients of certain Service Agents. Each Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. Each Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
Each Fund may modify or terminate any redemption privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently
[Page 20]
is contemplated. Shares held under Keogh Plans, IRAs or other retirement
plans, and shares for which certificates have been issued, are not eligible
for the Check Redemption, Wire Redemption, Telephone Redemption or
TELETRANSFER Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information." THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program. If
you have questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The DreyfusTrust Company. The Check Redemption Privilege is granted
automatically unless you refuse it.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve
[Page 21]
System, or a correspondent bank if your bank is not a member. Holders of
jointly registered Fund or bank accounts may have redemption proceeds of not
more than $250,000 wired within any 30-day period. You may telephone
redemption requests by calling 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452. The Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
TELETRANSFER PRIVILEGE (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND
ONLY) _ You may request by telephone that redemption proceeds (minimum $500
per day) be transferred between your Fund account and your bank account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be designated. Redemption proceeds will
be on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request. Holders of
jointly registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account not more than $250,000 within
any 30-day period.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the Municipal Funds, or 5:00 p.m., New York time, with respect to the
Government Money Fund and Money Fund on a business day, the proceeds of the
redemption ordinarily will be transmitted in Federal Funds on the same day
and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
SERVICE PLAN
(GOVERNMENT MONEY FUND AND MONEY FUND)
Class A shares of each of these Funds are subject to a separate
Service Plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under each
Service Plan, the Fund directly bears the costs of preparing, printing and
distributing prospectuses and statements of additional information and of
implementing and operating the Service Plan. In addition, each Fund
reimburses (a) the Distributor for payments made for distributing Class A
shares and servicing shareholder accounts ("Servicing") and (b) The Dreyfus
Corporation, Dreyfus Service Corporation, a wholly-owned subsidiary of The
Dreyfus Corporation, and any affiliate of either of them (collectively,
"Dreyfus") for payments made for Servicing, at an aggregate annual rate of up
to .20 of 1% of the value of the Fund's average daily net assets attributable
to Class A. Each of the Distributor and Dreyfus may pay one or more Service
Agents a fee in respect of the respective Fund's Class A shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. The schedule of
such fees and the basis upon which such fees will be paid shall be determined
from time to time by the Fund's Board. If a holder of
[Page 22]
Class A shares ceases to be a client of a Service Agent, but continues to
hold Class A shares, Dreyfus will act as the Service Agent in respect of such
shareholder and receive payments under the Service Plan for Servicing. The
fees payable for Servicing are payable without regard to actual expenses
incurred.
SHAREHOLDER SERVICES PLAN
Each Fund has adopted a separate Shareholder Services Plan with
respect to Class A pursuant to which the Fund reimburses Dreyfus Service
Corporation an amount not to exceed an annual rate of .25 of 1% of the value
of the Fund's average daily net assets attributable to Class A for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. As to each of the
Government Money Fund and the Money Fund, at no time will the amount paid
under this Plan, together with amounts otherwise paid with respect to Class A
under the Fund's Service Plan as a "service fee" as defined in the NASD
Conduct Rules, exceed the maximum amount permitted to be paid under the NASD
Conduct Rules as a service fee.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and Money Fund only, the Transfer Agent is open for business. The Fund's
earnings for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. Dividends usually are paid on the last calendar day
of each month and automatically are reinvested in additional shares at net
asset value or, at your option, paid in cash. If you redeem all shares in
your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If
you are an omnibus accountholder and indicate in a partial redemption request
that a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his or
her account, such portion of the accrued dividends will be paid to you along
with the proceeds of the redemption. Distributions from net realized
securities gains, if any, generally are declared and paid once a year, but
each Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the 1940 Act. No Fund will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional shares at net asset value. If you elect to
receive dividends and distributions in cash, and your dividend or
distribution check is returned to the Fund as undeliverable or remains
uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable
to you in additional Fund shares at net asset value. No interest will accrue
on amounts represented by uncashed distribution or redemption checks. All
expenses are accrued daily and deducted before declaration of dividends to
investors. Dividends paid by each Class will be calculated at the same time
and in the same manner and will be of the same amount, except that the
expenses attributable solely to a Class will be borne exclusively by such
Class.
Dividends paid by each Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
[Page 23]
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by each Municipal Fund will not be subject
to Federal income tax and, as to the California Municipal Fund, State of
California income taxes, and as to the New York Municipal Fund, New York
State and New York City income taxes. Although all or a substantial portion
of the dividends paid by each Municipal Fund may be excluded by shareholders
from their gross income for Federal income tax purposes, each Municipal Fund
may purchase specified private activity bonds, the interest from which may be
(i) a preference item for purposes of the alternative minimum tax, or (ii) a
factor in determining the extent to which a shareholder's Social Security
benefits are taxable. If a Municipal Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
Money Fund to individuals currently are not subject to tax in most states.
Dividends and distributions attributable to interest from other securities in
which the Government Money Fund and Money Fund may invest may be subject to
state tax. Each of these Funds intends to provide shareholders with a
statement which sets forth the percentage of dividends and distributions paid
by the Fund that is attributable to interest income from direct obligations
of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For each Municipal Fund,
these statements will set forth the dollar amount of income exempt from
Federal tax and, as to the California Municipal Fund, State of California
income taxes, and as to the New York Municipal Fund, New York State and New
York City income taxes, and the dollar amount, if any, subject to such tax.
These dollar amounts will vary depending upon the size and length of time of
the investor's investment in the Fund. If a Municipal Fund pays dividends
derived from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup
[Page 24]
withholding if the IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and interest
income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund has qualified for the fiscal year
ended November 30, 1997 as a "regulated investment company" under the Code.
Each Fund intends to continue to so qualify if such qualification is in the
best interests of its shareholders. Such qualification relieves the Fund of
any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. Each Fund
is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The Government Money Fund, National Municipal Fund and Money Fund
were incorporated under Maryland law on April 8, 1982, April 8, 1982 and May
15, 1981, respectively, and commenced operations on February 7, 1983,
December 21, 1983 and February 8, 1982, respectively. Prior to October 6,
1990, the National Municipal Fund's name was General Tax Exempt Money Market
Fund, Inc. Each of the Government Money Fund and the National Municipal Fund
is authorized to issue 15 billion shares of Class A Common Stock and one
billion shares of Class B Common Stock, par value $.01 per share. The Money
Fund is authorized to issue 15 billion shares of Class A Common Stock and 10
billion shares of Class B Common Stock, par value $.01 per share. The
California Municipal Fund and New York Municipal Fund were organized as
unincorporated business trusts under the laws of the Commonwealth of
Massachusetts pursuant to a separate Agreement and Declaration of Trust dated
September 19, 1986 and September 16, 1986, respectively, and commenced
operations on March 10, 1987 and December 2, 1986, respectively. Prior to
March 19, 1990, the California Municipal Fund's name was General California
Tax Exempt Money Market Fund. Prior to January 29, 1990, the New York
Municipal Fund's name was General New York Tax Exempt Money Market Fund. Each
of these Funds is authorized to issue an unlimited number of shares of
beneficial interest, par value $.001 per share. Each Fund's shares are
classified into two classes_Class A and Class B. Each share has one vote and
shareholders will vote in the aggregate and not by class except as otherwise
required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority, in the case of the Government Money Fund, National Municipal
Fund and Money Fund, or two-thirds, in the case of the California Municipal
Fund and New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, a Fund's Board will call a special meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
[Page 25]
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.California Municipal Fund and New York
Municipal Fund only _ Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the obligations of the
Fund. However, its Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given
in each agreement, obligation or instrument entered into or executed by the
Fund or a Trustee. The Trust Agreement provides for indemnification from the
Fund's property for all losses and expenses of any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations, a possibility which management believes is remote. Upon payment
of any liability incurred by the Fund, the shareholder paying such liability
will be entitled to reimbursement from the general assets of the Fund. The
Fund intends to conduct its operations in such a way so as to avoid, as far
as possible, ultimate liability of the shareholders for liabilities of the
Fund.
[Page 26]
APPENDIX
INVESTMENT TECHNIQUES
BORROWING _ Each Fund may borrow money from banks for temporary or emergency
(not leveraging) purposes in an amount up to 15% of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of a Fund's total
assets, such Fund will not make any additional investments.
FORWARD COMMITMENTS (Municipal Funds) _ Each Municipal Fund may purchase
Municipal Obligations and other securities on a forward commitment or
when-issued basis, which means that delivery and payment take place a number
of days after the date of the commitment to purchase. The payment obligation
and the interest rate receivable on a forward commitment or when-issued
security are fixed when the Fund enters into the commitment, but the Fund
does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. The Fund will set aside
in a segregated account of the Fund consisting of permissible liquid assets
at least equal at all times to the amount of the commitments will be
established and maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES (GOVERNMENT MONEY FUND AND MONEY FUND) _
Securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury; others by the right of the
issuer to borrow from the Treasury; others by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government currently
provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS (GOVERNMENT MONEY FUND AND MONEY FUND) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, a Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
BANK OBLIGATIONS (MONEY FUND) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only
in debt obligations of U.S. domestic issuers. See "Description of the Funds
_ Investment Considerations and Risks _ Foreign Securities."
[Page 27]
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER (MONEY FUND) _ Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations issued by domestic and foreign entities. The other corporate
obligations in which the Fund may invest consist of high quality, U.S. dollar
denominated short-term bonds and notes (including variable amount master
demand notes) issued by domestic and foreign corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but which permit
the holder to demand payment of principal at any time, or at specified
intervals not exceeding 13 months, in each case upon not more than 30 days'
notice. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
PARTICIPATION INTERESTS (MONEY FUND) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
ASSET-BACKED SECURITIES (MONEY FUND) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
MUNICIPAL OBLIGATIONS (Municipal Funds) _ Municipal Obligations generally
include debt obligations issued to obtain funds for various public purposes
as well as certain industrial development bonds issued by or on behalf of
public authorities. Municipal Obligations are classified as general obligation
[Page 28]
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenue derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from
the general taxing power. Tax exempt industrial development bonds, in most
cases, are revenue bonds that generally do not carry the pledge of the credit
of the issuing municipality, but generally are guaranteed by the corporate
entity on whose behalf they are issued. Notes are short-term instruments
which are obligations of the issuing municipalities or agencies and are sold
in anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property or equipment
issued by municipalities.
CERTAIN TAX EXEMPT OBLIGATIONS (Municipal Funds) _ Each Municipal Fund may
purchase floating and variable rate demand notes and bonds, which are tax
exempt obligations ordinarily having stated maturities in excess of 13
months, but which permit the holder to demand payment of principal at any
time or at specified intervals not exceeding 13 months, in each case upon not
more than 30 days' notice. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Changes in the credit quality of banks and other financial institutions that
provide such credit or liquidity enhancements to the Fund's portfolio
securities could cause losses to the Fund and affect its share price. Because
these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value plus accrued interest.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the Fund will meet the quality criteria established
for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS (Municipal Funds) _ Each Municipal Fund
may purchase from financial institutions participation interests in Municipal
Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
TENDER OPTION BONDS (Municipal Funds) _ Each Municipal Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders
the option, at periodic intervals, to tender their securities to the
institution and receive the face
[Page 29]
value thereof. As consideration for providing the option, the financial
institution receives periodic fees equal to the difference between the
Municipal Obligation's fixed coupon rate and the rate, as determined by a
remarketing or similar agent at or near the commencement of such period, that
would cause the securities, coupled with the tender option, to trade at par
on the date of such determination. Thus, after payment of this fee, the
security holder effectively holds a demand obligation that bears interest at
the prevailing short-term tax exempt rate. The Dreyfus Corporation, on behalf
of the Fund, will consider on an ongoing basis the creditworthiness of the
issuer of the underlying Municipal Obligation, of any custodian and of the
third party provider of the tender option. In certain instances and for
certain tender option bonds, the option may be terminable in the event of a
default in payment of principal or interest on the underlying Municipal
Obligations and for other reasons.
STAND-BY COMMITMENTS (Municipal Funds) _ Each Municipal Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
TAXABLE INVESTMENTS (Municipal Funds) _ From time to time, on a temporary
basis other than for temporary defensive purposes (but not to exceed 20% of
the value of the Fund's net assets) or for temporary defensive purposes, each
Municipal Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time of
purchase, a quality rating within the two highest grades of Moody's, S&P or
Fitch; obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-2 by Moody's, A-2 by S&P or F-2 by
Fitch; certificates of deposit of U.S. domestic banks, including foreign
branches of domestic banks, with assets of one billion dollars or more; time
deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by
the Fund that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions and
Taxes." Except for temporary defensive purposes, at no time will more than
20% of the value of the Fund's net assets be invested in Taxable Investments.
If the Fund purchases Taxable Investments, it will value them using the
amortized cost method and comply with the provisions of Rule 2a-7 relating to
purchases of taxable instruments. When the California Municipal Fund or New
York Municipal Fund has adopted a temporary defensive position, including
when acceptable California or New York Municipal Obligations are unavailable
for investment by the relevant Fund, in excess of 35% of the Fund's net
assets may be invested in securities that are not exempt from California or
New York State and New York City income taxes, respectively. Under normal
market conditions, the Fund anticipates that not more than 5% of the value of
its total assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
ILLIQUID SECURITIES _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements
[Page 30]
providing for settlement in more than seven days after notice. As to these
securities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 31]
General Government Securities
Money Market Fund, Inc.
General Money Market Fund, Inc.
General California Municipal
Money Market Fund
General Municipal
Money Market Fund, Inc.
General New York Municipal
Money Market Fund
Combined Prospectus
FPO
CLASS A SHARES
Copy Rights 1998 Dreyfus Service Corporation
GEN/p0498A
Dreyfus
______________________________________________________________________________
COMBINED PROSPECTUS April 1, 1998
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
CLASS B SHARES
______________________________________________________________________________
General Government Securities Money Market Fund, Inc. (the
"Government Money Fund"), General Money Market Fund, Inc. (the "Money Fund"),
General California Municipal Money Market Fund (the "California Municipal
Fund"), General Municipal Money Market Fund, Inc. (the "National Municipal
Fund") and General New York Municipal Money Market Fund (the "New York
Municipal Fund") are open-end management investment companies, known as money
market mutual funds. Each Fund seeks to provide you with as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. In addition, each of the California Municipal Fund,
the National Municipal Fund and the New York Municipal Fund seeks to provide
current income exempt from Federal income tax and, in the case of the
California Municipal Fund, exempt from State of California income taxes, and,
in the case of the New York Municipal Fund, exempt from New York State and
New York City income taxes.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES EACH FUND'S PORTFOLIO.
AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Since each of the California Municipal Fund and the New York
Municipal Fund may invest a significant portion of its assets in a single
issuer, an investment in these Funds may involve greater risk than
investments in certain other types of money market funds.
(cover page continued on next page)
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT EACH FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
A STATEMENT OF ADDITIONAL INFORMATION, DATED APRIL 1, 1998, WHICH MAY
BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS
IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUNDS. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO A FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MONEY MARKET MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________________________________________________________________
(CONTINUED FROM COVER PAGE)
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY IMPOSED BY A FUND.
FUND SHARES MAY BE PURCHASED ONLY BY CLIENTS OF SERVICE AGENTS AS
DESCRIBED HEREIN. BY THIS PROSPECTUS, EACH FUND IS OFFERING CLASS B SHARES.
ANOTHER CLASS OF FUND SHARES - CLASS A SHARES - ARE OFFERED BY THE FUNDS
PURSUANT TO A SEPARATE PROSPECTUS AND ARE NOT OFFERED HEREBY. CLASS A AND
CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE SERVICES OFFERED TO, AND THE
EXPENSES BORNE BY, EACH CLASS WHICH MAY AFFECT PERFORMANCE. IF YOU WOULD LIKE
TO OBTAIN INFORMATION ABOUT CLASS A SHARES, PLEASE WRITE TO THE ADDRESS OR
CALL THE NUMBER SET FORTH ON THE COVER PAGE.
EACH FUND IS A SEPARATE ENTITY WITH A SEPARATE PORTFOLIO. THE
OPERATIONS AND RESULTS OF ONE FUND ARE UNRELATED TO THOSE OF EACH OTHER FUND.
THIS COMBINED PROSPECTUS HAS BEEN PREPARED FOR YOUR CONVENIENCE TO PROVIDE
YOU THE OPPORTUNITY TO CONSIDER FIVE INVESTMENT CHOICES IN ONE DOCUMENT.
______________________________________________________________________________
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses................... 4
Condensed Financial Information.................. 5
Yield Information................................ 7
Description of the Funds......................... 8
Management of the Funds.......................... 12
How to Buy Shares................................ 13
Shareholder Services............................. 16
How to Redeem Shares............................. 19
Distribution Plan................................ 22
Shareholder Services Plan........................ 22
Dividends, Distributions and Taxes............... 22
General Information.............................. 24
Appendix......................................... 26
[Page 2]
[This Page Intentionally Left Blank]
[Page 3]
<TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
GOVERNMENT
MONEY MONEY
FUND FUND
__________ ______
<S> <C> <C>
Management Fees................................................. .50% .50%
12b-1 Fees...................................................... .20% .20%
Other Expenses.................................................. .35% .35%
Total Fund Operating Expenses.................................... 1.05% 1.05%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 11 $ 11
3 YEARS $ 33 $ 33
5 YEARS $ 58 $ 58
10 YEARS $128 $128
CALIFORNIA NATIONAL NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
___________ _________ __________
Management Fees............................................ .50% .50% .50%
12b-1 Fees................................................... .20% .20% .20%
Other Expenses............................................... .43% .41% .33%
Total Fund Operating Expenses............................... 1.13% 1.11% 1.03%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period:
1 YEAR $ 12 $ 11 $ 11
3 YEARS $ 36 $ 35 $ 33
5 YEARS $ 62 $ 61 $ 57
10 YEARS $137 $135 $126
_______________________________________________________________________________
</TABLE>
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
_______________________________________________________________________________
The purpose of the foregoing tables is to assist you in understanding
the costs and expenses borne by each Fund, the payment of which will reduce
investors' annual return. The information in the foregoing table does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. Each Fund's Class B shares are charged directly for sub-accounting
services provided by Service Agents (as defined below) at the annual rate of
.05% of the value of the Fund's average daily net assets attributable to
Class B, which is reflected under "Other Expenses" in the foregoing table.
Certain Service Agents may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the foregoing
table. See "Management of the Funds," "How to Buy Shares," "Distribution
Plan" and "Shareholder Services Plan."
[Page 4]
CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst &
Young LLP, each Fund's independent auditors. Further financial data, related
notes and report of independent auditors for each Fund accompany the
Statement of Additional Information, available upon request.
FINANCIAL HIGHLIGHTS
Government Money Fund _ Contained below is per share operating performance
data for a Class B share of Common Stock outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the Government Money
Fund's financial statements.
<TABLE>
Government Money Fund
______________________________________________
FISCAL YEAR TEN MONTHS ENDED
JANUARY 31, NOVEMBER 30,
_______________________ ________________
PER SHARE DATA: 1996(1) 1997 1997(2)
_______ ______ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ _______
INVESTMENT OPERATIONS:
Investment income-net..................................... .042 .045 .038
______ ______ _______
DISTRIBUTIONS:
Dividends from investment income-net...................... (.042) (.045) (.038)
______ ______ _______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== =======
TOTAL INVESTMENT RETURN................................... 5.04%(3) 4.58% 4.69%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.00%(3) 1.00% 1.00%(3)
Ratio of net investment income to average net assets...... 5.01%(3) 4.48% 4.60%(3)
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation................................... .10%(3) .08% .05%(3)
Net Assets, end of period (000's omitted)................. $58 $90,175 $364,845
____________________________
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Effective February 1, 1997, the Fund has changed its fiscal year end from
January 31 to November 30.
(3) Annualized.
</TABLE>
Money Fund _ Contained below is per share operating performance data for a
Class B share of Common Stock outstanding, total investment return, ratios to
average net assets and other supplemental data for each period indicated. This
information has been derived from the Money Fund's financial statements.
<TABLE>
Money Fund
_____________________________________________
FISCAL YEAR TEN MONTHS
ENDED ENDED
JANUARY 31, NOVEMBER 30,
_______________________ ________________
PER SHARE DATA: 1996(1) 1997 1997(2)
_______ ______ _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ ______ _______
INVESTMENT OPERATIONS:
Investment income-net .................................... .043 .046 .039
______ ______ _______
DISTRIBUTIONS:
Dividends from investment income-net...................... (.043) (.046) (.039)
______ ______ _______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== =======
TOTAL INVESTMENT RETURN..................................... 5.18%(3) 4.65% 4.83%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .................. 1.00%(3) 1.00% 1.00%(3)
Ratio of net investment income to average net assets ..... 5.00%(3) 4.56%
4.78%(3) Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation................... .07%(3) .07% .05%(3)
Net Assets, end of period (000's omitted)................. $50,446 $369,205 $1,231,132
________________________________
(1) From March 31, 1995 (commencement of initial offering) to January 31, 1996.
(2) Effective February 1, 1997, the Fund changed its fiscal year end from January 31 to November 30.
(3) Annualized.
</TABLE>
[Page 5]
CALIFORNIA MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class B share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each
period indicated. This information has been derived from the California
Municipal Fund's financial statements.
<TABLE>
California Municipal Fund
_________________________________________
FISCAL YEAR FOUR MONTHS
ENDED ENDED
JULY 31, NOVEMBER 30,
_______________________ ________________
PER SHARE DATA: 1996(1) 1997 1997(2)
______ _____- _______
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00
______ _____- _______
INVESTMENT OPERATIONS:
Investment income-net..................................... .025 .026 .009
______ _____- _______
DISTRIBUTIONS:
Dividends from investment income - net.................... (.025) (.026) (.009)
______ _____- _______
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00
====== ====== =======
TOTAL INVESTMENT RETURN................................... 2.56% 2.61% 2.57%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................... 1.00% 1.00% 1.00%(3)
Ratio of net investment income to average net assets...... 2.45% 2.52% 2.62%(3)
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation .................. .08% .07% .13%(3)
Net Assets, end of period (000's omitted)................. $5,475 $928 $2,669
______________________________________
(1) From August 1, 1995 (commencement of initial offering) to July 31, 1996.
(2) Effective August 1, 1997, the Fund changed its fiscal year end from July 31 to November 30.
(3) Annualized.
</TABLE>
NATIONAL MUNICIPAL FUND _ Contained below is per share operating performance
data for a Class B share of Common Stock outstanding, total investment return,
ratios to average net assets and other supplemental data for each year
indicated. This information has been derived from the National Municipal
Fund's financial statements.
<TABLE>
National Municipal Fund
______________________________________________
FISCAL YEAR ENDED NOVEMBER 30,
_______________________________________________
1995(1) 1996 1997
_______ ______ _____
PER SHARE DATA:
<S> <C> <C> <C>
Net asset value, beginning of year.................................. $ 1.00 $ 1.00 $ 1.00
________ ________ _______
INVESTMENT OPERATIONS:
Investment income-net............................................... .020 .027 .028
________ ________ _______
DISTRIBUTIONS:
Dividends from investment income - net.............................. (.020) (.027) (.028)
________ ________ _______
Net asset value, end of year........................................ $ 1.00 $ 1.00 $ 1.00
======= ======== ========
TOTAL INVESTMENT RETURN............................................. 3.01%(2) 2.70% 2.86%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................. 1.10%(2) .85% .95%
Ratio of net investment income to average net assets................ 2.83%(2) 2.65% 2.87%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation ............................ .09%(2) .29% .16%
Net Assets, end of year (000's omitted)............................. $3,024 $17,491 $263,008
(1) From March 31, 1995 (commencement of initial offering) to November 30, 1995.
(2) Annualized.
</TABLE>
[Page 6]
New York Municipal Fund _ Contained below is per share operating performance
data for a Class B share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each year
indicated. This information has been derived from the New York Municipal
Fund's financial statements.
<TABLE>
New York Municipal Fund
________________________-______________________________
FISCAL YEAR ENDED NOVEMBER 30,
________________________-______________________________
1995(1) 1996 1997
______- _____- ____-
PER SHARE DATA:
<C> <C> <C> <C>
Net asset value, beginning of year.................................. $ 1.00 $ 1.00 $ 1.00
______- _____- ____-
INVESTMENT OPERATIONS:
Investment income-net............................................... .006 .025 .027
______- _____- ____-
DISTRIBUTIONS:
Dividends from investment income-net................................ (.006) (.025) (.027)
______- _____- ____-
Net asset value, end of year........................................ $ 1.00 $ 1.00 $ 1.00
======= ======== ========
TOTAL INVESTMENT RETURN............................................... 2.82%(2) 2.55% 2.68%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................. 1.04%(2) .95% .95%
Ratio of net investment income to average net assets................ 3.64%(2) 2.47% 2.64%
Decrease reflected in above expense ratios due to undertakings by
The Dreyfus Corporation............................................. _ .16% .08%
Net Assets, end of year(000's omitted).............................. _ $36,199 $42,169
__________________________________
(1) From September 8, 1995 (commencement of initial offering) to
November 30, 1995.
(2) Annualized.
</TABLE>
YIELD INFORMATION
From time to time, each Fund advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. A Fund's yield refers to the income generated
by an investment in such Fund over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. A Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Funds."
As to the California Municipal Fund, the National Municipal Fund and
the New York Municipal Fund (collectively, the "Municipal Funds"), tax
equivalent yield is calculated by determining the pre-tax yield which, after
being taxed at a stated rate (in the case of the California Municipal Fund
and New York Municipal Fund typically the highest combined Federal and
California, or New York State and New York City, respectively, personal
income tax rates), would be equivalent to a stated yield or effective yield
calculated as described above.
Yield information is useful in reviewing a Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing Fund shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, IBC's
Money Fund ReportTM, Morningstar, Inc. and other industry publications.
[Page 7]
DESCRIPTION OF THE FUNDS
INVESTMENT OBJECTIVE
The investment objective of the Government Money Fund and the Money
Fund is to provide you with as high a level of current income as is
consistent with the preservation of capital and, in the case of the
Government Money Fund, the maintenance of liquidity. The investment objective
of the Municipal Funds is to maximize current income exempt from Federal
income tax to the extent consistent with the preservation of capital and the
maintenance of liquidity and, in the case of the California Municipal Fund,
exempt from State of California income taxes, and, in the case of the New
York Municipal Fund, exempt from New York State and New York City income
taxes. Each Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of such Fund's outstanding voting shares. There
can be no assurance that a Fund's investment objective will be achieved. Each
Fund pursues its investment objective in the manner described below.
Securities in which a Fund invests may not earn as high a level of current
income as long-term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, each Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the 1940 Act, which
Rule includes various maturity, quality and diversification requirements,
certain of which are summarized as follows. In accordance with Rule 2a-7,
each Fund is required to maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Fund's
Board to present minimal credit risks and, in the case of the Money Fund and
each Municipal Fund, which are rated in one of the two highest rating
categories for debt obligations by at least two nationally recognized
statistical rating organizations (or one rating organization if the
instrument was rated by only one such organization) or, if unrated, are of
comparable quality as determined in accordance with procedures established by
the Fund's Board. The nationally recognized statistical rating organizations
currently rating instruments of the type the Money Fund and each Municipal
Fund may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Ratings Group ("S&P"), Duff & Phelps Credit Rating Co., Fitch IBCA,
Inc. ("Fitch") and Thomson BankWatch, Inc., and their rating criteria are
described in the "Appendix" to the Statement of Additional Information. This
discussion concerning investment ratings does not apply to the Government
Money Fund because it invests exclusively in U.S. Government securities and
repurchase agreements in respect thereof. For further information regarding
the amortized cost method of valuing securities, see "Determination of Net
Asset Value" in the Statement of Additional Information. There can be no
assurance a Fund will be able to maintain a stable net asset value of $1.00
per share.
Each of the Government Money Fund, the Money Fund and the National
Municipal Fund is classified as a diversified investment company. Each of the
California Municipal Fund and the New York Municipal Fund is classified as a
non-diversified investment company.
GOVERNMENT MONEY FUND _ The Fund invests in securities issued or guaranteed
as to principal and interest by the U.S. Government or its agencies or
instrumentalities, and repurchase agreements in respect of such securities.
See "Appendix _ Certain Portfolio Securities."
MONEY FUND _ The Fund invests in short-term money market obligations,
including securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, time deposits, certificates of deposit,
bankers' acceptances and other short-term obligations issued by domestic
banks, foreign subsidiaries or foreign branches of domestic banks, domestic
and foreign branches of foreign banks and
[Page 8]
thrift institutions, repurchase agreements, asset-backed securities, and high
quality domestic and foreign commercial paper and other short-term corporate
obligations, including those with floating or variable rates of interest. The
Fund may invest in U.S. dollar denominated obligations issued or guaranteed
by one or more foreign governments or any of their political subdivisions,
agencies or instrumentalities, including obligations of supranational
entities. See "Appendix _ Certain Portfolio Securities." During normal
market conditions, at least 25% of the value of the Fund's total assets will
be invested in bank obligations. See "Investment Considerations and Risks"
below.
NATIONAL MUNICIPAL FUND _ The Fund will invest at least 80% of the value of
its net assets (except when maintaining a temporary defensive position) in
Municipal Obligations. Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal income tax.
Municipal Obligations generally include debt obligations issued to obtain
funds for various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal Obligations
bear fixed, floating or variable rates of interest. See "Appendix_Certain
Portfolio Securities."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in taxable
money market instruments ("Taxable Investments") of the quality described
under "Appendix _ Certain Portfolio Securities _ Taxable Investments."
CALIFORNIA MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State of
California personal income taxes (collectively, "California Municipal
Obligations"). The remainder of the Fund's assets may be invested in
securities that are not California Municipal Obligations and therefore may be
subject to California income taxes. To the extent acceptable California
Municipal Obligations are at any time unavailable for investment by the Fund,
the Fund will invest temporarily in other Municipal Obligations which may be
subject to State of California income tax and in Taxable Investments. See
"Investment Considerations and Risks_Investing in California Municipal
Obligations" below, "Dividends, Distributions and Taxes" and "Appendix _
Certain Portfolio Securities."
NEW YORK MUNICIPAL FUND _ The Fund's management policies are identical to
those of the National Municipal Fund, except that, under normal
circumstances, at least 65% of the value of the Fund's net assets will be
invested in debt securities of the State of New York, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal, New York
State and New York City income taxes (collectively, "New York Municipal
[Page 9]
Obligations").The remainder of the Fund's assets may be invested in
securities that are not New York Municipal Obligations and therefore may be
subject to New York State and New York City income taxes. To the extent
acceptable New York Municipal Obligations are at any time unavailable for
investment by the Fund, the Fund will invest temporarily in other Municipal
Obligations which may be subject to New York State and New York City income
tax and in Taxable Investments. See "Investment Considerations and Risks _
Investing in New York Municipal Obligations" below, "Dividends, Distributions
and Taxes" and "Appendix _ Certain Portfolio Securities."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each Fund attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect a Fund since each Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations, including U.S. Government securities. The value of the portfolio
securities held by each Fund will vary inversely to changes in prevailing
interest rates. Thus, if interest rates have increased from the time a
security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was
purchased at face value and held to maturity, no gain or loss would be
realized.
FOREIGN SECURITIES (MONEY FUND ONLY) _ Since the Fund's portfolio may
contain securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to those securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers, although such obligations
may be higher yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and economic
developments, seizure or nationalization of foreign deposits, imposition of
foreign withholding taxes on interest income payable on the securities,
establishment of exchange controls or adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on these securities.
BANK SECURITIES (MONEY FUND ONLY) _ To the extent the Fund's investments are
concentrated in the banking industry, the Fund will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions could increase
the exposure to credit losses. In addition, the value of and the investment
return on the Fund's shares could be affected by economic or regulatory
developments in or related to the banking industry, which industry also is
subject to the effects of competition within the banking industry as well as
with other types of financial institutions. The Fund, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.
INVESTING IN MUNICIPAL OBLIGATIONS (MUNICIPAL FUNDS) _ Each of the Municipal
Funds may invest more than 25% of the value of its total assets in Municipal
Obligations which are related in such a way that an economic, business or
political development or change affecting one such security also would affect
the other securities; for example, securities the interest upon which is paid
from revenues of similar types of projects. As a result, each of these Funds
may be subject to greater risk as compared to a fund that does not follow
this practice.
Certain municipal lease/purchase obligations in which each of the
Municipal Funds may invest may contain "non-appropriation" clauses which
provide that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of
[Page 10]
a municipal lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of factors including
the likelihood that the issuing municipality will discontinue appropriating
funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in any of the
Municipal Funds. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the availability
of Municipal Obligations for investment by the Municipal Funds so as to
adversely affect Fund shareholders, each Municipal Fund would reevaluate its
investment objective and policies and submit possible changes in the Fund's
structure to shareholders for their consideration. If legislation were
enacted that would treat a type of Municipal Obligation as taxable, the
Municipal Funds would treat such security as a permissible Taxable Investment
within the applicable limits set forth herein.
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS (CALIFORNIA MUNICIPAL FUND
ONLY) _ Since the California Municipal Fund is concentrated in securities
issued by California or entities within California, an investment in the Fund
may involve greater risk than investments in certain other types of money
market funds. You should consider carefully the special risks inherent in
investing principally in California Municipal Obligations. These risks result
from certain amendments to the California Constitution and other statutes
that limit the taxing and spending authority of California governmental
entities, as well as from the general financial condition of the State of
California. A severe recession from 1990 through fiscal 1994 reduced revenues
and increased expenditures for social welfare programs, resulting in a period
of budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94 fiscal
year, the accumulated budget deficit was so large that it was impractical to
budget to retire it in one year, so a two-year program was implemented, using
the issuance of revenue anticipation warrants to carry a portion of the
deficit over the end of the fiscal year. When the economy failed to recover
sufficiently, a second two-year plan was implemented in 1994-95, again using
cross-fiscal year revenue anticipation warrants to partly finance the deficit
into the 1995-96 fiscal year. As a consequence of the accumulated budget
deficits, the State's cash resources available to pay its ongoing obligations
were significantly reduced causing the State to rely increasingly on external
debt markets to meet its cash needs. Future budget problems or a
deterioration in California's general financial condition may have the effect
of impairing the ability of the issuers of California Municipal Obligations
to pay interest on, or repay the principal of, such California Municipal
Obligations. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS (NEW YORK MUNICIPAL FUND ONLY) _
Since the New York Municipal Fund is concentrated in securities issued by New
York or entities within New York, an investment in the Fund may involve
greater risk than investments in certain other types of money market funds.
You should consider carefully the special risks inherent in investing
principally in New York Municipal Obligations. These risks result from the
financial condition of New York State, certain of its public bodies and
municipalities, and New York City. Beginning in early 1975, New York State,
New York City and other New York State entities faced serious financial
difficulties which jeopardized the credit standing and impaired the borrowing
abilities of such entities and contributed to high interest rates on, and
lower market prices for, debt obligations issued by them. A recurrence of
such financial difficulties or a failure of certain financial recovery
programs could result in defaults or declines in the market values of various
New
[Page 11]
York Municipal Obligations in which the Fund may invest. If there should be a
default or other financial crisis relating to New York State, New York City,
a State or City agency, or a State municipality, the market value and
marketability of outstanding New York Municipal Obligations in the Fund's
portfolio and the interest income to the Fund could be adversely affected.
Moreover, the national recession and the significant slowdown in the New York
and regional economies in the early 1990's added substantial uncertainty to
estimates of the State's tax revenues, which, in part, caused the State to
incur cash-basis operating deficits in the General Fund and issue deficit
notes during the fiscal periods 1989 through 1992. New York State's financial
operations have improved, however, during recent fiscal years. For its fiscal
years 1993 through 1997, the State recorded balanced budgets on a cash basis,
with positive fund balances in the General Fund. New York State ended its
1996-97 fiscal year on March 31, 1997 in balance on a cash basis, with a cash
surplus in the General Fund of approximately $1.4 billion. There can be no
assurance that New York State will not face substantial potential budget gaps
in future years. You should obtain and review a copy of the Statement of
Additional Information which more fully sets forth these and other risk
factors.
NON-DIVERSIFIED STATUS (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL
FUND) _ The classification of each of these Funds as a "non-diversified"
investment company means that the proportion of the Fund's assets that may be
invested in the securities of a single issuer is not limited by the 1940 Act.
A "diversified" investment company is required by the 1940 Act generally,
with respect to 75% of its total assets, to invest not more than 5% of such
assets in the securities of a single issuer. Since a relatively high
percentage of each of these Funds' assets may be invested in the obligations
of a limited number of issuers, the Fund's portfolio may be more sensitive to
changes in the market value of a single issuer. However, to meet Federal tax
requirements, at the close of each quarter each Fund may not have more than
25% of its total assets invested in any one issuer and, with respect to 50%
of total assets, not more than 5% of its total assets invested in any one
issuer. These limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS _ Investment decisions for each Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as a Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
Year 2000 Risks _ Like other mutual funds, financial and business
organizations and individuals around the world, each Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Funds' other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on a Fund.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as each Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of February 28, 1998, The Dreyfus Corporation
managed or administered approximately $99 billion in assets for approximately
1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of each Fund's affairs under a separate Management Agreement with
the Fund, subject to the authority of the Fund's Board in accordance with
applicable State law.
[Page 12]
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in the
United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a number
of companies known as Mellon Financial Services Corporations. Through its
subsidiaries, including The Dreyfus Corporation, Mellon managed more than $305
billion in assets as of December 31, 1997, including approximately $104 billion
in proprietary mutual fund assets. As of December 31, 1997, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $1.532 trillion in assets, including
approximately $60 billion in mutual fund assets.
For the fiscal year ended November 30, 1997, each Fund paid The
Dreyfus Corporation a monthly management fee at the annual rate of .50 of 1%
of the value of such Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of a Fund, which would have the effect of lowering the
expense ratio of such Fund and increasing yield to investors. No Fund will
pay The Dreyfus Corporation at a later time for any amounts it may waive, nor
will a Fund reimburse The Dreyfus Corporation for any amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of a
Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for each Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
The Dreyfus Corporation may pay the Funds' distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Funds. The
Funds' distributor may use part or all of such payments to pay Service Agents
in respect of these services.
DISTRIBUTOR _ Each Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is each Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is each Fund's Custodian.
HOW TO BUY SHARES
Each Fund's shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers"), and other industry professionals such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents") that have entered into service agreements with the Distributor. For
shareholders who purchase Fund shares from the Distributor, the Distributor
will act as Service Agent. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the Municipal Funds be used as a vehicle for Keogh, IRA or
other qualified plans. Each Fund reserves the right to reject any purchase
order.
The minimum initial investment in each Fund is $2,500, or $1,000 if
you are a client of a Service Agent which maintains an omnibus account in the
relevant Fund and has made an aggregate minimum initial purchase in the Fund
for its customers of $2,500. Subsequent investments must be at least $100.
[Page 13]
For the Government Money Fund and Money Fund, however, the minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including regular
IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and rollover
IRAs) and 403(b)(7) Plans with only one participant and $500 for
Dreyfus-sponsored Education IRAs, with no minimum for subsequent purchases.
The initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
each Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment is $1,000. For full-time or part-time employees of
The Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund accounts, the
minimum initial investment is $50. The Government Money Fund and Money Fund
reserve the right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified and
non-qualified employee benefit plans or other programs where contributions or
account information can be transmitted in a manner and form acceptable to
such Fund. Each Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire. Checks should be made
payable to "The Dreyfus Family of Funds" or, if for Dreyfus retirement plan
accounts with respect to the Government Money Fund and Money Fund, to "The
Dreyfus Trust Company, Custodian." Payments to open new accounts which are
mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application
indicating that Class B shares are being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE RELEVANT FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Other purchase procedures may be in
effect for clients of certain Service Agents.
Wire payments may be made, if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York together with the applicable
Fund's DDA# as shown below, for purchase of Fund shares in your name:
DDA # 8900052414/General Government Securities Money Market Fund,
Inc.
DDA # 8900051957/General Money Market Fund, Inc.
DDA # 8900052163/General California Municipal Money Market Fund
DDA # 8900052376/General Municipal Money Market Fund, Inc.
DDA # 8900052171/General New York Municipal Money Market Fund
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable, and must indicate the Class of
shares being purchased. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear.
[Page 14]
Each Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC Asset
BuilderRegistration Mark, the Government Direct Deposit Privilege or the
Payroll Savings Plan described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with
a convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit and
will not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number preceded by the digits "1111."
Service Agents may receive different levels of compensation for
selling different Classes of shares. Management understands that some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus and, to the extent permitted by
applicable regulatory authority, may charge their clients direct fees. You
should consult your Service Agent in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on deposit
at a Federal Reserve Bank) are received by the Transfer Agent or other entity
authorized to receive orders on behalf of the Fund in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which are
not members of the Federal Reserve System may take considerably longer to
convert into Federal Funds. Prior to receipt of Federal Funds, your money
will not be invested.
Net asset value per share of each Class is computed by dividing the
value of the Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of such Class
outstanding. See "Determination of Net Asset Value" in the Statement of
Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to a Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
Government Money Fund and Money Fund _ Each of these Funds' net asset value
per share is determined twice each day the New York Stock Exchange or the
Funds' Transfer Agent is open for business: as of 5:00 p.m., New York time,
and as of 8:00 p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent on a business day, you will
receive the dividend declared that day. If your payments are received in or
converted into Federal Funds after 12:00 Noon, New York time, by the Transfer
Agent, you will begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund
shares of each of these Funds. A telephone order placed with the Distributor
or its designee in New York will become effective at the price determined at
5:00 p.m., New York time, and the shares purchased will receive the dividend
on Fund shares declared on that day, if such order is placed with the
Distributor or its designee in New York by 5:00 p.m., New York time, and
Federal Funds are received by 6:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee in New York after
5:00 p.m., New York time,
[Page 15]
but by 8:00 p.m., New York time, on a given day will become effective at the
price determined at 8:00 p.m., New York time, on that day, and the shares
purchased will begin to accrue dividends on the next business day, if Federal
Funds are received by 11:00 a.m., New York time, on the next business day.
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in each Fund's shares by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining such
plans or programs have a minimum of 250 employees eligible for participation
in such plans or programs, or (ii) such plan's or program's aggregate
investment in the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans or programs exceeds $1,000,000
("Eligible Benefit Plans"). Shares of funds in the Dreyfus Family of Funds
then held by Eligible Benefit Plans will be aggregated to determine the fee
payable. The Distributor reserves the right to cease paying these fees at any
time. The Distributor will pay such fees from its own funds, other than
amounts received from the Fund, including past profits or any other source
available to it.
Municipal Funds _ Each of the Municipal Funds' net asset value per share is
determined twice each day the New York Stock Exchange or the Funds' Transfer
Agent is open for business: as of 12:00 Noon, New York time, and as of 8:00
p.m., New York time.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into Federal
Funds after 12:00 Noon, New York time, you will begin to accrue dividends on
the following business day.
Qualified institutions may telephone orders for purchase of shares of
each of these Funds. A telephone order placed with the Distributor or its
designee in New York will become effective at the price determined at 12:00
Noon, New York time, on a given day, and the shares purchased will receive
the dividend on Fund shares declared on that day, if the telephone order is
placed with the Distributor or its designee by 12:00 Noon, New York time, and
Federal Funds are received by 4:00 p.m., New York time, on that day. A
telephone order placed with the Distributor or its designee after 12:00 Noon,
New York time, but by 8:00 p.m., New York time, on a given day will become
effective at the price determined at 8:00 p.m., New York time, on that day,
and the shares purchased will begin to accrue dividends on the next business
day, if Federal Funds are received by 11:00 a.m., New York time, on the next
business day.
TELETRANSFER PRIVILEGE (California Municipal Fund and New York Municipal Fund
only) _ You may purchase shares (minimum $500, maximum $150,000 per day) by
telephone if you have checked the appropriate box and supplied the necessary
information on the Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The proceeds will be transferred between the
bank account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Each of these Funds may
modify or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard. In addition, use of the privileges noted below may require that the
proper forms and information be filed with and processed by the Transfer
Agent.
[Page 16]
FUND EXCHANGES _ Clients of certain Service Agents may purchase, in exchange
for shares of a Fund, shares of certain other funds managed or administered
by The Dreyfus Corporation, to the extent such shares are offered for sale in
such client's state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use this
service, you should consult your Service Agent or call 1-800-645-6561 to
determine if it is available and whether any conditions are imposed on its
use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given
to shareholders of each Fund automatically, unless you check the applicable
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone system) by calling
1-800-645-6561. If you are calling from overseas, call 516-794-5452. See "How
to Redeem Shares _ Procedures." Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Check Redemption Privilege,
Wire Redemption Privilege, Telephone Redemption Privilege, TeleTransfer
Privilege, and the dividend/capital gain distribution option (except for
Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although each Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. Each Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of a Fund, in shares of certain other funds in
the Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or canceled
[Page 17]
by the Fund or the Transfer Agent. You may modify or cancel your exercise of
this Privilege at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Each
Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call toll
free 1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization form
the Transfer Agent. You may obtain the necessary authorization form from your
Service Agent or by calling 1-800-645-6561. You may cancel your participation
in this Privilege or change the amount of your purchase at any time by
mailing written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427, and the notification will be effective three
business days following receipt. Each Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee currently is
contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government,
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Government Direct Deposit, you must
file with the Transfer Agent a completed Direct Deposit Sign-Up Form for each
type of payment that you desire to include in this Privilege. The appropriate
form may be obtained from your Service Agent or by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, a Fund may
terminate your participation upon 30 days' notice to you.
PAYROLL SAVINGS PLAN _ The Payroll Savings Plan permits you to purchase Fund
shares (minimum of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may have part or
all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization form by calling 1-800-645-6561. You may
change the amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Payroll Savings Plan. Each Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS _ Dividend Sweep enables you to invest automatically
dividends or dividends and capital gain distributions, if any, paid by a Fund
in shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which do
not include the sales load or which reflect a reduced sales load. If you are
investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject to the contingent
[Page 18]
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dividend
ACH permits you to transfer electronically dividends or dividends and capital
gain distributions, if any, from a Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for this
service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep. Each Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares held under Keogh Plans or IRAs are not
eligible for Dividend Sweep.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from a Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter. You may open a Quarterly Distribution Plan by submitting a
request to the Transfer Agent. The Quarterly Distribution Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An Automatic
Withdrawal Plan may be established by filing an Automatic Withdrawal Plan
application with the Transfer Agent or by oral request from any of the
authorized signatories on the account by calling 1-800-645-6561. The
Automatic Withdrawal Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued may not be
redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS (GOVERNMENT MONEY FUND AND MONEY FUND ONLY) _ Each of these
Funds offers a variety of pension and profit-sharing plans, including Keogh
Plans, IRAs (including regular IRAs, spousal IRAs for a non-working spouse,
Roth IRAs, SEP-IRAs, rollover IRAs and Education IRAs), 401(k) Salary
Reduction Plans and 403(b)(7) Plans. Plan support services also are
available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs (except SEP-IRAs), please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form by the Transfer Agent or other entity
authorized to receive orders on behalf of the Funds, your Fund will redeem
the shares at the next determined net asset value.
No Fund imposes a charge when shares are redeemed. Service Agents may
charge their clients a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the respective Fund's then-current
net asset value.
Each Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the
[Page 19]
Securities and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND
SHARES BY CHECK, BY TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDERRegistration Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST
TO THE TRANSFER AGENT, YOUR REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR
PURCHASE CHECK, TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER
ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, EACH
FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE,
AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO
THE TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT
BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR THE
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY
WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR
ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
Each Fund reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value
is $500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or through the Check Redemption Privilege or
Telephone Redemption Privilege, which are granted automatically unless you
specifically refuse them by checking the applicable "No" box on the Account
Application. The Check Redemption Privilege and Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through the
Wire Redemption Privilege or, with respect to the California Municipal Fund
and New York Municipal Fund, the TELETRANSFER Privilege, if you have checked
the appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. If you are a client of a Selected Dealer, you may redeem Fund shares
through the Selected Dealer. Other redemption procedures may be in effect for
clients of certain Service Agents. Each Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. Each Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
Each Fund may modify or terminate any redemption privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for the
Check Redemption, Wire Redemption, Telephone Redemption or TELETRANSFER
Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be genuine.
Each Fund will require the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither a Fund nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases,
[Page 20]
you should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if telephone
redemption had been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. For the location of the nearest Dreyfus
Financial Center, please call one of the telephone numbers listed under
"General Information." THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program. If
you have questions with respect to signature-guarantees, please call one of
the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check due to insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The DreyfusTrust Company. The Check Redemption Privilege is granted
automatically unless you refuse it.
WIRE REDEMPTION PRIVILEGE _ You may request by wire, telephone or letter
that redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of not more than $250,000 wired within
any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
TELETRANSFER PRIVILEGE (CALIFORNIA MUNICIPAL FUND AND NEW YORK MUNICIPAL FUND
ONLY) _ You may request by telephone that redemption proceeds (minimum $500
per day) be transferred between your Fund account and your bank account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be designated. Redemption proceeds will
be on deposit in your account at an Automated Clearing House member bank
ordinarily
[Page 21]
two days after receipt of the redemption request. Holders of jointly
registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account not more than $250,000 within
any 30-day period.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of shares by calling 1-800-645-6561 or, if you are
calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER _ If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent or its designee by 12:00 Noon, New York time, with respect
to the Municipal Funds, or 5:00 p.m., New York time, with respect to the
Government Money Fund and Money Fund on a business day, the proceeds of the
redemption ordinarily will be transmitted in Federal Funds on the same day
and the shares will not receive the dividend declared on that day. If a
redemption request is received after such time, but by 8:00 p.m., New York
time, the redemption request will be effective on that day, the shares will
receive the dividend declared on that day and the proceeds of redemption
ordinarily will be transmitted in Federal Funds on the next business day. If
a redemption request is received after 8:00 p.m., New York time, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited to
your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
DISTRIBUTION PLAN
Class B shares of each Fund are subject to a separate Distribution
Plan adopted pursuant to Rule 12b-1 under the 1940 Act. Under each
Distribution Plan, the Fund directly bears the costs of preparing, printing
and distributing prospectuses and statements of additional information and of
implementing and operating the Distribution Plan. In addition, each Fund
reimburses the Distributor for payments made to third parties for
distributing (within the meaning of Rule 12b-1) Class B shares at an
aggregate annual rate of up to .20 of 1% of the value of the Fund's average
daily net assets attributable to Class B.
SHAREHOLDER SERVICES PLAN
Each Fund has adopted a separate Shareholder Services Plan with
respect to Class B pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class B shares a fee at the
annual rate of .25 of 1% of the value of the Fund's average daily net assets
attributable to Class B. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. Under each Fund's
Shareholder Services Plan, the Distributor may make payments to Service
Agents in respect of these services. The Distributor determines the amounts
to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund ordinarily declares dividends from its net investment
income on each day the New York Stock Exchange or, for the Government Money
Fund and Money Fund only, the Transfer Agent is open for business. The Fund's
earnings for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. Dividends usually are paid on the last calendar day
of each month and automatically are reinvested in additional shares at net
asset value or, at your option, paid in cash. If you redeem all shares in
your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If
you are an omnibus accountholder and indicate in a partial redemption request
that a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his or
her account, such portion of the accrued dividends will be paid to you along
with the proceeds of the redemption. Distributions from net realized
[Page 22]
securities gains, if any, generally are declared and paid once a year, but
each Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the 1940 Act. No Fund will make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional shares at net asset value. If you elect to
receive dividends and distributions in cash, and your dividend or
distribution check is returned to the Fund as undeliverable or remains
uncashed for six months, the Fund reserves the right to reinvest such
dividends or distributions and all future dividends and distributions payable
to you in additional Fund shares at net asset value. No interest will accrue
on amounts represented by uncashed distribution or redemption checks. All
expenses are accrued daily and deducted before declaration of dividends to
investors. Dividends paid by each Class will be calculated at the same time
and in the same manner and will be of the same amount, except that the
expenses attributable solely to a Class will be borne exclusively by such
Class.
Dividends paid by each Municipal Fund derived from Taxable
Investments, and dividends paid by each other Fund derived from interest,
together with distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, are subject to Federal income tax as
ordinary income, whether received in cash or reinvested in additional Fund
shares. Distributions from net realized long-term securities gains, if any,
will be taxable as long-term capital gains for Federal income tax purposes if
you are a citizen or resident of the United States. The Code provides that an
individual generally will be taxed on his or her net capital gain at a
maximum rate of 28% with respect to capital gain from securities held for
more than one year but not more than 18 months and at a maximum rate of 20%
with respect to capital gain from securities held for more than 18 months.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is
not deductible.
Except for dividends from Taxable Investments, it is anticipated that
substantially all dividends paid by each Municipal Fund will not be subject
to Federal income tax and, as to the California Municipal Fund, State of
California income taxes, and as to the New York Municipal Fund, New York
State and New York City income taxes. Although all or a substantial portion
of the dividends paid by each Municipal Fund may be excluded by shareholders
from their gross income for Federal income tax purposes, each Municipal Fund
may purchase specified private activity bonds, the interest from which may be
(i) a preference item for purposes of the alternative minimum tax, or (ii) a
factor in determining the extent to which a shareholder's Social Security
benefits are taxable. If a Municipal Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Dividends and distributions attributable to interest from direct
obligations of the United States and paid by the Government Money Fund and
Money Fund to individuals currently are not subject to tax in most states.
Dividends and distributions attributable to interest from other securities in
which the Government Money Fund and Money Fund may invest may be subject to
state tax. Each of these Funds intends to provide shareholders with a
statement which sets forth the percentage of dividends and distributions paid
by the Fund that is attributable to interest income from direct obligations
of the United States.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
[Page 23]
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. For each Municipal Fund,
these statements will set forth the dollar amount of income exempt from
Federal tax and, as to the California Municipal Fund, State of California
income taxes, and as to the New York Municipal Fund, New York State and New
York City income taxes, and the dollar amount, if any, subject to such tax.
These dollar amounts will vary depending upon the size and length of time of
the investor's investment in the Fund. If a Municipal Fund pays dividends
derived from taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income earned on that
day bears to total income earned on that day. Thus, the percentage of the
dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require each Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify a Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the account, and
may be claimed as a credit on the record owner's Federal income tax return.
Management believes that each Fund has qualified for fiscal year
ended November 30, 1997 as a "regulated investment company" under the Code.
Each Fund intends to continue to so qualify if such qualification is in the
best interests of its shareholders. Such qualification relieves the Fund of
any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. Each Fund
is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state and local taxes.
GENERAL INFORMATION
The Government Money Fund, National Municipal Fund and Money Fund
were incorporated under Maryland law on April 8, 1982, April 8, 1982 and May
15, 1981, respectively, and commenced operations on February 7, 1983,
December 21, 1983 and February 8, 1982, respectively. Prior to October 6,
1990, the National Municipal Fund's name was General Tax Exempt Money Market
Fund, Inc. Each of the Government Money Fund and the National Municipal Fund
is authorized to issue 15 billion shares of Class A Common Stock and one
billion shares of Class B Common Stock, par value $.01 per share. The Money
Fund is authorized to issue 15 billion shares of Class A Common Stock and 10
billion shares of Class B Common Stock, par value $.01 per share. The
California Municipal Fund and New York Municipal Fund were organized as
unincorporated business trusts under the laws of the
[Page 24]
Commonwealth of Massachusetts pursuant to a separate Agreement and
Declaration of Trust dated September 19, 1986 and September 16, 1986,
respectively, and commenced operations on March 10, 1987 and December 2,
1986, respectively. Prior to March 19, 1990, the California Municipal Fund's
name was General California Tax Exempt Money Market Fund. Prior to January
29, 1990, the New York Municipal Fund's name was General New York Tax Exempt
Money Market Fund. Each of these Funds is authorized to issue an unlimited
number of shares of beneficial interest, par value $.001 per share. Each
Fund's shares are classified into two classes_Class A and Class B. Each share
has one vote and shareholders will vote in the aggregate and not by class
except as otherwise required by law.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for any Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, the holders of at least 10% of a Fund's
shares outstanding and entitled to vote may require such Fund to hold a
special meeting of shareholders for purposes of removing a Board member from
office. Fund shareholders may remove a Board member by the affirmative vote
of a majority, in the case of the Government Money Fund, National Municipal
Fund and Money Fund, or two-thirds, in the case of the California Municipal
Fund and New York Municipal Fund, of the Fund's outstanding voting shares. In
addition, a Fund's Board will call a special meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or
by calling toll free 1-800-242-8671. In New York City, call 1-718-895-1396;
outside the U.S., call 516-794-5452.
Although each Fund is offering only its own shares, it is possible
that a Fund might become liable for any misstatement in this Prospectus about
any other Fund. Each Fund's Board has considered this factor in approving the
use of this combined Prospectus.
California Municipal Fund and New York Municipal Fund only _ Under
Massachusetts law, shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, its Trust
Agreement disclaims shareholder liability for acts or obligations of the Fund
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee.
The Trust Agreement provides for indemnification from the Fund's property for
all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Fund, the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund.
[Page 25]
APPENDIX
INVESTMENT TECHNIQUES
BORROWING _ Each Fund may borrow money from banks for temporary or emergency
(not leveraging) purposes in an amount up to 15% of the value of its total
assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of a Fund's total
assets, such Fund will not make any additional investments.
FORWARD COMMITMENTS (Municipal Funds) _ Each Municipal Fund may purchase
Municipal Obligations and other securities on a forward commitment or
when-issued basis, which means that delivery and payment take place a number
of days after the date of the commitment to purchase. The payment obligation
and the interest rate receivable on a forward commitment or when-issued
security are fixed when the Fund enters into the commitment, but the Fund
does not make payment until it receives delivery from the counterparty. The
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. The Fund will set aside
in a segregated account permissible liquid assets at least equal at all times
to the amount of the commitments.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES (GOVERNMENT MONEY FUND AND MONEY FUND) _
Securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury; others by the right of the
issuer to borrow from the Treasury; others by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government currently
provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since
it is not so obligated by law.
REPURCHASE AGREEMENTS (GOVERNMENT MONEY FUND AND MONEY FUND) _ Each of these
Funds may enter into repurchase agreements with certain banks or non-bank
dealers. In a repurchase agreement, a Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities.
BANK OBLIGATIONS (MONEY FUND) _ The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, and thrift
institutions, savings and loan associations and other banking institutions.
With respect to such securities issued by foreign subsidiaries or foreign
branches of domestic banks, and domestic and foreign branches of foreign
banks, the Fund may be subject to additional investment risks that are
different in some respects from those incurred by a fund which invests only
in debt obligations of U.S. domestic issuers. See "Description of the Funds
_ Investment Considerations and Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
[Page 26]
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER (MONEY FUND) _ Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations issued by domestic and foreign entities. The other corporate
obligations in which the Fund may invest consist of high quality, U.S. dollar
denominated short-term bonds and notes (including variable amount master
demand notes) issued by domestic and foreign corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS (MONEY FUND) _ The Fund may purchase
floating and variable rate demand notes and bonds, which are obligations
ordinarily having stated maturities in excess of 13 months, but which permit
the holder to demand payment of principal at any time, or at specified
intervals not exceeding 13 months, in each case upon not more than 30 days'
notice. Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts, at varying
rates of interest, pursuant to direct arrangements between the Fund, as
lender, and the borrower. These obligations permit daily changes in the
amounts borrowed. Because these obligations are direct lending arrangements
between the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal and
interest on demand.
PARTICIPATION INTERESTS (MONEY FUND) _ The Fund may purchase from financial
institutions participation interests in securities in which the Fund may
invest. A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has been given a
rating below that which is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise will be
collateralized by U.S. Government securities, or, in the case of unrated
participation interests, The Dreyfus Corporation must have determined that
the instrument is of comparable quality to those instruments in which the
Fund may invest.
ASSET-BACKED SECURITIES (MONEY FUND) _ The Fund may purchase asset-backed
securities, which are securities issued by special purpose entities whose
primary assets consist of a pool of mortgages, loans, receivables or other
assets. Payment of principal and interest may depend largely on the cash
flows generated by the assets backing the securities and, in certain cases,
supported by letters of credit, surety bonds or other forms of credit or
liquidity enhancements. The value of these asset-backed securities also may
be affected by the creditworthiness of the servicing agent for the pool of
assets, the originator of the loans or receivables or the financial
institution providing the credit support.
MUNICIPAL OBLIGATIONS (Municipal Funds) _ Municipal Obligations generally
include debt obligations issued to obtain funds for various public purposes
as well as certain industrial development bonds issued by or on behalf of
public authorities. Municipal Obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the
[Page 27]
revenue derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Tax exempt industrial
development bonds, in most cases, are revenue bonds that generally do not
carry the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities.
CERTAIN TAX EXEMPT OBLIGATIONS (Municipal Funds) _ Each Municipal Fund may
purchase floating and variable rate demand notes and bonds, which are tax
exempt obligations ordinarily having stated maturities in excess of 13
months, but which permit the holder to demand payment of principal at any
time or at specified intervals not exceeding 13 months, in each case upon not
more than 30 days' notice. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit daily
changes in the amount borrowed. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Changes in the credit quality of banks and other financial institutions that
provide such credit or liquidity enhancements to the Fund's portfolio
securities could cause losses to the Fund and affect its share price. Because
these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value plus accrued interest.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the Fund will meet the quality criteria established
for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS (Municipal Funds) _ Each Municipal Fund
may purchase from financial institutions participation interests in Municipal
Obligations (such as industrial development bonds and municipal
lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or variable
rates of interest, with remaining maturities of 13 months or less. If the
participation interest is unrated or has been given a rating below that which
otherwise is permissible for purchase by the Fund, it will be backed by an
irrevocable letter of credit or guarantee of a bank that the Fund's Board has
determined meets prescribed quality standards for banks, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio.
TENDER OPTION BONDS (Municipal Funds) _ Each Municipal Fund may purchase
tender option bonds. A tender option bond is a Municipal Obligation
(generally held pursuant to a custodial arrangement) having a relatively long
maturity and bearing interest at a fixed rate substantially higher than
prevailing short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders
the option, at periodic intervals, to tender their securities to the
institution and receive the face value thereof. As consideration for providing
the option, the financial institution receives periodic fees equal to the
difference between the Municipal Obligation's fixed coupon rate and the rate,
as determined
[Page 28]
by a remarketing or similar agent at or near the commencement of such
period, that would cause the securities, coupled with the tender option, to
trade at par on the date of such determination. Thus, after payment of this
fee, the security holder effectively holds a demand obligation that bears
interest at the prevailing short-term tax exempt rate. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligation, of any
custodian and of the third party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on the
underlying Municipal Obligations and for other reasons.
STAND-BY COMMITMENTS (Municipal Funds) _ Each Municipal Fund may acquire
"stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a stand-by commitment, the Fund obligates a broker, dealer
or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable.
TAXABLE INVESTMENTS (Municipal Funds) _ From time to time, on a temporary
basis other than for temporary defensive purposes (but not to exceed 20% of
the value of the Fund's net assets) or for temporary defensive purposes, each
Municipal Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time of
purchase, a quality rating within the two highest grades of Moody's, S&P or
Fitch; obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-2 by Moody's, A-2 by S&P or F-2 by
Fitch; certificates of deposit of U.S. domestic banks, including foreign
branches of domestic banks, with assets of one billion dollars or more; time
deposits; bankers' acceptances and other short-term bank obligations; and
repurchase agreements in respect of any of the foregoing. Dividends paid by
the Fund that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions and
Taxes." Except for temporary defensive purposes, at no time will more than
20% of the value of the Fund's net assets be invested in Taxable Investments.
If the Fund purchases Taxable Investments, it will value them using the
amortized cost method and comply with the provisions of Rule 2a-7 relating to
purchases of taxable instruments. When the California Municipal Fund or New
York Municipal Fund has adopted a temporary defensive position, including
when acceptable California or New York Municipal Obligations are unavailable
for investment by the relevant Fund, in excess of 35% of the Fund's net
assets may be invested in securities that are not exempt from California or
New York State and New York City income taxes, respectively. Under normal
market conditions, the Fund anticipates that not more than 5% of the value of
its total assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of Additional
Information to which reference hereby is made.
ILLIQUID SECURITIES _ Each Fund may invest up to 10% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
[Page 29]
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
[Page 30]
[This Page Intentionally Left Blank]
[Page 31]
General Government Securities
Money Market Fund, Inc.
General Money Market Fund, Inc.
General California Municipal
Money Market Fund
General Municipal
Money Market Fund, Inc.
General New York Municipal
Money Market Fund
Combined Prospectus
FPO
CLASS B SHARES
Copy Rights 1998 Dreyfus Service Corporation
GEN/p0498B
Dreyfus
GENERAL GOVERNMENT SECURITIES MONEY MARKET FUND, INC.
GENERAL MONEY MARKET FUND, INC.
GENERAL CALIFORNIA MUNICIPAL MONEY MARKET FUND
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
COMBINED PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 1, 1998
CLASS A AND CLASS B SHARES
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current combined
Prospectus for Class A or Class B shares of General Government Securities
Money Market Fund, Inc. (the "Government Money Fund"), General Money Market
Fund, Inc. (the "Money Fund"), General California Municipal Money Market
Fund (the "California Municipal Fund"), General Municipal Money Market Fund,
Inc. (the "National Municipal Fund") and General New York Municipal Money
Market Fund (the "New York Municipal Fund") (each a "Fund" and collectively
the "Funds"), dated April 1, 1998, as it may be revised from time to time.
To obtain a copy of the Prospectus for Class A or Class B shares of a Fund,
please write to a Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1396
Outside the U.S. -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as each Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of each Fund's shares.
Each Fund is a separate entity with a separate portfolio. The
operations and investment results of one Fund are unrelated to those of each
other Fund. This combined Statement of Additional Information has been
provided for your convenience to provide you with the opportunity to
consider five investment choices in one document.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies ...............B-3
Management of the Funds ....................................B-16
Management Agreements ......................................B-21
Purchase of Shares .........................................B-23
Service Plan and Distribution Plan .........................B-24
Shareholder Services Plans .................................B-27
Redemption of Shares .......................................B-28
Shareholder Services .......................................B-31
Determination of Net Asset Value ...........................B-34
Dividends, Distributions and Taxes .........................B-35
Yield Information ..........................................B-36
Portfolio Transactions .....................................B-38
Information About the Funds ................................B-39
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors .........................B-39
Financial Statements and Reports of Independent Auditors ...B-40
Appendix A .................................................B-41
Appendix B .................................................B-44
Appendix C .................................................B-48
Appendix D .................................................B-61
Appendix E .................................................B-74
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections of each Fund Prospectus entitled "Description of the
Funds" and "Appendix."
Portfolio Securities
Repurchase Agreements. (All Funds) Each Fund's custodian or sub-
custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by each Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, each Fund will enter into
repurchase agreements only with domestic banks with total assets in excess
of $1 billion, or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type in
which the Fund may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below the resale price.
Illiquid Securities. (All Funds) Where a substantial market of
qualified institutional buyers develops for certain restricted securities
purchased by a Fund pursuant to Rule 144A under the Securities Act of 1933,
as amended, the Fund intends to treat such securities as liquid securities
in accordance with procedures approved by the Fund's Board. Because it is
not possible to predict with assurance how the market for restricted
securities pursuant to Rule 144A will develop, each Fund's Board has
directed the Manager to monitor carefully the Fund's investments in such
securities with particular regard to trading activity, availability of
reliable price information and other relevant information. To the extent
that, for a period of time, qualified institutional buyers cease purchasing
restricted securities pursuant to Rule 144A, a Fund's investing in such
securities may have the effect of increasing the level of illiquidity in the
Fund's portfolio during such period.
Bank Obligations. (Money Fund) As a result of Federal and state laws
and regulations, domestic banks whose certificates of deposit ("CDs") may be
purchased by the Money Fund are, among other things, generally required to
maintain specified levels of reserves, and are subject to other supervision
and regulation designed to promote financial soundness. However, not all of
such laws and regulations apply to the foreign branches of domestic banks.
Domestic commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to be members
of the Federal Reserve System and to have their deposits insured by the
Federal Deposit Insurance Corporation (the "FDIC"). Domestic banks organized
under state law are supervised and examined by state banking authorities but
are members of the Federal Reserve System only if they elect to join. In
addition, state banks whose CDs may be purchased by the Money Fund are
insured by the Bank Insurance Fund administered by the FDIC (although such
insurance may not be of material benefit to the Money Fund, depending upon
the principal amount of the CDs of each bank held by the Money Fund) and are
subject to Federal examination and to a substantial body of Federal law and
regulation.
Obligations of foreign branches of domestic banks, foreign subsidiaries
of domestic banks and domestic and foreign branches of foreign banks, such
as CDs and time deposits ("TDs"), may be general obligations of the parent
banks in addition to the issuing branch, or may be limited by the terms of a
specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and other
taxes on interest income. These foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements as apply
to domestic banks, such as mandatory reserve requirements, loan limitations,
and accounting, auditing and financial recordkeeping requirements. In
addition, less information may be publicly available about a foreign branch
of a domestic bank or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by Federal and state
regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of one billion dollars may be subject to reserve
requirements imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal or State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Manager carefully evaluates such
investments on a case-by-case basis.
The Money Fund may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than one billion
dollars in assets, the deposits of which are insured by the FDIC, provided
the Money Fund purchases any such CD in a principal amount of no more than
$100,000, which amount would be fully insured by the Bank Insurance Fund or
the Savings Association Insurance Fund administered by the FDIC. Interest
payments on such a CD are not insured by the FDIC. The Money Fund will not
own more than one such CD per such issuer.
Municipal Obligations. (California Municipal Fund, National Municipal
Fund and New York Municipal Fund (the "Municipal Funds")) The average
distribution of investments (at value) in Municipal Obligations (including
notes) by ratings as of the fiscal period ended November 30, 1997, computed
on a monthly basis, was as follows:
<TABLE>
Percentage of Value
Fitch Moody's Standard & California National New York
IBCA, Investors Poor's Municipal Municipal Municipal
Inc. Service, Ratings Fund Fund Fund
("Fitch") or Inc. or Group Four Months November November
("Moody's") ("S&P") Ended 30, 1997 30, 1997
November 30,1997
- --------- ------------ --------- -------------------- -------- ---------
<S> <C> <C> <C> <C> <C>
F1+/F1 VMIG1/MIG1, SP1+/SP1, 92.9% 93.4% 88.3%
P1 A1+/A1
AAA/AA Aaa/Aa AAA/AA 2.7% 3.1% 1.4%
Not Not Rated Not Rated 4.4%* 3.5%* 10.3%*
Rated ----- ------- -------
100.0% 100.0% 100.0%
====== ====== ======
</TABLE>
_______________________________
* Included in the Not Rated category are securities which, while not
rated, have been determined by the Manager to be of comparable quality to
securities in the VMIG1/MIG1 or SP-1+/SP-1 rating categories.
The term "Municipal Obligations" generally includes debt obligations
issued to obtain funds for various public purposes, including the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding outstanding obligations,
obtaining funds for general operating expenses and lending such funds to
other public institutions and facilities. In addition, certain types of
industrial development bonds are issued by or on behalf of public
authorities to obtain funds to provide for the construction, equipment,
repair or improvement of privately operated housing facilities, sports
facilities, convention or trade show facilities, airport, mass transit,
industrial, port or parking facilities, air or water pollution control
facilities and certain local facilities for water supply, gas, electricity
or sewage or solid waste disposal; the interest paid on such obligations may
be exempt from Federal income tax, although current tax laws place
substantial limitations on the size of such issues. Such obligations are
considered to be Municipal Obligations if the interest paid thereon
qualifies as exempt from Federal income tax in the opinion of bond counsel
to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand obligations are tax exempt
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each
case upon not more than 30 days' notice. The issuer of such obligations
ordinarily has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders thereof.
The interest rate on a floating rate demand obligation is based on a known
lending rate, such as a bank's prime rate, and is adjusted automatically
each time such rate is adjusted. The interest rate on a variable rate
demand obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act of
1940, as amended (the "1940 Act"), with respect to the National Municipal
Fund, the identification of the issuer of Municipal Obligations depends on
the terms and conditions of the security. When the assets and revenues of
an agency, authority, instrumentality or other political subdivision are
separate from those of the government creating the subdivision and the
security is backed only by the assets and revenues of the subdivision, such
subdivision would be deemed to be the sole issuer. Similarly, in the case
of an industrial development bond, if that bond is backed only by the assets
and revenues of the non-governmental user, then such non-governmental user
would be deemed to be the sole issuer. If, however, in either case, the
creating government or some other entity guarantees a security, such a
guaranty would be considered a separate security and will be treated as an
issue of such government or other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of a Fund's management fee, as well as other operating
expenses, including fees paid under a Fund's Service Plan and/or
Distribution Plan, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the event
of foreclosure might prove difficult. Each Municipal Fund will seek to
minimize these risks by investing only in those lease obligations that
(1) are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was rated
only by one such organization) or (2) if unrated, are purchased principally
from the issuer or domestic banks or other responsible third parties, in
each case only if the seller shall have entered into an agreement with the
Fund providing that the seller or other responsible third party will either
remarket or repurchase the lease obligation within a short period after
demand by the Fund. The staff of the Securities and Exchange Commission
currently considers certain lease obligations to be illiquid. Accordingly,
not more than 10% of the value of a Fund's net assets will be invested in
lease obligations that are illiquid and in other illiquid securities.
A Municipal Fund will not purchase tender option bonds unless (a) the
demand feature applicable thereto is exercisable by the Fund within 13
months of the date of such purchase upon no more than 30 days' notice and
thereafter is exercisable by the Fund no less frequently than annually upon
no more than 30 days' notice and (b) at the time of such purchase, the
Manager reasonably expects (i) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment and (ii) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity, the Fund will
exercise the tender option with respect to any tender option bonds unless
the Manager reasonably expects, (x) based upon its assessment of current and
historical interest rate trends, that prevailing short-term tax exempt rates
will not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and (y) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. The Fund will exercise the tender feature with respect
to tender option bonds, or otherwise dispose of its tender option bonds,
prior to the time the tender option is scheduled to expire pursuant to the
terms of the agreement under which the tender option is granted. The Fund
otherwise will comply with the provisions of Rule 2a-7 in connection with
the purchase of tender option bonds, including, without limitation, the
requisite determination by the Fund's Board that the tender option bonds in
question meet the quality standards described in Rule 2a-7, which, in the
case of a tender option bond subject to a conditional demand feature, would
include a determination that the security has received both the required
short-term and long-term quality rating or is determined to be of comparable
quality. In the event of a default of the Municipal Obligation underlying a
tender option bond, or the termination of the tender option agreement, the
Fund would look to the maturity date of the underlying security for purposes
of compliance with Rule 2a-7 and, if its remaining maturity was greater than
13 months, the Fund would sell the security as soon as would be practicable.
The Fund will purchase tender option bonds only when it is satisfied that
the custodial and tender option arrangements, including the fee payment
arrangements, will not adversely affect the tax exempt status of the
underlying Municipal Obligations and that payment of any tender fees will
not have the effect of creating taxable income for the Fund. Based on the
tender option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. (Municipal Funds) If, subsequent to
its purchase by a Municipal Fund, (a) an issue of rated Municipal
Obligations ceases to be rated in the highest rating category by at least
two rating organizations (or one rating organization if the instrument was
rated by only one such organization) or the Fund's Board determines that it
is no longer of comparable quality or (b) the Manager becomes aware that any
portfolio security not so highly rated or any unrated security has been
given a rating by any rating organization below the rating organization's
second highest rating category, the Fund's Board will reassess promptly
whether such security presents minimal credit risk and will cause the Fund
to take such action as it determines is in the best interest of the Fund and
its shareholders; provided
that the reassessment required by clause (b) is not required if the
portfolio security is disposed of or matures within five business days of
the Manager becoming aware of the new rating and the Fund's Board is
subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, each Fund will attempt to use
comparable ratings as standards for its investments in accordance with its
stated investment policies contained in the Fund's Prospectus and this
Statement of Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal Obligations
which they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for selection
of portfolio investments, the Manager also will evaluate these securities
and the creditworthiness of the issuers of such securities.
Taxable Investments. (Municipal Funds) The taxable investments in
which Municipal Funds may invest include U.S. Government securities,
commercial paper, certificates of deposit, time deposits, bankers'
acceptances, and repurchase agreements. See also "Repurchase Agreements"
above.
Securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities include U.S. Treasury securities, which differ in their
interest rates, maturities and times of issuance. Some obligations issued
or guaranteed by U.S. Government agencies and instrumentalities are
supported by the full faith and credit of the U.S. Treasury; others by the
right of the issuer to borrow from the U.S. Treasury; others by discretion
ary authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so,
since it is not so obligated by law.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured direct obligations bearing fixed, floating or variable
rates of interest.
Management Policies
Forward Commitments. (Municipal Funds) Municipal Obligations and other
securities purchased on a forward commitment or when-issued basis are
subject to changes in value (generally changing in the same way, i.e.,
appreciating when interest rates decline and depreciating when interest
rates rise) based upon the public's perception of the creditworthiness of
the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose
a Fund to risks because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued basis can involve
the additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when a Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net
asset value per share.
Investment Considerations and Risks
Investing in California Municipal Obligations. (California Municipal Fund)
Investors should consider carefully the special risks inherent in the Fund's
investment in California Municipal Obligations. These risks result from
certain amendments to the California Constitution and other statues that
limit the taxing and spending authority of California governmental entities,
as well as from the general financial condition of the State of California.
A severe recession from 1990 through fiscal 1994 reduced revenues and
increased expenditures for social welfare programs, resulting in a period of
budget imbalance. During this period, expenditures exceeded revenues in
four out of six years, and the State accumulated and sustained a budget
deficit in its budget reserve, the Special Fund for Economic Uncertainties,
approaching $2.8 billion at its peak at June 30, 1993. By the 1993-94
fiscal year, the accumulated budget deficit was so large that it was
impractical to budget to retire it in one year, so a two-year program was
implemented, using the issuance of revenue anticipation warrants to carry a
portion of the deficit over the end of the fiscal year. When the economy
failed to recover sufficiently, a second two-year plan was implemented in
1994-95, again using cross-fiscal year revenue anticipation warrants to
partly finance the deficit into the 1995-96 fiscal year. As a consequence
of the accumulated budget deficits, the State's cash resources available to
pay its ongoing obligations were significantly reduced causing the State to
rely increasingly on external debt markets to meet its cash needs. Future
budget problems or a deterioration in California's general financial
condition may have the effect of impairing the ability of the issuers of
California Municipal Obligations to pay interest on, or repay the principal
of, such California Municipal Obligations. These and other factors may have
the effect of impairing the ability of the issuers of California Municipal
Obligations to pay interest on, or repay principal of, such California
Municipal Obligations. Investors should review "Appendix C" which sets
forth additional information relating to investing in California Municipal
Obligations.
Investing in New York Municipal Obligations. (New York Municipal Fund) Each
investor should consider carefully the special risks inherent in the
investment in New York Municipal Obligations by the Fund. These risks
result from the financial condition of New York State, certain of its public
bodies and municipalities, and New York City. Beginning in early 1975, New
York State, New York City and other New York State entities faced serious
financial difficulties which jeopardized the credit standing and impaired
the borrowing abilities of such entities and contributed to high interest
rates on, and lower market prices for, debt obligations issued by them. A
recurrence of such financial difficulties or a failure of certain financial
recovery programs could result in defaults or declines in the market values
of various New York Municipal Obligations in which the Fund may invest. If
there should be a default or other financial crisis relating to New York
State, New York City, a State or City agency, or a State municipality, the
market value and marketability of outstanding New York Municipal Obligations
in the Fund's portfolio and the interest income to the Fund could be
adversely affected. Moreover, the national recession and the significant
slowdown in the New York and regional economies in the early 1990's added
substantial uncertainty to estimates of the State's tax revenues, which, in
part, caused the State to incur cash-basis operating deficits in the General
Fund and issue deficit notes during the fiscal periods 1989 through 1992.
New York State's financial operations have improved, however, during recent
fiscal years. For its fiscal years 1993 through 1997, the State recorded
balanced budgets on a cash basis, with positive fund balances in the General
Fund. New York State ended its 1996-97 fiscal year on March 31, 1997 in
balance on a cash basis, with a cash surplus in the General Fund of
approximately $1.4 billion. There can be no assurance that New York State
will not face substantial potential budget gaps in future years. Investors
should review "Appendix D" which sets forth additional information relating
to investing in New York Municipal Obligations.
Investment Restrictions
Government Money Fund. The Government Money Fund has adopted
investment restrictions numbered 1 through 10 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 11 and 12 are not fundamental policies and may be
changed by vote of a majority of the Government Money Fund's Board members
at any time. The Government Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Write or purchase put or call options.
5. Underwrite the securities of other issuers.
6. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.
7. Make loans to others (except through the purchase of debt
obligations referred to under "Description of the Funds" in the Prospectus).
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Invest more than 25% of its assets in the securities of issuers in
any industry, provided that there shall be no limitation on investments in
obligations issued or guaranteed as to principal and interest by the U.S.
Government.
11. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
Money Fund. The Money Fund has adopted investment restrictions
numbered 1 through 12 as fundamental policies, which cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding voting shares. Investment restriction number 13
is not a fundamental policy and may be changed by vote of a majority of the
Money Fund's Board members at any time. The Money Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other equity
securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds (except through the purchase of
debt obligations referred to under "Description of the Funds" in the
Prospectus and under "Investment Objective and Management Policies" in this
Statement of Additional Information).
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Pledge its assets, except in an amount up to 15% of the value of
its total assets but only to secure borrowings for temporary or emergency
purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
7. Purchase or sell real estate investment trust securities,
commodities, or oil and gas interests.
8. Make loans to others (except through the purchase of debt
obligations referred to under "Description of the Funds" in the Prospectus
and under "Investment Objective and Management Policies" in this Statement
of Additional Information).
9. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the commercial paper of any
one issuer. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank.
10. Invest less than 25% of its assets in securities issued by banks
or invest more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
California Municipal Fund. The California Municipal Fund has adopted
investment restrictions numbered 1 through 9 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 are not fundamental policies and may be
changed by vote of a majority of the California Municipal Fund's Board
members at any time. The California Municipal Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
5. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
6. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Fund's Prospectus.
7. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
National Municipal Fund. The National Municipal Fund has adopted
investment restrictions numbered 1 through 11 as fundamental policies which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restriction number 12 is not a fundamental policy and may be changed by vote
of a majority of the National Municipal Fund's Board members at any time.
The National Municipal Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
6. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
7. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Prospectus.
8. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the obligations of any other
issuer, except that up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities may be purchased, without regard to any such
limitations. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to such limitation.
9. Invest more than 25% of its assets in the securities of issuers in
any single industry; provided that there shall be no limitation on the
purchase of Municipal Obligations and, for defensive purposes, securities
issued by banks and obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.
10. Purchase more than 10% of the voting securities of any issuer or
invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets
and except for the purchase, to the extent permitted by Section 12 of the
1940 Act, of shares of registered unit investment trusts whose assets
consist substantially of Municipal Obligations.
12. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
New York Municipal Fund. The New York Municipal Fund has adopted
investment restrictions numbered 1 through 9 as fundamental policies, which
cannot be changed without approval by the holders of a majority (as defined
in the 1940 Act) of the Fund's outstanding voting shares. Investment
restrictions numbered 10 and 11 are not fundamental policies and may be
changed by vote of a majority of the New York Municipal Fund's Board members
at any time. The New York Municipal Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the Fund's
total assets, the Fund will not make any additional investments.
3. Sell securities short or purchase securities on margin.
4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
5. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
6. Make loans to others, except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to above
and in the Fund's Prospectus.
7. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
8. Invest in companies for the purpose of exercising control.
9. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 10% of the value of the Fund's net assets would
be so invested.
* * * * *
Municipal Funds. For purposes of Investment Restriction No. 7 for the
California Municipal Fund and the New York Municipal Fund and Investment
Restriction No. 9 for the National Municipal Fund, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an industry.
All Funds. If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
Each Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should a Fund determine that a commitment is no longer in the best interest
of the Fund and its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUNDS
Board members and officers of each Fund, together with information as
to their principal business occupations during at least the last five years,
are shown below.
Board Members of the Funds
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981, Mr.
Alexander served as Secretary of the Army and Chairman of the Board of
the Panama Canal Company, and from 1975 to 1977, he was a member of the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Alexander. He is a director of American Home Products Corporation,
Cognizant Corporation, a service provider of marketing information and
information technology, The Dun & Bradstreet Corporation, MCI
Communications Corporation, Mutual of America Life Insurance Company
and TLC Beatrice International Holdings, Inc. He is 64 years old and
his address is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York University
School of Law. Professor Davis has been a member of the New York
University law faculty since 1983. Prior to that time, she served for
three years as a judge in the courts of New York State; was engaged for
eight years in the practice of law, working in both corporate and non-
profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes
and teaches in the fields of evidence, constitutional theory, family
law, social sciences and the law, legal process and professional
methodology and training. She is 55 years old and her address is
c/o New York University School of Law, 40 Washington Square South, New
York, New York 10012.
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is a
director, and from February 1995 until November 1997 was Chairman of
the Board, of Noel Group, Inc., a venture capital company. He is also
a director of The Muscular Dystrophy Association, HealthPlan Services
Corporation, a provider of marketing, administrative and risk
management services to health and other benefit programs, Carlyle
Industries, Inc. (formerly Belding Heminway Company, Inc.), a button
packager and distributor, Century Business Services, Inc., a provider
of various outsourcing functions for small and medium sized companies,
and Staffing Resources, Inc., a temporary placement firm. For more
than five years prior to January 1995, he was President, a director
and, until August 1994, Chief Operating Officer of Dreyfus and
Executive Vice President and a director of Dreyfus Service Corporation,
a wholly-owned subsidiary of Dreyfus and, until August 24, 1994, the
Fund's distributor. From August 1994 until December 31, 1994, he was a
director of Mellon Bank Corporation. He is 54 years old and his
address is 200 Park Avenue, New York, New York 10166.
ERNEST KAFKA, Board Member. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions and has published many articles on subjects in
the field of psychoanalysis. He is 65 years old and his address is 23
East 92nd Street, New York, New York 10128.
SAUL B. KLAMAN, Board Member. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal Reserve
System and on several Presidential Commissions, and has held numerous
consulting and advisory positions in the fields of economics and
housing finance. He is 78 years old and his address is 431-B Dedham
Street, The Gables, Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of
New York City from September 1979 until March 1984 and Commissioner of
the Department of Housing Preservation and Development of New York City
from February 1978 to September 1979. Mr. Leventhal was an associate
and then a member of the New York law firm of Poletti Freidin Prashker
Feldman and Gartner from 1974 to 1978. He was
Commissioner of Rent and Housing Maintenance for New York City from
1972 to 1973. Mr. Leventhal serves as Chairman of Citizens Union, an
organization which strives to reform and modernize city and state
government from June 1994 until June 1997. He is 55 years old and his
address is 70 Lincoln Center Plaza, New York, New York 10023-6583.
For so long as a Fund's plan described in the sections captioned
"Service Plan and Distribution Plan" and "Shareholder Services Plans" remain
in effect, the Board members of the Fund who are not "interested persons" of
the Fund, as defined in the 1940 Act, will be selected and nominated by the
Board members who are not "interested persons" of the Fund.
Each Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by each Fund for the fiscal year
ended November 30, 1997, and by all other funds in the Dreyfus Family of
Funds for which such person is a Board member (the number of which is set
forth in parenthesis next to each Board member's total compensation) for the
year ended December 31, 1997, are set forth below.
Total
Aggregate Compensation
Compensation From Funds and
Name of Board Member from the Fund* Fund Complex Paid
to Board Member
CLIFFORD L. ALEXANDER, JR. $ 88,305 (17)
Government Money Fund $4,500
Money Fund $4,500
California Municipal Fund** $3,500
National Municipal Fund $3,500
New York Municipal Fund $3,500
PEGGY C. DAVIS $ 78,750 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund** $3,500
National Municipal Fund $3,500
New York Municipal Fund $3,500
JOSEPH S. DIMARTINO $597,128 (94)
Government Money Fund $6,250
Money Fund $6,250
California Municipal Fund** $4,375
National Municipal Fund $4,375
New York Municipal Fund $4,375
ERNEST KAFKA $ 77,500 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal $3,500
Fund** $5,500
National Municipal Fund $4,000
New York Municipal Fund
SAUL B. KLAMAN $ 78,750 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund** $3,500
National Municipal Fund $5,500
New York Municipal Fund $4,000
NATHAN LEVENTHAL $ 78,750 (15)
Government Money Fund $5,000
Money Fund $5,000
California Municipal Fund** $3,500
National Municipal Fund $3,500
New York Municipal Fund $3,500
_____________________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $803 for the Government Money Fund, $1,388
for the Money Fund, $97 for the California Municipal Fund, $413 for the
National Municipal Fund and $387 for the New York Municipal Fund, for
all Board members as a group.
** California Fund compensation estimated based on full year.
Officers of the Funds
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer, Chief Compliance Officer and a director of the Distributor and
Funds Distributor, Inc., the ultimate parent of which is Boston
Institutional Group, Inc., and an officer of other investment companies
advised or administered by the Manager. She is 40 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Assistant Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
April 1993 to January 1995, he was a Senior Fund Accountant for
Investors Bank & Trust Company. From December 1991 to March 1993, he
was employed as a Fund Accountant at The Boston Company, Inc. He is 28
years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President of
the Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for The Boston Company, Inc. She is 33 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Senior Vice
President of Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From
December 1989 through November 1996, he was employed by GE Investments
where he held various financial, business development and compliance
positions. He also served as Treasurer of the GE Funds and as a
Director of GE Investment Services. He is 36 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer, Chief Financial Officer and a director of the
Distributor and Funds Distributor, Inc., and an officer of other
investment companies advised or administered by the Manager. From July
1988 to August 1994, he was employed by The Boston Company, Inc. where
he held various management positions in the Corporate Finance and
Treasury areas. He is 35 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Executive Vice
President of the Distributor and Funds Distributor, Inc., and an
officer of other investment companies advised or administered by the
Manager. From March 1994 to November 1995, he was Vice President and
Division Manager for First Data Investor Services Group. From 1989 to
1994, he was Vice President, Assistant Treasurer and Tax Director -
Mutual Funds of The Boston Company, Inc. He is 41 years old.
The address of each officer of the Funds is 200 Park Avenue, New York,
New York 10166.
Each Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares outstanding on March 7, 1998.
Set forth in "Appendix E" to this Statement of Additional Information
are the shareholders known by each Fund (as indicated) to own of record 5%
or more of such Fund's Class A and Class B shares outstanding on March 7,
1998. A shareholder who beneficially owns, directly or indirectly, more
than 25% of the Fund's voting securities may be deemed a "control person"
(as defined in the 1940 Act) of the Fund.
MANAGEMENT AGREEMENTS
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Management of the Funds."
The Manager provides management services pursuant to separate
Management Agreements (respectively, the "Agreement") dated August 24, 1994
with each Fund. As to each Fund, the Agreement is subject to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in
the 1940 Act) of the Fund's outstanding voting securities, provided that in
either event the continuance also is approved by a majority of the Fund's
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund or the Manager, by vote cast in person at a meeting called for
the purpose of voting on such approval. Each Fund's Agreement was approved
by shareholders on August 3, 1994 and was last approved by the Fund's Board,
including a majority of the Board members who are not "interested persons"
of any party to the Agreement, at a meeting held on September 17, 1997. As
to each Fund, the Agreement is terminable without penalty, on 60 days'
notice, by the Fund's Board or by vote of the holders of a majority of the
Fund's shares or, upon not less than 90 days' notice, by the Manager. Each
Agreement will terminate automatically, as to the relevant Fund, in the
event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman-Distribution and a director; Ronald O'Hanley III, Vice
Chairman; J. David Officer, Vice Chairman; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President-
Corporate Communications; Mary Beth Leibig, Vice President-Human Resources;
Jeffrey N. Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser,
Vice President-Information Systems; William V. Healey, Assistant Secretary;
and Mandell L. Berman, Burton C. Borgelt, Frank V. Cahouet and Richard F.
Syron, directors.
The Manager manages each Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions and provides
each Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The portfolio managers of the Government
Money Fund and the Money Fund are Bernard W. Kiernan, Patricia A. Larkin and
Thomas Riordan. The portfolio managers of the Municipal Funds are Joseph P.
Darcy, A. Paul Disdier, Douglas J. Gaylor, Karen M. Hand, Stephen C. Kris,
Richard J. Moynihan, W. Michael Petty, Jill C. Shaffro, Samuel J. Weinstock
and Monica S. Wieboldt. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts who
provide research services for each Fund and for other funds advised by the
Manager.
The Manager maintains office facilities on behalf of each Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Funds. The Manager also may make such advertising and
promotional expenditures using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of a Fund are borne by such
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by each Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Fund's existence,
investor services (including, without limitation, telephone and personnel
expenses), costs of shareholder reports and meetings, costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders, and any
extraordinary expenses. Each Fund bears certain expenses in accordance with
separate written plans and also bears certain costs associated with
implementing and operating such plans. See "Service Plan and Distribution
Plan" and "Shareholder Services Plans."
As compensation for the Manager's services under the Agreement, each
Fund has agreed to pay the Manager a monthly management fee at the annual
rate of .50 of 1% of the value of such Fund's average daily net assets. All
fees and expenses are accrued daily and deducted before declaration of
dividends to investors. Set forth below are the total amounts paid by each
Fund to the Manager for each Fund's last three fiscal years, including for
Government Money Fund, Money Fund, and California Municipal Fund, which
changed their fiscal year end to November 30, the period ended November 30,
1997:
Ten-Month
Period Ended
November 30, 1997 Fiscal Year Ended January 31,
----------------- -----------------------------
1997 1996 1995
Government Money $3,330,297 $3,002,777 $2,622,700 $2,624,643
Fund
Money Fund $7,091,891 $5,285,812 $3,172,667 $2,850,622
Four-Month
Period Ended
November 30, 1997 Fiscal Year Ended July 31,
1997 1996 1995
California $620,429 $1,836,034 $2,195,288 $2,105,653
Fund
Fiscal Year Ended November 30,
1997 1996 1995
National Municipal Fund $2,127,041 $1,566,276 $1,447,734
New York Municipal Fund $2,599,539 $2,945,172 $2,936,785
As to each Fund, the Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest and
(with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed 1-1/2% of the average market value of the net assets of such Fund for
that fiscal year, the Fund may deduct from the payment to be made to the
Manager under the Agreement, or the Manager will bear, such excess expense.
Such deduction or payment, if any, will be estimated daily and reconciled
and effected or paid, as the case may be, on a monthly basis. As to each
Fund, no such deduction or payment was required for the most recent fiscal
year end.
As to each Fund, the aggregate of the fees payable to the Manager is
not subject to reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as each Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the funds in the Dreyfus Family
of Funds and for certain other investment companies.
Using Federal Funds. Dreyfus Transfer, Inc., each Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt to
notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means of
transmitting the money. If the investor is a customer of a securities
dealer ("Selected Dealer") and his order to purchase Fund shares is paid for
other than in Federal Funds, the Selected Dealer, acting on behalf of its
customer, will complete the conversion into, or itself advance, Federal
Funds, generally on the business day following receipt of the customer
order. The order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Fund shares placed by an
investor with sufficient Federal Funds or a cash balance in his brokerage
account with a Selected Dealer will become effective on the day that the
order, including Federal Funds, is received by the Transfer Agent.
TeleTransfer Privilege. (California Municipal Fund and New York
Municipal Fund only) TeleTransfer purchase orders may be made at any time.
Purchase orders received by 4:00 p.m., New York time, on any business day that
the Transfer Agent and the New York Stock Exchange are open for business will
be credited to the shareholder's Fund account on the next bank business day
following such purchase order. Purchase orders made after 4:00 p.m., New
York time, on any business day the Transfer Agent and the New York Stock
Exchange are open for business, or orders made on Saturday, Sunday or any
Fund holiday (e.g., when the New York Stock Exchange is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
TeleTransfer Privilege, the initial payment for purchase of Fund shares must
be drawn on, and redemption proceeds paid to, the same bank and account as
are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and signature-
guaranteed. See "Redemption of Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
SERVICE PLAN AND DISTRIBUTION PLAN
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus relating to Class A shares entitled
"Service Plan" and in conjunction with the section of each Fund Prospectus
relating to Class B shares entitled "Distribution Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an
investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Board of each
of the Government Money Fund and the Money Fund has adopted separate plans
with respect to Class A and Class B of such Funds and the Board of each of
the Municipal Funds has adopted a plan with respect to Class B of such Funds
(each, a "Plan"). Under each Plan, the respective Fund bears directly the
costs of preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the Plan. Under
each Plan adopted with respect to Class A of the Government Money Fund and
Money Fund (the "Service Plan"), the Fund reimburses (a) the Distributor for
payments made for distributing Class A shares and servicing shareholder
accounts ("Servicing") and (b) the Manager, Dreyfus Service Corporation and
any affiliate of either of them (collectively, "Dreyfus") for payments made
for Servicing. Under each Service Plan, each of the Distributor and Dreyfus
may pay one or more financial institutions, Selected Dealers or other
industry professionals (collectively, "Service Agents") a fee in respect of
Class A shares of the Fund owned by shareholders with whom the Service Agent
has a Servicing relationship or for whom the Service Agent is the dealer or
holder of record. Under each Fund's Plan adopted with respect to Class B
(the "Distribution Plan"), the Fund reimburses the Distributor for payments
made to third parties for distributing (within the meaning of the Rule)
Class B shares. Each Fund's Board believes that there is a reasonable
likelihood that each Plan will benefit the Fund and holders of the relevant
Class of shares.
A quarterly report of the amounts expended under each Plan, and the
purposes for which such expenditures were incurred, must be made to the
Fund's Board for its review. In addition, each Plan provides that it may
not be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without shareholder approval of the
affected Class and that other material amendments of the Plan must be
approved by the Board, and by the Fund's Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the Manager
and have no direct or indirect financial interest in the operation of the
Plan or in any related agreements entered into in connection with such Plan,
by vote cast in person at a meeting called for the purpose of considering
such amendments. Each Plan is subject to annual approval by such vote of
the Board members cast in person at a meeting called for the purpose of
voting on the Plan. Each Plan was last so approved on September 17, 1997.
Each Plan is terminable at any time by vote of a majority of the Fund's
Board members who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Plan or in any of the
related agreements or by vote of a majority of the relevant Class of shares.
Set forth below are the total amounts paid by each of the Government
Money Fund and the Money Fund pursuant to its Service Plan with respect to
Class A (i) to the Distributor ("Distributor Payments") as reimbursement for
distributing Class A shares and Servicing, (ii) to Dreyfus for payments made
for Servicing ("Dreyfus Payments"), and (iii) for costs of preparing,
printing and distributing prospectuses and statement of additional
information and of implementing and operating the Service Plan ("Printing
and Implementation") for the Fund's fiscal year ended January 31, 1997, and,
because each of these Funds changed its fiscal year end to November 30, the
ten-month period ended November 30, 1997.
<TABLE>
Name of Total Amount Printing
Fund Paid Distributor Dreyfus and
Pursuant to Payments Payments Implementation
Service Plan
Ten- Fiscal Ten- Fiscal Ten- Fiscal Ten- Fiscal
Month Year Month Year Month Year Month Year
Period Ended Period Ended Period Ended Period Ended
Ended January Ended January Ended January ended January
November 31, November 31, November 31, November 31,
30, 1997 30, 1997 30, 1997 30, 1997
1997 1997 1997 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Government
Money
Fund
-
Class A $2,554,860 $1,937,170 $1,687,230 $881,905 $867,630 $1,047,607 $ - $7,658
Money $3,936,117 $2,627,518 $2,602,009 $1,160,113 $1,325,410 $1,454,173 $8,698 $13,232
Fund - Class A
</TABLE>
Set forth below are the total amounts paid by each Fund to the
Distributor pursuant to its Distribution Plan with respect to Class B for
the Fund's most recent fiscal year and, with respect to Government Money
Fund, Money Fund and California Municipal Fund, for the stated period ended
November 30, 1997:
Name of Fund Total Amount Paid Pursuant to
Distribution Plan
Ten-Month Period Fiscal Year
Ended November Ended
30, 1997 January 31,
1997
Government
Money Fund
- - Class B $ 464,489 $ 153,504
Money Fund
- - Class B $1,511,346 $ 660,152
Four-Month Fiscal Year
Period Ended Ended
November 30, July 31, 1997
1997
California
Municipal Fund
- - Class B $ 1,747 $ 7,812
Fiscal Year
Ended
November 30, 1997
National
Municipal Fund $ 335,468
- - Class B
New York
Municipal Fund
- - Class B $ 80,288
SHAREHOLDER SERVICES PLANS
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Shareholder Services
Plan."
Each Fund has adopted a Shareholder Services Plan with respect to Class
A pursuant to which the Fund reimburses Dreyfus Service Corporation for
certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. Each Fund also has adopted a Shareholder Services
Plan with respect to Class B pursuant to which the Fund pays the Distributor
for the provision of certain services to the holders of Class B shares.
Under each Shareholder Services Plan, the services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts. As to each Fund, under the Shareholders Services Plan for Class
B, the Distributor may make payments to Service Agents in respect of their
services.
A quarterly report of the amounts expended under each Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Fund's Board for its review. In addition, each
Shareholder Services Plan provides that material amendments to the
Shareholder Services Plan must be approved by the Fund's Board, and by the
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund and have no direct or indirect financial interest in the
operation of the Shareholder Services Plan, by vote cast in person at a
meeting called for the purpose of considering such amendments. Each
Shareholder Services Plan is subject to annual approval by such vote of its
Board members cast in person at a meeting called for the purpose of voting
on the Shareholder Services Plan. Each Shareholder Services Plan was last
so approved on September 17, 1997. Each Shareholder Services Plan is
terminable at any time by vote of a majority of the Board members who are
not "interested persons" and have no direct or indirect financial interest
in the operation of the Shareholder Services Plan.
<TABLE>
Set forth below are the total amounts payable by each Fund pursuant to
its separate Shareholder Services Plans for Class A and Class B, the amounts
reimbursed to the Fund by the Manager pursuant to undertakings in effect, if
any, and the net amount paid by the Fund for the Fund's most recent fiscal
year and, with respect to Government Money Fund, Money Fund and California
Municipal Fund, for the period ended November 30, 1997:
Name of Total Amount Amount Reimbursed
Fund Payable Pursuant Pursuant Net Amount Paid
and to to Undertaking by Fund
Class Shareholder
Services Plan
Ten- Ten-Month Ten-Month
Month Fiscal Period Fiscal Period Fiscal
Period Year Ended Year Ended Year
Ended Ended November Ended November Ended
November January 30, 1997 January 30, 1997 January
30, 1997 31, 1997 31, 1997 31, 1997
<S> <C> <C> <C> <C> <C> <C>
Government
Money
Fund
- - Class A $228,811 $215,006 $ - $ - $228,811 $215,006
- - Class B $580,611 $191,880 $112,572 $62,819 $468,039 $129,061
Name
of Total Amount
Fund Payable Pursuant to Amount Reimbursed Net Amount Paid
and Shareholder Pursuant to by Fund
Class Services Plan Undertaking
Ten-Month Ten-Month Ten-Month
Period Fiscal Period Fiscal Period Fiscal
Ended Year Ended Year Ended Year
November Ended November Ended November Ended
30, 1997 January 30, 1997 January 30, 1997 January
31, 1997 31, 1997 31,
1997
Money
Fund
- - Class A $331,353 $363,543 $ - $ - $331,353 $363,543
- - Class B $1,889,183 $825,189 $401,679 $243,136 $1,487,504 $582,053
Four- Four- Four-
Month Fiscal Month Fiscal Month Fiscal
Period Year Period Year Period Year
Ended Ended Ended Ended Ended Ended
November July 31, November July 31, November July 31,
30, 1997 1997 30,1997 1997 30, 1997 1997
California
Municipal
Fund
- - Class A $149,000 $217,509 $ - $ - $149,000 $217,509
- -Class B $ 2,620 $11,719 $1,139 $2,734 $ 1,481 $ 8,985
Fiscal Fiscal Fiscal
Year Year Year
Ended Ended Ended
November November November
30, 1997 30, 1997 30, 1997
National
Municipal
Fund
- - Class A $ 74,764 $ - $ 74,764
- - Class B $419,335 $261,396 $157,939
Fiscal Fiscal Fiscal
Year Year Year
Ended Ended Ended
November November November
30, 1997 30, 1997 30, 1997
New
York
Municipal
Fund
- - Class A $429,622 $ - $429,622
- - Class B $100,360 $33,165 $ 67,195
</TABLE>
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Redeem Shares."
Check Redemption Privilege. Each Fund provides Redemption Checks
("Checks") automatically upon opening an account, unless the investor
specifically refuses the Check Redemption Privilege by checking the
applicable "No" box on the Account Application. The Check Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form. Checks will be sent only to the registered
owner(s) of the account and only to the address of record. The Account
Application or Shareholder Services Form must be manually signed by the
registered owner(s). Checks are drawn on the investor's Fund account and
may be made payable to the order of any person in an amount of $500 or more.
When a Check is presented to the Transfer Agent for payment, the Transfer
Agent, as the investor's agent, will cause the Fund to redeem a sufficient
number of full or fractional shares in the investor's account to cover the
amount of the Check. Dividends are earned until the Check clears. After
clearance, a copy of the Check will be returned to the investor. Investors
generally will be subject to the same rules and regulations that apply to
checking accounts, although the election of this Privilege creates only a
shareholder-transfer agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient funds.
Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire, telephone or letter redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, each
Fund will initiate payment for shares redeemed pursuant to this Privilege on
the same business day if the Transfer Agent receives the redemption request
in proper form prior to 5:00 p.m., New York time, on such day; otherwise the
Fund will initiate payment on the next business day. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account Application
or the Shareholder Services Form, or to a correspondent bank if the
investor's bank is not a member of the Federal Reserve System. Fees
ordinarily are imposed by such bank and borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary
to avoid a delay in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors also should advise the operator that
the above transmittal code must be used and also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
TeleTransfer Privilege. (California Municipal Fund and New York
Municipal
Fund only) Investors should be aware that if they have selected the
TeleTransfer privilege, any request for a wire redemption will be effected
as a TeleTransfer transaction through the Automated Clearing House (ACH)
system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Shares -- TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. Each Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, each Fund's Board reserves the right to make payments in whole or in
part in securities or other assets of the Fund in case of an emergency or
any time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the securities would
be valued in the same manner as the Fund's portfolio is valued. If the
recipient sold such securities, brokerage charges might be incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets a Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of a Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such other periods
as the Securities and Exchange Commission by order may permit to protect a
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load, and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor, or an investor's Service Agent
acting on the investor's behalf, must give exchange instructions to the
Transfer Agent in writing or by telephone. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless the investor checks the applicable "No" box on the Account
Application, indicating that the investor specifically refuses this
Privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions (including
over The Dreyfus Touch automated telephone system) from any person
representing himself or herself to be the investor or a representative of
the investor's Service Agent, and reasonably believed by the Transfer Agent
to be genuine. Telephone exchanges may be subject to limitations as to the
amount involved or the number of telephone exchanges permitted. Shares
issued in certificate form are not eligible for telephone exchanges.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of a Fund, shares of certain
other funds in the Dreyfus Family of Funds. This Privilege is available
only for existing accounts. Shares will be exchanged on the basis of
relative net asset value as described above under "Fund Exchanges."
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by the investor. An investor
will be notified if his account falls below the amount designated to be
exchanged under this Privilege. In this case, an investor's account will
fall to zero unless additional investments are made in excess of the
designated amount prior to the next Auto-Exchange transaction. Shares held
under IRA and other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired legally may be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. Each Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or the
Auto-Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest
automatically their dividends or dividends and capital gain distributions,
if any, paid by a Fund in shares of another fund in the Dreyfus Family of
Funds of which the investor is a shareholder. Shares of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of
other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in shares
of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon redemption
of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans.
(Government Money Fund and Money Fund) Each of the Government Money Fund and
the Money Fund makes available to corporations a variety of prototype
pension and profit-sharing plans, including Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, IRAs set up
under a Simplified Employee Pension Plan ("SEP-IRAs"), rollover IRAs and
Education IRAs), 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. Investors can obtain details on the
various plans by calling the following numbers toll free: for Keogh Plans,
please call 1-800-358-5566; for IRAs (except SEP-IRAs), please call 1-800-
645-6561; or for SEP-IRAs, 401(k) Salary Reduction Plan, and 403(b)(7)
Plans, please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of
receipt of funds.
The minimum initial investment for corporate plans, salary reduction
plans, 403(b)(7) Plans and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment is $750 for Dreyfus-sponsored Keogh Plans, IRAs (including
regular IRAs, spousal IRAs for a non-working spouse, Roth IRAs, SEP-IRAs and
rollover IRAs) and 403(b)(7) Plans with only one participant and $500 for
Education IRAs, with no minimum for subsequent purchases.
The investor should read the prototype retirement plans and the
applicable form of custodial agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "How to Buy Shares."
Amortized Cost Pricing. The valuation of each Fund's portfolio
securities is based upon their amortized cost, which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method
provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the instrument.
Each Fund's Board has established, as a particular responsibility
within the overall duty of care owed to the Fund's shareholders, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of purchases and redemptions at $1.00. Such procedures include
review of the Fund's portfolio holdings by the Board, at such intervals as
it may deem appropriate, to determine whether the Fund's net asset value
calculated by using available market quotations or market equivalents
deviates from $1.00 per share based on amortized cost. In such review,
investments for which market quotations are readily available will be valued
at the most recent bid price or yield equivalent for such securities or for
securities of comparable maturity, quality and type, as obtained from one or
more of the major market makers for the securities to be valued. Other
investments and assets, to the extent a Fund is permitted to invest in such
instruments, will be valued at fair value as determined in good faith by the
Board. With respect to the Municipal Funds, market quotations and market
equivalents used in the Board's review are obtained from an independent
pricing service (the "Service") approved by the Board. The Service values
these Funds' investments based on methods which include considerations of:
yields or prices of municipal obligations of comparable quality, coupon,
maturity and type; indications of values from dealers; and general market
conditions. The Service also may employ electronic data processing
techniques and/or a matrix system to determine valuations.
The extent of any deviation between a Fund's net asset value based upon
available market quotations or market equivalents and $1.00 per share based
on amortized cost will be examined by the Fund's Board. If such deviation
exceeds 1/2 of 1%, the Board promptly will consider what action, if any,
will be initiated. In the event a Fund's Board determines that a deviation
exists which may result in material dilution or other unfair results to
investors or existing shareholders, it has agreed to take such corrective
action as it regards as necessary and appropriate, including: selling
portfolio instruments prior to maturity to realize capital gains or losses
or to shorten average portfolio maturity; withholding dividends or paying
distributions from capital or capital gains; redeeming shares in kind; or
establishing a net asset value per share by using available market
quotations or market equivalents.
New York Stock Exchange and Transfer Agent Closings. The holidays (as
observed) on which both the New York Stock Exchange and the Transfer Agent
are closed currently are: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Dividends, Distributions
and Taxes."
Management believes that each Fund has qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"), for it most recent fiscal year and each Fund intends to continue to
so qualify, if such qualification is in the best interests of its
shareholders. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Code.
With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of Federal tax exempt obligations, then the Fund may
designate and pay Federal exempt-interest dividends from interest earned on
all such tax exempt obligations. Such exempt-interest dividends may be
excluded by shareholders of the Fund from their gross income for Federal
income tax purposes. Dividends derived from Taxable Investments, together
with distributions from any net realized short-term securities gains,
generally are taxable as ordinary income for Federal income tax purposes
whether or not reinvested. Distributions from net realized long-term
securities gains generally are taxable as long-term capital gains to a
shareholder who is a citizen or resident of the United States, whether or
not reinvested and regardless of the length of time the shareholder has held
his shares.
With respect to the California Municipal Fund, if, at the close of each
quarter of its taxable year, at least 50% of the value of the Fund's total
assets consists of obligations which, when held by an individual, the
interest therefrom is exempt from California personal income tax, and if the
Fund qualifies as a management company under the California Revenue and
Taxation Code, then the Fund will be qualified to pay dividends to its
shareholders that are exempt from California personal income tax (but not
from California franchise tax) ("California exempt-interest dividends").
However, the total amount of California exempt-interest dividends paid by
the Fund to a non-corporate shareholder with respect to any taxable year
cannot exceed such shareholder's pro rata share of interest received by the
Fund during such year that is exempt from California taxation less any
expenses and expenditures deemed to have been paid from such interest.
For shareholders subject to the California personal income tax, exempt-
interest dividends derived from California Municipal Obligations will not be
subject to the California personal income tax. Distributions from net
realized short-term capital gains to California resident shareholders will
be subject to the California personal income tax distributed by the Fund as
ordinary income. Distributions from net realized long-term capital gains
may constitute long-term capital gains for individual California resident
shareholders. Unlike under Federal tax law, the California Municipal Fund's
shareholders will not be subject to California personal income tax, or
receive a credit for California taxes paid by the Fund, on undistributed
capital gains. In addition, California tax law does not consider any
portion of the exempt-interest dividends paid an item of tax preference for
the purpose of computing the California alternative minimum tax.
YIELD INFORMATION
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "Yield Information."
For the seven-day period ended November 30, 1997, the yield and
effective yield for Class A and Class B shares of each Fund were as follows:
Name of Fund and Class Yield Effective Yield
Government Money Fund
Class A 4.84% 4.96%
Class B 4.65% /4.59%* 4.76% /4.69%*
Money Fund
Class A 4.94% 5.06%
Class B 4.78% /4.72%* 4.89% /4.83%*
California Municipal
Fund 3.17% 3.22%
Class A 2.83% / 2.76%* 2.87% / 2.80%*
Class B
National Municipal Fund
Class A 3.33% 3.38%
Class B 2.98% / 2.87%* 3.02% / 2.91%*
New York Municipal Fund
Class A 3.13% 3.18%
Class B 2.86% / 2.75%* 2.90% / 2.79%*
________________
* Net of absorbed expenses.
Yield is computed in accordance with a standardized method which involves
determining the net change in the value of a hypothetical pre-existing Fund
account having a balance of one share at the beginning of a seven calendar
day period for which yield is to be quoted, dividing the net change by the
value of the account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying the base
period return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with dividends declared on
the original share and any such additional shares and fees that may be
charged to shareholder accounts, in proportion to the length of the base
period and the Fund's average account size, but does not include realized
gains and losses or unrealized appreciation and depreciation. Effective
yield is computed by adding 1 to the base period return (calculated as
described above), raising that sum to a power equal to 365 divided by 7, and
subtracting 1 from the result. Both yield figures take into account any
applicable distribution and service fees. As a result, at any given time,
the performance of Class B shares should be expected to be lower than that
of Class A shares.
As to the Municipal Funds, tax equivalent yield is computed by dividing
that portion of the yield or effective yield (calculated as described above)
which is tax exempt by 1 minus a stated tax rate and adding the quotient to
that portion, if any, of the yield of the Fund that is not tax exempt.
Based upon a 1998 Federal and State of California income tax rate of 45.22%,
the tax equivalent yield for the 7-day period ended November 30, 1997 for
Class A and Class B shares of the California Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
California Municipal Fund
Class A 5.79%
Class B 5.17% / 5.04%*
Based upon a 1998 Federal tax rate of 39.60%, the tax equivalent yield
for the seven-day period ended November 30, 1997 for the Class A and Class B
shares of National Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
National Municipal Fund
Class A 5.51%
Class B 4.93% / 4.75%*
Based upon a combined 1998 Federal, New York State and New York City
personal income tax rate of 46.43%, the tax equivalent yield for the seven-
day period ended November 30, 1997 for Class A and Class B shares of the New
York Municipal Fund was as follows:
Name of Fund and Class Tax Equivalent Yield
New York Municipal Fund
Class A 5.84%
Class B 5.34% / 5.13%*
______________
* Net of absorbed expenses.
The tax equivalent yields noted above for the National Municipal Fund
represent the application of the highest Federal marginal personal income
tax rate currently in effect. The taxes equivalent figures, however, do not
include the potential effect of any state or local (including, but not
limited to, county, district or city) taxes, including applicable
surcharges. The tax equivalent yield noted above for the California
Municipal Fund represents the application of the highest Federal and State
of California marginal personal income tax rates presently in effect. The
tax equivalent yields noted above for the New York Municipal Fund represent
the application of the highest Federal, New York State, and New York City
marginal personal income tax rates presently in effect. For Federal
personal income tax purposes a 39.60% tax rate has been used, for California
Sate income tax purposes the rate of 9.30% has been used, and for New York
State and New York City personal income tax purposes, the rates of 6.85% and
4.46%, respectively, have been used. In addition, there may be pending
legislation which could affect such stated tax rates or yields. Each
investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
Yields will fluctuate and are not necessarily representative of future
results. The investor should remember that yield is a function of the type
and quality of the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in a Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the manner in
which a Fund's price per share is determined.
From time to time, each Municipal Fund may use hypothetical tax
equivalent yields or charts in its advertising. These hypothetical yields
or charts will be used for illustrative purposes only and not as being
representative of the Fund's past or future performance.
From time to time, advertising materials for a Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, or actual or proposed tax legislation, and to statistical or other
information concerning trends relating to investment companies, as compiled
by industry associations such as the Investment Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer
or from an underwriter or a market maker for the securities. Usually no
brokerage commissions, as such, are paid by a Fund for such purchases.
Purchases from underwriters of portfolio securities include a concession
paid by the issuer to the underwriter and the purchase price paid to, and
sales price received from, market makers for the securities may include the
spread between the bid and asked price. No brokerage commissions have been
paid by any Fund to date.
Transactions are allocated to various dealers by the portfolio managers
of a Fund in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms and may be
selected based upon their sales of Fund shares.
Research services furnished by brokers through which a Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses of
its research department.
INFORMATION ABOUT THE FUNDS
The following information supplements and should be read in conjunction
with the section of each Fund Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Fund shares have equal rights as to dividends and in liquidation. Shares
have no preemptive, subscription or conversion rights and are freely
transferable.
Each Fund sends annual and semi-annual financial statements to all its
share-
holders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is each Fund's transfer and
dividend disbursing agent. Under a separate Transfer Agency Agreement with
each Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee from each Fund computed on the basis of the number of
shareholder accounts it maintains for such Fund during the month, and is
reimbursed for certain out-of-pocket expenses. The fee paid the Transfer
Agent by each Fund for its last fiscal year, including for Government Money
Fund, Money Fund and California Municipal Fund, which changed their fiscal
year end to November 30, for the stated period ended November 30, 1997, was
as follows:
Ten-Month Period Fiscal Year Ended
Ended November 30, January 31, 1997
1997
Government Money $50, 005 $ 58,897
Fund
Money Fund $156,866 $213,208
Four-Month Period Fiscal Year Ended
Ended November 30, July 31, 1997
1997
California Municipal $33,644 $114,834
Fund
Fiscal Year Ended
November 30, 1997
National Municipal $161,750
Fund
New York Municipal $176,157
Fund
The Bank of New York, 90 Washington Street, New York, New York 10286,
is each Fund's custodian.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for each Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the each Fund Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of each Fund.
FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITOR
The Funds' Annual Reports to Shareholders for the fiscal year ended
November 30, 1997 are separate documents and the financial statements,
accompanying notes and, with respect to the Annual Reports, reports of
independent auditors appearing therein are incorporated by reference into
this Statement of Additional Information. When requesting a copy of this
Statement of Additional Information, you will receive the annual report(s)
for the Fund(s) in which you are a shareholder.
APPENDIX A
(MONEY FUND ONLY)
Description of the two highest commercial paper, bond and other short-
and long-term rating categories assigned by Standard & Poor's Ratings Group
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch IBCA, Inc.
("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), and Thomson BankWatch,
Inc. ("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
with a plus sign (+) designation. Capacity for timely payment on issues
with an A-2 designation is strong. However, the relative degree of safety
is not as high as for issues designated A-1.
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return of funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2
(P-2) have a strong capacity for repayment of short-term promissory
obligations. This ordinarily will be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment. The rating Fitch-2 (Very
Good Grade) is the second highest commercial paper rating assigned by Fitch
which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded
as having good certainty of timely payment, good access to capital markets
and sound liquidity factors and company fundamentals. Risk factors are
small.
The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment. Obligations rated TBW-2 are supported by a
strong capacity for timely repayment, although the degree of safety is not
as high as for issues rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest. Bonds rated AA by S&P are judged by S&P to have a very strong
capacity to pay principal and interest and, in the majority of instances,
differ only in small degrees from issues rated AAA. The rating AA may be
modified by the addition of a plus or minus sign to show relative standing
within the rating category.
Bonds rated Aaa by Moody's are judged to be of the best quality. Bonds
rated Aa by Moody's are judged by Moody's to be of high quality by all
standards and, together with the Aaa group they comprise what are generally
known as high-grade bonds. Bonds rated Aa are rated lower than Aaa bonds
because margins of protection may not be as large or fluctuations of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa rating category.
The modifier 1 indicates a ranking for the security in the higher end of
this rating category, the modifier 2 indicates a mid-range ranking, and the
modifier 3 indicates a ranking in the lower end of the rating category.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions and liable to slight market fluctuation other than through
changes in the money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements, with such
stability of applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions. Bonds rated AA by Fitch are judged by
Fitch to be of safety virtually beyond question and are readily salable,
whose merits are not unlike those of the AAA class, but whose margin of
safety is less strikingly broad. The issue may be the obligation of a small
company, strongly secured but influenced as to rating by the lesser
financial power of the enterprise and more local type of market.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt. Bonds rated AA are considered by Duff to be of high
credit quality with strong protection factors. Risk is modest but may vary
slightly from time to time because of economic conditions.
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.
Fitch also assigns a rating to certain international and U.S. banks. A
Fitch bank rating represents Fitch's current assessment of the strength of
the bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, Fitch uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, Fitch
assigns banks Long- and Short-Term Ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support from central
banks or shareholders if it experienced difficulties, and such ratings are
considered by Fitch to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E, represent
Fitch's assessment of a bank's economic merits and address the question of
how the bank would be viewed if it were entirely independent and could not
rely on support from state authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents an
assessment of the overall political and economic stability of the country in
which the bank is domiciled.
APPENDIX B
(MUNICIPAL FUNDS)
Description of certain S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable, and will include:
(1) likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature of and provisions of the obligation; and
(3) protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 indicates that the
degree of safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Bonds in the Aa category which Moody's
believes possess the strongest investment attributes are designated by the
symbol Aa1.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issuers rated Prime-2
(P-2) have a strong ability for repayment of senior short-term debt
obligations. Capitalization characteristics, while still appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings recognize
the difference between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in
bond risk, long-term secular trends for example, may be less important over
the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such characteristics
as payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to
the fact that the source of payment may be limited to the external liquidity
with no or limited legal recourse to the issuer in the event the demand is
not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and
operating performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond ratings
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
APPENDIX C
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
RISK FACTORS--INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
Certain California (the "State") constitutional amendments, legislative
measures, executive orders, civil actions and voter initiatives, as well as
the general financial condition of the State, could adversely affect the
ability of issuers of California Municipal Obligations to pay interest and
principal on such obligations. The following information constitutes only a
brief summary, does not purport to be a complete description, and is based
on information drawn from official statements relating to securities
offerings of the State of California and various local agencies, available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to believe
that such information is not correct in all material respects.
Recent Developments. From mid-1990 to late 1993, the State suffered a
recession with the worst economic, fiscal and budget conditions since the
1930s. Construction, manufacturing (especially aerospace), exports and
financial services, among others, were all severely affected. Job losses
were the worst of any post-war recession. Unemployment reached 10.1% in
January 1994, but fell sharply to 7.7% in October and November 1994.
According to the State's Department of Finance, recovery from the recession
in California began in 1994.
The recession seriously affected State tax revenues, which basically
mirror economic conditions. It also caused increased expenditures for
health and welfare programs. The State has also been facing a structural
imbalance in its budget with the largest programs supported by the General
Fund (K-12 schools and community colleges, health and welfare, and
corrections) growing at rates higher than the growth rates for the principal
revenue sources of the General Fund. As a result, the State experienced
recurring budget deficits in the late 1980s and early 1990s. The State
Controller reported that expenditures exceeded revenues for four of the five
fiscal years ending with 1991-92. However, at June 30, 1996, according to
the Department of Finance, the State's Special Fund for Economic
Uncertainties ("SFEU") had a small negative balance of approximately $87
million, all but eliminating the accumulated budget deficit from the early
1990's.
The accumulated budget deficits over the past several years, together
with expenditures for school funding which have not been reflected in the
budget, and reduction of available internal borrowable funds, have combined
to significantly deplete the State's cash resources to pay its ongoing
expenses. In order to meet its cash needs, the State has had to rely for
several years on a series of external borrowings, including borrowings past
the end of a fiscal year. Such borrowings are expected to continue in
future fiscal years. To meet its cash flow needs in the 1994-95 fiscal year
the State issued, in July and August 1994, $4.0 billion of revenue
anticipation warrants which matured on April 25, 1996, and $3.0 billion of
revenue anticipation notes which matured on June 28, 1995. The State issued
$3.0 billion of revenue anticipation notes for the 1996-97 fiscal year on
August 7, 1996, which matured on June 30, 1997.
As a result of the deterioration in the State's budget and cash
situation, the rating agencies reduced the State's credit ratings. Between
October 1991 and July 1994, the rating on the State's general obligation
bonds was reduced by S&P from "AAA" to "A," by Moody's from "Aaa" to "A1"
and by Fitch from "AAA" to "A."
The 1996-97 Fiscal Year Budget projects $47.6 billion of General Fund
revenues and transfers and $47.3 billion of budgeted expenditures.
The 1997-98 Fiscal Year Budget was released by the Governor on January
9, 1997. It projects $50.7 billion of General Fund revenues and transfers
and $50.3 billion of budgeted expenditures, and projects a balance in the
SFEU of $553 million on June 30, 1998.
On December 6, 1994, Orange County, California (the "County"), together
with its pooled investment funds (the "County Funds"), filed for protection
under Chapter 9 of the Federal Bankruptcy Code, after reports that the
County Funds had suffered significant market losses in their investments,
causing a liquidity crisis for the County Funds and the County. More than
200 other public entities, most of which, but not all, are located in the
County, were also depositors in the County Funds. As of mid-January 1995,
following a restructuring of most of the County Funds' assets to increase
their liquidity and reduce their exposure to interest rate increases, the
County estimated the County Funds' loss at about $1.69 billion, or about 23%
of their initial deposits of approximately $7.5 billion. Many of the
entities which deposited monies in the County Funds, including the County,
are facing cash flow difficulties because of the bankruptcy filing and may
be required to reduce programs or capital projects. This also may effect
their ability to meet their outstanding obligations.
The State has no existing obligation with respect to any outstanding
obligations or securities of the County or any of the other participating
entities. However, in the event the County is unable to maintain county
administered State programs because of insufficient resources, it may be
necessary for the State to intervene, but the State cannot presently predict
what, if any, action may occur.
State Finances. State moneys are segregated into the General Fund and
approximately 800 Special Funds including Bond, Trust and Pension Funds.
The General Fund consists of the revenues received into the State Treasury
and earnings from State investments, which are not required by law to be
credited to any other fund. The General Fund is the principal operating
fund for the majority of governmental activities and is the depository of
most major State revenue sources.
The SFEU is funded with General Fund revenues and was established to
protect the State from unforeseen reduced levels of revenues and/or
unanticipated expenditure increases. Amounts in the SFEU may be transferred
by the Controller as necessary to meet cash needs of the General Fund. The
Controller is required to return moneys so transferred without payment of
interest as soon as there are sufficient moneys in the General Fund. For
budgeting and accounting purposes, any appropriation made from the SFEU is
deemed an appropriation from the General Fund. For year-end reporting
purposes, the Controller is required to add the balance in the SFEU to the
balance in the General Fund so as to show the total monies then available
for General Fund purposes.
Inter-fund borrowing has been used for many years to meet temporary
imbalances of receipts and disbursements in the General Fund. As of June
30, 1996, the General Fund had outstanding loans from the SFEU and Special
Funds in the amount of $1.5 billion.
Articles XIIIA, XIIIB, XIIIC and XIIID to the State Constitution and
Other Revenue Law Changes. Prior to 1977, revenues of the State government
experienced significant growth primarily as a result of inflation and
continuous expansion of the tax base of the State. In 1978, State voters
approved an amendment to the State Constitution known as Proposition 13,
which added Article XIIIA to the State Constitution, reducing ad valorem
local property taxes by more than 50%. In addition, Article XIIIA provides
that additional taxes may be levied by cities, counties and special
districts only upon approval of not less than a two-thirds vote of the
"qualified electors" of such district, and requires not less than a two-
thirds vote of each of the two houses of the State Legislature to enact any
changes in State taxes for the purpose of increasing revenues, whether by
increased rate or changes in methods of computation.
Primarily as a result of the reductions in local property tax revenues
received by local governments following the passage of Proposition 13, the
Legislature undertook to provide assistance to such governments by
substantially increasing expenditures from the General Fund for that purpose
beginning in the 1978-79 fiscal year. In recent years, in addition to such
increased expenditures, the indexing of personal income tax rates (to adjust
such rates for the effects of inflation), the elimination of certain
inheritance and gift taxes and the increase of exemption levels for certain
other such taxes had a moderating impact on the growth in State revenues.
In addition, the State has increased expenditures by providing a variety of
tax credits, including renters' and senior citizens' credits and energy
credits.
The State is subject to an annual "appropriations limit" imposed by
Article XIIIB of the State Constitution adopted in 1979. Article XIIIB
prohibits the State from spending "appropriations subject to limitation" in
excess of the appropriations limit imposed. "Appropriations subject to
limitations" are authorizations to spend "proceeds of taxes," which consist
of tax revenues, and certain other funds, including proceeds from regulatory
licenses, user charges or other fees to the extent that such proceeds exceed
"the cost reasonably borne by such entity in providing the regulation,
product or service." One of the exclusions from these limitations is "debt
service" (defined as "appropriations required to pay the cost of interest
and redemption charges, including the funding of any reserve or sinking fund
required in connection therewith, on indebtedness existing or legally
authorized as of January 1, 1979 or on bonded indebtedness thereafter
approved" by the voters). In addition, appropriations required to comply
with mandates of courts or the Federal government and, pursuant to
Proposition 111 enacted in June 1990, appropriations for qualified capital
outlay projects and appropriations of revenues derived from any increase in
gasoline taxes and motor vehicle weight fees above January 1, 1990 levels
are not included as appropriations subject to limitation. In addition, a
number of recent initiatives were structured or proposed to create new tax
revenues dedicated to certain specific uses, with such new taxes expressly
exempted from the Article XIIIB limits (e.g., increased cigarette and
tobacco taxes enacted by Proposition 99 in 1988). The appropriations limit
also may be exceeded in cases of emergency. However, unless the emergency
arises from civil disturbance or natural disaster declared by the Governor,
and the appropriations are approved by two-thirds of the Legislature, the
appropriations limit for the next three years must be reduced by the amount
of the excess.
The State's appropriations limit in each year is based on the limit for
the prior year, adjusted annually for changes in California per capita
personal income and changes in population, and adjusted, when applicable,
for any transfer of financial responsibility of providing services to or
from another unit of government. The measurement of change in population is
a blended average of statewide overall population growth, and change in
attendance at local school and community college ("K-14") districts. As
amended by Proposition 111, the appropriations limit is tested over
consecutive two-year periods. Any excess of the aggregate "proceeds of
taxes" received over such two-year periods above the combined appropriations
limits for those two years is divided equally between transfers to
K-14 districts and refunds to taxpayers.
As originally enacted in 1979, the State's appropriations limit was
based on its 1978-79 fiscal year authorizations to expend proceeds of taxes
and was adjusted annually to reflect changes in cost of living and
population (using different definitions, which were modified by Proposition
111). Commencing with the 1991-92 fiscal year, the State's appropriations
limit is adjusted annually based on the actual 1986-87 limit, and as if
Proposition 111 had been in effect. The State Legislature has enacted
legislation to implement Article XIIIB which defines certain terms used in
Article XIIIB and sets forth the methods for determining the State's
appropriations limit. Government Code Section 7912 requires an estimate of
the State's appropriations limit to be included in the Governor's Budget,
and thereafter to be subject to the budget process and established in the
Budget Act.
The limit for the 1993-94 fiscal year was $36.60 billion, and the
appropriations subject to limitation were $6.55 billion under the limit.
The limit for the 1994-95 fiscal year was $37.55 billion, and the
appropriations subject to limitations were $5.93 billion under the limit.
The limit for the 1995-96 fiscal year was $39.31 billion, and the
appropriations subject to limitations were estimated to be $5.12 billion
under the limit. The estimated limit for the 1996-97 fiscal year was $42
billion, and the appropriations subject to limitations were estimated to be
$7.12 billion under the limit.
In November 1988, State voters approved Proposition 98, which changed
State funding of public education below the university level and the
operation of the State's appropriations limit, primarily by guaranteeing K-
14 schools a minimum share of General Fund revenues. Under Proposition 98
(as modified by Proposition 111, which was enacted in June 1990), K-14
schools are guaranteed the greater of (a) 40.3% of General Fund revenues
("Test 1"), (b) the amount appropriated to K-14 schools in the prior year,
adjusted for changes in the cost of living (measured as in Article XIIIB by
reference to California per capita personal income) and enrollment ("Test
2"), or (c) a third test, which would replace the second test in any year
when the percentage growth in per capita General Fund revenues from the
prior year plus .5% is less than the percentage growth in California per
capita personal income ("Test 3"). Under "Test 3," schools would receive
the amount appropriated in the prior year adjusted for changes in enrollment
and per capita General Fund revenues, plus an additional small adjustment
factor. If "Test 3" is used in any year, the difference between "Test 3"
and "Test 2" would become a "credit" to schools which would be the basis of
payments in future years when per capita General Fund revenue growth exceeds
per capita personal income growth.
Proposition 98 permits the Legislature by two-thirds vote of both
houses, with the Governor's concurrence, to suspend the K-14 schools'
minimum funding formula for a one-year period. In the fall of 1989, the
Legislature and the Governor utilized this provision to avoid having 40.3%
of revenues generated by a special supplemental sales tax enacted for
earthquake relief go to K-14 schools. Proposition 98 also contains
provisions transferring certain State tax revenues in excess of the Article
XIIIB limit to K-14 schools.
The 1991-92 Budget Act, applying "Test 2" of Proposition 98,
appropriated approximately $18.4 billion for K-14 schools pursuant to
Proposition 98. During the course of the fiscal year, revenues proved to be
substantially below expectations. By the time the Governor's Budget was
introduced in January 1992, it became clear that per capita growth in
General Fund revenues for 1991-92 would be far smaller than the growth in
California per capita personal income and the Governor's Budget therefore
reflected a reduction in Proposition 98 funding in 1991-92 by applying "Test
3" rather than "Test 2."
In response to the changing revenue situation and to fully fund the
Proposition 98 guarantee in both the 1991-92 and 1992-93 fiscal years
without exceeding it, the Legislature enacted several bills as part of the
1992-93 budget package which responded to the fiscal crisis in education
funding. Fiscal year 1991-92 Proposition 98 appropriations for K-14 schools
were reduced by $1.083 billion. In order to not adversely impact cash
received by school districts, however, a short-term loan was appropriated
from the non-Proposition 98 State General Fund. The Legislature then
appropriated $16.6 billion to K-14 schools for 1992-93 (the minimum
guaranteed by Proposition 98), but designated $1.083 billion of this amount
to "repay" the prior year loan, thereby reducing cash outlays in 1992-93 by
that amount. In addition to reducing the 1991-92 fiscal year appropriations
for K-14 schools by $1.083 billion and converting the amount to a loan (the
"inter-year adjustment"), Chapter 703, Statutes of 1992 also made an
adjustment to "Test 1," based on the additional $1.2 billion of local
property taxes that were shifted to schools and community colleges. The
"Test 1" percentage changed from 40% to 37%. Additionally, Chapter 703
contained a provision that if an appellate court should determine that the
"Test 1" recalculation or the inter-year adjustment is unconstitutional,
unenforceable or invalid, Proposition 98 would be suspended for the 1992-93
fiscal year, with the result that K-14 schools would receive the amount
intended by the 1992-93 Budget Act compromise.
The State Controller stated in October 1992 that, because of a drafting
error in Chapter 703, he could not implement the $1.083 billion reduction of
the 1991-92 school funding appropriation, which was part of the inter-year
adjustment. The Legislature untimely enacted corrective legislation as part
of the 1993-94 Budget package to implement the $1.083 billion inter-year
adjustment as originally intended.
In the 1992-93 Budget Act, a new loan of $732 million was made to K-12
schools in order to maintain per-average daily attendance ("ADA") funding at
the same level as 1991-92, at $4,187. An additional loan of $241 million
was made to community college districts. These loans are to be repaid from
future Proposition 98 entitlements. (The teachers' organization lawsuit
discussed above also seeks to declare invalid the provision making the $732
million a loan "repayable" from the future years' Proposition 98 funds).
Including both State and local funds, and adjusting for the loans and
repayments, on a cash basis, total Proposition 98 K-12 funding in 1992-93
increased to $21.5 billion, 2.4% more than the amount in 1992-93 ($21.0
billion).
Based on revised State tax revenues and estimated decreased reported
pupil enrollment, the 1993-94 Budget Act projected that the 1992-93
Proposition 98 Budget Act appropriations of $16.6 billion exceeded a revised
minimum guarantee by $313 million. As a result, the 1993-94 Budget Act
reverted $25 million in 1992-93 appropriations to the General Fund.
Limiting the reversion to this amount ensures that per ADA funding for
general purposes will remain at the prior year level of $4,217 per pupil.
The 1993-94 Governor's Budget subsequently proposed deficiency funding of
$121 million for school apportionments and special education, increasing
funding per pupil in 1992-93 to $4,244. The 1993-94 Budget Act also
designated $98 million in 1992-93 appropriations toward satisfying prior
years' guarantee levels, an obligation that resulted primarily from updating
State tax revenues for 1991-92, and designates $190 million as a loan
repayable from 1993-94 funding.
The 1993-94 Budget Act projected the Proposition 98 minimum funding
level at $13.5 billion based on the "Test 3" calculation where the guarantee
is determined by the change in per capita growth in General Fund revenues,
which are projected to decrease on a year-over-year basis. This amount also
takes into account increased property taxes transferred to school districts
from other local governments.
Legislation accompanying the 1993-94 Budget Act (Chapter 66/93)
provided a new loan of $609 million to K-12 schools in order to maintain per
ADA funding at $4,217 and a loan of $178 million to community colleges.
These loans have been combined with the K-14 1992-93 loans into one loan
totaling $1.760 billion. Repayment of this loan would be from future years'
Proposition 98 entitlements, and would be conditioned on maintaining current
funding levels per pupil for K-12 schools. Chapter 66 also reduced the
"Test 1" percentage to 35% to reflect the property tax shift among local
government agencies.
The 1994-95 Budget Act appropriated $14.4 billion of Proposition 98
funds for K14 schools based on Test 2. This exceeded the minimum
Proposition 98 guarantee by $8 million to maintain K-12 funding per pupil at
$4,217. Based upon updated State revenues, growth rates and inflation
factors, the 1994-95 Budget Act appropriated an additional $286 million
within Proposition 98 for the 1993-94 fiscal year, to reflect a need in
appropriations for school districts and county offices of education, as well
as an anticipated deficiency in special education fundings. These and other
minor appropriation adjustments increased the 1993-94 Proposition 98
guarantee to $13.8 billion, which exceeds the minimum guarantee in that year
by $272 million and provided per pupil funding of $4,225.
The 1995-96 Governor's Budget adjusted the 1993-94 minimum guarantee to
reflect changes in enrollment and inflation, and 1993-94 Proposition 98
appropriations were increased to $14.1 billion, primarily to reflect changes
in the statutory continuous appropriation for apportionments. The revised
appropriations exceeded the minimum guarantee by $32 million. This
appropriation level still provided per-pupil funding of $4,225.
The 1994-95 Proposition 98 minimum guarantee also has been adjusted for
changes in factors described above, and was calculated to be $14.9 billion.
Within the minimum guarantee, the dollars per pupil were maintained at the
prior year's level; consequently, the 1994-95 minimum guarantee included a
loan repayment of $135 million, and the per-pupil funding increased to
$4,231.
The 1995-96 Governor's Budget proposes to appropriate $15.9 billion of
Proposition 98 funds to K-14 to meet the guarantee level. Included within
the guarantee is a loan repayment of $379 million for the combined
outstanding loans of $1.76 billion. Funding per pupil is estimated to
increase by $61 over 1994-95 to $4,292.
In November 1996, State voters approved Proposition 218, which added
Articles XIIIC and XIIID to the State Constitution generally requiring voter
approval of most tax or fee increases by local governments and curtailing
local governments' use of benefit assessments to fund certain property-
related services to finance infrastructure. The amendments extend to all
local government entities the requirement that all taxes for general
purposes be approved by a majority vote and that all taxes for special
purposes be approved by a two-thirds majority vote (including the
ratification of those taxes that have been imposed since January 1, 1995 up
to the effective date of the amendments). Proposition 218 also limits the
use of special assessments or "property-related" fees to services or
infrastructure that confer a "special benefit" to specific property; police,
fire and other services are now deemed to benefit the public at large and,
therefore, could not be funded by special assessments. Finally, the
amendments enable the voters to use their initiative power to repeal
previously-authorized taxes, assessments, fees and charges. It remains to
be seen what impact these Articles will have on existing and future
California debt obligations.
Sources of Tax Revenue. The California personal income tax, which in
1994-95 contributed about 43% of General Fund revenues, is closely modeled
after the Federal income tax law. It is imposed on net taxable income
(gross income less exclusions and deductions). The tax is progressive with
rates ranging from 1% to 9.3%. Personal, dependent, and other credits are
allowed against the gross tax liability. In addition, taxpayers may be
subject to an alternative minimum tax ("AMT") which is much like the Federal
AMT. This is designed to ensure that excessive use of tax preferences does
not reduce taxpayers' liabilities below some minimum level. Legislation
enacted in July 1991 added two new marginal tax rates, at 10% and 11%,
effective for tax years 1991 through 1995. After 1995, the maximum personal
income tax rate returned to 9.3%, and the AMT rate dropped from 8.5% to 7%.
The personal income tax is adjusted annually by the change in the
consumer price index to prevent taxpayers from being pushed into higher tax
brackets without a real increase in income.
The sales tax is imposed upon retailers for the privilege of selling
tangible personal property in California. Most retail sales and leases are
subject to the tax. However, exemptions have been provided for certain
essentials such as food for home consumption, prescription drugs, gas,
electricity and water. Sales tax accounted for about 34% of General Fund
revenue in 1995-96. Bank and corporation tax revenues comprised about 13%
of General Fund revenue in 1995-96. In 1989, Proposition 99 added a 25
cents per pack excise tax on cigarettes, and a new equivalent excise tax on
other tobacco products. Legislation enacted in 1993 added an additional 2
cents per pack for the purpose of funding breast cancer research.
General Financial Condition of the State. In the years following
enactment of the Federal Tax Reform Act of 1986, and conforming changes to
the State's tax laws, taxpayer behavior became more difficult to predict,
and the State experienced a series of fiscal years in which revenue came in
significantly higher or lower than original estimates. The 1989-90 fiscal
year ended with revenues below estimates and the SFEU was fully depleted by
June 30, 1990. This date essentially coincided with the date of the most
recent recession, and the State subsequently accumulated a budget deficit in
the SFEU approaching $2.8 billion at its peak. The State's budget problems
in recent years also have been caused by a structural imbalance which has
been identified by the current and previous Administrations. The largest
General Fund programs -- K-14 education, health, welfare and corrections --
were increasing faster than the revenue base, driven by the State's rapid
population increases.
Starting in the 1990-91 fiscal year, each budget required multibillion
dollar actions to bring projected revenues and expenditures into balance and
to close large "budget gaps" which were identified. The Legislature and
Governor eventually agreed on significant cuts in program expenditures, some
transfers of program responsibilities and funding from the State to local
governments, revenue increases (particularly in the 1991-92 fiscal year
budget), and various one-time adjustments and accounting changes. However,
as the recession took hold and deepened after the summer of 1990, revenues
dropped sharply and expenditures for health and welfare programs increased
as job losses mounted, so that the State ended each of the 1990-91 and 1991-
92 fiscal years with an unanticipated deficit in the budget reserve, the
SFEU, as compared to projected positive balances.
As a result of the revenue shortfalls accumulating for the previous two
fiscal years, the Controller in April 1992 indicated that cash resources
(including borrowing from Special Funds) would not be sufficient to meet all
General Fund obligations due on June 30 and July 1, 1992. On June 25, 1992,
the Controller issued $475 million of 1992 Revenue Anticipation Warrants
(the "1992 Warrants") in order to provide funds to cover all necessary
payments from the General Fund at the end of the 1991-92 fiscal year and on
July 1, 1992. The 1992 Warrants were paid on July 24, 1992. In addition to
the 1992 Warrants, the Controller reported that as of June 30, 1992, the
General Fund had borrowed $1.336 billion from the SFEU and $4.699 billion
from other Special Funds, using all but about $183 million of borrowable
cash resources.
To balance the 1992-93 Governor's Budget, program reductions totaling
$4.365 billion and a revenue and transfer increase of $872 million were
proposed for the 1991-92 and 1992-93 fiscal years. Economic performance in
the State continued to be sluggish after the 1992-93 Governor's Budget was
prepared. By the time of the "May Revision," issued on May 20, 1992, the
Administration estimated that the 1992-93 Budget needed to address a gap of
about $7.9 billion, much of which was needed to repay the accumulated budget
deficits of the previous two years.
The severity of the budget actions needed led to a long delay in
adopting the budget. With the failure to enact a budget by July 1, 1992,
the State had no legal authority to pay many of its vendors until the budget
was passed. Starting on July 1, 1992, the Controller was required to issue
"registered warrants" in lieu of normal warrants backed by cash to pay many
State obligations. Available cash was used to pay constitutionally mandated
and priority obligations, such as debt service on bonds and revenue
anticipation warrants. Between July 1 and September 4, 1992, the Controller
issued an aggregate of approximately $3.8 billion of registered warrants
payable from the General Fund, all of which were called for redemption by
September 4, 1992 following enactment of the 1992-93 Budget Act and issuance
by the State of $3.3 billion of interim notes.
The Legislature enacted the 1992-93 Budget Bill on August 29, 1992, and
it was signed by the Governor on September 2, 1992. The 1992-93 Budget Act
provided for expenditures of $57.4 billion and consisted of General Fund
expenditures of $40.8 billion and Special Fund and Bond Fund expenditures of
$16.6 billion. The Department of Finance estimated a balance in the SFEU of
$28 million on June 30, 1993.
The $7.9 billion budget gap was closed primarily through cuts in the
program expenditures (principally for health and welfare programs, aid to
schools and support for higher education), together with some increases in
revenues from accelerated collections and changes in tax laws to confirm to
Federal law changes, and a variety of on-time inter-fund transfers and
deferrals. The other major component of the budget compromise was a law
requiring local governments to transfer a total of $1.3 billion to K-12
school and community college districts, thereby reducing by that amount
General Fund support for those districts under Proposition 98.
In May 1993, the Department of Finance projected that the General Fund
would end the fiscal year on June 30, 1993 with an accumulated budget
deficit of about $2.8 billion, and a negative fund balance of about $2.2
billion (the difference being certain reserves for encumbrances and school
funding costs). As a result, the State issued $5 billion of revenue
anticipation notes and warrants.
The Governor's 1993-94 Budget, introduced on January 8, 1993, proposed
General Fund expenditures of $37.3 billion, with projected revenues of $39.9
billion. It also proposed Special Fund expenditures of $12.4 billion and
Special Fund revenues of $12.1 billion. The 1993-94 fiscal year represented
the third consecutive year the Governor and the Legislature were faced with
a very difficult budget environment, requiring revenue actions and
expenditure cuts totaling billions of dollars to produce a balanced budget.
To balance the budget in the face of declining revenues, the Governor
proposed a series of revenue shifts from local government, reliance on
increased Federal aid and reductions in state spending.
The "May Revision" of the Governor's Budget, released on May 20, 1993,
indicated that the revenue projections of the January Budget Proposal were
tracking well, with the full year 1992-93 about $80 million higher than the
January projection. Personal income tax revenue was higher than projected,
sales tax was close to target, and bank and corporation taxes were lagging
behind projections. The May Revision projected the State would have an
accumulated deficit of about $2.75 billion by June 30, 1993. The Governor
proposed to eliminate this deficit over an 18-month period. He also agreed
to retain the 0.5% sales tax scheduled to expire June 30 for a six-month
period, dedicated to local public safety purposes, with a November election
to determine a permanent extension. Unlike previous years, the Governor's
Budget and May Revision did not calculate a "gap" to be closed, but rather
set forth revenue and expenditure forecasts and proposals designed to
produce a balanced budget.
The 1993-94 Budget Act was signed by the Governor on June 30, 1993,
along with implementing legislation. The Governor vetoed about $71 million
in spending. With enactment of the Budget Act, the State carried out its
regular cash flow borrowing program for the fiscal year, which included the
issuance of approximately $2 billion of revenue anticipation notes that
matured on June 28, 1994.
The 1993-94 Budget Act was predicated on General Fund revenues and
transfers estimated at $40.6 billion, about $700 million higher than the
January Governor's Budget, but still about $400 million below 1992-93 (and
the second consecutive year of actual decline). The principal reasons for
declining revenues were the continued weak economy and the expiration (or
repeal) of three fiscal steps taken in 1991 -- a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by initiative
of a sales tax on candy and snack foods.
The 1993-94 Budget Act also assumed Special Fund revenues of $11.9
billion, an increase of 2.9% over 1992-93.
The 1993-94 Budget Act included General Fund expenditures of $38.5
billion (a 6.3% reduction from projected 1992-93 expenditures of $41.1
billion), in order to keep a balanced budget within the available revenues.
The Budget also included Special Fund expenditures of $12.1 billion, a 4.2%
increase.
The 1993-94 Budget Act contained no General Fund tax/revenue increases
other than a two year suspension of the renters' tax credit.
Administration reports during the course of the 1993-94 fiscal year
indicated that while economic recovery appeared to have started in the
second half of the fiscal year, recessionary conditions continued longer
than had been anticipated when the 1993-94 Budget Act was adopted. Overall,
revenues for the 1993-94 fiscal year were about $800 million lower than
original projections, and expenditures were about $780 million higher,
primarily because of higher health and welfare caseloads, lower property
taxes which require greater State support for K-14 education to make up to
shortfall, and lower than anticipated Federal government payments for
immigration-related costs. The reports in May and June 1994, indicated that
revenues in the second half of the 1993-94 fiscal year were very close to
the projections made in the Governor's Budget of January 10, 1994, which was
consistent with a slow turn around in the economy.
The Department of Finance's July 1994 Bulletin, which included final
June receipts, reported that June revenues were $114 million (2.5%) above
projection, with final end-of-year results at $377 million (about 1%) above
the May Revision projections. Part of this result was due to the end-of-
year adjustments and reconciliations. Personal income tax and sales tax
continued to track projections. The largest factor in the higher than
anticipated revenues was from bank and corporation taxes, which were $140
million (18.4%) above projection in June.
During the 1993-94 fiscal year, the State implemented the Deficit
Retirement Plan, which was part of the 1993-94 Budget Act, by issuing $1.2
billion of revenue anticipation warrants in February 1994 that matured
December 21, 1994. This borrowing reduced the cash deficit at the end of the
1993-94 fiscal year. Nevertheless, because of the $1.5 billion variance
from the original 1993-94 Budget Act assumptions, the General Fund ended the
fiscal year at June 30, 1994 carrying forward an accumulated deficit of
approximately $1.8 billion.
Because of the revenue shortfall and the State's reduced internal
borrowable cash resources, in addition to the $1.2 billion of revenue
anticipation warrants issued as part of the Deficit Retirement Plan, the
State issued an additional $2.0 billion of revenue anticipation warrants
that matured July 26, 1994, which were needed to fund the State's
obligations and expenses through the end of the 1993-94 fiscal year.
The 1994-95 fiscal year represented the fourth consecutive year the
Governor and Legislature were faced with a very difficult budget environment
to produce a balanced budget. Many program cost and budgetary adjustments
had already been made in the last three years. The Governor's Budget
Proposal, as updated in May and June 1994 proposed a two-year solution to
pass the accumulated deficit. The budget proposal set forth revenue and
expenditure forecasts and revenue and expenditure proposals which estimated
operating surpluses for the budget for both 1994-95 and 1995-96, and lead to
the elimination of the accumulated budget deficit, estimated at about $1.8
billion at June 30, 1994, by June 30, 1996.
The 1994-95 Budget Act, signed by the Governor on July 8, 1994,
projected revenues and transfers of $41.9 billion, $2.1 billion higher than
revenues in 1993-94. This reflected the Administration's forecast of an
improving economy. Also included in this figure was the projected receipt
of about $360 million from the Federal government to reimburse the State's
cost of incarcerating undocumented immigrants, most of which eventually was
not received.
The 1994-95 Budget Act projected Special Fund revenues of $12.1
billion, a decrease of 2.4% from 1993-94 estimated revenues.
The 1994-95 Budget Act projected General Fund expenditures of $40.9
billion, an increase of $1.6 billion over the 1993-94 fiscal year. The 1994-
95 Budget Act also projected Special Fund expenditures of $13.7 billion, a
5.4% increase over 1993-94 fiscal year estimated expenditures.
The 1994-95 Budget Act contained no tax increases. Under legislation
enacted for the 1993-94 Budget Act, the renters' tax credit was suspended
for two years (1993 and 1994). A ballot proposition to permanently restore
the renters' tax credit after 1995 failed at the June 1994 election. The
Legislature enacted a further one-year suspension of the renters' tax
credit, for 1995, saving about $390 million in the 1995-96 fiscal year.
The 1995-96 Budget Act was signed by the Governor on August 3, 1995, 34
days after the start of the fiscal year. The Budget Act projected General
Fund revenues and transfers of $44.1 billion, a 3.5% increase from the prior
year. Expenditures were budgeted at $43.4 billion, a 4% increase. The
Budget Act also projected Special Fund revenues of $12.7 billion and
appropriated Special Fund expenditures of $13.0 billion.
Final data for the 1995-96 Fiscal Year showed revenues and transfers of
$46.1 billion, some $2 billion over the original fiscal year estimate, which
was attributed to the strong economic recovery. Expenditures also
increased, to an estimated $45.4 billion, as a result of the requirement to
expend revenues for schools under Proposition 98, and among other things,
failure of the federal government to enact welfare reform during the fiscal
year and to budget new aid for illegal immigrant costs, both of which had
been counted on to allow reductions in State costs. Available internal
borrowable resources (available cash, after payment of all obligations due)
on June 30, 1996 was approximately $3.8 billion, representing a significant
improvement in the State's cash position, and ending the need for deficit
borrowing over the end of the fiscal year. The State's improved cash
position allowed it to repay the $4.0 billion Revenue Anticipation Warrant
issue on April 25, 1996, and to issue only $2.0 billion in revenue
anticipation notes during the fiscal year, which matured on June 28, 1996.
The 1996-97 Budget Act was signed by the Governor on July 15, 1996,
along with various implementing bills. The Governor vetoed about $82
million of appropriations (both General Fund and Special Fund). With the
signing of the Budget Act, the State implemented its regular cash flow
borrowing program with the issuance of $3.0 billion of Revenue Anticipation
Notes to mature on June 30, 1997. The Budget Act appropriated a modest
budget reserve in the SFEU of $305 million, as of June 30, 1997. The
Department of Finance projected that, on June 30, 1997, the State's
available internal borrowable (cash) resources will be $2.9 billion, and
after payment of all obligations due by that date, so that no cross-fiscal
year borrowing will be needed.
The Legislature rejected the Governor's proposed 15% cut in personal
income taxes (to be phased in over three years), and did not approve a 5%
cut in bank and corporation taxes, which was to be effective for income
years starting on January 1, 1997. As a result, revenues for the fiscal
year were estimated to total $47.64 billion, a 3.3% increase over the final
estimated 1995-96 revenues. Special Fund revenues were estimated to be
$13.3 billion.
The Budget Act contained General Fund appropriations totaling $47.25
billion, a 4.0% increase over the final estimated 1995-96 expenditures.
Special Fund expenditures were budgeted at $12.6 billion.
With the continued strong economic recovery in the State, the
Department of Finance has estimated, in connection with the release of the
Governor's 1997-98 Budget Proposal, that revenues for the 1996-97 fiscal
year will exceed initial projections by about $760 million. This increase
will be offset by higher expenditures for K-14 school aid (pursuant to
Proposition 98) and for health and welfare costs, because Federal law
changes and other Federal actions did not provide as much assistance to the
State as was initially planned in the Budget Act. The Department's updated
projections show a balance in the SFEU of $197 million, slightly lower than
projected in July 1996. The Department also projects the State's cash
position will be stronger than originally estimated, with unused internal
borrowable resources at June 30, 1997 of approximately $4.3 billion.
APPENDIX D
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
RISK FACTORS--INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
The financial condition of New York State (the "State") and certain of
its public bodies (the "Agencies") and municipalities, particularly New York
City (the "City"), could affect the market values and marketability of New
York Municipal Obligations which may be held by the Fund. The following
information constitutes only a brief summary, does not purport to be a
complete description, and is based on information drawn from official
statements relating to securities offerings of the State, the City and the
Municipal Assistance Corporation for the City of New York ("MAC") available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to believe
that such information is not correct in all material respects.
The State's budget for the 1997-98 fiscal year was enacted by the
Legislature on August 4, 1997, more than four months after the start of the
fiscal year on April 1. Prior to adoption of the budget, the Legislature
enacted appropriations for disbursements considered to be necessary for
State operations and other purposes, including all necessary appropriations
for debt service. The State Financial Plan for the 1997-98 fiscal year was
formulated on August 11, 1997 and is based on the State's budget as enacted
by the Legislature and signed into law by the Governor, as well as actual
results for the first quarter of the 1997-98 fiscal year.
After adjustments for comparability between fiscal years, the adopted
1997-98 budget projects an increase in General Fund disbursements of $1.7
billion or 5.2% over 1996-97 levels. The average annual growth rate over
the last three fiscal years has been 1.2%. Adjusted State Funds (excluding
Federal grants) disbursements are projected to increase by 5.4% from the
1996-97 fiscal year. All Governmental Funds projected disbursements
increase by 7.0% over the prior fiscal year, after adjustments for
comparability.
The 1997-98 State Financial Plan is projected to be balanced on a cash
basis. The Financial Plan projections include a reserve for future needs of
$530 million. As compared to the Governor's Executive Budget as amended in
February 1997, the State's adopted budget for 1997-98 increases General Fund
spending by $1.7 billion, primarily from increases for local assistance
($1.3 billion). Resources used to fund these additional expenditures
include increased revenues projected for the 1997-98 fiscal year, increased
resources produced in the 1996-97 fiscal year that will be utilized in 1997-
98, reestimates of social service, fringe benefit and other spending, and
certain non-recurring resources. Total non-recurring resources included in
the 1997-98 Financial Plan are projected by State Division of the Budget
("DOB") to be $270 million, or 0.7% of total General Fund receipts.
The 1997-98 adopted budget includes multi-year tax reductions,
including a State funded property and local income tax reduction program,
estate tax relief, utility gross receipts tax reductions, permanent
reductions in the State sales tax on clothing, and elimination of
assessments on medical providers. These reductions are intended to reduce
the overall level of State and local taxes in New York and to improve the
State's competitive position vis-a-vis other states. The various elements
of the State and local tax and assessment reductions have little or no
impact on the 1997-98 Financial Plan, and do not begin to materially affect
the outyear projections until the State's 1999-2000 fiscal year.
The 1997-98 Financial Plan also includes: a projected General Fund
reserve of $530 million; a projected balance of $332 million in the Tax
Stabilization Reserve Fund; and a projected $65 million balance in the
Contingency Reserve Fund.
The major factor affecting the General Fund GAAP-basis results for 1996-
97 and the projections for 1997-98 is the 1996-97 cash-basis surplus, which
helped produce a GAAP-basis surplus in the 1996-97 fiscal year of $1.93
billion. The use of this cash-basis surplus to fund liabilities in the 1997-
98 fiscal year, offset by the $494 million change in the projected 1997-98
cash-basis fund balance, is the primary reason for the projected 1997-98
GAAP-basis deficit of $959 million. This represents an increase of $191
million from the prior projection, issued in January 1997 as part of the
1997-98 Executive Budget. The new projection reflects the impact of
legislative changes to the Executive Budget, and the increase in the 1996-97
cash-basis surplus since that time. Across the two fiscal years, the
General Fund accumulated deficit is projected to be reduced by $974 million
to $1.95 billion.
For 1997-98, total revenues in the General Fund are projected at $33.37
billion, total expenditures are projected at $34.66 billion, and net
operating sources and uses are projected to contribute $331 million. For
all governmental funds, total revenues are projected at $67.48 billion,
total expenditures are projected at $68.24 billion, and financing uses are
projected to exceed financing sources by $220 million. The all governmental
funds GAAP-basis Financial Plan projections show a deficiency of revenues
and other financing sources over expenditures and other financing uses of
$979 million, after a reported 1996-97 all funds surplus of $2.1 billion
The State Financial Plan was based upon forecasts of national and State
economic activity. Economic forecasts have frequently failed to predict
accurately the timing and magnitude of changes in the national and the State
economies. Many uncertainties exist in forecasts of both the national and
State economies, including consumer attitudes toward spending, Federal
financial and monetary policies, the availability of credit and the
condition of the world economy, which could have an adverse effect on the
State. There can be no assurance that the State economy will not experience
worse-than-predicted results, with corresponding material and adverse
effects on the State's projections of receipts and disbursements.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant disparity
between tax revenues projected from a lower recurring receipts base and the
spending required to maintain State programs at current levels. To address
any potential budgetary imbalance, the State may need to take significant
actions to align recurring receipts and disbursements in future fiscal
years.
On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P changed its ratings on all of the State's outstanding
general obligation bonds from AA- to A and from A to A-, respectively. In
February 1991, Moody's lowered its rating on the City's general obligation
bonds from A to Baa1 and in July 1995, S&P lowered its rating on such bonds
from A- to BBB+. Ratings reflect only the respective views of such
organizations, and their concerns about the financial condition of New York
State and City, the debt load of the State and City and any economic
uncertainties about the region. There is no assurance that a particular
rating will continue for any given period of time or that any such rating
will not be revised downward or withdrawn entirely if, in the judgment of
the agency originally establishing the rating, circumstances so warrant.
(1) The State, Agencies and Other Municipalities. During the mid-
1970s, some of the Agencies and municipalities (in particular, the City)
faced extraordinary financial difficulties, which affected the State's own
financial condition. These events, including a default on short-term notes
issued by the New York State Urban Development Corporation ("UDC") in
February 1975, which default was cured shortly thereafter, and a
continuation of the financial difficulties of the City, created substantial
investor resistance to securities issued by the State and by some of its
municipalities and Agencies. For a time, in late 1975 and early 1976, these
difficulties resulted in a virtual closing of public credit markets for
State and many State related securities.
In response to the financial problems confronting it, the State
developed and implemented programs for its 1977 fiscal year that included
the adoption of a balanced budget on a cash basis (a deficit of $92 million
that actually resulted was financed by issuing notes that were paid during
the first quarter of the State's 1978 fiscal year). In addition,
legislation was enacted limiting the occurrence of additional so-called
"moral obligation" and certain other Agency debt, which legislation does
not, however, apply to MAC debt.
GAAP-Basis Results--1996-97 Fiscal Year. The State completed its 196-97
fiscal year with a combined Governmental Funds operating surplus of $2.1
billion, which included an operating surplus in the General Fund of $1.9
billion, in Capital Projects Funds of $98 million and in the Special Revenue
Funds of $65 million, offset in part by an operating deficit of $37 million
in the Debt Service Funds.
GAAP-Basis Results--1995-96 Fiscal Year. The State completed its 1995-96
fiscal year with a combined Governmental Funds operating surplus of $432
million, which included an operating surplus in the General Fund of $380
million, in the Capital Projects Funds of $276 million and in the Debt
Service Funds of $185 million. There was an operating deficit of $409
million in the Special Revenue Funds. The State's Combined Balance Sheet as
of March 31, 1996 showed an accumulated deficit in its combined Governmental
Funds of $1.23 billion, reflecting liabilities of $14.59 billion and assets
of $13.35 billion. This accumulated Governmental Funds deficit includes a
$2.93 billion accumulated deficit in the General Fund and an accumulated
deficit of $712 million in the Capital Projects Fund type as partially
offset by accumulated surpluses of $468 million and $1.94 billion in the
Special Revenue and Debt Service Fund types, respectively.
GAAP-Basis Results--1994-95 Fiscal Year. The State's Combined Balance Sheet
as of March 31, 1995 showed an accumulated deficit in its combined
Governmental Funds of $1.666 billion reflecting liabilities of $14.778
billion and assets of $13.112 billion. This accumulated Governmental Funds
deficit includes a $3.308 billion accumulated deficit in the General Fund,
as well as accumulated surpluses in the Special Revenue and Debt Service
Fund types of $877 million and $1.753 billion, respectively, and a $988
million accumulated deficit in the Capital Projects Fund type.
The State completed its 1994-95 fiscal year with a combined
Governmental Funds operating deficit of $1.791 billion, which included
operating deficits in the General Fund of $1.426 billion, in the Capital
Projects Funds of $366 million, and in the Debt Service Funds of $38
million. There was an operating surplus in the Special Revenue Funds of $39
million.
State Financial Plan--Cash-Basis Results--General Fund. The General
Fund is the principal operating fund of the State and is used to account for
all financial transactions, except those required to be accounted for in
another fund. It is the State's largest fund and receives almost all State
taxes and other resources not dedicated to particular purposes. General
Fund moneys are also transferred to other funds, primarily to support
certain capital projects and debt service payments in other fund types.
In the State's 1997-98 fiscal year, the General Fund is expected to
account for approximately 48% of total Governmental Funds disbursements and
71% of total State Funds disbursements. The General Fund is projected to be
balanced on a cash basis for the 1997-98 fiscal year. Total receipts and
transfers from other funds are projected to be $35.09 billion, an increase
of $2.05 billion from the prior fiscal year. Total General Fund
disbursements and transfers to other funds are projected to be $34.60
billion, an increase of $1.70 billion from the total in the prior fiscal
year.
New York State's financial operations have improved during recent
fiscal years. During the period 1989-90 through 1991-92, the State incurred
General Fund operating deficits that were closed with receipts from the
issuance of tax and revenue anticipation notes ("TRANs"). First, the
national recession, and then the lingering economic slowdown in the New York
and regional economy, resulted in repeated shortfalls in receipts and three
budget deficits. During its last five fiscal years, however, the State
recorded balanced budgets on a cash basis, with positive fund balances as
described below.
The State ended its 1996-97 fiscal year on March 31, 1997 in balance on
a cash basis, with a General Fund cash surplus as reported by DOB of
approximately $1.4 billion. The cash surplus was derived primarily from
higher-than-expected revenues and lower-than-expected spending for social
services programs. The Governor in his Executive Budget applied $1.05
billion of the cash surplus amount to finance the 1997-98 Financial Plan,
and the additional $373 million is available for use in financing the 1997-
98 Financial Plan when enacted by the State Legislature.
The General Fund closing fund balance was $433 million. Of that
amount, $317 million was in the Tax Stabilization Reserve Fund ("TSRF"),
after a required deposit of $15 million and an additional deposit of $65
million in 1996-97. The TSRF can be used in the event of any future General
Fund deficit, as provided under the State Constitution and State Finance
Law. In addition, $41 million remains on deposit in the Contingency Reserve
Fund ("CRF"). This fund assists the State in financing any extraordinary
litigation costs during the fiscal year. The remaining $75 million reflects
amounts on deposit in the Community Projects Fund. This fund was created to
fund certain legislative initiatives. The General Fund closing fund balance
does not include $1.86 billion in the tax refund reserve account, of which
$521 million was made available as a result of the Local Government
Assistance Corporation ("LGAC") financing program as was required to be on
deposit as of March 31, 1997.
General Fund receipts and transfers from other funds for the 1996-97
fiscal year totaled $33.04 billion, and increase of 0.7% from the previous
fiscal year (excluding deposits into the tax refund reserve account).
General Fund disbursements and transfers to other funds totaled $32.90
billion for the 1996-97 fiscal year, an increase of 0.7% from the 1995-96
fiscal year.
The State ended its 1995-96 fiscal year on March 31, 1996 with a
General Fund cash surplus, as reported by DOB, of $445 million. Of that
amount, $65 million was deposited into the TSRF, and $380 million was used
to reduce 1996-97 Financial Plan liabilities by accelerating 1996-97
payments, deferring 1995-96 revenues, and making a deposit to the tax refund
reserve account.
The General Fund closing fund balance was $287 million, an increase of
$129 million from 1994-95 levels. The $129 million change in fund balance
is attributable to the $65 million voluntary deposit to the TSRF, a $15
million required deposit to the TSRF, a $40 million deposit to the CRF, and
a $9 million deposit to the Revenue Accumulation Fund. The closing fund
balance includes $237 million on deposit in the TSRF, to be used in the
event of any future General Fund deficit as provided under the State
Constitution and State Finance Law. In addition, $41 million is on deposit
in the CRF. The CRF was established in State fiscal year 1993-94 to assist
the State in financing the costs of extraordinary litigation. The remaining
$9 million reflects amounts on deposit in the Revenue Accumulation Fund.
This fund was created to hold certain tax receipts temporarily before their
deposit to other accounts. In addition, $678 million was on deposit in the
tax refund reserve account, of which $521 million was necessary to complete
the restructuring of the State's cash flow under the LGAC program.
General Fund receipts totaled $32.81 billion, a decrease of 1.1% from
1994-95 levels. This decrease reflects the impact of tax reductions enacted
and effective in both 1994 and 1995. General Fund disbursements totaled
$32.68 billion for the 1995-96 fiscal year, a decrease of 2.2% from 1994-95
levels.
The State ended its 1994-95 fiscal year with the General Fund in
balance. The $241 million decline in the fund balance reflects the planned
use of $264 million from the CRF, partially offset by the required deposit
of $23 million to the TSRF. In addition, $278 million was on deposit in the
tax refund reserve account, $250 million of which was deposited to continue
the process of restructuring the State's cash flow as part of the LGAC
program. The closing fund balance of $158 million reflects $157 million in
the TSRF and $1 million in the CRF.
General Fund receipts totaled $33.16 billion, an increase of 2.9% from
1993-94 levels. General Fund disbursements totaled $33.40 billion for the
1994-95 fiscal year, an increase of 4.7% from the previous fiscal year.
Cash-Basis Results--Other Governmental Funds. Activity in the three other
governmental funds has remained relatively stable over the last three fiscal
years ended March 31, 1997, with Federally-funded programs comprising
approximately two-thirds of these funds. The most significant change in the
structure of these funds has been the redirection of a portion of
transportation-related revenues from the General Fund to two new dedicated
funds in the Special Revenue and Capital Projects Fund types. These
revenues are used to support the capital programs of the Department of
Transportation and the Metropolitan Transportation Authority ("MTA").
The Special Revenue Funds account for State receipts from specific
sources that are legally restricted in use to specified purposes and include
all moneys received from the Federal government. Disbursements from Special
Revenue Funds increased from $24.38 billion to $26.02 billion over the last
three years, primarily as a result of increased costs for the federal share
of Medicaid. Other activity reflected dedication of taxes to a new fund for
mass transportation, new lottery games, and new fees for criminal justice
programs. Although activity in this fund type is expected to comprise
approximately 42% of total governmental funds receipts in the 1997-98 fiscal
year, three-quarters of that activity relates to federally-funded programs.
Projected receipts in this fund type for the 1997-98 fiscal year total
$28.22 billion, an increase of $2.51 billion (9.7%) over the prior year.
Projected disbursements in this fund type total $28.45 billion, an increase
of $2.43 billion (9.3%) over 1996-97 levels. Disbursements from federal
funds, primarily the federal share of Medicaid and other social services
programs, are projected to total $21.19 billion in the 1997-98 fiscal year.
Remaining projected spending of $7.26 billion primarily reflects aid to SUNY
supported by tuition and dormitory fees, education aid funded from lottery
receipts, operating aid payments to the MTA funded from the proceeds of
dedicated transportation taxes, and costs of a variety of self-supporting
programs which deliver services financed by user fees.
The Capital Projects Funds are used to finance the acquisition,
construction or rehabilitation of major state capital facilities and to aid
local government units and Agencies in financing capital construction.
Disbursements in the Capital Projects Funds declined from $3.62 billion to
$3.54 billion over the last three years, as spending for miscellaneous
capital programs decreased, partially offset by increases for mental
hygiene, health and environmental programs. The composition of this fund
type's receipts also changed as the dedicated transportation taxes began to
be deposited, general obligation bond proceeds declined substantially,
federal grants remained stable, and reimbursements from public authority
bonds (primarily transportation related) increased. The increase in the
negative fund balance in 1994-95 resulted from delays in reimbursements
caused by delays in the timing of public authority bond sales.
In the 1997-98 fiscal year, activity in these funds is expected to
comprise 5% of total governmental receipts.
Total receipts in this fund type for the 1997-98 fiscal year are
projected at $3.30 billion. Bond and note proceeds are expected to provide
$605 million in other financing sources. Disbursements from this fund type
are projected to be $3.70 billion, an increase of $154 million (4.3%) over
prior-year levels. The Dedicated Highway and Bridge Trust Fund is the
single largest dedicated fund, comprising an estimated $982 million (27%) of
the activity in this fund type. Total spending for capital projects will be
financed through a combination of sources: federal grants (29%), public
authority bond proceeds (31%), general obligation bond proceeds (15%), and
pay-as-you-go revenues (25%).
The Debt Service Funds serve to fulfill State debt service on long-term
general obligation State debt and other State lease/purchase and contractual
obligation financing commitments.
Activity in the Debt Service Funds reflected increased use of bonds
during the three-year period for improvements to the State's capital
facilities and the continued implementation of the LGAC fiscal reform
program. The increases were moderated by the refunding savings achieved by
the State over the last several years using strict present value savings
criteria. The growth in LGAC debt service was offset by reduced short-term
borrowing costs reflected in the General Fund. This fund type is expected
to comprise 4% of total governmental fund receipts and 4.7% of total
government disbursements in the 1997-98 fiscal year. Receipts in these
funds in excess of debt service requirements may be transferred to the
General Fund and Special Revenue Funds, pursuant to law.
The Debt Service fund type consists of the General Debt Service Fund,
which is supported primarily by tax receipts transferred from the General
Fund, and other funds established to accumulate moneys for the payment of
debt service. In the 1997-998 fiscal year, total disbursements in this fund
type are projected at $3.17 billion, an increase of $641 million or 25.3%,
most of which is explained by increases in the General Fund transfer as
discussed earlier. The projected transfer from the General Fund of $2.07
billion is expected to finance 65% of these payments.
The remaining payments are expected to be financed by pledged revenues,
including $2.03 billion in taxes and $601 million in dedicated fees and
other miscellaneous receipts. After required impoundment for debt service,
$3.77 billion is expected to be transferred to the General Fund and other
funds in support of State operations. The largest transfer-$1.86 billion-is
made to the Special Revenue fund type in support of operations of the mental
hygiene agencies. Another $1.47 billion in excess sales taxes is expected
to be transferred to the General Fund, following payments of projected debt
service on LGAC bonds.
State Borrowing Plan. The State anticipates that its capital programs
will be financed, in part, through borrowings by the State and public
authorities in the 1997-98 fiscal year. The State expects to issue $605
million in general obligation bonds (including $140 million for purposes of
redeeming outstanding BANs) and $140 million in general obligation
commercial paper. The Legislature has also authorized the issuance of $311
million in COPs during the State's 1997-98 fiscal year for equipment
purchases. The projection of the State regarding its borrowings for the
1997-98 fiscal year may change if circumstances require.
State Agencies. The fiscal stability of the State is related, at least
in part, to the fiscal stability of its localities and various of its
Agencies. Various Agencies have issued bonds secured, in part, by
non-binding statutory provisions for State appropriations to maintain
various debt service reserve funds established for such bonds (commonly
referred to as "moral obligation" provisions).
At September 30, 1996, there were 17 Agencies that had outstanding debt
of $100 million or more. The aggregate outstanding debt, including
refunding bonds, of these 17 Agencies was $75.4 billion as of September 30,
1996. As of March 31, 1997, aggregate Agency debt outstanding as State-
supported debt was $32.8 billion and as State-related was $37.1 billion.
Debt service on the outstanding Agency obligations normally is paid out of
revenues generated by the Agencies' projects or programs, but in recent
years the State has provided special financial assistance, in some cases on
a recurring basis, to certain Agencies for operating and other expenses and
for debt service pursuant to moral obligation indebtedness provisions or
otherwise. Additional assistance is expected to continue to be required in
future years.
Several Agencies have experienced financial difficulties in the past.
Certain Agencies continue to experience financial difficulties requiring
financial assistance from the State. Failure of the State to appropriate
necessary amounts or to take other action to permit certain Agencies to meet
their obligations could result in a default by one or more of such Agencies.
If a default were to occur, it would likely have a significant effect on the
marketability of obligations of the State and the Agencies. These Agencies
are discussed below.
The New York State Housing Finance Agency ("HFA") provides financing
for multifamily housing, State University construction, hospital and nursing
home development, and other programs. In general, HFA depends upon
mortgagors in the housing programs it finances to generate sufficient funds
from rental income, subsidies and other payments to meet their respective
mortgage repayment obligations to HFA, which provide the principal source of
funds for the payment of debt service on HFA bonds, as well as to meet
operating and maintenance costs of the projects financed. From January 1,
1976 through March 31, 1987, the State was called upon to appropriate a
total of $162.8 million to make up deficiencies in the debt service reserve
funds of HFA pursuant to moral obligation provisions. The State has not
been called upon to make such payments since the 1986-87 fiscal year.
UDC has experienced, and expects to continue to experience, financial
difficulties with the housing programs it had undertaken prior to 1975,
because a substantial number of these housing program mortgagors are unable
to make full payments on their mortgage loans. Through a subsidiary, UDC is
currently attempting to increase its rate of collection by accelerating its
program of foreclosures and by entering into settlement agreements. UDC has
been, and will remain, dependent upon the State for appropriations to meet
its operating expenses. The State also has appropriated money to assist in
the curing of a default by UDC on notes which did not contain the State's
moral obligation provision.
The MTA oversees New York City's subway and bus lines by its
affiliates, the New York City Transit Authority and the Manhattan and Bronx
Surface Transit Operating Authority (collectively, the "TA"). Through MTA's
subsidiaries, the Long Island Rail Road Company, the Metro-North Commuter
Railroad Company and the Metropolitan Suburban Bus Authority, the MTA
operates certain commuter rail and bus lines in the New York metropolitan
area. In addition, the Staten Island Rapid Transit Authority, an MTA
subsidiary, operates a rapid transit line on Staten Island. Through its
affiliated agency, the Triborough Bridge and Tunnel Authority (the "TBTA"),
the MTA operates certain toll bridges and tunnels. Because fare revenues
are not sufficient to finance the mass transit portion of these operations,
the MTA has depended and will continue to depend for operating support upon
a system of State, local government and TBTA support and, to the extent
available, Federal operating assistance, including loans, grants and
subsidies. If current revenue projections are not realized and/or operating
expenses exceed current projections, the TA or commuter railroads may be
required to seek additional State assistance, raise fares or take other
actions.
Since 1980, the State has enacted several taxes--including a surcharge
on the profits of banks, insurance corporations and general business
corporations doing business in the 12-county region (the "Metropolitan
Transportation Region") served by the MTA and a special .25% regional sales
and use tax--that provide additional revenues for mass transit purposes,
including assistance to the MTA. In addition, since 1987, State law has
required that the proceeds of .25% mortgage recording tax paid on certain
mortgages in the Metropolitan Transportation Region be deposited in a
special MTA fund for operating or capital expenses. Further, in 1993, the
State dedicated a portion of certain additional State petroleum business tax
receipts to fund operating or capital assistance to the MTA. For the 1997-
98 State fiscal year, total State assistance to the MTA is estimated at
approximately $1.2 billion, an increase of $76 million over the 1996-97
fiscal year.
In 1981, the State Legislature authorized procedures for the adoption,
approval and amendment of a five-year plan for the capital program designed
to upgrade the performance of the MTA's transportation systems and to
supplement, replace and rehabilitate facilities and equipment, and also
granted certain additional bonding authorization therefor.
State legislation accompanying the 1996-97 adopted State budget
authorized the MTA, TBTA and TA to issue an aggregate of $6.5 billion in
bonds to finance a portion of a new $11.98 billion MTA capital plan for the
1995 through 1999 calendar years (the "1995-99 Capital Program"), and
authorized the MTA to submit the 1995-99 Capital Program to the Capital
Program Review Board for approval. This plan supersedes the overlapping
portion of the MTA's 1992-96 Capital Program. This is the fourth capital
plan since the Legislature authorized procedures for the adoption, approval
and amendment of MTA capital programs and is designed to upgrade the
performance of the MTA's transportation systems by investing in new rolling
stock, maintaining replacement schedules for existing assets and bringing
the MTA system into a state of good repair. The 1995-99 Capital Program
assumes the issuance of an estimated $5.1 billion in bonds under this $6.5
billion aggregate bonding authority. The remainder of the plan is projected
to be financed through assistance from the State, the Federal government,
and the City of New York, and from various other revenues generated from
actions taken by the MTA.
There can be no assurance that such governmental actions will be taken,
that sources currently identified will not be decreased or eliminated, or
that the 1995-1999 Capital Program will not be delayed or reduced. If the
MTA capital program is delayed or reduced because of funding shortfalls or
other factors, ridership and fare revenues may decline, which could, among
other things, impair the MTA's ability to meet its operating expenses
without additional State assistance.
The cities, towns, villages and school districts of the State are
political subdivisions of the State with the powers granted by the State
Constitution and statutes. As the sovereign, the State retains broad powers
and responsibilities with respect to the government, finances and welfare of
these political subdivisions, especially in education and social services.
In recent years the State has been called upon to provide added financial
assistance to certain localities.
Other Localities. Certain localities in addition to the City could
have financial problems leading to requests for additional State assistance
during the last several State fiscal years. The potential impact on the
State of such actions by localities is not included in the projections of
the State receipts and disbursements in the State's 1997-98 fiscal year.
Fiscal difficulties experienced by the City of Yonkers resulted in the
re-establishment of the Financial Control Board for the City of Yonkers by
the State in 1984. That Board is charged with oversight of the fiscal
affairs of Yonkers. Future actions taken by the State to assist Yonkers
could result in increased State expenditures for extraordinary local
assistance.
Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the
City of Troy in 1994. The Supervisory Board's powers were increased in
1995, when Troy MAC was created to help Troy avoid default on certain
obligations. The legislation creating Troy MAC prohibits the City of Troy
from seeking federal bankruptcy protection while Troy MAC bonds are
outstanding.
Eighteen municipalities received extraordinary assistance during the
1996 legislative session through $50 million in special appropriations
targeted for distressed cities, and that was largely continued in 1997.
Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1995, the total indebtedness of all
localities in the State, other than the City, was approximately $19 billion.
A small portion (approximately $102.3 million) of this indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant
to enabling State legislation. State law requires the Comptroller to review
and make recommendations concerning the budgets of those local government
units other than the City authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding.
Eighteen localities had outstanding indebtedness for deficit financing at
the close of their fiscal year ending in 1995.
From time to time, Federal expenditure reductions could reduce, or in
some cases eliminate, Federal funding of some local programs and accordingly
might impose substantial increased expenditure requirements on affected
localities to increase local revenues to sustain those expenditures. If the
State, the City or any of the Agencies were to suffer serious financial
difficulties jeopardizing their respective access to the public credit
markets, the marketability of notes and bonds issued by localities within
the State could be adversely affected. Localities also face anticipated and
potential problems resulting from certain pending litigation, judicial
decisions and long-range economic trends. Long-range, potential problems of
declining urban population, increasing expenditures and other economic
trends could adversely affect localities and require increasing State
assistance in the future.
Certain litigation pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these litigations are those that
involve: (i) the validity and fairness of agreements and treaties by which
various Indian tribes transferred title to the State of approximately six
million acres of land in central New York; (ii) certain aspects of the
State's Medicaid rates and regulations, including reimbursements to
providers of mandatory and optional Medicaid services; (iii) contamination
in the Love Canal area of Niagara Falls; (iv) a challenge to the State's
practice of reimbursing certain Office of Mental Health patient-care
expenses with clients' Social Security benefits; (v) a challenge to the
methods by which the State reimburses localities for the administrative
costs of food stamp programs; (vi) a challenge to the State's possession of
certain funds taken pursuant to the State's Abandoned Property law; (vii)
alleged responsibility of State officials to assist in remedying racial
segregation in the City of Yonkers; (viii) an action, in which the State is
a third party defendant, for injunctive or other appropriate relief,
concerning liability for the maintenance of stone groins constructed along
certain areas of Long Island's shoreline; (ix) actions challenging the
constitutionality of legislation enacted during the 1990 legislative session
which changed the actuarial funding methods for determining contributions to
State employee retirement systems; (x) an action against State and City
officials alleging that the present level of shelter allowance for public
assistance recipients is inadequate under statutory standards to maintain
proper housing; (xi) an action challenging legislation enacted in 1990 which
had the effect of deferring certain employer contributions to the State
Teachers' Retirement System and reducing State aid to school districts by a
like amount; (xii) a challenge to the constitutionality of financing
programs of the Thruway Authority authorized by Chapters 166 and 410 of the
Laws of 1991 (described below in this Part); (xiii) a challenge to the
constitutionality of financing programs of the Metropolitan Transportation
Authority and the Thruway Authority authorized by Chapter 56 of the Laws of
1993 (described below in this Part); (xiv) challenges to the delay by the
State Department of Social Services in making two one-week Medicaid payments
to the service providers; (xv) challenges by commercial insurers, employee
welfare benefit plans, and health maintenance organizations to provisions of
Section 2807-c of the Public Health Law which impose 13%, 11% and 9%
surcharges on inpatient hospital bills and a bad debt and charity care
allowance on all hospital bills paid by such entities; (xvi) challenges to
the promulgation of the State's proposed procedure to determine the
eligibility for and nature of home care services for Medicaid recipients;
(xvii) a challenge to State implementation of a program which reduces
Medicaid benefits to certain home-relief recipients; and (xviii) challenges
to the rationality and retroactive application of State regulations
recelebrating nursing home Medicaid rates.
(2) New York City. In the mid-1970s, the City had large accumulated
past deficits and until recently was not able to generate sufficient tax and
other ongoing revenues to cover expenses in each fiscal year. However, the
City has achieved balanced operating results for each of its fiscal years
since 1981 as reported in accordance with the then-applicable GAAP
standards. The City's ability to maintain balanced operating results in
future years is subject to numerous contingencies and future developments.
In 1975, the City became unable to market its securities and entered a
period of extraordinary financial difficulties. In response to this crisis,
the State created MAC to provide financing assistance to the City and also
enacted the New York State Financial Emergency Act for the City of New York
(the "Emergency Act") which, among other things, created the Financial
Control Board (the "Control Board") to oversee the City's financial affairs
and facilitate its return to the public credit markets. The State also
established the Office of the State Deputy Comptroller ("OSDC") to assist
the Control Board in exercising its powers and responsibilities. On June
30, 1986, the Control Board's powers of approval over the City Financial
Plan were suspended pursuant to the Emergency Act. However, the Control
Board, MAC and OSDC continue to exercise various monitoring functions
relating to the City's financial condition. The City prepares and operates
under a four-year financial plan which is submitted annually to the Control
Board for review and which the City periodically updates.
The City's independently audited operating results for each of its
fiscal years from 1981 through 1995 show a General Fund surplus reported in
accordance with GAAP. The City has eliminated the cumulative deficit in its
net General Fund position.
During the 1990 and 1991 fiscal years, as a result of a slowing
economy, the City has experienced significant shortfalls in almost all of
its major tax sources and increases in social services costs, and was
required to take actions to close substantial budget gaps in order to
maintain balanced budgets in accordance with the Financial Plan.
According to a recent OSDC economic report, the City's economy was slow
to recover from the recession and was expected to have experienced a weak
employment situation, and moderate wage and income growth, during the 1995-
96 period. Also, Financial Plan reports of OSDC, the Control Board, and the
City Comptroller have variously indicated that many of the City's balanced
budgets have been accomplished, in part, through the use of non-recurring
resource, tax and fee increases, personnel reductions and additional State
assistance; that the City has not yet brought its long-term expenditures in
line with recurring revenues; that the City's proposed gap-closing programs,
if implemented, would narrow future budget gaps; that these programs tend to
rely heavily on actions outside the direct control of the City; and that the
City is therefore likely to continue to face futures projected budget gaps
requiring the City to reduce expenditures and/or increase revenues.
According to the most recent staff reports of OSDC, the Control Board and
the City Comptroller during the four-year period covered by the current
Financial Plan, the City is relying on obtaining substantial resources from
initiatives needing approval and cooperation of its municipal labor unions,
Covered Organizations, and City Council, as well as the State and Federal
governments, among others, and there can be no assurance that such approval
can be obtained.
The City requires certain amounts of financing for seasonal and capital
spending purposes. The City issued $1.75 billion of notes for seasonal
financing purposes during the 1994 fiscal year. The City's capital financing
program projects long-term financing requirements of approximately $17
billion for the City's fiscal years 1995 through 1998 for the construction
and rehabilitation of the City's infrastructure and other fixed assets. The
major capital requirement include expenditures for the City's water supply
system, and waste disposal systems, roads, bridges, mass transit, schools
and housing. In addition, the City and the Municipal Water Finance
Authority issued about $1.8 billion in refunding bonds in the 1994 fiscal
year.
State Economic and Demographic Trends. The State historically has been
one of the wealthiest states in the nation. For decades, however, the State
has grown more slowly than the nation as a whole, gradually eroding its
relative economic position. Statewide, urban centers have experienced
significant changes involving migration of the more affluent to the suburbs
and an influx of generally less affluent residents. Regionally, the older
Northeast cities have suffered because of the relative success that the
South and the West have had in attracting people and business. The City has
also had to face greater competition as other major cities have developed
financial and business capabilities which make them less dependent on the
specialized services traditionally available almost exclusively in the City.
During the 1982-83 recession, overall economic activity in the State
declined less than that of the nation as a whole. However, in the calendar
years 1984 through 1991, the State's rate of economic expansion was somewhat
slower than that of the nation. In the 1990-91 recession, the economy of
the State, and that of the rest of the Northeast, was more heavily damaged
than that of the nation as a whole and has been slower to recover. The
total employment growth rate in the State has been below the national
average since 1984. The unemployment rate in the State dipped below the
national rate in the second half of 1981 and remained lower until 1991;
since then, it has been higher. According to data published by the U.S.
Bureau of Economic Analysis, during the past ten years, total personal
income in the State rose slightly faster than the national average only from
1986 through 1988.
The forecast of the State's economy shows moderate expansion during the
first half of calendar 1997 with the trend continuing through the year.
Although industries that export goods and services are expected to continue
to do well, growth is expected to be moderated by tight fiscal constraints
on the health care and social services industries. On an average annual
basis, employment growth in the State is expected to be up substantially
from the 1996 rate. Personal income is expected to record moderate gains in
1997. Bonus payments in the securities industry are expected to increase
further from last year's record level.
APPENDIX E
Set forth below, as to each share Class of each Fund, as applicable,
are those shareholders of record known by the Fund to own 5% or more of a
Class of shares of the Fund as of March 7, 1998.
Government Money Fund
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 55.3%;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 21.4%;
NationsBanc Montgomery Securities, Money Market Funds
Omnibus, 600 Montgomery Street, Suite 4, San Francisco, CA 9411-
2702 - owned of record 5.9%;
George K. Baum & Company, Attn: Ron Frazier, 120 West 12th
Street, Kansas City, MO 64105-1917 - owned of record 5.2%.
Money Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 10.9%
The Dart Foundation, Attn: Richard Winter, SUB 320 10134 1 8
236, P.O. Box 31363, Seven Mile Beach, Grand Cayman, BWI, owned of
record 6.0%;
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 49.4%;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 33.7%;
George K. Baum & Company, Attn: Ron Frazier, 120 West 12th
Street, Kansas City, MO 64105-1917 - owned of record 6.1%;
NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 5.2%.
California Municipal Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 15%;
Class B: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 40.9%;
Robert W. Baird & Co., Omnibus Account for the Exclusive
Benefit of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 -
owned of record 27.9%;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 26.4%
National Municipal Fund
Class A: NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 28.3%
Class B: Robert W. Baird & Co., Omnibus Account for the Exclusive Benefit
of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 - owned of
record 78.2%;
George K. Baum & Company, Attn: Ron Frazier, 120 West 12th
Street, Kansas City, MO 64105-1917 - owned of record 11.9%.;
First Albany Corporation, P.O. Box 22024, Albany, NY 12201-
2024 - owned of record 5.9%
New York Municipal Fund
Class B: First Albany Corporation, P.O. Box 22024, Albany, NY 12201-2024 -
owned of record 85.3%;
Robert W. Baird & Co., Omnibus Account for the Exclusive
Benefit of Customers, P.O. Box 672, Milwaukee, WI 53201-0672 -
owned of record 8.9%;
NationsBanc Montgomery Securities, Money Market Funds Omnibus, 600
Montgomery Street, Suite 4, San Francisco, CA 9411-2702 - owned of
record 5.7%
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ __________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information for the ten years ended
November 30, 1997 for Class A and for
the period from March 31, 1995 (commencement of initial
offering) to November 30, 1995 and for the two years
ended November 30, 1997, for Class B.
Included in Part B of the Registration Statement:
Statement of Investments--November 30, 1997.*
Statement of Assets and Liabilities--November 30, 1997 *
Statement of Operations--year ended November 30, 1997 *
Statement of Changes in Net Assets--for each of the years
ended November 30, 1996 and 1997.*
Notes to Financial Statements.*
Report of Ernst & Young LLP, Independent Auditors, dated
January 8, 1998.*
________________
* Items are incorporated by reference to the Fund's Annual Report on Form
N-30D, filed on February 5, 1998.
All Schedules and other financial statement information, for which provision
is made in the applicable accounting regulations of the Securities and
Exchange Commission, are either omitted because they are not required under
the related instructions, they are inapplicable, or the required information
is presented in the financial statements or notes thereto which are included
in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ ______________________________________________________
(b) Exhibits:
(1)(a) Registrant's Articles of Incorporation are incorporated by
reference to Exhibit (1)(a) of Post-Effective Amendment No. 20 to
the Registration Statement on Form N-1A, filed on March 29, 1995.
(1)(b) Registrant's Articles of Amendment are incorporated by reference to
Exhibit (1)(b) of Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A, filed on March 29, 1995.
(1)(c) Articles Supplementary are incorporated by reference to Exhibit
(1)(c) of Post-Effective Amendment No. 20 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(2) Registrant's By-Laws, as amended are incorporated by
reference to Exhibit (2) of Post-Effective Amendment No. 23 to the
Registration Statement on Form N-1A, filed on March 29, 1996.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 20 to the Registration Statement on
Form N-1A, filed on March 29, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 20 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(6)(b) Forms of Service Agreement are incorporated by reference to Exhibit
(6)(b) of Post-Effective Amendment No. 20 to the Registration
Statement on Form N-1A, filed on March 29, 1995.
(8)(a) Amended and Restated Custody Agreement is incorporated
by reference to Exhibit (8)(a) of Post-Effective Amendment No. 20
to the Registration Statement on Form N-1A, filed on March 29,
1995.
(9)(a) Shareholder Services Plan (Class A) is incorporated by reference to
Exhibit (9)(a) of Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A, filed on January 30,
1995.
(9)(b) Shareholder Services Plan (Class B) is incorporated by reference to
Exhibit (9)(b) of Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A, filed on January 30,
1995.
(10) Opinion and consent of Registrant's counsel is incorporated
by reference to Exhibit (10) of Post-Effective Amendment No. 20 to
the Registration Statement on Form N-1A, filed on March 29, 1995.
(11) Consent of Independent Auditors.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ ______________________________________________________
(15)(b) Distribution Plan (Class B) is incorporated by reference to Exhibit
(15) of Post-Effective Amendment No. 19 to the Registration
Statement on Form N-1A, filed on January 30, 1995.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A, filed on January 30,
1995.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan is incorporated by reference to Post-
Effective Amendment No. 22 to the Registration Statement on Form
N-1A, filed on January 26, 1996.
Other Exhibits
______________
(a) Powers of Attorney of the Officers and Directors are
incorporated by reference to Other
Exhibits (a) of Post-Effective Amendment No. 25 to the
Registration Statement on Form N-1A, filed on March 27,
1997.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Post-Effective Amendment No. 25 to
the Registration Statement on Form N-1A, filed on March
27, 1997.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of March 7, 1998
______________ _____________________________
Common Stock
(Par value $.01)
Class A 2,846
Class B 12
Item 27. Indemnification
_______ _______________
Reference is made to Article SEVENTH of the Registrant's
Articles of Incorporation which is incorporated by reference to
Exhibit (1)(a) to Post-Effective Amendment No. 20 to the
Registration Statement on Form N-1A, filed March 29, 1995 and to
Section 2-418 of the Maryland General
Corporation Law. The application of these provisions is
limited by Article VIII of the Registrant's By-Laws, as amended,
incorporated by reference to Exhibit (2) of Post-Effective
Amendment No. 23 on Form N-1A, filed on March 29, 1996 and by the
following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in such Act and will be governed by the final adjudication of
such issue.
Reference is also made to the Distribution Agreement which is
incorporated by reference to Exhibit (6)(a) of Post-Effective
Amendment No. 20 to the Registration Statement filed on Form N-1A,
filed on March 29, 1995.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser and manager for sponsored investment companies
registered under the Investment Company Act of 1940 and as an
investment adviser to institutional and individual accounts.
Dreyfus also serves as sub-investment adviser to and/or
administrator of other investment companies. Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus, serves
primarily as a registered broker-dealer of shares of investment
companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as investment adviser, sub-investment
adviser or administrator. Dreyfus Management, Inc., another
wholly-owned subsidiary, provides investment management services
to various pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
RICHARD F. SYRON Chairman of the Board and
Director Chief Executive Officer:
American Stock Exchange
86 Trinity Place
New York, New York 10006;
Director:
John Hancock Mutual Life Insurance Company
John Hancock Place, Box 111
Boston, Massachusetts 02117;
Thermo Electron Corporation
81 Wyman Street, Box 9046
Waltham, Massachusetts 02254-9046;
American Business Conference
1730 K Street, NW, Suite 120
Washington, D.C. 20006;
Trustee:
Boston College - Board of Trustees
140 Commonwealth Ave.
Chestnut Hill, Massachusetts 02167-3934
J. DAVID OFFICER Vice Chairman:
Vice Chairman The Dreyfus Corporation*;
Director:
Dreyfus Financial Services Corporation*****;
Dreyfus Investment Services Corporation*****;
Mellon Trust of Florida
2875 Northeast 191st Street
North Miami Beach, Florida 33180;
Mellon Preferred Capital Corporation****;
Boston Group Holdings, Inc.****;
Mellon Trust of New York
1301 Avenue of the Americas - 41st Floor
New York, New York 10019;
Mellon Trust of California
400 South Hope Street
Los Angeles, California 90071-2806;
Executive Vice President:
Mellon Bank, N.A.***;
Vice Chairman and Director:
The Boston Company, Inc.****;
President and Director:
RECO, Inc.****;
The Boston Company Financial Services,
Inc.****;
Boston Safe Deposit and Trust Company****;
RONALD P. O'HANLEY Vice Chairman:
Vice Chairman The Dreyfus Corporation*;
Director:
The Boston Company Asset Management, LLC****;
TBCAM Holding, Inc.****;
Franklin Portfolio Holdings, Inc.
Two International Place - 22nd Floor
Boston, Massachusetts 02110;
Mellon Capital Management Corporation
595 Market Street, Suite #3000
San Francisco, California 94105;
Certus Asset Advisors Corporation
One Bush Street, Suite 450
San Francisco, California 94104;
Mellon-France Corporation***;
Chairman and Director:
Boston Safe Advisors, Inc.****;
Partner Representative:
Pareto Partners
271 Regent Street
London, England W1R 8PP;
Chairman and Trustee:
Mellon Bond Associates, LLP***;
Mellon Equity Associates, LLP***;
Trustee:
Laurel Capital Advisors, LLP***;
Chairman, President and Chief Executive Officer:
Mellon Global Investing Corp.***;
Partner:
McKinsey & Company, Inc.
Boston, Massachusetts
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
Chairman and Director:
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus America Fund+++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Dreyfus Transfer, Inc.
Fund Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
WILLIAM V. HEALEY President:
Assistant Secretary The Truepenny Corporation*;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
Secretary and Director:
Dreyfus Partnership Management Inc.*;
Director:
The Dreyfus Trust Company++;
Assistant Secretary:
Dreyfus Service Corporation*;
Dreyfus Investment Advisors, Inc.*;
Assistant Clerk:
Dreyfus Insurance Agency of Massachusetts,
Inc.+++++
______________________________________
* The address of the business so indicated is 200 Park Avenue, New York,
New York 10166.
** The address of the business so indicated is 131 Second Street,
Lewes, Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place,
Boston, Massachusetts 02108.
***** The address of the business so indicated is Union Trust Building,
501 Grant Street, Room 179, Pittsburgh, Pennsylvania 15259;
+ The address of the business so indicated is Atrium Building,
80 Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route `d'Esch, L-
1470 Luxembourg.
++++ The address of the business so indicated is 69, Route `d'Esch, L-
2953 Luxembourg.
+++++ The address of the business so indicated is 53 State Street, Boston,
Massachusetts 02103.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management Funds
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Index Funds, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Preferred Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Funds, Inc.
35) Dreyfus Investment Grade Bond Funds, Inc.
36) The Dreyfus/Laurel Funds, Inc.
37) The Dreyfus/Laurel Funds Trust
38) The Dreyfus/Laurel Tax-Free Municipal Funds
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus MidCap Index Fund
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Insured Tax Exempt Bond Fund
54) Dreyfus New York Municipal Cash Management
55) Dreyfus New York Tax Exempt Bond Fund, Inc.
56) Dreyfus New York Tax Exempt Intermediate Bond Fund
57) Dreyfus New York Tax Exempt Money Market Fund
58) Dreyfus 100% U.S. Treasury Intermediate Term Fund
59) Dreyfus 100% U.S. Treasury Long Term Fund
60) Dreyfus 100% U.S. Treasury Money Market Fund
61) Dreyfus 100% U.S. Treasury Short Term Fund
62) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
63) Dreyfus Pennsylvania Municipal Money Market Fund
64) Dreyfus Premier California Municipal Bond Fund
65) Dreyfus Premier Equity Funds, Inc.
66) Dreyfus Premier International Funds, Inc.
67) Dreyfus Premier GNMA Fund
68) Dreyfus Premier Worldwide Growth Fund, Inc.
69) Dreyfus Premier Insured Municipal Bond Fund
70) Dreyfus Premier Municipal Bond Fund
71) Dreyfus Premier New York Municipal Bond Fund
72) Dreyfus Premier State Municipal Bond Fund
73) Dreyfus Premier Value Fund
74) Dreyfus Short-Intermediate Government Fund
75) Dreyfus Short-Intermediate Municipal Bond Fund
76) The Dreyfus Socially Responsible Growth Fund, Inc.
77) Dreyfus Stock Index Fund, Inc.
78) Dreyfus Tax Exempt Cash Management
79) The Dreyfus Third Century Fund, Inc.
80) Dreyfus Treasury Cash Management
81) Dreyfus Treasury Prime Cash Management
82) Dreyfus Variable Investment Fund
83) Dreyfus Worldwide Dollar Money Market Fund, Inc.
84) General California Municipal Bond Fund, Inc.
85) General California Municipal Money Market Fund
86) General Government Securities Money Market Fund, Inc.
87) General Money Market Fund, Inc.
88) General Municipal Bond Fund, Inc.
89) General Municipal Money Market Fund, Inc.
90) General New York Municipal Bond Fund, Inc.
91) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Treasurer and Chief Financial and Assistant
Officer Treasurer
Richard W. Ingram Executive Vice President Vice President
and Assistant
Treasurer
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 27th day of March, 1998.
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
BY: /s/Marie E. Connolly*
__________________________________________
Marie E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
__________________________ ___________________________ ________
/s/Marie E. Connolly*
President and Treasurer (Principal 3/27/98
______________________________ Executive Officer)
Marie E. Connolly
/s/Joseph F. Tower*
Assistant Treasurer (Principal 3/27/98
_____________________________ Financial and Accounting Officer)
Joseph F. Tower
/s/Joseph S. DiMartino* Chairman of the Board of 3/27/98
______________________________ Directors
Joseph S. DiMartino
/s/Clifford L. Alexander, Jr.* Director 3/27/98
_____________________________
Clifford L. Alexander, Jr.
/s/Peggy C.Davis* Director 3/27/98
_____________________________
Peggy C.Davis
/s/Ernest Kafka* Director 3/27/98
_____________________________
Ernest Kafka
/s/Saul B. Klaman* Director 3/27/98
______________________________
Saul B. Klaman
/s/Nathan Leventhal*
Director 3/27/98
_____________________________
Nathan Leventhal
*BY: /s/ Michael Petrucelli
__________________________
Michael Petrucelli,
Attorney-in-Fact
GENERAL MUNICIPAL MONEY MARKET FUND, INC.
INDEX OF EXHIBITS
(11) Consent of Independent Auditors
(17) Financial Data Schedule
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated January 8, 1998, which is incorporated by reference, in this Registration
Statement (Form N-1A No. 2-77767) of General Municipal Money Market Fund, Inc.
ERNST & YOUNG LLP
New York, New York
March 25, 1998
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