DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus California
Tax Exempt Bond Fund, Inc. For its annual reporting period ended May 31,
1996, your Fund produced a total return of 1.58%.* Income dividends exempt
from Federal and State of California personal income taxes of approximately
$.770 per share were paid** which is equivalent to an annualized tax-free
distribution rate per share of 5.48%.***
THE ECONOMY
Recent economic reports show that the economy continues to recover from
its year-end 1995 pause. Spurred by a surge in consumer and business
spending, the annualized gross domestic product grew at a moderate 2.3%
during the first quarter of this year. Suggesting further strength, a major
forecasting index, the Index of Leading Economic Indicators, extended its
string of increases for the third consecutive month in April, the first such
three-month advance since late 1993. Despite a sharp jump in energy prices,
inflation remained in check. For the twelve months ended May 31, consumer
prices rose 2.9%. Giving further evidence of moderating prices, a survey
released in May by the National Business Council revealed greater difficulty
for major industrial companies to raise prices now than six months ago.
Despite the relatively benign level of inflation, the economy's expansion
has sparked concerns that the Federal Reserve Board could raise short-term
interest rates. In reaction to this possibility, long-term rates have risen
since the beginning of the year. So far, the Fed has refrained from
tightening monetary policy, apparently interpreting economic data to mean
that the economy remains on a path of moderate growth unaccompanied by a
surge in inflation. However, the strong May employment data has caused some
investors to fear that the Fed will not remain inactive for long. There is
now a greater consensus view that the Fed will tighten credit soon in order
to prevent unacceptable levels of inflation from coming on the heels of
economic growth.
Consumers, who account for over two-thirds of our country's Gross
Domestic Product (GDP), are vital contributors to economic growth. So far,
they have continued to spend, setting aside concerns about job security and
stagnating real wages in favor of current consumption. New-home sales, an
important component of consumer spending, continued to post gains throughout
the reporting period, and are up 28% since April of last year. Retail sales
in general are 6% above year-ago levels. Additional encouragement to
consumers occurred when the Labor Department recently reported a continuation
of the declining trend in first-time jobless claims.
On the corporate side of the economy, capacity utilization inched higher
and is now at 83%. While still well below the peak level (85.1%) for this
economic expansion which was reached over a year ago, further growth in this
indicator may result in shortages that could produce higher prices. Following
the GM strike-induced slowdown in March, industrial production has risen,
bringing the year-over-year gain to a solid 2.6% through April.
We remain alert to early signs of growing inflationary pressures that
might cause the Federal Reserve to raise interest rates. To date, prices are
still being kept under control. However, we are especially watchful regarding
the potential buildup in wage pressures given the rising trend in both
corporate output and capacity utilization.
MARKET ENVIRONMENT
For the first seven months of your Fund's fiscal year ended May 31, 1996,
the trading of fixed-income securities was buoyed by signs that the economy's
most recent period of growth was drawing to a close. Statistical data
covering such areas as job creation, personal income and consumption and
housing starts seemed to indicate that the slowing economy foretold a much
more favorable environment for bonds. As
such, as the calendar year drew to a close in late December, long-term
interest rates were driven to their lowest levels in more than two years.
Such optimism proved short-lived, however, as subsequent data indicated the
economy had merely experienced a temporary decline in the growth rate which
was quickly reversed with the turn of the calendar into 1996. As forecasts
for growth and inflation were adjusted upward, interest rates were forced
higher as well, and that at a pace rarely seen in recent years. While
California municipal bonds were unable to avoid this rapid adjustment, they
were supported by the formidable technical dynamic they have enjoyed for much
of the past year. In addition, as the State's economy emerged from its
protracted period of retrenchment, market participants sensed a much more
positive fundamental backdrop for California municipal bonds. As such, the
rise in yields of California exempt securities was much more muted than that
of their taxable counterparts.
THE PORTFOLIO
In managing your Fund's assets during a period of such volatility a
decidedly conservative posture was maintained. During the market's early
strength, portfolio duration was extended in order to capitalize on potential
price appreciation inherent in such an environment. As market perceptions
turned more tentative, emphasis was shifted toward those issues offering
generous levels of income exempt from California taxation and bearing lesser
qualities of principal volatility. At times, higher levels of cash reserves
were established in order to further buffer the portfolio from the
consequences of a rising interest rate environment. Throughout the period,
investment decisions tended to focus on those issues bearing higher degrees
of creditworthiness and strong characteristics of protection from redemption
prior to maturity. These more defensive measures caused the Fund's total
return to lag over the fiscal period. Portfolio liquidity was further
enhanced by securing those issues enjoying broad measures of acceptance both
within the California community as well as the national municipal market.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Sincerely
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
June 14, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the net asset
value per share at the end of the period.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC. MAY 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS CALIFORNIA TAX
EXEMPT
BOND FUND, INC. AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
[Exhibit A:
Dollars
$21,985
Lehman Brothers
Municipal Bond Index*
$18,629
Dreyfus California
Tax Exempt Bond Fund
*Source: Lehman Brothers]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED
MAY 31, 1996 MAY 31, 1996 MAY 31, 1996
_________ _________ _________
<S> <C> <C>
1.58% 5.51% 6.42%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus California Tax
Exempt Bond Fund, Inc. on 5/31/86 to a $10,000 investment made in the Lehman
Brothers Municipal Bond Index on that date. All dividends and capital gain
distributions are reinvested.
The Fund invests primarily in California municipal securities and its
performance shown in the line graph takes into account fees and expenses.
Unlike the Fund, the Lehman Brothers Municipal Bond Index is an unmanaged
total return performance benchmark for the long-term, investment-grade,
geographically unrestricted tax exempt bond market, calculated by using
municipal bonds selected to be representative of the municipal market
overall. The Index does not take into account charges, fees and other expenses
. Also, unlike the Fund which principally limits investments to California
municipal obligations, the Index is not State specific. These factors can
contribute to the Index potentially outperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-97.0% AMOUNT VALUE
________ ________
<S> <C> <C>
Alameda County, COP:
7.25%, 12/1/2014 (Insured; BIGI) (Prerefunded 12/1/2000) (a,b).......... $ 5,980,000 $ 6,748,968
7.25%, 12/1/2015 (Insured; BIGI) (Prerefunded 12/1/2000) (a)............ 4,045,000 4,565,147
Anaheim Public Finance Authority, Revenue,
Tax Allocation 6.45%, 12/28/2018 (Insured; MBIA)........................ 20,000,000 21,085,800
Bay Area Government Association, Tax Allocation Revenue
(California Redevelopment Agency) 6%, 12/15/2024 (Insured; FSA)......... 11,500,000 11,306,915
Bellflower, COP, Refunding
(Bellflower Civic Center) 7.20%, 10/1/2019 (Insured; MBIA).............. 1,475,000 1,595,301
Berkeley, Health Facilities Revenue, Refunding
(Alta Bates Medical Center) 6.55%, 12/1/2022........................... 17,000,000 16,501,560
Brea Public Finance Authority, Revenue, Tax Allocation (Redevelopment
Project):
6.75%, 8/1/2022 (Insured; MBIA) (Prerefunded 8/1/2001) (a).............. 4,625,000 5,140,225
6.75%, 8/1/2022 (Insured; MBIA)......................................... 1,775,000 1,888,281
California:
5.25%, 10/1/2014........................................................ 4,200,000 3,898,482
5.25%, 10/1/2018........................................................ 4,000,000 3,653,800
5.25%, 10/1/2019........................................................ 15,200,000 13,680,304
6.40%, 2/1/2022......................................................... 29,000,000 29,085,840
Refunding 5.625%, 9/1/2024.............................................. 15,650,000 14,783,303
6.375%, 2/1/2027 (Insured; AMBAC)....................................... 30,000,000 30,230,100
California Department of Veteran Affairs, Home Purchase Revenue
8.30%, 8/1/2019......................................................... 1,000,000 1,037,890
California Department of Water Resources,
Water System Revenue (Central Valley Project)
5.25%, 12/1/2024........................................................ 5,000,000 4,487,800
California Educational Facilities Authority, Revenue:
(Carnegie Institution Washington) 5.60%, 10/1/2023...................... 5,420,000 5,044,231
(Claremont Colleges Pooled Facilities) 6.375%, 5/1/2022................. 3,655,000 3,686,360
(Loyola Marymount University) 5.75%, 10/1/2024.......................... 4,750,000 4,505,280
California Health Facilities Financing Authority, Revenue:
(Adventist Health System-West):
6.40%, 3/1/2002 (Insured; MBIA)....................................... 1,955,000 2,110,892
6.50%, 3/1/2003 (Insured; MBIA)....................................... 2,140,000 2,317,813
(Catholic Health Facilities) 5%, 7/1/2008 (Insured; AMBAC).............. 4,500,000 4,270,680
(Downey Community Hospital):
5.625%, 5/15/2008..................................................... 2,500,000 2,467,850
5.75%, 5/15/2015...................................................... 6,750,000 6,296,400
(Episcopal Homes Foundation) 7.75%, 7/1/2018............................ 4,270,000 4,366,502
(Mills-Peninsula Hospital) 7.50%, 1/15/2000 (Prerefunded 1/15/1997) (a). 800,000 834,376
(Refunding, Children's Hospital) 5.375%, 7/1/2020 (Insured; MBIA)....... 8,270,000 7,590,950
(Robert F. Kennedy Medical Center) 7.75%, 3/1/2014 (Prerefunded 3/1/1998) (a) 1,500,000 1,617,810
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
California Health Facilities Financing Authority, Revenue (continued):
(Saint Joseph's Health System) 6.75%, 7/1/2021 (Prerefunded 7/1/2001) (a) $ 8,500,000 $ 9,415,620
(San Diego Hospital Association) 6.125%, 8/1/2022 (Insured; MBIA)....... 4,250,000 4,265,810
(Stanford University):
6.50%, 11/1/2020 (Prerefunded 11/1/2000) (a).......................... 8,975,000 9,790,289
6.50%, 11/1/2020...................................................... 1,025,000 1,063,202
(Unihealth America) 7.625%, 10/1/2015 (Insured; AMBAC).................. 55,000 59,377
California Housing Finance Agency:
Home Mortage Revenue:
6.30%, 2/1/2008....................................................... 2,770,000 2,828,059
6.35%, 2/1/2009....................................................... 2,945,000 2,995,389
6.40%, 2/1/2010....................................................... 3,110,000 3,174,875
8.20%, 8/1/2017....................................................... 115,000 120,021
8.30%, 8/1/2019....................................................... 155,000 161,347
6.70%, 8/1/2025....................................................... 8,405,000 8,570,747
7.125%, 2/1/2026...................................................... 3,690,000 3,836,198
6.55%, 8/1/2026....................................................... 11,225,000 11,508,319
7.65%, 8/1/2029....................................................... 11,150,000 11,649,074
MFHR 6.30%, 8/1/2026 (Insured; AMBAC)................................... 7,150,000 7,130,052
Multi-Unit Rental Housing Revenue 6.85%, 8/1/2015....................... 3,140,000 3,232,442
Single Family Mortgage:
6.25%, 8/1/2014 (Insured; AMBAC)...................................... 3,650,000 3,658,432
6.25%, 2/1/2018 (Insured; FHA)........................................ 2,000,000 2,007,840
6.30%, 8/1/2024....................................................... 8,000,000 8,037,760
6.45%, 8/1/2025....................................................... 15,355,000 15,618,645
California Pollution Control Financing Authority:
PCR:
(Pacific Gas & Electric Co.):
6.35%, 6/1/2009................................................... 5,000,000 5,082,950
5.85%, 12/1/2023 (Insured; AMBAC)................................. 5,000,000 4,818,250
5.85%, 12/1/2023 (Insured; MBIA) ................................. 20,000,000 19,298,600
(Refunding, Atlantic Richfield Project) 5%, 4/1/2008
(LOC; Wachovia Bank of Georgia N.A.) (c).......................... 10,000,000 9,657,900
(Southern California Edison Co.):
6.40%, 12/1/2024.................................................. 12,600,000 12,684,420
6.40%, 12/1/2024 (Insured; AMBAC)................................. 4,125,000 4,202,055
6.40%, 12/1/2024 (Insured; FGIC).................................. 10,000,000 10,186,800
SWDR:
(Browning Ferris Industry) 6.75%, 9/1/2019............................ 3,400,000 3,532,022
(Keller Canyon Landfill Co. Project) 6.875%, 11/1/2027................ 7,440,000 7,816,166
California Public Works Board, LR:
(Department of Corrections, California State Prison, Susanville)
5.375%, 6/1/2018 (Insured; MBIA)...................................... 7,385,000 6,745,459
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
California Public Works Board, LR (continued):
(Department of Corrections, Calipatria State Prison, Imperial County)
6.50%, 9/1/2017 (Insured; MBIA)....................................... $ 10,000,000 $ 10,777,300
(Department of Corrections, Corcoran II)
5.25%, 1/1/2021 (Insured; AMBAC)...................................... 12,000,000 10,857,120
(Various University of California Projects):
5.50%, 6/1/2014....................................................... 6,750,000 6,286,815
6.70%, 10/1/2017...................................................... 8,000,000 8,396,960
6.375%, 10/1/2019..................................................... 12,775,000 13,015,553
California State University Foundation, Revenue (Sacramento Auxiliary)
5.375%, 10/1/2027 (Insured; MBIA)....................................... 2,530,000 2,309,232
California Statewide Community Development Authority, Revenue,
COP (Saint Joseph Health System):
Refunding 5.50%, 7/1/2009 (Insured; MBIA)............................. 8,645,000 8,408,992
Refunding 5.50%, 7/1/2010 (Insured; MBIA)............................. 9,115,000 8,760,609
6.50%, 7/1/2015....................................................... 7,000,000 7,253,470
Central California Joint Powers Health Financing Authority, COP, Refunding
(Community Hospitals of Central California Project) 5.25%, 2/1/2013..... 5,750,000 5,123,825
Central Coast Water Authority, Revenue
(State Water Project Regional Facilities) 6.60%, 10/1/2022 (Insured; AMBAC) 3,800,000 4,038,222
Chico Public Financing Authority, Revenue
(Southeast Chico Redevelopment Project) 6.625%, 4/1/2021 (Insured; FGIC) 2,000,000 2,098,820
Contra Costa County, COP (Merrithew Memorial Hospital) 6.60%, 11/1/2012..... 10,000,000 10,414,800
Contra Costa Water District, Water Revenue 5%, 10/1/2024 (Insured; MBIA).... 13,000,000 11,246,040
Corona Community Facilities District, Special Tax, Refunding:
7.60%, 9/1/2013......................................................... 5,755,000 5,993,487
7.60%, 9/1/2017......................................................... 3,000,000 3,074,820
7.70%, 9/1/2019......................................................... 2,000,000 2,093,400
Dos Palos Public Financing Authority, Local Agency Revenue 7.90%, 10/1/2020. 3,315,000 2,884,116
East Bay Municipal Utilities District, Revenue:
Wastewater Treatment System:
Refunding 5.50%, 6/1/2013 (Insured; AMBAC)............................ 16,900,000 16,145,922
Refunding 5.55%, 6/1/2020 (Insured; AMBAC)............................ 26,500,000 24,770,345
7.20%, 6/1/2020 (Insured; AMBAC) (Prerefunded 6/1/2000) (a)........... 3,325,000 3,698,830
Water System, Refunding 4.75%, 6/1/2021 (Insured; FGIC)................. 38,435,000 32,102,065
Eldorado County Public Financing Authority, Revenue, Refunding:
5.50%, 2/15/2016 (Insured; FGIC)........................................ 2,000,000 1,901,740
5.50%, 2/15/2021 (Insured; FGIC)........................................ 3,000,000 2,813,220
Emeryville Public Financing Authority, Revenue
(Shellmound Park Redevelopment Project) 6.80%, 5/1/2024................. 2,365,000 2,404,874
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
Fairfield, Water Revenue, Refunding:
5.25%, 4/1/2012 (Insured; AMBAC)........................................ $ 4,310,000 $ 4,098,336
5.25%, 4/1/2013 (Insured; AMBAC)........................................ 4,535,000 4,280,450
5.25%, 4/1/2014 (Insured; AMBAC)........................................ 2,500,000 2,344,275
Folsom, Special Tax (Community Facilities District Number 3) 7.80%, 12/1/2015 1,900,000 1,984,835
Folsom Public Financing Authority, Local Agency Revenue
7.90%, 10/1/2019........................................................ 18,120,000 18,702,920
Fontana, Redevelopment Agency, MFHR, Refunding
(Village Drive) 7.15%, 5/1/2028 (Insured; FHA).......................... 3,955,000 4,104,420
Foothill, Eastern Transportation Corridor Agency, Toll Road Revenue
6%, 1/1/2034............................................................ 19,775,000 18,455,217
Fresno, Sewer Revenue 5.25%, 9/1/2019 (Insured; AMBAC)...................... 3,600,000 3,312,072
Hesperia Water District, COP, Refunding
(Water Facilities Improvement Project) 7.15%, 6/1/2026 (Insured; FGIC).. 4,500,000 4,937,220
Industry Urban Development Agency, Refunding (Civic Recreational Project):
7.375%, 5/1/2015 (Prerefunded 5/1/1997) (a)............................. 765,000 805,377
7.375%, 5/1/2015........................................................ 235,000 242,520
Inglewood, HR (Daniel Freeman Hospital, Inc.) 6.75%, 5/1/2013............... 6,300,000 6,483,141
La Verne Community Facilities District, Special Tax
(Koll Business Center) 7.875%, 3/1/2014................................. 3,625,000 3,835,721
Lake Elsinore Public Financing Authority, Revenue:
Local Agency 8%, 10/1/2020.............................................. 7,670,000 7,022,115
Tax Allocation (Lake Elsinore Redevelopment Project)
6.25%, 2/1/2019 (Insured; FGIC)....................................... 4,220,000 4,262,580
Lincoln Unified School Distict, Special Tax, Refunding (Community Facilities
District Number 1) 5.625%, 9/1/2021 (Insured; AMBAC) (d)................ 4,500,000 4,289,940
Loma Linda, HR, Refunding (Loma Linda University Medical Center Project)
7%, 12/1/2015 (Insured; AMBAC).......................................... 12,355,000 13,303,988
Los Angeles Community Redevelopment Agency, Tax Allocation
(Hollywood Redevelopment Project) 6.10%, 7/1/2022 (Insured; MBIA)....... 4,900,000 4,864,916
Los Angeles County, COP:
(Disney Parking Project)
6.50%, 3/1/2023....................................................... 7,440,000 7,359,946
(Edmund D. Edelman Childrens' Court) 6%, 4/1/2012 (Insured; AMBAC)...... 9,000,000 9,142,290
(Van Nuys Courthouse Project) 9%, 6/1/2015 (Prerefunded 6/1/1996) (a)... 225,000 229,500
Los Angeles County Sanitation Districts Financing Authority, Revenue
(Capital Projects):
5.375%, 10/1/2013..................................................... 4,000,000 3,759,160
5.25%, 10/1/2019...................................................... 2,305,000 2,071,895
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
Los Angeles Department Water and Power, Revenue:
Electric Plant:
5.30%, 2/15/2025...................................................... $ 5,690,000 $ 5,093,802
Crossover Refunding:
5.375%, 9/1/2023.................................................. 2,000,000 1,809,540
5.25%, 11/15/2026 (Insured; MBIA)................................. 15,000,000 13,254,000
5.875%, 9/1/2030 (Insured; FGIC).................................. 4,500,000 4,395,780
7.10%, 1/15/2031...................................................... 2,160,000 2,389,759
Waterworks, Refunding:
5.90%, 5/15/2011 (Insured; FGIC)...................................... 2,190,000 2,239,056
6.40%, 5/15/2028...................................................... 2,435,000 2,512,993
6.375%, 7/1/2034 (Insured; MBIA)...................................... 12,000,000 12,368,040
Los Angeles Harbor Department, Revenue:
6.625%, 8/1/2019........................................................ 3,855,000 4,022,268
6.625%, 8/1/2019 (Insured; AMBAC)....................................... 6,000,000 6,240,660
6.625%, 8/1/2025........................................................ 17,780,000 18,551,474
Los Angeles Municipal Improvement Corp., LR, Refunding
(Central Library Project):
5.375%, 6/1/2011...................................................... 3,725,000 3,453,410
6.30%, 6/1/2016....................................................... 3,500,000 3,509,800
6.30%, 6/1/2018....................................................... 4,250,000 4,251,318
6.35%, 6/1/2020....................................................... 7,700,000 7,716,709
Menlo Park Community Development Agency, Tax Allocation, Refunding
(Las Puglas Community Development Project)
5.375%, 6/1/2022 (Insured; AMBAC)....................................... 11,825,000 10,821,885
Metropolitan Water District of Southern California, Waterworks Revenue:
6.75%, 7/1/2018 (Prerefunded 7/1/2001) (a).............................. 4,750,000 5,261,670
Refunding 4.75%, 7/1/2021 (Insured; MBIA)............................... 31,000,000 25,883,450
Modesto, Multi-Family Housing Mortage Revenue, Refunding 6.40%, 6/1/2029.... 7,723,000 7,824,094
Moreno Valley Unified School District,
Community Facilities District, Special Tax 7.70%, 8/15/2014............. 9,000,000 8,928,900
Moulton Niguel Water District (Improvement District Number 6)
7.25%, 4/1/2016 (Insured; AMBAC) (Prerefunded 4/1/2000) (a)............. 5,000,000 5,556,500
Mount Diablo Hospital District, Revenue
6.125%, 12/1/2020 (Insured; AMBAC) (Prerefunded 12/1/2000) (a).......... 5,000,000 5,396,750
Mount Diablo Unified School District, Community Facilities District, Special
Tax
7.05%, 8/1/2020 (Insured; FGIC)......................................... 3,500,000 3,800,755
Northern California, Transmission Revenue
(California-Oregon Transmission Project):
5.25%, 5/1/2020 (Insured; MBIA)....................................... 14,000,000 12,536,160
6%, 5/1/2024 (Insured; MBIA).......................................... 5,000,000 4,929,750
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
Northern California Power Agency, Power Revenue:
(Hydroelectric Project) 7%, 7/1/2016 (Insured; AMBAC) (Prerefunded 1/1/2016) (a) $ 670,000 $ 773,227
Refunding 7.50%, 7/1/2023 (Insured; AMBAC) (Prerefunded 7/1/2021) (a)... 375,000 439,594
Northridge Water District, COP, Revenue
5.25%, 2/1/2018 (Insured; AMBAC)........................................ 2,500,000 2,269,875
Palmdale Elementary School District, Special Tax,
Community Facilities District number 90:
5.30%, 8/1/2014 (Insured; FSA)........................................ 2,500,000 2,327,375
5.40%, 8/1/2025 (Insured; FSA)........................................ 3,500,000 3,214,330
Pasadena, COP, Refunding (Capital Project) 5.75%, 1/1/2013.................. 1,000,000 960,220
Pasadena Community Development Commission, MFHR, (Civic Center)
6.45%, 12/1/2021 (Insured; FSA)......................................... 15,000,000 15,117,000
Port of Oakland, Revenue:
Port 6.50%, 11/1/2016 (Insured; MBIA)................................... 8,300,000 8,556,802
Special Facilities
(Mitsui O.S.K. Lines Ltd.) 6.80%, 1/1/2019 (LOC; Industrial Bank of Japan) (c) 2,000,000 2,069,220
Rancho Cucamonga Redevelopment Agency, Tax Allocation
(Rancho Cucamonga Redevelopment Project):
7.125%, 9/1/2019 (Insured; MBIA)...................................... 2,455,000 2,648,577
6.75%, 9/1/2020 (Insured; MBIA)....................................... 1,665,000 1,756,708
Redding Redevelopment Agency, TAN, Refunding
(Canby, Hilltop, Cypress) 5%, 9/1/2023 (Insured; FSA)................... 1,285,000 1,098,983
Riverside County Asset Leasing Corp., Leasehold Revenue
(Riverside County Hospital Project) 6.25%, 6/1/2019..................... 7,500,000 7,500,975
Riverside County Community Facilities District, Special Tax:
7.80%, 9/1/2015 (e)..................................................... 6,750,000 3,375,000
8.25%, 9/1/2016......................................................... 4,730,000 4,651,482
Sacramento, COP (Refunding-Public Facilities Project) 6%, 7/1/2012.......... 6,000,000 5,965,980
Sacramento Area Flood Control Agency (Capital Assessment District Number 2)
5.375%, 10/1/2025 (Insured; FGIC)....................................... 2,500,000 2,286,950
Saddleback Community College District, COP
7%, 8/1/2019 (Insured; BIGI)............................................ 2,875,000 3,079,441
San Bernardino County, COP:
(Capital Facilities Project)
6.875%, 8/1/2024...................................................... 5,000,000 5,799,000
(Refunding, Medical Center Financing Project):
5.50%, 8/1/2015 (Insured; MBIA)....................................... 7,030,000 6,697,481
5.50%, 8/1/2022 (Insured; MBIA)....................................... 19,780,000 18,567,486
5.50%, 8/1/2024....................................................... 4,400,000 3,862,496
5%, 8/1/2028 (Insured; MBIA).......................................... 9,000,000 7,695,000
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
San Bernardino County, COP (continued):
(West Valley Detention Center)
5.90%, 11/1/2001 (Insured; MBIA)...................................... $ 1,565,000 $ 1,657,272
San Diego Public Facilities Financing Authority,
Sewer Revenue:
5%, 5/15/2020 (Insured; FGIC)......................................... 20,000,000 17,486,400
5%, 5/15/2025 (Insured; FGIC)......................................... 36,850,000 31,838,769
San Elijo Joint Powers Authority, Revenue
(San Elijo Water Pollution Control Project)
7%, 3/1/2020 (Insured; FGIC) (Prerefunded 3/1/2000) (a)................. 5,500,000 6,055,170
San Francisco Bay Area Rapid Transportation District, Sales Tax Revenue
5.50%, 7/1/2020 (Insured; FGIC)......................................... 10,830,000 10,163,847
San Francisco City and County, SFMR
(FNMA/GNMA Mortgage Backed Securities Program) 7.45%, 1/1/2024.......... 260,000 270,117
San Francisco City and County Airports Commission, International Airport
Revenue,
Refunding:
6.10%, 5/1/2003 (Insured; AMBAC)...................................... 3,000,000 3,209,790
6.20%, 5/1/2004 (Insured; AMBAC)...................................... 1,500,000 1,613,940
5.75%, 5/1/2020 (Insured; FGIC)....................................... 24,005,000 22,938,938
San Francisco City and County Public Utilities Commission, Water Revenue
6.50%, 11/1/2017........................................................ 3,500,000 3,610,670
San Francisco City and County Redevelopment Agency, Multi-Family Revenue
(South Beach Project) 5.50%, 3/1/2014................................... 4,500,000 4,279,410
San Gabriel Valley Schools Financing Authority, Revenue, Refunding
(Pomona Unified School District) 5.50%, 2/1/2024........................ 4,500,000 4,038,975
San Jose Redevelopment Agency, Tax Allocation
(Redevelopment Project) 5.75%, 8/1/2024................................. 10,525,000 9,837,297
San Marcos Public Facilities Authority, Tax Allocation Revenue
6%, 1/1/2006 (Insured; FSA) (Prerefunded 1/1/2002) (a).................. 10,500,000 11,311,650
San Mateo County, COP (Capital Projects Program)
6.50%, 7/1/2017 (Insured; MBIA) (Prerefunded 7/1/2001) (a).............. 6,000,000 6,587,820
Santa Barbara, COP, Refunding (Water System Improvement Project)
6.70%, 4/1/2027 (Insured; AMBAC)........................................ 4,000,000 4,268,800
Santa Clara County, COP (Capital Project)
6.25%, 10/1/2016 (Insured; AMBAC)....................................... 10,000,000 10,110,800
Santa Cruz County, COP (Capital Facilities Project)
6.70%, 9/1/2020 (Insured; MBIA)......................................... 5,000,000 5,310,900
Santa Cruz County Public Financing Authority, Revenue, Refunding
7.10%, 9/1/2021 (Insured; MBIA)......................................... 6,500,000 7,035,340
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
Santa Monica, Malibu Unified School District
(Public School Facilities Reconstruction Projects) 5.50%, 8/1/2018...... $ 9,585,000 $ 8,895,647
Santa Rosa:
Mortgage Revenue, Refunding
(Redwood Park Apartments Projects) 5.625%, 1/1/2026 (Insured; FHA).... 3,310,000 3,104,217
Wastewater Revenue, Refunding (Subregional Wastewater Project)
5%, 9/1/2022 (Insured; FGIC).......................................... 10,000,000 8,691,400
Southern California Public Power Authority, Revenue,
Transmission Project (Refunding - Southern Transmission Project)
6.125%, 7/1/2018........................................................ 1,470,000 1,461,107
Southern California Rapid Transportation District, COP (Workers Compensation
Fund)
6.50%, 7/1/2007 (Insured; MBIA)......................................... 22,900,000 24,517,427
Tracy Area Public Facilities Financing Agency, Special Tax, Refunding,
(Community Facilities District Number 81-1-H)
5.875%, 10/1/2019 (Insured; MBIA)....................................... 7,500,000 7,377,750
University of California:
COP (UCLA Central Chiller/Cogeneration)
6.25%, 11/1/2009 (Prerefunded 11/1/1999) (a).......................... 3,000,000 3,219,419
Revenue (Multiple Purpose Projects):
5.125%, 9/1/2013 (Insured; AMBAC)..................................... 4,845,000 4,449,405
5%, 9/1/2014 (Insured; AMBAC)......................................... 5,835,000 5,219,407
5.125%, 9/1/2018 (Insured; AMBAC)..................................... 7,670,000 6,769,541
5%, 9/1/2023 (Insured; AMBAC)......................................... 10,000,000 8,552,400
West Basin Municipal Water District, COP
6.85%, 8/1/2016 (Insured; AMBAC) (Prerefunded 8/1/2000) (a)............. 6,000,000 6,617,639
________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $1,281,508,804)................................................... $1,288,673,380
========
SHORT-TERM MUNICIPAL INVESTMENTS-3.0%
California Health Facilities Financing Authority, Revenue, VRDN
(Catholic Health Care) 3.40% (f)........................................ $ 5,500,000 $ 5,500,000
California Pollution Control Financing Authority, RRR, VRDN:
(Delano Project):
3.90% (LOC; ABN AMRO Bank N.V.) (c,f)................................. 4,400,000 4,400,000
3.90% (LOC; ABN AMRO Bank N.V.) (c,f)................................. 4,800,000 4,800,000
(Refunding, Ultrapower-Rocklin) 3.95% (f)............................. 2,100,000 2,100,000
Irvine Ranch Water District, Refunding, VRDN
3.45% (f)............................................................... 300,000 300,000
Kern County, COP, VRDN (Kern Public Facilities Project)
3.40% (f)............................................................... 7,955,000 7,955,000
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
________ ________
Los Angeles County, Metropolitian Transportation Authority, Sales Tax Revenue,
Refunding VRDN 3.35% (Insured; MBIA) (f)................................ $ 7,000,000 $ 7,000,000
Metropolitan Water District of Southern California, Waterworks Revenue,
Refunding,
VRDN 3.35% (Insured; AMBAC) (f)......................................... 7,200,000 7,200,000
________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $39,255,000)...................................................... $ 39,255,000
========
TOTAL INVESTMENTS-100.0%
(cost $1,320,763,804)................................................... $1,327,928,380
========
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
BIGI Bond Investors Guaranty Insurance MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage Association SWDR Solid Waste Disposal Revenue
HR Hospital Revenue TAN Tax Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
<S> <C> <C> <C>
AAA Aaa AAA 60.3%
AA Aa AA 11.4
A A A 17.2
BBB Baa BBB 3.4
F1 MIG1/P1 SP1/A1 3.0
Not Rated(h) Not Rated(h) Not Rated(h) 4.7
____
100.0%
====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Bonds which are prerefunded are collateralized by U.S. government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Wholly held by custodian as collateral for delayed-delivery
security.
(c) Secured by letters of credit.
(d) Purchased on a delayed-delivery basis.
(e) Non-income producing security; interest payment in default.
(f) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(g) Fitch currently provides creditworthiness information for a limited
number of investments.
(h) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $1,320,763,804)-see statement................................... $1,327,928,380
Receivable for investment securities sold............................... 25,891,155
Interest receivable..................................................... 24,397,231
Prepaid expenses........................................................ 25,512
_______
1,378,242,278
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $ 748,962
Due to Custodian........................................................ 1,773,364
Payable for investment securities purchased............................. 4,339,271
Payable for Common Stock redeemed....................................... 13,662
Accrued expenses and other liabilities.................................. 93,215 6,968,474
_____ _______
NET ASSETS ................................................................ $1,371,273,804
========
REPRESENTED BY:
Paid-in capital......................................................... $1,394,021,530
Accumulated net realized (loss) on investments.......................... (29,912,302)
Accumulated net unrealized appreciation on investments-Note 3........... 7,164,576
_______
NET ASSETS at value applicable to 97,979,939 shares outstanding
(300 million shares of $.01 par value Common Stock authorized).......... $1,371,273,804
========
NET ASSET VALUE, offering and redemption price per share
($1,371,273,804 / 97,979,939 shares).................................... $14.00
========
See notes to financial statements.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1996
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 88,488,803
EXPENSES:
Management fee-Note 2(a).............................................. $ 8,764,933
Shareholder servicing costs-Note 2(b)................................. 978,912
Custodian fees........................................................ 104,563
Professional fees..................................................... 89,769
Prospectus and shareholders' reports.................................. 65,133
Directors' fees and expenses-Note 2(c)................................ 60,977
Registration fees..................................................... 27,194
Miscellaneous......................................................... 20,849
______
TOTAL EXPENSES.................................................... 10,112,330
______
INVESTMENT INCOME-NET............................................. 78,376,473
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments-Note 3................................. $ 5,971,617
Net unrealized (depreciation) on investments............................ (57,311,024)
______
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (51,339,407)
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 27,037,066
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MAY 31,
__________________________________
1995 1996
_______ _______
<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 88,762,640 $ 78,376,473
Net realized gain (loss) on investments........................... (35,847,441) 5,971,617
Net unrealized appreciation (depreciation) on investments for the year 28,991,441 (57,311,024)
_______ _______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 81,906,640 27,037,066
_______ _______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............................................. (88,762,640) (78,376,473)
Net realized gain on investments.................................. (5,043,994) --
_______ _______
TOTAL DIVIDENDS................................................. (93,806,634) (78,376,473)
_______ _______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold..................................... 774,956,088 1,244,233,021
Dividends reinvested.............................................. 59,447,230 49,530,321
Cost of shares redeemed........................................... (923,531,181) (1,428,904,541)
_______ _______
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS........ (89,127,863) (135,141,199)
_______ _______
TOTAL (DECREASE) IN NET ASSETS.............................. (101,027,857) (186,480,606)
NET ASSETS:
Beginning of year................................................. 1,658,782,267 1,557,754,410
_______ _______
End of year....................................................... $ 1,557,754,410 $ 1,371,273,804
======== ========
SHARES SHARES
_______ _______
CAPITAL SHARE TRANSACTIONS:
Shares sold....................................................... 54,884,789 86,863,106
Shares issued for dividends reinvested............................ 4,208,309 3,452,140
Shares redeemed................................................... (65,606,330) (99,479,542)
_______ _______
NET (DECREASE) IN SHARES OUTSTANDING............................ (6,513,232) (9,164,296)
======== ========
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
YEAR ENDED MAY 31,
__________________________________________________________
PER SHARE DATA: 1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $14.66 $14.82 $15.34 $14.59 $14.54
---- ---- ---- ---- ----
INVESTMENT OPERATIONS:
Investment income-net........................ .93 .89 .84 .82 .77
Net realized and unrealized gain (loss)
on investments............................. .20 .66 (.57) .- (.54)
---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS........... 1.13 1.55 .27 .82 .23
---- ---- ---- ---- ----
DISTRIBUTIONS:
Dividends from investment income-net......... (.93) (.88) (.85) (.82) (.77)
Dividends from net realized gain on investments (.04) (.15) (.17) (.05) .-
---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS........................ (.97) (1.03) (1.02) (.87) (.77)
---- ---- ---- ---- ----
Net asset value, end of year................. $14.82 $15.34 $14.59 $14.54 $14.00
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 7.90% 10.89% 1.58% 5.93% 1.58%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .68% .69% .70% .71% .69%
Ratio of net investment income to
average net assets......................... 6.32% 5.88% 5.46% 5.77% 5.37%
Portfolio Turnover Rate...................... 45.58% 41.40% 28.14% 39.85% 56.12%
Net Assets, end of year (000's Omitted)...... $1,751,880 $1,834,956 $1,658,782 $1,557,754 $1,371,274
See notes to financial statements.
</TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus California Tax Exempt Bond Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company. The Fund's investment objective is to
provide investors with the maximum amount of current income exempt from
Federal and State of California income taxes as is consistent with the
preservation of capital. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares, which are sold to the public without a
sales charge.
(A) PORTFOLIO VALUATION: The Fund's investments are valued each business
day by an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the
Service are valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of municipal securities of
comparable quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has an unused capital loss carryover of approximately $29,996,000
available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
May 31, 1996. If not applied, $2,069,000 of the carryover expires in fiscal
2003 and $27,927,000 of the carryover expires in 2004.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed 11\2% of the average value of the Fund's net
assets for any full fiscal year. There was no expense reimbursement for the
year ended May 31, 1996.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the year ended May 31, 1996, the Fund was charged an aggregate of
$377,878 pursuant to the Shareholder Services Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of the Manager, under a transfer agency agreement
for providing personnel and facilities to perform transfer agency services
for the Fund. Such compensation amounted to $216,265 for the period from
December 1, 1995 through May 31, 1996.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the year ended May 31, 1996, amounted
to $778,694,036 and $883,180,162, respectively.
At May 31, 1996, accumulated net unrealized appreciation on investments
was $7,164,576, consisting of $33,517,242 gross unrealized appreciation and
$26,352,666 gross unrealized depreciation.
At May 31, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus California Tax Exempt Bond Fund, Inc., including the statement of
investments, as of May 31, 1996, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of May 31, 1996 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus California Tax Exempt Bond Fund, Inc. at May 31, 1996,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[Ernst and Young LLP signature logo]
New York, New York
July 5, 1996
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended May
31, 1996 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are California residents, California personal income
taxes).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
[Dreyfus lion "d" logo]
DREYFUS CALIFORNIA
TAX EXEMPT BOND FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 928AR965
[Dreyfus logo]
California
Tax Exempt
Bond Fund, Inc.
Annual Report
May 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
_______________________________________________
| | | DREYFUS |
| | LEHMAN BROTHERS | CALIFORNIA |
| PERIOD | MUNICIPAL | TAX EXEMPT |
| | BOND INDEX * | BOND FUND |
|---------- | -----------------|--------------|
| 5/31/86 | 10,000 | 10,000 |
| 5/31/87 | 10,653 | 10,542 |
| 5/31/88 | 11,610 | 11,125 |
| 5/31/89 | 12,946 | 12,346 |
| 5/31/90 | 13,893 | 13,099 |
| 5/31/91 | 15,293 | 14,245 |
| 5/31/92 | 16,795 | 15,370 |
| 5/31/93 | 18,805 | 17,044 |
| 5/31/94 | 19,269 | 17,313 |
| 5/31/95 | 21,024 | 18,339 |
| 5/31/96 | 21,985 | 18,629 |
|----------------------------------------------|
*Source: Lehman Brothers
