File No. 2-96709
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 11 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 11 [X]
(Check appropriate box or boxes.)
DREYFUS MASSACHUSETTS TAX EXMEPT BOND FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b) of Rule 485
----
x on August 22, 1994 pursuant to paragraph (b) of Rule 485
----
60 days after filing pursuant to paragraph (a) of Rule 485
----
on (date) pursuant to paragraph (a) of Rule 485
----
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940. Registrant's Rule
24f-2 Notice for the fiscal year ended May 31, 1994 was filed on or about
July 12, 1994.
DREYFUS MASSACHUSETTS TAX EXMEPT BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 2
3 Condensed Financial Information 2
4 General Description of Registrant 3
5 Management of the Fund 10
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 19
7 Purchase of Securities Being Offered 10
8 Redemption or Repurchase 14
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
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10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History B-25
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal B-13
Holders of Securities
16 Investment Advisory and Other B-14
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS MASSACHUSETTS TAX EXMEPT BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-23
18 Capital Stock and Other Securities B-25
19 Purchase, Redemption and Pricing B-15, B-16
of Securities Being Offered
20 Tax Status *
21 Underwriters B-22
22 Calculations of Performance Data B-23
23 Financial Statements B-39
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-30
30 Location of Accounts and Records C-38
31 Management Services C-38
32 Undertakings C-38
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
FOR USE BY BANKS ONLY
August 22, 1994
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
SUPPLEMENT TO PROSPECTUS DATED AUGUST 22, 1994
All mutual fund shares involve certain investment risks, including the
possible loss of principal.
267/stkr082294IST
August 22, 1994
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
SUPPLEMENT TO PROSPECTUS
DATED AUGUST 22, 1994
I. PROPOSED MERGER OF THE DREYFUS CORPORATION
The Fund's adviser, The Dreyfus Corporation ("Dreyfus"), has entered
into an Agreement and Plan of Merger providing for the merger (the
"Merger") of Dreyfus with a subsidiary of Mellon Bank, N.A. ("Mellon").
Following the Merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon. Closing of the Merger is subject to a number of
contingencies, including approvals of the stockholders of Dreyfus and of
Mellon. The Merger is expected to occur in late August 1994, but could
occur significantly later.
The Merger will result in the automatic termination of the Fund's
current investment advisory agreement with Dreyfus, as required by the
Investment Company Act of 1940, as amended.
II. RESULTS OF FUND SHAREHOLDER VOTE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY
CONTRARY INFORMATION CONTAINED IN THE FUND'S PROSPECTUS.
On August 2, 1994, the Fund's shareholders voted to (a) approve a
new investment advisory agreement with Dreyfus, to become effective
upon consummation of the Merger; and (b) change certain of the Fund's
fundamental policies and investment restrictions to permit the Fund to (i)
borrow money to the extent permitted under the Investment Company Act
of 1940, as amended and (ii) pledge its assets to the extent necessary to
secure borrowings and make such policy non-fundamental.
(CONTINUED ON REVERSE SIDE)
III. REVISED MANAGEMENT POLICIES
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH, AND SUPERCEDES ANY CONTRARY INFORMATION
CONTAINED IN, THE SECTION IN THE FUND'S PROSPECTUS ENTITLED
"DESCRIPTION OF THE FUND--MANAGEMENT POLICIES."
BORROWING MONEY -- As a fundamental policy, the Fund is permitted
to borrow to the extent permitted under the Investment Company Act of
1940. However, the Fund currently intends to borrow money only for
temporary or emergency (not leveraging) purposes, in an amount up to 15%
of the value of the Fund's total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While borrowings exceed
5% of the Fund's total assets, the Fund will not make any additional
investments.
267/stkr082294
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PROSPECTUS AUGUST 22, 1994
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
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DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN
AS A MUNICIPAL BOND FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A
LEVEL OF CURRENT INCOME EXEMPT FROM FEDERAL AND MASSACHUSETTS
INCOME TAXES AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT
CHARGE OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO
EARN INCOME ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN
PURCHASE OR REDEEM SHARES BY TELEPHONE USING DREYFUS
TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE
FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED AUGUST 22, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR
666.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY ANY BANK, AND ARE NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. THE NET ASSET VALUE OF MUTUAL FUNDS OF
THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES............................. 2
CONDENSED FINANCIAL INFORMATION............................ 2
DESCRIPTION OF THE FUND.................................... 3
MANAGEMENT OF THE FUND..................................... 11
HOW TO BUY FUND SHARES..................................... 11
SHAREHOLDER SERVICES....................................... 13
HOW TO REDEEM FUND SHARES.................................. 15
SHAREHOLDER SERVICES PLAN.................................. 18
DIVIDENDS, DISTRIBUTIONS AND TAXES......................... 18
PERFORMANCE INFORMATION.................................... 20
GENERAL INFORMATION........................................ 21
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.......................................... .60%
Other Expenses........................................... .20%
Total Fund Operating Expenses............................ .80%
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
You would pay the following expenses
on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at
the end of each time period: $8 $26 $44 $99
</TABLE>
- --------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
- ------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. You can purchase Fund shares without charge directly from Dreyfus
Service Corporation; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund" and "Shareholder
Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears
in the Statement of Additional Information. Further financial data and
related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31,
1986(1) 1987 1988 1989 1990 1991 1992 1993 1994
--------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of year... $15.50 $15.89 $15.48 $15.22 $15.66 $15.43 $15.59 $16.20 $17.01
------- ------ ------- ------ ------ ------- ------ ------ ------
INVESTMENT OPERATIONS:
Investment income __ net.............. 1.17 1.12 1.10 1.09 1.08 1.06 1.01 .97 .91
Net realized and unrealized
gain (loss) on investments........... .39 (.41) (.26) .44 (.23) .16 .60 .81 (.52)
------- ------ ------- ------ ------ ------- ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS..... 1.56 .71 .84 1.53 .85 1.22 1.61 1.78 .39
------- ------ ------- ------ ------ ------- ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income_net.. (1.17) (1.12) (1.10) (1.09) (1.08) (1.06) (1.00) (.97) (.92)
Dividends from net realized gain
on investments...................... __ __ __ __ __ __ __ __ (.21)
Dividends in excess of net realized
gain on investments................. __ __ __ __ __ __ __ __ (.24)
TOTAL DISTRIBUTIONS................. (1.17) (1.12) (1.10) (1.09) (1.08) (1.06) (1.00) (.97) (1.37)
------- ------ ------- ------ ------ ------- ------ ------ ------
Net asset value, end of year......... $15.89 $15.48 $15.22 $15.66 $15.43 $15.59 $16.20 $17.01 $16.03
====== ======= ====== ====== ====== ====== ====== ====== =======
TOTAL INVESTMENT RETURN............... 10.85%(2) 4.27% 5.61% 10.39% 5.58% 8.20% 10.62% 11.27% 2.07%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets................. .26%(2) .64% .79% .83% .83% .81% .84% .81% .80%
Ratio of net investment income to
average net assets................. 7.66%(2) 6.75% 7.18% 7.06% 6.92% 6.87% 6.30% 5.83% 5.30%
Decrease reflected in above
expense ratios due to
undertakings by The Dreyfus Corporation.. .86%(2) .25% .10% .04% __ __ __ __ __
Portfolio Turnover Rate......... 103.17%(3) 39.32% 71.18% 18.05% 55.02% 49.73% 68.07% 85.29% 29.73%
Net Assets, end of year
(000's omitted)................ $54,756 $81,671 $84,160 $99,108 $107,861 $120,540 $157,061 $183,601 $168,473
- ---------------------------
(1)From June 11, 1985 (commencement of operations) to May 31, 1986.
(2)Annualized.
(3)Not annualized.
</TABLE>
Page 2
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's goal is to provide you with as high a
level of current income exempt from Federal and Massachusetts income
taxes as is consistent with the preservation of capital. To accomplish this
goal, the Fund invests primarily in the debt securities of the
Commonwealth of Massachusetts, its political subdivisions, authorities
and corporations, the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal and Massachusetts income
taxes (collectively, "Massachusetts Municipal Obligations"). To the extent
acceptable Massachusetts Municipal Obligations are at any time
unavailable for investment by the Fund, the Fund will invest temporarily
in other debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal, but not Commonwealth of
Massachusetts, income tax. The Fund's investment objective cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective will be
achieved.
MUNICIPAL OBLIGATIONS - Debt securities the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal income tax
("Municipal Obligations") generally include debt obligations issued to
obtain funds for various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities. Municipal
Obligations are classified as general obligation bonds, revenue bonds and
notes. General obligation bonds are secured by the issuer's pledge of its
faith, credit and taxing power for the payment of principal and interest.
Revenue bonds are payable from the revenue derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise or other specific revenue source, but not from the general
taxing power. Tax exempt industrial development bonds, in most cases, are
revenue bonds that generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which
are obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase
agreements which are similar to installment purchase contracts for
property or equipment issued by municipalities. Municipal Obligations bear
fixed, floating or variable rates of interest, which are determined in some
instances by formulas under which the Municipal Obligation's interest rate
will change directly or inversely to changes in interest rates or an index,
or multiples thereof, in many cases subject to a maximum and minimum.
Certain Municipal Obligations are subject to redemption at a date earlier
than their stated maturity pursuant to call options, which may be
separated from the related Municipal Obligation and purchased and sold
separately.
MANAGEMENT POLICIES - It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when
maintaining a temporary defensive position) in Municipal Obligations. At
least 65% of the value of the Fund's net assets (except when maintaining a
temporary defensive position) will be invested in bonds and debentures.
Under normal circumstances, at least 65% of the Fund's net assets will be
invested in Massachusetts Municipal Obligations and the remainder may be
invested in securities that are not Massachusetts Municipal Obligations
and therefore may be subject to Massachusetts income taxes. See "Risk
Factors- Investing in Massachusetts Municipal Obligations" below, and
"Dividends, Distributions and Taxes."
At least 80% of the value of the Fund's net assets must consist of
Municipal Obligations which, in the case of bonds, are rated no lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard &
Poor's Corporation ("S&P") or Fitch Investors Service, Inc. ("Fitch"). The
Fund may invest
Page 3
up to 20% of the value of its net assets in Municipal
Obligations which, in the case of bonds, are rated lower than Baa by
Moody's and BBB by S&P and Fitch and as low as the lowest rating assigned
by Moody's, S&P or Fitch, but it currently is the intention of the Fund that
this portion of the Fund's portfolio be invested primarily in Municipal
Obligations rated no lower than Baa by Moody's or BBB by S&P or Fitch. The
Fund may invest in short-term Municipal Obligations which are rated in
the two highest rating categories by Moody's, S&P or Fitch. See "Appendix
B" in the Statement of Additional Information. Municipal Obligations rated
BBB by S&P or Fitch or Baa by Moody's are considered investment grade
obligations; those rated BBB by S&P and Fitch are regarded as having an
adequate capacity to pay principal and interest, while those rated Baa by
Moody's are considered medium grade obligations which lack outstanding
investment characteristics and have speculative characteristics.
Investments rated Ba or lower by Moody's and BB or lower by S&P and
Fitch ordinarily provide higher yields but involve greater risk because of
their speculative characteristics. The Fund may invest in Municipal
Obligations rated C by Moody's or D by S&P or Fitch, which is such rating
organizations' lowest rating and indicates that the Municipal Obligation is
in default and interest and/or repayment of principal is in arrears. See
"Risk Factors -Lower Rated Bonds" below for a further discussion of
certain risks. The Fund also may invest in securities which, while not
rated, are determined by The Dreyfus Corporation to be of comparable
quality to the rated securities in which the Fund may invest; for purposes
of the 80% requirement described in this paragraph, such unrated
securities shall be deemed to have the rating so determined. The Fund also
may invest in Taxable Investments of the quality described below.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security
also would affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of projects. As
a result, the Fund may be subject to greater risk as compared to a fund
that does not follow this practice.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds), which are specified
private activity bonds, as defined in the Internal Revenue Code of 1986, as
amended (the "Code"), issued after August 7, 1986, while exempt from
Federal income tax, is a preference item for the purpose of the alternative
minimum tax. Where a regulated investment company receives such
interest, a proportionate share of any exempt interest dividend paid by the
investment company may be treated as such a preference item to
shareholders. The Fund will invest no more than 20% of the value of its net
assets in Municipal Obligations the interest from which gives rise to a
preference item for the purpose of the alternative minimum tax and,
except for temporary defensive purposes, in other investments subject to
Federal income tax.
The Fund may purchase floating and variable rate demand notes and
bonds, which are tax exempt obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to demand
payment of principal at any time, or at specified intervals. Variable rate
demand notes include master demand notes which are obligations that
permit the Fund to invest fluctuating amounts, which may change daily
without penalty, pursuant to direct arrangements between the Fund, as
lender, and the borrower. The interest rates on these obligations fluctuate
from time to time. Frequently, such obligations are secured by letters of
credit or other credit support arrangements provided by banks. Use of
letters of credit or other credit support arrangements will not adversely
affect the tax exempt status of these obligations. Because these
obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem
Page 4
is dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations. The Dreyfus Corporation,
on behalf of the Fund, will consider on an ongoing basis the creditworthiness
of the issuers of the floating and variable rate demand obligations in the
Fund's portfolio. The Fund will not invest more than 15% of the value of its
net assets in floating or variable rate demand obligations as to which the Fund
cannot exercise the demand feature on not more than seven days' notice if there
is no secondary market available for these obligations, and in other illiquid
securities.
The Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds
and municipal lease/purchase agreements). A participation interest gives
the Fund an undivided interest in the Municipal Obligation in the proportion
that the Fund's participation interest bears to the total principal amount
of the Municipal Obligation. These instruments may have fixed, floating or
variable rates of interest. If the participation interest is unrated, it will
be backed by an irrevocable letter of credit or guarantee of a bank that the
Board of Trustees has determined meets the prescribed quality standards
for banks set forth below, or the payment obligation otherwise will be
collateralized by U.S. Government securities. For certain participation
interests, the Fund will have the right to demand payment, on not more
than seven days' notice, for all or any part of the Fund's participation
interest in the Municipal Obligation, plus accrued interest. As to these
instruments, the Fund intends to exercise its right to demand payment
only upon a default under the terms of the Municipal Obligation, as needed
to provide liquidity to meet redemptions, or to maintain or improve the
quality of its investment portfolio. The Fund will not invest more than
15% of the value of its net assets in participation interests that do not
have this demand feature if there is no secondary market available for
these instruments, and in other illiquid securities.
The Fund may purchase custodial receipts representing the right to
receive certain future principal and interest payments on Municipal
Obligations which underlie the custodial receipts. A number of different
arrangements are possible. In a typical custodial receipt arrangement, an
issuer or a third party owner of Municipal Obligations deposits such
obligations with a custodian in exchange for two classes of custodial
receipts. The two classes have different characteristics, but, in each
case, payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest
rate is adjusted, and ownership changes, based on an auction mechanism.
This class's interest rate generally is expected to be below the coupon
rate of the underlying Municipal Obligations and generally is at a level
comparable to that of a Municipal Obligation of similar quality and having
a maturity equal to the period between interest rate adjustments. The
second class bears interest at a rate that exceeds the interest rate
typically borne by a security of comparable quality and maturity; this rate
also is adjusted, but in this case inversely to changes in the rate of
interest of the first class. If the interest rate on the first class exceeds
the coupon rate of the underlying Municipal Obligations, its interest rate
will exceed the rate paid on the second class. In no event will the
aggregate interest paid with respect to the two classes exceed the
interest paid by the underlying Municipal Obligations. The value of the
second class and similar securities should be expected to fluctuate more
than the value of a Municipal Obligation of comparable quality and
maturity and their purchase by the Fund should increase the volatility of
its net asset value and, thus, its price per share. These custodial receipts
are sold in private placements. The Fund also may purchase directly from
issuers, and not in a private placement, Municipal Obligations having
characteristics similar to custodial receipts. These securities may be
issued as part of a multi-class offering and the interest rate on certain
classes may be subject to a cap or floor.
The Fund may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided
such investments are consistent with the Fund's investment objective.
Such securities may include securities that are not readily marketable,
such as certain securities that are
Page 5
subject to legal or contractual restrictions on resale and repurchase
agreements providing for settlement in more than seven days after notice. As to
these securities, the Fund is subject to a risk that should the Fund desire to
sell them when a ready buyer is not available at a price that the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected. However, if a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities Act of
1933, as amended, for certain of these securities held by the Fund, the Fund
intends to treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board of Trustees. Because it is not
possible to predict with assurance how the market for restricted securities
pursuant to Rule 144A will develop, the Fund's Board of Trustees has directed
The Dreyfus Corporation to monitor carefully the Fund's investments in such
securities with particular regard to trading activity, availability of reliable
price information and other relevant information. To the extent that for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities may
have the effect of increasing the level of illiquidity in the Fund's portfolio
during such period.
The Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase, at the Fund's
option, specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise of a
stand-by commitment, therefore, is subject to the ability of the seller to
make payment on demand. The Fund will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise its
rights thereunder for trading purposes. The Fund may pay for stand-by
commitments if such action is deemed necessary, thus increasing to a
degree the cost of the underlying Municipal Obligation and similarly
decreasing such security's yield to investors. The Fund also may acquire
call options on specific Municipal Obligations. The Fund generally would
purchase these call options to protect the Fund from the issuer of the
related Municipal Obligation redeeming, or other holder of the call option
from calling away, the Municipal Obligation before maturity. The sale by
the Fund of a call option that it owns on a specific Municipal Obligation
could result in the receipt of taxable income by the Fund.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement)
having a relatively long maturity and bearing interest at a fixed rate
substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank, broker-
dealer or other financial institution, pursuant to which such institution
grants the security holders the option, at periodic intervals, to tender
their securities to the institution and receive the face value thereof. As
consideration for providing the option, the financial institution receives
periodic fees equal to the difference between the Municipal Obligation's
fixed coupon rate and the rate, as determined by a remarketing or similar
agent at or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on the date of
such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the
Fund, will consider on an ongoing basis the creditworthiness of the
issuers of the underlying Municipal Obligation, of any custodian and of the
third party provider of the tender option. In certain instances and for
certain tender option bonds, the option may be terminable in the event of a
default in payment of principal or interest on the underlying Municipal
Obligations and for other reasons. The Fund will not invest more than 15%
of the value of its net assets in securities that are illiquid, which would
include tender option bonds as to which it cannot exercise the tender
feature on not more than seven days' notice if there is no secondary
market available for these obligations.
The Fund may invest in zero coupon securities which are debt securities
issued or sold at a discount from their face value which do not entitle the
holder to any periodic payment of interest prior to maturity or a specified
redemption date (or cash payment date). The amount of the discount varies
depending on
Page 6
the time remaining until maturity or cash payment date, prevailing interest
rates, liquidity of the security and perceived credit quality of the issuer.
Zero coupon securities also may take the form of debt securities that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities generally
are more volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit qualities. The
Fund may invest up to 5% of its assets in zero coupon bonds which are rated
below investment grade. See "Risk Factors-Lower Rated Bonds" and "Other
Investment Considerations" below, and "Investment Objective and Management
Policies-Risk Factors-Lower Rated Bonds" and "Dividends, Distributions and
Taxes" in the Statement of Additional Information.
From time to time, the Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. Such loans may not exceed
331/3% of the Fund's total assets. In connection with such loans, the Fund
will receive collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. The Fund can increase its income through the investment of
such collateral. The Fund continues to be entitled to payments in amounts
equal to interest or other distributions payable on the loaned security and
receives interest on the amount of the loan. Such loans will be terminable
at any time upon specified notice. The Fund might experience risk of loss
if the institutions with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in
taxable short-term investments ("Taxable Investments") consisting of:
notes of issuers having, at the time of purchase, a quality rating within
the two highest grades of Moody's, S&P or Fitch; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper rated
not lower than P-1 by Moody's, A-1 by S&P or F-1 by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic
banks, with assets of one billion dollars or more; time deposits; bankers'
acceptances and other short-term bank obligations; and repurchase
agreements in respect of any of the foregoing. Dividends paid by the Fund
that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions
and Taxes." Except for temporary defensive purposes, at no time will more
than 20% of the value of the Fund's net assets be invested in Taxable
Investments and Municipal Obligations the interest from which gives rise
to a preference item for the purpose of the alternative minimum tax. When
the Fund has adopted a temporary defensive position, including when
acceptable Massachusetts Municipal Obligations are unavailable for
investment by the Fund, in excess of 35% of the Fund's net assets may be
invested in securities that are not exempt from Massachusetts income tax.
Under normal market conditions, the Fund anticipates that not more than
5% of the value of its total assets will be invested in any one category of
Taxable Investments. Taxable Investments are more fully described in the
Statement of Additional Information, to which reference hereby is made.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money from
banks, but only for temporary or emergency (not leveraging) purposes, in
an amount up to 15% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made.
While borrowings exceed 5% of the value of the Fund's total assets, the
Fund will not make any additional investments; and (ii) invest up to 25% of
its assets in the securities of issuers in any single industry, provided that
there is no such limitation on the purchase of Municipal Obligations and,
for temporary defensive purposes, securities issued by banks and
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph
Page 7
describes fundamental policies that cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940) of the
Fund's outstanding voting shares. See "Investment Objective and Management
Policies-Investment Restrictions" in the Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES __ The Fund may (i)
pledge, hypothecate, mortgage or otherwise encumber its assets, but only
to secure borrowings for temporary or emergency purposes; and (ii) invest
up to 15% of the value of its net assets in repurchase agreements
providing for settlement in more than seven days after notice and in other
illiquid securities (which securities could include participation interests
(including municipal lease/purchase agreements) that are not subject to
the demand feature described above, and floating and variable rate demand
obligations as to which the Fund cannot exercise the related demand
feature described above and as to which there is no secondary market).
See "Investment Objective and Management Policies __ Investment
Restrictions" in the Statement of Additional Information.
RISK FACTORS
INVESTING IN MASSACHUSETTS MUNICIPAL OBLIGATIONS - You should
consider carefully the special risks inherent in the Fund's investment in
Massachusetts Municipal Obligations. Massachusetts' economic
difficulties and fiscal problems may affect Massachusetts Municipal
Obligations in the Fund's portfolio. The persistence of serious financial
difficulties could adversely affect the market values and marketability
of, or result in default in payment on, outstanding Massachusetts
Municipal Obligations. Massachusetts' expenditures for State programs and
services in each of the fiscal years 1987 through 1991 exceeded each
year's current revenues. In addition, Massachusetts' tax revenues during
this period repeatedly failed to meet official forecasts. For the budgeted
funds, operating losses in fiscal 1987 and 1988 were covered largely by
drawing on fund balances from prior fiscal years. Massachusetts'
operating losses in fiscal 1989 and 1990, which totalled $672.5 million
and $1.251 billion, respectively, were covered primarily through deficit
borrowings. Massachusetts ended fiscal 1991 with an operating deficit of
$21.2 million, but with positive closing fund balances of $237.1 million,
after applying the opening fund balances created from the proceeds of the
fiscal 1990 deficit borrowing. No deficit borrowing was required to close
out fiscal 1991. Massachusetts ended fiscal 1992 and 1993 with revenues
and other sources exceeding expenditures and other uses by $312.3 million
and $13.1 million, respectively, and with positive fund balances of
approximately $549.4 million and $562.5 million, respectively. Fiscal
1994 is estimated to end with a current operating loss of $162.8 million
and fund balances of approximately $399.7 million. You should obtain and
review a copy of the Statement of Additional Information which more
fully sets forth these and other risk factors.
LOWER RATED BONDS - You should carefully consider the relative risks of
investing in the higher yielding (and, therefore, higher risk) debt
securities in which the Fund may invest up to 20% of the value of its net
assets. These are bonds such as those rated Ba by Moody's or BB by S&P or
Fitch or as low as the lowest rating assigned by Moody's, S&P or Fitch.
They generally are not meant for short-term investing and may be subject
to certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. Bonds rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate. Bonds
rated BB by S&P are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face major
ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Bonds rated BB by Fitch are
considered speculative and the payment of principal and interest may be
affected at any time by adverse economic changes. Bonds rated C by
Moody's are regarded as having extremely poor prospects of ever attaining
any real investment standing. Bonds rated D by S&P are in default and the
payment of interest and/or repayment of principal is in arrears. Bonds
rated DDD, DD or D by Fitch are in actual or imminent default, are
Page 8
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the issuer; DDD
represents the highest potential for recovery of such bonds; and D
represents the lowest potential for recovery. Such bonds, though high
yielding, are characterized by great risk. See "Appendix B" in the
Statement of Additional Information for a general description of Moody's,
S&P and Fitch ratings of Municipal Obligations. The ratings of Moody's,
S&P and Fitch represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and, although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. Therefore,
although these ratings may be an initial criterion for selection of
portfolio investments, The Dreyfus Corporation also will evaluate these
securities and the ability of the issuers of such securities to pay interest
and principal. The Fund's ability to achieve its investment objective may
be more dependent on The Dreyfus Corporation's credit analysis than might
be the case for a fund that invested in higher rated securities. Once the
rating of a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold
the security.
The market price and yield of bonds rated Ba or lower by Moody's and BB
or lower by S&P and Fitch are more volatile than those of higher rated
bonds. Factors adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value. In addition,
the retail secondary market for these bonds may be less liquid than that
of higher rated bonds; adverse market conditions could make it difficult at
times for the Fund to sell certain securities or could result in lower
prices than those used in calculating the Fund's net asset value.
The Fund may invest up to 5% of the value of its net assets in zero
coupon securities and pay-in-kind bonds (bonds which pay interest through
the issuance of additional bonds) rated Ba or lower by Moody's and BB or
lower by S&P and Fitch. These securities may be subject to greater
fluctuations in value due to changes in interest rates than interest-
bearing securities and thus may be considered more speculative than
comparably rated interest-bearing securities. See "Other Investment
Considerations" below, and "Investment Objective and Management
Policies- Risk Factors-Lower Rated Bonds" and "Dividends, Distributions
and Taxes" in the Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS - Even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price fluctuations.
Certain securities that may be purchased by the Fund, such as those with
interest rates that fluctuate directly or indirectly based on multiples of a
stated index, are designed to be highly sensitive to changes in interest
rates and can subject the holders thereof to extreme reductions of yield
and possibly loss of principal. The values of fixed-income securities also
may be affected by changes in the credit rating or financial condition of
the issuing entities. The Fund's net asset value generally will not be
stable and should fluctuate based upon changes in the value of the Fund's
portfolio securities. Securities in which the Fund invests may earn a
higher level of current income than certain shorter-term or higher quality
securities which generally have greater liquidity, less market risk and
less fluctuation in market value.
New issues of Municipal Obligations usually are offered on a when-
issued basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate
that will be received on the Municipal Obligations are fixed at the time
the Fund enters into the commitment. The Fund will make commitments to
purchase such Municipal Obligations only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable, although any gain realized on
such sale would be taxable. The Fund will not accrue income in respect of
a when-issued security prior to its stated delivery date. No additional
when-issued commitments will be made if more than 20% of the value of
the Fund's net assets would be so committed.
Page 9
Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in value
(both generally changing in the same way, i.e., appreciating when interest
rates decline and depreciating when interest rates rise) based upon the
public's perception of the creditworthiness of the issuer and changes, real
or anticipated, in the level of interest rates. Municipal Obligations
purchased on a when-issued basis may expose the Fund to risk because
they may experience such fluctuations prior to their actual delivery.
Purchasing Municipal Obligations on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the when-issued
commitments will be established and maintained at the Fund's custodian
bank. Purchasing Municipal Obligations on a when-issued basis when the
Fund is fully or almost fully invested may result in greater potential
fluctuation in the value of the Fund's net assets and its net asset value
per share.
Federal income tax law requires the holder of a zero coupon security or
of certain pay-in-kind bonds to accrue income with respect to these
securities prior to the receipt of cash payments. To maintain its
qualification as a regulated investment company and avoid liability for
Federal income taxes, the Fund may be required to distribute such income
accrued with respect to these securities and may have to dispose of
portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years
unless money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for
the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund
and thus reduce the available yield. Shareholders should consult their tax
advisers concerning the effect of these provisions on an investment in the
Fund. Proposals that may restrict or eliminate the income tax exemption
for interest on Municipal Obligations may be introduced in the future. If
any such proposal were enacted that would reduce the availability of
Municipal Obligations for investment by the Fund so as to adversely affect
Fund shareholders, the Fund would reevaluate its investment objective and
policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were enacted that
would treat a type of Municipal Obligation as taxable, the Fund would treat
such security as a permissible Taxable Investment within the applicable
limits set forth herein.
The Fund's classification as a "non-diversified" investment company
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act
of 1940. A "diversified" investment company is required by the
Investment Company Act of 1940 generally to invest, with respect to 75%
of its total assets, not more than 5% of such assets in the securities of a
single issuer. However, the Fund intends to conduct its operations so as to
qualify as a "regulated investment company" for purposes of the Code,
which requires that, at the end of each quarter of its taxable year, (i) at
least 50% of the market value of the Fund's total assets be invested in
cash, U.S. Government securities, the securities of other regulated
investment companies and other securities, with such other securities of
any one issuer limited for the purposes of this calculation to an amount
not greater
Page 10
than 5% of the value of the Fund's total assets, and (ii) not
more than 25% of the value of its total assets be invested in the
securities of any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies). Since a relatively
high percentage of the Fund's assets may be invested in the obligations of
a limited number of issuers, the Fund's portfolio securities may be more
susceptible to any single economic, political or regulatory occurrence
than the portfolio securities of a diversified investment company.
Investment decisions for the Fund are made independently from those of
other investment companies advised by The Dreyfus Corporation. However,
if such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time
as the Fund, available investments or opportunities for sales will be
allocated equitably to each investment company. In some cases, this
procedure may adversely affect the size of the position obtained for or
disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of June 30, 1994, The Dreyfus Corporation managed or
administered approximately $71 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law. The Fund's primary investment
officer is L. Lawrence Troutman. He has held that position since January
1986, and has been employed by The Dreyfus Corporation since October
1985. The Fund's other investment officers are identified under
"Management of the Fund" in the Fund's Statement of Additional
Information. The Dreyfus Corporation also provides research services for
the Fund as well as for other funds advised by The Dreyfus Corporation
through a professional staff of portfolio managers and security analysts.
For the fiscal year ended May 31, 1994, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .60 of 1% of
the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case
may be. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume.
The Dreyfus Corporation may pay Dreyfus Service Corporation for
shareholder and distribution services from The Dreyfus Corporation's own
assets, including past profits but not including the management fee paid
by the Fund. Dreyfus Service Corporation may use part or all of such
payments to pay securities dealers or others in respect of these services.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
You can purchase Fund shares without a sales charge directly from
Dreyfus Service Corporation; you may be charged a nominal fee if you
effect transactions in Fund shares through a securities dealer, bank or
Page 11
other financial institution. Share certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the Fund be used as a vehicle for Keogh, IRA or other
qualified plans. The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client
of a securities dealer, bank or other financial institution which has made
an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment
must be accompanied by the Fund's Account Application. For full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a
fund advised by The Dreyfus Corporation, including members of the Fund's
Board, or the spouse or minor child of any of the foregoing, the minimum
initial investment is $1,000. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund account, the
minimum initial investment is $50. The Fund reserves the right to vary
further the initial and subsequent investment minimum requirements at
any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account
Application. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to
The Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-
0105. Neither initial nor subsequent investments should be made by third
party check. Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call the telephone number listed
under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank
having a correspondent bank in New York City. Immediately available funds
may be transmitted by wire to The Bank of New York, DDA
#8900051981/Dreyfus Massachusetts Tax Exempt Bond Fund, for purchase
of Fund shares in your name. The wire must include your Fund account
number (for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer number, if
applicable. If your initial purchase of Fund shares is by wire, please call
1-800-645-6561 after completing your wire payment to obtain your Fund
account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the
Fund, as no redemptions will be permitted until the Account Application is
received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear.
The Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS
"1111."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent. Net asset value per share is determined as of the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m.,
New York time), on each day the New York Stock Exchange is open for
business. Net asset value per share is computed by dividing the value of
the Fund's net assets (i.e., the value of its assets less liabilities) by the
total number
Page 12
of shares outstanding. The Fund's investments are valued by
an independent pricing service approved by the Board of Trustees and are
valued at fair value as determined by the pricing service. The pricing
service's procedures are reviewed under the general supervision of the
Board of Trustees. For further information regarding the methods
employed in valuing Fund investments, see "Determination of Net Asset
Value" in the Fund's Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50.00 penalty imposed by the Internal Revenue Service (the
"IRS").
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for shares of the Fund, shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. If you desire to
use this Privilege, you should consult Dreyfus Service Corporation to
determine if it is available and whether any conditions are imposed on its
use.
To use this Privilege, you must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. If you previously have
established the Telephone Exchange Privilege, you may telephone exchange
instructions by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Fund Shares-
Procedures." Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained from Dreyfus Service
Corporation. Except in the case of Personal Retirement Plans, the shares
being exchanged must have a current value of at least $500; furthermore,
when establishing a new account by exchange, shares being exchanged
must have a value of at least the minimum initial investment required for
the fund into which the exchange is being made. Telephone exchanges may
be made only if the appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on file
with the Transfer Agent. Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Exchange Privilege, Check Redemption Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TELETRANSFER Privilege, and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b)
acquired by a previous exchange from shares purchased with a sales load,
or (c) acquired through reinvestment of dividends or distributions paid
with respect to the foregoing categories of shares. To qualify, at the
Page 13
time of your exchange you must notify the Transfer Agent. Any such
qualification is subject to confirmation of your holdings through a check
of appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund reserves the
right, upon not less than 60 days' written notice, to charge shareholders a
nominal fee in accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege
enables you to invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares of other funds
in the Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then-current
net asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder Services" in
the Statement of Additional Information. The right to exercise this
Privilege may be modified or cancelled by the Fund or the Transfer Agent.
You may modify or cancel your exercise of this Privilege at any time by
writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for this Privilege.
No such fee currently is contemplated. The exchange of shares of one fund
for shares of another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss. For more
information concerning this Privilege and the funds in the Dreyfus Family
of Funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER - Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum
$150,000 per transaction) at regular intervals selected by you. Fund
shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will
be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may cancel your
participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, and the notification will
be effective three business days following receipt. The Fund may modify
or terminate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE - Dreyfus Government
Direct Deposit Privilege enables you to purchase Fund shares (minimum of
$100 and maximum of $50,000 per transaction) by having Federal salary,
Social Security, or certain veterans', military or other payments from the
Federal government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in Dreyfus
Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in the Privilege. The appropriate form may be obtained
from Dreyfus Service Corporation. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time
to terminate
Page 14
your participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to you.
DREYFUS DIVIDEND OPTIONS - Dreyfus Dividend Sweep enables you to
invest automatically dividends or dividends and capital gain distributions,
if any, paid by the Fund in shares of another fund in the Dreyfus Family of
Funds of which you are a shareholder. Shares of the other fund will be
purchased at the then-current net asset value; however, a sales load may
be charged with respect to investments in shares of a fund sold with a
sales load. If you are investing in a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will be subject on
redemption to the contingent deferred sales charge, if any, applicable to
the purchased shares. See "Shareholder Services" in the Statement of
Additional Information. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank account. Only an
account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Banks may
charge a fee for this service.
For more information concerning these privileges, or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To
select a new fund after cancellation, you must submit a new Dividend
Options Form. Enrollment in or cancellation of these privileges is
effective three business days following receipt. These privileges are
available only for existing accounts and may not be used to open new
accounts. Minimum subsequent investments do not apply for Dreyfus
Dividend Sweep. The Fund may modify or terminate these privileges at any
time or charge a service fee. No such fee currently is contemplated.
DREYFUS PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits
you to purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your employer's direct
deposit program, you may have part or all of your paycheck transferred to
your existing Dreyfus account electronically through the Automated
Clearing House system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse
side of the form and return it to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may change the
amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not Dreyfus Service Corporation, The Dreyfus Corporation, the
Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently is
contemplated.
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be obtained
from Dreyfus Service Corporation. There is a service charge of 50 cents
for each withdrawal check. The Automatic Withdrawal Plan may be ended
at any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value.
Page 15
The Fund imposes no charges when shares are redeemed directly through
Dreyfus Service Corporation. Securities dealers, banks and other financial
institutions may charge a nominal fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed
may be more or less than their original cost, depending upon the Fund's
then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION
PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT
BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL
REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT
TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-
AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT
COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON
SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED
TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares
will not be redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES - You may redeem shares by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the
Wire Redemption Privilege, the Telephone Redemption Privilege, or the
Dreyfus TELETRANSFER privilege. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. If you select a
telephone redemption or exchange privilege, you authorize the Transfer
Agent to act on telephone instructions from any person representing
himself or herself to be you and reasonably believed by the Transfer Agent
to be genuine. The Fund will require the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification,
to confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent instructions. Neither the Fund nor the
Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these other redemption procedures may result in your redemption request
being processed at a later time than it would have been if telephone
redemption had been used. During the delay, the Fund's net asset value may
fluctuate.
REGULAR REDEMPTION - Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption
requests may be delivered in person only to a Dreyfus Financial Center.
THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call the telephone number listed under
Page 16
"General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call the telephone number listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE - You may request on the Account
Application, Shareholder Services Form or by later written request that
the Fund provide Redemption Checks drawn on the Fund's account.
Redemption Checks may be made payable to the order of any person in the
amount of $500 or more. Potential fluctuation in the net asset value of
Fund shares should be considered in determining the amount of the check.
Redemption Checks should not be used to close your account. Redemption
Checks are free, but the Transfer Agent will impose a fee for stopping
payment of a Redemption Check upon your request or if the Transfer Agent
cannot honor the Redemption Check due to insufficient funds or other valid
reason. You should date your Redemption Checks with the current date
when you write them. Please do not postdate your Redemption Checks. If
you do, the Transfer Agent will honor, upon presentment, even if presented
before the date of the check, all postdated Redemption Checks which are
dated within six months of presentment for payment, if they are
otherwise in good order. Shares for which certificates have been issued
may not be redeemed by Redemption Check. This Privilege may be modified
or terminated at any time by the Fund or the Transfer Agent upon notice to
shareholders.
WIRE REDEMPTION PRIVILEGE - You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank
if your bank is not a member. To establish the Wire Redemption Privilege,
you must check the appropriate box and supply the necessary information
on the Fund's Account Application or file a Shareholder Services Form
with the Transfer Agent. You may direct that redemption proceeds be paid
by check (maximum $150,000 per day) made out to the owners of record
and mailed to your address. Redemption proceeds of less than $1,000 will
be paid automatically by check. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by
calling 1-800-221-4060 or, if you are calling from overseas, call 1-401-
455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit
the amount involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares for which certificates
have been issued are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE - You may redeem Fund shares
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The redemption
proceeds will be paid by check and mailed to your address. You may
telephone redemption instructions by calling 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. The Fund reserves the
right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or
the number of telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund.
Shares for which certificates have been issued are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares
(minimum $500 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's
Page 17
Account Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between your Fund account and the bank
account designated in one of these documents. Only such an account maintained
in a domestic financial institution which is an Automated Clearing House member
may be so designated. Redemption proceeds will be on deposit in your account at
an Automated Clearing House member bank ordinarily two days after receipt of
the redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer to
their bank account only up to $250,000 within a 30-day period. The Fund
reserves the right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. The Fund may modify or terminate this Privilege at
any time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-
3306. Shares issued in certificate form are not eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses Dreyfus Service Corporation an amount not to exceed an
annual rate of .25 of 1% of the value of the Fund's average daily net assets
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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income
on each day the New York Stock Exchange is open for business. Fund shares
begin earning income dividends on the day following the date of purchase.
The Fund's earnings for Saturdays, Sundays and holidays are declared as
dividends on the next business day. Dividends usually are paid on the last
business day of each month and are automatically reinvested in additional
Fund shares at net asset value or, at your option, paid in cash. If you
redeem all shares in your account at any time during the month, the
dividends to which you are entitled will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but the Fund may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will
not make distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares at net asset value. All expenses are accrued daily and deducted
before declaration of dividends to investors.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends from net investment income paid by the
Fund will not be subject to Federal income tax. Dividends derived from
Taxable Investments, together with distributions from any net realized
short-term securities gains and all or a portion of any gains realized from
the sale or other disposition of certain market discount bonds, are subject
to Federal income tax as ordinary income whether or not reinvested. No
dividend paid by the Fund will qualify for the dividends received deduction
allowable to certain U.S. corporations. Distributions from net realized
long-term securities gains of the Fund are taxable as long-term capital
gains for Federal income tax purposes if you are a citizen or resident of
the United States. The Code provides that the net capital gain of an
individual generally will not be subject to Federal income tax at a rate in
excess of 28%. Under the Code, interest on indebtedness incurred or
continued to purchase or carry Fund shares which is deemed to relate to
exempt-interest dividends is not deductible.
Page 18
Dividends paid by the Fund to a Massachusetts resident will not be
subject to Massachusetts personal income tax to the extent that such
dividends are attributable to interest income received by the Fund from
Massachusetts Municipal Obligations or direct U.S. Government obligations
and are properly designated as such. Distributions of capital gain
dividends by the Fund to a Massachusetts resident are not subject to
Massachusetts personal income tax to the extent that such distributions
are attributable to net realized long-term gain from the sale of certain
Massachusetts Municipal Obligations, the gain from which is exempt from
Massachusetts personal income tax. Dividends and distributions by the
Fund to a Massachusetts resident that are attributable to most other
sources are subject to Massachusetts personal income tax. The Fund
believes that distributions from net realized long-term securities gains
that are taxable by Massachusetts are reportable as long-term capital
gains, irrespective of how long the resident has held shares in the Fund. In
addition, distributions from the Fund may be included in the net income
measure of the corporate excise tax for corporate shareholders which are
subject to the Massachusetts corporate excise tax. Fund shares are not
subject to property taxation by Massachusetts or its political
subdivisions. To the extent investors are obligated to pay state or local
taxes outside of Massachusetts, dividends and distributions by the Fund
may represent taxable income.
Although all or a substantial portion of the dividends paid by the Fund
may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private
activity bonds, the interest from which may be (i) a preference item for
purposes of the alternative minimum tax, (ii) a component of the
"adjusted current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the extent to
which a shareholder's Social Security benefits are taxable. If the Fund
purchases such securities, the portion of the Fund's dividends related
thereto will not necessarily be tax exempt to an investor who is subject
to the alternative minimum tax and/or tax on Social Security benefits and
may cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year. These statements set
forth the dollar amount of income exempt from Federal tax and the dollar
amount, if any, subject to Federal tax. These dollar amounts will vary
depending on the size and length of time of your investment in the Fund. If
the Fund pays dividends derived from taxable income, it intends to
designate as taxable the same percentage of the day's dividends as the
actual taxable income earned on that day bears to total income earned on
that day. Thus, the percentage of the dividend designated as taxable, if
any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify either
that the TIN furnished in connection with opening an account is correct, or
that such shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest income on a
Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended May 31, 1994 as a "regulated investment company"
under the Code. The Fund intends to continue to so qualify if such
Page 19
qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax to
the extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding questions as to Federal,
state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, tax equivalent yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment income per
share over a 30-day period, expressed as a percentage of the net asset
value per share at the end of the period. For purposes of calculating
current yield, the amount of net investment income per share during that
30-day period, computed in accordance with regulatory requirements, is
compounded by assuming that it is reinvested at a constant rate over a
six-month period. An identical result is then assumed to have occurred
during a second six-month period which, when added to the result for the
first six months, provides an "annualized" yield for an entire one-year
period. Calculations of the Fund's current yield may reflect absorbed
expenses pursuant to any undertaking that may be in effect. See
"Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
current yield calculated as described above.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased
with an initial payment of $1,000 and that the investment was redeemed
at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and ten year
periods, or for shorter time periods depending upon the length of time
during which the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the net
asset value per share at the beginning of the period. Advertisements may
include the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type
and quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment
companies using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from CDA
Investment Technologies, Inc., Lipper Analytical Services, Inc., Moody's
Bond Survey Bond Index, Lehman Brothers Municipal Bond Index,
Morningstar, Inc. and other industry publications.
Page 20
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement
and Declaration of Trust (the "Trust Agreement") dated March 13, 1985,
and commenced operations on June 11, 1985. The Trustees have authorized
an unlimited number of shares of beneficial interest, par value $.01 per
share. Each share has one vote.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed
by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations, a possibility which management
believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder paying such liability will be entitled to reimbursement from
the general assets of the Fund. The Trustees intend to conduct the
operations of the Fund in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund. As
discussed under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may have the right to
call a meeting of shareholders for the purpose of voting to remove
Trustees.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY
PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 21
DREYFUS
MASSACHUSETTS
TAX EXEMPT
BOND FUND
PROSPECTUS
(DREYFUS LION LOGO)
(Copyright Logo) Dreyfus Service Corporation, 1994
Distributor
__________________________________________________________________________
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
AUGUST 22, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Massachusetts Tax Exempt Bond Fund (the "Fund"), dated August
22, 1994 as it may be further revised from time to time. To obtain a copy
of the Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call toll free
1-800-645-6561.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . B-10
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Shareholder Services Plan. . . . . . . . . . . . . . . . . . . . . . . . B-15
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . B-16
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . B-17
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . B-19
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . B-22
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . B-22
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . B-23
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . B-24
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . . B-25
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . . . . . . B-26
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-33
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . B-41
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . B-48
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
Portfolio Securities
The average distribution of investments (at value) in Municipal
Obligations (including notes) by ratings for the fiscal year ended May 31,
1994, computed on a monthly basis, was as follows:
Fitch Investors Moody's Investors Standard & Poor's
Service, Inc. Service, Inc. Corporation Percent of
("Fitch") or ("Moody's") or ("S&P") Value
- --------------- ----------------- ----------------- ----------
AAA Aaa AAA 40.6%
AA Aa AA 10.2
A A A 32.1
BBB Baa BBB 8.3
F-1 VMIG-1/MIG-1, P-1 SP-1, A-1 2.1(1)
Not Rated Not Rated Not Rated 6.7(2)
________
100.0%
========
______________________________________
(1) Includes tax exempt notes rated in one of the two highest rating
categories by Moody's, S&P or Fitch. These securities, together with
Municipal Obligations rated Baa or better by Moody's or BBB or better
by S&P or Fitch, are taken into account at the time of a purchase for
purposes of determining that the Fund's portfolio meets the 80%
minimum quality standard discussed in the Fund's Prospectus.
(2) Included in the Not Rated category are securities comprising 6.7% of
the Fund's market value which, while not rated, have been determined
by the Manager to be of comparable quality to securities in the
Baa/BBB rating category.
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity, or sewage or solid waste disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time, or at
specified intervals. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligations.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. The staff of
the Securities and Exchange Commission currently considers certain lease
obligations to be illiquid. Determination as to the liquidity of such
securities is made in accordance with guidelines established by the Fund's
Board. Pursuant to such guidelines, the Board has directed the Manager to
monitor carefully the Fund's investment in such securities with particular
regard to (1) the frequency of trades and quotes for the lease
obligation; (2) the number of dealers willing to purchase or sell the
lease obligation and the number of the potential buyers; (3) the
willingness of dealers to undertake to make a market in the lease
obligation; (4) the nature of the marketplace trades including the time
needed to dispose of the mechanics of transfer; and (5) such other factors
concerning the trading market for the lease obligation as the Manager may
deem relevant. In addition, in evaluating the liquidity and credit
quality of a lease obligation that is unrated, the Fund's Board has
directed the Manager to consider (a) whether the lease can be cancelled;
(b) what assurance there is that the assets represented by the lease can
be sold; (c) the strength of the lessee's general credit (e.g., its debt,
administrative, economic, and financial characteristics ); (d) the
likelihood that the municipality will discontinue appropriating funding
for the leased property because the property is no longer deemed essential
to the operations of the municipality (e.g., the potential for an "event
of nonappropriation"); (e) the legal recourse in the event of failure to
appropriate; and (f) such other factors concerning credit quality as the
Manager may deem relevant. The Fund will not invest more than 15% of the
value of its net assets in illiquid securities. See "Investment
Restriction No. 11" below.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund. Based
on the tender option bond agreement, the Fund expects to be able to value
the tender option bond at par; however, the value of the instrument will
be monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the extent
that the ratings given by Moody's, S&P or Fitch for Municipal Obligations
may change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
its investments in accordance with the investment policies contained in
the Fund's Prospectus and this Statement of Additional Information. The
ratings of Moody's, S&P and Fitch represent their opinions as to the
quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective
and are not absolute standards of quality. Although these ratings may be
an initial criterion for selection of portfolio investments, the Manager
also will evaluate these securities.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Bank, by
the right of the issuer to borrow from the U.S. Treasury; others, such as
those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government -
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so, since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk
with respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
or sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the Securities and
Exchange Commission to be loans by the Fund. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, the Fund will enter
into repurchase agreements only with domestic banks with total assets in
excess of one billion dollars or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Manager will monitor on
an ongoing basis the value of the collateral to assure that it always
equals or exceeds the repurchase price. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral.
For purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by the Fund to be
the equivalent of cash. From time to time, the Fund may return to the
borrower or a third party which is unaffiliated with the Fund, and which
is acting as a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value
of the securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Risk Factors
Investing in Massachusetts Municipal Obligations. Investors should
consider carefully the special risks inherent in the Fund's investment in
Massachusetts Municipal Obligations. Massachusetts' economic difficulties
and fiscal problems may affect Massachusetts Municipal Obligations in the
Fund's portfolio. The persistence of serious financial difficulties
could adversely affect the market values and marketability of, or result
in default in payment on, outstanding Massachusetts Municipal Obligations.
Massachusetts' expenditures for State programs and services in each of the
fiscal years 1987 through 1991 exceeded each year's current revenues. In
addition, Massachusetts' tax revenues during this period repeatedly failed
to meet official forecasts. For the budgeted funds, operating losses in
fiscal 1987 and 1988 were covered largely by drawing on fund balances from
prior fiscal years. Massachusetts' operating losses in fiscal 1989 and
1990, which totalled $672.5 million and $1.251 billion, respectively, were
covered primarily through deficit borrowings. Massachusetts ended fiscal
1991 with an operating deficit of $21.2 million, but with positive closing
fund balances of $237.1 million, after applying the opening fund balances
created from the proceeds of the fiscal 1990 deficit borrowing. No
deficit borrowing was required to close out fiscal 1991. Massachusetts
ended fiscal 1992 and 1993 with revenues and other sources exceeding
expenditures and other uses by $312.3 million and $13.1 million,
respectively, and with positive fund balances of approximately $549.4
million and $562.5 million, respectively. Fiscal 1994 is estimated to end
with a current operating loss of $162.8 million and fund balances of
approximately $399.7 million. Investors should review Appendix A which
more fully sets forth these and other risk factors.
Lower Rated Bonds. The Fund is permitted to invest in securities
rated below Baa by Moody's and below BBB by S&P and Fitch. Such bonds,
though higher yielding, are characterized by risk. See in the Prospectus
"Description of the Fund--Risk Factors-- Lower Rated Bonds" for a
discussion of certain risks and "Appendix B" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations. Although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. The Fund will
rely on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, the Manager will take
into consideration, among other things, the issuer's financial resources,
its sensitivity to economic conditions and trends, the quality of the
issuer's management and regulatory matters. It also is possible that a
rating agency might not timely change the rating on a particular issue to
reflect subsequent events. As stated above, once the rating of a bond in
the Fund's portfolio has been changed, the Manager will consider all
circumstances deemed relevant in determining whether the Fund should
continue to hold the bond.
Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities. These bonds are considered by S&P, Moody's and Fitch,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in
the higher rating categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally
is not as liquid as the secondary market for higher rated securities. The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues
when necessary to meet the Fund's liquidity needs or in response to a
specific economic event such as a deterioration in the creditworthiness of
the issuer. The lack of a liquid secondary market for certain securities
also may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and calculating
its net asset value. Adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and
liquidity of these securities. In such cases, judgment may play a greater
role in valuation because less reliable, objective data may be available.
These bonds may be particularly susceptible to economic downturn. It
is likely that any economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default for such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The
Fund has no arrangement with the Distributor or any other persons
concerning the acquisition of such securities, and the Manager will review
carefully the credit and other characteristics pertinent to such new
issues.
Lower rated zero coupon securities, in which the Fund may invest up
to 5% of its net assets, involve special considerations. The credit risk
factors pertaining to lower rated securities also apply to lower rated
zero coupon bonds. Such zero coupon bonds carry an additional risk in
that, unlike bonds which pay interest throughout the period to maturity,
the Fund will realize no cash until the cash payment date unless a portion
of such securities are sold and, if the issuer defaults, the Fund may
obtain no return at all on its investment. See "Dividends, Distributions
and Taxes."
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 7 as
fundamental policies. These restrictions cannot be changed without
approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended ("Act")) of the Fund's outstanding voting
shares. Investment restrictions numbered 8 through 12 are non-fundamental
policies and may be changed by a vote of a majority of the Fund's Trustees
at any time. The Fund may not:
1. Invest more than 25% of its assets in the securities of issuers
in any single industry; provided that there shall be no
limitation on the purchase of Municipal Obligations and, for
temporary defensive purposes, securities issued by banks and
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the
Fund's total assets (including the amount borrowed) based on the
lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Fund's total assets,
the Fund will not make any additional investments. For purposes
of this investment restriction, the entry into options, forward
contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes shall not
constitute borrowing.
3. Purchase or sell real estate, commodities or commodity
contracts, or oil and gas interests, but this shall not prevent
the Fund from investing in Municipal Obligations secured by real
estate or interests therein, or prevent the Fund from purchasing
and selling options, forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes.
4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of
Municipal Obligations directly from an issuer for its own
portfolio to take advantage of the lower purchase price
available, and except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements; however,
the Fund may lend its portfolio securities in an amount not to
exceed 33-1/3% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines
established by the Securities and Exchange Commission and the
Fund's Board of Trustees.
6. Issue any senior security (as such term is defined in Section
18(f) of the Act), except to the extent that the activities
permitted in Investment Restrictions numbered 2, 3 and 10 may be
deemed to give rise to a senior security.
7. Sell securities short or purchase securities on margin, but the
Fund may make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or
indexes.
8. Purchase securities other than Municipal Obligations and Taxable
Investments and those arising out of transactions in futures and
options or as otherwise provided in the Fund's Prospectus.
9. Invest in securities of other investment companies, except to
the extent permitted under the Act.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure borrowings for
temporary or emergency purposes and to the extent related to the
deposit of assets in escrow in connection with the purchase of
securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements with
respect to options, futures contracts, including those related
to indexes, and options on futures contracts or indexes.
11. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which
are illiquid (which securities could include participation
interest (including municipal lease/purchase agreements) that
are not subject to the demand feature described in the Fund's
Prospectus, and floating and variable rate demand obligations as
to which the Fund cannot exercise the demand feature described
in the Fund's Prospectus on less than seven days' notice and as
to which there is no secondary market), if, in the aggregate,
more than 15% of its net assets would be so invested.
12. Invest in companies for the purpose of exercising control.
For purposes of Investment Restriction No. 1, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry." If a percentage restriction is adhered to at the time
of an investment, a later increase or decrease in percentage resulting
from a change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees and Officers of the Fund
*DAVID W. BURKE, Trustee. Vice President and Chief Administrative Officer
of the Manager since October 1990 and a director or trustee of other
investment companies advised or administered by the Manager. From
1977 to 1990, Mr. Burke was involved in the management of national
television news, as Vice President and Executive Vice President of
ABC News, and subsequently as President of CBS News. His address is
200 Park Avenue, New York, New York 10166.
SAMUEL CHASE, Trustee. Since 1982, President of Samuel Chase & Company,
Ltd., an economic consulting firm. From 1983 to 1989, Chairman of
Chase, Brown & Blaxall, Inc., an economic consulting firm. His
address is 4410 Massachusetts Avenue N.W., Suite 408, Washington,
D.C. 20016.
JONI EVANS, Trustee. Senior Vice President of the William Morris Agency.
From September 1987 to May 1993, Executive Vice President of Random
House, Inc. and, from January 1991 to May 1993, President and
Publisher of Turtle Bay Books; from January 1987 to December 1990,
Publisher of Random House Adult Trade Division; and from 1985 to
1987, President of Simon and Schuster - Trade Division. Her address
is 1350 Avenue of the Americas, New York, New York 10022.
*LAWRENCE M. GREENE, Trustee. Legal Consultant to and a director of the
Manager, Executive Vice President and a director of the Distributor
and an officer, director or trustee of other investment companies
advised or administered by the Manager. His address is 200 Park
Avenue, New York, New York 10166.
ARNOLD S. HIATT, Trustee. Chairman of The Stride Rite Foundation. From
1969 to June 1992, Chairman of the Board, President or Chief
Executive Officer of The Stride Rite Corporation, a multi-divisional
footwear manufacturing company. Mr. Hiatt is also a director of The
Cabot Corporation. His address is 400 Atlantic Avenue, Boston,
Massachusetts 02110.
DAVID J. MAHONEY, Trustee. President of David Mahoney Ventures since
1983. From 1968 to 1983, he was Chairman and Chief Executive Officer
of Norton Simon Inc., a producer of consumer products and services.
Mr. Mahoney is also a director of National Health Laboratories Inc.,
Bionaire Inc. and Good Samaritan Health Systems, Inc. His address is
745 Fifth Avenue, Suite 700, New York, New York 10151.
*RICHARD J. MOYNIHAN, Trustee, President and Investment Officer. An
employee of the Manager and an officer, director or trustee of other
investment companies advised or administered by the Manager. His
address is 200 Park Avenue, New York, New York 10166.
BURTON N. WALLACK, Trustee. President and co-owner of Wallack Management
Company, a real estate management company managing real estate in the
New York City area. His address is 18 East 64th Street, Suite 3D,
New York, New York 10021.
Each of the "non-interested" Trustees is also a trustee of Dreyfus
Massachusetts Municipal Money Market Fund, Dreyfus New York Tax Exempt
Intermediate Bond Fund, Dreyfus New York Tax Exempt Money Market Fund and
Dreyfus Pennsylvania Municipal Money Market Fund and a director of Dreyfus
BASIC Municipal Fund, Dreyfus California Tax Exempt Bond Fund, Inc.,
Dreyfus Connecticut Municipal Money Market Fund, Inc., Dreyfus GNMA Fund,
Inc., Dreyfus Intermediate Municipal Bond Fund, Inc., Dreyfus Michigan
Municipal Money Market Fund, Inc., Dreyfus New Jersey Municipal Money
Market Fund, Inc., Dreyfus New York Tax Exempt Bond Fund, Inc. and Dreyfus
Ohio Municipal Money Market Fund, Inc.
Ordinarily, no meetings of shareholders will be held for the purpose
of electing Trustees unless and until such time as less than a majority of
the Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Under the Act, shareholders of record of not less
than two-thirds of the Fund's outstanding shares may remove a Trustee
through a declaration in writing or by vote cast in person or by proxy at
a meeting called for that purpose. Under the Fund's Agreement and
Declaration of Trust, the Trustees are required to call a meeting of
shareholders for the purpose of voting upon the question of removal of any
such Trustee when requested in writing to do so by the shareholders of
record of not less than 10% of the Fund's outstanding shares.
For so long as the Fund's plan described in the section "Shareholder
Services Plan" remains in effect, the Trustees of the Fund who are not
"interested persons" of the Fund, as defined in the Act, will be selected
and nominated by the Trustees who are not "interested persons" of the
Fund.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $11,401 for the fiscal year ended May 31, 1994
for all such Trustees as a group.
Officers of the Fund Not Listed Above
JOSEPH P. DARCY, Vice President and Investment Officer. Since May 1994,
an employee of the Manager and, since July 1994, an officer of other
investment companies advised and administered by the Manager. From
October 1989 to May 1994, Mr. Darcy was a Vice President and
Portfolio Manager for Merrill Lynch Asset Management. Prior thereto,
he worked in sales and marketing at Chemical Bank.
A. PAUL DISDIER, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
KAREN M. HAND, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
STEPHEN C. KRIS, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
JILL C. SHAFFRO, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
JEFFREY N. NACHMAN, Vice President--Financial. Vice President - Mutual
Fund Accounting of the Manager and an officer of other investment
companies advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
JEAN FARLEY, Controller. Senior Accounting Manager in the Fund Accounting
Department of the Manager and an officer of other investment
companies advised or administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares outstanding on August 8, 1994.
The following persons are also officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive Officer;
Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S.
DiMartino, President, Chief Operating Officer and a director; Alan M.
Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Elie M. Genadry, Vice President-Institutional Sales; Peter A.
Santoriello, Vice President; Kirk V. Stumpp, Vice President--New Products
Development; Philip L. Toia, Vice President--Fixed-Income Research;
Maurice Bendrihem, Controller; Katherine C. Wickham, Assistant Vice
President--Human Resources; Mandell L. Berman, Alvin E. Friedman, Abigail
Q. McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated May 24, 1985 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Trustees or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Trustees who are not "interested persons"
(as defined in the Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. The
Agreement was approved by shareholders of the Fund on June 26, 1986, and
was last approved by the Fund's Board of Trustees, including a majority of
the Trustees who are not "interested persons" of any party to the
Agreement, at a meeting held on April 6, 1994. The Agreement is
terminable without penalty, on not more than 60 days' notice, by the
Fund's Board of Trustees or by vote of the holders of a majority of the
Fund's outstanding voting shares, or, upon not less than 90 days' notice,
by the Manager. The Agreement will terminate automatically in the event
of its assignment (as defined in the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Trustees. The Manager is responsible for investment decisions, and
provides the Fund with Investment Officers who are authorized by the Board
of Trustees to execute purchases and sales of securities. The Fund's
Investment Officers are Joseph P. Darcy, A. Paul Disdier, Karen M. Hand,
Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence
Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the
Fund as well as for other funds advised by the Manager. All purchases and
sales are reported for the Trustees' review at the Board meeting
subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include, among other things: taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Fund's existence,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
meetings, costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to
existing shareholders, and any extraordinary expenses.
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services.
The Manager also may make such advertising and promotional expenditures,
using its own resources, as it from time to time deems appropriate.
As compensation for the Manager's services to the Fund, the Fund has
agreed to pay the Manager a monthly management fee at the annual rate of
.60 of 1% of the value of the Fund's average daily net assets. The
management fees paid to the Manager for the fiscal years ended May 31,
1992, 1993 and 1994 amounted to $850,709, $1,031,668 and $1,104,362,
respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage fees, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% of the value of the Fund's average net assets
for the fiscal year, the Fund may deduct from the payment to be made to
the Manager under the Agreement, or the Manager will bear, such excess
expense. Such deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund reimburses the Distributor 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.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Trustees and by
the Trustees who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan is subject to annual
approval by such vote of the Trustees. The Plan is terminable at any time
by vote of a majority of the Trustees who are not "interested persons" and
have no direct or indirect financial interest in the operation of the
Plan.
For the period July 1, 1993 (effective date of the Fund's Plan)
through May 31, 1994, $99,107 was chargeable to the Fund under the Plan.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
Service Charges. There is no sales or service charge by the Fund or
the Distributor although investment dealers, banks and other institutions
may make reasonable charges to investors for their services. The services
provided and the applicable fees are established by each dealer or other
institution acting independently of the Fund. The Fund has been given to
understand that fees may be charged for customer services including, but
not limited to: same-day investment of client funds; same-day access to
client funds; advising customers about the status of their accounts, yield
currently being paid, or income earned to date; providing periodic account
statements showing security and money market positions; other services
available from the dealer, bank or other institution; and assistance with
inquiries related to client investments. Any such fees will be deducted
monthly from the investor's account, which on smaller accounts could
constitute a substantial portion of distributions. Small, inactive,
long-term accounts involving monthly service charges may not be in the
best interest of investors. In addition, some securities dealers also may
require an investor to invest more than the minimum stated investment; not
purchase fractional shares; take monthly income distributions in cash; or
other conditions. Investors should be aware that they may purchase Fund
shares directly from the Fund without imposition of any maintenance or
service charges, other than those already described herein. In some
states, banks or other institutions effecting transactions in Fund shares
may be required to register as dealers pursuant to state law.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time,
on any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to
use the Dreyfus TeleTransfer Privilege, the initial payment for purchase
of Fund shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or
Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and your signature must be signature-guaranteed. See
"Redemption of Fund Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year in which the account is closed or during the following
calendar year, provided the information on the old Account Application is
still applicable.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only
to the registered owner(s) of the account and only to the address of
record. The Account Application or later written request must be manually
signed by the registered owner(s). Checks may be made payable to the
order of any person in an amount of $500 or more. When a Check is
presented to the Transfer Agent for payment, the Transfer Agent, as the
investor's agent, will cause the Fund to redeem a sufficient number of
shares in the investor's account to cover the amount of the Check.
Dividends are earned until the Check clears. After clearance, a copy of
the Check will be returned to the investor. Investors generally will be
subject to the same rules and regulations that apply to checking accounts,
although election of this Privilege creates only a shareholder-transfer
agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
the investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt if the Transfer
Agent receives the redemption request in proper form. Redemption proceeds
will be transferred by Federal Reserve wire only to the commercial bank
account specified by the investor on the Account Application or
Shareholder Services Form. Redemption proceeds, if wired, must be in the
amount of $1,000 or more and will be wired to the investor's account at
the bank of record designated in the investor's file at the Transfer
Agent, if the investor's bank is a member of the Federal Reserve System,
or to a correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmission:
Transfer Agent's
Transmittal Code Answer Back Sign
________________ ________________
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Share Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have also selected the Dreyfus TeleTransfer Privilege, any request
for a wire redemption will be effected as a Dreyfus TeleTransfer
transaction through the Automated Clearing House ("ACH") system unless
more prompt transmittal specifically is requested. Redemption proceeds
will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Fund Shares--Dreyfus TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians and may accept other
suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to signature-
guarantees, please call the telephone number listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In such event,
the securities would be valued in the same manner as the portfolio of the
Fund is valued. If the recipient sold such securities, brokerage charges
would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable or
(c) for such other periods as the Securities and Exchange Commission by
order may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Exchange Privilege. Shares of other funds purchased by exchange will
be purchased on the basis of relative net asset value per share as
follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares") provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at
the time the Purchased Shares were acquired), without giving
effect to any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must
notify the Transfer Agent of their prior ownership of fund shares and
their account number.
To use this Privilege, an investor must give exchange instructions to
the Transfer Agent in writing, by wire or by telephone. Telephone
exchanges may be made only if the appropriate "YES" box has been checked
on the Account Application, or a separate signed Shareholder Services Form
is on file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on exchange instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares issued in certificate form are not
eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Exchange
Privilege." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if his account falls below the
amount designated to be exchanged under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are
eligible for this Privilege. Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the
fund being acquired legally may be sold. Before any exchange, the
investor must obtain and should read a copy of the current prospectus of
the fund into which an exchange is being made. Shares may be exchanged
only between accounts having identical names and other identifying
designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice
to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available from the
Distributor. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or distributions and capital
gain distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with
a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
by an independent pricing service (the "Service") approved by the Board of
Trustees. When, in the judgment of the Service, quoted bid prices for
investments are readily available and are representative of the bid side
of the market, these investments 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 bonds of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general
market conditions. The Service may employ electronic data processing
techniques and/or a matrix system to determine valuations. The Service's
procedures are reviewed by the Fund's officers under the general
supervision of the Board of Trustees. Expenses and fees, including the
management fee (reduced by the expense limitation, if any), are accrued
daily and are taken into account for the purpose of determining the net
asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price. No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's
Investment Officers in their best judgment. The primary consideration is
prompt and effective execution of orders at the most favorable price.
Subject to that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
The Fund anticipates that its annual portfolio turnover rate
generally will not exceed 100%, but the turnover rate will not be a
limiting factor when the Fund deems it desirable to sell or purchase
securities. Therefore, depending upon market conditions, the Fund's
annual portfolio turnover rate may exceed 100% in particular years.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
The Internal Revenue Code of 1986, as amended, (the "Code"), provides
that if a shareholder has not held his Fund shares for more than six
months (or such shorter period as the Internal Revenue Service may
prescribe by regulation) and has received an exempt-interest dividend with
respect to such shares, any loss incurred on the sale of such shares shall
be disallowed to the extent of the exempt-interest dividend received. In
addition, any dividend or distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of his shares
below the cost of his investment. Such a distribution would be a return
on the investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus.
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of any
gain realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Code.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders. For example, the
Fund could be required to take into account annually a portion of the
discount (or deemed discount) at which such securities were issued and to
distribute such portion in order to maintain its qualification as a
regulated investment company. In such case, the Fund may have to dispose
of securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Fund's current yield for the 30-day period ended May 31, 1994 was
5.26%. Current yield is computed pursuant to a formula which operates as
follows: The amount of the Fund's expenses accrued for the 30-day period
is subtracted from the amount of the dividends and interest earned
(computed in accordance with regulatory requirements) by the Fund during
the period. That result is then divided by the product of: (a) the
average daily number of shares outstanding during the period that were
entitled to receive dividends, and (b) the net asset value per share on
the last day of the period less any undistributed earned income per share
reasonably expected to be declared as a dividend shortly thereafter. The
quotient is then added to 1, and that sum is raised to the 6th power,
after which 1 is subtracted. The current yield is then arrived at by
multiplying the result by 2.
Based upon a combined 1994 Federal and Massachusetts tax rate of
46.85%, the Fund's tax equivalent yield for the 30-day period ended May
31, 1994 was 9.90%. Tax equivalent yield is computed by dividing that
portion of the current yield (calculated as described above) which is tax
exempt by 1 minus a stated tax rate and adding the quotient to that
portion, if any, of the yield of the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of
the highest Federal and Commonwealth of Massachusetts marginal personal
income tax rates presently in effect. For Federal personal income tax
purposes, a 39.6% tax rate has been used. For Massachusetts personal
income tax purposes, a 12% tax rate has been used. The tax equivalent
figure, however, does not include the potential effect of any local
(including, but not limited to, county, district or city) taxes, including
applicable surcharges. In addition, there may be pending legislation
which could affect such stated tax rates or yield. Each investor should
consult its tax adviser, and consider its own factual circumstances and
applicable tax laws, in order to ascertain the relevant tax equivalent
yield.
The Fund's average annual total return for the 1 and 5 year periods
ended May 31, 1994, and for the period from the Fund's commencement of
operations on June 11, 1985 through May 31, 1994, was 2.07%, 7.49% and
7.59%, respectively. Average annual total return is calculated by
determining the ending redeemable value of an investment purchased with a
hypothetical $1,000 payment made at the beginning of the period (assuming
the reinvestment of dividends and distributions), dividing by the amount
of the initial investment, taking the "n"th root of the quotient (where
"n" is the number of years in the period) and subtracting 1 from the
result.
The Fund's total return for the period June 11, 1985 (commencement of
operations) to May 31, 1994 was 92.84%. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end
of the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and are not representative of
the Fund's past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, and actual or proposed tax legislation. From time to time,
advertising materials for the Fund also may refer to statistical or other
information concerning trends relating to investment companies, as
compiled by industry associations such as the Investment Company
Institute. From time to time, advertising materials for the Fund also may
refer to Morningstar ratings and related analyses supporting the rating.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
nonassessable. Fund shares are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
On November 23, 1992, Fund shareholders approved a proposal to change
certain of the Fund's fundamental policies and investment restrictions,
among other things, to (i) permit the Fund to lend its portfolio
securities in an amount not to exceed 33-1/3% of the value of its total
assets, (ii) increase from 10% to 15% the amount of the Fund's assets
which the Fund may borrow from banks for temporary or emergency purposes,
and (iii) increase from 10% to 15% the amount of the Fund's assets which
may be invested in illiquid securities and make such policy non-
fundamental.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
portfolio securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Fund.
APPENDIX A
RISK FACTORS - INVESTING
IN MASSACHUSETTS MUNICIPAL OBLIGATIONS
The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn
from official statements relating to securities offerings of the
Commonwealth of Massachusetts available as of the date of this Statement
of Additional Information. While the Fund has not independently verified
this information, it has no reason to believe that such information is not
correct in all material aspects.
Massachusetts recently has undergone serious financial difficulties
that adversely affected the Commonwealth's credit standing.
Massachusetts' economic difficulties and fiscal problems could adversely
affect the market values and marketability of, or result in default in
payment of, outstanding Massachusetts Municipal Obligations. While
Massachusetts had benefitted from an annual job growth rate of
approximately 2% since the early 1980s, by 1989, employment started to
decline. Nonagricultural employment declined 0.7% in 1989 and 4.0% in
1990. The Commonwealth's unemployment rate in 1992 averaged 8.5%, which
exceeded the national unemployment rate, and was 6.3% in December 1993,
which was lower than the national unemployment rate. The construction and
manufacturing sectors experienced the highest percentage loss of jobs.
Per capita personal income growth has begun to slow as well, after several
years during which the per capita personal income growth rate in
Massachusetts was among the highest in the nation. Between the second
quarter of 1992 and the second quarter of 1993, total personal income in
Massachusetts increased 4.0% as compared to 5.5% for the nation as a
whole.
Massachusetts' expenditures for state government programs and
services in each of the fiscal years 1987 through 1991, inclusive,
exceeded each fiscal year's current revenues. In fiscal years 1987 and
1988, largely by drawing on fund balances from prior years, Massachusetts
ended each fiscal year with budgetary surpluses. However, fiscal years
1989 and 1990 ended with operating deficits of $672.5 million and $1.25
billion, respectively. The fiscal 1989 deficit was covered primarily
through the issuance of $466.4 million of notes and $244 million of
Medicaid-related notes, all of which matured and were paid on or before
January 15, 1991, and by delaying payments of local aid to cities, towns
and regional school districts. The fiscal 1990 deficit was financed in
arrears in the following year by the issuance of approximately $1.4
billion of Fiscal Recovery Bonds (see below). Fiscal 1990 ended with a
budgetary deficit of $1.104 billion. Using proceeds of $1.363 billion
generated from deficit financings, the adjusted fiscal 1990 closing
balance was $259 million.
In fiscal 1991, total revenues and other sources of the budgeted
operating funds increased by 13.8% over the prior year, to $13.913
billion. This increase was due chiefly to state tax rate increases
enacted in July 1990 and to a substantial Federal reimbursement under the
Medicaid program for uncompensated patient care payments, as well as other
factors. The Commonwealth ended fiscal 1991 with an operating loss of
$21.2 million, but with positive closing fund balances of $237.1 million,
after applying the opening fund balances created from proceeds of the
fiscal 1990 deficit borrowing. No deficit borrowing was required to close
out fiscal 1991.
Budgeted revenues and other sources for fiscal 1992 were $13.728
billion, including tax revenues of $9.484 billion. Budgeted revenues and
other sources increased by approximately 0.7% from fiscal 1991 to fiscal
1992, while tax revenues increased by 5.4% for the same period.
Commonwealth expenditures and other uses were approximately $13.420
billion in fiscal 1992, which was $238.7 million, or 1.7% lower than
fiscal 1991 budgeted expenditures and other uses. Final fiscal 1992
budgeted expenditures were approximately $300 million higher than the
initial July 1991 estimates of budgetary expenditures. A large portion of
the increase in spending was the result of increases in certain human
services programs, including an increase of $268.7 million for the
Medicaid program and $50.0 million for mental retardation consent decree
requirements. Fiscal 1992 expenditures for Medicaid were $2.818 billion,
or 1.9% higher than fiscal 1991. This increase compared favorably with
the 19% average annual growth rate of Medicaid expenditures for fiscal
years 1988 through 1991.
Overall, the budgeted operating funds ended fiscal 1992 with an
excess of revenues and other sources over expenditures and other uses of
$312.3 million, and with positive fund balances of approximately $549.4
million, when such excess was added to the fund balances of $237.1 million
carried forward from fiscal 1991. Total fiscal 1992 spending authority
continued into fiscal 1993 was $231 million.
The budgeted operating funds of the Commonwealth ended fiscal 1993
with a surplus of revenues and other sources over expenditures and other
uses of $13.1 million and aggregate ending fund balances in the budgeted
operating funds of the Commonwealth of approximately $562.5 million.
Budgeted revenues and other sources for fiscal 1993 totalled approximately
$14.710 billion, including tax revenues of $9.930 billion. Total revenues
and other sources increased by approximately 6.9% from fiscal 1992 to
fiscal 1993, while tax revenues increased by 4.7% for the same period. In
July 1992, tax revenues had been estimated to be approximately $9.685
billion for fiscal 1993. This amount was subsequently revised during
fiscal 1993 to $9.940 billion.
Commonwealth budgeted expenditures and other uses in fiscal 1993
totalled approximately $14.696 billion, which is $1.280 billion or
approximately 9.6% higher than fiscal 1992 expenditures and other uses.
Fiscal 1993 budgeted expenditures were $23 million lower than the initial
July 1992 estimates of fiscal 1993 budgeted expenditures.
On July 19, 1993 the Governor signed the Commonwealth's budget for
fiscal 1994. As signed by the Governor, the budget authorizes
approximately $15.463 billion in fiscal 1994 expenditures. The
Legislature had originally approved a fiscal 1994 budget with
appropriations totalling $15.545 billion. The Governor exercised his
authority to veto and reduce individual line-items and reduced total
expenditures by approximately $82.4 million in order to bring the fiscal
1994 budget into balance and to fund fiscal 1993 appropriations continued
into fiscal 1994 and certain other fiscal 1994 expenditures which the
Governor believes will be necessary. Total budgeted expenditures and
other uses for fiscal 1994 (excluding any supplemental appropriations)
were estimated to be approximately $15.500 billion.
Budgeted revenues and other sources to be collected in fiscal 1994
were estimated by the Executive Office for Administration and Finance to
be approximately $15.483 billion. This amount includes estimated fiscal
1994 tax revenues of approximately $10.560 billion, which is approximately
$630 million higher than fiscal 1993 tax revenues of approximately $9.930
billion. The fiscal 1994 tax revenue amount represents the $10.540
billion consensus tax revenue estimate jointly endorsed by the Secretary
for Administration and Finance and the Chairmen of the House and Senate
Ways and Means Committees in connection with the preparation of the fiscal
1994 budget, plus $20 million of additional tax receipts expected to be
received from a one-year tax amnesty program mandated by the fiscal 1994
budget. Fiscal 1994 non-tax revenues were estimated to be approximately
$4.923 billion (as compared to $4.731 billion of estimated fiscal 1993
non-tax revenues), which amount includes approximately $39.9 million in
additional federal matching funds for Medicaid and Emergency Assistance
not included in previous revenues estimates. In addition, any fiscal 1993
appropriations reauthorized for fiscal 1994 will be funded by an identical
amount in revenues carried forward from fiscal 1993 and reserved for such
reauthorized expenditures.
On January 14, 1994, the Governor signed into law supplemental
appropriations totalling approximately $157.9 million. Including an
additional $8.1 million in fiscal 1994 supplemental appropriation
recommendations that the Governor plans to file, and an approximate $100
million contingency reserve in fiscal 1994 for possible additional
spending, fiscal 1994 budgeted expenditures were estimated in January 1994
to be approximately $15.716 billion.
Fiscal 1994 is estimated to end with a deficiency of revenues and
other sources over expenditures and other uses of $162.8 million and
ending fund balances of $399.7 million. However, on June 1, 1994, the
Department of Revenue announced that fiscal 1994 tax revenue collections
through May, 1994 were $63 million below the year-to-date range
established by the Department of Revenue for fiscal 1994. The Department
of Revenue has not officially revised its current fiscal 1994 tax revenue
estimate of $10.694 billion, although it is possible that fiscal 1994 tax
revenues will be approximately $30 million to $70 million below such
estimate. The Executive Office for Administration and Finance has taken
steps to control spending and expects to offset any reduction in fiscal
1994 tax revenues through these measures.
On May 12, 1994, the House adopted a fiscal 1995 budget that
appropriates total expenditues of $16.389 billion, as compared to the
Governor's fiscal 1995 budget recommendation of $16.139 billion. On June
8, 1994, the Senate Ways and Means Committee recommended fiscal 1995
appropriations of approximately $16.273 billion. The fiscal 1995 budget
will now be considered by the full Senate.
The Governor's recommendation projects a fiscal 1995 ending balance
of approximately $383.4 million, of which approximately $325.0 million
will be in the Stabilization Fund. The Governor's budget recommendation
is based on a tax revenue estimate of $11.226 billion, an increase of
approximately $532 million, or approximately 5.0%, as compared to
estimated fiscal 1994 tax revenues of $10.694 billion. The Governor's
fiscal 1995 budget submission also proposes tax reductions aggregating
$105 million in fiscal 1995, which include a reduction in the income tax
rate from 5.95% to 5.85%, an increase in certain income tax exemptions and
an increase in the no-tax status threshold for low-income taxpayers. The
fiscal 1995 tax revenue estimate of $11.226 billion is net of the $105
million tax reduction proposal. The annualized impact of these reductions
is estimated to be approximately $270 million.
Under the Governor's budget recommendation, non-tax revenues are
estimated to increase to approximately $4.915 billion in fiscal 1995, an
increase of approximately $73.9 million, or 1.5%, over estimated non-tax
revenues for fiscal 1994. Such non-tax revenues would include $125
million from a new video poker game and water-based gambling to be run by
the State Lottery Commission, which are proposed in the Governor's budget
recommendation.
In November 1980, voters in the Commonwealth approved a state-wide
tax limitation initiative petition, commonly known as Proposition 2-1/2, to
constrain levels of property taxation and to limit the charges and fees
imposed on cities and town by certain government entities, including
county governments. The law is not a constitutional provision and
accordingly is subject to amendment or repeal by the legislature.
Proposition 2-1/2 limits the property taxes which a Massachusetts city or
town may assess in any fiscal year to the lesser of (i) 2.5% of the full
and fair cash value of real estate and personal property therein and (ii)
2.5% over the previous year's levy limit plus any growth in the tax base
from certain new construction and parcel subdivisions. In addition,
Proposition 2-1/2 limits any increase in the charges and fees assessed by
certain governmental entities, including county governments, on cities and
towns to the sum of (i) 2.5% of the total charges and fees imposed in the
preceding fiscal year, and (ii) any increase in charges for services
customarily provided locally or services obtained by the city or town at
its option. The law contains certain override provisions which require a
majority vote, or higher, for approval at a general or special election.
Proposition 2-1/2 also limits any annual increase in the total assessments on
cities and towns by any county, district, authority, the Commonwealth, or
any other governmental entity.
During the 1980s, Massachusetts increased payments to its cities,
towns and regional school districts ("Local Aid") to mitigate the impact
of Proposition 2-1/2 on local programs and services. In fiscal 1994
approximately 28.7% of Massachusetts' budget is to be allocated to Local
Aid.
Direct Local Aid decreased from $2.961 billion in fiscal 1989 to
$2.328 billion in fiscal 1992 and increased to $2.547 billion in fiscal
1993. It is estimated that fiscal 1994 expenditures for direct Local Aid
will be $2.733 billion, which is an increase of approximately 7.5% above
the fiscal 1993 level. The additional amount of indirect Local Aid
provided over the above direct Local Aid was approximately $1.717 billion
in fiscal 1993. It is estimated that in fiscal 1994 approximately 1.717
billion of indirect Local Aid will also be paid.
Voters approved in November 1990 a petition which regulates the
distribution of Local Aid by requiring, subject to appropriation,
distribution to cities and towns of no less than 40% of collections from
personal income taxes, sales and use taxes, corporate excise taxes, and
lottery fund proceeds. The Local Aid distribution to each city or town
would equal no less than 100% of the total Local Aid received for fiscal
1989. Distributions in excess of fiscal 1989 levels would be based on new
formulas that would replace the current Local Aid distribution formulas.
By its terms, the new formula would have called for a substantial increase
in direct Local Aid in fiscal 1992, and would call for such an increase in
fiscal 1993 and in subsequent years. However, Local Aid payments
expressly remain subject to annual appropriation, and fiscal 1992
appropriations for Local Aid did not meet and fiscal 1993 appropriations
for Local Aid do not meet, the levels set forth in the initiative law.
In recent years, health care related costs have risen dramatically in
Massachusetts and across the nation and the increase in the State's
Medicaid and group health insurance costs reflects this trend. In fiscal
1992, Medicaid was the largest item in Massachusetts' budget and has been
one of the fastest growing budget items. During fiscal years 1988, 1989,
1990, 1991 and 1992, Medicaid expenditures were $1.64 billion, $1.83
billion, $2.12 billion, $2.77 billion and $2.82 billion, respectively,
representing an average annual increase of 15.4%. Expenditures for fiscal
1993 were $3.151 billion, a 11.8% increase over fiscal 1992. The
Executive Office for Administration and Finance estimates that fiscal 1994
Medicaid expenditures will total approximately $3.27 billion, an increase
of 3.9% over fiscal 1993 expenditures.
Massachusetts' pension costs have risen dramatically as the State has
appropriated funds to address in part the unfunded liabilities that had
accumulated over several decades. Total pension costs increased at an
average annual rate of 7.1% from $659.7 million in fiscal 1989 to $868.2
million in 1993. The estimated pension costs (inclusive of current
benefits and pension reserves) for fiscal 1994 are $941 million, an
increase of 9.5% over fiscal 1993 expenditures.
Payments for debt service on Massachusetts general obligation bonds
and notes have risen at an average annual rate of 20.4%, from $649.8
million in fiscal 1989 to $942.3 million in fiscal 1991. Debt service
payments in fiscal 1992 were $898.3 million, representing a 4.7% decrease
from fiscal 1991. Debt service expenditures for fiscal 1993 were $1.139
billion and are projected to be $1.171 billion in fiscal 1994. In January
1990, legislation was enacted which imposes a 10% limit on the total
appropriations in any fiscal year that may be expended for payment of
interest and principal on general obligations debt (excluding Fiscal
Recovery Bonds) of Massachusetts.
Massachusetts currently has three types of bond and note liabilities:
general obligation debt, dedicated income tax debt, and special obligation
debt. As of April 1, 1994, the State had approximately $11.848 billion of
long-term general obligation debt outstanding and short-term direct
obligations of the Commonwealth totalled $746 million. In October and
December 1990 Massachusetts issued Fiscal Recovery Bonds in the aggregate
principal amount of $1.416 billion to be repaid no later than December 31,
1997 from funds deposited in a State trust fund.
Certain independent authorities and agencies within the State are
statutorily authorized to issue debt for which Massachusetts is either
directly, in whole or in part, or indirectly liable. The State's
liabilities are either in the form of (i) a direct guaranty, (ii) State
support through contract assistance payments for debt service, or (iii)
indirect obligations. The State is indirectly liable for the debt of
certain authorities through the funding of reserve funds which are pledged
as security for the authorities' debt.
Many factors affect the financial condition of the Commonwealth of
Massachusetts and its cities, towns, and public bodies, such as social,
environmental, and economic conditions, many of which are not within the
control of such entities. As in the case with most urban states, the
continuation of many of Massachusetts' programs, particularly its human
services programs, is in significant part dependent upon continuing
Federal reimbursements which have been steadily declining. The loss of
grants to Massachusetts and its cities and towns could further slow
economic development. To the extent that such factors may exist, they
could have an adverse effect on economic conditions in Massachusetts,
although what effect, if any, such factors would have on Massachusetts
Municipal Obligations cannot be predicted.
APPENDIX B
Description of certain S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree.
A
Principal and interest payments on bonds in this category are
regarded as safe. This rating describes the third strongest capacity for
payment of debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local
economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse
circumstances, any one such weakness might impair the ability of the
issuer to meet debt obligations at some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management
performance appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of
debt service. The difference between A and BBB rating is that the latter
shows more than one fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only one deficiency among
the factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the
pledged revenues could show substantial variations with the revenue flow
possibly being subject to erosion over time. Basic security provisions
are no more than adequate. Management performance could be stronger.
BB, B, CCC, CC
Debt rated BB, B, CCC or CC is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but presently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic
conditions to meet timely payments of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC rating.
C
The rating C typically is applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus or
minus sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+) sign
designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 indicates that
the degree of safety regarding timely payment is either overwhelming or
very strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa
Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major ratings categories, except in the Aaa category
and in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower
end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns a MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This description denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations.
This ordinarily will be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal
is considered to be strong, but may be more vulnerable to adverse changes
in economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment
grade is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default in payment of
interest and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of
interest and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor. DDD represents the highest
potential for recovery on these bonds and D represents lowest potential
for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the AAA category covering
12-36 months or the DDD, DD or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the F-1+ and
F-1 categories.
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
STATEMENT OF INVESTMENTS MAY 31, 1994
PRINCIPAL
MUNICIPAL BONDS--94.5% AMOUNT VALUE
------------- -------------
<S> <C> <C>
MASSACHUSETTS--89.2%
Boston:
6.75%, 7/1/2011 (Insured; MBIA, Prerefunded 7/1/2001) (a)............... $ 2,500,000 $ 2,772,775
6.50%, 7/1/2012 (Insured; AMBAC)........................................ 3,000,000 3,156,090
Boston City Hospital, Revenue, Refunding 5.75%, 2/15/2013 (Insured; FHA).... 2,000,000 1,877,800
Boston - Mount Pleasant Housing Development Corp., MFHR, Refunding
6.75%, 8/1/2023 (Insured; FHA).......................................... 1,700,000 1,734,867
Boston Water and Sewer Commission, Revenue 6%, 11/1/2021 (Insured; FGIC).... 4,000,000 3,915,520
Massachusetts Bay Transportation Authority:
6.40%, 3/1/2015 (Guaranteed; Massachusetts Commonwealth)................ 3,000,000 3,056,040
General Transportation System 6.10%, 3/1/2023........................... 2,500,000 2,453,200
Refunding 6.20%, 3/1/2016............................................... 1,225,000 1,255,907
Massachusetts Commonwealth:
Consolidated Loan:
6%, 6/1/2011.......................................................... 3,500,000 3,501,960
6%, 7/1/2012.......................................................... 2,000,000 1,986,800
Refunding:
5.25%, 2/1/2008....................................................... 1,500,000 1,430,910
6%, Series A, 8/1/2012................................................ 2,000,000 1,986,680
6%, Series B, 8/1/2012 (Insured; FGIC)................................ 1,755,000 1,756,843
Massachusetts Convention Center Authority (Boston Common Parking Garage)
5.375%, 9/1/2013........................................................ 2,250,000 2,047,500
Massachusetts Education Loan Authority, Education Loan Revenue:
7.55%, 1/1/2002 (Insured; MBIA)......................................... 925,000 973,313
8%, 6/1/2002 (LOC; Rabobank Nederland) (b).............................. 790,000 846,319
Massachusetts Health and Educational Facilities Authority, Revenue:
(Addison Gilbert Hospital) 9.25%, 7/1/2014 (Prerefunded 7/1/1995) (a)... 1,045,000 1,123,250
(Amherst College) 6.375%, 11/1/2019..................................... 1,000,000 1,011,210
(Berklee College of Music) 6.875%, 10/1/2021 (Insured; MBIA)............ 4,380,000 4,610,388
(Boston University) 6%, 10/1/2022 (Insured; MBIA)....................... 1,175,000 1,152,910
(Holyoke Hospital) 9.50%, 7/1/2015 (Prerefunded 7/1/1995) (a)........... 1,500,000 1,597,485
(Jordan Hospital) 7.85%, 8/15/2028 (Insured; FHA, Prerefunded 8/15/1998) (a) 3,355,000 3,730,559
(Lahey Clinic Medical Center):
5.625%, 7/1/2015 (Insured; MBIA)...................................... 6,800,000 6,373,300
5.375%, 7/1/2023 (Insured; MBIA)...................................... 1,000,000 882,100
(Massachusetts General Hospital):
6.25%, 7/1/2020 (Insured; AMBAC)...................................... 3,500,000 3,521,980
Refunding:
6%, 7/1/2015 (Insured; AMBAC)..................................... 2,000,000 1,967,000
5.25%, 7/1/2023 (Insured; AMBAC).................................. 2,000,000 1,730,920
(Mclean Hospital) 6.50%, 7/1/2010 (Insured; FGIC)....................... 1,000,000 1,042,730
(New England Medical Center Hospitals) 6.50%, 7/1/2012 (Insured; FGIC).. 1,000,000 1,038,880
(Refunding - Baystate Medical Center) 6%, 7/1/2015 (Insured; FGIC)...... 1,140,000 1,121,190
(Refunding - Milton Hospital) 7%, 7/1/2016 (Insured; MBIA).............. 1,000,000 1,070,570
(Youville Hospital):
8.875%, 8/1/2004 (Insured; FHA)....................................... 1,295,000 1,404,738
9.10%, 8/1/2015 (Insured; FHA)........................................ 2,030,000 2,205,493
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------- -------------
MASSACHUSETTS (CONTINUED)
Massachusetts Housing Finance Agency, Revenue:
Housing Projects, Refunding:
6.15%, 10/1/2015...................................................... $ 3,365,000 $ 3,282,726
6.375%, 4/1/2021...................................................... 3,000,000 2,971,110
Multi-Family Residential Housing 9.60%, 8/1/2022........................ 1,810,000 1,847,612
Residential Development 6.25%, 11/15/2012 (Collateralized; FNMA)........ 4,100,000 4,137,392
Single-Family Housing 5.60%, 6/1/2025................................... 1,300,000 1,293,500
Massachusetts Industrial Finance Agency, Revenue:
Electrical Utility (Nantucket Electric Co.), 8.50%, 3/1/2016............ 3,000,000 3,278,070
(Refunding-Harvard Community Health) 8.125%, 10/1/2017.................. 4,000,000 4,389,120
(Refunding-Holy Cross College):
6%, 11/1/2002......................................................... 400,000 420,732
6.375%, 11/1/2015..................................................... 2,000,000 2,037,180
Massachusetts Municipal Wholesale Electric Co., Power Supply System Revenue,
Refunding:
6.40%, 7/1/2002....................................................... 400,000 421,612
4.70%, 7/1/2006 (Insured; MBIA)....................................... 4,000,000 3,670,280
6.625%, 7/1/2018...................................................... 3,500,000 3,573,220
6.125%, 7/1/2019...................................................... 2,500,000 2,422,100
Massachusetts Port Authority, Revenue:
6%, 7/1/2013............................................................ 2,050,000 2,011,091
9.375%, 7/1/2015 (Prerefunded 7/1/1995) (a)............................. 325,000 348,673
9.375%, 7/1/2015 (Prerefunded 7/1/1995) (a)............................. 675,000 726,806
6%, 7/1/2023............................................................ 5,000,000 4,885,400
Special Project (Harborside Hyatt) 10%, 3/1/2026........................ 8,000,000 8,720,000
Massachusetts Water Resources Authority:
5.25%, 3/1/2013......................................................... 4,550,000 4,055,733
6.50%, 12/1/2019 (Prerefunded 12/1/2001) (a)............................ 2,750,000 3,016,640
New Bedford 5.75%, 3/1/2006................................................. 1,565,000 1,546,705
New England Education Loan Marketing Corp., Student Loan Revenue:
5.40%, 6/1/2000......................................................... 2,000,000 2,006,080
6.90%, 11/1/2009........................................................ 3,000,000 3,115,500
Quincy, Revenue (Quincy City Hospital):
5.25%, 1/15/2016 (Insured; FSA)......................................... 2,000,000 1,777,420
7.875%, 1/15/2016 (Insured; FHA, Prerefunded 7/1/1996) (a).............. 2,400,000 2,612,856
Southbridge 6.375%, 1/1/2012 (Insured; AMBAC)............................... 1,000,000 1,026,960
Southern Berkshire Regional School District, Refunding
5.375%, 4/15/2010 (Insured; MBIA)....................................... 2,285,000 2,166,797
Worcester, IDR (National Envelope Corp. Project)
8%, 12/1/2004 (LOC; Manufacturers Hanover Trust Co.) (b)................ 4,000,000 4,317,040
U.S. RELATED--5.3%
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 3,000,000 3,020,670
Puerto Rico Electric Power Authority, Power Revenue 6.25%, 7/1/2017......... 2,000,000 2,006,840
Virgin Islands Water and Power Authority, Electric System Revenue 7.40%, 7/1/2011 3,450,000 3,734,107
-------------
TOTAL MUNICIPAL BONDS (cost $151,220,025)................................... $155,177,199
=============
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1994
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS--5.5% AMOUNT VALUE
------------- -------------
MASSACHUSETTS;
Massachusetts Health and Educational Facilities Authority, Revenue, VRDN:
(Saint Elizabeth Hospital) 2.48% (Insured; FSA) (c)..................... $ 4,050,000 $ 4,050,000
(William's College) 2.25% (c)........................................... 5,000,000 5,000,000
-------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $9,050,000).................... $ 9,050,000
=============
TOTAL INVESTMENTS--100.0%
(cost $160,270,025)..................................................... $164,227,199
=============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation IDR Industrial Development Revenue
FGIC Financial Guaranty Insurance Corporation LOC Letter of Credit
FHA Federal Housing Administration MBIA Municipal Bond Insurance Association
FNMA Federal National Mortgage Association MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (D) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <S> <C>
AAA Aaa AAA 40.9%
AA Aa AA 9.0
A A A 33.8
BBB Baa BBB 6.0
F1 MIG1, VMG1 & P1 SP1 & A1 3.0
Not Rated Not Rated Not Rated 7.3
--------
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 tax-exempt issue and to retire the bonds in full at the
earliest refunding date.
(b) Secured by letters of credit.
(c) 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.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $160,270,025)-see statement..................................... $164,227,199
Cash.................................................................... 1,128,555
Interest receivable..................................................... 3,256,406
Prepaid expenses........................................................ 12,544
--------------
168,624,704
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 92,840
Accrued expenses ....................................................... 58,913 151,753
------------ --------------
NET ASSETS ................................................................ $168,472,951
==============
REPRESENTED BY:
Paid-in capital......................................................... $167,099,155
Accumulated net realized capital losses and distributions in excess of
net realized gain on investments-Note 1(c)............................ (2,583,378)
Accumulated net unrealized appreciation on investments-Note 3........... 3,957,174
--------------
NET ASSETS at value applicable to 10,508,487 shares outstanding
(unlimited number of $.01 par value shares of Beneficial
Interest authorized).................................................... $168,472,951
==============
NET ASSET VALUE, offering and redemption price per share
($168,472,951 / 10,508,487 shares)...................................... $16.03
======
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1994
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 11,322,486
EXPENSES:
Management fee--Note 2(a)............................................. $1,104,362
Shareholder servicing costs-Note 2(b)................................. 244,978
Professional fees..................................................... 50,140
Prospectus and shareholders' reports.................................. 20,250
Custodian fees........................................................ 18,865
Registration fees..................................................... 12,344
Trustees' fees and expenses-Note 2(c)................................. 11,401
Miscellaneous......................................................... 18,343
------------
TOTAL EXPENSES.................................................. 1,480,683
--------------
INVESTMENT INCOME--NET.......................................... 9,841,803
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments--Note 3.............................. $(1,956,469)
Net unrealized (depreciation) on investments............................ (3,680,332)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (5,636,801)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 4,205,002
==============
See notes to financial statements.
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MAY 31,
--------------------------------
1993 1994
-------------- --------------
OPERATIONS:
Investment income--net............................................... $ 10,022,090 $ 9,841,803
Net realized gain (loss) on investments.............................. 6,751,188 (1,956,469)
Net unrealized appreciation (depreciation) on investments for the year 1,523,402 (3,680,332)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 18,296,680 4,205,002
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net.......................................... (9,992,814) (9,922,292)
From net realized gain on investments................................ -- (2,229,211)
In excess of net realized gain on investments........................ -- (2,583,378)
-------------- --------------
TOTAL DIVIDENDS.................................................... (9,992,814) (14,734,881)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................ 48,849,342 47,458,511
Dividends reinvested................................................. 7,691,333 11,443,149
Cost of shares redeemed.............................................. (38,304,055) (63,499,837)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 18,236,620 (4,598,177)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 26,540,486 (15,128,056)
NET ASSETS:
Beginning of year.................................................... 157,060,521 183,601,007
-------------- --------------
End of year (including undistributed investment income-net of
$80,489 on May 31, 1993)........................................... $183,601,007 $168,472,951
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 2,946,281 2,815,211
Shares issued for dividends reinvested............................... 462,681 673,634
Shares redeemed...................................................... (2,308,690) (3,772,878)
-------------- --------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING...................... 1,100,272 (284,033)
============== ==============
See notes to financial statements.
</TABLE>
Condensed Financial Information:
Reference is made to Page 2 of the Prospectus dated August 22, 1994.
See notes to financial statements.
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the exclusive distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor
is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
(A) PORTFOLIO VALUATION: The Fund's investments are valued each business
day by an independent pricing service ("Service") approved by the Board of
Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market are valued in the judgment
of the Service 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, when appropriate,
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, if any, it is the policy of the Fund not to distribute such gain.
Dividends in excess of net realized gains on investment for financial
statement purposes result primarily from losses from security transactions
during the year ended May 31, 1994 which are treated for Federal income tax
purposes as arising in fiscal 1995.
(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 taxes.
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 average
daily value of the Fund's 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 1 1/2% 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, 1994.
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Distributor an amount not to exceed an annual rate of .25 of 1% of the
value of the Fund's average daily net assets for servicing 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, 1994, the
Fund was charged an aggregate of $99,107 pursuant to the Shareholder Services
Plan.
(C) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each trustee
who is not an "affiliated person" receives an annual fee of $1,500 and an
attendance fee of $250 per meeting.
(D) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Manager
with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's
shareholders before completion of the merger. Proxy materials, approved by
the Fund's Board, recently have been mailed to Fund shareholders.
NOTE 3--SECURITIES TRANSACTIONS:
Purchases and sales of securities amounted to $116,381,745 and
$117,520,669, respectively, for the year ended May 31, 1994, and consisted
entirely of municipal bonds and short-term municipal investments.
At May 31, 1994, accumulated net unrealized appreciation on investments
was $3,957,174, consisting of $5,814,175 gross unrealized appreciation and
$1,857,001 gross unrealized depreciation.
At May 31, 1994, 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 MASSACHUSETTS TAX EXEMPT BOND FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
We have audited the accompanying statement of assets and liabilities of
Dreyfus Massachusetts Tax Exempt Bond Fund, including the statement of
investments, as of May 31, 1994, 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, 1994 by correspondence with the custodian. 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 Massachusetts Tax Exempt Bond Fund at May 31, 1994, 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 Signature Logo)
New York, New York
July 9, 1994
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from June 11,
1985 (commencement of operations) to May 31, 1986 and for the
eight fiscal years ended May 31, 1994.
Included in Part B of the Registration Statement:
Statement of Investments-- May 31, 1994
Statement of Assets and Liabilities-- May 31, 1994
Statement of Operations--year ended May 31, 1994
Statement of Changes in Net Assets--for the years
ended May 31, 1993 and 1994.
Notes to Financial Statements.
Report of Ernst & Young, Independent Auditors, dated
July 9, 1994.
Schedules No. I through VII and other financial statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Agreement and Declaration of Trust is incorporated by
reference to Exhibit (1) to the Registration Statement on Form N-
1A, filed on March 28, 1985.
(2) Registrant's By-Laws are incorporated by reference to Exhibit (2)
of Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on May 22, 1985.
(4) Specimen Certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-1A, filed
on May 22, 1985.
(5) Management Agreement is incorporated by reference to Exhibit (5)
of Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on May 22, 1985.
(6) Distribution Agreement is incorporated by reference to Exhibit (6)
of Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on May 22, 1985.
(8)(a) Amended and Restated Custody Agreement, dated August 18, 1989, is
incorporated by reference to Exhibit 8(a) of Post-Effective
Amendment No. 7 to the Registration Statement on Form N-1A, filed
on September 28, 1990.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
8(b) of Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A, filed on September 28, 1990.
(9) Shareholder Services Plan, dated July 14, 1993, is incorporated by
referenced to Exhibit (9) of Post-Effective Amendment No. 10 to
the Registration Statement on From N-1A, filed on September 28,
1993.
(10) Opinion and Consent of Registrant's Counsel is incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on May 22, 1985.
(11) Consent of Independent Auditors.
(16) Yield Computation of Performance Information.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney are incorporated by reference to
Signature Page of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on September 12,
1988, and Other Exhibit of Post-Effective Amendment No. 8 to
the Registration Statement on From N-1A, filed on August 2,
1991, and Other Exhibit of Post-Effective Amendment No. 9 to
the Registration Statement on From N-1A, filed on September
25, 1992 and an additional Power of Attorney is being filed
herewith.
(b) Registrant's Certificate of Secretary is incorporated by
reference to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A, filed on September 25,
1989.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of August 8, 1994
______________ _____________________________
Shares of beneficial interest, 5,034
par value $.01 per share
Item 27. Indemnification
_______ _______________
Reference is made to Article VIII of the Registrant's Declaration
of Trust incorporated by reference to Exhibit (1) to the
Registration Statement on Form N-1A, filed on March 28, 1985. The
application of these provisions is limited by the following
undertaking set forth in the rules promulgated by the Securities and
Exchange Commission.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such
Act and will be governed by the final adjudication of such issue.
Reference also is made to the Distribution Agreement incorporated
by reference to Exhibit (6) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed on May 22, 1985.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser, manager and distributor for sponsored investment
companies registered under the Investment Company Act of 1940 and as
an investment adviser to institutional and individual accounts.
Dreyfus also serves as sub-investment adviser to and/or
administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary
of Dreyfus, serves primarily as distributor of shares of investment
companies sponsored by Dreyfus and of an investment company for
which Dreyfus acts as sub-investment adviser and administrator.
Dreyfus Management, Inc. another wholly-owned subsidiary, provides
investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and Investment
Chairman of the Board and Officer:
Chief Executive Officer Dreyfus Capital Growth Fund (A Premier
Fund)++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus New Leaders Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc. ++;
The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
HOWARD STEIN Dreyfus Land Development Corporation*;
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Strategic Growth, L.P. ++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Dreyfus Growth Allocation Fund, Inc.++
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
HOWARD STEIN Seven Six Seven Agency, Inc.*;
(cont'd) World Balanced Fund++++;
Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
JOSEPH S. DiMARTINO Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Trustee and Investment Officer:
Premier GNMA Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
JOSEPH S. DiMARTINO Trustee:
(cont'd) Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Vice President and former Treasurer and
Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Fund ++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
LAWRENCE M. GREENE Dreyfus New Leaders Fund, Inc.++;
(cont'd) Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
Dreyfus Growth Opportunity Fund, Inc.++;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
Director:
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond
Fund, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Intermediate Municipal Bond
Fund, Inc.++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New York Tax Exempt Bond
Fund, Inc.++;
Dreyfus Ohio Municipal Money Market
Fund, Inc.++;
Trustee:
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Cash Management++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt
Bond Fund++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
DAVID W. BURKE Dreyfus Pennsylvania Municipal Money
(cont'd) Market Fund++;
Dreyfus Short-Intermediate Government
Fund++
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++
ELIE M. GENADRY President:
Vice President - Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Vice President:
The Dreyfus Trust Company++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
DANIEL C. MACLEAN Dreyfus New York Insured Tax Exempt Bond
(cont'd) Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
DANIEL C. MACLEAN Premier New York Municipal Bond Fund++;
(cont'd) Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
DANIEL C. MACLEAN Dreyfus Strategic Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN Dreyfus New Jersey Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
JEFFREY N. NACHMAN General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
JEFFREY N. NACHMAN First Prairie U.S. Treasury Securities
(Cont'd) Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.*;
Vice President:
Dreyfus Personal Management, Inc.*
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- Director:
Income Research The Dreyfus Security Savings Bank F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Assistant Vice President - Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Treasurer and Assistant Secretary:
Assistant Vice President The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
JOHN J. PYBURN Dreyfus California Tax Exempt Money Market
(cont'd) Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
JOHN J. PYBURN Dreyfus 100% U.S. Treasury Money Market
(cont'd) Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
MAURICE BENDRIHEM Controller:
(cont'd) Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
MARK N. JACOBS Dreyfus 100% U.S. Treasury Money Market
(cont'd) Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
MARK N. JACOBS Dreyfus Municipal Cash Management Plus++;
(cont'd) Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
MARK N. JACOBS Premier State Municipal Bond Fund++;
(cont'd) Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund, (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus International Equity Fund, Inc.++;
(cont'd) Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
CHRISTINE PAVALOS The Dreyfus Socially Responsible Growth
(cont'd) Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Michigan Municipal Money Market Fund, Inc.
42) Dreyfus Money Market Instruments, Inc.
43) Dreyfus Municipal Bond Fund, Inc.
44) Dreyfus Municipal Cash Management Plus
45) Dreyfus Municipal Money Market Fund, Inc.
46) Dreyfus New Jersey Intermediate Municipal Bond Fund
47) Dreyfus New Jersey Municipal Bond Fund, Inc.
48) Dreyfus New Jersey Municipal Money Market Fund, Inc.
49) Dreyfus New Leaders Fund, Inc.
50) Dreyfus New York Insured Tax Exempt Bond Fund
51) Dreyfus New York Municipal Cash Management
52) Dreyfus New York Tax Exempt Bond Fund, Inc.
53) Dreyfus New York Tax Exempt Intermediate Bond Fund
54) Dreyfus New York Tax Exempt Money Market Fund
55) Dreyfus Ohio Municipal Money Market Fund, Inc.
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Short-Intermediate Government Fund
63) Dreyfus Short-Intermediate Municipal Bond Fund
64) Dreyfus Short-Term Income Fund, Inc.
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Strategic Growth, L.P.
67) Dreyfus Strategic Income
68) Dreyfus Strategic Investing
69) Dreyfus Tax Exempt Cash Management
70) The Dreyfus Third Century Fund, Inc.
71) Dreyfus Treasury Cash Management
72) Dreyfus Treasury Prime Cash Management
73) Dreyfus Variable Investment Fund
74) Dreyfus-Wilshire Target Funds, Inc.
75) Dreyfus Worldwide Dollar Money Market Fund, Inc.
76) First Prairie Cash Management
77) First Prairie Diversified Asset Fund
78) First Prairie Money Market Fund
79) First Prairie Municipal Money Market Fund
80) First Prairie Tax Exempt Bond Fund, Inc.
81) First Prairie U.S. Government Income Fund
82) First Prairie U.S. Treasury Securities Cash Management
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
91) Pacific American Fund
92) Peoples Index Fund, Inc.
93) Peoples S&P MidCap Index Fund, Inc.
94) Premier Insured Municipal Bond Fund
95) Premier California Municipal Bond Fund
96) Premier GNMA Fund
97) Premier Growth Fund, Inc.
98) Premier Municipal Bond Fund
99) Premier New York Municipal Bond Fund
100) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board None
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director None
Lawrence M. Greene* Executive Vice President and Director Trustee
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President None
Henry D. Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President None
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President and None
Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Vice
President
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President None
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
James Barr
Newton, MA Regional Vice President None
Mary B. Brundage
Pasadena, CA Regional Vice President None
Edward Donley
Latham, NY Regional Vice President None
Thomas Ellis
Ranchero Murietta, CA Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Richard P. Kundracik
Waterford, MI Regional Vice President None
Michael Lane
Beaver Falls, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Robert J. Richardson
Houston, TX Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Donald A. Nanfeldt* Executive Vice President None
Kathleen M. Lewis++ Vice President-Institutional None
Sales Manager
Charles Cardona** Senior Vice President- None
Institutional Services
Stacy Alexander* Vice President-Bank Wholesale None
James E. Baskin+++++++ Vice President-Institutional Sales None
Kenneth Bernstein
Boca Raton, FL Vice President-Bank Wholesale None
Stephen Burke* Vice President-Bank Wholesaler None
Sales Manager
Laurel A. Diedrick
Burrows*** Vice President-Bank Wholesale None
Gary F. Callahan
Somerville, NJ Vice President-Bank Wholesale None
Daniel L. Clawson++++ Vice President-Institutional Sales None
Anthony T. Corallo
San Francisco, CA Vice President-Institutional Sales None
Bonnie M. Cymbryla
Brewerton, NY Vice President-Bank Wholesale None
William Davis
Bellevue, WA Vice President None
William E. Findley**** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Bank Wholesale None
Bradford Lange* Vice President-Bank Wholesale None
Eva Machek***** Vice President-Institutional Sales None
Bradley R. Maybury
Seattle, WA Vice President-Bank Wholesale None
Mary McCabe*** Vice President-Bank Wholesale None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President-Bank Wholesale- None
National Accounts Manager
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President-Bank Wholesale None
Lorianne Pinto* Vice President-Bank Wholesale None
Douglas Rentschler
Grosse Point Park, MI Vice President-Bank Wholesale None
Leah Ryan**** Vice President-Institutional Sales None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President-Institutional None
Administration
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Brant Snavely
Charlotte, NC Vice President-Bank Wholesale None
Thomas Stallings
Richmond, VA Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Thomas Winnick
Malverne, PA Vice President-Bank Wholesale None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Mary Rogers** Assistant Vice President-
Institutional Servicing None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Robert W. Stone* Executive Vice President None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
William Gallagher* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested in writing
to do so by the holders of at least 10% of the Registrant's outstanding
shares of beneficial interest and in connection with such meeting to comply
with the provisions of Section 16(c) of the Investment Company Act of 1940
relating to shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with
a copy of its latest annual report to shareholders, upon request and without
charge.
SIGNATURES
---------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the day of August, 1994.
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
BY: /s/Richard J. Moynihan*
___________________________________________
RICHARD J. MOYNIHAN, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
Signatures Title Date
__________________________ _______________________________ _________
/s/Richard J. Moynihan* President (Principal Executive 8/ /94
______________________________ Officer) and Trustee
Richard J. Moynihan
/s/John J. Pyburn*
Treasurer (Principal Financial 8/ /94
______________________________ Officer)
John J. Pyburn
/s/Gregory S. Gruber* Controller (Principal Accounting 8/ /94
______________________________ Officer)
Gregory S. Gruber
/s/David W. Burke* Trustee 8/ /94
______________________________
David W. Burke
/s/Samuel Chase* Trustee 8/ /94
______________________________
Samuel Chase
/s/Joni Evans* Trustee 8/ /94
______________________________
Joni Evans
/s/Lawrence M. Greene* Trustee 8/ /94
______________________________
Lawrence M. Greene
/s/Arnold S. Hiatt* Trustee 8/ /94
______________________________
Arnold S. Hiatt
/s/David J. Mahoney* Trustee 8/ /94
______________________________
David J. Mahoney
/s/Burton N. Wallack* Trustee 8/ /94
______________________________
Burton N. Wallack
*BY: __________________________
Mark N. Jacobs,
Attorney-in-Fact
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
EXHIBIT INDEX
Exhibit No.
24(b)(11) Consent of Ernst & Young
24(b)(16) Schedule of Computation of
Performance Data
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated July 9, 1994, in this Registration Statement (Form N-1A 2-96709)
of Dreyfus Massachusetts Tax Exempt Bond Fund.
ERNST & YOUNG
New York, New York
August 18, 1994
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 5/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 5/31/94 of a $1,000
hypothetical investment made on 6/11/85 (inception)
8.973
1000( 1 + T ) = 1,928.44
T = 7.59%
==========
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
TOTAL RETURN COMPUTATION
Total return computation from inception through 5/31/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 16.03 + ( 16.03 x 0.86468 ) ] - 15.50
--------------------------------------------
15.50
T = 92.84%
========
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
SEC 30 DAY YIELD CALCULATION
INCOME 5/2/94 - 5/31/94 $824,181.17
EXPENSES 5/2/94 - 5/31/94 $95,455.46
Average Shares Entitled to Dividend
5/2/94 - 5/31/94 10,484,148.765
NAV per share 5/31/94 $16.03
x = 824,181.17 - 95,455.46
------------------------------------------
10,484,148.765 x 16.03
x = 0.004336
6
30 Day yield = 2 [( 1 + x) -1]
6
30 Day yield = 2 [ ( 1 + 0.004336 ) -1]
30 Day yield = 5.26%
=================
TAX EQUIVALENT YIELD
Taxable portion of yield = 0.00%
Tax exempt portion of yield = 5.26%
----------------
Yield = 5.26%
================
Federal & State Tax Bracket = 46.85%
================
5.26
Tax Equivalent Yield = -------------------- = 9.90%
( 1 - 0.4685 ) ================
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 5/31/93 through 5/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 5/31/94 of a $1,000
hypothetical investment made on 5/31/93
1.00
1000( 1 + T ) = 1,020.65
T = 2.07%
============
DREYFUS MASSACHUSETTS TAX EXEMPT BOND FUND
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 5/31/89 through 5/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 5/31/94 of a $1,000
hypothetical investment made on 5/31/89
5.00
1000( 1 + T ) = 1,435.18
T = 7.49%
============
