<PAGE>
As filed with the Securities and Exchange
Commission on May 23, 1995
File No. 2-79807
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 30 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 28 X
ALLIANCE MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code:(800) 221-5672
_______________________
EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
It is proposed that this filing will become effective (Check
appropriate line)
immediately upon filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)
____ on (date) pursuant to paragraph (a) of rule 485.
Registrant has registered an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the Investment
Company Act of 1940. Registrant's Rule 24f-2 notice for its
fiscal year ended June 30, 1994 was filed on August 25, 1994.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
N-1A ITEM NO. LOCATION IN PROSPECTUSES
(Caption)
PART A
Item 1. Cover Page Cover Page
Item 2. Synopsis Expense Information
Item 3. Financial Highlights Not Applicable
Item 4. General Description of Investment Objectives and
Registrant Policies
Item 5. Management of the Fund Additional Information
Item 6. Capital Stock and Other Additional Information
Securities
Item 7. Purchase of Securities Purchase and Redemption of
Being Offered Shares; Additional
Information
Item 8. Redemption or Repurchase Purchase and Redemption of
Shares
Item 9. Pending Legal Proceedings Not Applicable
PART B LOCATION IN STATEMENTS
OF ADDITIONAL INFORMATION
(Caption)
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. General Information and Management; General
History Information
Item 13. Investment Objectives and Investment Objectives and
Policies Policies; Investment
Restrictions
Item 14. Management of the Fund Management
Item 15. Control Persons and Management
Principal Holders of
Securities
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
N-1A ITEM NO. LOCATION IN STATEMENTS OF
ADDITIONAL INFORMATION
(Caption)
PART B (continued)
Item 16. Investment Advisory and Management
Other Services
Item 17. Brokerage Allocation General Information
Item 18. Capital Stock and Other Daily Dividends -
Securities Determination of Net Asset
Value; General Information
Item 19. Purchase, Redemption and Purchase and
Pricing of Securities Redemption of
Being Offered Shares; Daily
Dividends -
Determination
of Net Asset Value
Item 20. Tax Status Taxes
Item 21. Underwriters General Information
Item 22. Calculation of General Information
Performance Data
Item 23. Financial Statements Not Applicable
<PAGE>
ALLIANCE
MUNICIPAL TRUST
--Florida Portfolio
Alliance Capital
Prospectus
[ ], 1995
<PAGE>
SHAREHOLDER SERVICES
Our specially trained shareholder representatives are
committed to providing you with ongoing, responsive service.
They are available to answer your questions about the status of
your account or other Fund matters. Call toll-free (800) 221-
5672 or write the Fund, P.O. Box 1520, Secaucus, New Jersey,
07096-1520, whenever you need fast, efficient, and friendly
service.
Yields. For current recorded yield information on Alliance
Municipal Trust--Florida Portfolio, call on a touch-tone
telephone toll-free (800) 251-0539 and press the following
sequence of keys: [ ] For non-touch-tone telephones,
call toll-free (800) 221-9513.
Alliance Municipal Trust--Florida Portfolio (the
"Fund") is a non-diversified, open-end investment company with
investment objectives of safety, liquidity and tax-free income.
Shares of the Fund are offered only to residents of Florida.
This prospectus sets forth the information about the Fund that a
prospective investor should know before investing. Please retain
it for future reference.
An investment in the Fund is (i) neither insured nor
guaranteed by the U.S. Government; (ii) not a deposit or
obligation of, or guaranteed or endorsed by, any bank; and (iii)
not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency.
There can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share.
A "Statement of Additional Information," dated
[ ], 1995, which provides a further discussion of
certain areas in this prospectus and other matters which may be
of interest to some investors, has been filed with the Securities
and Exchange Commission and is incorporated herein by reference.
For a free copy, call or write the Fund at the telephone number
or address shown above.
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.
(R)This registered service mark used under license from the
owner, Alliance Capital Management L.P.
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CONTENTS
Expense Information
Investment Objectives and Policies
Purchase and Redemption of Shares
Additional Information
Alliance Municipal Trust--
Florida Portfolio
________________________
[LOGO]
PROSPECTUS
[ ], 1995
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EXPENSE INFORMATION
Shareholder Transaction Expenses
The Fund has no sales load on purchases or reinvested
dividends, deferred sales load, redemption fee or exchange fee.
Annual Fund Operating Expenses (as
a percentage of average net assets)
Management Fees...............................................
12b-1 Fees....................................................
Other Expenses................................................
_______
Total Fund Operating Expenses.................................
Example
You would pay the following expenses on a $1,000
investment, assuming a 5% annual return (cumulatively through the
end of each time period):
1 Year 3 Years
______ _______
The purpose of the foregoing table is to assist the
investor in understanding the various costs and expenses that an
investor in the Fund will bear directly and indirectly. "Other
Expenses" are based on estimated amounts for the Fund's current
fiscal year. The example should not be considered a
representation of past or future expenses; actual expenses may be
greater or less than those shown.
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INVESTMENT OBJECTIVES AND POLICIES
Investment Objectives
The investment objectives of the Fund are safety of
principal, liquidity and, to the extent consistent with these
objectives, maximum current income that is exempt from income
taxation to the extent described below. The Fund pursues its
objectives by investing in high quality municipal securities
having remaining maturities of 397 days or less (which maturities
may extend to such greater length of time as may be permitted
from time to time pursuant to Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "Act")) and, except when the
Fund assumes a temporary defensive position, at least 80% of the
Fund's total assets will be invested in such securities (as
opposed to the taxable investments described below). Normally,
substantially all of the Fund's income will be tax-exempt as
described below. The average weighted maturity of the Fund
cannot exceed 90 days. The Fund is a series of Alliance
Municipal Trust which currently consists of six other series not
offered by this prospectus. Alliance Municipal Trust may in the
future establish additional portfolios which may have different
investment objectives.
The Fund seeks maximum current income that is exempt
from Federal income tax and State of Florida intangible tax by
investing not less than 65% of its total assets in a portfolio of
high-quality municipal securities issued by Florida or its
political subdivisions.
The Fund may invest without limitation in tax-exempt
municipal securities subject to the alternative minimum tax (the
"AMT").
Under current Federal income tax law, (1) interest on
tax-exempt municipal securities issued after August 7, 1986 which
are "specified private activity bonds," and the proportionate
share of any exempt-interest dividends paid by a regulated
investment company which receives interest from such specified
private activity bonds, will be treated as an item of tax
preference for purposes of the AMT imposed on individuals and
corporations, though for regular Federal income tax purposes such
interest will remain fully tax-exempt, and (2) interest on all
tax-exempt obligations will be included in "adjusted current
earnings" of corporations for AMT purposes. Such bonds have
provided, and may continue to provide, somewhat higher yields
than other comparable municipal securities. See below, "Daily
Dividends, Other Distributions, Taxes."
There can be no assurance that the Fund will achieve its
investment objectives. Potential investors should consider the
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greater risk of the concentration of the Fund versus the safety
that comes with less concentrated investments and should compare
yields available on portfolios of Florida's issues with those of
more diversified portfolios, including other states' issues,
before making an investment decision. Alliance Capital
Management L.P., the Fund's investment adviser (the "Adviser")
believes that by maintaining the Fund's investments in liquid,
short-term, high quality investments, the Fund is largely
insulated from the credit risks that exist on long-term municipal
securities of Florida. See the Statement of Additional
Information for a more detailed discussion of the financial
condition of Florida.
Municipal Securities
The municipal securities in which the Fund invests
include municipal notes and short-term municipal bonds.
Municipal notes are generally used to provide for short-term
capital needs and generally have maturities of one year or less.
Examples include tax anticipation and revenue anticipation notes,
which are generally issued in anticipation of various seasonal
revenues, bond anticipation notes, and tax-exempt commercial
paper. Short-term municipal bonds may include general obligation
bonds, which are secured by the issuer's pledge of its faith,
credit and taxing power for payment of principal and interest,
and revenue bonds, which are generally paid from the revenues of
a particular facility or a specific excise or other source.
The Fund may invest in variable rate obligations whose
interest rates are adjusted either at predesignated periodic
intervals or whenever there is a change in the market rate to
which the security's interest rate is tied. Such adjustments
minimize changes in the market value of the obligation and,
accordingly, enhance the ability of the Fund to maintain a stable
net asset value. Variable rate securities purchased may include
participation interests in industrial development bonds backed by
letters of credit of Federal Deposit Insurance Corporation member
banks having total assets of more than $1 billion. The letters
of credit of any single bank in respect of all variable rate
obligations will not cover more than 10% of the Fund's total
assets.
All of the Fund's municipal securities at the time of
purchase are rated within the two highest quality ratings of
Moody's Investors Service, Inc. (Aaa and Aa, MIG 1 and MIG 2, or
VMIG 1 and VMIG 2) or Standard & Poor's Corporation (AAA and AA
or SP-1 and SP-2), or judged by the Adviser to be of comparable
quality. Securities must also meet credit standards applied by
the Adviser.
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Taxable Investments
The Fund may invest in taxable investments including
obligations of the U.S. Government and its agencies, high quality
certificates of deposit and bankers' acceptances, prime
commercial paper, and repurchase agreements.
General
The Fund will comply with Rule 2a-7 under the Act
including the diversity, quality and maturity limitations imposed
by the Rule. A more detailed description of Rule 2a-7 is set
forth in the Fund's Statement of Additional Information.
The Fund also may invest in stand-by commitments, which
may involve certain expenses and risks, but such commitments are
not expected to comprise more than 5% of the Fund's net assets.
The Fund may commit up to 15% of its net assets to the purchase
of when-issued securities. The Fund's custodian will maintain,
in a separate account of the Fund, liquid high-grade debt
securities having value equal to, or greater than, such when-
issued securities. The price of when-issued securities, which is
generally expressed in yield terms, is fixed at the time the
commitment to purchase is made, but delivery and payment for such
securities takes place at a later time. Normally the settlement
date occurs from within ten days to one month after the purchase
of the issue. The value of when-issued securities may fluctuate
prior to their settlement, thereby creating an unrealized gain or
loss to the Fund.
The Fund will not invest more than 10% of its net assets
in illiquid securities, which include "restricted securities"
subject to legal restrictions on resale arising from an issuer's
reliance upon certain exemption from registration under the
Securities Act of 1933, as amended (the "Securities Act"). The
Fund may purchase restricted securities determined by the Adviser
to be liquid in accordance with procedures adopted by the
Trustees of the Fund.
Fundamental Investment Policies
While the Fund's investment objectives and the
investment policies identified below in this paragraph may not be
changed for the Fund without the approval of its shareholders,
the other investment policies set forth in this prospectus may be
changed upon notice but without such approval. To reduce
investment risk, the Fund may not invest more than 25% of its
total assets in municipal securities the interest upon which is
paid from revenues of similar-type projects. The Fund may not
invest more than 5% of its total assets in the securities of any
one issuer except the U.S. Government, although it may invest 50%
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of its total assets in as few as four issuers (but no more than
25% of total assets in any one issuer). The Fund may not
purchase more than 10% of any class of the voting securities of
any one issuer except those of the U.S. Government.
PURCHASE AND REDEMPTION OF SHARES
Opening Accounts-New Investments
A. When Funds Are Sent By Wire (the wire method permits
immediate credit)
1) Telephone the Fund toll-free at (800) 824-1916. The
Fund will ask for the (a) name of the account as you
wish it to be registered, (b) address of the account and
(c) taxpayer identification number--social security
number for an individual. The Fund will then provide
you with an account number.
2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:
ABA 0110 00028
State Street Bank and Trust Company
Boston, MA 02101
Alliance Municipal Trust
--Florida Portfolio
DDA 9903-279-9
Your account name as registered
Your account number with the Fund
3) Mail a completed Application Form to:
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520
B. When Funds Are Sent By Check
1) Fill out an Application Form.
2) Mail the completed Application Form along with your
check or negotiable bank draft (minimum $1,000), payable
to Alliance Municipal Trust--Florida Portfolio, to
Alliance Fund Services, Inc. as in A(3).
Subsequent Investments
A. Investments By Wire (to obtain immediate credit)
Instruct your bank to wire Federal funds (minimum $100)
to State Street Bank and Trust Company ("State Street Bank") as
in A(2) above.
8
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B. Investments By Check
Mail your check or negotiable bank draft (minimum $100),
payable to Alliance Municipal Trust--Florida Portfolio to
Alliance Fund Services, Inc. as in A(3) above.
Include with the check or draft the "next investment"
stub from one of your previous monthly or interim account
statements. For added identification, place your Fund account
number on the check or draft.
Investments Made By Check
Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the
Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.
Proceeds from any subsequent redemption by you of Fund
shares that were purchased by check or electronic funds transfer
will not be forwarded to you until the Fund is reasonably assured
that your check or electronic funds transfer has cleared, up to
fifteen days following the purchase date. If the redemption
request during such period is in the form of a Fund check, the
check will be marked "insufficient funds" and be returned unpaid
to the presenting bank.
Redemptions
A. By Telephone
You may withdraw any amount from your account on any
Fund business day (i.e., any weekday exclusive of days on which
the New York Stock Exchange or State Street Bank is closed)
between 9:00 a.m. and 5:00 p.m. (New York time) via orders given
to Alliance Fund Services, Inc. by telephone toll-free (800) 824-
1916. Redemption orders must include your account name as
registered with the Fund and the account number.
If your telephone redemption order is received by
Alliance Fund Services, Inc. prior to 12:00 Noon (New York time),
we will send the proceeds in Federal funds by wire to your
designated bank account that day. The minimum amount for a wire
is $1,000. If your telephone redemption order is received by
Alliance Fund Services, Inc. after 12:00 Noon and before 4:00
p.m., we will wire the proceeds the next business day. You also
may request that proceeds be sent by check to your designated
bank. Redemptions are made without any charge to you.
9
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During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching
Alliance Fund Services, Inc. by telephone (although no such
difficulty was apparent at any time in connection with the 1987
market break). If a shareholder were to experience such
difficulty, the shareholder should issue written instructions to
Alliance Fund Services, Inc. at the address shown on the cover of
this prospectus. The Fund reserves the right to suspend or
terminate its telephone redemption service at any time without
notice. Neither the Fund nor the Adviser, or Alliance Fund
Services, Inc. will be responsible for the authenticity of
telephone requests for redemptions that the Fund reasonably
believes to be genuine. The Fund will employ reasonable
procedures in order to verify that telephone requests for
redemptions are genuine, including among others, recording such
telephone instructions and causing written confirmations of the
resulting transactions to be sent to shareholders. If the Fund
did not employ such procedures, it could be liable for losses
arising from unauthorized or fraudulent telephone instructions.
Selected dealers or agents may charge a commission for handling
telephone requests for redemptions.
B. By Check-Writing
Under this service, you may write checks made payable to
any payee in any amount of $100 or more. Checks cannot be
written for more than the principal balance (not including any
accrued dividends) in your account. First, you must fill out the
Signature Card which is with the Application Form. If you wish
to establish this check-writing service subsequent to the opening
of your Fund account, contact the Fund by telephone or mail.
There is no separate charge for the check-writing service, except
that State Street Bank will impose its normal charges for checks
which are returned unpaid because of insufficient funds or for
checks upon which you have placed a stop order. The check-
writing service enables you to receive the daily dividends
declared on the shares to be redeemed until the day that your
check is presented to State Street Bank for payment.
C. By Mail
You may withdraw any amount from your account at any
time by mail. Written orders for withdrawal, accompanied by duly
endorsed certificates, if issued, should be mailed to Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, New Jersey 07096-
1520. Such orders must include the account name as registered
with the Fund and the account number. All written orders for
redemption and accompanying certificates, if any, must be signed
by all owners of the account with the signatures guaranteed by an
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institution which is an "eligible guarantor" as defined in Rule
17 Ad-15 under the Securities Exchange Act of 1934, as amended.
Obtaining an Application Form-Assistance. If you wish
to obtain an Application Form, or you have questions about the
Form, purchasing shares, or other Fund procedures, please
telephone the Fund toll-free at (800) 221-5672.
If your account with the Fund is to be established and
maintained through a brokerage firm, investment adviser, bank, or
other institution, your account will be opened for you. In this
case, do not fill out the Application Form or the Signature Card.
For purchases and redemptions, contact your account
representative at such institution. Institutions may charge a
fee for providing such assistance.
ADDITIONAL INFORMATION
Arrangements For Telephone Redemptions. If you wish to
use the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later
that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Municipal Trust,
P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.
Automatic Investment Program. A shareholder may
purchase shares of the Fund through an automatic investment
program through a bank that is a member of the National Automated
Clearing House Association. Purchases can be made on a Fund
business day each month designated by the shareholder.
Shareholders wishing to establish an automatic investment program
should write or telephone the Fund or Alliance Fund Services,
Inc. at (800) 221-5672.
Share Price. Shares of the Fund are sold and redeemed
on a continuous basis without sales or redemption charges at
their net asset value which is expected to be constant at $1.00
per share, although this price is not guaranteed. The net asset
value of the Fund's shares is determined each business day at
12:00 Noon and 4:00 p.m. (New York time). The net asset value
per share of the Fund is calculated by taking the sum of the
value of its investments (amortized cost value is used for this
purpose) and any cash or other assets, subtracting liabilities,
and dividing by the total number of shares outstanding. All
expenses, including the fees payable to the Adviser, are accrued
daily.
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Timing Of Investments And Redemptions. The Fund has two
transaction times each business day, 12:00 Noon and 4:00 p.m.
(New York time). New investments represented by Federal funds or
bank wire monies received by State Street Bank at any time during
a day prior to 4:00 p.m. are entitled to the full dividend to be
paid to shareholders for that day. Shares do not earn dividends
on the day a redemption is effected regardless of whether the
redemption order is received before or after 12:00 Noon.
However, if you wish to have Federal funds wired the same day of
your telephone redemption request, make sure that your request
will be received by the Fund prior to 12:00 Noon.
Redemption proceeds are normally wired or mailed either
the same or the next business day, but in no event later than
seven days, unless redemptions have been suspended or postponed
due to the determination of an "emergency" by the Securities and
Exchange Commission or to certain other unusual conditions.
Minimums. The Fund has minimums of $1,000 for initial
investments, $100 for subsequent investments, and $500 for
account balances. These minimums do not apply to shareholder
accounts maintained through brokerage firms or other financial
institutions, as such financial intermediaries may maintain their
own minimums for their customers' investments in the Fund.
However, the Fund imposes service charges upon financial
intermediaries to reflect the relatively higher costs of small
accounts and small transactions. These intermediaries may in
turn pass on such charges to affected accounts.
A shareholder subject to the minimum account balance
requirement must increase his account balance to at least $500
within sixty days after notice has been mailed by the Fund of a
deficient balance, or the Fund will close the account and mail a
check for the proceeds to the shareholder. The Fund intends at
least once each six months to review its shareholder balances in
regard to the $500 minimum and to send appropriate notices to
shareholders with deficient accounts. The Fund imposes no
minimums for redemptions by mail or for redemptions made on an
account's behalf by brokerage firms or other financial
institutions. However, such firms may have internal procedures
that include minimums.
Daily Dividends, Other Distributions, Taxes. All net
income of the Fund is determined each business day at 4:00 p.m.
(New York time) and is paid immediately thereafter pro rata to
shareholders of record via automatic investment in additional
full and fractional shares in each shareholder's account. As
such additional shares are entitled to dividends on following
days, a compounding growth of income occurs.
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The Fund's net income consists of all accrued interest
income on its assets less its expenses applicable to that
dividend period. Realized gains and losses of the Fund are
reflected in its net asset value and are not included in net
income.
Distributions to you out of tax-exempt interest income
earned by the Fund are not subject to Federal income tax (other
than the AMT). Any exempt-interest dividends derived from
interest on municipal securities subject to the AMT will be a
specific preference item for purposes of the Federal individual
and corporate AMT. Distributions out of taxable interest income,
other investment income, and short-term capital gains are taxable
to you as ordinary income and distributions of long-term capital
gains, if any, are taxable as long-term capital gains
irrespective of the length of time you may have held your shares.
Distributions of short and long-term capital gains, if any, are
normally made near year-end. Dividends paid by the Fund to
individual Florida shareholders will not be subject to Florida
income tax, which is imposed only on corporations. However,
Florida currently imposes an "intangible tax" at the rate of
$2.00 per $1,000 taxable value of certain securities, such as
shares of the Fund, and other intangible assets owned by Florida
residents. U.S. Government Securities and Florida municipal
securities are exempt from this intangible tax. It is
anticipated that the Fund's shares will qualify for exemption
from the Florida intangible tax. In order to so qualify, the
Fund must, among other things, have its entire portfolio invested
in U.S. Government Securities and Florida municipal securities on
December 31 of any year. Exempt-interest dividends paid by the
Fund to corporate shareholders will be subject to Florida
corporate income tax. Each year shortly after December 31, the
Fund will send you tax information stating the amount and type of
all its distributions for the year just ended.
The Adviser. The Fund retains Alliance Capital
Management L.P. under an Advisory Agreement to provide investment
advice and, in general, to supervise the Fund's management and
investment program, subject to the general control of the
Trustees of the Fund. The Fund pays an advisory fee at an annual
rate of .50 of 1% of up to $1.25 billion of the average daily
value of its net assets, .49 of 1% of the next $.25 billion of
such assets, .48 of 1% of the next $.25 billion of such assets,
.47 of 1% of the next $.25 billion of such assets, .46 of 1% of
the next $1 billion of such assets and .45 of 1% of its average
daily net assets in excess of $3 billion. The fee is accrued
daily and paid monthly.
Under a Distribution Services Agreement (the
"Agreement"), the Fund pays the Adviser at a maximum annual rate
of .25 of 1% of the Fund's aggregate average daily net assets.
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Substantially all such monies (together with significant amounts
from the Adviser's own resources) are paid by the Adviser to
broker-dealers and other financial intermediaries for their
distribution assistance and to banks and other depository
institutions for administrative and accounting services provided
to the Fund, with any remaining amounts being used to partially
defray other expenses incurred by the Adviser in distributing
Fund shares. The Fund believes that the administrative services
provided by depository institutions are permissible activities
under present banking laws and regulations and will take
appropriate actions (which should not adversely affect the Fund
or its shareholders) in the future to maintain such legal
conformity should any changes in, or interpretations of, such
laws or regulations occur.
The Adviser will reimburse the Fund to the extent that
the combined net expenses of the Fund (including the Adviser's
fee and expenses incurred under the Agreement) exceed 1% of its
average daily net assets for any fiscal year.
Custodian, Transfer Agent and Distributor. State Street
Bank and Trust Company, P.O. Box 1912, Boston, MA 02105, is the
Fund's Custodian. Alliance Fund Services, Inc., P.O. Box 1520,
Secaucus NJ 07096-1520 and Alliance Fund Distributors, Inc., 1345
Avenue of the Americas, New York, NY 10105, are the Fund's
Transfer Agent and Distributor, respectively. The transfer agent
charges a fee for its services.
Fund Organization. Alliance Municipal Trust (the
"Trust") is an open-end management investment company registered
under the Act. The Trust is organized as a Massachusetts
business trust. The Trust's activities are supervised by its
Trustees. Normally, shares of each series of the Trust are
entitled to one vote, and vote as a single series on matters that
affect the series in substantially the same manner.
Massachusetts law does not require annual meetings of
shareholders and it is anticipated that shareholder meetings will
be held only when required by Federal law. Shareholders have
available certain procedures for the removal of Trustees.
Managed Assets Plan ("MAP"). Certain brokerage firms
offer their customers MAP, which is a special cash management
service linked to the Fund or to its companion money market
funds. Among various features of MAP, the customer has direct
access to his fund balance (1) with a Visa Gold Card that is
accepted worldwide by participating merchants, banks and
automated teller machines and (2) by MAP checks which can be
written for any amount up to the balance in the account, with no
restriction on the number of checks. Details of MAP, including
its annual fee, are available from participating brokerage firms.
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Prospectus for Alliance Municipal Trust - Incorporated by
reference to Alliance Municipal Trust Prospectus in Post-
Effective Amendment No. 29 of Registration on Form N-1A
(File No. 2-79807), filed May 8, 1995 and Post-Effective
Amendment No. 28 of Registration Statement on Form N-1A
(File No. 2-79807), filed September 28, 1994.
<PAGE>
ALLIANCE MUNICIPAL TRUST-
Florida Portfolio
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
________________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
[ ], 1995
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TABLE OF CONTENTS
PAGE
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Investment Objectives and Policies . . . . . . .
Investment Restrictions . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . .
Purchase and Redemption of Shares . . . . . . .
Daily Dividends-Determination of Net Asset Value
Taxes . . . . . . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . .
Appendix A-Description of Municipal Securities .
Appendix B-Description of Securities Ratings . .
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated [ ], 1995. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.
(R): This registered service mark used under license from the
owner, Alliance Capital Management L.P.
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INVESTMENT OBJECTIVES AND POLICIES
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Alliance Municipal Trust (the "Fund") is an open-end
management investment company. The Fund consists of seven
distinct Portfolios, the General Portfolio, the New York
Portfolio, the California Portfolio, the Connecticut Portfolio,
the New Jersey Portfolio, the Virginia Portfolio and the Florida
Portfolio (the "Portfolio"), each of which is, in effect, a
separate fund issuing a separate class of shares. This Statement
of Additional Information covers only the Portfolio. The
investment objectives of the Portfolio are safety of principal,
liquidity and, to the extent consistent with these objectives,
maximum current income that is exempt from Federal and State
taxation to the extent described below. The Portfolio pursues
its objectives by investing in high-quality municipal securities
having remaining maturities of 397 days or less, which maturities
may extend to such greater length of time as may be permitted
from time to time pursuant to Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "Act") and, except when the
Portfolio assumes a temporary defensive position, at least 80% of
its total assets will be so invested. Normally, substantially
all of the Portfolio's assets will generate tax-exempt income as
described below. The Fund may in the future establish additional
portfolios which may have different investment objectives. There
can be no assurance, as is true with all investment companies,
that the Portfolio will achieve its investment objectives.
To the extent consistent with its other investment
objectives, the Portfolio seeks maximum current income that is
exempt from both Federal income taxes and State of Florida
intangible tax by investing principally in a non-diversified
portfolio of high-quality municipal securities issued by the
State of Florida or its political subdivisions. Except when the
Portfolio assumes a temporary defensive position, at least 65% of
its total assets will be so invested. Shares of the Portfolio
are available only to Florida residents.
Apart from the risks associated with investment in any
money market fund seeking tax-exempt income, such as default by
municipal issuers and fluctuation in short-term interest rates,
investors in the Portfolio should consider the greater risks of
the Portfolio's concentration versus the safety that comes with a
less concentrated investment portfolio and should compare yields
available on portfolios of Florida issues with those of more
diversified portfolios, including other states' issues, before
making an investment decision. The Portfolio is a non-
diversified investment company and, accordingly, the permitted
concentration of investments may present greater risks than in
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the case of a diversified company. (See below "Special Risk
Factors of Concentration in Florida.")
To the extent suitable Florida municipal securities are
not available for investment by the Portfolio, the Portfolio may
purchase municipal securities issued by other states and
political subdivisions. The dividends designated as derived from
interest income on such municipal securities generally will be
exempt from Federal income taxes.
MUNICIPAL SECURITIES
The term "municipal securities," as used in the
Prospectus and this Statement of Additional Information, means
obligations issued by or on behalf of states, territories, and
possessions of the United States or their political subdivisions,
agencies and instrumentalities, the interest from which is exempt
(subject to the alternative minimum tax) from Federal income
taxes. The municipal securities in which the Fund invests are
limited to those obligations which at the time of purchase:
1. are backed by the full faith and credit of the
United States; or
2. are municipal notes rated MIG-1/VMIG-1 or
MIG-2/VMIG-2 by Moody's Investors Service, Inc.
("Moody's") or SP-1 or SP-2 by Standard and Poor's
Corporation ("S&P"), or, if not rated, are of
equivalent investment quality as determined by
Alliance Capital Management L.P., the Portfolio's
investment adviser (the "Adviser") and ultimately
reviewed by the Trustees; or
3. are municipal bonds rated Aa or higher by Moody's,
AA or higher by S&P or, if not rated, are of
equivalent investment quality as determined by the
Adviser and ultimately reviewed by the Trustees; or
4. are other types of municipal securities, provided
that such obligations are rated Prime-1 by Moody's,
A-1 or higher by S&P or, if not rated, are of
equivalent investment quality as determined by the
Adviser and ultimately reviewed by the Trustees.
(See Appendix A for a description of municipal
securities and Appendix B for a description of
these ratings.)
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RULE 2a-7 UNDER THE ACT
The Portfolio will comply with Rule 2a-7 under the Act
including the diversity, quality and maturity limitations imposed
by the Rule.
Currently, pursuant to Rule 2a-7, each Portfolio of the
Fund may invest only in "eligible securities," as that term is
defined in the Rule. Generally, an eligible security is a
security that (i) is denominated in U.S. Dollars and has a
remaining maturity of 397 days or less; (ii) is rated, or is
issued by an issuer with short-term debt outstanding that is
rated, in one of the two highest rating categories by two
nationally recognized statistical rating organizations ("NRSROs")
or, if only one NRSRO has issued a rating, by that NRSRO; and
(iii) has been determined by the Adviser to present minimal
credit risks pursuant to procedures approved by the Trustees. A
security that originally had a maturity of greater than 397 days
is an eligible security if the issuer has outstanding short-term
debt that would be an eligible security. Unrated securities may
also be eligible securities if the Adviser determines that they
are of comparable quality to a rated eligible security pursuant
to guidelines approved by the Trustees. A description of the
ratings of some NRSROs appears in Appendix B attached hereto.
The Portfolio will not invest 25% or more of its total
assets in the securities of non-governmental issuers conducting
their principal business activities in any one industry.
ALTERNATIVE MINIMUM TAX
The Portfolio may invest without limitation in tax-
exempt municipal securities subject to the alternative minimum
tax (the "AMT"). Under current Federal income tax law,
(1) interest on tax-exempt municipal securities issued after
August 7, 1986 which are "specified private activity bonds," and
the proportionate share of any exempt-interest dividend paid by a
regulated investment company which receives interest from such
specified private activity bonds, will be treated as an item of
tax preference for purposes of the AMT imposed on individuals and
corporations, though for regular Federal income tax purposes such
interest will remain fully tax-exempt, and (2) interest on all
tax-exempt obligations will be included in "adjusted current
earnings" of corporations for AMT purposes. Such private
activity bonds ("AMT-Subject Bonds") have provided, and may
continue to provide, somewhat higher yields than other comparable
municipal securities.
Investors should consider that, in most instances, no
state, municipality or other governmental unit with taxing power
will be obligated with respect to AMT-Subject Bonds. AMT-Subject
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Bonds are in most cases revenue bonds and do not generally have
the pledge of the credit or the taxing power, if any, of the
issuer of such bonds. AMT-Subject Bonds are generally limited
obligations of the issuer supported by payments from private
business entities and not by the full faith and credit of a state
or any governmental subdivision. Typically the obligation of the
issuer of an AMT-Subject Bond is to make payments to bond holders
only out of and to the extent of payments made by the private
business entity for whose benefit the AMT-Subject Bonds were
issued. Payment of the principal and interest on such revenue
bonds depends solely on the ability of the user of the facilities
financed by the bonds to meet its financial obligations and the
pledge, if any, of real and personal property so financed as
security for such payment. It is not possible to provide
specific detail on each of these obligations in which Fund assets
may be invested.
TAXABLE SECURITIES
Although the Portfolio of the Fund is, and expects to
be, largely invested in municipal securities, the Portfolio may
elect to invest up to 20% of its total assets in taxable money
market securities when such action is deemed to be in the best
interests of shareholders. Such taxable money market securities
also are limited to remaining maturities of 397 days or less at
the time of investment, and the Portfolio's municipal and taxable
securities are maintained at a dollar-weighted average of 90 days
or less. Taxable money market securities purchased by the
Portfolio are limited to those described below:
1. marketable obligations of, or guaranteed by, the
United States Government, its agencies or
instrumentalities; or
2. certificates of deposit, bankers' acceptances and
interest-bearing savings deposits of banks having
total assets of more than $1 billion and which are
members of the Federal Deposit Insurance
Corporation; or
3. commercial paper of prime quality rated A-1 or
higher by S&P or Prime-1 by Moody's or, if not
rated, issued by companies which have an
outstanding debt issue rated AA or higher by S&P,
or Aa or higher by Moody's. (See Appendix B for a
description of these ratings.)
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REPURCHASE AGREEMENTS
The Portfolio may also enter into repurchase agreements
pertaining to the types of securities in which it may invest. A
repurchase agreement arises when a buyer purchases a security and
simultaneously agrees to resell it to the vendor at an agreed-
upon future date, normally one day or a few days later. The
resale price is greater than the purchase price, reflecting an
agreed-upon market rate which is effective for the period of time
the buyer's money is invested in the security and which is not
related to the coupon rate on the purchased security. The
Portfolio requires continuous maintenance of collateral in an
amount equal to, or in excess of, the market value of the
securities which are the subject of the agreement. In the event
that a vendor defaulted on its repurchase obligation, the
Portfolio might suffer a loss to the extent that the proceeds
from the sale of the collateral were less than the repurchase
price. If the vendor became bankrupt, the Portfolio might be
delayed in selling the collateral. Repurchase agreements may be
entered into with member banks of the Federal Reserve System
(including the Fund's Custodian) or "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S.
Government securities. It is the Portfolio's current practice to
enter into repurchase agreements only with such primary dealers
and its Custodian, and the Fund has adopted procedures for
monitoring the creditworthiness of such organizations.
REVERSE REPURCHASE AGREEMENTS
The Portfolio may enter into reverse repurchase
agreements, which involve the sale of securities held by the
Portfolio with an agreement to repurchase the securities at an
agreed upon price, date and interest payment, although the
Portfolio currently has no plans to enter into such agreements.
VARIABLE RATE OBLIGATIONS
The interest rate payable on certain municipal
securities in which the Portfolio may invest, called "variable
rate" obligations, is not fixed and may fluctuate based upon
changes in market rates. The interest rate payable on a variable
rate municipal security is adjusted either at pre-designated
periodic intervals or whenever there is a change in the market
rate to which the security's interest rate is tied. Other
features may include the right of the Portfolio to demand
prepayment of the principal amount of the obligation prior to its
stated maturity and the right of the issuer to prepay the
principal amount prior to maturity. The main benefit of a
variable rate municipal security is that the interest rate
adjustment minimizes changes in the market value of the
obligation. As a result, the purchase of variable rate municipal
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securities enhances the ability of the Portfolio to maintain a
stable net asset value per share and to sell an obligation prior
to maturity at a price approximating the full principal amount.
The payment of principal and interest by issuers of certain
municipal securities purchased by the Portfolio may be guaranteed
by letters of credit or other credit facilities offered by banks
or other financial institutions. Such guarantees will be
considered in determining whether a municipal security meets the
Portfolio's investment quality requirements.
Variable rate obligations purchased by the Portfolio may
include participation interests in variable rate industrial
development bonds that are backed by irrevocable letters of
credit or guarantees of banks that meet the criteria for banks
described above in "Taxable Securities." Purchase of a
participation interest gives the Portfolio an undivided interest
in certain such bonds. The Portfolio can exercise the right, on
not more than 30 days' notice, to sell such an instrument back to
the bank from which it purchased the instrument and draw on the
letter of credit for all or any part of the principal amount of
the Portfolio's participation interest in the instrument, plus
accrued interest, but will do so only (i) as required to provide
liquidity to the Portfolio, (ii) to maintain a high quality
investment portfolio, or (iii) upon a default under the terms of
the demand instrument. Banks retain portions of the interest
paid on such variable rate industrial development bonds as their
fees for servicing such instruments and the issuance of related
letters of credit and repurchase commitments. No single bank
will issue its letters of credit with respect to variable rate
obligations or participation interests therein covering more than
10% of the total assets of the Portfolio. The Portfolio will not
purchase participation interests in variable rate industrial
development bonds unless it receives an opinion of counsel or a
ruling of the Internal Revenue Service that interest earned by
the Portfolio from the bonds in which it holds participation
interests is exempt from Federal income taxes. The Adviser will
monitor the pricing, quality and liquidity of variable rate
demand obligations and participation interests therein held by
the Portfolio on the basis of published financial information,
rating agency reports and other research services to which the
Adviser may subscribe.
STANDBY COMMITMENTS
The Portfolio may purchase municipal securities together
with the right to resell them to the seller at an agreed-upon
price or yield within specified periods prior to their maturity
dates. Such a right to resell is commonly known as a "standby
commitment," and the aggregate price which the Portfolio pays for
securities with a standby commitment may be higher than the price
which otherwise would be paid. The primary purpose of this
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practice is to permit the Portfolio to be as fully invested as
practicable in municipal securities while preserving the
necessary flexibility and liquidity to meet unanticipated
redemptions. In this regard, the Portfolio acquires standby
commitments solely to facilitate portfolio liquidity and does not
exercise its rights thereunder for trading purposes. Since the
value of a standby commitment is dependent on the ability of the
standby commitment writer to meet its obligation to repurchase,
the Portfolio's policy is to enter into standby commitment
transactions only with municipal securities dealers which are
determined to present minimal credit risks.
The acquisition of a standby commitment does not affect
the valuation or maturity of the underlying municipal securities
which continue to be valued in accordance with the amortized cost
method. Standby commitments acquired by the Portfolio are valued
at zero in determining net asset value. Where the Portfolio pays
directly or indirectly for a standby commitment, its cost is
reflected as unrealized depreciation for the period during which
the commitment is held. Standby commitments do not affect the
average weighted maturity of the Portfolio's portfolio of
securities.
WHEN-ISSUED SECURITIES
Municipal securities are frequently offered on a "when-
issued" basis. When so offered, the price, which is generally
expressed in yield terms, is fixed at the time the commitment to
purchase is made, but delivery and payment for the when-issued
securities take place at a later date. Normally, the settlement
date occurs within one month after the purchase of municipal
bonds and notes. During the period between purchase and
settlement, no payment is made by the Portfolio to the issuer
and, thus, no interest accrues to the Portfolio from the
transaction. When-issued securities may be sold prior to the
settlement date, but the Portfolio makes when-issued commitments
only with the intention of actually acquiring the securities. To
facilitate such acquisitions, the Fund's Custodian will maintain,
in a separate account of the Portfolio, cash, U.S. Government or
other liquid high-grade debt securities, having value equal to,
or greater than, such commitments. Similarly, a separate account
will be maintained to meet obligations in respect of reverse
repurchase agreements. On delivery dates for such transactions,
the Portfolio will meet its obligations from maturities or sales
of the securities held in the separate account and/or from the
available cash flow. If the Portfolio, however, chooses to
dispose of the right to acquire a when-issued security prior to
its acquisition, it can incur a gain or loss. At the time the
Portfolio makes the commitment to purchase a municipal security
on a when-issued basis, it records the transaction and reflects
the value of the security in determining its net asset value. No
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when-issued commitments will be made if, as a result, more than
15% of the Portfolio's net assets would be so committed.
ILLIQUID SECURITIES
The Portfolio has adopted the following investment
policy which may be changed by the vote of the Trustees: The
Portfolio will not maintain more than 10% of its net assets
(taken at market value) in illiquid securities. For this
purpose, illiquid securities include, among others, (a)
securities that are illiquid by virtue of the absence of a
readily available market or legal or contractual restriction on
resale and (b) repurchase agreements not terminable within seven
days.
The Portfolio may purchase restricted securities
determined by the Adviser to be liquid in accordance with
procedures adopted by the Trustees, including securities eligible
for resale under Rule 144A of the Securities Act of 1933 (the
"Securities Act"). Restricted securities are securities subject
to contractual or legal restrictions on resale, such as those
arising from an issuer's reliance upon certain exemptions from
registration under the Securities Act.
In recent years, a large institutional market has
developed for certain types of restricted securities including,
among others, private placements, repurchase agreements,
commercial paper, foreign securities and corporate bonds and
notes. These instruments are often restricted securities because
they are sold in transactions not requiring registration. For
example, commercial paper issues in which the Portfolio may
invest include, among others, securities issued by major
corporations without registration under the Securities Act in
reliance on the exemption from registration afforded by Section
3(a)(3) of such Act and commercial paper issued in reliance on
the private placement exemption from registration which is
afforded by Section 4(2) of the Securities Act ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition
under the Federal securities laws in that any resale must also be
made in an exempt transaction. Section 4(2) paper is normally
resold to other institutional investors through or with the
assistance of investment dealers who make a market in Section
4(2) paper, thus providing liquidity. Institutional investors,
rather than selling these instruments to the general public,
often depend on an efficient institutional market in which such
restricted securities can be readily resold in transactions not
involving a public offering. In many instances, therefore, the
existence of contractual or legal restrictions on resale to the
general public does not, in practice, impair the liquidity of
such investments from the perspective of institutional holders.
In recognition of this fact, the Staff of the Securities and
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Exchange Commission has stated that Section 4(2) paper may be
determined to be liquid by the Trustees, so long as certain
conditions, which are described below, are met.
In 1990, in part to enhance the liquidity in the
institutional markets for restricted securities, the Securities
and Exchange Commission (the "Commission") adopted Rule 144A
under the Securities Act to establish a safe harbor from the
Securities Act's registration requirements for resale of certain
restricted securities to qualified institutional buyers.
Pursuant to Rule 144A, the institutional restricted securities
markets may provide both readily ascertainable values for
restricted securities and the ability to liquidate an investment
in order to satisfy share redemption orders on a timely basis.
An insufficient number of qualified institutional buyers
interested in purchasing certain restricted securities held by
the Portfolio, however, could affect adversely the marketability
of such portfolio securities and the Portfolio might be unable to
dispose of such securities promptly or at reasonable prices.
Rule 144A has already produced enhanced liquidity for many
restricted securities, and market liquidity for such securities
may continue to expand as a result of Rule 144A and the
consequent inception of the PORTAL System sponsored by the
National Association of Securities Dealers, Inc., an automated
system for the trading, clearance and settlement of unregistered
securities.
The Trustees have the ultimate responsibility for
determining whether specific securities are liquid or illiquid.
The Trustees have delegated the function of making day-to-day
determinations of liquidity to the Adviser, pursuant to
guidelines approved by the Trustees.
The Adviser takes into account a number of factors in
determining whether a restricted security being considered for
purchase is liquid, including at least the following:
(i) the frequency of trades and quotations for the
security;
(ii) the number of dealers making quotations to purchase
or sell the security;
(iii) the number of other potential purchasers of the
security;
(iv) the number of dealers undertaking to make a market
in the security;
(v) the nature of the security (including its
unregistered nature) and the nature of the
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marketplace for the security (e.g., the time needed
to dispose of the security, the method of
soliciting offers and the mechanics of transfer);
and
(vi) any applicable Commission interpretation or
position with respect to such types of securities.
To make the determination that an issue of Section 4(2)
paper is liquid, the Adviser must conclude that the following
conditions have been met:
(i) the Section 4(2) paper must not be traded flat or
in default as to principal or interest; and
(ii) the Section 4(2) paper must be rated in one of the
two highest rating categories by at least two
NRSROs, or if only one NRSRO rates the security, by
that NRSRO; if the security is unrated, the Adviser
must determine that the security is of equivalent
quality.
The Adviser must also consider the trading market for
the specific security, taking into account all relevant factors.
Following the purchase of a restricted security by the
Portfolio, the Adviser monitors continuously the liquidity of
such security and reports to the Trustees regarding purchases of
liquid restricted securities.
GENERAL
Yields on municipal securities are dependent on a
variety of factors, including the general condition of the money
market and of the municipal bond and municipal note market, the
size of a particular offering, the maturity of the obligation and
the rating of the issue. Municipal securities with longer
maturities tend to produce higher yields and are generally
subject to greater price movements than obligations with shorter
maturities. (An increase in interest rates will generally reduce
the market value of portfolio investments, and a decline in
interest rates will generally increase the value of portfolio
investments. There can be no assurance, as is true with all
investment companies, that the Portfolio's objectives will be
achieved. The achievement of the Portfolio's investment
objectives is dependent in part on the continuing ability of the
issuers of municipal securities in which the Portfolio invests to
meet their obligations for the payment of principal and interest
when due. Municipal securities historically have not been
subject to registration with the Securities and Exchange
Commission, although there have been proposals which would
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require registration in the future. The Portfolio generally will
hold securities to maturity rather than follow a practice of
trading. However, the Portfolio may seek to improve portfolio
income by selling certain portfolio securities prior to maturity
in order to take advantage of yield disparities that occur in
securities markets.)
Obligations of issuers of municipal securities are
subject to the provisions of bankruptcy, insolvency, and other
laws affecting the rights and remedies of creditors, such as the
Bankruptcy Code. In addition, the obligations of such issuers
may become subject to laws enacted in the future by Congress,
state legislatures, or referenda extending the time for payment
of principal and/or interest, or imposing other constraints upon
enforcement of such obligations or upon the ability of
municipalities to levy taxes. There is also the possibility
that, as a result of litigation or other conditions, the ability
of any issuer to pay, when due, the principal of, and interest
on, its municipal securities may be materially affected.
Except as otherwise provided above, the Portfolio's
investment objectives and policies are not designated
"fundamental policies" within the meaning of the Act and may,
therefore, be changed without a shareholder vote. However, the
Portfolio will not change its investment policies without
contemporaneous written notice to shareholders.
Effective November 1, 1991, the Fund's former name of
Alliance Tax-Exempt Reserves was changed to Alliance Municipal
Trust.
SPECIAL RISK FACTORS OF CONCENTRATION IN FLORIDA
The primary purpose of investing in a portfolio of a
single state's municipal securities is the special tax treatment
accorded that state's resident individual investors. However,
payment of interest and preservation of principal is dependent
upon the continuing ability of the state's issuers and/or
obligors of its state, municipal and public authority debt
obligations to meet their obligations thereunder. Investors
should consider the greater risk of the concentration of the
Portfolio versus the safety that comes with a less concentrated
investment portfolio and should compare yields available on
portfolios of the relevant state's issues with those of more
diversified portfolios, including other states' issues, before
making an investment decision. The Adviser believes that by
maintaining the Portfolio's investment portfolio in liquid,
short-term, high-quality investments, including the participation
interests and other variable rate obligations that have credit
support such as letters of credit from major financial
institutions, the Portfolio is largely insulated from the credit
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risks that exist on long-term municipal securities of the
relevant state.
The following summary is included for the purpose of
providing a general description of credit and financial
conditions of Florida and is based on information from official
statements made available in March 1995 in connection with the
issuance of certain securities and does not purport to be
complete. While the Fund has not undertaken to independently
verify such information, it has no reason to believe that such
information is not correct in all material aspects. This summary
does not provide specific information regarding all securities in
which the Portfolio is permitted to invest and in particular does
not provide specific information on the private business entities
whose obligations support the payments on AMT-Subject Bonds.
Economic Climate. As of April 1, 1993 Florida was ranked the
fourth most populous state with an estimated population of 13.6
million. The State's average annual population growth rate for
the period 1983 to 1993 was approximately 2.5% while the nation's
average annual growth rate for the same period was approximately
1.0%. During this same period, Florida maintained an average
growth of approximately 293,000 new residents per year.
From 1984 through 1993 Florida's per capita income rose
an average of 5.4% per year, while the national per capita income
increased an average of 5.5%. The structure of Florida's income
differs from that of the nation. Because Florida has a
proportionally greater retiree population, property income
(dividends, interest and rent) and transfer payments (social
security and pension benefits) are a relatively more important
source of income. Florida's employment income in 1993
represented 62% of total personal income, while the U.S. share of
total personal income in the form of wages and salaries and other
labor benefits was 72%. One positive aspect of this greater
diversity is that transfer payments are typically less sensitive
to the business cycle than employment income, and, therefore, act
as stabilizing forces in weak economic periods. From 1984
through 1993, Florida's total nominal personal income increased
by 115% and per capita income by approximately 68.7%. For the
U.S., total and per capita personal income increased by
approximately 87.9% and 70.3%, respectively. Property income in
Florida, however, continues to exceed the national average by
approximately 50%. Due to the effect of low interest rates on
interest earnings, property income is forecast to decline
slightly as a share of income in 1995.
From 1980 through 1993, Florida's employment increased
with each succeeding year, with a small decrease in employment
occurring in 1991 and 1992. In 1992, Florida non-agricultural
job creation began to recover, and increased by 3.9% in 1993 from
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1992. The State is now less dependent on employment from
construction and construction-related manufacturing and resource
based manufacturing, which have declined as a proportion of total
state employment. Trade and services, the two largest sectors
account for more than half the total non-farm employment in
Florida. Employment in the service sector increased by 7.2% in
1993 from 1992. Tourism is also one of Florida's most important
industries. Approximately 41 million people visited the State in
1993.
During 1993, Florida's unemployment rate was 7% and
approximated the national average of 6.8%. The estimated
unemployment rate for Florida is 6.5% as compared to the U.S.
average of 6.1% in 1994. A significant reason for the
improvement in Florida's employment rate is the clean-up and
repair effort associated with Hurricane Andrew in Dade County,
Florida. The unemployment rate in Florida through the end of
1995 is forecast to drop to 6.1% for the first time since 1990.
The State legislature has enacted a law whereby the
projected revenue windfall will be transferred from the General
Revenue Fund to a Trust Fund to defray the costs of matching
funds and a wide array of expenditures related to Hurricane
Andrew. The amount of the transfer will change based on
revisions made by the State's Revenue Estimating Conference. The
State's Revenue Estimating Conference has estimated that
additional non-recurring general revenues totaling $220 million
during fiscal year 1993-94 and $159 million during fiscal year
1994-95 will be generated as a result of increased economic
activity due to Hurricane Andrew.
Financial Condition. Florida prepares an annual budget which is
formulated each year and presented to the Governor and
Legislature. Under current law, the State budget as a whole, and
each separate fund within the State budget, must be kept in
balance from currently available revenues each State fiscal Year.
In fiscal year 1993-1994, Florida derived approximately
66% of its total direct revenues from State taxes and fees.
Federal funds and other special revenues accounted for the
remaining revenues. Florida does not currently impose an
individual income tax. The greatest single source of tax
receipts in Florida is the sales and use tax, accounting for 68%
of general revenue funds available. For the fiscal year which
ended June 30, 1994, receipts from this source were $10.013
billion, an increase of 6.9% from fiscal year 1992-93.
For fiscal year 1993-94 general revenue funds were
$13.037 billion. Based on effective general revenue fund
appropriations of $12.885 billion, unencumbered reserves at the
end of fiscal year 1993-94 are $152.4 million.
14
<PAGE>
In fiscal year 1994-95, the available general revenue
working capital and budget stabilization funds are estimated to
be $14.683 billion, a 6.1% increase from fiscal year 1993-94.
This amount reflects a transfer of $159 million in non-recurring
revenue due to Hurricane Andrew, which will be transferred to a
hurricane relief trust fund. The $13.702 billion in estimated
revenues (excluding the Hurricane Andrew impacts) represent a
6.6% increase from the analogous figures in 1993-94. With
combined general revenue, working capital and budget
stabilization fund appropriations at $14.310 billion,
unencumbered reserves at the end of 1994-95 are estimated at
$373.2 million.
For fiscal year 1995-96 the estimated general revenue
plus working capital funds available total $14.915 billion, a
1.6% increase from fiscal year 1994-95. The $14.465 billion in
estimated revenues represent a 5.6% increase from the analogous
figure in 1994-95.
The Florida Constitution places limitations on the ad
valorem taxation of real estate and tangible personal property
for all county, municipal or school purposes, and for water
management districts. Counties, school districts and
municipalities are authorized by law, and special districts may
be authorized by law, to levy ad valorem taxes. The State does
not levy ad valorem taxes on real property or tangible personal
property. These limitations do not apply to taxes levied for
payment of bonds and taxes levied for periods not longer than two
years when authorized by a vote of the electors. The Florida
Constitution and the Florida Statutes, provide for the exemption
of homesteads from all taxation, except for assessments for
special benefits, up to the assessed valuation of $5,000. For
every person who is entitled to the foregoing exemption, the
exemption is increased to a total of $25,000 of assessed
valuation for taxes levied by governing bodies.
________________________________________________________________
INVESTMENT RESTRICTIONS
________________________________________________________________
Unless specified to the contrary, the following
restrictions are fundamental policies which may not be changed
with respect to the Portfolio without the affirmative vote of the
holders of a majority of the Portfolio's outstanding voting
securities, which means (1) 67% or more of the shares represented
at a meeting at which more than 50% of the outstanding shares are
present in person or by proxy or (2) more than 50% of the
outstanding shares, whichever is less. If a percentage
restriction is adhered to at the time of an investment, a later
increase or decrease in percentage resulting from a change in
15
<PAGE>
values of portfolio securities or in the amount of the
Portfolio's assets will not constitute a violation of that
restriction.
The Portfolio:
1. May not invest more than 25% of its total assets in
the securities of issuers conducting their
principal business activities in any one industry,
provided that for purposes of this policy (a) there
is no limitation with respect to investments in
municipal securities (including industrial
development bonds), securities issued or guaranteed
by the U.S. Government, its agencies or
instrumentalities, certificates of deposit,
bankers' acceptances and interest-bearing savings
deposits, and (b) consumer finance companies,
industrial finance companies and gas, electric,
water and telephone utility companies are each
considered to be separate industries. For purposes
of this restriction and those set forth in
restrictions 3 and 4 below, the Portfolio will
regard the entity which has the primary
responsibility for the payment of interest and
principal as the issuer;
2. May not invest more than 25% of its total assets in
municipal securities the interest upon which is
paid from revenues of similar-type projects;
3. May not invest more than 5% of its total assets in
the securities of any one issuer (other than
securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities)
except that with respect to 50% of its total assets
the Portfolio may invest in the securities of as
few as four issuers (provided that no more than 25%
of the Portfolio's total assets are invested in the
securities of any one issuer). For purposes of
such 5% and 10% limitations, the issuer of the
letter of credit or other guarantee backing a
participation interest in a variable rate
industrial development bond is deemed to be the
issuer of such participation interest;
4. May not purchase more than 10% of any class of the
voting securities of any one issuer except
securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities;
16
<PAGE>
5. May not borrow money except from banks on a
temporary basis or via entering into reverse
repurchase agreements for extraordinary or
emergency purposes in an aggregate amount not to
exceed 15% of the Portfolio's total assets. Such
borrowings may be used, for example, to facilitate
the orderly maturation and sale of portfolio
securities during periods of abnormally heavy
redemption requests, if they should occur; such
borrowings may not be used to purchase investments
and the Portfolio will not purchase any investment
while any such borrowings exist;
6. May not pledge, hypothecate, mortgage or otherwise
encumber its assets except to secure borrowings,
including reverse repurchase agreements, effected
within the limitations set forth in restriction 5.
To meet the requirements of regulations in certain
states, the Portfolio, as a matter of operating
policy, will limit any such pledging, hypothecating
or mortgaging to 10% of its total assets, valued at
market, so long as shares of the Portfolio are
being sold in those states;
7. May not make loans of money or securities except by
the purchase of debt obligations in which the
Portfolio may invest consistent with its investment
objectives and policies and by investment in
repurchase agreements;
8. May not enter into repurchase agreements (i) not
terminable within seven days if, as a result
thereof, more than 10% of the Portfolio's total
assets would be committed to such repurchase
agreements (whether or not illiquid) or other
illiquid investments,* or (ii) with a particular
vendor if immediately thereafter more than 5% of
___________________
* As a matter of operating policy, the Portfolio will limit its
investment in illiquid securities to 10% of its net assets.
17
<PAGE>
the Portfolio's assets would be committed to
repurchase agreements entered into with such
vendor; or
9. May not (a) make investments for the purpose of
exercising control; (b) purchase securities of
other investment companies, except in connection
with a merger, consolidation, acquisition or
reorganization; (c) invest in real estate (other
than securities secured by real estate or interests
therein or securities issued by companies which
invest in real estate or interests therein),
commodities or commodity contracts; (d) purchase
any restricted securities or securities on margin;
(e) make short sales of securities or maintain a
short position or write, purchase or sell puts
(except for standby commitments as described in the
Prospectus and above), calls, straddles, spreads or
combinations thereof; (f) invest in securities of
issuers (other than agencies and instrumentalities
of the United States Government) having a record,
together with predecessors, of less than three
years of continuous operation if more than 5% of
the Portfolio's assets would be invested in such
securities; (g) purchase or retain securities of
any issuer if those officers and trustees of the
Fund and officers and directors of the Adviser who
own individually more than 1/2 of 1% of the
outstanding securities of such issuer together own
more than 5% of the securities of such issuer; or
(h) act as an underwriter of securities.
________________________________________________________________
MANAGEMENT
________________________________________________________________
TRUSTEES AND OFFICERS
The Trustees and principal officers of the Fund, their
ages and their primary occupations during the past five years are
set forth below. Each such Trustee and officer is also a
trustee, director or officer of other registered investment
companies sponsored by the Adviser. An asterisk precedes those
Trustees who are considered "interested persons" as defined in
the Act. Unless otherwise specified, the address of each such
person is 1345 Avenue of the Americas, New York, New York 10105.
18
<PAGE>
TRUSTEES
*DAVE H. WILLIAMS, [ ], Chairman, is the Chairman of
the Board of Directors of Alliance Capital Management Corporation
("ACMC")**, the sole general partner of the Adviser with which he
has been associated since prior to 1990.
*JOHN D. CARIFA, [ ], is the President, Chief
Operating Officer, and a Director of ACMC with which he has been
associated since prior to 1990.
SAM Y. CROSS, [ ], was, until December 1991, Executive
Vice President of The Federal Reserve Bank of New York and
manager for foreign operations for the Federal Reserve System
since prior to 1990. He is also a Director of Fuji Bank and
Trust Co. His address is 200 East 66th Street, New York, New
York 10021.
CHARLES H.P. DUELL, [ ], is President of Middleton
Place Foundation with which he has been associated since prior to
1990. He is also a Director of GRC International, Inc., a
Trustee Emeritus of the National Trust for Historic Preservation
and serves on the Board of Architectural Review, City of
Charleston. His address is Middleton Place Foundation, Ashley
River Road, Charleston, South Carolina, 29414.
WILLIAM H. FOULK, JR., [ ], is a Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he has been associated since prior to 1990. His address is
521 Fifth Avenue, New York, New York 10175.
ELIZABETH J. McCORMACK, [ ], is an Associate of
Rockefeller Family and Associates (philanthropic organization)
with which she has been associated since prior to 1990. She is a
Director of Philip Morris, Inc., Champion International
Corporation, and The American Savings Bank. She is a Trustee of
Hamilton College, and a Member of the Board of Overseers Managers
of Swarthmore College and the Memorial Sloan-Kettering Cancer
Center. Her address is 30 Rockefeller Plaza, New York, New York
10112.
____________________
* An "interested person" of the Fund as defined in the Act.
** For purposes of this Statement of Additional Information, ACMC
refers to Alliance Capital Management Corporation, the sole
general partner of the Adviser, and to the predecessor general
partner of the Adviser of the same name.
19
<PAGE>
DAVID K. STORRS, [ ], is President of The Common Fund
(investment management for educational institutions) with which
he has been associated since prior to 1990. His address is The
Common Fund, 450 Post Road East, Westport, Connecticut 06881.
SHELBY WHITE, [ ], has been an author and financial
journalist since prior to 1990. Her address is One Sutton Place
South, New York, New York 10022.
JOHN WINTHROP, [ ], is President of John Winthrop &
Co., Inc. (investment management) with which he has been
associated since prior to 1990. He is a Director of NUI
Corporation and American Farmland Trust and a Trustee of Pioneer
Funds. His address is One North Ager's Wharf, Charleston, South
Carolina 29401.
OFFICERS
JAMES P. SYRETT - President, [ ], is a Senior Vice
President of ACMC and Division President and Chief Executive
Officer of Alliance Cash Management Services with which he has
been associated since prior to 1990.
RONALD M. WHITEHILL - Executive Vice President, [ ],
is a Vice President of ACMC and Executive Vice President of
Alliance Cash Management Services with which he has been
associated since 1993. Previously, he was Senior Vice President
and Managing Director of Reserve Fund since prior to 1990.
JOHN R. BONCZEK - Senior Vice President, [ ], is a
Vice President of ACMC with which he has been associated since
prior to 1990.
SUSAN P. KEENAN - Senior Vice President, 38, is a Senior
Vice President of ACMC with which she has been associated since
prior to 1990.
RONALD R. VALEGGIA - Senior Vice President, [ ], is a
Senior Vice President of ACMC with which he has been associated
since prior to 1990.
DREW BIEGEL - Vice President, [ ], is a Vice President
of ACMC which he has been associated with since prior to 1990.
DORIS T. CILIBERTI - Vice President, [ ], is an
Assistant Vice President of ACMC with which she has been
associated since prior to 1990.
PATRICIA NETTER - Vice President, [ ], is a Vice
President of ACMC with which she has been associated since prior
to 1990.
20
<PAGE>
EDMUND P. BERGAN, JR. - Secretary, 44, is a Senior Vice
President and General Counsel of Alliance Fund Distributors, Inc.
("AFD") with which he has been associated since prior to 1990.
MARK D. GERSTEN - Treasurer and Chief Financial Officer,
44, is a Senior Vice President of Alliance Fund Services, Inc.
("AFS") with which he has been associated since prior to 1990.
PATRICK J. FARRELL - Controller, [ ], is a Vice
President of AFS with which he has been associated since prior to
1990.
The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 1994, the
aggregate compensation paid to each of the Trustees during
calendar year 1994 by all of the funds to which the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of funds in the
Alliance Fund Complex with respect to which each of the Trustees
serves as a trustee or director, are set forth below. Neither
the Fund nor any other fund in the Alliance Fund Complex provides
compensation in the form of pension or retirement benefits to any
of its trustees or directors.
<TABLE>
<CAPTION>
Total Total Number of Funds in
Compensation the Alliance Fund Complex,
Aggregate From the Alliance Including the Fund, as to
Name of Trustee Compensation Fund Complex, which the Trustee is
of the Fund from the Fund Including the Fund a Trustee or Director
_______________ _____________ __________________ _____________________
<S> <C> <C> <C>
Dave H. Williams $ 0 $ 0 [ ]
John D. Carifa $ 0 $ 0 [ ]
Sam Y. Cross $ [ ] $ [ ] [ ]
Charles H.P. Duell $ [ ] $ [ ] [ ]
William H. Foulk, Jr. $ [ ] $ [ ] [ ]
Elizabeth J. McCormack $ [ ] $ [ ] [ ]
David K. Storrs $ [ ] $ [ ] [ ]
Shelby White $ [ ] $ [ ] [ ]
John Winthrop $ [ ] $ [ ] [ ]
</TABLE>
As of May [ ], 1995, the Directors and officers of the Fund as a
group owned less than 1% of the shares of the Fund.
21
<PAGE>
ADVISER
The Adviser is a leading international investment
manager supervising client accounts with assets as of
December 31, 1994 of more than $121 billion (of which more than
$36 billion represented the assets of investment companies). The
Adviser's clients are primarily major corporate employee benefit
funds, public employee retirement systems, investment companies,
foundations and endowment funds and included, as of December 31,
1994, 29 of the FORTUNE 100 Companies. As of that date, the
Adviser and its subsidiaries employed approximately 1,450
employees who operated out of domestic offices and the overseas
offices of subsidiaries in Bombay, Istanbul, London, Sydney,
Tokyo, Toronto, Bahrain, Luxembourg and Singapore. The 51
registered investment companies comprising 103 separate
investment portfolios managed by the Adviser currently have more
than one million shareholders.
Alliance Capital Management Corporation, the sole
general partner of, and the owner of a 1% general partnership
interest in, the Adviser, is an indirect wholly-owned subsidiary
of The Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"), a holding company controlled by
AXA, a French insurance holding company. As of December 31,
1994, ACMC, Inc. and Equitable Capital Management Corporation,
each a wholly-owned direct or indirect subsidiary of Equitable,
owned in the aggregate approximately 59% of the issued and
outstanding units representing assignments of beneficial
ownership of limited partnership interests in the Adviser
("Units"). As of December 31, 1994, approximately 32% and 9% of
the Units were owned by the public and employees of the Adviser
and its subsidiaries, respectively, including employees of the
Adviser who serve as Directors of the Fund.
AXA owns approximately 60% of the outstanding voting
shares of common stock of ECI. AXA is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations are comprised of
activities in life insurance, property and casualty insurance and
reinsurance. The insurance operations are diverse geographically
with activities in France, the United States, the United Kingdom,
Canada and other countries, principally in Europe. AXA is also
engaged in asset management, investment banking and brokerage,
real estate and other financial services activities in the United
States and Europe. Based on information provided by AXA, as of
January 1, 1995, 42.3% of the issued shares (representing 54.7%
of the voting power) of AXA were owned by Midi Participations, a
French corporation that is a holding company. The voting shares
of Midi Participations are in turn owned 60% by Finaxa, a French
22
<PAGE>
corporation that is a holding company, and 40% by subsidiaries of
Assicurazioni Generali S.p.A., an Italian corporation
("Generali") (one of which, Belgica Insurance Holding S.A., a
Belgian corporation, owned 34.1%). As of January 1, 1995, 62.1%
of the issued shares (representing 75.7% of the voting power) of
Finaxa were owned by five French mutual insurance companies (the
"Mutuelles AXA") (one of which, AXA Assurances I.A.R.D. Mutuelle,
owned 31.8% of the issued shares) (representing 39.0% of the
voting power), and 26.5% of the issued shares (representing 16.6%
of the voting power) of Finaxa were owned by Banque Paribas, a
French bank ("Paribas"). Including the shares owned by Midi
Participations, as of January 1, 1995, the Mutuelles AXA directly
or indirectly owned 51.3% of the issued shares (representing
65.8% of the voting power) of AXA. In addition, certain
subsidiaries of AXA own 0.4% of the shares of AXA which are not
entitled to be voted. Acting as a group, the Mutuelles AXA
control AXA, Midi Participations and Finaxa.
Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Portfolio and pays all compensation of Trustees of the Fund
who are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund, without charge, with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Portfolio pays an advisory fee at the
annual rate of .50 of 1% up to $1.25 billion of the average daily
value of its net assets, .49 of 1% of the next $.25 billion of
such assets, .48 of 1% of the next $.25 billion of such assets,
.47 of 1% of the next $.25 billion of such assets, .46 of 1% of
the next $1 billion of such assets and .45 of 1% of the average
daily net assets of the Portfolio in excess of $3 billion. The
fee is accrued daily and paid monthly. The Adviser will
reimburse the Portfolio to the extent that its net expenses
(excluding taxes, brokerage, interest and extraordinary expenses)
exceed 1% of its average daily net assets for any fiscal year.
In accordance with the Distribution Services Agreement described
below, the Fund may pay a portion of advertising and promotional
expenses in connection with the sale of shares of the Fund. The
Fund also pays for printing of prospectuses and other reports to
shareholders and all expenses and fees related to registration
and filing with the Securities and Exchange Commission and with
state regulatory authorities. The Fund pays all other expenses
incurred in its operations, including the Adviser's management
fees; custody, transfer and dividend disbursing expenses; legal
and auditing costs; clerical, accounting, administrative and
other office costs; fees and expenses of Trustees who are not
affiliated with the Adviser; costs of maintenance of the Fund's
existence; and interest charges, taxes, brokerage fees, and
commissions. As to the obtaining of clerical and accounting
services not required to be provided to the Fund by the Adviser
under the Advisory Agreement, the Fund may employ its own
23
<PAGE>
personnel. For such services, it also may utilize personnel
employed by the Adviser or its affiliates; if so done, the
services are provided to the Fund at cost and the payments
therefore must be specifically approved in advance by the Fund's
Trustees.
The Fund has made arrangements with certain broker-
dealers whose customers are Fund shareholders pursuant to which
the broker-dealers perform shareholder servicing functions, such
as opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays for the electronic communications equipment
maintained at the broker-dealers' offices that permits access to
the Fund's computer files and, in addition, reimburses the
broker-dealers at cost for personnel expenses involved in
providing the services. All such reimbursements must be approved
in advance by the Fund's Trustees.
The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement until June 30, 1995
was approved by the vote, cast in person by all the Trustees of
the Trust who neither were interested persons of the Trust nor
had any direct or indirect financial interest in the Agreement or
any related agreement, at a meeting called for that purpose on
June 13, 1994.
The Advisory Agreement remains in effect from year to
year provided that such continuance is specifically approved at
least annually by a vote of a majority of the outstanding shares
of the Fund or by the Fund's Trustees, including in either case
approval by a majority of the Trustees who are not parties to the
Agreement, or interested persons as defined in the Act. The
Advisory Agreement may be terminated without penalty on 60 days'
written notice at the option of either party or by a vote of the
outstanding voting securities of the Fund; it will automatically
terminate in the event of assignment. The Adviser is not liable
for any action or inaction with regard to its obligations under
the Advisory Agreement as long as it does not exhibit willful
misfeasance, bad faith, gross negligence, or reckless disregard
of its obligations.
DISTRIBUTION SERVICES AGREEMENT
Rule 12b-1 adopted by the Securities and Exchange
Commission under the Act permits an investment company to
directly or indirectly pay expenses associated with the
distribution of its shares in accordance with a duly adopted and
approved plan. The Fund has entered into a Distribution Services
Agreement (the "Agreement") which includes a plan adopted
pursuant to Rule 12b-1 (the "Plan"). Pursuant to the Plan, the
24
<PAGE>
Fund pays to the Adviser a Rule 12b-1 distribution services fee,
which may not exceed an annual rate of .25 of 1% of the Fund's
aggregate average daily net assets. In addition, under the
Agreement the Adviser makes payments for distribution assistance
and for administrative and accounting services from its own
resources which may include the management fee paid by the Fund.
Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including Donaldson, Lufkin & Jenrette Securities
Corporation, an affiliate of the Adviser, for distribution
assistance and to banks and other depository institutions for
administrative and accounting services, and (ii) otherwise
promoting the sale of shares of the Fund such as by paying for
the preparation, printing and distribution of prospectuses and
other promotional materials sent to existing and prospective
shareholders and by directly or indirectly purchasing radio,
television, newspaper and other advertising. In approving the
Agreement, the Trustees determined that there was a reasonable
likelihood that the Agreement would benefit the Fund and its
shareholders.
The administrative and accounting services provided by
broker-dealers, depository institutions and other financial
institutions may include, but are not limited to, establishing
and maintaining shareholder accounts, sub-accounting, processing
of purchase and redemption orders, sending confirmations of
transactions, forwarding financial reports and other
communications to shareholders and responding to shareholder
inquiries regarding the Fund.
The Treasurer of the Fund reports the amounts expended
under the Agreement and the purposes for which such expenditures
were made to the Trustees on a quarterly basis. Also, the
Agreement provides that the selection and nomination of
disinterested Trustees (as defined in the Act) are committed to
the discretion of the disinterested Trustees then in office.
The Agreement became effective on July 22, 1992.
Continuance of the Agreement until June 30, 1995 was approved by
the vote, cast in person by all the Trustees of the Fund who
neither were interested persons of the Fund nor had any direct or
indirect financial interest in the Agreement or any related
agreement, at a meeting called for that purpose on June 13, 1994.
The Agreement may be continued annually thereafter if approved by
a majority vote of the Trustees who neither are interested
persons of the Fund nor have any direct or indirect financial
interest in the Agreement or in any related agreement, cast in
person at a meeting called for that purpose.
25
<PAGE>
All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
increase materially the costs which the Fund may bear pursuant to
the Agreement without the approval of a majority of the
outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of the Fund
or by the Adviser. Any agreement with a qualifying broker-dealer
or other financial intermediary may be terminated without penalty
on not more than 60 days' written notice by a vote of the
majority of non-party Trustees, by a vote of a majority of the
outstanding shares of the Fund, or by the Adviser and will
terminate automatically in the event of its assignment.
The Agreement is in compliance with rules of the
National Association of Securities Dealers, Inc. (the "NASD")
which became effective July 7, 1993 and which limit the annual
asset-based sales charges and service fees that a mutual fund may
impose to .75% and .25%, respectively, of average annual net
assets.
________________________________________________________________
PURCHASE AND REDEMPTION OF SHARES
________________________________________________________________
The Portfolio may refuse any order for the purchase of
shares. The Portfolio reserves the right to suspend the sale of
its shares to the public in response to conditions in the
securities markets or for other reasons.
Shareholders maintaining Portfolio accounts through
brokerage firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Portfolio itself so that the institutions may
properly process such orders prior to their transmittal to State
Street Bank and Trust Company ("State Street Bank"). Should an
investor place a transaction order with such an institution after
its deadline, the institution may not effect the order with the
Portfolio until the next business day. Accordingly, an investor
should familiarize himself or herself with the deadlines set by
his or her institution. For example, the Portfolio's Distributor
accepts purchase orders from its customers up to 2:15 p.m. (New
York time) for issuance at the 4:00 p.m. transaction time and
price. A brokerage firm acting on behalf of a customer in
connection with transactions in Portfolio shares is subject to
the same legal obligations imposed on it generally in connection
26
<PAGE>
with transactions in securities for a customer, including the
obligation to act promptly and accurately.
Orders for the purchase of Portfolio shares become
effective at the next transaction time after Federal funds or
bank wire monies become available to State Street Bank for a
shareholder's investment. Federal funds are a bank's deposits in
a Federal Reserve Bank. These funds can be transferred by
Federal Reserve wire from the account of one member bank to that
of another member bank on the same day and are considered to be
immediately available funds; similar immediate availability is
accorded monies received at State Street Bank by bank wire.
Money transmitted by a check drawn on a member of the Federal
Reserve System is converted to Federal funds in one business day
following receipt. Checks drawn on banks which are not members
of the Federal Reserve System may take longer. All payments
(including checks from individual investors) must be in United
States dollars.
All shares purchased are confirmed to each shareholder
and are credited to his or her account at the net asset value.
To avoid unnecessary expense to the Portfolio and to facilitate
the immediate redemption of shares, share certificates, for which
no charge is made, are not issued except upon the written request
of a shareholder. Certificates are not issued for fractional
shares. Shares for which certificates have been issued are not
eligible for any of the optional methods of withdrawal; namely,
the telephone, telegraph, check-writing or periodic redemption
procedures. The Portfolio reserves the right to reject any
purchase order.
The Portfolio reserves the right to close an account if
it has a balance below $500 for each day of the first two months
of a calendar year. Therefore, unless this has occurred, a
shareholder with a zero balance, when reinvesting, should
continue to use his account number. Otherwise, the account
should be re-opened pursuant to procedures described in the
Prospectus.
A "business day," during which purchases and redemptions
of Portfolio shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Portfolio
purposes as any weekday exclusive of New Year's Day, Washington's
Birthday (observed), Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day and Christmas Day;
if one of these holidays falls on a Saturday or Sunday, purchases
and redemptions will likewise not be processed on the preceding
Friday or the following Monday, respectively. On any such day
that is an official bank holiday in Massachusetts, neither
purchases nor wired redemptions can become effective because
Federal funds cannot be received or sent by State Street Bank.
27
<PAGE>
On such days, therefore, the Portfolio can only accept redemption
orders for which shareholders desire remittance by check. The
right of redemption may be suspended or the date of a redemption
payment postponed for any period during which the New York Stock
Exchange is closed (other than customary weekend and holiday
closings), when trading on the New York Stock Exchange is
restricted, or an emergency (as determined by the Securities and
Exchange Commission) exists, or the Commission has ordered such a
suspension for the protection of shareholders. The value of a
shareholder's investment at the time of redemption may be more or
less than his or her cost, depending on the market value of the
securities held by the Portfolio at such time and the income
earned.
________________________________________________________________
DAILY DIVIDENDS - DETERMINATION OF NET ASSET VALUE
________________________________________________________________
All net income of the Portfolio is determined after the
close of each business day, currently 4:00 p.m. New York time
(and at such other times as the Trustees may determine) and is
paid immediately thereafter pro rata to shareholders of record of
the Portfolio via automatic investment in additional full and
fractional shares in each shareholder's account at the rate of
one share for each dollar distributed. As such additional shares
are entitled to dividends on following days, a compounding growth
of income occurs.
The Portfolio's net income consists of all accrued
interest income on Portfolio assets less expenses allocable to
the Portfolio (including accrued expenses and fees payable to the
Adviser) applicable to that dividend period. Realized gains and
losses are reflected in the Portfolio's net asset value and are
not included in net income. Net asset value per share of the
Portfolio is expected to remain constant at $1.00 since all net
income of the Portfolio is declared as a dividend each time net
income is determined and net realized gains and losses are
expected to be relatively small.
The valuation of the Portfolio's securities is based
upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying 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. During periods of declining interest rates,
the daily yield on shares of the Portfolio may be higher than
that of a fund with identical investments utilizing a method of
28
<PAGE>
valuation based upon market prices for its portfolio instruments;
the converse would apply in a period of rising interest rates.
The Portfolio utilizes the amortized cost method of
valuation of portfolio securities in accordance with the
provisions of Rule 2a-7 under the Act. Pursuant to such rule as
in effect on the date hereof, the Portfolio maintains a dollar-
weighted average portfolio maturity of 90 days or less, purchases
instruments which, at the time of investment, have remaining
maturities of no more than 397 days, and invests only in
securities of high quality. Under Rule 2a-7, the Portfolio
treats a municipal security which has a variable or floating rate
of interest as having a maturity equal to the longer of either
the period, if any, remaining until the interest rate is next
scheduled to be readjusted or the period remaining until the
principal amount can be recovered by exercising the security's
demand feature. The Portfolio maintains procedures designed to
stabilize, to the extent reasonably possible, the price per share
of the Portfolio as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the
Portfolio's holdings by the Trustees at such intervals as they
deem appropriate to determine whether and to what extent the net
asset value of the Portfolio calculated by using available market
quotations or market equivalents deviates from net asset value
based on amortized cost. If such deviation as to the Portfolio
exceeds 1/2 of 1%, the Trustees will promptly consider what
action, if any, should be initiated. In the event the Trustees
determine that such a deviation may result in material dilution
or other unfair results to new investors or existing
shareholders, they will consider corrective action which might
include (1) selling instruments held by the Portfolio prior to
maturity to realize capital gains or losses or to shorten average
portfolio maturity; (2) withholding dividends of net income on
shares of the Portfolio; or (3) establishing a net asset value
per share of the Portfolio by using available market quotations
or equivalents.
The net asset value of the shares of the Portfolio is
determined each business day (and on such other days as the
Trustees deem necessary) at 12:00 Noon and 4:00 p.m. New York
time. The net asset value per share of the Portfolio is
calculated by taking the sum of the value of the Portfolio's
investments and any cash or other assets, subtracting
liabilities, and dividing by the total number of shares of the
Portfolio outstanding. All expenses, including the fees payable
to the Adviser, are accrued daily.
29
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________________________________________________________________
TAXES
________________________________________________________________
FEDERAL INCOME TAX CONSIDERATIONS
The Portfolio intends to qualify to be taxed as a
regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code") and, as such, will not be liable
for Federal income and excise taxes on the net income and capital
gains distributed to its shareholders. Since the Portfolio will
distribute all of its net income and capital gains, the Portfolio
should thereby avoid all Federal income and excise taxes.
For shareholders' Federal income tax purposes,
distributions to shareholders out of tax-exempt interest income
earned by the Portfolio generally are not subject to Federal
income tax. See, however, "Alternative Minimum Tax" above.
Distributions out of taxable interest income, other
investment income, and short-term capital gains are taxable to
shareholders as ordinary income. Since the Portfolio's
investment income is derived from interest rather than dividends,
no portion of such distributions is eligible for the dividends-
received deduction available to corporations. Long-term capital
gains, if any, distributed by the Portfolio to a shareholder are
taxable to the shareholder as long-term capital gain,
irrespective of the length of time he may have held his shares.
Distributions of short and long-term capital gains, if any, are
normally made once each year near calendar year-end, although
such distributions may be made more frequently if necessary in
order to maintain the Portfolio's net asset value at $1.00 per
share.
Interest on indebtedness incurred by shareholders to
purchase or carry shares of the Portfolio is not deductible for
Federal income tax purposes. Under rules of the Internal Revenue
Service for determining when borrowed funds are used for
purchasing or carrying particular assets, shares may be
considered to have been purchased or carried with borrowed funds
even though those funds are not directly linked to the shares.
Further, persons who are "substantial users" (or related persons)
of facilities financed by private activity bonds (within the
meaning of Section 147(a) of the Code) should consult their tax
advisers before purchasing shares of the Portfolio.
Substantially all of the dividends paid by the Portfolio
are anticipated to be exempt from Federal income taxes. Shortly
after the close of each calendar year, a notice is sent to each
shareholder advising him of the total dividends paid into his
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account for the year and the portion of such total that is exempt
from Federal income taxes. This portion is determined by the
ratio of the tax-exempt income to total income for the entire
year and, thus, is an annual average rather than a day-by-day
determination for each shareholder.
STATE TAX CONSIDERATIONS
Dividends paid by the Portfolio to individual Florida
shareholders will not be subject to Florida income tax, which is
imposed only on corporations. However, Florida currently imposes
an "intangible tax" at the rate of $2.00 per $1,000 taxable value
of certain securities, such as shares of the Portfolio, and other
intangible assets owned by Florida residents. U.S. Government
Securities and Florida municipal securities are exempt from this
intangible tax. It is anticipated that the Portfolio's shares
will qualify for exemption from the Florida intangible tax. In
order to so qualify, the Portfolio must, among other things, have
its entire portfolio invested in U.S. Government Securities and
Florida municipal securities on December 31 of any year.
Exempt-interest dividends paid by the Portfolio to corporate
shareholders will be subject to Florida corporate income tax.
________________________________________________________________
GENERAL INFORMATION
________________________________________________________________
PORTFOLIO TRANSACTIONS. Subject to the general
supervision of the Trustees of the Portfolio, the Adviser is
responsible for the investment decisions and the placing of the
orders for portfolio transactions for the Portfolio. Because the
Portfolio invests in securities with short maturities, there is a
relatively high portfolio turnover rate. However, the turnover
rate does not have an adverse effect upon the net yield and net
asset value of the Portfolio's shares since the Portfolio's
transactions occur primarily with issuers, underwriters or major
dealers in money market instruments acting as principals. Such
transactions are normally on a net basis which do not involve
payment of brokerage commissions. The cost of securities
purchased from an underwriter usually includes a commission paid
by the issuer to the underwriters; transactions with dealers
normally reflect the spread between bid and asked prices.
The Portfolio intends to have no obligations to enter
into transactions in portfolio securities with any dealer,
issuer, underwriter or other entity. In placing orders, it is
the policy of the Portfolio to obtain the best price and
execution for its transactions. Where best price and execution
may be obtained from more than one dealer, the Adviser may, in
its discretion, purchase and sell securities through dealers who
31
<PAGE>
provide research, statistical and other information to the
Adviser. Such services may be used by the Adviser for all of its
investment advisory accounts and, accordingly, not all such
services may be used by the Adviser in connection with the
Portfolio. The supplemental information received from a dealer
is in addition to the services required to be performed by the
Adviser under the Advisory Agreement, and the expenses of the
Adviser will not necessarily be reduced as a result of the
receipt of such information. Portfolio securities will not be
purchased from or sold to the Adviser's affiliate, Donaldson,
Lufkin & Jenrette, Inc., or any subsidiary or affiliate of the
parent.
CAPITALIZATION. All shares of the Portfolio, when
issued, are fully paid and non-assessable. The Trustees are
authorized to reclassify and issue any unissued shares to any
number of additional classes or series without shareholder
approval. Accordingly, the Trustees in the future, for reasons
such as the desire to establish one or more additional portfolios
with different investment objectives, policies or restrictions,
may create additional classes or series of shares. Any issuance
of shares of another class would be governed by the Act and the
law of the Commonwealth of Massachusetts. Shares of the
Portfolio are normally entitled to one of vote for all purposes.
Generally, shares of all Portfolios of the Fund vote as a single
series for the election of Trustees and on any other matter
affecting all Portfolios in substantially the same manner. As to
matters affecting each Portfolio differently, such as approval of
the Advisory Agreement and changes in investment policy, shares
of each Portfolio vote as separate classes. Certain procedures
for the removal by shareholders of trustees of investment trusts,
such as the Portfolio, are set forth in Section 16(c) of the Act.
SHAREHOLDER LIABILITY. Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Portfolio. However,
the Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Portfolio and requires
that the Trustees use their best efforts to ensure that notice of
such disclaimer be given in each note, bond, contract,
instrument, certificate or undertaking made or issued by the
trustees or officers of the Portfolio. The Agreement and
Declaration of Trust provides for indemnification out of the
property of the Portfolio for all loss and expense of any
shareholder of the Portfolio held personally liable for the
obligations of the Portfolio. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Portfolio would be unable
to meet its obligations. In the view of the Adviser, such risk
is not material.
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LEGAL MATTERS. The legality of the shares offered
hereby has been passed upon by Seward & Kissel, One Battery Park
Plaza, New York, New York, counsel for the Portfolio and the
Adviser. Seward & Kissel has relied upon the opinion of Sullivan
& Worcester, Boston, Massachusetts, for matters relating to
Massachusetts law.
ACCOUNTANTS. An opinion relating to the Portfolio's
financial statements is given herein by McGladrey & Pullen, New
York, New York, independent auditors for the Portfolio.
YIELD QUOTATIONS AND PERFORMANCE INFORMATION.
Advertisements containing yield quotations for the Portfolio may
from time to time be sent to investors or placed in newspapers,
magazines or other media on behalf of the Portfolio. These
advertisements may quote performance rankings, ratings or data
from independent organizations or financial publications such as
Lipper Analytical Services, Inc., Morningstar, Inc., IBC's Money
Fund Report, IBC's Money Market Insight or Bank Rate MonitorTM or
compare the Portfolio's performance to bank money market deposit
accounts, certificates of deposit or various indices. Yield
quotations are calculated in accordance with the standardized
method referred to in Rule 482 under the Securities Act of 1933.
Yield quotations for the Portfolio are thus determined
by (i) computing the net change over a seven-day period,
exclusive of the capital changes, in the value of a hypothetical
pre-existing account having a balance of one share of the
Portfolio at the beginning of such period, (ii) dividing the net
change in account value by the value of the account at the
beginning of the base period to obtain the base period return,
and (iii) multiplying the base period return by (365/7) with the
resulting yield figure carried to the nearest hundredth of one
percent. The Portfolio's effective annual yield represents a
compounding of the annualized yield according to the formula:
effective yield = [(base period return + 1) 365/7] - 1.
Depending on an investor's tax bracket, an investor may
earn a substantially higher after-tax return from the Portfolio
than from comparable investments whose income is taxable. A 5%
tax-exempt yield of the Portfolio for such an investor in the top
1994 Federal and Florida income tax brackets would be equivalent
to a taxable yield of [ ]%.
PERIODIC DISTRIBUTION PLANS. Without affecting
shareholders' right of using any of the methods of redemption
described above, by checking the appropriate boxes on the
Application Form shareholders may elect to participate
additionally in the following plans without any separate charge.
Under the Income Distribution Plan shareholders receive monthly
33
<PAGE>
payments of all the income earned in his or her Portfolio
account, with payments forwarded shortly after the close of the
month. Under the Systematic Withdrawal Plan, shareholders may
request checks in any specified amount of $50 or more each month
or in any intermittent pattern of months. If desired,
shareholders can order, via signature-guaranteed letter to the
Portfolio, such periodic payments to be sent to another person.
REPORTS. You will receive semi-annual and annual
reports of the Portfolio as well as a monthly summary of your
account. You can arrange for a copy of each of your account
statements to be sent to other parties.
ADDITIONAL INFORMATION. This Statement of Additional
Information does not contain all the information set forth in the
Registration Statement filed by the Portfolio with the Securities
and Exchange Commission under the Securities Act of 1933. Copies
of the Registration Statement may be obtained at a reasonable
charge from the Commission or may be examined, without charge, at
the Commission's offices in Washington, D.C.
34
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________________________________________________________________
APPENDIX A
DESCRIPTION OF MUNICIPAL SECURITIES
________________________________________________________________
MUNICIPAL NOTES generally are used to provide for short-
term capital needs and usually have maturities of one year or
less. They include the following:
1. PROJECT NOTES, which carry a U.S. Government
guarantee, are issued by public bodies (called
"local issuing agencies") created under the laws of
a state, territory, or U.S. possession. They have
maturities that range up to one year from the date
of issuance. Project Notes are backed by an
agreement between the local issuing agency and the
Federal Department of Housing and Urban
Development. These Notes provide financing for a
wide range of financial assistance programs for
housing, redevelopment, and related needs (such as
low-income housing programs and renewal programs).
2. TAX ANTICIPATION NOTES are issued to finance
working capital needs of municipalities.
Generally, they are issued in anticipation of
various seasonal tax revenues, such as income,
sales, use and business taxes, and are payable from
these specific future taxes.
3. REVENUE ANTICIPATION NOTES are issued in
expectation of receipt of other types of revenues,
such as Federal revenues available under the
Federal Revenue Sharing Programs.
4. BOND ANTICIPATION NOTES are issued to provide
interim financing until long-term financing can be
arranged. In most cases, the long-term bonds then
provide the money for the repayment of the Notes.
5. CONSTRUCTION LOAN NOTES are sold to provide
construction financing. After successful
completion and acceptance, many projects receive
permanent financing through the Federal Housing
Administration under the Federal National Mortgage
Association or the Government National Mortgage
Association.
6. TAX-EXEMPT COMMERCIAL PAPER is a short-term
obligation with a stated maturity of 365 days or
less. It is issued by agencies of state and local
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governments to finance seasonal working capital
needs or as short-term financing in anticipation of
longer term financing.
MUNICIPAL BONDS, which meet longer term capital needs
and generally have maturities of more than one year when issued,
have three principal classifications:
1. GENERAL OBLIGATION BONDS are issued by such
entities as states, counties, cities, towns, and
regional districts. The proceeds of these
obligations are used to fund a wide range of public
projects, including construction or improvement of
schools, highways and roads, and water and sewer
systems. The basic security behind General
Obligation Bonds is the issuer's pledge of its full
faith and credit and taxing power for the payment
of principal and interest. The taxes that can be
levied for the payment of debt service may be
limited or unlimited as to the rate or amount of
special assessments.
2. REVENUE BONDS generally are secured by the net
revenues derived from a particular facility, group
of facilities, or, in some cases, the proceeds of a
special excise or other specific revenue source.
Revenue Bonds are issued to finance a wide variety
of capital projects including electric, gas, water
and sewer systems; highways, bridges, and tunnels;
port and airport facilities; colleges and
universities; and hospitals. Many of these Bonds
provide additional security in the form of a debt
service reserve fund to be used to make principal
and interest payments. Housing authorities have a
wide range of security, including partially or
fully insured mortgages, rent subsidized and/or
collateralized mortgages, and/or the net revenues
from housing or other public projects. Some
authorities provide further security in the form of
a state's ability (without obligation) to make up
deficiencies in the debt service reserve fund.
3. INDUSTRIAL DEVELOPMENT BONDS are considered
municipal bonds if the interest paid thereon is
exempt from Federal income tax and are issued by or
on behalf of public authorities to raise money to
finance various privately operated facilities for
business and manufacturing, housing, sports, and
pollution control. These Bonds are also used to
finance public facilities such as airports, mass
transit systems, ports, and parking. The payment
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of the principal and interest on such Bonds is
dependent solely on the ability of the facility's
user to meet its financial obligations and the
pledge, if any, of real and personal property as
security for such payment.
A-3
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________________________________________________________________
APPENDIX B
DESCRIPTION OF SECURITIES RATINGS
________________________________________________________________
MUNICIPAL AND CORPORATE
BONDS AND MUNICIPAL LOANS
The two highest ratings of Moody's Investors Service,
Inc. ("Moody's") for municipal and corporate bonds are Aaa and
Aa. Bonds rated Aaa are judged by Moody's to be of the best
quality. Bonds rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are
generally known as high-grade bonds. Moody's states that Aa
bonds are rated lower than the best bonds because margins of
protection or other elements make long-term risks appear somewhat
larger than Aaa securities. The generic rating Aa may be
modified by the addition of the numerals 1, 2 or 3. The modifier
1 indicates that the security ranks in the higher end of the Aa
rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower
end of such rating category.
The two highest ratings of Standard & Poor's Corporation
("Standard & Poor's") for municipal and corporate bonds are AAA
and AA. Bonds rated AAA have the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest
and repay principal is extremely strong. Bonds rated AA have a
very strong capacity to pay interest and repay principal and
differ from the highest rated issues only in a small degree. The
AA rating may be modified by the addition of a plus (+) or minus
(-) sign to show relative standing within that rating category.
SHORT-TERM MUNICIPAL LOANS
Moody's highest rating for short-term municipal loans is
MIG-1/VMIG-1. Moody's states that short-term municipal
securities rated MIG-1/VMIG-1 are of the best quality, enjoying
strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG-2/VMIG-2
designation are of high quality, with margins of protection ample
although not so large as in the MIG-1/VMIG-1 group.
Standard & Poor's highest rating for short-term
municipal loans is SP-1. Standard & Poor's states that short-
term municipal securities bearing the SP-1 designation have very
strong or strong capacity to pay principal and interest. Those
issues rated SP-1 which are determined to possess overwhelming
safety characteristics will be given a plus (+) designation.
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Issues rated SP-2 have satisfactory capacity to pay principal and
interest.
OTHER MUNICIPAL SECURITIES AND COMMERCIAL PAPER
"Prime-1" is the highest rating assigned by Moody's for
other short-term municipal securities and commercial paper, and
"A-1+" and "A-1" are the two highest ratings for commercial paper
assigned by Standard & Poor's (Standard & Poor's does not rate
short-term tax-free obligations). Moody's uses the numbers 1, 2
and 3 to denote relative strength within its highest
classification of "Prime", while Standard & Poor's uses the
number 1+, 1, 2 and 3 to denote relative strength within its
highest classification of "A". Issuers rated "Prime" by Moody's
have the following characteristics: their short-term debt
obligations carry the smallest degree of investment risk, margins
of support for current indebtedness are large or stable with cash
flow and asset protection well assured, current liquidity
provides ample coverage of near-term liabilities and unused
alternative financing arrangements are generally available.
While protective elements may change over the intermediate or
longer term, such changes are most unlikely to impair the
fundamentally strong position of short-term obligations.
Commercial paper issuers rated "A" by Standard & Poor's have the
following characteristics: liquidity ratios are better than
industry average, long-term debt rating is A or better, the
issuer has access to at least two additional channels of
borrowing, and basic earnings and cash flow are in an upward
trend. Typically, the issuer is a strong company in a well-
established industry and has superior management.
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<PAGE>
Statement of Additional Information for Alliance Municipal
Trust - Incorporated by reference to Alliance Municipal
Trust Statement of Additional Information in Post-Effective
Amendment No. 29 of Registration Statement on Form N-1A
(File No. 2-79807), filed May 8, 1995 and Post-Effective
Amendment No. 28 of Registration Statement on Form N-1A
(File No. 2-79807), filed September 28, 1994.
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits for the Fund
(a) FINANCIAL HIGHLIGHTS
Included in the Prospectus Condensed Financial
Information
Included in the Statement of Additional Information
Statement of Net Assets for period ended -
March 31, 1995 (unaudited)
Statement of Operations for period
October 25, 19941 to March 31, 1995 (unaudited)
Statement of Changes in Net Assets for
October 25, 19941 to March 31, 1995 (unaudited)
Notes to Financial Highlights - March 31, 1995
(unaudited)
Included in Part C of the Registration Statement
All other schedules are omitted as the required
information is inapplicable
(b) EXHIBITS
(1) Declaration of Trust - Incorporated by reference to
Exhibit No. 1 to Post-Effective Amendment No. 4 of
Registration Statement on Form N-1A (File No. 2-79807)
(the "Registrant's Form N-1A"), filed April 29, 1985.
(2) By-Laws - Incorporated by reference to Exhibit No. 2
to Post-Effective Amendment No. 4 of the Registrant's
Form N-1A, filed April 29, 1985.
(3) Not applicable.
(4) Specimen Forms of Certificate for Shares of Beneficial
Interest of the General and New York Portfolio -
Incorporated by reference to Exhibit No. 4 to Post-
Effective Amendment No. 7, filed July 10, 1986; for
the California Portfolio - Incorporated by reference
to Exhibit No. 4 to Post-Effective Amendment No. 10
filed March 9, 1988; and for the Connecticut Portfolio
- Incorporated by reference to Exhibit No. 4 to Post-
Effective Amendment No. 17 filed October 24, 1989.
____________________
1. Commencement of operations.
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(4)(b) Specimen Form of Certificate for Shares of Beneficial
Interest of the New Jersey Portfolio - Incorporated by
reference to Exhibit No. 4 to Post-Effective Amendment
No. 25, filed November 30, 1993.
(4)(c) Specimen Form of Certificate for Shares of Beneficial
Interest of the Virginia Portfolio - Incorporated by
reference to Post-Effective Amendment No. 26, filed
July 18, 1994.
(4)(d) Specimen Form of Certificate for Shares of Beneficial
Interest of the Florida Portfolio - Filed herewith.
(5) Copy of Advisory Agreement between the Registrant and
Alliance Capital Management L.P. - Incorporated by
reference to Exhibit 5(b) to Post-Effective Amendment
No. 22 of the Registrant's Form N-1A, filed October
13, 1992.
(6)(b) Copy of Distribution Services Agreement between the
Registrant and Alliance Fund Distributors, Inc. -
Incorporated by reference to Exhibit 6(b) to Post-
Effective Amendment No. 22 of the Registrant's Form N-
1A, filed October 13, 1992.
(7) Not applicable.
(8) Copy of Custodian Contract between the Registrant and
State Street Bank and Trust Company incorporated by
reference to Exhibit No. 8 to Post-Effective Amendment
No. 4 of the Registrant's Form N-1A, filed April 29,
1985.
(9) Copy of Transfer Agency Agreement between the
Registrant and Alliance Fund Services, Inc. -
Incorporated by reference to Exhibit No. 9 to Post-
Effective Amendment No. 14 filed February 15, 1989.
(10) (a) Opinion of Messrs. Seward & Kissel - Incorporated
by reference to Exhibit No. 10 to Pre-Effective
Amendment No. 1 to Registrant's Registration Statement
on Form N-1 (Pre-Effective Amendment No. 1).
(b) Opinion of Messrs. Venable, Baetjer and Howard -
Incorporated by reference to Exhibit No. 10(b) to Pre-
Effective Amendment No. 1.
(11) Not applicable.
(12) Not applicable.
C-2
<PAGE>
(13) Not applicable.
(14) Not applicable.
(15) Rule 12b-1 Plan - See Exhibit 6 hereto.
(16) Schedule of Computation of Performance Quotation
Provided in Response to Item 22 - Incorporated by
reference to Exhibit No. 16 to Post-Effective
Amendment No. 22 of the Registrant's Statement on
Form N-1A, filed October 13, 1992.
OTHER EXHIBITS:
Powers of Attorney of: John D. Carifa, Charles H. P.
Duell, William H. Foulk, Jr., Elizabeth J. McCormack,
David K. Storrs, Dave H. Williams, John Winthrop -
Incorporated by reference to Other Exhibits to Post-
Effective Amendment No. 14 of the Registrant's
Statement on Form N-1A, filed on February 15, 1989.
Powers of Attorney of: Sam Y. Cross and Shelby White
- Incorporated by reference to Other Exhibits to Post-
Effective Amendment No. 22 of the Registrant's
Statement on Form N-1A, filed October 13, 1992.
ITEM 25. Persons Controlled by or Under Common Control with
Registrant.
None.
ITEM 26. Number of Holders of Securities.
Registrant had, as of May 3, 1995, the following
record holders of shares of Beneficial Interest:
General Portfolio 25,233
New York Portfolio 4,185
California Portfolio 5,109
Connecticut Portfolio 1,723
New Jersey Portfolio 2,668
Virginia Portfolio 1,262
ITEM 27. Indemnification
It is the Registrant's policy to indemnify its
trustees and officers, employees and other agents as
set forth in Article V of Registrant's Agreement and
Declaration of Trust, filed as Exhibit 1 in response
to Item 24 and Section 7 of the Distribution Agreement
filed as Exhibit 6 in response to Item 24, all as set
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forth below. The liability of the Registrant's
trustees and officers is also dealt with in Article V
of Registrant's Agreement and Declaration of Trust.
The Adviser's liability for loss suffered by the
Registrant or its shareholders is set forth in Section
4 of the Advisory Agreement filed as Exhibit 5 in
response to Item 24, as set forth below.
Article V of Registrant's Agreement and Declaration of
Trust reads as follows:
SECTION 5.1 - NO PERSONAL LIABILITY OF SHAREHOLDERS,
TRUSTEES, ETC.
No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with
Trust Property, including the property of any series
of the Trust, or the acts, obligations or affairs of
the Trust or any series thereof. No Trustee, officer,
employee or agent of the Trust shall be subject to any
personal liability whatsoever to any Person, other
than the Trust or applicable series thereof or its
Shareholders, in connection with Trust Property or the
property of any series thereof or the affairs of the
Trust or any series thereof, save only that arising
from bad faith, willful misfeasance, gross negligence
or reckless disregard for his duty to such Person; and
all such Persons shall look solely to the Trust
Property or the property of the appropriate series of
the Trust for satisfaction of claims of any nature
arising in connection with the affairs of the Trust or
any series thereof. If any Shareholder, Trustee,
officer, employee or agent, as such, of the Trust is
made a party to any suit or proceeding to enforce any
such liability, he shall not, on account thereof, be
held to any personal liability. The Trust shall
indemnify and hold each Shareholder harmless from and
against all claims by reason of his being or having
been a Shareholder, and shall reimburse such
Shareholder for all legal and other expenses
reasonably incurred by him in connection with any such
claim or liability, provided that any such expenses
shall be paid solely out of the funds and property of
the series of the Trust with respect to which such
Shareholder's Shares are issued. The rights accruing
to a Shareholder under this Section 5.1 shall not
exclude any other right to which such Shareholder may
be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify
or reimburse a Shareholder in any appropriate
situation even though not specifically provided
herein.
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SECTION 5.2 - NON-LIABILITY OF TRUSTEES, ETC.
No Trustee, officer, employee or agent of the Trust
shall be liable to the Trust, its Shareholders, or to
any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including
without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of
trust) except for his own bad faith, willful
misfeasance, gross negligence or reckless disregard of
his duties.
SECTION 5.3 - INDEMNIFICATION.
(a) The Trustees shall provide for indemnification by
the Trust (or by the appropriate series thereof) of
every person who is, or has been, a Trustee or officer
of the Trust against all liability and against all
expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in
the settlement thereof, in such manner as the Trustees
may provide from time to time in the By-Laws.
(b) The words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits
or proceedings (civil, criminal, or other, including
appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts
paid in settlement, fines, penalties and other
liabilities.
SECTION 5.4 - NO BOND REQUIRED OF TRUSTEES.
No Trustee shall be obligated to give any bond or
other security for performance of any of his duties
hereunder.
SECTION 5.5 - NO DUTY OF INVESTIGATION; NOTICE IN
TRUST INSTRUMENTS, INSURANCE.
No purchaser, lender, transfer agent or other Person
dealing with the Trustees or any officer, employee or
agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting
to be made by the Trustees or by said officer,
employee or agent or be liable for the application of
money or property paid, loaned, or delivered to or on
the order of the Trustees or of said officer, employee
or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever
C-5
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executed in connection with the Trust shall be
conclusively presumed to have been executed or done by
the executors thereof only in their capacity as
Trustees under the Declaration or in their capacity as
officers, employees or agents of the Trust. Every
written obligation, contract, instrument, certificate,
Share, other security of the Trust or undertaking made
or issued by the Trustees shall recite that the same
is executed or made by them not individually, but as
Trustees under the Declaration, and that the
obligations of any such instrument are not binding
upon any of the Trustees or Shareholders,
individually, but bind only the Trust Property or the
property of the appropriate series of the Trust, and
may contain any further recital which they or he may
deem appropriate, but the omission of such recital
shall not operate to bind the Trustees or Shareholders
individually. The Trustees shall at all times
maintain insurance for the protection of the Trust
Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees
shall deem adequate to cover possible tort liability,
and such other insurance as the Trustees in their sole
judgment shall deem advisable.
SECTION 5.6 - RELIANCE ON EXPERTS, ETC.
Each Trustee and officer or employee of the Trust
shall, in the performance of his duties, be fully and
completely justified and protected with regard to any
act or any failure to act resulting from reliance in
good faith upon the books of account or other records
of the Trust, upon an opinion of counsel or upon
reports made to the Trust by any of its officers or
employees or by the Investment Adviser, the
Distributor, Transfer Agent, selected dealers,
accountants, appraisers or other experts or
consultants selected with reasonable care by the
Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may also
be a Trustee.
The Advisory Agreement between Registrant and Alliance
Capital Management L.P. provides that Alliance Capital
Management L.P. will not be liable under such
agreement for any mistake of judgment or in any event
whatsoever except for lack of good faith and that
nothing therein shall be deemed to protect, or purport
to protect, Alliance Capital Management L.P. against
any liability to Registrant or its security holders to
which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in
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the performance of its duties thereunder, or by reason
of reckless disregard of its obligations and duties
thereunder.
The Distribution Agreement between the Registrant and
Alliance Fund Distributors, Inc. provides that the
Registrant will indemnify, defend and hold Alliance
Fund Distributors, Inc., and any person who controls
it within the meaning of Section 15 of the Investment
Company Act of 1940, free and harmless from and
against any and all claims, demands, liabilities and
expenses which Alliance Fund Distributors, Inc. or any
controlling person may incur arising out of or based
upon any alleged untrue statement of a material fact
contained in Registrant's Registration Statement or
Prospectus or Statement of Additional Information or
arising out of, or based upon any alleged omission to
state a material fact required to be stated in or
necessary to make the statements in either thereof not
misleading; provided, however that nothing therein
shall be so construed as to protect Alliance Fund
Distributors, Inc. against any liability to the
Registrant or its security holders to which it would
otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of
its duties thereunder, or by reason of reckless
disregard of its obligations and duties thereunder.
The foregoing summaries are qualified by the entire
text of Registrant's Agreement and Declaration of
Trust, the Advisory Agreement between Registrant and
Alliance Capital Management L.P. and the Distribution
Agreement between Registrant and Alliance Fund
Distributors, Inc.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to trustees,
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 the Securities 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 trustee, officer or controlling person of
the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection
with the securities being registered, the Registrant
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<PAGE>
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 of
whether such indemnification by it is against public
policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
In accordance with Release No. IC-11330 (September 2,
1980) the Registrant will indemnify its directors,
officers, investment manager and principal
underwriters only if (1) a final decision on the
merits was issued by the court or other body before
whom the proceeding was brought that the person to be
indemnified (the "indemnitee") was not liable by
reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling
conduct") or (2) a reasonable determination is made,
based upon a review of the facts, that the indemnitee
was not liable of disabling conduct, by (a) the vote
of a majority of a quorum of the directors who are
neither "interested persons" of the Registrant as
defined in section 2(a)(19) of the Investment Company
Act of 1940 nor parties to the proceeding
("disinterested, non-party directors"), or (b) an
independent legal counsel in a written opinion. The
Registrant will advance attorneys fees or other
expenses incurred by its directors, officers,
investment adviser or principal underwriters in
defending a proceeding, upon the undertaking by or on
behalf of the indemnitee to repay the advance unless
it is ultimately determined that he is entitled to
indemnification and, as a condition to the advance,
(1) the indemnitee shall provide a security for his
undertaking, (2) the Registrant shall be insured
against losses arising by reason of any lawful
advances, or (3) a majority of a quorum of
disinterested, non-party directors of the Registrant,
or an independent legal counsel in a written opinion,
shall determine, based on a review of readily
available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the
indemnitee ultimately will be found entitled to
indemnification.
The Registrant participates in a joint directors and
officers liability insurance policy issued by the ICI
Mutual Insurance Company. Coverage under this policy
has been extended to directors, trustees and officers
of the investment companies managed by Alliance
Capital Management L.P. Under this policy, outside
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trustees and directors would be covered up to the
limits specified for any claim against them for acts
committed in their capacities as trustee or director.
A pro rata share of the premium for this coverage is
charged to each investment company.
ITEM 28. Business and Other Connections of Investment Adviser.
The descriptions of Alliance Capital Management L.P.
under the caption "The Adviser" in the Prospectus and
"Management of the Fund" in the Prospectus and in the
Statement of Additional Information constituting Parts
A and B, respectively, of this Registration Statement
are incorporated by reference herein.
The information as to the directors and executive
officers of Alliance Capital Management Corporation,
the general partner of Alliance Capital Management
L.P., set forth in Alliance Capital Management L.P.'s
Form ADV filed with the Securities and Exchange
Commission on April 21, 1988 (File No. 801-32361) and
amended through the date hereof, is incorporated by
reference.
Item 29. Principal Underwriters
(a) Alliance Fund Distributors, Inc., the
Registrant's Principal Underwriter in connection
with the sale of shares of the Registrant, also
acts as Principal Underwriter for the following
registered investment companies:
ACM Institutional Reserves, Inc.
AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Counterpoint Fund
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Government Reserves
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Mortgage Strategy Trust, Inc.
Alliance Multi-Market Strategy Trust, Inc.
C-9
<PAGE>
Alliance Municipal Income Fund II
Alliance Municipal Income Fund, Inc.
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
Fiduciary Management Associates
The Alliance Fund, Inc.
The Alliance Portfolios
The Hudson River Trust
(b) The following are the Directors and Officers of
Alliance Fund Distributors, Inc. the principal
place of business of which is 1345 Avenue of the
Americas, New York, New York, 10105.
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT
____ ____________ ______________
Michael J. Laughlin Chairman
Robert L. Errico President
Kimberly A. Baumgardner Senior Vice President
Daniel J. Dart Senior Vice President
Byron M. Davis Senior Vice President
Mark D. Gersten Senior Vice President Treasurer and
Chief Financial
Officer
Geoffrey L. Hyde Senior Vice President
Robert H. Joseph Senior Vice President
and Treasurer
Barbara J. Krumsiek Senior Vice President
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<PAGE>
William F. O'Grady Senior Vice President
Dusty W. Paschall Senior Vice President
Antonios G. Poleonadkis Senior Vice President
Gregory K. Shannahan Senior Vice President
James P. Syrett Senior Vice President
Peter J. Szabo Senior Vice President
Richard A. Winge Senior Vice President
Jim A. Yockey Senior Vice President
Edmund P. Bergan, Jr. Senior Vice President, Secretary
Secretary and
General Counsel
Michael T. Anderson Vice President
Kenneth F. Barkoff Vice President
Kevin T. Cannon Vice President
Mark J. Dunbar Vice President
Linda A. Finnerty Vice President
Robert M. Frank Vice President
Gerard J. Friscia Vice President
Troy L. Glawe Vice President
James E. Gunter Vice President
Alan Halfenger Vice President
Steven P. Hecht Vice President
George R. Hrabovsky Vice President
Valerie J. Hugo Vice President
Mark H. Huston Vice President
Marek E. Lakotko Vice President
Sheila M. Lamb Vice President
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<PAGE>
Stephen R. Laut Vice President
Thomas Leavitt, III Vice President
Christopher J. MacDonald Vice President
John A. McClain Vice President
Gregory T. McCombs Vice President
Daniel D. McGinley Vice President
Matthew P. Mintzer Vice President
Nicole M. Nolan Vice President
Robert T. Pigozzi Vice President
Bruce W. Reitz Vice President
Dennis A. Sanford Vice President
Joseph F. Sumanski Vice President
Richard E. Tambourine Vice President
Nicholas K. Willett Vice President
Warren W. Babcock III Assistant Vice President
Benji A. Baer Assistant Vice President
Casimir F. Bolanowski Assistant Vice President
Maria L. Carreras Assistant Vice President
Leo H. Cook Assistant Vice President
John W. Cronin Assistant Vice President
Richard W. Dabney Assistant Vice President
Gerard P. DiSalvo Assistant Vice President
Sohaila S. Farsheed Assistant Vice President
Leon M. Fern Assistant Vice President
William C. Fisher Assistant Vice President
Joseph W. Gibson Assistant Vice President
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<PAGE>
William B. Hanigan Assistant Vice President
Alan C. Hanson Assistant Vice President
Vicky M. Hayes Assistant Vice President
Daniel M. Hazard Assistant Vice President
John C. Hershock Assistant Vice President
James J. Hill Assistant Vice President
Kenneth R. Hill Assistant Vice President
Thomas K. Intoccia Assistant Vice President
Edward W. Kelly Assistant Vice President
Donna M. Lamback Assistant Vice President
David P. Lambert Assistant Vice President
Nicholas J. Lapi Assistant Vice President
Michael F. Mahoney Assistant Vice President
Renate S. Mars Assistant Vice President
Daniel G. McCabe Assistant Vice President
Shawn P. McClain Assistant Vice President
Maura A. McGrath Assistant Vice President
Paul J. McIntyre Assistant Vice President
Charles R. Mechler Assistant Vice President
Thomas F. Monnerat Assistant Vice President
Joanna D. Murray Assistant Vice President
Jeanette M. Nardella Assistant Vice President
William E. Noe Assistant Vice President
Marilyn I. Noonan Assistant Vice President
Camilo R. Pedraza Assistant Vice President
Robert E. Powers Assistant Vice President
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<PAGE>
Patrick J. Pung Assistant Vice President
Carol H. Rappa Assistant Vice President
Karen C. Satterberg Assistant Vice President
Raymond S. Scalfani Assistant Vice President
Rodney J. Schull Assistant Vice President
Robert M. Smith Assistant Vice President
William J. Strott Assistant Vice President
Joseph T. Tocyloski Assistant Vice President
Neil B. Wood Assistant Vice President
Mark R. Manley Assistant Secretary
(c) Not applicable.
ITEM 30. Location of Accounts and Records.
The majority of the accounts, books and other
documents required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and the Rules
thereunder are maintained as follows: journals,
ledgers, securities records and other original records
are maintained principally at the offices of Alliance
Fund Services, Inc. 500 Plaza Drive, Secaucus, New
Jersey 07094-1520 and at the offices of State Street
Bank and Trust Company, the Registrant's Custodian,
225 Franklin Street, Boston, Massachusetts 02110. All
other records so required to be maintained are
maintained at the offices of Alliance Capital
Management L.P., 1345 Avenue of the Americas, New
York, New York 10105.
ITEM 31. Management Services.
Not applicable.
ITEM 32. Undertakings.
The Registrant undertakes to file a Post-Effective
Amendment, using financial statements which need not
be certified, within four to six months from the
effective dated of its Securities Act of 1933
Registration Statement.
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<PAGE>
The Registrant undertakes to furnish each person to
whom a prospectus is delivered a copy of the
Registrant's latest report to shareholders, upon
request and without charge.
The Registrant undertakes to provide assistance to
shareholders in communications concerning the removal
of any Trustee of the Fund in accordance with Section
16 of the Investment Company Act of 1940.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
the Registrant certifies that it meets all of the requirements
for effectiveness of this Amendment to its Registration pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its 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 23 day of May
1995.
ALLIANCE MUNICIPAL TRUST
by /s/ Ronald M. Whitehill
__________________________
Ronald M. Whitehill
President
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Amendment to the Registration Statement has been
signed below by the following persons in the capacities and on
the dates indicated:
SIGNATURE TITLE DATE
_________ _____ ____
1) Principal
Executive Officer
/s/ Ronald M. Whitehill President May 23, 1995
_______________________
Ronald M. Whitehill
2) Principal Financial and
Accounting Officer
/s/ Mark D. Gersten Treasurer May 23, 1995
_______________________ and Chief
Mark D. Gersten Financial
Officer
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3) ALL OF THE TRUSTEES
_______________________
John D. Carifa David K. Storrs
Sam Y. Cross Shelby White
Charles H.P. Duell Dave H. Williams
William H. Foulk, Jr. John Winthrop
Elizabeth J. McCormack
by /s/ Edmund P. Bergan, Jr. May 23, 1995
________________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.
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Index to Exhibits
__________________
PAGE
(4)(d) Specimen form of Share Certificate
for Alliance Municipal Trust - Florida
Portfolio
C-18
00250221.AB0
<PAGE>
ALLIANCE MUNICIPAL TRUST
FLORIDA PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
PAR VALUE $.01 PER SHARE
NUMBER SHARES
ACCOUNT NO. ALPHA CODE CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS CERTIFIES THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, PAR VALUE OF $.01 PER SHARE, IN ALLIANCE MUNICIPAL
TRUST - FLORIDA PORTFOLIO under, in accordance with, and subject
to all the provisions of, an Agreement and Declaration of Trust
dated April 16, 1985 a copy of which has been filed with the
Secretary of The Commonwealth of Massachusetts, to all of which
provisions, as the same may be in effect from time to time, the
holder and every transferee and assignee hereof agrees by the
acceptance of this share certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Agreement
and Declaration of Trust, acting not individually, but as such
Trustees, have caused to be affixed to this certificate the
facsimile Seal of the Trust and the facsimile signature of two
duly authorized officers of the Trust, acting not individually,
but as such officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MUNICIPAL TRUST
FLORIDA PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MUNICIPAL
TRUST - FLORIDA PORTFOLIO as provided by said Agreement and
Declaration of Trust, which is incorporated by reference herein.
In particular, the shares represented by this certificate are
transferable on the records of the Trust (other than by operation
of law) only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon surrender of the
certificate thereof, properly endorsed or accompanied by duly
executed instruments of transfer.
The name ALLIANCE MUNICIPAL TRUST - FLORIDA PORTFOLIO is
the designation of the Trustees for the time being under an
Agreement and Declaration of Trust dated April 16, 1985, and the
holder and every transferee and assignee of the certificate shall
be conclusively deemed to have agreed to look solely to the
property of the Florida Portfolio (a Series of Alliance Municipal
Trust) for the enforcement of any claims as such holder,
transferee or assignee, as neither the Trustees, officers, agents
or shareholders assume any personal liability for obligations
entered into on behalf of ALLIANCE MUNICIPAL TRUST - FLORIDA
PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MUNICIPAL TRUST - FLORIDA
PORTFOLIO represented by the within Certificate and do hereby
irrevocably constitute and appoint _____________________________
Attorney, to transfer the said Shares on the books of the said
Trust with full power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank of Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250221.AB1
