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 fiscal year ended May 31, 1997. Your Fund
produced a total return including bond price changes, capital gain
distributions and interest income of 7.61%.* The Fund's tax-free annualized
distribution rate per share was 5.08%.** (Some income may be subject to the
Federal Alternative Minimum Tax for certain shareholders).
ECONOMIC REVIEW
Plentiful jobs and low inflation spurred consumer confidence to its
highest level in 27 years by the end of the reporting period, May 31, 1997.
Economic growth surged 5.6% in the first quarter of this year, sharply higher
than the 3.8% rate in the last quarter of 1996. With unemployment at its
lowest level in 23 years, there was fear that without some preemptive
tightening in monetary policy, inflationary pressures would resume. As a
precaution, in March 1997, the Federal Open Market Committee (the "FOMC"),
the policy-making arm of the Federal Reserve Board (the "Fed"), raised the
Federal Funds rate one quarter of a percentage point to 5.50%. It was the
first hike in short-term rates in over two years. (The Federal Funds rate is
the rate of interest banks charge each other for overnight loans.) Fed
Chairman Greenspan likened the increase to "the small immediate discomfort of
a vaccination against the possibility of getting a serious disease."
Subsequent to the March rate increase, signs of inventory accumulation and
some moderation in retail sales may have helped stay the Fed from
implementing additional increases in short-term interest rates.
The great difference between the present economic recovery and previous
ones is the absence of inflation. The economy is now in its seventh year of
expansion, an expansion devoid of any appreciable resurgence in inflation.
The Producer Price Index, a measure of prices paid by manufacturers and an
indicator of so-called pipeline inflation, declined over the first four
months of this year and has risen less than 1% over the previous twelve
months. The rise in inflation on the consumer level has been similarly
subdued. The Consumer Price Index increased a modest 2.5% over the
twelve-month period ending in April.
On another front, the tight labor market has spawned fears that rising
wages would provide an inflationary stimulus to the economy. So far this has
not occurred. The Employment Cost Index, a gauge of wage and benefit
increases, has remained below 3%. The bipartisan budget agreement recently
reached between the Clinton Administration and the Republican Congressional
leadership has also eased inflationary fears.
The economic confidence of consumers is readily understandable. The
exceptionally low unemployment rate has combined with a strong economy that
has expanded with unusual vigor. But, despite huge business investment in
technology to improve productivity, it would be folly to assume that the
economy's capacity for noninflationary growth is unlimited. Consumers
enjoying both job stability and rising personal incomes could increase their
spending to levels that would strain production and bring on inflation or the
Fed could again tighten credit, perhaps in another precautionary move.
MARKET ENVIRONMENT
For much of the past year, the trading environment for fixed income
securities has been dominated by a measure of volatility one would expect to
find during periods of rapidly shifting perceptions as to the course of
economic growth and of inflationary pressures. Early on, as attention focused
on the tightening of the labor markets as the economy continued to expand at
a quickening pace, investors became convinced of an imminent tightening of
monetary policy by the FOMC. As such, interest rates were driven to their
highest levels in more than a year. As subsequent data showed an abatement in
the pace of the economy's rate of growth and the absence of any clear signs
of inflationary pressures, market perceptions quickly reversed, sending
prices up and interest rates back down to more comfortable levels. These
rapid shifts
in investors' perceptions of the economy and the appropriate levels of long
term interest rates occurred frequently throughout the year, establishing a
broad trading range in prices. In November 1996, as investors became
convinced of a significant slowing in the rate of growth of the economy, this
range in prices was redefined to higher levels. With the turn of the calendar
into 1997, however, these higher levels proved unsustainable as evidence of
the resilience of the economy's current expansion continued to mount. The
resulting rise in long term interest rates foretold the move by the FOMC to
assume a more restrictive posture at its March meeting.
Throughout 1996 municipal securities were hard pressed to escape the
volatility witnessed by the fixed income markets in general. Ultimately, tax
exempt bonds were supported by a formidable technical dynamic of strong
demand and limited supply which enabled municipals to significantly
outperform comparable term U.S. Treasuries. A comparison of the decline in
yields and subsequent price appreciation experienced by the holders of
30-year U.S. Treasury bonds and Municipal bonds as represented by the Bond Buy
er's 25 Bond Revenue Index (the "Revenue Index") clearly illustrates this
point. While interest rates fluctuated significantly over the course of the
year ended May 31, 1997, 30-year Treasury yields closed the period 10 basis
points lower than the start of the year (.10%) at 6.90%. Over the same time,
the Revenue Index declined by 30 basis points (.30%) to close the period at
5.91%, which represents a taxable equivalent yield of 8.20%, assuming a 28%
Federal income tax bracket. (Remember, fund yields and net asset values do
fluctuate, past performance is no guarantee of future results, and actual
results for a fund will vary from an index).
PORTFOLIO OVERVIEW
In managing your Fund's assets during a period of such volatility, a
decidedly conservative posture was maintained. During those periods when
perceptions became more tentative, emphasis was placed on those securities
bearing more muted characteristics of principal volatility and higher levels
of tax-free income. At these times higher levels of cash reserves were
established in order to further buffer the Portfolio from the consequences of
a rising interest rate environment. As perceptions became more constructive
and prices advanced, trading activity sought to extend Portfolio duration in
order to capitalize on potential price appreciation inherent in such an
environment. Your Fund's performance during this reporting period also was
impacted by efforts to achieve a balanced posture addressing the generation
of tax-free income as well as a measure of total return reflective of the
market in general. Throughout this process, performance was further impacted
by enhancing the liquidity and performance characteristics of the portfolio
by extending the optional redemption characteristics and improving the
underlying creditworthiness of its holdings.
We appreciate your investment in the Dreyfus California Tax Exempt Bond
Fund, and we want to assure you that we are, at all times, working in the
Fund's best interest.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
June 17, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** Distribution rate per share is based upon dividends per share paid
from net investment income during the period (annualized), divided by the net
asset value per share at the end of the period, adjusted for capital gain
distributions.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC. MAY 31, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS CALIFORNIA TAX
EXEMPT BOND FUND, INC. AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Dollars
$22,345
Lehman Brothers
Municipal Bond Index*
$19,017
Dreyfus California
Tax Exempt Bond Fund
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
Average Annual Total Returns
One Year Ended Five Years Ended Ten Years Ended
May 31, 1997 May 31, 1997 May 31, 1997
________________ ________________ ________________
<S> <C> <C> <C>
7.61% 5.46% 6.64%
</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 5/31/87 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
and is not limited to investments principally in California municipal
obligations. 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>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1997
Principal
Long-Term Municipal Investments_89.2% Amount Value
______________ ____________
<S> <C> <C>
California_87.3%
Alameda County, COP:
7.25%, 12/1/2014 (Insured; BIGI) (Prerefunded 12/1/2000) (a).............. $ 5,980,000 $ 6,633,494
7.25%, 12/1/2015 (Insured; BIGI) (Prerefunded 12/1/2000) (a).............. 4,045,000 4,487,038
Anaheim Public Finance Authority, Revenue,
Tax Allocation 6.45%, 12/28/2018 (Insured; MBIA).......................... 20,000,000 21,559,000
Bellflower, COP, Refunding
(Bellflower Civic Center) 7.20%, 10/1/2019 (Insured; MBIA)................ 1,475,000 1,588,664
Berkeley, Health Facilities Revenue, Refunding
(Alta Bates Medical Center) 6.55%, 12/1/2022.............................. 17,000,000 17,385,390
Brea Public Finance Authority, Revenue, Tax Allocation (Redevelopment Project):
6.75%, 8/1/2022 (Insured; MBIA) (Prerefunded 8/1/2001) (a)................ 4,625,000 5,105,168
6.75%, 8/1/2022 (Insured; MBIA)........................................... 1,775,000 1,923,887
California:
5.25%, 10/1/2017 (Insured; FGIC).......................................... 10,000,000 9,725,300
University Revenue, Refunding (Housing System) 5.80%, 11/1/2017 (Insured; FGIC) 5,080,000 5,141,112
California Department of Veteran Affairs, Home Purchase Revenue 8.30%, 8/1/2019 1,000,000 1,036,530
California Department of Water Resources, Water System Revenue
(Central Valley Project):
5.75%, 12/1/2016........................................................ 9,705,000 9,811,658
5.25%, 12/1/2024........................................................ 21,920,000 20,864,552
California Educational Facilities Authority, Revenue
(Claremont Colleges Pooled Facilities) 6.375%, 5/1/2022................... 3,655,000 3,805,878
California Health Facilities Financing Authority, Revenue:
(Adventist Health System-West):
6.40%, 3/1/2002 (Insured; MBIA)......................................... 1,955,000 2,103,521
6.50%, 3/1/2003 (Insured; MBIA)......................................... 2,140,000 2,306,877
(Downey Community Hospital):
5.625%, 5/15/2008....................................................... 2,500,000 2,542,400
5.75%, 5/15/2015........................................................ 5,750,000 5,683,300
(Episcopal Homes Foundation) 7.75%, 7/1/2018.............................. 4,270,000 4,347,629
(Saint Joseph's Health System) 6.75%, 7/1/2021 (Prerefunded 7/1/2001) (a). 8,500,000 9,349,575
(San Diego Hospital Association) 6.125%, 8/1/2022 (Insured; MBIA)......... 4,250,000 4,371,040
(Stanford University):
6.50%, 11/1/2020 (Prerefunded 11/1/2000) (a)............................ 8,975,000 9,726,028
6.50%, 11/1/2020........................................................ 1,025,000 1,087,546
(Unihealth America) 7.625%, 10/1/2015 (Insured; AMBAC).................... 55,000 58,366
California Housing Finance Agency:
Home Mortage Revenue:
6.30%, 2/1/2008......................................................... 2,700,000 2,800,521
6.35%, 2/1/2009......................................................... 2,870,000 2,966,317
6.40%, 2/1/2010......................................................... 3,030,000 3,146,655
5.85%, 8/1/2017 (b)..................................................... 6,000,000 6,051,420
8.20%, 8/1/2017......................................................... 115,000 118,007
8.30%, 8/1/2019......................................................... 115,000 119,083
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
________ ________
California (continued)
California Housing Finance Agency (continued):
Home Mortage Revenue (continued):
6.70%, 8/1/2025......................................................... $ 8,075,000 $ 8,424,082
7.125%, 2/1/2026........................................................ 3,240,000 3,443,051
6.55%, 8/1/2026......................................................... 11,225,000 11,694,542
6.15%, 8/1/2027 (Insured; MBIA)......................................... 10,000,000 10,213,900
6.40%, 8/1/2027 (Insured; MBIA)......................................... 20,000,000 20,708,200
7.65%, 8/1/2029......................................................... 10,225,000 10,648,622
MFHR 6.30%, 8/1/2026 (Insured; AMBAC) (c)................................. 7,150,000 7,333,469
Multi-Unit Rental Housing Revenue 6.85%, 8/1/2015......................... . 3,140,000 3,267,390
Single Family Mortgage:
6.25%, 8/1/2014 (Insured; AMBAC)........................................ 3,625,000 3,693,694
6.30%, 8/1/2024......................................................... 8,000,000 8,213,040
6.45%, 8/1/2025......................................................... 15,355,000 15,922,981
California Pollution Control Financing Authority:
PCR (Pacific Gas & Electric Co.) 6.35%, 6/1/2009 (Insured; MBIA).......... 5,000,000 5,354,950
(Refunding, San Diego Gas and Electric) 5.90%, 6/1/2014 (Insured; MBIA)... 41,830,000 44,142,362
(Southern California Edison Co.):
6.40%, 12/1/2024........................................................ 12,600,000 13,071,744
6.40%, 12/1/2024 (Insured; AMBAC)....................................... 4,125,000 4,285,256
SWDR (Browning Ferris Industry, Inc.):
5.80%, 12/1/2016........................................................ 5,660,000 5,573,685
6.75%, 9/1/2019......................................................... 3,400,000 3,642,862
California Public Works Board, LR:
(Department of Corrections, California State Prison, Susanville)
5.25%, 6/1/2015 (Insured; FSA).......................................... 5,455,000 5,383,158
(Department of Corrections, Calipatria State Prison, Imperial County)
6.50%, 9/1/2017 (Insured; MBIA)......................................... 13,000,000 14,668,810
(Department of Corrections, Madera State Prison)
5.50%, 6/1/2015 (Insured; MBIA)......................................... 4,500,000 4,528,170
(Department of Corrections, Substance Abuse Treatment Facility-Corcoran II)
5.80%, 1/1/2013 (Insured; AMBAC)........................................ 10,105,000 10,418,053
(Various University of California Projects)
6.375%, 10/1/2019....................................................... 12,775,000 13,538,434
California Statewide Community Development Authority, Revenue,
COP (Saint Joseph Health System):
Refunding 5.50%, 7/1/2009 (Insured; MBIA)............................... 8,645,000 8,819,715
Refunding 5.50%, 7/1/2010 (Insured; MBIA)............................... 9,115,000 9,239,146
6.50%, 7/1/2015......................................................... 7,000,000 7,571,970
Chico Public Financing Authority, Revenue
(Southeast Chico Redevelopment Project) 6.625%, 4/1/2021 (Insured; FGIC).. 2,000,000 2,132,440
Contra Costa County, COP (Merrithew Memorial Hospital):
6.60%, 11/1/2012 (Prerefunded 11/1/2002) (a).............................. 10,000,000 11,123,400
5.375%, 11/1/2017 (Insured; MBIA)......................................... 21,500,000 20,902,085
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
California (continued)
Contra Costa Water District, Water Revenue:
5.50%, 10/1/2019 (Insured; MBIA).......................................... $ 5,000,000 $ 4,877,200
5%, 10/1/2024 (Insured; MBIA)............................................. 14,000,000 12,694,360
Corona Community Facilities District, Special Tax, Refunding:
7.60%, 9/1/2013........................................................... 5,755,000 6,025,830
7.60%, 9/1/2017........................................................... 3,000,000 3,138,600
7.70%, 9/1/2019........................................................... 2,000,000 2,096,540
East Bay Municipal Utilities District, Revenue:
Wastewater Treatment System:
Refunding 5.50%, 6/1/2013 (Insured; AMBAC).............................. 16,900,000 16,565,718
Refunding 5.55%, 6/1/2020 (Insured; AMBAC).............................. 26,500,000 25,469,415
7.20%, 6/1/2020 (Insured; AMBAC) (Prerefunded 6/1/2000) (a)............. 3,325,000 3,649,986
Water System, Refunding:
6%, 6/1/2012 (Insured; MBIA)............................................ 15,600,000 16,236,480
4.75%, 6/1/2021 (Insured; FGIC)......................................... 43,435,000 38,099,879
Eldorado County Public Financing Authority, Revenue, Refunding
5.50%, 2/15/2016 (Insured; FGIC).......................................... 9,000,000 8,900,820
Emeryville Public Financing Authority, Revenue
(Shellmound Park Redevelopment Project) 6.80%, 5/1/2024................... 2,365,000 2,503,258
Escondido Union High School District:
Zero Coupon, 11/1/2015 (Insured; MBIA).................................... 6,250,000 2,223,625
Zero Coupon, 11/1/2017 (Insured; MBIA).................................... 4,000,000 1,249,560
Fairfield, Water Revenue, Refunding:
5.25%, 4/1/2012 (Insured; AMBAC).......................................... 4,310,000 4,285,519
5.25%, 4/1/2013 (Insured; AMBAC).......................................... 4,535,000 4,474,730
Folsom, Special Tax (Community Facilities District Number 3) 7.80%, 12/1/2015 1,900,000 2,014,076
Folsom Public Financing Authority, Local Agency Revenue
7.90%, 10/1/2019.......................................................... 18,120,000 18,655,084
Foothill Eastern Transportation Corridor Agency, Toll Road Revenue
6%, 1/1/2016.............................................................. 8,750,000 8,861,300
Fresno, Sewer Revenue 5.25%, 9/1/2019 (Insured; AMBAC)...................... 4,850,000 4,679,959
Hesperia Water District, COP, Refunding
(Water Facilities Improvement Project) 7.15%, 6/1/2026 (Insured; FGIC).... 4,500,000 4,969,125
Inglewood, HR (Daniel Freeman Hospital, Inc.) 6.75%, 5/1/2013............... 6,300,000 6,715,989
La Verne Community Facilities District, Special Tax
(Koll Business Center) 7.875%, 3/1/2014................................... 3,625,000 3,822,128
Lake Elsinore Public Financing Authority, Revenue:
Local Agency 8%, 10/1/2020................................................ 3,000,000 2,100,000
Tax Allocation (Lake Elsinore Redevelopment Project)
6.25%, 2/1/2019 (Insured; FGIC)......................................... 4,220,000 4,361,539
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
____________ ____________
California (continued)
Loma Linda, HR, Refunding (Loma Linda University Medical Center Project)
7%, 12/1/2015 (Insured; AMBAC)............................................ $ 12,355,000 $ 13,228,004
Los Angeles Community Redevelopment Agency, Tax Allocation
(Hollywood Redevelopment Project) 6.10%, 7/1/2022 (Insured; MBIA)......... 4,900,000 5,045,726
Los Angeles County, COP:
(Disney Parking Project) 6.50%, 3/1/2023.................................. 7,440,000 7,595,496
(Edmund D. Edelman Childrens' Court) 6%, 4/1/2012 (Insured; AMBAC)........ 9,000,000 9,333,090
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
6%, 7/1/2020 (Insured; MBIA).............................................. 15,000,000 15,495,900
Los Angeles Department Water and Power,
Waterworks Reveue, Refunding:
5.90%, 5/15/2011 (Insured; FGIC)........................................ 2,190,000 2,301,492
6.40%, 5/15/2028........................................................ 2,435,000 2,541,044
6.375%, 7/1/2034 (Insured; MBIA)........................................ 12,000,000 12,746,640
Los Angeles Harbor Department, Revenue:
6%, 8/1/2012.............................................................. 8,900,000 9,221,735
5.375%, 11/1/2016......................................................... 12,545,000 12,012,465
6.625%, 8/1/2019 (Insured; AMBAC)......................................... 6,000,000 6,380,460
6.625%, 8/1/2025.......................................................... 17,780,000 18,957,036
Los Angeles Municipal Improvement Corp.:
COP (Equipment Real Property) 5.40%, 12/1/2010 (Insured; AMBAC)........... 3,935,000 3,980,489
LR, Refunding (Central Library Project):
6.30%, 6/1/2016......................................................... 3,500,000 3,639,300
6.30%, 6/1/2018......................................................... 4,250,000 4,401,725
6.35%, 6/1/2020......................................................... 7,700,000 8,023,939
Menlo Park Community Development Agency, Tax Allocation, Refunding
(Las Puglas Community Development Project):
5.375%, 6/1/2016 (Insured; AMBAC)....................................... 6,470,000 6,334,324
5.375%, 6/1/2022 (Insured; AMBAC)....................................... 11,825,000 11,508,090
Metropolitan Water District of Southern California, Waterworks Revenue:
6.75%, 7/1/2018 (Prerefunded 7/1/2001) (a)................................ 4,750,000 5,230,368
Refunding 4.75%, 7/1/2021 (Insured; MBIA)................................. 32,000,000 28,061,760
5%, 7/1/2027.............................................................. 30,735,000 28,128,057
Modesto, Multi-Family Housing Mortage Revenue, Refunding 6.40%, 6/1/2029.... 7,723,000 7,924,107
Modesto Irrigation District Financing Authority, Revenue, Refunding
5.75%, 10/1/1010 (Insured; MBIA).......................................... 8,275,000 8,719,533
Mojave Water Agency, Refunding (Improvement District-Morongo Basin)
5.75%, 9/1/2015 (Insured; FGIC)........................................... 3,000,000 3,065,820
Moulton Niguel Water District (Improvement District Number 6)
7.25%, 4/1/2016 (Insured; AMBAC) (Prerefunded 4/1/2000) (a)............... 5,000,000 5,478,800
Mount Diablo Hospital District, Revenue
6.125%, 12/1/2020 (Insured; AMBAC) (Prerefunded 12/1/2000) (a)............ 5,000,000 5,370,650
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
California (continued)
Mount Diablo Unified School District, Community Facilities District, Special Tax
7.05%, 8/1/2020 (Insured; FGIC) (Prerefunded 8/1/2000) (a)................ $ 3,500,000 $ 3,840,480
M-S-R Public Power Agency, Revenue, Refunding (San Juan Project):
5.375%, 7/1/2013 (Insured; MBIA).......................................... 2,500,000 2,499,875
5.375%, 7/1/2014 (Insured; MBIA).......................................... 3,000,000 2,983,260
5.90%, 7/1/2020........................................................... 16,750,000 16,755,025
Northern California Power Agency, Power Revenue:
(Hydroelectric Project) 7%, 7/1/2016 (Insured; AMBAC) (Prerefunded 1/1/2016) (a) 670,000 784,731
Refunding 7.50%, 7/1/2023 (Insured; AMBAC) (Prerefunded 7/1/2021) (a)..... 375,000 457,714
Northridge Water District, COP, Revenue
5.25%, 2/1/2018 (Insured; AMBAC).......................................... 2,500,000 2,389,025
Orange Cove Irrigation District, Revenue, COP, Refunding (Rehabilitation Project)
5%, 2/1/2017 (Insured; AMBAC)............................................. 7,300,000 6,793,599
Palmdale Elementary School District, Special Tax, Community Facilities District Number 90
5.30%, 8/1/2014 (Insured; FSA)............................................ 2,500,000 2,465,175
Palo Alto Unified School District 5.375%, 8/1/2017.......................... 6,940,000 6,867,824
Pasadena Community Development Commission, MFHR (Civic Center)
6.45%, 12/1/2021 (Insured; FSA)........................................... 13,185,000 13,539,281
Port of Oakland, Special Facilities Revenue, (Mitsui O.S.K. Lines Ltd.)
6.80%, 1/1/2019 (LOC; Industrial Bank of Japan) (d)....................... 2,000,000 2,117,700
Rancho Cucamonga Redevelopment Agency, Tax Allocation
(Rancho Cucamonga Redevelopment Project):
7.125%, 9/1/2019 (Insured; MBIA)........................................ 2,455,000 2,642,096
6.75%, 9/1/2020 (Insured; MBIA)......................................... 1,415,000 1,511,588
Riverside County Asset Leasing Corp., Leasehold Revenue
(Riverside County Hospital Project) 6.25%, 6/1/2019....................... 7,500,000 7,522,950
Riverside County Community Facilities District, Special Tax
8.25%, 9/1/2016........................................................... 4,730,000 4,705,120
Sacramento, COP (Refunding-Public Facilities Project) 6%, 7/1/2012.......... 6,000,000 6,120,420
Sacramento County, Airport System Revenue:
6%, 7/1/2017 (Insured; MBIA).............................................. 5,850,000 5,965,889
5.90%, 7/1/2024 (Insured; MBIA)........................................... 9,650,000 9,723,630
Saddleback Community College District, COP
7%, 8/1/2019 (Insured; BIGI).............................................. 2,875,000 3,073,634
San Bernardino County, COP:
(Capital Facilities Project)
6.875%, 8/1/2024........................................................ 5,000,000 5,927,400
(Refunding, Medical Center Financing Project) 5.50%, 8/1/2015 (Insured; MBIA) 12,790,000 12,823,510
(West Valley Detention Center)
5.90%, 11/1/2001 (Insured; MBIA)........................................ 1,565,000 1,659,260
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
California (continued)
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 $ 5,979,765
San Francisco City and County, SFMR
(FNMA/GNMA Mortgage Backed Securities Program) 7.45%, 1/1/2024............ 255,000 267,740
San Francisco City and County Airports Commission, International Airport Revenue:
Refunding, 6.10%, 5/1/2003 (Insured; AMBAC)............................... 3,000,000 3,233,160
5.75%, 5/1/2020 (Insured; FGIC)........................................... 28,005,000 27,879,818
San Francisco City and County Public Utilities Commission, Water Revenue
6.50%, 11/1/2017 (Prerefunded 11/1/2001) (a).............................. 3,500,000 3,844,680
San Francisco City and County Redevelopment Agency, LR
(George R. Moscone Convention) 5.50%, 7/1/2018............................ 3,120,000 2,975,794
San Jose_Santa Clara Water Financing Authority, Sewer Revenue
5.375%, 11/15/2020 (Insured; FGIC)........................................ 15,030,000 14,562,417
San Marcos Public Facilities Authority, Tax Allocation Revenue
6%, 1/1/2006 (Insured; FSA) (Prerefunded 1/1/2002) (a).................... 10,500,000 11,314,590
San Mateo County, COP (Capital Projects Program)
6.50%, 7/1/2017 (Insured; MBIA) (Prerefunded 7/1/2001) (a)................ 6,000,000 6,558,419
Santa Barbara, COP, Refunding (Water System Improvement Project)
6.70%, 4/1/2027 (Insured; AMBAC).......................................... 4,000,000 4,341,680
Santa Clara County, COP (Capital Project)
6.25%, 10/1/2016 (Insured; AMBAC)......................................... 10,000,000 10,461,600
Santa Cruz County, COP (Capital Facilities Project)
6.70%, 9/1/2020 (Insured; MBIA) (Prerefunded 9/1/2001) (a)................ 5,000,000 5,517,100
Santa Cruz County Public Financing Authority, Revenue, Refunding
7.10%, 9/1/2021 (Insured; MBIA)........................................... 6,500,000 7,003,880
Southern California Rapid Transportation District, COP (Workers Compensation Fund)
6.50%, 7/1/2007 (Insured; MBIA) (e)....................................... 22,900,000 24,662,155
University of California:
COP (UCLA Central Chiller/Cogeneration)
6.25%, 11/1/2009 (Prerefunded 11/1/1999) (a)............................ 3,000,000 3,189,569
HR (UC Davis Medical Center) 5.70%, 7/1/2011 (Insured; AMBAC)............. 10,195,000 10,528,681
West Basin Municipal Water District, COP
6.85%, 8/1/2016 (Insured; AMBAC) (Prerefunded 8/1/2000) (a)............... 6,000,000 6,548,519
U.S. Related_1.9%
Puerto Rico Electric Power Authority, Power Revenue
5.375%, 7/1/2027 (Insured; MBIA).......................................... 26,500,000 25,842,800
____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $1,162,463,031)..................................................... $1,205,083,490
=================
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1997
Principal
Short-Term Municipal Investments_10.8% Amount Value
________ ________
California_7.6%
California Statewide Communities Development Corp., IDR, VRDN (Grundfos Pump Project)
3.75% (LOC: Bank of Tokyo Mitsubishi, California State Teachers Retirement) (d,f) $ 5,900,000.. $ 5,900,000
California Health Facilities Financing Authority, Revenue,
(Catholic Health Care West) 3.40% (Insured; AMBAC) (g).................... 12,000,000 12,000,000
California Pollution Control Financing Authority, PCR, Refunding, VRDN
(Pacific Gas and Electric)
3.90% (LOC; Bank of America National Trust and Savings Association) (d,f). 31,300,000 31,300,000
Chula Vista, IDR, Refunding, VRDN
(San Diego Gas) 3.75% (f)................................................. 5,550,000 5,550,000
Irvine Improvement Bond Act 1915, Revenue, VRDN
(Assessment District Number 94-15) 3.80% (LOC; Dai-Ichi Kangyo Bank Ltd.) (d,f) 6,000,000 6,000,000
Irvine Public Facilities and Infrastructure Authority, LR, VRDN
(Capital Improvement Project) 3.70% (LOC; National Westminster PLC) (d,f). 10,000,000 10,000,000
Irvine Ranch Water District, Refunding, VRDN
3.70% (LOC; Bank of America National Trust and Savings Association) (d,f). 8,900,000 8,900,000
Orange County Sanitation District (Numbers 1-3, 5-7,11,13 & 14), COP, VRDN
3.75% (LOC; National Westminster PLC) (d,f)............................... 9,200,000 9,200,000
Tustin Improvement Bond Act 1915, (Reassessment District Number 95-2), VRDN
3.75% (LOC; Kredietbank, N. V.) (d,f)..................................... 14,000,000 14,000,000
U.S. Related_3.2%
Commonwealth of Puerto Rico, Government Development Bank, Refunding, VRDN
3.55% (LOC; Credit Suisse) (d,f).......................................... 25,150,000 25,150,000
Puerto Rico Electric Power Authority, Power Revenue 3.48% (Insured; FSA) (g) 17,500,000 17,500,000
______________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $145,500,000)....................................................... $ 145,500,000
===============
TOTAL INVESTMENTS_100.0%
(cost $1,307,963,031)..................................................... $1,350,583,490
===============
</TABLE>
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BIGI Bond Investors Guaranty Insurance LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FNMA Federal National Mortgage Association MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch (h) or Moody's or Standard & Poor's Percentage of Value
____ ______ _________________ ______________________
AAA Aaa AAA 62.7%
AA Aa AA 14.4
A A A 8.4
BBB Baa BBB 2.7
F1 MIG1/P1 SP1/A1 8.6
Not Rated(i) Not Rated(i) Not Rated(i) 3.2
________
100.0%
=========
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) Purchased on a delayed-delivery basis.
(c) Wholly held by custodian as collateral for delayed-delivery
security.
(d) Secured by letters of credit.
(e) Partially held by custodian in a segregated account as initial
margin for open financial future positions.
(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) Inverse Floater Security_the interest rate is subject to change
periodically.
(h) Fitch currently provides creditworthiness information for a limited
number of investments.
(i) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
(j) At May 31, 1997, 28.8% of the Fund's net assets are insured by MBIA.
</TABLE>
<TABLE>
STATEMENT OF FINANCIAL FUTURES MAY 31, 1997
Market Value Unrealized
Covered (Depreciation)
Financial Futures Short Contracts by Contracts Expiration at 5/31/97
____________ ____________ ____________ ____________ ________________
<S> <C> <C> <C> <C>
U.S. Treasury Futures........................ 750 $82,218,750 September `97 $(656,250)
=============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1997
Cost Value
____________ ____________
ASSETS: Investments in securities_See Statement of Investments $1,307,963,031 $1,350,583,490
Cash....................................... 3,461,825
Interest receivable........................ 24,648,188
Prepaid expenses........................... 35,066
_____________
1,378,728,569
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 903,801
Payable for investment securities purchased 8,122,461
Payable for futures variation margin_Note 4(a) 515,625
Accrued expenses........................... 128,323
_____________
9,670,210
_____________
NET ASSETS.................................................................. $1,369,058,359
================
REPRESENTED BY: Paid-in capital............................ $1,359,023,634
Accumulated undistributed investment income_net184,490
Accumulated net realized gain (loss) on investments (32,113,974)
Accumulated net unrealized appreciation (depreciation)
on investments [including ($656,250) net unrealized
(depreciation) on financial futures]_Note 4(b) 41,964,209
_____________
NET ASSETS.................................................................. $1,369,058,359
================
SHARES OUTSTANDING
(300 MILLION SHARES OF $.01 PAR VALUE COMMON STOCK AUTHORIZED).............. 95,608,003
NET ASSET VALUE, offering and redemption price per share_Note 3(d).......... $14.32
=========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1997
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $ 80,291,434
EXPENSES: Management fee_Note 3(a)................... $ 8,259,304
Shareholder servicing costs_Note 3(b)...... 1,334,611
Custodian fees............................. 107,384
Directors' fees and expenses_Note 3(c)..... 71,998
Professional fees.......................... 64,302
Prospectus and shareholders' reports....... 47,653
Registration fees.......................... 34,166
Loan commitment fees_Note 2................ 8,767
Miscellaneous.............................. 76,566
____________
Total Expenses......................... 10,004,751
_____________
INVESTMENT INCOME_NET....................................................... 70,286,683
_____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments.... $(2,044,218)
Net realized gain (loss) on financial futures (71,094)
____________
Net Realized Gain (Loss)............... (2,115,312)
Net unrealized appreciation (depreciation) on investments
[including ($656,250) net unrealized (depreciation)
on financial futures].................. 34,799,633
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 32,684,321
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $102,971,004
=============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
May 31, 1997 May 31, 1996
_________________ _________________
<S> <C> <C>
OPERATIONS:
Investment income_net.................................................. $ 70,286,683 $ 78,376,473
Net realized gain (loss) on investments................................ (2,115,312) 5,971,617
Net unrealized appreciation (depreciation) on investments.............. 34,799,633 (57,311,024)
_________________ _________________
Net Increase (Decrease) in Net Assets Resulting from Operations...... 102,971,004 27,037,066
_________________ _________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net.................................................. (70,102,193) (78,376,473)
Net realized gain on investments....................................... (86,360) ___
_________________ _________________
Total Dividends...................................................... (70,188,553) (78,376,473)
_________________ _________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 1,675,496,366 1,244,233,021
Dividends reinvested................................................... 43,945,559 49,530,321
Cost of shares redeemed................................................ (1,754,439,821) (1,428,904,541)
_________________ _________________
Increase (Decrease) in Net Assets from Capital Stock Transactions.... (34,997,896) (135,141,199)
_________________ _________________
Total Increase (Decrease) in Net Assets............................ (2,215,445) (186,480,606)
NET ASSETS:
Beginning of Period.................................................... 1,371,273,804 1,557,754,410
_________________ _________________
End of Period....................................................... $ 1,369,058,359 $ 1,371,273,804
================== =================
UNDISTRIBUTED INVESTMENT INCOME_NET.......................... $ 184,490 ___
_________________ _________________
Shares Shares
_________________ _________________
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 117,770,679 86,863,106
Shares issued for dividends reinvested................................ 3,079,624 3,452,140
Shares redeemed........................................................ (123,222,239) (99,479,542)
_________________ _________________
Net Increase (Decrease) in Shares Outstanding........................ (2,371,936) (9,164,296)
================== =================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
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 period indicated. This
information has been derived from the Fund's financial statements.
Year Ended May 31,
_____________________________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $14.00 $14.54 $14.59 $15.34 $14.82
________ ________ ________ ________ ________
Investment Operations:
Investment income_net................... .73 .77 .82 .84 .89
Net realized and unrealized gain (loss)
on investments............................ .32 (.54) __ (.57) .66
________ ________ ________ ________ ________
Total from Investment Operations............ 1.05 .23 .82 .27 1.55
________ ________ ________ ________ ________
Distributions:
Dividends from investment income-net......... (.73) (.77) (.82) (.85) (.88)
Dividends from net realized gain on investments __ __ (.05) (.17) (.15)
________ ________ ________ ________ ________
Total Distributions......................... (.73) (.77) (.87) (1.02) (1.03)
________ ________ ________ ________ ________
Net asset value, end of period............... $14.32 $14.00 $14.54 $14.59 $15.34
======= ======== ======== ======== ========
TOTAL INVESTMENT RETURN....................... 7.61% 1.58% 5.93% 1.58% 10.89%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .73% .69% .71% .70% .69%
Ratio of net investment income
to average net assets................ 5.11% 5.37% 5.77% 5.46% 5.88%
Portfolio Turnover Rate.................. 60.56% 56.12% 39.85% 28.14% 41.40%
Net Assets, end of period (000's Omitted).... $1,369,058 $1,371,274 $1,557,754 $1,658,782 $1,834,956
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. is the distributor of the Fund's
shares, which are sold to the public without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities 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.
The Fund has an unused capital loss carryover of approximately
$31,549,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to May 31, 1997.
The carryover does not include net realized securities losses from November
1, 1996 through May 31, 1997 which are treated, for Federal income tax
purposes, as arising in fiscal 1998. If not applied, $2,069,000 of the
carryover expires in fiscal 2003, $27,927,000 expires in fiscal 2004 and $1,55
3,000 expires in fiscal 2005.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As a result of the treatment of market discount for financial reporting
purposes, versus federal income tax purposes, the
Fund reclassified $82,514 from undistributed net realized and unrealized
gains to net investment income. This amount represented the cumulative effect
of such difference. Results of operations and net assets were not affected by
this reclassification.
NOTE 2_Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended May
31, 1997, the Fund did not borrow under the Facility.
NOTE 3_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 that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings, commitment fees and
extraordinary expenses, exceed 11\2% of the value of the Fund's average daily
net assets, the Fund may deduct from the payments to be made to the Manager,
or the Manager will bear such excess expense. There was no expense
reimbursement during the period ended May 31, 1997.
(B) Under the 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 period ended May 31, 1997, the Fund was charged an aggregate of
$728,051 pursuant to the Shareholder Services Plan.
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 $412,416 during the period ended May 31, 1997.
(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.
(D) Effective May 12, 1997, a .10% redemption fee is charged on certain
redemptions of Fund shares (including redemptions through the use of the Fund
Exchanges service) where the shares being redeemed were issued subsequent to
a specified effective date and the redemption or exchange occurs less than
fifteen days following the date of issuance. During the period ended May 31,
1997, redemption fees amounted to $36,527.
NOTE 4_Securities Transactions:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the year ended
May 31, 1997, amounted to $783,465,179 and $900,962,298, respectively.
The Fund may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. The Fund is exposed to
market risk as a result of changes in the value of the underlying financial
instruments (see the Statement of Financial Futures). Investments in
financial futures require the Fund to "mark to market" on a daily basis,
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
which reflects the change in market value of the contracts at the close of
each day's trading. Accordingly, variation margin payments are received or
made to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments
require initial margin deposits with a custodian, which consist of cash or
cash equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on which
the contract is traded and is subject to change. Contracts open at May 31,
1997 and their related unrealized depreciation are set forth in the Statement
of Financial Futures.
(B) At May 31, 1997, accumulated net unrealized appreciation on
investments and financial futures was $41,964,209, consisting of $45,858,036
gross unrealized appreciation and $3,893,827 gross unrealized depreciation.
At May 31, 1997, 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 statements of
investments and financial futures, as of May 31, 1997, 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 and financial highlights. Our procedures included
confirmation of securities owned as of May 31, 1997 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, 1997,
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 & Young LLP signature logo]
New York, New York
June 26, 1997
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, 1997 as "exempt-interest dividends" (not generally 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 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
[Dreyfus lion "d" logo]
Registration Mark
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.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 928AR975
[Dreyfus logo]
Registration Mark
California
Tax Exempt
Bond Fund, Inc.
Annual Report
May 31, 1997
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
5/31/87 10,000 10,000
5/31/88 10,898 10,553
5/31/89 12,152 11,712
5/31/90 13,041 12,426
5/31/91 14,355 13,513
5/31/92 15,765 14,580
5/31/93 17,651 16,168
5/31/94 18,087 16,423
5/31/95 19,735 17,397
5/31/96 20,636 17,672
5/31/97 22,345 19,017
*Source: Lehman Brothers
