<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __
Post-Effective Amendment No. 18 (File No. 33-5103) /X/
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 21 (File No. 811-4646) /X/
------------------------
IDS CALIFORNIA TAX-EXEMPT TRUST
IDS Tower 10, Minneapolis, Minnesota 55440-0534
Leslie L. Ogg
901 Marquette Avenue South
Minneapolis, MN 55402-3268
(612) 330-9283
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/X/ on March 30, 1995 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
/X/ This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
------------------------
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OR AMOUNT OF SECURITIES
UNDER THE SECURITIES ACT OF 1933 PURSUANT TO SECTION 24F-2 OF THE INVESTMENT
COMPANY ACT OF 1940. RULE 24F-2 NOTICE FOR ITS MOST RECENT FISCAL YEAR WAS FILED
ON OR ABOUT AUG. 31, 1994.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
The prospectus and Statement of Additional Information contained in this
Post-Effective Amendment No. 18 to Registration Statement No. 33-5103 are
related to and are identical with the prospectus and Statement of Additional
Information for the IDS Minnesota, Massachusetts, Michigan, New York and Ohio
Funds contained in Post-Effective Amendment No. 24 to Registration Statement No.
33-5102 for IDS Special Tax-Exempt Series Trust. The cross reference sheet below
shows the location in the prospectus and the Statement of Additional Information
of the information called for by the items enumerated in Part A and Part B of
Form N-1A.
Negative answers omitted from Part A or Part B are so indicated.
<TABLE>
<CAPTION>
PART A
- ---------------------------------------------------------------------------------
ITEM NO. SECTION IN PROSPECTUS
- ------------ ------------------------------------------------------------------
<C> <S>
1 Cover page of prospectus
2 The fund in brief; Sales charge and fund expenses
3(a) Financial highlights
(b) NA
(c) Performance
(d) Financial highlights
4(a) The fund in brief; Investment policies and risks; How the fund is
organized
(b) Investment policies and risks
(c) Investment policies and risks
5(a) Directors and officers; Directors and officers of the fund
(listing)
(b) How the fund is organized; About American Express Financial
Corporation
(b)(i) About American Express Financial Corporation -- General
information
(b)(ii) Investment manager and transfer agent
(b)(iii) Investment manager and transfer agent
(c) Portfolio manager
(d) The fund in brief
(e) Investment manager and transfer agent
(f) Distributor
(g) Investment manager and transfer agent
5A(a) *
(b) *
6(a) Shares; Voting rights
(b) NA
(c) NA
(d) Voting rights
(e) Cover page; Special shareholder services
(f) Dividends and capital gain distributions; Reinvestments
(g) Taxes
7(a) Distributor
(b) Key terms; Valuing assets
(c) How to buy, exchange or sell shares
(d) How to buy shares
(e) NA
(f) Distributor
8(a) How to sell shares
(b) NA
(c) How to buy shares: Three ways to invest
(d) How to buy, exchange or sell shares: Redemption policies --
"Important..."
9 None
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART B
- ---------------------------------------------------------------------------------
ITEM NO. SECTION IN SAI
- ------------ ------------------------------------------------------------------
<C> <S>
10 Cover page of SAI
11 Table of Contents
12 NA
13(a) Additional Investment Policies; all appendices except Dollar-Cost
Averaging
(b) Additional Investment Policies
(c) Additional Investment Policies
(d) Portfolio Transactions
14(a) Directors and officers of the fund;** Directors and Officers
(b) Directors and Officers
(c) Directors and Officers
15(a) NA
(b) NA
(c) Directors and Officers
16(a)(i) How the fund is organized; About American Express Financial
Corporation**
(a)(ii) Agreements: Investment Management Services Agreement, Plan and
Agreement of Distribution
(a)(iii) Agreements: Investment Management Services Agreement
(b) Agreements: Investment Management Services Agreement
(c) NA
(d) Agreements: Administrative Services Agreement, Shareholder Service
Agreement
(e) NA
(f) Agreements: Distribution Agreement
(g) NA
(h) Custodian; Independent Auditors
(i) Agreements: Transfer Agency Agreement; Custodian
17(a) Portfolio Transactions
(b) Brokerage Commissions Paid to Brokers Affiliated with American
Express Financial Corporation
(c) Portfolio Transactions
(d) Portfolio Transactions
(e) Portfolio Transactions
18(a) Shares and Voting rights**
(b) NA
19(a) Investing in the Fund
(b) Valuing Fund Shares; Investing in the Fund
(c) NA
20 Taxes
21(a) Agreements: Distribution Agreement
(b) Agreements: Distribution Agreement
(c) NA
22(a) Performance Information (for money market funds only)
(b) Performance Information (for all funds except money market funds)
23 Financial Statements
<FN>
- ------------------------
*Designates information is located in annual report.
**Designates page number in prospectus.
</TABLE>
<PAGE>
This prospectus contains facts IDS CALIFORNIA TAX-EXEMPT TRUST
that can help you decide if CALIFORNIA TAX-EXEMPT FUND
one or more of the funds is IDS SPECIAL TAX-EXEMPT SERIES TRUST
the right investment for you. MASSACHUSETTS TAX-EXEMPT FUND
Read it before you invest and MICHIGAN TAX-EXEMPT FUND
keep it for future reference. MINNESOTA TAX-EXEMPT FUND
NEW YORK TAX-EXEMPT FUND
Additional facts about the OHIO TAX-EXEMPT FUND
funds are in a Statement of PROSPECTUS
Additional Information (SAI), AUG. 29, 1994
filed with the Securities and AS REVISED MARCH 20, 1995
Exchange Commission. The SAI, EACH FUND'S GOAL IS TO
dated Aug. 29, 1994 as revised PROVIDE A HIGH LEVEL OF
March 20, 1995, is INCOME GENERALLY EXEMPT
incorporated here by FROM FEDERAL INCOME TAX AS
reference. For a free copy, WELL AS FROM THE RESPECTIVE
contact American Express STATE AND LOCAL INCOME TAX.
Shareholder Service. A PORTION OF EACH FUND'S
ASSETS MAY BE INVESTED IN
THESE SECURITIES HAVE NOT BEEN BONDS WHOSE INTEREST IS
APPROVED OR DISAPPROVED BY THE SUBJECT TO THE ALTERNATIVE
SECURITIES AND EXCHANGE MINIMUM TAX COMPUTATION.
COMMISSION OR ANY STATE American Express Shareholder
SECURITIES COMMISSION, NOR HAS Service
THE SECURITIES AND EXCHANGE P.O. Box 534
COMMISSION OR ANY STATE Minneapolis, MN
SECURITIES COMMISSION PASSED 55440-0534
UPON THE ACCURACY OR ADEQUACY 612-671-3733
OF THIS PROSPECTUS. ANY TTY: 800-846-4852
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES IN THE FUNDS
ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR
GUARANTEED OR
ENDORSED BY, ANY
BANK, AND SHARES ARE
NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE
BOARD, OR ANY
OTHER AGENCY.
<PAGE>
---------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------
THE FUNDS IN BRIEF
Goals 3P
Types of fund investments 3P
Manager and distributor 3P
Portfolio manager 3P
Alternative sales arrangements 3P
- --------------------------------------------------------------
SALES CHARGE AND FUND EXPENSES
- --------------------------------------------------------------
PERFORMANCE
Financial highlights 8P
Total returns 14P
Yield 15P
Key terms 16P
- --------------------------------------------------------------
INVESTMENT POLICIES AND RISKS
Facts about investments and their risks 17P
Alternative investment option 22P
Valuing assets 22P
- --------------------------------------------------------------
HOW TO BUY, EXCHANGE OR SELL SHARES
Alternative sales arrangements 23P
How to buy shares 26P
How to exchange shares 28P
How to sell shares 28P
Reductions and waivers of the sales charge 32P
- --------------------------------------------------------------
SPECIAL SHAREHOLDER SERVICES
Services 36P
Quick telephone reference 36P
- --------------------------------------------------------------
DISTRIBUTIONS AND TAXES
Dividend and capital gain distributions 37P
Reinvestments 37P
Taxes 38P
- --------------------------------------------------------------
HOW THE FUNDS ARE ORGANIZED
Shares 41P
Voting rights 42P
Shareholder meetings 42P
Trustees and officers 42P
Investment manager and transfer agent 44P
Distributor 45P
- --------------------------------------------------------------
ABOUT AMERICAN EXPRESS FINANCIAL CORPORATION
General information 47P
- --------------------------------------------------------------
APPENDICES
A: Tax-exempt vs. taxable income 48P
B: Description of corporate bond ratings 62P
C: Descriptions of derivative instruments 63P
2P
<PAGE>
- -------------------------------------------------------------------------------
The funds in brief
GOALS
Each fund seeks to provide shareholders a high level of income
generally exempt from federal income tax as well as from the
respective state and local income tax. Because any investment
involves risk, achieving these goals cannot be guaranteed. Only
shareholders can change the goals.
TYPES OF FUND INVESTMENTS
Each fund is a non-diversified mutual fund that invests primarily
in high- or medium-grade municipal securities that are generally
exempt from federal income tax as well as from the respective state
and local income tax. A portion of each fund's assets may be
invested in bonds subject to the alternative minimum tax
computation.
Each of the funds may invest in lower-quality securities that tend
to be more price volatile than higher-quality securities. Funds
that concentrate their investments in a single state or invest more
than 5% of their assets in a single issuer may have more market
risk than funds that have broader diversification.
MANAGER AND DISTRIBUTOR
The funds are managed by American Express Financial Corporation, a
provider of financial services since 1894. American Express
Financial Corporation currently manages more than $37 billion in
assets for the IDS MUTUAL FUND GROUP. Shares of the funds are sold
through American Express Financial Advisors Inc., a wholly owned
subsidiary of American Express Financial Corporation.
PORTFOLIO MANAGER
Paul Hylle joined American Express Financial Corporation in 1993
and serves as portfolio manager. He also is portfolio manager of
IDS Insured Tax-Exempt Fund. Prior to joining American Express
Financial Corporation, he had been a portfolio manager at Lutheran
Brotherhood, a Minnesota based fraternal benefit society offering
financial services to Lutherans.
ALTERNATIVE SALES ARRANGEMENTS
Each fund offers its shares in three classes. Class A shares are
subject to a sales charge at the time of purchase. Class B shares
are subject to a contingent deferred sales charge (CDSC) on
redemptions made within 6 years of purchase and an annual
distribution (12b-1) fee. Class Y shares are sold without a sales
charge to qualifying institutional investors. Other differences
between the classes include the fees paid by each class. Each fund
offers these alternatives so you may choose the method of
purchasing shares that is most beneficial given the amount of
purchase, length of time you expect to hold the shares and other
circumstances.
3P
<PAGE>
- -------------------------------------------------------------------------------
Sales charge and fund expenses
When you buy Class A shares, you pay a maximum sales charge of 5%
of the public offering price. This charge can be reduced, depending
on your total investments in IDS funds. See "Reductions of the
sales charge." No sales charge applies at the time of purchase of
Class B shares, although Class B shares may be subject to a CDSC on
redemptions made within 6 years and are subject to annual
distribution (12b-1) fees. Class Y shares are sold without a sales
charge to qualifying institutional investors. Shareholder
transaction expenses are incurred directly by an investor on the
purchase or redemption of fund shares. Fund operating expenses are
paid out of fund assets for each class of assets. Operating
expenses are reflected in each fund's daily share price and
dividends, and are not charged directly to shareholder accounts.
-------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge on purchases (as a percentage of offering
price)
<TABLE>
<CAPTION>
California Massachusetts Michigan Minnesota New York Ohio
<C> <S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
Class A 5% 5% 5% 5% 5% 5%
Class B 0% 0% 0% 0% 0% 0%
Class Y 0% 0% 0% 0% 0% 0%
</TABLE>
Maximum deferred sales charge imposed on redemptions (as a
percentage of original purchase price)
<TABLE>
<CAPTION>
California Massachusetts Michigan Minnesota New York Ohio
<C> <S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
Class A 0% 0% 0% 0% 0% 0%
Class B 5% 5% 5% 5% 5% 5%
Class Y 0% 0% 0% 0% 0% 0%
</TABLE>
-------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES*
(% OF AVERAGE DAILY NET ASSETS):
<TABLE>
<CAPTION>
CALIFORNIA CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.47% 0.47% 0.47%
-----------------------------------------------------------
12b-1 fee.................... -- 0.75% --
-----------------------------------------------------------
Other expenses**............. 0.28% 0.28% 0.11%
-----------------------------------------------------------
Total........................ 0.75% 1.50% 0.58%
<CAPTION>
MASSACHUSETTS CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.47% 0.47% 0.47%
-----------------------------------------------------------
12b-1 fee.................... -- 0.75% --
-----------------------------------------------------------
Other expenses**............. 0.36% 0.36% 0.18%
-----------------------------------------------------------
Total........................ 0.83% 1.58% 0.65%
</TABLE>
4P
<PAGE>
- --------------------------------------------------------------------------------
-------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES* (CONTINUED)
(% OF AVERAGE DAILY NET ASSETS):
<TABLE>
<CAPTION>
MICHIGAN CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.47% 0.47% 0.47%
-----------------------------------------------------------
12b-1 fee.................... -- 0.75% --
-----------------------------------------------------------
Other expenses**............. 0.32% 0.33% 0.14%
-----------------------------------------------------------
Total........................ 0.79% 1.55% 0.61%
<CAPTION>
MINNESOTA CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.46% 0.46% 0.46%
-----------------------------------------------------------
12b-1 fee.................... -- 0.75% --
-----------------------------------------------------------
Other expenses**............. 0.33% 0.33% 0.15%
-----------------------------------------------------------
Total........................ 0.79% 1.54% 0.61%
<CAPTION>
NEW YORK CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.47% 0.47% 0.47%
-----------------------------------------------------------
12b-1 fee.................... -- 0.75% --
-----------------------------------------------------------
Other expenses**............. 0.32% 0.32% 0.14%
-----------------------------------------------------------
Total........................ 0.79% 1.54% 0.61%
<CAPTION>
OHIO CLASS A CLASS B CLASS Y
<S> <C> <C> <C>
-----------------------------------------------------------
Management fee............... 0.47% 0.47% 0.47%
-----------------------------------------------------------
12b-1 fee.................... -- 0.75% --
-----------------------------------------------------------
Other expenses**............. 0.33% 0.33% 0.16%
-----------------------------------------------------------
Total........................ 0.80% 1.55% 0.63%
<FN>
*Expenses for Class A are based on actual expenses for the
last fiscal year, restated to reflect current fees. Expenses
for Class B and Class Y are estimated based on the restated
expenses for Class A, except that the 12b-1 fee and transfer
agent fee (under other expenses) for Class B are based on
agreements for that class.
**Other expenses include an administrative services fee, a
shareholder services fee, a transfer agent fee and other
non-advisory expenses.
</TABLE>
5P
<PAGE>
- --------------------------------------------------------------------------------
Sales charge and fund expenses
EXAMPLE: Suppose for each year for the next 10 years, fund expenses
are as above and annual return is 5%. If you sold your shares at
the end of the following years, for each $1,000 invested, you would
pay total expenses of:
<TABLE>
<CAPTION>
California 1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $ 57 $ 73 $ 90 $ 139
------------------------------------------------------------------------
Class B...................... $ 65 $ 87 $ 102 $ 159
------------------------------------------------------------------------
Class B*..................... $ 15 $ 47 $ 82 $ 159
------------------------------------------------------------------------
Class Y...................... $ 6 $ 19 $ 32 $ 73
<CAPTION>
Massachusetts 1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $ 58 $ 75 $ 94 $ 148
------------------------------------------------------------------------
Class B...................... $ 66 $ 90 $ 106 $ 168
------------------------------------------------------------------------
Class B*..................... $ 16 $ 50 $ 86 $ 168
------------------------------------------------------------------------
Class Y...................... $ 7 $ 21 $ 36 $ 81
<CAPTION>
Michigan 1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $ 58 $ 74 $ 92 $ 143
------------------------------------------------------------------------
Class B...................... $ 66 $ 89 $ 105 $ 164
------------------------------------------------------------------------
Class B*..................... $ 16 $ 49 $ 85 $ 164
------------------------------------------------------------------------
Class Y...................... $ 6 $ 20 $ 34 $ 77
<CAPTION>
Minnesota 1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $ 58 $ 74 $ 92 $ 143
------------------------------------------------------------------------
Class B...................... $ 66 $ 89 $ 104 $ 164
------------------------------------------------------------------------
Class B*..................... $ 16 $ 49 $ 84 $ 164
------------------------------------------------------------------------
Class Y...................... $ 6 $ 20 $ 34 $ 77
<CAPTION>
New York 1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $ 58 $ 74 $ 92 $ 143
------------------------------------------------------------------------
Class B...................... $ 66 $ 89 $ 104 $ 164
------------------------------------------------------------------------
Class B*..................... $ 16 $ 49 $ 84 $ 164
------------------------------------------------------------------------
Class Y...................... $ 6 $ 20 $ 34 $ 77
<FN>
*Assuming Class B shares are not redeemed at the end of the
period.
**Based on conversion of Class B shares to Class A shares after
8 years.
</TABLE>
6P
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ohio 1 year 3 years 5 years 10 years**
<S> <C> <C> <C> <C>
------------------------------------------------------------------------
Class A...................... $ 58 $ 74 $ 92 $ 144
------------------------------------------------------------------------
Class B...................... $ 66 $ 89 $ 105 $ 165
------------------------------------------------------------------------
Class B*..................... $ 16 $ 49 $ 85 $ 165
------------------------------------------------------------------------
Class Y...................... $ 6 $ 20 $ 35 $ 79
<FN>
*Assuming Class B shares are not redeemed at the end of the
period.
**Based on conversion of Class B shares to Class A shares after
8 years.
</TABLE>
THIS EXAMPLE DOES NOT REPRESENT ACTUAL EXPENSES, PAST OR FUTURE.
ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN. Because
Class B pays annual distribution (12b-1) fees, long-term
shareholders of Class B may indirectly pay an equivalent of more
than a 6.25% sales charge, the maximum permitted by the National
Association of Securities Dealers.
7P
<PAGE>
- -------------------------------------------------------------------------------
Performance
IDS CALIFORNIA TAX-EXEMPT TRUST
IDS CALIFORNIA TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30,
- --------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(11994) 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+
-----------------------------------------------------------------------------------------------
Net asset value, $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 $4.82 $4.66 $5.07 $5.00
beginning of period
INCOME FROM INVESTMENT OPERATIONS:
-----------------------------------------------------------------------------------------------
Net investment .15 .31 .30 .31 .32 .32 .16 .32 .32 .11
income
-----------------------------------------------------------------------------------------------
Net gains (losses) ) (.18 (.28) .23 .24 .05 (.08) .15 .16 (.41) .07
on securities (both
realized and
unrealized)
-----------------------------------------------------------------------------------------------
Total from ) (.03 .03 .53 .55 .37 .24 .31 .48 (.09) .18
investment
operations
LESS DISTRIBUTIONS:
-----------------------------------------------------------------------------------------------
Dividends from net ) (.15 (.31) (.30) (.31) (.32) (.32) (.16) (.32) (.32) (.11)
investment income
-----------------------------------------------------------------------------------------------
Net asset value, end $ 4.95 $5.13 $5.41 $5.18 $4.94 $4.89 $4.97 $ 4.82 $ 4.66 $5.07
of period
</TABLE>
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994(1) 1994 1993 1992 1991 1990 1989 ** 1988 *** 1987 *** 1986 +
-----------------------------------------------------------------------------------------------
Net assets, end of $231 $255 $261 $222 $185 $142 $95 $63 $40 $21
period (in millions)
-----------------------------------------------------------------------------------------------
Ratio of expenses to **.61%** .61% .63% .64% .60% .62% .64%**** .72% .78% .75%****++
average daily net
assets
-----------------------------------------------------------------------------------------------
Ratio of net income **6.0%** 5.67% 5.78% 6.16% 6.51% 6.53% 6.67%**** 6.61% 6.74% 6.44%****++
to average daily net
assets
-----------------------------------------------------------------------------------------------
Portfolio turnover 18% 27% 5% 7% 23% 20% 6% 13% 16% 0%
rate (excluding
short-term
securities)
-----------------------------------------------------------------------------------------------
Total return+++ )(0.6%(2) 0.4% 10.8% 11.4% 7.7% 5.0% 6.5%++++ 10.5% (1.6%) 3.5%++++
<FN>
*For a share outstanding throughout the year. Rounded to the
nearest cent.
**Six months ended June 30, 1989. The fund's fiscal year end
was changed from Dec. 31, to June 30, effective 1989.
***Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988.
****Adjusted to an annual basis.
+Commencement of operations. Period from Aug. 18, 1986 to Dec.
31, 1986.
++During this period, IDS voluntarily reimbursed the fund for
expenses in excess of 0.75% of its average daily net assets,
on an annual basis. Had IDS not done so, the ratio of
expenses and ratio of net investment income would have been
0.93% and 6.26%, respectively.
+++Total return does not reflect payment of a sales charge.
++++For the fiscal periods ended Dec. 31, 1986 and June 30,
1989, the annualized total returns are 13.0% and 13.6%,
respectively.
(1)Six months ended Dec. 31, 1994 (Unaudited).
(2)For the period ended Dec. 31, 1994, the annualized total
return is (1.2%).
</TABLE>
8P
<PAGE>
- --------------------------------------------------------------------------------
IDS SPECIAL TAX-EXEMPT SERIES TRUST
IDS MASSACHUSETTS TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30,
- --------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<CAPTION>
1994++ 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------
Net asset value, beginning of year $5.24 $5.49 $5.20 $4.96 $4.88 $5.01 $4.91 $5.00
INCOME FROM INVESTMENT OPERATIONS:
--------------------------------------------------------------
Net investment income .15 .30 .30 .31 .32 .32 .32 .31
--------------------------------------------------------------
Net gains (losses) on securities (.20) (.25) .29 .24 .08 (.12) .12 (.06)
(both realized and unrealized)
--------------------------------------------------------------
Total from investment (.05) .05 .59 .55 .40 .20 .44 .25
operations
LESS DISTRIBUTIONS:
--------------------------------------------------------------
Dividends from net investment (.15) (.30) (.30) (.31) (.32) (.32) (.32) (.31)
income
--------------------------------------------------------------
Distributions from realized gains -- -- -- -- -- (.01) (.02) (.03)
--------------------------------------------------------------
Total distributions (.15) (.30) (.30) (.31) (.32) (.33) (.34) (.34)
--------------------------------------------------------------
Net asset value, end of year $5.04 $5.24 $5.49 $5.20 $4.96 $4.88 $5.01 $4.91
</TABLE>
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
1994++ 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------
Net assets, end of year (in $66 $72 $64 $44 $27 $19 $13 $4
millions)
--------------------------------------------------------------
Ratio of expenses to average daily .68%*** .69% .72% .72% .69% .70% .84% .93%+
net assets
--------------------------------------------------------------
Ratio of net income to average 5.83%*** 5.40% 5.57% 6.05% 6.53% 6.59% 6.55% 6.40%+
daily net assets
--------------------------------------------------------------
Portfolio turnover rate (excluding 6% 6% 0% 2% 16% 36% 25% 34%
short-term securities)
--------------------------------------------------------------
Total return** (.09%)+++ 0.9% 11.5% 11.4% 8.5% 4.2% 9.2% 5.3%
<FN>
*For a share outstanding throughout the year. Rounded to the
nearest cent.
**Total return does not reflect payment of a sales charge.
***Adjusted to an annual basis.
+During the period from July 2, 1987 to March 31, 1988, IDS
voluntarily reimbursed the fund for expenses in excess of
0.75% of its average daily net assets, on an annual basis.
Had IDS not done so, the ratio of expenses and ratio of net
investment income would have been 1.30% and 6.03%,
respectively.
++Six months ended Dec. 31, 1994 (unaudited).
+++For the period ended Dec. 31, 1994, the annualized total
return is (1.8%).
</TABLE>
9P
<PAGE>
- --------------------------------------------------------------------------------
Performance
IDS SPECIAL TAX-EXEMPT SERIES TRUST
IDS MICHIGAN TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30,
- --------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 ++ 1994 1993 1992 1991 1990 1989 1988
--------------------------------------------------------------
Net asset value, beginning of year $5.35 $5.60 $5.31 $5.04 $4.96 $5.08 $4.85 $5.00
INCOME FROM INVESTMENT OPERATIONS:
--------------------------------------------------------------
Net investment income .15 .31 .31 .32 .32 .32 .32 .31
--------------------------------------------------------------
Net gains (losses) on securities (.19) (.25) .29 .27 .08 (.12) .23 (.11)
(both realized and unrealized)
--------------------------------------------------------------
Total from investment (.04) .06 .60 .59 .40 .20 .55 .20
operations
LESS DISTRIBUTIONS:
--------------------------------------------------------------
Dividends from net investment (.15) (.31) (.31) (.32) (.32) (.32) (.32) (.31)
income
--------------------------------------------------------------
Distributions from realized gains -- -- -- -- -- -- -- (.04)
--------------------------------------------------------------
Total distributions (.15) (.31) (.31) (.32) (.32) (.32) (.32) (.35)
--------------------------------------------------------------
Net asset value, end of year $5.16 $5.35 $5.60 $5.31 $5.04 $4.96 $5.08 $4.85
</TABLE>
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 ++ 1994 1993 1992 1991 1990 1989 1988
--------------------------------------------------------------
Net assets, end of year (in $77 $77 $72 $55 $41 $29 $16 $8
millions)
--------------------------------------------------------------
Ratio of expenses to average daily .68%*** .65% .68% .67% .67% .71% .81% .87%+
net assets
--------------------------------------------------------------
Ratio of net income to average 5.80%*** 5.43% 5.64% 6.18% 6.45% 6.47% 6.50% 6.56%+
daily net assets
--------------------------------------------------------------
Portfolio turnover rate (excluding 18% 16% 2% 0% 3% 5% 10% 14%
short-term securities)
--------------------------------------------------------------
Total return** (0.7%)+++ 1.0% 11.6% 12.0% 8.3% 4.1% 11.7% 4.4%
<FN>
*For a share outstanding throughout the year. Rounded to the
nearest cent.
**Total return does not reflect payment of a sales charge.
***Adjusted to an annual basis.
+During the period from July 2, 1987 to March 31, 1988, IDS
voluntarily reimbursed the fund for expenses in excess of
0.75% of its average daily net assets, on an annual basis.
Had IDS not done so, the ratio of expenses and ratio of net
investment income would have been 1.09% and 6.34%,
respectively.
++Six months ended Dec. 31, 1994 (unaudited).
+++For the period ended Dec. 31, 1994, the annualized total
return is (1.4%).
</TABLE>
10P
<PAGE>
- --------------------------------------------------------------------------------
IDS SPECIAL TAX-EXEMPT SERIES TRUST
IDS MINNESOTA TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30,
- --------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<CAPTION>
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------
Net asset value, $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 $4.86 $4.76 $5.18 $5.00
beginning of period
INCOME FROM INVESTMENT OPERATIONS:
------------------------------------------------------------------------------------------
Net investment .15 .31 .31 .33 .33 .32 .16 .33 .33 .12
income
------------------------------------------------------------------------------------------
Net gains (losses) (.17) (.28) .22 .21 .06 (.10) .19 .10 (.42) .19
on securities (both
realized and
unrealized)
------------------------------------------------------------------------------------------
Total from (.02) .03 .53 .54 .39 .22 .35 .43 (.09) .31
investment
operations
LESS DISTRIBUTIONS:
------------------------------------------------------------------------------------------
Dividends from net (.15) (.31) (.31) (.33) (.33) (.32) (.16) (.33) (.33) (.12)
investment income
------------------------------------------------------------------------------------------
Distributions from -- -- -- -- -- -- -- -- -- (.01)
realized gains
------------------------------------------------------------------------------------------
Total distributions (.15) (.31) (.31) (.33) (.33) (.32) (.16) (.33) (.33) (.13)
------------------------------------------------------------------------------------------
Net asset value, end $4.99 $5.16 $5.44 $5.22 $5.01 $4.95 $5.05 $4.86 $4.76 $5.18
of period
</TABLE>
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------
Net assets, end of $374 $408 $402 $313 $233 $181 $121 $82 $50 $32
period (in millions)
------------------------------------------------------------------------------------------
Ratio of expenses to .69%**** .66% .67% .66% .63% .64% .65%**** .65% .78% .75%****++
average daily net
assets
------------------------------------------------------------------------------------------
Ratio of net income 6.06%**** 5.73% 5.91% 6.43% 6.67% 6.62% 6.84%**** 6.73% 6.83% 6.85%****++
to average daily net
assets
------------------------------------------------------------------------------------------
Portfolio turnover 12% 13% 2% 7% 10% 8% 0% 14% 40% 27%
rate (excluding
short-term
securities)
------------------------------------------------------------------------------------------
Total return+++ (0.3%)2 0.4% 10.5% 11.0% 8.2% 4.8% 7.4%++++ 9.3% (1.4%) 6.1%++++
<FN>
*For a share outstanding throughout the period. Rounded to the
nearest cent.
**Six months ended June 30, 1989. The fund's fiscal year end
was changed from Dec. 31 to June 30, effective 1989.
***Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988.
****Adjusted to an annual basis.
+Commencement of operations. Period from Aug. 18, 1986 to Dec.
31, 1986.
++During this period IDS voluntarily reimbursed the fund for
expenses in excess of 0.75% of its average daily net assets,
on an annual basis. Had IDS not so, the ratio of expenses and
ratio of net investment income would have been 0.88% and
6.72%, respectively.
+++Total return does not reflect payment of a sales charge.
++++For the fiscal periods ended Dec. 31, 1986 and June 30,
1989, the annualized total returns are 16.7% and 15.5%,
respectively.
1Six months ended Dec. 31, 1994 (unaudited).
2For the period ended Dec. 31, 1994, the annualized total
return is (0.5%).
</TABLE>
11P
<PAGE>
- --------------------------------------------------------------------------------
Performance
IDS SPECIAL TAX-EXEMPT SERIES TRUST
IDS NEW YORK TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30,
- --------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<CAPTION>
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------
Net asset value, $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 $4.73 $4.58 $5.07 $5.00
beginning of period
INCOME FROM INVESTMENT OPERATIONS:
------------------------------------------------------------------------------------------
Net investment .15 .30 .30 .31 .31 .31 .16 .31 .31 .11
income
------------------------------------------------------------------------------------------
Net gains (losses) (.18) (.29) .28 .27 .06 (.07) .14 .15 (.49) .07
on securities (both
realized and
unrealized)
------------------------------------------------------------------------------------------
Total from (.03) .01 .58 .58 .37 .24 .30 .46 (.18) .18
investment
operations
LESS DISTRIBUTIONS:
------------------------------------------------------------------------------------------
Dividends from net (.15) (.30) (.30) (.31) (.31) (.31) (.16) (.31) (.31) (.11)
investment income
------------------------------------------------------------------------------------------
Net asset value, end $4.94 $5.12 $5.41 $5.13 $4.86 $4.80 $4.87 $4.73 $4.58 $5.07
of period
</TABLE>
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
19941 1994 1993 1992 1991 1990 1989** 1988*** 1987*** 1986+
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------
Net assets, end of $113 $120 $117 $95 $79 $68 $49 $34 $21 $13
period (in millions)
------------------------------------------------------------------------------------------
Ratio of expenses to .66%**** .65% .67% .67% .65% .65% .66%**** .71% .88% .75%****++
average daily net
assets
------------------------------------------------------------------------------------------
Ratio of net income 5.97%**** 5.61% 5.79% 6.26% 6.53% 6.57% 6.78%**** 6.61% 6.79% 6.52%****++
to average daily net
assets
------------------------------------------------------------------------------------------
Portfolio turnover 7% 10% 0% 8% 17% 8% 1% 6% 20% 3%
rate (excluding
short-term
securities)
------------------------------------------------------------------------------------------
Total return+++ (0.5%)2 0.1% 11.6% 12.3% 8.2% 5.0% 6.5%++++ 10.3% (3.4%) 3.6%++++
<FN>
*For a share outstanding throughout the period. Rounded to the
nearest cent.
**Six months ended June 30, 1989. The fund's fiscal year end
was changed from Dec. 31, to June 30, effective 1989.
***Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988.
****Adjusted to an annual basis.
+Commencement of operations. Period from Aug. 18, 1986 to Dec.
31, 1986.
++During this period, IDS voluntarily reimbursed the fund for
expenses in excess of 0.75% of its average daily net assets,
on an annual basis. Had IDS not done so, the ratio of
expenses and ratio of net investment income would have been
1.11% and 6.16%, respectively.
+++Total return does not reflect payment of a sales charge.
++++For the fiscal periods ended Dec. 31, 1986 and June 30,
1989, the annualized total returns are 12.1% and 13.6%,
respectively.
1Six months ended Dec. 31, 1994 (unaudited).
2For the period ended Dec. 31, 1994, the annualized total
return is (1.1%).
</TABLE>
12P
<PAGE>
- --------------------------------------------------------------------------------
IDS SPECIAL TAX-EXEMPT SERIES TRUST
IDS OHIO TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30,
- --------------------------------------------------------------------------------
PER SHARE INCOME AND CAPITAL CHANGES*
<TABLE>
<CAPTION>
1994++ 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------
Net asset value, beginning of year $5.26 $5.58 $5.28 $5.01 $4.94 $5.04 $4.87 $5.00
INCOME FROM INVESTMENT OPERATIONS:
---------------------------------------------------------------
Net investment income .15 .30 .30 .31 .32 .31 .31 .32
---------------------------------------------------------------
Net gains (losses) on securities (both (.18) (.32) .31 .27 .07 (.09) .18 (.10)
realized and unrealized)
---------------------------------------------------------------
Total from investment (.03) (.02) .61 .58 .39 .22 .49 .22
operations
LESS DISTRIBUTIONS:
---------------------------------------------------------------
Dividends from net investment income (.15) (.30) (.30) (.31) (.32) (.31) (.31) (.32)
---------------------------------------------------------------
Distributions from realized gains -- -- (.01) -- -- (.01) (.01) (.03)
---------------------------------------------------------------
Total distributions (.15) (.30) (.31) (.31) (.32) (.32) (.32) (.35)
---------------------------------------------------------------
Net asset value, end of year $5.08 $5.26 $5.58 $5.28 $5.01 $4.94 $5.04 $4.87
</TABLE>
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
<TABLE>
<CAPTION>
1994++ 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------
Net assets, end of year (in millions) $69 $72 $65 $47 $33 $25 $16 $8
---------------------------------------------------------------
Ratio of expenses to average daily net assets .66%*** .66% .67% .70% .68% .70% .82% .86%+
---------------------------------------------------------------
Ratio of net income to average daily net 5.78%*** 5.44% 5.65% 6.14% 6.41% 6.43% 6.40% 6.64%+
assets
---------------------------------------------------------------
Portfolio turnover rate (excluding short-term 25% 11% 0% 5% 2% 6% 10% 0%
securities)
---------------------------------------------------------------
Total return** (0.5%)+++ (0.5%) 12.1% 11.9% 8.1% 4.6% 10.5% 4.7%
<FN>
*For a share outstanding throughout the year. Rounded to the
nearest cent.
**Total return does not reflect payment of a sales charge.
***Adjusted to an annual basis.
+During the period from July 2, 1987 to March 31, 1988, IDS
voluntarily reimbursed the fund for expenses in excess of
0.75% of its average daily net assets, on an annual basis.
Had IDS not done so, the ratio of expenses and ratio of net
investment income would have been 1.09% and 6.41%,
respectively.
++Six months ended Dec. 31, 1994 (unaudited).
+++For the period ended Dec. 31, 1994, the annualized total
return is (1.1%).
</TABLE>
Except for the semi-annual period ended Dec. 31, 1994, the
information in these tables has been audited by KPMG Peat Marwick
LLP, independent auditors. The independent auditors' report and
additional information about the performance of each fund are
contained in the funds' annual report which, if not included with
this prospectus, may be obtained without charge. Information on
Class B and Class Y shares is not included because no shares of
those classes were outstanding for the periods shown.
13P
<PAGE>
- --------------------------------------------------------------------------------
Performance
TOTAL RETURNS
- ---------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
AS OF JUNE 30, 1994
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE
PURCHASE MADE AGO AGO INCEPTION*
<S> <C> <C> <C>
------------------------------------------------------------------------------------------
California Fund -4.6% +5.9% +6.1%
------------------------------------------------------------------------------------------
Massachusetts Fund -4.2 +6.1 +6.4
------------------------------------------------------------------------------------------
Michigan Fund -4.0 +6.2 +6.7
------------------------------------------------------------------------------------------
Minnesota Fund -4.6 +5.8 +6.4
------------------------------------------------------------------------------------------
New York Fund -4.9 +6.3 +6.1
------------------------------------------------------------------------------------------
Ohio Fund -5.5 +6.0 +6.5
------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +0.2 +7.9 +7.8(1) +8.0(2)
<FN>
*(1)SINCE 8/18/86 FOR CALIFORNIA, MINNESOTA AND NEW YORK.
(2)SINCE 7/2/87 FOR MASSACHUSETTS, MICHIGAN AND OHIO.
</TABLE>
- ---------------------------------------------------------
CUMULATIVE TOTAL RETURNS
AS OF JUNE 30, 1994
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE
PURCHASE MADE AGO AGO INCEPTION*
<S> <C> <C> <C>
------------------------------------------------------------------------------------------
California Fund -4.6% +33.2% +59.6%
------------------------------------------------------------------------------------------
Massachusetts Fund -4.2 +34.4 +54.5
------------------------------------------------------------------------------------------
Michigan Fund -4.0 +35.2 +57.6
------------------------------------------------------------------------------------------
Minnesota Fund -4.6 +32.7 +62.5
------------------------------------------------------------------------------------------
New York Fund -4.9 +35.5 +59.3
------------------------------------------------------------------------------------------
Ohio Fund -5.5 +34.1 +55.1
------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +0.02 +46.5 +80.6(1) +71.7(2)
<FN>
*(1)SINCE 8/18/86 FOR CALIFORNIA, MINNESOTA AND NEW YORK.
(2)SINCE 7/2/87 FOR MASSACHUSETTS, MICHIGAN AND OHIO.
</TABLE>
These examples show total returns from hypothetical investments in Class A
shares of each fund. These returns are compared to those of a popular index for
the same periods. No shares for Class B and Class Y were outstanding during the
periods presented.
For purposes of calculation, information about each fund assumes:
- -a sales charge of 5% for Class A shares
- -no adjustments for taxes an investor may have paid on the reinvested income and
capital gains
- -a period of widely fluctuating securities prices. Returns shown should not be
considered a representation of fund's future performance.
Each fund invests primarily in debt securities that may be different from those
in the index. The index reflects reinvestment of all distributions and changes
in market prices, but excludes brokerage commissions or other fees.
Lehman Brothers Municipal Bond Index is made up of a representative list of
general obligation, revenue, insured and pre-refunded bonds.
The index is frequently used as a general measure of tax-exempt bond market
performance. However, the securities used to create the index may not be
representative of the bonds held in a fund.
14P
<PAGE>
- --------------------------------------------------------------------------------
YIELD
SEC standardized yield for the 30-day period ended June 30, 1994 was 4.97% for
California Fund, 5.03% for Massachusetts Fund, 4.73% for Michigan Fund, 5.10%
for Minnesota Fund, 4.77% for New York Fund and 5.04% for Ohio Fund.
Each fund calculates this 30-day SEC standardized yield by dividing:
- -net investment income per share deemed earned during a 30-day period by
- -the public offering price per share on the last day of the period, and
- -converting the result to a yearly equivalent figure.
Non-standardized (distribution) yield for the same 30-day period ended June 30,
1994 was 5.62% for California Fund, 5.37% for Massachusetts Fund, 5.41% for
Michigan Fund, 5.62% for Minnesota Fund, 5.51% for New York Fund and 5.37% for
Ohio Fund.
Each fund computes distribution yield by dividing:
- -the total dividends paid over the 30-day period by
- -the sum of each day's public offering price for that period, and
- -converting the result to a yearly equivalent figure.
A fund also may calculate a tax equivalent yield by dividing the tax-exempt
portion of its yield by one minus a stated income tax rate. A tax equivalent
yield demonstrates the taxable yield necessary to produce an after-tax yield
equivalent to that of a fund that invests in exempt obligations.
These yield calculations do not include any contingent deferred sales charge,
ranging from 5% to 0% on Class B shares, which would reduce the yields quoted.
A fund's yield varies from day to day, mainly because share values and offering
prices (which are calculated daily) vary in response to changes in interest
rates. Net investment income normally changes much less in the short run. Thus,
when interest rates rise and share values fall, yield tends to rise. When
interest rates fall, yield tends to follow.
Past yields should not be an indicator of future yields.
15P
<PAGE>
- --------------------------------------------------------------------------------
Performance
- --------------------------------------------------------------------------------
KEY TERMS
NET ASSET VALUE
(NAV)
Value of a single fund share. For each class, it is the total
market value of all of a fund's investments and other assets
attributable to that class, less any liabilities attributable to
that class, divided by the number of shares of that class
outstanding.
When you buy shares, you pay the NAV plus any applicable sales
charge. When you sell shares, the price you receive is the NAV
minus any applicable sales charge. The NAV usually changes daily,
and is calculated at the close of business, normally 3 p.m. Central
time, each business day (any day the New York Stock Exchange is
open). NAV generally declines as interest rates increase and rises
as interest rates decline.
PUBLIC
OFFERING PRICE
Price at which you buy shares. It is the NAV plus the sales charge
for Class A. It is the NAV for Class B and Class Y. NAVs and public
offering prices of IDS funds are listed each day in major
newspapers and financial publications for classes of funds large
enough to be listed.
INVESTMENT
INCOME
Dividends and interest earned on securities held by the fund.
CAPITAL GAINS
OR LOSSES
Increase or decrease in value of the securities the fund holds.
Gains or losses are realized when securities that have increased or
decreased in value are sold. A fund also may have unrealized gains
or losses when securities increase or decrease in value but are not
sold.
DISTRIBUTIONS
Payments to shareholders of two types: investment income
(dividends) and realized net long-term capital gains (capital gains
istributions).
TOTAL RETURN
Sum of all of your returns for a given period, assuming you
reinvest all distributions. Calculated by taking the total value of
shares you own at the end of the period (including shares acquired
by reinvestment), less the price of shares you purchased at the
beginning of the period.
AVERAGE ANNUAL
TOTAL RETURN
The annually compounded rate of return over a given time period
(usually two or more years) -- total return for the period
converted to an equivalent annual figure.
YIELD
Net investment income earned per share for a specified time period,
divided by the offering price at the end of the period.
16P
<PAGE>
- -------------------------------------------------------------------------------
Investment policies and risks
Under normal market conditions, California, Massachusetts,
Michigan, Minnesota, New York and Ohio Funds will invest at least
80% of their net assets in bonds, notes and commercial paper issued
by or on behalf of their respective state or local governmental
units whose interest, in the opinion of bond counsel for the
issuer, is exempt from federal, state and local (if applicable)
income tax in their respective states.
In addition, a portion of each fund's assets may be invested in
bonds whose interest is subject to the alternative minimum tax
computation. As long as the staff of the SEC maintains its current
position that a fund calling itself a "tax-exempt" fund may not
invest more than 20% of its net assets in these bonds, each fund
will limit its investments in these bonds to 20% of its net assets.
The various types of investments the portfolio manager uses to
achieve investment performance are described in more detail in the
next section and in the SAI.
FACTS ABOUT INVESTMENTS AND THEIR RISKS
BONDS AND OTHER DEBT SECURITIES EXEMPT FROM FEDERAL, STATE AND
LOCAL INCOME TAXES: The price of an investment-grade bond
fluctuates as interest rates change or if its credit rating is
upgraded or downgraded. At least 75% of each fund's investments
will be in investment-grade securities, that is securities given
the four highest ratings by Moody's Investors Service, Inc.
(Moody's) and Standard & Poor's Corporation (S&P) or in non-rated
securities of equivalent investment quality in the judgment of the
fund's investment manager. The other 25% may be in securities rated
Ba or B by Moody's or BB or B by S&P or the equivalent (commonly
known as "junk bonds").
DEBT SECURITIES BELOW INVESTMENT GRADE: The price of these bonds
may react more to the ability of a company to pay interest and
principal when due than to changes in interest rates. They have
greater price fluctuations, are more likely to experience a
default, and sometimes are referred to as "junk bonds." Reduced
market liquidity for these bonds may occasionally make it more
difficult to value them. In valuing bonds the fund relies both on
independent rating agencies and the investment manager's credit
analysis. Securities that are subsequently downgraded in quality
may continue to be held and will be sold only when the fund's
investment manager believes it is advantageous to do so.
-------------------------------------------------------------------
BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR CALIFORNIA TAX-EXEMPT
FUND
<TABLE>
<CAPTION>
AMERICAN
EXPRESS
FINANCIAL
CORPORATION'S
S&P RATING PROTECTION ASSESSMENT
PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED
NET ASSETS EQUIVALENT) AND INTEREST SECURITIES
<C> <S> <C> <C>
--------------------------------------------------------------
37.93% AAA Highest quality 12.34%
--------------------------------------------------------------
24.75 AA High quality --
--------------------------------------------------------------
16.76 A Upper medium grade 0.17
--------------------------------------------------------------
3.34 BBB Medium grade 0.11
--------------------------------------------------------------
Moderately
-- BB speculative 1.63
--------------------------------------------------------------
-- B Speculative 0.09
--------------------------------------------------------------
-- CCC Highly speculative --
--------------------------------------------------------------
-- CC Poor quality --
--------------------------------------------------------------
-- C Lowest quality --
--------------------------------------------------------------
-- D In default --
--------------------------------------------------------------
15.26 Unrated Unrated securities 0.92
</TABLE>
17P
<PAGE>
- --------------------------------------------------------------------------------
Investment policies and risks
-------------------------------------------------------------------
BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR MASSACHUSETTS
TAX-EXEMPT FUND
<TABLE>
<CAPTION>
AMERICAN
EXPRESS
FINANCIAL
CORPORATION'S
S&P RATING PROTECTION ASSESSMENT
PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED
NET ASSETS EQUIVALENT) AND INTEREST SECURITIES
<C> <S> <C> <C>
--------------------------------------------------------------
55.91% AAA Highest quality 1.67%
--------------------------------------------------------------
10.78 AA High quality --
--------------------------------------------------------------
16.91 A Upper medium grade --
--------------------------------------------------------------
7.38 BBB Medium grade --
--------------------------------------------------------------
Moderately
0.19 BB speculative 2.49
--------------------------------------------------------------
-- B Speculative --
--------------------------------------------------------------
-- CCC Highly speculative --
--------------------------------------------------------------
-- CC Poor quality --
--------------------------------------------------------------
-- C Lowest quality --
--------------------------------------------------------------
-- D In default --
--------------------------------------------------------------
4.38 Unrated Unrated securities 0.22
</TABLE>
-------------------------------------------------------------------
BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR MICHIGAN TAX-EXEMPT
FUND
<TABLE>
<CAPTION>
AMERICAN
EXPRESS
FINANCIAL
CORPORATION'S
S&P RATING PROTECTION ASSESSMENT
PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED
NET ASSETS EQUIVALENT) AND INTEREST SECURITIES
<C> <S> <C> <C>
--------------------------------------------------------------
39.87% AAA Highest quality 10.08%
--------------------------------------------------------------
32.35 AA High quality --
--------------------------------------------------------------
11.50 A Upper medium grade --
--------------------------------------------------------------
2.52 BBB Medium grade 0.43
--------------------------------------------------------------
Moderately
-- BB speculative --
--------------------------------------------------------------
-- B Speculative --
--------------------------------------------------------------
-- CCC Highly speculative --
--------------------------------------------------------------
-- CC Poor quality --
--------------------------------------------------------------
-- C Lowest quality --
--------------------------------------------------------------
-- D In default --
--------------------------------------------------------------
11.40 Unrated Unrated securities 0.89
</TABLE>
18P
<PAGE>
- --------------------------------------------------------------------------------
-------------------------------------------------------------------
BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR MINNESOTA TAX-EXEMPT
FUND
<TABLE>
<CAPTION>
AMERICAN
EXPRESS
FINANCIAL
CORPORATION'S
S&P RATING PROTECTION ASSESSMENT
PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED
NET ASSETS EQUIVALENT) AND INTEREST SECURITIES
<C> <S> <C> <C>
--------------------------------------------------------------
27.55% AAA Highest quality 6.67%
--------------------------------------------------------------
23.96 AA High quality 4.01
--------------------------------------------------------------
22.52 A Upper medium grade 0.20
--------------------------------------------------------------
0.57 BBB Medium grade 5.16
--------------------------------------------------------------
Moderately
0.59 BB speculative 2.61
--------------------------------------------------------------
-- B Speculative 1.78
--------------------------------------------------------------
-- CCC Highly speculative --
--------------------------------------------------------------
-- CC Poor quality --
--------------------------------------------------------------
-- C Lowest quality --
--------------------------------------------------------------
1.12 D In default --
--------------------------------------------------------------
21.13 Unrated Unrated securities 0.70
</TABLE>
-------------------------------------------------------------------
BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR NEW YORK TAX-EXEMPT
FUND
<TABLE>
<CAPTION>
AMERICAN
EXPRESS
FINANCIAL
CORPORATION'S
S&P RATING PROTECTION ASSESSMENT
PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED
NET ASSETS EQUIVALENT) AND INTEREST SECURITIES
<C> <S> <C> <C>
--------------------------------------------------------------
29.73% AAA Highest quality 5.60%
--------------------------------------------------------------
34.95 AA High quality --
--------------------------------------------------------------
13.09 A Upper medium grade --
--------------------------------------------------------------
13.79 BBB Medium grade --
--------------------------------------------------------------
Moderately
-- BB speculative --
--------------------------------------------------------------
-- B Speculative --
--------------------------------------------------------------
-- CCC Highly speculative --
--------------------------------------------------------------
-- CC Poor quality --
--------------------------------------------------------------
-- C Lowest quality --
--------------------------------------------------------------
-- D In default --
--------------------------------------------------------------
5.60 Unrated Unrated securities --
</TABLE>
19P
<PAGE>
- --------------------------------------------------------------------------------
Investment policies and risks
-------------------------------------------------------------------
BOND RATINGS AND HOLDINGS FOR FISCAL 1994 FOR OHIO TAX-EXEMPT FUND
<TABLE>
<CAPTION>
AMERICAN
EXPRESS
FINANCIAL
CORPORATION'S
S&P RATING PROTECTION ASSESSMENT
PERCENT OF (OR MOODY'S OF PRINCIPAL OF UNRATED
NET ASSETS EQUIVALENT) AND INTEREST SECURITIES
<C> <S> <C> <C>
--------------------------------------------------------------
50.94% AAA Highest quality 4.41%
--------------------------------------------------------------
14.50 AA High quality --
--------------------------------------------------------------
17.76 A Upper medium grade --
--------------------------------------------------------------
6.22 BBB Medium grade --
--------------------------------------------------------------
Moderately
0.04 BB speculative 1.99
--------------------------------------------------------------
-- B Speculative 1.42
--------------------------------------------------------------
-- CCC Highly speculative 0.25
--------------------------------------------------------------
-- CC Poor quality --
--------------------------------------------------------------
-- C Lowest quality --
--------------------------------------------------------------
-- D In default --
--------------------------------------------------------------
8.27 Unrated Unrated securities 0.20
</TABLE>
(See Appendix to this prospectus for further information regarding
ratings.)
DEBT SECURITIES SOLD AT A DEEP DISCOUNT: Some bonds are sold at
deep discounts because they do not pay interest until maturity.
They include zero coupon bonds and PIK (pay-in-kind) bonds. To
comply with tax laws, the fund has to recognize a computed amount
of interest income and pay dividends to shareholders even though no
cash has been received. In some instances, the fund may have to
sell securities to have sufficient cash to pay the dividends.
CONCENTRATION: Each of the funds concentrates its investments in
the securities of its respective state. In addition, each fund may
invest more than 25% of its total assets in a particular segment of
the municipal securities market, such as electric revenue bonds,
hospital revenue bonds, housing agency bonds, industrial
development bonds, airport bonds, or in securities the interest
upon which is paid from revenues of a similar type of project. In
such circumstances, an economic, business, political or other
change affecting one bond (such as proposed legislation affecting
the financing of a project, shortages or price increases of needed
materials, or declining markets or needs of the projects) also may
affect other bonds in the same segment. This could increase market
risk.
Each fund may invest more than 25% of its total assets in
industrial revenue bonds, but does not intend to invest more than
25% of its total assets in industrial revenue bonds issued for
companies in the same industry. As the similarity in issuers
increases, the potential for fluctuation in the net asset value of
each fund's shares also increases.
20P
<PAGE>
- --------------------------------------------------------------------------------
Economic conditions in each respective state affect both the total
amount of taxes each state collects and the personal income growth
within each state. In the recent past each state has experienced
financial difficulty when budgeted expenses outpaced tax revenue
collections. Budgetary shortfalls were managed either by short-term
borrowing (in the case of California, New York and Massachusetts)
or use of reserve funds (in the case of Michigan, Minnesota and
Ohio). Current state budgets are assumed to be based on
conservative economic forecasts and reduced spending levels.
Budgetary shortfalls may result in reductions in credit ratings for
securities issued by the states. This may cause an increase in the
yield and a decrease in the price of a security issued by a
particular state. Furthermore, because local finances are dependent
upon the fiscal integrity of the state and upon the same financial
factors that influence state government, the credit ratings of
state agencies, authorities and municipalities may be similarly
affected. See the SAI for more information concerning each state.
TAXABLE INVESTMENTS: If, in the opinion of the investment manager,
appropriate tax-exempt securities are not available, each fund may
invest up to 20% of its net assets, or more on a temporary
defensive basis, in investments the income from which is subject to
federal, state or local income tax, as described more fully in the
SAI.
DERIVATIVE INSTRUMENTS: The portfolio manager may use derivative
instruments in addition to securities to achieve investment
performance. Derivative instruments include futures, options and
forward contracts. Such instruments may be used to maintain cash
reserves while remaining fully invested, to offset anticipated
declines in values of investments, to facilitate trading, to reduce
transaction costs, or to pursue higher investment returns.
Derivative instruments are characterized by requiring little or no
initial payment and a daily change in price based on or derived
from a security, a currency, a group of securities or currencies,
or an index. A number of strategies or combination of instruments
can be used to achieve the desired investment performance
characteristics. A small change in the value of the underlying
security, currency or index will cause a sizable gain or loss in
the price of the derivative instrument. Derivative instruments
allow the portfolio manager to change the investment performance
characteristics very quickly and at lower costs. Risks include
losses of premiums, rapid changes in prices, defaults by other
parties, and inability to close such instruments. A fund will use
derivative instruments only to achieve the same investment
performance characteristics it could achieve by directly holding
those securities and currencies permitted under the investment
policies. Each fund will designate cash or appropriate liquid
assets to cover its portfolio obligations. The use of derivative
instruments may produce taxable income. No more than 5% of each
fund's net assets can be used at any one time for good faith
deposits on futures and premiums for options on futures that do not
offset existing investment positions. For further information, see
Appendix C to this prospectus.
21P
<PAGE>
- --------------------------------------------------------------------------------
Investment policies and risks
INVERSE FLOATERS: Inverse floaters are derivatives created by
underwriters using the interest payments on securities. A portion
of the interest received is paid to holders of instruments based on
current interest rates for short-term securities. What is left
over, less a servicing fee, is paid to holders of the inverse
floaters. As interest rates go down, the holders of the inverse
floaters receive more income and an increase in the price for the
inverse floaters. As interest rates go up, the holders of the
inverse floaters receive less income and a decrease in the price
for the inverse floaters. No more than 10% of each fund's assets
will be held in inverse floaters.
SECURITIES AND DERIVATIVE INSTRUMENTS THAT ARE ILLIQUID: Illiquid
means the security or derivative instrument cannot be sold quickly
in the normal course of business. Some investments cannot be resold
to the U.S. public because of their terms or government
regulations. All securities and derivative instruments, however,
can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. The
portfolio manager will follow guidelines established by the board
of trustees and consider relevant factors such as the nature of the
security and the number of likely buyers when determining whether a
security is illiquid. No more than 10% of each fund's net assets
will be held in securities and derivative instruments that are
illiquid.
The investment policies described above, except for the policies
concerning the type and amount of tax-exempt investments, may be
changed by the trustees.
LENDING PORTFOLIO SECURITIES: Each fund may lend its securities to
earn income so long as borrowers provide collateral equal to the
market value of the loans. The risks are that borrowers will not
provide collateral when required or return securities when due.
Unless shareholders approve otherwise, loans may not exceed 30% of
a fund's net assets.
ALTERNATIVE INVESTMENT OPTION
In the future, the board of the funds may determine for operating
efficiencies to use a master/ feeder structure. Under that
structure, each fund's investment portfolio would be managed by
another investment company with the same goal as the fund, rather
than investing directly in a portfolio of securities.
VALUING ASSETS
- Bonds and assets without readily available market values are
valued at fair value according to methods selected in good faith
by the board of trustees.
- Securities maturing in 60 days or less are valued at amortized
cost.
- Securities (except bonds) and assets with available market values
are valued on that basis.
22P
<PAGE>
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How to buy, exchange or sell shares
ALTERNATIVE SALES ARRANGEMENTS
Each fund offers three different classes of shares -- Class A,
Class B and Class Y. The primary differences among the classes are
in the sales charge structures and in their ongoing expenses. These
differences are summarized in the table below. You may choose the
class that best suits your circumstances and objectives.
<TABLE>
<CAPTION>
SALES CHARGE SERVICE FEE
AND DISTRIBUTION (AS A % OF AVERAGE
(12B-1) FEE DAILY NET ASSETS) OTHER INFORMATION
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------
Class A Maximum initial sales charge Service fee of 0.175% Initial sales charge waived or
of 5% reduced for certain purchases
----------------------------------------------------------------------------------------------
Class B No initial sales charge; Service fee of 0.175% Shares convert to Class A
distribution fee of 0.75% of after 8 years; CDSC waived in
daily net assets; maximum CDSC certain circumstances
of 5% declines to 0% after 6
years
----------------------------------------------------------------------------------------------
Class Y None None Available only to certain
qualifying institutional
investors
</TABLE>
CONVERSION OF CLASS B SHARES TO CLASS A SHARES -- Eight calendar
years after Class B shares were originally purchased, Class B
shares will convert to Class A shares and will no longer be subject
to a distribution fee. The conversion will be on the basis of
relative net asset values of the two classes, without the
imposition of any sales charge. Class B shares purchased through
reinvested dividends and distributions will convert to Class A
shares in a pro-rata portion as the Class B shares purchased other
than through reinvestment.
23P
<PAGE>
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How to buy, exchange or sell shares
CONSIDERATIONS IN DETERMINING WHETHER TO PURCHASE CLASS A OR CLASS
B SHARES -- You should consider the information below in
determining whether to purchase Class A or Class B shares.
SALES CHARGES ON PURCHASE OR REDEMPTION
IF YOU PURCHASE CLASS A SHARES IF YOU PURCHASE CLASS B SHARES
- - You will not have all of your purchase - All of your money is invested in
price invested. Part of your purchase shares of stock. However, you will
price will go to pay the sales charge. pay a sales charge if you redeem
You will not pay a sales charge when your shares within 6 years of
you redeem your shares. purchase.
- - You will be able to take advantage of - No reductions of the sales charge
reductions in the sales charge. If are available for large purchases.
your investments in IDS funds total
$250,000 or more, you are better off
paying the reduced sales charge in
Class A than paying the higher fees in
Class B. If you qualify for a waiver
of the sales charge, you should
purchase Class A shares.
- - The sales charges and distribution fee are structured so that you will have
approximately the same total return at the end of 8 years regardless of which
class you chose.
ONGOING EXPENSES
- - Your shares will have a lower expense - The distribution and transfer
ratio than Class B shares because agent fees for Class B will cause
Class A does not pay a distribution your shares to have a higher
fee and the transfer agent fee for expense ratio and to pay lower
Class A is lower than the fee for dividends than Class A shares.
Class B. As a result, Class A shares After 8 years, Class B shares will
will pay higher dividends than Class B convert to Class A shares and will
shares. no longer be subject to higher
fees.
You should consider how long you plan to hold your shares and
whether the accumulated higher fees and CDSC on Class B shares
prior to conversion would be less than the initial sales charge on
Class A shares. Also consider to what extent the difference would
be offset by the lower expenses on Class A shares. To help you in
this analysis, the Example in the "Sales charge and fund expenses"
section of the prospectus illustrates the charges applicable to
each class of shares.
24P
<PAGE>
- --------------------------------------------------------------------------------
CLASS Y SHARES -- Class Y shares are offered to certain
institutional investors. Class Y shares are sold without a
front-end sales charge or a CDSC and are not subject to either a
service fee or a distribution fee. The following investors are
eligible to purchase Class Y shares:
- Qualified employee benefit plans* if the plan:
-- uses a daily transfer recordkeeping service offering
participants daily access to IDS funds and has
-- at least $10 million in plan assets or
-- 500 or more participants; or
-- does not use daily transfer recordkeeping and has
-- at least $3 million invested in funds of the IDS MUTUAL FUND
GROUP or
-- 500 or more participants.
- Trust companies or similar institutions, and charitable
organizations that meet the definition in Section 501(c)(3) of the
Internal Revenue Code.* These must have at least $10 million
invested in funds of the IDS MUTUAL FUND GROUP.
- Nonqualified deferred compensation plans* whose participants are
included in a qualified employee benefit plan described above.
* Eligibility must be determined in advance by American Express
Financial Advisors. To do so, contact your financial advisor.
Financial advisors may receive different compensation for selling
Class A, Class B and Class Y shares.
25P
<PAGE>
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How to buy, exchange or sell shares
HOW TO BUY SHARES
If you're investing in one of the funds for the first time, you'll
need to set up an account. Your financial advisor will help you
fill out and submit an application. Once your account is set up,
you can choose among several convenient ways to invest.
IMPORTANT: When opening an account, you must provide American
Express Financial Corporation with your correct Taxpayer
Identification Number (Social Security or Employer Identification
number). See "Distributions and taxes."
When you buy shares for a new or existing account, the price you
pay per share is determined at the close of business on the day
your investment is received and accepted at the Minneapolis
headquarters.
PURCHASE POLICIES:
- Investments must be received and accepted in the Minneapolis
headquarters on a business day before 3 p.m. Central time to be
included in your account that day and to receive that day's share
price. Otherwise your purchase will be processed the next business
day and you will pay the next day's share price.
- The minimums allowed for investment may change from time to time.
- Wire orders can be accepted only on days when your bank, American
Express Financial Corporation, the funds and Norwest Bank
Minneapolis are open for business.
- Wire purchases are completed when wired payment is received and
the fund accepts the purchase.
- American Express Financial Corporation and the funds are not
responsible for any delays that occur in wiring funds, including
delays in processing by the bank.
- You must pay any fee the bank charges for wiring.
- Each fund reserves the right to reject any application for any
reason.
- If your application does not specify which class of share you are
purchasing, it will be assumed that you are investing in Class A
shares.
26P
<PAGE>
- --------------------------------------------------------------------------------
THREE WAYS TO INVEST
-----------------------------------------------------------------------------
---------------
1
BY REGULAR Send your check and MINIMUM AMOUNTS
ACCOUNT application (or your name and Initial investment per
account number if you have an fund: $2,000
established account) to: Additional investments per
American Express fund: $100
Financial Advisors Inc. Account balances per fund:$300*
P.O. Box 74
Minneapolis, MN 55440-0074
Your financial advisor will
help you with this process.
-----------------------------------------------------------------------------
---------------
2
BY Contact your financial advisor MINIMUM AMOUNTS
SCHEDULED to set up one of the following Initial investment: $100
INVESTMENT scheduled plans: Additional investments: $100/mo
PLAN - automatic payroll deduction Account balances: none
- bank authorization (on active plans
- direct deposit of Social of monthly payments)
Security check
- other plan approved by the
Fund
-----------------------------------------------------------------------------
---------------
3
BY WIRE If you have an established If this information is not
account, you may wire money included, the order may be
to: rejected and all money
Norwest Bank Minneapolis received by the fund, less any
Routing No. 091000019 costs the fund or American
Minneapolis, MN Express Financial Corporation
Attn: Domestic Wire Dept. incurs, will be returned
promptly.
Give these instructions: MINIMUM AMOUNTS:
Credit IDS Account #00-30-015 Each wire investment: $1,000 **
for personal account # (your
account number) for (your
name).
*If your account balance falls below
$300, you will be asked in writing to
bring it up to $300 or establish a
scheduled investment plan. If you
don't do so within 30 days, your
shares can be redeemed and the
proceeds mailed to you.
**The money sent by a single wire can
be invested only in one fund.
27P
<PAGE>
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How to buy, exchange or sell shares
HOW TO EXCHANGE SHARES
You can exchange your shares of the fund at no charge for shares of
the same class of any other publicly offered fund in the IDS MUTUAL
FUND GROUP available in your state. Exchanges into IDS Tax-Free
Money Fund must be made from Class A shares. For complete
information, including fees and expenses, read the prospectus
carefully before exchanging into a new fund.
If your exchange request arrives at the Minneapolis headquarters
before the close of business, your shares will be redeemed at the
net asset value set for that day. The proceeds will be used to
purchase new fund shares the same day. Otherwise, your exchange
will take place the next business day at that day's net asset
value.
For tax purposes, an exchange represents a sale and purchase and
may result in a gain or loss. However, you cannot create a tax loss
(or reduce a taxable gain) by exchanging from the fund within 91
days of your purchase. For further explanation, see the SAI.
HOW TO SELL SHARES
You can sell (redeem) your shares at any time. American Express
Shareholder Service will mail payment within seven days after
receiving your request.
When you sell shares, the amount you receive may be more or less
than the amount you invested. Your shares will be redeemed at net
asset value, minus any applicable sales charge, at the close of
business on the day your request is accepted at the Minneapolis
headquarters. If your request arrives after the close of business,
the price per share will be the net asset value, minus any
applicable sales charge, at the close of business on the next
business day.
A redemption is a taxable transaction. If the fund's net asset
value when you sell shares is more or less than the cost of your
shares, you will have a gain or loss, which can affect your tax
liability.
28P
<PAGE>
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TWO WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES
-----------------------------------------------------------------------------
---------------
1
BY LETTER Include in your letter: - any paper certificates of
- the name of the fund(s) shares you hold
- the class of shares to be REGULAR MAIL:
exchanged or redeemed American Express Shareholder
- your account number(s) (for Service
exchanges, both funds must be Attn: Redemptions
registered in the same P.O. Box 534
ownership) Minneapolis, MN 55440-0534
- your Taxpayer Identification EXPRESS MAIL:
Number (TIN) American Express Shareholder
- the dollar amount or number Service
of shares you want to Attn: Redemptions
exchange or sell 733 Marquette Ave.
- signature of all registered Minneapolis, MN 55402
account owners
- for redemptions, indicate how
you want your sales proceeds
delivered to you
-----------------------------------------------------------------------------
---------------
2
BY PHONE - The fund and American Express American Express Shareholder
American Financial Corporation will Service. Each registered owner
Express honor any telephone exchange must sign the request.
Telephone or redemption request - American Express Financial
Transaction believed authentic and will Corporation answers phone
Service: use reasonable procedures to requests promptly, but you
800-437-3133 confirm that they are. This may experience delays when
or includes asking identifying call volume is high. If you
612-671-3800 questions and tape recording are unable to get through,
calls. So long as reasonable use mail procedure as an
procedures are followed, alternative.
neither the fund nor American - Phone privileges may be
Express Financial Corporation modified or discontinued at
will be liable for any loss any time.
resulting from fraudulent MINIMUM AMOUNT
requests. Redemption: $100
- Phone exchange and redemption MAXIMUM AMOUNT
privileges automatically Redemption: $50,000
apply to all accounts except
custodial, corporate or
qualified retirement accounts
unless you request these
privileges NOT apply by
writing
29P
<PAGE>
- --------------------------------------------------------------------------------
How to buy, exchange or sell shares
EXCHANGE POLICIES:
- You may make up to three exchanges within any 30-day period, with
each limited to $300,000. These limits do not apply to scheduled
exchange programs and certain employee benefit plans or other
arrangements through which one shareholder represents the
interests of several. Exceptions may be allowed with pre-approval
of the fund.
- Exchanges must be made into the same class in the new fund.
- If your exchange creates a new account, it must satisfy the
minimum investment amount for new purchases.
- Once we receive your exchange request, you cannot cancel it.
- Shares of the new fund may not be used on the same day for
another exchange.
- If your shares are pledged as collateral, the exchange will be
delayed until written approval is obtained from the secured party.
- American Express Financial Corporation and the fund reserve the
right to reject any exchange, limit the amount, or modify or
discontinue the exchange privilege, to prevent abuse or adverse
effects on the fund and its shareholders. For example, if
exchanges are too numerous or too large, they may disrupt the
fund's investment strategies or increase its costs.
REDEMPTION POLICIES:
- A "change of mind" option allows you to change your mind after
requesting a redemption and to use all or part of the proceeds to
buy new shares in the same account at the net asset value, rather
than the offering price on the date of a new purchase. If you
reinvest in this manner, any CDSC you paid on the amount you are
reinvesting also will be reinvested in the fund. To take advantage
of this option, send a written request within 30 days of the date
your redemption request was received. Include your account number
and mention this option. This privilege may be limited or
withdrawn at any time, and it may have tax consequences.
- A telephone redemption request will not be allowed within 30 days
of a phoned-in address change.
IMPORTANT: If you request a redemption of shares you recently
purchased by a check or money order that is not guaranteed, the
fund will wait for your check to clear. Please expect a minimum of
10 days from the date of purchase before a check is mailed to you.
(A check may be mailed earlier if your bank provides evidence
satisfactory to the fund and American Express Financial Corporation
that your check has cleared.)
30P
<PAGE>
- --------------------------------------------------------------------------------
THREE WAYS TO RECEIVE PAYMENT WHEN YOU SELL SHARES
-------------------------------------------------------------------
---------------
1
BY REGULAR - Mailed to the address on record.
OR EXPRESS - Payable to names listed on the account.
MAIL
NOTE: The express mail delivery charges you pay will vary
depending on the courier you select.
-------------------------------------------------------------------
---------------
2
BY WIRE - Minimum wire redemption: $1,000.
- Request that money be wired to your bank.
- Bank account must be in the same ownership as the IDS fund
account.
NOTE: Pre-authorization required. For instructions, contact your
financial advisor or American Express Shareholder Service.
-------------------------------------------------------------------
---------------
3
BY - Minimum payment: $50.
SCHEDULED - Contact your financial advisor or American Express Shareholder
PAYOUT Service to set up regular payments to you on a monthly,
PLAN bimonthly, quarterly, semiannual or annual basis.
- Buying new shares while under a payout plan may be
disadvantageous because of the sales charges.
31P
<PAGE>
- --------------------------------------------------------------------------------
How to buy, exchange or sell shares
REDUCTIONS AND WAIVERS OF THE SALES CHARGE
CLASS A -- INITIAL SALES CHARGE ALTERNATIVE
On purchases of Class A shares, you pay a 5% sales charge on the
first $50,000 of your total investment and less on investments
after the first $50,000:
<TABLE>
<CAPTION>
SALES CHARGE AS A
PERCENT OF:*
----------------------------
PUBLIC OFFERING NET AMOUNT
TOTAL INVESTMENT PRICE INVESTED
<S> <C> <C> <C>
-------------------------------------------------------------------
Up to $50,000 5.0% 5.26%
-------------------------------------------------------------------
Next $50,000 4.5 4.71
-------------------------------------------------------------------
Next $400,000 3.8 3.95
-------------------------------------------------------------------
Next $500,000 2.0 2.04
-------------------------------------------------------------------
More than $1,000,000 0.0 0.00
<FN>
*To calculate the actual sales charge on an investment greater
than $50,000, amounts for each applicable increment must be
totaled. See the SAI.
</TABLE>
REDUCTIONS OF THE SALES CHARGE ON CLASS A SHARES
Your sales charge may be reduced, depending on the totals of:
- the amount you are investing in this fund now,
- the amount of your existing investment in this fund, if any, and
- the amount you and your immediate family (spouse or unmarried
children under 21) are investing or have in other funds in the IDS
MUTUAL FUND GROUP that carry a sales charge.
Other policies that affect your sales charge:
- IDS Tax-Free Money Fund and Class A shares of IDS Cash Management
Fund do not carry sales charges. However, you may count
investments in these funds if you acquired shares in them by
exchanging shares from IDS funds that carry sales charges.
- Employee benefit plan purchases made through a payroll deduction
plan or through a plan sponsored by an employer, association of
employers, employee organization or other similar entity, may be
added together to reduce sales charges for all shares purchased
through that plan.
For more details, see the SAI.
WAIVERS OF THE SALES CHARGE FOR CLASS A SHARES
Sales charges do not apply to:
- Current or retired trustees, directors, officers or employees of
the fund or American Express Financial Corporation or its
subsidiaries, their spouses and unmarried children under 21.
- Current or retired American Express financial advisors, their
spouses and unmarried children under 21.
- Qualified employee benefit plans* using a daily transfer
recordkeeping system offering participants daily access to IDS
funds.
(Participants in certain qualified plans for which the initial
sales charge is waived may be subject to a deferred sales charge of
up to 4% on certain redemptions. For more information, see the
SAI.)
32P
<PAGE>
- --------------------------------------------------------------------------------
- Shareholders who have at least $1 million invested in funds of
the IDS MUTUAL FUND GROUP. If the investment is redeemed in the
first year after purchase, a CDSC of 1% will be charged on the
redemption.
- Purchases made within 30 days after a redemption of shares (up to
the amount redeemed):
-- of a product distributed by American Express Financial Advisors
in a qualified plan subject to a deferred sales charge or
-- a qualified plan where American Express Trust Company acts as
trustee or recordkeeper.
Send the fund a written request along with your payment, indicating
the amount of the redemption and the date on which it occurred.
- Purchases made with dividend or capital gain distributions from
another fund in the IDS MUTUAL FUND GROUP that has a sales charge.
* Eligibility must be determined in advance by American Express
Financial Advisors. To do so, contact your financial advisor.
33P
<PAGE>
- --------------------------------------------------------------------------------
How to buy, exchange or sell shares
CLASS B -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE
Where a CDSC is imposed on a redemption, it is based on the amount
of the redemption and the number of calendar years, including the
year of purchase, between purchase and redemption. The following
table shows the declining scale of percentages that apply to
redemptions during each year after a purchase:
<TABLE>
<CAPTION>
IF A REDEMPTION THE PERCENTAGE
IS MADE RATE FOR THE
DURING THE CDSC IS:
<S> <C>
-----------------------------------------------------------------
First year 5%
-----------------------------------------------------------------
Second year 4%
-----------------------------------------------------------------
Third year 4%
-----------------------------------------------------------------
Fourth year 3%
-----------------------------------------------------------------
Fifth year 2%
-----------------------------------------------------------------
Sixth year 1%
-----------------------------------------------------------------
Seventh year 0%
</TABLE>
If the amount you are redeeming reduces the current net asset value
of your investment in Class B shares below the total dollar amount
of all your purchase payments during the last 6 years (including
the year in which your redemption is made), the CDSC is based on
the lower of the redeemed purchase payments or market value.
The following example illustrates how the CDSC is applied. Assume
you had invested $10,000 in Class B shares and that your investment
had appreciated in value to $12,000 after 15 months, including
reinvested dividend and capital gain distributions. You could
redeem any amount up to $2,000 without paying a CDSC ($12,000
current value less $10,000 purchase amount). If you redeemed
$2,500, the CDSC would apply only to the $500 that represented part
of your original purchase price. The CDSC rate would be 4% because
a redemption after 15 months would take place during the second
year after purchase.
34P
<PAGE>
- --------------------------------------------------------------------------------
Because the CDSC is imposed only on redemptions that reduce the
total of your purchase payments, you never have to pay a CDSC on
any amount you redeem that represents appreciation in the value of
your shares, income earned by your shares or capital gains. In
addition, when determining the rate of any CDSC, your redemption
will be made from the oldest purchase payment you made. Of course,
once a purchase payment is considered to have been redeemed, the
next amount redeemed is the next oldest purchase payment. By
redeeming the oldest purchase payments first, lower CDSCs are
imposed than would otherwise be the case.
WAIVERS OF THE SALES CHARGE FOR CLASS B SHARES
The CDSC on Class B shares will be waived on redemptions of shares:
- In the event of the shareholder's death,
- Purchased by any trustee, director, officer or employee of a fund
or American Express Financial Corporation or its subsidiaries,
- Purchased by any American Express financial advisor,
- Held in a trusteed employee benefit plan,
- Held in IRAs or certain qualified plans for which American
Express Trust Company acts as custodian, such as Keogh plans,
tax-sheltered custodial accounts or corporate pension plans,
provided that the shareholder is:
-- at least 59 1/2 years old, and
-- taking a retirement distribution (if the redemption is part of a
transfer to an IRA or qualified plan in a product distributed by
American Express Financial Advisors, or a custodian-to-custodian
transfer to a product not distributed by American Express Financial
Advisors, the CDSC will not be waived), or
-- redeeming under an approved substantially equal periodic payment
arrangement.
35P
<PAGE>
- -------------------------------------------------------------------------------
Special shareholder services
SERVICES
To help you track and evaluate the performance of your investments,
American Express Financial Corporation provides these services:
QUARTERLY STATEMENTS listing all of your holdings and transactions
during the previous three months.
YEARLY TAX STATEMENTS featuring average-cost-basis reporting of
capital gains or losses if you redeem your shares along with
distribution information -- which simplifies tax calculations.
A PERSONALIZED MUTUAL FUND PROGRESS REPORT detailing returns on
your initial investment and cash-flow activity in your account. It
calculates a total return to reflect your individual history in
owning fund shares. This report is available from your financial
advisor.
-----------------------------------------------------------
QUICK TELEPHONE REFERENCE
AMERICAN Redemptions and exchanges, National/Minnesota:
EXPRESS dividend payments or 800-437-3133
TELEPHONE reinvestments and automatic Mpls./St. Paul
TRANSACTION payment arrangements area:
SERVICE 671-3800
----------------------------------------------------
AMERICAN Fund performance, objectives and 612-671-3733
EXPRESS account inquiries
SHAREHOLDER
SERVICE
----------------------------------------------------
TTY SERVICE For the hearing impaired 800-846-4852
----------------------------------------------------
AMERICAN Automated account information National/Minnesota:
EXPRESS (TouchTone-Registered Trademark- 800-272-4445
INFOLINE phones only), including current Mpls./St. Paul
fund prices and performance, area:
account values and recent 671-1630
account transactions
----------------------------------------------------
36P
<PAGE>
- -------------------------------------------------------------------------------
Distributions and taxes
The fund distributes to shareholders investment income and net
capital gains. It does so to qualify as a regulated investment
company and to avoid paying corporate income and excise taxes.
Dividend and capital gains distributions will have tax consequences
you should know about.
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS
Each fund distributes its net investment income (dividends and
interest earned on securities held by the fund, less operating
expenses) to shareholders of record monthly. Short-term capital
gains distributed are included in net investment income. Net
realized capital gains, if any, from selling securities are
distributed at the end of the calendar year. Before they're
distributed, net capital gains are included in the value of each
share. After they're distributed, the value of each share drops by
the per-share amount of the distribution. (If your distributions
are reinvested, the total value of your holdings will not change.)
Dividends paid by each class will be calculated at the same time,
in the same manner and in the same amount, except the expenses
attributable solely to Class A, Class B and Class Y will be paid
exclusively by that class. Class B shareholders will receive lower
per share dividends than Class A and Class Y shareholders because
expenses for Class B are higher than for Class A or Class Y. Class
A shareholders will receive lower per share dividends than Class Y
shareholders because expenses for Class A are higher than for Class
Y.
REINVESTMENTS
Dividends and capital gain distributions are automatically
reinvested in additional shares in the same class of the fund,
unless:
- you request the fund in writing or by phone to pay distributions
to you in cash, or
- you direct the fund to invest your distributions in any publicly
available IDS fund for which you've previously opened an account.
You pay no sales charge on shares purchased through reinvestment
from this fund into any IDS fund.
The reinvestment price is the net asset value at close of business
on the day the distribution is paid. (Your quarterly statement will
confirm the amount invested and the number of shares purchased.)
If you choose cash distributions, you will receive only those
declared after your request has been processed.
If the U.S. Postal Service cannot deliver the checks for the cash
distributions, we will reinvest the checks into your account at the
then-current net asset value and make future distributions in the
form of additional shares.
37P
<PAGE>
- --------------------------------------------------------------------------------
Distributions and taxes
TAXES
Dividends distributed from interest earned by each fund on
tax-exempt securities (exempt-interest dividends) are exempt from
federal income taxes but may be subject to state and local taxes.
Dividends distributed from other income earned by each fund and
capital gain distributions are not exempt from federal income
taxes. Distributions are taxable in the year a fund pays them
regardless of whether you take them in cash or reinvest them.
Interest on certain private activity bonds is a preference item for
purposes of the individual and corporate alternative minimum taxes.
To the extent a fund earns such income, it will flow through to its
shareholders and may be taxable to those shareholders who are
subject to the alternative minimum tax.
Because interest on municipal bonds and notes is tax-exempt for
federal income tax purposes, any interest on borrowed money used
directly or indirectly to purchase fund shares is not deductible on
your federal income tax return. You should consult a tax advisor
regarding its deductibility for state and local income tax
purposes.
Each January, you will receive a statement showing the kinds and
total amount of all distributions you received during the previous
year. You must report all distributions on your tax returns, even
if they are reinvested in additional shares.
"Buying a dividend" creates a tax liability. This means buying
shares shortly before a capital gain distribution. You pay the full
pre-distribution price for the shares, then receive a portion of
your investment back as a distribution, which is taxable.
38P
<PAGE>
- --------------------------------------------------------------------------------
Redemptions and exchanges subject you to a tax on any capital gain.
If you sell shares for more than their cost, the difference is a
capital gain. Your gain may be either short term (for shares held
for one year or less) or long term (for shares held for more than
one year).
YOUR TAXPAYER IDENTIFICATION NUMBER (TIN) IS IMPORTANT. As with any
financial account you open, you must list your current and correct
Taxpayer Identification Number (TIN) -- either your Social Security
or Employer Identification number. The TIN must be certified under
penalties of perjury on your application when you open an account
at AEFC.
If you don't provide the TIN, or the TIN you report is incorrect,
you could be subject to backup withholding of 31% of taxable
distributions and proceeds from certain sales and exchanges. You
also could be subject to further penalties, such as:
- a $50 penalty for each failure to supply your correct TIN
- a civil penalty of $500 if you make a false statement that
results in no backup withholding
- criminal penalties for falsifying information
You also could be subject to backup withholding because you failed
to report interest or dividends on your tax return as required.
39P
<PAGE>
- --------------------------------------------------------------------------------
Distributions and taxes
-----------------------------------------------------------
HOW TO DETERMINE THE CORRECT TIN
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: USE THE SOCIAL SECURITY OR
EMPLOYER IDENTIFICATION
NUMBER OF:
<S> <C>
---------------------------------------------------
Individual or joint The individual or first
account person listed on the account
---------------------------------------------------
Custodian account of a The minor
minor (Uniform
Gifts/Transfers to Minors
Act)
---------------------------------------------------
A living trust The grantor-trustee (the
person who puts the money
into the trust)
---------------------------------------------------
An irrevocable trust, The legal entity (not the
pension trust or estate personal representative or
trustee, unless no legal
entity is designated in the
account title)
---------------------------------------------------
Sole proprietorship or The owner or partnership
partnership
---------------------------------------------------
Corporate The corporation
---------------------------------------------------
Association, club or The organization
tax-exempt organization
---------------------------------------------------
</TABLE>
For details on TIN requirements, ask your financial advisor or
local American Express Financial Advisors office for Federal Form
W-9, "Request for Taxpayer Identification Number and
Certification."
IMPORTANT: This information is a brief and selective summary of
certain federal tax rules that apply to each fund. Tax matters are
highly individual and complex, and you should consult a qualified
tax advisor about your personal situation.
40P
<PAGE>
- -------------------------------------------------------------------------------
How the funds are organized
IDS Special Tax-Exempt Series Trust, of which IDS Massachusetts
Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota
Tax-Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio
Tax-Exempt Fund are a part, is an open-end management investment
company, as defined in the Investment Company Act of 1940. It was
organized as a Massachusetts business trust on April 7, 1986. IDS
California Tax-Exempt Trust, of which IDS California Tax-Exempt
Fund is a part, was organized as a Massachusetts business trust on
April 7, 1986. The funds' headquarters are at 901 S. Marquette
Ave., Suite 2810, Minneapolis, MN 55402-3268.
The trustees have considered that the use of a combined prospectus
for six funds makes each fund responsible for disclosure contained
in the prospectus regardless of the particular fund to which it
pertains and have concluded that the cost savings available to
shareholders support the use of a combined prospectus.
SHARES
IDS Special Tax-Exempt Series Trust currently is composed of six
funds and IDS California Tax-Exempt Trust currently is composed of
one fund. Each fund issues its own shares of capital stock. Each
fund is owned by its shareholders. Each fund issues shares in three
classes -- Class A, Class B and Class Y. Each class has different
sales arrangements and bears different expenses. Each class
represents interests in the assets of the fund. Par value is 1 cent
per share. Both full and fractional shares can be issued.
The shares of each fund represent an interest in that fund's assets
only (and profits or losses), and, in the event of liquidation,
each share of a fund would have the same rights to dividends and
assets as every other share of that fund.
The trustees may from time to time issue other funds of the Series
Trust, the assets and liabilities of which will likewise be
separate and distinct from any other fund.
The funds no longer issue stock certificates.
41P
<PAGE>
- --------------------------------------------------------------------------------
How the funds are organized
VOTING RIGHTS
As a shareholder, you have voting rights over the fund's management
and fundamental policies. You are entitled to one vote for each
share you own. Each class has exclusive voting rights with respect
to the provisions of the fund's distribution plan that pertain to a
particular class and other matters for which separate class voting
is appropriate under applicable law.
SHAREHOLDER MEETINGS
The funds do not hold annual shareholder meetings. However, the
trustees may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove trustees.
TRUSTEES AND OFFICERS
Shareholders elect the trustees that oversees the operations of the
fund and chooses its officers. Its officers are responsible for
day-to-day business decisions based on policies set by the board.
The board has named an executive committee that has authority to
act on its behalf between meetings. The trustees also serve on the
boards of all of the other funds in the IDS MUTUAL FUND GROUP,
except for Mr. Dudley, who is a director of all publicly offered
funds.
42P
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES AND OFFICERS OF THE FUNDS
President and WILLIAM R. PEARCE
interested trustee President of all funds in the IDS MUTUAL FUND GROUP.
- --------------------------------------------------------------------------------
Independent LYNNE V. CHENEY
trustees Distinguished fellow, American Enterprise Institute for
Public Policy Research.
ROBERT F. FROEHLKE
Former president of all funds in the IDS MUTUAL FUND
GROUP.
HEINZ F. HUTTER
Former president and chief operating officer, Cargill,
Inc.
ANNE P. JONES
Attorney and telecommunications consultant.
DONALD M. KENDALL
Former chairman and chief executive officer, PepsiCo,
Inc.
MELVIN R. LAIRD
Senior counsellor for national and international
affairs,
The Reader's Digest Association, Inc.
LEWIS W. LEHR
Former chairman and chief executive officer, Minnesota
Mining and Manufacturing Company (3M).
EDSON W. SPENCER
Former chairman and chief executive officer, Honeywell,
Inc.
WHEELOCK WHITNEY
Chairman, Whitney Management Company.
C. ANGUS WURTELE
Chairman of the board and chief executive officer,
The Valspar Corporation.
- --------------------------------------------------------------------------------
Interested trustees WILLIAM H. DUDLEY
who are officers Executive vice president, American Express Financial
and/or employees Corporation.
of American Express DAVID R. HUBERS
Financial President and chief executive officer, American Express
Corporation Financial Corporation.
JOHN R. THOMAS
Senior vice president, American Express Financial
Corporation.
- --------------------------------------------------------------------------------
Other officer LESLIE L. OGG
Vice president of all funds in the IDS MUTUAL FUND
GROUP and general counsel and treasurer of the publicly
offered funds.
Refer to the SAI for the trustees' and officers' biographies.
43P
<PAGE>
- --------------------------------------------------------------------------------
How the funds are organized
INVESTMENT MANAGER AND TRANSFER AGENT
The funds pay American Express Financial Corporation for managing
their portfolios, providing administrative services and serving as
transfer agent (handling shareholder accounts).
Under its Investment Management Services Agreement, American
Express Financial Corporation determines which securities will be
purchased, held or sold (subject to the direction and control of
the fund's trustees). Effective March 1995, each fund pays American
Express Financial Corporation a fee for these services based on the
average daily net assets of the fund, as follows:
<TABLE>
<CAPTION>
ASSETS ANNUAL RATE
(BILLIONS) AT EACH ASSET LEVEL
<S> <C> <C>
-----------------------------------------
First $ 0.25 0.470%
-----------------------------------------
Next 0.25 0.445
-----------------------------------------
Next 0.25 0.420
-----------------------------------------
Next 0.25 0.405
-----------------------------------------
Over 1.0 0.380
</TABLE>
For the fiscal year ended June 30, 1994, under a prior agreement,
each fund paid American Express Financial Corporation total
investment management fees of 0.53% of its average daily net
assets. Under the Agreement, each fund also pays taxes, brokerage
commissions and nonadvisory expenses.
Under an Administrative Services Agreement, each fund pays American
Express Financial Corporation for administration and accounting
services at an annual rate of 0.04% decreasing in gradual
percentages to 0.02% as assets increase.
In addition, under a separate Transfer Agency Agreement, American
Express Financial Corporation maintains shareholder accounts and
records. Each fund pays American Express Financial Corporation an
annual fee per shareholder account for this service as follows:
- Class A $15.50
- Class B $16.50
- Class Y $15.50
44P
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTOR
The funds sell shares through American Express Financial Advisors,
a wholly owned subsidiary of American Express Financial
Corporation, under a Distribution Agreement. Financial advisors
representing American Express Financial Advisors provide
information to investors about individual investment programs, the
funds and their operations, new account applications, exchange and
redemption requests. The cost of these services is paid partially
by the funds' sales charge.
Portions of sales charges may be paid to securities dealers who
have sold the funds' shares, or to banks and other financial
institutions. The proceeds paid to others range from 0.8% to 4% of
each fund's offering price depending on the monthly sales volume.
For Class B shares, to help defray costs not covered by sales
charges, including costs for marketing, sales administration,
training, overhead, direct marketing programs, advertising and
related functions, each fund pays American Express Financial
Advisors a distribution fee, also known as a 12b-1 fee. This fee is
paid under a Plan and Agreement of Distribution that follows the
terms of Rule 12b-1 of the Investment Company Act of 1940. Under
this Agreement, each fund pays a distribution fee at an annual rate
of 0.75% of the fund's average daily net assets attributable to
Class B shares for distribution-related services.
45P
<PAGE>
- --------------------------------------------------------------------------------
How the funds are organized
Total 12b-1 fees paid under a prior agreement were 0.02% of average
daily net assets for California, 0.03% for Massachusetts, 0.02% for
Michigan, 0.02% for Minnesota, 0.02% for New York and 0.02% for
Ohio Fund for the fiscal year ended June 30, 1994. These fees will
not cover all of the costs incurred by American Express Financial
Advisors.
Under a Shareholder Service Agreement, each fund also pays a fee
for service provided to shareholders by financial advisors and
other servicing agents. The fee is calculated at a rate of 0.175%
of the fund's average daily net assets attributable to Class A and
Class B shares.
Total expenses paid by each fund amounted to 0.61% of average daily
net assets for California, 0.69% for Massachusetts, 0.65% for
Michigan, 0.66% for Minnesota, 0.65% for New York and 0.66% for
Ohio Fund for the fiscal year ended June 30, 1994.
Total fees and expenses (excluding taxes and brokerage commissions)
cannot exceed the most restrictive applicable state expense
limitation.
46P
<PAGE>
- -------------------------------------------------------------------------------
About American Express Financial Corporation
GENERAL INFORMATION
The American Express Financial Corporation family of companies
offers not only mutual funds but also insurance, annuities,
investment certificates and a broad range of financial management
services.
Besides managing investments for all publicly offered funds in the
IDS MUTUAL FUND GROUP, American Express Financial Corporation also
manages investments for itself and its subsidiaries, IDS
Certificate Company and IDS Life Insurance Company. Total assets
under management on June 30, 1994 were more than $100 billion.
American Express Financial Advisors serves individuals and
businesses through its nationwide network of more than 175 offices
and more than 7,800 advisors.
Other American Express Financial Corporation subsidiaries provide
investment management and related services for pension, profit
sharing, employee savings and endowment funds of businesses and
institutions.
American Express Financial Corporation is located at IDS Tower 10,
Minneapolis, MN 55440-0010. It is a wholly owned subsidiary of
American Express Company, a financial services company with
headquarters at American Express Tower, World Financial Center, New
York, NY 10285. The fund may pay brokerage commissions to
broker-dealer affiliates of American Express and American Express
Financial Corporation.
47P
<PAGE>
- -------------------------------------------------------------------------------
Appendix A
- --------------------------------------------------------------------------------
TAX-EXEMPT INCOME VS. TAXABLE INCOME
1994 CALIFORNIA TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700
to $290,200 column. The Taxable Income line and Adjusted Gross Income column
meet at 38.26 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
-------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 0 - $ 9,332 15.85%
9,332 - 22,118 16.70
22,118 - 34,906 18.40
34,906 - 38,000 20.10
38,000 - 48,456 32.32
48,456 - 61,240 33.76
61,240 - 91,850 34.70
91,850 - 140,000 37.42 38.26% 38.26%
140,000 - 212,380 41.95 42.93 44.21
212,380 - 250,000 42.40 44.64 43.37%
250,000 - 424,760 45.64 48.11*** 46.71
424,760 + 46.24 47.30
-------------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 OVER
to to
$111,800(1) $234,300(3) $234,300(2)
-------------------------------------------------------------------------------------------------------------
SINGLE
$ 0 - $ 4,666 15.85%
4,666 - 11,059 16.70
11,059 - 17,453 18.40
17,453 - 22,750 20.10
22,750 - 24,228 32.32
24,228 - 30,620 33.76
30,620 - 55,100 34.70
55,100 - 106,190 37.42 38.81%
106,190 - 115,000 37.90 39.28
115,000 - 212,380 42.40 44.01
212,380 - 250,000 43.04 44.63 44.00%
250,000 + 46.24 47.30
-------------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1) No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single
taxpayer has one personal exemption, joint taxpayers have two personal
exemptions and itemized deductions continue to phase-out.
Federal taxes are not deductible on the California state tax return.
The combined federal/California tax brackets are based on state tax rates in
effect on Dec. 31, 1993. These rates may change if California tax rates change
in 1994. If state tax rates change equivalent rates may be higher than those
shown.
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
48P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL AND CALIFORNIA STATE TAXABLE YIELD
EQUIVALENTS.
Using 38.26 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.48 percent yield.
<TABLE>
<CAPTION>
For these TAX-EXEMPT RATES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
15.85% 4.75% 5.35% 5.94% 6.54% 7.13% 7.72% 8.32% 8.91%
16.70 4.80 5.40 6.00 6.60 7.20 7.80 8.40 9.00
18.40 4.90 5.51 6.13 6.74 7.35 7.97 8.58 9.19
20.10 5.01 5.63 6.26 6.88 7.51 8.14 8.76 9.39
32.32 5.91 6.65 7.39 8.13 8.87 9.60 10.34 11.08
33.76 6.04 6.79 7.55 8.30 9.06 9.81 10.57 11.32
34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72 11.49
37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19 11.98
37.90 6.44 7.25 8.05 8.86 9.66 10.47 11.27 12.08
38.26 6.48 7.29 8.10 8.91 9.72 10.53 11.34 12.15
38.74 6.53 7.35 8.16 8.98 9.79 10.61 11.43 12.24
38.81 6.54 7.35 8.17 8.99 9.81 10.62 11.44 12.26
39.28 6.59 7.41 8.23 9.06 9.88 10.70 11.53 12.35
41.95 6.89 7.75 8.61 9.47 10.34 11.20 12.06 12.92
42.40 6.94 7.81 8.68 9.55 10.42 11.28 12.15 13.02
42.93 7.01 7.89 8.76 9.64 10.51 11.39 12.27 13.14
43.04 7.02 7.90 8.78 9.66 10.53 11.41 12.29 13.17
43.37 7.06 7.95 8.83 9.71 10.60 11.48 12.36 13.24
44.00 7.14 8.04 8.93 9.82 10.71 11.61 12.50 13.39
44.01 7.14 8.04 8.93 9.82 10.71 11.61 12.50 13.39
44.21 7.17 8.07 8.96 9.86 10.75 11.65 12.55 13.44
44.63 7.22 8.13 9.03 9.93 10.84 11.74 12.64 13.55
44.64 7.23 8.13 9.03 9.93 10.84 11.74 12.64 13.55
45.64 7.36 8.28 9.20 10.12 11.04 11.96 12.88 13.80
46.24 7.44 8.37 9.30 10.23 11.16 12.09 13.02 13.95
46.71 7.51 8.44 9.38 10.32 11.26 12.20 13.14 14.07
47.30 7.59 8.54 9.49 10.44 11.39 12.33 13.28 14.23
47.99 7.69 8.65 9.61 10.57 11.54 12.50 13.46 14.42
48.11 7.71 8.67 9.64 10.60 11.56 2.53 13.49 14.45
48.68 7.71 8.67 9.64 10.60 11.56 12.53 13.49 14.45
- ------------------------------------------------------------------------------------------------------
</TABLE>
49P
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
1994 MASSACHUSETTS TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700
to $290,200 column. The Taxable Income line and Adjusted Gross Income column
meet at 40.10 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
- ------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 12,000 - $ 38,000 25.20%
38,000 - 91,850 36.64 36.64%
91,850 - 140,000 39.28 40.10 40.10%
140,000 - 250,000 43.68 44.63 45.87
250,000 + 46.85 49.26*** 47.89%
- ------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 OVER
to to
$111,800(1) $234,300(3) $234,300(2)
- ------------------------------------------------------------------------------------------------------
SINGLE
$ 8,000 - $ 22,750 25.20%
22,750 - 55,100 36.64
55,100 - 115,000 39.28 40.63%
115,000 - 250,000 43.68 45.25 44.63%
250,000 + 46.85 47.89
- ------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1)No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2)Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(3)Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single
taxpayer has one personal exemption, joint taxpayers have two personal
exemptions and itemized deductions continue to phase-out.\
Federal taxes are not deductible on the Massachusetts state tax return.
The combined federal/Massachusetts tax brackets are based on state tax rates in
effect on Jan. 1, 1994. These rates may change if Massachusetts tax rates change
in 1994. If state tax rates change equivalent rates may be higher than those
shown.
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
50P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL AND MASSACHUSETTS STATE TAXABLE YIELD
EQUIVALENTS.
Using 40.10 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.68 percent yield.
<TABLE>
<CAPTION>
For these TAX-EXEMPT RATES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
25.20% 5.35% 6.02% 6.68% 7.35% 8.02% 8.69% 9.36% 10.03%
36.64 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84
39.28 6.59 7.41 8.23 9.06 9.88 10.70 11.53 12.35
40.10 6.68 7.51 8.35 9.18 10.02 10.85 11.69 12.52
40.63 6.74 7.58 8.42 9.26 10.11 10.95 11.79 12.63
43.68 7.10 7.99 8.88 9.77 10.65 11.54 12.43 13.32
44.63 7.22 8.13 9.03 9.93 10.84 11.74 12.64 13.55
45.25 7.31 8.22 9.13 10.05 10.96 11.87 12.79 13.70
45.87 7.39 8.31 9.24 10.16 11.08 12.01 12.93 13.86
46.85 7.53 8.47 9.41 10.35 11.29 12.23 13.17 14.11
47.89 7.68 8.64 9.60 10.55 11.51 12.47 13.43 14.39
48.58 7.78 8.75 9.72 10.70 11.67 12.64 13.61 14.59
49.26 7.88 8.87 9.85 10.84 11.82 12.81 13.80 14.78
- ------------------------------------------------------------------------------------------------------
</TABLE>
51P
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
1994 MICHIGAN TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700
to $290,200 column. The Taxable Income line and Adjusted Gross Income column
meet at 34.93 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
-------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 0 - $ 38,000 18.74%
38,000 - 91,850 31.17 31.17%
91,850 - 140,000 34.04 34.93 34.93%
140,000 - 250,000 38.82 39.85 41.20
250,000 + 42.26 44.88*** 43.39%
-------------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 OVER
to to
$111,800(1) $234,300(3) $234,300(2)
-------------------------------------------------------------------------------------------------------------
SINGLE
$ 0 - $ 22,750 18.74%
22,750 - 55,100 31.17
55,100 - 115,000 34.04 35.51%
115,000 - 250,000 38.82 40.52 39.85%
250,000 + 42.26 43.39
-------------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1)No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2)Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(3)Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single
taxpayer has one personal exemption, joint taxpayers have two personal
exemptions and itemized deductions continue to phase-out.
Federal taxes are not deductible on the Michigan state tax return.
The combined federal/Michigan tax brackets are based on state tax rates in
effect on May 1, 1994. These rates may change if Michigan tax rates change in
1994.
If state tax rates change equivalent rates may be higher than those shown.
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
52P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL AND MICHIGAN STATE TAXABLE YIELD
EQUIVALENTS.
Using 34.93 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.15 percent yield.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For these TAX-EXEMPT RATES:
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
18.74% 4.92% 5.54% 6.15% 6.77% 7.38% 8.00% 8.61% 9.23%
31.17 5.81 6.54 7.26 7.99 8.72 9.44 10.17 10.90
34.04 6.06 6.82 7.58 8.34 9.10 9.85 10.61 11.37
34.93 6.15 6.92 7.68 8.45 9.22 9.99 10.76 11.53
35.51 6.20 6.98 7.75 8.53 9.30 10.08 10.85 11.63
38.82 6.54 7.36 8.17 8.99 9.81 10.62 11.44 12.26
39.85 6.65 7.48 8.31 9.14 9.98 10.81 11.64 12.47
40.52 6.72 7.57 8.41 9.25 10.09 10.93 11.77 12.61
41.20 6.80 7.65 8.50 9.35 10.20 11.05 11.90 12.76
42.26 6.93 7.79 8.66 9.53 10.39 11.26 12.12 12.99
43.39 7.07 7.95 8.83 9.72 10.60 11.48 12.37 13.25
44.14 7.16 8.06 8.95 9.85 10.74 11.64 12.53 13.43
44.88 7.26 8.16 9.07 9.98 10.89 11.79 12.70 13.61
- ------------------------------------------------------------------------------------------------------
</TABLE>
53P
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
1994 MINNESOTA TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700
to $290,200 column. The Taxable Income line and Adjusted Gross Income column
meet at 37.72 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
-------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 0 - $ 22,260 20.10%
22,260 - 38,000 21.80
38,000 - 88,460 33.76 33.76%
88,460 - 91,850 34.12 34.12 34.12%
91,850 - 140,000 36.87 37.72 37.72
140,000 - 250,000 41.44 42.43 43.72
250,000 + 44.73 47.24*** 45.82%
-------------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 OVER
to to
$111,800(1) $234,300(3) $234,300(2)
-------------------------------------------------------------------------------------------------------------
SINGLE
$ 0 - $ 15,230 20.10%
15,230 - 22,750 21.80
22,750 - 50,030 33.76
50,030 - 55,100 34.12
55,100 - 115,000 36.87 38.27%
115,000 - 250,000 41.44 43.07 42.43%
250,000 + 44.73 45.82
-------------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1) No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single
taxpayer has one personal exemption, joint taxpayers have two personal
exemptions and itemized deductions continue to phase-out.
Federal taxes are not deductible on the Minnesota state tax return.
The combined federal/Minnesota tax brackets are based on state tax rates in
effect on Jan. 1, 1994. These rates may change if Minnesota tax rates change
in 1994. If state tax rates change equivalent rates may be higher than those
shown.
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
54P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL AND MINNESOTA STATE TAXABLE YIELD
EQUIVALENTS.
Using 37.72 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.42 percent yield.
<TABLE>
<CAPTION>
For these TAX-EXEMPT RATES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
20.10% 5.01% 5.63% 6.26% 6.88% 7.51% 8.14% 8.76% 9.39%
21.80 5.12 5.75 6.39 7.03 7.67 8.31 8.95 9.59
33.76 6.04 6.79 7.55 8.30 9.06 9.81 10.57 11.32
34.12 6.07 6.83 7.59 8.35 9.11 9.87 10.63 11.38
36.87 6.34 7.13 7.92 8.71 9.50 10.30 11.09 11.88
37.72 6.42 7.23 8.03 8.83 9.63 10.44 11.24 12.04
38.27 6.48 7.29 8.10 8.91 9.72 10.53 11.34 12.15
41.44 6.83 7.68 8.54 9.39 10.25 11.10 11.95 12.81
42.43 6.95 7.82 8.69 9.55 10.42 11.29 12.16 13.03
43.07 7.03 7.90 8.78 9.66 10.54 11.42 12.30 13.17
43.72 7.11 8.00 8.88 9.77 10.66 11.55 12.44 13.33
44.73 7.24 8.14 9.05 9.95 10.86 11.76 12.67 13.57
45.82 7.38 8.31 9.23 10.15 11.07 12.00 12.92 13.84
46.53 7.48 8.42 9.35 10.29 11.22 12.16 13.09 14.03
47.24 7.58 8.53 9.48 10.42 11.37 12.32 13.27 14.22
- ------------------------------------------------------------------------------------------------
</TABLE>
55P
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
1994 NEW YORK STATE TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$91,850-$140,000 range. Under Adjusted Gross Income, $175,000 is in the $167,700
to $290,200 column. The Taxable Income line and Adjusted Gross Income column
meet at 38.22 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 150,000 $ 167,700 OVER
to to to to
$111,800(1) $150,000(2) $167,700(3) $290,200(4) $290,200(3)
-------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 0 - $ 13,000 18.87%
13,000 - 19,000 19.72
19,000 - 25,000 20.57
25,000 - 38,000 21.45
38,000 - 91,850 33.47
91,850 - 140,000 36.24 38.08% 37.10% 38.22%
140,000 - 250,000 40.86 42.76 41.86 43.16
250,000 + 44.19 46.72*** 47.55%
-------------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 $ 150,000 OVER
to to to
$111,800(1) $150,000(5) $234,300(4) $234,300(3)
-------------------------------------------------------------------------------------------------------------
SINGLE
$ 0 - $ 6,500 18.87%
6,500 - 9,500 19.72
9,500 - 12,500 20.57
12,500 - 22,750 21.45
22,750 - 55,100 33.47
55,100 - 115,000 36.24 37.59%
115,000 - 250,000 40.86 42.31 42.51% 42.96%
250,000 + 44.19 46.42
-------------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1) No Phase-out or recapture of personal income tax -- Assumes no phase-out of
itemized deductions or personal exemptions and does not reflect the state
recapture of personal income tax.
(2) Itemized Deductions Phase-out and Recapture of Personal Income Tax --
Assumes a single taxpayer has one personal exemption, joint taxpayers have
two personal exemptions and reflects the state AGI recapture of personal
income tax beginning at $100,000 ending at $150,000.
(3) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(4) Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer
has one personal exemption, joint taxpayers have two personal exemptions and
itemized deductions continue to phase-out.
(5) Deductions and Personal Exemption Phase-outs and Recapture of Personal
Income Tax -- Assumes a single taxpayer has one personal exemption, joint
taxpayers have two personal exemptions, itemized deductions continue to
phase-out and reflects the state AGI recapture of personal income tax
beginning at $100,000 ending at $150,000.
Federal taxes are not deductible on the New York state tax return.
The combined federal/New York state tax brackets are based on state tax rates in
effect on Jan. 1, 1994. These rates may change if New York state tax rates
change in 1994. If state tax rates change equivalent rates may be higher
than those shown.
This table does not refelect the state itemized deduction adjustment.
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
56P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL AND NEW YORK STATE TAXABLE YIELD
EQUIVALENTS.
Using 38.22 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.47 percent yield.
<TABLE>
<CAPTION>
For these TAX-EXEMPT RATES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
18.87% 4.93% 5.55% 6.16% 6.78% 7.40% 8.01% 8.63% 9.24%
19.72 4.98 5.61 6.23 6.85 7.47 8.10 8.72 9.34
20.57 5.04 5.67 6.29 6.92 7.55 8.18 8.81 9.44
21.45 5.09 5.73 6.37 7.00 7.64 8.27 8.91 9.55
31.93 5.88 6.61 7.35 8.08 8.81 9.55 10.28 11.02
32.54 5.93 6.67 7.41 8.15 8.89 9.64 10.38 11.12
33.15 5.98 6.73 7.48 8.23 8.98 9.72 10.47 11.22
33.47 6.01 6.76 7.52 8.27 9.02 9.77 10.52 11.27
36.24 6.27 7.06 7.84 8.63 9.41 10.19 10.98 11.76
37.10 6.36 7.15 7.95 8.74 9.54 10.33 11.13 11.92
37.59 6.41 7.21 8.01 8.81 9.61 10.41 11.22 12.02
37.66 6.42 7.22 8.02 8.82 9.62 10.43 11.23 12.03
38.08 6.46 7.27 8.07 8.88 9.69 10.50 11.30 12.11
38.14 6.47 7.27 8.08 8.89 9.70 10.51 11.32 12.12
38.22 6.47 7.28 8.09 8.90 9.71 10.52 11.33 12.14
39.18 6.58 7.40 8.22 9.04 9.87 10.69 11.51 12.33
40.86 6.76 7.61 8.45 9.30 10.15 10.99 11.84 12.68
41.86 6.88 7.74 8.60 9.46 10.32 11.18 12.04 12.90
42.31 6.93 7.80 8.67 9.53 10.40 11.27 12.13 13.00
42.51 6.96 7.83 8.70 9.57 10.44 11.31 12.18 13.05
42.76 6.99 7.86 8.74 9.61 10.48 11.36 12.23 13.10
42.96 7.01 7.89 8.77 9.64 10.52 11.40 12.27 13.15
43.16 7.04 7.92 8.80 9.68 10.56 11.44 12.32 13.19
44.04 7.15 8.04 8.93 9.83 10.72 11.62 12.51 13.40
44.19 7.17 8.06 8.96 9.85 10.75 11.65 12.54 13.44
45.28 7.31 8.22 9.14 10.05 10.96 11.88 12.79 13.71
45.71 7.37 8.29 9.21 10.13 11.05 11.97 12.89 13.81
46.00 7.41 8.33 9.26 10.19 11.11 12.04 12.96 13.89
46.13 7.43 8.35 9.28 10.21 11.14 12.07 12.99 13.92
46.42 7.47 8.40 9.33 10.27 11.20 12.13 13.06 14.00
46.72 7.51 8.45 9.38 10.32 11.26 12.20 13.14 14.08
47.55 7.63 8.58 9.53 10.49 11.44 12.39 13.35 14.30
- ------------------------------------------------------------------------------------------------------
</TABLE>
57P
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
1994 NEW YORK STATE AND NEW YORK CITY TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD
CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$108,000-$140,000 range. Under Adjusted Gross Income, $175,000 is in the
$167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income
column meet at 40.13 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 150,000 $ 167,700 OVER
to to to to
$111,800(1) $150,000(2) $167,700(3) $290,200(4) $290,200(3)
-------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 0 - $ 13,000 21.05%
13,000 - 14,400 21.90
14,400 - 19,000 22.97
19,000 - 25,000 23.82
25,000 - 27,000 24.71
27,000 - 38,000 25.19
38,000 - 45,000 36.63
45,000 - 91,850 36.64
91,850 - 108,000 39.28
108,000 - 140,000 39.32 41.11% 40.13% 40.13%
140,000 - 250,000 43.71 45.57 44.66 45.90
250,000 + 46.88 49.29*** 50.12%
-------------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 $ 150,000 OVER
to to to
$111,800(1) $150,000(5) $234,300(4) $234,300(3)
-------------------------------------------------------------------------------------------------------------
SINGLE
$ 0 - $ 6,500 21.05%
6,500 - 8,400 21.90
8,400 - 9,500 22.97
9,500 - 12,500 23.82
12,500 - 15,000 24.71
15,000 - 22,750 25.19
22,750 - 25,000 36.63
25,000 - 55,100 36.64
55,100 - 60,000 39.28
60,000 - 115,000 39.32 41.15%
115,000 - 250,000 43.71 45.73 45.28% 44.66%
250,000 + 46.88 47.92
-------------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1) No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2) Itemized Deductions Phase-out and Recapture of Personal Income Tax --
Assumes a single taxpayer has one personal exemption, joint taxpayers have
two personal exemptions and reflects the state AGI recapture of personal
income tax beginning at $100,000 ending at $150,000.
(3) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(4) Deductions and Personal Exemption Phase-outs -- Assumes a single taxpayer
has one personal exemption, joint taxpayers have two personal exemptions and
itemized deductions continue to phase-out.
(5) Deductions and Personal Exemption Phase-outs and Recapture of Personal
Income Tax -- Assumes a single taxpayer has one personal exemption, joint
taxpayers have two personal exemptions, itemized deductions continue to
phase-out and reflects the state AGI recapture of personal income tax
beginning at $100,000 ending at $150,000.
Federal taxes are not deductible on the New York state tax return.
The combined federal/New York state and city tax brackets are based on state and
city tax rates in effect on Jan. 1, 1994. These rates may change if New York
state or city tax rates change in 1994. If state or city tax rates change
equivalent rates may be higher than those shown.
This table does not reflect the state itemized deduction adjustment.
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
58P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL, NEW YORK STATE AND NEW YORK CITY
TAXABLE YIELD EQUIVALENTS.
Using 39.32 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.59 percent yield.
<TABLE>
<CAPTION>
For these TAX-EXEMPT RATES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
21.05% 5.07% 5.70% 6.33% 6.97% 7.60% 8.23% 8.87% 9.50%
21.90 5.12 5.76 6.40 7.04 7.68 8.32 8.96 9.60
22.97 5.19 5.84 6.49 7.14 7.79 8.44 9.09 9.74
23.82 5.25 5.91 6.56 7.22 7.88 8.53 9.19 9.85
24.71 5.31 5.98 6.64 7.31 7.97 8.63 9.30 9.96
25.19 5.35 6.02 6.68 7.35 8.02 8.69 9.36 10.03
36.63 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84
36.64 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84
39.28 6.59 7.41 8.23 9.06 9.88 10.70 11.53 12.35
39.32 6.59 7.42 8.24 9.06 9.89 10.71 11.54 12.36
40.09 6.68 7.51 8.35 9.18 10.02 10.85 11.68 12.52
40.13 6.68 7.52 8.35 9.19 10.02 10.86 11.69 12.53
40.62 6.74 7.58 8.42 9.26 10.10 10.95 11.79 12.63
40.67 6.74 7.58 8.43 9.27 10.11 10.96 11.80 12.64
41.11 6.79 7.64 8.49 9.34 10.19 11.04 11.89 12.74
41.15 6.80 7.65 8.50 9.35 10.20 11.05 11.89 12.74
43.71 7.11 7.99 8.88 9.77 10.66 11.55 12.44 13.32
44.66 7.23 8.13 9.04 9.94 10.84 11.75 12.65 13.55
45.11 7.29 8.20 9.11 10.02 10.93 11.84 12.75 13.66
45.28 7.31 8.22 9.14 10.05 10.96 11.88 12.79 13.71
45.57 7.35 8.27 9.19 10.10 11.02 11.94 12.86 13.78
45.73 7.37 8.29 9.21 10.13 11.06 11.98 12.90 13.82
45.90 7.39 8.32 9.24 10.17 11.09 12.01 12.94 13.86
46.79 7.52 8.46 9.40 10.34 11.28 12.22 13.16 14.10
46.88 7.53 8.47 9.41 10.35 11.30 12.24 13.18 14.12
47.92 7.68 8.64 9.60 10.56 11.52 12.48 13.44 14.40
48.35 7.74 8.71 9.68 10.65 11.62 12.58 13.55 14.52
48.61 7.78 8.76 9.73 10.70 11.68 12.65 13.62 14.59
48.77 7.81 8.78 9.76 10.74 11.71 12.69 13.66 14.64
49.03 7.85 8.83 9.81 10.79 11.77 12.75 13.73 14.71
49.29 7.89 8.87 9.86 10.85 11.83 12.82 13.80 14.79
50.12 8.02 9.02 10.02 11.03 12.03 13.03 14.03 15.04
- ------------------------------------------------------------------------------------------------------
</TABLE>
59P
<PAGE>
- --------------------------------------------------------------------------------
Appendix A
1994 OHIO TAX-EXEMPT AND TAXABLE EQUIVALENT YIELD CALCULATION
These tables will help you determine your combined federal and state taxable
yields equivalents for given rates of tax-exempt income.
STEP 1: CALCULATING YOUR MARGINAL TAX RATES.
Using your Taxable Income and Adjusted Gross Income figures as guides you can
locate your Marginal Tax Rate in the table below.
First locate your Taxable Income in a filing status and income range in the
left-hand column. Then, locate your Adjusted Gross Income at the top of the
chart. At the point where your Taxable Income line meets your Adjusted Gross
Income column the percentage indicated is an approximation of your Marginal Tax
Rate. For example: Let's assume you are married filing jointly, your taxable
income is $138,000 and your adjusted gross income is $175,000.
Under Taxable Income married filing jointly status, $138,000 is in the
$100,000-$140,000 range. Under Adjusted Gross Income, $175,000 is in the
$167,700 to $290,200 column. The Taxable Income line and Adjusted Gross Income
column meet at 42.74 percent. This is the rate you'll use in Step 2.
<TABLE>
<CAPTION>
ADJUSTED GROSS INCOME*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
TAXABLE INCOME** $0 $ 111,800 $ 167,700 OVER
to to to
$111,800(1) $167,700(2) $290,200(3) $290,200(2)
-------------------------------------------------------------------------------------------------------------
MARRIED FILING JOINTLY
$ 0 - $ 5,000 15.63%
5,000 - 10,000 16.27
10,000 - 15,000 17.52
15,000 - 20,000 18.16
20,000 - 38,000 18.79
38,000 - 40,000 31.21
40,000 - 80,000 31.74 31.74%
80,000 - 91,850 32.28 32.28
91,850 - 100,000 35.10 35.10
100,000 - 140,000 35.76 36.63 42.74%
140,000 - 200,000 40.42 41.42 43.10
200,000 - 250,000 40.80 46.66*** 41.80%
250,000 + 44.13 45.23
-------------------------------------------------------------------------------------------------------------
$ 0 $ 111,800 OVER
to to
$111,800(1) $234,300(3) $234,300(2)
-------------------------------------------------------------------------------------------------------------
SINGLE
$ 0 - $ 5,000 15.63%
5,000 - 10,000 16.27
10,000 - 15,000 17.52
15,000 - 20,000 18.16
20,200 - 22,750 18.79
22,750 - 40,000 31.21
40,000 - 55,100 31.74
55,100 - 80,000 34.59
80,000 - 100,000 35.10
100,000 - 115,000 35.76 37.19%
115,000 - 200,000 40.42 42.08 41.42%
200,000 - 250,000 40.80 42.45 41.80
250,000 + 44.13 45.23
-------------------------------------------------------------------------------------------------------------
<FN>
* Gross income with certain adjustments before taking itemized deductions and
personal exemptions.
** Amount subject to federal income tax after itemized deduction and personal
exemptions.
*** This rate is applicable only in the limited case where your adjusted gross
income is less than $290,200 and your taxable income exceeds $250,000.
(1) No Phase-out -- Assumes no phase-out of itemized deductions or personal
exemptions.
(2) Itemized Deductions Phase-out -- Assumes a single taxpayer has one personal
exemption and joint taxpayers have two personal exemptions.
(3) Itemized Deductions and Personal Exemption Phase-outs -- Assumes a single
taxpayer has one personal exemption, joint taxpayers have two personal
exemptions and the itemized deductions continue to phase-out.
Federal taxes are not deductible on the Ohio state tax return.
The combined federal/Ohio tax brackets are based on state tax rates in effect on
Dec. 31, 1993. These rates may change if Ohio tax rates change in 1994. If state
tax rates change equivalent rates may be higher than those shown.
This table does not reflect the state joint filing credit
If these assumptions do not apply to you, it will be necessary to construct your
own personalized tax equivalency table.
</TABLE>
60P
<PAGE>
- --------------------------------------------------------------------------------
STEP 2: DETERMINING YOUR COMBINED FEDERAL AND OHIO STATE TAXABLE YIELD
EQUIVALENTS.
Using 42.74 percent, you may determine that a tax-exempt yield of 4 percent is
equivalent to earning a taxable 6.99 percent yield.
<TABLE>
<CAPTION>
For these TAX-EXEMPT RATES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50%
-------------------------------------------------------------------------------
<CAPTION>
MARGINAL TAX RATES Equal the TAXABLE RATES shown below:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
15.63% 4.74% 5.33% 5.93% 6.52% 7.11% 7.70% 8.30% 8.89%
16.26 4.78 5.37 5.97 6.57 7.17 7.76 8.36 8.96
17.53 4.85 5.46 6.06 6.67 7.28 7.88 8.49 9.09
18.16 4.89 5.50 6.11 6.72 7.33 7.94 8.55 9.16
18.79 4.93 5.54 6.16 6.77 7.39 8.00 8.62 9.24
31.21 5.81 6.54 7.27 8.00 8.72 9.45 10.18 10.90
31.74 5.86 6.59 7.32 8.06 8.79 9.52 10.25 10.99
32.28 5.91 6.65 7.38 8.12 8.86 9.60 10.34 11.08
34.59 6.12 6.88 7.64 8.41 9.17 9.94 10.70 11.47
35.10 6.16 6.93 7.70 8.47 9.24 10.02 10.79 11.56
35.76 6.23 7.00 7.78 8.56 9.34 10.12 10.90 11.67
36.63 6.31 7.10 7.89 8.68 9.47 10.26 11.05 11.84
37.19 6.37 7.16 7.96 8.76 9.55 10.35 11.14 11.94
40.42 6.71 7.55 8.39 9.23 10.07 10.91 11.75 12.59
40.80 6.76 7.60 8.45 9.29 10.14 10.98 11.82 12.67
41.42 6.83 7.68 8.54 9.39 10.24 11.10 11.95 12.80
41.80 6.87 7.73 8.59 9.45 10.31 11.17 12.03 12.89
42.08 6.91 7.77 8.63 9.50 10.36 11.22 12.09 12.95
42.45 6.95 7.82 8.69 9.56 10.43 11.29 12.16 13.03
42.74 6.99 7.86 8.73 9.61 10.48 11.35 12.22 13.10
43.10 7.03 7.91 8.79 9.67 10.54 11.42 12.30 13.18
44.13 7.16 8.05 8.95 9.84 10.74 11.63 12.53 13.42
45.23 7.30 8.22 9.13 10.04 10.95 11.87 12.78 13.69
45.95 7.40 8.33 9.25 10.18 11.10 12.03 12.95 13.88
46.66 7.50 8.44 9.37 10.31 11.25 12.19 13.12 14.06
- ------------------------------------------------------------------------------------------------------
</TABLE>
61P
<PAGE>
- -------------------------------------------------------------------------------
Appendix B
-------------------------------------------------------------------
DESCRIPTION OF CORPORATE BOND RATINGS
Bond ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's rating may change which could affect
its price. Ratings by Moody's Investors Service, Inc. are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca, C and D. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
AAA/AAA
Judged to be of the best quality and carry the smallest degree of
investment risk. Interest and principal are secure.
AA/AA
Judged to be high-grade although margins of protection for interest
and principal may not be quite as good as Aaa or AAA rated
securities.
A
Considered upper-medium grade. Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.
BAA/BBB
Considered medium-grade obligations. Protection for interest and
principal is adequate over the short-term; however, these
obligations may have certain speculative characteristics.
BA/BB
Considered to have speculative elements. The protection of interest
and principal payments may be very moderate.
B
Lack characteristics of the desirable investments. There may be
small assurance over any long period of time of the payment of
interest and principal.
CAA/CCC
Are of poor standing. Such issues may be in default or there may be
risk with respect to principal or interest.
CA/CC
Represent obligations that are highly speculative. Such issues are
often in default or have other marked shortcomings.
C
Are obligations with a higher degree of speculation. These
securities have major risk exposures to default.
D
Are in payment default. The D rating is used when interest payments
or principal payments are not made on the due date.
NON-RATED SECURITIES will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with the fund's objectives and policies. When assessing the risk
involved in each non-rated security, the fund will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
DEFINITIONS OF ZERO-COUPON AND PAY-IN-KIND SECURITIES
A ZERO-COUPON SECURITY is a security that is sold at a deep
discount from its face value and makes no periodic interest
payments. The buyer of such a security receives a rate of return by
gradual appreciation of the security, which is redeemed at face
value on the maturity date.
A PAY-IN-KIND SECURITY is a security in which the issuer has the
option to make interest payments in cash or in additional
securities. The securities issued as interest usually have the same
terms, including maturity date, as the pay-in-kind securities.
62P
<PAGE>
- -------------------------------------------------------------------------------
Appendix C
-------------------------------------------------------------------
DESCRIPTIONS OF DERIVATIVE INSTRUMENTS
What follows are brief descriptions of derivative instruments the
fund may use. At various times the fund may use some or all of
these instruments and is not limited to these instruments. It may
use other similar types of instruments if they are consistent with
the fund's investment goal and policies. For more information on
these instruments, see the Statement of Additional Information.
OPTIONS AND FUTURES CONTRACTS. An option is an agreement to buy or
sell an instrument at a set price during a certain period of time.
A futures contract is an agreement to buy and sell an instrument
for a set price on a future date. The fund may buy and sell options
and futures contracts to manage its exposure to changing interest
rates, security prices and currency exchange rates. Options and
futures may be used to hedge the fund's investments against price
fluctuations or to increase market exposure.
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES. Asset-backed and
mortgage-backed securities include interests in pools of consumer
loans or mortgages, such as collateralized mortgage obligations and
stripped mortgage-backed securities. Interest and principal
payments depend on payment of the underlying loans or mortgages.
The value of these securities may also be affected by changes in
interest rates, the market's perception of the issuers and the
creditworthiness of the parties involved. Stripped mortgage-backed
securities include interest only (IO) and principal only (PO)
securities. Cash flows and yields on IOs and POs are extremely
sensitive to the rate of principal payments on the underlying
mortgage loans or mortgage-backed securities.
INDEXED SECURITIES. The value of indexed securities is linked to
currencies, interest rates, commodities, indexes or other financial
indicators. Most indexed securities are short- to intermediate-term
fixed income securities whose values at maturity or interest rates
rise or fall according to the change in one or more specified
underlying instruments. Indexed securities may be more volatile
than the underlying instrument itself.
INVERSE FLOATERS. Inverse floaters are created using the interest
payment on securities. A portion of the interest received is paid
to holders of instruments based on current interest rates for
short-term securities. The remainder, minus a servicing fee, is
paid to holders of inverse floaters. Inverse floaters are extremely
sensitive to changes in interest rates.
STRUCTURED PRODUCTS. Structured products are over-the-counter
financial instruments created specifically to meet the needs of one
or a small number of investors. The instrument may consist of a
warrant, an option or a forward contract embedded in a note or any
of a wide variety of debt, equity and/or currency combinations.
Risks of structured products include the inability to close such
instruments, rapid changes in the market and defaults by other
parties.
63P
<PAGE>
IDS SPECIAL TAX-EXEMPT SERIES TRUST
IDS CALIFORNIA TAX-EXEMPT TRUST
STATEMENT OF ADDITIONAL INFORMATION
FOR
IDS CALIFORNIA TAX-EXEMPT FUND
IDS MASSACHUSETTS TAX-EXEMPT FUND
IDS MICHIGAN TAX-EXEMPT FUND
IDS MINNESOTA TAX-EXEMPT FUND
IDS NEW YORK TAX-EXEMPT FUND
IDS OHIO TAX-EXEMPT FUND
Aug. 29, 1994 as revised March 20, 1995
This Statement of Additional Information (SAI) is not a prospectus.
It should be read together with the prospectus and the financial
statements contained in the Annual Report which may be obtained
from your American Express financial advisor or by writing to
American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534.
This SAI is dated Aug. 29, 1994 as revised March 20, 1995, and it is
to be used with the prospectus dated Aug. 29, 1994 as revised March 20,
1995, the Annual Report for the fiscal year ended June 30, 1994, and the
Semiannual Report for the period ended Dec. 31, 1994.
-1-
<PAGE>
TABLE OF CONTENTS
Goals and Investment Policies........................See Prospectus
Additional Investment Policies................................p.
Brokerage Commissions Paid to Brokers Affiliate with American
Express Financial Corporation..............................p.
Portfolio Transactions........................................p.
Performance Information.......................................p.
Valuing Each Fund's Shares....................................p.
Investing in a Fund...........................................p.
Redeeming Shares..............................................p.
Pay-out Plans.................................................p.
Exchanges.....................................................p.
Capital Loss Carryover........................................p.
Taxes.........................................................p.
Agreements....................................................p.
Trustees and Officers.........................................p.
The Trusts....................................................p.
Custodian.....................................................p.
Independent Auditors..........................................p.
Financial Statements..............................See Annual Report
Prospectus....................................................p.
Appendix A: Description of Ratings of Tax-Exempt Securities
and Short-Term Securities........................p.
Appendix B: Options and Interest Rate Futures Contracts......p.
Appendix C: State Risk Factors...............................p.
Appendix D: Dollar-Cost Averaging............................p.
-2-
<PAGE>
ADDITIONAL INVESTMENT POLICIES
These are investment policies in addition to those presented in the
prospectus. Unless holders of a majority of the outstanding shares
agree to make the change each fund will not:
'Act as an underwriter (sell securities for others). However,
under the securities laws, a fund may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
'Borrow money or property, except as a temporary measure for
extraordinary or emergency purposes, in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. No fund has borrowed in the past and has any
present intention to borrow.
'Make cash loans if the total commitment amount exceeds 5% of the
fund's total assets.
'Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the fund from investing in securities or other instruments backed
by real estate or securities of companies engaged in the real
estate business. For purposes of this policy, real estate includes
real estate limited partnerships.
'Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the fund from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
'Make a loan of any part of its assets to American Express
Financial Corporation, to the directors and officers of American Express
Financial Corporation or to its own trustees and officers.
'Purchase securities of an issuer if the trustees and officers of
the fund or the directors and officers of American Express
Financial Corporation hold more than a certain percentage of
the issuer's outstanding securities. The rule is this: the
holdings of all trustees and officers of a fund and the holding of
all directors and officers of American Express Financial Corporation
who own more than 0.5% of an issuer's securities are added together,
and if in total they own more than 5%, the fund will not purchase
securities of that issuer.
'Lend portfolio securities in excess of 30% of its net assets, at
market value. This policy may not be changed without shareholders
approval. The current policy of each fund's trustees is to make
these loans, either long- or short-term, to broker-dealers. In
making such loans the fund gets the market price in cash,
-3-
<PAGE>
U.S.government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the trustees. If the fund receives cash as collateral, a fund
will invest the cash collateral in short-term debt securities. A
fund reviews the market value of the loaned securities daily and
will get additional collateral if this value goes up. The risks
are that the borrower may not provide additional collateral when
required or return the securities when due.
Unless changed by the trustees, each fund will not:
'Buy on margin or sell short, but it may enter into interest rate
futures contracts.
'Pledge or mortgage its assets beyond 15% of total assets. If
a fund were ever to do so, valuation of the pledged or mortgaged
assets would be based on market values. For purposes of this
restriction, collateral arrangements for margin deposits on futures
contracts are not deemed to be a pledge of assets.
'Invest more than 5% of its total assets in securities whose issuer
or guarantor of principal and interest has been in operation for less
than three years.
'Invest in voting securities, securities of investment companies or
exploration or development programs, such as oil, gas or mineral
programs.
'Invest more than 5% of its net assets in warrants. Under one
state's law no more than 2% of the fund's net assets may be
invested in warrants not listed on an Exchange.
'Invest more than 10% of its net assets in securities and
derivative instruments that are illiquid. In determining the
liquidity of municipal lease obligations, the investment manager,
under guidelines established by the trustees, will consider the
essential nature of the lease property, the likelihood that the
municipality will continue appropriating funding for the leased
property, and other relevant factors related to the general credit
quality of the municipality and the marketability of the municipal
lease obligation. For purposes of complying with Ohio law, the fund
will not invest more than 15% of its assets in illiquid securities
and 144A securities.
In determining the liquidity of commercial paper issued in
transactions not involving a public offering under Section 4(2) of
the Securities Act of 1933, the investment manager, under
guidelines established by the trustees, will evaluate relevant
factors such as the issuer and the size and nature of its
commercial paper programs, the willingness and ability of the
issuer or dealer to repurchase the paper, and the nature of the
clearance and settlement procedures for the paper.
Each fund may invest up to 20% of its net assets in certain taxable
investments for temporary defensive purposes. It may purchase
short-term U.S. and Canadian government securities. It may invest
in bank obligations including negotiable certificates of deposit,
non-negotiable fixed time deposits, bankers' acceptances and
letters of credit. The issuing bank or savings and loan generally
-4-
<PAGE>
must have capital, surplus and undivided profits (as of the date of
its most recently published annual financial statements) in excess
of $100 million (or the equivalent in the instance of a foreign
branch of a U.S. bank) at the date of investment. Each fund may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's or S&P or the equivalent. It
also may use repurchase agreements with broker-dealers registered
under the Securities Exchange Act of 1934 and with commercial
banks. Repurchase agreements involve investments in debt
securities where the seller (broker-dealer or bank) agrees to
repurchase the securities from the fund at cost plus an agreed-to
interest rate within a specified time. A risk of a repurchase
agreement is that if the seller seeks the protection of the
bankruptcy laws, the fund's ability to liquidate the security
involved could be impaired, and it might subsequently incur a loss
if the value of the security declines or if the other party to a
repurchase agreement defaults on its obligation.
Each fund may purchase debt securities on a when-issued basis,
which means that it may take as long as 45 days after the purchase
before the securities are delivered to a fund. Payment and
interest terms, however, are fixed at the time the purchaser enters
into a commitment. Under normal market conditions, each fund does
not intend to commit more than 5% of its total assets to these
practices. A fund does not pay for the securities or start earning
interest on them until the contractual settlement date.
When-issued securities are subject to market fluctuations and they
may affect a fund's total assets the same as owned securities.
Each fund relies both on ratings assigned by credit agencies and on
the investment manager's credit analysis because credit agencies
may fail to reflect subsequent events on a timely basis and because
credit ratings do not evaluate market risk. With lower rated
securities, the achievement of each fund's investment objective may
be more dependent upon the investment manager's credit analysis
than is the case for higher quality securities.
Notwithstanding any of the fund's other investment policies, the
fund may invest its assets in an open-end management investment
company having substantially the same investment objectives,
policies and restrictions as the fund for the purpose of having
those assets managed as part of a combined pool.
For a description of ratings of tax-exempt securities and short-
term securities, see Appendix A. For a discussion on options and
interest rate futures contracts, see Appendix B. For a discussion
of state risk factors, see Appendix C.
PORTFOLIO TRANSACTIONS
Subject to policies set by the board, American Express Financial Corporation
is authorized to determine, consistent with each fund's investment
goal and policies, which securities will be purchased, held or sold.
In determining where the buy and sell orders are to be placed, American
Express Financial Corporation has been directed to use its best efforts
to obtain the best available price and the most favorable execution
-5-
<PAGE>
except where otherwise authorized by the trustees. Normally, each
fund's securities are traded on a principal rather than an agency
basis. In other words, American Express Financial Corporation will
trade directly with the issuer or with a dealer who buys or sells for
its own account, rather than acting on behalf of another client.
American Express Financial Corporation does not pay the dealer
commissions. Instead, the dealer's profit, if any, is the
difference, or spread, between the dealer's purchase and sale price
for the security.
Each investment decision made for each fund is made independently
from any decision made for another fund in the IDS MUTUAL FUND
GROUP or other account advised by American Express Financial
Corporation or any of its subsidiaries. When a fund buys or sells
the same security as another fund or account, American Express Financial
Corporation carries out the purchase or sale in a way the fund agrees in
advance is fair. Although sharing in large transactions may adversely affect
the price or volume purchased or sold by a fund, the fund hopes to gain an
overall advantage in execution.
On occasion, it may be desirable to compensate a broker for
research services or for brokerage services by paying a commission
that might not otherwise be charged or a commission in excess of
the amount another broker might charge. The board of Trustees has
adopted a policy authorizing American Express Financial Corporation
to do so to the extent authorized by law, if American Express Financial
Corporation determines, in good faith, that such commission is
reasonable in relation to the value of the brokerage or research
services provided by a broker or dealer, viewed either in the light
of that transaction or American Express Financial Corporation's overall
responsibilities to the funds in the IDS MUTUAL FUND GROUP and other
funds for which it acts as investment advisor.
Research provided by brokers supplements American Express Financial
Corporation's own research activities. Such services include economic
data on, and analysis of, U.S. and foreign economies; information on
specific industries; information about specific companies, including
earnings estimates; purchase recommendations for stocks and bonds;
portfolio strategy services; political, economic, business and industry
trend assessments; historical statistical information; market data
services providing information on specific issues and prices; and
technical analysis of various aspects of the securities markets,
including technical charts. Research services may take the form of
written reports, computer software or personal contact by telephone
or at seminars or other meetings. American Express Financial Corporation
has obtained, and in the future may obtain, computer hardware from
brokers, including but not limited to personal computers that will be
used exclusively for investment decision-making purposes, which include
the research, portfolio management and trading functions and other
services to the extent permitted under an interpretation by the Securities
and Exchange Commission.
For the fiscal years ending June 30, each fund paid the following
brokerage commissions on financial futures contracts.
<TABLE>
<CAPTION>
CA MA MI MN NY OH
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1994 $-0- $-0- $-0- $3,850 $1,260 $-0-
1993 -0- -0- -0- -0- -0- -0-
1992 1,442 210 322 1,848 630 280
</TABLE>
-6-
<PAGE>
Each fund acquired no securities of their regular brokers or
dealers or of the parents of those brokers or dealers that derived
more than 15% of gross revenue from securities-related activities
during the fiscal year ended June 30, 1994.
The portfolio turnover rates for the fiscal years ended June 30
were as follows:
<TABLE>
<CAPTION>
CA MA MI MN NY OH
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1994 27% 6% 16% 13% 10% 11%
1993 5 0 2 2 0 0
</TABLE>
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH AMERICAN EXPRESS
FINANCIAL CORPORATION
Affiliates of American Express Company (American Express) (of which American
Express Financial Corporation is a wholly-owned subsidiary) may engage in
brokerage and other securities transactions on behalf of the fund according
to procedures adopted by the fund's board of directors and to the extent
consistent with applicable provisions of the federal securities laws. American
Express Financial Corporation will use an American Express affiliate only if
(i) American Express Financial Corporation determines that the fund will
receive prices and executions at least as favorable as those offered by
qualified independent brokers performing similar brokerage and other services
for the fund and (ii) the affiliate charges the fund commission rates
consistent with those the affiliate charges comparable unaffiliated customers
in similar transactions and if such use is consistent with terms of the
Investment Management Services Agreement.
American Express Financial Corporation may direct brokerage to compensate
an affiliate. American Express Financial Corporation will receive research on
South Africa from New Africa Advisers a wholly-owned subsidiary of Sloan
Financial Group. American Express Financial Corporation owns 100% of IDS
Capital Holdings Inc. which in turn owns 40% of Sloan Financial Group. New
Africa Advisers will send research to American Express Financial Corporation
and in turn American Express Financial Corporation will direct trades to a
particular broker. The broker will have an agreement to pay New Africa
Advisers. All transactions will be on a best execution basis. Compensation
received will be reasonable for the services rendered.
No brokerage commissions were paid to brokers affiliated with American
Express Financial Corporation for the three most recent fiscal periods.
PERFORMANCE INFORMATION
Each fund may quote various performance figures to illustrate past
performance. Average annual total return and current yield
quotations used by a fund are based on standardized methods of
computing performance as required by the SEC. An explanation of
the methods used by the fund to compute performance follows below.
AVERAGE ANNUAL TOTAL RETURN
Each fund may calculate average annual total return for a class for
certain periods by finding the average annual compounded rates of
return over the period that would equate the initial amount
invested to the ending redeemable value, according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
AGGREGATE TOTAL RETURN
Each fund may calculate aggregate total return for a class for
certain periods representing the cumulative change in the value of
an investment in the fund over a specified period of time according
to the following formula:
ERV - P
-------
P
where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000
payment, made at the beginning of a period, at the
end of the period (or fractional portion thereof)
-7-
<PAGE>
ANNUALIZED YIELD
Each fund may calculate an annualized yield for a class by dividing
the net investment income per share deemed earned during a 30-day
period by the public offering price per share (including the
maximum sales charge) on the last day of the period and annualizing
the results.
Yield is calculated according to the following formula:
Yield = 2[(a-b + 1)6 - 1]
---
cd
where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements)
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last
day of the period
The following table gives an annualized yield quotation for each of
the funds:
30-Day Period
Fund Ended June 30, 1994 Yield
- -------------------------------------------------------------------
California 4.97%
Massachusetts 5.03
Michigan 4.73
Minnesota 5.10
New York 4.77
Ohio 5.04
- -------------------------------------------------------------------
TAX-EQUIVALENT YIELD
Tax-equivalent yield is calculated by dividing that portion of the
yield (as calculated above) which is tax-exempt by one minus a
stated income tax rate and adding the result to that portion, if
any, of the yield that is not tax-exempt. The following table
shows the tax equivalent yield, based on federal but not state tax
rates, for the funds listed:
<TABLE>
<CAPTION>
Marginal
Income Tax Tax-Equivalent Yield
Bracket for 30-Day Period Ended June 30,1994
- ------------------------------------------------------------------------
California Massachusetts Michigan Minnesota New York Ohio
---------- ------------- -------- --------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
15.0% 5.85% 5.92% 5.56% 6.00% 5.61% 5.93%
28.0% 6.90 6.99 6.57 7.08 6.63 7.00
33.0% 7.42 7.51 7.06 7.61 7.12 7.52
</TABLE>
In its sales material and other communications, each fund may
quote, compare or refer to rankings, yields or returns as published
by independent statistical services or publishers and publications
such as The Bank Rate Monitor National Index, Barron's, Business
-8-
<PAGE>
Week, Donoghue's Money Market Fund Report, Financial Services Week,
Financial Times, Financial World, Forbes, Fortune, Global Investor,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report,
Sylvia Porter's Personal Finance, USA Today, U.S. News and World
Report, The Wall Street Journal and Wiesenberger Investment
Companies Service.
VALUING FUND SHARES
The value of an individual share is determined by using the net
asset value before shareholder transactions for the day. On July 1,
1994, the first business day following the end of the year, the
computation looked like this:
<TABLE>
<CAPTION>
Net assets before Shares outstanding Net asset value
Fund shareholder transactions at end of previous day of one share
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A*
California $255,560,404 divided by 49,714,953 equals $5.13
Massachusetts 72,071,218 13,749,968 5.24
Michigan 76,682,318 14,320,277 5.36
Minnesota 408,801,729 79,123,225 5.16
New York 120,156,154 23,481,717 5.12
Ohio 71,835,655 13,661,035 5.26
<FN>
*Shares of Class B and Class Y were not outstanding on that date.
</TABLE>
In determining net assets before shareholder transactions, each
fund's portfolio securities are valued as follows as of the close
of business of the New York Stock Exchange:
'Securities, except bonds, other than convertibles traded on a
securities exchange for which a last-quoted sales price is readily
available are valued at the last-quoted sales price on the exchange
where such security is primarily traded.
'Securities other than convertibles traded on a securities exchange
for which a last-quoted sales price is not readily available are
valued at the mean of the closing bid and asked prices, looking
first to the bid and asked prices on the exchange where the
security is primarily traded, and if none exists, to the over-the-
counter market.
'Securities included in the NASDAQ National Market System are
valued at the last-quoted sales price in this market.
'Securities included in the NASDAQ National Market System for which
a last-quoted sales price is not readily available, and other
securities traded over-the-counter but not included in the NASDAQ
National Market System are valued at the mean of the closing bid
and asked prices.
'Futures and options traded on major exchanges are valued at their
last-quoted sales price on their primary exchange.
'Short-term securities maturing more than 60 days from the
valuation date are valued at the readily available market price or
approximate market value based on current interest rates. Short-
term securities maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at
-9-
<PAGE>
amortized cost using the market value on the 61st day before
maturity. Short-term securities maturing in 60 days or less at
acquisition date are valued at amortized cost. Amortized cost is
an approximation of market value determined by systematically
increasing the carrying value of a security if acquired at a
discount, or systematically reducing the carrying value if acquired
at a premium, so that the carrying value is equal to the maturity
value on maturity date.
'Securities without a readily available market price, bonds other
than convertibles and other assets are valued at fair value, as
determined in good faith by the board of trustees (the "trustees").
The trustees are responsible for selecting methods they believe
provide fair value. When possible bonds are valued by a pricing
service independent from a fund. If a valuation of a bond is not
available from a pricing service, the bond will be valued by a
dealer knowledgeable about the bond if such a dealer is available.
The New York Stock Exchange, American Express Financial Corporation,
and each of the funds will be closed on the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
INVESTING IN A FUND
Sales Charge
Shares of the fund are sold at the public offering price determined
at the close of business on the day an application is accepted.
The public offering price is the net asset value of one share plus
a sales charge if applicable. For Class B and Class Y, there is no
initial sales charge so the public offering price is the same as
the net asset value. For Class A, the public offering price for an
investment of less than $50,000, made July 1, 1994, was determined
as follows:
<TABLE>
<CAPTION>
Fund Net asset value Divided by (1.00 Public offering
of one share -0.05) for a price
sales charge
<S> <C> <C> <C>
California 5.13 / 0.95 = $5.40
Massachusetts 5.24 / 0.95 = 5.52
Michigan 5.36 / 0.95 = 5.64
Minnesota 5.16 / 0.95 = 5.43
New York 5.12 / 0.95 = 5.39
Ohio 5.26 / 0.95 = 5.53
</TABLE>
The sales charge is paid to American Express Financial Advisors by
the person buying the shares.
-10-
<PAGE>
Class A - Calculation of the Sales Charge
Sales charges are determined as follows:
<TABLE>
<CAPTION>
Within each increment,
sales charge as a
percentage of:
----------------------------------------
Public Net
Amount of Investment Offering Price Amount Invested
-------------------- -------------- ---------------
<S> <C> <C>
First $ 50,000 5.0% 5.26%
Next 50,000 4.5 4.71
Next 400,000 3.8 3.95
Next 500,000 2.0 2.04
More than 1,000,000 0.0 0.00
</TABLE>
Sales charges on an investment greater than $50,000 are calculated
for each increment separately and then totaled. The resulting
total sales charge, expressed as a percentage of the public
offering price and of the net amount invested, will vary depending
on the proportion of the investment at different sales charge
levels.
For example, compare an investment of $60,000 with an investment of
$85,000. The $60,000 investment is composed of $50,000 that incurs
a sales charge of $2,500 (5.0% x $50,000) and $10,000 that incurs a
sales charge of $450 (4.5% x $10,000). The total sales charge of
$2,950 is 4.92% of the public offering price and 5.17% of the net
amount invested.
In the case of the $85,000 investment, the first $50,000 also
incurs a sales charge of $2,500 (5.0% x $50,000) and $35,000 incurs
a sales charge of $1,575 (4.5% x $35,000). The total sales charge
of $4,075 is 4.79% of the public offering price and 5.04% of the
net amount invested.
The following table shows the range of sales charges as a
percentage of the public offering price and of the net amount
invested on total investments at each applicable level.
<TABLE>
<CAPTION>
On total investment, sales
charge as a percentage of
- ------------------------------------------------------------------------------
Public Net
Offering Price Amount Invested
-------------- ---------------
Amount of Investment ranges from:
- -------------------- -------------------------------------------
<S> <C> <C>
First $ 50,000 5.00% 5.26%
More than 50,000 to 100,000 5.00-4.50 5.26-4.71
More than 100,000 to 500,000 4.50-3.80 4.71-3.95
More than 500,000 to 1,000,000 3.80-2.00 3.95-2.04
More than 1,000,000 0.00 0.00
</TABLE>
Class A - Reducing the Sales Charge
Sales charges are based on the total amount of your investments in
any of these funds. The amount of all prior investments plus any
new purchase is referred to as your "total amount invested." For
-11-
<PAGE>
example, suppose you have made an investment of $20,000 and later
decide to invest $40,000 more. Your total amount invested would be
$60,000. As a result, $10,000 of your $40,000 investment qualifies
for the lower 4.5% sales charge that applies to investments of more
than $50,000 to $100,000.
The total amount invested includes any shares held in any of these
funds in the name of a member of your immediate family (spouse and
unmarried children under 21). For instance, if your spouse already
has invested $20,000 and you want to invest $40,000, your total
amount invested will be $60,000 and therefore you will pay the
lower charge of 4.5% on $10,000 of the $40,000.
Until a spouse remarries, the sales charge is waived for spouses
and unmarried children under 21 of deceased trustees, directors,
officers or employees of the fund or American Express Financial
Corporation or its subsidiaries and deceased advisors.
The total amount invested also includes any investment you or your
immediate family already have in the other publicly offered funds
in the IDS MUTUAL FUND GROUP where the investment is subject to a
sales charge. For example, suppose you already have a direct
investment of $25,000 in IDS Stock Fund and $5,000 in one of these
funds (IDS California Tax-Exempt Fund, IDS Massachusetts Tax-Exempt
Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund,
IDS New York Tax-Exempt Fund or IDS Ohio Tax-Exempt Fund). If you
invest $40,000 more in one of these funds, your total amount
invested in the funds will be $70,000 and therefore $20,000 of your
$40,000 investment will incur a 4.5% sales charge.
Class A - Letter of Intent
You can reduce the sales charges in Class A by filing a letter-of-
intent stating that you intend to invest $1 million over a period
of 13 months. The agreement can start at any time and will remain
in effect for 13 months. Your investment will be charged normal
sales charges until you have invested $1 million. At that time,
the sales charges previously paid will be reversed. If you do not
invest $1 million by the end of 13 months, there is no penalty,
you'll just miss out on the sales charge adjustment. A letter-of-
intent is not an option (absolute right) to buy shares.
Here's an example. You file a letter-of-intent to invest $1
million and make an investment of $100,000 at that time. You pay
the normal 5% sales charge on the first $50,000 and 4.5% sales
charge on the next $50,000 of this investment. Let's say you make
a second investment of $900,000 (bringing the total up to $1
million) one month before the 13-month period is up. What sales
charge do you pay? American Express Financial Corporation makes an
adjustment on your last purchase so that there's no sales charge on the
total $1 million investment, just as if you had invested $1 million
all at once.
Systematic Investment Programs
After you make your investment of $2,000 or more in a fund, you can
arrange to make additional payments of $100 or more in that fund on
a regular basis. These minimums do not apply to all systematic
-12-
<PAGE>
investment programs. You decide how often you want to make
payments - monthly, quarterly or semiannually. You are not
obligated to make any payments. You can omit payments, or
discontinue the investment program altogether. A fund also can
change the program or end it at any time. If there is no
obligation, why do it? Putting money aside is an important part of
financial planning. With a systematic investment program, you have
a goal to work for.
How does this work? Your regular investment amount will purchase
more shares when the net asset value per share decreases, and fewer
shares when the net asset value per share increases. Each purchase
is a separate transaction. After each purchase your new shares
will be added to your account. Shares bought through these
programs are exactly the same as any other fund shares. They can
be bought and sold at any time. A systematic investment program is
not an option or an absolute right to buy shares.
The systematic investment program itself cannot ensure a profit,
nor can it protect against a loss in a declining market. If you
decide to discontinue the program and redeem your shares when their
net asset value is less than what you paid for them, you will incur
a loss.
For a discussion on dollar-cost averaging, see Appendix D.
Automatic Directed Dividends
Dividend and capital gain distributions, paid by another fund in
the IDS MUTUAL FUND GROUP subject to a sales charge may be used to
automatically purchase shares in the same class of any of these
funds without paying a sales charge. Dividends may be directed to
existing accounts only. Dividends declared by a fund are exchanged
to one of these funds the following day. Dividends can be
exchanged into one fund but cannot be split to make purchases in
two or more funds. Automatic directed dividends are available
between accounts of any ownership EXCEPT:
'Between a non-custodial account and an IRA, or 401(k) plan account
or other qualified retirement account of which American Express
Trust Company acts as custodian;
'Between two American Express Trust Company custodial accounts with
different owners (for example, you may not exchange dividends from
your IRA to the IRA of your spouse);
'Between different kinds of custodial accounts with the same
ownership (for example, you may not exchange dividends from your
IRA to your 401(k) plan account, although you may exchange
dividends from one IRA to another IRA).
Dividends may be directed from accounts established under the
Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors
Act (UTMA) only into other UGMA or UTMA accounts with identical
ownership.
-13-
<PAGE>
Each fund has a different investment goal described in its
prospectus along with other information, including fees and expense
ratios. Before exchanging dividends into another fund, you should
read its prospectus. You will receive a confirmation that the
automatic directed dividend service has been set up for your
account.
REDEEMING SHARES
You have a right to redeem your shares at any time. For an
explanation of redemption procedures, please see the prospectus.
DURING AN EMERGENCY, the board can suspend the computation of net
asset value, stop accepting payments for purchase of shares or suspend
the duty of a fund to redeem shares for more than seven days. Such
emergency situations would occur if:
'The New York Stock Exchange closes for reasons other than the usual
weekend and holiday closings or trading on the Exchange is restricted, or
'Disposal of a fund's securities is not reasonably practicable or
it is not reasonably practicable for that fund to determine the
fair value of its net assets, or
'The SEC, under the provisions of the Investment Company Act of
1940, as amended, declares a period of emergency to exist.
Should a fund stop selling shares, the trustees may make a
deduction from the value of the assets held by that fund to cover
the cost of future liquidations of the assets so as to distribute
fairly these costs among all shareholders.
PAY-OUT PLANS
You can use any of several pay-out plans to redeem your investment
in regular installments. If you redeem Class B shares you may be
subject to a contingent deferred sales charge as discussed in the
prospectus. While the plans differ on how the pay-out is figured,
they all are based on the redemption of your investment. Net
investment income dividends and any capital gain distributions will
automatically be reinvested, unless you elect to receive them in
cash.
Applications for a systematic investment in a class of any fund
subject to a sales charge normally will not be accepted while a
pay-out plan for any of those funds is in effect. Occasional
investments, however, may be accepted.
To start any of these plans, please write or call American Express
Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534,
612-671-3733. Your authorization must be received in the
Minneapolis headquarters at least five days before the date you
want your payments to begin. The initial payment must be at least
-14-
<PAGE>
$50. Payments will be made on a monthly, bimonthly, quarterly,
semiannual or annual basis. Your choice is effective until you
change or cancel it.
The following pay-out plans are designed to take care of the needs
of most shareholders in a way American Express Financial Corporation
can handle efficiently and at a reasonable cost. If you need a more
irregular schedule of payments, it may be necessary for you to make a
series of individual redemptions, in which case you'll have to send in
a separate redemption request for each pay-out. Each fund reserves
the right to change or stop any pay-out plan and to stop making
such plans available.
Plan #1: Pay-out for a fixed period of time
If you choose this plan, a varying number of shares will be
redeemed at regular intervals during the time period you choose.
This plan is designed to end in complete redemption of all shares
in your account by the end of the fixed period.
Plan #2: Redemption of a fixed number of shares
If you choose this plan, a fixed number of shares will be redeemed
for each payment and that amount will be sent to you. The length
of time these payments continue is based on the number of shares in
the account.
Plan #3: Redemption of a fixed dollar amount
If you decide on a fixed dollar amount, whatever number of shares
is necessary to make the payment will be redeemed in regular
installments until the account is closed.
Plan #4: Redemption of a percentage of net asset value
Payments are made based on a fixed percentage of the net asset
value of the shares in your account computed on the day of each
payment. Percentages range from 0.25% to 0.75%. For example, if
you are on this plan and arrange to take 0.5% each month, you will
get $50 if the value of your account is $10,000 on the payment
date.
EXCHANGES
If you buy shares in one of the funds and then exchange into
another fund, it is considered a sale and subsequent purchase of
shares. Under tax laws, if this exchange is done within 91 days,
any sales charge waived on Class A shares on a subsequent purchase
of shares applies to the new shares acquired in the exchange.
Therefore, you cannot create a tax loss or reduce a tax gain
attributable to the sales charge when exchanging shares within 91
days.
CAPITAL LOSS CARRYOVER
For federal income tax purposes, IDS California, Massachusetts,
Michigan, Minnesota, New York and Ohio Tax-Exempt Fund's had total
capital loss carryovers of $3,420,653, $199,063, $156,952,
-15-
<PAGE>
$2,753,600, $1,267,843, and $185,465, respectively, at June 30,
1994, that if not offset by subsequent capital gains will expire as
set-out below:
<TABLE>
<CAPTION>
Fund 1996 1997 1998 1999
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California $311,803 $29,089
Massachusetts $133,727
Michigan
Minnesota 764,634
New York 284,215
Ohio 106,387
<CAPTION>
Fund 2000 2001 2002
- -------------------------------------------------------------------------------
California $3,079,761
Massachusetts $ 6,932 $ 25,326 33,078
Michigan 156,952
Minnesota 361,841 1,627,125
New York 32,265 22,639 822,337
Ohio 185,465
</TABLE>
It is unlikely that the board of trustees will authorize a
distribution of any net realized capital gains until the available
capital loss carryover has been offset or has expired except as
required by Internal Revenue Service rules.
TAXES
All distributions of net investment income during the year will
have the same percentage designated as tax-exempt. This annual
percentage is expected to be substantially the same as the
percentage of tax-exempt income actually earned during any
particular distribution period.
For the fiscal year ended June 30, 1994, 100% of the income
distributions for California, Massachusetts, Michigan, Minnesota,
New York and Ohio were designated as exempt from federal income
tax. In addition, 100% of exempt interest distributions were
derived from interest on municipal securities for California,
Massachusetts, Minnesota, New York and Ohio, whereas Michigan had
99% of exempt interest distributed on municipal securities.
State law determines whether interest income on a particular
municipal bond is tax-exempt for state tax purposes. Each fund
will tell you the percentage of interest income from municipal
bonds it received during the year.
Each shareholder should consult a tax advisor about reporting
income for local tax purposes.
Capital gain distributions received by individual and corporate
shareholders should be treated as long-term capital gains
regardless of how long they owned their shares. Short-term capital
gains earned by the fund are paid to shareholders as part of their
ordinary income dividend and are taxable.
If you are a "substantial user" (or related person) of facilities
financed by industrial development bonds, you should consult your
tax advisor before investing. The income from such bonds may not
be tax-exempt for you.
-16-
<PAGE>
Interest on private activity bonds generally issued after August
1986 is a preference item for purposes on the individual and
corporate alternative minimum taxes. "Private-activity" (non-
governmental purpose) municipal bonds include industrial revenue
bonds, student loan bonds and multi-and single-family housing
bonds. An exception is made for private-activity bonds issued for
qualified--501(c)(3)--organizations, including non-profit colleges,
universities and hospitals. These bonds will continue to be tax-
exempt and will not be subject to the alternative minimum tax for
individuals. To the extent a fund earns income subject to the
alternative minimum tax, it will flow through to that fund's
shareholders and may subject some shareholders, depending on their
tax status, to the alternative minimum tax. Each fund reports the
percentage of income earned from these bonds to shareholders with
their other tax information.
Under federal tax law, and an election made by each fund under
federal tax rules, by the end of a calendar year each fund must
declare and pay dividends representing, 98% of ordinary income
through Dec. 31 and 98% of net capital gains (both long-term and
short-term) for the 12-month period ending Oct. 31 of that calendar
year. Each fund is subject to an excise tax equal to 4% of the
excess, if any, of the amount required to be distributed over the
amount actually distributed. Each fund intends to comply with
federal tax law and avoid any excise tax.
This is a brief summary that relates to federal income taxation
only. Shareholders should consult their tax advisor for more
complete information as the application of federal, state and local
income tax laws to fund distributions.
AGREEMENTS
Investment Management Services Agreement
Each fund has an Investment Management Services Agreement with American
Express Financial Corporation. For its services, American Express
Financial Corporation is paid a fee based on the following schedule:
<TABLE>
<CAPTION>
Assets Annual rate at
(billions) each asset level
- ---------- ----------------
<S> <C>
First $0.25 0.470%
Next 0.25 0.445
Next 0.25 0.420
Next 0.25 0.405
Over 1.0 0.380
</TABLE>
In March 1995, the daily rate applied to the funds' assets is
expected to be approximately 0.47% on an annual basis for California,
Massachusetts, Michigan, New York, and Ohio, and approximately
0.46% on an annual basis for Minnesota. The fee is calculated
for each calendar day on the basis of net assets as of the close
of business two business days prior to the day for which the
calculation is made.
The management fee is paid monthly. The table below shows the
total amount paid by each fund over the past three fiscal years.
-17-
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year Ended June 30,
-----------------------------------------------
Fund 1994 1993 1992
- -----------------------------------------------------------------
<S> <C> <C> <C>
California $1,418,804 $1,292,626 $1,114,190
Massachusetts 377,077 288,822 189,795
Michigan 405,578 334,048 258,584
Minnesota 2,227,969 1,913,496 1,478,887
New York 648,514 567,263 472,912
Ohio 381,106 294,453 215,667
</TABLE>
Under the current Agreement, each fund also pays taxes, brokerage
commissions and nonadvisory expenses that include custodian fees;
audit and certain legal fees; cost of prospectuses, proxies and
reports sent to shareholders; fidelity bond premiums; registration
fees for shares; fund office expenses; consultants' fees;
compensation of trustees, officers and employees; corporate filing
fees; organizational expenses; expenses incurred in connection with
lending portfolio securities of each fund; and expenses properly
payable by each fund, approved by the board of trustees. Under a
prior agreement, each fund paid nonadvisory expenses. The table
below shows the expenses paid over the past three fiscal years.
<TABLE>
<CAPTION>
Fiscal Year Ended June 30,
---------------------------------------------
Fund 1994 1993 1992
- ---------------------------------------------------------------
<S> <C> <C> <C>
California $82,545 $87,327 $97,528
Massachusetts 52,628 45,673 33,042
Michigan 40,366 43,191 26,931
Minnesota 229,572 172,869 91,681
New York 51,629 46,905 36,400
Ohio 40,747 30,732 32,498
</TABLE>
Administrative Services Agreement
Each fund has an Administrative Services Agreement with American Express
Financial Corporation. Under this agreement, each fund pays American
Express Financial Corporation for providing administration and accounting
services. The fee is calculated as follows:
<TABLE>
<CAPTION>
Assets Annual rate
(billions) each asset level
---------- ----------------
<S> <C>
First $0.25 0.040%
Next 0.25 0.035
Next 0.25 0.030
Next 0.25 0.025
Over $1.0 0.020
</TABLE>
Transfer Agency Agreement
Each fund has a Transfer Agency Agreement with American Express
Financial Corporation. This agreement governs American Express
Financial Corporation's responsibility for administering and/or
performing transfer agent functions, for acting as service agent in
connection with dividend and distribution functions and for performing
shareholder account administration agent functions in connection with the
issuance, exchange and redemption or repurchase of each fund's shares.
Under the agreement, American Express Financial Corporation will earn a fee
from each fund determined by multiplying the number of shareholder
accounts at the end of the day by a rate determined for each class and
-18-
<PAGE>
dividing by the number of days in the year. The rate for class A
and for Class Y is $15.50 per year. The rate for Class B
is $16.50 per year. The fees paid to American Express Financial
Corporation may be changed from time to time upon agreement of the
parties without shareholder approval. Each fund paid the following
fees for the fiscal year ended June 30, 1994:
<TABLE>
<S> <C>
California $104,864
Massachusetts 47,474
Michigan 41,235
Minnesota 248,181
New York 72,277
Ohio 40,107
</TABLE>
Distribution Agreement
Under a Distribution Agreement, sales charges deducted for
distributing fund shares are paid to American Express Financial
Advisors daily. Line one of the following table shows total sales
charges collected. Line two shows the amounts retained by American
Express Financial Advisors for the past three fiscal years ending
June 30.
<TABLE>
<CAPTION>
Year California Massachusetts Michigan Minnesota New York Ohio
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1992 (1) $1,453,718 $672,533 $493,246 $2,906,844 $638,700 $450,254
(2) 513,760 233,749 173,551 1,023,870 227,161 158,439
1993 (1) 1,429,331 915,161 610,586 3,248,432 820,465 620,667
(2) 501,684 328,492 213,345 1,145,154 283,310 214,778
1994 (1) 1,177,341 867,225 560,739 2,458,058 728,241 593,137
(2) 414,319 271,784 194,612 863,376 260,045 205,291
</TABLE>
Additional information about commissions and compensation for the
fiscal year ended June 30, 1994, is contained in the following
table:
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Compensation
Name of Underwriting on Redemption
Principal Discounts and and Brokerage Other
Fund Underwriter Commissions Repurchases Commissions Compensation*
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
California American Express
Financial
Advisors $1,177,341 None None $41,568
Massachusetts American Express
Financial
Advisors 867,225 None None 18,719
Michigan American Express
Financial
Advisors 560,739 None None 16,271
Minnesota American Express
Financial
Advisors 2,458,058 None None 97,718
New York American Express
Financial
Advisors 728,241 None None 29,229
Ohio American Express
Financial
Advisors 593,137 None None 15,702
- ---------------------------------------------------------------------------------------------
<FN>
*Distribution fees paid pursuant to the Plan and Supplemental
Agreement of Distribution.
</TABLE>
-19-
<PAGE>
Shareholder Service Agreement
Each fund pays a fee for service provided to shareholders by
financial advisors and other servicing agents. The fee is
calculated at a rate of 0.175% of each fund's average daily net
assets attributable to Class A and Class B shares.
Plan and Agreement of Distribution
For Class B shares, to help American Express Financial Advisors
defray the cost of distribution and servicing, not covered by sales
charges received under the Distribution Agreement, each fund and
American Express Financial Advisors entered into a Plan and
Agreement of Distribution (Plan). These costs relate to most
aspects of distributing each fund's shares including American
Express Financial Advisors' overhead expenses. These costs do not
include compensation to the sales force. A substantial portion of
the costs are not specifically identified to any one fund in the
IDS MUTUAL FUND GROUP. Under the Plan, American Express Financial
Advisors is paid a fee at an annual rate of 0.75% of each fund's
average daily net assets attributable to Class B shares.
The Plan must be approved annually by the board, including a majority of
the disinterested trustees, if it is to continue for more than a year.
At least quarterly, the board must review written reports concerning the
amounts expended under the Plan and the purposes for which such
expenditures were made. The Plan and any agreement related to it
may be terminated at any time by vote of a majority of the trustees
who are not interested persons of the Trusts and have no direct or
indirect financial interest in the operation of the Plan or in any
agreement related to the Plan, or by vote of a majority of the
outstanding voting securities of each fund or by American Express
Financial Advisors. The Plan (or any agreement related to it) will
terminate in the event of its assignment as that term is defined in
the Investment Company Act of 1940, as amended. The Plan may not
be amended to increase the amount to be spent for distribution
without shareholders' approval, and all material amendments to the
Plan must be approved by a majority of the trustees, including a
majority of the trustees who are not interested persons of the
Trusts and who do not have a financial interest in the operation of
the Plan or any agreement related to it. The selection and
nomination of disinterested trustees is the responsibility of
disinterested trustees. No interested person of the Trusts, and no
trustee who is not an interested person, has any direct or indirect
financial interest in the operation of the Plan or any related
agreement.
Total fees and nonadvisory expenses cannot exceed the most
restrictive applicable state limitation. Currently, the most
restrictive applicable state expense limitation, subject to
exclusion of certain expenses, is 2.5% of the first $30 million of
the fund's average daily net assets, 2% of the next $70 million and
1.5% of average daily net assets over $100 million, on an annual
basis. At the end of each month, if the fees and expenses of the
fund exceed this limitation for the fund's fiscal year in progress,
American Express Financial Corporation will assume all expenses in
excess of the limitation. American Express Financial Corporation
-20-
<PAGE>
then may bill the fund for such expenses in subsequent months up to
the end of that fiscal year, but not after that date. No interest
charges are assessed by American Express Financial Corporation
for expenses it assumes.
TRUSTEES AND OFFICERS
The following is a list of the fund's trustees who, except for Mr.
Dudley, also are directors of all other funds in the IDS MUTUAL
FUND GROUP. Mr. Dudley is a director of all publicly offered
funds. All shares have cumulative voting rights when voting on the
election of trustees.
LYNNE V. CHENEY+'
Born in 1941.
American Enterprise Institute
for Public Policy Research (AEI)
1150 17th St., N.W.
Washington, D.C.
Distinguished Fellow AEI. Former Chair of National Endowment of
the Humanities. Director, The Reader's Digest Association Inc.,
Lockheed Corp., and the Interpublic Group of Companies, Inc.
(advertising).
WILLIAM H. DUDLEY+**
Born in 1932.
2900 IDS Tower
Minneapolis, MN
Executive vice president and director of American Express Financial
Corporation.
ROBERT F. FROEHLKE+
Born in 1922.
1201 Yale Place
Minneapolis, MN
Former president of all funds in the IDS MUTUAL FUND GROUP.
Director, the ICI Mutual Insurance Co., Institute for Defense
Analyses, Marshall Erdman and Associates, Inc. (architectural
engineering) and Public Oversight Board of the American Institute
of Certified Public Accountants.
DAVID R. HUBERS**
Born in 1943.
2900 IDS Tower
Minneapolis, MN
President, chief executive officer and director of American Express
Financial Corporation. Previously, senior vice president, finance and
chief financial officer of American Express Financial Corporation.
HEINZ F. HUTTER+
Born in 1929.
P.O. Box 5724
Minneapolis, MN
President and chief operating officer, Cargill, Incorporated
(commodity merchants and processors) from February 1991 to
September 1994. Executive vice president from 1981 to February
1991.
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ANNE P. JONES+
Born in 1935.
5716 Bent Branch Rd.
Bethesda, MD
Attorney and telecommunications consultant. Former partner, law
firm of Sutherland, Asbill & Brennan. Director, Motorola, Inc. and
C-Cor Electronics, Inc.
DONALD M. KENDALL'
Born in 1921.
PepsiCo, Inc.
Purchase, NY
Former chairman and chief executive officer, PepsiCo, Inc.
MELVIN R. LAIRD+
Born in 1922.
Reader's Digest Association, Inc.
1730 Rhode Island Ave., N.W.
Washington, D.C.
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc. Chairman of the board, COMSAT
Corporation, former nine-term congressman, secretary of defense and
presidential counsellor. Director, Martin Marietta Corp.,
Metropolitan Life Insurance Co., The Reader's Digest Association,
Inc., Science Applications International Corp., Wallace Reader's
Digest Funds and Public Oversight Board (SEC Practice Section,
American Institute of Certified Public Accountants).
LEWIS W. LEHR'
Born in 1921.
3050 Minnesota World Trade Center
30 E. Seventh St.
St. Paul, MN
Former chairman of the board and chief executive officer, Minnesota
Mining and Manufacturing Company (3M). Director, Jack Eckerd
Corporation (drugstores). Advisory Director, Peregrine Inc.
(microelectronics).
WILLIAM R. PEARCE+*
Born in 1927.
901 S. Marquette Ave.
Minneapolis, MN
President of all funds in the IDS MUTUAL FUND GROUP since June
1993. Former vice chairman of the board, Cargill, Incorporated
(commodity merchants and processors).
EDSON W. SPENCER
Born in 1926.
4900 IDS Center
80 S. 8th St.
Minneapolis, MN
President, Spencer Associates Inc. (consulting). Chairman of the
board, Mayo Foundation (healthcare). Former chairman of the board
and chief executive officer, Honeywell Inc. Director, Boise
Cascade Corporation (forest products) and CBS Inc. Member of
International Advisory Councils, Robert Bosch (Germany) and NEC
(Japan).
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JOHN R. THOMAS**
Born in 1937.
2900 IDS Tower
Minneapolis, MN
Senior vice president and director of American Express Financial
Corporation.
WHEELOCK WHITNEY+
Born in 1926.
1900 Foshay Tower
821 Marquette Ave.
Minneapolis, MN
Chairman, Whitney Management Company (manages family assets).
C. ANGUS WURTELE
Born in 1934.
1101 S. 3rd St.
Minneapolis, MN
Chairman of the board and chief executive officer, The Valspar
Corporation (paints). Director, Bemis Corporation (packaging),
Donaldson Company (air cleaners & mufflers) and General Mills, Inc.
(consumer foods).
+ Member of executive committee.
' Member of joint audit committee.
* Interested person by reason of being an officer and employee of
the fund.
**Interested person by reason of being an officer, director,
employee and/or shareholder of American Express Financial Corporation
or American Express.
The board also has appointed officers who are responsible for day-
to-day business decisions based on policies it has established.
Besides Mr. Pearce, who is president, the fund's other officer is:
LESLIE L. OGG
Born in 1938.
901 S. Marquette Ave.
Minneapolis, MN
Vice president of all funds in the IDS MUTUAL FUND GROUP and
general counsel and treasurer of the publicly offered funds.
Members who are not officers of the fund or officers or directors of American
Express Financial Corporation receive an annual base fee of $250. They receive
a fee for all board and committee meetings they attend. The fee is shared
equally among each fund in the IDS MUTUAL FUNDS GROUP holding concurrent
meetings. The fees are $500 for Board, Executive, Audit and Investment Review
committees, $750 for Personnel with out-of-state members receiving an
additional $500 if an extra day of travel is required. The Chair of Contracts
receives an additional $5,000. In addition members who retire after age 70
or earlier for health reasons receive monthly retirement benefits of 1/2 of
the base fee on the date they retire divided by 12 for each month of service
up to 120 months.
During the fiscal year that ended June 30, 1994, the members of the
board, for attending up to 51 meetings, received the following
compensation, in total, from all funds in the IDS MUTUAL FUND
GROUP.
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<TABLE>
<CAPTION>
Board compensation
Aggregate Retirement Estimated Total Cash
compensation benefits annual compensation
from the accrued as benefit on from the IDS
Board member fund fund expenses retirement MUTUAL FUND GROUP
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lynne V. Cheney $1,551 $ --- $1,125 $25,600
(part of year)
Robert F. Froehlke 4,734 2,709 1,125 77,400
Anne P. Jones 3,864 693 1,125 71,300
Donald M. Kendall 3,390 3,088 1,070 68,000
Melvin R. Laird 3,834 2,397 1,125 71,000
Lewis W. Lehr 3,894 3,217 1,061 71,500
William R. Pearce --- 1,036 1,125 ---
(part of year)
Edson W. Spencer 3,852 1,578 601 71,200
Wheelock Whitney 4,224 1,451 1,125 73,800
</TABLE>
On June 30, 1994, the fund's trustees and officers as a group owned
less than 1% of the outstanding shares of each fund. During the
fiscal year ended June 30, 1994, no trustee or officer earned more
than $60,000 from the California, Massachusetts, Michigan,
Minnesota, New York and Ohio funds, respectively. Column A
illustrates the amount all trustees and officers as a group earned
from each fund; Column B details their retirement plan expenses.
<TABLE>
<CAPTION>
A B
- -
<S> <C> <C>
California $ 8,683 $2,243
Massachusetts 4,288 1,640
Michigan 6,427 1,800
Minnesota 13,711 3,928
New York 7,262 1,800
Ohio 6,902 1,800
</TABLE>
THE TRUSTS
The Trusts are entities of the type commonly known as Massachusetts
business trusts. Under Massachusetts law, shareholders of such a
trust may, under certain circumstances, be held personally liable
as partners for its obligations. However, the risk of a
shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself is
unable to meet its obligations.
CUSTODIAN
The fund's securities and cash are held by First Bank National
Association, 180 E. Fifth St., St. Paul, MN 55101-1631, through a
custodian agreement. The custodian is permitted to deposit some or
all of its securities in central depository systems as allowed by
federal law.
INDEPENDENT AUDITORS
The financial statements contained in the Annual Report to
shareholders, for the fiscal year ended June 30, 1994, were audited
by independent auditors, KPMG Peat Marwick LLP, 4200 Norwest
Center, 90 S. Seventh St., Minneapolis, MN 55402-3900. The
independent auditors also provide other accounting and tax-related
services as requested by the fund.
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<PAGE>
FINANCIAL STATEMENTS
The Independent Auditors' Report and the Financial Statements,
including Notes to the Financial Statements and the Schedule of
Investments in Securities, contained in the 1994 Annual Report to
shareholders, pursuant to Section 30(d) of the Investment Company
Act of 1940, as amended, are hereby incorporated in this SAI by
reference. No other portion of the Annual Report however, is
incorporated by reference. The 1994 Semiannual Report to shareholders
is also incorporated in this SAI by reference.
PROSPECTUS
The prospectuses for IDS California Tax Exempt Fund, IDS
Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS
Minnesota Tax-Exempt Fund, IDS New York Tax-Exempt Fund, and IDS
Ohio Tax-Exempt Fund dated Aug. 29, 1994 as revised March 20, 1995,
are hereby incorporated in this SAI by reference.
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<PAGE>
APPENDIX A
DESCRIPTION OF RATINGS OF TAX-EXEMPT SECURITIES AND SHORT-TERM
SECURITIES
TAX-EXEMPT SECURITIES
Tax-exempt securities are used to raise money for various public
purposes, such as constructing public facilities and making loans
to public institutions. Certain types of tax-exempt bonds are
issued to obtain funding for privately operated facilities. There
are two principal classifications of municipal securities: notes
and bonds. Notes are used generally to provide for short-term
capital needs and generally have a maturity of up to one year.
These include tax anticipation notes, revenue anticipation notes,
bond anticipation notes, construction loan notes, variable rate
demand notes and tax-exempt commercial paper (also known as
municipal paper). Bonds, which meet longer-term capital needs,
generally have maturities of more than one year and fall into one
of two categories. General obligation bonds are backed by the
taxing power of the issuing municipality and are considered the
safest type of municipal bond. Revenue bonds are payable only from
the revenues of a particular project or facility and are generally
dependent solely on a specific revenue source. Industrial
development bonds are a specific type of revenue bond backed by the
credit and security of a private user.
The ratings concern the quality of the issuer. They are not an
opinion of the market value of the security. Such ratings are
opinions on whether the principal and interest will be repaid when
due. A security's rating may change which could affect its price.
Ratings by Moody's Investors Service, Inc. (Moody's) are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca, C and D. Standard & Poor's Corporation
(S&P) ratings are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
Securities rated Aaa and AAA are judged to be of the best quality.
Capacity to pay interest and repay principal is extremely strong.
Prices are responsive only to interest rate fluctuations.
Securities rated Aa and AA also are judged to be high-grade
although margins of protection for interest and principal may not
be quite as good as Aaa or AAA rated securities. Long-term risk
may appear greater than the Aaa or AAA group. Prices are primarily
responsive to interest rate fluctuations.
Securities rated A are considered upper-medium grade. Protection
for interest and principal are deemed adequate but susceptible to
future impairment. The market prices of such obligations move
primarily with interest rate fluctuations but also with changing
economic or trade conditions.
Securities rated Baa and BBB are considered upper-medium-grade
obligations. Protection for interest and principal is adequate
over the short term; however, these obligations have certain
speculative characteristics. They are susceptible to changing
economic conditions and require constant review. Such bonds are
more responsive to business and trade conditions than to interest
rate fluctuations.
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<PAGE>
Securities rated Ba and BB are considered to have speculative
elements. Their future cannot be considered well assured. The
protection of interest and principal payments may be very moderate
and not well safeguarded during future good and bad times.
Uncertainty of position characterizes these bonds.
Securities rated B or lower lack characteristics of more desirable
investments. There may be small assurance over any long period of
time of the payment of interest and principal or of the maintenance
of other contract terms. Some of these bonds are of poor standing
and may be in default or have other marked shortcomings.
Bonds rated Caa and CCC are of poor standing. Such issues may be
in default or there may be elements of danger with respect to
principal or interest.
Bonds rated Ca and CC represent obligations that are highly
speculative. Such issues are often in default or have other marked
shortcomings.
Bonds rated C are obligations with a higher degree of speculation.
These securities have major risk exposures to default.
Bonds rated D are in payment default. The D rating is used when
interest payments or principal payments are not made on the due
date.
Non-rated securities will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with fund objectives and policies. When assessing the risk
involved in each nonrated security, the funds will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
SHORT-TERM TAX-EXEMPT SECURITIES
A portion of each fund's assets are in cash and short-term
securities for day-to-day operating purposes. The investments will
usually be in short-term municipal bonds and notes. These include:
(1) Tax anticipation notes sold to finance working capital needs
of municipalities in anticipation of receiving taxes on a future
date.
(2) Bond anticipation notes sold on an interim basis in
anticipation of a municipality issuing a longer term bond in the
future.
(3) Revenue anticipation notes issued in anticipation of revenues
from sources other than taxes, such as federal revenues available
under the Federal Revenue Sharing Program.
(4) Tax and revenue anticipation notes issued in anticipation of
revenues from taxes and other sources of revenue, except bond
placements.
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<PAGE>
(5) Construction loan notes insured by the Federal Housing
Administration which remain outstanding until permanent financing
by the Federal National Mortgage Association (FNMA) or the
Government National Mortgage Association (GNMA) at the end of the
project construction period.
(6) Tax-exempt commercial paper with a stated maturity of 365
days or less issued by agencies of state and local governments to
finance seasonal working capital needs or as short-term financing
in anticipation of longer-term financing.
(7) Variable rate demand notes, on which the yield is adjusted at
periodic intervals not exceeding 31 days and on which the principal
may be repaid after not more than seven days' notice, are
considered short-term regardless of the stated maturity.
Short-term municipal bonds and notes are rated by Moody's and by
S&P. The ratings reflect the liquidity concerns and market access
risks unique to notes.
Moody's MIG 1/VMIG 1 indicates the best quality. There is present
strong protection by established cash flows, superior liquidity
support or demonstrated broad-based access to the market for
refinancing.
Moody's MIG 2/VMIG 2 indicates high quality. Margins of protection
are ample although not so large as in the preceding group.
Moody's MIG 3/VMIG 3 indicates favorable quality. All security
elements are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow
protection may be narrow and market access for refinancing is
likely to be less well established.
Moody's MIG 4/VMIG 4 indicates adequate quality. Protection
commonly regarded as required of an investment security is present
and although not distinctly or predominantly speculative, there is
specific risk.
Standard & Poor's rating SP-1 indicates very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics will be given a plus
(+) designation.
Standard & Poor's rating SP-2 indicates satisfactory capacity to
pay principal and interest.
Standard & Poor's rating SP-3 indicates speculative capacity to pay
principal and interest.
SHORT-TERM TAXABLE SECURITIES AND REPURCHASE AGREEMENTS
Depending on market conditions, a portion of each fund's
investments may be in short-term taxable securities. These
include:
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<PAGE>
(1) Obligations of the U.S. government, its agencies and
instrumentalities resulting principally from lending programs of
the U.S. government;
(2) U.S. Treasury bills with maturities up to one year. The
difference between the purchase price and the maturity value or
resale price is the interest income to the fund;
(3) Certificates of deposit or receipts with fixed interest rates
issued by banks in exchange for deposit of funds;
(4) Bankers' acceptances arising from short-term credit
arrangements designed to enable businesses to obtain funds to
finance commercial transactions;
(5) Letters of credit which are short-term notes issued in bearer
form with a bank letter of credit obligating the bank to pay the
bearer the amount of the note;
(6) Commercial paper rated in the two highest grades by Moody's
or S&P. Commercial paper is generally defined as unsecured short-
term notes issued in bearer form by large well-known corporations
and finance companies. These ratings reflect a review of
management, economic evaluation of the industry competition,
liquidity, long-term debt and ten-year earning trends;
Moody's rating Prime-1 (P-1) and Standard & Poor's rating A-1
indicate that the degree of safety regarding timely payment of
short-term promissory obligations is either overwhelming or very
strong.
Moody's rating Prime-2 (P-2) and Standard & Poor's rating A-2
indicate that capacity for timely payment of short-term promissory
obligations with this designation is strong.
(7) Repurchase agreements involving acquisition of securities by
a fund with a concurrent agreement by the seller, usually a bank or
securities dealer, to reacquire the securities at cost plus
interest within a specified time. From this investment, a fund
receives a fixed rate of return that is insulated from market rate
changes while it holds the security.
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<PAGE>
APPENDIX B
OPTIONS AND INTEREST RATE FUTURES CONTRACTS
Each fund may buy or write options traded on any U.S. exchange or
in the over-the-counter market. Each fund may enter into interest
rate futures contracts traded on any U.S. exchange. Each fund also
may buy or write put and call options on these futures. Bond
options in the over-the-counter market will be purchased only when
the investment manager believes a liquid secondary market exists
for the options and only from dealers and institutions the
investment manager believes present a minimal credit risk. Some
options are exercisable only on a specific date. In that case, or
if a liquid secondary market does not exist, a fund could be
required to buy or sell securities at disadvantageous prices,
thereby incurring losses.
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a stock
at a set price for the length of the contract. A person who writes
a put option agrees to buy the security at the set price if the
purchaser wants to exercise the option, no matter what the market
price of the security is at that time. An option is covered if the
writer owns the security (in the case of a call) or sets aside the
cash (in the case of a put) that would be required upon exercise.
The price paid by the buyer for an option is called a premium. In
addition the buyer generally pays a broker a commission. The
writer receives a premium, less a commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for less than the market price if the
market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
the market price decreases below the exercise price.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
reasons. The use of options and futures contracts may benefit a
fund and its shareholders by improving the fund's liquidity and by
helping to stabilize the value of its net assets.
BUYING OPTIONS. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be used for investment. Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the security market
and its price on the options market. It is anticipated the trading
technique will be utilized only to effect a security transaction
when the price of the security plus the option price will be as
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<PAGE>
good or better than the price at which the stock could be bought or
sold directly. When the option is purchased, a fund pays a premium
and a commission. It then pays a second commission on the purchase
or sale of the underlying security when the option is exercised.
For record keeping and tax purposes, the price obtained on the
purchase of the underlying security will be the combination of the
exercise price, the premium and both commissions. When using
options as a trading technique, commissions on the option will be
set as if only the underlying securities were traded.
Put and call options also may be held by a fund for investment
purposes. Options permit a fund to experience the change in the
value of a security with a relatively small initial cash
investment. The risk a fund assumes when it buys an option is the
loss of the premium. To be beneficial to a fund, the price of the
underlying security must change within the time set by the option
contract. Furthermore, the change must be sufficient to cover the
premium paid, the commissions paid both in the acquisition of the
option and in a closing transaction or in the exercise of the
option and subsequent sale (in the case of a call) or purchase (in
the case of a put) of the underlying security. Even then the price
change in the underlying security does not ensure a profit since
prices in the option market may not reflect such a change.
Each fund will not purchase puts, calls, straddles, spreads, and any
combination thereof if by reason thereof the value of its aggregate
investments in such classes of securities will exceed 5% of its total
assets.
WRITING COVERED OPTIONS. Each fund will write covered options when
it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with that fund's
goal.
'All options written by a fund will be covered. For covered call
options if a decision is made to sell the security, that fund will
attempt to terminate the option contract through a closing purchase
transaction.
'Each fund will write options only as permitted under federal or
state laws or regulations, such as those that limit the amount of
total assets subject to the options. While no limit has been set
by the funds, it will conform to the requirements of those states.
For example, California limits the writing of options to 50% of the
assets of a fund. Some regulations also affect the Custodian.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since each fund
is taxed as a regulated investment company under the Internal
Revenue Code, any gains on options and other securities held less
than three months must be limited to less than 30% of its annual
gross income.
If a covered call option is exercised, the security is sold by that
fund. The fund will recognize a capital gain or loss based upon
the difference between the proceeds and the security's basis.
Options on many securities are listed on options exchanges. If a
fund writes listed options, it will follow the rules of the options
exchange. Options are valued at the close of the New York Stock
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<PAGE>
Exchange. An option listed on a national exchange or NASDAQ will
be valued at the last quoted sales price or, if such a price is not
readily available, at the mean of the last bid and asked prices.
FUTURES CONTRACTS. A futures contract is an agreement between two
parties to buy and sell a security for a set price on a future
date. They have been established by boards of trade which have
been designated contracts markets by the Commodity Futures Trading
Commission (CFTC). Futures contracts trade on these markets in a
manner similar to the way a stock trades on a stock exchange, and
the boards of trade, through their clearing corporations, guarantee
performance of the contracts. Currently, there are futures
contracts based on such debt securities as long-term U.S. Treasury
bonds, Treasury notes, GNMA modified pass-through mortgage-backed
securities, three-month U.S. Treasury bills and bank certificates
of deposit. While futures contracts based on debt securities do
provide for the delivery and acceptance of securities, such
deliveries and acceptances are very seldom made. Generally, the
futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract sale
is effected by each fund entering into a futures contract purchase
for the same aggregate amount of the specific type of financial
instrument and same delivery date. If the price in the sale
exceeds the price in the offsetting purchase, that fund immediately
is paid the difference and realizes a gain. If the offsetting
purchase price exceeds the sale price, the fund pays the difference
and realizes a loss. Similarly, closing out a futures contract
purchase is effected by the fund entering into a futures contract
sale. If the offsetting sale price exceeds the purchase price, the
fund realizes a gain, and if the offsetting sale price is less than
the purchase price, the fund realizes a loss. At the time a
futures contract is made, a good-faith deposit called initial
margin is set up within a segregated account at the fund's
custodian bank. The initial margin deposit is approximately 1.5%
of a contract's face value. Daily thereafter, the futures contract
is valued and the payment of variation margin is required so that
each day the fund would pay out cash in an amount equal to any
decline in the contract's value or receive cash equal to any
increase. At the time a futures contract is closed out, a nominal
commission is paid, which is generally lower than the commission on
a comparable transaction in the cash markets.
The purpose of a futures contract, in the case of a portfolio
holding long-term debt securities, is to gain the benefit of
changes in interest rates without actually buying or selling long-
term debt securities. For example, if a fund owned long-term bonds
and interest rates were expected to increase, it might enter into
futures contracts to sell securities which would have much the same
effect as selling some of the long-term bonds it owned. Futures
contracts are based on types of debt securities referred to above,
which have historically reacted to an increase or decline in
interest rates in a fashion similar to the debt securities a fund
owns. If interest rates did increase, the value of the debt
securities in the portfolio would decline, but the value of a
fund's futures contracts would increase at approximately the same
rate, thereby keeping the net asset value of a fund from declining
as much as it otherwise would have. If, on the other hand, a fund
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<PAGE>
held cash reserves and interest rates were expected to decline, it
might enter into interest rate futures contracts for the purchase
of securities. If short-term rates were higher than long-term
rates, the ability to continue holding these cash reserves would
have a very beneficial impact on a fund's earnings. Even if short-
term rates were not higher, a fund would still benefit from the
income earned by holding these short-term investments. At the same
time, by entering into futures contracts for the purchase of
securities, a fund could take advantage of the anticipated rise in
the value of long-term bonds without actually buying them until the
market had stabilized. At that time, the futures contracts could
be liquidated and a fund's cash reserves could then be used to buy
long-term bonds on the cash market. A fund could accomplish
similar results by selling bonds with long maturities and investing
in bonds with short maturities when interest rates are expected to
increase or by buying bonds with long maturities and selling bonds
with short maturities when interest rates are expected to decline.
But by using futures contracts as an investment tool, given the
greater liquidity in the futures market than in the cash market, it
might be possible to accomplish the same result more easily and
more quickly. Successful use of futures contracts depends on the
investment manager's ability to predict the future direction of
interest rates. If the investment manager's prediction is
incorrect, a fund would have been better off had it not entered
into futures contracts.
In addition to the requirement that futures contracts be offset by
assets of a fund and not used for speculation, the Trustees have
adopted two restrictions on the use of futures contracts. The
first is that each fund may not commit more than 5% of its total
assets to initial margin deposits. The second restriction is that
the aggregate market value of the futures contracts the fund holds
may not exceed 30% of the market value of its total assets.
Neither of the restrictions would be changed by the Trustees
without considering the concerns of the various federal and state
regulatory agencies.
OPTIONS ON FUTURES CONTRACTS. Options give the holder a right to
buy or sell futures contracts in the future. Unlike a futures
contract, which requires the parties to the contract to buy and
sell a security on a set date, an option on a futures contract
merely entitles its holder to decide on or before a future date
(within nine months of the date of issue) whether to enter into
such a contract. If the holder decides not to enter into the
contract, all that is lost is the amount (premium) paid for the
option. Furthermore, because the value of the option is fixed at
the point of sale, there are no daily payments of cash to reflect
the change in the value of the underlying contract. However, since
an option gives the buyer the right to enter into a contract at a
set price for a fixed period of time, its value does change daily
and that change is reflected in the net asset value of that fund.
RISKS. There are risks in engaging in each of the management tools
described above. The risk each fund assumes when it buys an option
is the loss of the premium paid for the option. Purchasing options
also limits the use of monies that might otherwise be available for
long-term investments.
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The risk involved in writing options on futures contracts a fund
owns, or on securities held in its portfolio, is that there could
be an increase in the market value of such contracts or securities.
If that occurred, the option would be exercised and the asset sold
at a lower price than the cash market price. To some extent, the
risk of not realizing a gain could be reduced by entering into a
closing transaction. A fund could enter into a closing transaction
by purchasing an option with the same terms as the one it had
previously sold. The cost to close the option and terminate a
fund's obligation, however, might be more or less than the premium
received when it originally wrote the option. Furthermore, a fund
might not be able to close the option because of insufficient
activity in the options market.
A risk in employing futures contracts to protect against the price
volatility of portfolio securities is that the prices of securities
subject to futures contracts may not correlate perfectly with the
behavior of the cash prices of that fund's portfolio securities.
The correlation may be distorted because the futures market is
dominated by short-term traders seeking to profit from the
difference between a contract or security price and their cost of
borrowed funds. Such distortions are generally minor and would
diminish as the contract approached maturity.
Another risk is a fund's investment manager could be incorrect in
anticipating as to the direction or extent of various interest rate
movements or the time span within which the movements take place.
For example, if a fund sold futures contracts for the sale of
securities in anticipation of an increase in interest rates, and
interest rates declined instead, it would lose money on the sale.
TAX TREATMENT. As permitted under federal income tax laws, each
fund intends to identify futures contracts as mixed straddles and
not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in a fund being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income tax treatment of gains or losses from transactions
in options on futures contracts and indexes is currently unclear,
although each fund's tax advisor currently believes marking to
market is not required. Depending on developments, and although no
assurance is given, a fund may seek Internal Revenue Service (IRS)
rulings clarifying questions concerning such treatment. Certain
provisions of the Internal Revenue Code may also limit a fund's
ability to engage in futures contracts and related options
transactions. For example, at the close of each quarter of a
fund's taxable year, at least 50% of the value of its assets must
consist of cash, government securities and other securities,
subject to certain diversification requirements. Less than 30% of
its gross income must be derived from sales of securities held less
than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50%-of-assets test and that its issuer
is the issuer of the underlying security, not the writer of the
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option, for purposes of the diversification requirements. In order
to avoid realizing a gain within a three-month period, a fund may
be required to defer closing out a contract beyond the time when it
might otherwise be advantageous to do so. Each fund also may be
restricted in purchasing put options for the purpose of hedging
underlying securities because of applying the short sale holding
period rules with respect to such underlying securities.
Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (a fund's agent in acquiring
the futures position). During the period the futures contract is
open, changes in value of the contract will be recognized as
unrealized gains or losses by marking to market on a daily basis to
reflect the market value of the contract at the end of each day's
trading. Variation margin payments will be made or received
depending upon whether gains or losses are incurred. All contracts
and options will be valued at the last-quoted sales price on their
primary exchange.
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APPENDIX C
STATE RISK FACTORS
Each fund's ability to achieve its investment objective is
dependent upon the ability of the issuers of state tax-exempt bonds
to meet their continuing obligation for the payment of principal
and interest.
The following information highlights certain legal, financial,
political and economic affairs for California, Massachusetts,
Michigan, Minnesota, New York and Ohio and their political
subdivisions and is based on official statements and public
information. No fund has acquired direct knowledge of this
information, however, the funds are not aware of any facts which
would render the information inaccurate. The matters discussed
below constitute only a brief summary of financial information and
do not purport to be a complete description.
Although revenue obligations of any state or its political
subdivisions may be payable from a specific project or source,
there can be no assurance that past, current or future economic
difficulties, and the resulting impact on state and local
governmental finances will not adversely affect the market value of
municipal obligations held in a fund or the ability of the
respective issuers to make required payments on the obligations.
FACTORS AFFECTING CALIFORNIA
Financial stability continues to elude California's administration.
Current budget difficulty is attributed to reduction of the
aerospace and defense industries, closing of military bases and the
federal government's failure to follow through on a promise of
disaster funds.
Several years of economic stress have strained both revenues and
expenses. This has caused state general fund operating results to
fall significantly under budget. Past budgets thought to have been
balanced had unrealistic economic expectations.
California's 1994 budget makes progress toward balancing its budget
with recurring revenues and expenditures. Governor Wilson's
January budget for fiscal year 1995 projects a $2.5 billion
operating surplus and a pay down of the accumulated budgetary basis
deficit by the end of fiscal year 1995. The deficit will be funded
through short-term borrowing.
Current credit agency ratings on general obligation debt is in the
A+ to AA range. These ratings reflect continuing significant
economic stress, moderate growth and the accumulation of a deficit.
Certain California constitutional amendments, legislative measures,
executive orders, civil actions and voter initiatives could
adversely affect the ability of issuers of California state and
municipal securities to obtain sufficient revenue to pay their bond
obligations. Prior to 1977, revenues of the state government
experienced significant growth primarily as a result of inflation
and continuous expansion of the tax base of the state. In 1978,
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California voters approved an amendment to the California
constitution known as Proposition 13, which added Article XIIIA to
the state Constitution. Article XIIIA reduced ad valorem
(according to value) taxes on real property, and restricted the
ability of taxing entities to increase real property tax revenues.
In addition, Article XIIIA provides that additional taxes may be
levied by cities, counties and special districts only upon approval
of not less than a two-thirds vote of the "qualified electors" of
such district and requires not less than a two-thirds vote of each
of the two houses of the state legislature to enact any changes in
state taxes for purposes of increasing revenues, whether by
increased rate or changes in methods of computation.
In 1986 Proposition 62, an initiative statute enacted in
California, placed further limits on the ability of local
governments to levy taxes other than ad valorem property taxes,
except with voter approval. Legislation enacted subsequent to
Article XIIIA provided for the redistribution of California's
general fund surplus to local agencies, the reallocation of certain
state revenues to local agencies and the assumption of certain
local obligations by the state so as to help California municipal
issuers raise revenues to pay their bond obligations.
Primarily as a result of the reductions in local property tax
revenues received by local governments following the passage of
Proposition 13, the legislature undertook to provide assistance to
such governments by substantially increasing expenditures from the
general fund for that purpose beginning in the 1978-1979 fiscal
year. In past years, in addition to such increased expenditures,
the indexing of personal income tax rates (to adjust such rates for
the effects of inflation), the elimination of certain inheritance
and gift taxes, and the increase of exemption levels for certain
other such taxes had a moderating impact on the growth in state
revenues. In addition, the state has increased expenditures by
providing a variety of tax credits, senior citizens' credits and
energy credits.
In 1979, the voters of California passed an initiative adding
Article XIIIB to the California Constitution. Article XIIIB
prohibits the state from spending "appropriations subject to
limitation" in excess of the appropriations limit imposed.
"Appropriations subject to limitations" are authorizations to spend
"proceeds of taxes" which consist of tax revenues and certain other
funds. One of the exclusions from these limitations is "debt
service" (defined as "appropriations required to pay the cost of
interest and redemption charges, including the funding of any
reserve or sinking fund required in connection therewith, on
indebtedness on existing or legally authorized as of Jan. 1, 1979,
or on bonded indebtedness thereafter approved" by voters). In
addition, appropriations required to comply with mandates of courts
or the Federal government are not included as appropriations
subject to limitation.
The state's appropriations limit is adjusted annually to reflect
change in cost of living and population and transfer of financial
responsibility from one governmental unit to another. Revenues in
any fiscal year which exceed the amount which may be appropriated
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in compliance with Article XIIIB must be returned to taxpayers by a
revision of tax rates or fee schedules within the two subsequent
fiscal years.
In November 1988, voters approved an initiative call Proposition 98
which substantially modified Article XIIIB, by providing that a
substantial amount (up to $600 million per year currently) of any
excess state revenues would, instead of being returned to
taxpayers, be paid to public schools and community college
districts.
In the years immediately after enactment of Article XIIIB, very few
California government entities neared their appropriations limits.
To the extent the state remains constrained by its appropriations
limit, the absolute level, or the rate of growth, of assistance to
local governments may be reduced.
Because of the complex nature of Articles XIIIA and XIIIB, the
ambiguities and possible inconsistencies in their terms and the
applicability of their exemptions and exceptions and impossibility
of predicting future appropriations or changes in population and
cost of living, it is not currently possible to determine the
impact of Article XIIIA or Article XIIIB or any related legislation
on the securities held in the Fund or the ability of state or local
governments to pay interest on or repay the principal of such
securities. With a limited exception, to date the California
courts have either upheld the constitutionality of Article XIIIA
and its implementing and related legislation or have interpreted
them in such a manner as to avoid the necessity for direct
determination of constitutional issues. Article XIIIA and XIIIB
and their respective implementing and related legislation will most
probably be subject to continuing or future legal challenges. It
is not presently possible to predict the outcome of any such
legislation with respect to the ultimate scope, impact or
constitutionality of either Article XIIIA or Article XIIIB, or
their respective related legislation; or the impact of any
determinations upon state agencies or local government, or upon the
abilities of such entities to pay the interest on, or repay the
principal of, the securities held by the Fund.
FACTORS AFFECTING MASSACHUSETTS
Massachusetts administration continues to demonstrate spending
discipline, reduce reliance on short-term borrowing and non-
recurring revenues, and balance general fund operations and make
reasonable budget projections. Continuing success is primarily
attributed to a better working relationship between the legislative
and executive branches of government. The government collected $7
million more in taxes at June 30 fiscal year end than anticipated.
The commonwealth's finances continue to stabilize. Following
several years in which revenue fell short of estimates and resulted
in two deficits, the general fund closed two fiscal years in
balance and more revenue than anticipated. The governor's proposed
1994-1995 budget contemplates eliminating a personal income tax
cut, $10 million reduction in state fees, overhaul of the welfare
system and $125 million in revenue from gambling venues.
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The Massachusetts constitution requires that a balanced budget be
provided for each year. In addition, the commonwealth adopted
certain budgetary and fiscal controls to eliminate the
possibilities of expenditures exceeding available revenues and
funds. The general fund, the local aid fund and the highway fund
are the three principal operating funds of the commonwealth and the
condition of these funds is generally regarded as the principal
indicator of whether the commonwealth's operating revenues and
expenses are balanced.
The commonwealth had and may continue to have unfunded general
liabilities of its retirement systems and a program to fund these
liabilities. In 1978, the commonwealth began assuming full
financial responsibility for all costs of the administration of
justice within the state, and Medicaid expenditures which have
increased each year. It also raised aggregate aid to cities,
towns schools and other districts and transit authorities. In the
past the commonwealth signed constant decrees to improve mental
health care and programs for the mentally retarded to meet federal
standards including those governing federal reimbursements under
various programs.
All of the 351 cities and towns in Massachusetts have achieved a
property tax level of no more than 2.5% of full property values.
Legislation that effected this leveling is Proposition 2 1/2.
Under Proposition 2 1/2, cities and towns may increase the property
tax levy annually. In most cases property taxes can increase by
2.5% of the prior year's tax levy plus 2.5% of the value of new
properties and of significant improvements to property.
The reductions in local revenues and reductions in local personnel
and services resulting from Proposition 2 1/2 created a strong
demand for substantial increases in state-funded
local aid, with increases in fiscal years 1982 through 1987. The
effect of this increase in local aid was to shift a major part of
the impact of Proposition 2 1/2 to the commonwealth. Legislation
had been enacted providing for certain local option taxes.
Efforts to limit and reduce the levels of taxation in Massachusetts
have been underway for several years. Chapter 62F of the
Massachusetts General Laws establishes a state tax revenue growth
limit and does not exclude principal and interest payments on
commonwealth debt obligations from the scope of the limit.
Lawsuits filed against the commonwealth or its authorities may
affect its future fiscal condition. Among the more significant of
these suits are suits regarding the clean up of pollution in Boston
Harbor, services to be provided at state schools for the retarded
and at a state mental hospital, the governor's authority to reduce
allotments of appropriated funds and Medicaid reimbursement levels.
There have also been actions filed in which recipients of human
service benefits seek expanded levels of services and benefits and
in which providers of such services or benefits challenge the rate
at which they are reimbursed by the commonwealth. Any lawsuits
that result in judgments requiring the commonwealth to provide
expanded services or benefits, to pay increased rates or to take
other remedial measures, operating capital expenditures might be
needed to implement such judgements.
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FACTORS AFFECTING MICHIGAN
Michigan continues to recover from the effect of the national
recession problems it faced in the early 1980's and weak economic
performance in fiscal years 1991 and 1992. The current challenge
is rebuilding the general and budget stabilization reserves which
had been depleted. The state had managed to balance its general
fund operations through the use of reserves, changes in accounting
practices, severe cuts in public assistance, and a state employee
wage freeze. As of February 1994 Michigan's general obligation
debt rated AA.
Michigan's low debt position helped it to weather recent difficult
economic times. Financial operations remained solvent through
budget adjustments, spending cuts and use of non-recurring items.
Previous budget problems arose from revenue estimates falling below
expectation and increased spending levels. This caused deficits in
the general fund budget for fiscal years ended 1990 and 1991.
The principal sectors of Michigan's economy are manufacturing of
durable goods (including automobiles and office equipment), tourism
and agriculture. As of August 1987, manufacturing represented
25.8% of total employment in the state. Income derived from
manufacturing exceeded 35% of total state income from all
employment sectors. Because of the emphasis on durable goods,
however, economic activity in the state has tended to be more
cyclical than in the nation as a whole. Moreover, this domination
left the state's economy more susceptible to upward and downward
cycles. The manufacturer sector has benefitted from significant
private investment and improved international competitiveness. The
current low interest rate environment should continue to help
strengthen business investment.
The state's economy has improved over the years, primarily due to
diversification of the economic base, yet it remains vulnerable.
Service industry employment continues to replace manufacturing as
primary employment.
The declining trend of personal income has placed a strain on the
state as income taxes are a primary source of income. Other
factors that could strain the state's budget are property tax-
relief proposals (which are expected to reduce assessments by 30
percent over five years), and a requirement that the state
government appropriate 42% of its expenditures to local government
to insulate them from decreased state aid.
Budget pressure could occur if voters pass any property tax reform
legislation. Such reform will cause the state administration to
have to aid school districts affected by loss of property tax
revenue.
FACTORS AFFECTING MINNESOTA
The governor's 1994-1995 biennium budget is based on conservative
economic forecasts and a restraint on spending. The governor's
supplemental budget carried a recommendation to bring the state's
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budget reserve to $680 million by June 1995. The recommendation is
founded on a forecast of slower economic growth in the next
biennium.
Economic weakness has tested Minnesota's historically strong
financial management. The rainy day fund established in the mid-
1980's totaled $550 million as of fiscal 1990. To address budget
gaps in 1991 and the 1992-1993 biennium, the reserve was drawn down
to $240 million as of June, 1992. The state operates on a cash
basis in its accounting general fund and ended fiscal year 1991
with a $555 million fund balance, including the budgetary reserve
and $42 million reserved for appropriations carried forward to
fiscal 1992.
Because most Minnesota tax-exempt bonds are revenue or general
obligations of local governments or authorities, rather than
general obligations of the state of Minnesota itself, ratings on
Minnesota tax-exempt bonds in the Trust's portfolio may be
different from the ratings given to the general obligation bonds of
the state.
The unemployment rate, growth rates and income trends in Minnesota
compare favorably with national averages, but the economy is
cyclically sensitive. Minnesota's employment and population are
forecasted to continue to grow at rates near the national average.
Total employment in the state is expected to grow at an average
annual rate of 1.3% a year through 2005, slightly below the
projected national growth rate of 1.5% annually. During the
recessionary period from 1980 to 1983, economic conditions in the
agricultural and iron mining industries, which are two of the
leading sectors of Minnesota's economy, were poor. However, mining
is a less significant factor in the state economy than it once was
while the manufacture of durable and non-durable goods is
relatively more important to the economy. The state relies heavily
on a progressive individual income tax for revenue, which results
in a fiscal system unusually sensitive to economic conditions.
There can be no assurances, however, that Minnesota's economy and
fiscal situation will continue to improve or that further
difficulties will not occur.
FACTORS AFFECTING NEW YORK
The financial health of New York state showed more signs of
improvement. Over the past few years, the state's administration
has: adopted accurate and conservative economic assumptions,
balanced operations, eliminated its operating deficit and closed
the past two years with an operating surplus. The 1994-1995 budget
may continue the trend.
The state used the past two year's general fund operating surpluses
to eliminate leftover deficit notes cover tax refunds.
As of March 1994 New York's general obligation debt carried an
agency rating of A-.
The state has historically been one of the wealthiest in the
nation. For decades, however, the state economy has grown more
slowly than that of the nation as a whole, resulting in a gradual
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erosion of its relative economic affluence. The causes of this
decline are varied and complex, in many cases involving national
and international developments beyond the state's control. Part of
the reason for the long-term relative decline in the state economy
has been attributed to the combined state and local tax burden,
which is among the highest in the nation. The existence of this
tax burden limits the state's ability to impose higher taxes in the
event of future financial difficulties.
The financial condition of the state may be affected by various
financial, social, economic and political factors. Those factors
can be very complex, may vary from fiscal year to fiscal year, and
are frequently the result of actions taken not only by the state
and its authorities and municipalities but also entities that are
not under control by the state. The fiscal stability of the state
is related to the fiscal stability of New York City and the
authorities (which generally finance, construct and operate
revenue-producing public benefit facilities). The state's
experience has been that if New York City or any of the authorities
suffer serious financial difficulties, the ability of the state,
New York City, the state's political subdivisions and the
authorities to obtain financing in the public credit markets is
adversely affected. This results in part from the expectation that
to the extent that any authority or local government experiences
financial difficulty, it will seek and receive state financial
assistance. Moreover, New York City accounts for approximately 40%
of the state's population and tax receipts, so New York City's
financial integrity affects the state directly. Accordingly, if
there should be a default by New York City or any of the
authorities, the market value and marketability of all New York
tax-exempt securities could be adversely affected.
Since the enactment of the Federal Tax Reform Act of 1986, the
state has found it difficult to accurately estimate tax receipts.
In the 1988-89 fiscal year, the state overestimated tax receipts of
$1.9 billion. After implementing various deficit-reduction
measures, the state completed its 1988-89 fiscal year with a cash-
basis operating deficit of $529 million. The state faced a
potential budget gap for the 1989-90 fiscal year of approximately
$2.8 billion, but took measures to close that gap through a
combination of tax and fee increases and spending cuts, including a
reduction of financial aid to localities.
New York state adopted a balanced 1992-1993 budget based on
realistic economic assumptions. Quick adoption of the budget also
afforded administrators more time to implement their plan and be
proactive instead of reactive to economic changes. The budget
maintained essential revenue-raising features including a deferral
of any cut in state's personal income tax rate, increases in energy
taxes and deferral of a scheduled reduction in business taxes.
Past fiscal problems have left the state's economy in a weak
position. Issues that affect the state's budget are: freezing
personal and business tax rates, escalating social service costs,
and costs associated with civil service employee collective
bargaining.
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While principal and interest payments on outstanding authority
obligations are normally paid from revenues generated by the
projects of the authorities, in recent years New York has had to
appropriate large amounts to enable certain authorities to meet
their financial obligations and in some cases to prevent default.
Further assistance may be required in the future. In particular,
the New York State Urban Development Corporation (UDC), the New
York State Housing Finance Agency (HFA), and the Metropolitan
Transportation Authority (MTA) may require substantial amounts of
assistance from the state.
The HFA provides financing for multifamily housing, state
university construction, hospital and nursing home development and
other programs. HFA depends upon mortgagors in each of its
programs to generate sufficient funds from rental income, subsidies
and other payments to meet their respective mortgage repayment
obligations to HFA as well as to meet the operating and maintenance
costs of the project. On several occasions in the past, in
fulfillment of its moral obligation commitment, New York
appropriated funds on behalf of HFA to replenish its debt service
reserve funds. There can be no assurance that the state will not
be called upon to provide further assistance in the future. Any
litigation decided against HFA also may have an adverse effect on
the financial condition of HFA mortgages.
The MTA oversees the operations of the city's bus and subway system
by the New York City Transit Authority and the Manhattan and Bronx
Surface Operating Authority (collectively, the TA) and, through
subsidiaries, operates certain commuter rail lines. The MTA has
depended and will continue to depend upon federal, state and local
government support to operate the transit system because fare
revenues are insufficient.
The TA and New York City had damage claims filed against it from
deaths and injuries sustained during a Dec. 1990 subway fire and an
Aug. 1991 train derailment. Law suits could have an adverse
financial impact on TA.
Beginning in 1975 (in part as a result of the New York City and UDC
financial crises), various localities of New York began
experiencing difficulty in marketing their securities. As a
result, certain localities, in addition to New York City, have
experienced financial problems leading to requests for state
assistance. If future financial problems cause agencies or
localities to seek special state assistance, this could adversely
affect New York's ability to pay its obligations. Similarly, if
financial difficulties of the state result in the inability to meet
its regular aid commitments or to provide further emergency
financing, issuers may default on their outstanding obligations,
which would affect the marketability of debt obligations of the
state, its agencies and municipalities, such as the New York tax-
exempt bonds in the Fund's portfolio.
Reductions in federal spending could materially and adversely
affect the financial condition and budget projections of New York's
localities. Should localities be adversely affected by federal
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cutbacks, they may seek additional assistance from the state that
might, in turn, have an adverse impact on New York's ability to
maintain a balanced budget.
The Long Island Lighting Company (LILCO) is the investor-owned
utility which supplies gas service and substantially all electric
service in Nassau and Suffolk Counties and a small portion of
Queens County and New York City. In early 1984, LILCO reported
that it faced serious cash-flow and other financial difficulties
that were attributable to, among other things, construction
problems on its 809-megawatt Shoreham Nuclear Power Facility.
LILCO is the largest single real property taxpayer in both Suffolk
and Nassau Counties and if its financial problems continue, there
could be severe financial difficulties for the affected localities,
particularly in Suffolk County. State legislation was enacted in
1986 creating the Long Island Power Authority (LIPA), a public
benefit corporation that has the power to acquire LILCO if it
determines that to do so would result in lower electric rates for
LILCO customers. The legislation requires that, with certain
exceptions, if LILCO property is acquired by LIPA and is therefore
removed from the tax rolls, LIPA is to make payments in lieu of
most state and local taxes that would otherwise have been paid by
LILCO. LIPA made and subsequently amended an offer to the Board of
Directors of LILCO for a negotiated acquisition of LILCO by LIPA.
The New York State comptroller recently reached a preliminary
conclusion that the issuance of tax-exempt bonds by LIPA to acquire
LILCO may create a temporary oversupply in the market for new and
outstanding issues of New York tax-exempt bonds.
In February 1989, the Governor and LILCO reached an agreement
pursuant to which LILCO would sell Shorham to the New York Power
Authority for $1 (which would then decommission Shoreham) in return
for a schedule of rate increases which have since been approved by
the State Public Service Commission (the PSC). The agreement has
been approved by the New York Power Authority and LIPA. The
agreement and PSC rate increases have enabled LILCO to reenter the
public credit markets. It is difficult to predict the ultimate
fiscal and economic impact on the state or on local governments on
Long Island of any litigation to which LILCO is or may become a
party, or of any bankruptcy by or takeover of LILCO.
NEW YORK CITY AND MUNICIPAL ASSISTANCE CORPORATION. In 1975, New
York City encountered severe financial difficulties that impaired
the borrowing ability of the city, the state and the authorities.
As a result, New York City lost access to public credit markets and
was not able to sell debt to the public until 1979. MAC was
organized in 1975 to provide financing assistance for New York City
and to exercise certain oversight and review functions with respect
to the city's financing. Prior to 1985, MAC had the authority to
issue bonds and notes and to pay or lend the proceeds to the city.
Since 1985, MAC has been authorized to issue bonds and notes only
to refund its outstanding bonds and notes. MAC also has the
authority to exchange its obligations for New York City
obligations. MAC bonds are payable from appropriations of certain
state sales and use taxes imposed by New York City, the state stock
transfer tax and per capita state aid to New York City. The state
is not, however, obligated to continue these taxes, to continue to
appropriate revenue from these taxes or to continue the
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appropriation of per capita state aid to pay MAC obligations. MAC
does not have taxing powers and its bonds are not obligations
enforceable against either New York City or New York.
New York City has maintained a balanced budget for several fiscal
years and has retired all of its federally guaranteed debt. As a
result, certain restrictions imposed on New York City by the New
York State Financial Control Board (the Control Board), which was
created in response to New York City's 1975 fiscal crisis, have
been suspended. Those restrictions, including the Control Board's
power to approve or disapprove certain contracts, long-term and
short-term borrowings and the four-year financial plan of the City,
will remain suspended unless and until, among other things, there
is a substantial threat of or an actual failure by the City to pay
debt service on its notes and bonds or to keep its annual operating
deficits below $100 million. The City's four-year financial plan
for fiscal years 1989 through 1992 was submitted to the Control
Board on July 5, 1988, and had been subsequently modified by the
City. As modified it projects a balanced budget for the 1989
fiscal year, and budget gaps of $661 million, $945 million and $818
million for the 1990, 1991, and 1992 fiscal years, respectively,
before implementation of gap closing programs.
The ability of New York City to balance its future budgets as
provided in its financial plans depend on various actions the City
expects will be taken but are not within its control. If expected
federal and state aid is not forthcoming, if economic conditions
significantly further reduce revenue derived from economically
sensitive taxes or increase expenditure for public assistance, or
if other uncertainties materialize which reduce expected revenues
or increase projected expenditures, then, to avoid operating
deficits, it is likely that New York City would make demands upon
the state for substantial additional financial assistance.
LITIGATION. Certain litigation pending against the state, its
subdivisions and their officers and employees could have a
substantial and long-term adverse effect on state finances. In
addition, New York City is a defendant in a significant number of
lawsuits pertaining to material matters, including those claims
asserted that are incidental to performing routine governmental and
other functions.
FACTORS AFFECTING OHIO
Ohio's general obligation bonds had AA ratings as of February 1994.
Ohio's financial operations continue to demonstrate significant
improvements in recent years. Increased employment opportunities
led by services and trade sectors has helped diversify the state's
economy and give greater stability through the current recession.
As with other states, Ohio has experienced economic weakness in
some revenue areas. This and other factors, led to budget short-
falls in 1991-1992. However, these short-falls were effectively
managed through a draw-down on the state's budget stabilization
fund and an executive order to reduce state spending by $196
million.
-45-
<PAGE>
In the early 1980s, Ohio's financial operations continued a trend
of vulnerability to economic cycles. Spending reductions coupled
with tax increases were implemented as a method of maintaining
control during recessionary periods. Ohio may face similar
scenarios in future years. However, the effects of economic cycles
should be less severe because the state's economic base is more
diversified than it has been in the two previous decades.
Constitutional and statutory provisions require the state to close
each fiscal year with a positive general fund balance, in
conjunction with Ohio's advantageous current budgetary practice
should help future financial performance.
Ohio benefits from a diversified revenue structure and a relatively
low tax burden. The state carries out most of its operations
through the general revenue fund which receives general state
revenues not otherwise dedicated. General fund revenues are
derived mainly from personal income, sales, corporate and franchise
taxes. General fund operations historically have paralleled
economic trends, as evidenced by the performance in recent
recessionary periods.
While diversifying more into the service area, Ohio's economy
continues to rely in part on durable-goods and manufacturing. This
reliance is largely concentrated in motor vehicles and equipment,
steel, rubber products and household appliances. As a result,
economic activity in Ohio, as in many other industrially developed
states, tends to be more cyclical than in some other states and in
the nation as a whole. However, the manufacturing industry is
stronger after downsizing and restructuring in the 1980's and has
performed reasonably well through the current recession. The
state's export activity also has been stabilizing during the
current recession. Agriculture also is an important segment of the
economy. The state has instituted several programs to provide
financial assistance to farmers.
A number of local Ohio communities and school districts have faced
significant financial problems. The state has established
procedures for municipal fiscal emergencies, under which joint
state and local commissions are established to monitor the fiscal
affairs of a financially troubled municipality the municipality
must develop a financial plan to eliminate deficits and cure any
defaults. Since their adoption in 1979, these procedures have been
applied to approximately twenty cities and villages, including the
City of Cleveland; in a majority of these communities, the fiscal
situation has been resolved and the procedures terminated.
Local school districts in Ohio receive a major portion of their
operational funds from state subsidies, but are dependent upon
local taxes for significant portions of their budgets. Local
school districts are authorized to submit for voter approval an
income tax on the district income of individuals and estates. A
small number of local school districts have required emergency
advances from the state in order to prevent year-end deficits. The
number of districts applying for aid has fluctuated over the years.
Legislation (with enhanced provision for individual district
borrowing) has replaced the emergency advance loan program.
Ohio's current economic recovery reflects both a turnaround in the
manufacturing sector and economic restructuring that has shifted
-46-
<PAGE>
employment from manufacturing to the wholesale and retail trade and
services sectors. Manufacturing employment in 1990 accounted for
22.7% of total employment, down from 28.9% in 1980. Despite its
decreasing prominence, manufacturing remains Ohio's major
employment and earnings sector. Services and trade follow closely
as second and third largest employment sectors. Since 1980, Ohio
has experienced an unemployment rate generally higher than the
United States average. Income levels are slightly below the
national average, but show a stable to positive trend.
-47-
<PAGE>
APPENDIX D
DOLLAR-COST AVERAGING
A technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is
dollar-cost averaging. Dollar-cost averaging involves building a
portfolio through the investment of fixed amounts of money on a
regular basis regardless of the price or market condition. This
may enable an investor to smooth out the effects of the volatility
of the financial markets. By using this strategy, more shares will
be purchased when the price is low and less when the price is high.
As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the shares lower than the
average market price of shares purchased, although there is no
guarantee.
While this does not ensure a profit and does not protect against a
loss if the market declines, it is an effective way for many
shareholders who can continue investing through changing market
conditions to accumulate shares in a fund to meet long term goals.
DOLLAR-COST AVERAGING
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
REGULAR MARKET PRICE SHARES
INVESTMENT OF A SHARE ACQUIRED
<S> <C> <C>
$100 $ 6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
$500 $25.00 103.4
</TABLE>
AVERAGE MARKET PRICE OF A SHARE OVER 5 PERIODS:
$5.00 ($25.00 DIVIDED BY 5).
THE AVERAGE PRICE YOU PAID FOR EACH SHARE:
$4.84 ($500 DIVIDED BY 103.4).
-48-
<PAGE>
___________________________________________________________________
Independent auditors' report
The board of trustees and shareholders
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments in securities,
of IDS California Tax-Exempt Fund (a fund within IDS California
Tax-Exempt Trust), and IDS Massachusetts Tax-Exempt Fund, IDS
Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New
York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund (funds within IDS
Special Tax-Exempt Series Trust) as of June 30, 1994, and the
related statements of operations for the year then ended, the
statements of changes in net assets for each of the years in the
two-year period ended June 30, 1994, the financial highlights for
each of the years in the five-year period ended June 30, 1994, the
six months ended June 30, 1989, each of the years in the two-year
period ended December 31, 1988, and the period from August 18, 1986
(commencement of operations), to December 31, 1986, of IDS
California Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund and IDS
New York Tax-Exempt Fund; and the financial highlights for each of
the years in the seven-year period ended June 30, 1994, of IDS
Massachusetts Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund and IDS
Ohio Tax-Exempt Fund. These financial statements and the financial
highlights are the responsibility of fund management. Our
responsibility is to express an opinion on these financial
statements and the 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 the 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. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and
sold but not received or delivered, we request confirmations from
brokers, and where replies are not received, we carry out other
appropriate auditing procedures. 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.
<PAGE>
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
California Tax-Exempt Fund, IDS Massachusetts Tax-Exempt Fund, IDS
Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New
York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund at June 30, 1994,
and the results of their operations for the year then ended, the
changes in their net assets for each of the years in the two-year
period ended June 30, 1994, and the financial highlights for the
periods stated in the first paragraph above, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
August 5, 1994
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
June 30, 1994
_____________________________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________________________
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1)
(identified cost $238,921,908, $68,569,018 and
$72,083,775) $250,756,406 $ 70,150,034 $75,396,329
Cash in bank on demand deposit 16,912 348,034 418,827
Accrued interest receivable 4,989,483 1,649,762 1,334,666
Receivable for investment securities sold -- -- 2,221,242
_____________________________________________________________________________________________________________________________
Total assets 255,762,801 72,147,830 79,371,064
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Dividends payable to shareholders 129,639 35,115 36,782
Payable for investment securities purchased 262,500 -- 2,593,349
Accrued investment management and services fee 112,274 31,505 33,498
Accrued distribution fee 3,421 1,602 1,409
Accrued transfer agency fee 8,708 4,107 3,617
Other accrued expenses 49,503 26,919 19,595
_____________________________________________________________________________________________________________________________
Total liabilities 566,045 99,248 2,688,250
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares $255,196,756 $ 72,048,582 $76,682,814
_____________________________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________________________
Shares of beneficial interest - $.01 par value, unlimited
number of shares authorized; outstanding 49,714,953; 13,749,968
and 14,320,277 shares $ 497,150 $ 137,500 $ 143,203
Additional paid-in capital 246,797,727 70,634,128 73,515,716
Undistributed net investment income 35 -- --
Accumulated net realized loss (Notes 1 and 6) (3,252,279) (304,062) (288,659)
Unrealized appreciation (Note 5) 11,154,123 1,581,016 3,312,554
_____________________________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $255,196,756 $ 72,048,582 $76,682,814
_____________________________________________________________________________________________________________________________
Net asset value per share $ 5.13 $ 5.24 $ 5.35
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
June 30, 1994
_____________________________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________________________
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
Investments in securities, at value (Note 1)
(identified cost $392,601,640, $112,351,032
and $68,841,082) $400,662,645 $117,798,265 $70,538,749
Cash in bank on demand deposit 4,885,147 77,025 346,514
Accrued interest receivable 9,254,717 2,549,320 1,044,978
Receivable for investment securities sold 345,000 -- --
_____________________________________________________________________________________________________________________________
Total assets 415,147,509 120,424,610 71,930,241
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Dividends payable to shareholders 202,557 58,755 34,189
Payable for investment securities purchased 6,241,965 118,125 --
Accrued investment management and services fee 178,143 52,348 31,452
Accrued distribution fee 8,090 2,437 1,358
Accrued transfer agency fee 20,766 6,247 3,486
Other accrued expenses 105,357 28,066 24,821
_____________________________________________________________________________________________________________________________
Total liabilities 6,756,878 265,978 95,306
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares $408,390,631 $120,158,632 $71,834,935
_____________________________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________________________
Shares of beneficial interest - $.01 par value, unlimited
shares authorized; outstanding 79,123,225; 23,481,717
and 13,661,035 shares $ 791,232 $ 234,817 $ 136,610
Additional paid-in capital 402,653,683 115,982,775 70,304,997
Accumulated net realized loss (Notes 1 and 6) (2,179,071) (1,200,068) (304,339)
Unrealized appreciation (Note 5) 7,124,787 5,141,108 1,697,667
_____________________________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $408,390,631 $120,158,632 $71,834,935
_____________________________________________________________________________________________________________________________
Net asset value per share $ 5.16 $ 5.12 $ 5.26
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended ended June 30, 1994
_____________________________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________________________
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
Income:
Interest $16,884,415 $ 4,357,924 $ 4,674,907
_____________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 1,418,804 377,077 405,578
Distribution fee 41,568 18,719 16,271
Transfer agency fee 104,864 47,474 41,235
Compensation of trustees 6,710 3,547 5,804
Compensation of officers 1,973 741 623
Custodian fees 2 9 386
Postage 20,647 8,610 4,518
Registration fees 11,274 9,517 6,879
Reports to shareholders 15,146 2,574 1,033
Audit fees 14,750 13,000 13,000
Administrative 4,697 3,239 2,958
Other 7,346 11,391 5,165
_____________________________________________________________________________________________________________________________
Total expenses 1,647,781 495,898 503,450
_____________________________________________________________________________________________________________________________
Investment income -- net 15,236,634 3,862,026 4,171,457
_____________________________________________________________________________________________________________________________
Realized and unrealized loss -- net
_____________________________________________________________________________________________________________________________
Net realized loss on security transactions (Note 3) (959,173) (29,934) (72,444)
Net realized loss on closed interest rate futures contracts (1,416,331) -- --
_____________________________________________________________________________________________________________________________
Net realized loss on investments (2,375,504) (29,934) (72,444)
Net change in unrealized appreciation or depreciation (11,906,345) (3,499,662) (3,496,616)
_____________________________________________________________________________________________________________________________
Net loss on investments (14,281,849) (3,529,596) (3,569,060)
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting from operations $ 954,785 $ 332,430 $ 602,397
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30, 1994
_____________________________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________________________
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
Income:
Interest $ 27,008,972 $ 7,698,991 $ 4,405,508
_____________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 2,227,969 648,514 381,106
Distribution fee 97,718 29,229 15,702
Transfer agency fee 248,181 74,277 40,107
Compensation of trustees 8,690 6,381 6,160
Compensation of officers 5,021 881 742
Custodian fees 50 -- --
Postage 45,706 11,886 6,640
Registration fees 108,888 8,623 8,797
Reports to shareholders 24,711 5,591 2,389
Audit fees 15,500 14,250 13,000
Administrative 5,280 2,454 1,406
Other 15,726 1,563 1,613
_____________________________________________________________________________________________________________________________
Total expenses 2,803,440 803,649 477,662
_____________________________________________________________________________________________________________________________
Investment income -- net 24,205,532 6,895,342 3,927,846
_____________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________________________
Net realized gain (loss) on security transactions (Note 3) 1,590,129 134,546 (177,991)
Net realized loss on closed interest rate futures contracts (1,941,413) (639,604) --
______________________________________________________________________________________________________________________________
Net realized loss on investments (351,284) (505,058) (177,991)
Net change in unrealized appreciation or depreciation (22,689,828) (6,437,361) (4,272,974)
_____________________________________________________________________________________________________________________________
Net loss on investments (23,041,112) (6,942,419) (4,450,965)
_____________________________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations $ 1,164,420 $ (47,077) $ (523,119)
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30,
_____________________________________________________________________________________________________________________________
Operations and distributions 1994 1993 1994 1993
_____________________________________________________________________________________________________________________________
California Tax-Exempt Fund Massachusetts Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income -- net $ 15,236,634 $ 13,860,607 $ 3,862,026 $ 2,982,897
Net realized gain (loss) on investments (2,375,504) 170,092 (29,934) (479)
Net change in unrealized appreciation or (11,906,345) 10,595,516 (3,499,662) 2,842,517
depreciation
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 954,785 24,626,215 332,430 5,824,935
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (15,235,348) (13,861,943) (3,862,035) (2,982,956)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales (Note 2) 35,683,408 43,318,047 22,403,265 22,543,737
Reinvestment of distributions 10,573,864 9,387,295 3,055,527 2,340,831
Payments for redemptions (37,967,003) (24,496,269) (14,032,861) (7,383,168)
_____________________________________________________________________________________________________________________________
Increase in net assets from share transactions 8,290,269 28,209,073 11,425,931 17,501,400
_____________________________________________________________________________________________________________________________
Total increase (decrease) in net assets (5,990,294) 38,973,345 7,896,326 20,343,379
Net assets at beginning of year 261,187,050 222,213,705 64,152,256 43,808,877
_____________________________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income
for IDS California of $35 for 1994
and IDS Massachusetts of $9 for 1993) $255,196,756 $261,187,050 $ 72,048,582 $ 64,152,256
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series
Year ended June 30,
_____________________________________________________________________________________________________________________________
Operations and distributions 1994 1993 1994 1993
_____________________________________________________________________________________________________________________________
Michigan Tax-Exempt Fund Minnesota Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
Investment income -- net $ 4,171,457 $ 3,490,946 $ 24,205,532 $ 20,972,865
Net realized gain (loss) on investments (72,444) 25,065 (351,284) 114,873
Net change in unrealized appreciation or (3,496,616) 3,377,911 (22,689,828) 14,751,768
depreciation
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting from operations 602,397 6,893,922 1,164,420 35,839,506
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (4,171,489) (3,491,044) (24,204,281) (20,974,210)
Net realized gain on investments (68,841) -- -- --
_____________________________________________________________________________________________________________________________
Total distributions (4,240,330) (3,491,044) (24,204,281) (20,974,210)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales (Note 2) 15,113,866 17,163,359 81,250,235 96,570,778
Reinvestment of distributions 3,148,115 2,459,045 19,448,232 16,613,955
Payments for redemptions (9,715,456) (5,905,586) (70,952,363) (39,837,405)
_____________________________________________________________________________________________________________________________
Increase in net assets from share transactions 8,546,525 13,716,818 29,746,104 73,347,328
______________________________________________________________________________________________________________________________
Total increase in net assets 4,908,592 17,119,696 6,706,243 88,212,624
Net assets at beginning of year 71,774,222 54,654,526 401,684,388 313,471,764
_____________________________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income
for IDS Michigan of $32 for 1993) $ 76,682,814 $ 71,774,222 $408,390,631 $401,684,388
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30,
_____________________________________________________________________________________________________________________________
Operations and distributions 1994 1993 1994 1993
_____________________________________________________________________________________________________________________________
New York Tax-Exempt Fund Ohio Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
Investment income -- net $ 6,895,342 $ 6,091,422 $ 3,927,846 $ 3,083,675
Net realized gain (loss) on investments (505,058) (4,095) (177,991) 38,778
Net change in unrealized appreciation or (6,437,361) 5,557,017 (4,272,974) 3,216,945
depreciation
_____________________________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations (47,077) 11,644,344 (523,119) 6,339,398
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (6,894,339) (6,092,439) (3,927,883) (3,083,897)
Net realized gain on investments -- -- (786) (78,831)
_____________________________________________________________________________________________________________________________
Total distributions (6,894,339) (6,092,439) (3,928,669) (3,162,728)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales (Note 2) 21,355,340 22,014,933 17,974,999 18,759,240
Reinvestment of distributions 5,365,427 4,602,258 3,100,875 2,456,447
Payments for redemptions (16,789,123) (10,260,106) (9,646,507) (6,171,189)
_____________________________________________________________________________________________________________________________
Increase in net assets from share transactions 9,931,644 16,357,085 11,429,367 15,044,498
_____________________________________________________________________________________________________________________________
Total increase in net assets 2,990,228 21,908,990 6,977,579 18,221,168
Net assets at beginning of year 117,168,404 95,259,414 64,857,356 46,636,188
_____________________________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income
for IDS Ohio of $37 for 1993) $120,158,632 $117,168,404 $ 71,834,935 $ 64,857,356
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
___________________________________________________________________
1. Summary of significant accounting policies
IDS California Tax-Exempt Trust and IDS Special Tax-Exempt Series
Trust were organized as Massachusetts business trusts. IDS California
Tax-Exempt Trust includes only IDS California Tax-Exempt Fund. IDS
Special Tax-Exempt Series Trust is a "series fund" that is presently
comprised of six individual funds, including IDS Massachusetts
Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota
Tax-Exempt Fund, IDS New York Tax-Exempt Fund and IDS Ohio Tax-Exempt
Fund (the funds). The funds are non-diversified, open-end management
investment companies as defined in the Investment Company Act of 1940
(as amended). The funds concentrate their investments in a single
state and therefore may have more credit risk related to the economic
conditions of the respective state than funds that have a broader
geographical diversification.
Significant accounting policies followed by the funds are summarized
below:
Valuation of securities
All securities are valued at the close of each business day.
Securities for which market quotations are not readily available are
valued at fair value according to methods selected in good faith by
the board of trustees. Determination of fair value
involves, among other things, reference to market indexes, matrixes
and data from independent brokers. Short-term securities maturing in
more than 60 days from the valuation date are valued at the market
price or approximate market value based on current interest rates;
those maturing in 60 days or less are valued at amortized cost.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, each fund may buy and sell interest rate futures contracts.
Risks of entering into futures contracts and related options include
the possibility that there may be an illiquid market and that a
change in the value of the contract or option may not correlate with
changes in the value of the underlying securities.
Upon entering into a futures contract, each fund is required to
deposit either cash or securities in an amount (initial margin) equal
to a certain percentage of the contract value. Subsequent payments
(variation margin) are made or received by each fund each day. The
variation margin payments are equal to the daily changes in the
contract value and are recorded as unrealized gains and losses. Each
fund recognizes a realized gain or loss when the contract is closed
or expires.
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
___________________________________________________________________
1. Summary of significant accounting policies (continued)
Federal taxes
Since each fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because of
the deferral of losses on certain futures contracts, the recognition
of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash
sale" transactions. The character of distributions made during the
year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax purposes.
Also, due to the timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the year that the
income or realized gains (losses) were recorded by the fund.
Dividends to shareholders
Dividends from net investment income, declared daily and paid
monthly, are reinvested in additional shares of each fund at net
asset value or payable in cash. Capital gains, when available, are
distributed along with the last income dividend at the end of the
calendar year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Interest income, including level-yield
amortization of premium and discount, is accrued daily.
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, each fund pays IDS
Financial Corporation (IDS) a fee for managing its investments,
recordkeeping and other specified services. The fee is a percentage
of each fund's average daily net assets consisting of a group asset
charge in reducing percentages from 0.46% to 0.32% annually on the
combined net assets of all non-money market funds in the IDS MUTUAL
FUND GROUP and an individual annual asset charge of 0.13% of average
daily net assets for each fund.
Each fund also pays IDS a distribution fee at an annual rate of $6
per shareholder account and a transfer agency fee at an annual rate
of $15.50 per shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder redemptions.
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
___________________________________________________________________
2. Expenses and sales charges (continued)
IDS will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
Sales charges by IDS Financial Services Inc. for distributing the
funds' shares were $1,177,341 for IDS California, $867,225 for IDS
Massachusetts, $560,739 for IDS Michigan, $2,458,058 for IDS
Minnesota, $728,241 for IDS New York and $593,137 for IDS Ohio
Tax-Exempt Funds for the year ended June 30, 1994.
Each fund also has a retirement plan for its independent trustees.
Upon retirement, trustees receive monthly payments equal to one-half
of the retainer fee for as many months as they served as
trustees up to 120 months. There are no death benefits. The plan is
not funded but each fund recognizes the cost of payments during the
time the trustees serve on the board. The retirement plan expense
amounted to $2,243 for IDS California, $1,640 for IDS Massachusetts,
$3,928 for IDS Minnesota, $1,800 each for IDS Michigan, IDS New York
and IDS Ohio Tax-Exempt Funds for the year ended June 30, 1994.
___________________________________________________________________
3. Securities transactions
For the year ended June 30, 1994, cost of purchases and proceeds from
sales (other than short-term obligations) aggregated $82,551,185 and
$71,318,373 for IDS California, $16,693,428 and $4,406,310 for IDS
Massachusetts, $20,950,381 and $11,646,528 for
IDS Michigan, $85,238,653 and $55,076,357 for IDS Minnesota,
$22,253,738 and $11,722,684 for IDS New York and $19,654,275 and
$7,444,006 for IDS Ohio Tax-Exempt Funds. Realized gains and losses
are determined on an identified cost basis.
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
___________________________________________________________________
4. Share transactions
Transactions in shares of each fund for the years indicated are as
follows:
Number of shares:
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________________
California Tax-Exempt Fund Massachusetts Tax-Exempt Fund Michigan Tax-Exempt Fund
_____________________________ ______________________________ ______________________________
Year ended June 30, Year ended June 30, Year ended June 30,
1994 1993 1994 1993 1994 1993
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Sold 6,578,766 8,197,569 4,061,994 4,217,029 2,687,659 3,154,702
Issued for reinvested
distributions 1,962,600 1,777,866 558,167 438,573 562,683 451,734
Redeemed (7,091,287) (4,641,462) (2,564,761) (1,380,830) (1,739,752) (1,088,585)
________________________________________________________________________________________________________________________
Net increase 1,450,079 5,333,973 2,055,400 3,274,772 1,510,590 2,517,851
________________________________________________________________________________________________________________________
Number of shares:
________________________________________________________________________________________________________________________
Minnesota Tax-Exempt Fund New-York Tax-Exempt Fund Ohio Tax-Exempt Fund
_____________________________ ______________________________ ______________________________
Year ended June 30, Year ended June 30, Year ended June 30,
1994 1993 1994 1993 1994 1993
________________________________________________________________________________________________________________________
Sold 14,961,095 18,162,534 3,952,327 4,171,087 3,231,719 3,465,518
Issued for reinvested
distributions 3,599,781 3,126,057 999,332 872,831 562,446 454,076
Redeemed (13,233,479) (7,491,955) (3,127,657) (1,944,622) (1,753,354) (1,139,720)
________________________________________________________________________________________________________________________
Net increase 5,327,397 13,796,636 1,824,002 3,099,296 2,040,811 2,779,874
________________________________________________________________________________________________________________________
</TABLE>
___________________________________________________________________
5. Interest rate futures contracts
Investments in securities at June 30, 1994, included securities
valued at $1,067,400 for IDS California, $1,011,840 for IDS Minnesota
and $958,820 for IDS New York Tax-Exempt Funds that were pledged as
collateral to cover initial margin deposits on 200, 275 and 90
purchase contracts, respectively. The market value of the open
contracts at June 30, 1994, was $20,243,750 for IDS California,
$27,835,156 for IDS Minnesota and $9,109,688 for IDS New York
Tax-Exempt Funds with a net unrealized loss of $680,375 for IDS
California, $936,218 for IDS Minnesota and $306,125 for
IDS New York Tax-Exempt Funds.
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
___________________________________________________________________
6. Capital loss carryover
For federal income tax purposes, capital loss carryovers were
$3,420,653 for IDS California, $199,063 for IDS Massachusetts,
$2,753,600 for IDS Minnesota, $1,267,843 for IDS New York and
$185,465 for IDS Ohio Tax-Exempt Funds at June 30, 1994. These
capital loss carryovers will expire in 1996 through 2002 if not
offset by subsequent capital gains.
___________________________________________________________________
7. Financial highlights
"Financial highlights" showing per share data and selected
information are presented on pages 5-10 of the prospectus.
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS California Tax-Exempt Fund
(Percentage represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (98.3%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,f) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Adelanto Improvement Agency Tax Allocation Refunding Bonds
Series B (FGIC Insured) 5.50% 2023 $3,000,000 $ 2,647,650
Aliso Viejo Orange County District Community Facilities District #88-1
Special Tax Bonds Series 1992A 7.35 2018 3,000,000 3,451,590
Burbank Redevelopment Agency Tax Allocation Bonds Golden State Series 1992A 6.00 2013 1,500,000 1,414,665
Chapman College Educational Facilities Authority Revenue Bonds
Series 1989B 7.50 2018 500,000 518,400
Chico Walker Senior Housing Insured Revenue Bonds The Lodge Series 1993A 5.70 2023 1,500,000 1,284,585
Clearlake Redevelopment Agency Highlands Park Community Development
Tax Allocation Bonds Series 1993 6.40 2023 1,420,000 1,293,947
Eastern Municipal Water District Riverside County Water & Sewer
Revenue Certificates of Participation Series 1991 6.00 2023 1,000,000 914,510
Eastern Municipal Water District Riverside County Water & Sewer
Pre-Refunded Revenue Certificates of Participation Series 1991
(FGIC Insured) 6.50 2020 3,000,000 3,277,650
Eden Township Hospital District Insured Health Facility Refunding Revenue
Certificate of Participation Series 1993 (California Mortgage Insured) 5.75 2012 3,000,000 2,707,380
El Camino Hospital District Hospital Pre-Refunded Revenue
Certificate of Participation Series A 8.50 2017 1,500,000 1,691,895
Fontana Redevelopment Agency Refunding Certificate of Participation
Police Facility Series 1993 5.625 2016 1,750,000 1,541,400
Foothill-De Anza Community College Santa Clara County Refunding
Certificate of Participation Series 1993 (Connie Lee Insured) 5.25 2021 1,675,000 1,403,801
Gilroy Las Animas Technology Park Refunding Bonds District #2 Series 1988-1 8.40 2006-07 500,000 518,611
Indian Wells Improvement Bonds Assessment District #13 7.50 2008 430,000 442,431
Lancaster Redevelopment Agency Tax Allocation Bonds (MBIA Insured) 5.80 2023 2,500,000 2,293,750
Long Beach Harbor Revenue Bonds AMT Series 1989A 7.25 2019 7,000,000 (e) 7,471,800
Los Angeles Convention & Exhibition Center Pre-Refunded
Certificate of Participation Series 1989A 7.00 2020 5,000,000 5,517,150
Los Angeles Convention & Exhibition Center Pre-Refunded
Certificate of Participation Series 1989A 7.30 2009 1,000,000 1,112,500
Los Angeles Convention & Exhibition Center Pre-Refunded
Certificate of Participation Series 1989A 7.375 2018 2,900,000 3,235,965
Los Angeles County Transportation Commission Sales Tax Refunded
Revenue Bonds
Series A 7.00 2019 4,150,000 4,284,003
Los Angeles County Transportation Commission Sales Tax Pre-Refunded
Revenue Bonds
Series A 8.00 2016 2,000,000 2,217,760
Los Angeles County Transportation Commission Sales Tax Pre-Refunding
Revenue Bonds
Series 1988A 7.875 2008 500,000 562,715
Los Angeles County Transportation Commission Sales Tax Refunding
Revenue Bonds
Series 1989A 7.40 2015 2,000,000 2,170,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS California Tax-Exempt Fund
(Percentage represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,f) rate amount
_____________________________________________________________________________________________________________________________
Los Angeles County Transportation Commission Sales Tax Pre-Refunded
Revenue Bonds
Series A 7.60% 2012 $ 640,000 $ 690,630
Los Angeles Department of Water & Power Electric Plant Revenue Bonds
Series 1990 7.125 2030 6,500,000 7,173,270
Los Angeles Department of Water & Power Waterworks Refunding Revenue Bonds 5.80 2024 2,900,000 2,633,780
Los Angeles Multi-family Housing Revenue Bonds AMT (FHA Insured) 7.85 2029 130,000 138,272
Los Angeles Multi-family Housing Revenue Bonds AMT Park Parthenia
Series 1986A
(GNMA Insured) 7.40 2022 1,000,000 1,041,470
Los Angeles Single Family Home Mortgage Revenue Bonds AMT Series 1991A
(GNMA & FNMA Insured) 6.875 2025 5,700,000 5,721,033
Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds
State Department of General Services Lease Series 1988A 7.25 2006 3,000,000 3,285,150
Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds
State Department of General Services Lease Series 1988A 7.50 2011 1,500,000 1,657,245
Los Angeles State Harbor Revenue Bonds Escrowed to Maturity 7.60 2018 1,000,000 1,137,200
Los Angeles USD Refunding Certficate of Participation (FSA Insured) 5.50 2010 1,000,000 921,880
Los Angeles Wastewater System Refunding Revenue Bonds Series A
(MBIA Insured) 5.70 2020 5,775,000 5,246,067
Los Angeles Wastewater System Refunding Revenue Bonds Series A
(MBIA Insured) 5.80 2021 4,250,000 3,909,107
Los Angeles Wastewater System Pre-Refunded Revenue Bonds Series 1987 8.125 2017 1,000,000 1,121,720
Marin County Municipal Water District Revenue Bonds Series 1993 5.65 2023 3,500,000 3,085,005
Mayer Memorial Hospital District Insured Health Facility Revenue Bonds
(California Mortgage Insured) 5.50 2013 950,000 834,223
Modesto Certificate of Participation Pre-Refunded Bonds Community Center 8.10 2015 1,000,000 1,120,960
Modesto Irrigation Certificate of Participation 7.25 2015 2,000,000 2,134,720
Mount Diablo Hospital District Hospital Pre-Refunded Revenue Bonds
Series 1990A (AMBAC Insured) 7.00 2017 3,000,000 3,360,840
Northern California Public Power Authority Power Pre-Refunded Revenue Bonds
Hydroelectric Series 1986B-3 8.00 2024 2,000,000 2,226,840
Northern California Public Power Authority Power Pre-Refunded Revenue Bonds
Hydroelectric #1 Series 1986B-1 8.00 2024 2,100,000 2,338,182
Northern California Public Power Authority Refunding Revenue Bonds
Geothermal #3 Series 1985A 7.00 2010 830,000 839,645
Northern California Public Power Authority Refunding Revenue Bonds
Geothermal #3 Series 1987A 7.00 2007 6,825,000 7,099,229
Northern California Transmission Agency California-Oregon Transmission
Pre-Refunded Revenue Bonds Series 1990A (MBIA Insured) 7.00 2024 2,000,000 2,217,320
Pittsburg Public Financing Authority Wastewater
Refunding Bonds Series 1994A (FGIC Insured) 5.125 2015 1,000,000 853,020
Pleasanton Joint Powers Financing Authority Reassessment Revenue Bonds
Series 1993A 6.15 2012 1,960,000 1,826,054
Port of Oakland Revenue Bonds AMT Series 1989A (BIG Insured) 7.60 2016 500,000 542,340
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS California Tax-Exempt Fund
(Percentage represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,f) rate amount
_____________________________________________________________________________________________________________________________
Rancho Cucamonga Redevelopment Agency 1990 Tax Allocation Bonds
(MBIA Insured) 7.125% 2019 $3,460,000 $ 3,724,586
Rancho Cucamonga Redevelopment Agency 1990 Tax Allocation Pre-Refunded Bonds
(MBIA Insured) 7.125 2019 3,540,000 3,942,180
Rancho Mirage Joint Powers Finance Authority Certificate of Participation
Eisenhower Memorial Hospital 7.00 2022 4,250,000 4,314,897
Riverside County Transportation Commission Sales Tax Revenue Bonds
Series 1993A (AMBAC Insured) 5.75 2009 1,750,000 1,710,520
Riverside Electric Revenue Bonds Series 1991 6.00 2015 6,530,000 6,246,206
Sacramento Municipal Utility District Series R 6.00 2015-17 7,500,000 7,057,770
Sacramento Municipal Utility District Pre-Refunded Series R 7.125 2013 3,000,000 3,228,420
Sacramento Municipal Utility District Pre-Refunded Series V 7.50 2018 2,775,000 3,046,867
Sacramento Municipal Utility District Pre-Refunded Series W 7.50 2018 1,980,000 2,173,981
Sacramento Municipal Utility District Pre-Refunded Series Y (MBIA Insured) 6.75 2019 3,400,000 3,769,682
Sacramento Redevelopment Agency Tax Allocation Bonds Series 1990A
(MBIA Insured) 6.50 2013 3,500,000 3,546,725
San Diego County Capital Asset Lease Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured) 7.82 2007 3,200,000 (d) 2,992,000
San Diego Industrial Development Revenue Bonds San Diego Gas & Electric
Series A 7.625 2021 1,000,000 1,058,890
San Diego Regional Transportation Commission Sales Tax
Pre-Refunded Revenue Bonds Limited Tax Series 1989A 6.25 2008 5,030,000 5,303,582
San Francisco Redevelopment Financing Authority Tax Allocation
Refunding Bonds Series B (FGIC Insured) 5.25 2017 1,500,000 1,282,095
San Joaquin County Pre-Refunded Certificate of Participation
Human Services Facility Series 1989 (BIG Insured) 6.70 2009 3,500,000 3,817,450
San Joaquin County Certificate of Participation
Jail & Sheriffs Operation Center (MBIA Insured) 6.75 2015 2,000,000 2,198,760
San Jose Redevelopment Agency Merged Area Tax Allocation Bonds
Series 1993 Inverse Floater (MBIA Insured) 7.448 2014 3,000,000 (d) 2,385,000
San Mateo County Transit District Limited Tax Pre-Refunded Bonds
Series 1990A (MBIA Insured) 6.50 2020 2,500,000 2,662,900
Santa Clara County Pre-Refunded Certificates of Participation
Housing Authority Office 7.875 2017 630,000 668,209
Santa Clara County Transit District Sales Tax Revenue Bonds Series 1991A 6.25 2021 9,980,000 9,512,038
Santa Cruz Certificate of Participation 8.375 2007 1,220,000 1,243,570
Santa Rosa Sonoma County Wastewater Service Facility District
Pre-Refunded Improvement Bonds Series 1989 7.80 2015 1,000,000 1,103,410
Sonoma County Community Redevelopment Agency Tax Allocation Bonds
Windsor Redevelopment Series C 7.90 2014 415,000 422,943
Southern California Home Financing Authority Single Family Mortgage
Revenue Bonds AMT 1990B (GNMA Insured) 7.75 2024 665,000 683,879
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS California Tax-Exempt Fund
(Percentage represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,f) rate amount
_____________________________________________________________________________________________________________________________
Southern California Public Power Authority Pre-Refunded Revenue Bonds
Palo Verde Series B 7.125% 2015 $5,000,000 $ 5,350,450
Southern California Public Power Authority Transmission Pre-Refunded
Revenue Bonds
Series 1986A 7.875 2018 1,500,000 1,640,250
Southern California Public Power Authority Transmission Pre-Refunded
Revenue Bonds
Series 1986B 7.00 2022 5,000,000 5,363,600
Southern California Public Power Authority Transmission Revenue Bonds
Series 1986B 7.00 2022 1,760,000 1,855,410
Southern California Public Power Authority Transportation Bonds Series B 7.375 2021 400,000 430,132
State Department of Water Resources Water System Pre-Refunded Revenue Bonds
Central Valley Series D 7.70 2024 2,400,000 2,655,720
State Educational Facilities Authority Revenue Bonds Stanford University
Series J 6.00 2016 7,275,000 7,082,358
State Health Facilities Finance Authority Revenue Bonds Kaiser Permanente
Series 1989A 7.00 2018 2,000,000 2,100,360
State Health Facility Finance Authority Pre-Refunded Revenue Bonds
St. Joseph Health System Series 1989A 6.90 2014 3,500,000 3,840,900
State Housing Finance Agency Home Mortgage Revenue Bonds Series 1986B 6.90 2016 1,990,000 2,004,547
State Housing Finance Agency Home Single Family Mortgage Revenue Bonds
Series 1991A 7.375 2017 2,315,000 2,337,409
State Pollution Control Finance Authority Pollution Control Revenue
Bonds AMT
Southern California Edison Series 1988A 6.90 2006 2,000,000 2,066,900
State Public Works Board University of California Lease Pre-Refunded
Revenue Bonds
Series 1990A 7.00 2015 2,250,000 2,513,048
State Public Works Board Various Community Colleges Lease Revenue Bonds
Series 1992A (AMBAC Insured) 6.00 2017 1,465,000 1,397,669
State University Parking System Revenue Bonds 7.70 2009 225,000 244,780
State University Revenue Bonds San Jose State University Student Union
Series B 7.60 2007 150,000 161,348
Statewide Community Development Authority Health Facilities Revenue Bonds
Unihealth America Series 1993A Inverse Floater (AMBAC Insured) 8.03 2011 5,000,000 (d) 4,368,750
Stockton Refunding Wastewater System Certificate of Participation
(AMBAC Insured) 5.50 2015 1,250,000 1,127,088
Stockton Single Family Mortgage Revenue Bonds AMT Series 1990A 7.50 2023 145,000 153,147
(GNMA Insured)
Suisun City Redevelopment Agency Tax Allocation Refunded Bonds
(MBIA Insured) 5.50 2023 1,000,000 877,960
Turlock Irrigation District Pre-Refunded Bonds Series 1986A 7.75 2018 1,000,000 1,070,050
University of Southern California Educational Facilities Authority
Pre-Refunded Revenue Bonds Series 1989B 6.75 2015 5,000,000 5,152,100
_____________________________________________________________________________________________________________________________
See accompany notes to investments in securities.
<PAGE>
Investments in securities
IDS California Tax-Exempt Fund
(Percentage represents value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,f) rate amount
_____________________________________________________________________________________________________________________________
Vacaville Limited Obligation Improvement Bonds
Water Rights Assessment District 8.00% 2007 $ 925,000 $ 952,694
Walnut Valley Unified School District Unlimited Tax General
Obligation Bonds
(MBIA Insured) 6.00 2014-15 2,870,000 2,783,816
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $238,921,908) $250,756,406
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $238,921,908)(g) $250,756,406
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS California Tax-Exempt Fund
June 30, 1994
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 6-30-94 6-30-93
___________________________________________________________________
AAA 63% 38%
AA 18 35
A 16 19
BBB and below 3 3
Non-rated -- 5
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(d) Inverse Floaters represents securities which pay interest at a
rate that increases (decreases) based on (decreases) increases
of market short-term rates. Interest rate disclosed is the rate
in effect on June 30, 1994.
(e) Partially pledged as inital deposit on the following open
interest rate futures purchase contracts (see Note 5 to the
financial statements):
Type of security Par Value
_____________________________________________________
U.S. Treasury Bond, Sept. 1994 $20,000,000
_____________________________________________________
(f) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(g) At June 30, 1994, the cost of securities for federal income tax
purposes was $238,863,654 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $15,609,964
Unrealized depreciation (3,717,212)
___________________________________________________________________
Net unrealized appreciation $11,892,752
___________________________________________________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Massachusetts Tax-Exempt Fund
(Percentages represent
June 30, 1994 value of investments
compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (96.8%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Ashburnham-Westminister Regional School District Unlimited Tax
General Obligation School Bonds (MBIA Insured) 6.00% 2013 $1,000,000 $ 978,630
Bay Transit Authority Series A (Secondary FGIC Insured) 5.75 2022 1,000,000 922,160
Bay Transportation Authority General Transportation System
Refunding Bonds Series 1992B 6.20 2016 1,500,000 1,478,730
Boston City Hospital Refunding Revenue Bonds Series B (FHA Insured) 5.75 2023 3,000,000 2,701,890
Boston City Hospital Pre-Refunded Revenue Bonds Series A (FHA Insured) 7.625 2021 1,000,000 1,142,590
Boston General Obligation Bonds Series 1991A (MBIA Insured) 6.75 2011 500,000 550,740
Boston General Obligation Refunding Bonds Series 1993A (AMBAC Insured) 5.65 2009 1,500,000 1,445,115
Boston Industrial Development Financing Authority Revenue Bonds
Massachusetts College of Pharmacy Series 1993A (Connie Lee Insured) 5.25 2026 1,000,000 837,850
Boston Water & Sewer Commission General Pre-Refunded Revenue Bonds Senior
Pre-Refunded Series 1991A (FGIC Insured) 7.00 2018 1,000,000 1,119,640
Boston Water & Sewer Commission General Subordinate Revenue Bonds Series A
(BIG Insured) 6.00 2008 500,000 502,785
Boston Water & Sewer Commission Senior Revenue Bonds Series A 7.875 2013 365,000 396,186
Boston Water & Sewer Commission Senior Pre-Refunded Revenue Bonds Series A 7.875 2013 210,000 229,364
Commonwealth General Obligation Consolidated Loan Pre-Refunded Bonds
Series 1990A (FGIC Insured) 7.25 2009 500,000 558,592
Greater Lawrence Sanitary District North Andover General Obligation Bonds 8.50 2005 625,000 656,362
Health & Educational Facilities Authority Pre-Refunded Bonds
Bentley College Series G 8.125 2017 400,000 423,952
Health & Educational Facilities Authority Refunding Revenue Bonds
Beth Israel Hospital Series 1989E 7.00 2009-14 550,000 577,468
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series A (MBIA Insured) 7.50 2008 500,000 549,335
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series C 5.90 2011 1,000,000 888,840
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Beverly Hospital Series D (MBIA Insured) 7.30 2019 400,000 444,660
Health & Educational Facilities Authority Revenue Bonds
Boston College Series J (FGIC Insured) 6.625 2021 2,000,000 2,037,260
Health & Educational Facilities Authority Revenue Bonds
Boston College Series K 5.25 2023 1,000,000 850,460
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series C 6.75 2021 500,000 506,285
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Massachusetts Tax-Exempt Fund
(Percentages represent
June 30, 1994 value of investments
compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series 1991D 6.75% 2024 $1,000,000 $ 1,016,820
Health & Educational Facilities Authority Revenue Bonds
Charlton Memorial Hospital Series 1991B 7.25 2013 1,750,000 1,819,037
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Children's Hospital Series D 7.75 2018 500,000 556,405
Health & Educational Facilities Authority Revenue Bonds
Holyoke Hospital Series B 6.50 2015 500,000 471,650
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Lahey Clinic Medical Center Series A (MBIA Insured) 7.625 2018 500,000 555,090
Health & Educational Facilities Authority Revenue Bonds
Lahey Clinic Medical Center Series B (MBIA Insured) 5.625 2015 1,500,000 1,379,685
Health & Educational Facilities Authority Revenue Bonds
Lahey Clinic Medical Center Series B (MBIA Insured) 5.375 2023 1,000,000 859,770
Health & Educational Facilities Authority Revenue Bonds
Melrose-Wakefield Hospital Series 1992B 6.375 2016 1,000,000 951,840
Health & Educational Facilities Authority Revenue Bonds
McLean Hospital Series 1992C (FGIC Insured) 6.625 2015 1,250,000 1,279,800
Health & Educational Facilities Authority Revenue Bonds
Morton Hospital & Medical Center Series B (Connie Lee Insured) 5.25 2014 1,000,000 873,300
Health & Educational Facilities Authority Revenue Bonds
Mount Auburn Hospital Series A (MBIA Insured) 7.875 2018 205,000 227,060
Health & Educational Facilities Authority Revenue Bonds
New England Deaconess Hospital Series 1992D 6.625 2012 1,000,000 992,140
Health & Educational Facilities Authority Revenue Bonds
Newton Wellesley Hospital Series 1991D (MBIA Insured) 7.00 2015 1,000,000 1,071,640
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Northeastern University Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,088,000
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Northeastern University Series E (MBIA Insured) 6.55 2022 1,000,000 1,014,010
Health & Educational Facilities Authority Revenue Bonds
South Shore Hospital Series 1992D (MBIA Insured) 6.50 2022 1,000,000 1,010,240
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Massachusetts Tax-Exempt Fund
(Percentages represent
June 30, 1994 value of investments
compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Stonehill College Series 1990D (AMBAC Insured) 7.70% 2020 $1,000,000 $ 1,145,540
Health & Educational Facilities Authority Revenue Bonds
Suffolk University Series B (Connie Lee Insured) 6.35 2022 2,495,000 2,459,621
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Wentworth Institute of Technology Series A (AMBAC Insured) 7.40 2010 750,000 843,810
Health & Educational Facilities Authority Revenue Bonds
Wentworth Institute of Technology Series B (Connie Lee Insured) 5.50 2023 1,500,000 1,304,580
Holyoke Unlimited Tax General Obligation Municipal Purpose Loans
Series 1993B (FSA Insured) 6.125 2013 1,100,000 1,089,550
Industrial Finance Agency 1st Mortgage Pre-Refunded Revenue Bonds
Berkshire Retirement Community at Lennox 9.875 2018 200,000 227,394
Industrial Finance Agency Pollution Control Refunding Revenue Bonds
Eastern Edison Series 1993 5.875 2008 1,500,000 1,402,440
Industrial Finance Agency Resource Recovery Revenue Bonds AMT
Ogden Haverhill Series 1986A (AMBAC Insured) 7.375 2011 175,000 188,454
Industrial Finance Agency Resource Recovery Revenue Bonds
SEMASS Series 1991A 9.00 2015 1,500,000 1,635,660
Industrial Finance Agency Revenue Bonds Brandeis University (MBIA Insured) 6.80 2019 700,000 721,665
Industrial Finance Agency Revenue Bonds Museum of Science Series 1989
(FSA Insured) 7.30 2009 1,000,000 1,119,830
Leominster General Obligation Bonds (MBIA Insured) 7.50 2009 1,000,000 1,101,580
Lowell Limited Tax General Obligation State Qualified Refunding Bonds
Series A (FSA Insured) 5.50 2010 800,000 747,640
Mansfield General Obligation Bonds (AMBAC Insured) 6.70 2011 1,000,000 1,038,480
Municipal Wholesale Electric Power Supply System Revenue Bonds Series A 6.00 2018 1,500,000 1,402,545
Municipal Wholesale Electric Power Supply System Pre-Refunded Revenue Bonds
Series 1992B 6.75 2017 1,395,000 1,540,038
Municipal Wholesale Electric Power Supply System Revenue Bonds Series 1992B 6.75 2017 605,000 618,667
Nantucket General Obligation Bonds 6.80 2011 1,000,000 1,071,710
North Andover General Obligation Bonds (MBIA Insured) 7.35 2008 310,000 342,091
Port Authority Pre-Refunded Revenue Bonds AMT Series 1988A 7.75 2018 485,000 512,640
Port Authority Revenue Bonds AMT Series 1988A 7.75 2018 515,000 539,566
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Massachusetts Tax-Exempt Fund
(Percentages represent
June 30, 1994 value of investments
compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
Port Authority Revenue Bonds AMT Series 1990A (FGIC Insured) 7.50% 2020 $1,000,000 $ 1,089,230
Quincy Pre-Refunded Revenue Bonds Quincy City Hospital (FHA Insured) 7.875 2016 1,000,000 1,085,820
Quincy Refunding Revenue Bonds Quincy Hospital Issue Series 1993
(FSA Insured) 5.25 2016 1,000,000 878,170
Southeastern University Building Authority Refunding Revenue Bonds
Series 1986A 7.80 2016 100,000 106,214
Southeastern University Building Revenue Bonds 7.80 2011 325,000 345,195
Southern Berkshire Regional School District Unlimited Tax
General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.55 2010 1,000,000 1,133,120
Springfield Limited Tax General Obligation Municipal Purpose Loan Bonds
Series 1993B (MBIA Insured) 6.00 2013 750,000 731,963
State College Building Authority Refunding Revenue Bonds Series 1986A 7.125 2006 150,000 157,572
State College Building Authority Refunding Revenue Bonds Series 1986A 7.25 2016 250,000 263,160
State General Obligation Consolidated Loan Bonds Series 1991A
(FGIC Insured) 6.00 2011 1,095,000 1,073,297
State Housing Finance Agency Housing Revenue Rental Bonds Series 1
(AMBAC Insured) 7.20 2026 850,000 861,653
State Housing Finance Agency Single Family Housing Revenue Bonds AMT
Series 13 7.95 2023 500,000 516,210
State Housing Finance Authority Residential Development Bonds Series 1992A
(FNMA Insured) 6.875 2011 1,000,000 1,037,230
State Housing Finance Authority Single Family Mortgage Housing
Revenue Bonds Series 4 7.375 2014 475,000 492,447
State Housing Finance Authority Single Family Mortgage Housing
Revenue Bonds AMT Series 7 8.10 2020 265,000 272,460
University of Lowell Building Authority Facilities Revenue Bonds
4th Series A 7.40 2007 125,000 133,589
University of Lowell Building Authority Facilities Revenue Bonds
4th Series A 7.60 2012 50,000 53,735
University of Massachusetts Building Authority Revenue Bonds Series A
(FSA Insured) 7.50 2014 500,000 547,505
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Massachusetts Tax-Exempt Fund
(Percentages represent
June 30, 1994 value of investments
compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
University of Massachusetts Building Authority Revenue Bonds Series A
Escrowed to Maturity 7.50% 2011 $ 120,000 $ 135,467
Water Resource Authority General Pre-Refunded Revenue Bonds Series 1990A 7.625 2014 500,000 567,805
Water Resource Authority General Pre-Refunded Revenue Bonds Series 1991A 6.50 2019 1,000,000 1,086,980
Water Resource Authority General Revenue Bonds Series 1993C 5.25 2020 1,400,000 1,161,258
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $68,167,340) $ 69,748,962
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
(Percentages represent
value of investments
compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term security (0.6%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
_____________________________________________________________________________________________________________________________
Municipal note
Massachusetts Bay Transit Authority
03-01-95 3.10% $400,000 $ 401,072
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $401,678) $ 401,072
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $68,569,018)(e) $ 70,150,034
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Investments in securities
IDS Massachusetts Tax-Exempt Fund
June 30, 1994
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 06-30-94 06-30-93
___________________________________________________________________
AAA 64% 54%
AA 12 15
A 17 20
BBB and below 7 8
Non-rated -- 3
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in the portfolio
descriptions:
AMT -- Alternative Minimum Tax
(e) At June 30, 1994, the cost of securities for federal income tax
purposes was $68,596,143 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $3,213,492
Unrealized depreciation (1,659,601)
___________________________________________________________________
Net unrealized appreciation $1,553,891
___________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Michigan Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.7%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alpena County Limited Tax Hospital Improvement Pre-Refunded Bonds
Series B (AMBAC Insured) 8.75% 2002 $ 150,000 $ 159,464
Auburn Hills Limited Tax General Obligation Street Improvement Bonds 6.00 2004 200,000 205,894
Battle Creek Water Supply System Pre-Refunded Revenue Bonds Series 1990B 6.375 2008-10 1,640,000 1,752,373
Buena Vista School District Saginaw County School Building & Site
Unlimited Tax General Obligation Pre-Refunded Bonds Series 1991 7.20 2016 1,500,000 1,675,140
Caledonia Community School Unlimited Tax General Obligation
Refunding Revenue Bonds (AMBAC Insured) 5.50 2022 2,000,000 1,793,420
Central Michigan University Board of Trustees
General Pre-Refunded Revenue Bonds Series 1987 (MBIA Insured) 7.90 2015 250,000 277,017
Chassell Township Schools County of Houghton Refunding Unlimited Tax
General Obligation Bonds Qualified School Bond Loan Fund 5.25 2020 1,045,000 891,657
Chelsea General Obligation Bonds (BIG Insured) 8.20 2006 145,000 163,205
Chippewa Valley School Macomb County Qualified School Building Loan Fund
Unlimited Tax General Obligation Bonds (FGIC Insured) 5.00 2021 1,000,000 828,130
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1989 6.00 2016 400,000 422,732
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1989 6.875 2010 260,000 284,079
Detroit General Obligation Pre-Refunded Bonds Distributable State Aid
Series 1989 (AMBAC Insured) 7.20 2009 1,000,000 1,105,490
Detroit Sewer Disposal Pre-Refunded Revenue Bonds 8.00 2008 500,000 552,320
Detroit Unlimited Tax General Obligation Bonds Series A 7.25 2009 1,000,000 1,029,320
Detroit Unlimited Tax General Obligation Bonds Series A 8.625 2007 100,000 109,725
Detroit Unlimited Tax General Obligation Bonds Series 1988A 7.875 2008 700,000 752,913
Detroit Water Supply System Pre-Refunded Revenue Bonds
Series 1988 (MBIA Insured) 7.875 2008 400,000 447,656
Detroit Water Supply System Refunding Revenue Bonds
Series 1993 (FGIC Insured) 5.00 2023 1,000,000 817,550
Dexter Community Schools Building Site & Refunding Unlimited Tax
General Obligation Bonds 5.00 2017 1,500,000 1,240,230
East Lansing School District School Building & Site Unlimited Tax
General Obligation Bonds Series 1991 6.625 2014 1,000,000 1,029,140
Eastern Michigan University Pre-Refunded Revenue Bonds Residence Hall 7.80 2006 205,000 221,035
Farmington Hills Hospital Finance Authority Revenue Bonds
Botsford General Hospital Series 1992A (MBIA Insured) 6.50 2022 1,500,000 1,510,485
Forest Hills School District Unlimited Tax General Obligation
Pre-Refunded Bonds 7.375 2015 1,000,000 1,117,190
Frenchtown Resort Drainage District Monroe County Drain
Pre-Refunded Bonds Series 1987 7.50 2011-12 615,000 687,976
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Michigan Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal Bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
Garden City School District Authority Pre-Refunded Revenue Bonds 7.80% 2010 $ 305,000 $ 336,357
Grand Haven Electrical Pre-Refunded Revenue Bonds 6.75 2016 1,000,000 1,037,630
Grand Rapids Water Supply System Improvement
Pre-Refunded Revenue Bonds Series 1988 7.875 2018 700,000 777,861
Grand Rapids Water Supply System Improvement Pre-Refunded Revenue Bonds
Series 1990 (FGIC Insured) 7.25 2020 1,250,000 1,393,925
Grand Rapids Water Supply System Refunding Revenue Bonds Series 1991
(FGIC Insured) 5.75 2018 500,000 465,920
Holland School District Unlimited Tax General Obligation Bonds
Counties of Ottawa & Allegan 1989 School Building & Site Boards 7.375 2019 1,000,000 1,090,140
Inkster School District Unlimited Tax General Obligation
Pre-Refunded Bonds (AMBAC Insured) 7.00 2018 450,000 496,237
Isoco County Water Supply System Limited Tax General Obligation Bonds
(AMBAC Insured) 5.50 2008-10 575,000 553,610
Jackson County Unlimited Tax General Obligation Refunding Bonds
Series 1987 6.75 2011 150,000 160,197
Kalamazoo Hospital Financial Authorization Bronson Methodist Hospital
Pre-Refunded Bonds 9.375 2016 150,000 159,456
Kent County Hospital Pre-Refunded Revenue Bonds Butterworth Hospital
Series 1989A 7.00 2019 500,000 546,660
Kent County Hospital Pre-Refunded Revenue Bonds Butterworth Hospital
Series 1989A 7.25 2013 500,000 551,675
Kent County Refuse Disposal System Limited Tax
General Obligation Refunding Bonds Series 1987 8.40 2010 150,000 164,946
Laingsburg Community Schools Unlimited Tax General Obligation Bonds 6.375 2021 1,500,000 1,485,555
Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.80 2014 1,000,000 942,640
Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.85 2021 500,000 470,380
Marquette Hospital Finance Authority Refunding Revenue Bonds
Marquette General Hospital Series 1989C 7.50 2007-19 825,000 877,280
Monroe County Pollution Control Revenue Bonds AMT Detroit Edison
Fermi Plants Series 1990I (FGIC Insured) 7.65 2020 1,000,000 1,100,520
Monroe County Pollution Control Revenue Bonds AMT Detroit Edison
Fermi 2 Plants Series CC (AMBAC Insured) 7.50 2019 1,750,000 1,940,207
Muskegon Hospital Finance Authority Refunding Revenue Bonds Hackley Hospital
Series 1988A 8.00 2008 400,000 437,192
Northville Public Schools Unlimited Tax General Obligation Bonds
Series 1991B 7.00 2008 1,500,000 1,603,650
Oak Park School District Unlimited Tax General Obligation
Pre-Refunded Bonds 7.15 2009 705,000 765,461
Plymouth-Canton Community School District Series 1992C 6.50 2016 1,000,000 1,035,870
River Rouge School District #19 Unlimited Tax General Obligation Bonds
(FSA Insured) 5.50 2009 1,185,000 1,113,367
Rochester Hill Unlimited Tax General Obligation Bonds Series 1990A 6.00 2009-10 735,000 726,017
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Michigan Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal Bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
Rockford Public Schools Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds 7.375% 2019 $1,000,000 $ 1,117,190
Rockford Public Schools Unlimited Tax General Obligation Bonds
Qualified School Bond Loan Fund 5.875 2019 1,500,000 1,390,260
Southfield Public Schools Building & Site Unlimited Tax
General Obligation Bonds 5.875 2022 1,975,000 1,836,000
South Lake District Unlimited Tax General Obligation Bonds 6.80 2010 355,000 374,046
State Building Authority Refunding Revenue Bonds Series 1991I 6.25 2020 2,200,000 2,138,950
State Comprehensive Transportation Pre-Refunded Bonds Series 1986II 7.75 2011 135,000 144,669
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
Detroit Medical Center Series 1988A 8.125 2012 310,000 350,114
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988A 8.125 2012 90,000 98,731
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988B 8.00 2008 500,000 564,430
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Sisters of Mercy Health Group Series 1993P (MBIA Insured) 5.25 2021 1,200,000 1,013,856
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
McLaren Obligated Group Series 1991A 7.50 2021 1,750,000 2,002,053
State Hospital Finance Authority Revenue Bonds Henry Ford Hospital Series A 7.50 2013 400,000 433,076
State Hospital Finance Authority Revenue Bonds Henry Ford Hospital
Series 1990A 7.00 2010 1,000,000 1,035,220
State Hospital Finance Authority Revenue Bonds Henry Ford Hospital
Series 1992A 5.75 2017 1,500,000 1,352,850
State Hospital Finance Authority Pre-Refunded Revenue Bonds
Oakwood Hospital Group Series 1990A (FGIC Insured) 7.10 2018 1,000,000 1,113,780
State Job Development Authority Pollution Control Revenue Bonds
Chrysler Project 5.70 1999 1,000,000 997,180
State Public Power Agency Belle River Pre-Refunded Bonds Series 1983 6.625 2019 675,000 697,639
State Public Power Agency Belle River Pre-Refunded Revenue Bonds Series 1986 7.00 2018 1,510,000 1,584,443
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Detroit Edison Series 1990BB (MBIA Insured) 7.00 2008 1,000,000 1,089,960
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Detroit Edison Series 1992BB (FGIC Insured) 6.50 2016 2,500,000 2,540,525
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Ford Motor Series 1991A 7.10 2006 1,650,000 1,786,950
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Escrowed to Maturity Oxford Institute 7.875 2005 150,000 173,898
State Trunk Line Series A (FGIC Insured) 5.75 2020 2,730,000 2,518,097
State University Board of Trustees General Revenue Bonds Series 1992A 6.25 2015 3,000,000 2,975,370
State University Hospital Pre-Refunded Revenue Bonds Series 1986A 7.75 2012 150,000 163,633
State University Revenue Parking System Pre-Refunded Bonds
Ann Arbor Campus Series A 7.40 2015 150,000 161,005
Taylor Tax Increment Finance Authority Bonds Series 1989A (MBIA Insured) 6.00 2007-09 1,205,000 1,220,455
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Michigan Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal Bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
Warren Consolidated School District Refunding Revenue Bonds
Unlimited Tax General Obligation Bonds (MBIA Insured) 5.50% 2021 $1,500,000 $ 1,343,640
Waterford School District Unlimited Tax General Obligation Bonds
Series Q 6.25 2013 340,000 337,372
Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport
Series 1986 (FGIC Insured) 8.00 2014 250,000 273,472
Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport
Series 1990A (AMBAC Insured) 7.00 2020 1,080,000 1,148,299
Wayne County Airport Revenue Bonds Detroit Metropolitan Airport Series 1993C
(MBIA Insured) 5.25 2021 1,500,000 1,279,980
Wyandotte Electric Pre-Refunded Revenue Bonds Series 1987 (AMBAC Insured) 7.875 2017 300,000 332,292
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $71,583,775) $ 74,896,329
_____________________________________________________________________________________________________________________________
Short-term security (0.6%)
_____________________________________________________________________________________________________________________________
Issuer (e) Effective Amount Value(a)
yield payable
at
maturity
_____________________________________________________________________________________________________________________________
Municipal note
Regents of the University of Michigan Hospital
Refunding Revenue Bonds Series 1992A
12-01-19 2.65% $ 500,000 $ 500,000
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $500,000) $ 500,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $72,083,775)(f) $ 75,396,329
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Investments in securities
IDS Michigan Tax-Exempt Fund
June 30, 1994
___________________________________________________________________
Investments in securities (continued)
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 06-30-94 06-30-93
___________________________________________________________________
AAA 65% 36%
AA 25 40
A 6 19
BBB and below 4 3
Non-rated - 2
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(e) Interest rate varies to reflect current market conditions; rate
shown is the effective rate on June 30, 1994.
(f) At June 30, 1994, the cost of securities for federal income tax
purposes was $72,060,816 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $ 4,576,063
Unrealized depreciation (1,240,550)
___________________________________________________________________
Net unrealized appreciation $ 3,335,513
___________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1994 compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (96.4%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,g) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Anoka County General Obligation Capital Improvement Revenue Bonds
Series 1989B 7.00% 2007-10 $7,950,000 $ 8,546,807
Anoka County Resource Recovery Revenue Bonds Northern States Power
Series 1985 7.15 2008 3,750,000 3,970,800
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.25 2001 155,000 164,660
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.30 2002 175,000 186,064
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.40 2003 190,000 202,441
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.50 2004 450,000 480,384
Appleton Correctional Facility Revenue Bonds Series 1990A 9.875 2020 4,000,000 (d) 2,520,000
Bass Brook Pollution Control Revenue Bonds Minnesota Power & Light
Series 1992 6.00 2022 6,300,000 5,942,412
Becker Pollution Control Revenue Bonds Northern States Power
Series 1987A 6.80 2007 4,025,000 4,180,727
Becker Pollution Control Revenue Bonds Northern States Power
Sherburne County Generating Station Units 1 & 2 Series 1987A 7.25 2005 2,000,000 2,072,200
Bemidji Hospital Facilities 1st Mortgage Revenue Bonds
North Country Health Services Series 1991 7.00 2021 1,755,000 1,819,566
Bloomington Community Development Refunding Revenue Bonds
Note 24th Avenue Motel 8.50 2005 1,858,796 1,905,266
Braham Independent School District #314 Refunding Bonds 5.20 2019 3,340,000 2,947,917
Brainerd Hospital Refunding Revenue Bonds Evangelical Lutheran
Good Samaritan Society Series 1992A (Capital Guaranty Insured) 6.65 2017 1,695,000 1,765,919
Brainerd Hospital Revenue Bonds Evangelical Lutheran
Good Samaritan Society Series 1992B (Capital Guaranty Insured) 6.65 2017 2,865,000 2,984,872
Burnsville Multi-family Housing Refunding Revenue Bonds
FHA-Summit Park Apartments Series 1993 6.00 2033 4,000,000 3,675,560
Chaska Advance Refunded Certificate of Participation
Lease Purchase Agreement Bonds Series 1986C 7.25 2001 800,000 850,784
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place Series 1991 10.00 2032 560,000 607,830
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place Series 1991 (FHA Insured) 7.75 2032 2,755,000 2,852,802
Duluth Economic Development Authority Health Care Facility
Pre-Refunded Revenue Bonds Benedictine Health System
St. Mary's Medical Center Series 1990 8.375 2020 2,000,000 2,336,040
Duluth Hospital Facilities St. Lukes Hospital
Pre-Refunded Revenue Bonds Series 1988 9.00 2018 2,500,000 2,882,400
Duluth Housing and Redevelopment Authority 1st Mortgage Revenue Bonds
Lakeshore Lutheran Home 8.25 2009 125,000 122,686
Duluth Recreation Revenue Certificate of Participation 9.00 2003-07 1,430,000 1,572,905
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1994 compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,g) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Eden Prairie Housing Development Refunding Revenue Bonds Eden Commons
Series 1990 (FHA Insured) 8.25% 2025 $6,420,000 $ 6,313,235
Edina Hospital System Revenue Bonds Fairview Hospital & Health Care Services
Series 1989A 7.125 2019 2,500,000 2,585,350
Edina Multi-family Housing Revenue Bonds Walker Assisted Living
Series 1991 9.00 2031 6,700,000 7,249,936
Faribault Single Family Mortgage Refunding Revenue Bonds Series 1991A 7.50 2011 3,550,000 3,634,348
Hennepin County Lease Revenue Certificate of Participation Series 1991 6.80 2017 7,250,000 7,657,088
Hennepin County Solid Waste Resource Recovery General Obligation
Revenue Bonds Series 1987A 8.20 2009 1,760,000 1,873,344
Hermantown Independent School District #700 General Obligation
School Building Pre-Refunded Bonds Series 1986A (MBIA Insured) 8.10 2006 290,000 311,895
Hubbard County Solid Waste Disposal Revenue Bonds AMT Potlatch Series 1989 7.375 2013 5,610,000 5,960,401
International Falls Solid Waste Disposal Revenue Bonds AMT Boise Cascade
Series 1990 7.75 2015 4,000,000 4,194,080
Maplewood Care Institute Series 1994 7.75 2024 3,830,000 3,651,637
Maplewood Multi-family Housing Revenue Bonds Maplewood (FHA Insured) 7.75 2021 2,135,000 2,139,206
Minneapolis & St. Paul Housing Board Multi-family Mortgage Revenue Bonds AMT
GNMA Collateral Mortgage Revenue Loan Riverside Plaza Series 1988 8.25 2030 3,945,000 4,186,316
Minneapolis Community Development Agency & St. Paul Housing
& Redevelopment Authority Home Ownership Mortgage Revenue Bonds
Family Housing Mortgage Phase II 7.875 2017 1,515,000 1,579,887
Minneapolis Convention Center Sales Tax Pre-Refunded Revenue Bonds
Series 1986 (AMBAC Insured) 7.625 2004 1,750,000 1,880,778
Minneapolis Convention Center Sales Tax Pre-Refunded Revenue Bonds
Series 1986 (AMBAC Insured) 7.75 1996 700,000 753,774
Minneapolis General Obligation Sales Tax Refunding Bonds Series 1992 6.25 2012 13,000,000 13,567,190
Minneapolis Health Care Facilities Revenue Bonds Fairview Hospital &
Healthcare Services Series 1993A (MBIA Insured) 5.25 2019 3,750,000 3,288,450
Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan
Incorporated
Series 1987A 8.125 2017 3,630,000 4,007,012
Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan
Incorporated
Series 1989A 7.00 2014 5,000,000 5,528,250
Minneapolis Housing & Redevelopment Authority of St. Paul
Health Care System Revenue Bonds Healthspan Series 1993 (AMBAC Insured) 4.75 2018 3,000,000 2,386,620
Minneapolis Nursing Home Revenue Bonds Walker Cityview & Southview Projects
Series 1992 8.50 2022 5,565,000 5,720,931
Minneapolis St. Paul Housing & Redevelopment Authority Health Care System
Revenue Bonds Healthspan Series 1993A (AMBAC Insured) 5.00 2007-13 6,690,000 5,991,651
Minneapolis Water & Sewer Revenue Bonds Series 1992 5.00 1995 5,000,000 5,057,050
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1994 compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,g) rate amount
_____________________________________________________________________________________________________________________________
Minnetonka Multi-family Housing Refunding Revenue Bonds Cedar Hill West
(FHA Insured) 7.75% 2026 $5,625,000 $ 5,520,150
Minnetonka Multi-family Housing Revenue Bonds The Cedar Hills Series 1985 7.50 2017 500,000 513,065
Montevideo Independent School District #129 General Obligation
Unlimited Tax Bonds School Credit Enhancement Program 4.90 2014 1,875,000 1,581,844
Northern Municipal Power Agency Electric Refunding Revenue Bonds
Series A (AMBAC Insured) 6.00 2019 2,250,000 2,174,422
Northern Municipal Power Agency Electric System Refunding Revenue Bonds
Series 1989A 7.25 2016 5,475,000 5,909,824
Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds
Series 1989A (AMBAC Insured) 7.40 2018 1,000,000 1,107,480
Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds
Series 1989B (AMBAC Insured) 7.40 2018 1,800,000 1,964,448
Norwood-Young America Independent School District #108 General Obligation
School Building Bonds Unlimited Tax School Credit
Enhancement Program Series 1994A 5.00 2014 1,345,000 1,159,229
Osseo Area Schools Independent School District #279
General Obligation School Building Bonds Series 1993A Inverse Floater 7.30 2012 5,000,000 (e) 4,250,000
Owatanna Public Utilities Pre-Refunded Revenue Bonds Series 1991 6.75 2016 1,000,000 1,075,470
Plymouth Multi-family Housing Revenue Bonds AMT Harbor Lane Apartments
Project
Series 1993 (Asset Guaranty Insured) 5.90 2013 2,325,000 2,142,069
Port Authority St. Paul General Obligation Bonds Series 1994 5.125 2017 2,885,000 2,544,916
Red Wing Industrial Development Refunding Revenue Bonds K mart Series 1993 5.50 2008 400,000 363,580
Richfield Independent School District #280 Unlimited Tax General Obligation
School Building Bonds Series 1993C Inverse Floater (FGIC Insured) 7.15 2010 3,300,000 (e) 2,833,875
Richfield Independent School District #280 Unlimited Tax General Obligation
School Building Bonds Series 1993C Inverse Floater (FGIC Insured) 7.25 2012 2,510,000 (e) 2,081,694
Robbinsdale Hospital Pre-Refunded Revenue Bonds
North Memorial Medical Center Series 1989 (AMBAC Insured) 7.375 2019 2,200,000 2,439,800
Rochester Health Care Facility Revenue Bonds Mayo Foundation/Mayo Medical
Center Series 1992I 5.75 2021 3,000,000 2,752,920
Rochester Multi-family Housing Development Revenue Bonds Civic Square
Series 1991 (FHA Insured) 7.45 2031 4,475,000 4,569,736
Roseville Health Care Facility Refunding Revenue Bonds
Presbyterian Homes of Minnesota Series 1987 7.50 2007 2,250,000 2,339,910
Rush City Independent School District #139 Unlimited Tax School Building
Refunding Bonds School Credit Enhancement Program 5.25 2018 2,595,000 2,297,250
St. Cloud Hospital Facilities Revenue Bonds St. Cloud Hospital Series 1990B
(AMBAC Insured) 7.00 2020 5,000,000 5,561,350
St. Cloud Hospital Refunding Revenue Bonds Series 1993C (AMBAC Insured) 5.25 2013 1,000,000 897,070
St. Cloud Hydro Electric Generation Facility Gross Revenue Bonds 7.375 2018 1,100,000 1,165,296
Series 1986
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993 (AMBAC Insured) 5.20 2023 4,500,000 3,817,935
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1994 compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,g) rate amount
_____________________________________________________________________________________________________________________________
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993A (AMBAC Insured) 5.20% 2016 $ 3,000,000 $ 2,629,350
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993B Inverse Floater
(AMBAC Insured) 6.773 2013 7,000,000 (e) 5,232,500
St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds
Park Nicollet Medical Center Series 1990A 9.25 2020 4,000,000 4,822,680
St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds
Park Nicollet Medical Center Series 1991A 8.625 2021 2,000,000 2,358,160
St. Louis Park Multi-family Rental Housing Revenue Bonds
Mortgage Loan-Community Housing & Services Series 1985 (FHA Insured) 7.375 2028 2,250,000 2,343,555
St. Paul & Minneapolis Housing & Redevelopment Authority Health Care
Facility Revenue Bonds Group Health Plan Series 1992 6.75 2013 10,500,000 (f) 10,624,320
St. Paul Housing & Redevelopment Authority Hospital Facility Revenue Bonds
St. Paul Ramsey Medical Center (AMBAC Insured) 5.55 2023 2,000,000 1,821,140
St. Paul Housing & Development Bonds Highland Retirement (FHA Insured) 7.013 2026 5,210,000 (d) 4,793,200
St. Paul Housing & Redevelopment Authority Commercial Development
Refunding Revenue Bonds Beverly Enterprises Series 1992 7.75 2002 2,900,000 3,053,265
St. Paul Housing & Redevelopment Authority Health Care Facility
Revenue Bonds
Lyngblomsten Care Center Series 1993A 7.125 2017 1,960,000 1,889,714
St. Paul Housing & Redevelopment Authority Health Care Facility
Revenue Bonds
Lyngblomsten Care Center Series 1993A 9.60 2006 1,110,000 1,108,912
St. Paul Housing & Redevelopment Authority Health Care Facility
Revenue Bonds
Multi-family Rental Housing Revenue Bonds Lynblomsten Project 1993B 7.00 2024 1,930,000 1,786,794
St. Paul Housing & Redevelopment Authority Sales Tax Revenue Bonds
Civic Center Series 1993 5.55 2023 5,000,000 4,506,900
St. Paul Sewer Refunding Revenue Bonds Series 1993 (AMBAC Insured) 5.60 2008 7,700,000 7,484,477
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Series 1992B 5.75 2018 1,100,000 1,023,770
Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988A 8.125 2018 1,315,000 1,471,722
Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988B 8.125 2018 1,000,000 1,119,180
Southern Minnesota Municipal Power Agency Power Supply System
Pre-Refunded Revenue Bonds Series 1986A 6.75 2013 1,000,000 1,055,090
Southern Minnesota Municipal Power Agency Power Supply System
Pre-Refunded Revenue Bonds Series 1986B 7.00 2016 2,500,000 2,646,725
Southern Minnesota Municipal Power Agency Power Supply System
Pre-Refunded Revenue Bonds Series 1984B 7.00 2018 3,475,000 3,707,269
Southern Minnesota Municipal Power Agency Power Supply System
Pre-Refunded Revenue Bonds Series 1986C 7.125 2015 8,000,000 8,484,000
Spring Park Health Care Facility Revenue Bonds Twin Birch Health
Care Center
Series 1991 8.25 2011 1,780,000 1,920,175
State General Obligation Various Purpose Pre-Refunded Bonds Series 1990 7.00 2009 7,850,000 8,604,306
State General Obligation Various Purpose Pre-Refunded Bonds Series 1991 6.70 2011 9,065,000 9,828,273
State Higher Education Facility Authority Mortgage
Pre-Refunded Revenue Bonds St. Mary's College Series 2M 8.375 2017 1,000,000 1,140,060
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1994 compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,g) rate amount
_____________________________________________________________________________________________________________________________
State Housing Facility Authority Housing Development Bonds Series A 7.125% 2020 $ 845,000 $ 862,120
State Housing Facility Authority Housing Development Bonds Series 1976A 7.25 2018 205,000 209,799
State Housing Facility Authority Housing Development Bonds Series 1978B 7.10 2021 470,000 479,142
State Housing Facility Authority Housing Development Bonds Series 1979A 7.00 2022 700,000 714,595
State Housing Facility Authority Housing Finance Agency Housing Development
Single Family Mortgage Bonds Series B 7.25 2016 480,000 495,912
State Housing Finance Agency Single Family Mortgage Bonds Series AMT 1989A 8.00 2029 1,860,000 1,915,819
State Housing Finance Agency Single Family Mortgage Bonds Series AMT 1990A 7.95 2022 3,915,000 3,988,954
State Housing Finance Agency Single Family Mortgage Bonds Series AMT 1991A 7.45 2022 3,595,000 3,722,874
State Housing Finance Agency Single Family Mortgage Bonds Series 1992A 6.95 2016 3,330,000 3,390,107
State Public Facilities Authority Water Pollution Control Revenue Bonds
Series 1989A 7.00 2009 6,250,000 6,647,937
State Public Facilities Authority Water Pollution Control Revenue Bonds
Series 1992A 6.50 2014 9,050,000 9,574,538
State University Board of Regents General Obligation Bonds
Series 1993A Inverse Floater 6.427 2003 5,000,000 (e) 4,400,000
State University Board of Regents General Obligation Pre-Refunded Bonds
Series 1986A 7.75 2010 1,675,000 1,794,427
State University Board of Regents General Obligation Pre-Refunded Bonds
Series 1989A 6.00 2011 4,625,000 4,572,090
State University Board State University System Pre-Refunded Revenue Bonds
Series 1989A (MBIA Insured) 7.40 2019 4,000,000 4,412,640
Washington County General Obligation Capital Improvement Bonds
Series 1989A 7.00 2009-10 4,425,000 4,775,858
Washington County Housing & Redevelopment Authority Multi-family Housing
Revenue Bonds AMT Orleans Homes Series 1987-2 9.00 2017 2,000,000 2,155,480
Western Minnesota Municipal Power Agency Revenue Bonds
Escrowed to Maturity (AMBAC Insured) 6.75 2016 5,935,000 6,124,445
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series 1987A 5.50 2015 5,000,000 4,503,250
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series 1987A 6.875 2007 2,500,000 2,627,775
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series 1987A 7.00 2013 7,300,000 7,694,273
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series A (Secondary MBIA Insured) 5.50 2015 6,250,000 5,719,062
White Bear Lake Industrial Development Revenue Bonds AMT Taylor 8.75 2008 2,250,000 2,443,207
Series 1988A
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $385,791,640) $393,852,645
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1994 compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term securities (1.7%)
_____________________________________________________________________________________________________________________________
Issuer(g) Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
Municipal notes
Regents of University of Minnesota Series I
07-01-94 2.30% $1,000,000 $ 1,000,000
Richfield Independent School District #280 S.A.V.R.
(FGIC Insured)
08-01-94 3.16% 5,810,000 5,810,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $6,810,000) $ 6,810,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $392,601,640)(h) $400,662,645
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Investments in securities
IDS Minnesota Tax-Exempt Fund
June 30, 1994
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 06-30-94 06-30-93
___________________________________________________________________
AAA 43% 22%
AA 24 28
A 20 31
BBB and below 13 3
Non-rated -- 16
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
MBIA -- Municipal Bond Investors Assurance
(d) Presently non-income producing. Item identified is in default
as to payment of interest and/or principal.
(e) Inverse floaters represent securities which pay interest at a
rate that increases (decreases) based on (decreases) increases
of market short-term rates. Interest rate disclosed is the rate
in effect on June 30, 1994.
(f) Partially pledged as initial deposit on the following open
interest rate futures purchase contracts (see Note 5 to the
financial statements):
Type of security Par value
_____________________________________________________
U.S. Treasury Bond, Sept. 1994 $27,500,000
_____________________________________________________
(g) The following abbreviations are used in portfolio descriptions:
AMT -- Alternative Minimum Tax
S.A.V.R. -- Select Auction Variable Rate
(h) At June 30, 1994, the cost of securities for federal income tax
purposes was $392,505,556 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $19,346,065
Unrealized depreciation (11,188,976)
___________________________________________________________________
Net unrealized appreciation $ 8,157,089
___________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS New York Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (96.9%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,h) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Battery Park City Authority Senior Refunding Revenue Bonds Series 1993A 5.25% 2017 $4,000,000 $ 3,456,920
Broome County Certificates of Partication Public Safety Facility
Series 1994 (MBIA Insured) 5.25 2022 1,250,000 1,064,338
Buffalo Municipal Water Finance Authority Water System Revenue Bonds
(FSA Insured) 5.75 2019 700,000 643,615
Erie County Water Authority Fourth Resolution Water Refunding Revenue Bonds
Zero Coupon Series 1992 (AMBAC Insured) 7.30 2017 1,215,000 (d) 225,613
Erie County Water Authority Water Works System Revenue Bonds
Escrowed to Maturity Series 1990A (AMBAC Insured) 6.00 2008 1,765,000 1,781,856
Fallsburg Sullivan County Unlimited Tax General Obligation Improvement
Pre-Refunded Bonds Series 1991 7.05 2011-14 1,300,000 1,450,566
Great Neck North Water Authority Water System Pre-Refunded Revenue Bonds
Series 1989A 6.00 2020 1,415,000 1,471,996
Metropolitan Transportation Authority Commuter Facilities
1987 Service Contract Refunding Bonds Series 5 6.50 2016 1,775,000 1,754,534
Metropolitan Transportation Authority Service Transit Facilities
Pre-Refunded Revenue Bonds Series G 8.50 2011 1,000,000 1,096,210
Metropolitan Transportation Authority Transit Facilities Bonds Series 5 6.00 2018 1,500,000 1,388,085
Metropolitan Transportation Authority Transit Facilities
Pre-Refunded Revenue Bonds Series F 8.375 2016 725,000 793,027
Monroe County Utility General Obligation Pre-Refunded Bonds
Water Improvement System 7.10 2008-14 2,190,000 2,406,328
Municipal Assistance New York City Series 57 7.25 2008 500,000 532,310
Municipal Assistance New York City Series 59 7.75 2006 660,000 722,561
Municipal Assistance New York City Series 62 6.75 2006 2,200,000 2,347,224
New York & New Jersey Port Authority Consolidated Revenue Bonds
AMT Series 61 8.125 2023 750,000 790,965
New York & New Jersey Port Authority Consolidated Revenue Bonds
AMT Series 62 8.00 2023 1,000,000 1,061,640
New York & New Jersey Port Authority Consolidated Revenue Bonds AMT
Series 84 6.00 2028 2,500,000 2,339,725
New York City General Obligation Unlimited Tax Bonds Series E
(Capital Guaranty Insured) 6.00 2016 1,500,000 (e) 1,438,230
New York City Municipal Water Finance Authority Water & Sewer System Revenue
Bonds Series B Inverse Floater (MBIA Insured) 7.35 2009 2,000,000 (f) 1,705,000
New York City Water Finance Authority Water & Sewer System
Pre-Refunded Revenue Bonds Series A (FGIC Insured) 6.75 2014 1,185,000 1,288,996
New York City Water Finance Authority Water & Sewer System Revenue
Bonds Series A (FGIC Insured) 6.75 2014 565,000 584,571
New York City Water Finance Authority Water & Sewer System Revenue
Pre-Refunded Bonds Series 1988A 7.00 2018 2,500,000 2,686,825
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS New York Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,h) rate amount
_____________________________________________________________________________________________________________________________
New York City Water Finance Authority Water & Sewer System Revenue Bonds
Series 1993A (AMBAC Insured) 5.75% 2018 $4,000,000 $ 3,706,400
State Certificate of Participation City University John J. College 7.25 2007 360,000 379,375
State Dormitory Authority City University System Pre-Refunded Revenue Bonds 8.125 2017 3,400,000 3,781,990
State Dormitory Authority City University System Pre-Refunded Revenue Bonds
Series 1986A 7.625 2013 1,000,000 1,079,900
State Dormitory Authority City University System Revenue Bonds
Series 1993A 5.75 2013 3,000,000 2,753,430
State Dormitory Authority State University Education Facility
Refunding Revenue Bonds Series 1990B 7.50 2011 1,900,000 2,098,968
State Dormitory Authority State University Education Facility
Pre-Refunded Revenue Bonds Series 1990A 7.70 2012 1,750,000 2,000,513
State Dormitory Authority Upstate Community Colleges Series A
(Connie Lee Insured) 5.625 2012 1,500,000 1,390,350
State Energy Research & Development Authority Electric Facility
Revenue Bonds AMT Consolidated Edison Series 1986A 7.50 2021 1,750,000 1,847,878
State Energy Research & Development Authority Electric Facility
Revenue Bonds AMT Consolidated Edison Series 1989A 7.75 2024 1,000,000 1,070,330
State Energy Research & Development Authority Electric Facility
Revenue Bonds AMT Consolidated Edison Series 1990A 7.50 2025 5,000,000 5,314,900
State Energy Research & Development Authority Gas Facility Revenue Bonds
Brooklyn Union Gas Series I 7.125 2020 2,000,000 2,114,620
State Energy Research & Development Authority Gas Facility Revenue Bonds
Brooklyn Union Gas Series II 7.00 2020 1,500,000 1,581,765
State Environmental Facility State Water & Pollution Control
Revolving Fund Revenue Bonds New York City Municipal Water
Finance Authority Series 1990A 7.50 2012 3,000,000 3,291,600
State Housing Finance Authority State University Construction Program
Pre-Refunded Bonds Series 1986A 8.00 2016 400,000 432,148
State Housing Finance Authority State University Construction Program
Pre-Refunded Bonds Series A 8.30 2018 500,000 563,535
State Local Government Assistance Pre-Refunded Bonds Series 1991A 7.00 2016 4,000,000 4,461,840
State Local Government Assistance Bonds Series 1992A 6.875 2019 2,000,000 2,103,380
State Medical Care Facility Finance Agency Hospital & Nursing Home
Mortgage Revenue Bonds Montefiore Hospital Series 1989A (FHA Insured) 7.25 2024 1,400,000 1,487,990
State Medical Care Facility Finance Agency Mental Health Services Facility
Improving Refunding Revenue Bonds Series 1993F 5.375 2014 1,000,000 867,180
State Medical Care Facility Finance Agency Mental Health Services Facility
Improving Refunding Revenue Bonds Series 1994A 5.25 2023 1,500,000 1,232,700
State Medical Care Facility Finance Agency Pre-Refunded Bonds
Presbyterian Hospital Series 1985B 8.00 2025 1,320,000 1,465,094
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS New York Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,h) rate amount
_____________________________________________________________________________________________________________________________
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.60% 2008 $1,500,000 $ 1,680,120
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.70 2022 1,950,000 2,187,471
State Medical Care Facility Finance Agency Revenue Bonds
North Shore University Glen Cove Series A (MBIA Insured) 5.125 2012 1,000,000 874,190
State Medical Care Facility Finance Agency Secured Hospital Revenue Bonds
Series 1987A 7.10 2027 550,000 571,148
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 4,000,000 4,205,960
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series 27 6.90 2015 3,000,000 3,046,320
State Mortgage Agency Revenue Bonds AMT Series 9 7.30 2017 1,000,000 1,019,880
State Power Authority General Purpose Pre-Refunded Revenue Bonds Series T 7.375 2018 1,000,000 1,063,120
State Thruway Authority Local Highway & Bridge Service Contract Bonds
Series 1991 6.00 2011 2,500,000 2,374,575
State Urban Development Correction Facility Pre-Refunded Bonds Series B 8.00 2015 1,000,000 1,073,260
State Urban Development Correction Facility
Pre-Refunded Revenue Bonds Series 1986 8.00 2015 750,000 804,945
State Urban Development Correction Facility Pre-Refunded Revenue Bonds
Series 1 (FSA Insured) 7.50 2020 4,500,000 5,080,950
State Urban Development Correctional Capital Facilities
Refunding Revenue Bonds Series 1993A 5.25 2021 2,500,000 2,066,600
Suffolk County General Obligation Public Improvement Refunding Bonds
Series G (MBIA Insured) 5.40 2014 1,000,000 902,120
Triborough Bridge & Tunnel Authority General Purpose
Pre-Refunded Revenue Bonds Series S 7.00 2021 3,000,000 3,327,030
Triborough Bridge & Tunnel Authority Special Obligation Refunding Bonds
Series 1991B (FGIC Insured) 6.875 2015 2,000,000 2,098,240
United Nations Development Pre-Refunded Revenue Bonds
Phase II & III 7.875 2026 1,460,000 1,574,333
United Nations Development Senior Lien Pre-Refunded Revenue Bonds
1986 Phase II & III 7.875 2006 250,000 269,577
United Nations Development Senior Lien Refunding Revenue Bonds
Series 1992A 6.00 2026 4,500,000 4,221,405
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $111,051,032) $116,498,265
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS New York Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term securities (1.1%)
_____________________________________________________________________________________________________________________________
Issuer (g) Effective Amount Value(a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
Municipal notes
New York City General Obligation Bonds Series H-5
08-12-12 3.50% $ 500,000 $ 500,000
New York City General Obligation Bonds Subseries 1994A-4
08-01-22 2.90 600,000 600,000
New York City Municipal Water Finance Authority
Water & Sewer System Series 1992C
06-15-22 2.75 200,000 200,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $1,300,000) $ 1,300,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $112,351,032)(i) $117,798,265
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Investments in securities
IDS New York Tax-Exempt Fund
June 30, 1994
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 06-30-94 06-30-93
___________________________________________________________________
AAA 46% 26%
AA 30 43
A 11 15
BBB and below 13 16
Non-rated -- --
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC - American Municipal Bond Association Corporation
FGIC - Financial Guarantee Insurance Corporation
FHA - Federal Housing Authority
FSA - Financial Security Assurance
MBIA - Municipal Bond Investors Assurance
(d) For zero coupon bonds, the interest rate disclosed represents
the annualized effective yield on the date of acquisition.
(e) Partially pledged as initial deposit on the following open
interest rate futures purchase contracts (see Note 5 to the
financial statements):
Type of security Par value
___________________________________________________________________
U.S. Treasury Bonds, Sept. 94 $9,000,000
___________________________________________________________________
(f) Inverse floaters represent securities which pay interest at a
rate that increases (decreases) based on (decreases) increases
of market short-term rates. Interest rate disclosed is the rate
in effect on June 30, 1994.
(g) Interest rate varies to reflect current market conditions; rate
shown is the effective rate on June 30, 1994.
(h) The following abbreviation is used in portfolio descriptions:
AMT - Alternative Minimum Tax
(i) At June 30, 1994, the cost of securities for federal income tax
purposes was $112,324,643 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $7,810,635
Unrealized depreciation (2,337,013)
___________________________________________________________________
Net unrealized appreciation $5,473,622
___________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Ohio Tax-Exempt Fund (Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (98.2%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds
Childrens Hospital Medical Center (AMBAC Insured) 5.00% 2015 $1,000,000 $ 854,640
Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds
Childrens Hospital Medical Center Series 1993 (AMBAC Insured) 5.25 2020 1,500,000 1,300,290
Barberton Limited Tax Various Purpose General Obligation Bonds
Series 1989-1 7.35 2009 700,000 727,020
Bedford School District Unlimited Tax Improvement General Obligation
Various Purpose Bonds Series 1993 6.25 2013 700,000 688,373
Bedford Sewer System Mortgage Revenue Bonds Series 1986 (AMBAC Insured) 7.80 2010 300,000 327,597
Bellefontaine Hospital Facility Refunding Revenue Bonds
Mary Rutan Health Association of Logan County Series 1993 6.00 2013 1,000,000 892,680
Benjamin Logan Local School District Refunding Revenue Bonds
Childrens Hospital Medical Center (AMBAC Insured) 5.20 2010 550,000 502,271
Butler County Hospital Facility Improvement Refunding Revenue Bonds 7.50 2010 1,750,000 1,709,347
Cincinnati Student Loan Funding Corporation Junior Sub Bonds AMT
Series 1993B 6.20 2012 1,000,000 961,100
Cincinnati Student Loan Funding Corporation Senior Sub Bonds Series 1993A 6.15 2010 500,000 481,210
Clermont County Hospital Facility Refunding Revenue Bonds
Mercy Health Systems Series B (AMBAC Insured) 5.875 2015 1,250,000 1,193,837
Clermont County Hospital Facility Revenue Bonds Mercy Health System
Province of Cincinnati Series 1989A (AMBAC Insured) 7.50 2019 750,000 831,165
Cleveland Airport Systems Revenue Bonds AMT Series 1990A (MBIA Insured) 7.40 2020 500,000 547,750
Cleveland General Obligation Pre-Refunded Bonds 7.375 2003 125,000 136,746
Cleveland Public Power System 1st Mortgage Pre-Refunded Revenue Bonds 8.375 2017 100,000 111,740
Cleveland Waterworks Improvement 1st Mortgage Pre-Refunded Revenue Bonds
Series F 1992A (AMBAC Insured) 6.50 2021 1,590,000 1,722,145
Cleveland Waterworks Improvement 1st Mortgage Refunding Revenue Bonds
Series F 1992B (AMBAC Insured) 6.25 2016 1,000,000 999,980
Cleveland Waterworks Improvement 1st Mortgage Revenue Bonds Series 1987E 6.00 2017 200,000 189,614
Cleveland Waterworks Improvement 1st Mortgage Pre-Refunded Revenue Bonds
Series 1987E 7.875 2016 650,000 709,280
Columbus Sewer Pre-Refunded Revenue Bonds Series A 8.00 2008 100,000 108,391
Columbus Water System Refunding Revenue Bonds Series 1991 6.375 2010 1,000,000 1,009,320
Coshocton County Solid Waste Disposal Refunding Revenue Bonds
Stone Container Series 1992 7.875 2013 1,000,000 1,000,980
Cuyahoga County Hospital Improvement Revenue Bonds
Cleveland Clinic Foundation 7.00 2013 500,000 522,105
Cuyahoga County Hospital Improvement Pre-Refunded Revenue Bonds
Cleveland Clinic Foundation Series 1987A 7.875 2010 275,000 304,931
Cuyahoga County Hospital Improvement Revenue Bonds
Mount Sinai Medical Center Series 1991 (AMBAC Insured) 6.625 2021 600,000 615,288
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Ohio Tax-Exempt Fund Percentages represent value of
June 30, 1994 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c) rate amount
_____________________________________________________________________________________________________________________________
Cuyahoga County Hospital Improvement Revenue Bonds
University Hospitals Health System Series 1992 (AMBAC Insured) 6.50% 2011 $ 500,000 $ 514,645
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992 5.50 2011 1,500,000 1,399,695
Cuyahoga County Hospital Refunding Revenue Bonds
Mount Sinai Medical Center Series 1987A 8.125 2014 400,000 439,992
Cuyahoga County Hospital Revenue Bonds Cleveland Fairview
General & Lutheran Medical Center Series 1993 6.25 2010 500,000 494,455
Cuyahoga County Hospital Revenue Bonds Meridia Health Series 1991 7.00 2023 1,000,000 1,035,290
Cuyahoga County Limited Tax General Obligation Bonds 5.60 2013 500,000 471,620
Cuyahoga Hospital Revenue Bonds Metrohealth System Series 1989
(MBIA Insured) 6.00 2019 1,000,000 971,130
Dover Limited Tax Improvement General Obligation
Municipal Sewer System Bonds 7.10 2009 1,000,000 1,077,700
Dublin Local School District Unlimited Tax Improvement
School Building Construction Pre-Refunded Bonds (FGIC Insured) 7.50 2003 100,000 110,048
Elyria Limited Tax Improvement General Obligation
Recreation Facility Bonds 7.10 2009 715,000 765,379
Erie County Hospital Improvement Refunding Revenue Bonds
Firelands Community Hospital Series 1992 6.75 2015 2,000,000 2,030,780
Fairfield Union Local School District School Facilities
Unlimited Tax Improvement General Obligation Bonds (AMBAC Insured) 5.90 2018 625,000 601,525
Findlay Limited Tax General Obligation Sewage System Pre-Refunded Bonds
Series 1989 7.20 2011 500,000 555,180
Franklin County Convention Facilities Authority Tax & Lease
Revenue Anticipation Bond (MBIA Insured) 5.80 2013 1,000,000 960,570
Franklin County Convention Facilities Authority Tax & Lease
Revenue Anticipation Pre-Refunded Bonds (MBIA Insured) 7.00 2019 1,500,000 1,672,485
Franklin County Limited Tax General Obligation Refunding Bonds Series 1993 5.50 2013 1,000,000 929,510
Highland Heights Limited Tax Improvement General Obligation Street Bonds 7.75 2008 400,000 447,168
Kettering School District Improvement General Obligation Bonds
(FGIC Insured) 5.25 2022 1,000,000 872,530
Lake County Water System Limited Tax Improvement General Obligation
Pre-Refunded Bonds Series 1987-2 8.125 2010 700,000 783,503
Lakota Local School District Butler County School Unlimited Tax
Improvement Bonds 7.00 2012 500,000 545,200
Lakota Local School District Butler County School Unlimited Tax Improvement
Pre-Refunded Bonds 7.90 2011 200,000 222,648
Lima Limited Tax Improvement General Obligation Sanitary Sewer System
Pre-Refunded Bonds 8.25 2012 200,000 224,640
Lucas County Hospital Refunding Revenue Bonds St. Vincent's Medical Center
Series B (MBIA Insured) 5.25 2020 2,000,000 1,734,700
Lucas County Hospital Pre-Refunded Revenue Bonds Toledo Hospital
(MBIA Insured) 7.00 2014 100,000 106,587
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Ohio Tax-Exempt Fund
June 30, 1994 (Percentages represent value of
investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Marietta Sewer System Improvement Bonds (BIG Insured) 7.50% 2007 $ 200,000 $ 221,496
Marion County Health Care Facilities Improvement Refunding Revenue
Bonds United Church Homes Series 1993 6.375 2010 1,000,000 956,410
Marysville Sewer System 1st Mortgage Revenue Bonds AMT Series 1988
(BIG Insured) 7.85 2008 400,000 444,604
Marysville Water System Mortgage Revenue Bonds Series 1991 (MBIA Insured) 7.05 2021 1,000,000 1,077,830
Mason Waterworks System Refunding Revenue Bonds Series 1993
(AMBAC Insured) 6.00 2017 600,000 585,234
Massillon School District School Unlimited Tax Improvement
General Obligation Bonds Series 1989-1 (AMBAC Insured) 7.10 2011 300,000 333,552
Medina County Hospital Revenue Bonds Medina County Community Hospital
Series 1987 (AMBAC Insured) 6.875 2016 100,000 106,662
Miami County Hospital Facility Refunding Revenue Bonds
Upper Valley Medical Center Series 1987A 8.375 2013 75,000 82,701
Miami State University General Receipts Bonds Series 1993 (FGIC Insured) 5.60 2013 500,000 468,505
Montgomery County Health Facilities Revenue Bonds Friendship Village Dayton
Series 1990A 9.25 2016 1,000,000 1,054,270
Montgomery County Industrial Development Revenue Bonds AMT SPM System
Series 1991 10.00 2005 720,000 (d) 360,000
Montgomery County Sewer System Refunding Revenue Bonds
Greater Moraine - Beavercreek District Series 1993 (FGIC Insured) 5.60 2011 1,000,000 943,090
Newark Water System Limited Tax Improvement General Obligation Bonds
(AMBAC Insured) 6.00 2018 500,000 488,085
Parma Hospital Improvement Revenue Bonds Parma Community General Hospital
Series 1989B (MBIA Insured) 7.125 2013 500,000 541,490
Pickerington Local School District Unlimited Tax General Obligation
Pre-Refunded Bonds (AMBAC Insured) 7.00 2013 1,000,000 1,114,990
Pleasant Local School District Unlimited Tax Improvement
General Obligation Bonds Series 1993 (AMBAC Insured) 5.10 2018 780,000 669,224
Rocky River City School District Unlimited Tax Improvement
General Obligation Bonds Series 1991A 6.90 2011 2,220,000 2,344,409
Rural Loraine County Water Authority Water Resource Improvement
Pre-Refunded Revenue Bonds Series 1991 (AMBAC Insured) 7.00 2011 1,000,000 1,107,360
South Euclid Lyndhurst School District General Obligation Bonds
(FGIC Insured) 5.25 2018 1,000,000 876,670
Southwest Local School District Hamilton & Butler Counties School
Unlimited Tax Improvement Bonds (AMBAC Insured) 7.65 2010 500,000 572,640
Stark County Hospital Pre-Refunded Revenue Bonds
Timkin Mercy Medical Center 7.50 2007 125,000 135,503
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Ohio Tax-Exempt Fund
June 30, 1994 (Percentages represent value of
investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
State Air Quality Development Authority Revenue Bonds
Cleveland Electric Illuminating Series A 7.00% 2009 $ 350,000 $ 350,431
State Building Authority Local Jail Grant Bonds Series 1989A
(MBIA Insured) 7.35 2009 500,000 560,265
State Building Authority State Correctional Facility Refunding Revenue Bonds
Series 1993A 5.90 2007 1,000,000 991,730
State Building Authority State Correctional Facility Refunding Revenue Bonds
Series 1993A 6.00 2008 500,000 509,065
State Building Authority State Correctional Facility Revenue Bonds Series B 7.125 2009 75,000 79,022
State Building Authority State Facility Pre-Refunded Bonds
Columbus State Office Building Series 1985C 7.35 2005 1,000,000 1,126,940
State Building Authority State Facility Pre-Refunded Bonds
Department of Administrative Services Data Center Series 1988A 7.80 2007 300,000 331,626
State Higher Educational Facility Pre-Refunded Revenue Bonds
Oberlin College Series 1989 7.375 2014 500,000 560,195
State Higher Educational Facility Revenue Bonds University of Dayton
Series 1994 (FGIC Insured) 5.80 2019 900,000 848,700
State Housing Finance Agency Mortgage Revenue Bonds AMT
Aristocrat South Board & Care Series 1991A (FHA Insured) 7.30 2031 1,500,000 1,525,515
State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT
Series 1990A (GNMA Insured) 7.80 2030 745,000 772,200
State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT
Series 1990C (GNMA Insured) 7.85 2021 990,000 1,025,977
State Municipal Electric Generation Agency Joint Venture #5 Revenue Bonds
(AMBAC Insured) 5.375 2024 1,250,000 1,098,600
State Water Development Authority Improvement Refunding Revenue Bonds
Pure Water Series (AMBAC Insured) 6.00 2008 1,500,000 1,517,265
State Water Development Authority Pollution Control Revenue Bonds
Phillip Morris 7.25 2008 150,000 161,028
State Water Development Authority Water Development Pre-Refunded Bonds
Pure Water Series 1987I 7.75 2006-14 200,000 219,190
State Water Development Authority Water Development Pre-Refunded Bonds
Pure Water Series 1988I 7.00 2014 500,000 535,165
Summit County Industrial Development Revenue Bonds Century Products 7.75 2005 100,000 107,639
Summit County Limited Tax General Obligation Pre-Refunded Bonds
Human Services Facility (AMBAC Insured) 8.00 2007 100,000 111,541
Sycamore Board of Education Community School District
Hamilton County School Improvement Bonds 6.50 2009 500,000 508,150
University of Cincinnati General Receipt Bonds Series 1991G 7.00 2011 1,000,000 1,068,220
University of Cincinnati General Receipt Pre-Refunded Bonds Series H 7.50 2008 250,000 276,100
University of Cincinnati General Receipt Pre-Refunded Bonds Series I-1 7.10 2010 750,000 828,270
University of Toledo General Receipt Bonds Series A (FGIC Insured) 5.90 2020 1,000,000 955,290
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
IDS Ohio Tax-Exempt Fund
June 30, 1994 (Percentages represent value of
investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (continued)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c) rate amount
_____________________________________________________________________________________________________________________________
University of Toledo General Receipt Bonds Series B (FGIC Insured) 5.90% 2020 $ 1,000,000 $ 955,290
University of Toledo General Receipt Pre-Refunded Bonds Series 1990
(MBIA Insured) 7.125 2020 500,000 556,935
Warren County Various Purpose Limited Tax General Obligation Bonds
Series 1992 6.10 2012 500,000 499,960
Whitehall City School District Franklin County Unlimited Tax
Improvement General Obligation School Building Construction
Pre-Refunded Bonds 7.25 2013 500,000 558,935
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $68,841,082) 70,260,000 $ 70,538,749
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $68,841,082)(e) 70,260,000 $ 70,538,749
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Investments in securities
IDS Ohio Tax-Exempt Fund
June 30, 1994
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 06-30-94 06-30-93
___________________________________________________________________
AAA 65% 43%
AA 11 22
A 14 23
BBB and below 10 6
Non-rated -- 6
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(d) Presently non-income producing. For long-term debt securities
item identified is in default as to payment of interest and/or
principal.
(e) At June 30, 1994, the cost of securities for federal income tax
purposes was $68,810,402 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $3,370,429
Unrealized depreciation (1,642,082)
___________________________________________________________________
Net unrealized appreciation $1,728,347
___________________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Dec. 31, 1994
_____________________________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________________________
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
(Unaudited) (Unaudited) (Unaudited)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1)
(identified cost $226,241,022, $64,891,403 and
$73,604,255) $228,034,493 $63,663,446 $73,714,460
Cash in bank on demand deposit 12,740 613,041 2,730,756
Accrued interest receivable 4,804,924 1,557,079 1,270,367
Receivable for investment securities sold 21,875 5,188 5,250
_____________________________________________________________________________________________________________________________
Total assets 232,874,032 65,838,754 77,720,833
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Dividends payable to shareholders 429,535 84,156 24,020
Payable for investment securities purchased 981,370 -- 942,317
Accrued investment management and services fee 99,297 28,107 31,401
Accrued distribution fee 3,215 1,501 1,381
Accrued transfer agency fee 8,114 3,801 3,534
Other accrued expenses 70,822 30,059 25,177
_____________________________________________________________________________________________________________________________
Total liabilities 1,592,353 147,624 1,027,830
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares $231,281,679 $65,691,130 $76,693,003
_____________________________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________________________
Shares of beneficial interest - $.01 par value, unlimited
number of shares authorized; outstanding 46,744,339; 13,028,192
and 14,857,463 shares $ 467,443 $ 130,282 $ 148,575
Additional paid-in capital 232,102,156 67,003,640 76,266,075
Accumulated net realized gain (loss) (Notes 1 and 7) (3,444,354) (312,724) 68,884
Unrealized appreciation (depreciation) (Note 5) 2,156,434 (1,130,068) 209,469
_____________________________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $231,281,679 $65,691,130 $76,693,003
_____________________________________________________________________________________________________________________________
Net asset value per share $ 4.95 $ 5.04 $ 5.16
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Dec. 31, 1994
_____________________________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________________________
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
(Unaudited) (Unaudited) (Unaudited)
_____________________________________________________________________________________________________________________________
Investments in securities, at value (Note 1)
(identified cost $370,458,586, $109,313,325
and $67,632,022) $367,298,692 $110,422,200 $66,747,987
Cash in bank on demand deposit -- 768,849 1,080,032
Accrued interest receivable 8,767,837 2,387,466 1,023,329
Receivable for investment securities sold 368,750 14,063 5,188
_____________________________________________________________________________________________________________________________
Total assets 376,435,279 113,592,578 68,856,536
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 2,162,803 -- --
Dividends payable to shareholders 123,839 36,627 21,903
Accrued investment management and services fee 163,354 48,423 29,333
Accrued distribution fee 7,730 2,336 1,323
Accrued transfer agency fee 19,590 5,947 3,362
Other accrued expenses 260,330 40,622 24,194
_____________________________________________________________________________________________________________________________
Total liabilities 2,737,646 133,955 80,115
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares $373,697,633 $113,458,623 $68,776,421
_____________________________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________________________
Shares of beneficial interest - $.01 par value, unlimited
number of shares authorized; outstanding 74,855,838; 22,978,473
and 13,540,588 shares $ 748,558 $ 229,785 $ 135,406
Additional paid-in capital 381,558,224 113,492,683 69,747,411
Accumulated net realized loss (Notes 1 and 7) (6,196,783) (1,608,405) (320,250)
Unrealized appreciation (depreciation) (Note 5) (2,412,366) 1,344,560 (786,146)
_____________________________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $373,697,633 $113,458,623 $68,776,421
_____________________________________________________________________________________________________________________________
Net asset value per share $ 4.99 $ 4.94 $ 5.08
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Six months ended Dec. 31, 1994
_____________________________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________________________
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
(Unaudited) (Unaudited) (Unaudited)
_____________________________________________________________________________________________________________________________
Income:
Interest $8,159,010 $2,256,616 $2,427,005
_____________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 645,698 181,449 196,929
Distribution fee 20,260 9,481 8,515
Transfer agency fee 51,277 24,206 21,753
Compensation of trustees 4,184 4,107 3,209
Compensation of officers 1,524 439 236
Postage 11,006 3,298 2,842
Registration fees 5,941 1,953 940
Reports to shareholders 6,713 1,703 1,624
Audit fees 7,375 6,500 6,500
Administrative 2,664 1,427 1,212
Other 775 1,938 995
_____________________________________________________________________________________________________________________________
Total expenses 757,417 236,501 244,755
_____________________________________________________________________________________________________________________________
Investment income -- net 7,401,593 2,020,115 2,182,250
_____________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________________________
Net realized gain (loss) on security transactions (Note 3) 810,520 (4,450) 397,970
Net realized loss on closed interest rate futures contracts (1,296,613) (62,823) (62,823)
Net realized gain on exercised or expired option contracts written (Note 6) 294,020 58,611 58,611
_____________________________________________________________________________________________________________________________
Net realized gain (loss) on investments (192,073) (8,662) 393,758
Net change in unrealized appreciation or depreciation (8,997,689) (2,711,084) (3,103,085)
_____________________________________________________________________________________________________________________________
Net loss on investments (9,189,762) (2,719,746) (2,709,327)
_____________________________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(1,788,169) $ (699,631) $ (527,077)
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Six months ended Dec. 31, 1994
_____________________________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________________________
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
(Unaudited) (Unaudited) (Unaudited)
_____________________________________________________________________________________________________________________________
Income:
Interest $13,427,126 $3,883,051 $2,275,088
_____________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 1,043,298 306,852 185,087
Distribution fee 48,462 14,583 8,197
Transfer agency fee 123,738 37,298 20,996
Compensation of trustees 13,465 3,779 2,455
Compensation of officers 1,665 613 400
Custodian fees 110 -- --
Postage 41,965 5,777 2,547
Registration fees 29,995 2,194 1,217
Reports to shareholders 44,398 2,212 1,421
Audit fees 7,750 7,125 6,500
Administrative 3,093 1,206 657
Other 8,920 2,277 2,335
_____________________________________________________________________________________________________________________________
Total expenses 1,366,859 383,916 231,812
_____________________________________________________________________________________________________________________________
Investment income -- net 12,060,267 3,499,135 2,043,276
_____________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________________________
Net realized gain (loss) on security transactions (Note 3) (2,616,945) 45,533 (11,687)
Net realized loss on closed interest rate futures contracts (2,124,681) (633,831) (62,823)
Net realized gain on exercised or expired option contracts written (Note 6) 723,957 179,961 58,611
______________________________________________________________________________________________________________________________
Net realized loss on investments (4,017,669) (408,337) (15,899)
Net change in unrealized appreciation or depreciation (9,537,153) (3,796,548) (2,483,813)
_____________________________________________________________________________________________________________________________
Net loss on investments (13,554,822) (4,204,885) (2,499,712)
_____________________________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(1,494,555) $ (705,750) $ (456,436)
_____________________________________________________________________________________________________________________________
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
_____________________________________________________________________________________________________________________________
Operations and distributions
_____________________________________________________________________________________________________________________________
California Tax-Exempt Fund Massachusetts Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
Six months ended Year ended Six months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
(Unaudited) (Unaudited)
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income -- net $ 7,401,593 $ 15,236,634 $ 2,020,115 $ 3,862,026
Net realized loss on investments (192,073) (2,375,504) (8,662) (29,934)
Net change in unrealized appreciation or depreciation (8,997,689) (11,906,345) (2,711,084) (3,499,662)
_____________________________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting
from operations (1,788,169) 954,785 (699,631) 332,430
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (7,401,630) (15,235,348) (2,020,115) (3,862,035)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales (Note 2) 9,800,491 35,683,408 5,228,979 22,403,265
Reinvestment of distributions 5,157,785 10,573,864 1,578,221 3,055,527
Payments for redemptions (29,683,554) (37,967,003) (10,444,906) (14,032,861)
_____________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
share transactions (14,725,278) 8,290,269 (3,637,706) 11,425,931
_____________________________________________________________________________________________________________________________
Total increase (decrease) in net assets (23,915,077) (5,990,294) (6,357,452) 7,896,326
Net assets at beginning of period 255,196,756 261,187,050 72,048,582 64,152,256
_____________________________________________________________________________________________________________________________
Net assets at end of period $231,281,679 $255,196,756 $65,691,130 $72,048,582
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series
_____________________________________________________________________________________________________________________________
Operations and distributions
______________________________________________________________________________________________________________________________
Michigan Tax-Exempt Fund Minnesota Tax-Exempt Fund
______________________________________________________________________________________________________________________________
Six months ended Year ended Six months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
(Unaudited) (Unaudited)
______________________________________________________________________________________________________________________________
Investment income -- net $ 2,182,250 $ 4,171,457 $ 12,060,267 $ 24,205,532
Net realized gain (loss) on investments 393,758 (72,444) (4,017,669) (351,284)
Net change in unrealized appreciation or depreciation (3,103,085) (3,496,616) (9,537,153) (22,689,828)
_____________________________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations (527,077) 602,397 (1,494,555) 1,164,420
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (2,182,176) (4,171,489) (12,060,310) (24,204,281)
Net realized gain (36,289) (68,841) -- --
_____________________________________________________________________________________________________________________________
Total distributions (2,218,465) (4,240,330) (12,060,310) (24,204,281)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales (Note 2) 8,581,243 15,113,866 24,303,818 81,250,235
Reinvestment of distributions 1,661,930 3,148,115 9,632,645 19,448,232
Payments for redemptions (7,487,442) (9,715,456) (55,074,596) (70,952,363)
_____________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
share transactions 2,755,731 8,546,525 (21,138,133) 29,746,104
_____________________________________________________________________________________________________________________________
Total increase (decrease) in net assets 10,189 4,908,592 (34,692,998) 6,706,243
Net assets at beginning of period 76,682,814 71,774,222 408,390,631 401,684,388
_____________________________________________________________________________________________________________________________
Net assets at end of period $76,693,003 $76,682,814 $373,697,633 $408,390,631
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
_____________________________________________________________________________________________________________________________
Operations and distributions
_____________________________________________________________________________________________________________________________
New York Tax-Exempt Fund Ohio Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
Six months ended Year ended Six months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
(Unaudited) (Unaudited)
______________________________________________________________________________________________________________________________
Investment income -- net $ 3,499,135 $ 6,895,342 $ 2,043,276 $ 3,927,846
Net realized loss on investments (408,337) (505,058) (15,899) (177,991)
Net change in unrealized appreciation or depreciation (3,796,548) (6,437,361) (2,483,813) (4,272,974)
_____________________________________________________________________________________________________________________________
Net decrease in net assets
resulting from operations (705,750) (47,077) (456,436) (523,119)
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (3,499,135) (6,894,339) (2,043,288) (3,927,883)
Net realized gain -- -- -- (786)
_____________________________________________________________________________________________________________________________
Total distributions (3,499,135) (6,894,339) (2,043,288) (3,928,669)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales (Note 2) 6,999,349 21,355,340 6,805,529 17,974,999
Reinvestment of distributions 2,715,805 5,365,427 1,600,824 3,100,875
Payments for redemptions (12,210,278) (16,789,123) (8,965,143) (9,646,507)
_____________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
share transactions (2,495,124) 9,931,644 (558,790) 11,429,367
_____________________________________________________________________________________________________________________________
Total increase (decrease) in net assets (6,700,009) 2,990,228 (3,058,514) 6,977,579
Net assets at beginning of period 120,158,632 117,168,404 71,834,935 64,857,356
_____________________________________________________________________________________________________________________________
Net assets at end of period $113,458,623 $120,158,632 $68,776,421 $71,834,935
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
(Unaudited as to Dec. 31, 1994)
______________________________________________________________________________
1. Summary of significant accounting policies
IDS California Tax-Exempt Trust and IDS Special Tax-
Exempt Series Trust were organized as Massachusetts
business trusts. IDS California Tax-Exempt Trust
includes only IDS California Tax-Exempt Fund. IDS
Special Tax-Exempt Series Trust is a "series fund"
that is currently composed of individual state tax-
exempt funds and one insured national tax-exempt
fund, including IDS Massachusetts Tax-Exempt Fund,
IDS Michigan Tax-Exempt Fund, IDS Minnesota Tax-
Exempt Fund, IDS New York Tax-Exempt Fund and IDS
Ohio Tax-Exempt Fund (the funds). The funds are non-
diversified, open-end management investment companies
as defined in the Investment Company Act of 1940 (as
amended). The funds, excluding IDS Insured Tax-Exempt
Fund, concentrate their investments in a single state
and therefore may have more credit risk related to
the economic conditions of the respective state than
funds that have a broader geographical
diversification. Significant accounting policies
followed by the funds are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities for which market quotations
are not readily available are valued at fair value
according to methods selected in good faith by the
board of trustees. Determination of fair value
involves, among other things, reference to market
indexes, matrixes and data from independent brokers.
Short-term securities maturing in more than 60 days
from the valuation date are valued at the market
price or approximate market value based on current
interest rates; those maturing in 60 days or less are
valued at amortized cost.
Options transactions
In order to produce incremental earnings, protect
gains and facilitate buying and selling of securities
for investment purposes, each fund may buy and sell
put and call options and write covered call options
on portfolio securities and may write cash-secured
put options. The risk in writing a call option is
that each fund gives up the opportunity of profit if
the market price of the security increases. The risk
in writing a put option is that each fund may incur a
loss if the market price of the security decreases
and the option is exercised. Each fund also has the
additional risk of not being able to enter into a
<PAGE>
closing transaction if a liquid secondary market does
not exist. Each fund also may write over-the-counter
options where the completion of the obligation is
dependent upon the credit standing of the other
party.
Option contracts are valued daily at the closing
prices on their primary exchanges and unrealized
appreciation or depreciation is recorded. Each fund
will realize a gain or loss upon expiration or
closing of the option transaction. When options on
debt securities or futures are exercised, the fund
will realize a gain or loss. When other options are
exercised, the proceeds on sales for a written call
option, the purchase cost for a written put option or
the cost of a security for a purchase put or call
option is adjusted by the amount of the premium
received or paid.
<PAGE>
Futures transactions
In order to gain exposure to or protect itself from
changes in the market, each fund may buy and sell
interest rate futures contracts. Risks of entering
into futures contracts and related options include
the possibility that there may be an illiquid market
and that a change in the value of the contract or
option may not correlate with changes in the value of
the underlying securities.
Upon entering into a futures contract, each fund is
required to deposit either cash or securities in an
amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation
margin) are made or received by each fund each day.
The variation margin payments are equal to the daily
changes in the contract value and are recorded as
unrealized gains and losses. Each fund recognizes a
realized gain or loss when the contract is closed or
expires.
Federal taxes
Since each fund's policy is to comply with all
sections of the Internal Revenue Code applicable to
regulated investment companies and to distribute all
of its taxable income to shareholders, no provision
for income or excise taxes is required.
Net investment income (loss) and net realized gains
(losses) may differ for financial statement and tax
purposes primarily because of the deferral of losses
on certain futures contracts, the recognition of
certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred
due to "wash sale" transactions. The character of
distributions made during the year from net
investment income or net realized gains may differ
from their ultimate characterization for federal
income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that
the income or realized gains (losses) were recorded
by the fund.
<PAGE>
Dividends to shareholders
Dividends from net investment income, declared daily
and paid monthly, are reinvested in additional shares
of each fund at net asset value or payable in cash.
Capital gains, when available, are distributed along
with the last income dividend at the end of the
calendar year.
Other
Security transactions are accounted for on the date
securities are purchased or sold. Interest income,
including level-yield amortization of premium and
discount, is accrued daily.
______________________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991, each
fund pays American Express Financial Corporation a
fee for managing its investments, recordkeeping and
other specified services. The fee is a percentage of
each fund's average daily net assets consisting of a
group asset charge in reducing percentages from 0.46%
to 0.32% annually on the combined net assets of all
non-money market funds in the IDS MUTUAL FUND GROUP
and an individual annual asset charge of 0.13% of
average daily net assets for each fund.
Each fund also pays American Express Financial
Corporation a distribution fee at an annual rate of
$6 per shareholder account and a transfer agency fee
at an annual rate of $15.50 per shareholder account.
The transfer agency fee is reduced by earnings on
monies pending shareholder redemptions.
<PAGE>
American Express Financial Corporation will assume
and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive
applicable state expense limitation.
Sales charges by American Express Financial Advisors
Inc. for distributing the funds' shares were $227,465
for IDS California, $154,982 for IDS Massachusetts,
$98,362 for IDS Michigan, $580,207 for IDS Minnesota,
$192,480 for IDS New York and $115,834 for IDS Ohio
Tax-Exempt Funds for the six months ended Dec. 31,
1994.
Each fund also has a retirement plan for its
independent trustees. Upon retirement, trustees
receive monthly payments equal to one-half of the
retainer fee for as many months as they served as
trustees up to 120 months. There are no death
benefits. The plan is not funded but each fund
recognizes the cost of payments during the time the
trustees serve on the board. The retirement plan
expense amounted to $1,159 for IDS California, $984
for IDS Massachusetts, $2,156 for IDS Minnesota, $977
for IDS Michigan and $983 each for IDS New York and
IDS Ohio Tax-Exempt Funds for the six months ended
Dec. 31, 1994.
______________________________________________________________________________
3. Securities transactions
For the six months ended Dec. 31, 1994, cost of
purchases and proceeds from sales (other than short-
term obligations) aggregated $44,412,773 and
$61,704,150 for IDS California, $3,823,059 and
$7,096,186 for IDS Massachusetts, $13,362,305 and
$13,039,795 for IDS Michigan, $45,755,558 and
$58,471,667 for IDS Minnesota, $7,879,149 and
$9,662,389 for IDS New York and $17,614,116 and
$18,811,489 for IDS Ohio Tax-Exempt Funds. Realized
gains and losses are determined on an identified cost
basis.
<PAGE>
______________________________________________________________________________
4. Share transactions
<TABLE>
<CAPTION>
Transactions in shares of each fund for the periods
indicated are as follows:
Number of shares:
________________________________________________________________________________________________________________________
California Tax-Exempt Fund Massachusetts Tax-Exempt Fund Michigan Tax-Exempt Fund
_____________________________ ______________________________ ______________________________
Six months Year ended Six months Year ended Six months Year ended
ended 12/31/94 6/30/94 ended 12/31/94 6/30/94 ended 12/31/94 6/30/94
(Unaudited) (Unaudited) (Unaudited)
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Sold 1,942,845 6,578,766 1,018,916 4,061,994 1,652,212 2,687,659
Issued for reinvested
distributions 1,024,853 1,962,600 308,743 558,167 317,657 562,683
Redeemed (5,938,312) (7,091,287) (2,049,435) (2,564,761) (1,432,683) (1,739,752)
________________________________________________________________________________________________________________________
Net increase (decrease) (2,970,614) 1,450,079 (721,776) 2,055,400 537,186 1,510,590
________________________________________________________________________________________________________________________
Number of shares:
________________________________________________________________________________________________________________________
Minnesota Tax-Exempt Fund New-York Tax-Exempt Fund Ohio Tax-Exempt Fund
_____________________________ ______________________________ ______________________________
Six months Year ended Six months Year ended Six months Year ended
ended 12/31/94 6/30/94 ended 12/31/94 6/30/94 ended 12/31/94 6/30/94
(Unaudited) (Unaudited) (Unaudited)
________________________________________________________________________________________________________________________
Sold 4,816,184 14,961,095 1,404,397 3,952,327 1,319,523 3,231,719
Issued for reinvested
distributions 1,908,677 3,599,781 542,355 999,332 311,523 562,446
Redeemed (10,992,248) (13,233,479) (2,449,996) (3,127,657) (1,751,493) (1,753,354)
________________________________________________________________________________________________________________________
Net increase (decrease) (4,267,387) 5,327,397 (503,244) 1,824,002 (120,447) 2,040,811
________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
______________________________________________________________________________
5. Interest rate futures contracts
Investments in securities at Dec. 31, 1994,
included securities valued at $2,015,620 for
IDS California, $458,115 for IDS Massachusetts,
$424,075 for IDS Michigan, $4,854,250 for IDS
Minnesota, $1,383,045 for IDS New York and
$483,010 for IDS Ohio Tax-Exempt Funds that were
pledged as collateral to cover initial margin
deposits on 350, 83, 84, 1,400, 225 and 83 open
purchase contracts and 350, 83, 84, 1,400, 225
and 83 open sale contracts, respectively. The
market value of the open contracts at Dec. 31,
1994, was $64,421,875 for IDS California,
$15,277,188 for IDS Massachusetts, $15,461,250
for IDS Michigan, $128,843,750 for IDS Minnesota,
$41,414,062 for IDS New York and $15,277,188 for
IDS Ohio Tax-Exempt Funds with a net unrealized
gain of $362,963 for IDS California, $97,889 for
IDS Massachusetts, $99,264 for IDS Michigan,
$747,528 for IDS Minnesota, $235,685 for IDS New
York and $97,889 for IDS Ohio Tax-Exempt Funds.
__________________________________________________________________________
6. Option contracts written
<TABLE>
<CAPTION>
The number of contracts and premium amounts
associated with option contracts written is as
follows:
California Tax-Exempt
Six months ended Dec. 31, 1994
____________________________________________
Puts Calls
____________________________________________
Contracts Premium Contracts Premium
____________________________________________
<S> <C> <C> <C> <C>
Balance June 30, 1994 -- $ -- -- $ --
Opened 150 219,810 162 74,210
Exercised (150) (219,810) -- --
Expired -- -- (162) (74,210)
_____________________________________________________________
Balance Dec. 31, 1994 -- $ -- -- $ --
_____________________________________________________________
Massachusetts Tax-Exempt
Six months ended Dec. 31, 1994
____________________________________________
Puts
____________________________________________
Contracts Premium
____________________________________________
Balance June 30, 1994 -- $ --
Opened 40 58,611
Expired (40) (58,611)
<PAGE>
____________________________________________
Balance Dec. 31, 1994 -- $ --
____________________________________________
Michigan Tax-Exempt
Six months ended Dec. 31, 1994
____________________________________________
Puts
____________________________________________
Contracts Premium
____________________________________________
Balance June 30, 1994 -- $ --
Opened 40 58,611
Expired (40) (58,611)
____________________________________________
Balance Dec. 31, 1994 -- $ --
____________________________________________
Minnesota Tax-Exempt
Six months ended Dec. 31, 1994
____________________________________________
Puts Calls
____________________________________________
Contracts Premium Contracts Premium
____________________________________________
Balance June 30, 1994 -- $ -- -- $ --
Opened 425 622,088 222 101,868
Exercised (425) (622,088) -- --
Expired -- -- (222) (101,868)
_____________________________________________________________
Balance Dec. 31, 1994 -- $ -- -- $ --
_____________________________________________________________
New York Tax-Exempt
Six months ended Dec. 31, 1994
____________________________________________
Puts Calls
____________________________________________
Contracts Premium Contracts Premium
____________________________________________
Balance June 30, 1994 -- $ -- -- $ --
Opened 100 146,441 73 33,520
Exercised (100) (146,441) -- --
Expired -- -- (73) (33,520)
_____________________________________________________________
Balance Dec. 31, 1994 -- $ -- -- $ --
_____________________________________________________________
Ohio Tax-Exempt
Six months ended Dec. 31, 1994
____________________________________________
Puts
____________________________________________
Contracts Premium
____________________________________________
Balance June 30, 1994 -- $ --
<PAGE>
Opened 40 58,611
Expired (40) (58,611)
____________________________________________
Balance Dec. 31, 1994 -- $ --
____________________________________________
</TABLE>
______________________________________________________________________________
7. Capital loss carryover
For federal income tax purposes, capital loss
carryovers were approximately $3,617,000 for IDS
California, $208,000 for IDS Massachusetts,
$6,787,000 for IDS Minnesota, $1,680,000 for IDS New
York and $209,000 for IDS Ohio Tax-Exempt Funds at
Dec. 31, 1994. These capital loss carryovers will
expire in 1996 through 2003 if not offset by
subsequent capital gains.
<PAGE>
IDS California Tax-Exempt Trust
IDS California Tax-Exempt Fund
______________________________________________________________________________
8. Financial highlights
<TABLE>
<CAPTION>
The table below shows certain important financial
information for evaluating each fund's results.
Fiscal period ended June 30,
Per share income and capital changes*
1994** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.13 $5.41 $5.18 $4.94 $4.89 $4.97
beginning of period
Income from investment operations:
Net investment income .15 .31 .30 .31 .32 .32
Net gains (losses) (.18) (.28) .23 .24 .05 (.08)
(both realized
and unrealized)
Total from investment (.03) .03 .53 .55 .37 .24
operations
Less distributions:
Dividends from net (.15) (.31) (.30) (.31) (.32) (.32)
investment income
Net asset value, $4.95 $5.13 $5.41 $5.18 $4.94 $4.89
end of period
Ratios/supplemental data
1994** 1994 1993 1992 1991 1990
Net assets, end of period $231 $255 $261 $222 $185 $142
(in millions)
Ratio of expenses to .61%*** .61% .63% .64% .60% .62%
average daily net assets
Ratio of net income to 6.00%*** 5.67% 5.78% 6.16% 6.51% 6.53%
average daily net assets
Portfolio turnover rate 18% 27% 5% 7% 23% 20%
(excluding short-term
securities)
Total return+ (0.6%)++ 0.4% 10.8% 11.4% 7.7% 5.0%
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Dec. 31, 1994 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.2%).
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Massachusetts Tax-Exempt Fund
<TABLE>
<CAPTION>
Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended June 30,
Per share income and capital changes*
1994** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.24 $5.49 $5.20 $4.96 $4.88 $5.01
beginning of period
Income from investment operations:
Net investment income .15 .30 .30 .31 .32 .32
Net gains (losses) (.20) (.25) .29 .24 .08 (.12)
(both realized
and unrealized)
Total from investment (.05) .05 .59 .55 .40 .20
operations
Less distributions:
Dividends from net (.15) (.30) (.30) (.31) (.32) (.32)
investment income
Distributions from -- -- -- -- -- (.01)
realized gains
Total distributions (.15) (.30) (.30) (.31) (.32) (.33)
Net asset value, $5.04 $5.24 $5.49 $5.20 $4.96 $4.88
end of period
Ratios/supplemental data
1994** 1994 1993 1992 1991 1990
Net assets, end of period $66 $72 $64 $44 $27 $19
(in millions)
Ratio of expenses to .68%*** .69% .72% .72% .69% .70%
average daily net assets
Ratio of net income to 5.83%*** 5.40% 5.57% 6.05% 6.53% 6.59%
average daily net assets
Portfolio turnover rate 6% 6% 0% 2% 16% 36%
(excluding short-term
securities)
Total return+ (0.9%)++ 0.9% 11.5% 11.4% 8.5% 4.2%
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Dec. 31, 1994 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.8%).
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Michigan Tax-Exempt Fund
<TABLE>
<CAPTION>
Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended June 30,
Per share income and capital changes*
1994** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.35 $5.60 $5.31 $5.04 $4.96 $5.08
beginning of period
Income from investment operations:
Net investment income .15 .31 .31 .32 .32 .32
Net gains (losses) (.18) (.25) .29 .27 .08 (.12)
(both realized
and unrealized)
Total from investment (.03) .06 .60 .59 .40 .20
operations
Less distributions:
Dividends from net (.16) (.31) (.31) (.32) (.32) (.32)
investment income
Net asset value, $5.16 $5.35 $5.60 $5.31 $5.04 $4.96
end of period
Ratios/supplemental data
1994** 1994 1993 1992 1991 1990
Net assets, end of period $77 $77 $72 $55 $41 $29
(in millions)
Ratio of expenses to .65%*** .65% .68% .67% .67% .71%
average daily net assets
Ratio of net income to 5.80%*** 5.43% 5.64% 6.18% 6.45% 6.47%
average daily net assets
Portfolio turnover rate 18% 16% 2% 0% 3% 5%
(excluding short-term
securities)
Total return+ (0.7%)++ 1.0% 11.6% 12.0% 8.3% 4.1%
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Dec. 31, 1994 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.4%).
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Minnesota Tax-Exempt Fund
<TABLE>
<CAPTION>
Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended June 30,
Per share income and capital changes*
1994** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.16 $5.44 $5.22 $5.01 $4.95 $5.05
beginning of period
Income from investment operations:
Net investment income .15 .31 .31 .33 .33 .32
Net gains (losses) (.17) (.28) .22 .21 .06 (.10)
(both realized
and unrealized)
Total from investment (.02) .03 .53 .54 .39 .22
operations
Less distributions:
Dividends from net (.15) (.31) (.31) (.33) (.33) (.32)
investment income
Net asset value, $4.99 $5.16 $5.44 $5.22 $5.01 $4.95
end of period
Ratios/supplemental data
1994** 1994 1993 1992 1991 1990
Net assets, end of period $374 $408 $402 $313 $233 $181
(in millions)
Ratio of expenses to .69%*** .66% .67% .66% .63% .64%
average daily net assets
Ratio of net income to 6.06%*** 5.73% 5.91% 6.43% 6.67% 6.62%
average daily net assets
Portfolio turnover rate 12% 13% 2% 7% 10% 8%
(excluding short-term
securities)
Total return+ (0.3%)++ 0.4% 10.5% 11.0% 8.2% 4.8%
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Dec. 31, 1994 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Dec. 31, 1994, the annualized total return is (0.5%).
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS New York Tax-Exempt Fund
<TABLE>
<CAPTION>
Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended June 30,
Per share income and capital changes*
1994** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.12 $5.41 $5.13 $4.86 $4.80 $4.87
beginning of period
Income from investment operations:
Net investment income .15 .30 .30 .31 .31 .31
Net gains (losses) (.18) (.29) .28 .27 .06 (.07)
(both realized
and unrealized)
Total from investment (.03) .01 .58 .58 .37 .24
operations
Less distributions:
Dividends from net (.15) (.30) (.30) (.31) (.31) (.31)
investment income
Net asset value, $4.94 $5.12 $5.41 $5.13 $4.86 $4.80
end of period
Ratios/supplemental data
1994** 1994 1993 1992 1991 1990
Net assets, end of period $113 $120 $117 $95 $79 $68
(in millions)
Ratio of expenses to .66%*** .65% .67% .67% .65% .65%
average daily net assets
Ratio of net income to 5.97%*** 5.61% 5.79% 6.26% 6.53% 6.57%
average daily net assets
Portfolio turnover rate 7% 10% 0% 8% 17% 8%
(excluding short-term
securities)
Total return+ (0.5%)++ 0.1% 11.6% 12.3% 8.2% 5.0%
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Dec. 31, 1994 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.1%).
</TABLE>
<PAGE>
IDS Special Tax-Exempt Series Trust
IDS Ohio Tax-Exempt Fund
<TABLE>
<CAPTION>
Financial highlights
The table below shows certain important financial
information for evaluating the fund's results.
Fiscal period ended June 30,
Per share income and capital changes*
1994** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, $5.26 $5.58 $5.28 $5.01 $4.94 $5.04
beginning of period
Income from investment operations:
Net investment income .15 .30 .30 .31 .32 .31
Net gains (losses) (.18) (.32) .31 .27 .07 (.09)
(both realized
and unrealized)
Total from investment (.03) (.02) .61 .58 .39 .22
operations
Less distributions:
Dividends from net (.15) (.30) (.30) (.31) (.32) (.31)
investment income
Distributions from -- -- (.01) -- -- (.01)
realized gains
Total distributions (.15) (.30) (.31) (.31) (.32) (.32)
Net asset value, $5.08 $5.26 $5.58 $5.28 $5.01 $4.94
end of period
Ratios/supplemental data
1994** 1994 1993 1992 1991 1990
Net assets, end of period $69 $72 $65 $47 $33 $25
(in millions)
Ratio of expenses to .66%*** .66% .67% .70% .68% .70%
average daily net assets
Ratio of net income 5.78%*** 5.44% 5.65% 6.14% 6.41% 6.43%
to average daily net assets
Portfolio turnover rate 25% 11% 0% 5% 2% 6%
(excluding short-term
securities)
Total return+ (0.5%)++ (0.5%) 12.1% 11.9% 8.1% 4.6%
<FN>
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended Dec. 31, 1994 (Unaudited).
***Adjusted to an annual basis.
+Total return does not reflect payment of a sales charge.
++For the fiscal period ended Dec. 31, 1994, the annualized total return is (1.1%).
</TABLE>
<PAGE>
Investments in securities
<TABLE>
<CAPTION>
IDS California Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1994 (Unaudited) investments compared to net assets)
____________________________________________________________________________________________________________________________
Municipal bonds (97.0%)
____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,f) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Adelanto Improvement Agency Tax Allocation Refunding Bonds
Series B (FGIC Insured) 5.50 % 2023 $3,000,000 $ 2,496,090
Aliso Viejo Orange County District Community Facilities District #88-1
Special Tax Bonds Series 1992A 7.35 2018 3,000,000 3,339,390
Anaheim Public Finance Authority Revenue 2nd Series Electric Utilities
San Juan (FGIC Insured) 5.75 2022 1,400,000 1,197,434
Burbank Redevelopment Agency Tax Allocation Bonds Golden State Series 1992A 6.00 2013 1,500,000 1,321,080
Burbank Redevelopment Agency Tax Allocation Bonds Golden State Series 1993A 6.00 2023 2,000,000 1,690,540
Chapman College Educational Facilities Authority Revenue Bonds
Series 1989B 7.50 2018 500,000 495,670
Chico Walker Senior Housing Insured Revenue Bonds The Lodge Series 1993A 5.70 2023 1,500,000 1,211,130
Clearlake Redevelopment Agency Highlands Park Community Development
Tax Allocation Bonds Series 1993 6.40 2023 1,420,000 1,244,076
Eastern Municipal Water District Riverside County Water & Sewer
Revenue Certificates of Participation Series 1991 6.00 2023 1,000,000 875,030
Eastern Municipal Water District Riverside County Water & Sewer
Pre-Refunded Revenue Certificates of Participation Series 1991
(FGIC Insured) 6.50 2020 3,000,000 3,160,440
Eden Township Hospital District Insured Health Facility Refunding Revenue
Certificate of Participation Series 1993 (California Mortgage Insured) 5.75 2012 3,000,000 2,555,130
El Camino Hospital District Hospital Pre-Refunded Revenue
Certificate of Participation Series A 8.50 2017 1,500,000 1,646,580
Fontana Redevelopment Agency Refunding Certificate of Participation
Police Facility Series 1993 5.625 2016 1,750,000 1,462,055
Foothill-De Anza Community College Santa Clara County Refunding
Certificate of Participation Series 1993 (Connie Lee Insured) 5.25 2021 1,675,000 1,327,990
Fresno Health Facility Refunding Revenue Bonds Holy Cross Health System
(MBIA Insured) 5.625 2018 2,000,000 1,705,320
Garden Grove Certificate of Participation Bahia Village/Emerald Isle
(FSA Insured) 5.70 2023 2,660,000 2,240,651
Health Facility Finance Revenue Bonds Kaiser Permanente Series A 6.50 2020 1,945,000 1,794,496
Indian Wells Improvement Bonds Assessment District #13 7.50 2008 430,000 442,900
Lancaster Redevelopment Agency Tax Allocation Bonds (MBIA Insured) 5.80 2023 2,500,000 2,189,350
Long Beach Harbor Revenue Bonds AMT Series 1989A 7.25 2019 7,000,000 (e) 7,054,670
Los Angeles Convention & Exhibition Center Pre-Refunded
Certificate of Participation Series 1989A 7.00 2020 5,000,000 5,337,100
Los Angeles Convention & Exhibition Center Pre-Refunded
Certificate of Participation Series 1989A 7.30 2009 1,000,000 1,079,620
Los Angeles Convention & Exhibition Center Pre-Refunded
Certificate of Participation Series 1989A 7.375 2018 2,900,000 3,139,279
Los Angeles County Transportation Commission Sales Tax Refunding
Revenue Bonds Series A 7.00 2019 4,150,000 4,152,075
Los Angeles County Transportation Commission Sales Tax Pre-Refunded
Revenue Bonds Series A 8.00 2016 2,000,000 2,161,440
Los Angeles County Transportation Commission Sales Tax Pre-Refunded
Revenue Bonds Series 1988A 7.875 2008 500,000 545,780
See accompanying notes to investments in securities.
<PAGE>
Los Angeles County Transportation Commission Sales Tax Refunding
Revenue Bonds Series 1989A 7.40 2015 2,000,000 2,052,720
Los Angeles County Transportation Commission Sales Tax
Pre-Refunded Revenue Bonds Series A 7.60 2012 640,000 674,598
Los Angeles Department of Water & Power Electric Plant Revenue Bonds
Series 1990 7.125 2030 6,500,000 6,926,010
Los Angeles Multi-family Housing Revenue Bonds AMT Park Parthenia
Series 1986A (GNMA Insured) 7.40 2022 1,000,000 1,025,480
Los Angeles Single Family Home Mortgage Revenue Bonds AMT Series 1991A
(GNMA & FNMA Insured) 6.875 2025 3,000,000 2,960,190
Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds
State Department of General Services Lease Series 1988A 7.25 2006 3,000,000 3,202,680
Los Angeles State Building Authority Lease Pre-Refunded Revenue Bonds
State Department of General Services Lease Series 1988A 7.50 2011 1,500,000 1,611,630
Los Angeles State Harbor Revenue Bonds Escrowed to Maturity 7.60 2018 1,000,000 1,083,480
Los Angeles USD Refunding Certficate of Participation (FSA Insured) 5.50 2010 1,000,000 886,540
Los Angeles Wastewater System Refunding Revenue Bonds Series A
(MBIA Insured) 5.70 2020 5,500,000 4,772,460
Los Angeles Wastewater System Pre-Refunded Revenue Bonds Series 1987 8.125 2017 1,000,000 1,090,260
Marin County Municipal Water District Revenue Bonds Series 1993 5.65 2023 3,500,000 2,883,055
Mayer Memorial Hospital District Insured Health Facility Revenue Bonds
(California Mortgage Insured) 5.50 2013 950,000 779,048
Metropolitan Water District Southern California Waterworks Revenue Bonds 5.50 2019 4,500,000 3,788,055
Modesto Certificate of Participation Pre-Refunded Bonds Community Center 8.10 2015 1,000,000 1,090,720
Modesto Irrigation Certificate of Participation 7.25 2015 2,000,000 2,028,640
Mount Diablo Hospital District Hospital Pre-Refunded Revenue Bonds
Series 1990A (AMBAC Insured) 7.00 2017 3,000,000 3,242,670
Northern California Public Power Authority Power Pre-Refunded Revenue Bonds
Hydroelectric Series 1986B-3 8.00 2024 2,000,000 2,157,860
Northern California Public Power Authority Power Pre-Refunded Revenue Bonds
Hydroelectric #1 Series 1986B-1 8.00 2024 2,100,000 2,266,467
Northern California Public Power Authority Refunding Revenue Bonds
Geothermal #3 Series 1985A 7.00 2010 830,000 838,989
Northern California Public Power Authority Refunding Revenue Bonds
Geothermal #3 Series 1987A 7.00 2007 6,825,000 6,975,833
Northern California Transmission Agency California-Oregon Transmission
Pre-Refunded Revenue Bonds Series 1990A (MBIA Insured) 7.00 2024 2,000,000 2,143,940
Northern California Transmission Revenue Linked Select Auction
Variable Rate Security & Residual Interest Bonds (MBIA Insured) 5.358 2024 2,500,000 (g) 2,080,875
Novato Community Facility District #1 Vintage Oaks Public Improvement
Special Tax Refunding Bonds 7.25 2021 2,000,000 1,894,300
Pittsburg Public Financing Authority Wastewater
Refunding Bonds Series 1994A (FGIC Insured) 5.125 2015 1,000,000 814,600
Pleasanton Joint Powers Financing Authority Reassessment Revenue Bonds
Series 1993A 6.15 2012 1,955,000 1,760,321
Port of Oakland Revenue Bonds AMT Series 1989A (BIG Insured) 7.60 2016 500,000 514,160
Rancho Cucamonga Redevelopment Agency 1990 Tax Allocation Pre-Refunded Bonds
(MBIA Insured) 7.125 2019 3,540,000 3,811,837
Rancho Mirage Joint Powers Finance Authority Certificate of Participation
Eisenhower Memorial Hospital 7.00 2022 4,250,000 4,104,480
Redding Redevelopment Agency Tax Allocation Refunding Bonds
Canby Hilltop Cypress Series D (CGIC Insured) 5.00 2023 4,700,000 3,562,177
Riverside Electric Revenue Bonds Series 1991 6.00 2015 6,530,000 5,939,230
<PAGE>
Sacramento Municipal Utility District Series R 6.00 2015-17 7,500,000 6,741,735
Sacramento Municipal Utility District Pre-Refunded Series V 7.50 2018 2,775,000 2,950,075
Sacramento Municipal Utility District Pre-Refunded Series W 7.50 2018 1,980,000 2,108,918
Sacramento Municipal Utility District Pre-Refunded Series Y (MBIA Insured) 6.75 2019 3,400,000 3,630,316
Sacramento Redevelopment Agency Tax Allocation Bonds Series 1990A
(MBIA Insured) 6.50 2013 3,500,000 3,492,020
San Diego County Capital Asset Lease Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured) 6.83 2007 3,200,000 (d) 2,720,000
San Diego Industrial Development Revenue Bonds San Diego Gas & Electric
Series A 7.625 2021 1,000,000 1,026,920
San Diego Regional Transportation Commission Sales Tax
Pre-Refunded Revenue Bonds Limited Tax Series 1989A 6.25 2008 5,030,000 5,151,575
San Francisco City & County Airport Commission International Airport
Refunding Revenue Bonds Second Series Issue 1 (AMBAC Insured) 6.30 2011 1,000,000 976,000
San Francisco Redevelopment Financing Authority Tax Allocation
Refunding Bonds Series B (FGIC Insured) 5.25 2017 1,500,000 1,226,070
San Joaquin County Pre-Refunded Certificate of Participation
Human Services Facility Series 1989 (BIG Insured) 6.70 2009 3,500,000 3,700,725
San Joaquin County Certificate of Participation
Jail & Sheriffs Operation Center (MBIA Insured) 6.75 2015 2,000,000 2,126,400
San Jose Redevelopment Agency Merged Area Tax Allocation Bonds
Series 1993 Inverse Floater (MBIA Insured) 6.586 2014 3,000,000 (d) 2,141,250
San Jose Redevelopment Agency Merged Area Tax Allocation Redevelopment
Project (MBIA Insured) 6.00 2015 5,500,000 5,107,575
San Mateo County Transit District Limited Tax Pre-Refunded Bonds
Series 1990A (MBIA Insured) 6.50 2020 1,500,000 1,550,925
Santa Clara County Transit District Sales Tax Revenue Bonds Series 1991A 6.25 2021 3,000,000 2,764,230
Santa Cruz Certificate of Participation 8.375 2007 1,220,000 1,236,092
Santa Rosa Sonoma County Wastewater Service Facility District
Pre-Refunded Improvement Bonds Series 1989 7.80 2015 1,000,000 1,076,150
Sonoma County Community Redevelopment Agency Tax Allocation Bonds
Windsor Redevelopment Series C 7.90 2014 400,000 408,460
Southern California Home Financing Authority Single Family Mortgage
Revenue Bonds AMT 1990B (GNMA Insured) 7.75 2024 575,000 600,162
Southern California Public Power Authority Transmission
Pre-Refunded Revenue Bonds Series 1986A 7.875 2018 1,500,000 1,599,060
Southern California Public Power Authority Transmission Revenue
Subordinate Refunding Bonds Southern Transmission 5.50 2020 3,000,000 2,474,430
Southern California Public Power Authority Transportation Bonds Series B 7.375 2021 400,000 421,696
State Department Water Resources Water System Pre-Refunded Revenue Bonds
Central Valley Series D 7.70 2024 2,400,000 2,587,200
State Department Water Resource Water System Revenue Bonds
Central Valley Project Series L 5.50 2023 3,000,000 2,457,510
<PAGE>
State Education Facility Authority Revenue Bonds Pomona College 6.00 2017 3,000,000 2,730,330
State Health Facility Finance Authority Pre-Refunded Revenue Bonds
St. Joseph Health System Series 1989A 6.90 2014 3,500,000 3,737,685
State Housing Finance Agency Home Mortgage Revenue Bonds Series 1986B 6.90 2016 1,990,000 1,987,612
State Pollution Control Finance Authority Pollution Control Revenue Bonds
AMT Southern California Edison Series 1988A 6.90 2006 2,000,000 2,037,520
State Public Works Board Lease Revenue Bonds California Community Colleges
Series 1994B 7.00 2019 2,000,000 1,985,880
State Public Works Board University of California Lease Pre-Refunded
Revenue Bonds Series 1990A 7.00 2015 2,250,000 2,425,838
State University Parking System Revenue Bonds 7.70 2009 225,000 238,909
State University Revenue Bonds San Jose State University Student Union
Series B 7.60 2007 150,000 156,897
Statewide Community Development Authority Health Facilities Revenue Bonds
Unihealth America Series 1993A Inverse Floater (AMBAC Insured) 5.897 2011 5,000,000 (d) 3,925,000
Stockton Refunding Wastewater System Certificate of Participation
(AMBAC Insured) 5.50 2015 1,250,000 1,070,887
Stockton Single Family Mortgage Revenue Bonds AMT
Series 1990A (GNMA Insured) 7.50 2023 115,000 123,802
Suisun City Redevelopment Agency Tax Allocation Refunded Bonds
(MBIA Insured) 5.50 2023 1,000,000 836,660
Turlock Irrigation District Pre-Refunded Bonds Series 1986A 7.75 2018 1,000,000 1,043,730
University of Southern California Educational Facilities Authority
Pre-Refunded Revenue Bonds Series 1989B 6.75 2015 5,000,000 4,982,700
Upland Certificate of Participation Water System Refunding Bonds
(FGIC Insured) 6.60 2016 1,000,000 993,090
Vacaville Limited Obligation Improvement Bonds
Water Rights Assessment District 8.00 2007 830,000 853,838
______________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $222,441,022) $224,234,493
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term security (1.6%)
______________________________________________________________________________________________________________________________
Issuer (c) Effective Amount Value(a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal note
Contra Costa Transportation Authority Series 1993A (FGIC Insured)
03-01-09 5.65% $3,800,000 (g) $ 3,800,000
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $3,800,000) $ 3,800,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $226,241,022)(h) $228,034,493
_____________________________________________________________________________________________________________________________
<PAGE>
______________________________________________________________________________________________________________________________
Notes to investments in securities
_______________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 12-31-94 6-30-94
_____________________________________________________________________________
AAA 59% 63%
AA 22 18
A 16 16
BBB and below 3 3
Non-rated -- --
Total 100% 100%
_____________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guarantee Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(d) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the same
magnitude as, or in a multiple of, a decline (increase) in market short-term rates. Interest rate disclosed
is the rate in effect on Dec. 31, 1994. Inverse floaters in the aggregate represent 3.8% of the fund's
net assets as of Dec. 31, 1994.
(e) Partially pledged as inital deposit on the following open interest rate futures contracts
(see Note 5 to the financial statements):
Type of security Notional amount
_____________________________________________________
Purchase contracts
Municipal Bonds March 1995 $35,000,000
Sales contracts
U.S. Treasury Bonds March 1995 35,000,000
_____________________________________________________
(f) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(g) Interest rate varies to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 1994.
(h) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $226,148,000
and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $9,434,000
Unrealized depreciation (7,548,000)
______________________________________________________________________
Net unrealized appreciation $1,886,000
______________________________________________________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Massachusetts Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (96.9%)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b,c,d) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Bay Transit Authority Series A (Secondary FGIC Insured) 5.75 % 2022 $1,000,000 $ 879,510
Bay Transportation Authority General Transportation System
Refunding Bonds Series 1992B 6.20 2016 1,500,000 1,415,625
Boston City Hospital Refunding Revenue Bonds Series B (FHA Insured) 5.75 2023 3,000,000 2,512,590
Boston City Hospital Pre-Refunded Revenue Bonds Series A (FHA Insured) 7.625 2021 1,000,000 1,099,380
Boston General Obligation Bonds Series 1991A (MBIA Insured) 6.75 2011 500,000 534,840
Boston General Obligation Refunding Bonds Series 1993A (AMBAC Insured) 5.65 2009 1,500,000 (e) 1,374,345
Boston Industrial Development Financing Authority Revenue Bonds
Massachusetts College of Pharmacy Series 1993A (Connie Lee Insured) 5.25 2026 1,000,000 782,180
Boston Water & Sewer Commission General Pre-Refunded Revenue Bonds Senior
Pre-Refunded Series 1991A (FGIC Insured) 7.00 2018 1,000,000 1,086,230
Boston Water & Sewer Commission General Subordinate Revenue Bonds Series A
(BIG Insured) 6.00 2008 500,000 486,230
Boston Water & Sewer Commission Senior Revenue Bonds Series A 7.875 2013 365,000 386,221
Boston Water & Sewer Commission Senior Pre-Refunded Revenue Bonds Series A 7.875 2013 210,000 223,539
Chelsea General Obligation Bonds School Loan Act of 1948
Full Construction Program (AMBAC Insured) 6.00 2014 2,000,000 1,869,500
Commonwealth General Obligation Consolidated Loan Pre-Refunded Bonds
Series 1990A (FGIC Insured) 7.25 2009 500,000 542,938
Greater Lawrence Sanitary District North Andover General Obligation Bonds 8.50 2005 625,000 645,600
Health & Educational Facilities Authority Refunding Revenue Bonds
Beth Israel Hospital Series 1989E 7.00 2009-14 550,000 555,751
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series A (MBIA Insured) 7.50 2008 500,000 531,920
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series C 5.90 2011 1,000,000 795,420
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Beverly Hospital Series D (MBIA Insured) 7.30 2019 400,000 432,788
Health & Educational Facilities Authority Revenue Bonds
Boston College Series J (FGIC Insured) 6.625 2021 2,000,000 1,991,340
Health & Educational Facilities Authority Revenue Bonds
Boston College Series K 5.25 2023 1,000,000 801,860
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series C 6.75 2021 500,000 487,340
See accompanying notes to investments in securities.
<PAGE>
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series 1991D 6.75 2024 1,000,000 958,170
Health & Educational Facilities Authority Revenue Bonds
Charlton Memorial Hospital Series 1991B 7.25 2013 1,750,000 1,753,290
Health & Educational Facilities Authority Revenue Bonds
Holyoke Hospital Series B 6.50 2015 500,000 436,780
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Lahey Clinic Medical Center Series A (MBIA Insured) 7.625 2018 500,000 541,015
Health & Educational Facilities Authority Revenue Bonds
Lahey Clinic Medical Center Series B (MBIA Insured) 5.625 2015 1,500,000 1,314,090
Health & Educational Facilities Authority Revenue Bonds
Lahey Clinic Medical Center Series B (MBIA Insured) 5.375 2023 1,000,000 819,450
Health & Educational Facilities Authority Revenue Bonds
Melrose-Wakefield Hospital Series 1992B 6.375 2016 1,000,000 894,450
Health & Educational Facilities Authority Revenue Bonds
McLean Hospital Series 1992C (FGIC Insured) 6.625 2015 1,250,000 1,245,125
Health & Educational Facilities Authority Revenue Bonds
Morton Hospital & Medical Center Series B (Connie Lee Insured) 5.25 2014 1,000,000 828,280
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Mount Auburn Hospital Series A (MBIA Insured) 7.875 2018 205,000 223,770
Health & Educational Facilities Authority Revenue Bonds
New England Deaconess Hospital Series 1992D 6.625 2012 1,000,000 942,610
Health & Educational Facilities Authority Revenue Bonds
Newton Wellesley Hospital Series 1991D (MBIA Insured) 7.00 2015 1,000,000 1,019,850
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Northeastern University Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,061,990
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Northeastern University Series E (MBIA Insured) 6.55 2022 1,000,000 986,020
Health & Educational Facilities Authority Revenue Bonds
South Shore Hospital Series 1992D (MBIA Insured) 6.50 2022 1,000,000 966,490
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Stonehill College Series 1990D (AMBAC Insured) 7.70 2020 1,000,000 1,110,980
Health & Educational Facilities Authority Revenue Bonds
Suffolk University Series B (Connie Lee Insured) 6.35 2022 2,495,000 2,334,122
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Wentworth Institute of Technology Series A (AMBAC Insured) 7.40 2010 750,000 819,653
Health & Educational Facilities Authority Revenue Bonds
Valley Regional Health System Series C (Connie Lee Insured) 5.75 2018 1,000,000 864,060
Health & Educational Facilities Authority Revenue Bonds
Wentworth Institute of Technology Series B (Connie Lee Insured) 5.50 2023 1,500,000 1,233,945
Industrial Finance Agency 1st Mortgage Pre-Refunded Revenue Bonds
Berkshire Retirement Community at Lennox 9.875 2018 200,000 220,144
Industrial Finance Agency Pollution Control Refunding Revenue Bonds
Eastern Edison Series 1993 5.875 2008 1,500,000 1,328,250
<PAGE>
Industrial Finance Agency Resource Recovery Revenue Bonds AMT
Ogden Haverhill Series 1986A (AMBAC Insured) 7.375 2011 175,000 180,190
Industrial Finance Agency Resource Recovery Revenue Bonds
SEMASS Series 1991A 9.00 2015 1,500,000 1,585,710
Industrial Finance Agency Revenue Bonds Museum of Science Series 1989
(FSA Insured) 7.30 2009 1,000,000 1,087,210
Leominster General Obligation Bonds (MBIA Insured) 7.50 2009 1,000,000 1,064,920
Lowell Limited Tax General Obligation State Qualified Refunding Bonds
Series A (FSA Insured) 5.50 2010 800,000 709,864
Mansfield General Obligation Bonds (AMBAC Insured) 6.70 2011 1,000,000 1,009,380
Municipal Wholesale Electric Power Supply System Revenue Bonds Series A 6.00 2018 1,125,000 996,188
Municipal Wholesale Electric Power Supply System Pre-Refunded Revenue Bonds
Series 1992B 6.75 2017 1,395,000 1,496,361
Nantucket General Obligation Bonds 6.80 2011 1,000,000 1,007,220
North Andover General Obligation Bonds (MBIA Insured) 7.35 2008 310,000 334,366
Port Authority Revenue Bonds AMT Series 1988A 7.75 2018 515,000 528,411
Port Authority Revenue Bonds AMT Series 1990A (FGIC Insured) 7.50 2020 1,000,000 1,040,000
Quincy Refunding Revenue Bonds Quincy Hospital Series 1993
(FSA Insured) 5.25 2016 1,000,000 826,880
Southeastern University Building Authority Refunding Revenue Bonds
Series 1986A 7.80 2016 100,000 103,417
Southeastern University Building Revenue Bonds 7.80 2011 325,000 336,105
Southern Berkshire Regional School District Unlimited Tax
General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.55 2010 1,000,000 1,100,110
Springfield Limited Tax General Obligation Municipal Purpose Loan Bonds
Series 1993B (MBIA Insured) 6.00 2013 750,000 699,930
State College Building Authority Pre-Refunded Revenue Bonds Series 1986A 7.125 2006 150,000 156,181
State College Building Authority Pre-Refunded Revenue Bonds Series 1986A 7.25 2016 250,000 261,408
State General Obligation Consolidated Loan Bonds Series 1991A
(FGIC Insured) 6.00 2011 1,095,000 1,034,895
State Housing Finance Agency Single Family Housing Revenue Bonds AMT
Series 13 7.95 2023 500,000 517,730
State Housing Finance Authority Residential Development Bonds Series 1992A
(FNMA Insured) 6.875 2011 1,000,000 1,014,010
State Housing Finance Authority Single Family Mortgage Housing
Revenue Bonds Series 4 7.375 2014 465,000 477,950
State Housing Finance Authority Single Family Mortgage Housing
Revenue Bonds AMT Series 7 8.10 2020 260,000 267,509
State Water Resource Authority Revenue Bonds Series A
(Secondary MBIA Insured) 5.50 2022 1,100,000 931,403
University of Lowell Building Authority Facilities Revenue Bonds
4th Series A 7.40 2007 125,000 129,427
University of Lowell Building Authority Facilities Revenue Bonds
4th Series A 7.60 2012 50,000 52,075
<PAGE>
University of Massachusetts Building Authority Revenue Bonds Series A
(FSA Insured) 7.50 2014 500,000 517,850
University of Massachusetts Building Authority Revenue Bonds Series A
Escrowed to Maturity 7.50 2011 120,000 128,315
Water Resource Authority General Pre-Refunded Revenue Bonds Series 1990A 7.625 2014 500,000 551,240
Water Resource Authority General Pre-Refunded Revenue Bonds Series 1991A 6.50 2019 1,000,000 1,058,110
Water Resource Authority General Revenue Bonds Series 1993C 5.25 2020 1,400,000 1,121,400
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $64,891,403) $63,663,446
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $64,891,403)(f) $63,663,446
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 12-31-94 06-30-94
_______________________________________________________________________________________________________
AAA 67% 64%
AA 8 12
A 18 17
BBB and below 7 7
Non-rated -- --
Total 100% 100%
_______________________________________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in the portfolio descriptions:
AMT -- Alternative Minimum Tax
(e) Partially pledged as initial deposit on the following open interest rate futures contracts
(see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
__________________________________________________________
Municipal Bonds March 1995 $8,300,000
__________________________________________________________
Sale contracts
__________________________________________________________
U.S. Treasury Bonds March 1995 8,300,000
__________________________________________________________
<PAGE>
(f) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately
$64,878,000 and the approximate aggregate gross unrealized appreciation and depreciation based
on that cost was:
Unrealized appreciation $1,826,000
Unrealized depreciation (3,041,000)
_______________________________________________________________________________________________________
Net unrealized depreciation $(1,215,000)
_______________________________________________________________________________________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Michigan Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (94.4%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Alpena County Limited Tax Hospital Improvement Pre-Refunded Bonds
Series B (AMBAC Insured) 8.75 % 2002 $ 150,000 $ 155,532
Auburn Hills Limited Tax General Obligation Street Improvement Bonds 6.00 2004 200,000 200,802
Battle Creek Calhoun County Downtown Development Authority Bonds
Series 1994 7.65 2022 1,250,000 1,266,788
Battle Creek Water Supply System Pre-Refunded Revenue Bonds Series 1990B 6.375 2008-10 1,640,000 1,713,210
Brighton District Library Unlimited Tax Improvement General Obligation Bonds
Series 1994 (MBIA Insured) 6.00 2015 1,000,000 929,400
Buena Vista School District Saginaw County School Building & Site
Unlimited Tax General Obligation Pre-Refunded Bonds Series 1991 7.20 2016 1,500,000 1,627,350
Caledonia Community School Unlimited Tax General Obligation
Refunding Revenue Bonds (AMBAC Insured) 5.50 2022 2,000,000 (e) 1,696,300
Chassell Township Schools County of Houghton Refunding Unlimited Tax
General Obligation Bonds Qualified School Bond Loan Fund 5.25 2020 1,045,000 837,693
Chelsea General Obligation Bonds (BIG Insured) 8.20 2006 145,000 159,023
Chippewa Valley School Macomb County Qualified School Building Loan Fund
Unlimited Tax General Obligation Bonds (FGIC Insured) 5.00 2021 1,000,000 786,790
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1989 6.00 2016 400,000 412,652
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1989 6.875 2010 260,000 276,663
Detroit General Obligation Pre-Refunded Bonds Distributable State Aid
Series 1989 (AMBAC Insured) 7.20 2009 1,000,000 1,075,240
Detroit Sewer Disposal Pre-Refunded Revenue Bonds 8.00 2008 500,000 538,895
Detroit Unlimited Tax General Obligation Bonds Series A 7.25 2009 1,000,000 1,007,310
Detroit Unlimited Tax General Obligation Bonds Series A 8.625 2007 100,000 105,514
Detroit Unlimited Tax General Obligation Bonds Series 1988A 7.875 2008 700,000 717,794
Detroit Water Supply System Pre-Refunded Revenue Bonds
Series 1988 (MBIA Insured) 7.875 2008 400,000 435,952
Detroit Water Supply System Refunding Revenue Bonds
Series 1993 (FGIC Insured) 5.00 2023 1,000,000 771,580
Dexter Community Schools Building Site & Refunding Unlimited Tax
General Obligation Bonds 5.00 2017 1,500,000 1,176,180
East Lansing School District School Building & Site Unlimited Tax
General Obligation Bonds Series 1991 6.625 2014 1,000,000 989,680
Eastern Michigan University Pre-Refunded Revenue Bonds Residence Hall 7.80 2006 205,000 215,547
Farmington Hills Hospital Finance Authority Revenue Bonds
Botsford General Hospital Series 1992A (MBIA Insured) 6.50 2022 1,500,000 1,455,270
Forest Hills School District Unlimited Tax General Obligation
Pre-Refunded Bonds 7.375 2015 1,000,000 1,085,310
Frenchtown Resort Drainage District Monroe County Drain
Pre-Refunded Bonds Series 1987 7.50 2011-12 615,000 668,776
Garden City School District Authority Pre-Refunded Revenue Bonds 7.80 2010 305,000 333,405
Grand Rapids Tax Increment Revenue Bonds Series 1994 (MBIA Insured) 6.875 2024 380,000 383,705
<PAGE>
Grand Rapids Water Supply System Improvement
Pre-Refunded Revenue Bonds Series 1988 7.875 2018 700,000 757,505
Grand Rapids Water Supply System Improvement Pre-Refunded Revenue Bonds
Series 1990 (FGIC Insured) 7.25 2020 1,250,000 1,355,550
Grand Rapids Water Supply System Refunding Revenue Bonds Series 1991
(FGIC Insured) 5.75 2018 2,500,000 2,226,050
Holland School District Unlimited Tax General Obligation Bonds
Counties of Ottawa & Allegan 1989 School Building & Site Boards 7.375 2019 1,000,000 1,063,370
Inkster School District Unlimited Tax General Obligation
Pre-Refunded Bonds (AMBAC Insured) 7.00 2018 450,000 482,386
Isoco County Water Supply System Limited Tax General Obligation Bonds
(AMBAC Insured) 5.50 2008-10 575,000 520,535
Jackson County Unlimited Tax General Obligation Refunding Bonds
Series 1987 6.75 2011 150,000 156,651
Kalamazoo Hospital Financial Authorization Bronson Methodist Hospital
Pre-Refunded Bonds 9.375 2016 150,000 154,833
Kent County Hospital Pre-Refunded Revenue Bonds Butterworth Hospital
Series 1989A 7.25 2013 500,000 538,190
Kent County Refuse Disposal System Limited Tax
General Obligation Refunding Bonds Series 1987 8.40 2010 150,000 162,648
Laingsburg Community Schools Unlimited Tax General Obligation Bonds 6.375 2021 1,500,000 1,425,690
Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.80 2014 1,000,000 905,130
Lincoln Consolidated School District Refunding Revenue Bonds (FGIC Insured) 5.85 2021 500,000 443,765
Marquette Hospital Finance Authority Refunding Revenue Bonds
Marquette General Hospital Series 1989C 7.50 2007-19 825,000 843,442
Monroe County Pollution Control Revenue Bonds AMT Detroit Edison
Fermi Plants Series 1990I (FGIC Insured) 7.65 2020 1,000,000 1,048,760
Monroe County Pollution Control Revenue Bonds AMT Detroit Edison
Fermi 2 Plants Series CC (AMBAC Insured) 7.50 2019 1,750,000 1,817,375
Muskegon Hospital Finance Authority Refunding Revenue Bonds Hackley Hospital
Series 1988A 8.00 2008 400,000 428,848
Northville Public Schools Unlimited Tax General Obligation Bonds
Series 1991B 7.00 2008 1,500,000 1,553,310
Plymouth-Canton Community School District Series 1992C 6.50 2016 1,000,000 971,820
Richmond Limited Obligation Refunding Revenue Bonds Kmart Series A 6.625 2007 530,000 513,199
River Rouge School District #19 Unlimited Tax General Obligation Bonds
(FSA Insured) 5.50 2009 1,185,000 1,073,397
Rochester Hill Unlimited Tax General Obligation Bonds Series 1990A 6.00 2009-10 735,000 702,147
Rockford Public Schools Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds 7.375 2019 1,000,000 1,084,830
Rockford Public Schools Unlimited Tax General Obligation Bonds
Qualified School Bond Loan Fund 5.875 2019 1,500,000 1,305,495
Rockford Public Schools Unlimited Tax Improvement General Obligation Bonds
(Secondary AMBAC Insured) 5.875 2019 1,000,000 898,220
Southfield Public Schools Building & Site Unlimited Tax
General Obligation Bonds 5.875 2022 1,000,000 876,790
South Lake District Unlimited Tax General Obligation Bonds 6.80 2010 355,000 362,881
State Building Authority Refunding Revenue Bonds Series 1991I 6.25 2020 2,200,000 2,041,006
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
Detroit Medical Center Series 1988A 8.125 2012 310,000 340,600
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988A 8.125 2012 90,000 97,465
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988B 8.00 2008 500,000 548,880
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Sisters of Mercy Health Group Series 1993P (MBIA Insured) 5.25 2021 1,200,000 963,168
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
McLaren Obligated Group Series 1991A 7.50 2021 1,750,000 1,941,082
State Hospital Finance Authority Revenue Bonds Henry Ford Hospital
Series 1990A 7.00 2010 1,000,000 1,009,250
State Hospital Finance Authority Revenue Bonds Henry Ford Hospital
<PAGE>
Series 1992A 5.75 2017 1,500,000 1,271,775
State Hospital Finance Authority Pre-Refunded Revenue Bonds
Oakwood Hospital Group Series 1990A (FGIC Insured) 7.10 2018 1,000,000 1,081,950
State Municipal Bond Authority Refunding Revenue Bonds (AMBAC Insured) 5.70 2016 1,000,000 889,170
State Public Power Agency Belle River Refunding Revenue Bonds
Series A 5.25 2018 1,000,000 815,020
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Detroit Edison Series 1990BB (MBIA Insured) 7.00 2008 1,000,000 1,064,020
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Detroit Edison Series 1992BB (FGIC Insured) 6.50 2016 2,500,000 2,474,250
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Ford Motor Series 1991A 7.10 2006 1,650,000 1,707,436
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Escrowed to Maturity Oxford Institute 7.875 2005 150,000 166,970
State Strategic Fund Limited Tax Obligation Revenue Bonds AMT
Great Lakes Pulp & Fibre 10.25 2016 1,000,000 1,002,530
State Trunk Line Bonds Series A (FGIC Insured) 5.75 2020 1,065,000 933,132
State Trunk Line Refunded Bonds Series B-1 5.50 2021 2,500,000 2,093,600
State University Revenue Bonds Series A 5.50 2022 560,000 469,162
State University Revenue Parking System Pre-Refunded Bonds
Ann Arbor Campus Series A 7.40 2015 150,000 157,125
Taylor Tax Increment Finance Authority Bonds Series 1989A (MBIA Insured) 6.00 2007-09 1,205,000 1,166,403
Van Buren Township Tax Increment Revenue Bonds Series 1994 8.40 2016 1,000,000 1,011,670
Warren Consolidated School District Refunding Revenue Bonds
Unlimited Tax General Obligation Bonds (MBIA Insured) 5.50 2021 1,500,000 1,267,185
Waterford School District Unlimited Tax General Obligation Bonds
Series Q 6.25 2013 340,000 324,958
Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport
Series 1986 (FGIC Insured) 8.00 2014 250,000 262,857
Wayne County Airport Revenue Bonds AMT Detroit Metropolitan Airport
Series 1990A (AMBAC Insured) 7.00 2020 1,080,000 1,086,404
Wayne County Airport Revenue Bonds Detroit Metropolitan Airport Series 1993C
(MBIA Insured) 5.25 2021 1,500,000 1,208,250
Wyandotte Electric Pre-Refunded Revenue Bonds Series 1987 (AMBAC Insured) 7.875 2017 300,000 323,964
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $72,304,255) $72,414,460
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term security (1.7%)
_____________________________________________________________________________________________________________________________
Issuer (f) Effective Amount Value(a)
yield payable
at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal note
Regents of the University of Michigan Hospital
Refunding Revenue Bonds Series 1992A
12-01-19 6.15% $1,300,000 $ 1,300,000
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $1,300,000) $ 1,300,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $73,604,255)(g) $73,714,460
_____________________________________________________________________________________________________________________________
<PAGE>
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 12-31-94 06-30-94
______________________________________________________________________________________________________
AAA 62% 65%
AA 25 25
A 6 6
BBB and below 6 4
Non-rated 1 -
Total 100% 100%
(c) The following abbreviations are used in portfolio descriptions to identify the insurer
of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(e) Partially pledged as initial deposit on the following open interest rate futures contracts
(see Note 5 to the financial statements):
Type of security Notional amount
________________________________________________________________________________
Purchase contracts
Municipal Bonds March 1995 $8,400,000
Sales contracts
U.S. Treasury Bonds March 1995 8,400,000
________________________________________________________________________________
(f) Interest rate varies to reflect current market conditions; rate shown is the effective rate
on Dec. 31, 1994.
(g) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $73,578,000
and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $ 2,698,000
Unrealized depreciation (2,562,000)
______________________________________________________________________________________________________
Net unrealized appreciation $ 136,000
______________________________________________________________________________________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
Dec. 31, 1994 (Unaudited) compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (98.3%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Anoka County General Obligation Capital Improvement Revenue Bonds
Series 1989B 7.00 % 2007-10 $ 7,950,000 $ 8,318,244
Anoka County Resource Recovery Revenue Bonds Northern States Power
Series 1985 7.15 2008 3,750,000 3,887,025
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.25 2001 155,000 160,630
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.30 2002 175,000 181,513
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.40 2003 190,000 197,412
Apple Valley Certificate of Participation Lease Pre-Refunded Bonds
Central Garage Facility Financial Agreement 7.50 2004 450,000 468,369
Appleton Correctional Facility Revenue Bonds Series 1990A 9.875 2020 4,000,000 (e) 2,600,000
Bass Brook Pollution Control Revenue Bonds Minnesota Power & Light
Series 1992 6.00 2022 6,300,000 5,570,397
Becker Pollution Control Revenue Bonds Northern States Power
Sherburne County Generating Station Units 1 & 2 Series 1987A 7.25 2005 2,000,000 2,038,320
Becker Solid Waste Disposal Facility
Revenue Bonds AMT Liberty Paper Series 1994B 9.00 2015 3,825,000 3,712,813
Bemidji Hospital Facilities 1st Mortgage Revenue Bonds
North Country Health Services Series 1991 7.00 2021 1,755,000 1,748,436
Bloomington Community Development Refunding Revenue Bonds
Note 24th Avenue Motel 8.50 2005 1,843,781 1,908,313
Braham Independent School District #314 Refunding Bonds 5.20 2019 3,340,000 2,748,386
Brainerd Hospital Refunding Revenue Bonds Evangelical Lutheran
Good Samaritan Society Series 1992A (C.G.I.C.) 6.65 2017 1,695,000 1,697,644
Brainerd Hospital Revenue Bonds Evangelical Lutheran
Good Samaritan Society Series 1992B (C.G.I.C.) 6.65 2017 2,865,000 2,869,469
Burnsville Multi-family Housing Refunding Revenue Bonds
FHA-Summit Park Apartments Series 1993 6.00 2033 4,000,000 3,411,040
Chaska Advance Refunded Certificate of Participation
Lease Purchase Agreement Bonds Series 1986C 7.25 2001 800,000 828,008
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place Series 1991 10.00 2032 560,000 596,400
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place Series 1991 (FHA Insured) 7.75 2032 2,750,000 2,809,455
Duluth Economic Development Authority Health Care Facility
Pre-Refunded Revenue Bonds Benedictine Health System
St. Mary's Medical Center Series 1990 8.375 2020 2,000,000 2,264,540
Duluth Hospital Facilities St. Lukes Hospital
Pre-Refunded Revenue Bonds Series 1988 9.00 2018 2,500,000 2,801,300
Duluth Housing and Redevelopment Authority 1st Mortgage Revenue Bonds
Lakeshore Lutheran Home 8.25 2009 125,000 122,931
Duluth Recreation Revenue Certificate of Participation 9.00 2003-07 1,430,000 1,531,216
See accompanying notes to investments in securities.
<PAGE>
Eden Prairie Housing Development Refunding Revenue Bonds Eden Commons
Series 1990 (FHA Insured) 8.25 2025 6,360,000 6,254,615
Edina Hospital System Revenue Bonds Fairview Hospital & Health Care Services
Series 1989A 7.125 2019 2,500,000 2,555,250
Edina Multi-family Housing Revenue Bonds Walker Assisted Living
Series 1991 9.00 2031 6,700,000 7,065,351
Faribault Single Family Mortgage Refunding Revenue Bonds Series 1991A 7.50 2011 3,160,000 3,234,513
Hennepin County Lease Revenue Certificate of Participation Series 1991 6.80 2017 7,250,000 7,340,190
Hennepin County Solid Waste Resource Recovery General Obligation
Revenue Bonds Series 1987A 8.20 2009 1,760,000 1,826,651
Hopkins Revenue Bonds Blake School 6.70 2024 3,120,000 3,068,302
Hubbard County Solid Waste Disposal Revenue Bonds AMT Potlatch Series 1989 7.375 2013 5,610,000 5,802,367
International Falls Solid Waste Disposal Revenue Bonds AMT Boise Cascade
Series 1990 7.75 2015 4,000,000 4,021,320
Maplewood Care Institute Series 1994 7.75 2024 3,830,000 3,507,016
Maplewood Multi-family Housing Revenue Bonds Maplewood (FHA Insured) 7.75 2021 2,115,000 2,125,533
Minneapolis & St. Paul Housing Board Multi-family Mortgage Revenue Bonds AMT
GNMA Collateral Mortgage Revenue Loan Riverside Plaza Series 1988 8.25 2030 3,945,000 4,157,754
Minneapolis Community Development Agency & St. Paul Housing
& Redevelopment Authority Home Ownership Mortgage
Revenue Bonds Family Housing Mortgage Phase II 7.875 2017 1,515,000 1,563,071
Minneapolis General Obligation Sales Tax Refunding Bonds Series 1992 6.25 2012 5,260,000 5,156,062
Minneapolis Health Care Facilities Revenue Bonds Fairview Hospital &
Healthcare Services Series 1993A (MBIA Insured) 5.25 2019 3,750,000 3,060,713
Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan Incorporated
Series 1987A 8.125 2017 3,630,000 3,901,633
Minneapolis Hospital Facility Pre-Refunded Revenue Bonds Lifespan Incorporated
Series 1989A 7.00 2014 5,000,000 5,370,900
Minneapolis Housing & Redevelopment Authority of St. Paul
Health Care System Revenue Bonds Healthspan Series 1993 (AMBAC Insured) 4.75 2018 3,000,000 2,267,100
Minneapolis Nursing Home Revenue Bonds Walker Cityview & Southview
Series 1992 8.50 2022 5,565,000 5,568,729
Minneapolis St. Paul Housing & Redevelopment Authority Health Care System
Revenue Bonds Healthspan Series 1993A (AMBAC Insured) 5.00 2007-13 6,690,000 5,699,915
Minneapolis Water & Sewer Revenue Bonds Series 1992 5.00 1995 5,000,000 4,975,900
<PAGE>
Minnetonka Multi-family Housing Refunding Revenue Bonds Cedar Hill West
(FHA Insured) 7.75 2026 5,605,000 5,481,802
Minnetonka Multi-family Housing Revenue Bonds The Cedar Hills Series 1985 7.50 2017 500,000 518,040
Montevideo Independent School District #129 General Obligation
Unlimited Tax Bonds School Credit Enhancement Program 4.90 2014 1,875,000 1,530,037
Northern Municipal Power Agency Electric System Refunding Revenue Bonds
Series 1989A 7.25 2016 5,475,000 5,592,055
Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds
Series 1989A (AMBAC Insured) 7.40 2018 1,000,000 1,074,160
Northern Municipal Power Agency Electric System Pre-Refunded Revenue Bonds
Series 1989B (AMBAC Insured) 7.40 2018 1,800,000 1,876,698
Norwood-Young America Independent School District #108 General Obligation
School Building Bonds Unlimited Tax School Credit
Enhancement Program Series 1994A 5.00 2014 1,345,000 1,110,123
Osseo Area Schools Independent School District #279
General Obligation School Building Bonds Series 1993A Inverse Floater 4.775 2012 5,000,000 (f) 3,825,000
Owatanna Public Utilities Pre-Refunded Revenue Bonds Series 1991 6.75 2016 1,000,000 1,046,020
Plymouth Multi-family Housing Revenue Bonds AMT Harbor Lane Apartments
Series 1993 (Asset Guaranty Insured) 5.90 2013 2,325,000 2,100,777
Port Authority St. Paul General Obligation Bonds Series 1994 5.125 2017 2,885,000 2,378,279
Port Authority St. Paul Unlimited Tax General Obligation Bonds 5.125 2024 2,270,000 1,811,801
Red Wing Industrial Development Refunding Revenue Bonds K mart Series 1993 5.50 2008 400,000 346,564
Richfield Independent School District #280 Unlimited Tax General Obligation
School Building Bonds Series 1993C Inverse Floater
(FGIC Insured) 4.575 2010 3,300,000 (f) 2,532,750
Richfield Independent School District #280 Unlimited Tax General Obligation
School Building Bonds Series 1993C Trust Inverse Floater
(FGIC Insured) 4.675 2012 2,510,000 (f) 1,888,775
Robbinsdale Hospital Pre-Refunded Revenue Bonds
North Memorial Medical Center Series 1989 (AMBAC Insured) 7.375 2019 2,200,000 2,379,234
Rochester Health Care Facility Revenue Bonds Mayo Foundation/Mayo Medical
Center Series 1992I 5.75 2021 4,240,000 3,665,522
Rochester Multi-family Housing Development Revenue Bonds Civic Square
Series 1991 (FHA Insured) 7.45 2031 4,450,000 4,485,911
Roseville Health Care Facility Refunding Revenue Bonds
Presbyterian Homes of Minnesota Series 1987 7.50 2007 2,250,000 2,263,635
Rush City Independent School District #139 Unlimited Tax School Building
Refunding Bonds School Credit Enhancement Program 5.25 2018 2,595,000 2,196,097
St. Cloud Hospital Facilities Revenue Bonds St. Cloud Hospital Series 1990B
(AMBAC Insured) 7.00 2020 5,000,000 5,387,200
St. Cloud Hospital Facility Refunding Revenue Bonds Series C (AMBAC Insured) 5.30 2020 1,515,000 1,241,921
St. Cloud Hospital Refunding Revenue Bonds Series 1993C (AMBAC Insured) 5.25 2013 1,000,000 853,000
St. Cloud Hydro Electric Generation Facility Gross Revenue Bonds Series 1986 7.375 2018 1,100,000 1,122,715
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993 (AMBAC Insured) 5.20 2023 6,000,000 4,804,440
<PAGE>
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993A (AMBAC Insured) 5.20 2016 3,000,000 2,494,170
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993B
Inverse Floater (AMBAC Insured) 4.175 2013 7,000,000 (f) 4,550,000
St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds
Park Nicollet Medical Center Series 1990A 9.25 2020 4,000,000 4,672,600
St. Louis Park Health Care Facilities Pre-Refunded Revenue Bonds
Park Nicollet Medical Center Series 1991A 8.625 2021 2,000,000 2,286,140
St. Louis Park Multi-family Rental Housing Revenue Bonds
Mortgage Loan-Community Housing & Services Series 1985 (FHA Insured) 7.375 2028 2,250,000 2,276,258
St. Paul & Minneapolis Housing & Redevelopment Authority Health Care
Facility Revenue Bonds Group Health Plan Series 1992 6.75 2013 10,500,000 (g) 10,193,925
St. Paul Housing & Redevelopment Authority Hospital Facility Revenue Bonds
St. Paul Ramsey Medical Center (AMBAC Insured) 5.55 2023 5,000,000 4,223,750
St. Paul Housing & Development Bonds Highland Retirement (FHA Insured) 7.013 2026 5,210,000 4,793,200
St. Paul Housing & Redevelopment Authority Commercial Development
Refunding Revenue Bonds Beverly Enterprises Series 1992 7.75 2002 2,700,000 2,754,000
St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds
Lyngblomsten Care Center Series 1993A 7.125 2017 1,945,000 1,801,829
St. Paul Housing & Redevelopment Authority Health Care Facility Revenue Bonds
Lyngblomsten Care Center Series 1993A 9.60 2006 1,060,000 1,071,660
St. Paul Housing & Redevelopment Authority Health Care Facility
Multi-family Rental Housing Revenue Bonds Lynblomsten 1993B 7.00 2024 1,930,000 1,721,579
St. Paul Housing & Redevelopment Authority Sales Tax Revenue Bonds
Civic Center Series 1993 5.55 2023 5,000,000 4,159,500
St. Paul Sewer Refunding Revenue Bonds Series 1993 (AMBAC Insured) 5.60 2008 7,700,000 7,259,252
Southern Minnesota Municipal Power Agency Bonds Escrowed to Maturity 5.75 2018 370,000 330,247
Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988A 8.125 2018 1,315,000 1,431,996
Southern Minnesota Municipal Power Agency Pre-Refunded Bonds Series 1988B 8.125 2018 1,000,000 1,088,970
Southern Minnesota Municipal Power Agency Power Supply System
Revenue Bonds Zero Coupon Series 1994A (MBIA Insured) 6.67 2019 19,500,000 (h) 4,019,145
6.88 2022 12,000,000 (h) 1,988,160
Southern Minnesota Municipal Power Agency Series A
(Secondary MBIA Insured) 5.75 2018 3,000,000 2,671,260
Southern Minnesota Municipal Power Agency Un-Refunded Balance
Power Revenue Bonds Series A 5.75 2018 1,895,000 1,655,320
Spring Park Health Care Facility Revenue Bonds Twin Birch Health Care Center
Series 1991 8.25 2011 1,780,000 1,948,833
State General Obligation Various Purpose Pre-Refunded Bonds Series 1990 7.00 2009 7,850,000 8,354,677
State General Obligation Various Purpose Pre-Refunded Bonds Series 1991 6.70 2011 8,000,000 8,424,560
State Higher Education Facility Authority Mortgage
Pre-Refunded Revenue Bonds St. Mary's College Series 2-M 8.375 2017 1,000,000 1,104,940
<PAGE>
State Housing Facility Authority Housing Development Bonds Series A 7.125 2020 845,000 854,388
State Housing Facility Authority Housing Development Bonds Series 1976A 7.25 2018 205,000 207,837
State Housing Facility Authority Housing Development Bonds Series 1978B 7.10 2021 470,000 474,733
State Housing Facility Authority Housing Development Bonds Series 1979A 7.00 2022 700,000 697,410
State Housing Facility Authority Housing Finance Agency Housing Development
Single Family Mortgage Bonds Series B 7.25 2016 440,000 448,395
State Housing Finance Agency Single Family Mortgage Bonds AMT Series 1989A 8.00 2029 1,625,000 1,655,062
State Housing Finance Agency Single Family Mortgage Bonds AMT Series 1990A 7.95 2022 3,670,000 3,831,627
State Housing Finance Agency Single Family Mortgage Bonds AMT Series 1991A 7.45 2022 3,570,000 3,656,180
State Housing Finance Agency Single Family Mortgage Bonds Series 1992A 6.95 2016 3,330,000 3,336,560
State Housing Finance Agency Single Family Mortgage Revenue Bonds
AMT Series L 6.70 2020 1,100,000 1,053,470
State Public Facilities Authority Water Pollution Control Revenue Bonds
Series 1989A 7.00 2009 6,250,000 6,512,000
State Public Facilities Authority Water Pollution Control Revenue Bonds
Series 1992A 6.50 2014 9,050,000 9,019,411
State University Board of Regents General Obligation Bonds
Series 1993A Inverse Floater 5.171 2003 5,000,000 (f) 4,075,000
State University Board of Regents General Obligation Pre-Refunded Bonds
Series 1989A 6.00 2011 4,625,000 4,400,456
State University Board State University System Pre-Refunded Revenue Bonds
Series 1989A (MBIA Insured) 7.40 2019 2,250,000 2,410,897
Washington County General Obligation Capital Improvement Bonds
Series 1989A 7.00 2009-10 4,425,000 4,629,966
Washington County Housing & Redevelopment Authority Multi-family Housing
Revenue Bonds AMT Orleans Homes Series 1987-2 9.00 2017 2,000,000 2,142,840
Western Minnesota Municipal Power Agency Revenue Bonds
Escrowed to Maturity (AMBAC Insured) 6.75 2016 5,935,000 6,015,360
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series 1987A 5.50 2015 5,000,000 4,324,400
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series 1987A 6.875 2007 2,500,000 2,543,075
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series 1987A 7.00 2013 7,300,000 7,355,407
Western Minnesota Municipal Power Agency Supply Refunding Revenue Bonds
Series A (Secondary MBIA Insured) 5.50 2015 6,250,000 5,473,750
White Bear Lake Industrial Development Revenue Bonds AMT Taylor Series 1988A 8.75 2008 2,250,000 2,397,195
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $370,458,586) $367,298,692
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $370,458,586)(i) $367,298,692
_____________________________________________________________________________________________________________________________
<PAGE>
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 12-30-94 06-30-94
_______________________________________________________________________________________________________
AAA 41% 43%
AA 23 24
A 21 20
BBB and below 14 13
Non-rated 1 --
Total 100% 100%
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(e) Presently non-income producing. Item identified is in default as to payment of interest
and/or principal.
(f) Inverse floaters represent securities which pay interest at a rate that increases (decreases) in the same
magnitude as, or in a multiple of, a decline (increase) in market short-term rates. Interest rate disclosed
is the rate in effect on Dec. 31, 1994. Inverse floaters in the aggregate represent 4.5% of the fund's net
assets as of Dec. 31, 1994.
(g) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 5
to the financial statements):
Type of security Notional amount
_____________________________________________________
Purchase contracts
Municipal Bonds March 1995 $70,000,000
Sales contracts
U.S. Treasury Bonds March 1995 70,000,000
_____________________________________________________
(h) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(i) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $370,333,000
and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $11,091,000
Unrealized depreciation (14,125,000)
______________________________________________________________________________________________________
Net unrealized depreciation $(3,034,000)
______________________________________________________________________________________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS New York Tax-Exempt Fund (Percentages represent value of
Dec. 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.3%)
_____________________________________________________________________________________________________________________________
Name of issuer and title of issue (b,c,d) Coupon Maturity Principal Value(a)
rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Battery Park City Authority Senior Refunding Revenue Bonds Series 1993A 5.25 % 2017 $4,000,000 $ 3,192,000
Broome County Certificates of Partication Public Safety Facility
Series 1994 (MBIA Insured) 5.25 2022 1,250,000 1,008,362
Buffalo Municipal Water Finance Authority Water System Revenue Bonds
(FSA Insured) 5.75 2019 700,000 617,435
Erie County Water Authority Fourth Resolution Water Refunding Revenue Bonds
Zero Coupon Series 1992 (AMBAC Insured) 7.30 2017 1,215,000 (e) 234,191
Erie County Water Authority Water Works System Revenue Bonds
Escrowed to Maturity Series 1990A (AMBAC Insured) 6.00 2008 1,765,000 1,713,091
Fallsburg Sullivan County Unlimited Tax General Obligation Improvement
Pre-Refunded Bonds Series 1991 7.05 2011-14 1,300,000 1,409,330
Great Neck North Water Authority Water System Pre-Refunded Revenue Bonds
Series 1989A 6.00 2020 1,415,000 1,435,079
Metropolitan Transportation Authority Commuter Facilities
1987 Service Contract Refunding Bonds Series 5 6.50 2016 1,775,000 1,651,070
Metropolitan Transportation Authority Service Transit Facilities
Pre-Refunded Revenue Bonds Series G 8.50 2011 1,000,000 1,067,500
Metropolitan Transportation Authority Transit Facilities
Pre-Refunded Revenue Bonds Series F 8.375 2016 725,000 772,524
Metropolitan Transportation Authority Transit Facilities
Revenue Bonds Series 1994 (MBIA Insured) 6.00 2024 1,500,000 1,371,060
Monroe County Utility General Obligation Pre-Refunded Bonds
Water Improvement System 7.10 2008-09 1,000,000 1,070,700
Municipal Assistance New York City Series 57 7.25 2008 500,000 520,175
Municipal Assistance New York City Series 59 7.75 2006 660,000 703,527
Municipal Assistance New York City Series 62 6.75 2006 2,200,000 2,286,636
New York & New Jersey Port Authority Consolidated Revenue Bonds
AMT Series 61 8.125 2023 750,000 780,360
New York & New Jersey Port Authority Consolidated Revenue Bonds
AMT Series 62 8.00 2023 1,000,000 1,041,170
New York City General Obligation Bonds Series 1995B 7.00 2016 1,500,000 1,473,615
New York City General Obligation Unlimited Tax Bonds Series E
(CGIC Insured) 6.00 2016 1,500,000 (f) 1,383,045
New York City Municipal Water Finance Authority Water & Sewer System
Revenue Bonds Series B Inverse Floater (MBIA Insured) 6.04 2009 2,000,000 (g) 1,495,000
New York City Water Finance Authority Water & Sewer System
Pre-Refunded Revenue Bonds Series A (FGIC Insured) 6.75 2014 1,185,000 1,251,561
New York City Water Finance Authority Water & Sewer System
Revenue Bonds Series A (FGIC Insured) 6.75 2014 565,000 568,633
New York City Water Finance Authority Water & Sewer System
Revenue Pre-Refunded Bonds Series 1988A 7.00 2018 1,500,000 1,577,010
See accompanying notes to investments in securities.
<PAGE>
New York City Water Finance Authority Water & Sewer System Revenue Bonds
Series 1993A (AMBAC Insured) 5.75 2018 4,000,000 3,544,920
State Certificate of Participation City University John J. College 7.25 2007 360,000 365,411
State Dormitory Authority City University System
Consolidated 3rd Resolution Revenue Bonds Series 1994-2 (MBIA Insured) 6.25 2019 1,500,000 1,420,995
State Dormitory Authority City University System Pre-Refunded Revenue Bonds 8.125 2017 3,400,000 3,689,306
State Dormitory Authority City University System Pre-Refunded Revenue Bonds
Series 1986A 7.625 2013 1,000,000 1,052,630
State Dormitory Authority City University System Revenue Bonds
Series 1993A 5.75 2013 3,000,000 2,603,100
State Dormitory Authority State University Education Facility
Refunding Revenue Bonds Series 1990B 7.50 2011 1,900,000 2,002,904
State Dormitory Authority State University Education Facility
Pre-Refunded Revenue Bonds Series 1990A 7.70 2012 1,750,000 1,947,750
State Dormitory Authority Upstate Community Colleges Series A
(Connie Lee Insured) 5.625 2012 1,500,000 1,339,530
State Energy Research & Development Authority Electric Facility
Revenue Bonds AMT Consolidated Edison Series 1986A 7.50 2021 1,750,000 1,767,815
State Energy Research & Development Authority Electric Facility
Revenue Bonds AMT Consolidated Edison Series 1989A 7.75 2024 1,000,000 1,021,490
State Energy Research & Development Authority Electric Facility
Revenue Bonds AMT Consolidated Edison Series 1990A 7.50 2025 5,000,000 5,061,250
State Energy Research & Development Authority Gas Facility Revenue Bonds
Brooklyn Union Gas Series I 7.125 2020 2,000,000 2,010,780
State Energy Research & Development Authority Gas Facility Revenue Bonds
Brooklyn Union Gas Series II 7.00 2020 1,500,000 1,496,295
State Energy Research & Development Authority Pollution Control
Refunding Revenue Bonds AMT Rochester Gas & Electric (MBIA Insured) 6.50 2032 2,500,000 2,385,525
State Environmental Facility State Water & Pollution Control
Revolving Fund Revenue Bonds New York City Municipal Water
Finance Authority Series 1990A 7.50 2012 3,000,000 3,162,240
State Housing Finance Authority State University Construction Program
Pre-Refunded Bonds Series 1986A 8.00 2016 400,000 422,684
State Housing Finance Authority State University Construction Program
Pre-Refunded Bonds Series A 8.30 2018 500,000 549,345
State Local Government Assistance Bonds Series C 5.50 2022 1,500,000 1,238,640
State Local Government Assistance Bonds Series 1992A 6.875 2019 2,000,000 2,008,500
State Local Government Assistance Pre-Refunded Bonds Series 1991A 7.00 2016 4,000,000 4,334,760
State Medical Care Facility Finance Agency Hospital & Nursing Home
Mortgage Revenue Bonds Montefiore Hospital Series 1989A (FHA Insured) 7.25 2024 1,400,000 1,436,582
State Medical Care Facility Finance Agency Mental Health Services Facility
Improving Refunding Revenue Bonds Series 1993F 5.375 2014 1,000,000 814,640
State Medical Care Facility Finance Agency Mental Health Services Facility
Improving Refunding Revenue Bonds Series 1994A 5.25 2023 1,500,000 1,139,925
State Medical Care Facility Finance Agency Pre-Refunded Bonds
Presbyterian Hospital Series 1985B 8.00 2025 1,320,000 1,433,124
<PAGE>
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.60 2008 1,500,000 1,632,360
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.70 2022 1,950,000 2,128,406
State Medical Care Facility Finance Agency Revenue Bonds
North Shore University Glen Cove Series A (MBIA Insured) 5.125 2012 1,000,000 839,230
State Medical Care Facility Finance Agency Secured Hospital Revenue Bonds
Series 1987A 7.10 2027 550,000 529,793
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series TT 7.50 2015 4,000,000 4,143,280
State Mortgage Agency Homeowner Mortgage Revenue Bonds Series 27 6.90 2015 3,000,000 2,999,550
State Mortgage Agency Revenue Bonds AMT Series 9 7.30 2017 970,000 987,896
State Thruway Authority Local Highway & Bridge Service Contract Bonds
Series 1991 6.00 2011 2,500,000 2,289,675
State Urban Development Correction Facility
Pre-Refunded Revenue Bonds Series 1986 8.00 2015 750,000 785,805
State Urban Development Correction Facility Pre-Refunded Revenue Bonds
Series 1 (FSA Insured) 7.50 2020 4,500,000 4,942,170
State Urban Development Correctional Capital Facilities
Refunding Revenue Bonds Series 1993A 5.25 2021 2,500,000 1,935,250
Suffolk County General Obligation Public Improvement Refunding Bonds
Series G (MBIA Insured) 5.40 2014 1,000,000 867,220
Triborough Bridge & Tunnel Authority General Purpose
Pre-Refunded Revenue Bonds Series S 7.00 2021 3,000,000 3,226,380
Triborough Bridge & Tunnel Authority Special Obligation Refunding Bonds
Series 1991B (FGIC Insured) 6.875 2015 2,000,000 2,036,220
United Nations Development Senior Lien Pre-Refunded Revenue Bonds
1986 Phase II & III 7.875 2006 250,000 264,830
United Nations Development Senior Lien Refunding Revenue Bonds
Series 1992A 6.00 2026 4,500,000 3,940,920
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $109,313,325) $110,422,200
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $109,313,325)(h) $110,422,200
_____________________________________________________________________________________________________________________________
<PAGE>
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 12-31-94 06-30-94
_______________________________________________________________________________________________________
AAA 51% 46%
AA 26 30
A 11 11
BBB and below 12 13
Non-rated - -
Total 100% 100%
_______________________________________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(e) For zero coupon bonds, the interest rate disclosed represents the annualized yield on the date of
acquisition.
(f) Partially pledged as initial deposit on the following open interest rate futures contracts
(see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
___________________________________________________________
Municipal Bonds March 1995 $22,500,000
Sale contracts
U.S. Treasury Bonds March 1995 22,500,000
___________________________________________________________
(g) Inverse floaters represent securities that pay interest at a rate that increases (decreases) in the
same magnitude as, or in a multiple of, a decline (increase) in market short-term rates. Interest
rate disclosed is the rate in effect on Dec. 31, 1994. Inverse floaters in the aggregate represent
1.3% of the fund's net assets as of Dec. 31, 1994.
(h) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $109,283,000
and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $4,960,000
Unrealized depreciation (3,821,000)
______________________________________________________________________________________________________
Net unrealized appreciation $1,139,000
______________________________________________________________________________________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in securities
IDS Ohio Tax-Exempt Fund
Dec. 31, 1994 (Unaudited) (Percentages represent value of
investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.1%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds
Childrens Hospital Medical Center (AMBAC Insured) 5.00 % 2015 $1,000,000 $ 807,420
Akron Bath & Copley Joint Township Hospital Refunding Revenue Bonds
Childrens Hospital Medical Center Series 1993 (AMBAC Insured) 5.25 2020 1,500,000 1,220,115
Barberton Limited Tax Various Purpose General Obligation Bonds
Series 1989-1 7.35 2009 700,000 713,958
Bedford Sewer System Mortgage Revenue Bonds Series 1986 (AMBAC Insured) 7.80 2010 300,000 319,224
Bellefontaine Hospital Facility Refunding Revenue Bonds
Mary Rutan Health Association of Logan County Series 1993 6.00 2013 1,000,000 826,840
Butler County Hospital Facility Improvement Refunding Revenue Bonds 7.50 2010 1,750,000 1,687,595
Clermont County Hospital Facility Revenue Bonds Mercy Health System
Province of Cincinnati Series 1989A (AMBAC Insured) 7.50 2019 750,000 818,992
Cleveland Airport Systems Revenue Bonds AMT Series 1990A (MBIA Insured) 7.40 2020 500,000 518,740
Cleveland Airport Systems Revenue Bonds AMT Series A (FGIC Insured) 6.00 2024 1,500,000 1,364,685
Cleveland General Obligation Pre-Refunded Bonds 7.375 2003 125,000 133,624
Cleveland Public Power System 1st Mortgage Pre-Refunded Revenue Bonds 8.375 2017 100,000 108,845
Cleveland School District Unlimited Tax Improvement
General Obligation Bonds Series A (FGIC Insured) 5.875 2011 1,000,000 942,220
Cleveland Waterworks Improvement 1st Mortgage Refunding Revenue Bonds
Series F 1992B (AMBAC Insured) 6.25 2016 1,000,000 (f) 966,020
Cleveland Waterworks Improvement 1st Mortgage Revenue Bonds Series 1987E 6.00 2017 200,000 182,936
Cleveland Waterworks Improvement 1st Mortgage Pre-Refunded Revenue Bonds
Series 1987E 7.875 2016 650,000 692,562
Coshocton County Solid Waste Disposal Refunding Revenue Bonds
Stone Container Series 1992 7.875 2013 1,000,000 971,920
Cuyahoga County Hospital Improvement Revenue Bonds
Cleveland Clinic Foundation 7.00 2013 500,000 502,170
Cuyahoga County Hospital Improvement Pre-Refunded Revenue Bonds
Cleveland Clinic Foundation Series 1987A 7.875 2010 275,000 297,209
Cuyahoga County Hospital Improvement Revenue Bonds
Mount Sinai Medical Center Series 1991 (AMBAC Insured) 6.625 2021 600,000 599,562
Cuyahoga County Hospital Improvement Revenue Bonds
University Hospitals Health System Series 1992 (AMBAC Insured) 6.50 2011 500,000 499,485
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992 5.50 2011 1,500,000 1,347,525
Cuyahoga County Hospital Refunding Revenue Bonds
Mount Sinai Medical Center Series 1987A 8.125 2014 400,000 431,356
Cuyahoga County Hospital Revenue Bonds Meridia Health Series 1991 7.00 2023 1,000,000 976,950
Cuyahoga County Limited Tax General Obligation Bonds 5.60 2013 500,000 440,400
Cuyahoga Hospital Revenue Bonds Metrohealth System Series 1989
(MBIA Insured) 6.00 2019 1,000,000 917,850
Dover Limited Tax Improvement General Obligation
Municipal Sewer System Bonds 7.10 2009 1,000,000 1,025,650
Dover Waterworks System Revenue Bonds Series 1994 (AMBAC Insured) 6.00 2020 1,000,000 930,590
See accompanying notes to investments in securities.
<PAGE>
Elyria Limited Tax Improvement General Obligation
Recreation Facility Bonds 7.10 2009 715,000 733,340
Erie County Hospital Improvement Refunding Revenue Bonds
Firelands Community Hospital Series 1992 6.75 2015 2,000,000 1,879,240
Fairfield Union Local School District School Facilities
Unlimited Tax Improvement General Obligation Bonds (AMBAC Insured) 5.90 2018 625,000 573,388
Findlay Water System Limited Tax Improvement General Obligation Bonds 5.55 2018 365,000 315,663
Franklin County Convention Facilities Authority Tax & Lease
Revenue Anticipation Bonds (MBIA Insured) 5.80 2013 1,000,000 922,310
Franklin County Convention Facilities Authority Tax & Lease
Revenue Anticipation Pre-Refunded Bonds (MBIA Insured) 7.00 2019 1,500,000 1,622,910
Franklin County Hospital Refunding Revenue Bonds
Riverside United Methodist Hospital Series 1993A 5.75 2012 1,000,000 879,010
Franklin County Limited Tax General Obligation Refunding Bonds Series 1993 5.50 2013 1,000,000 886,000
Highland Heights Limited Tax Improvement General Obligation Street Bonds 7.75 2008 400,000 432,900
Kettering School District Improvement General Obligation Bonds
(FGIC Insured) 5.25 2022 1,000,000 816,820
Lake County Water System Limited Tax Improvement General Obligation
Pre-Refunded Bonds Series 1987-2 8.125 2010 700,000 762,972
Lakota Local School District Butler County School Unlimited Tax
Improvement Bonds 7.00 2012 500,000 529,470
Lakota Local School District Butler County School Unlimited Tax Improvement
Pre-Refunded Bonds 7.90 2011 200,000 216,398
Lokata Local School District Unlimited Tax Improvement
General Obligation Bonds (AMBAC Insured) 6.25 2014 2,000,000 1,955,360
Lima Limited Tax Improvement General Obligation
Pre-Refunded Bonds Sanitary Sewer System 8.25 2012 200,000 218,656
Lucas County Hospital Refunding Revenue Bonds St. Vincent's Medical Center
Series B (MBIA Insured) 5.25 2020 2,000,000 1,638,580
Lucas County Hospital Pre-Refunded Revenue Bonds Toledo Hospital
(MBIA Insured) 7.00 2014 100,000 101,873
Marietta Sewer System Improvement Bonds (BIG Insured) 7.50 2007 200,000 212,144
Marion County Health Care Facilities Improvement Refunding Revenue
Bonds United Church Homes Series 1993 6.375 2010 1,000,000 874,700
Marysville Sewer System 1st Mortgage Revenue Bonds AMT Series 1988
(BIG Insured) 7.85 2008 400,000 427,380
Marysville Water System Mortgage Revenue Bonds Series 1991 (MBIA Insured) 7.05 2021 1,000,000 1,079,420
Mason Waterworks System Refunding Revenue Bonds Series 1993
(AMBAC Insured) 6.00 2017 600,000 560,406
Medina County Hospital Revenue Bonds Medina County Community Hospital
Series 1987 (AMBAC Insured) 6.875 2016 100,000 101,089
Miami County Hospital Facility Refunding Revenue Bonds
Upper Valley Medical Center Series 1987A 8.375 2013 75,000 79,834
Miami State University General Receipts Bonds Series 1993 (FGIC Insured) 5.60 2013 500,000 450,370
Montgomery County Health Facilities Revenue Bonds Friendship Village Dayton
Series 1990A 9.25 2016 1,000,000 1,008,580
Montgomery County Industrial Development Revenue Bonds AMT SPM System
Series 1991 10.00 2005 720,000 (e) 360,000
Montgomery County Sewer System Refunding Revenue Bonds
Greater Moraine - Beavercreek District Series 1993 (FGIC Insured) 5.60 2011 1,000,000 911,000
Montgomery County Water Revenue Bonds Greater Moraine - Beavercreek
District (FGIC Insured) 6.25 2017 1,000,000 966,880
Newark Water System Limited Tax Improvement General Obligation Bonds
(AMBAC Insured) 6.00 2018 500,000 466,965
Parma Hospital Improvement Revenue Bonds Parma Community General Hospital
Series 1989B (MBIA Insured) 7.125 2013 500,000 518,820
Pickerington Local School District Unlimited Tax General Obligation
Pre-Refunded Bonds (AMBAC Insured) 7.00 2013 1,000,000 1,081,940
Pleasant Local School District Unlimited Tax Improvement
<PAGE>
General Obligation Bonds Series 1993 (AMBAC Insured) 5.10 2018 780,000 633,773
Rural Loraine County Water Authority Water Resource Improvement
Pre-Refunded Revenue Bonds Series 1991 (AMBAC Insured) 7.00 2011 1,000,000 1,075,220
South Euclid Lyndhurst School District General Obligation Bonds
(FGIC Insured) 5.25 2018 1,000,000 832,400
Southwest Local School District Hamilton & Butler Counties School
Unlimited Tax Improvement Bonds (AMBAC Insured) 7.65 2010 500,000 555,380
Stark County Hospital Pre-Refunded Revenue Bonds
Timkin Mercy Medical Center 7.50 2007 125,000 132,226
State Air Quality Development Authority Refunding Revenue Bonds
AMT Series 1994 (AMBAC Insured) 6.375 2029 2,000,000 1,887,860
State Air Quality Development Authority Revenue Bonds
Cleveland Electric Illuminating Series A 7.00 2009 350,000 331,565
State Building Authority Local Jail Grant Bonds Series 1989A
(MBIA Insured) 7.35 2009 500,000 545,090
State Building Authority State Correctional Facility Revenue Bonds Series B 7.125 2009 75,000 77,790
State Building Authority State Facility Pre-Refunded Bonds
Columbus State Office Building Series 1985C 7.35 2005 1,000,000 1,095,060
State Higher Educational Facility Pre-Refunded Revenue Bonds
Oberlin College Series 1989 7.375 2014 500,000 543,980
State Higher Educational Facility Revenue Bonds University of Dayton
Series 1994 (FGIC Insured) 5.80 2019 900,000 806,436
State Housing Finance Agency Mortgage Revenue Bonds AMT
Aristocrat South Board & Care Series 1991A (FHA Insured) 7.30 2031 1,500,000 1,512,165
State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT
Series 1990A (GNMA Insured) 7.80 2030 675,000 702,614
State Housing Finance Agency Single Family Mortgage Revenue Bonds AMT
Series 1990C (GNMA Insured) 7.85 2021 990,000 1,032,570
State Municipal Electric Generation Agency Joint Venture #5 Revenue Bonds
(AMBAC Insured) 5.375 2024 1,250,000 1,032,088
State Turnpike Revenue Bonds Series A 5.75 2024 1,750,000 1,536,080
State Water Development Authority Pollution Control Revenue Bonds
Phillip Morris 7.25 2008 150,000 151,488
State Water Development Authority Bonds AMT Toledo Edison Series 1994 8.00 2023 1,000,000 976,750
State Water Development Authority Water Development Pre-Refunded Bonds
Pure Water Series 1987I 7.75 2006-14 200,000 214,417
State Water Development Authority Water Development Pre-Refunded Bonds
Pure Water Series 1988I 7.00 2014 500,000 522,405
State Water Development Authority Water Development Refunding Revenue Bonds
Pure Water (AMBAC Insured) 5.50 2018 750,000 646,575
Summit County Industrial Development Revenue Bonds Century Products 7.75 2005 100,000 104,852
Summit County Limited Tax General Obligation Pre-Refunded Bonds
Human Services Facility (AMBAC Insured) 8.00 2007 100,000 108,662
Sycamore Board of Education Community School District
Hamilton County School Improvement Bonds 6.50 2009 500,000 504,345
Toledo General Obligation Improvement Bonds (AMBAC Insured) 6.10 2014 1,000,000 958,820
Toledo Sewerage System Mortgage Revenue Bonds Series 1994 (AMBAC Insured) 6.45 2024 500,000 493,430
University of Cincinnati General Receipt Pre-Refunded Bonds Series I-1 7.10 2010 750,000 805,792
University of Toledo General Receipt Bonds Series A (FGIC Insured) 5.90 2020 1,000,000 907,400
University of Toledo General Receipt Pre-Refunded Bonds Series 1990
(MBIA Insured) 7.125 2020 500,000 541,115
Warren County Various Purpose Limited Tax General Obligation Bonds
Series 1992 6.10 2012 500,000 476,945
Warren County Waterworks System Revenue Bonds Series 1994 (MBIA Insured) 6.00 2019 675,000 631,213
Whitehall City School District Franklin County Unlimited Tax
Improvement General Obligation Pre-Refunded Bonds
School Building Construction 7.25 2013 500,000 542,620
_____________________________________________________________________________________________________________________________
Total municipal bonds
<PAGE>
(Cost: $67,632,022) $66,747,987
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $67,632,022)(g) $66,747,987
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 12-31-94 06-30-94
___________________________________________________________________________________________________________
AAA 70% 65%
AA 9 11
A 9 14
BBB and below 12 10
Non-rated -- --
Total 100% 100%
(c) The following abbreviations are used in portfolio descriptions to identify the
insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
AMT -- Alternative Minimum Tax
(e) Presently non-income producing. For long-term debt securities, item identified is in default as to payment of
interest and/or principal.
(f) Partially pledged as initial deposit on the following open interest rate futures contracts (see Note 4 to the
financial statements):
Type of security Notional amount
______________________________________________________________________________________________________
Purchase contracts
Municipal Bonds March 1995 $8,300,000
Sale contracts
U.S. Treasury Bonds March 1995 8,300,000
______________________________________________________________________________________________________
(g) At Dec. 31, 1994, the cost of securities for federal income tax purposes was approximately $67,594,000 and
the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $ 1,908,000
Unrealized depreciation (2,754,000)
________________________________________________________________________________________________________
Net unrealized depreciation $ (846,000)
________________________________________________________________________________________________________
</TABLE>
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<C> <C> <S>
(a) FINANCIAL STATEMENTS:
List of financial statements filed as part of this Post-Effective Amendment to the
Registration Statement:
- Independent Auditors' Report dated August 5, 1994
- Statement of Assets and Liabilities, June 30, 1994
- Statement of Operations, Year ended June 30, 1994
- Statement of Changes in Net Assets, for the two-year period ended June 30,
1993 and June 30, 1994
- Notes to Financial Statements
- Investments in Securities, June 30, 1994
- Notes to Investments in Securities
Semiannual Report Data (unaudited):
- Statement of Assets and Liabilities, December 31, 1994
- Statement of Operations, Period ended December 31, 1994
- Statement of Changes in Net Assets, for the period ended December 31, 1994
- Notes to Financial Statements
- Investments in Securities, December 31, 1994
- Notes to Investments in Securities
(b) EXHIBITS:
1. Declaration of Trust dated April 7, 1986, filed as Exhibit No. 1 to
Registration Statement No. 33-5103 is incorporated herein by reference.
2. Amended By-laws dated May 14, 1987, filed as Exhibit No. 2 to Registration
Statement 33-5103 is incorporated herein by reference.
3. Not Applicable.
4. Form of Certificate for shares of beneficial interest filed as Exhibit No. 4
to Pre-Effective Amendment No. 1 to Registration Statement No. 33-5103 is
incorporated herein by reference.
5. Form of Investment Management Services Agreement between Registrant and
American Express Financial Corporation, dated March 20, 1995, is filed
electronically herewith.
6. Form of Distribution Agreement between Registrant and American Express
Financial Advisors Inc., dated March 20, 1995, is filed electronically
herewith.
7. All employees are eligible to participate in a profit sharing plan. Entry into
the plan is Jan. 1 or July 1. The Registrant contributes each year an amount
up to 15 percent of their annual salaries, the maximum deductible amount
permitted under Section 404(a) of the Internal Revenue Code.
8. Form of Custodian Agreement between Registrant and American Express Trust
Company, dated March 20, 1995, is filed electronically herewith.
9.(a) Form of Transfer Agency Agreement between Registrant and American Express
Financial Corporation, dated March 20, 1995, is filed electronically herewith.
9.(b) Form of Administrative Services Agreement between Registrant and American
Express Financial Corporation, dated March 20, 1995, is filed electronically
herewith.
9.(c) Form of Shareholder Service Agreement between Registrant and American Express
Financial Advisors Inc., dated March 20, 1995, is filed electronically
herewith.
10. Opinion and Consent of Counsel filed as Exhibit No. 10 to Pre-Effective
Amendment No. 3 to Registration Statement No. 33-5103 is incorporated herein
by reference.
11. Independent Auditors' Consent is filed electronically herewith.
12. None.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <C> <S>
13. Not Applicable.
14. Forms of Keogh, IRA and other retirement plans filed as Exhibits 14(a) through
14(n) to IDS Growth Fund, Inc. Post-Effective Amendment No. 34 to Registration
Statement No. 2-38355 on Sept. 8, 1986, are incorporated herein by reference.
15. Form of Plan and Agreement of Distribution between Registrant and American
Express Financial Advisors Inc., dated March 20, 1995, is filed electronically
herewith.
16. Schedule for computation of each performance quotation provided in the
Registration Statement in response to Item 22, filed as exhibit 16 to
Registration Statement No. 33-5103 is incorporated herein by reference.
17. Financial Data Schedule is filed electronically herewith.
18.(a) Trustees' Power of Attorney to sign Amendments to this Registration Statement
dated November 10, 1994, filed electronically as Exhibit 18(a) to Registrant's
Post-Effective Amendment No. 17, is incorporated herein by reference.
18.(b) Officers' Power of Attorney to sign Amendments to this Registration Statement
dated June 1, 1993 filed as Exhibit 17(a) to Registration Statement No.
33-5103 is incorporated herein by reference.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Subsidiaries of IDS Financial Corporation:
IDS Financial Services Inc.; IDS Real Estate Services, Inc.; Advisory Bank &
Trust Company; IDS Securities Corporation; Investors Accumulation Plan, Inc.;
IDS Life Insurance Company; IDS Life Insurance Company of New York; IDS
Certificate Company; Investors Syndicate Development Corp.; Mankato Ventures
(Joint Venture); Lawyers Joint Law Library Associates; Peninsular Properties,
Inc.; Relco-Bo, Inc.; IDS International, Inc.; IDS Fund Management Ltd.; IDS
Insurance Agency Inc.; IDS Insurance Agency of Arkansas Inc.; IDS Insurance
Agency of Alabama Inc.; IDS Insurance Agency of New Mexico Inc.; IDS Insurance
Agency of North Carolina Inc.; IDS Insurance Agency of Massachusetts Inc.; IDS
Insurance Agency of Utah, Inc.; IDS Insurance Agency of Wyoming Inc.; IDS
Advisory Group Inc.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
(1) (2)
NUMBER OF
RECORD
HOLDERS AS OF
JANUARY 23,
TITLE OF CLASS 1995
- -------------------------------------- -------------
<S> <C>
IDS California Tax-Exempt Fund 6,418
Shares of Beneficial Interest $.01 par
value
</TABLE>
ITEM 27. INDEMNIFICATION
The Declaration of Trust of the registrant provides that the Trust shall
indemnify any person who was or is a party or is threatened to be made a party,
by reason of the fact that he is or was a trustee, officer, employee or agent of
the Trust, or is or was serving at the request of the Trust as a trustee,
officer, employee or agent of another company, partnership, joint venture, trust
or other enterprise, to any threatened, pending or completed action, suit or
proceeding, wherever brought, and the Trust may purchase liability insurance and
advance legal expenses, all to the fullest extent permitted by the laws of the
State of Massachusetts, as now existing or hereafter amended. The By-laws of the
registrant provide that present or former directors or officers of the Trust
made or threatened to be made a party to or involved (including as a witness) in
an actual or threatened action, suit or proceeding shall be indemnified by the
Trust to the full extent authorized by the laws of the Commonwealth of
Massachusetts, all as more fully set forth in the By-laws filed as an exhibit to
this registration statement.
Insofar as indemnification for liability 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
II-2
<PAGE>
indemnification is against public policy as expressed in the 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 the Act and will be governed by the final adjudication of
such issue.
Any indemnification hereunder shall not be exclusive of any other rights of
indemnification to which the trustees, officers, employees or agents might
otherwise be entitled. No indemnification shall be made in violation of the
Investment Company Act of 1940.
II-3
<PAGE>
PAGE 1
<TABLE><CAPTION>
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)
Directors and officers of American Express Financial Corporation who are directors and/or
officers of one or more other companies:
<S> <C> <C>
Ronald G. Abrahamson, Vice President--Service Quality and Reengineering
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Service Quality
and Reengineering
American Express Service Corporation Vice President
Douglas A. Alger, Vice President--Total Compensation
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
Jerome R. Amundson, Vice President and Controller--Investment Accounting
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Investment
Accounting
Peter J. Anderson, Director and Senior Vice President--Investments
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Investments
IDS Advisory Group Inc. Director and Chairman
of the Board
IDS Capital Holdings Inc. Director and President
IDS Fund Management Limited Director
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Securities Corporation Executive Vice President-
Investments
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Ward D. Armstrong, Vice President-Sales and Marketing, American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, American
Express Institutional
Services
Kent L. Ashton, Vice President--Financial Education Services
American Express Financial Advisors IDS Tower 10 Vice President-Financial
Minneapolis, MN 55440 Education Services
<PAGE>
PAGE 2
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
Robert C. Basten, Vice President--Tax and Business Services
American Express Financial Advisors IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
American Express Tax & Business Director, President and
Services Inc. Chief Executive Officer
Timothy V. Bechtold, Vice President--Insurance Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
IDS Life Insurance Company Vice President-Insurance
Product Development
Carl E. Beihl, Vice President--Strategic Technology Planning
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
Alan F. Bignall, Vice President--Financial Planning Systems
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Financial Planning
Systems
American Express Service Corporation Vice President
John C. Boeder, Vice President--Mature Market Group
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Group
IDS Life Insurance Company of New York Box 5144 Director
Albany, NY 12205
Karl J. Breyer, Director and Senior Vice President--Corporate Affairs and General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Affairs and
Special Counsel
American Express Minnesota Foundation Director
IDS Aircraft Services Corporation Director and President
<PAGE>
PAGE 3
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Harold E. Burke, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Express Service Corporation Vice President
Daniel J. Candura, Vice President--Marketing Support
American Express Financial Advisors IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--American Express Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
American Express Financial Advisors Vice President-IDS
Securities Services
Orison Y. Chaffee III, Vice President--Field Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts Inc. Vice President--North
Central Region
IDS Insurance Agency of Nevada Inc. Vice President--North
Central Region
IDS Insurance Agency of New Mexico Inc. Vice President--North
Central Region
IDS Insurance Agency of North Carolina Inc. Vice President--North
Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
IDS Property Casualty Insurance Co. Director
<PAGE>
PAGE 4
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Manager-IDS Property
Casualty
IDS Property Casualty Insurance Co. I WEG Blvd. Director and President
DePere, Wisconsin 54115
Alan R. Dakay, Vice President--Institutional Insurance Marketing
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Express Financial Advisors Vice President -
Institutional Insurance
Marketing
American Partners Life Insurance Co. Director and President
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
Regenia David, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
William H. Dudley, Director and Executive Vice President--Investment Operations
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Investment Operations
IDS Advisory Group Inc. Director
IDS Capital Holdings Inc. Director
IDS Futures Corporation Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
Roger S. Edgar, Director and Senior Vice President--Information Systems
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information Systems
<PAGE>
PAGE 5
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 General Counsel
IDS Insurance Agency of Alabama Inc. Director and Vice President
IDS Insurance Agency of Arkansas Inc. Director and Vice President
IDS Insurance Agency of Massachusetts Inc. Director and Vice President
IDS Insurance Agency of Nevada Inc. Director and Vice President
IDS Insurance Agency of New Mexico Inc. Director and Vice President
IDS Insurance Agency of North Carolina Inc. Director and Vice President
IDS Insurance Agency of Ohio Inc. Director and Vice President
IDS Insurance Agency of Wyoming Inc. Director and Vice President
IDS Real Estate Services, Inc. Vice President
Investors Syndicate Development Corp. Director
Robert M. Elconin, Vice President--Government Relations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Vice President-
Retail Services
American Express Tax & Business Director and Chairman of
Services Inc. the Board
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mutual Fund Equity
Investments
IDS Advisory Group Inc. Executive Vice President
IDS International, Inc. Vice President and
Portfolio Manager
<PAGE>
PAGE 6
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Chief Financial Officer
American Express Tax & Business Director
Services Inc.
American Express Trust Company Director
IDS Cable Corporation Director
IDS Cable II Corporation Director
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Insurance Company Director
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
Investors Syndicate Development Corp. Vice President
Robert G. Gilbert, Vice President--Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Compensation Development
Harvey Golub, Director
American Express Company American Express Tower Chairman and Chief
World Financial Center Executive Officer
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
<PAGE>
PAGE 7
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Vice President and
Company Treasurer
American Express Financial Advisors Vice President and
Corporate Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
American Express Tax & Business Vice President and
Services Inc. Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Vice President and
Treasurer
IDS Cable II Corporation Vice President and
Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Deposit Corp. Director, President
and Treasurer
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Inc. Vice President and
Treasurer
IDS Insurance Agency of Nevada Inc. Vice President and
Treasurer
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Inc. Vice President and
Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Insurance Company Vice President and
Treasurer
IDS Life Series Fund, Inc. Vice President and
Treasurer
<PAGE>
PAGE 8
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Vice President and
Treasurer
IDS Partnership Services Corporation Vice President and
Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Realty Corporation Vice President and
Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Suzanne Graf, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
David A. Hammer, Vice President and Marketing Controller
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Express Financial Advisors Vice President-Insurance
Investments
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Life Insurance Company Vice President-Investments
IDS Property Casualty Insurance Company Vice President-Investment
Officer
Investors Syndicate Development Corp. Vice President-Investments
<PAGE>
PAGE 9
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Scott A. Hawkinson, Vice President--Assured Assets Product Development and Management
American Express Financial Advisors IDS Tower 10 Vice President-Assured
Minneapolis, MN 55440 Assets Product
Development & Management
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
James G. Hirsh, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
Darryl G. Horsman, Vice President--Product Development and Technology, American Express
Institutional Services
American Express Trust Company IDS Tower 10 Vice President
Minneapolis, MN 55440
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Financial Advisors Vice President-
Government and
Customer Relations
American Express Service Corporation Vice President
IDS Securities Corporation Vice President and Chief
Compliance Officer
David R. Hubers, Director, President and Chief Executive Officer
American Express Financial Advisors IDS Tower 10 Chairman, Chief Executive
Minneapolis, MN 55440 Officer and President
American Express Service Corporation Director and President
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Life Insurance Company Director
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
Marietta L. Johns, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
<PAGE>
PAGE 10
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Douglas R. Jordal, Vice President--Taxes
American Express Financial Advisors IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
IDS Aircraft Services Corporation Vice President
Craig A. Junkins, Vice President--IDS 1994 Implementation Planning and Financial Planning
Development
American Express Financial Advisors IDS Tower 10 Vice President-IDS 1994
Minneapolis, MN 55440 Implementation Planning
and Financial Planning
Development
American Express Service Corporation Vice President
James E. Kaarre, Vice President--Marketing Information
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
Linda B. Keene, Vice President--Market Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Market Development
G. Michael Kennedy, Vice President--Investment Services and Investment Research
American Express Financial Advisors IDS Tower 10 Vice President-Investment
Minneapolis, MN 55440 Services and Investment
Research
Susan D. Kinder, Director and Senior Vice President--Human Resources
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Human Resources
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
<PAGE>
PAGE 11
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Express Financial Advisors Senior Vice President-
Risk Management Products
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Inc. Director and President
IDS Insurance Agency of Nevada Inc. Director and President
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Inc. Director and President
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A&B Member of Board of
Managers, Chairman of the
Board and President
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the
of New York Albany, NY 12205 Board and President
Harold D. Knutson, Vice President--System Services
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 System Services
Paul F. Kolkman, Vice President--Actuarial Finance
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
Claire Kolmodin, Vice President--Service Quality
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Financial Advisors IDS Tower 10 Director and Senior Vice
Minneapolis, MN 55440 President-Field
Management and Business
Systems
American Express Service Corporation Vice President
<PAGE>
PAGE 12
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Edward Labenski, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS Advisory Group Inc. Senior Vice President
Kurt A. Larson, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Lori J. Larson, Vice President--Variable Assets Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Variable
Minneapolis, MN 55440 Assets Product
Development
IDS Cable Corporation Director and Vice President
IDS Cable II Corporation Director and Vice President
IDS Futures Brokerage Group Assistant Vice President-
General Manager/Director
IDS Futures Corporation Director and Vice President
IDS Futures III Corporation Director and Vice President
IDS Management Corporation Director and Vice President
IDS Partnership Services Corporation Director and Vice President
IDS Realty Corporation Director and Vice President
Ryan R. Larson, Vice President--IPG Product Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Life Insurance Company Vice President-
Annuity Product
Development
Daniel E. Laufenberg, Vice President and Chief U.S. Economist
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
Richard J. Lazarchic, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
<PAGE>
PAGE 13
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Peter A. Lefferts, Director, Senior Vice President and Chief Marketing Officer
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Chief Marketing Officer
American Express Trust Company Director and Chairman of
the Board
IDS Life Insurance Company Director and Executive
Vice President-Marketing
IDS Plan Services of California, Inc. Director
Investors Syndicate Development Corp. Director
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Private
Client Group
American Express Service Corporation Vice President
Mary J. Malevich, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS International, Inc. Vice President and
Portfolio Manager
Fred A. Mandell, Vice President--Field Marketing Readiness
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
<PAGE>
PAGE 14
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Janis E. Miller, Vice President--Variable Assets
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Variable Assets
IDS Cable Corporation Director and President
IDS Cable II Corporation Director and President
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Insurance Company Director and Executive
Vice President-Variable
Assets
IDS Life Series Fund, Inc. Director
IDS Life Variable Annuity Funds A&B Director
IDS Management Corporation Director and President
IDS Partnership Services Corporation Director and President
IDS Realty Corporation Director and President
IDS Life Insurance Company of New York Box 5144 Executive Vice President
Albany, NY 12205
James A. Mitchell, Director and Executive Vice President--Marketing and Products
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Executive Vice President-
Marketing and Products
IDS Certificate Company Director and Chairman of
the Board
IDS Life Insurance Company Director, Chairman of
the Board and Chief
Executive Officer
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Pamela J. Moret, Vice President--Corporate Communications
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Communications
American Express Minnesota Foundation Director and President
Barry J. Murphy, Director and Senior Vice President--Client Service
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
<PAGE>
PAGE 15
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Robert J. Neis, Vice President--Information Systems Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Information Systems
Operations
James R. Palmer, Vice President--Insurance Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Life Insurance Company Vice President-Taxes
Carla P. Pavone, Vice President--Specialty Service Teams and Emerging Business
American Express Financial Advisors IDS Tower 10 Vice President-Specialty
Minneapolis, MN 55440 Service Teams and
Emerging Business
Judith A. Pennington, Vice President--Field Technology
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Field Technology
George M. Perry, Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Strategy
and Development
IDS Property Casualty Insurance Co. Director
Susan B. Plimpton, Vice President--Segmentation Development and Support
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
Ronald W. Powell, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Cable Corporation Vice President and
Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Services Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
<PAGE>
PAGE 16
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
James M. Punch, Vice President--TransAction Services
American Express Financial Advisors IDS Tower 10 Vice President-Trans
Minneapolis, MN 55440 Action Services
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Taxable Mutual Fund
Investments
IDS Advisory Group Inc. Vice President
ReBecca K. Roloff, Vice President--1994 Program Director
American Express Financial Advisors IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
American Express Financial Advisors IDS Tower 10 Vice President-Advisory
Minneapolis, MN 55440 Institutional Marketing
IDS Advisory Group Inc. President and Chief
Executive Officer
Robert A. Rudell, Vice President--American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-American
Minneapolis, MN 55440 Express Institutional
Services
American Express Trust Company Director
IDS Sales Support Inc. Director and President
John P. Ryan, Vice President and General Auditor
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
<PAGE>
PAGE 17
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
New England Region
IDS Insurance Agency of Nevada Inc. Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Inc. Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
Stuart A. Sedlacek, Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
American Express Financial Advisors Vice President-
Assured Assets
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
Donald K. Shanks, Vice President--Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Property Casualty
IDS Property Casualty Insurance Co. Senior Vice President
<PAGE>
PAGE 18
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Express Financial Advisors Vice President-Senior
Portfolio Manager
Insurance Investments
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Life Insurance Company Vice President-Real
Estate Loan Management
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Director and Vice President
IDS Realty Corporation Vice President
IDS Life Insurance Company of New York Box 5144 Vice President and
Albany, NY 12205 Assistant Treasurer
Judy P. Skoglund, Vice President--Human Resources and Organization Development
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
Ben C. Smith, Vice President--Workplace Marketing
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
William A. Smith, Vice President and Controller--Private Client Group
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
Bridget Sperl, Vice President--Human Resources Management Services
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
Jeffrey E. Stiefler, Director
American Express Company American Express Tower Director and President
World Financial Center
New York, NY 10285
<PAGE>
PAGE 19
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
William A. Stoltzmann, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Partners Life Insurance Co. Director, Vice President,
General Counsel and
Secretary
IDS Life Insurance Company Vice President, General
Counsel and Secretary
IDS Life Series Fund, Inc. General Counsel and
Assistant Secretary
IDS Life Variable Annuity Funds A&B General Counsel and
Assistant Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
James J. Strauss, Vice President--Corporate Planning and Analysis
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
American Express Financial Advisors IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
Fenton R. Talbott, Director
ACUMA Ltd. ACUMA House President and Chief
The Glanty, Egham Executive Officer
Surrey TW 20 9 AT
UK
<PAGE>
PAGE 20
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
John R. Thomas, Director and Senior Vice President--Information and Technology
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information and
Technology
IDS Bond Fund, Inc. Director
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Select Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Investment Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
Melinda S. Urion, Vice President and Corporate Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Express Financial Advisors Vice President and
Corporate Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
Wesley W. Wadman, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Fund Management Limited Director and Chairman
IDS International, Inc. Senior Vice President
<PAGE>
PAGE 21
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Norman Weaver, Jr., Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
Pacific Region
IDS Insurance Agency of Arkansas Inc. Vice President-
Pacific Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
Pacific Region
IDS Insurance Agency of Nevada Inc. Vice President-
Pacific Region
IDS Insurance Agency of New Mexico Inc. Vice President-
Pacific Region
IDS Insurance Agency of North Carolina Inc. Vice President-
Pacific Region
IDS Insurance Agency of Ohio Inc. Vice President-
Pacific Region
IDS Insurance Agency of Wyoming Inc. Vice President-
Pacific Region
Michael L. Weiner, Vice President--Corporate Tax Operations
American Express Financial Advisors IDS Tower 10 Vice President-Corporate
Minneapolis, MN 55440 Tax Operations
IDS Capital Holdings Inc. Vice President
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
IDS Futures III Corporation Vice President, Treasurer
and Secretary
Lawrence J. Welte, Vice President--Investment Administration
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
Jeffry F. Welter, Vice President--Equity and Fixed Income Trading
American Express Financial Advisors IDS Tower 10 Vice President-Equity
Minneapolis, MN 55440 and Fixed Income Trading
<PAGE>
PAGE 22
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
William N. Westhoff, Director, Senior Vice President and Global Chief Investment Officer
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Global Chief Investment
Officer
IDS International, Inc. Director
IDS Partnership Services Corporation Director and Vice President
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director and Vice President
Investors Syndicate Development Corp. Director
Edwin M. Wistrand, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
North Region
IDS Insurance Agency of Arkansas Inc. Vice President-
North Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
North Region
IDS Insurance Agency of Nevada Inc. Vice President-
North Region
IDS Insurance Agency of New Mexico Inc. Vice President-
North Region
IDS Insurance Agency of North Carolina Inc. Vice President-
North Region
IDS Insurance Agency of Ohio Inc. Vice President-
North Region
IDS Insurance Agency of Wyoming Inc. Vice President-
North Region
IDS Life Insurance Company Box 5144 Director
of New York Albany, NY 12205
</TABLE>
<PAGE>
PAGE 23
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal
underwriter for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-Exempt
Fund, Inc.; IDS International Fund, Inc.; IDS Investment
Series, Inc.; IDS Managed Retirement Fund, Inc.; IDS Market
Advantage Series, Inc.; IDS Money Market Series, Inc.; IDS New
Dimensions Fund, Inc.; IDS Precious Metals Fund, Inc.; IDS
Progressive Fund, Inc.; IDS Selective Fund, Inc.; IDS Special
Tax-Exempt Series Trust; IDS Stock Fund, Inc.; IDS Strategy
Fund, Inc.; IDS Tax-Exempt Bond Fund, Inc.; IDS Tax-Free Money
Fund, Inc.; IDS Utilities Income Fund, Inc. and IDS
Certificate Company.
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Service Quality and
Minneapolis, MN 55440 Reengineering
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Jerome R. Amundson Vice President and None
IDS Tower 10 Controller-Investment
Minneapolis, MN 55440 Accounting
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Investments
Minneapolis, MN 55440
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 American Express
Institutional Services
Alvan D. Arthur Group Vice President- None
IDS Tower 10 Central California/
Minneapolis, MN 55440 Western Nevada
Kent L. Ashton Vice President- None
IDS Tower 10 Financial Education
Minneapolis, MN 55440 Services
<PAGE>
PAGE 24
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Joseph M. Barsky III Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Robert C. Basten Vice President-Tax None
IDS Tower 10 and Business Services
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Insurance None
IDS Tower 10 Product Development
Minneapolis, MN 55440
John D. Begley Group Vice Presdient- None
Olentangy Valley Center Ohio/Indiana
Suite 300
7870 Olentangy River Rd.
Columbus, OH 43235
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Jack A. Benjamin Group Vice President- None
Greater Pennsylvania
Alan F. Bignall Vice President- None
IDS Tower 10 Financial Planning
Minneapolis, MN 55440 Systems
Brent L. Bisson Group Vice President- None
Seafirst Financial Los Angeles Metro
Center, Suite 1730
601 W. Riverside Ave.
Spokane, WA 99201
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Bruce J. Bordelon Group Vice President- None
Gulf States
Charles R. Branch Group Vice President- None
Northwest
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
Harold E. Burke Vice President None
IDS Tower 10 and Assistant
Minneapolis, MN 55440 General Counsel<PAGE>
PAGE 25
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Daniel J. Candura Vice President- None
IDS Tower 10 Marketing Support
Minneapolis, MN 55440
Cynthia M. Carlson Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Securities Services
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James E. Choat Senior Vice President- None
Suite 124 Field Management
6210 Campbell Rd.
Dallas, TX 75248
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304
Roger C. Corea Group Vice President- None
345 Woodcliff Drive Upstate New York
Fairport, NY 14450
Henry J. Cormier Group Vice President- None
Connecticut
John M. Crawford Group Vice President- None
Arkansas/Springfield/Memphis
Kevin F. Crowe Group Vice President- None
IDS Tower 10 Carolinas/Eastern Georgia
Minneapolis, MN 55440
Alan R. Dakay Vice President- None
IDS Tower 10 Institutional Insurance
Minneapolis, MN 55440 Marketing
Regenia David Vice President- None
Systems Services
Scott M. Digiammarino Group Vice President- None
Washington/Baltimore
Bradford L. Drew Group Vice President- None
Eastern Florida
<PAGE>
PAGE 26
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William H. Dudley Director and Executive Director/
IDS Tower 10 Vice President- Trustee
Minneapolis MN 55440 Investment Operations
Roger S. Edgar Senior Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Robert M. Elconin Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Retail Services
Minneapolis, MN 55440
Joseph Evanovich Jr. Group Vice President- None
Nebraska/Iowa/Dakotas
Louise P. Evenson Group Vice President- None
San Francisco Bay Area
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Louis C. Fornetti Senior Vice President None
IDS Tower 10 and Chief Financial
Minneapolis, MN 55440 Officer
Douglas L. Forsberg Group Vice President- None
IDS Tower 10 Portland/Eugene
Minneapolis, MN 55440
William P. Fritz Group Vice President- None
Northern Missouri
Carl W. Gans Group Vice President- None
IDS Tower 10 Twin City Metro
Minneapolis, MN 55440
Bruce M. Gaurino Group Vice President- None
Hawaii
<PAGE>
PAGE 27
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
Morris Goodwin Jr. Vice President and None
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Suzanne Graf Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Bruce M. Guarino Group Vice President- None
Hawaii
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Teresa A. Hanratty Group Vice President- None
Northern New England
John R. Hantz Group Vice President- None
Detroit Metro
Robert L. Harden Group Vice President- None
Suite 403 Boston Metro
8500 Leesburg Pike
Vienna, VA 22180
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President-Assured None
IDS Tower 10 Assets Product Development
Minneapolis, MN 55440 and Management
Brian M. Heath Group Vice President- None
IDS Tower 10 North Texas
Minneapolis, MN 55440
Raymond E. Hirsch Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
<PAGE>
PAGE 28
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
David J. Hockenberry Group Vice President- None
Eastern Tennessee
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations
David R. Hubers Chairman, Chief None
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Marietta L. Johns Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Douglas R. Jordal Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Craig A. Junkins Vice President - IDS 1994 None
IDS Tower 10 Implementation Planning
Minneapolis, MN 55440 and Financial Planning
Development
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Information
Minneapolis, MN 55440
Linda B. Keene Vice President- None
Market Development
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Senior Vice President- None
IDS Tower 10 Risk Management Products
Minneapolis, MN 55440
<PAGE>
PAGE 29
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Harold D. Knutson Vice President- None
IDS Tower 10 System Services
Minneapolis, MN 55440
Paul F. Kolkman Vice President- None
IDS Tower 10 Actuarial Finance
Minneapolis, MN 55440
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
David S. Kreager Group Vice President- None
IDS Tower 10 Greater Michigan
Minneapolis, MN 55440
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Group Vice President- None
IDS Tower 10 Chicago Metro
Minneapolis, MN 55440
Edward Labenski Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Lori J. Larson Vice President- None
IDS Tower 10 Variable Assets Product
Minneapolis, MN 55440 Development
Ryan R. Larson Vice President- None
IDS Tower 10 IPG Product Development
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and None
IDS Tower 10 Chief U.S. Economist
Minneapolis, MN 55440
Richard J. Lazarchic Vice President- None
IDS Tower 10 Senior Portfolio
MInneapolis, MN 55440 Manager
Peter A. Lefferts Senior Vice President and None
IDS Tower 10 Chief Marketing Officer
Minneapolis, MN 55440<PAGE>
PAGE 30
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Douglas A. Lennick Director and Executive None
IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Fred A. Mandell Vice President- None
IDS Tower 10 Field Marketing Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President- None
Pittsburgh Metro
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas W. Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 International Research
Minneapolis, MN 55440 and Chief International
Economist
Janis E. Miller Vice President- None
IDS Tower 10 Variable Assets
Minneapolis, MN 55440
James A. Mitchell Executive Vice President- None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
John P. Moraites Group Vice President- None
Kansas/Oklahoma
Pamela J. Moret Vice President- None
IDS Tower 10 Corporate Communications
Minneapolis, MN 55440
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
Robert J. Neis Vice President- None
IDS Tower 10 Information Systems
Minneapolis, MN 55440 Operations<PAGE>
PAGE 31
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald E. Newton Group Vice President- None
Rhode Island/Central
Massachusetts
Thomas V. Nicolosi Group Vice President- None
New York Metro Area
Vernon F. Palen Region Vice President- None
Suite D-222 Rocky Mountain Region
7100 E. Lincoln Drive
Scottsdale, AZ 85253
James R. Palmer Vice President- None
IDS Tower 10 Insurance Operations
Minneapolis, MN 55440
Carla P. Pavone Vice President- None
IDS Tower 10 Specialty Service Teams
Minneapolis, MN 55440 and Emerging Business
Judith A. Pennington Vice President- None
IDS Tower 10 Field Technology
Minneapolis, MN 55440
George M. Perry Vice President- None
IDS Tower 10 Corporate Strategy
Minneapolis, MN 55440 and Development
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Larry M. Post Group Vice President- None
Philadelphia Metro
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 TransAction Services
Minneapolis, MN 55440
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
R. Daniel Richardson Group Vice President- None
Southern Texas
<PAGE>
PAGE 32
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Roger B. Rogos Group Vice President- None
Suite 15, Parkside Pl. Western Florida
945 Boardman-Canfield Rd
Youngstown, Ohio 44512
ReBecca K. Roloff Vice President-1994 None
IDS Tower 10 Program Director
Minneapolis, MN 55440
Stephen W. Roszell Vice President- None
IDS Tower 10 Advisory Institutional
Minneapolis, MN 55440 Marketing
Max G. Roth Group Vice President- None
Wisconsin/Upper Michigan
Robert A. Rudell Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Institutional Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven A. Samsel Senior Vice President- None
45 Braintree Hill Park Field Management
Braintree, MA 02184
Russell L. Scalfano Group Vice President- None
Illinois/Indiana/Kentucky
William G. Scholz Group Vice President- None
Arizona/Las Vegas
Stuart A. Sedlacek Vice President- None
IDS Tower 10 Assured Assets
Minneapolis, MN 55440
Donald K. Shanks Vice President- None
IDS Tower 10 Property Casualty
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager,
Minneapolis, MN 55440 Insurance Investments
Judy P. Skoglund Vice President- None
IDS Tower 10 Human Resources and
Minneapolis, MN 55440 Organization Development<PAGE>
PAGE 33
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Julian W. Sloter Group Vice Presidnet- None
9040 Roswell Rd. Orlando/Jacksonville
River Ridge-Suite 600
Atlanta, GA 30350
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Group Vice President- None
IDS Tower 10 Eastern Iowa Area
Minneapolis, MN 55440
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Paul J. Stanislaw Group Vice President- None
Southern California
Lois A. Stilwell Group Vice President- None
IDS Tower 10 Outstate Minnesota Area/
Minneapolis, MN 55440 North Dakota/Western Wisconsin
William A. Stoltzmann Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Neil G. Taylor Group Vice President- None
IDS Tower 10 Seattle/Tacoma
Minneapolis, MN 55440
John R. Thomas Senior Vice President- Director/
IDS Tower 10 Information and Trustee
Minneapolis, MN 55440 Technology
Melinda S. Urion Vice President and None
IDS Tower 10 Corporate Controller
Minneapolis, MN 55440<PAGE>
PAGE 34
Item 29(b). (Continued)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Peter S. Velardi Group Vice President- None
Atlanta/Birmingham
Charles F. Wachendorfer Group Vice President- None
Denver/Salt Lake City/
Albuquerque
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
Suite 215 Field Management
1501 Westcliff Drive
Newport Beach, CA 92660
Michael L. Weiner Vice President- None
IDS Tower 10 Corporate Tax
Minneapolis, MN 55440 Operations
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
Jeffry M. Welter Vice President- None
IDS Tower 10 Equity and Fixed Income
Minneapolis, MN 55440 Trading
William N. Westhoff Senior Vice President and None
IDS Tower 10 Global Chief Investment
Minneapolis, MN 55440 Officer
Thomas L. White Group Vice President- None
Cleveland Metro
Eric S. Williams Group Vice President- None
Virginia
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
Suite 815 Field Management
8585 Broadway
Merrillville, IN 46410
<PAGE>
PAGE 35
Item 29(c). Not applicable.
Item 30. Location of Accounts and Records
IDS Financial Corporation
IDS Tower 10
Minneapolis, MN 55440
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant undertakes to furnish each person
to whom a prospectus is delivered with a copy of
the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS California Tax-Exempt Trust,
certifies that it meets the requirements for the effectiveness of this Amendment
to its Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Minneapolis and the State of Minnesota on the 27th day of February, 1995.
IDS CALIFORNIA TAX-EXEMPT TRUST
By /s/ WILLIAM R. PEARCE**
------------------------------------
William R. Pearce,
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following persons in
the capacities indicated on the 27th day of February, 1995.
SIGNATURE CAPACITY
- ----------------------------------- -------------------------
/s/ WILLIAM R. PEARCE** President, Principal
- ----------------------------------- Executive Officer and
William R. Pearce Trustee
Treasurer, Principal
/s/ LESLIE L. OGG** Financial Officer and
- ----------------------------------- Principal Accounting
Leslie L. Ogg Officer
/s/ LYNNE V. CHENEY*
- ----------------------------------- Trustee
Lynne V. Cheney
/s/ WILLIAM H. DUDLEY*
- ----------------------------------- Trustee
William H. Dudley
/s/ ROBERT F. FROEHLKE*
- ----------------------------------- Trustee
Robert F. Froehlke
/s/ DAVID R. HUBERS*
- ----------------------------------- Trustee
David R. Hubers
/s/ HEINZ F. HUTTER*
- ----------------------------------- Trustee
Heinz F. Hutter
II-4
<PAGE>
SIGNATURE CAPACITY
- ----------------------------------- -------------------------
/s/ ANNE P. JONES*
- ----------------------------------- Trustee
Anne P. Jones
/s/ DONALD M. KENDALL*
- ----------------------------------- Trustee
Donald M. Kendall
/s/ MELVIN R. LAIRD*
- ----------------------------------- Trustee
Melvin R. Laird
/s/ LEWIS W. LEHR*
- ----------------------------------- Trustee
Lewis W. Lehr
/s/ EDSON W. SPENCER*
- ----------------------------------- Trustee
Edson W. Spencer
/s/ JOHN R. THOMAS*
- ----------------------------------- Trustee
John R. Thomas
/s/ WHEELOCK WHITNEY*
- ----------------------------------- Trustee
Wheelock Whitney
/s/ C. ANGUS WURTELE*
- ----------------------------------- Trustee
C. Angus Wurtele
*Signed pursuant to Trustees' Power of Attorney, dated November 10, 1994, filed
electronically as Exhibit 18(a) to Registrant's Post-Effective Amendment No.
17, by:
/s/ LESLIE L. OGG
- -------------------------------------------
Leslie L. Ogg
**Signed pursuant to Officers' Power of Attorney filed on or about June 23, 1994
as Exhibit 17(a) to Post-Effective Amendment No. 14 to Registration Statement
No. 33-5103 by:
/s/ LESLIE L. OGG
- -------------------------------------------
Leslie L. Ogg
II-5
<PAGE>
CONTENTS OF THIS
POST-EFFECTIVE AMENDMENT NO. 18
TO REGISTRATION STATEMENT NO. 33-5103
This Post-Effective Amendment comprises the following papers and documents:
The facing sheet.
The cross-reference page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other information.
Exhibits.
The signatures.
<PAGE>
IDS California Tax-Exempt Trust
Registration Number 33-5103/811-4646
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Exhibit 5: Form of Investment Management Services Agreement between
Registrant and American Express Financial Corporation,
dated March 20, 1995.
Exhibit 6: Form of Distribution Agreement between Registrant and
American Express Financial Advisors Inc., dated March 20,
1995.
Exhibit 8: Form of Custodian Agreement between Registrant and American
Express Trust Company, dated March 20, 1995.
Exhibit 9a: Form of Transfer Agency Agreement between Registrant and
American Express Financial Corporation, dated March 20,
1995.
Exhibit 9b: Form of Administrative Services Agreement between Registrant
and American Express Financial Corporation Inc., dated
March 20, 1995.
Exhibit 9c: Form of Shareholder Service Agreement between Registrant and
American Express Financial Advisors Inc., dated March 20,
1995.
Exhibit 11: Independent Auditors' Consent.
Exhibit 15: Form of Plan and Agreement of Distribution between
Registrant and American Express Financial Advisors Inc.,
dated March 20, 1995.
Exhibit 17: Financial Data Schedule.
</TABLE>
<PAGE>
FORM OF
INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 20th day of March, 1995, by and between IDS California
Tax-Exempt Trust (the "Fund"), a Massachusetts business trust, and American
Express Financial Corporation, a Delaware corporation.
PART ONE: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Fund hereby retains American Express Financial Corporation, and
American Express Financial Corporation hereby agrees, for the period of this
Agreement and under the terms and conditions hereinafter set forth, to furnish
the Fund continuously with suggested investment planning; to determine,
consistent with the Fund's investment objectives and policies, which securities
in American Express Financial Corporation's discretion shall be purchased, held
or sold and to execute or cause the execution of purchase or sell orders; to
prepare and make available to the Fund all necessary research and statistical
data in connection therewith; to furnish all services of whatever nature
required in connection with the management of the Fund as provided under this
Agreement; and to pay such expenses as may be provided for in Part Three;
subject always to the direction and control of the Board of Trustees (the
"Board"), the Executive Committee and the authorized officers of the Fund.
American Express Financial Corporation agrees to maintain an adequate
organization of competent persons to provide the services and to perform the
functions herein mentioned. American Express Financial Corporation agrees to
meet with any persons at such times as the Board deems appropriate for the
purpose of reviewing American Express Financial Corporation's performance under
this Agreement.
(2) American Express Financial Corporation agrees that the investment
planning and investment decisions will be in accordance with general investment
policies of the Fund as disclosed to American Express Financial Corporation from
time to time by the Fund and as set forth in its prospectuses and registration
statements filed with the United States Securities and Exchange Commission (the
"SEC").
(3) American Express Financial Corporation agrees that it will maintain
all required records, memoranda, instructions or authorizations relating to the
acquisition or disposition of securities for the Fund.
(4) The Fund agrees that it will furnish to American Express Financial
Corporation any information that the latter may reasonably request with respect
to the services performed or to be performed by American Express Financial
Corporation under this Agreement.
(5) American Express Financial Corporation is authorized to select the
brokers or dealers that will execute the purchases and sales of portfolio
securities for the Fund and is directed to use its best efforts to obtain the
best available price and most favorable execution, except as prescribed herein.
Subject to prior authorization by the Fund's Board of appropriate policies and
procedures, and subject to termination at any time by the Board, American
Express Financial Corporation may also be authorized to effect individual
securities transactions at commission rates in excess of the minimum commission
rates available, to the extent authorized by law, if American Express Financial
Corportion determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or American Express Financial Corporation's overall
responsibilities with respect to the Fund and other funds for which it acts
as investment adviser.
(6) It is understood and agreed that in furnishing the Fund with the
services as herein provided, neither American Express Financial Corporation, nor
any officer, trustee or agent thereof shall be held liable to the Fund or its
creditors or shareholders for errors of judgment or for anything except willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties under the terms of this
Agreement. It is further understood and agreed that American Express Financial
Corporation may rely upon information furnished to it reasonably believed to be
accurate and reliable.
PART TWO: COMPENSATION TO INVESTMENT MANAGER
(1) The Fund agrees to pay to American Express Financial Corporation, and
American Express Financial Corporation covenants and agrees to accept from the
Fund in full payment for the services furnished, a fee for each calendar day of
each year equal to the total of 1/365th (1/366th in each leap
<PAGE>
year) of the amount computed as shown below. The computation shall be made for
each day on the basis of net assets as of the close of business of the full
business day two (2) business days prior to the day for which the computation
is being made. In the case of the suspension of the computation of net asset
value, the asset charge for each day during such suspension shall be computed
as of the close of business on the last full business day on which the net
assets were computed. Net assets as of the close of a full business day shall
include all transactions in shares of the Fund recorded on the books of the
Fund for that day.
The asset charge shall be based on the net assets of the Fund as set forth
in the following table.
ASSET CHARGE
<TABLE>
<CAPTION>
Assets Annual Rate at
(Billions) Each Asset Level
----------- ----------------
<S> <C>
First $0.25 0.470%
Next $0.25 0.445
Next $0.25 0.420
Next $0.25 0.405
Over $1 0.380
</TABLE>
(2) The fee shall be paid on a monthly basis and, in the event of the
termination of this Agreement, the fee accrued shall be prorated on the basis of
the number of days that this Agreement is in effect during the month with
respect to which such payment is made.
(3) The fee provided for hereunder shall be paid in cash by the Fund to
American Express Financial Corporation within five business days after the last
day of each month.
PART THREE: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Fees payable to American Express Financial Corporation for its
services under the terms of this Agreement.
(b) Taxes.
(c) Brokerage commissions and charges in connection with the purchase and
sale of assets.
(d) Custodian fees and charges.
(e) Fees and charges of its independent certified public accountants for
services the Fund requests.
(f) Premium on the bond required by Rule 17g-1 under the Investment
Company Act of 1940.
(g) Fees and expenses of attorneys (i) it employs in matters not involving
the assertion of a claim by a third party against the Fund, its trustees and
officers, (ii) it employs in conjunction with a claim asserted by the Board
against American Express Financial Corporation, except that American Express
Financial Corporation shall reimburse the Fund for such fees and expenses if it
is ultimately determined by a court of competent jurisdiction, or American
Express Financial Corporation agrees, that it is liable in whole or in part to
the Fund, and (iii) it employs to assert a claim against a third party.
(h) Fees paid for the qualification and registration for public sale of
the securities of the Fund under the laws of the United States and of the
several states in which such securities shall be offered for sale.
(i) Fees of consultants employed by the Fund.
<PAGE>
(j) Trustees, officers and employees expenses which shall include fees,
salaries, memberships, dues, travel, seminars, pension, profit sharing, and all
other benefits paid to or provided for trustees, officers and employees,
trustees and officers liability insurance, errors and omissions liability
insurance, worker's compensation insurance and other expenses applicable to the
trustees, officers and employees, except the Fund will not pay any fees or
expenses of any person who is an officer or employee of American Express
Financial Corporation or its affiliates.
(k) Filing fees and charges incurred by the Fund in connection with filing
any amendment to its articles of incorporation, or incurred in filing any other
document with the State of Minnesota or its political subdivisions.
(l) Organizational expenses of the Fund.
(m) Expenses incurred in connection with lending portfolio securities of
the Fund.
(n) Expenses properly payable by the Fund, approved by the Board.
(2) American Express Financial Corporation agrees to pay all expenses
associated with the services it provides under the terms of this Agreement.
Further, American Express Financial Corporation agrees that if, at the end of
any month, the expenses of the Fund under this Agreement and any other agreement
between the Fund and American Express Financial Corporation, but excluding those
expenses set forth in (1)(b) and (1)(c) of this Part Three, exceed the most
restrictive applicable state expenses limitation, the Fund shall not pay those
expenses set forth in (1)(a) and (d) through (n) of this Part Three to the
extent necessary to keep the Fund's expenses from exceeding the limitation, it
being understood that American Express Financial Corporation will assume all
unpaid expenses and bill the Fund for them in subsequent months but in no event
can the accumulation of unpaid expenses or billing be carried past the end of
the Fund's fiscal year.
PART FOUR: MISCELLANEOUS
(1) American Express Financial Corporation shall be deemed to be an
independent contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for or represent the Fund.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund recognizes that American Express Financial Corporation now
renders and may continue to render investment advice and other services to other
investment companies and persons which may or may not have investment policies
and investments similar to those of the Fund and that American Express Financial
Corporation manages its own investments and/or those of its subsidiaries.
American Express Financial Corporation shall be free to render such investment
advice and other services and the Fund hereby consents thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto shall
be invalidated or in any way affected by the fact that trustees, officers,
agents and/or shareholders of the Fund are or may be interested in American
Express Financial Corporation or any successor or assignee thereof, as trustees,
officers, stockholders or otherwise; that trustees, officers, stockholders or
agents of American Express Financial Corporation are or may be interested in the
Fund as trustees, officers, shareholders, or otherwise; or that American Express
Financial Corporation or any successor or assignee, is or may be interested in
the Fund as shareholder or otherwise, provided, however, that neither American
Express Financial Corporation, nor any officer, trustee or employee thereof or
of the Fund, shall sell to or buy from the Fund any property or security other
than shares issued by the Fund, except in accordance with applicable regulations
or orders of the SEC.
(5) Any notice under this Agreement shall be given in writing, addressed,
and delivered, or mailed postpaid, to the party to this Agreement entitled to
receive such, at such party's principal place of business in Minneapolis,
Minnesota, or to such other address as either party may designate in writing
mailed to the other.
(6) American Express Financial Corporation agrees that no officer,
trustee or employee of American Express Financial Corporation will deal for or
on behalf of the Fund with himself as principal or agent, or with any
corporation or partnership in which he may have a financial interest, except
that this shall not prohibit:
(a) Officers, trustees or employees of American Express Financial
Corporation from having a financial interest in the Fund or in American Express
Financial Corporation.
<PAGE>
(b) The purchase of securities for the Fund, or the sale of securities
owned by the Fund, through a security broker or dealer, one or more of whose
partners, officers, trustees or employees is an officer, trustee or employee of
American Express Financial Corporation, provided such transactions are handled
in the capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
(c) Transactions with the Fund by a broker-dealer affiliate of American
Express Financial Corporation as may be allowed by rule or order of the SEC, and
if made pursuant to procedures adopted by the Fund's Board.
(7) American Express Financial Corporation agrees that, except as herein
otherwise expressly provided or as may be permitted consistent with the use of a
broker-dealer affiliate of American Express Financial Corporation under
applicable provisions of the federal securities laws, neither it nor any of its
officers, trustees or employees shall at any time during the period of this
Agreement, make, accept or receive, directly or indirectly, any fees, profits or
emoluments of any character in connection with the purchase or sale of
securities (except shares issued by the Fund) or other assets by or for the
Fund.
PART FIVE: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect until March 19, 1997, or
until a new agreement is approved by a vote of the majority of the
outstanding shares of the Fund and by vote of the Fund's Board, including the
vote required by (b) of this paragraph, and if no new agreement is so
approved, this Agreement shall continue from year to year thereafter unless
and until terminated by either party as hereinafter provided, except that
such continuance shall be specifically approved at least annually (a) by the
Board of the Fund or by a vote of the majority of the outstanding shares of
the Fund and (b) by the vote of a majority of the trustees who are not parties
to this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. As used in this
paragraph, the term "interested person" shall have the same meaning as set
forth in the Investment Company Act of 1940, as amended (the "1940 Act").
(2) This Agreement may be terminated by either the Fund or American
Express Financial Corporation at any time by giving the other party 60 days'
written notice of such intention to terminate, provided that any termination
shall be made without the payment of any penalty, and provided further that
termination may be effected either by the Board of the Fund or by a vote of the
majority of the outstanding voting shares of the Fund. The vote of the majority
of the outstanding voting shares of the Fund for the purpose of this Part Five
shall be the vote at a shareholders' regular meeting, or a special meeting duly
called for the purpose, of 67% or more of the Fund's shares present at such
meeting if the holders of more than 50% of the outstanding voting shares are
present or represented by proxy, or more than 50% of the outstanding voting
shares of the Fund, whichever is less.
(3) This Agreement shall terminate in the event of its assignment, the
term "assignment" for this purpose having the same meaning as set forth in the
1940 Act.
IN WITNESS THEREOF, the parties hereto have executed the foregoing
Agreement as of the day and year first above written.
IDS CALIFORNIA TAX-EXEMPT TRUST
By: -----------------------------
Leslie L. Ogg,
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: -----------------------------
<PAGE>
DISTRIBUTION AGREEMENT
Agreement made as of the 20th day of March, 1995, by and between
IDS California Tax-Exempt Trust (the "Fund"), a Massachusetts
business trust, for and on behalf of each class of the Fund, and
American Express Financial Advisors Inc., a Delaware corporation.
Part One: DISTRIBUTION OF SECURITIES
(1) The Fund covenants and agrees that, during the term of this
agreement and any renewal or extension, American Express Financial
Advisors shall have the exclusive right to act as principal
underwriter for the Fund and to offer for sale and to distribute
either directly or through any affiliate any and all shares of each
class of capital stock issued or to be issued by the Fund.
(2) American Express Financial Advisors hereby covenants and
agrees to act as the principal underwriter of each class of capital
shares issued and to be issued by the Fund during the period of
this agreement and agrees during such period to offer for sale such
shares as long as such shares remain available for sale, unless
American Express Financial Advisors is unable or unwilling to make
such offer for sale or sales or solicitations therefor legally
because of any federal, state, provincial or governmental law, rule
or agency or for any financial reason.
(3) With respect to the offering for sale and sale of shares of
each class to be issued by the Fund, it is mutually understood and
agreed that such shares are to be sold on the following terms:
(a) All sales shall be made by means of an application, and
every application shall be subject to acceptance or rejection by
the Fund at its principal place of business. Shares are to be sold
for cash, payable at the time the application and payment for such
shares are received at the principal place of business of the Fund.
(b) No shares shall be sold at less than the asset value
(computed in the manner provided by the currently effective
prospectus or Statement of Additional Information and the
Investment Company Act of 1940, and rules thereunder). The number
of shares or fractional shares to be acquired by each applicant
shall be determined by dividing the amount of each accepted
application by the public offering price of one share of the
capital stock of the appropriate class as of the close of business
on the day when the application, together with payment, is received
by the Fund at its principal place of business. The computation as
to the number of shares and fractional shares shall be carried to
three decimal points of one share with the computation being
carried to the nearest 1/lOOOth of a share. If the day of receipt
of the application and payment is not a full business day, then the
asset value of the share for use in such computation shall be
determined as of the close of business on the next succeeding full
business day. In the event of a period of emergency, the
computation of the asset value for the purpose of determining the
number of shares or fractional shares to be acquired by the
applicant may be deferred until the close of business on the first
full business day following the termination of the period of
<PAGE>
emergency. A period of emergency shall have the definition given
thereto in the Investment Company Act of 1940, and rules
thereunder.
(4) The Fund agrees to make prompt and reasonable effort to do
any and all things necessary, in the opinion of American Express
Financial Advisors, to have and to keep the Fund and the shares
properly registered or qualified in all appropriate jurisdictions
and, as to shares, in such amounts as American Express Financial
Advisors may from time to time designate in order that the Fund's
shares may be offered or sold in such jurisdictions.
(5) The Fund agrees that it will furnish American Express
Financial Advisors with information with respect to the affairs and
accounts of the Fund, and in such form, as American Express
Financial Advisors may from time to time reasonably require and
further agrees that American Express Financial Advisors, at all
reasonable times, shall be permitted to inspect the books and
records of the Fund.
(6) American Express Financial Advisors or its agents may prepare
or cause to be prepared from time to time circulars, sales
literature, broadcast material, publicity data and other
advertising material to be used in the sales of shares issued by
the Fund, including material which may be deemed to be a prospectus
under rules promulgated by the Securities and Exchange Commission
(each separate promotional piece is referred to as an "Item of
Soliciting Material"). At its option, American Express Financial
Advisors may submit any Item of Soliciting Material to the Fund for
its prior approval. Unless a particular Item of Soliciting
Material is approved in writing by the Fund prior to its use,
American Express Financial Advisors agrees to indemnify the Fund
and its trustees and officers against any and all claims, demands,
liabilities and expenses which the Fund or such persons may incur
arising out of or based upon the use of any Item of Soliciting
Material. The term "expenses" includes amounts paid in
satisfaction of judgments or in settlements. The foregoing right
of indemnification shall be in addition to any other rights to
which the Fund or any trustee or officer may be entitled as a
matter of law. Notwithstanding the foregoing, such indemnification
shall not be deemed to abrogate or diminish in any way any right or
claim American Express Financial Advisors may have against the Fund
or its officers or trustees in connection with the Fund's
registration statement, prospectus, Statement of Additional
Information or other information furnished by or caused to be
furnished by the Fund.
(7) American Express Financial Advisors agrees to submit to the
Fund each application for shares immediately after the receipt of
such application and payment therefor by American Express Financial
Advisors at its principal place or business.
(8) American Express Financial Advisors agrees to cause to be
delivered to each person submitting an application a prospectus or
circular to be furnished by the Fund in the form required by the
applicable federal laws or by the acts or statutes of any
applicable state, province or country.
<PAGE>
(9) The Fund shall have the right to extend to shareholders of
each class the right to use the proceeds of any cash dividend paid
by the Fund to that shareholder to purchase shares of the same
class at the net asset value at the close of business upon the day
of purchase, to the extent set forth in the currently effective
prospectus or Statement of Additional Information.
(10) Shares of each class issued by the Fund may be offered and
sold at their asset value to the shareholders of the same class of
other Funds in the IDS MUTUAL FUND GROUP who wish to exchange their
investments in shares of the other Funds in the IDS MUTUAL FUND
GROUP to investments in shares of the Fund, to the extent set forth
in the currently effective prospectus or Statement of Additional
Information, such asset value to be computed as of the close of
business on the day of sale of such shares of the Fund.
(11) American Express Financial Advisors and the Fund agree to use
their best efforts to conform with all applicable state and federal
laws and regulations relating to any rights or obligations under
the term of this agreement.
Part Two: ALLOCATION OF EXPENSES
Except as provided by any other agreements between the parties,
American Express Financial Advisors covenants and agrees that
during the period of this agreement it will pay or cause or be paid
all expenses incurred by American Express Financial Advisors, or
any of its affiliates, in the offering for sale or sale of each
class of the Fund's shares.
Part Three: COMPENSATION
(1) It is covenanted and agreed that American Express Financial
Advisors shall be paid:
(i) for a class of shares imposing a front-end sales charge,
by the purchasers of Fund shares in an amount equal to the
difference between the total amount received upon each sale of
shares issued by the Fund and the asset value of such shares at the
time of such sale; and
(ii) for a class of shares imposing a deferred sales charge,
by owners of Fund shares at the time the sales charge is imposed in
an amount equal to any deferred sales charge, as described in the
Fund's prospectus.
Such sums as are received by the Fund shall be received as Agent
for American Express Financial Advisors and shall be remitted to
American Express Financial Advisors daily as soon as practicable
after receipt.
(2) The asset value of any share of each class of the Fund shall
be determined in the manner provided by the classes currently
effective prospectus and Statement of Additional Information and
the Investment Company Act of 1940, and rules thereunder.
<PAGE>
Part Four: MISCELLANEOUS
(1) American Express Financial Advisors shall be deemed to be an
independent contractor and, except as expressly provided or
authorized in this agreement, shall have no authority to act for or
represent the Fund.
(2) American Express Financial Advisors shall be free to render
to others services similar to those rendered under this agreement.
(3) Neither this agreement nor any transaction had pursuant
hereto shall be invalidated or in any way affected by the fact that
trustees, officers, agents and/or shareholders of the Fund are or
may be interested in American Express Financial Advisors as
trustees, officers, shareholders or otherwise; that trustees,
officers, shareholders or agents of American Express Financial
Advisors are or may be interested in the Fund as trustees,
officers, shareholders or otherwise; or that American Express
Financial Advisors is or may be interested in the Fund as
shareholder or otherwise, provided, however, that neither American
Express Financial Advisors nor any officer or trustee of American
Express Financial Advisors or any officers or trustees of the Fund
shall sell to or buy from the Fund any property or security other
than a security issued by the Fund, except in accordance with a
rule, regulation or order of the federal Securities and Exchange
Commission.
(4) For the purposes of this agreement, a "business day" shall
have the same meaning as is given to the term in the By-laws of the
Fund.
(5) Any notice under this agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the parties to this
agreement at each company's principal place of business in
Minneapolis, Minnesota, or to such other address as either party
may designate in writing mailed to the other.
(6) American Express Financial Advisors agrees that no officer,
trustee or employee of American Express Financial Advisors will
deal for or on behalf of the Fund with himself as principal or
agent, or with any corporation or partnership in which he may have
a financial interest, except that this shall not prohibit:
(a) Officers, trustees and employees of American Express
Financial Advisors from having a financial interest in the Fund or
in American Express Financial Advisors.
(b) The purchase of securities for the Fund, or the sale of
securities owned by the Fund, through a security broker or dealer,
one or more of whose partners, officers, trustees or employees is
an officer, trustee or employee of American Express Financial
Advisors, provided such transactions are handled in the capacity of
broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
<PAGE>
(c) Transactions with the Fund by a broker-dealer affiliate
of American Express Financial Advisors if allowed by rule or order
of the Securities and Exchange Commission and if made pursuant to
procedures adopted by the Fund's Board of Trustees.
(7) American Express Financial Advisors agrees that, except as
otherwise provided in this agreement, or as may be permitted
consistent with the use of a broker-dealer affiliate of American
Express Financial Advisors under applicable provisions of the
federal securities laws, neither it nor any of its officers,
trustees or employees shall at any time during the period of this
agreement make, accept or receive, directly or indirectly, any
fees, profits or emoluments of any character in connection with the
purchase or sale of securities (except securities issued by the
Fund) or other assets by or for the Fund.
Part Five: TERMINATION
(1) This agreement shall continue from year to year unless and
until terminated by American Express Financial Advisors or the
Fund, except that such continuance shall be specifically approved
at least annually by a vote of a majority of the Board of Trustees
who are not parties to this agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of
voting on such approval, and by a majority of the Board of Trustees
or by vote of a majority of the outstanding voting securities of
the Trust. As used in this paragraph, the term "interested person"
shall have the meaning as set forth in the Investment Company Act
of 1940, as amended.
(2) This agreement may be terminated by American Express
Financial Advisors or the Trust at any time by giving the other
party sixty (60) days written notice of such intention to
terminate.
(3) This agreement shall terminate in the event of its
assignment, the term "assignment" for this purpose having the same
meaning as set forth in the Investment Company Act of 1940, as
amended.
IN WITNESS WHEREOF, The parties hereto have executed the foregoing
agreement on the date and year first above written.
IDS CALIFORNIA TAX-EXEMPT TRUST
By _____________________________________
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
By ____________________________________
Vice President
<PAGE>
CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT dated March 20, 1995, between IDS
California Tax-Exempt Trust (the "Trust"), a Massachusetts business
trust, and American Express Trust Company, a corporation organized
under the laws of the State of Minnesota with its principal place
of business at Minneapolis, Minnesota (the "Custodian").
WHEREAS, the Trust desires that its securities and cash be
hereafter held and administered by Custodian pursuant to the terms
of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Trust and the Custodian agree as follows:
SECTION 1. DEFINITIONS
The word "securities" as used herein shall be construed to include,
without being limited to, shares, stocks, treasury stocks,
including any stocks of this Trust, notes, bonds, debentures,
evidences of indebtedness, options to buy or sell stocks or stock
indexes, certificates of interest or participation in any profit-
sharing agreements, collateral trust certificates, preorganization
certificates or subscriptions, transferable shares, investment
contracts, voting trust certificates, certificates of deposit for a
security, fractional or undivided interests in oil, gas or other
mineral rights, or any certificates of interest or participation
in, temporary or interim certificates for, receipts for, guarantees
of, or warrants or rights to subscribe to or purchase any of the
foregoing, acceptances and other obligations and any evidence of
any right or interest in or to any cash, property or assets and any
interest or instrument commonly known as a security. In addition,
for the purpose of this Custodian Agreement, the word "securities"
also shall include other instruments in which the Trust may invest
including currency forward contracts and commodities such as
interest rate or index futures contracts, margin deposits on such
contracts or options on such contracts.
The words "custodian order" shall mean a request or direction,
including a computer printout, directed to the Custodian and signed
in the name of the Trust by any two individuals designated in the
current certified list referred to in Section 2.
The word "facsimile" shall mean an exact copy or likeness which is
electronically transmitted for instant reproduction.
SECTION 2. NAMES, TITLES AND SIGNATURES OF AUTHORIZED PERSONS
The Trust will certify to the Custodian the names and signatures of
its present officers and other designated persons authorized on
behalf of the Trust to direct the Custodian by custodian order as
herein before defined. The Trust agrees that whenever any change
occurs in this list it will file with the Custodian a copy of a
resolution certified by the Secretary or an Assistant Secretary of
<PAGE>
the Trust as having been duly adopted by the Board of Trustees or
the Executive Committee of the Board of Trustees of the Trust
designating those persons currently authorized on behalf of the
Trust to direct the Custodian by custodian order, as herein before
defined, and upon such filing (to be accompanied by the filing of
specimen signatures of the designated persons) the persons so
designated in said resolution shall constitute the current
certified list. The Custodian is authorized to rely and act upon
the names and signatures of the individuals as they appear in the
most recent certified list from the Trust which has been delivered
to the Custodian as herein above provided.
SECTION 3. USE OF SUBCUSTODIANS
The Custodian may make arrangements, where appropriate, with other
banks having not less than two million dollars aggregate capital,
surplus and undivided profits for the custody of securities. Any
such bank selected by the Custodian to act as subcustodian shall be
deemed to be the agent of the Custodian.
The Custodian also may enter into arrangements for the custody of
securities entrusted to its care through foreign branches of United
States banks; through foreign banks, banking institutions or trust
companies; through foreign subsidiaries of United States banks or
bank holding companies, or through foreign securities depositories
or clearing agencies (hereinafter also called, collectively, the
"Foreign Subcustodian" or indirectly through an agent, established
under the first paragraph of this section, if and to the extent
permitted by Section 17(f) of the Investment Company Act of 1940
and the rules promulgated by the Securities and Exchange Commission
thereunder, any order issued by the Securities and Exchange
Commission, or any "no-action" letter received from the staff of
the Securities and Exchange Commission. To the extent the existing
provisions of the Custodian Agreement are consistent with the
requirements of such Section, rules, order or no-action letter,
they shall apply to all such foreign custodianships. To the extent
such provisions are inconsistent with or additional requirements
are established by such Section, rules, order or no-action letter,
the requirements of such Section, rules, order or no-action letter
will prevail and the parties will adhere to such requirements;
provided, however, in the absence of notification from the Trust of
any changes or additions to such requirements, the Custodian shall
have no duty or responsibility to inquire as to any such changes or
additions.
SECTION 4. RECEIPT AND DISBURSEMENT OF MONEY
(1) The Custodian shall open and maintain a separate account or
accounts in the name of the Trust or cause its agent to open and
maintain such account or accounts subject only to checks, drafts or
directives by the Custodian pursuant to the terms of this
Agreement. The Custodian or its agent shall hold in such account
or accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Trust. The Custodian or its
agent shall make payments of cash to or for the account of the
Trust from such cash only:
<PAGE>
(a) for the purchase of securities for the portfolio of the
Trust upon the receipt of such securities by the
Custodian or its agent unless otherwise instructed on
behalf of the Corporation;
(b) for the purchase or redemption of shares of capital
stock of the Trust;
(c) for the payment of interest, dividends, taxes,
management fees, or operating expenses (including,
without limitation thereto, fees for legal, accounting
and auditing services);
(d) for payment of distribution fees, commissions, or
redemption fees, if any;
(e) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed
to by the Trust held by or to be delivered to the
Custodian;
(f) for payments in connection with the return of
securities loaned by the Trust upon receipt of such
securities or the reduction of collateral upon receipt
of proper notice;
(g) for payments for other proper corporate purposes;
(h) or upon the termination of this Agreement.
Before making any such payment for the purposes permitted under the
terms of items (a), (b), (c), (d), (e), (f) or (g) of paragraph (1)
of this section, the Custodian shall receive and may rely upon a
custodian order directing such payment and stating that the payment
is for such a purpose permitted under these items (a), (b), (c),
(d), (e), (f) or (g) and that in respect to item (g), a copy of a
resolution of the Board of Trustees or of the Executive Committee
of the Board of Trustees of the Trust signed by an officer of the
Trust and certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the purpose to
be a proper corporate purpose, and naming the person or persons to
whom such payment is made. Notwithstanding the above, for the
purposes permitted under items (a) or (f) of paragraph (1) of this
section, the Custodian may rely upon a facsimile order.
(2) The Custodian is hereby appointed the attorney-in-fact of the
Trust to endorse and collect all checks, drafts or other orders for
the payment of money received by the Custodian for the account of
the Trust and drawn on or to the order of the Trust and to deposit
same to the account of the Trust pursuant to this Agreement.
SECTION 5. RECEIPT OF SECURITIES
Except as permitted by the second paragraph of this section, the
Custodian or its agent shall hold in a separate account or
accounts, and physically segregated at all times from those of any
other persons, firms or Trusts, pursuant to the provisions hereof,
all securities received by it for the account of the Trust. The
<PAGE>
Custodian shall record and maintain a record of all certificate
numbers. Securities so received shall be held in the name of the
Trust, in the name of an exclusive nominee duly appointed by the
Custodian or in bearer form, as appropriate.
Subject to such rules, regulations or guidelines as the Securities
and Exchange Commission may adopt, the Custodian may deposit all or
any part of the securities owned by the Trust in a securities
depository which includes any system for the central handling of
securities established by a national securities exchange or a
national securities association registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Commission, pursuant
to which system all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical
delivery of such securities.
All securities are to be held or disposed of by the Custodian for,
and subject at all times to the instructions of, the Trust pursuant
to the terms of this Agreement. The Custodian shall have no power
or authority to assign, hypothecate, pledge or otherwise dispose of
any such securities, except pursuant to the directive of the Trust
and only for the account of the Trust as set forth in Section 6 of
this Agreement.
SECTION 6. TRANSFER EXCHANGE, DELIVERY, ETC. OF SECURITIES
The Custodian shall have sole power to release or deliver any
securities of the Trust held by it pursuant to this Agreement. The
Custodian agrees to transfer, exchange or deliver securities held
by it or its agent hereunder only:
(a) for sales of such securities for the account of the Trust,
upon receipt of payment therefor;
(b) when such securities are called, redeemed, retired or
otherwise become payable;
(c) for examination upon the sale of any such securities in
accordance with "street delivery" custom which would include
delivery against interim receipts or other proper delivery
receipts;
(d) in exchange for or upon conversion into other securities
alone or other securities and cash whether pursuant to any
plan of
(e) merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(f) for the purpose of exchanging interim receipts or temporary
certificates for permanent certificates;
(g) upon conversion of such securities pursuant to their terms
into other securities;
<PAGE>
(h) upon exercise of subscription, purchase or other similar
rights represented by such securities; for loans of such
securities by the Trust upon receipt of collateral; or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items (a),
(b), (c), (d), (e), (f), (g) and (h), securities or cash received
in exchange therefore shall be delivered to the Custodian, its
agent, or to a securities depository. Before making any such
transfer, exchange or delivery, the Custodian shall receive a
custodian order or a facsimile from the Trust requesting such
transfer, exchange or delivery and stating that it is for a purpose
permitted under Section 6 (whenever a facsimile is utilized, the
Trust will also deliver an original signed custodian order) and, in
respect to item (i), a copy of a resolution of the Board of
Trustees or of the Executive Committee of the Board of Trustees of
the Trust signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the securities,
setting forth the purpose for which such payment, transfer,
exchange or delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom
such transfer, exchange or delivery of such securities shall be
made.
SECTION 7. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until the Custodian receives a contrary custodian order
from the Trust, the Custodian shall or shall cause its agent to:
(a) present for payment all coupons and other income items held
by the Custodian or its agent for the account of the Trust
which call for payment upon presentation and hold all cash
received by it upon such payment for the account of the
Trust;
(b) present for payment all securities held by it or its agent
which mature or when called, redeemed, retired or otherwise
become payable;
(c) ascertain all stock dividends, rights and similar securities
to be issued with respect to any securities held by the
Custodian or its agent hereunder, and to collect and hold for
the account of the Trust all such securities; and
(d) ascertain all interest and cash dividends to be paid to
security holders with respect to any securities held by the
Custodian or its agent, and to collect and hold such interest
and cash dividends for the account of the Trust.
SECTION 8. VOTING AND OTHER ACTION
Neither the Custodian nor any nominee of the Custodian shall vote
any of the securities held hereunder by or for the account of the
Trust. The Custodian shall promptly deliver to the Trust all
notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered
<PAGE>
holder of such securities (if registered otherwise than in the name
of the Trust), but without indicating the manner in which such
proxies are to be voted.
Custodian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith) received by the Custodian from issuers of the securities
being held for the Trust. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Trust all
written information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer.
SECTION 9. TRANSFER TAXES
The Trust shall pay or reimburse the Custodian for any transfer
taxes payable upon transfers of securities made hereunder,
including transfers resulting from the termination of this
Agreement. The Custodian shall execute such certificates in
connection with securities delivered to it under this Agreement as
may be required, under any applicable law or regulation, to exempt
from taxation any transfers and/or deliveries of any such
securities which may be entitled to such exemption.
SECTION 10. CUSTODIAN'S REPORTS
The Custodian shall furnish the Trust as of the close of business
each day a statement showing all transactions and entries for the
account of the Trust. The books and records of the Custodian
pertaining to its actions as Custodian under this Agreement and
securities held hereunder by the Custodian shall be open to
inspection and audit by officers of the Trust, internal auditors
employed by the Trust's investment adviser, and independent
auditors employed by the Trust. The Custodian shall furnish the
Trust in such form as may reasonably be requested by the Trust a
report, including a list of the securities held by it in custody
for the account of the Trust, identification of any subcustodian,
and identification of such securities held by such subcustodian, as
of the close of business of the last business day of each month,
which shall be certified by a duly authorized officer of the
Custodian. It is further understood that additional reports may
from time to time be requested by the Trust. Should any report
ever be filed with any governmental authority pertaining to lost or
stolen securities, the Custodian will concurrently provide the
Trust with a copy of that report.
The Custodian also shall furnish such reports on its systems of
internal accounting control as the Trust may reasonably request
from time to time.
SECTION 11. CONCERNING CUSTODIAN
For its services hereunder the Custodian shall be paid such
compensation at such times as may from time to time be agreed on in
writing by the parties hereto in a Custodian Fee Agreement.
<PAGE>
The Custodian shall not be liable for any action taken in good
faith upon any custodian order or facsimile herein described or
certified copy of any resolution of the Board of Trustees or of the
Executive Committee of the Board of Trustees of the Trust, and may
rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Trust agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against
it or its nominee in connection with the performance of this
Agreement, except such as may arise from the Custodian's or its
nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the
Trust for such items. In the event of any advance of cash for any
purpose made by Custodian resulting from orders or instructions of
the Trust, or in the event that Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this
Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Trust shall be
security therefor.
The Custodian shall maintain a standard of care equivalent to that
which would be required of a bailee for hire and shall not be
liable for any loss or damage to the Trust resulting from
participation in a securities depository unless such loss or damage
arises by reason of any negligence, misfeasance, or willful
misconduct of officers or employees of the Custodian, or from its
failure to enforce effectively such rights as it may have against
any securities depository or from use of an agent, unless such loss
or damage arises by reason of any negligence, misfeasance, or
willful misconduct of officers or employees of the Custodian, or
from its failure to enforce effectively such rights as it may have
against any agent.
SECTION 12. TERMINATION AND AMENDMENT OF AGREEMENT
The Trust and the Custodian mutually may agree from time to time in
writing to amend, to add to, or to delete from any provision of
this Agreement.
The Custodian may terminate this Agreement by giving the Trust
ninety days' written notice of such termination by registered mail
addressed to the Trust at its principal place of business.
The Trust may terminate this Agreement at any time by written
notice thereof delivered, together with a copy of the resolution of
the Board of Trustees authorizing such termination and certified by
the Secretary of the Trust, by registered mail to the Custodian.
Upon such termination of this Agreement, assets of the Trust held
by the Custodian shall be delivered by the Custodian to a successor
custodian, if one has been appointed by the Trust, upon receipt by
the Custodian of a copy of the resolution of the Board of Trustees
of the Trust certified by the Secretary, showing appointment of the
<PAGE>
successor custodian, and provided that such successor custodian is
a bank or trust company, organized under the laws of the United
States or of any State of the United States, having not less than
two million dollars aggregate capital, surplus and undivided
profits. Upon the termination of this Agreement as a part of the
transfer of assets, either to a successor custodian or otherwise,
the Custodian will deliver securities held by it hereunder, when so
authorized and directed by resolution of the Board of Trustees of
the Trust, to a duly appointed agent of the successor custodian or
to the appropriate transfer agents for transfer of registration and
delivery as directed. Delivery of assets on termination of this
Agreement shall be effected in a reasonable, expeditious and
orderly manner; and in order to accomplish an orderly transition
from the Custodian to the successor custodian, the Custodian shall
continue to act as such under this Agreement as to assets in its
possession or control. Termination as to each security shall
become effective upon delivery to the successor custodian, its
agent, or to a transfer agent for a specific security for the
account of the successor custodian, and such delivery shall
constitute effective delivery by the Custodian to the successor
under this Agreement.
In addition to the means of termination herein before authorized,
this Agreement may be terminated at any time by the vote of a
majority of the outstanding shares of the Trust and after written
notice of such action to the Custodian.
SECTION 13. GENERAL
Nothing expressed or mentioned in or to be implied from any
provision of this Agreement is intended to, or shall be construed
to give any person or Trust other than the parties hereto, any
legal or equitable right, remedy or claim under or in respect of
this Agreement, or any covenant, condition or provision herein
contained, this Agreement and all of the covenants, conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective
successors and assigns.
This Agreement shall be governed by the laws of the State of
Minnesota.
<PAGE>
This Agreement supersedes all prior agreements between the parties.
IDS CALIFORNIA TAX-EXEMPT TRUST
By: __________________________________
Leslie L. Ogg
Vice President
AMERICAN EXPRESS TRUST COMPANY
By: __________________________________
Vice President
<PAGE>
TRANSFER AGENCY AGREEMENT
AGREEMENT dated as of March 20, 1995, between IDS California
Tax-Exempt Trust (the "Trust"), a Massachusetts business trust, and
American Express Financial Corporation (the "Transfer Agent"), a
Delaware corporation.
In consideration of the mutual promises set forth below, the Trust
and the Transfer Agent agree as follows:
1. Appointment of the Transfer Agent. The Trust hereby appoints the
Transfer Agent, as transfer agent for its shares and as shareholder
servicing agent for the Trust, and the Transfer Agent accepts such
appointment and agrees to perform the duties set forth below.
2. Compensation. The Trust will compensate the Transfer Agent for
the performance of its obligations as set forth in Schedule A.
Schedule A does not include out-of-pocket disbursements of the
Transfer Agent for which the Transfer Agent shall be entitled to
bill the Trust separately.
The Transfer Agent will bill the Trust monthly. The fee provided
for hereunder shall be paid in cash by the Trust to American
Express Financial Corporation within five (5) business days after
the last day of each month.
Out-of-pocket disbursements shall include, but shall not be limited
to, the items specified in Schedule B. Reimbursement by the Trust
for expenses incurred by the Transfer Agent in any month shall be
made as soon as practicable after the receipt of an itemized bill
from the Transfer Agent.
Any compensation jointly agreed to hereunder may be adjusted from
time to time by attaching to this Agreement a revised Schedule A,
dated and signed by an officer of each party.
3. Documents. The Trust will furnish from time to time such
certificates, documents or opinions as the Transfer Agent deems to
be appropriate or necessary for the proper performance of its
duties.
4. Representations of the Trust and the Transfer Agent.
(a) The Trust represents to the Transfer Agent that all outstanding
shares are validly issued, fully paid and non-assessable by the
Trust. When shares are hereafter issued in accordance with the
terms of the Trust's Articles of Incorporation and its prospectus,
such shares shall be validly issued, fully paid and non-assessable
by the Trust.
(b) The Transfer Agent represents that it is registered under
Section 17A(c) of the Securities Exchange Act of 1934. The
Transfer Agent agrees to maintain the necessary facilities,
equipment and personnel to perform its duties and obligations under
this agreement and to comply with all applicable laws.
<PAGE>
5. Duties of the Transfer Agent. The Transfer Agent shall be
responsible, separately and through its subsidiaries or affiliates,
for the following functions:
(a) Sale of Trust Shares.
(1) On receipt of an application and payment, wired instructions
and payment, or payment identified as being for the account of a
shareholder, the Transfer Agent will deposit the payment, prepare
and present the necessary report to the Custodian and record the
purchase of shares in a timely fashion in accordance with the terms
of the prospectus. All shares shall be held in book entry form and
no certificate shall be issued unless the Trust is permitted to do
so by the prospectus and the purchaser so requests.
(2) On receipt of notice that payment was dishonored, the Transfer
Agent shall stop redemptions of all shares owned by the purchaser
related to that payment, place a stop payment on any checks that
have been issued to redeem shares of the purchaser and take such
other action as it deems appropriate.
(b) Redemption of Trust Shares. On receipt of instructions to
redeem shares in accordance with the terms of the Trust's
prospectus, the Transfer Agent will record the redemption of shares
of the Trust, prepare and present the necessary report to the
Custodian and pay the proceeds of the redemption to the
shareholder, an authorized agent or legal representative upon the
receipt of the monies from the Custodian.
(c) Transfer or Other Change Pertaining to Trust Shares. On receipt
of instructions or forms acceptable to the Transfer Agent to
transfer the shares to the name of a new owner, change the name or
address of the present owner or take other legal action, the
Transfer Agent will take such action as is requested.
(d) Exchange of Trust Shares. On receipt of instructions to
exchange the shares of the Trust for the shares of another fund in
the IDS MUTUAL FUND GROUP or other American Express Financial
Corporation product in accordance with the terms of the prospectus,
the Transfer Agent will process the exchange in the same manner as
a redemption and sale of shares.
(e) Right to Seek Assurance. The Transfer Agent may refuse to
transfer, exchange or redeem shares of the Trust or take any action
requested by a shareholder until it is satisfied that the requested
transaction or action is legally authorized or until it is
satisfied there is no basis for any claims adverse to the
transaction or action. It may rely on the provisions of the
Uniform Act for the Simplification of Fiduciary Security Transfers
or the Uniform Commercial Code. The Trust shall indemnify the
Transfer Agent for any act done or omitted to be done in reliance
on such laws or for refusing to transfer, exchange or redeem shares
or taking any requested action if it acts on a good faith belief
that the transaction or action is illegal or unauthorized.
(f) Shareholder Records, Reports and Services.
<PAGE>
(1) The Transfer Agent shall maintain all shareholder accounts,
which shall contain all required tax, legally imposed and
regulatory information; shall provide shareholders, and file with
federal and state agencies, all required tax and other reports
pertaining to shareholder accounts; shall prepare shareholder
mailing lists; shall cause to be printed and mailed all required
prospectuses, annual reports, semiannual reports, statements of
additional information (upon request), proxies and other mailings
to shareholders; and shall cause proxies to be tabulated.
(2) The Transfer Agent shall respond to all valid inquiries related
to its duties under this Agreement.
(3) The Transfer Agent shall create and maintain all records in
accordance with all applicable laws, rules and regulations,
including, but not limited to, the records required by Section
31(a) of the Investment Company Act of 1940.
(g) Dividends and Distributions. The Transfer Agent shall prepare
and present the necessary report to the Custodian and shall cause
to be prepared and transmitted the payment of income dividends and
capital gains distributions or cause to be recorded the investment
of such dividends and distributions in additional shares of the
Trust or as directed by instructions or forms acceptable to the
Transfer Agent.
(h) Confirmations and Statements. The Transfer Agent shall confirm
each transaction either at the time of the transaction or through
periodic reports as may be legally permitted.
(i) Lost or Stolen Checks. The Transfer Agent will replace lost or
stolen checks issued to shareholders upon receipt of proper
notification and will maintain any stop payment orders against the
lost or stolen checks as it is economically desirable to do.
(j) Reports to Trust. The Transfer Agent will provide reports
pertaining to the services provided under this Agreement as the
Trust may request to ascertain the quality and level of services
being provided or as required by law.
(k) Other Duties. The Transfer Agent may perform other duties for
additional compensation if agreed to in writing by the parties to
this Agreement.
6. Ownership and Confidentiality of Records. The Transfer Agent
agrees that all records prepared or maintained by it relating to
the services to be performed by it under the terms of this
Agreement are the property of the Trust and may be inspected by the
Trust or any person retained by the Trust at reasonable times. The
Trust and Transfer Agent agree to protect the confidentiality of
those records.
7. Action by Board and Opinion of Trust's Counsel. The Transfer
Agent may rely on resolutions of the Board of Trustees or the
Executive Committee of the Board of Trustees and on opinion of
counsel for the Trust.
<PAGE>
8. Duty of Care. It is understood and agreed that, in furnishing
the Trust with the services as herein provided, neither the
Transfer Agent, nor any officer, trustee or agent thereof shall be
held liable for any loss arising out of or in connection with their
actions under this Agreement so long as they act in good faith and
with due diligence, and are not negligent or guilty of any willful
misconduct. It is further understood and agreed that the Transfer
Agent may rely upon information furnished to it reasonably believed
to be accurate and reliable. In the event the Transfer Agent is
unable to perform its obligations under the terms of this Agreement
because of an act of God, strike or equipment or transmission
failure reasonably beyond its control, the Transfer Agent shall not
be liable for any damages resulting from such failure.
9. Term and Termination. This Agreement shall become effective on
the date first set forth above (the "Effective Date") and shall
continue in effect from year to year thereafter as the parties may
mutually agree; provided that either party may terminate this
Agreement by giving the other party notice in writing specifying
the date of such termination, which shall be not less than 60 days
after the date of receipt of such notice. In the event such notice
is given by the Trust, it shall be accompanied by a vote of the
Board of Trustees, certified by the Secretary, electing to
terminate this Agreement and designating a successor transfer agent
or transfer agents. Upon such termination and at the expense of
the Trust, the Transfer Agent will deliver to such successor a
certified list of shareholders of the Trust (with name, address and
taxpayer identification or Social Security number), a historical
record of the account of each shareholder and the status thereof,
and all other relevant books, records, correspondence, and other
data established or maintained by the Transfer Agent under this
Agreement in the form reasonably acceptable to the Trust, and will
cooperate in the transfer of such duties and responsibilities,
including provisions for assistance from the Transfer Agent's
personnel in the establishment of books, records and other data by
such successor or successors.
10. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties.
11. Subcontracting. The Trust agrees that the Transfer Agent may
subcontract for certain of the services described under this
Agreement with the understanding that there shall be no diminution
in the quality or level of the services and that the Transfer Agent
remains fully responsible for the services. Except for
out-of-pocket expenses identified in Schedule B, the Transfer Agent
shall bear the cost of subcontracting such services, unless
otherwise agreed by the parties.
12. Miscellaneous.
(a) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
without the written consent of the other party.
(b) This Agreement shall be governed by the laws of the State of
Minnesota.
<PAGE>
13. Limitation of Liability. The Trust and the Transfer Agent agree
that the obligations of the Trust hereunder shall not be binding
upon any of the trustees, shareholders, nominees, officers,
employees or agents, whether past, present or future, of the Trust,
individually, but are binding only upon the assets and property of
the Trust, as provided in the Agreement and Declaration of Trust.
The execution and delivery of this Agreement have been authorized
by the trustees of the Trust, and signed by an authorized officer
of the Trust, acting as such, and neither such authorization by
such trustees nor such execution and delivery by such officer shall
be deemed to have been made by any of them individually or to
impose any liability on any of them or any shareholder of the Trust
personally, but shall bind only the property of the Trust as
provided in the Agreement and Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers as of the day and year
written above.
IDS CALIFORNIA TAX-EXEMPT TRUST
By: __________________________________
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: __________________________________
Vice President
<PAGE>
SCHEDULE A
IDS CALIFORNIA TAX-EXEMPT TRUST
TRANSFER AGENT FEE
Effective the 20th day of March, 1995, the Annual Per Account
Fee accrued daily and payable monthly is revised as follows:
CLASS FEE
----- ---
A $ 15.50
B 16.50
Y 15.50
<PAGE>
Schedule B
OUT-OF-POCKET EXPENSES
The Trust shall reimburse the Transfer Agent monthly for the
following out-of-pocket expenses:
- - typesetting, printing, paper, envelopes, postage and return
postage for proxy soliciting material, and proxy tabulation costs
- - printing, paper, envelopes and postage for dividend notices,
dividend checks, records of account, purchase confirmations,
exchange confirmations and exchange prospectuses, redemption
confirmations, redemption checks, confirmations on changes of
address and any other communication required to be sent to
shareholders
- - typesetting, printing, paper, envelopes and postage for
prospectuses, annual and semiannual reports, statements of
additional information, supplements for prospectuses and statements
of additional information and other required mailings to
shareholders
- - stop orders
- - outgoing wire charges
- - other expenses incurred at the request or with the consent of the
Trust
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made the 20th day of March, 1995, by and between IDS
California Tax-Exempt Trust (the "Fund"), a Massachusetts business
trust, and American Express Financial Corporation, a Delaware
corporation.
PART ONE: SERVICES
(1) The Fund hereby retains American Express Financial Corporation,
and American Express Financial Corporation hereby agrees, for the
period of this Agreement and under the terms and conditions
hereinafter set forth, to furnish the Fund continuously with all
administrative, accounting, clerical, statistical, correspondence,
corporate and all other services of whatever nature required in
connection with the administration of the Fund as provided under
this Agreement; and to pay such expenses as may be provided for in
Part Three hereof; subject always to the direction and control of
the Board of Trustees, the Executive Committee and the authorized
officers of the Fund. American Express Financial Corporation
agrees to maintain an adequate organization of competent persons to
provide the services and to perform the functions herein mentioned.
American Express Financial Corporation agrees to meet with any
persons at such times as the Board of Trustees deems appropriate
for the purpose of reviewing American Express Financial
Corporation's performance under this Agreement.
(2) The Fund agrees that it will furnish to American Express
Financial Corporation any information that the latter may
reasonably request with respect to the services performed or to be
performed by American Express Financial Corporation under this
Agreement.
(3) It is understood and agreed that in furnishing the Fund with
the services as herein provided, neither American Express Financial
Corporation, nor any officer, trustee or agent thereof shall be
held liable to the Fund or its creditors or shareholders for errors
of judgment or for anything except willful misfeasance, bad faith,
or gross negligence in the performance of its duties, or reckless
disregard of its obligations and duties under the terms of this
Agreement. It is further understood and agreed that American
Express Financial Corporation may rely upon information furnished
to it reasonably believed to be accurate and reliable.
PART TWO: COMPENSATION FOR SERVICES
(1) The Fund agrees to pay to American Express Financial
Corporation, and American Express Financial Corporation covenants
and agrees to accept from the Fund in full payment for the services
furnished, based on the net assets of the Fund as set forth in the
following table:
<PAGE>
<TABLE>
<CAPTION>
Assets Annual Rate At
(Billions) Each Asset Level
----------- ----------------
<S> <C>
First $0.25 0.040%
Next 0.25 0.035
Next 0.25 0.030
Next 0.25 0.025
Over 1 0.020
</TABLE>
The administrative fee for each calendar day of each year shall be
equal to 1/365th (1/366th in each leap year) of the total amount
computed. The computation shall be made for each such day on the
basis of net assets as of the close of business of the full
business day two (2) business days prior to the day for which the
computation is being made. In the case of the suspension of the
computation of net asset value, the administrative fee for each day
during such suspension shall be computed as of the close of
business on the last full business day on which the net assets were
computed. As used herein, "net assets" as of the close of a full
business day shall include all transactions in shares of the Fund
recorded on the books of the Fund for that day.
(2) The administrative fee shall be paid on a monthly basis and, in
the event of the termination of this Agreement, the administrative
fee accrued shall be prorated on the basis of the number of days
that this Agreement is in effect during the month with respect to
which such payment is made.
(3) The administrative fee provided for hereunder shall be paid in
cash by the Fund to American Express Financial Corporation within
five (5) business days after the last day of each month.
PART THREE: ALLOCATION OF EXPENSES
(1) The Fund agrees to pay:
(a) Administrative fees payable to American Express Financial
Corporation for its services under the terms of this Agreement.
(b) Taxes.
(c) Fees and charges of its independent certified public
accountants for services the Fund requests.
(d) Fees and expenses of attorneys (i) it employs in matters not
involving the assertion of a claim by a third party against the
Fund, its trustees and officers, (ii) it employs in conjunction
with a claim asserted by the Board of Trustees against American
Express Financial Corporation, except that American Express
Financial Corporation shall reimburse the Fund for such fees and
expenses if it is ultimately determined by a court of competent
jurisdiction, or American Express Financial Corporation agrees,
that it is liable in whole or in part to the Fund, and (iii) it
employs to assert a claim against a third party.
<PAGE>
(e) Fees paid for the qualification and registration for public
sale of the securities of the Fund under the laws of the United
States and of the several states in which such securities shall be
offered for sale.
(f) Office expenses which shall include a charge for occupancy,
insurance on the premises, furniture and equipment, telephone,
telegraph, electronic information services, books, periodicals,
published services, and office supplies used by the Fund, equal to
the cost of such incurred by American Express Financial
Corporation.
(g) Fees of consultants employed by the Fund.
(h) Trustees, officers and employees expenses which shall include
fees, salaries, memberships, dues, travel, seminars, pension,
profit sharing, and all other benefits paid to or provided for
trustees, officers and employees, trustees and officers liability
insurance, errors and omissions liability insurance, worker's
compensation insurance and other expenses applicable to the
trustees, officers and employees, except the Fund will not pay any
fees or expenses of any person who is an officer or employee of
American Express Financial Corporation or its affiliates.
(i) Filing fees and charges incurred by the Fund in connection with
filing any amendment to its articles of incorporation, or incurred
in filing any other document with the State of Minnesota or its
political subdivisions.
(j) Organizational expenses of the Fund.
(k) One-half of the Investment Company Institute membership dues
charged jointly to the IDS MUTUAL FUND GROUP and American Express
Financial Corporation.
(l) Expenses properly payable by the Fund, approved by the Board of
Trustees.
(2) American Express Financial Corporation agrees to pay all
expenses associated with the services it provides under the terms
of this Agreement. Further, American Express Financial Corporation
agrees that if, at the end of any month, the expenses of the Fund
under this Agreement and any other agreement between the Fund and
American Express Financial Corporation, but excluding those
expenses set forth in (1)(b) of this Part Three, exceed the most
restrictive applicable state expenses limitation, the Fund shall
not pay those expenses set forth in (1)(a) and (c) through (m) of
this Part Three to the extent necessary to keep the Fund's expenses
from exceeding the limitation, it being understood that American
Express Financial Corporation will assume all unpaid expenses and
bill the Fund for them in subsequent months but in no event can the
accumulation of unpaid expenses or billing be carried past the end
of the Fund's fiscal year.
<PAGE>
PART FOUR: MISCELLANEOUS
(1) American Express Financial Corporation shall be deemed to be an
independent contractor and, except as expressly provided or
authorized in this Agreement, shall have no authority to act for or
represent the Fund.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Fund recognizes that American Express Financial Corporation
now renders and may continue to render investment advice and other
services to other investment companies and persons which may or may
not have investment policies and investments similar to those of
the Fund and that American Express Financial Corporation manages
its own investments and/or those of its subsidiaries. American
Express Financial Corporation shall be free to render such
investment advice and other services and the Fund hereby consents
thereto.
(4) Neither this Agreement nor any transaction had pursuant hereto
shall be invalidated or in anyway affected by the fact that
trustees, officers, agents and/or shareholders of the Fund are or
may be interested in American Express Financial Corporation or any
successor or assignee thereof, as trustees, officers, stockholders
or otherwise; that trustees, officers, stockholders or agents of
American Express Financial Corporation are or may be interested in
the Fund as trustees, officers, shareholders, or otherwise; or that
American Express Financial Corporation or any successor or
assignee, is or may be interested in the Fund as shareholder or
otherwise, provided, however, that neither American Express
Financial Corporation, nor any officer, trustee or employee thereof
or of the Fund, shall sell to or buy from the Fund any property or
security other than shares issued by the Fund, except in accordance
with applicable regulations or orders of the United States
Securities and Exchange Commission.
(5) Any notice under this Agreement shall be given in writing,
addressed, and delivered, or mailed postpaid, to the party to this
Agreement entitled to receive such, at such party's principal place
of business in Minneapolis, Minnesota, or to such other address as
either party may designate in writing mailed to the other.
(6) American Express Financial Corporation agrees that no officer,
trustee or employee of American Express Financial Corporation will
deal for or on behalf of the Fund with himself as principal or
agent, or with any corporation or partnership in which he may have
a financial interest, except that this shall not prohibit officers,
trustees or employees of American Express Financial Corporation
from having a financial interest in the Fund or in American Express
Financial Corporation.
(7) The Fund agrees that American Express Financial Corporation may
subcontract for certain of the services described under this
Agreement with the understanding that there shall be no diminution
in the quality or level of the services and that American Express
Financial Corporation remains fully responsible for the services.
<PAGE>
(8) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable
without the written consent of the other party. This Agreement
shall be governed by the laws of the State of Minnesota.
PART FIVE: RENEWAL AND TERMINATION
(1) This Agreement shall become effective on the date first set
forth above (the "Effective Date") and shall continue in effect
from year to year thereafter as the parties may mutually agree;
provided that either party may terminate this Agreement by giving
the other party notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of
receipt of such notice.
(2) This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.
IN WITNESS THEREOF, the parties hereto have executed the foregoing
Agreement as of the day and year first above written.
IDS CALIFORNIA TAX-EXEMPT TRUST
By: __________________________________
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By: __________________________________
Vice President
<PAGE>
SHAREHOLDER SERVICE AGREEMENT
This agreement is between IDS California Tax-Exempt Trust (the
"Fund) and American Express Financial Advisors Inc., the principal
underwriter of the Fund, for services to be provided to
shareholders by personal financial advisors and other servicing
agents. It is effective on the first day the Fund offers multiple
classes of shares.
American Express Financial Advisors represents that shareholders
consider their financial advisor or servicing agent a significant
factor in their satisfaction with their investment and, to help
retain financial advisors or servicing agents, it is necessary for
the Fund to pay annual servicing fees to financial advisors and
other servicing agents.
American Express Financial Advisors represents that fees paid to
financial advisors will be used by financial advisors to help
shareholders thoughtfully consider their investment goals and
objectively monitor how well the goals are being achieved. As
principal underwriter, American Express Financial Advisors will use
its best efforts to assure that other distributors provide
comparable services to shareholders for the servicing fees
received.
American Express Financial Advisors agrees to monitor the services
provided by financial advisors and servicing agents, to measure the
level and quality of services provided, to provide training and
support to financial advisors and servicing agents and to devise
methods for rewarding financial advisors and servicing agents who
achieve an exemplary level and quality of services.
The Fund agrees to pay American Express financial advisors and
other servicing agents 0.15 percent of the net asset value for each
shareholder account assigned to a financial advisor or servicing
agent that holds either Class A or Class B shares. In addition,
the Fund agrees to pay American Express Financial Advisors' costs
to monitor, measure, train and support services provided by
financial advisors or servicing agents up to 0.025 percent of the
net asset value for each shareholder account assigned to a
financial advisor or servicing agent that holds either Class A or
Class B shares. The Fund agrees to pay American Express Financial
Advisors in cash within five (5) business days after the last day
of each month.
American Express Financial Advisors agrees to provide the Fund,
prior to the beginning of the calendar year, a budget covering its
expected costs to monitor, measure, train and support services and
a quarterly report of its actual expenditures. American Express
Financial Advisors agrees to meet with representatives of the Fund
at their request to provide information as may be reasonably
necessary to evaluate its performance under the terms of this
agreement.
American Express Financial Advisors agrees that if, at the end of
any month, the expenses of the Fund, including fees under this
agreement and any other agreement between the Fund and American
Express Financial Advisors or American Express Financial
<PAGE>
Corporation, but excluding taxes, brokerage commissions and charges
in connection with the purchase and sale of assets exceed the most
restrictive applicable state expense limitation for the Fund's
current fiscal year, the Fund shall not pay fees and expenses under
this agreement to the extent necessary to keep the Fund's expenses
from exceeding the limitation, it being understood that American
Express Financial Advisors will assume all unpaid expenses and bill
the Fund for them in subsequent months but in no event can the
accumulation of unpaid expenses or billing be carried past the end
of the Fund's fiscal year.
This agreement shall continue in effect for a period of more than
one year so long as it is reapproved at least annually at a meeting
called for the purpose of voting on the agreement by a vote, in
person, of the members of the Board who are not interested persons
of the Fund and have no financial interest in the operation of the
agreement, and of all the members of the Board.
This agreement may be terminated at any time without payment of any
penalty by a vote of a majority of the members of the Board who are
not interested persons of the Fund and have no financial interest
in the operation of the agreement or by American Express Financial
Advisors. The agreement will terminate automatically in the event
of its assignment as that term is defined in the Investment Company
Act of 1940. This agreement may be amended at any time provided
the amendment is approved in the same manner the agreement was
initially approved and the amendment is agreed to by American
Express Financial Advisors.
Approved this 20th day of March, 1995.
IDS CALIFORNIA TAX-EXEMPT TRUST
__________________________________
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
__________________________________
Vice President
<PAGE>
INDEPENDENT AUDITORS' CONSENT
______________________________________________________________________________
The Board of Directors and Shareholders
IDS California Tax-Exempt Trust:
We consent to the use of our report incorporated herein by reference and to the
references to our Firm under the headings "Financial highlights" in Part A and
"INDEPENDENT AUDITORS" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 27, 1995
<PAGE>
PLAN AND AGREEMENT OF DISTRIBUTION
This plan and agreement is between IDS California Tax-Exempt Trust
(the "Fund"), and American Express Financial Advisors Inc., the
principal underwriter of the Fund, for distribution services to the
Fund. It is effective on the first day the Fund offers multiple
classes of shares.
The plan and agreement has been approved by members of the Board of
Trustees (the "Board") of the Fund who are not interested persons
of the Fund and have no direct or indirect financial interest in
the operation of the plan or any related agreement, and all of the
members of the Board, in person, at a meeting called for the
purpose of voting on the plan and agreement.
The plan and agreement provides that:
1. The Fund will reimburse American Express Financial Advisors
for all sales and promotional expenses attributable to the sale of
Class B shares, including sales commissions, business and employee
expenses charged to distribution of Class B shares, and corporate
overhead appropriately allocated to the sale of Class B shares.
2. The amount of the reimbursement shall be equal on an annual
basis to 0.75% of the average daily net assets of the Fund
attributable to Class B shares. The amount so determined shall be
paid to American Express Financial Advisors in cash within five (5)
business days after the last day of each month. American Express
Financial Advisorsagrees that if, at the end of any month, the
expenses of the Fund, including fees under this agreement and any
other agreement between the Fund and American Express Financial
Advisorsor American Express Financial Corporation, but excluding
taxes, brokerage commissions and charges in connection with the
purchase and sale of assets exceed the most restrictive applicable
state expense limitation for the Fund's current fiscal year, the
Fund shall not pay fees and expenses under this agreement to the
extent necessary to keep the Fund's expenses from exceeding the
limitation, it being understood that American Express Financial
Advisors will assume all unpaid expenses and bill the Fund for them
in subsequent months, but in no event can the accumulation of
unpaid expenses or billing be carried past the end of the Fund's
fiscal year.
3. For each purchase of Class B shares, after eight years the
Class B shares will be converted to Class A shares and those assets
will no longer be included in determining the reimbursement amount.
4. The Fund understands that if a shareholder redeems Class B
shares before they are converted to Class A shares, American
Express Financial Advisors will impose a sales charge directly on
the redemption proceeds to cover those expenses it has previously
incurred on the sale of those shares.
5. American Express Financial Advisors agrees to provide at
least quarterly an analysis of distribution expenses and to meet
with representatives of the Fund as reasonably requested to provide
additional information.
<PAGE>
6. The plan and agreement shall continue in effect for a period
of more than one year provided it is reapproved at least annually
in the same manner in which it was initially approved.
7. The plan and agreement may not be amended to increase
materially the amount that may be paid by the Fund without the
approval of a least a majority of the outstanding shares of Class
B. Any other amendment must be approved in the manner in which the
plan and agreement was initially approved.
8. This agreement may be terminated at any time without payment
of any penalty by a vote of a majority of the members of the Board
who are not interested persons of the Fund and have no financial
interest in the operation of the plan and agreement, or by vote of
a majority of the outstanding Class B shares, or by American
Express Financial Advisors. The plan and agreement will terminate
automatically in the event of its assignment as that term is
defined in the Investment Company Act of 1940.
Approved this 20th day of March, 1995.
IDS CALIFORNIA TAX-EXEMPT TRUST
__________________________________
Leslie L. Ogg
Vice President
AMERICAN EXPRESS FINANCIAL ADVISORS INC.
__________________________________
Vice President
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 226241022
[INVESTMENTS-AT-VALUE] 228034493
[RECEIVABLES] 4826799
[ASSETS-OTHER] 12740
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 232874032
[PAYABLE-FOR-SECURITIES] 981370
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 610983
[TOTAL-LIABILITIES] 1592353
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 232569599
[SHARES-COMMON-STOCK] 46744339
[SHARES-COMMON-PRIOR] 49714953
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (3444354)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 2156434
[NET-ASSETS] 231281679
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 8159010
[OTHER-INCOME] 0
[EXPENSES-NET] 757417
[NET-INVESTMENT-INCOME] 7401593
[REALIZED-GAINS-CURRENT] (192073)
[APPREC-INCREASE-CURRENT] (8997689)
[NET-CHANGE-FROM-OPS] (1788169)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (7401630)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1942845
[NUMBER-OF-SHARES-REDEEMED] (5938312)
[SHARES-REINVESTED] 1024853
[NET-CHANGE-IN-ASSETS] (23915077)
[ACCUMULATED-NII-PRIOR] 15236634
[ACCUMULATED-GAINS-PRIOR] (2375504)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 645698
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 757417
[AVERAGE-NET-ASSETS] 230414360
[PER-SHARE-NAV-BEGIN] 5.13
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] (.18)
[PER-SHARE-DIVIDEND] (.15)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 4.95
[EXPENSE-RATIO] .61
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 63663446
[INVESTMENTS-AT-VALUE] 64891403
[RECEIVABLES] 1562267
[ASSETS-OTHER] 613041
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 65838754
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 147624
[TOTAL-LIABILITIES] 147624
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 67133922
[SHARES-COMMON-STOCK] 13028192
[SHARES-COMMON-PRIOR] 13749968
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (312724)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (1130068)
[NET-ASSETS] 65691130
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 2256616
[OTHER-INCOME] 0
[EXPENSES-NET] 236501
[NET-INVESTMENT-INCOME] 2020115
[REALIZED-GAINS-CURRENT] (8662)
[APPREC-INCREASE-CURRENT] (2711084)
[NET-CHANGE-FROM-OPS] (699631)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (2020115)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1018916
[NUMBER-OF-SHARES-REDEEMED] (2049435)
[SHARES-REINVESTED] 308743
[NET-CHANGE-IN-ASSETS] (6357452)
[ACCUMULATED-NII-PRIOR] 3862026
[ACCUMULATED-GAINS-PRIOR] (29934)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 181449
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 2020115
[AVERAGE-NET-ASSETS] 69100681
[PER-SHARE-NAV-BEGIN] 5.24
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] (.20)
[PER-SHARE-DIVIDEND] (.15)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 5.04
[EXPENSE-RATIO] .66
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 73604255
[INVESTMENTS-AT-VALUE] 73714460
[RECEIVABLES] 1275887
[ASSETS-OTHER] 2730756
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 77720833
[PAYABLE-FOR-SECURITIES] 942317
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 85513
[TOTAL-LIABILITIES] 1027830
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 76414650
[SHARES-COMMON-STOCK] 14857463
[SHARES-COMMON-PRIOR] 14320277
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 68884
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 209469
[NET-ASSETS] 76693003
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 2427005
[OTHER-INCOME] 0
[EXPENSES-NET] 244755
[NET-INVESTMENT-INCOME] 2182250
[REALIZED-GAINS-CURRENT] 393758
[APPREC-INCREASE-CURRENT] (3103085)
[NET-CHANGE-FROM-OPS] (527077)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (2182176)
[DISTRIBUTIONS-OF-GAINS] (36289)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1652212
[NUMBER-OF-SHARES-REDEEMED] (1432683)
[SHARES-REINVESTED] 317657
[NET-CHANGE-IN-ASSETS] 10189
[ACCUMULATED-NII-PRIOR] 4171458
[ACCUMULATED-GAINS-PRIOR] (72444)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 196929
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 244755
[AVERAGE-NET-ASSETS] 74980711
[PER-SHARE-NAV-BEGIN] 5.35
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] (.18)
[PER-SHARE-DIVIDEND] (.16)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 5.16
[EXPENSE-RATIO] .65
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 370458586
[INVESTMENTS-AT-VALUE] 367298692
[RECEIVABLES] 9136587
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 376435279
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 2737646
[TOTAL-LIABILITIES] 2737646
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 382306782
[SHARES-COMMON-STOCK] 74855838
[SHARES-COMMON-PRIOR] 79123225
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (6196783)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (2412366)
[NET-ASSETS] 373697633
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 13427126
[OTHER-INCOME] 0
[EXPENSES-NET] 1366859
[NET-INVESTMENT-INCOME] 12060267
[REALIZED-GAINS-CURRENT] (4017669)
[APPREC-INCREASE-CURRENT] (9537153)
[NET-CHANGE-FROM-OPS] (1494555)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (12060310)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 4816184
[NUMBER-OF-SHARES-REDEEMED] (10992248)
[SHARES-REINVESTED] 1908677
[NET-CHANGE-IN-ASSETS] (34692998)
[ACCUMULATED-NII-PRIOR] 24205532
[ACCUMULATED-GAINS-PRIOR] (351284)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1043298
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1366859
[AVERAGE-NET-ASSETS] 397240976
[PER-SHARE-NAV-BEGIN] 5.16
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] (.17)
[PER-SHARE-DIVIDEND] (.15)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 4.99
[EXPENSE-RATIO] .69
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 109313325
[INVESTMENTS-AT-VALUE] 110422200
[RECEIVABLES] 2401529
[ASSETS-OTHER] 768849
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 113592578
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 133955
[TOTAL-LIABILITIES] 133955
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 113722468
[SHARES-COMMON-STOCK] 22978473
[SHARES-COMMON-PRIOR] 23481717
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1608405)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1344560
[NET-ASSETS] 113458623
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 3883051
[OTHER-INCOME] 0
[EXPENSES-NET] 383916
[NET-INVESTMENT-INCOME] 3499135
[REALIZED-GAINS-CURRENT] (408337)
[APPREC-INCREASE-CURRENT] (3796548)
[NET-CHANGE-FROM-OPS] (705750)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (13499135)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1404397
[NUMBER-OF-SHARES-REDEEMED] (2449996)
[SHARES-REINVESTED] 542355
[NET-CHANGE-IN-ASSETS] (6700009)
[ACCUMULATED-NII-PRIOR] 6895342
[ACCUMULATED-GAINS-PRIOR] (505058)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 306852
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 383916
[AVERAGE-NET-ASSETS] 116845720
[PER-SHARE-NAV-BEGIN] 5.12
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] (.18)
[PER-SHARE-DIVIDEND] (.15)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 4.94
[EXPENSE-RATIO] .66
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] DEC-31-1994
[INVESTMENTS-AT-COST] 67632022
[INVESTMENTS-AT-VALUE] 66747987
[RECEIVABLES] 1028517
[ASSETS-OTHER] 1080032
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 68856536
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 80115
[TOTAL-LIABILITIES] 80115
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 69882817
[SHARES-COMMON-STOCK] 13540588
[SHARES-COMMON-PRIOR] 13661035
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (320250)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (786146)
[NET-ASSETS] 68776421
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 2275088
[OTHER-INCOME] 0
[EXPENSES-NET] 231812
[NET-INVESTMENT-INCOME] 2043276
[REALIZED-GAINS-CURRENT] (15899)
[APPREC-INCREASE-CURRENT] (2483813)
[NET-CHANGE-FROM-OPS] (456436)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (2043288)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1319523
[NUMBER-OF-SHARES-REDEEMED] (1751493)
[SHARES-REINVESTED] 311523
[NET-CHANGE-IN-ASSETS] (3058514)
[ACCUMULATED-NII-PRIOR] 3927846
[ACCUMULATED-GAINS-PRIOR] (177991)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 185087
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 231812
[AVERAGE-NET-ASSETS] 70481039
[PER-SHARE-NAV-BEGIN] 5.26
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] (.18)
[PER-SHARE-DIVIDEND] (.15)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 5.08
[EXPENSE-RATIO] .66
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>