SELIGMAN PENNSYLVANIA TAX EXEMPT FUND SERIES, 485BPOS, 1995-02-01

SELIGMAN PENNSYLVANIA TAX EXEMPT FUND SERIES
485BPOS, 1995-02-01

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File No. 33-5793

As filed with the Securities and Exchange Commission on February 1, 1995

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. 13 |X|

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|

Amendment No. 15 |X|

SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES
(Exact name of registrant as specified in charter)

100 PARK AVENUE, NEW YORK, NEW YORK 10017
(Address of principal executive offices)

Registrant's Telephone Number: 212-850-1864 or
Toll-Free 800-221-2450

THOMAS G. ROSE, Treasurer
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)

It is proposed that this filing will become effective (check the
appropriate box).

|_| immediately upon filing pursuant to paragraph (b) of rule 485

|X| on February 1, 1995 pursuant to paragraph (b) of rule 485

|_| 60 days after filing pursuant to paragraph (a)(i) of rule 485

|_| on (date) pursuant to paragraph (a)(i) of rule 485

|_| 75 days after filing pursuant to paragraph (a)(ii) of rule 485

|_| on (date) pursuant to paragraph (a)(ii) of rule 485.

If appropriate, check the following box:

|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2(a)(1) and a Rule 24f-2 Notice was
filed by Registrant on November 29, 1994.

<PAGE>

CROSS REFERENCE SHEET
Post-Effective Amendment #13
Pursuant to Rule 481 (a)

Item in Part of Form N-1A Location in Prospectus
- ------------------------- ----------------------
<S> <C>
1. Cover Page Cover Page

2. Synopsis Summary of Fund Expenses

3. Condensed Financial Information Financial Highlights

4. General Description of Registrant Cover Page; Organization and Capitalization

5. Management of the Fund Management Services

6. Capital Stock and Other Securities Cover Page; Organization And Capitalization

7. Purchase of Securities Being Offered Alternative Distribution System; Purchase of Shares; Administration,
Shareholder Services And Distribution Plan

8. Redemption or Repurchase Telephone Transactions; Redemption of Shares; Exchange Privilege;
Further Information About Transactions in The Fund

9. Pending Legal Proceedings Not Applicable

<CAPTION>
Item in Part B of Form N-1A Location in Statement of Additional Information
- --------------------------- -----------------------------------------------
<S> <C>
10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History General Information; Organization and Capitalization (Prospectus)

13. Investment Objectives and Policies Investment Objectives, Policies and Risks; Investment Limitations

14. Management of the Fund Management And Expenses

15. Control Persons and Principal Trustees and Officers; General Information
Holders of Securities

16. Investment Advisory and Other Services Management and Expenses; Distribution Services

17. Brokerage Allocation Portfolio Transactions; Administration, Shareholder Services and
Distribution Plan

18. Capital Stock and Other Securities General Information; Organization and Capitalization (Prospectus)

19. Purchase, Redemption and Pricing Purchase and Redemption of Fund Shares; Valuation
of Securities being Offered

20. Tax Status More About Taxes; Special Considerations Regarding Investments In
Pennsylvania Tax-Exempt Securities

21. Underwriters Distribution Services

22. Calculation of Performance Data Performance Information

23. Financial Statements Financial Statements

</TABLE>

<PAGE>

SELIGMAN NEW JERSEY TAX-EXEMPT FUND, INC.
SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES
SELIGMAN TAX-EXEMPT FUND SERIES, INC.

National Tax-Exempt Series, Colorado Tax-Exempt Series, Georgia Tax-Exempt
Series, Louisiana Tax-Exempt Series, Maryland Tax-Exempt Series, Massachusetts
Tax-Exempt Series, Michigan Tax-Exempt Series, Minnesota Tax-Exempt Series,
Missouri Tax-Exempt Series, New York Tax-Exempt Series, Ohio Tax-Exempt Series,
Oregon Tax-Exempt Series and South Carolina Tax-Exempt Series

SELIGMAN TAX-EXEMPT SERIES TRUST

California Tax-Exempt High-Yield Series, California Tax-Exempt Quality Series,
Florida Tax-Exempt Series and North Carolina Tax-Exempt Series

100 Park Avenue o New York, N.Y. 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 221-2450--all continental United States

February 1, 1995

This prospectus offers shares of nineteen different series (the "Series")
which include Seligman New Jersey Tax-Exempt Fund, Inc. (the "New Jersey Fund"),
Seligman Pennsylvania Tax-Exempt Fund Series (the "Pennsylvania Fund"), National
Tax-Exempt Series (the "National Series") and twelve individual state Series of
Seligman Tax-Exempt Fund Series, Inc. (the "Tax-Exempt Fund"), and four
individual state Series of Seligman Tax-Exempt Series Trust (the "Tax-Exempt
Trust" and collectively with the New Jersey Fund, the Pennsylvania Fund and the
Tax-Exempt Fund, the "Funds"). Each of the Funds is a non-diversified, open-end
management investment company.

The Tax-Exempt Fund offers the following state Series: Colorado Tax-Exempt
Series, Georgia Tax-Exempt Series, Louisiana Tax-Exempt Series, Maryland
Tax-Exempt Series, Massachusetts Tax-Exempt Series, Michigan Tax-Exempt Series,
Minnesota Tax-Exempt Series, Missouri Tax-Exempt Series, New York Tax-Exempt
Series, Ohio Tax-Exempt Series, Oregon Tax-Exempt Series and South Carolina
Tax-Exempt Series (collectively, the "Tax-Exempt Fund State Series"). The
Tax-Exempt Trust offers the following state Series: California Tax-Exempt
Quality Series, California Tax-Exempt High-Yield Series, Florida Tax-Exempt
Series and the North Carolina Tax-Exempt Series (collectively, the "Tax-Exempt
Trust State Series", and together with the Tax-Exempt Fund State Series, the New
Jersey Fund and the Pennsylvania Fund, the "State Series").

The New Jersey Fund seeks to maximize income exempt from federal income tax
and New Jersey personal income tax consistent with preservation of capital and
with consideration given to opportunities for capital gain by investing in
investment grade New Jersey tax-exempt securities. Throughout this Prospectus,
the New Jersey Gross Income Tax is referred to as the New Jersey personal income
tax.

(continued on following page)

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.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

The Pennsylvania Fund seeks to provide a high level of income exempt from
federal and Pennsylvania income taxes consistent with preservation of capital by
investing primarily in Pennsylvania tax-exempt securities rated within the four
highest rating categories of Moody's Investors Service ("Moody's") and/or
Standard & Poor's Corporation ("S&P"). Capital appreciation is not a
consideration in the selection of investments. The Fund may also invest in
Pennsylvania tax-exempt securities that are unrated but are believed by the
Manager (as defined below) to be of comparable quality to securities rated
within the four highest rating categories.

The Tax-Exempt Fund's National Tax-Exempt Series seeks to provide to its
shareholders maximum income exempt from federal income taxes to the extent
consistent with preservation of capital and with consideration given to
opportunities for capital gain by investing in investment grade securities the
interest on which is exempt from federal income taxes. The investment objective
of each of the individual Tax-Exempt Fund State Series is to maximize income
exempt from federal income taxes and from personal income taxes in that state,
consistent with the preservation of capital and with consideration given to
opportunities for capital gain by investing in investment grade tax-exempt
securities of the designated state, its political subdivisions, municipalities
and public authorities.

The Tax-Exempt Trust State Series, except for the California Tax-Exempt
High-Yield Series, each seek high income exempt from federal income taxes and
from personal income taxes in their respective state (other than Florida which
does not incur an individual income tax) consistent with preservation of capital
and with consideration given to capital gain, by investing in the four highest
credit rating categories (or three highest with respect to the California
Tax-Exempt Quality Series) of Moody's and/or S&P.

The California Tax-Exempt High-Yield Series seeks the maximum amount of
tax-exempt income consistent with preservation of capital and with consideration
given to capital gain by investing primarily in California tax-exempt securities
that are rated in the medium and lower rating categories of Moody's and/or S&P
or which are unrated. Such securities generally offer a higher current yield
than those in the higher rating categories but also involve greater price
volatility and risk of loss of principal and income. The California Tax-Exempt
High-Yield Series invests primarily in high-yield, high risk securities and
therefore may not be suitable for all investors.

There can be no assurance that a Series will achieve its objective.

Investment advisory and management services are provided to the Funds by J.
& W. Seligman & Co. Incorporated (the "Manager") and each Fund's distributor is
Seligman Financial Services, Inc., an affiliate of the Manager. Each Series
offers two classes of shares. Class A shares are sold subject to an initial
sales load of up to 4.75% and an annual service fee currently charged at a rate
of up to .25 of 1% of the average daily net asset value of the Class A shares.
Class D shares are sold without an initial sales load but are subject to
contingent deferred sales loads of 1% imposed on certain redemptions within one
year of purchase, an annual distribution fee of up to .75 of 1% and an annual
service fee of up to .25 of 1% of the average daily net asset value of the Class
D shares. See "Alternative Distribution System." Shares of the Series may be
purchased through any authorized investment dealer.

This Prospectus sets forth concisely the information a prospective investor
should know about the Funds and each individual Series before investing. Please
read it carefully before you invest and keep it for future reference. Additional
information about the Funds, including a Statement of Additional Information,
has been filed with the Securities and Exchange Commission. A Statement of
Additional Information for each Series is available upon request and without
charge by calling or writing the Funds at the telephone numbers or the address
set forth above. Each Statement of Additional Information is dated the same date
as this Prospectus and is incorporated herein by reference in its entirety.

<PAGE>

SUMMARY OF FUND EXPENSES

The purpose of this table is to assist investors in understanding the
various costs and expenses which shareholders of a Series bear directly or
indirectly. The sales load on Class A shares is a one-time charge paid at the
time of purchase of shares. Reductions in sales loads are available in certain
circumstances. The CDSL on Class D shares is a one-time charge paid only if
shares are redeemed within one year of purchase. For more information concerning
reduction in sales loads and for more complete descriptions of the various costs
and expenses see "Purchase Of Shares," "Redemption Of Shares" and "Management
Services" herein. Each Series' Administration, Shareholder Services and
Distribution Plan to which the caption "12b-1 Fees" relates is discussed under
"Administration, Shareholder Services And Distribution Plan" herein.

<TABLE>
<CAPTION>
NJ FUND PA FUND
-------------------------- --------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on
Purchases (as percentage of
offering price)................ 4.75% None 4.75% None
Sales Load on Reinvested Dividends None None None None
Deferred Sales Load (as percentage
of original price or redemption
proceeds, whichever is lower) None 1% during None 1% during
the first year, the first year,
None None
thereafter thereafter

Redemption Fees................ None None None None
Exchange Fees.................. None None None None

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating Expenses
for Fiscal Year Ended September 30,
1994 (as percentage of average net
assets)
Management Fees.............. .33%+ .38%+ .50% .50%
12b-1 Fees................... .23 1.00** .22 1.00**
Other Expenses............... .34 .37 .44 .50
--- ---- ---- ----
Total Series Operating Expenses .90% 1.75% 1.16% 2.00%
=== ==== ==== ====

</TABLE>
<TABLE>
<CAPTION>
NAT'L SERIES CO SERIES
-------------------------- --------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

Redemption Fees................ None None None None
Exchange Fees.................. None None None None

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating Expenses
for Fiscal Year Ended September 30,
1994 (as percentage of average net
assets)
Management Fees.............. .50% .50% .50% .50%
12b-1 Fees................... .08 1.00** .09 1.00**
Other Expenses............... .27 .26 .27 .28
--- ---- --- ----
Total Series Operating Expenses .85% 1.76% .86% 1.78%
=== ==== === ====
</TABLE>

In fiscal 1994, the Manager, in its discretion, waived a portion of its fee
from the New Jersey Fund. The management fee listed in the table for the New
Jersey Fund is net of voluntary fee waiver for the Series. Absent such waiver,
the management fee would have been .50% of the Fund's average daily net assets
and total operating expenses for Class A shares of the New Jersey Fund would
have been 1.07%. Annualized total operating expenses for Class D shares of the
New Jersey Fund would have been 1.87%. There can be no assurance that the
Manager will agree to waive any of its fee in future periods.

The following example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown and the
5% used in this example is a hypothetical rate.

<TABLE>
<CAPTION>
NJ FUND PA FUND NAT'L SERIES CO SERIES
------------------ ------------------ ------------------ ------------------
Example Class A Class D* Class A Class D* Class A Class D* Class A Class D*
- ------- ------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the end of
each time period:
1 year ............ $ 56 $ 28++ $ 59 $ 30++ $ 56 $ 28++ $ 56 $ 28++
3 years ........... 75 55 83 63 73 55 74 56
5 years ........... 95 95 108 108 92 95 93 96
10 years ........... 153 206 182 233 147 207 149 209

</TABLE>

- ------------
* Annualized. Based on actual expenses incurred by the Series' Class D shares
for the period February 1, 1994 (commencement of offering of Class D shares)
through September 30, 1994.

** Includes an annual distribution fee of .75 of 1% and an annual service fee
of .25 of 1% (collectively, "distribution fee"). Pursuant to Rules of the
National Association of Securities Dealers, Inc., the aggregate deferred
sales loads and annual distribution fees on Class D shares of each Series
may not exceed 6.25% of total gross sales, subject to certain exclusions.
The 6.25% limitation is imposed on the Series rather than on a per
shareholder basis. Therefore, a long-term Class D shareholder of a Series
may pay more in total sales loads (including distribution fees) than the
economic equivalent of 6.25% of such shareholder's investment in the shares.

+ Net of fees waived.

++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be: NJ--$18; PA--$20; NATL --$18;
CO--$18.

<PAGE>

SUMMARY OF FUND EXPENSES--(continued)

GA SERIES LA SERIES
----------------------------- -----------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on
Purchases (as percentage of
offering price)................. 4.75% None 4.75% None
Sales Load on Reinvested Dividends None None None None
Deferred Sales Load (as percentage
of original price or redemption
proceeds, whichever is lower). None 1% during None 1% during
the first year, the first year,
None None
thereafter thereafter
Redemption Fees................. None None None None
Exchange Fees................... None None None None

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average net assets)

Management Fees ............... .30%+ .36%+ .50% .50%
12b-1 Fees .................... .10 1.00** .10 1.00**
Other Expenses ................ .33 .40 .27 .28
--- ---- --- ----
Total Series Operating
Expenses .................... .73% 1.76% .87% 1.78%
=== ==== === ====

</TABLE>
<TABLE>
<CAPTION>

MD SERIES MA SERIES
----------------------------- -----------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average net assets)

Management Fees ............... .50% .50% .50% .50%
12b-1 Fees .................... .09 1.00** .09 1.00**
Other Expenses ................ .33 .30 .26 .28
--- ---- --- ----
Total Series Operating
Expenses .................... .92% 1.80% .85% 1.78%
=== ==== === ====

</TABLE>

In fiscal 1994, the Manager, in its discretion, waived a portion of its fee
from the Georgia Series. The management fee listed in the table for the Georgia
Series is net of voluntary fee waiver for the Series. Absent such waiver, the
management fee would have been .50% of the Series' average daily net assets and
total operating expenses for Class A shares of the Georgia Series would have
been .93%. Annualized total operating expenses for Class D shares of the Georgia
Series would have been 1.90%. There can be no assurance that the Manager will
agree to waive any of its fee in future periods.

<TABLE>
<CAPTION>
GA FUND LA FUND MD SERIES MA SERIES
------------------ ------------------ ------------------ ------------------
Example Class A Class D* Class A Class D* Class A Class D* Class A Class D*
- ------- ------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the end of
each time period:
1 year ............ $ 55 $ 28++ $ 56 $ 28++ $ 56 $ 28++ $ 56 $ 28++
3 years ........... 70 55 74 56 75 57 73 56
5 years ........... 86 95 93 96 96 97 92 96
10 years ........... 134 207 150 209 155 212 147 209

</TABLE>

- ------------
* Annualized. Based on actual expenses incurred by the Fund's Class D shares
for the period February 1, 1994 (commencement of offering of Class D shares)
through September 30, 1994.

+ Net of fees waived.

++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be: GA--$18; LA--$18; MD --$18;
MA--$18.

4
<PAGE>

SUMMARY OF FUND EXPENSES--(continued)
<TABLE>
<CAPTION>

MI SERIES MN SERIES
----------------------------- -----------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average
net assets)

Management Fees ............... .50% .50% .50% .50%
12b-1 Fees .................... .10 1.00** .10 1.00**
Other Expenses ................ .24 .25 .25 .24
--- ---- --- ----
Total Series Operating
Expenses .................... .84% 1.75% .85% 1.74%
=== ==== === ====

</TABLE>
<TABLE>
<CAPTION>

MO SERIES NY SERIES
----------------------------- -----------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average
net assets)

Management Fees ............... .36%+ .40%+ .50% .50%
12b-1 Fees .................... .09 1.00** .08 1.00**
Other Expenses ................ .29 .30 .29 .31
--- ---- --- ----
Total Series Operating
Expenses .................... .74% 1.70% .87% 1.81%
=== ==== === ====

</TABLE>

In fiscal 1994, the Manager, in its discretion, waived a portion of its fee
from the Missouri Series. The management fee listed in the table for the
Missouri Series is net of voluntary fee waiver for the Series. Absent such
waiver, the management fee would have been .50% of the Series' average daily net
assets and total operating expenses for Class A shares of the Missouri Series
would have been .88%. Annualized total operating expenses for Class D shares of
the Missouri Series would have been 1.80%. There can be no assurance that the
Manager will agree to waive any of its fee in future periods.

<TABLE>
<CAPTION>
MI FUND MN FUND MO SERIES NY SERIES
------------------ ------------------ ------------------ ------------------
Example Class A Class D* Class A Class D* Class A Class D* Class A Class D*
- ------- ------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the end of
each time period:
1 year ............ $ 56 $ 28++ $ 56 $ 28++ $ 55 $ 27++ $ 56 $ 28++
3 years ........... 73 55 73 55 70 54 74 57
5 years ........... 92 95 92 94 87 92 93 98
10 years ........... 146 206 147 205 135 201 150 213

</TABLE>

- ------------

* Annualized. Based on actual expenses incurred by the Fund's Class D shares
for the period February 1, 1994 (commencement of offering of Class D shares)
through September 30, 1994.

+ Net of fees waived.

++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be: MI--$18; MN--$18; MO--$17;
NY--$18

5
<PAGE>

SUMMARY OF FUND EXPENSES--(continued)

OH SERIES OR SERIES
----------------------------- -----------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average net assets)

Management Fees ............... .50% .50% .39%+ .40%+
12b-1 Fees .................... .10 1.00** .10 1.00**
Other Expenses ................ .24 .28 .29 .32
--- ---- --- ----
Total Series Operating
Expenses .................... .84% 1.78% .78% 1.72%
=== ==== === ====

</TABLE>
<TABLE>
<CAPTION>
CA
SC SERIES HIGH-YIELD SERIES
----------------------------- -----------------------------
Class A Class D Class A Class D
Shares Shares Shares Shares
------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative)

Class A Class D* Class A Class D*
------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average
net assets)

Management Fees ............... .50% .50% .50% .50%
12b-1 Fees .................... .10 1.00** .09 1.00**
Other Expenses ................ .23 .24 .26 .24
--- ---- --- ----
Total Series Operating
Expenses .................... .83% 1.74% .85% 1.74%
=== ==== === ====

</TABLE>

In fiscal 1994, the Manager, in its discretion, waived a portion of its
fees from the Oregon Series. The management fee listed in the table for the
Oregon Series is net of voluntary fee waiver for the Series. Absent such waiver,
the management fee would have been .50% of the Series' average daily net assets
and total operating expenses for Class A shares of the Oregon Series would have
been .89%. Annualized total operating expenses for Class D shares of the Oregon
Series would have been 1.82%. There can be no assurance that the Manager will
agree to waive any of its fee in future periods.

<TABLE>
<CAPTION>
CA
OH FUND OR FUND SC SERIES HIGH-YIELD SERIES
------------------ ------------------ ------------------ ------------------
Example Class A Class D* Class A Class D* Class A Class D* Class A Class D*
- ------- ------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the end of
each time period:
1 year ............ $ 56 $ 28++ $ 55 $ 27++ $ 56 $ 28++ $ 56 $ 28++
3 years ........... 73 56 71 54 73 55 73 55
5 years ........... 92 96 89 93 91 94 92 94
10 years ........... 146 209 140 203 145 205 147 205

</TABLE>

- ------------
* Annualized. Based on actual expenses incurred by the Fund's Class D shares
for the period February 1, 1994 (commencement of offering of Class D shares)
through September 30, 1994.

+ Net of fees waived.

++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be: OH--$18; OR--$17; SC--$18;
CA: High-Yield--$18

6
<PAGE>

SUMMARY OF FUND EXPENSES--(continued)

CA QUALITY SERIES FL SERIES NC SERIES
----------------------------- ----------------------------- -----------------------------
Class A Class D Class A Class D Class A Class D
Shares Shares Shares Shares Shares Shares
------------ ------------ ------------ ------------ ------------ ------------
(Initial (Deferred (Initial (Deferred (Initial (Deferred
Sales Load Sales Load Sales Load Sales Load Sales Load Sales Load
Alternative) Alternative) Alternative) Alternative) Alternative) Alternative)

<S> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on
Purchases (as percentage of
offering price)................. 4.75% None 4.75% None 4.75% None
Sales Load on Reinvested Dividends None None None None None None
Deferred Sales Load (as percentage
of original price or redemption
proceeds, whichever is lower). None 1% during None 1% during None 1% during
the first year, the first year, the first year,
None None None
thereafter thereafter thereafter
Redemption Fees................. None None None None None None
Exchange Fees................... None None None None None None

Class A Class D* Class A Class D* Class A Class D*
------------ ------------ ------------ ------------ ------------ ------------
Annual Series Operating
Expenses for Fiscal Year
Ended September 30, 1994
(as percentage of average
net assets)

Management Fees ............... .50% .50% .16%+ .16%+ .12%+ .12%+
12b-1 Fees .................... .09 1.00** .23 1.00** .24 1.00**
Other Expenses ................ .22 .27 .27 .34 .39 .45
--- ---- --- ---- --- ----
Total Series Operating
Expenses .................... .81% 1.77% .66% 1.50% .75% 1.57%
=== ==== === ==== === ====

</TABLE>

In fiscal 1994, the Manager, in its discretion, waived all or a portion of
its fees and reimbursed certain expenses of the North Carolina Series and the
Florida Series. In fiscal 1995, the Manager expects to waive a portion of its
fees for each of these Series, and as such, the expense information in the table
has been restated to reflect such waivers and the elimination of the
reimbursement of other expenses. Absent such waivers in fiscal 1995, the
management fee would be .50% of each Series' average daily net assets and
estimated total operating expenses for Class A shares and Class D shares of the
North Carolina Series will be 1.13% and 1.95%, respectively. Estimated total
operating expenses for Class A shares and Class D shares of the Florida Series
would be 1.00% and 1.84%, respectively. There can be no assurance that the
Manager will agree to waive any of its fee in future periods.

CA QUALITY SERIES FL SERIES NC SERIES
----------------------------- ----------------------------- -----------------------------
Example Class A Class D* Class A Class D* Class A Class D*
- ------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the end of
each time period:

1 yr ............. $ 55 $ 28++ $ 54 $ 25++ $ 55 $ 26++
3 yrs ............ 72 56 68 47 70 50
5 yrs ............ 90 96 83 82 87 86
10 yrs ............ 143 208 126 179 136 187

</TABLE>

- ------------
* Annualized. Based on actual expenses incurred by the Fund's Class D shares
for the period February 1, 1994 (commencement of offering of Class D shares)
through September 30, 1994.

+ Net of fees waived.

++ Assuming (1) 5% annual return and (2) no redemption at the end of one year,
the expenses on a $1,000 investment would be: CA: Quality--$18; FL--$15;
NC--$16.

7
<PAGE>

FINANCIAL HIGHLIGHTS

Each Fund's financial highlights for Class A and Class D shares for the
periods presented below have been audited by Deloitte & Touche LLP, independent
auditors. This information, which is derived from the financial and accounting
records of the Funds, should be read in conjunction with the fiscal 1994
financial statements and notes contained in the fiscal 1994 Annual Report of
each Fund which may be obtained by calling or writing the Funds at the telephone
numbers or address provided on the cover page of this Prospectus.

The per share operating performance data is designed to allow investors to
trace the operating performance, on a per share basis, from a Series' beginning
net asset value to the ending net asset value so that they may understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per share amounts. The total return
based on net asset value measures performance assuming investors purchased
shares at the net asset value as of the beginning of the period, invested
dividends and capital gains paid at net asset value and then sold their shares
at net asset value per share on the last day of the period. The total return
computations do not reflect any sales charges investors may incur in purchasing
or selling shares. Total returns for periods of less than one year are not
annualized.

Increase
Net Realized (Decrease)
Net Asset Value Net & Unrealized from Dividends
Per Share Operating at Beginning Investment Investment Investment Paid or
Performance: of Period Income(1) Gain (Loss) Operations Declared
- ------------------- --------------- ---------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C>

New Jersey--Class A
Year ended 9/30/94 ...... $8.24 $0.41 $(0.74) $(0.33) ($0.41)
Year ended 9/30/93 ...... 7.74 0.42 0.61 1.03 (0.42)
Year ended 9/30/92 ...... 7.49 0.44 0.27 0.71 (0.44)
Year ended 9/30/91 ...... 7.01 0.44 0.51 0.95 (0.44)
Year ended 9/30/90 ...... 7.17 0.45 (0.10) 0.35 (0.45)
Year ended 9/30/89 ...... 6.98 0.48 0.19 0.67 (0.48)
2/16/88*-9/30/88 ........ 7.14 0.30 (0.16) 0.14 (0.30)

New Jersey--Class D
2/1/94**-9/30/94......... 8.14 0.23 (0.66) (0.43) (0.23)

Pennsylvania--Class A
Year ended 9/30/94....... 8.61 0.39 (0.80) (0.41) (0.39)
Year ended 9/30/93....... 8.02 0.42 0.71 1.13 (0.42)
Year ended 9/30/92....... 7.74 0.46 0.30 0.76 (0.46)
Year ended 9/30/91....... 7.34 0.47 0.49 0.96 (0.47)
Year ended 9/30/90....... 7.50 0.47 (0.16) 0.31 (0.47)
Year ended 9/30/89....... 7.31 0.49 0.19 0.68 (0.49)
Year ended 9/30/88....... 6.76 0.50 0.56 1.06 (0.50)
Year ended 9/30/87....... 7.58 0.51 (0.81) (0.30) (0.51)
7/15/86*-9/30/86......... 7.14 0.10 0.44 0.54 (0.10)

Pennsylvania--Class D
2/1/94**-9/30/94......... 8.37 0.22 (0.83) (0.61) (0.22)

National Series--Class A
Year ended 9/30/94....... 8.72 0.41 (1.04) (0.63) (0.41)
Year ended 9/30/93....... 8.07 0.45 0.78 1.23 (0.45)
Year ended 9/30/92....... 7.90 0.48 0.20 0.68 (0.48)
Year ended 9/30/91....... 7.44 0.49 0.54 1.03 (0.49)
Year ended 9/30/90....... 7.73 0.51 (0.19) 0.32 (0.51)
Year ended 9/30/89....... 7.64 0.53 0.11 0.64 (0.53)
Year ended 9/30/88....... 7.41 0.54 0.55 1.09 (0.54)
Year ended 9/30/87....... 8.48 0.59 (0.74) (0.15) (0.59)
Year ended 9/30/86....... 7.47 0.64 1.20 1.84 (0.64)
Year ended 9/30/85....... 6.84 0.67 0.63 1.30 (0.67)

National Series--Class D
2/1/94** - 9/30/94 ...... 8.20 0.22 (1.02) (0.80) (0.22)

Colorado Series--Class A
Year ended 9/30/94....... 7.76 0.37 (0.59) (0.22) (0.37)
Year ended 9/30/93....... 7.34 0.39 0.49 0.88 (0.39)
Year ended 9/30/92....... 7.22 0.42 0.12 0.54 (0.42)
Year ended 9/30/91....... 6.91 0.44 0.31 0.75 (0.44)
Year ended 9/30/90....... 7.06 0.46 (0.15) 0.31 (0.46)
Year ended 9/30/89....... 6.87 0.46 0.19 0.65 (0.46)
Year ended 9/30/88....... 6.38 0.46 0.53 0.99 (0.46)
Year ended 9/30/87....... 7.07 0.47 (0.66) (0.19) (0.47)
5/1/86*-9/30/86.......... 7.14 0.19 (0.07) 0.12 (0.19)

Colorado Series--Class D
2/1/94** - 9/30/94....... 7.72 0.20 (0.63) (0.43) (0.20)

</TABLE>

Total Return Ratio of
Distributions Net Increase Net Asset Based on Expenses
Per Share Operating from Net (Decrease) in Value at Net Asset to Average
Performance: Gain Realized Net Asset Value End of Period Value Net Assets(1)
___________________ ------------- --------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>

New Jersey--Class A
Year ended 9/30/94 ...... $(0.10) $(0.84) $7.40 (4.25)% 0.90%
Year ended 9/30/93 ...... (0.11) 0.50 8.24 14.02 0.86
Year ended 9/30/92 ...... (0.02) 0.25 7.74 9.70 0.85
Year ended 9/30/91 ...... (0.03) 0.48 7.49 13.97 0.81
Year ended 9/30/90 ...... (0.06) (0.16) 7.01 5.04 0.81
Year ended 9/30/89 ...... -- 0.19 7.17 9.91 0.57
2/16/88*-9/30/88 ........ -- (0.16) 6.98 1.96 0.40+

New Jersey--Class D
2/1/94**-9/30/94......... -- (0.66) 7.48 (5.47) 1.75+

Pennsylvania--Class A
Year ended 9/30/94....... (0.26) (1.06) 7.55 (5.00) 1.16
Year ended 9/30/93....... (0.12) 0.59 8.61 14.71 1.19
Year ended 9/30/92....... (0.02) 0.28 8.02 10.04 1.01
Year ended 9/30/91....... (0.09) 0.40 7.74 13.40 0.98
Year ended 9/30/90....... -- (0.16) 7.34 4.13 0.06
Year ended 9/30/89....... -- 0.19 7.50 9.53 0.92
Year ended 9/30/88....... (0.01) 0.55 7.31 16.20 0.83
Year ended 9/30/87....... (0.01) (0.82) 6.76 (4.21) 0.58
7/15/86*-9/30/86......... -- 0.44 7.58 7.19 --+

Pennsylvania--Class D
2/1/94**-9/30/94......... -- (0.83) 7.54 (7.50) 2.00+

National Series--Class A
Year ended 9/30/94....... (0.50) (1.54) 7.18 (7.83) 0.85
Year ended 9/30/93....... (0.13) 0.65 8.72 16.00 0.86
Year ended 9/30/92....... (0.03) 0.17 8.07 8.84 0.77
Year ended 9/30/91....... (0.08) 0.46 7.90 14.24 0.80
Year ended 9/30/90....... (0.10) (0.29) 7.44 4.10 0.78
Year ended 9/30/89....... (0.02) 0.09 7.73 8.62 0.78
Year ended 9/30/88....... (0.32) 0.23 7.64 16.43 0.83
Year ended 9/30/87....... (0.33) (1.07) 7.41 (2.37) 0.74
Year ended 9/30/86....... (0.19) 1.01 8.48 26.17 0.76
Year ended 9/30/85....... -- 0.63 7.47 19.18 0.88

National Series--Class D
2/1/94** - 9/30/94 ...... -- (1.02) 7.18 (9.96) 1.76+

Colorado Series--Class A
Year ended 9/30/94....... (0.08) (0.67) 7.09 (2.92) 0.86
Year ended 9/30/93....... (0.07) 0.42 7.76 12.54 0.90
Year ended 9/30/92....... -- 0.12 7.34 7.74 0.81
Year ended 9/30/91....... -- 0.31 7.22 11.15 0.84
Year ended 9/30/90....... -- (0.15) 6.91 4.38 0.85
Year ended 9/30/89....... -- 0.19 7.06 9.70 0.86
Year ended 9/30/88....... (0.04) 0.49 6.87 16.19 0.88
Year ended 9/30/87....... (0.03) (0.69) 6.38 (3.18) 0.77
5/1/86*-9/30/86.......... -- (0.07) 7.07 1.53 0.55+

Colorado Series--Class D
2/1/94** - 9/30/94....... -- (0.63) 7.09 (5.73) 1.78+

</TABLE>

Ratio of
Net
Investment Adjusted Net
Income Net Assets at Investment
Per Share Operating to Average Portfolio End of Period Income
Performance: Net Assets(1) Turnover (000's omitted) Per Share(1)
- ------------------- ------------- --------- --------------- ------------
<S> <C> <C> <C> <C>

New Jersey--Class A
Year ended 9/30/94 ...... 5.24% 12.13% $73,942 $0.40
Year ended 9/30/93 ...... 5.37 15.90 82,447 0.40
Year ended 9/30/92 ...... 5.74 27.13 74,256 0.42
Year ended 9/30/91 ...... 6.02 14.64 65,044 0.42
Year ended 9/30/90 ...... 6.32 37.26 54,287 0.43
Year ended 9/30/89 ...... 6.70 16.10 51,015 0.44
2/16/88*-9/30/88 ........ 6.92+ 8.20 35,563 0.26

New Jersey--Class D
2/1/94**-9/30/94......... 4.37+ 12.13++ 986 0.22

Pennsylvania--Class A
Year ended 9/30/94....... 4.91 7.71 34,943
Year ended 9/30/93....... 5.14 40.74 41,296
Year ended 9/30/92....... 5.79 32.87 39,431 0.45
Year ended 9/30/91....... 6.16 25.24 37,853 0.45
Year ended 9/30/90....... 6.24 40.64 35,572 0.45
Year ended 9/30/89....... 6.56 9.05 41,856 0.47
Year ended 9/30/88....... 6.96 4.14 30,796 0.48
Year ended 9/30/87....... 6.78 9.19 30,014 0.47
7/15/86*-9/30/86......... 5.92+ -- 19,306 0.07

Pennsylvania--Class D
2/1/94**-9/30/94......... 4.20+ 7.71++ 43

National Series--Class A
Year ended 9/30/94....... 5.30 24.86 111,374
Year ended 9/30/93....... 5.49 72.68 136,394
Year ended 9/30/92....... 6.02 63.99 132,130
Year ended 9/30/91....... 6.35 71.67 136,326
Year ended 9/30/90....... 6.64 55.01 133,412
Year ended 9/30/89....... 6.86 71.90 140,376
Year ended 9/30/88....... 7.35 40.58 135,667
Year ended 9/30/87....... 7.15 64.79 133,341
Year ended 9/30/86....... 7.81 62.28 110,428
Year ended 9/30/85....... 9.07 87.94 48,818 0.67

National Series--Class D
2/1/94** - 9/30/94 ...... 4.37+ 24.86++ 446

Colorado Series--Class A
Year ended 9/30/94....... 5.06 10.07 58,197
Year ended 9/30/93....... 5.21 14.09 67,912
Year ended 9/30/92....... 5.81 23.22 64,900
Year ended 9/30/91....... 6.19 14.60 64,310
Year ended 9/30/90....... 6.47 31.89 63,173
Year ended 9/30/89....... 6.56 -- 62,515
Year ended 9/30/88....... 6.89 12.95 66,257
Year ended 9/30/87....... 6.61 16.70 79,961 0.46
5/1/86*-9/30/86.......... 6.31+ 12.11 63,796 0.18

Colorado Series--Class D
2/1/94** - 9/30/94....... 4.05+ 10.07++ 96

</TABLE>

Adjusted
Adjusted Ratio of
Ratio of Net Investment
Expenses to Income
Per Share Operating Average Net to Average
Performance: Assets(1) Net Assets(1)
- ------------------- ----------- --------------
<S> <C> <C>

New Jersey--Class A
Year ended 9/30/94 ...... 1.07% 5.07%
Year ended 9/30/93 ...... 1.11 5.12
Year ended 9/30/92 ...... 1.10 5.49
Year ended 9/30/91 ...... 1.11 5.72
Year ended 9/30/90 ...... 1.12 6.01
Year ended 9/30/89 ...... 1.17 6.10
2/16/88*-9/30/88 ........ 1.36+ 5.96+

New Jersey--Class D
2/1/94**-9/30/94......... 1.87+ 4.25+

Pennsylvania--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92....... 1.16 5.64
Year ended 9/30/91....... 1.23 5.91
Year ended 9/30/90....... 1.31 5.99
Year ended 9/30/89....... 1.17 6.30
Year ended 9/30/88....... 1.08 6.71
Year ended 9/30/87....... 1.12 6.24
7/15/86*-9/30/86......... 1.80+ 4.17+

Pennsylvania--Class D
2/1/94**-9/30/94.........

National Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86.......
Year ended 9/30/85....... 0.91 9.05

National Series--Class D
2/1/94** - 9/30/94 ......

Colorado Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87....... 0.85 6.53
5/1/86*-9/30/86.......... 0.68+ 6.20+

Colorado Series--Class D
2/1/94** - 9/30/94.......

</TABLE>

- ------------
(1)During the periods stated, the Manager, at its discretion, reimbursed certain
expenses and/or waived all or portions of its fees. The adjusted net
investment income per share and adjusted ratios reflect what the results
would have been had the Manager not reimbursed certain expenses and/or not
waived its fees.

* Commencement of offering of Class A shares.

** Commencement of offering of Class D shares.

+ Annualized.

++ For the year ended 9/30/94.

8 & 9
<PAGE>

Georgia Series--Class A
Year ended 9/30/94....... $8.43 $0.41 $(0.86) $(0.45) $(0.41)
Year ended 9/30/93....... 7.85 0.43 0.62 1.05 (0.43)
Year ended 9/30/92....... 7.63 0.46 0.25 0.71 (0.46)
Year ended 9/30/91....... 7.18 0.47 0.46 0.93 (0.47)
Year ended 9/30/90....... 7.30 0.48 (0.10) 0.38 (0.48)
Year ended 9/30/89....... 7.09 0.48 0.22 0.70 (0.48)
Year ended 9/30/88....... 6.49 0.49 0.60 1.09 (0.49)
6/15/87*-9/30/87......... 7.14 0.13 (0.65) (0.52) (0.13)

Georgia Series--Class D
2/1/94** - 9/30/94....... 8.33 0.22 (0.84) (0.62) (0.22)

Louisiana Series--Class A
Year ended 9/30/94....... 8.79 0.44 (0.77) (0.33) (0.44)
Year ended 9/30/93....... 8.38 0.46 0.51 0.97 (0.46)
Year ended 9/30/92....... 8.18 0.49 0.24 0.73 (0.49)
Year ended 9/30/91....... 7.70 0.50 0.50 1.00 (0.50)
Year ended 9/30/90....... 7.88 0.52 (0.12) 0.40 (0.52)
Year ended 9/30/89....... 7.79 0.53 0.15 0.68 (0.53)
Year ended 9/30/88....... 7.36 0.55 0.49 1.04 (0.55)
Year ended 9/30/87....... 7.93 0.55 (0.49) 0.06 (0.55)
10/1/85*-9/30/86......... 7.14 0.58 0.79 1.37 (0.58)

Louisiana Series--Class D
2/1/94** - 9/30/94....... 8.73 0.24 (0.79) (0.55) (0.24)

Maryland Series--Class A
Year ended 9/30/94....... 8.64 0.42 (0.76) (0.34) (0.42)
Year ended 9/30/93....... 8.15 0.44 0.59 1.03 (0.44)
Year ended 9/30/92....... 7.94 0.46 0.24 0.70 (0.46)
Year ended 9/30/91....... 7.45 0.47 0.49 0.96 (0.47)
Year ended 9/30/90....... 7.59 0.48 (0.14) 0.34 (0.48)
Year ended 9/30/89....... 7.39 0.48 0.20 0.68 (0.48)
Year ended 9/30/88....... 6.87 0.47 0.56 1.03 (0.47)
Year ended 9/30/87....... 7.59 0.48 (0.72) (0.24) (0.48)
10/1/85*-9/30/86......... 7.14 0.54 0.45 0.99 (0.54)

Maryland Series--Class D
2/1/94** - 9/30/94 ...... 8.46 0.23 (0.74) (0.51) (0.23)

Massachusetts Series--Class A
Year ended 9/30/94....... 8.54 0.44 (0.67) (0.23) (0.44)
Year ended 9/30/93....... 8.06 0.47 0.55 1.02 (0.47)
Year ended 9/30/92....... 7.86 0.49 0.24 0.73 (0.49)
Year ended 9/30/91....... 7.26 0.50 0.62 1.12 (0.50)
Year ended 9/30/90....... 7.65 0.50 (0.31) 0.19 (0.50)
Year ended 9/30/89....... 7.62 0.52 0.08 0.60 (0.52)
Year ended 9/30/88....... 7.20 0.53 0.51 1.04 (0.53)
Year ended 9/30/87....... 8.07 0.55 (0.69) (0.14) (0.55)
Year ended 9/30/86....... 7.30 0.60 0.78 1.38 (0.60)
Year ended 9/30/85....... 6.89 0.63 0.41 1.04 (0.63)

Massachusetts Series--Class D
2/1/94** - 9/30/94 ...... 8.33 0.24 (0.67) (0.43) (0.24)

Michigan Series--Class A
Year ended 9/30/94....... 9.08 0.46 (0.71) (0.25) (0.46)
Year ended 9/30/93....... 8.68 0.47 0.59 1.06 (0.47)
Year ended 9/30/92....... 8.38 0.50 0.35 0.85 (0.50)
Year ended 9/30/91....... 7.89 0.51 0.51 1.02 (0.51)
Year ended 9/30/90....... 8.14 0.52 (0.16) 0.36 (0.52)
Year ended 9/30/89....... 7.94 0.54 0.23 0.77 (0.54)
Year ended 9/30/88....... 7.48 0.54 0.58 1.12 (0.54)
Year ended 9/30/87....... 8.54 0.56 (0.77) (0.21) (0.56)
Year ended 9/30/86....... 7.55 0.62 1.09 1.71 (0.62)
Year ended 9/30/85....... 7.07 0.64 0.48 1.12 (0.64)

Michigan Series--Class D
2/1/94** - 9/30/94....... 9.01 0.25 (0.73) (0.48) (0.25)

</TABLE>

Georgia Series--Class A
Year ended 9/30/94....... $(0.09) $(0.95) $7.48 (5.52)% 0.73%
Year ended 9/30/93....... (0.04) 0.58 8.43 13.96 0.63
Year ended 9/30/92....... (0.03) 0.22 7.85 9.64 0.47
Year ended 9/30/91....... (0.01) 0.45 7.63 13.30 0.59
Year ended 9/30/90....... (0.02) (0.12) 7.18 5.19 0.53
Year ended 9/30/89....... (0.01) 0.21 7.30 10.15 0.64
Year ended 9/30/88....... -- 0.60 7.09 17.51 0.36
6/15/87*-9/30/87......... -- (0.65) 6.49 (7.61) 0.17+

Georgia Series--Class D
2/1/94** - 9/30/94....... -- (0.84) 7.49 (7.57) 1.76+

Louisiana Series--Class A
Year ended 9/30/94....... (0.08) (0.85) 7.94 (3.83) 0.87
Year ended 9/30/93....... (0.10) 0.41 8.79 12.10 0.87
Year ended 9/30/92....... (0.04) 0.20 8.38 9.13 0.80
Year ended 9/30/91....... (0.02) 0.48 8.18 13.49 0.83
Year ended 9/30/90....... (0.06) (0.18) 7.70 5.20 0.81
Year ended 9/30/89....... (0.06) 0.09 7.88 9.04 0.84
Year ended 9/30/88....... (0.06) 0.43 7.79 14.69 0.85
Year ended 9/30/87....... (0.08) (0.57) 7.36 0.62 0.73
10/1/85*-9/30/86......... -- 0.79 7.93 19.47 0.62+

Louisiana Series--Class D
2/1/94** - 9/30/94....... -- (0.79) 7.94 (6.45) 1.78+

Maryland Series--Class A
Year ended 9/30/94....... (0.17) (0.93) 7.71 (4.08) 0.92
Year ended 9/30/93....... (0.10) 0.49 8.64 13.23 0.97
Year ended 9/30/92....... (0.03) 0.21 8.15 9.15 0.86
Year ended 9/30/91....... -- 0.49 7.94 13.26 0.88
Year ended 9/30/90....... -- (0.14) 7.45 4.47 0.87
Year ended 9/30/89....... -- 0.20 7.59 9.43 0.87
Year ended 9/30/88....... (0.04) 0.52 7.39 15.73 0.91
Year ended 9/30/87....... -- (0.72) 6.87 (3.41) 0.87
10/1/85*-9/30/86......... -- 0.45 7.59 14.11 0.59+

Maryland Series--Class D
2/1/94** - 9/30/94 ...... -- (0.74) 7.72 (6.21) 1.80+

Massachusetts Series--Class A
Year ended 9/30/94....... (0.21) (0.88) 7.66 (2.94) 0.85
Year ended 9/30/93....... (0.07) 0.48 8.54 13.18 0.88
Year ended 9/30/92....... (0.04) 0.20 8.06 9.75 0.77
Year ended 9/30/91....... (0.02) 0.60 7.86 15.84 0.83
Year ended 9/30/90....... (0.08) (0.39) 7.26 2.48 0.79
Year ended 9/30/89....... (0.05) 0.03 7.65 8.18 0.79
Year ended 9/30/88....... (0.09) 0.42 7.62 15.15 0.84
Year ended 9/30/87....... (0.18) (0.87) 7.20 (2.16) 0.79
Year ended 9/30/86....... (0.01) 0.77 8.07 19.49 0.78
Year ended 9/30/85....... -- 0.41 7.30 15.32 0.83

Massachusetts Series--Class D
2/1/94** - 9/30/94 ...... -- (0.67) 7.66 (5.34) 1.78+

Michigan Series--Class A
Year ended 9/30/94....... (0.09) (0.80) 8.28 (2.90) 0.84
Year ended 9/30/93....... (0.19) 0.40 9.08 12.97 0.83
Year ended 9/30/92....... (0.05) 0.30 8.68 10.55 0.76
Year ended 9/30/91....... (0.02) 0.49 8.38 13.34 0.80
Year ended 9/30/90....... (0.09) (0.25) 7.89 4.57 0.80
Year ended 9/30/89....... (0.03) 0.20 8.14 9.91 0.81
Year ended 9/30/88....... (0.12) 0.46 7.94 15.98 0.88
Year ended 9/30/87....... (0.29) (1.06) 7.48 (2.87) 0.79
Year ended 9/30/86....... (0.10) 0.99 8.54 23.73 0.82
Year ended 9/30/85....... -- 0.48 7.55 16.19 0.89

Michigan Series--Class D
2/1/94** - 9/30/94....... -- (0.73) 8.28 (5.47) 1.75+

</TABLE>
<TABLE>
<CAPTION>

Georgia Series--Class A
Year ended 9/30/94....... 5.21% 19.34% $61,466 $0.40
Year ended 9/30/93....... 5.34 12.45 64,650 0.40
Year ended 9/30/92....... 5.95 10.24 44,585 0.43
Year ended 9/30/91....... 6.30 6.07 28,317 0.43
Year ended 9/30/90....... 6.53 5.83 19,002 0.44
Year ended 9/30/89....... 6.59 -- 14,452 0.44
Year ended 9/30/88....... 7.15 6.32 9,752 0.43
6/15/87*-9/30/87......... 6.64+ 21.71 6,382 0.07

Georgia Series--Class D
2/1/94** - 9/30/94....... 4.28+ 19.34++ 849 0.21

Louisiana Series--Class A
Year ended 9/30/94....... 5.31 17.16 61,441
Year ended 9/30/93....... 5.40 9.21 67,529
Year ended 9/30/92....... 5.89 25.45 57,931
Year ended 9/30/91....... 6.31 20.85 50,089
Year ended 9/30/90....... 6.62 31.54 43,475
Year ended 9/30/89....... 6.82 12.94 43,908
Year ended 9/30/88....... 7.19 36.01 42,521
Year ended 9/30/87....... 7.02 10.20 49,661
10/1/85*-9/30/86......... 7.44+ 31.18 45,338 0.57

Louisiana Series--Class D
2/1/94** - 9/30/94....... 4.33+ 17.16++ 704

Maryland Series--Class A
Year ended 9/30/94....... 5.17 17.68 57,263
Year ended 9/30/93....... 5.28 14.10 64,472
Year ended 9/30/92....... 5.76 29.57 57,208
Year ended 9/30/91....... 6.09 18.84 54,068
Year ended 9/30/90....... 6.26 16.50 47,283
Year ended 9/30/89....... 6.38 2.19 46,643
Year ended 9/30/88....... 6.63 17.42 45,939
Year ended 9/30/87....... 6.45 21.48 50,580
10/1/85*-9/30/86......... 6.90+ 4.60 46,478 0.53

Maryland Series--Class D
2/1/94** - 9/30/94 ...... 4.26+ 17.68++ 424

Massachusetts Series--Class A
Year ended 9/30/94....... 5.46 12.44 120,149
Year ended 9/30/93....... 5.65 20.66 139,504
Year ended 9/30/92....... 6.27 27.92 128,334
Year ended 9/30/91....... 6.64 14.37 118,022
Year ended 9/30/90....... 6.66 19.26 110,246
Year ended 9/30/89....... 6.81 7.51 122,515
Year ended 9/30/88....... 7.02 21.77 126,150
Year ended 9/30/87....... 6.95 16.14 131,404
Year ended 9/30/86....... 7.50 27.39 131,732
Year ended 9/30/85....... 8.50 12.38 65,563 0.62

Massachusetts Series--Class D
2/1/94** - 9/30/94 ...... 4.52+ 12.44++ 1,099

Michigan Series--Class A
Year ended 9/30/94....... 5.32 10.06 151,095
Year ended 9/30/93....... 5.41 6.33 164,638
Year ended 9/30/92....... 5.93 32.12 144,524
Year ended 9/30/91....... 6.28 22.81 129,004
Year ended 9/30/90....... 6.47 26.36 112,689
Year ended 9/30/89....... 6.67 8.24 111,180
Year ended 9/30/88....... 7.06 34.00 104,904
Year ended 9/30/87....... 6.89 15.40 104,053
Year ended 9/30/86....... 7.41 40.68 99,013
Year ended 9/30/85....... 8.40 37.63 42,987 0.64

Michigan Series--Class D
2/1/94** - 9/30/94....... 4.40+ 10.06++ 671

</TABLE>

Georgia Series--Class A
Year ended 9/30/94....... 0.93% 5.01%
Year ended 9/30/93....... 0.93 5.04
Year ended 9/30/92....... 0.87 5.55
Year ended 9/30/91....... 1.09 5.80
Year ended 9/30/90....... 1.03 6.03
Year ended 9/30/89....... 1.19 6.04
Year ended 9/30/88....... 1.35 6.17
6/15/87*-9/30/87......... 2.87+ 3.94+

Georgia Series--Class D
2/1/94** - 9/30/94....... 1.90+ 4.15+

Louisiana Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
10/1/85*-9/30/86......... 0.71+ 7.35+

Louisiana Series--Class D
2/1/94** - 9/30/94.......

Maryland Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
10/1/85*-9/30/86......... 0.76+ 6.73+

Maryland Series--Class D
2/1/94** - 9/30/94 ......

Massachusetts Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86.......
Year ended 9/30/85.......
0.88 8.45

Massachusetts Series--Class D
2/1/94** - 9/30/94 ......

Michigan Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86.......
Year ended 9/30/85....... 0.96 8.33

Michigan Series--Class D
2/1/94** - 9/30/94.......

</TABLE>

* Commencement of offering of Class A shares.

** Commencement of offering of Class D shares.

+ Annualized.

++ For the year ended 9/30/94.

10 & 11
<PAGE>

Minnesota Series--Class A
Year ended 9/30/94....... $8.28 $0.45 $(0.44) $(0.01) $(0.45)
Year ended 9/30/93....... 7.89 0.47 0.51 0.98 (0.47)
Year ended 9/30/92....... 7.81 0.49 0.09 0.58 (0.49)
Year ended 9/30/91....... 7.49 0.49 0.32 0.81 (0.49)
Year ended 9/30/90....... 7.60 0.49 (0.06) 0.43 (0.49)
Year ended 9/30/89....... 7.52 0.51 0.11 0.62 (0.51)
Year ended 9/30/88....... 7.12 0.51 0.48 0.99 (0.51)
Year ended 9/30/87....... 7.99 0.53 (0.66) (0.13) (0.53)
Year ended 9/30/86....... 7.15 0.58 0.88 1.46 (0.58)
Year ended 9/30/85....... 6.76 0.62 0.39 1.01 (0.62)

Minnesota Series--Class D
2/1/94** - 9/30/94 ...... 8.22 0.25 (0.49) (0.24) (0.25)

Missouri Series--Class A
Year ended 9/30/94....... 8.31 0.40 (0.79) (0.39) (0.40)
Year ended 9/30/93....... 7.80 0.42 0.57 0.99 (0.42)
Year ended 9/30/92....... 7.72 0.44 0.15 0.59 (0.44)
Year ended 9/30/91....... 7.22 0.46 0.50 0.96 (0.46)
Year ended 9/30/90....... 7.28 0.45 (0.06) 0.39 (0.45)
Year ended 9/30/89....... 7.10 0.47 0.18 0.65 (0.47)
Year ended 9/30/88....... 6.57 0.48 0.58 1.06 (0.48)
Year ended 9/30/87....... 7.32 0.47 (0.75) (0.28) (0.47)
7/1/86*-9/30/86.......... 7.14 0.11 0.18 0.29 (0.11)

Missouri Series--Class D
2/1/94** - 9/30/94 ...... 8.20 0.22 (0.79) (0.57) (0.22)

New York Series--Class A
Year ended 9/30/94....... 8.75 0.43 (0.88) (0.45) (0.43)
Year ended 9/30/93....... 8.13 0.45 0.74 1.19 (0.45)
Year ended 9/30/92....... 7.94 0.49 0.26 0.75 (0.49)
Year ended 9/30/91....... 7.40 0.50 0.54 1.04 (0.50)
Year ended 9/30/90....... 7.71 0.51 (0.26) 0.25 (0.51)
Year ended 9/30/89....... 7.57 0.52 0.17 0.69 (0.52)
Year ended 9/30/88....... 7.28 0.52 0.48 1.00 (0.52)
Year ended 9/30/87....... 8.24 0.55 (0.71) (0.16) (0.55)
Year ended 9/30/86....... 7.40 0.60 0.94 1.54 (0.60)
Year ended 9/30/85....... 6.97 0.63 0.43 1.06 (0.63)

New York Series--Class D
2/1/94** - 9/30/94 ...... 8.55 0.23 (0.88) (0.65) (0.23)

Ohio Series--Class A
Year ended 9/30/94....... 8.77 0.44 (0.70) (0.26) (0.44)
Year ended 9/30/93....... 8.28 0.46 0.56 1.02 (0.46)
Year ended 9/30/92....... 8.06 0.49 0.26 0.75 (0.49)
Year ended 9/30/91....... 7.62 0.51 0.45 0.96 (0.51)
Year ended 9/30/90....... 7.80 0.52 (0.08) 0.44 (0.52)
Year ended 9/30/89....... 7.71 0.54 0.11 0.65 (0.54)
Year ended 9/30/88....... 7.38 0.54 0.53 1.07 (0.54)
Year ended 9/30/87....... 8.09 0.57 (0.59) (0.02) (0.57)
Year ended 9/30/86....... 7.27 0.61 0.87 1.48 (0.61)
Year ended 9/30/85....... 6.83 0.63 0.44 1.07 (0.63)

Ohio Series--Class D
2/1/94** - 9/30/94 ...... 8.61 0.24 (0.69) (0.45) (0.24)

Oregon Series--Class A
Year ended 9/30/94....... 8.08 0.40 (0.59) (0.19) (0.40)
Year ended 9/30/93....... 7.60 0.42 0.48 0.90 (0.42)
Year ended 9/30/92....... 7.42 0.42 0.18 0.60 (0.42)
Year ended 9/30/91....... 6.96 0.44 0.46 0.90 (0.44)
Year ended 9/30/90....... 7.05 0.44 (0.09) 0.35 (0.44)
Year ended 9/30/89....... 6.83 0.44 0.22 0.66 (0.44)
Year ended 9/30/88....... 6.21 0.45 0.62 1.07 (0.45)
10/15/86*-9/30/87........ 7.14 0.43 (0.93) (0.50) (0.43)

Oregon Series--Class D
2/1/94**-9/30/94 ........ 8.02 0.22 (0.59) (0.37) (0.22)

</TABLE>

Minnesota Series--Class A
Year ended 9/30/94....... $(0.12) $(0.56) $7.72 0.12% 0.85%
Year ended 9/30/93....... (0.12) 0.39 8.28 13.06 0.90
Year ended 9/30/92....... (0.01) 0.08 7.89 7.71 0.80
Year ended 9/30/91....... -- 0.32 7.81 11.10 0.80
Year ended 9/30/90....... (0.05) (0.11) 7.49 5.79 0.81
Year ended 9/30/89....... (0.03) 0.08 7.60 8.34 0.83
Year ended 9/30/88....... (0.08) 0.40 7.52 14.76 0.87
Year ended 9/30/87....... (0.21) (0.87) 7.12 (1.94) 0.89
Year ended 9/30/86....... (0.04) 0.84 7.99 21.25 0.90
Year ended 9/30/85....... -- 0.39 7.15 15.04 0.89

Minnesota Series--Class D
2/1/94** - 9/30/94 ...... -- (0.49) 7.73 (3.08) 1.74+

Missouri Series--Class A
Year ended 9/30/94....... (0.11) (0.90) 7.41 (4.85) 0.74
Year ended 9/30/93....... (0.06) 0.51 8.31 13.17 0.71
Year ended 9/30/92....... (0.07) 0.08 7.80 7.87 0.83
Year ended 9/30/91....... -- 0.50 7.72 13.61 0.88
Year ended 9/30/90....... -- (0.06) 7.22 5.47 0.84
Year ended 9/30/89....... -- 0.18 7.28 9.33 0.96
Year ended 9/30/88....... (0.05) 0.53 7.10 16.74 0.86
Year ended 9/30/87....... -- (0.75) 6.57 (4.20) 0.82
7/1/86*-9/30/86.......... -- 0.18 7.32 3.87 0.86+

Missouri Series--Class D
2/1/94** - 9/30/94 ...... -- (0.79) 7.41 (7.16) 1.70+

New York Series--Class A
Year ended 9/30/94....... (0.20) (1.08) 7.67 (5.37) 0.87
Year ended 9/30/93....... (0.12) 0.62 8.75 15.26 0.94
Year ended 9/30/92....... (0.07) 0.19 8.13 9.80 0.79
Year ended 9/30/91....... -- 0.54 7.94 14.56 0.80
Year ended 9/30/90....... (0.05) (0.31) 7.40 3.19 0.79
Year ended 9/30/89....... (0.03) 0.14 7.71 9.35 0.80
Year ended 9/30/88....... (0.19) 0.29 7.57 14.74 0.86
Year ended 9/30/87....... (0.25) (0.96) 7.28 (2.42) 0.77
Year ended 9/30/86....... (0.10) 0.84 8.24 21.75 0.79
Year ended 9/30/85....... -- 0.43 7.40 15.42 0.77

New York Series--Class D
2/1/94** - 9/30/94 ...... -- (0.88) 7.67 (7.73) 1.81+

Ohio Series--Class A
Year ended 9/30/94....... (0.17) (0.87) 7.90 (3.08) 0.84
Year ended 9/30/93....... (0.07) 0.49 8.77 12.81 0.85
Year ended 9/30/92....... (0.04) 0.22 8.28 9.68 0.75
Year ended 9/30/91....... (0.01) 0.44 8.06 12.96 0.77
Year ended 9/30/90....... (0.10) (0.18) 7.62 5.70 0.77
Year ended 9/30/89....... (0.02) 0.09 7.80 8.74 0.79
Year ended 9/30/88....... (0.20) 0.33 7.71 15.76 0.83
Year ended 9/30/87....... (0.12) (0.71) 7.38 (0.66) 0.78
Year ended 9/30/86....... (0.05) 0.82 8.09 21.17 0.80
Year ended 9/30/85....... -- 0.44 7.27 15.92 0.85

Ohio Series--Class D
2/1/94** - 9/30/94 ...... -- (0.69) 7.92 (5.36) 1.78+

Oregon Series--Class A
Year ended 9/30/94....... (0.06) (0.65) 7.43 (2.38) 0.78
Year ended 9/30/93....... -- 0.48 8.08 12.21 0.78
Year ended 9/30/92....... -- 0.18 7.60 8.35 0.68
Year ended 9/30/91....... -- 0.46 7.42 13.25 0.71
Year ended 9/30/90....... -- (0.09) 6.96 4.99 0.72
Year ended 9/30/89....... -- 0.22 7.05 9.95 0.64
Year ended 9/30/88....... -- 0.62 6.83 17.89 0.54
10/15/86*-9/30/87........ -- (0.93) 6.21 (7.68) 0.52+

Oregon Series--Class D
2/1/94**-9/30/94 ........ -- (0.59) 7.43 (4.76) 1.72+

</TABLE>

Minnesota Series--Class A
Year ended 9/30/94....... 5.70% 3.30% $134,990
Year ended 9/30/93....... 5.89 5.73 144,600
Year ended 9/30/92....... 6.29 12.08 151,922
Year ended 9/30/91....... 6.28 2.61 182,979
Year ended 9/30/90....... 6.40 12.10 160,930
Year ended 9/30/89....... 6.61 7.55 148,425
Year ended 9/30/88....... 6.95 35.37 132,541
Year ended 9/30/87....... 6.85 16.76 118,093
Year ended 9/30/86....... 7.41 24.98 108,016
Year ended 9/30/85....... 8.49 20.79 53,139 $0.61

Minnesota Series--Class D
2/1/94** - 9/30/94 ...... 4.68+ 3.30++ 1,649

Missouri Series--Class A
Year ended 9/30/94....... 5.18 14.33 52,621 0.39
Year ended 9/30/93....... 5.29 17.03 56,861 0.41
Year ended 9/30/92....... 5.71 18.80 49,459
Year ended 9/30/91....... 6.10 16.30 47,659
Year ended 9/30/90....... 6.20 30.46 50,875
Year ended 9/30/89....... 6.43 32.81 49,162
Year ended 9/30/88....... 6.88 12.32 58,457
Year ended 9/30/87....... 6.51 11.53 59,122 0.47
7/1/86*-9/30/86.......... 5.21+ 0.18 45,107 0.10

Missouri Series--Class D
2/1/94** - 9/30/94 ...... 4.27+ 14.33++ 350 0.22

New York Series--Class A
Year ended 9/30/94....... 5.31 28.19 90,914
Year ended 9/30/93....... 5.37 27.90 104,685
Year ended 9/30/92....... 6.09 42.90 92,681
Year ended 9/30/91....... 6.57 44.57 83,684
Year ended 9/30/90....... 6.65 32.14 77,766
Year ended 9/30/89....... 6.78 47.69 75,471
Year ended 9/30/88....... 6.96 62.42 74,238
Year ended 9/30/87....... 6.90 20.42 72,782
Year ended 9/30/86....... 7.44 35.89 64,562
Year ended 9/30/85....... 8.47 58.56 35,897 0.62

New York Series--Class D
2/1/94** - 9/30/94 ...... 4.39+ 28.19++ 476

Ohio Series--Class A
Year ended 9/30/94....... 5.34 9.37 171,469
Year ended 9/30/93....... 5.44 30.68 190,083
Year ended 9/30/92....... 6.02 7.15 170,427
Year ended 9/30/91....... 6.42 13.95 156,179
Year ended 9/30/90....... 6.63 16.05 136,251
Year ended 9/30/89....... 6.91 12.72 131,900
Year ended 9/30/88....... 7.20 26.71 122,386
Year ended 9/30/87....... 7.05 15.00 119,703
Year ended 9/30/86....... 7.62 17.21 114,023
Year ended 9/30/85....... 8.61 25.95 50,712 0.62

Ohio Series--Class D
2/1/94** - 9/30/94 ...... 4.41+ 9.37++ 324

Oregon Series--Class A
Year ended 9/30/94....... 5.20 9.43 59,884 0.39
Year ended 9/30/93....... 5.35 8.08 62,095 0.41
Year ended 9/30/92....... 5.63 0.21 48,797 0.42
Year ended 9/30/91....... 6.06 7.60 39,350 0.42
Year ended 9/30/90....... 6.17 4.09 32,221 0.42
Year ended 9/30/89....... 6.34 0.19 30,510 0.42
Year ended 9/30/88....... 6.86 3.94 26,609 0.42
10/15/86*-9/30/87........ 6.44+ 20.16 24,434 0.39

Oregon Series--Class D
2/1/94**-9/30/94 ........ 4.32+ 9.43++ 843 0.22

</TABLE>

Minnesota Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86.......
Year ended 9/30/85....... 0.99% 8.40%

Minnesota Series--Class D
2/1/94** - 9/30/94 ......

Missouri Series--Class A
Year ended 9/30/94....... 0.88 5.04
Year ended 9/30/93....... 0.91 5.09
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87....... 0.89 6.43
7/1/86*-9/30/86.......... 1.07+ 5.42+

Missouri Series--Class D
2/1/94** - 9/30/94 ...... 1.80+ 4.17+

New York Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86.......
Year ended 9/30/85....... 0.90 8.33

New York Series--Class D
2/1/94** - 9/30/94 ......

Ohio Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86.......
Year ended 9/30/85....... 0.91 8.56

Ohio Series--Class D
2/1/94** - 9/30/94 ......

Oregon Series--Class A
Year ended 9/30/94....... 0.89 5.09
Year ended 9/30/93....... 0.93 5.20
Year ended 9/30/92....... 0.83 5.48
Year ended 9/30/91....... 0.91 5.86
Year ended 9/30/90....... 0.93 5.96
Year ended 9/30/89....... 0.96 6.03
Year ended 9/30/88....... 1.01 6.39
10/15/86*-9/30/87........ 1.11+ 5.85+

Oregon Series--Class D
2/1/94**-9/30/94 ........ 1.82+ 4.22+

</TABLE>

* Commencement of offering of Class A shares.

** Commencement of offering of Class D shares.

+ Annualized.

++ For the year ended 9/30/94.

12 & 13
<PAGE>

South Carolina Series--Class A
Year ended 9/30/94....... $8.52 $0.41 $(0.79) $(0.38) $(0.41)
Year ended 9/30/93....... 8.00 0.43 0.54 0.97 (0.43)
Year ended 9/30/92....... 7.71 0.45 0.31 0.76 (0.45)
Year ended 9/30/91....... 7.23 0.46 0.52 0.98 (0.46)
Year ended 9/30/90....... 7.37 0.48 (0.14) 0.34 (0.48)
Year ended 9/30/89....... 7.21 0.48 0.17 0.65 (0.48)
Year ended 9/30/88....... 6.67 0.50 0.54 1.04 (0.50)
6/30/87*-9/30/87......... 7.14 0.11 (0.47) (0.36) (0.11)

South Carolina Series--Class D
2/1/94** - 9/30/94 ...... 8.42 0.22 (0.81) (0.59) (0.22)

California High-Yield Series--Class A
Year ended 9/30/94....... 6.73 0.37 (0.34) 0.03 (0.37)
Year ended 9/30/93....... 6.65 0.39 0.28 0.67 (0.39)
Year ended 9/30/92....... 6.50 0.41 0.16 0.57 (0.41)
Year ended 9/30/91....... 6.18 0.42 0.33 0.75 (0.42)
Year ended 9/30/90....... 6.36 0.42 (0.07) 0.35 (0.42)
Year ended 9/30/89....... 6.27 0.44 0.15 0.59 (0.44)
Year ended 9/30/88....... 5.94 0.44 0.39 0.83 (0.44)
Year ended 9/30/87....... 6.73 0.46 (0.53) (0.07) (0.46)
Year ended 9/30/86....... 5.96 0.51 0.89 1.40 (0.51)
11/20/84*- 9/30/85....... 5.73 0.47 0.23 0.70 (0.47)

California High-Yield Series--Class D
2/1/94**-9/30/94......... 6.67 0.21 (0.36) (0.15) (0.21)

California Quality Series--Class A
Year ended 9/30/94....... 7.28 0.35 (0.73) (0.38) (0.35)
Year ended 9/30/93....... 6.85 0.37 0.54 0.91 (0.37)
Year ended 9/30/92....... 6.65 0.40 0.22 0.62 (0.40)
Year ended 9/30/91....... 6.22 0.40 0.46 0.86 (0.40)
Year ended 9/30/90....... 6.47 0.40 (0.13) 0.27 (0.40)
Year ended 9/30/89....... 6.29 0.42 0.19 0.61 (0.42)
Year ended 9/30/88....... 6.01 0.42 0.39 0.81 (0.42)
Year ended 9/30/87....... 6.73 0.45 (0.59) (0.14) (0.45)
Year ended 9/30/86....... 5.98 0.49 0.83 1.32 (0.49)
11/20/84*- 9/30/85....... 5.73 0.44 0.25 0.69 (0.44)

California Quality Series--Class D
2/1/94**-9/30/94 ........ 7.13 0.19 (0.75) (0.56) (0.19)

Florida Series--Class A
Year ended 9/30/94....... 8.20 0.42 (0.74) (0.32) (0.42)
Year ended 9/30/93....... 7.56 0.46 0.65 1.11 (0.46)
Year ended 9/30/92....... 7.37 0.47 0.19 0.66 (0.47)
Year ended 9/30/91....... 6.90 0.43 0.47 0.90 (0.43)
Year ended 9/30/90....... 6.99 0.45 (0.09) 0.36 (0.45)
Year ended 9/30/89....... 6.71 0.46 0.28 0.74 (0.46)
Year ended 9/30/88....... 6.02 0.47 0.69 1.16 (0.47)
11/17/86*-9/30/87........ 7.14 0.40 (1.12) (0.72) (0.40)

Florida Series--Class D
2/1/94**-9/30/94 ........ 8.10 0.24 (0.76) (0.52) (0.24)

North Carolina Series--Class A
Year ended 9/30/94....... 8.22 0.41 (0.87) (0.46) (0.41)
Year ended 9/30/93....... 7.61 0.43 0.63 1.06 (0.43)
Year ended 9/30/92....... 7.39 0.44 0.22 0.66 (0.44)
Year ended 9/30/91....... 7.04 0.45 0.35 0.80 (0.45)
8/27/90*-9/30/90......... 7.14 0.03 (0.10) (0.07) (0.03)

North Carolina Series--Class D
2/1/94**-9/30/94 ........ 8.17 0.23 (0.88) (0.65) (0.23)

</TABLE>

South Carolina Series--Class A
Year ended 9/30/94....... $(0.12) $(0.91) $7.61 (4.61)% 0.83%
Year ended 9/30/93....... (0.02) 0.52 8.52 12.52 0.85
Year ended 9/30/92....... (0.02) 0.29 8.00 10.08 0.81
Year ended 9/30/91....... (0.04) 0.48 7.71 13.95 0.81
Year ended 9/30/90....... -- (0.14) 7.23 4.48 0.73
Year ended 9/30/89....... (0.01) 0.16 7.37 9.41 0.68
Year ended 9/30/88....... -- 0.54 7.21 16.18 0.33
6/30/87*-9/30/87......... -- (0.47) 6.67 (5.37) 0.02+

South Carolina Series--Class D
2/1/94** - 9/30/94 ...... -- (0.81) 7.61 (7.14) 1.74+

California High-Yield Series--Class A
Year ended 9/30/94....... (0.09) (0.43) 6.30 0.41 0.85
Year ended 9/30/93....... (0.20) 0.08 6.73 10.66 0.88
Year ended 9/30/92....... (0.01) 0.15 6.65 9.00 0.82
Year ended 9/30/91....... (0.01) 0.32 6.50 12.53 0.83
Year ended 9/30/90....... (0.11) (0.18) 6.18 5.57 0.89
Year ended 9/30/89....... (0.06) 0.09 6.36 9.61 0.89
Year ended 9/30/88....... (0.06) 0.33 6.27 14.72 0.91
Year ended 9/30/87....... (0.26) (0.79) 5.94 (1.46) 0.83
Year ended 9/30/86....... (0.12) 0.77 6.73 24.79 0.66
11/20/84*- 9/30/85....... -- 0.23 5.96 12.22 0.41+

California High-Yield Series--Class D
2/1/94**-9/30/94......... -- (0.36) 6.31 (2.47) 1.74+

California Quality Series--Class A
Year ended 9/30/94....... (0.16) (0.89) 6.39 (5.46) 0.81
Year ended 9/30/93....... (0.11) 0.43 7.28 13.92 0.82
Year ended 9/30/92....... (0.02) 0.20 6.85 9.56 0.78
Year ended 9/30/91....... (0.03) 0.43 6.65 14.35 0.78
Year ended 9/30/90....... (0.12) (0.25) 6.22 4.22 0.83
Year ended 9/30/89....... (0.01) 0.18 6.47 9.86 0.85
Year ended 9/30/88....... (0.11) 0.28 6.29 14.37 0.86
Year ended 9/30/87....... (0.13) (0.72) 6.01 (2.59) 0.77
Year ended 9/30/86....... (0.08) 0.75 6.73 23.06 0.67
11/20/84*- 9/30/85....... -- 0.25 5.98 11.95 0.48+

California Quality Series--Class D
2/1/94**-9/30/94 ........ -- (0.75) 6.38 (8.01) 1.77+

Florida Series--Class A
Year ended 9/30/94....... (0.12) (0.86) 7.34 (3.99) 0.42
Year ended 9/30/93....... (0.01) 0.64 8.20 15.21 0.23
Year ended 9/30/92....... -- 0.19 7.56 9.24 0.17
Year ended 9/30/91....... -- 0.47 7.37 13.41 0.90
Year ended 9/30/90....... -- (0.09) 6.90 5.23 0.65
Year ended 9/30/89....... -- 0.28 6.99 11.28 0.69
Year ended 9/30/88....... -- 0.69 6.71 19.82 0.67
11/17/86*-9/30/87........ -- (1.12) 6.02 (10.74) 0.50+

Florida Series--Class D
2/1/94**-9/30/94 ........ -- (0.76) 7.34 (6.64) 1.29+

North Carolina Series--Class A
Year ended 9/30/94....... (0.05) (0.92) 7.30 (5.80) 0.44
Year ended 9/30/93....... (0.02) 0.61 8.22 14.46 0.23
Year ended 9/30/92....... -- 0.22 7.61 9.23 0.14
Year ended 9/30/91....... -- 0.35 7.39 11.97 0.07
8/27/90*-9/30/90......... -- (0.10) 7.04 (1.40) 0.94+

North Carolina Series--Class D
2/1/94**-9/30/94 ........ -- (0.88) 7.29 (8.15) 1.27+

</TABLE>

South Carolina Series--Class A
Year ended 9/30/94....... 5.12% 1.81% $115,133
Year ended 9/30/93....... 5.19 17.69 120,589
Year ended 9/30/92....... 5.71 3.37 82,882
Year ended 9/30/91....... 6.14 9.05 63,863 $0.45
Year ended 9/30/90....... 6.47 15.26 49,234 0.47
Year ended 9/30/89....... 6.48 0.03 46,487 0.46
Year ended 9/30/88....... 7.03 12.36 26,385 0.45
6/30/87*-9/30/87......... 6.34+ -- 12,033 0.08

South Carolina Series--Class D
2/1/94** - 9/30/94 ...... 4.29+ 1.81++ 1,478

California High-Yield Series--Class A
Year ended 9/30/94....... 5.74 8.36 48,007
Year ended 9/30/93....... 5.94 7.70 51,218
Year ended 9/30/92....... 6.20 45.50 49,448
Year ended 9/30/91....... 6.67 5.13 49,172
Year ended 9/30/90....... 6.68 17.66 49,312
Year ended 9/30/89....... 6.85 14.70 51,079
Year ended 9/30/88....... 7.17 20.79 53,037
Year ended 9/30/87....... 7.07 16.89 56,598
Year ended 9/30/86....... 7.88 54.08 51,046 0.50
11/20/84*- 9/30/85....... 7.67+ 88.69 29,649 0.44

California High-Yield Series--Class D
2/1/94**-9/30/94......... 4.73+ 8.36++ 650

California Quality Series--Class A
Year ended 9/30/94....... 5.20 22.16 99,020
Year ended 9/30/93....... 5.30 15.67 111,732
Year ended 9/30/92....... 5.86 34.25 93,557
Year ended 9/30/91....... 6.19 20.11 77,884
Year ended 9/30/90....... 6.31 28.61 61,854
Year ended 9/30/89....... 6.53 57.85 59,258
Year ended 9/30/88....... 6.74 46.47 58,608
Year ended 9/30/87....... 6.76 15.17 58,872
Year ended 9/30/86....... 7.36 28.66 53,388 0.48
11/20/84*- 9/30/85....... 7.10+ 57.28 24,957 0.41

California Quality Series--Class D
2/1/94**-9/30/94 ........ 4.39+ 22.16++ 812

Florida Series--Class A
Year ended 9/30/94....... 5.49 6.17 49,897 0.38
Year ended 9/30/93....... 5.82 16.42 52,855 0.40
Year ended 9/30/92....... 6.32 12.62 37,957 0.41
Year ended 9/30/91....... 6.00 -- 28,173 0.42
Year ended 9/30/90....... 6.44 13.08 24,025 0.44
Year ended 9/30/89....... 6.61 2.41 23,062 0.44
Year ended 9/30/88....... 7.18 1.07 20,457 0.45
11/17/86*-9/30/87........ 6.85+ 28.52 22,228 0.37

Florida Series--Class D
2/1/94**-9/30/94 ........ 4.61+ 6.17++ 244 0.21

North Carolina Series--Class A
Year ended 9/30/94....... 5.29 15.61 38,920 0.35
Year ended 9/30/93....... 5.44 3.13 38,828 0.35
Year ended 9/30/92....... 5.83 12.51 21,836 0.34
Year ended 9/30/91....... 6.10 -- 9,255 0.22
8/27/90*-9/30/90......... 4.48+ -- 1,377 0.01

North Carolina Series--Class D
2/1/94**-9/30/94 ........ 4.49+ 15.61++ 1,282 0.20

</TABLE>

South Carolina Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91....... 0.91% 6.04%
Year ended 9/30/90....... 0.84 6.35
Year ended 9/30/89....... 0.88 6.28
Year ended 9/30/88....... 1.00 6.36
6/30/87*-9/30/87......... 2.08+ 4.28+

South Carolina Series--Class D
2/1/94** - 9/30/94 ......

California High-Yield Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86....... 0.80 7.73
11/20/84*- 9/30/85....... 0.91+ 7.17+

California High-Yield Series--Class D
2/1/94**-9/30/94.........

California Quality Series--Class A
Year ended 9/30/94.......
Year ended 9/30/93.......
Year ended 9/30/92.......
Year ended 9/30/91.......
Year ended 9/30/90.......
Year ended 9/30/89.......
Year ended 9/30/88.......
Year ended 9/30/87.......
Year ended 9/30/86....... 0.80 7.23
11/20/84*- 9/30/85....... 0.98+ 6.61+

California Quality Series--Class D
2/1/94**-9/30/94 ........

Florida Series--Class A
Year ended 9/30/94....... 1.00 4.91
Year ended 9/30/93....... 1.03 5.01
Year ended 9/30/92....... 1.02 5.47
Year ended 9/30/91....... 1.15 5.75
Year ended 9/30/90....... 0.90 6.20
Year ended 9/30/89....... 0.94 6.36
Year ended 9/30/88....... 0.91 6.93
11/17/86*-9/30/87........ 1.01+ 6.35+

Florida Series--Class D
2/1/94**-9/30/94 ........ 1.84+ 4.06+

North Carolina Series--Class A
Year ended 9/30/94....... 1.13 4.60
Year ended 9/30/93....... 1.22 4.45
Year ended 9/30/92....... 1.40 4.57
Year ended 9/30/91....... 3.22 2.96
8/27/90*-9/30/90......... 4.48+ 1.04+

North Carolina Series--Class D
2/1/94**-9/30/94 ........ 1.95+ 3.82+

</TABLE>

* Commencement of offering of Class A shares.

** Commencement of offering of Class D shares.

+ Annualized.

++ For the year ended 9/30/94.

14 & 15
<PAGE>
ALTERNATIVE DISTRIBUTION SYSTEM

Each Series offers two classes of shares. Class A shares are sold to
investors who have concluded that they would prefer to pay an initial sales load
and have the benefit of lower continuing charges. Class D shares are sold to
investors choosing to pay no initial sales load, a higher distribution fee and,
with respect to redemptions within one year of purchase, a CDSL. The Alternative
Distribution System allows investors to choose the method of purchasing shares
that is most beneficial in light of the amount of the purchase, the length of
time the shares are expected to be held and other relevant circumstances.
Investors should determine whether under their particular circumstances it is
more advantageous to incur an initial sales load and be subject to lower ongoing
charges, as discussed below, or to have the entire initial purchase price
invested in a Series with the investment thereafter being subject to higher
ongoing charges and, for a one-year period, a CDSL.

Investors who qualify for reduced sales loads, as described under "Purchase
of Shares" below, might choose to purchase Class A shares because Class A shares
would be subject to lower ongoing fees. The amount invested in a Series,
however, is reduced by the initial sales load deducted at the time of purchase.

Investors who do not qualify for reduced initial sales loads but expect to
maintain their investment for an extended period of time might also purchase
Class A shares because over time the accumulated continuing distribution fee of
Class D shares may exceed the initial sales load and lower distribution fee of
Class A shares. This consideration must be weighed against the fact that the
amount invested in a Series will be reduced by the initial sales load deducted
at the time of purchase. Furthermore, the distribution fees will be offset to
the extent any return is realized on the additional funds initially invested
under the Class D alternative.

On the other hand, some investors might determine to have all of their funds
invested initially by purchasing Class D shares although remaining subject to a
higher continuing distribution fee and, for a one-year period, a CDSL as
described below. For example, an investor who does not qualify for reduced sales
loads would have to hold Class A shares for more than 6.33 years for the Class D
distribution fee to exceed the initial sales load plus the distribution fee on
Class A shares. This example does not take into account the time value of money
which further reduces the impact of the Class D shares' 1% distribution fee,
fluctuations in net asset value or the effect of the return on the investment
over this period of time.

The two classes of shares of a Series represent interests in the same
portfolio of investments, have the same rights and are generally identical in
all respects except that each class bears its separate distribution and certain
class expenses and has exclusive voting rights with respect to any matter to
which a separate vote of any class is required by the Investment Company Act of
1940, as amended (the "1940 Act"), or applicable state law. The net income
attributable to each class and dividends payable on the shares of each class
will be reduced by the amount of distribution fee of each class. Class D shares
bear a higher distribution fee which will cause the Class D shares to pay lower
dividends than the Class A shares. The two classes also have separate exchange
privileges.

Directors or Trustees of each Fund believe that no conflict of interest
currently exists between the Class A and Class D shares. On an ongoing basis,
they, in the exercise of their fiduciary duties under the 1940 Act and
applicable state law, will seek to ensure that no such conflict arises. For this
purpose, they will monitor for the existence of any material conflict among the
classes and will take such action as is reasonably necessary to eliminate any
such conflicts that may develop.

Differences Between Classes. The primary distinctions between Class A and
Class D shares are their sales load structures and ongoing expenses as set forth
below. Each class has advantages and disadvantages for different investors, and
investors should choose the class that best suits their circumstances and their
objectives.

16
<PAGE>

Annual 12b-1 Fees
(as a % of average
Sales Load daily net assets) Other Information
---------- ------------------ -----------------

Class A Maximum initial Service fee of Initial sales load
sales load of 4.75% .25%. waived or reduced
of the public for certain
offering price. purchases.

Class D None Service fee of CDSL of 1% on
.25%; Distribution redemptions within
fee of .75%. one year of
purchase.

INVESTMENT OBJECTIVE AND POLICIES

Tax-Exempt Securities

As used in this Prospectus, tax-exempt securities refers to short-term notes,
commercial paper and intermediate and long-term bonds issued by or on behalf of
states, territories and possessions of the United States and the District of
Columbia, and their political subdivisions (such as counties, cities, boroughs,
townships, school districts and authorities), agencies, and instrumentalities,
the interest on which is, in the opinion of counsel to the issuers, exempt from
regular federal income taxes and, in certain instances, applicable state or
local income taxes. Such securities are traded primarily in the over-the-counter
market.

Tax-exempt bonds are issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as
airports, bridges, highways, housing, hospitals, mass transportation, schools,
streets, water and sewer works, and gas and electric utilities. Tax-exempt bonds
also may be issued in connection with the refunding of outstanding obligations,
obtaining funds to lend to other public institutions and for general operating
expenses.

The two principal classifications of tax-exempt bonds are "general obligation
bonds" and "revenue bonds." General obligation bonds are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal and
interest. Revenue bonds are payable from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source, but not from the general
taxing power. In addition, certain types of "industrial development bonds"
issued by or on behalf of public authorities to obtain funds for
privately-operated facilities are eligible for purchase, provided that the
interest paid thereon qualifies as exempt from federal income taxes and, in
certain instances, applicable state and/or local taxes. Tax-exempt industrial
development bonds do not generally carry the pledge of the credit of the issuing
municipality. Interest earned from certain tax-exempt securities (including
certain industrial development bonds) that are private activity bonds, as
defined in the Internal Revenue Code of 1986, is treated as a preference item
for purposes of the alternative minimum tax. In the event the Series invest in
tax-exempt securities whose interest is subject to the alternative minimum tax,
no more than 20% of each Series' assets would be invested in such securities,
together with securities the interest on which is subject to federal, state of
local income tax.

Tax-exempt notes generally are issued to provide for short-term capital needs
and generally have maturities of 5 years or less. They include such securities
as Tax Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes
and Construction Loan Notes. Tax-exempt commercial paper are short-term
obligations generally having a maturity of less than nine months.

It should be noted that tax-exempt securities may be adversely affected by
local political and economic conditions and developments within a particular
state. For example, adverse conditions in an industry that is significant to the
state could have a correspondingly adverse effect on specific issuers within the
state or on anticipated revenue of the issuing state; conversely, an improving
economic outlook for a significant industry may have a positive effect on such
issuers or revenue. The value of tax-exempt securities is dependent on a variety
of factors, including general conditions in the money markets or the municipal
bond markets, political and economic factors nationally or within a state, the
size of the particular offering, the supply of tax-exempt bonds, the maturity of
the obligation, the credit quality and rating of the issue and the assistance

17
<PAGE>

provided to the bond issuing authority by the applicable state. Under normal
market conditions, if general market interest rates are increasing, the prices
of bonds will decrease. In a market of decreasing interest rates, the opposite
will generally be true. In either case, the longer the maturity, the greater the
effect. A more detailed description of the tax-exempt securities in which each
Series may invest and special factors relating to them is set forth in the
Series' Statement of Additional Information.

Seligman New Jersey Tax-Exempt Fund, Inc.

The New Jersey Fund is a non-diversified, open-end management investment
company, as defined in the 1940 Act, or mutual fund, incorporated in Maryland on
March 13, 1987.

The New Jersey Fund seeks to maximize income exempt from federal income tax
and New Jersey personal income tax to the extent consistent with preservation of
capital and with consideration given to opportunities for capital gain by
investing in New Jersey tax-exempt securities that are rated investment grade on
the date of investment. The New Jersey Fund also may invest in New Jersey
tax-exempt securities that, while not rated as investment grade, are not rated
lower than B by S&P or Moody's, or if not rated, are believed, based upon credit
analysis by the Manager, to have at least comparable credit to B rated
securities. There can be no assurance that the Fund will be able to meet its
investment objective.

The Fund will attempt to invest 100% and as a matter of fundamental policy
will invest at least 80% of the value of its net assets in securities the
interest on which is exempt from federal income tax and New Jersey personal
income tax. However, in abnormal market conditions if, in the judgment of the
Manager, tax-exempt securities satisfying the Fund's objective may not be
purchased or for other temporary defensive purposes, the Fund may make
investments in securities the interest on which is exempt only from federal
income tax, such as securities issued by states other than New Jersey, or is
exempt only from New Jersey personal income tax, such as securities issued by
the U.S. Government (such as Treasury bills, notes and bonds), its agencies,
instrumentalities or authorities. Moreover, under such conditions, the Fund may
also make temporary investments in fixed-income securities the interest on which
is not exempt from either federal income tax or New Jersey personal income tax.
Such investments will be substantially in highly-rated corporate debt securities
(rated AA--, or better, by S&P or Aa3, or better, by Moody's) prime commercial
paper (rated A-1+/A-1 by S&P or P-1 by Moody's) and certificates of deposit of
"Acceptable Banking Institutions." Acceptable Banking Institutions are defined
as the 100 largest (based on assets) banks that are subject to regulatory
supervision by the U.S. Government or state governments and the 50 largest
(based on assets) foreign banks with branches or agencies in the United States.
Investments in certificates of deposit of foreign banks and foreign branches of
U.S. banks may involve certain risks, including different regulation, use of
different accounting procedures, political or other economic developments,
exchange controls, or possible seizure or nationalization of foreign deposits.
The Fund is permitted to purchase project notes and standby commitments;
however, the Fund has no present intention of investing in such securities.

Seligman Pennsylvania Tax-Exempt Fund Series

The Pennsylvania Fund is a non-diversified, open-end management investment
company organized as an unincorporated trust under the laws of the Commonwealth
of Pennsylvania by a Declaration of Trust dated May 13, 1986.

The Pennsylvania Fund seeks high tax-exempt income consistent with
preservation of capital by investing in Pennsylvania tax-exempt securities that
are rated investment grade on the date of investment. The Pennsylvania Fund also
may invest in unrated Pennsylvania tax-exempt securities if, based upon credit
analysis by the Manager, it is believed that such securities are of comparable
quality to investment grade securities. The securities which the Pennsylvania
Fund will hold ordinarily will have maturities in excess of one year. There can
be no assurance that the Fund will be able to meet its investment objective.

18
<PAGE>

Although the underlying value and quality of particular securities will be
considered in selecting investments for the Fund, capital appreciation will not
be a factor. However, the Fund may sell securities held in its portfolio and, as
a result, realize capital gain or loss, in order to eliminate unsafe investments
and investments not consistent with the preservation of the capital or tax
status of the Fund; honor redemption orders; meet anticipated redemption
requirements and negate gains from discount purchases; reinvest the earnings
from portfolio securities in like securities; or defray normal administration
expenses.

The Fund is authorized to purchase standby commitments; however, the Fund has
no present intention of investing in such securities.

Seligman Tax-Exempt Fund Series, Inc.

The Tax-Exempt Fund is a non-diversified, open-end management investment
company, as defined in the 1940 Act, incorporated in Maryland on August 8, 1983.
The Tax-Exempt Fund consists of a National Series and twelve state Series, as
described below. The Tax-Exempt Fund State Series offer investments in the
following states:

Colorado Minnesota
Georgia Missouri
Louisiana New York
Maryland Ohio
Massachusetts Oregon
Michigan South Carolina

Tax-Exempt Fund National Series seeks to maximize income exempt from federal
income taxes to the extent consistent with preservation of capital and with
consideration given to opportunities for capital gain. Under normal market
conditions, the National Series attempts to invest 100%, and as a matter of
fundamental policy will invest at least 80%, of the value of its net assets in
securities of states, territories and possessions of the United States and the
District of Columbia, and their political subdivisions, agencies and
instrumentalities, the interest on which is exempt from federal income taxes.
There can be no assurance that the Series will be able to meet its investment
objective.

Tax-Exempt Fund State Series each seek to maximize income exempt from federal
income taxes and from the personal income taxes of its designated state to the
extent consistent with preservation of capital and with consideration given to
opportunities for capital gain. Each State Series attempts to invest 100%, and
as a matter of fundamental policy invests at least 80%, of the value of its net
assets in securities the interest on which is exempt from federal income taxes
and from the personal income taxes of the designated state. Each State Series
may also invest in tax-exempt securities of issuers outside its designated state
if such securities bear interest that is exempt from federal income taxes and
personal income taxes of the state. If, in abnormal market conditions, in the
judgment of the Manager, tax-exempt securities satisfying the investment
objectives of any of the State Series are not available or for other defensive
purposes, such State Series may temporarily invest up to 20% of the value of its
net assets in instruments the interest on which is exempt from federal income
taxes, but not State personal income taxes. Such securities would

19
<PAGE>

include those set forth under Tax-Exempt Securities above, that would otherwise
meet the Series' objectives. There can be no assurance that a Series will be
able to meet its investment objective.

Each State Series and the National Series are expected to invest principally,
without percentage limitations, in tax-exempt securities that are rated
investment grade on the date of investment. Each Series also may invest in
unrated tax-exempt securities if, based upon credit analysis by the Manager, it
is believed that such securities are of comparable quality to investment grade
securities.

In unusual circumstances, the Tax-Exempt Fund may invest up to 20% of the
value of its net assets on a temporary basis in fixed-income securities, the
interest on which is subject to federal, state or local income tax, pending the
investment or reinvestment in tax-exempt securities of proceeds of sales of
shares or sales of portfolio securities or in order to avoid the necessity of
liquidating portfolio investments to meet redemptions of shares by investors or
where market conditions due to rising interest rates or other adverse factors
warrant temporary investing for defensive purposes. Investments in taxable
securities will be substantially in securities issued or guaranteed by the
United States Government (such as bills, notes and bonds), its agencies,
instrumentalities or authorities, highly-rated corporate debt securities (rated
AA-, or better, by S&P or Aa3, or better, by Moody's); prime commercial paper
(rated A-1+/A-1 by S&P or P-1 by Moody's) and certificates of deposit of
Acceptable Banking Institutions, as defined above. Investments in certificates
of deposit of foreign banks and foreign branches of U.S. banks may involve
certain risks, as described above.

Seligman Tax-Exempt Series Trust

The Tax-Exempt Trust is a non-diversified open-end management investment
company, organized as an unincorporated business trust under the laws of
Massachusetts on July 27, 1984. The Tax-Exempt Trust consists of Seligman North
Carolina Tax-Exempt Series, Seligman Florida Tax-Exempt Series, Seligman
California Tax-Exempt Quality Series and Seligman California Tax-Exempt
High-Yield Series.

Seligman North Carolina Tax-Exempt Series (the "North Carolina Series") and
Seligman Florida Tax-Exempt Series (the "Florida Series") each seek high income
exempt from federal income taxes (and with respect to the North Carolina Series,
North Carolina personal income taxes) consistent with preservation of capital
and with consideration given to capital gain by investing in North Carolina or
Florida tax exempt securities, as applicable, and investment grade commercial
paper rated within the two highest rating categories, on the date of investment.
Each Series also may invest in tax-exempt securities if, based upon credit
analysis by the Manager and under the supervision of the Trustees, it is
believed that such securities are of comparable quality to investment grade
securities.

Each series will attempt to invest 100% and as a matter of fundamental policy
will invest at least 80% of the value of its net assets in North Carolina or
Florida tax-exempt securities, as applicable, the interest on which is exempt
from federal taxes and, if applicable, North Carolina personal taxes. However,
in abnormal market conditions if, in the judgment of the Manager, North Carolina
or Florida tax-exempt securities satisfying the Series objective may not be
purchased, the Tax-Exempt Trust may make temporary investments in securities
issued by states other than North Carolina or Florida. Moreover, under such
conditions and for defensive purposes, a Series may make temporary investments
in high-quality securities, the interest on which is not exempt from federal
income tax or, if applicable, North Carolina personal taxes. Investments in
taxable securities will be substantially in securities issued or guaranteed by
the United States Government (such as bills, notes and bonds), its agencies,
instrumentalities or authorities, highly-rated corporate debt securities (rated
AA--, or better, by S&P or Aa3, or better, by Moody's); prime commercial paper
(rated A-1+/A-1 by S&P or P-1 by Moody's) and certificates of deposit of
Acceptable Banking Institutions, as defined above. Investments in certificates
of deposit of foreign banks and foreign branches of U.S. banks may involve
certain risks, as described above.

Each Series is permitted to purchase project notes and standby commitments;
however, neither Series has any present intention of investing in such
securities.

20
<PAGE>

Seligman California Tax-Exempt Quality Series (the "California Quality
Series") seeks high income exempt from federal income taxes and from the
personal income taxes of California income consistent with preservation of
capital and with consideration given to capital gain by investing in California
tax-exempt securities that on the date of investment are within the three
highest ratings of Moody's (Aaa, Aa, A for bonds; MIG1, MIG2, MIG3, for notes;
P-1 for commercial paper) or S&P (AAA, AA, A for bonds; SP-1, SP-2 for notes;
A-1+, A-1/A-2 for commercial paper). The Series also may invest in unrated
California tax-exempt securities if, based upon credit analysis by the Manager,
it is believed that such securities are of comparable quality to the rated
securities in which the series may invest. The securities held by the Series
ordinarily will have maturities in excess of one year. There can be no assurance
that the Series will be able to meet its investment objective.

Seligman California Tax-Exempt High-Yield Series (the "California High-Yield
Series") seeks the maximum income exempt from federal income taxes and from the
personal income taxes of California consistent with preservation of capital and
with consideration given to capital gain by investing in California tax-exempt
securities that on the date of investment have the following characteristics:

o Maturities ordinarily in excess of one year

o Rated within the medium to lower rating categories by Moody's (Baa or
lower for bonds; MIG3 or lower for notes; P-2 or lower for commercial
paper) or S&P (BBB or lower for bonds; A-2 or lower for commercial paper)

There can be no assurance that the Series will be able to meet its investment
objective.

The Series may invest in unrated California tax-exempt securities if, based
upon credit analysis by the Manager, it is believed that such securities are of
comparable quality to securities with a medium or low credit rating.

The securities in which this Series invests generally involve greater
volatility of price and risk of loss of principal and income than securities in
higher rating categories. Shares of this Series are appropriate for you only if
you can bear the risk inherent in seeking the highest tax-exempt yields.

During the fiscal year ended September 30, 1994 the weighted average ratings
of the California tax-exempt long-term securities held by the California
High-Yield Series were as follows:
Percentage of Total
S&P/Moody's Ratings Investments
------------------- -------------------
AAA/Aaa ................................................... 5%
AA/Aa ..................................................... 7%
A/A ....................................................... 37%
BBB/Baa ................................................... 11%
BB/Ba ..................................................... --
B/B ....................................................... --
CCC/Caa ................................................... --
Unrated ................................................... 36%

California tax-exempt securities in the fourth rating category of Moody's and
S&P, although commonly referred to as investment grade, may have some
speculative characteristics that may affect the issuer's ability to pay interest
and repay principal. California tax-exempt securities rated below the fourth
category are subject to greater risk of loss of principal and interest than
higher-rated securities, as they are predominantly speculative with respect to
the issuer's ability to pay interest and repay principal. California tax-exempt
securities rated below BBB by S&P or Baa by Moody's are also more susceptible to
price volatility due to general economic conditions and changes in interest
rates. Since tax-exempt securities are purchased from and sold to dealers,
prices at which these securities are sold will be affected by the degree of
interest of dealers to bid for them. In certain markets, dealers may be
unwilling to make bids for the securities of certain issuers that the seller
considers reasonable. Furthermore, because the net asset value of the Series'
shares reflects the degree of willingness of dealers to bid for California
tax-exempt securities, the price of the Series' shares may be subject to greater
fluctuation.

21
<PAGE>

Moody's and S&P's ratings are generally accepted measures of credit risk.
They are, however, subject to certain limitations. The rating of an issuer is
based heavily on past developments and does not necessarily reflect probable
future conditions. Ratings also are not updated continuously. For a detailed
description of the ratings, see Appendix A to the Series' Statement of
Additional Information.

The Manager attempts to minimize the risks to the Series inherent in the
investment in lower-rated California tax-exempt securities through analysis of
the particular issuer and security, trends in interest rates and local and
general economic conditions, diversification and when appropriate by investing a
substantial portion of the Series' assets in California tax-exempt securities
rated in the fourth rating category or higher.

Each of the California Quality and California High-Yield Series will attempt
to invest 100% and as a matter of fundamental policy will invest at least 80% of
the value of its net assets in securities the interest on which is exempt from
federal and California personal income taxes. However, in abnormal market
conditions if, in the judgment of the Trust's Manager, tax-exempt securities
satisfying the Series' objectives may not be purchased, a Series may make
temporary investments in securities the interest on which is exempt only from
federal income tax, such as securities issued by states other than California.
Moreover, under such conditions, a Series may make temporary investments in
high-quality securities the interest on which is not exempt from either federal
or California personal income taxes. Investments in taxable securities will be
substantially in securities issued or guaranteed by the United States Government
(such as bills, notes and bonds), its agencies, instrumentalities or
authorities, highly-rated corporate debt securities (rated AA--, or better, by
S&P or Aa3, or better, by Moody's); prime commercial paper (rated A-1+/A-1 by
S&P or P-1 by Moody's) and certificates of deposit of Acceptable Banking
Institutions. Investments in certificates of deposit of foreign banks and
foreign branches of U.S. banks may involve certain risks, as described above.

Furthermore, when economic or market conditions warrant, the California
High-Yield Series may assume a temporary defensive position and invest up to 25%
of the value of its net assets in California tax-exempt securities rated within
the three highest rating categories of Moody's and/or S&P. The securities which
the Series will hold under this circumstance may have maturities of less than
one year.

Each of the California Quality Series and the California High-Yield Series
may enter into stand-by commitments. Under a stand-by commitment, a Series
obligates a dealer to repurchase at the Series' option specified securities at a
specified price. The exercise of a stand-by commitment is subject to the ability
of the dealer to make payment on demand. A Series would acquire stand-by
commitments solely to facilitate portfolio liquidity and not for trading
purposes. Prior to investing in stand-by commitments the Tax-Exempt Trust, if it
deems necessary based upon the advice of counsel, will apply to the Securities
and Exchange Commission for an exemptive order relating to such commitments and
the valuation thereof. There can be no assurance that the Securities and
Exchange Commission will provide such authorization.

The price which a Series would pay for tax-exempt securities with stand-by
commitments generally would be higher than the price which otherwise would be
paid for the tax-exempt securities alone. A Series will only purchase
obligations with stand-by commitments from sellers the Manager deems
creditworthy.

Stand-by commitments with respect to portfolio securities of a Series with
maturities of less than 60 days which are separate from the underlying portfolio
securities are not assigned a value. The cost of any such stand-by commitment is
carried as an unrealized loss from the time of purchase until it is exercised or
expires. Stand-by commitments with respect to portfolio securities of a Series
with maturities of 60 days or more which are separate from the underlying
portfolio securities and the underlying portfolio securities are valued at fair
value as determined in accordance with procedures established by the Board of
Trustees. The Board of Trustees would, in connection with the determination of
the value of such a stand-by commitment, consider among other factors the
creditworthiness of the writer of the stand-by commitment, the duration of the

22
<PAGE>

stand-by commitment, the dates on which or the periods during which the stand-by
commitment may be exercised and the applicable rules and regulations of the
Securities and Exchange Commission.

GENERAL

Investment grade bonds and notes are within the four highest credit rating
categories, and investment grade commercial paper is within the two highest
credit rating categories, of Moody's (Aaa, Aa, A, Baa for bonds; MIG 1, MIG 2,
MIG 3, MIG 4 for notes; P-1--P-2 for commercial paper) or S&P (AAA, AA, A, BBB
for bonds; SP-1--SP-2 for notes; A-1+, A-1/A-2 for commercial paper). Although
bonds and notes rated in the fourth credit rating category are commonly referred
to as investment grade they may have speculative characteristics. Such
characteristics may under certain circumstances lead to a greater degree of
market fluctuations in the value of such securities than do higher rated
tax-exempt securities of similar maturities. A detailed discussion of such
characteristics and circumstances and their effect upon each Series appears in
the Statements of Additional Information under the heading "Investment
Objectives, Policies And Risks." A description of the credit ratings is
contained in Appendix A to the Statements of Additional Information.

In addition, each Series may invest up to 15% of the value of its net assets
in illiquid securities including "restricted securities", i.e., securities that
must be registered under the Securities Act of 1933 before they may be offered
or sold to the public or securities that may be sold only in privately
negotiated transactions and certain participation interests in domestic banks.
The Fund may, however, invest without regard to the limitation on illiquid
securities in lease obligations which the Manager, in accordance with guidelines
that have been adopted by the Board of Directors or Trustees, as applicable, and
subject to their supervision, determines to be liquid. The Manager will deem
lease obligations liquid if they are publicly offered and have received an
investment grade rating of Baa or better by Moody's, or BBB or better by S&P.
Unrated lease obligations (or those below investment grade, where applicable)
will be considered liquid if the obligations come to the market through an
underwritten public offering and at least two dealers are willing to give
competitive bids. The Manager must, among other things, also review the
creditworthiness of the municipality obligated to make payment under the unrated
(or below investment grade, where applicable) lease obligation and consider such
factors as the existence of a rating or credit enhancement such as insurance,
the frequency of trades or quotes for the obligation and the willingness of
dealers to make a market in the obligation.

Each Fund, as a non-diversified investment company, is not limited by the
1940 Act as to the proportion of its assets that it may invest in the
obligations of a single issuer. However, each Series will comply with the
diversification requirements of the Internal Revenue Code of 1986, and has
therefore adopted an investment restriction, which may not be changed without
shareholder vote (except for the New Jersey Fund), prohibiting each Series from
purchasing with respect to 50% of the value of the respective Series' total
assets, securities of any issuer if immediately thereafter more than 5% of such
Series' total assets would be invested in the securities of any single issuer.
Furthermore, as a matter of policy, with respect to 75% of each Series' assets,
the respective Series may not purchase any revenue bonds if thereafter more than
5% of such Series' assets would be invested in revenue bonds of a single issuer.
This policy is not fundamental and may be changed by the Directors or Trustees,
as applicable, without shareholder approval. In the view of the Manager, the
above restriction and policy reduce the risk that might otherwise be associated
with an investment in a non-diversified investment company.

As a matter of policy, the Board or Trustees, as applicable, will not change
a Series' investment objectives without a vote of a majority of the outstanding
voting security of that Series. Under the 1940 Act, a "vote of a majority of the
outstanding voting securities" of a Series means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Series or (2) 67%
or more of the shares of the Series present at a shareholder's meeting if more
than 50% of the outstanding shares of the Series are represented at the meeting
in person or by proxy.

23
<PAGE>

A more detailed list of each Series' investment policies, including a list of
those restrictions or investment activities that cannot be changed without a
vote of a majority of the outstanding voting securities of a Series appears in
each Series' Statement of Additional Information.

When Issued Securities

Each Series may purchase tax-exempt securities on a "when issued" basis,
which means that delivery of and payment for such securities normally take place
within 45 days after the date of the buyer's purchase commitment. The payment
obligation and the interest rate on when-issued securities are each fixed at the
time the purchase commitment is made, although no interest accrues to a
purchaser prior to the settlement of the purchase of the securities. As a result
the yields obtained and the market value on such securities may be higher or
lower on the date when the instruments are actually delivered to the buyer. A
Series will generally purchase a tax-exempt security sold on a when issued basis
with the intention of actually acquiring the securities on the settlement date.
Any gain realized from any such sale of securities will be subject to federal
and state taxes.

A separate account consisting of cash or high-grade liquid debt securities
equal to the amount of outstanding purchase commitments is established with the
Fund's Custodian in connection with any purchase of when issued securities. The
account is marked to market daily, with additional cash or liquid high-grade
debt securities added when necessary. A Series meets its respective obligation
to purchase when-issued securities from outstanding cash balances, sale of
securities held in the separate account, sale of other securities or, although
they would not normally expect to do so, from the sale of the when issued
securities themselves (which may have a greater or lesser value than the Series'
payment obligations).

Variable and Floating Rate Obligations

The interest rates payable on certain securities in which a Series may invest
are not fixed and may fluctuate based upon changes in market rates. The interest
rate on variable rate obligations is adjusted at predesignated periods and on
floating rate obligations whenever there is a change in the market rate of
interest on which the floating rate is based.

The interest rate is set as a specific percentage of a designated base rate,
such as the rate on a Treasury Bond or Bill or the prime rate at a major
commercial bank. Such a bond generally provides that a Series can demand payment
of the bond upon seven days' notice at an amount equal to par plus accrued
interest, which amount, in unusual cirumstances, may be more or less than the
amount a Series paid for the bond.

The maturity of floating or variable rate obligations (including
participation interests therein) is deemed to be the longer of (i) the notice
period required before a Series is entitled to receive payment of the obligation
upon demand or (ii) the period remaining until the obligation's next interest
rate adjustment. If not redeemed by a Series through the demand feature, the
obligations mature on a specified date which may range up to thirty years from
the date of issuance.

Participation Interests

From time to time, a Series may purchase from banks participation interest in
all or part of specific holdings of tax-exempt securities. Each participation
interest is backed by an irrevocable letter of credit or guarantee of the
selling bank. Participation interests will be purchased only if, in the opinion
of counsel, interest income on such interests will be tax-exempt when
distributed as dividends to shareholders of a Series.

Borrowings

Each Series may borrow money only from banks and only for temporary purposes
(such as meeting redemption requests or for extraordinary or emergency purposes
but not for the purchase of portfolio securities) in an amount not in excess of
10% of the value of its total assets at the time the borrowing is made (not
including the amount borrowed). Permitted borrowings may be secured or
unsecured. A Series will not purchase additional portfolio securities if such
Series has outstanding borrowings in excess of 5% of the value of its total
assets.

24
<PAGE>

MANAGEMENT SERVICES

The Board of Directors or Trustees, as applicable, provides broad supervision
over the affairs of the Funds. Pursuant to Management Agreements approved by the
Director or Trustees and the shareholders of each Series, the Manager manages
the investment of the assets of each Series and administers its business and
other affairs. The address of the Manager is 100 Park Avenue, New York, New York
10017.

In addition to serving the Funds, the Manager serves as manager of thirteen
other investment companies which, together with the Funds, make up the "Seligman
Group." The thirteen other companies are Seligman Capital Fund, Inc., Seligman
Cash Management Fund, Inc., Seligman Common Stock Fund, Inc., Seligman
Communications and Information Fund, Inc., Seligman Frontier Fund, Inc.,
Seligman Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman High Income Fund Series, Seligman Income Fund, Inc., Seligman
Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman Select
Municipal Fund, Inc. and Tri-Continental Corporation. The aggregate assets of
the Seligman Group are approximately $6.6 billion. The Manager also provides
investment management or advice to individual and institutional accounts having
a value of approximately $3 billion.

Mr. William C. Morris is Chairman and President of the Manager and Chairman
of the Board and Chief Executive Officer of each Fund. Mr. Morris owns a
majority of the outstanding voting securities of the Manager.

The Manager also provides senior management for Seligman Data Corp., a wholly
owned subsidiary of certain investment companies in the Seligman Group, which
performs, at cost, certain recordkeep-ing functions for each Fund, maintains the
records of shareholder investment accounts and provides related services.

The Manager is entitled to receive a management fee for its services,
calculated daily and payable monthly, equal to .50% of the average daily net
assets of the Series on an annual basis. The Manager has from time to time
voluntarily waived a portion of its management fee with respect to one or more
of the Series. Each Fund pays all its expenses other than those assumed by the
Manager; expenses are allocated among the Series of the Tax-Exempt Fund and of
the Tax-Exempt Trust in a manner determined by the Directors or Trustees to be
fair and equitable. The management fee paid by each Series expressed as a
percentage of average daily net assets of that Series is presented in the
following table for the fiscal year ended September 30,1994. Total expenses for
each Series' Class A and D shares, expressed as an annualized percentage of
average daily net assets, are also presented in the following table for the
year/period ended September 30, 1994.

- --------------------------------------------------------------------------------

Annualized Expense
Management Fee Rate Ratios for
for the year ended the year/period ended
Series 9/30/94 9/30/94
------ ------------------- ------------------------
Class A Class D
-------- --------
New Jersey ...................... .33%* .90% 1.75%
Pennsylvania .................... .50% 1.16% 2.00%
National ........................ .50% .85% 1.76%
Colorado ........................ .50% .86% 1.78%
Georgia ......................... .30%* .73% 1.76%
Louisiana ....................... .50% .87% 1.78%
Maryland ........................ .50% .92% 1.80%
Massachusetts ................... .50% .85% 1.78%
Michigan ........................ .50% .84% 1.75%
Minnesota ....................... .50% .85% 1.74%
Missouri ........................ .36%* .74% 1.70%
New York ........................ .50% .87% 1.81%
Ohio ............................ .50% .84% 1.78%
Oregon .......................... .39%* .78% 1.72%
South Carolina .................. .50% .83% 1.74%
California
High-Yield .................... .50% .85% 1.74%
California Quality .............. .50% .81% 1.77%
Florida ......................... .01%* .42%** 1.29%**
North Carolina .................. --%* .44%** 1.27%**

* During the year/period ended September 30, 1994 the Manager, at its
discretion, waived all or a portion of its fees from the Florida, Georgia,
Missouri, New Jersey, North Carolina and Oregon Series.

** The Manager also reimbursed certain expenses for the Florida and North
Carolina Series.

- --------------------------------------------------------------------------------

Portfolio Manager

25
<PAGE>

and Senior Portfolio Manager of each of the Funds. He is responsible for more
than $2 billion in tax-exempt securities. Mr. Moles, with more than 22 years of
experience, has spearheaded Seligman's tax-exempt efforts since joining the
Manager in 1983.

The Manager's discussion of each Fund's performance as well as a line graph
illustrating comparative performance information between each Series of the Fund
and the Lehman Brothers Municipal Bond Index is included in the respective
Fund's fiscal 1994 Annual Report to shareholders. Copies of the Annual Report
may be obtained, without charge, by calling or writing the Funds at the
telephone numbers or address listed on the front page of this Prospectus.

Portfolio Transactions

Fixed income securities are generally traded on the over-the-counter market
on a "net" basis without a stated commission, through dealers acting for their
own account and not as brokers. Prices paid to dealers will generally include a
"spread", i.e., the difference between the prices at which a dealer is willing
to purchase or to sell the security at that time. In underwritten offerings,
securities are purchased at a fixed price which includes an amount of
compensation to the underwriter.

The Management Agreements recognize that in the purchase and sale of
portfolio securities, the Manager will seek the most favorable price and
execution, and, consistent with that policy, may give consideration to the
research, statistical and other services furnished by dealers to the Manager for
its use in connection with its services to the Funds as well as other clients.

Consistent with the rules of the National Association of Securities Dealers,
Inc. and subject to seeking the most favorable price and execution available and
such other policies as the Directors may determine, the Manager may consider
sales of shares of the Funds (and, under applicable laws, of the other mutual
funds in the Seligman Group) as a factor in the selection of dealers to execute
portfolio transactions for the Fund.

Portfolio Turnover

A change in securities held by any Series is known as "portfolio turnover"
and may involve the payment by such Series of dealer spreads or underwriting
commissions and other transactions costs on the sale of the securities as well
as on the reinvestment of the proceeds in other securities. While it is the
policy of each Series to hold securities for investment, changes will be made
from time to time when the Manager believes such changes will strengthen the
Series' portfolio. The portfolio turnover of any Series is not expected to
exceed 100%.

PURCHASE OF SHARES

Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager, acts
as general distributor of the Funds' shares. Its address is 100 Park Avenue, New
York, New York 10017.

Each Series issues two classes of shares: Class A shares are sold to
investors choosing the initial sales load alternative; and Class D shares are
sold to investors choosing no initial sales load, a higher distribution fee and
a CDSL on redemptions within one year of purchase. See "Alternative Distribution
System" above.

Shares of the Series may be purchased through any authorized investment
dealer. All orders will be executed at the net asset value per share next
computed after receipt of the purchase order plus, in the case of Class A
shares, a sales load which, except for shares purchased under one of the reduced
sales load plans, will vary with the size of the purchase as shown in the
schedule under "Class A shares-Initial Sales Load" below.

The minimum amount for initial investment is $1,000; subsequent investments
must be in the minimum amount of $50 for each Series (except for investment of
dividends and capital gain distributions). The Funds reserve the right to return
investments that do not satisfy these minimums. Orders received by an authorized
dealer before the close of the New York Stock Exchange ("NYSE") (4:00 p.m. New
York City time) and accepted by SFSI before the close of business (5:00 p.m. New
York City time) on the same day will be executed at the Series' net asset value
determined as of the close of the NYSE on that day plus, in the case of Class A
shares, the applicable sales load. Orders accepted by dealers after the close of
the NYSE, or received by SFSI after the close of business, will be executed at

26
<PAGE>

the Series' net asset value next determined plus, in the case of Class A shares,
the applicable sales load. The authorized dealer through which the shareholder
purchases shares is responsible for forwarding the order to SFSI promptly.

Payment for dealer purchases may be made by check or by wire. To wire
payments, dealer orders must first be placed through SFSI's order desk and
assigned a purchase confirmation number. Funds in payment of the purchase may
then be wired to Mellon Bank, N.A., ABA #043000261, A/C (Name of Fund and
Series) (A or D), A/C #107-1011. WIRE TRANSFERS MUST INCLUDE THE PURCHASE
CONFIRMATION NUMBER AND CLIENT ACCOUNT REGISTRATION AND ACCOUNT NUMBER. Persons
other than dealers who wish to wire payment should contact Seligman Data Corp.
for specific wire instructions. Although the Funds make no charge for this
service, the transmitting bank may impose a wire service fee.

Existing shareholders may purchase additional shares at any time through
their dealers or by sending a check payable to (Name of Fund and Series)
directly to the Fund at P.O. Box 3936, New York, NY 10008-3936. Checks for
investment must be in U.S. dollars drawn on a domestic bank. The check should
include the shareholder's name, address, account number and class of shares.
Orders sent directly to Seligman Data Corp. will be executed at the offering
price next determined after your order is accepted plus, in the case of Class A
shares, the applicable sales load.

Seligman Data Corp. will charge a $10.00 processing fee for checks returned
to it marked "unpaid." This charge may be deducted from the account that
requested the purchase. For the protection of the Funds and their shareholders,
no redemption proceeds will be remitted to a shareholder with respect to shares
purchased by check (unless certified) until the Fund receives notice that the
check has cleared, which may be up to 15 days from the credit of the shares to
the shareholder's account.

Valuation

The net asset value of a Series is determined each day, Monday through
Friday, as of the close of the NYSE (currently 4:00 p.m. New York City time), on
each day that the NYSE is open. Net asset value is calculated separately for
each Series class. Net asset value is determined by dividing the value of the
total assets of the Series, less liabilities, by the number of shares
outstanding. Tax-exempt securities and short-term holdings maturing in more than
60 days are valued based on quotations provided by an independent pricing
service, approved by the Directors or Trustees, or in the absence thereof, at
fair value as determined in accordance with procedures approved by the Directors
or Trustees. Short-term holdings maturing in 60 days or less are generally
valued at amortized cost. Taxable securities are valued at market value, or in
the absence thereof, fair value as determined in accordance with procedures
approved by the Directors.

Class A Shares -- Initial Sales Load. Class A shares are subject to an
initial sales load which varies with the size of the purchase as shown in the
following schedule, and an annual service fee of up to .25% of the average daily
net asset value of Class A shares. See "Administration, Shareholder Services and
Distribution Plan" below.

- --------------------------------------------------------------------------------

Class A Shares -- Sales Load Schedule

Sales Load as a
Percentage of Regular
----------------------- Dealer
Net Amount Discount
Invested as a % of
Offering (Net Asset Offering
Amount of Purchase Price Value) Price
------------------ --------- ---------- ---------

Less than $ 50,000 ........... 4.75% 4.99% 4.25%
$ 50,000- 99,999 ........... 4.00 4.17 3.50
100,000- 249,999 ........... 3.50 3.63 3.00
250,000- 499,999 ........... 2.50 2.56 2.25
500,000- 999,999 ........... 2.00 2.04 1.75
1,000,000- 3,999,999 ........... 1.00 1.01 .90
4,000,000- or more* ........... 0 0 0

* Dealers may receive a fee of .15% on sales made without a sales load.

- --------------------------------------------------------------------------------

Reduced Sales Loads. Reductions in sales loads apply to purchases of Class
A shares by a "single person," including an individual, members of a family unit
comprising husband, wife and minor children purchasing securities for their own
account, or a trustee or other fiduciary purchasing for a single fiduciary
account or single trust. Purchases made by a trustee or other fiduciary for a
fiduciary account may not be aggregated with purchases made on behalf of any

27
<PAGE>

other fiduciary or individual account.

o Volume Discounts are provided if the total amount being invested in Class A
shares of a Fund alone, or in any combination of shares of the other mutual
funds in the Seligman Group that are sold with a sales load reaches levels
indicated in the above sales load schedule.

o The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of the other mutual funds in the Seligman Group sold
with a sales load with the total net asset value of shares of those funds
already owned that were sold with a sales load and the total net asset value of
shares of Seligman Cash Management Fund that were acquired by an investor
through an exchange of shares of another mutual fund in the Seligman Group on
which there was a sales load to determine reduced sales loads in accordance with
the sales load schedule. An investor or a dealer must indicate if the investor
has existing accounts when making investments or opening new accounts.

o A Letter of Intent allows an investor to purchase Class A shares over a
13-month period at reduced sales loads, based upon the total amount the investor
intends to purchase plus the total net asset value of shares of the other mutual
funds in the Seligman Group already owned that were sold with a sales load and
the total net asset value of shares of Seligman Cash Management Fund that were
acquired by the investor through an exchange of shares of another mutual fund in
the Seligman Group on which there was a sales load. An investor or a dealer must
indicate if the investor has existing accounts when making investments or
opening new accounts. For more information concerning terms of Letters of
Intent, see "Terms and Conditions" on page 50.

Special Programs. Each Fund may sell Class A shares at net asset value to
present and retired directors, trustees, officers, employees (and their spouses
and minor children) of the Funds, the other investment companies in the Seligman
Group, the Manager and other companies affiliated with the Manager. Such sales
also may be made to employee benefit plans and thrift plans for such persons and
to any investment advisory, custodial, trust or other fiduciary account managed
or advised by the Manager or any affiliate.

Class A shares also may be issued without a sales load in connection with the
acquisition of cash and securities owned by other investment companies and
personal holding companies; to any registered unit investment trust which is the
issuer of periodic payment plan certificates, the net proceeds of which are
invested in Fund shares; to separate accounts established and maintained by an
insurance company which are exempt from registration under Section 3(c)(11) of
the 1940 Act; to registered representatives and employees (and their spouses and
minor children) of any dealer that has a sales agreement with SFSI; to
shareholders of mutual funds with objectives similar to a Fund who purchase
shares with redemption proceeds of such funds; to financial institution trust
departments; to registered investment advisers exercising investment
discretionary authority with respect to the purchase of Series shares, or
pursuant to sponsored arrangements with organizations which make recommendations
to or permit group solicitation of, its employees, members or participants in
connection with the purchase of shares of the Series; and to "eligible employee
benefit plans" of employers who have at least 2,000 U.S. employees to whom such
plan is made available and, regardless of the number of employees, if such plan
is established and maintained by any dealer that has a sales agreement with
SFSI. "Eligible employee benefit plans" means any plans or arrangements, whether
or not tax qualified, which provide for the purchase of a Fund's shares. Sales
of shares to such plans must be made in connection with a payroll deduction
system of plan funding or other system acceptable to Seligman Data Corp.

Class D Shares. Class D shares are sold without an initial sales load but are
subject to a CDSL if the shares are redeemed within one year, an annual
distribution fee of up to .75 of 1% and an annual service fee of up to .25 of 1%
of the average daily net asset value of Class D shares. SFSI will make a 1%
payment to dealers in respect of purchases of Class D shares.

A CDSL will be imposed on any redemption of Class D shares which were
purchased during the preceding twelve months; however, no such charge will be
imposed on shares acquired through the investment of dividends or distributions

28
<PAGE>

from any Class D shares within the Seligman Group. The amount of any CDSL will
be paid to and retained by SFSI.

To minimize the application of CDSL to a redemption, shares acquired pursuant
to the investment of dividends and distributions (which are not subject to a
CDSL) will be redeemed first; followed by shares purchased at least one year
prior to the redemption. Shares held for the longest period of time within the
applicable one year period will then be redeemed. Additionally, for those shares
determined to be subject to the CDSL, the application of the 1% CDSL will be
made to the current net asset value or original purchase price, whichever is
less.

For example, assume an investor purchased 100 shares in January at a price of
$10.00 per share. During the first year, 5 additional shares were acquired
through investment of dividends and distributions. In January of the following
year, an additional 50 shares are purchased at a price of $12.00 per share. In
March of that year, the investor chooses to redeem $1,500.00 from the account
which now holds 155 shares with a total value of $1,898.75 ($12.25 per share).
The CDSL for this transaction would be calculated as follows:

Total shares to be redeemed
(122.449 @ $12.25) as follows: $1,500.00
=========
Dividend/Distribution shares
(5 @ $12.25) $ 61.25
Shares over 1 year old
(100 @ $12.25) 1,225.00
Shares less than 1 year old subject to
CDSL (17.449 @ $12.25) 213.75
---------
Gross proceeds of redemption $1,500.00
Less CDSL (17.449 shares @ $12.00 =
$209.39 x 1% = $2.09) (2.09)
---------
Net proceeds of redemption $1,497.91
=========

For federal income tax purposes, the amount of the CDSL will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.

The CDSL will be waived or reduced in the following instances:

(a) on redemptions following the death or disability of a shareholder, as
defined in section 72(m)(7) of the Internal Revenue Code of 1986, as amended;
(b) in connection with (i) distributions from retirement plans qualified under
section 401(a) of the Code when such redemptions are necessary to make
distributions to plan participants (such payments include, but are not limited
to death, disability, retirement, or separation of service), (ii) distributions
from a custodial account under Code section 403(b)(7) or an individual
retirement account ("IRA") due to death, disability, or attainment of age 591/2,
and (iii) a tax-free return of an excess contribution to an IRA; (c) in whole or
in part, in connection with shares sold to current and retired Directors or
Trustees of the Funds; (d) in whole or in part, in connection with shares sold
to any state, county, or city or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable investment laws from paying a
sales load or commission in connection with the purchase of shares of any
registered investment management company; (e) pursuant to an automatic cash
withdrawal service; (f) in connection with the redemption of Class D shares of a
Fund if it is combined with another mutual fund in the Seligman Group, or
another similar reorganization transaction; and (g) in connection with a Fund's
right to redeem or liquidate an account that holds below a certain minimum
number or dollar amount of shares (currently $500).

If, with respect to a redemption of any Class D shares sold by a dealer, the
CDSL is waived because the redemption qualifies for a waiver as set forth above,
the dealer shall remit to SFSI promptly upon notice an amount equal to the 1%
payment or a portion of the 1% payment paid on such shares.

SFSI may from time to time assist dealers by, among other things, providing
sales literature to, and holding informational programs for the benefit of,
dealers' registered representatives. Dealers may limit the participation of
registered representatives in such informational programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the Seligman Mutual Funds. SFSI may from time to time pay a bonus or
other incentive to dealers that sell shares of the Seligman Mutual Funds. In
some instances, these bonuses or incentives may be offered only to certain
dealers which employ a registered representative who has sold or may sell a

29
<PAGE>

significant amount of shares of a Fund and/or certain other Funds managed by the
Manager during a specified period of time. Such bonus or other incentive may
take the form of payment for travel expenses, including lodging, incurred in
connection with trips taken by qualifying registered representatives and members
of their families to places within or outside the United States. The cost to
SFSI of such promotional activities and payments will not exceed the amounts of
the sales loads retained by SFSI in respect of sales of shares of the Funds and
the other Seligman Mutual Funds effected through participating dealers and shall
be consistent with the rules of the National Association of Securities Dealers,
Inc., as then in effect.

TELEPHONE TRANSACTIONS

A shareholder whose account has either an individual or joint tenancy
registration may elect to effect the following transactions via telephone by
completing the Telephone Service Election portion of the Account Application or
a separate Telephone Service Election Form: (i) redemption of shares of a Fund,
(ii) exchange of shares of a Fund for shares of another Seligman Mutual Fund,
(iii) change of a dividend and/or capital gain distribution option, and (iv)
change of address. IRA accounts may only elect to effect exchanges or address
changes. By completing the appropriate section of the Account Application or
separate Election Form, all mutual funds with the same account number (i.e.,
registered exactly the same), including any new mutual fund in which the
shareholder invests in the future, will automatically include telephone
services. All telephone transactions are effected through Seligman Data Corp. at
(800) 221-2450.

For accounts registered as joint tenancies, each joint tenant, by electing
telephone transaction services, authorizes each of the other tenants to effect
telephone transactions on his or her behalf.

During times of drastic economic or market changes, a shareholder may
experience difficulty in contacting Seligman Data Corp. to request a redemption
or exchange of shares of a Fund. In these circumstances, the shareholder should
consider using other redemption or exchange procedures. Use of these other
redemption or exchange procedures will result in your redemption request being
processed at a later time than if telephone transactions had been used, and a
Series' net asset value may fluctuate during such periods.

Each Fund and Seligman Data Corp. will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. These will
include: recording all telephone calls requesting account activity, requiring
that the caller provide certain requested personal and/or account information at
the time of the call for the purpose of establishing the caller's identity, and
sending a written confirmation of redemptions, exchanges or address changes to
the address of record each time activity is initiated by telephone. As long as
each Fund and Seligman Data Corp. follow instructions communicated by telephone
that were reasonably believed to be genuine at the time of their receipt,
neither they nor any of their affiliates will be liable for any loss to the
shareholder caused by an unauthorized transaction. Shareholders are, of course,
under no obligation to apply for telephone transaction services. In any instance
where a Fund or Seligman Data Corp. is not reasonably satisfied that
instructions received by telephone are genuine, the requested transaction will
not be executed, and neither they nor any of their affiliates will be liable for
any losses which may occur due to a delay in implementing the transaction. If a
Fund or Seligman Data Corp. does not follow the procedures described above, a
Fund or Seligman Data Corp. may be liable for any losses due to unauthorized or
fraudulent instructions. Telephone services must be effected through a
representative of Seligman Data Corp., i.e., requests may not be communicated
via Seligman Data Corp.'s automated telephone answering system. Telephone
transaction services may be terminated by a shareholder at any time by sending a
written request to Seligman Data Corp. Written acknowledgment of termination of
telephone transaction services will be sent to the shareholder.

REDEMPTION OF SHARES

Regular Redemption Procedure. A shareholder may redeem shares held in book
credit form without charge (except the CDSL, if applicable) at any time by
sending a written request to Seligman Data Corp., 100 Park Avenue, New York, New

30
<PAGE>

York 10017. The redemption request must be signed by all persons in whose name
the shares are registered. A shareholder may redeem shares that are not in book
credit form, by surrendering certificates in proper form to the same address.
Certificates should be sent by registered mail. Share certificates must be
endorsed for transfer or accompanied by an endorsed stock power signed by all
shareowners exactly as their name(s) appear(s) on the account registration. The
shareholder's letter of instruction or endorsed stock power should specify the
name of the Series, the account number, class of shares (A or D), number of
shares or dollar amount to be redeemed. The Funds cannot accept conditional
redemption requests. If the redemption proceeds are (i) $50,000 or more, (ii) to
be paid to someone other than the shareholder of record (regardless of the
amount) or (iii) to be mailed to other than the address of record (regardless of
the amount), the signature(s) of the shareholder(s) must be guaranteed by an
eligible financial institution including, but not limited to, the following:
banks, trust companies, credit unions, securities brokers and dealers, savings
and loan associations and participants in the Securities Transfer Association
Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP) or the
New York Stock Exchange Medallion Signature Program (MSP). A Fund reserves the
right to reject a signature guarantee where it is believed that the Fund will be
placed at risk by accepting such guarantee. A signature guarantee is also
necessary in order to change the account registration. Notarization by a notary
public is not an acceptable signature guarantee. Additional documentation may
also be required by Seligman Data Corp. in the event of a redemption by
corporations, executors, administrators, trustees, custodians or retirement
plans. For further information with respect to necessary redemption
requirements, please contact the Shareholder Services Department of Seligman
Data Corp. for assistance. In the case of Class A shares, and in the case of
Class D shares redeemed after one year, a shareholder will receive the net asset
value per share next determined after receipt of a request in good order. If
Class D shares are redeemed within one year of purchase, a shareholder will
receive the net asset value per share next determined after receipt of a request
in good order, less a CDSL of 1% as described under "Purchase Of Shares -- Class
D Shares" above.

A shareholder may also "sell" shares to a Fund through an investment dealer
and, in that way, be certain, providing the order is timely, of receiving the
net asset value established at the end of the day on which the dealer is given
the repurchase order. The Funds make no charge for this transaction, but the
dealer may charge a service fee. "Sell" or repurchase orders received from an
authorized dealer before the close of the NYSE and received by SFSI, the
repurchase agent, before the close of business on the same day will be executed
at the net asset value per share determined at the close of the NYSE on that
day. Repurchase orders received from authorized dealers after the close of the
NYSE or not received by SFSI prior to the close of business, will be executed at
the net asset value determined as of the close of the NYSE on the next trading
day. Shares held in a "street name" account with a broker/dealer may be sold to
a Fund only through a broker/dealer.

Check Redemption Service. The Check Redemption Service allows a shareholder
of Class A shares who owns or purchases shares in a Series worth $25,000 or more
to request Seligman Data Corp. to provide redemption checks to be drawn on the
account associated with the Series in which the shareholder is invested, in
amounts of $500 or more. The shareholder may elect to use this Service on the
Account Application or by later written request to Seligman Data Corp. Shares
for which certificates have been issued will not be available for redemption
under this Service. Dividends continue to be earned through the date preceding
the date the check clears for payment. Use of this Service is subject to Mellon
Bank, N.A. rules and regulations covering checking accounts. Separate checkbooks
will be furnished for each Series.

There is no charge for use of checks. When honoring a check that was
processed for payment, Mellon Bank, N.A. will cause a Fund to redeem exactly
enough full and fractional shares from an account to cover the amount of the
check. If shares are owned jointly, redemption checks will need to be signed by

31
<PAGE>

all persons, unless otherwise elected under Section 5 of the Account
Application, in which case a single signature will be acceptable.

In view of daily fluctuations in share value, the shareholder should be
certain that the amount of shares in the account is sufficient in a Series to
cover the amount of checks written on that Series. If insufficient shares are in
the account, the check will be returned marked "insufficient funds." The Funds
will not redeem shares in one Series to cover a check written on another Series.
Seligman Data Corp. will charge a $10.00 processing fee for any check redemption
draft returned marked "unpaid." This charge may be debited from the account the
check was drawn against.

Check Redemption books cannot be reordered unless the shareholder's account
has a value of $25,000 or more and Seligman Data Corp. has a certified tax
identification number on file.

Cancelled checks will be returned to a shareholder under separate cover the
month after they clear. The Check Redemption Service may be terminated at any
time by the Fund or Mellon Bank, N.A. See "Terms and Conditions" on page 50 for
further information. The Check Redemption Service is not available with respect
to Class D shares.

For the protection of the Funds and their shareholders, no proceeds of a
check redemption will be remitted to a shareholder with respect to shares
purchased by check (unless certified) until Seligman Data Corp. has received
notice that the check has cleared, which may be up to 15 days from the credit of
the shares to such shareholder's account.

Telephone Redemptions. Telephone redemptions of uncertificated shares may be
made in an amount of up to $50,000 per day, per account. One telephone
redemption request per day is permitted. Telephone redemption requests must be
received by Seligman Data Corp. at (800) 221-2450 between 8:30 a.m. and 4:00
p.m. New York time, on any business day and will be processed as of the close of
business on that day. Redemption requests by telephone will not be accepted
within 30 days following an address change. Keogh Plans, IRAs or other
retirement plans are not eligible for telephone redemptions. Each Fund reserves
the right to suspend or terminate its telephone redemption service at any time
without notice.

For more information about telephone redemptions, including the procedure for
electing such service and the circumstances under which shareholders may bear
the risk of loss for a fraudulent transaction, see "Telephone Transactions"
above.

General

Whether shares are redeemed or repurchased, a check for the proceeds will be
sent to the address of record within seven calendar days after acceptance of the
redemption or repurchase order and will be made payable to all of the registered
owners on the account. The Funds will not mail redemption proceeds with respect
to shares purchased by check (unless certified) until Seligman Data Corp. has
received notice that the check has cleared which may be up to 15 days from the
credit of the shares to the shareholder's account. The proceeds of a redemption
or repurchase may be more or less than the investors' cost.

The Funds reserves the right to redeem shares owned by a shareholder whose
investment in a Fund has a value of less than the minimum specified by the
Fund's Directors or Trustees which is presently $500. Shareholders are sent a
notice before such redemption is processed stating that the value of their
investment is less than the specified minimum and that they have sixty days to
make an additional investment.

Reinstatement Privilege

If a shareholder redeems Class A shares and then decides not to redeem them,
or to shift the investment to one of the other Series or to one of the other
mutual funds in the Seligman Group, a shareholder may, within 120 calendar days
of the date of redemption, use all or any part of the proceeds of the redemption
to reinstate, free of sales load, all or any part of the investment in shares of
such Series; or if the shares redeemed have been held for seven calendar days or
longer a shareholder may reinstate them in shares of any of the other Series of
the Fund or any of the other mutual funds in the Seligman Group. If a
shareholder redeems Class D shares and the redemption was subject to a CDSL, the

32
<PAGE>

shareholder may reinstate the investment in shares of the same class of the
Series or any of the other mutual funds in the Seligman Group within 120
calendar days of the date of redemption and receive a credit for the CDSL paid.
Such investment will be reinstated at the net asset value per share established
as of the close of the NYSE on the day the request is accepted. Seligman Data
Corp. must be informed that the purchase is a reinstated investment. Reinstated
shares must be registered exactly and be of the same class as the shares
previously redeemed.

Generally, exercise of the Reinstatement Privilege does not alter the federal
income tax status of any capital gain realized on a sale of a Series' shares,
but to the extent that any shares are sold at a loss and the proceeds are
reinvested in shares of the same Series some or all of the loss will not be
allowed as a deduction, depending upon the percentage of the proceeds
reinvested.

ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN

Under an Administration, Shareholder Services and Distribution Plan (the
"Plan"), each Series may pay to Seligman Financial Services, Inc. ("SFSI"), the
Funds' general distributor, an administration, shareholder services and
distribution fee in respect of each Series' Class A and Class D shares. Payments
under the Plan may include, but are not limited to: (i) compensation to
securities dealers and other organizations ("Service Organizations") for
providing distribution assistance with respect to assets invested in a Series,
(ii) compensation to Service Organizations for providing administration,
accounting and other shareholder services with respect to Series' shareholders,
and (iii) otherwise promoting the sale of shares of each Series, including
paying for the preparation of advertising and sales literature and the printing
and distribution of such promotional materials and prospectuses to prospective
investors and defraying SFSl's costs incurred in connection with its marketing
efforts with respect to shares of the Series. The Manager, in its sole
discretion, may also make similar payments to SFSI from its own resources, which
may include the management fee that the Manager receives from each Series.

Under the Plans, each Series reimburses SFSI for its expenses with respect to
Class A shares at an annual rate of up to .25% of the average daily net asset
value of a Series' Class A shares. It is expected that the proceeds from the fee
in respect of Class A shares will be used primarily to compensate Service
Organizations which enter into agreements with SFSI. Such Service Organizations
will receive from SFSI a continuing fee of up to .25% on an annual basis,
payable quarterly, of the average daily net assets of a Series' Class A shares
attributable to the particular Service Organization for providing personal
service and/or the maintenance of shareholder accounts. The fee payable from
time to time is, within such limit, determined by the Directors or Trustees of
the Funds.

The Plan as it relates to the Class A shares of the New Jersey Fund, was
first approved by the Directors on January 12, 1988 and by the shareholders on
December 16, 1988. The Plan as it relates to the Class A shares of the
Pennsylvania Fund, was first approved by the Trustees on June 10, 1986 and by
the shareholders on April 23, 1987. The Plan as it relates to the Class A shares
of the California High-Yield Series and the California Quality Series, was first
approved by the Trustees on July 21, 1992 and by the shareholders on November
23, 1992. The Plan as it relates to the Class A shares of the Florida Series,
was first approved by the Trustees on June 21, 1990 and by the shareholders on
December 7, 1990. The Plan as it relates to Class A shares of the North Carolina
Series, was first approved by the Trustees on June 21, 1990 and by the
shareholders on April 11, 1991. Each Plan as it relates to Class A shares of the
other Series, was first approved by the Directors or Trustees on July 21, 1992
and by the shareholders of each Series on November 23, 1992. The Plans are
reviewed by the Directors or Trustees annually. The total amounts paid for the
year ended September 30, 1994 in respect of each Series' Class A shares, average

33
<PAGE>

daily net assets pursuant to the Plans were as follows:

% of
Average
Series Net Assets
------ ----------
New Jersey...................................................... .23%
Pennsylvania.................................................... .22
National........................................................ .08
Colorado........................................................ .09
Georgia......................................................... .10
Louisiana....................................................... .10
Maryland........................................................ .09
Massachusetts................................................... .09
Michigan........................................................ .10
Minnesota....................................................... .10
Missouri........................................................ .09
New York........................................................ .08
Ohio............................................................ .10
Oregon.......................................................... .10
South Carolina.................................................. .10
California High-Yield........................................... .09
California Quality.............................................. .09
Florida......................................................... .23
North Carolina.................................................. .24

Under the Plans, each Series reimburses SFSI for its expenses with respect to
Class D shares at an annual rate of up to 1% of the average daily net asset
value of the Class D shares. Proceeds from a Series' Class D distribution fee
are used primarily to compensate Service Organizations for administration,
shareholder services and distribution assistance (including a continuing fee of
up to .25% on an annual basis of the average daily net asset value of a Series'
Class D shares attributable to particular Service Organizations for providing
personal services and/or the maintenance of shareholder accounts) and will
initially be used by SFSI to defray the expense of the 1% payment to be made by
it to Service Organizations at the time of the sale of Class D shares. The
amounts expended by SFSI in any one year upon the initial purchase of Class D
shares may exceed the amounts received by it from Plan payments retained.
Expenses of administration, shareholder services and distribution of a Series'
Class D shares in one fiscal year may be paid from a Series' Class D Plan fees
received in any other fiscal year. Each Plan, as it relates to Class D shares,
was approved by the Directors or Trustees on November 18, 1993 and became
effective February 1, 1994. Each Plan is reviewed by the Directors or Trustees
annually. The total amount paid for the period February 1, 1994 to September 30,
1994, in respect of each Series' Class D shares pursuant to the Plan was 1.00%
per annum of each Series' average daily net assets of the Class D shares.

EXCHANGE PRIVILEGE

A shareholder for seven calendar days or more, may, without charge, exchange
at net asset value any or all of an investment in a Series for shares of another
Series or for shares of the other mutual funds in the Seligman Group. Exchanges
may be made by mail or by telephone if telephone services are elected by the
shareholder.

Class A and Class D shares may be exchanged only for Class A and Class D
shares, respectively, of another Series or another mutual fund in the Seligman
Group on the basis of relative net asset value.

If Class D shares that are subject to a CDSL for Class D shares of another
Series or fund, for purposes of assessing the CDSL payable upon disposition of
the exchanged Class D shares, the one year holding period shall be reduced by
the holding period of the original Class D shares.

Aside from the Series described in this Prospectus, the mutual funds in the
Seligman Group available under the Exchange Privilege are:

o Seligman Capital Fund, Inc: seeks aggressive capital appreciation. Current
income is not an objective.

o Seligman Cash Management Fund, Inc: invests in high quality money market
instruments. Shares are sold at net asset value.

o Seligman Common Stock Fund, Inc: seeks favorable current income and
long-term growth of both income and capital value without exposing capital to
undue risk.

o Seligman Communications and Information Fund, Inc: invests in shares of
companies in the communications, information and related industries to produce
capital gain. Income is not an objective.

34
<PAGE>

o Seligman Frontier Fund, Inc: seeks to produce growth in capital value,
income may be considered but will only be incidental to the fund's investment
objective.

o Seligman Growth Fund, Inc: seeks longer-term growth in capital value and an
increase in future income.

o Seligman Henderson Global Fund Series, Inc: consists of the Seligman
Henderson Global Smaller Companies Fund, Seligman Henderson Global Technology
Fund and the Seligman Henderson International Fund all of which seek long-term
capital appreciation primarily through investing in companies either globally or
internationally.

o Seligman High Income Fund Series: seeks high current income by investing in
debt securities. The Fund consists of the U.S. Government Securities Series and
the High-Yield Bond Series.

o Seligman Income Fund, Inc: seeks high current income and the possibility of
improvement of future income and capital value.

All permitted exchanges will be based on the then current net asset values of
the respective funds. Telephone requests for exchanges must be received between
8:30 a.m. and 4:00 p.m. New York time on any business day, by Seligman Data
Corp. at (800) 221-2450 and will processed as of the close of business on that
day. The registration of an account into which an exchange is made must be
identical to the registration of the account from which shares are exchanged.
When establishing a new account by an exchange of shares, the shares being
exchanged must have a value of at least the minimum initial investment required
by the mutual fund into which the exchange is being made. The method of
receiving distributions, unless otherwise indicated, will be carried over to the
new Fund account. Account services, such as Invest-A-Check(R) Service, Directed
Dividends and Automatic Cash Withdrawal Service will not be carried over to the
new Fund account unless specifically requested and permitted by the new Fund.
Exchange orders may be placed to effect an exchange of a specific number of
shares, an exchange of shares equal to a specific dollar amount or an exchange
of all shares held. Shares for which certificates have been issued may not be
exchanged via telephone and may be exchanged only upon receipt of an exchange
request together with certificates representing shares to be exchanged in form
for transfer.

Telephone exchanges are only available to shareholders whose accounts are
registered individually, as joint tenancies or IRAs. The Exchange Privilege via
mail is generally applicable to investments in an IRA and other retirement
plans, although some restrictions may apply. The terms of the exchange offer
described herein may be modified at any time; and not all of the mutual funds in
the Seligman Group are available to residents of all states. Before making any
exchange, contact your authorized investment dealer or Seligman Data Corp. to
obtain prospectuses of any of the mutual funds in the Seligman Group.

A broker/dealer of record will be able to effect exchanges on behalf of a
shareholder only if the broker/dealer has entered into a Telephone Exchange
Agreement with SFSI wherein the broker/dealer must agree to indemnify SFSI and
the Funds from any loss or liability incurred as a result of the acceptance of
telephone exchange orders. Written confirmation of all exchanges will be
forwarded to the shareholder to whom the exchanged shares are registered and a
duplicate confirmation will be sent to the dealer of record listed on the
account. SFSI reserves the right to reject a telephone exchange request. Each
Fund reserves the right to reject any telephone requests for transactions with a
share value exceeding $250,000. Any rejected telephone exchange order may be
processed by mail. For more information about telephone exchanges, including the
procedure for electing such service and the circumstances under which
shareholders may bear the risk of loss for a fraudulent transaction, see
"Telephone Transactions" above.

Exchanges of shares are sales and may result in a gain or loss for federal
and state income tax purposes.

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FURTHER INFORMATION ABOUT
TRANSACTIONS IN THE FUNDS

Because excessive trading (including short-term, "market timing" trading) can
hurt a Series' performance, a Fund, on behalf of a Series, may refuse any
exchange (1) from any shareholder account from which there have been two
exchanges in the preceding three month period, or (2) where the exchanged shares
equal in value the lesser of $1,000,000 or 1% of the Series' net assets. A Fund
may also refuse any exchange or purchase order from any shareholder account if
the shareholder or the shareholder's broker/dealer has been advised that
previous patterns of purchases and redemptions or exchanges have been considered
excessive. Accounts under common ownership or control, including those with the
same taxpayer ID number and those administered so as to redeem or purchase
shares based upon certain predetermined market indicators, will be considered
one account for this purpose. Additionally, each Fund reserves the right to
refuse any order for the purchase of shares.

DIVIDENDS AND DISTRIBUTIONS

Each Series intends to declare dividends of net investment income daily.
Dividends are paid in additional shares on the 17th day of each month. If the
17th day of the month falls on a weekend or holiday on which the NYSE is closed,
the dividend will be distributed on the previous business day. Payments vary in
amount depending on income received from portfolio securities, expenses of
operation and the number of days in the period.

Shares will begin earning dividends on the day on which a Series receives
payment and shares are issued. Shares continue to earn dividends through the
date preceding the date they are redeemed or delivered subsequent to repurchase.

Each Series distributes substantially all of any taxable net long-term and
short-term gain realized on investments to shareholders at least annually in
accordance with requirements under the Internal Revenue Code of 1986, as
amended, and other applicable statutory and regulatory requirements.

Shareholders may elect: (1) to receive both dividends and gain distributions
in shares; (2) to receive dividends in cash and gain distributions in shares;
(3) to receive both dividends and gain distributions in cash. In the case of
prototype retirement plans, dividends and gain distributions are reinvested in
additional shares. Unless another election is made, dividends and gain
distributions will be credited to shareholder accounts in additional shares.
Class D shares acquired through a dividend or gain distribution and credited to
the account are not subject to a CDSL. Dividends and gain distributions paid in
shares are invested at the net asset value on the payable date. Shareholders may
elect to change their dividend and gain distribution options by writing Seligman
Data Corp. at the address listed below. If the shareholder has elected telephone
services, changes may also be telephoned to Seligman Data Corp. between 8:30
a.m. and 5:30 p.m. New York time, by either the shareholder or the broker/dealer
of record on the account. For information about electing telephone services, see
"Telephone Transactions." These elections must be received by Seligman Data
Corp. at least five business days before the payable date, otherwise payment
will be made in accordance with the current option on the shareholder's account.

The per share dividends from net investment income on a Series' Class D
shares will be lower than the per share dividends on a Series' Class A shares as
a result of the higher distribution fee applicable with respect to a Series'
Class D shares. Per share dividends of the two classes may also differ as a
result of differing class expenses (e.g., transfer agency expenses).
Distributions of net capital gains, if any, will be paid in the same amount for
Class A and Class D shares.

Shareholders exchanging into another mutual fund in the Seligman Group will
continue to receive dividends and gains as elected prior to such exchange unless
otherwise specified.

TAXES

Federal Income Taxes

Each Series intends to continue to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended ("Code"). Thus

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<PAGE>

qualified, each Series will be relieved of federal income tax on income
distributed to shareholders provided that it distributes each year to its
shareholders at least 90% of its net investment income and net short-term
capital gains, if any.

If, at the close of each quarter of its taxable year, at least 50% of each
Series' total assets is invested in obligations exempt from federal income tax
the Series will be eligible to pay dividends that are excludable by shareholders
from gross income for federal income tax purposes ("exempt interest dividends").
The total amount of exempt interest dividends paid by a Series to shareholders
with respect to any taxable year cannot exceed the amount of federally
tax-exempt interest received by a Series during the year less any expenses
allocable to such interest.

Distributions of net capital gain, i.e., the excess of net long-term capital
gains over net short-term capital losses ("capital gain distributions") are
taxable to shareholders as long-term capital gain, whether received in shares or
cash, regardless of how long a shareholder has held shares in the Series, except
that the portion of net capital gains representing accrued market discount on
tax-exempt obligations acquired after April 30, 1993 will be taxable as ordinary
income. Individual shareholders will be subject to federal income tax on net
capital gains at a maximum rate of 28%. Net long-term capital gain of a
corporate shareholder is taxed at the same rate as ordinary income.
Distributions from a Series' other investment income (other than exempt interest
dividends) or from net realized short-term gain will be taxable to shareholders
as ordinary income, whether received in cash or in additional shares.
Distributions will not, generally, be eligible for the dividends-received
deduction for corporations. Shareholders receiving distributions in the form of
additional shares issued by a Series will be treated for federal income tax
purposes as having received a distribution in an amount equal to the fair market
value on the date of distribution of the shares received.

Interest on indebtedness incurred or continued to purchase or carry shares of
any Series will not be deductible for federal income tax purposes to the extent
that the Series distributions are exempt from federal income tax.

Any gain or loss realized upon a sale or redemption of shares of a Series by
a shareholder who is not a dealer in securities generally will be treated as a
long-term capital gain or loss if the shares have been held for more than twelve
months and otherwise as a short-term capital gain or loss. However, if shares on
which a long-term capital gain distribution has been received are subsequently
sold or redeemed and such shares have been held for six months or less, any loss
realized will be treated as long-term capital loss to the extent that it offsets
the long-term capital gain distribution. Moreover, any loss realized by a
shareholder upon the sale of shares of a Series held six months or less will be
disallowed to the extent of any exempt-interest dividends received by the
shareholders with respect to such shares.

In determining gain or loss on shares of a Series, that are sold or exchanged
within 90 days after acquisition, a shareholder generally will not be permitted
to include in the tax basis attributable to such shares the sales load incurred
in acquiring such shares to the extent of any subsequent reduction of the sales
load by reason of the Exchange or Reinstatement Privilege offered by a Fund. Any
sales load not taken into account in determining the tax basis of shares sold or
exchanged within 90 days after acquisition will be added to the shareholder's
tax basis in the shares acquired pursuant to the Exchange or Reinstatement
Privilege.

Shareholders are urged to consult their tax advisers concerning the effect of
federal income taxes in their individual circumstances. In particular, persons
who may be "substantial users" (or "related persons" of substantial users) of
facilities financed by industrial development bonds or private activity bonds
should consult their tax advisers before purchasing shares of any Series.

Unless a shareholder includes a taxpayer identification number (social
security number for individuals) on the Account Application and certifies that
such shareholder is not subject to backup withholding, each Fund is required to
withhold and remit to the U.S. Treasury a portion of non-exempt distributions
and other reportable payments to the shareholder. The rate of backup withholding

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<PAGE>

is 31%. Shareholders should be aware that, under regulations promulgated by the
Internal Revenue Service, a Fund may be fined up to $50 annually for each
account for which a certified taxpayer identification number is not provided. In
the event that such a fine is imposed with respect to any uncertified account in
any year, a corresponding charge may be made against that account.

California Taxes

In the opinion of Sullivan & Cromwell, counsel to the Funds, provided that at
the end of each quarter of its taxable year at least 50% of the total assets of
the California Quality or California High-Yield Series consist of federally
tax-exempt obligations of the State of California and its political subdivisions
("California Tax-Exempt Securities"), shareholders of each such Series who are
subject to California State taxation on dividends will not be subject to
California personal income taxes on dividends from that Series attributable to
interest received by each such Series on California Tax-Exempt Securities as
well as on certain other federally tax-exempt obligations the interest on which
is exempt from California personal income taxes. To the extent that the
distributions are derived from other income, including long- or short-term
capital gains, such distributions will not be exempt from California personal
income taxation, and, further to the extent that they constitute long-term
capital dividends they will be taxed as long-term gain to a shareholder.

Interest on indebtedness incurred or continued to purchase or carry shares of
the California Quality or California High Yield Series will not be deductible
for California personal income tax purposes to the extent such Series'
distributions are exempt from California personal income tax.

Prospective investors should be aware that an investment in these Series may
not be suitable for persons who are not residents of the State of California or
who do not receive income subject to income taxes of the State.

Colorado Taxes

In the opinion of Ireland, Stapleton, Pryor & Pascoe, Colorado tax counsel to
the Tax-Exempt Fund, individuals, trusts, estates and corporations who are
holders of the Colorado Series and who are subject to the Colorado income tax
will not be subject to Colorado income tax on Colorado Series dividends to the
extent that such distributions qualify as exempt-interest dividends of a
regulated investment company under Section 852(b)(5) of the Code, that are
derived from interest income received by the Colorado Series on (a) obligations
of the State of Colorado or its political subdivisions which are issued on or
after May 1,1980, and if issued before May 1,1980, to the extent such interest
is specifically exempt from income taxation under the laws of the State of
Colorado authorizing the issuance of such obligations, (b) obligations of the
United States and its possessions to the extent included in federal taxable
income, and (c) obligations of territories and possessions of the United States
to the extent federal law exempts interest on such obligations from taxation by
states. To the extent that Colorado Series distributions are attributable to
sources not described in the preceding sentence, such as long or short-term
capital gains, such distributions will not be exempt from Colorado income tax.
There are no municipal income taxes in Colorado. As intangibles, shares in the
Colorado Series are exempt from Colorado property taxes.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Colorado Series, at least 80% of the value of the net assets
of the Colorado Series will be maintained in debt obligations which are exempt
from federal income tax and Colorado income tax.

The Colorado Series will notify its shareholders within 60 days after the
close of the year as to the interest derived from Colorado obligations and
exempt from the Colorado income tax.

Florida Taxes

Florida does not presently impose an income tax on individuals and thus
individual shareholders of the Florida Series will not be subject to any Florida
state income tax on distributions received from the Florida Series. However,
Florida imposes an intangible personal property tax on shares of the Florida
Series owned by a Florida resident on January 1 of each year unless such shares

38
<PAGE>

qualify for an exemption from that tax. The Tax-Exempt Trust has received a
Technical Assistance Advisement from the State of Florida, Department of
Revenue, to the effect that shares of the Florida Series owned by a Florida
resident will be exempt from the intangible personal property tax so long as the
Florida Series' portfolio includes on December 31 of each year only assets, such
as Florida Tax-Exempt Securities and United States Government securities, which
are exempt from that tax. Corporate shareholders may be subject to Florida
income taxes depending on the portion of the income related to the Florida
Series that is allocable to Florida under applicable Florida law.

Georgia Taxes

In the opinion of King & Spalding, Georgia tax counsel to the Tax-Exempt
Fund, under existing Georgia law, shareholders of the Georgia Series will not be
subject to Georgia income taxes on dividends with respect to shares of the
Georgia Series to the extent that such distributions represent "exempt-interest
dividends" for federal income tax purposes that are attributable to
interest-bearing obligations issued by or on behalf of the State of Georgia or
its political subdivisions, or by the governments of Puerto Rico, the Virgin
Islands or Guam (collectively, "Georgia Obligations"), which are held by the
Georgia Series. Dividends, if any, derived from capital gains or other sources
generally will be taxable to shareholders of the Georgia Series for Georgia
income tax purposes. For purposes of the Georgia intangibles tax, shares of the
Georgia Series are taxable to shareholders who are otherwise subject to the
Georgia intangibles tax.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Georgia Series, at least 80% of the value of the net assets
of the Georgia Series will be maintained in debt obligations which are exempt
from federal income tax and Georgia income taxes.

The Georgia Series will notify its shareholders within 60 days after the
close of the year as to the interest derived from Georgia Obligations and exempt
from Georgia income taxes.

Louisiana Taxes

In the opinion of Liskow & Lewis, Louisiana tax counsel to the Tax-Exempt
Fund, based upon a private ruling obtained from the Louisiana Department of
Revenue and Taxation (the "Department"), and subject to the current policies of
the Department, shareholders of the Louisiana Series who are either corporations
or individuals and residents of the State of Louisiana and who are otherwise
subject to Louisiana income tax will not be subject to Louisiana income tax on
Louisiana Series dividends to the extent that such dividends are attributable to
interest on tax-exempt obligations of the State of Louisiana or its political or
governmental subdivisions, its governmental agencies or instrumentalities. To
the extent that distributions on the Louisiana Series are attributable to
sources other than those described in the preceding sentence, such
distributions, including but not limited to, long-term or short-term capital
gains, will not be exempt from Louisiana income tax.

Non-resident individuals maintaining their domicile other than in the State
of Louisiana will not be subject to Louisiana income tax on their Louisiana
Series dividends.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Louisiana Series, the Tax-Exempt Fund will maintain at least
80% of the value of the net assets of the Louisiana Series in debt obligations
which are exempt from federal income tax and exempt from Louisiana income tax.

The Louisiana Series will notify its shareholders within 60 days after the
close of the year as to the interest derived from Louisiana obligations and
exempt from Louisiana income tax.

Maryland Taxes

In the opinion of Venable, Baetjer and Howard, LLP, Maryland tax counsel to
the Tax-Exempt Fund, as long as dividends paid by the Maryland Series qualify as
interest excludable under Section 103 of the Code and the Maryland Series
qualifies as a "regulated investment company" under the Code, the portion of
exempt-interest dividends that represents interest received by the Maryland
Series on obligations (a) of Maryland or its political subdivisions and

39
<PAGE>

authorities, or (b) of the United States or an authority, commission,
instrumentality, possession or territory of the United States, will be exempt
from Maryland state and local income taxes when allocated or distributed to a
shareholder of the Maryland Series.

Gain realized by the Maryland Series from the sale or exchange of a bond
issued by Maryland or a political subdivision of Maryland, or of the United
States or an authority, commission or instrumentality of the United States will
not be subject to Maryland state and local income taxes.

To the extent that distributions of the Maryland Series are attributable to
sources other than those described in the preceding sentences, such as interest
received by the Maryland Series on obligations issued by states other than
Maryland, income earned on repurchase contracts, or gains realized by a
shareholder upon a redemption or exchange of Maryland Series shares, such
distributions will be subject to Maryland state and local income taxes.

Income earned on certain private activity bonds will constitute a Maryland
tax preference for individual shareholders.

Interest on indebtedness incurred or continued (directly or indirectly) by a
shareholder of the Maryland Series to purchase or carry shares of the Maryland
Series will not be deductible for Maryland state and local income tax purposes
to the extent such interest is allocable to exempt-interest dividends.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Maryland Series, at least 80% of the value of the net assets
of the Maryland Series will be maintained in debt obligations which are exempt
from federal income tax and are exempt from Maryland state and local income
taxes.

The Maryland Series will notify its shareholders within 60 days after the
close of the year as to the interest derived from Maryland obligations and
exempt from Maryland state and local income taxes.

Massachusetts Taxes

In the opinion of Palmer & Dodge, Massachusetts tax counsel to the Tax-Exempt
Fund, assuming that the Tax-Exempt Fund gives the notices described at the end
of this section, holders of the Massachusetts Series who are subject to the
Massachusetts personal income tax will not be subject to tax on distributions
from the Massachusetts Series to the extent that these distributions qualify as
exempt-interest dividends of a regulated investment company under Section
852(b)(5) of the Code which are directly attributable to interest on obligations
issued by the Commonwealth of Massachusetts, its instrumentalities or its
political subdivisions or by the government of Puerto Rico or by its authority,
by the government of Guam or by its authority, or by the government of the
Virgin Islands or its authority (collectively, "Massachusetts Obligations").
Except to the extent excluded as capital gain, distributions of income to
Massachusetts holders of the Massachusetts Series that are attributable to
sources other than those described in the preceding sentence will be includable
in the Massachusetts income of the holders of the Massachusetts Series.
Distributions will not be subject to tax to the extent that they qualify as
capital gain dividends which are attributable to obligations issued by the
Commonwealth of Massachusetts, its instrumentalities or political subdivisions
under any provision of law which exempts capital gain on the obligation from
Massachusetts income taxation. Distributions which qualify as capital gain
dividends under Section 852(b)(3)(C) of the Code and which are includable in
Federal gross income will be includable in the Massachusetts income of a holder
of the Massachusetts Series as capital gain.

Massachusetts Series dividends are not excluded in determining the
Massachusetts excise tax on corporations.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Massachusetts Series, the Tax-Exempt Fund will maintain at
least 80% of the value of the net assets of the Massachusetts Series in debt
obligations which are exempt from federal income tax and Massachusetts personal
income tax.

The Massachusetts Series will notify its shareholders within 60 days after
the close of the year as to the interest and capital gains derived from
Massachusetts Obligations and exempt from Massachusetts personal income tax.

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<PAGE>

Michigan Taxes

In the opinion of Dickinson, Wright, Moon, Van Dusen & Freeman, Michigan tax
counsel to the Tax-Exempt Fund, holders of the Michigan Series who are subject
to the Michigan income tax or single business tax will not be subject to the
Michigan income tax or single business tax on Michigan Series dividends to the
extent that such distributions qualify as exempt-interest dividends of a
regulated investment company under Section 852(b)(5) of the Code which are
attributable to interest on tax-exempt obligations of the State of Michigan, or
its political or governmental subdivisions, its governmental agencies or
instrumentalities (as well as certain other federally tax-exempt obligations,
the interest on which is exempt from Michigan tax, such as, for example, certain
obligations of Puerto Rico) (collectively, "Michigan Obligations"). To the
extent that distributions on the Michigan Series are attributable to sources
other than those described in the preceding sentence, such distributions,
including, but not limited to, long or short-term capital gains, will not be
exempt from Michigan income tax or single business tax. The Michigan Department
of Treasury has issued a bulletin stating that holders of interests in regulated
investment companies who are subject to the Michigan intangibles tax will be
exempt from the tax to the extent that the investment portfolio consists of U.S.
obligations and obligations of the State of Michigan or of its political
subdivisions. In addition, Michigan Series shares owned by certain financial
institutions or by certain other persons subject to the Michigan single business
tax are not subject to the Michigan intangibles tax. To the extent the
distributions on the Michigan Series are not subject to Michigan income tax,
they are not subject to the uniform city income tax imposed by certain Michigan
cities.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Michigan Series, at least 80% of the value of the net assets
of the Michigan Series will be maintained in debt obligations which are exempt
from federal income tax and Michigan income and single business taxes.

The Michigan Series will notify its shareholders within 60 days after the
close of the year as to the interest derived from Michigan Obligations and
exempt from Michigan income tax.

Minnesota Taxes

In the opinion of Faegre & Benson Professional Limited Liability Partnership,
Minnesota tax counsel to the Tax-Exempt Fund, provided that the Minnesota Series
qualifies as a "regulated investment company" under the Code, shareholders of
the Minnesota Series who are individuals, estates, or trusts and who are subject
to the regular Minnesota personal income tax will not be subject to such regular
Minnesota tax on Minnesota Series dividends to the extent that such
distributions qualify as exempt-interest dividends of a regulated investment
company under Section 852(b)(5) of the Code which are derived from interest on
tax-exempt obligations of the State of Minnesota, or its political or
governmental subdivisions, municipalities, governmental agencies or
instrumentalities. The foregoing will apply, however, only if the portion of the
exempt-interest dividends from such Minnesota sources that is paid to all
shareholders represents 95% or more of the exempt-interest dividends that are
paid by the Minnesota Series. If the 95% test is not met, all exempt-interest
dividends that are paid by the Minnesota Series will be subject to the regular
Minnesota personal income tax. Even if the 95% test is met, to the extent that
exempt-interest dividends that are paid by the Minnesota Series are not derived
from the Minnesota sources described in the first sentence of this paragraph,
such dividends will be subject to the regular Minnesota personal income tax.
Other distributions of the Minnesota Series, including distributions from net
short-term and long-term capital gains, are generally not exempt from the
regular Minnesota personal income tax.

Minnesota presently imposes an alternative minimum tax on individuals,
estates, and trusts that is based, in part, on such taxpayers' federal
alternative minimum taxable income, which includes federal tax preference items.
The Code provides that interest on specified private activity bonds is a federal
tax preference item, and that an exempt-interest dividend of a regulated
investment company constitutes a federal tax preference item to the extent of
its proportionate share of the interest on such private activity bonds.

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Accordingly, shareholders of the Minnesota Series who are individuals, estates,
or trusts may be subject to the Minnesota alternative minimum tax as a result of
the receipt of exempt-interest dividends that are attributable to such private
activity bond interest, even though they are also derived from the Minnesota
sources described in the paragraph above. In addition, the entire portion of
exempt-interest dividends that is received by such shareholders and that is
derived from sources other than the Minnesota sources described in the paragraph
above is subject to the Minnesota alternative minimum tax. Further, should the
95% test that is described in the paragraph above fail to be met, all of the
exempt-interest dividends that are paid by the Minnesota Series, including all
of those that are derived from the Minnesota sources described in the paragraph
above, will be subject to the Minnesota alternative minimum tax, in the case of
shareholders of the Minnesota Series who are individuals, estates or trusts.

Subject to certain limitations that are set forth in the Minnesota rules,
Minnesota Series dividends, if any, that are derived from interest on certain
United States obligations are not subject to the regular Minnesota personal
income tax or the Minnesota alternative minimum tax, in the case of shareholders
of the Minnesota Series who are individuals, estates, or trusts.

Minnesota Series distributions, including exempt-interest dividends, are not
excluded in determining the Minnesota franchise tax on corporations that is
measured by taxable income and alternative minimum taxable income. Minnesota
Series distributions may also be taken into account in certain cases in
determining the minimum fee that is imposed on corporations, S corporations, and
partnerships.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Minnesota Series, at least 80% of the value of the net assets
of the Minnesota Series will be maintained in debt obligations which are exempt
from the federal income tax and the Minnesota personal income tax. The Minnesota
Series will invest so that the 95% test described in the paragraphs above is
met.

The Minnesota Series will notify its shareholders within 30 days after the
close of the year as to the interest derived from Minnesota obligations and
exempt from the Minnesota personal income tax.

Missouri Taxes

In the opinion of Bryan Cave, Missouri tax counsel to the Tax-Exempt Fund,
dividends distributed to individual shareholders of the Missouri Series will be
exempt from the Missouri personal income tax imposed by Chapter 143 of the
Missouri Revised Statutes to the extent that such dividends qualify as exempt
interest dividends of a regulated investment company under Section 852(b)(5) of
the Code and are derived from interest on obligations of the State of Missouri
or any of its political subdivisions or authorities or obligations issued by the
government of Puerto Rico or its authority (collectively, "Missouri
Obligations"). Capital gain dividends, as defined in Section 852(b)(3) of the
Code, distributable by the Fund to individual resident shareholders of the
Missouri Series, to the extent includable in federal adjusted gross income, will
be subject to Missouri income taxation. Shares in the Missouri Series are not
subject to Missouri personal property taxes.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Missouri Series, at least 80% of the value of the net assets
of the Missouri Series will be maintained in debt obligations which are exempt
from federal income tax and Missouri personal income tax.

The Missouri Series will notify its shareholders within 60 days after the
close of the year as to the interest derived from Missouri Obligations and
exempt from the Missouri personal income tax.

New Jersey Taxes

In the opinion of McCarter & English, New Jersey counsel to the New Jersey
Fund, income distributions paid from a "qualified investment fund" are exempt
from the New Jersey personal income tax, to the extent attributable to
tax-exempt obligations specified by New Jersey law. As defined in N.J.S.A.
54A:6-14.1, a "qualified investment fund" is any investment or trust company, or

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series of such investment company or trust registered with the Securities and
Exchange Commission, which for the calendar year in which a distribution is
paid, which has no investments other than interest-bearing obligations,
obligations issued at a discount, and cash and cash items, including
receivables, and which has at least 80% of the aggregate principal amount of all
its investments, excluding cash and cash items, including receivables, invested
in obligations issued by New Jersey, or in obligations that are free from state
or local taxation under New Jersey and federal laws such as obligations issued
by the governments of Puerto Rico, Guam or the Virgin Islands ("Tax-Exempt
Securities"). Interest income and gains realized by the New Jersey Fund upon
disposition of obligations and distributed to the shareholders are exempt from
the New Jersey personal income tax to the extent attributable to Tax-Exempt
Securities. Gains resulting from the redemption or sale of shares of the New
Jersey Fund would also be exempt from the New Jersey personal income tax.

The New Jersey personal income tax is not applicable to corporations. For all
corporations subject to the New Jersey Corporate Business Tax, interest on
Tax-Exempt Securities is included in the net income tax base for purposes of
computing the corporation business tax. Furthermore, any gain upon the
redemption or sale of shares by a corporate shareholder is also included in the
net income tax base for purposes of computing the Corporation Business Tax.

The New Jersey Fund will notify shareholders by February 15 of each calendar
year as to the amounts of all such dividends and distributions which are exempt
from federal income taxes and New Jersey personal income tax and the amounts, if
any, which are subject to such taxes. Shareholders are, however, urged to
consult with their own tax advisors as to the federal, state or local tax
consequences in their specific circumstances.

Prospective investors should be aware that an investment in a state
tax-exempt fund may not be suitable for persons who do not receive income
subject to income taxes of such state.

New York State and City Taxes

In the opinion of Sullivan & Cromwell, counsel to the Funds, holders of the
New York Series who are subject to New York State and City tax on dividends will
not be subject to New York State and City personal income taxes on New York
Series dividends to the extent that such distributions qualify as
exempt-interest dividends under Section 852(b)(5) of the Code and represent
interest income attributable to federally tax-exempt obligations of the State of
New York and its political subdivisions (as well as certain other federally
tax-exempt obligations the interest on which is exempt from New York State and
City personal income taxes such as, for example, certain obligations of Puerto
Rico) (collectively, "New York Obligations"). To the extent that distributions
on the New York Series are derived from other income, including long or
short-term capital gains, such distributions will not be exempt from State or
City personal income taxes.

Dividends on the New York Series are not excluded in determining New York
State or City franchise taxes on corporations and financial institutions.

Except during temporary defensive periods or when acceptable investments are
unavailable to the New York Series, the Tax-Exempt Fund will maintain at least
80% of the value of the net assets of the New York Series in debt obligations
which are exempt from federal income tax and New York State and City personal
income taxes.

The Series will notify its shareholders within 45 days after the close of the
year as to the interest derived from New York Obligations and exempt from New
York State and City personal income taxes.

North Carolina Taxes

In the opinion of Horack, Tally, Pharr & Lowndes, tax counsel to the North
Carolina Series, distributions from the North Carolina Series to shareholders
subject to North Carolina income taxes will not be taxable for North Carolina
income tax purposes to the extent the distributions either (i) qualify as
exempt-interest dividends of a regulated investment company under the Code and
are attributable to interest on obligations issued by the State of North

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<PAGE>

Carolina and its political subdivisions or (ii) are dividends attributable to
interest on direct obligations of the United States government and agencies and
possessions of the United States, so long as in both cases the North Carolina
Series provides a supporting statement to the shareholders designating the
portion of the dividends of the North Carolina Series attributable to interest
on obligations issued by the State of North Carolina and its political
subdivisions or direct obligations of the United States government and agencies
and possessions of the United States. In the absence of such a statement, the
total amount of the dividends will be taxable for North Carolina income tax
purposes. Distributions attributable to other sources, including exempt-interest
dividends attributable to interest on obligations of states other than North
Carolina and the political subdivisions of such other states as well as capital
gains, will be taxable for North Carolina income tax purposes.

The North Carolina Series will notify its shareholders within sixty days
after the close of its taxable year as to the amount of dividends and
distributions to the shareholders of the North Carolina Series which are exempt
from North Carolina income taxes and the dollar amount, if any, which is subject
to North Carolina income taxes.

For purposes of the North Carolina tax on the value of intangible personal
property, there will be allowed a percentage reduction in the value of the
shares of the North Carolina Series equal to the percentage of the North
Carolina Series invested in direct obligations of the United States government
and agencies and possessions of the United States and obligations of the State
of North Carolina and its political subdivisions and agencies. In order for this
percentage reduction to apply, information regarding the composition of the
investments of the North Carolina Series must be submitted annually to the North
Carolina Department of Revenue by the North Carolina Series. The North Carolina
Series will provide such information and the percentage reduction in the value
of the shares of the North Carolina Series for North Carolina intangibles tax
purposes to the shareholders annually.

Ohio Taxes

In the opinion of Squire, Sanders & Dempsey, Ohio tax counsel to the
Tax-Exempt Fund, holders of the Ohio Series who are subject to the Ohio personal
income tax, the net income base of the Ohio corporation franchise tax, or school
district or municipal income taxes in Ohio will not be subject to such taxes on
dividend distributions with respect to shares of the Ohio Series to the extent
that such distributions are properly attributable to interest (including accrued
original issue discount) on obligations issued by or on behalf of the State of
Ohio, political subdivisions thereof, or agencies or instrumentalities thereof
("Ohio Obligations"), or by the government of Puerto Rico, the Virgin Islands or
Guam, provided that the Ohio Series qualifies as a "regulated investment
company" for federal income tax purposes and that at all times at least 50% of
the value of the total assets of the Ohio Series consists of Ohio Obligations or
similar obligations of other states or their subdivisions. It is assumed for
purposes of this discussion of Ohio taxes that these requirements are satisfied.
Shares of the Ohio Series will be included in a corporation's tax base for
purposes of computing the Ohio corporation franchise tax on the net worth basis.

Dividends on shares of the Ohio Series that are attributable to gain from the
sale, exchange or other disposition of Ohio Obligations held by the Ohio Series
are not subject to the Ohio personal income tax, the net income base of the Ohio
corporation franchise tax, or school district or municipal income taxes in Ohio.

The Ohio Series is not subject to the Ohio personal income tax, Ohio school
district income taxes, the Ohio corporation franchise tax, or the Ohio dealers
in intangibles tax, provided that, with respect to the Ohio corporation
franchise tax and the Ohio dealers in intangibles tax, the Tax-Exempt Fund
complies with certain reporting requirements.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Ohio Series, the Tax-Exempt Fund will maintain at least 80%
of the value of the net assets of the Ohio Series in debt obligations which are
exempt from federal income tax and the Ohio personal income tax and the net

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income base of the Ohio corporation franchise tax.

The Ohio Series will notify its shareholders within 60 days after the close
of the year as to the status for Ohio tax purposes of distributions with respect
to shares of the Ohio Series.

Oregon Taxes

In the opinion of Schwabe, Williamson & Wyatt, Oregon tax counsel to the
Tax-Exempt Fund, under present law, individual shareholders of the Oregon Series
will not be subject to Oregon personal income taxes on distributions received
from the Oregon Series to the extent that such distributions (1) qualify as
"exempt-interest dividends" under Section 852 (b)(5) of the Code and (2) are
derived from interest on obligations of the State of Oregon or any of its
political subdivisions or authorities or from interest on obligations of the
governments of Puerto Rico, Guam, the Virgin Islands or the Northern Mariana
Islands (collectively, "Oregon Obligations"). Other distributions, including any
long-term and short-term capital gains, will generally not be exempt from
personal income taxes in Oregon.

No portion of distributions from the Oregon Series are exempt from Oregon
excise tax on corporations. However, shares of the Oregon Series are not subject
to Oregon property tax.

Except during temporary defensive periods or when acceptable investments are
unavailable to the Oregon Series, at least 80% of the value of the net assets of
the Oregon Series will be maintained in debt obligations, the interest payments
of which are exempt from federal income tax and Oregon personal income taxes.

The Oregon Series will notify its shareholders within 60 days after the close
of the year as to the interest derived from Oregon Obligations and exempt from
Oregon personal income taxes.

Pennsylvania Taxes

In the opinion of Ballard Spahr Andrews & Ingersoll, Pennsylvania tax counsel
to the Pennsylvania Fund, individual shareholders of the Pennsylvania Fund who
are subject to the Pennsylvania personal income tax will not be subject to
Pennsylvania personal income tax on distributions from the Pennsylvania Fund to
the extent that such distributions are attributable to interest paid on
Pennsylvania Tax-Exempt Securities or U.S. Government obligations. Distributions
attributable to most other sources, including distributions attributable to gain
on the sale of such instruments, will not be exempt from Pennsylvania personal
income tax.

The same rules apply under the tax imposed by the Philadelphia School
District on the unearned income of Philadelphia residents, except that all
capital gain distributions are exempt from the School District tax regardless of
the source from which they are paid.

Corporate shareholders who are subject to the Pennsylvania corporate net
income tax will not be subject to corporate net income tax on distributions from
the Pennsylvania Fund that qualify as "exempt-interest dividends" for federal
income tax purposes or are derived from interest on U.S. Government obligations.

Individual shareholders of the Pennsylvania Fund who are subject to the
Pennsylvania personal property tax will be exempt from Pennsylvania personal
property tax on their shares of the Pennsylvania Fund to the extent that the
Pennsylvania Fund portfolio consists of Pennsylvania Tax-Exempt Securities and
U.S. Government obligations on the annual assessment date. Corporations are not
subject to Pennsylvania personal property taxes.

Shareholders will receive an annual Statement of Account and information
regarding the federal and Pennsylvania income tax status of all distributions
made during the year. Information will also be provided to individual
Pennsylvania shareholders regarding the portion of the value of their shares, if
any, subject to Pennsylvania personal property tax.

Prospective investors should be aware that an investment in the Pennsylvania
Fund may not be suitable for persons who are not residents of the State of
Pennsylvania or who do not receive income subject to income taxes of the State.

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South Carolina Taxes

In the opinion of Sinkler & Boyd, South Carolina tax counsel to the
Tax-Exempt Fund, shareholders of the South Carolina Series who are subject to
South Carolina individual or corporate income taxes will not be subject to such
taxes on South Carolina Series' dividends to the extent that such dividends
qualify as either (1) exempt-interest dividends of a regulated investment
company under Section 852(b)(5) of the Code, which are derived from interest on
tax-exempt obligations of the State of South Carolina or any of its political
subdivisions or on obligations of the Government of Puerto Rico that are exempt
from federal income tax; or (2) dividends derived from interest or dividends on
obligations of the United States and its possessions or on obligations or
securities of any authority or commission exempt from state income taxes under
the laws of the United States (collectively, "South Carolina Obligations"). To
the extent that South Carolina Series' distributions are attributable to other
sources, such as long or short-term capital gains, such distributions will not
be exempt from South Carolina taxes.

Except during temporary defensive periods or when acceptable investments are
unavailable to the South Carolina Series, at least 80% of the value of the net
assets of the South Carolina Series will be maintained in debt obligations which
are exempt from federal income tax and South Carolina income tax.

The South Carolina Series will notify its shareholders within 60-days after
the close of the year as to the interest derived from South Carolina Obligations
and exempt from South Carolina income taxes.

Other State and Local Taxes

The exemption of interest on tax-exempt securities for federal income tax
purposes does not necessarily result in exemption under the income tax laws of
any state or city. Except as noted above with respect to a particular state,
distributions from a Fund may be taxable to investors under state and local law
even though all or a part of such distributions may be derived from federally
tax-exempt sources or from obligations which, if received directly, would be
exempt from such income tax. In some states, shareholders of the National Series
may be afforded tax-exempt treatment on distributions to the extent they are
derived from tax-exempt securities issued by that state or its localities.
Prospective investors should be aware that an investment in a certain State
Series may not be suitable for persons who are not residents of the designated
state or who do not receive income subject to income taxes in that state.
Shareholders should consult their own tax advisers.

SHAREHOLDER INFORMATION

Shareholders will be sent semi-annual reports regarding their Fund. General
information about the Funds may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman & Co.
Incorporated, 100 Park Avenue, New York, New York 10017 or telephoning the
Corporate Communications/ Investor Relations Department toll-free by dialing
800-221-7844 from all continental United States, except New York or (212)
850-1864 in New York State and the Greater New York City area. Information about
shareholder accounts may be requested by writing Shareholder Services, Seligman
Data Corp., at the same address or by toll-free telephone by dialing
800-221-2450 from all continental United States. Seligman Data Corp. may be
telephoned Monday through Friday (except holidays), between the hours of 8:30
a.m. and 5:30 p.m. Eastern time and calls will be answered by our service
representatives. 24-hour automated telephone access is available by dialing
1-800-622-4597 on a touchtone phone which provides instant access to price,
yield, account balance, most recent transaction and other information. In
addition, account statements, Form 1099 DIVS and checkbooks can be ordered. To
insure prompt delivery of checks, account statements and other information,
Seligman Data Corp., should be notified immediately in writing of any address
change. Address changes may be telephoned to Seligman Data Corp. if the
shareholder has elected telephone services. For more information about telephone
services, see "Telephone Transactions" above.

Account Services. Shareholders are sent confirmation of financial
transactions.

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Other investor services are available. These include:

o Invest-A-Check(R) enables a shareholder to authorize checks to be drawn on
a checking account at regular intervals for fixed amounts of $50 or more, to
purchase shares. (See "Terms and Conditions" on page 50.)

o Automatic Dollar-Cost-Averaging Service. The Automatic
Dollar-Cost-Averaging Service permits a shareholder of Seligman Cash
Management Fund to exchange a specified amount, of at least $100, into Class
A shares of a Fund at regular monthly or quarterly intervals. The shares of
Seligman Cash Management Fund and the Fund must be registered in the same
name. If the shareholder is opening a new fund account through this service,
a minimum exchange of $1,000 is required.

o Dividends From Other Investments permits a shareholder to order dividends
payable on shares of other companies to be paid to and invested in additional
shares of the Series. (Dividend checks must meet or exceed the required
minimum purchase amount and include the shareholder's name, the name of the
Series and the class of shares in which the investment is to be made and the
shareholder's Series' account number.)

o Automatic CD Transfer Service permits a shareholder to instruct a bank to
invest the proceeds of a maturing bank certificate of deposit ("CD") in
shares of any designated Seligman Mutual Fund. Shareholders who wish to use
this service, should contact Seligman Data Corp. or a broker to obtain the
necessary documentation. Banks may charge a penalty on CD assets withdrawn
prior to maturity. Accordingly, it will not normally be advisable to
liquidate a CD before its maturity.

o Payments at Regular Intervals can be made to a shareholder who owns or
purchases Class A shares worth $5,000 or more and they are held as book
credits under the Automatic Cash Withdrawal Service. Holders of Class D
shares may elect to use this service with respect to shares that have been
held for at least one year. (See "Terms and Conditions" on page 50.)

o Directed Dividends allows a shareholder to pay dividends to another person
or to be directed to another mutual fund in the Seligman Group for purchase
at net asset value. Dividends on Class A and Class D shares may be directed
only to shares of the same class of another mutual fund in the Seligman
Group.

o Overnight Delivery to service shareholder requests is available for a
$15.00 fee which may be deducted from a shareholder's account, if requested.

o Copies of Account Statements will be sent to each shareholder free of
charge for the current year and most recent prior year. Copies of year-end
statements for years prior thereto are available for a fee of $10.00 per
year, per account, with a maximum charge of $150 per account. Statement
requests should be forwarded, along with a check to Seligman Data Corp.

ADVERTISING A FUND'S PERFORMANCE

From time to time, a Series advertises its "yield," "tax equivalent yield,"
"average annual total return" and "total return" each of which are calculated
separately for each Series' Class A and Class D shares. These figures are based
on historical earnings and are not intended to indicate future performance. The
"yield" of a Series' class refers to the income generated by an investment in
the Series over a 30-day period. This income is then "annualized." That is, the
amount of income generated by the investment during that 30-day period is
assumed to be generated each 30-day period for twelve periods and is shown as a
percentage of the investment. The income earned on the investment is also
assumed to be reinvested at the end of the sixth 30-day period. The "tax
equivalent yield" is calculated similarly to the "yield," except that the yield
is increased using a stated income tax rate to demonstrate the taxable yield
necessary to produce an after-tax yield equivalent to the Series. The "average
annual total return" is the annual rate required for the initial payment to grow
to the amount which would be received at the end of the specified period (one
year, five years, and ten years or since the inception of the Series), i.e., the
average annual compound rate of return, assuming the payment of the maximum
sales load, if any, when the investment was first made and that all

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distributions and dividends by the Series were reinvested on the reinvestment
dates during the period. Total return is calculated with these same assumptions
and shows the aggregate return on an investment in a class over a specified
period (one year, five years and ten years or since the inception of the
Series). Class A total return and average annual total return quoted from time
to time are not adjusted for periods prior to commencement dates, December 27,
1990, in the case of the Florida Series, and January 1, 1993, in the case of the
California High-Yield Series, California Quality Series, and each Series of the
Tax-Exempt Fund, for the annual administration, shareholder services and
distribution fee. Such fee, if reflected, would reduce the performance quoted.
The waiver by the Manager of its fees and reimbursement of certain expenses
during certain periods (as set forth under "Financial Highlights" herein) would
positively affect the performance results quoted.

From time to time, reference may be made in advertising or promotional
material to mutual fund rankings prepared by Lipper Analytical Service, Inc.
("Lipper"), an independent reporting service that monitors the performance of
mutual funds. Lipper ranks funds in various categories by making comparative
calculations using total return. Each Series may quote its Lipper ranking in the
Municipal Bond Fund category or the Single State Municipal Bond Fund category or
its Lipper ranking for all municipal bond funds monitored by Lipper. In
addition, each class of a Series may compare its total return over a certain
period with the average performance of all funds in these Lipper categories for
the same period. As is the case, in calculating the total return of a Series'
Class A and Class D shares, the Lipper analysis assumes investment of all
dividends and distributions paid but does not take into account applicable sales
loads. A Series may also refer in advertisements, or in other promotional
material to articles, comments, listings and columns in the financial and other
press pertaining to a Series' performance. Examples of such financial and other
press publications include Barron's, Business Week, CDA/Wiesenberger Mutual
Funds Investment Report, Christian Science Monitor, Financial Planning,
Financial Times, Financial World, Forbes, Fortune, Individual Investor,
Investment Advisor, Investors Business Daily, Kiplinger's, Los Angeles Times,
MONEY Magazine, Morningstar, Inc., Pensions and Investments, Smart Money, The
New York Times, The Wall Street Journal, USA Today, U.S. News and World Report,
Washington Post, Worth Magazine and Your Money.

ORGANIZATION AND CAPITALIZATION

Each Fund is a non-diversified, open-end management investment company, as
defined in the 1940 Act. The New Jersey Fund was incorporated in Maryland on
March 13, 1987. The Pennsylvania Fund was organized as an unincorporated trust
under the laws of the Commonwealth of Pennsylvania by a Declaration of Trust
dated May 13, 1986. The Tax-Exempt Fund was incorporated in Maryland on August
8, 1983. The Tax-Exempt Trust was established under the laws of the Commonwealth
of Massachusetts by a Declaration of Trust dated July 27, 1984.

The Directors or Trustees of the Funds have authority to create and classify
shares of capital stock or beneficial interest in separate Series, without
further action by shareholders. The Declarations of Trust of the Pennsylvania
Fund and the Tax-Exempt Trust permit the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest in separate Series. To
date, shares of thirteen Series of the Tax-Exempt Fund, four Series of
Tax-Exempt Trust, one Series of the New Jersey Fund and one Series of the
Pennsylvania Fund have been authorized, which shares constitute the interests in
the Series described herein. Further series may be added in the future. Each of
the Series capital stock or shares of beneficial interest has a par value of
$.001 per share and is divided into two classes. Each share of each Series'
Class A and Class D common stock or beneficial interest, is equal as to
earnings, assets and voting privileges, except that each class bears its own
separate distribution and certain other class expenses and has exclusive voting
rights with respect to any matter to which a separate vote of any class is
required by the 1940 Act or applicable state law. Each Fund has received an
order from the Securities and Exchange Commission permitting the issuance and
sale of multiple classes of common stock or beneficial interests. The 1940 Act

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requires that where more than one class exists, each class must be preferred
over all other classes in respect of assets specifically allocated to such
class. In accordance with the Articles of Incorporation or Declaration of Trust
of each Fund, the Board of Directors or Trustees may authorize the creation of
additional classes of common stock or beneficial interest with such
characteristics as are permitted by the order received from the Securities and
Exchange Commission. Shares entitle their holders to one vote per share. Shares
have noncumulative voting rights, do not have preemptive or subscription rights
and are transferable.

It is the intention of the Funds not to hold Annual Meetings of Shareholders.
The Directors or Trustees may call Special Meetings of Shareholders for action
by shareholder vote as may be required by the 1940 Act, or a Fund's Declaration
of Trust or Articles of Incorporation. Pursuant to the 1940 Act, shareholders
have to approve the adoption of any management contract, distribution plan and
any changes in fundamental investment policies. Shareholders also have the right
to call a meeting of shareholders for the purpose of voting on the removal of
one or more Directors or Trustees.

The shareholders of a Massachusetts business trust (the Tax-Exempt Trust) or
a Pennsylvania trust (the Pennsylvania Fund), could, under certain
circumstances, be held personally liable as partners of its obligations.
However, the Declaration of Trust of each of the Tax-Exempt Trust and the
Pennsylvania Fund, contains an express disclaimer of shareholder liability for
acts or obligations of the Trusts and also provides, for idemnification and
reimbursement of expenses out of the Trusts, or Series thereof, for any
shareholder held personally liable for obligations of the Trust, or Series
thereof.

There is a possibility that one Fund might be liable for any misstatement,
inaccuracy, or incomplete disclosure in this Prospectus concerning any other
Fund contained herein. Based on the advice of counsel, however, the Funds
believe that the potential liability of each Fund with respect to the disclosure
in this Prospectus extends only to the disclosure relating to that Fund.

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TERMS AND CONDITIONS

General Account Information

Investments will be made in as many shares of a Series, including fractions
to the third decimal place, as can be purchased at the net asset value plus a
sales load, if applicable, at the close of business on the day payment is
received. If your check received in payment of a purchase of shares is
dishonored for any reason, Seligman Data Corp. may cancel the purchase and may
also redeem additional shares, if any, held in your account in an amount
sufficient to reimburse the Fund for any loss it may have incurred and charge a
$10.00 return check fee. Shareholders will receive dividends from investment
income and any distributions from gain realized on investments in shares or in
cash according to the option elected. Dividend and gain options may be changed
by notifying Seligman Data Corp. in writing at least five business days prior to
the payable date. Stock certificates will not be issued unless requested.
Replacement stock certificates will be subject to a surety fee.

Invest-A-Check(R) Service

The Invest-A-Check(R) Service is available to all shareholders. Your
application is subject to acceptance by your bank and Seligman Data Corp. Checks
in the amount specified will be drawn automatically on your bank on the fifth
day of each month (or on the prior business day if the fifth day of the month
falls on a weekend or holiday) in which an investment is scheduled and invested
at the public offering price at the close of business on the same date. After
the initial investment, the value of shares held in your Account must equal not
less than two regularly scheduled investments. If a check is not honored by your
bank, or if the value of shares held falls below the required minimum, the
Service will be suspended. In the event that a check is returned marked
"unpaid," Seligman Data Corp. will cancel the purchase, redeem shares held in
your account for an amount sufficient to reimburse the Fund for any loss it may
have incurred as a result, and charge a $10.00 return check fee. This fee may be
debited from your account. Service will be reinstated upon written request
indicating that the cause of interruption has been corrected. The Service may be
terminated by you or Seligman Data Corp. at any time by written notice. You
agree to hold the Funds and their agents free from all liability which may
result from acts done in good faith and pursuant to these terms. Instructions
for establishing Invest-A-Check(R) Service are given on the Account Application.
In the event you exchange all of your shares from one mutual fund in the
Seligman Group to another, you must re-apply for the Invest-A-Check(R) Service
in the Seligman Fund into which your exchange was made. In the event of a
partial exchange, the Invest-A-Check(R) Service will be continued, subject to
the above conditions, in the Seligman Fund from which the exchange was made.

Automatic Cash Withdrawal Service

Automatic Cash Withdrawal Service is available to Class A shareholders and
to Class D shareholders with respect to Class D shares held for one year or
more. A sufficient number of full and fractional shares will be redeemed to
provide the amount required for a scheduled payment. Redemptions will be made at
the asset value at the close of business on the 15th day of each month (or on
the prior business day if the 15th falls on a weekend or holiday). You may
change the amount of scheduled payments or you may suspend payments by written
notice to Seligman Data Corp. at least ten days prior to the effective date of
such a change or suspension. Your Service may be terminated by you or Seligman
Data Corp. at any time by written notice. It will be terminated upon proper
notification of the death or legal incapacity of the shareholder. This Service
is considered terminated in the event a withdrawal of shares, other than to make
scheduled withdrawal payments, reduces the value of shares remaining on deposit
to less than $5,000. Continued payments in excess of dividend income invested
will reduce and ultimately exhaust capital. Withdrawals, concurrent with
purchases of shares of this or any other investment company, will be
disadvantageous to you because of the payment of duplicative sales loads, if
applicable. For this reason, additional purchases of Fund shares are discouraged
when the Withdrawal Service is in effect.

Letter of Intent -- Class A Shares Only

Seligman Financial Services, Inc. will hold in escrow shares equal to 5% of
the minimum purchase amount specified. Dividends and distributions on the
escrowed shares will be paid to you or credited to your Account. Upon completion
of the specified minimum purchase within the thirteen-month period, all shares
held in escrow will be deposited in your Account or delivered to you. You may
include the total asset value of shares of the Seligman Funds (on which a sales
load was paid) owned as of the date of a Letter of Intent toward the completion
of the Letter. If the total amount invested within the thirteen-month period
does not equal or exceed the specified minimum purchase, you will be requested
to pay the difference between the amount of the sales load paid and the amount
of the sales load applicable to the total purchase made. If, within 20 days
following the mailing of a written request, you have not paid this additional
sales load to Seligman Financial Services, sufficient escrowed shares will be
redeemed for payment of the additional sales load. Shares remaining in escrow
after this payment will be released to your Account. The intended purchase
amount may be increased at any time during the thirteen-month period by filing a
revised Agreement for the same period, provided that your Dealer furnishes
evidence that an amount representing the reduction in sales load under the new
Agreement, which becomes applicable on purchases already made under the original
Agreement, will be refunded to you and that the required additional escrowed
shares are being furnished by you.

Shares of Seligman Cash Management Fund, Inc. which have been acquired by an
exchange of shares of another Mutual Fund on which there is a sales load may be
taken into account in completing a Letter of Intent, or for Right of
Accumulation. However, shares of the Fund which have been purchased directly may
not be used for purposes of determining reduced sales loads on additional
purchases of the other Mutual Funds in the Seligman Group.

Check Redemption Service -- Class A Shares Only

If shares are held in joint names, all shareholders must sign Section 5 of
the Account Application. All checks will require all signatures unless a lesser
number is indicated on the face of the application. Accounts in the names of
corporations, trusts, partnerships, etc. must list all authorized signatories.

In all cases, each signature guarantees the genuineness of the other
signatures. Checks may not be drawn for less than $500.

I hereby authorize Mellon Bank, N.A. to honor checks drawn by me on my
account of Class A shares and to effect a redemption of sufficient shares in my
Fund account to cover payment of the check. I understand that shares in one
Series cannot be redeemed to cover a check written on another Series.

Mellon Bank, N.A. shall be liable only for its own negligence. The Fund will
not be liable for any loss, expense or cost arising out of check redemptions.
Each Fund reserves the right to change, modify or terminate this service at any
time upon notification mailed to the address of record of the shareholder(s).

SELIGMAN DATA CORP. WILL CHARGE A $10.00 PROCESSING FEE FOR ANY CHECK
REDEMPTION DRAFT RETURNED MARKED "UNPAID." THIS CHARGE MAY BE DEBITED FROM A
SHAREHOLDER'S ACCOUNT. NO REDEMPTION OF SHARES PURCHASED BY CHECK (UNLESS
CERTIFIED) WILL BE PERMITTED UNTIL THE FUND RECEIVES NOTICE THAT THE CHECK HAS
CLEARED WHICH MAY BE UP TO 15 DAYS FROM THE CREDIT OF THOSE SHARES TO A
SHAREHOLDER'S ACCOUNT.

2/95

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ACCOUNT APPLICATION

Please check one:
/ / Seligman New Jersey Tax-Exempt Fund, Inc. Please check one:
/ / Seligman Pennsylvania Tax-Exempt Fund Series / / Class A Shares
/ / Seligman Tax-Exempt Fund Series, Inc.--(Name of Series)______________ / / Class D Shares
/ / Seligman Tax-Exempt Series Trust--(Name of Series)___________________

Mail to: Seligman Data Corp., 100 Park Avenue, New York, NY 10017
(800) 221-2450 All Continental States

-------------------------------------------------------------------------------------------------------------------------------
1. ACCOUNT REGISTRATION
-------------------------------------------------------------------------------------------------------------------------------
TYPE OF / / Individuals / / Multiple Owners / / Transfer to Minor / / Other (Corporations, Trusts, Organizations,
Partnerships, etc.)
ACCOUNT Use Line 1 Use Lines 1, 2 & 3 Use Line 4 Use Line 5

Multiple Owners will be registered as Joint Tenants with Right of Survivorship.

The first name and Social Security or Taxpayer ID Number on line 1 or 5 of this Account Registration will be used for IRS
reporting.

NAME (Minors cannot be legal owners) PLEASE PRINT OR TYPE

1. __________________________________________________________________________________________________________________________
First Middle Last Social Security Number Birthdate

2. __________________________________________________________________________________________________________________________
First Middle Last Social Security Number Birthdate

3. __________________________________________________________________________________________________________________________
First Middle Last Social Security Number Birthdate

4. ___________________________________, as custodian for ___________________________ under the _________________
Custodian (one only) Minor (one only) State

Uniform Transfers to Minors Act ________________________________ until age ______________________ _____________________
Minor's Social Security Number (Not more than 21) Minor's Birthdate

5. _______________________________________________________________________________________ _________________________________
Name of Corporation or Other Entity. If a Trust, also complete Trust Section below. Taxpayer ID Number

ADDRESS TELEPHONE

________________________________________________ (_______)____________________ (_______)___________________
Street Address or P.O. Box Daytime Evening

___________________________________________________________ U.S. CITIZEN? / / Yes / / No_ ______________________
City State Zip If no, indicate country

- -----------------------------------------------------------------------------------------------------------------------------------
Enclosed is my check payable to (Please indicate below):
/ / Seligman New Jersey Tax-Exempt Fund / / Seligman Tax-Exempt Fund Series, Inc.--
/ / Seligman Pennsylvania Tax-Exempt Fund Series (Name of Series)____________
/ / Seligman Tax-Exempt Series Trust--
INITIAL (Name of Series)____________
INVESTMENT / / Class A Shares for $_____________ / / Class D Shares for $______________
($1,000 MINIMUM) ---------------------------------------------------------------------------------------------------------------
NO REDEMPTION OF SHARES PURCHASED BY CHECK (UNLESS CERTIFIED) WILL BE PERMITTED UNTIL THE FUND HAS RECEIVED
NOTICE THAT THE CHECK HAS CLEARED, WHICH MAY BE UP TO 15 DAYS FROM THE CREDIT OF THOSE SHARES TO YOUR ACCOUNT.

-------------------------------------------------------------------------------------------------------------------------------
2. TRUST ACCOUNTS
-------------------------------------------------------------------------------------------------------------------------------
TYPE OF ACCOUNT: / / Trust / / Guardianship / / Conservatorship / / Estate / / Other________________________
Trustee/Fiduciary Name______________________________ Trustee Name_________________________________

Trust Name_______________________________, for the benefit of (FBO)_________________________________

Trust Date_______________________________
-------------------------------------------------------------------------------------------------------------------------------
3. SIGNATURE AND CERTIFICATION
-------------------------------------------------------------------------------------------------------------------------------

Under penalties of perjury I certify that the number shown on this form is my correct Taxpayer Identification Number (Social
Security Number) and that I am not subject to backup withholding either because I have not been notified that I am subject to
backup withholding as a result of a failure to report all interest or dividends, or the Internal Revenue Service has notified
me that I am no longer subject to backup withholding. I certify to my legal capacity to purchase or redeem shares of the Fund
for my own Account, or for the Account of the organization named below. I have received a current Prospectus of the Funds and
appoint Seligman Data Corp. as my agent to act in accordance with my instructions herein.

A. __________________________________________________________________________________________________________________________
Date Signature of Investor

B. __________________________________________________________________________________________________________________________
Date Signature of Co-Investor, if any

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<S> <C>
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4. BROKER/DEALER OR FINANCIAL ADVISOR DESIGNATION
-------------------------------------------------------------------------------------------------------------------------------

__________________________________________________________________________________________________________________________
Firm Name

_____________________________________________________________(_________)__________________________________________________
Branch Address Area Code Telephone Number

__________________________________________________________________________________________________________________________
Representative Name Representative Number

-------------------------------------------------------------------------------------------------------------------------------
5. ACCOUNT OPTIONS AND SERVICES
-------------------------------------------------------------------------------------------------------------------------------

DIVIDENDS I elect to receive: / / 1. Dividends in shares, gain distributions in shares.
AND GAIN / / 2. Dividends in cash, gain distributions in shares.
DISTRIBUTIONS / / 3. Dividends in cash, gain distributions in cash.
Please NOTE: IF NO ELECTION IS MADE, OPTION NO. 1 AUTOMATICALLY WILL BE PUT INTO EFFECT.
check one All dividend and/or gain distributions taken in shares will be invested at net asset value.
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Please arrange with my bank to draw pre-authorized checks and invest $_____________ in my Account every:
INVEST-A- / / Month / / 3 Months
CHECK(R) I understand that my checks will be invested on the fifth day of the month for the period designated. I have
($50 MINIMUM) completed the "Bank Authorization to Honor Pre-Authorized Checks" on the following page.
- -----------------------------------------------------------------------------------------------------------------------------------

/ / Please send a check for $__________ beginning on the ____ day of ________________ 19____, and thereafter on
the ________ day specified of every:
AUTOMATIC / / Month / / 3rd Month / / 6th Month / / 12th Month
CASH
WITHDRAWAL Make payments to: Name______________________________________________________________________________________
(Class A or
Class D only Address___________________________________________________________________________________
after Class D
shares are held City________________________________ State____________________________ Zip____________
for one year)

Shares having a current value at offering price of $5,000 or more must be held in the Account at initiation of
Service, and all shares must be in "book credit" form.
- -----------------------------------------------------------------------------------------------------------------------------------

I intend to purchase, although I am not obligated to do so, shares of the above designated Series within a
LETTER 13-month period which, together with the total asset value of shares owned, will aggregate at least:
OF INTENT / / $50,000 / / $100,000 / / $250,000 / / $500,000 / / $1,000,000 / / $4,000,000
(Class A only) I agree to the escrow provision listed under "Terms and Conditions"in the back of the Prospectus.

- -----------------------------------------------------------------------------------------------------------------------------------
Accounts eligible for the Right of Accumulation or to be used toward completion of a Letter of Intent.

Please check applicable box:

/ / I am a trustee for the following accounts, which are held by the same trust, estate, or under the terms of
RIGHT a pension, profit sharing or other employee benefit trust qualified under section 401 of the Internal
OF Revenue Code.
ACCUMULATION
(Class A only) / / In calculating my holdings for Right of Accumulation or Letter of Intent purposes, I am including the
following additional accounts which are registered in my name, in my spouse's name, or in the name(s) of my
child(ren) under the age of 21.

Name____________________________ Fund______________________________ Account Number_____________________

Name____________________________ Fund______________________________ Account Number_____________________
- -----------------------------------------------------------------------------------------------------------------------------------

If you wish to have your dividend payments made to another party or Seligman Fund, please complete the
following. I hereby authorize and request that my dividend payments be made to:

DIVIDEND Name___________________________________________ Seligman Fund_______________________________________________
DIRECTION
OPTION Address________________________________________

City___________________________________________ Account Number______________________________________________

State, Zip_____________________________________
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</TABLE>

<PAGE>

INVEST-A-CHECK(R) SERVICE

(Please indicate below)
<TABLE>
<S> <C>

/ / Seligman New Jersey Tax-Exempt Fund, Inc. / / Seligman Tax-Exempt Fund Series, Inc.--(Name of Series)_______________
/ / Seligman Pennsylvania Tax-Exempt Fund Series / / Seligman Tax-Exempt Series Trust--(Name of Series)____________________
Please check one:
/ / Class A shares / / Class D shares
</TABLE>

Mail To: Seligman Data Corp., 100 Park Avenue, New York, NY 10017

To start your Invest-A-Check(R) Service, fill out Section A and the "Bank
Authorization to Honor Pre-Authorized Checks" below, and forward it with an
unsigned bank check from your regular checking account (marked "void", if you
wish).

- -------------------------------------------------------------------------------
A. INVEST-A-CHECK(R)

/ / Please arrange with my bank to draw pre-authorized checks and invest ($50
minimum) $____________ in my Account every:

/ / Month / / ___ Months

I understand that my checks will be dated on the fifth day of the month for the
period designated. I have completed the "Bank Authorization to Honor
Pre-Authorized Checks" below and have read and agree to the terms and conditions
applicable to the Invest-A-Check(R) Service as set forth in the Prospectus and
the Account Application included in the Prospectus.

__________________________________
Signature(s) of Investor(s)

__________________________________
- -------------------------------------------------------------------------------
BANK AUTHORIZATION TO HONOR PRE-AUTHORIZED CHECKS
- -------------------------------------------------------------------------------

To:____________________________________________________________________________
(Name of Bank)

_______________________________________________________________________________
Address of Bank or Branch (Street, City, State and Zip)

Please honor pre-authorized checks drawn on my account by Seligman Data Corp.,
100 Park Avenue, New York, N.Y. 10017, to the order of the Series designated and
charge them to my regular checking account. Your authority to do so shall
continue until you receive written notice from me revoking it. You may terminate
your participation in this arrangement at any time by written notice to me. I
agree that your rights with respect to each pre-authorized check shall be the
same as if it were a check drawn and signed by me. I further agree that should
any such check be dishonored, with or without cause, intentionally or
inadvertently, you shall be under no liability whatsoever.

_________________________ _________________________________________________
Checking Account Number Name(s) of Depositor(s) -- Please Print

_________________________________________________
Signature(s) of Depositor(s) -- As Carried by Bank

_________________________________________________

===============================================================================
Address (Street) (City) (State, Zip)

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
To the Bank Designated above:

Your depositor(s) named in the above form has instructed us to establish
the Invest-A-Check(R) Service for his convenience. Under the terms of the
Service, your depositor(s) has pre-authorized checks to be drawn against his
account in a specific amount at regular intervals to the order of the designated
Series. Checks presented to you will be magnetic-ink coded and will otherwise
conform to specifications of the American Bankers Association.

A letter of indemnification addressed to you and signed by Seligman
Financial Services, Inc., general distributor of the Series, appears below.

If there is anything we can do to help you in giving your depositor(s) this
additional Service which he has requested, please let us know.

SELIGMAN DATA CORP.

INDEMNIFICATION AGREEMENT

To the Bank designated above:

SELIGMAN FINANCIAL SERVICES, INC., distributor of the shares of the Series,
hereby agrees:

(1) To indemnify and hold you harmless against any loss, damage, claim or
suit, and any costs or expenses reasonably incurred in connection therewith,
either (a) arising as a consequence of your actions in connection with the
execution and issuance of any check or draft, whether or not genuine, purporting
to be executed by Seligman Data Corp. and received by you in the regular course
of business for the purpose of payment, or (b) resulting from the dishonor of
any such check or draft, with or without cause and intentionally or
inadvertently, even though such dishonor results in suspension or termination of
the Invest-A-Check(R) Service pursuant to which such checks or drafts are drawn.

(2) To refund to you any amount erroneously paid by you on any such check
or draft, provided claim for any such payment is made within 12 months after the
date of payment.

SELIGMAN FINANCIAL SERVICES, INC.

/s/ Stephen J. Hodgdon
President
- -------------------------------------------------------------------------------

2/95

C
<PAGE>

----------------------------------------------------------------------------
5. ACCOUNT OPTIONS AND SEVICES (continued)
----------------------------------------------------------------------------
TELEPHONE SERVICE ELECTION
By completing this section, I understand that I may place the following
requests by telephone:
o Redemptions up to $50,000 o Exchanges
o Address Changes o Dividend and/or Capital Gain
Distribution Option Changes

AUTHORIZATION
I understand that the telephone services are optional and that by signing
this Form I authorize the Funds, all other Seligman Funds with the same account
number and registration which I currently own or which I invest in the future,
and Seligman Data Corp. ("SDC"), to act upon instructions received by telephone
from me or any other person in accordance with the provisions regarding
telephone services as set forth in the current prospectus of each such Fund, as
amended from time to time. I understand that redemptions of uncertificated
shares of up to $50,000 will be sent only to my account address of record, and
only if such address has not changed within the 30 days preceding such request.

Any telephone instructions given in respect of this account and any account
into which exchanges are made are hereby ratified and I agree that neither the
Fund(s) nor SDC will be liable for any loss, cost or expense for acting upon
such telephone instructions reasonably believed to be genuine and in accordance
with the procedures described in the prospectus, as amended from time to time.
Such procedures include recording of telephone instructions, requesting personal
and/or account information to verify a caller's identity and sending written
confirmations of transactions. As a result of this policy, I may bear the risk
of any loss due to unauthorized or fraudulent telephone instructions; provided,
however, that if the Fund(s) or SDC fail to employ such procedures, the Fund(s)
and/or SDC may be liable. Please sign your name(s) as it appears on the first
page of this Account Application.

X___________________________________ X___________________________________
Date Date
- -------------------------------------------------------------------------------

2/95

- -------------------------------------------------------------------------------
CHECK REDEMPTION SERVICE -- Class A only

Available to shareholders who own or purchase shares having a value of at
least $25,000.00 on deposit with Seligman Data Corp.

If you wish to use this service, you must complete Section 3 and the
Signature Card below. Shareholders electing this service are subject to the
conditions of the Terms and Conditions in the back of the Prospectus.

- -------------------------------------------------------------------------------

CHECK WRITING SIGNATURE CARD
Authorized Signatures
_____________________________________ 1.___________________________________
Name of Fund
_____________________________________ 2.___________________________________
Account Number (If known)
_____________________________________ 3.___________________________________
Account Registration (Please Print)
_____________________________________ 4.___________________________________

/ / Check here if only one signature is required on checks.
/ / Check here if a combination of signatures is required and specify the
number: ________.

ACCOUNTS IN THE NAMES OF CORPORATIONS, TRUSTS, PARTNERSHIPS, ETC., MUST INDICATE
THE LEGAL TITLES OF ALL AUTHORIZED SIGNATORIES. SHAREHOLDERS ELECTING THIS
SERVICE ARE SUBJECT TO THE TERMS AND CONDITIONS LISTED IN THE PROSPECTUS.

<PAGE>

[THIS SECTION LEFT BLANK INTENTIONALLY]

- -------------------------------------------------------------------------------

Managed by

LOGO

J. & W. SELIGMAN & CO.
INCORPORATED
Investment Managers and Advisors
ESTABLISHED 1864

<PAGE>
- ------------------------------------------------------------------------------

Seligman New Jersey
Tax-Exempt Fund, Inc.

Seligman Pennsylvania
Tax-Exempt Fund Series

Seligman Tax-Exempt
Fund Series, Inc.

Seligman Tax-Exempt
Series Trust

- ------------------------------------------------------------------------------

100 Park Avenue
New York, New York 10017

TABLE OF CONTENTS
Page
----
Summary Of Fund Expenses................................................. 3
Financial Highlights .................................................... 8
Alternative Distribution System.......................................... 16
Investment Objective And Policies........................................ 17
Management Services...................................................... 25
Purchase Of Shares ...................................................... 26
Telephone Transactions................................................... 30
Redemption Of Shares..................................................... 31
Administration, Shareholder Services
And Distribution Plan.................................................. 33
Exchange Privilege....................................................... 34
Further Information About
Transactions In The Funds.............................................. 36
Dividends And Distributions ............................................. 36
Taxes.................................................................... 37
Shareholder Information ................................................. 46
Advertising A Fund's Performance ........................................ 47
Organization And Capitalization ......................................... 48

This prospectus does not constitute an offering in any state in which such
offering may not lawfully be made.

This prospectus is intended to constitute an offer by each Fund only of the
securities of which it is the issuer and is not intended to constitute an offer
by any Fund of the securities of any other Fund whose securities are also
offered by this prospectus. No Fund intends to make any representation as to the
accuracy or completeness of the disclosure in this prospectus relating to any
other Fund.

TEA1 2/95

- -------------------------------------------------------------------------------

Seligman New Jersey
Tax-Exempt Fund, Inc.

Seligman Pennsylvania
Tax-Exempt Fund Series

Seligman Tax-Exempt
Fund Series, Inc.

Seligman Tax-Exempt
Series Trust

- -------------------------------------------------------------------------------

[Photo]

Prospectus
February 1, 1995

LOGO

- -------------------------------------------------------------------------------
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
February 1, 1995
SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES
100 Park Avenue
New York, NY 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone:
(800) 221-2450 - all continental states

This Statement of Additional Information expands upon and supplements the
information contained in the current Prospectus of Seligman Pennsylvania
Tax-Exempt Fund Series, dated February 1, 1995. As stated in the Prospectus,
Seligman Pennsylvania Tax-Exempt Fund Series currently consists of one series,
the Seligman Pennsylvania Tax-Exempt Fund (the "Fund"). This Statement of
Additional Information should be read in conjunction with the Prospectus, which
may be obtained by writing or calling the Fund at the above address or telephone
numbers. This Statement of Additional Information, although not in itself a
Prospectus, is incorporated by reference into the Prospectus in its entirety.

The Fund offers two classes of shares. Class A shares may be purchased at
net asset value plus a sales load of up to 4.75%. Class D shares may be
purchased at net asset value and are subject to a contingent deferred sales load
("CDSL") of 1% if redeemed within one year.

Each share of Class A and Class D represents an identical legal interest in
the investment portfolio of the Fund and has the same rights except for certain
class expenses and except that Class D shares bear a higher distribution fee
that generally will cause the Class D shares to have a higher expense ratio and
pay lower dividends than Class A shares. Each Class has exclusive voting rights
with respect to its distribution plan. Although holders of Class A and Class D
shares have identical legal rights, the different expenses borne by each Class
will result in different dividends. The two classes also have different exchange
privileges.

TABLE OF CONTENTS

Page
----
Investment Objectives, Policies and Risks................................. 2
Investment Limitations.................................................... 5
Trustees and Officers..................................................... 6
Management and Expenses................................................... 10
Administration, Shareholder Services And
Distribution Plan....................................................... 11
Portfolio Transactions.................................................... 11
Purchase And Redemption Of Fund Shares.................................... 12
Distribution Services..................................................... 14
More About Taxes.......................................................... 14
Valuation................................................................. 15
Performance Information................................................... 15
General Information....................................................... 17
Special Considerations Regarding Investments
In Pennsylvania Tax-Exempt Securities................................... 18
Financial Statements...................................................... 20
Appendix A................................................................ 20
Appendix B................................................................ 23

TEDPA1A

1
<PAGE>

INVESTMENT OBJECTIVES, POLICIES AND RISKS

Seligman Pennsylvania Tax-Exempt Fund Series is a non-diversified open-end
management investment company or mutual fund, organized as an unincorporated
trust under the laws of the Commonwealth of Pennsylvania in 1986. The Fund seeks
to provide income exempt from federal and Pennsylvania income taxes.

The Fund is expected to invest principally, without percentage limitations,
in tax-exempt securities which on the date of investment are within the four
highest ratings of Moody's Investor Service ("Moody's") (Aaa, Aa, A, Baa for
bonds; MIG 1, MIG 2, MIG 3, MIG 4 for notes; P-1 for commercial paper) or
Standard & Poor's Corporation ("S&P") (AAA, AA, A, BBB for bonds; SP-1 - SP-2,
for notes; A-1+, A-1/A-2 for commercial paper). Tax-Exempt Securities rated in
these categories are commonly referred to as investment grade. The Fund may
invest in tax-exempt securities which are not rated, or which do not fall into
the credit ratings noted above if, based upon credit analysis by the Manager, it
is believed that such securities are of comparable quality. In determining
suitability of investment in a lower rated or unrated security, the Manager will
take into consideration asset and debt service coverage, the purpose of the
financing, history of the issuer, existence of other rated securities of the
issuer and other considerations as may be relevant, including comparability to
other issuers.

Although securities rated in the fourth rating category are commonly
referred to as investment grade, investment in such securities could involve
risks not usually associated with bonds rated in the first three categories.
Bonds rated BBB by S&P are more likely as a result of adverse economic
conditions or changing circumstance to exhibit a weakened capacity to pay
interest and re-pay principal than bonds in higher rating categories and bonds
rated Baa by Moody's lack outstanding investment characteristics and in fact
have speculative characteristics according to Moody's. Tax-exempt securities in
the fourth rating category of S&P or Moody's will generally provide a higher
yield than do higher rated tax-exempt securities of similar maturities; however,
they are subject to a greater degree of fluctuation in value as a result of
changing interest rates and economic conditions. The market value of the
tax-exempt securities will also be affected by the degree of interest of dealers
to bid for them, and in certain markets dealers may be more unwilling to trade
tax-exempt securities rated in the fourth rating categories than in the higher
rating categories.

A description of the credit ratings in which the Fund may invest is
contained in the Appendix to this Statement.

From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on tax-exempt securities and for providing state and local governments
with federal credit assistance. Reevaluation of the Fund's investment objectives
and structure might be necessary in the future due to market conditions which
may result from future changes in the tax laws.

Pennsylvania Tax-Exempt Securities

Pennsylvania Tax-Exempt Securities include notes, bonds and commercial
paper issued by or on behalf of the Commonwealth of Pennsylvania, its political
subdivisions, agencies and instrumentalities, the interest on which is, in the
opinion of counsel of the issuers, exempt from federal and Pennsylvania income
taxes. Such securities are traded primarily in an over-the-counter market. The
Fund may invest no more than 20% of its net assets in certain private activity
bonds, the interest on which is treated as a preference item for purposes of the
alternative minimum tax. See "Pennsylvania Tax-Exempt Securities" in the
Prospectus.

Under the Investment Company Act of 1940 (the "Act"), the identification of
the issuer of tax-exempt bonds, notes or commercial paper generally depends on
the terms and conditions of the obligation. If the assets and revenues of an
agency, authority, instrumentality or other political subdivision are separate
from those of the government creating the subdivision and the obligation is
backed only by the assets and revenues of the subdivision, such subdivision is
regarded as the sole issuer. Similarly, in the case of an industrial development
revenue bond or pollution control revenue bond, if the bond is backed only by
the assets and revenues of the nongovernmental user, the nongovernmental user is
regarded as the sole issuer. If in either case the creating government or
another entity guarantees an obligation, the security is treated as an issue of
such guarantor to the extent of the value of the guarantee.

2
<PAGE>

also may be issued in connection with the refunding of outstanding obligations,
obtaining funds to lend to other public institutions, and for general operating
expenses. Industrial development bonds, which are considered tax-exempt bonds if
the interest paid thereon is exempt from federal income tax, are issued by or on
behalf of public authorities to obtain funds to provide various
privately-operated facilities for business and manufacturing, housing, sports,
pollution control, and for airport, mass transit, port and parking facilities.

The two principal classifications of tax-exempt bonds are "general
obligation" and "revenue". General obligation bonds are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of principal
and interest. Revenue bonds are payable only from the revenues derived from a
particular facility or class of facilities or from the proceeds of other
specific revenue sources. Although industrial development bonds ("IDBs") are
issued by municipal authorities, they are generally secured by the revenues
derived from payments of the industrial user. The payment of principal and
interest on IDBs is dependent solely on the ability of the user of the
facilities financed by the bonds to meet its financial obligations and the
pledge, if any, of real and personal property so financed as security for such
payment.

Tax-Exempt Notes generally are used to provide for short-term capital needs
and generally have maturities of five years or less. Tax-Exempt Notes include:

1. Tax Anticipation Notes and Revenue Anticipation Notes. Tax Anticipation
Notes and Revenue Anticipation Notes are issued to finance short-term working
capital needs of political subdivisions. Generally, Tax Anticipation Notes are
issued in anticipation of various tax revenues, such as income, sales and real
property taxes, and are payable from these specific future taxes. Revenue
Anticipation Notes are issued in expectation of receipt of other kinds of
revenue, such as grant or project revenues. Usually political subdivisions issue
notes combining the qualities of both Tax and Revenue Anticipation Notes.

2. Bond Anticipation Notes. Bond Anticipation Notes are issued to provide
interim financing until long-term financing can be arranged. In most cases, the
long-term bonds then provide the money for the repayment of the Notes.

3. Construction Loan Notes. Construction Loan Notes are sold to provide
construction financing. Permanent financing, the proceeds of which are applied
to the payment of Construction Loan Notes, is sometimes provided by a commitment
by the Government National Mortgage Association ("GNMA") to purchase such loan
notes accompanied by a commitment by the Federal Housing Administration to
insure mortgage advances thereunder. In other instances, permanent financing is
provided by commitments of banks to purchase the loan notes.

Issues of Tax-Exempt Commercial Paper typically represent short-term,
unsecured, negotiable promissory notes. In most cases, Tax-Exempt Commercial
Paper is backed by letters of credit, lending agreements, note repurchase
agreements or other credit facility agreements offered by banks or other
institutions.

When-Issued Securities

As stated in the Prospectus, the Fund may purchase tax-exempt securities on
a when-issued basis, in which case delivery and payment normally take place
within 45 days after the date of the commitment to purchase. The payment
obligation and the interest rate that will be received on the tax-exempt
securities are each fixed at the time the buyer enters into the commitment.
Although the Fund will only purchase a tax-exempt security on a when-issued
basis with the intention of actually acquiring the securities, the Fund may sell
these securities before the settlement date if it is deemed advisable.

Tax-exempt securities purchased on a when-issued basis and the securities
held in the Fund are subject to changes in market value based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates (which will generally result in
similar changes in value, i.e., both experiencing appreciation when interest
rates decline and depreciation when interest rates rise). Therefore, to the
extent the Fund remains substantially fully invested at the same time that it
has purchased securities on a when-issued basis, there will be a greater
possibility that the market value of the Fund's assets will vary. Purchasing a
tax-exempt security on a when-issued basis can involve a risk that the yields
available in the market when the delivery takes place may be higher than those
obtained on the security so purchased.

3
<PAGE>

To the extent that the Fund purchases securities on a when-issued basis, a
segregated account consisting of cash or liquid debt securities equal to the
amount of the when-issued commitments will be established with the Custodian and
marked to market daily, with additional cash or liquid debt securities added
when necessary. When the time comes to pay for when-issued securities, the Fund
will meet its respective obligations from then available cash, the sale of
securities held in the segregated account, the sale of other securities or,
although it would not normally expect to do so, the sale of the when-issued
securities themselves (which may have a value greater or lesser than the Fund's
payment obligations). Sale of securities to meet such obligations carries with
it a potential for the realization of capital gain. As noted elsewhere in the
Prospectus and Statement of Additional Information, any such gain is not exempt
from federal or from Pennsylvania income taxes.

Floating Rate and Variable Rate Securities

As stated in the Prospectus, the Fund may purchase floating rate and
variable rate securities, including participation interests therein. Investments
in floating or variable rate securities normally will involve industrial
development or revenue bonds which provide that the rate of interest is set as a
specific percentage of a designated base rate, such as of rates on Treasury
Bonds or Bills or the prime rate of a major commercial bank, and that the Fund
can demand payment of the obligations on short notice at par plus accrued
interest, which amount may be more or less than the amount the Fund paid for
them. Variable rate securities provide for a specified periodic adjustment in
the interest rate, while floating rate securities have an interest rate which
changes whenever there is a change in the designated base interest rate.
Frequently such securities are secured by letters of credit or other credit
support arrangements provided by banks. The quality of the underlying creditor
or of the bank, as the case may be, must be equivalent to the standards set
forth with respect to taxable investments on page 5.

Stand-By Commitments

As stated in the Prospectus, the Fund is authorized to acquire stand-by
commitments issued by banks with respect to securities it holds although the
Manager has no present intention of investing the assets of the Fund in stand-by
commitments. These commitments would obligate the seller of the stand-by
commitment to repurchase, at the Fund's option, specified securities at a
specified price.

The price which the Fund would pay for tax-exempt securities with stand-by
commitments generally would be higher than the price which otherwise would be
paid for the municipal securities alone, and the Fund would use stand-by
commitments solely to facilitate portfolio liquidity. The stand-by commitment
generally is for a shorter term than the maturity of the security and does not
restrict in any way the Fund's right to dispose of or retain the security. There
is a risk that the seller of a stand-by commitment may not be able to repurchase
the security upon the exercise of the right to resell by the Fund. To minimize
such risks, the Fund is presently authorized to acquire stand-by commitments
solely from banks the Manager deems creditworthy. The Trustees may, in the
future, consider whether the Fund should be permitted to acquire stand-by
commitments from dealers. Prior to investing in stand-by commitments of dealers
the Fund, if it deems necessary based upon the advice of counsel, will apply to
the Securities and Exchange Commission for an exemptive order relating to such
commitments and the valuation thereof. There can be no assurance that the
Securities and Exchange Commission will issue such an order.

Stand-by commitments with respect to portfolio securities of the Fund with
maturities of less than 60 days which are separate from the underlying portfolio
securities are not assigned a value. The cost of any such stand-by commitments
is carried as an unrealized loss from the time of purchase until it is exercised
or expires. Stand-by commitments with respect to portfolio securities of the
Fund with maturities of 60 days or more which are separate from the underlying
portfolio securities are valued at fair value as determined in accordance with
procedures established by the Board of Trustees. The Board of Trustees would, in
connection with the determination of value of such a stand-by commitment,
consider among other factors the creditworthiness of the writer of the stand-by
commitment, the duration of the stand-by commitment, the dates on which or the
periods during which the stand-by commitment may be exercised and the applicable
rules and regulations of the Securities and Exchange Commission.

Portfolio Turnover

Portfolio transactions will be undertaken only to accomplish the Fund's
objectives and not for the purpose of realizing capital gains, although capital
gains may be realized on certain portfolio transactions. For example, capital
gains may be realized when a security is sold (i) so that another security can
be purchased to obtain a higher yield (provided that capital is preserved or

4
<PAGE>

enhanced), (ii) to take advantage of what the Manager believes to be a temporary
disparity in the normal yield relationship between the two securities, (iii)
when the Manager believes that the security to be purchased is of a higher
quality than its rating or current market value would indicate, or (iv) when the
Manager anticipates a decline in value due to market risk (a rise in interest
rates) or credit risk.

A change in securities held by the Fund is known as "portfolio turnover"
and may involve the payment by the Fund of dealer spreads or underwriting
commissions, and other transaction costs, on the sale of securities, as well on
the reinvestment of the proceeds in other securities. Portfolio turnover rate
for a fiscal year is the ratio of the lesser of purchases or sales of portfolio
securities to the monthly average of the value of portfolio securities.
Securities whose maturity or expiration date at the time of acquisition were one
year or less are excluded from the calculation. The portfolio turnover rates of
the Fund for the fiscal years ended September 30, 1993 and September 30, 1994,
were 40.74% and 7.71%, respectively. The fluctuation of portfolio turnover
ratios during 1994 and 1993 result from conditions in the State and the market
in general. The Fund's portfolio turnover rate will not be a limiting factor
when the Fund deems it desirable to sell or purchase securities.

Taxable Investments

Under normal market conditions, the Fund will attempt to invest 100% and as
a matter of fundamental policy will invest at least 80% of the value of its net
assets in securities the interest on which is exempt from federal and
Pennsylvania income taxes. However, in abnormal market conditions, if, in the
judgment of the Manager, the tax-exempt securities satisfying the Fund's
investment objectives may not be purchased, the Fund may for defensive purposes
temporarily invest in instruments the interest on which is exempt from federal
income taxes, but not Pennsylvania income taxes. Such securities would include
instruments issued by states other than Pennsylvania and having the same general
characteristics as those described under "Pennsylvania Tax-Exempt Securities".

The Fund may invest on a temporary basis in fixed-income securities, the
interest on which is only exempt from Pennsylvania income taxes or is not exempt
from either federal or Pennsylvania income taxes, pending the investment or
reinvestment in tax-exempt securities of proceeds of sales of shares or sales of
portfolio securities, in order to avoid the necessity of liquidating portfolio
investments to meet redemption of shares by investors or where market conditions
due to rising interest rates or other adverse factors warrant temporary
investing for defensive purposes. Such securities may include securities issued
or guaranteed by the U.S. Government (such as bills, notes and bonds), its
agencies, instrumentalities or authorities; highly-rated corporate debt
securities (rated AA-, or better, by Standard & Poor's or Aa3, or better, by
Moody's); prime commercial paper (rated A-1+/A-1 by Standard & Poor's or P-1 by
Moody's); and certificates of deposit of the 100 largest domestic banks in terms
of assets which are subject to regulatory supervision by the U.S. Government or
state governments and the 50 largest foreign banks in terms of assets with
branches or agencies in the United States. Investments in certificates of
deposit of foreign banks and foreign branches of U.S. banks may involve certain
risks, including different regulation, use of different accounting procedures,
political or other economic developments, exchange controls, or possible seizure
or nationalization of foreign deposits.

INVESTMENT LIMITATIONS

Under the Fund's fundamental policies, which cannot be changed except by
vote of a majority of the outstanding voting securities of the Fund, the Fund
may not:

- - Borrow money, except from banks for temporary purposes (such as meeting
redemption requests or for extraordinary or emergency purposes but not for the
purchase of portfolio securities) in an amount not to exceed 10% of the value
of its total assets at the time the borrowing is made (not including the
amount borrowed). The Fund will not purchase additional portfolio securities
if the Fund has outstanding borrowings in excess of 5% of the value of its
total assets;

- - Mortgage or pledge any of its assets, except to secure permitted borrowings
noted above;

- - Invest more than 25% of total assets at market value in any one industry;
except that tax-exempt securities and securities of the U.S. Government, its
agencies and instrumentalities are not considered an industry for purposes of
this limitation.

5
<PAGE>

- - As to 50% of the value of its total assets, purchase securities of any issuer
if immediately thereafter more than 5% of total assets at market value would
be invested in the securities of any issuer (except that this limitation does
not apply to obligations issued or guaranteed as to principal and interest by
the U.S. Government or its agencies or instrumentalities);

- - Invest in securities issued by other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;

- - Purchase or hold any real estate, except that the Fund may invest in
securities secured by real estate or interests therein or issued by persons
(other than real estate investment trusts) which deal in real estate or
interests therein;

- - Purchase or hold the securities of any issuer, if to its knowledge, trustees
or officers of the Fund individually owning beneficially more than 0.5% of the
securities of that issuer own in the aggregate more than 5% of such
securities;

- - Write or purchase put, call, straddle or spread options; purchase securities
on margin or sell "short"; or underwrite the securities of other issuers,
except that the Fund may be deemed an underwriter in connection with the
purchase and sale of portfolio securities;

- - Purchase or sell commodities or commodity contracts including futures
contracts; or

- - Make loans, except to the extent that the purchase of notes, bonds or other
evidences of indebtedness or deposits with banks may be considered loans.

As a matter of policy, with respect to 75% of the Fund's assets, no revenue
bond will be purchased by the Fund if as a result of such purchase more than 5%
of the Fund's assets would be invested in the securities of a single issuer.
This policy is not fundamental and may be changed by the Trustees without
shareholder approval.

Under the Act a "vote of a majority of the outstanding voting securities"
of the Fund means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund or (2) 67% or more of the shares of the Fund
present at a shareholders' meeting if more than 50% of the outstanding shares of
the Fund are represented at the meeting in person or by proxy.

TRUSTEES AND OFFICERS

Trustees and officers of the Fund, together with information as to their
principal business occupations during the past five years are shown below. Each
Trustee who is an "interested person" of the Fund, as defined in the Act, is
indicated by an asterisk. Unless otherwise indicated, their addresses are 100
Park Avenue, New York, NY 10017.

WILLIAM C. MORRIS* Trustee, Chairman of the Board, Chief Executive
(56) Officer and Chairman of the Executive Committee

Managing Director, Chairman and President, J. & W.
Seligman & Co. Incorporated, investment managers
and advisors; and Seligman Advisors, Inc.,
advisors; Chairman and Chief Executive Officer,
the Seligman Group of Investment Companies;
Chairman, Seligman Financial Services, Inc.,
distributor; Seligman Holdings, Inc., holding
company; Seligman Services, Inc., broker/dealer;
J. & W. Seligman Trust Company, trust company; and
Carbo Ceramics Inc., ceramic proppants for oil and
gas industry; Director or Trustee, Seligman Data
Corp. (formerly, Union Data Service Center Inc.),
shareholder service agent; Daniel Industries,
Inc., manufacturer of oil and gas metering
equipment; Kerr-McGee Corporation, diversified
energy company; and Sarah Lawrence College; and a
Member of the Board of Governors of the Investment
Company Institute; formerly, Chairman, Seligman
Securities, Inc., broker/dealer.

6
<PAGE>

RONALD T. SCHROEDER* Trustee, President and Member of the Executive
(47) Committee

Director, Managing Director and Chief Investment
Officer, J. & W. Seligman & Co. Incorporated,
investment managers and advisors; Managing
Director and Chief Investment Officer, Seligman
Advisors, Inc., advisors; Director or Trustee and
President and Chief Investment Officer,
Tri-Continental Corporation, closed-end investment
company and the open-end investment companies in
the Seligman Family of Mutual Funds; Director and
President, Seligman Holdings, Inc., holding
company; Director, Seligman Financial Services,
Inc., distributor; Director, Seligman Data Corp.,
shareholder service agent; Seligman Quality
Municipal Fund, Inc. and Seligman Select Municipal
Fund, Inc., closed-end investment companies;
Seligman Henderson Co., advisors; and Seligman
Services, Inc., broker/dealer; formerly, Director,
J. & W. Seligman Trust Company, trust company; and
Seligman Securities, Inc., broker/dealer.

FRED E. BROWN* Trustee
(81)

Director and Advisor, J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
Director or Trustee, Tri-Continental Corporation,
closed-end investment company; the open-end
investment companies in the Seligman Family of
Mutual Funds; Director, Seligman Financial
Services, Inc., distributor; Seligman Quality
Municipal Fund, Inc. and Seligman Select Municipal
Fund, Inc., closed-end investment companies;
Seligman Services, Inc., broker/dealer; Trustee,
Trudeau Institute, non-profit biological research
organization; Lake Placid Center for the Arts,
cultural organization; and Lake Placid Education
Foundation, education foundation; formerly,
Director, J. & W. Seligman Trust Company, trust
company; and Seligman Securities, Inc.,
broker/dealer.

ALICE S. ILCHMAN Trustee
(59)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment
Companies; NYNEX, telephone company; The
Rockefeller Foundation, charitable foundation; and
the Committee for Economic Development; The Markle
Foundation, philanthropic organization;
International Research and Exchange Board,
intellectual exchanges. Sarah Lawrence College,
Bronxville, New York 10708

JOHN E. MEROW* Trustee
(65)

Chairman and Senior Partner, Sullivan & Cromwell,
law firm; Director or Trustee, the Seligman Group
of Investment Companies; 457 Madison Avenue
Corporation, real estate; The Municipal Art
Society of New York; the United States Council for
International Business and the United States-New
Zealand Council; Elizabeth Blackwell Foundation;
New York Downtown Hospital; NYH Downtown, Inc.;
and The Society of the New York Hospital Fund,
Inc.; Chairman and Director, American Australian
Association; Chairman, The New York
Hospital-Cornell Medical Center Advisory Board;
and Member of the Board of Governors of the
Foreign Policy Association; Member of the Board of
Governors, New York Hospital; Member, Council on
Foreign Relations.

125 Broad Street, New York, NY 10004

7
<PAGE>

BETSY S. MICHEL Trustee
(52)
Attorney; Director or Trustee, the Seligman Group
of Investment Companies; National Association of
Independent Schools (Boston), education; Chairman
of the Board of Trustees of St. George's School
(Newport, RI).

St. Bernard's Road, Gladstone, NJ 07934

DOUGLAS R. NICHOLS, JR. Trustee
(74)

Management Consultant; Director or Trustee, the
Seligman Group of Investment Companies; formerly,
Trustee, Drew University.

790 Andrews Avenue, Delray Beach, FL 33483

JAMES C. PITNEY Trustee
(68)
Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of
Investment Companies; Public Service Enterprise
Group, public utility; formerly Director, The
Howard Savings Bank, savings bank.

Park Avenue at Morris County, P.O. Box 1945,
Morristown, NJ 07962-1945

JAMES Q. RIORDAN Trustee
(67)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies; The Brooklyn Museum; The Brooklyn Union
Gas Company; The Committee for Economic
Development; Dow Jones & Co. Inc.; Public
Broadcasting Service; and Co-Chairman of the
Policy Committee of the Tax Foundation; formerly,
Vice Chairman of Mobil Corporation; and Director
and President, Bekaert Corporation.

675 Third Avenue, Suite 3004, New York, NY 10017

HERMAN J. SCHMIDT Trustee
(78)

Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies; H. J. Heinz Company; HON Industries,
Inc.; and MAPCO, Inc; formerly, Director of
MetLife Series Fund, Inc. and MetLife Portfolios,
Inc.; Macmillan, Inc. and Ryder System, Inc.

15 Oakley Lane, Greenwich, CT 06830

ROBERT L. SHAFER Trustee
(62)
Vice President, Pfizer Inc., pharmaceuticals;
Director or Trustee, the Seligman Group of
Investment Companies; and USLIFE Corporation, life
insurance.

235 East 42nd Street, New York, NY 10017

JAMES N. WHITSON Trustee
(60)
Executive Vice President, Chief Operating Officer
and Director, Sammons Enterprises, Inc., Director
or Trustee, the Seligman Group of Investment
Companies, Director of, C-SPAN; formerly,
President, Sammons Communications, Inc.

300 Crescent Court, Suite 700, Dallas, TX 75202

BRIAN T. ZINO* Trustee
(42)
Managing Director (formerly, Chief Administrative
and Financial Officer), J. & W. Seligman & Co.
Incorporated, investment managers and advisors;
Director or Trustee, the Seligman Group of

8
<PAGE>

Investment Companies; Chairman, Seligman Data
Corp., shareholder service agent; Director,
Seligman Financial Services, Inc., distributor;
Seligman Services, Inc., broker/dealer; and J. &
W. Seligman Trust Company, trust company; Senior
Vice President, Seligman Henderson Co., advisor;
formerly, Director, Seligman Securities, Inc.,
broker/dealer; Director and Secretary, Chuo
Trust-JWS Advisors, Inc., advisor.

THOMAS G. MOLES Vice President
(52)
Director, Managing Director, (formerly, Vice
President and Portfolio Manager), J. & W. Seligman
& Co. Incorporated, investment managers and
advisors; Vice President and Portfolio Manager,
three other open-end investment companies in the
Seligman Family of Mutual Funds; President and
Portfolio Manager, Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund,
Inc., closed-end investment companies; Director,
Seligman Financial Services, Inc., distributor;
Seligman Services, Inc., broker/dealer; and J. &
W. Seligman Trust Company, trust company;
formerly, Director, Seligman Securities, Inc.,
broker/dealer.

LAWRENCE P. VOGEL Vice President
(38)
Senior Vice President, Finance, J. & W. Seligman &
Co. Incorporated, investment managers and
advisors; Seligman Financial Services, Inc.,
distributor; and Seligman Advisors, Inc.,
advisors; Vice President (formerly Treasurer), the
Seligman Group of Investment Companies; Senior
Vice President, Finance (formerly, Treasurer),
Seligman Data Corp., shareholder service agent;
Treasurer, Seligman Holdings, Inc., holding
company; and Seligman Henderson Co., advisors;
formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; Vice President,
Finance, J. & W. Seligman Trust Company; and
Senior Audit Manager, Price Waterhouse,
independent accountants.

FRANK J. NASTA Secretary
(30)
Secretary, the Seligman Group of Investment
Companies; J. & W. Seligman & Co. Incorporated,
investment managers and advisors; Seligman
Financial Services, Inc., distributor; Seligman
Henderson Co., advisors; Chuo Trust - JWS
Advisors, Inc., advisors; and Seligman Data Corp.,
shareholder service agent; Seligman Services,
Inc., broker/dealer; Vice President, Law and
Regulation, J. & W. Seligman & Co. Incorporated,
investment managers and advisers; formerly,
attorney, Seward & Kissel.

THOMAS G. ROSE Treasurer
(37)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc. and the American
Investors Family of Funds.

The Executive Committee of the Board acts on behalf of the Board between
meetings to determine the value of securities and assets owned by the Fund for
which no market valuation is available and to elect or appoint officers of the
Fund to serve until the next meeting of the Board.

9
<PAGE>

<TABLE>
<CAPTION>
Compensation Table

Pension or Total Compensation
Aggregate Retirement Benefits from Registrant and
Compensation Accrued as part of Fund Complex Paid
Position with Registrant from Registrant (1) Fund Expenses to Directors (2)
------------------------ ------------------- ------------- ----------------
<S> <C> <C> <C>

William C. Morris, Trustee N/A N/A N/A
Ronald T. Schroeder, Trustee N/A N/A N/A
Fred E. Brown, Trustee N/A N/A N/A
Alice S. Ilchman, Trustee $2,376.65 N/A $67,000.00
John E. Merow, Trustee $2,340.94(d) N/A $66,000.00(d)
Betsy S. Michel, Trustee $2,340.94 N/A $66,000.00
Douglas R. Nichols, Jr., Trustee $2,390.94 N/A $66,000.00
James C. Pitney, Trustee $2,376.65 N/A $67,000.00
James Q. Riordan, Trustee $2,340.94 N/A $66,000.00
Herman J. Schmidt, Trustee $2,340.94 N/A $66,000.00
Robert L. Shafer, Trustee $2,340.94 N/A $66,000.00
James N. Whitson, Trustee $2,340.94(d) N/A $66,000.00(d)
Brian T. Zino, Trustee N/A N/A N/A
</TABLE>

(1) For the year ended December 31, 1994.

(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.

(d) Deferred.

The Fund has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest will be
accrued on the deferred balances. The annual cost of such interest is included
in the trustees' fees and expenses, and the accumulated balance thereof at
September 30, 1994 of $30,336, is included in other liabilities, in the Fund's
financial statements.

Trustees and officers of the Fund are also trustees, directors and officers
of some or all of the other investment companies in the Seligman Group. No
trustees or officers of the Fund owned shares of the Fund at December 1994.

MANAGEMENT AND EXPENSES

As indicated in the Prospectus, under the Management Agreement, dated
December 29, 1988, subject to the control of the Trustees, the Manager manages
the investment of the assets of the Fund, including making purchases and sales
of portfolio securities consistent with the Fund's investment objectives and
policies, and administers its business and other affairs. The Manager provides
the Fund with such office space, administrative and other services and executive
and other personnel as are necessary for Fund operations. The Manager pays all
of the compensation of Trustees of the Fund who are employees or consultants of
the Manager and the officers and employees of the Fund. The Manager also
provides senior management for Seligman Data Corp., the Fund's shareholder
service agent. The Manager is entitled to receive a management fee from the Fund
calculated daily and payable monthly equal to 0.50% of the Fund's average daily
net assets on an annual basis. During fiscal year ended September 30, 1992, the
Manager, at its discretion, waived a portion of its fee. The management fee paid
during 1992 was 0.35% per annum, of the average net assets of the Fund or
$132,193. The management fees paid during fiscal 1993 and 1994 were .50% and
.50%, or $200,845 and $190,649, respectively, of the average net assets.

The Fund pays all its expenses other than those specifically assumed by the
Manager. These expenses include brokerage commissions, if any, interest loads,
fees and expenses of independent attorneys and auditors, taxes and governmental
fees including fees and expenses of qualifying the Fund and its shares under
federal and state securities laws, cost of stock certificates and expenses of
repurchase or redemption of shares, expenses of printing and distributing
reports, notices and proxy materials to existing shareholders, expenses of
printing and filing reports and other documents filed with governmental

10
<PAGE>

agencies, expenses of shareholders' meetings, expenses of corporate data
processing and related services, shareholder recordkeeping and shareholder
account services, fees and disbursements of transfer agents and custodians,
expenses of disbursing dividends and distributions, fees payable under the
Administration, Shareholder Services and Distribution Plan described below, fees
and expenses of Trustees of the Fund not employed by or serving as a Trustee of
the Manager or its affiliates, membership dues in the Investment Company
Institute, insurance premiums and extraordinary expenses such as litigation
expenses.

On December 29, 1988, a majority of the outstanding voting securities of
the Manager was purchased by Mr. William C. Morris and a simultaneous
recapitalization of the Manager occurred.

The Management Agreement is dated December 29, 1988, and was unanimously
approved by the Trustees at a meeting held on October 11, 1988 and was also
approved by the shareholders at a meeting held on December 16, 1988. The
Management Agreement will continue in effect from year to year thereafter if
such continuance is approved annually in the manner required by the Act (i.e.
(1) by a vote of a majority of the Trustees or of the outstanding voting
securities of the Fund and (2) by a vote of a majority of the Trustees who are
not parties to the Management Agreement or interested persons of any such party)
and if the Manager shall not have notified the Fund at least 60 days prior to
the anniversary date of the previous continuance that it does not desire such
continuance. The Agreement may be terminated by the Fund, without penalty, on 60
days' written notice to the Manager and will terminate automatically in the
event of its assignment. The Fund has agreed to change its name upon termination
of its Management Agreement if continued use of the name would cause confusion
in the context of the Manager's business.

The Manager is a successor firm to an investment banking business founded
in 1864 which has thereafter provided investment services to individuals,
families, institutions and corporations. See Appendix B.

ADMINISTRATION, SHAREHOLDER SERVICES AND DISTRIBUTION PLAN

As indicated in the Prospectus, an Administration, Shareholder Services and
Distribution Plan (the "Plan") for the Fund under Section 12(b) of the Act and
Rule 12b-1 thereunder has been in effect since inception of the Fund.

The Plan was approved on June 10, 1986 by the Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
Act) of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (the "Qualified
Trustees") and by the shareholders of the Fund on April 23, 1987. Amendments to
the Plan were approved in respect of Class D shares on November 18, 1993 by the
Trustees, including a majority of the Qualified Trustees, and became effective
with respect to the Class D shares on February 1, 1994. The Plan will continue
in effect until December 31 of each year so long as such continuance is approved
annually by a majority vote of both the Trustees of the Fund and the Qualified
Trustees, cast in person at a meeting called for the purpose of voting on such
approval. The Plan may not be amended to increase materially the amounts payable
under the terms of the Plan without the approval of a majority of the
outstanding voting securities of the Fund and no material amendment to the Plan
may be made except with the approval of a majority of both the Trustees and the
Qualified Trustees in accordance with the applicable provisions of the Act and
the Rule thereunder.

The Plan requires that the Treasurer of the Fund shall provide to the
Trustees, and the Trustees shall review at least quarterly, a written report of
the amounts expended (and purposes therefore) under the Plan. Rule 12b-1 also
requires that the selection and nomination of Trustees who are not "interested
persons" of the Fund be made by such disinterested Trustees.

PORTFOLIO TRANSACTIONS

No brokerage commissions were paid by the Fund during the fiscal years
ended September 30, 1992, 1993 or 1994. When the Fund or two or more of the
investment companies in the Seligman Group or other investment advisory clients
of the Manager desire to buy or sell the same security at the same time, the
securities purchased or sold are allocated by the Manager in a manner believed
to be equitable to each. There may be possible advantages or disadvantages of
such transactions with respect to price or the size of positions already
obtainable or saleable.

11
<PAGE>

PURCHASE AND REDEMPTION OF FUND SHARES

The Fund issues two classes of shares: Class A shares may be purchased at a
price equal to the next determined net asset value per share, plus a sales load.
Class D shares may be purchased at a price equal to the next determined net
asset value without an initial sales load, but a CDSL may be charged on certain
redemptions within one year of purchase. See "Alternative Distribution System,"
"Purchase Of Shares," and "Redemption Of Shares" in the Fund's Prospectus.

Specimen Price Make-Up

Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold at a maximum sales load of 4.75% and Class
D shares are sold at net asset value.* Using the Fund's net asset value at
September 30, 1994,the maximum offering price of the Fund's shares is as
follows:

Class A

Net asset value per share....................................... $ 7.55

Maximum sales load (4.75% of offering price).................... .38
-------

Maximum offering price per share................................ $ 7.93
======

Class D

Net asset value and maximum offering price per share*............... $ 7.54
======

- ------------
* Class D shares are subject to a CDSL of 1% on certain redemptions within one
year of purchase. See "Redemption Of Shares" in the Prospectus.

Class A Shares - Reduced Sales Loads

Reductions Available. Shares of any Seligman mutual fund sold with a sales load
in a continuous offering will be eligible for the following reductions:

Volume Discounts are provided if the total amount being invested in Class A
shares of the Fund alone, or in any combination of shares of the other mutual
funds in the Seligman Group which are sold with a sales load, reaches levels
indicated in the sales load schedule set forth in the Prospectuses.

The Right of Accumulation allows an investor to combine the amount being
invested in Class A shares of the Fund, Seligman Capital Fund, Seligman Common
Stock Fund, Seligman Communications and Information Fund, Seligman Frontier
Fund, Seligman Growth Fund, Seligman Henderson Global Fund Series, Seligman High
Income Fund Series, Seligman Income Fund, Seligman New Jersey Tax-Exempt Fund,
Seligman Tax-Exempt Fund Series or Seligman Tax-Exempt Fund Series Trust that
were sold with a sales load with the total net asset value of shares of those
Seligman mutual funds already owned that were sold with a sales load and the
total net asset value of shares of Seligman Cash Management Fund which were
acquired through an exchange of shares of another mutual fund in the Seligman
Group on which there was a sales load at the time of purchase to determine
reduced sales loads in accordance with the schedule in the Prospectuses. The
value of the shares owned, including the value of shares of Seligman Cash
Management Fund acquired in an exchange of shares of another mutual fund in the
Seligman Group on which there is a sales load at the time of purchase will be
taken into account in orders placed through a dealer, however, only if Seligman
Financial Services, Inc. ("SFSI") is notified by the investor or a dealer of the
amount owned at the time the purchase is made and is furnished sufficient
information to permit confirmation.

A Letter of Intent allows an investor to purchase Class A shares of the
Fund over a 13-month period at reduced sales loads in accordance with the
schedule in the Prospectuses, based on the total amount of Class A shares that
the letter states the investor intends to purchase plus the total net asset
value of shares that were sold with a sales load of Seligman Capital Fund,
Seligman Common Stock Fund, Seligman Communications and Information Fund,
Seligman Frontier Fund, Seligman Growth Fund, Seligman Henderson Global Fund

12
<PAGE>

Series, Seligman High Income Fund Series, Seligman Income Fund, Seligman New
Jersey Tax-Exempt Fund, Seligman Tax-Exempt Fund Series and Seligman Tax-Exempt
Series Trust already owned and the total net asset value of shares of Seligman
Cash Management Fund which were acquired through an exchange of shares of
another mutual fund in the Seligman Group on which there was a sales load at the
time of purchase. Reduced sales loads also may apply to purchases made within a
13-month period starting up to 90 days before the date of execution of a letter
of intent. For more information concerning the terms of the letter of intent,
see "Terms and Conditions - Letter of Intent" accompanying the Account
Application in the Fund's Prospectus.

Persons Entitled to Reductions. Reductions in sales loads apply to purchases of
Class A shares of the Fund by a "single person," including an individual;
members of a family unit comprising husband, wife and minor children; or a
trustee or other fiduciary purchasing for a single fiduciary account. Employee
benefit plans qualified under Section 401 of the Internal Revenue Code,
tax-exempt organizations under Section 501 (c)(3) or (13), and non-qualified
employee benefit plans that satisfy uniform criteria are considered "single
persons" for this purpose. The uniform criteria are as follows:

1. Employees must authorize the employer, if requested by the Fund, to receive
in bulk and to distribute to each participant on a timely basis the Fund
prospectuses, reports and other shareholder communications.

2. Employees participating in a plan will be expected to make regular periodic
investments (at least annually). A participant who fails to make such
investments may be dropped from the plan by the employer or the Fund 12
months and 30 days after the last regular investment in his account. In such
event, the dropped participant would lose the discount on share purchases to
which the plan might then be entitled.

3. The employer must solicit its employees for participation in such an
employee benefit plan or authorize and assist an investment dealer in making
enrollment solicitations.

Eligible Employee Benefit Plans. The table of sales loads in the Prospectuses
applies to sales to "eligible employee benefit plans," except that the Fund may
sell shares at net asset value to "eligible employee benefit plans," of
employers who have at least 2,000 U.S. employees to whom such plan is made
available or, regardless of the number of employees, if such plan is established
or maintained by any dealer which has a sales agreement with Seligman Financial
Services, Inc. Such sales must be made in connection with a payroll deduction
system of plan funding or other systems acceptable to Seligman Data Corp., the
Fund's shareholder service agent. Such sales are believed to require limited
sales effort and sales related expenses and therefore are made at net asset
value. Contributions or account information for plan participation also should
be transmitted to Seligman Data Corp. by methods which it accepts. Additional
information about "eligible employee benefit plans" is available from investment
dealers or SFSI. The term "eligible employee benefit plan" means any plan or
arrangement, whether or not tax qualified, which provides for the purchase of
Fund shares.

Further Types of Reductions. Class A shares may be issued without a sales load
in connection with the acquisition of cash and securities owned by other
investment companies and personal holding companies to financial institution
trust departments, to registered investment advisers exercising investment
discretionary authority with respect to the purchase of Fund shares, or pursuant
to sponsored arrangements with organizations which make recommendations to, or
permit group solicitation of, its employees, members or participants in
connection with the purchase of shares of the Fund, to separate accounts
established and maintained by an insurance company which are exempt from
registration under Section 3(c)(11) of the 1940 Act, to registered
representatives and employees (and their spouses and minor children) of any
dealer that has a sales agreement with SFSI, to shareholders of mutual funds
with investment objectives similar to the Fund's who purchase shares with
redemption proceeds of such funds and to certain unit investment trusts as
described in the Fund's Prospectus.

Class A shares may be sold at net asset value to these persons since such
sales require less sales effort and lower sales related expenses as compared
with sales to the general public.

Payment in Securities. In addition to cash, the Fund may accept securities in
payment for Fund shares sold at the applicable public offering price. Generally,
the Fund will only consider accepting securities (1) to increase its holdings in
a portfolio security of the Fund, or (2) if the Manager determines that the
offered securities are a suitable investment in a sufficient amount for
efficient management. Although no minimum has been established, it is expected
that the Fund would not accept securities with a value of less than $100,000 per
issue in payment for shares. The Fund may reject in whole or in part offers to

13
<PAGE>

pay for shares with securities, may require partial payment in cash for
applicable sales loads, and may discontinue accepting securities as payment for
shares at any time without notice. The Fund has no present intention of
accepting securities in payment for shares.

More About Redemptions. The procedures for redemption of Fund shares under
ordinary circumstances are set forth in the Prospectus. Payment may be made in
securities, subject to the review of some state securities commissions. Payment
may be postponed or the right of redemption suspended for more than seven days,
if the orderly liquidation of portfolio securities is prevented by the closing
of, or restricted trading in, the over-the-counter markets in which Pennsylvania
Tax-Exempt Securities are primarily traded due to an emergency or order of the
Securities and Exchange Commission. If payment were to be made in securities,
shareholders receiving securities could incur certain transaction costs in
receiving these securities.

DISTRIBUTION SERVICES

Seligman Financial Services, Inc. ("SFSI"), an affiliate of the Manager,
acts as general distributor of the shares of the Fund and of the other mutual
funds in the Seligman Group. As general distributor of the Fund's capital stock,
SFSI allows concessions on sales of Fund shares to all dealers of up to 4.25% on
purchases of Class A shares to which the 4.75% sales load applies. SFSI receives
the balance of sales loads and any CDSL paid on Class D shares, if applicable.
The Fund and SFSI are parties to a Distributing Agreement dated January 1, 1993.

The total sales loads paid by shareholders of the Fund for the fiscal years
ended September 30, 1994, 1993 and 1992 amounted to $41,027, $83,788 and
$140,230, respectively, of which $36,112, $74,006 and, $124,995 respectively,
was paid as concessions to dealers. SFSI receives the balance of sales loads
paid by investors. For the period February 1, 1994 through September 30, 1994,
SFSI retained CDSL charges amounting to $619.

Class A shares may be sold at net asset value to present and retired
Trustees, directors, officers, employees (and family members) of the Fund, the
other investment companies in the Seligman Group, the Manager and other
companies affiliated with the Manager. Such sales also may be made to employee
benefit plans for such persons and to any investment advisory, custodial, trust
or other fiduciary account managed or advised by the Manager or any affiliate.
These sales may be made for investment purposes only, and shares may be resold
only to the Fund.

MORE ABOUT TAXES

As indicated in the Prospectus, the Fund intends to qualify and elect to be
treated as a separate regulated investment company under the Internal Revenue
Code and thus to be relieved of federal income tax on income distributed to
shareholders; provided that it distributes at least 90 percent of its net
investment income and net short-term capital gains, if any.

Qualification as a regulated investment company under the Internal Revenue
Code requires among other things, that (a) at least 90% of the annual gross
income of the Fund be derived from dividends, interest, payments with respect to
securities loans and gains from the sale or other disposition of stocks,
securities or currencies, or other income (including but not limited to gains
from options, futures, or forward contracts) derived with respect to its
business of investing in such stocks, securities or currencies; (b) the Fund
derives less than 30% of its gross annual income from gains from the sale or
other disposition of stock, securities and certain other assets held for less
than three months; and (c) the Fund diversify its holdings so that, at the end
of each quarter of the taxable year, (i) at least 50% of the market value of the
Fund's assets is represented by cash, United States Government securities and
other securities limited in respect of any one issuer to an amount not greater
than 5% of the Fund's assets and 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the value of its assets is invested
in the securities of any one issuer (other than U.S. Government Securities).

As a trust, the Fund will not be subject to Pennsylvania corporate taxes,
nor will it be subject to Pennsylvania personal income tax with respect to any
taxable income currently distributed to its shareholders. Shareholders who are
subject to Pennsylvania personal income tax will be exempt from Pennsylvania
personal income tax on distributions attributable to interest on Pennsylvania
Tax-Exempt Securities or United States Government securities. To the extent that
the portfolio consists of such holdings, the shares of the Fund will be exempt
from Pennsylvania personal property taxes. Corporate shareholders who are
subject to the Pennsylvania corporate net income tax will not be subject to
corporate net income tax on distributions from the Fund that qualify as

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<PAGE>

exempt-interest dividends for federal income tax purposes or are derived from
interest on U.S. Government obligations. Corporations are not subject to
Pennsylvania personal property taxes.

VALUATION

The net asset value per share of the Fund is determined as of the close of
the New York Exchange ("NYSE") (currently, 4:00 p.m., New York City time), on
each day that the NYSE is open for business. The NYSE is currently closed on New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day. The Fund will also determine net asset
value on each day in which there is a sufficient degree of trading in the Fund's
portfolio securities that the net asset value of the Fund might be materially
affected. Net asset value is computed by dividing the value of the net assets of
the Fund (i.e., the value of its assets less liabilities) by the total number of
outstanding shares of the Fund. All expenses of the Fund, including the
Manager's fee, are accrued daily and taken into account for the purpose of
determining its net asset value.

Tax-exempt securities will be valued on the basis of quotations provided by
an independent pricing service, approved by the Trustees, which uses information
with respect to transactions in bonds, quotations from bond dealers, market
transactions in comparable securities and various relationships between
securities in determining value. In the absence of such quotations, in
accordance with fair value as determined in accordance with procedures approved
by the Trustees. Short-term notes having remaining maturities of 60 days or less
are generally valued at amortized cost.

Generally, trading in certain securities such as tax-exempt securities,
corporate bonds, U.S. Government securities, and money market instruments is
substantially completed each day at various times prior to the close of the
NYSE. The values of such securities used in determining the net asset value of
the Fund's shares are computed as of such times. Occasionally, events affecting
the value of such securities may occur between such times and the close of the
NYSE which will not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur during
such period, then these securities and other assets will be valued at their fair
market value as determined in good faith by the Trustees.

PERFORMANCE INFORMATION

The Fund's Class A shares annualized yield for the 30-day period ended
September 30, 1994 was 4.84%. The annualized yield was computed by dividing the
Fund's net investment income per share earned during this 30-day period by the
maximum offering price per share (i.e., the net asset value plus the maximum
sales load of 4.75% of the net amount invested) on September 30, 1994, which was
the last day of this period. The average number of Class A shares of the Fund
was 4,633,536 which was the average daily number of shares outstanding during
the 30-day period that were eligible to receive dividends. Income was computed
by totaling the interest earned on all debt obligations during the 30-day period
and subtracting from that amount the total of all recurring expenses incurred
during the period (which includes fees charged pursuant to the Fund's 12b-1
plan). The 30-day yield was then annualized on a bond-equivalent basis assuming
semi-annual reinvestment and compounding of net investment income, as described
in the Prospectus.

The Fund's Class A shares tax equivalent annualized yield for the 30-day
period ended September 30, 1994 was 8.24%. The tax equivalent annualized yield
was computed by first computing the annualized yield as discussed above. Then
the portion of the yield attributable to securities the income of which was
exempt for federal and state income tax purposes was determined. This portion of
the yield was then divided by one minus 41.29% (41.29% being the assumed maximum
combined federal and state income tax rate for individual taxpayers that are
subject to Pennsylvania personal income tax). Then the small portion of the
yield attributable to securities, the income of which was exempt only for
federal income tax purposes was determined. This portion of the yield was then
divided by one minus 39.6% (39.6% being the maximum federal income tax rate).
These two calculations were then added to the portion of the yield, if any, that
was not attributable to securities, the income of which was not tax exempt.

The Fund's Class A shares average annual total return for the one-year
period ended September 30, 1994 was (9.52)%; for the five-year period ended
September 30, 1994 was 6.18% and since inception through the period ended
September 30, 1994 was 7.13%. These amounts were computed by assuming a
hypothetical initial payment of $1,000. From this $1,000, the maximum sales load
of $47.50 (4.75% of public offering price) was deducted. It was then assumed
that all of the dividends and distributions by the Fund over the relevant time
period were reinvested. It was then assumed that at the end of the one-year,

15
<PAGE>

five years and since inception periods of the Fund, the entire amount was
redeemed. The average annual total return was then calculated by calculating the
annual rate required for the initial payment to grow to the amount which would
have been received upon redemption (i.e., the average annual compound rate of
return).

The annualized yield for the 30-day period ended September 30, 1994 for the
Fund's Class D shares was 4.40%. The annualized yield was computed as for Class
A shares by dividing the net investment income per share earned during this
30-day period by the maximum offering price per share (i.e., the net asset
value) on September 30, 1994, which was the last day of this period. The average
number of Class D shares were 9,160 which was the average daily number of shares
outstanding during the 30-day period that were eligible to receive dividends.

The tax equivalent annualized yield for the 30-day period ended September
30, 1994 for the Fund's Class D shares was 7.49%. The tax equivalent annualized
yield was computed as discussed above for Class A shares.

The total return for the period from February 1, 1994 through September 30,
1994 for the Fund's Class D shares was (8.40)%. This amount was computed by
assuming a hypothetical initial payment of $1,000 in Class D shares of the Fund
and that all of the dividends and distributions by the Fund's Class D shares
over the relevant time period were reinvested. It was then assumed that at the
end of the period, the entire amount was redeemed, subtracting the applicable 1%
CDSL.

The following tables are an illustration of the total return on a $1,000
investment in Class A and Class D shares of the Fund from the commencement of
their operations through September 30, 1994, assuming investment of all
dividends and capital gain distributions.

CLASS A SHARES

<TABLE>
<CAPTION>
Value of Capital Value Total Value
Period Initial Gain of of Total
Ended 1 Investment 2 Distributions Dividends Investment 2 Return 1,3
- ------- ------------ ------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>

9/30/86 $ 1,009 $ -- $ 11 $ 1,020
9/30/87 900 2 75 977
9/30/88 975 3 158 1,136
9/30/89 1,001 3 240 1,244
9/30/90 979 3 313 1,295
9/30/91 1,032 19 418 1,469
9/30/92 1,069 23 524 1,616
9/30/93 1,148 50 656 1,854
9/30/94 1,007 96 659 1,762 76.15%
</TABLE>

CLASS D SHARES
<TABLE>
<CAPTION>

Value of Capital Value Total Value
Period Initial Gain of of Total
Ended 1 Investment 2 Distributions Dividends Investment 2 Return 1,3
- ------- ------------ ------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>

9/30/94 $ 892 $ -- $ 24 $ 916 (8.40)%
</TABLE>

1 From commencement of operations of Class A shares on July 15, 1986; from
commencement of operations of Class D shares on February 1, 1994.

2 The "Value of Initial Investment" as of the date indicated reflects the
effect of the maximum sales load, assumes that all dividends and capital
gain distributions were taken in cash and reflects changes in the net asset
value of the shares purchased with the hypothetical initial investment.
"Total Value of Investment" assumes investment of all dividends and capital
gain distributions.

16
<PAGE>

3 Total return for the Fund is calculated by assuming a hypothetical initial
investment of $1,000 at the beginning of the period specified, subtracting
the maximum sales load or CDSL, if applicable; determining total value of
all dividends and distributions that would have been paid during the period
on such shares assuming that each dividend or distribution was invested in
additional shares at net asset value; calculating the total value of the
investment at the end of the period; and finally, by dividing the
difference between the amount of the hypothetical initial investment at the
beginning of the period and its value at the end of the period by the
amount of the hypothetical initial investment.

The waiver by the Manager of a portion or all of its fees and reimbursement
of certain expenses during certain of the periods (as set forth under
"Management and Expenses" herein and under "Management Services" in the
Prospectus) positively affected the performance results provided in this
section.

GENERAL INFORMATION

The Trustees are authorized to classify or reclassify and issue any shares
of beneficial interest of the Fund into any number of other classes without
further action by shareholders. The Act requires that where more than one class
exists, each class must be preferred over all other classes in respect of assets
specifically allocated to such class.

As a general matter, the Fund will not hold annual or other meetings of the
shareholders. This is because the Declaration of Trust provides for shareholder
voting only (a) for the election or removal of one or more Trustees if a meeting
is called for that purpose, (b) with respect to any matter as to which
shareholder approval is required by the Act, (c) with respect to any termination
or reorganization of the Fund or any Series, (d) with respect to any amendment
of the Declaration of Trust (other than amendments establishing and designating
new Series or classes of shares, abolishing Series or classes of shares when
there are no units thereof outstanding, changing the name of the Fund, supplying
any omission, curing any ambiguity or curing, correcting or supplementing any
provision thereof which is internally inconsistent with any other provision
thereof or which is defective or inconsistent with the Act or with the
requirements of the Internal Revenue Code or applicable regulations for the
Fund's obtaining the most favorable treatment thereunder available to regulated
investment companies, (e) to the same extent as the stockholders of a
Pennsylvania business corporation as to whether or not a court action,
proceeding, or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Fund or the shareholders, and (f) with
respect to such additional matters relating to the Fund as may be required by
the Act, the Declaration of Trust, the By-laws of the Fund, any registration of
the Fund with the Securities and Exchange Commission or any state, or as the
Trustees may consider necessary or desirable. Each Trustee serves until the next
meeting of shareholders, if any, called for the purpose of considering the
election or reelection of such Trustee or of a successor to such Trustee, and
until the election and qualification of his successor, if any, elected at such
meeting, or until such Trustee sooner dies, resigns, retires or is removed by
the shareholders or two-thirds of the Trustees.

The shareholders of the Fund have the right, upon the declaration in
writing or vote of more than two-thirds of the Fund's outstanding shares, to
remove a Trustee. The Trustees will call a meeting of shareholders to vote on
the removal of a Trustee upon the written request of the record holders of ten
percent of its shares. In addition, whenever ten or more shareholders of record
who have been such for at least six months preceding the date of application,
and who hold in the aggregate either shares having a net asset value of at least
$25,000 or at least 1 per centum of the outstanding shares, whichever is less,
shall apply to the Trustees in writing, stating that they wish to communicate
with other shareholders with a view to obtaining signatures to a request for a
meeting for the purpose of voting upon the question of removal of any Trustee or
Trustees and accompanied by a form of communication and request which they wish
to transmit, the Trustee shall within five business days after receipt of such
application either: (1) afford to such applicants access to a list of the names
and addresses of all shareholders as recorded on the books of the Fund; or (2)
inform such applicants as to the approximate number of shareholders of record,
and the approximate cost of mailing to them the proposed communication and form
of requests. If the Trustees elect to follow the latter course, the Trustees,
upon the written request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing, shall, with
reasonable promptness, mail such material to all shareholders of record at their
addresses as recorded on the books, unless within five business days after such
tender the Trustees shall mail to such applicants and file with the Securities
and Exchange Commission (the "Commission"), together with a copy of the material
to be mailed, a written statement signed by at least a majority of the Trustees
to the effect that in their opinion either such material contains untrue
statements of fact or omits to state facts necessary to make the statements
contained therein not misleading, or would be in violation of applicable law,
and specifying the basis of such opinion. After opportunity for hearing upon the
objections specified in the written statement so filed, the Commission may, and
if demanded by the Trustees or by such applicants shall, enter an order either
sustaining one or more of such objections or refusing to sustain any of them. If

17
<PAGE>

the Commission shall enter an order refusing to sustain any of such objections,
or if, after the entry of an order sustaining one or more of such objections,
the Commission shall find, after notice and opportunity for hearing, that all
objections so sustained have been met, and shall enter an order so declaring,
the Trustees shall mail copies of such material to all shareholders with
reasonable promptness after the entry of such order and the renewal of such
tender.

The shareholders of a Pennsylvania trust could, under certain
circumstances, be held personally liable as partners for its obligations.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust. The Declaration of Trust also
provides for indemnification and reimbursement of expenses out of the Fund's
assets for any shareholder held personally liable for obligations of the Fund.

Custodian. Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, Missouri 64105, serves as custodian for the Fund. It also maintains, under
the general supervision of the Manager, the accounting records and determines
the net asset value for the Fund.

Auditors. Deloitte & Touche LLP, independent auditors, have been selected
as auditors of the Fund. Their address is Two World Financial Center, New York,
NY 10281.

SPECIAL CONSIDERATIONS REGARDING INVESTMENTS IN
PENNSYLVANIA TAX-EXEMPT SECURITIES

The following information as to certain Pennsylvania considerations is
given to investors in view of the Fund's policy of investing primarily in
securities of Pennsylvania issuers. Such information is derived from sources
that are generally available to investors and is believed by the Manager to be
accurate. Such information constitutes only a brief summary, does not purport to
be a complete description and is based on information from official statements
relating to securities offerings of Pennsylvania issuers.

Employment. The industries traditionally strong in Pennsylvania, such as
coal, steel and railway, have declined and account for a decreasing share of
total employment. Service industries (including trade, health care, education
and finance) have grown, however, contributing increasing shares to the
Commonwealth's gross product and exceeding the manufacturing sector in each year
since 1985 as the largest single source of employment.

While the level of Pennsylvania's population basically remained constant
from 1984 through 1994, nonagricultural employment increased by 10.0% from 1984
to 1993, after declining during the early 1980's. In contrast, increases in U.S.
nonagricultural employment have been greater and declines smaller for the same
periods, with U.S. employment increasing by 17% from 1984 to 1993. Trends in the
unemployment rates of Pennsylvania and the U.S. have been similar from 1984 to
1993. From 1986 to 1990, Pennsylvania's unemployment rate was lower than the
U.S. rate. For example, Pennsylvania's unemployment rate for 1989 and 1990 was
4.5% and 5.4%, respectively, while the unemployment rate for the U.S. was 5.3%
and 5.5% for the same years. In 1992 and 1993, Pennsylvania's unemployment rate
was 7.5% and 7.1%, respectively, which slightly exceeded the U.S. employment
rate of 7.4% and 6.8% for the same years.

Commonwealth Debt. Debt service on general obligation bonds of
Pennsylvania, except those issued for highway purposes or the benefit of other
special revenue funds, is payable from Pennsylvania's general fund, the
recipient of all Commonwealth revenues that are not required to be deposited in
other funds.

As of June 30, 1994, the Commonwealth had $5,075 million of long-term bonds
outstanding, with debt for capital projects constituting the largest dollar
amount. Although Pennsylvania's Constitution permits the issuance of an
aggregate amount of capital project debt equal to 1.75 times the average annual
tax revenues of the preceding five fiscal years, the General Assembly may
authorize and historically has authorized a smaller amount. This constitutional
limit does not apply to other types of Pennsylvania debt such as electorate
approved debt or debt issued to rehabilitate areas affected by disaster.
However, the former may be incurred only after the enactment of legislation
calling for a referendum and usually specifying the purpose and amount of such
debt, followed by electoral approval. Similarly, debt issued to rehabilitate a
disaster area must be authorized by legislation which sets the debt limits.
These statutory and constitutional limitations imposed on bonds are also
applicable to bond anticipation notes.

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<PAGE>

Pennsylvania cannot use tax anticipation notes or any other form of debt to
fund budget deficits between fiscal years. All year-end deficits must be funded
within the succeeding fiscal year's budget. Moreover, the principal amount of
tax anticipation notes issued and outstanding for the account of a fund during a
fiscal year may not exceed 20 percent of that fund's estimated revenues for that
fiscal year.

Moral Obligations. The debt of the Pennsylvania Housing Finance Agency
("PHFA"), a state agency which provides housing for lower and moderate income
families, and certain obligations of The Hospitals and Higher Education
Facilities Authority of Philadelphia (the "Hospitals Authority") is the only
debt bearing Pennsylvania's moral obligation. PHFA's bonds, but not its notes,
are partially secured by a capital reserve fund required to be maintained by
PHFA in an amount equal to the maximum annual debt service on its outstanding
bonds in any succeeding calendar year. If there is a potential deficiency in the
capital reserve fund or if funds are necessary to avoid default on interest,
principal or sinking fund payments on bonds or notes of PHFA, the Governor must
place in Pennsylvania's budget for the next succeeding year an amount sufficient
to make up any such deficiency or to avoid any such default. The budget which
the General Assembly adopts may or may not include such amount. PHFA is not
permitted to borrow additional funds as long as any deficiency exists in the
capital reserve fund. As of June 30, 1994, PHFA had $1,985 million of bonds and
notes outstanding.

The Hospitals Authority is a municipal authority organized by the City of
Philadelphia (the "City") to, inter alia, acquire and prepare various sites for
use as intermediate care facilities for the mentally retarded. In 1986 the
Hospitals Authority issued $20.4 million of bonds, which were refunded in 1993
by a $21.1 million bond issue of the Hospitals Authority (the "Hospitals
Authority Bonds") for such facilities for the City. The Hospitals Authority
Bonds are secured by leases with the City and a debt service reserve fund for
which the Pennsylvania Department of Public Welfare (the "Department") has
agreed with the Hospitals Authority to request in the Department's annual budget
submission to the Governor, an amount of funds sufficient to alleviate any
deficiency in the debt service reserve fund that may arise. The budget as
finally adopted may or may not include the amount requested. If funds are paid
to the Hospitals Authority, the Department will obtain certain rights in the
property financed with the Hospitals Authority Bonds in return for such payment.

In response to a delay in the availability of billable beds and the
revenues from these beds to pay debt service on the Hospitals Authority Bonds,
PHFA agreed in June 1989 to provide a $2.2 million low-interest loan to the
Hospitals Authority. The loan enabled the Hospitals Authority to make all debt
service payments on the Hospitals Authority Bonds during 1990. Enough beds were
completed in 1991 to provide sufficient revenues to the Hospitals Authority to
meet its debt service payments and to begin repaying the loan from PHFA. As of
June 30, 1994, $1.64 million of the loan was outstanding.

Other Commonwealth Obligations; Pensions. Other obligations of Pennsylvania
include long-term agreements with public authorities to make lease payments that
are in some cases pledged as security for those authorities' revenue bonds, and
two pension plans covering state public school and other employees. The total
unfunded accrued liability under the larger of these pension plans for its
fiscal year ended in 1993 was $3,303 million.

Pennsylvania Agencies. Certain Pennsylvania-created agencies have statutory
authorization to incur debt for which legislation providing for state
appropriations to pay debt service thereon is not required. The debt of these
agencies is supported solely by assets of, or revenues derived from the various
projects financed and is not an obligation of Pennsylvania. Some of these
agencies, however, are indirectly dependent on Pennsylvania funds through
various state-assisted programs. There can be no assurance that in the future
assistance of the Commonwealth will be available to these agencies. These
entities are as follows: The Delaware River Joint Toll Bridge Commission,
Delaware River Port Authority, Pennsylvania Energy Development Authority,
Pennsylvania Higher Education Assistance Agency, Pennsylvania Higher Educational
Facilities Authority, Pennsylvania Industrial Development Authority,
Pennsylvania Infrastructure Investment Authority, the Pennsylvania State Public
School Building Authority, the Pennsylvania Turnpike Commission, the
Pennsylvania Economic Development Financing Authority and the Philadelphia
Regional Port Authority.

Debt of Political Subdivisions and their Authorities. The ability of
Pennsylvania's political subdivisions, such as counties, cities and school
districts, to engage in general obligation borrowing without electorate approval
is generally limited by their recent revenue collection experience, although
generally such subdivisions can levy real property taxes unlimited as to rate or
amount to repay general obligation borrowings. Recent legislation authorizes
these subdivisions to engage in general obligation borrowings without limit as
to principal amount to fund unfunded accrued pension liabilities.

19
<PAGE>

Political subdivisions can issue revenue obligations which will not affect
their general obligation borrowing capacity, but only if such revenue
obligations are either limited as to repayment from a certain type of revenue
other than tax revenues or projected to be repaid solely from project revenues.

Industrial development and municipal authorities, although created by
political subdivisions, can only issue obligations payable solely from the
revenues derived from the financed project. If the user of the project is a
political subdivision, that subdivision's full faith and credit may back the
repayment of the obligations of the industrial development or municipal
authority. Often the user of the project is a nongovernmental entity, such as a
not-for-profit hospital or university, a public utility or an industrial
corporation, and there can be no assurance that it will meet its financial
obligations or that the pledge, if any, of property financed will be adequate.
Factors affecting the business of the user of the project, such as governmental
efforts to control health care costs (in the case of hospitals), declining
enrollment and reductions in governmental financial assistance (in the case of
universities), increasing capital and operating costs (in the case of public
utilities) and economic slowdowns (in the case of industrial corporations) may
adversely affect the ability of the project user to pay the debt service on
revenue bonds issued on its behalf.

Many factors affect the financial condition of the Commonwealth and its
counties, cities, school districts and other political subdivisions, such as
social, environmental and economic conditions, many of which are not within the
control of such entities. As is the case with many states and cities, many of
the programs of the Commonwealth and its political subdivisions, particularly
human services programs, depend in part upon federal reimbursements which have
been steadily declining. In recent years the Commonwealth and various of its
political subdivisions (including particularly the City of Philadelphia and the
City of Scranton) have encountered financial difficulty due to a slowdown in the
pace of economic activity in the Commonwealth and to other factors. The Fund is
unable to predict what effect, if any, such factors would have on the Fund's
investments.

FINANCIAL STATEMENTS

The Annual Report to Shareholders for the fiscal year ended September 30,
1994 is incorporated by reference into this Statement of Additional Information.
The Annual Report contains a schedule of the investments of the Fund as of
September 30, 1994, as well as certain other financial information as of that
date. The Annual Report will be furnished without charge, to investors who
request copies of the Fund's Statement of Additional Information.

APPENDIX A

Moody's Investors Service
Tax-Exempt Bonds

Aaa: Tax-Exempt bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk. Interest payments
are protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.

Aa: Tax-exempt bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than Aaa bonds because margins
of protection may not be as large or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.

A: Tax-exempt bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Baa: Tax-exempt bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be characteristically lacking or may be
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact may have speculative characteristics as well.

20
<PAGE>

Ba: Tax-exempt bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate, and thereby
not well safeguarded during other good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Tax-exempt bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa: Tax-exempt bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.

Ca: Tax-exempt bonds which are rated Ca represent obligations which are
speculative in high degree. Such issues are often in default or have other
marked shortcomings.

C: Tax-exempt bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Moody's applies numerical modifiers (1, 2 and 3) in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; modifier 2 indicates a mid-range ranking; and modifier 3
indicates that the issuer ranks in the lower end of its generic rating category.

Tax-Exempt Notes

Moody's ratings for tax-exempt notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
established cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing. Loans bearing the designation
MIG 2 are of high quality, with margins of protection ample although not so
large as in the preceding group. Loans bearing the designation MIG 3 are of
favorable quality, with all security elements accounted for but lacking the
undeniable strength of the preceding grades. Market access for refinancing in
particular, is likely to be less well established. Notes bearing the designation
MIG 4 are judged to be of adequate quality, carrying specific risk but having
protection commonly regarded as required of an investment security and not
distinctly or predominantly speculative.

Commercial Paper

Moody's Commercial Paper Ratings are opinions of the ability of issuers to
repay punctually promissory senior debt obligations not having an original
maturity in excess of one year. Issuers rated "Prime-1" or "P-1" indicates the
highest quality repayment capacity of the rated issue.

The designation "Prime-2" or "P-2" indicates that the issuer has a strong
capacity for repayment of senior short-term promissory obligations. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternative liquidity is maintained.

The designation "Prime-3" or "P-3" indicates that the issuer has an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained.

Issues rated "Not Prime" do not fall within any of the Prime rating
categories.

21
<PAGE>

Standard & Poor's Corporation ("S&P")

Tax-Exempt Bonds

AAA: Tax-exempt bonds rated AAA are highest grade obligations. Capacity to
pay interest and repay principal is extremely strong.

AA: Tax-exempt bonds rated AA have a very high degree of safety and very
strong capacity to pay interest and repay principal and differs from the highest
rated issues only in small degree.

A: Tax-exempt bonds rated A are regarded as upper medium grade. They have a
strong degree of safety and capacity to pay interest and repay principal
although it is somewhat more susceptible in the long term to the adverse effects
of changes in circumstances and economic conditions than debt in higher rated
categories.

BBB: Tax-exempt bonds rated BBB are regarded as having a satisfactory
degree of safety and capacity to pay interest and re-pay principal. Whereas they
normally exhibit adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and re-pay principal for bonds in this category than for bonds in
higher rated categories.

BB, B, CCC, CC: Tax-exempt bonds rated BB, B, CCC and CC are regarded on
balance, as predominantly speculative with respect to capacity to pay interest
and pre-pay principal in accordance with the terms of the bond. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.

C: The rating C is reserved for income bonds on which no interest is being
paid.

D: Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.

NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.

Municipal Notes

SP-1: Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.

SP-2: Satisfactory capacity to pay principal and interest.

Commercial Paper

S&P Commercial Paper ratings are current assessments of the likelihood of
timely payment of debts having an original maturity of no more than 365 days.

A-1: The A-1 designation indicates that the degree of safety regarding
timely payment is very strong.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".

A-3: Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.

B: Issues rated "B" are regarded as having only a speculative capacity for
timely payment.

C: This rating is assigned to short-term debt obligations with a doubtful
capacity of payment.

22
<PAGE>

D: Debt rated "D" is in payment default.

NR: Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that S&P does not rate a particular
type of bond as a matter of policy.

The ratings assigned by S&P may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within its major rating categories.

APPENDIX B

HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED

Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest
of eight brothers, arrived in the United States from Germany. He earned his
living as a pack peddler in Pennsylvania, and began sending for his brothers.
The Seligmans became successful merchants, establishing business in the South
and East.

Backed by nearly thirty years of business success - culminating in the sale
of government securities to help finance the Civil War - Joseph Seligman, with
his brothers, established the international banking and investment firm of J. &
W. Seligman & Co. In the years that followed, Seligman played a major role in
the geographical expansion and industrial development of the United States.

Seligman:

...Prior to 1900

o Helps finance America's fledgling railroads.
o Is admitted to the New York Stock Exchange in 1869.
o Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistant to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and Urban
development.

...1900-1910

o Helps Congress finance the building of the Panama Canal.

...1910s

o Participates in raising billions for Great Britain, France and Italy,
helping finance World War I.

...1920s

o Participates in hundreds of successful underwritings including those for
some of the Country's most important companies: Briggs Manufactoring, Dodge
Brothers, General Motors, Minneapolis-Honeywell Regulatory Company, Maytag
Company United Artists Theater Circuit and Victor Talking Machine Company.
o Forms Tri-Continental Corporation in 1929, today the nations largest,
diversified closed-end equity investment company, and one of its oldest,
with over $2 billion in assets.

...1930s

o Assumes management of Broad Street Investing Co. Inc., its first mutual
fund, today known as Seligman Common Stock Fund.
o Establishes Investment Advisory Service.

23
<PAGE>

...1940s

o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund.

...1950-1989

o Develops new open-end investment companies. Today, manages 43 mutual fund
portfolios.
o Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-free funds.
o Establishes J. & W. Seligman Trust Company, and J. & W. Seligman Valuations
Corporation.

...1990s

o Introduces Seligman Select Municipal Fund and Seligman Quality Municipal
Fund, two high quality, closed-end municipal bond funds.
o In 1991 establishes a joint venture with Henderson Administration Group plc,
of London, known as Seligman Henderson Co., to offer global investment
products.
o Introduces two small-cap mutual funds: Seligman Frontier Fund and
Seligman Henderson Global Smaller Companies Fund.

<PAGE>

======================================================================
Seligman
Pennsylvania
Tax-Exempt
Fund

----------------------------------------------------------------------
9th Annual Report
September 30, 1994

======================================================================
JWS

<PAGE>
================================================================================
To the Shareholders
- --------------------------------------------------------------------------------

We are pleased to report the long-term investment results, portfolio holdings,
and audited financial statements for Seligman Pennsylvania Tax-Exempt Fund for
the fiscal year ended September 30, 1994.

For your Fund's Class A shares, total dividends were $0.193 per share for
the six months and $0.392 per share for the 12 months ended September 30. For
your Fund's Class D shares, total dividends were $0.161 per share for the six
months ended September 30 and $0.216 per share since February 1, 1994, when
these shares were first offered.

Net asset value of your Fund's Class A shares was $7.55 per share on
September 30, down from $7.69 per share on March 31, and $8.61 per share a year
ago. Net asset value of your Fund's Class D shares was $7.54 per share on
September 30, down from $7.70 per share on March 31, and $8.37 per share on
February 1. Highlights, the performance overview, and portfolio information
begin on page 2.

The economic recovery which has been unfolding over the past several years
was characterized by low inflation, declining interest rates, and steady, albeit
modest, growth. During the second half of 1993, however, the economy began to
show signs of increased strength. In February of 1994, the Federal Reserve Board
(FRB) moved to raise the federal funds rate for the first time in five years in
an effort to slow the economy's rate of growth and keep inflation under control.
Since then, the FRB has raised the federal funds rate an additional four times
as economic reports continued to suggest that the economy was gaining momentum.
Further tightening remains a possibility until such time as the FRB achieves its
goal of moderate growth and stable inflation.

1994 has been a difficult year for the bond markets. The increase in
interest rates has led to a decline in the value of fixed-income securities,
including those held in your Fund. The municipal bond market, however, has
experienced less volatility and, in general, has outperformed the taxable bond
markets. Additionally, intermediate-term and long-term municipal bonds still
provide a substantial yield advantage when compared with the after-tax returns
of taxable bonds of comparable quality. While the possibility exists that
interest rates will increase further, we believe there is value in the current
municipal market environment.

Early this year, the use of derivatives in the management of mutual fund
portfolios gained substantial media attention, and many of you have inquired
about the use of these securities in your Fund. Your Manager does not invest in
derivative securities because, in our opinion, they may increase the potential
of investment risk to your portfolio.

For additional information about your Fund, or your investment in its
shares, please write, or call the toll-free telephone numbers listed on page 15.

By order of the Trustees,

/s/ WILLIAM C. MORRIS
William C. Morris
Chairman

/s/ RONALD T. SCHROEDER
Ronald T. Schroeder
President

October 28, 1994
1
<PAGE>
================================================================================
Seligman Pennsylvania Tax-Exempt Fund
- --------------------------------------------------------------------------------

Highlights September 30, 1994 Class A Class D
- --------------------------------------------------------------------------------
Net Assets $34.9 (millions) $43 (thous.)
- --------------------------------------------------------------------------------
Yield* 4.84% 4.40%
- --------------------------------------------------------------------------------
Dividends** $0.392 $0.216
- --------------------------------------------------------------------------------
Capital Gain Distributions** $0.261 --
- --------------------------------------------------------------------------------
Net asset value per share $7.55 $7.54
- --------------------------------------------------------------------------------
Maximum offering price per share $7.93 $7.54
- --------------------------------------------------------------------------------
Moody's/S&P Ratings+
Aaa/AAA 70%
Aa/AA 23
A/A 6
Baa/BBB 1
- --------------------------------------------------------------------------------
Holdings by Market Sector+
Revenue Bonds 77%
General Obligation Bonds 23
- --------------------------------------------------------------------------------
Weighted Average Maturity (years) 21.8
- --------------------------------------------------------------------------------

* Current yield representing the annualized yield based upon maximum offering
price for the 30-day period ended September 30, 1994.

** Represents per share amount paid or declared in respect of Class A shares
during the year ended September 30, 1994; in the case of Class D shares,
for the period February 1, 1994, to September 30, 1994.

+ Percentages based on current market value of long-term holdings.

Note: Results reflect past performance, which is not indicative of future
results. The yields have been computed in accordance with current SEC
regulations and will vary, and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. A small portion of the Fund's income dividends may be
subject to applicable state and local taxes, and to the federal alternative
minimum tax.

<PAGE>
================================================================================
Annual Performance Overview
- --------------------------------------------------------------------------------

The following is a biography of your Portfolio Manager, a discussion with him
regarding Seligman Pennsylvania Tax-Exempt Fund, and a comparison chart and
table of your Fund's performance against the Lehman Brothers Municipal Bond
Index.

Your Portfolio Manager

Thomas G. Moles is a Managing Director of J. & W. Seligman & Co.
Incorporated, as well as President and Senior Portfolio Manager
of Seligman Select Municipal Fund and Seligman Quality Municipal
Fund, and Vice President and Senior Portfolio Manager of the
Seligman tax-exempt mutual funds which include 19 separate
portfolios. He is responsible for more than $2 billion in
tax-exempt securities. Mr. Moles, with more than 24 years of
experience, has spearheaded Seligman's tax-exempt efforts since
joining the firm in 1983.

[Photo of Thomas G. Moles]

Investment Policy:

"To manage the portfolio for total return and to provide
competitive tax-exempt yields while striving to minimize risk to
principal."

Economic Factors Affecting Seligman Pennsylvania Tax-Exempt Fund:

"Interest rates have been moving higher since the fourth quarter
of 1993, as steadily improving economic conditions focused attention on the risk
of an acceleration in the rate of inflation. In February of 1994, the Federal
Reserve Board voted to begin raising the federal funds rate in an attempt to
slow the economy's rate of growth and keep inflation under control. Since the
increases began, yields on municipal securities for all maturities have
increased and market values have declined across the yield curve.

"While the economic recovery of 1994 has made for a difficult year for
fixed-income markets, it has generally been positive for municipal issuers. The
improving financial condition of cities and towns has served to strengthen the
creditworthiness of many outstanding municipal bonds, many of which we currently
hold in our portfolio."

Your Manager's Investment Strategy:

"New purchases for the portfolio have been concentrated in higher-quality
municipal bonds in order to enhance the overall quality of the portfolio. We
continue to purchase long-term bonds, despite rising interest rates, because of
the significantly higher yields available compared to those offered by
short-term bonds. By remaining in the long-end of the market, however, the
portfolio has declined more in value than it would have had a greater percentage
of assets been invested in cash or other high-quality, short-term securities."

Looking Ahead:

"We believe that the Federal Reserve Board ultimately will be successful in
accomplishing its objectives and, therefore, do not expect inflation to become a
serious threat. In the interim, however, the bond markets may experience further
volatility. While 1994 has been a difficult year for all fixed-income markets,
municipal securities have generally outperformed other fixed-income securities,
such as U.S. Treasuries. We anticipate that this outperformance will continue,
due mainly to the imbalance in supply and demand which has characterized the
municipal market for most of the year. New issue volume, which has declined
significantly in 1994, is expected to remain subdued while demand for municipal
securities should continue to increase because of the relative attractiveness of
their yields."

3
<PAGE>
================================================================================
Performance Comparison Chart and Table September 30, 1994
- --------------------------------------------------------------------------------

This chart compares a $10,000 hypothetical investment made in Seligman
Pennsylvania Tax-Exempt Fund Class A shares, with and without the maximum
initial sales charge of 4.75%, since inception on July 15, 1986, through
September 30, 1994, to a $10,000 hypothetical investment made in the Lehman
Brothers Municipal Bond Index (Lehman Index) for the same period. The
performance of Seligman Pennsylvania Tax-Exempt Fund Class D shares is not shown
in this chart but is included in the table below. It is important to keep in
mind that the Lehman Index excludes the effects of any fees or sales charges,
and does not reflect state-specific bond market performance.

[The table below was represented as a line graph in the printed material]

Lehman Brothers
with without Municipal
sales charge sales charge Bond Index
7/15/86 9,520 10,000 10,000
9/30/86 10,205 10,719 10,474
12/31/86 10,568 11,101 10,836
3/31/87 10,838 11,384 11,098
6/30/87 10,277 10,795 10,797
9/30/87 9,775 10,267 10,529
12/31/87 10,417 10,942 10,999
3/31/88 10,773 11,316 11,377
6/30/88 11,057 11,615 11,598
9/30/88 11,358 11,930 11,895
12/31/88 11,709 12,299 12,117
3/31/89 11,789 12,384 12,197
6/30/89 12,474 13,103 12,919
9/30/89 12,441 13,067 12,928
12/31/89 12,907 13,558 13,424
3/31/90 12,868 13,517 13,484
6/30/90 13,153 13,816 13,799
9/30/90 12,955 13,607 13,807
12/31/90 13,598 14,283 14,403
3/31/91 13,804 14,500 14,728
6/30/91 14,132 14,844 15,043
9/30/91 14,691 15,430 15,627
12/31/91 15,133 15,896 16,151
3/31/92 15,181 15,946 16,199
6/30/92 15,778 16,573 16,813
9/30/92 16,166 16,980 17,261
12/31/92 16,544 17,378 17,575
3/31/93 17,176 18,042 18,228
6/30/93 17,823 18,722 18,824
9/30/93 18,543 19,477 19,461
12/31/93 18,679 19,621 19,734
3/31/94 17,484 18,366 18,650
6/30/94 17,577 18,463 18,861
9/30/94 17,615 18,502 18,985

The table below shows the average annual total returns for the one-year,
five-year, and since-inception periods through September 30, 1994, for Seligman
Pennsylvania Tax-Exempt Fund Class A shares, with and without the maximum
initial sales charge of 4.75%, and the Lehman Index. Also included in the table
is the total return for the period since inception on February 1, 1994, to
September 30, 1994, for Seligman Pennsylvania Tax-Exempt Fund Class D shares,
with and without the effect of the 1% contingent deferred sales load ("CDSL")
imposed on shares redeemed within one year of purchase, and the Lehman Index.

Average Annual Total Returns

Since Since
One Five Inception Inception
Year Years 7/15/86 2/1/94
------- ------ -------- -----------
Seligman Pennsylvania Seligman Pennsylvania
Tax-Exempt Fund Tax-Exempt Fund
Class A with Class D with
Sales Charge (1) -9.52% 6.18% 7.13% CDSL(1) -8.40%
Class A without Class D without
Sales Charge (2) -5.00 7.20 7.78 CDSL(2) -7.50
Lehman Index -2.44 7.99 8.16 Lehman Index -4.88

(1) Represents the average compound rate of return per year over the specified
period for Class A shares and total return for Class D shares, and reflects
changes in price and assumes all distributions within the period are reinvested
in additional shares; also reflects the effect of the 4.75% maximum initial
sales charge or CDSL of 1%, if applicable.

(2) Represents the rate of return as above, but does not reflect the effect of
the 4.75% maximum initial sales charge or 1% CDSL.

Investment return and principal value of an investment will fluctuate so that
shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.

4
<PAGE>
================================================================================
Portfolio of Investments September 30, 1994
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Face Ratings Market
Amount Municipal Bonds Moody's/S&P+ Value
- -------- ----------------------- -------------- ---------
<S> <C> <C> <C>
$1,500,000 Allegheny County, PA Airport Rev.
(Greater Pittsburgh International
Airport),
6.80% due 1/1/2010* ........................... Aaa/AAA $ 1,561,395
1,000,000 Berks County Municipal Authority,
PA Higher Education Rev.
(University of Pennsylvania
Project), 7% due 9/1/2015 ..................... Aa/AA 1,029,000
1,000,000 Berks County Municipal Authority,
PA Hospital Rev. (The Reading Hospital
& Medical Center Project),
5.70% due 10/1/2014 ........................... Aaa/AAA 916,360
1,000,000 Berks County Municipal Authority,
PA Hospital Rev. (The Reading
Hospital & Medical Center Project),
6.10% due 10/1/2023 .......................... Aaa/AAA 963,840
1,000,000 Delaware County Authority, PA
(Haverford College Rev.),
5 1/2% due 11/15/2023 ......................... Aaa/AAA 866,450
1,000,000 Delaware County, PA G.O.'s,
6% due 11/15/2022 ............................. Aa/AA 939,380
1,000,000 Franklin County, PA Industrial
Development Authority Hospital Rev.
(The Chambersburg Hospital Project),
6 1/4% due 7/1/2022 ........................... Aaa/AAA 962,960
2,000,000 Lehigh County, PA G.O.'s,
6.90% due 8/1/2011 ............................ Aaa/AAA 2,197,720
1,750,000 Lehigh County, PA Industrial
Development
Authority Pollution Control Rev.
(Pennsylvania Power & Light Company
Project), 6.40% due 11/1/2021 ................. Aaa/AAA 1,729,875
500,000 Montgomery County, PA Industrial
Development Authority Pollution
Control Rev. (Philadelphia
Electric Co.),
7.60% due 4/1/2021* ........................... Baa2/BBB+ 510,960
2,000,000 Pennsylvania Higher Education
Assistance Agency Student Loan Rev.,
6.40% due 3/1/2022* ........................... Aaa/AAA 1,925,000
1,155,000 Pennsylvania Higher Educational
Facilities Authority College &
University Rev. (La Salle
University), 6 3/4% due 5/1/2011 .............. Aaa/AAA 1,193,565
2,000,000 Pennsylvania Higher Educational
Facilities Authority Rev.
(Temple University),
6 1/2% due 4/1/2021 ........................... Aaa/AAA 2,006,440
2,000,000 Pennsylvania Housing Finance Agency
(Single Family Mortgage Rev.),
5.45% due 10/1/2017 ........................... Aa/AA 1,717,120
1,800,000 Pennsylvania Housing Finance Agency
(Rental Housing Rev.),
6 1/2% due 7/1/2023 ........................... Aaa/AAA 1,756,332
2,000,000 Pennsylvania State G.O.'s,
6 1/2% due 11/15/2011 ......................... A1/AA- 2,044,420
1,000,000 Pennsylvania State Public School
Building Authority College Rev.
(Community College
of Philadelphia Project),
7.30% due 5/1/2009 ............................ Aaa/AAA 1,091,690
1,500,000 Pennsylvania State Turnpike
Commission Rev., 6% due 12/1/2017 ............. Aaa/AAA 1,440,075
1,500,000 Philadelphia Hospitals & Higher
Educational Facilities Authority,
PA Hospital Rev. (Children's Hospital
of Philadelphia Project),
6 1/2% due 2/15/2021 .......................... Aaa/NR 1,617,510
2,500,000 Philadelphia Hospitals & Higher
Educational Facilities Authority,
PA Hospital Rev. (Children's Hospital
of Philadelphia Project),
5% due 2/15/2021 .............................. Aa/AA 1,984,725
1,000,000 Philadelphia, PA Gas Works Rev.,
7% due 5/15/2020 .............................. Aaa/AAA 1,111,620
1,000,000 Philadelphia, PA Water & Wastewater
Rev., 5 1/4% due 6/15/2023 .................... Aaa/AAA 824,290
450,000 Philadelphia Redevelopment Authority,
PA (Home Mortgage Rev.),
9% due 6/1/2017 ............................... NR/AA 455,126
2,000,000 Pottsville Hospital Authority,
PA Hospital Rev. (Daughters of
Charity National Health System--
Good Samaritan Regional Medical
Center), 5% due 8/15/2012 ..................... Aa/NR 1,654,020
1,500,000 University of Pittsburgh Capital
Project, 6 1/8% due 6/1/2021 .................. Aaa/AAA 1,447,380
-----------
Total Municipal Bonds--97.0% (Cost $34,378,385) ................................ 33,947,253
Variable Rate Demand Notes--1.2% (Cost $400,000) ............................... 400,000
Other Assets Less Liabilities--1.8% ............................................ 638,847
-----------
NET ASSETS--100.0% ............................................................. $34,986,100
===========
</TABLE>
- --------------
* Interest income earned from this security is subject to the federal
alternative minimum tax.
+ Ratings have not been audited by Deloitte & Touche LLP.

See notes to financial statements.
5
<PAGE>
================================================================================
Statement of Assets and Liabilities September 30, 1994
- --------------------------------------------------------------------------------

Assets:
Investments, at value:
Long-term holdings (cost $34,378,385) ......... $ 33,947,253
Short-term holdings (cost $400,000) ........... 400,000 $ 34,347,253
------------
Cash ............................................ 105,841
Interest receivable ............................. 652,084
Receivable for Shares of Beneficial
Interest sold ................................... 21,929
Expenses prepaid to shareholder
service agent ................................. 16,594
Other ........................................... 2,026
------------
Total Assets .................................... 35,145,727
------------
Liabilities:
Dividends payable ............................... 57,687
Payable for Shares of Beneficial Interest
repurchased ................................... 21,887
Accrued expenses, taxes, and other .............. 80,053
------------
Total Liabilities ............................... 159,627
------------
Net Assets ...................................... $ 34,986,100
============
Composition of Net Assets:
Shares of Beneficial Interest, at par
($.001 par value; unlimited shares
authorized; 4,636,387 shares outstanding):
Class A ....................................... $ 4,630
Class D ....................................... 6
Additional paid-in capital ...................... 34,815,081
Undistributed net realized gain ................. 597,515
Net unrealized depreciation of investments ...... (431,132)
------------
Net Assets ...................................... $ 34,986,100
============
Net Asset Value per share:
Class A ($34,943,028 (divided by)
4,630,677 shares) ........................... $ 7.55
============
Class D ($43,072 (divided by) 5,710 shares) ... $ 7.54
============
- --------------
See notes to financial statements.

6
<PAGE>
================================================================================
Statement of Operations For the year ended September 30, 1994
- --------------------------------------------------------------------------------

Investment income:
Interest ................................... $ 2,311,249

Expenses:
Management fee ............................. $ 190,649
Distribution and service fees .............. 82,927
Shareholder account services ............... 62,185
Auditing and legal fees .................... 35,764
Custody and related services ............... 25,263
Trustees' fees and expenses ................ 23,067
Registration ............................... 11,190
Shareholder reports and communications ..... 6,113
Miscellaneous .............................. 4,253
------------
Total expenses ............................. 441,411
------------
Net investment income ...................... 1,869,838
Net realized and unrealized gain (loss)
on investments:
Net realized gain on investments ........... 601,610
Net change in unrealized appreciation
of investments ............................ (4,456,835)
------------
Net loss on investments .................... (3,855,225)
------------
Decrease in net assets from operations ..... $ (1,985,387)
============
- --------------
See notes to financial statements.

7
<PAGE>
================================================================================
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Year Ended September 30
-------------------------------
1994 1993
------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income ....................................................................... $ 1,869,838 $ 2,067,183
Net realized gain on investments ............................................................ 601,610 1,250,944
Net change in unrealized appreciation
of investments .............................................................................. (4,456,835) 2,213,205
------------ ------------
Increase (decrease) in net assets
from operations ........................................................................... (1,985,387) 5,531,332
------------ ------------
Distributions to shareholders:
Net investment income:
Class A ................................................................................... (1,867,544) (2,067,183)
Class D ................................................................................... (2,294) --
Net realized gain on investments ............................................................ (1,252,721) (565,778)
------------ ------------
Decrease in net assets from distributions ................................................... (3,122,559) (2,632,961)
------------ ------------
Transactions in Shares
of Beneficial Interest:*
Shares
-------------------------------
Year Ended September 30
-------------------------------
1994 1993
------------ ------------
Net proceeds from
sales of shares:
Class A .............................................. 135,693 250,660 1,087,069 2,047,898
Class D .............................................. 13,776 -- 109,993 --
Shares issued in payment
of dividends:
Class A .............................................. 128,868 137,867 1,027,943 1,130,239
Class D .............................................. 177 -- 1,367 --
Exchanged from associated
Funds--Class A ....................................... 47,776 41,125 384,668 337,795
Shares issued in payment
of gain distributions--
Class A .............................................. 99,772 46,761 819,130 369,879
------------ ------------ ------------ ------------
Total .................................................. 426,062 476,413 3,430,170 3,885,811
------------ ------------ ------------ ------------
Cost of shares repurchased:
Class A ............................................... (523,413) (542,203) (4,152,902) (4,458,974)
Class D ............................................... (8,243) -- (62,980) --
Exchanged into associated
Funds--Class A ........................................ (52,019) (56,144) (416,602) (459,705)
------------ ------------ ------------ ------------
Total .................................................. (583,675) (598,347) (4,632,484) (4,918,679)
------------ ------------ ------------ ------------
Decrease in net assets
from capital share
transactions .......................................... (157,613) (121,934) (1,202,314) (1,032,868)
============ ============ ------------ ------------
Increase (decrease)
in net assets ............................................................................. (6,310,260) 1,865,503
Net Assets:
Beginning of year ........................................................................... 41,296,360 39,430,857
------------ ------------
End of year ................................................................................. $ 34,986,100 $ 41,296,360
============ ============
</TABLE>
- --------------
*The Fund began offering Class D shares on February 1, 1994.

See notes to financial statements.

8
<PAGE>
================================================================================
Notes to Financial Statements
- --------------------------------------------------------------------------------

1. Effective February 1, 1994, Seligman Pennsylvania Tax-Exempt Fund (the
"Fund") began offering two classes of shares. All shares existing prior to
February 1, 1994 have been classified as Class A shares. Class A shares are sold
with an initial sales charge of up to 4.75% and a continuing service fee of up
to 0.25% on an annual basis. Class D shares are sold without an initial sales
charge but are subject to a higher distribution fee and a contingent deferred
sales load ("CDSL") of 1% imposed on certain redemptions made within one year of
purchase. The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required.

2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:

a. All tax-exempt securities and other short-term holdings maturing in more
than 60 days are valued based upon quotations provided by an independent
pricing service or, in their absence, at fair value determined in
accordance with procedures adopted by the Trustees. Short-term holdings
maturing in 60 days or less are generally valued at amortized cost.

b. There is no provision for federal income or excise tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
Dividends are declared daily and paid monthly.

c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income
tax purposes. Interest income is recorded on the accrual basis. The Fund
amortizes original issue discounts and premiums paid on purchases of
portfolio securities. Discounts other than original issue discounts are not
amortized.

d. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares
based upon the relative proportion of the value of settled shares
outstanding of each class. Class-specific expenses, which include
distribution and service fees and any other items that can be specifically
attributed to a particular class, are charged directly to such class.

e. The treatment for financial statement purposes of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, and capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations
or net asset value per share of the Fund.

3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended September 30, 1994, amounted to $2,907,520 and
$5,551,689, respectively.

At September 30, 1994, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
investments amounted to $894,750 and $1,325,882, respectively.

4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
all officers of the Fund, all trustees of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager is
paid by the Manager. The Manager's fee, calculated daily and payable monthly, is
equal to 0.50% per annum of the Fund's average daily net assets.

Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
commissions of $4,915 from the sale of Class A shares, after concessions of
$36,112 paid to dealers.
9
<PAGE>
================================================================================
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------

The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Fund pursuant to
the Plan. For the year ended September 30, 1994, fees paid aggregated $82,384,
or 0.22% per annum of the average daily net assets of Class A shares.

Effective February 1, 1994, the Fund adopted a Plan with respect to Class D
shares under which service organizations can enter into agreements with the
Distributor and receive a continuing fee for providing personal services and/or
the maintenance of shareholder accounts of up to 0.25% on an annual basis of the
average daily net assets of the Class D shares for which the organizations are
responsible, and fees for providing other distribution assistance of up to 0.75%
on an annual basis of such average daily net assets. Such fees are paid monthly
by the Fund to the Distributor pursuant to the Plan. For the period February 1,
1994 to September 30, 1994, fees paid amounted to $543, or 1% per annum of the
average daily net assets of Class D shares.

The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the
period February 1, 1994, to September 30, 1994, such charges amounted to $619.

Seligman Data Corp., formerly Union Data Service Center, Inc., which is
owned by certain associated investment companies, charged at cost $62,185 for
shareholder account services.

Certain officers and trustees of the Fund are officers or directors of the
Manager, the Distributor, and/or Seligman Data Corp.

Fees of $8,000 were incurred by the Fund for the legal services of Sullivan
& Cromwell, a member of which firm is a trustee of the Fund.

The Fund has a compensation arrangement under which trustees who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in trustees' fees and
expenses, and the accumulated balance thereof at September 30, 1994, of $30,336
is included in other liabilities.

5. Class-specific expenses charged to Class A and Class D during the period
ended September 30, 1994, which are included in the corresponding captions of
the Statement of Operations, were as follows:

Class A Class D
-------- -------
Distribution and service fees .................. $82,384 $ 543
Registration ................................... 1,519 27
Shareholder reports and
communications ................................ 1,303 5

10
<PAGE>
================================================================================
Financial Highlights
- --------------------------------------------------------------------------------

The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item as disclosed in the financial statements
to their equivalent per share amounts using average shares outstanding.

The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
return for the period of less than one year is not annualized.

Per Share Operating Performance:

<TABLE>
<CAPTION>
Class A Class D
----------------------------------------------------------- --------
Year Ended September 30 2/1/94*
----------------------------------------------------------- to
1994 1993 1992 1991 1990 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning
of period ........ $ 8.61 $ 8.02 $ 7.74 $ 7.34 $ 7.50 $ 8.37
------- ------- ------- ------- ------- -------
Net investment
income ........... .39 .42 .46 .47 .47 .22
Net realized
and unrealized
investment
gain (loss) ...... (.80) .71 .30 .49 (.16) (.83)
------- ------- ------- ------- ------- -------
Increase (decrease)
from investment
operations ....... (.41) 1.13 .76 .96 .31 (.61)
Dividends paid
or declared ...... (.39) (.42) (.46) (.47) (.47) (.22)
Distributions from
net gain realized (.26) (.12) (.02) (.09) .-- .--
------- ------- ------- ------- ------- -------
Net increase
(decrease) in
net asset value .. (1.06) .59 .28 .40 (.16) (.83)
------- ------- ------- ------- ------- -------
Net asset value,
end of period .... $ 7.55 $ 8.61 $ 8.02 $ 7.74 $ 7.34 $ 7.54
======= ======= ======= ======= ======= =======
Total return based
on net asset
value ............ (5.00)% 14.71% 10.04% 13.40% 4.13% (7.50)%
Ratios/Supplemental
Data:
Expenses to
average net
assets ........... 1.16% 1.19% 1.01% .98% 1.06% 2.00%+
Net investment
income to
average net
assets ........... 4.91% 5.14% 5.79% 6.16% 6.24% 4.20%+
Portfolio turnover 7.71% 40.74% 32.87% 25.24% 40.64% 7.71%++
Net assets,
end of period
(000's omitted) .. $34,943 $41,296 $39,431 $37,853 $35,572 $ 43

</TABLE>
- --------------
See page 12 for footnotes.
11
<PAGE>
================================================================================
Financial Highlights (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class D
----------------------------------------------------------- --------
Year Ended September 30 2/1/94*
----------------------------------------------------------- to
1994 1993 1992 1991 1990 9/30/94
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Without management
fee waiver:**
Net investment
income per share $.45 $.45 $.45
Expenses to
average net assets 1.16% 1.23% 1.31%
Net investment income
to average net assets 5.64% 5.91% 5.99%

</TABLE>

- --------------
* Commencement of offering of Class D shares.

** The Manager, at its discretion, waived a portion of its fees for the
periods presented.

+ Annualized.

++ For the year ended September 30, 1994.

12
<PAGE>
================================================================================
Report of Independent Auditors
- --------------------------------------------------------------------------------

The Trustees and Shareholders,
Seligman Pennsylvania Tax-Exempt Fund:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Pennsylvania Tax- Exempt Fund as of
September 30, 1994, the related statements of operations for the year then ended
and of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1994 by correspondence with the Fund's custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman
Pennsylvania Tax-Exempt Fund as of September 30, 1994, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP
New York, New York
October 28, 1994
13
<PAGE>
================================================================================
Trustees
- --------------------------------------------------------------------------------

Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated

Alice S. Ilchman 3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Trustee, The Rockefeller Foundation

John E. Merow
Chairman and Senior Partner,
Sullivan & Cromwell, Attorneys

Betsy S. Michel 2
Director or Trustee,
Various Organizations

William C. Morris 1
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Daniel Industries, Inc.
Director, Kerr-McGee Corporation

Douglas R. Nichols, Jr. 2
Management Consultant

James C. Pitney 3
Partner, Pitney, Hardin, Kipp & Szuch, Attorneys
Director, Public Service Enterprise Group

James Q. Riordan 3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service

Herman J. Schmidt 2
Director, H.J. Heinz Company
Director, HON Industries, Inc.
Director, MAPCO, Inc.

Ronald T. Schroeder 1
President
Managing Director, J. & W. Seligman & Co. Incorporated

Robert L. Shafer 3
Vice President, Pfizer Inc.
Director, USLIFE Corporation

James N. Whitson 2
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN

Brian T. Zino 1
Managing Director,
J. & W. Seligman & Co. Incorporated

- --------------
Member:
1 Executive Committee
2 Audit Committee
3 Trustee Nominating Committee

14
<PAGE>
================================================================================
Executive Officers
- --------------------------------------------------------------------------------

William C. Morris
Chairman

Ronald T. Schroeder
President

Thomas G. Moles
Vice President

Lawrence P. Vogel
Vice President

Thomas G. Rose
Treasurer

Frank J. Nasta
Secretary

- --------------------------------------------------------------------------------

Manager
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, NY 10017

General Counsel
Sullivan & Cromwell

Independent Auditors
Deloitte & Touche LLP

General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017

Shareholder Service Agent
Seligman Data Corp. (formerly
Union Data Service Center, Inc.)
100 Park Avenue
New York, NY 10017

Important Telephone Numbers

(800) 221-2450 Shareholder
Services

(800) 622-4597 24-Hour Automated
Telephone Access
Service

15
<PAGE>

Seligman Financial Services, Inc.
an affiliate of
logo goes here
J. & W. Seligman & Co.
incorporated
established 1864
100 Park Avenue, New York, NY 10017

This report is intended only for the information of shareholders or
those who have received the offering prospectus covering shares of
Beneficial Interest of Seligman Pennsylvania Tax-Exempt Fund, which
contains information about the sales charges, management fee, and other
costs. Please read the prospectus carefully before investing or sending
money.

TEDPA2 9/94

<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Schedules:

Part A - Financial Highlights for Class A shares for the period from
7/15/86 (commencement of operations) to September 30, 1994. Financial
Highlights for Class D shares for the period 2/1/94 (commencement of
offering) to September 30, 1994.

Part B - Required Financial Statements are included in the Fund's Annual
Report to shareholders, dated September 30, 1994, which are
incorporated by reference in the Statement of Additional Information.
These Financial Statements are: Portfolio of Investments as of
September 30, 1994; Statement of Assets and Liabilities as of
September 30, 1994; Statement of Operations for year ended September
30, 1994; Statements of Changes in Net Assets for the years ended
September 30, 1994 and September 30, 1993; Notes to Financial
Statements; Financial Highlights for the five years ended September
30, 1994 for the Fund's Class A shares and for the period 2/1/94
(commencement of offering) through September 30, 1993 and for the year
ended September 30, 1994 for the Fund's Class D shares; Report of
Independent Auditors.

(b) Exhibits were filed with the Registrant's initial registration
statement on May 16, 1986 and the amendments filed thereto are hereby
specifically incorporated by reference herein. All other Exhibits have
been previously filed except Exhibits marked with an (*) which are
incorporated herein.

(1) Instrument of Establishment and Designation of Declaration of Trust of
Registrant.
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 11 filed on November 30, 1993.)

(2) Bylaws of Registrant.
(Incorporated by Reference to Registrants Registration Statement filed
on May 19, 1986.)

(4) Specimen of Stock Certificate for Class D Shares.
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 12 filed on January 31, 1994.)

(5) Copy of New Management Agreement between each Series of the Registrant
and J. & W. Seligman & Co. Incorporated.
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 4 filed on February 1, 1989.)

(6a) Copy of the New Distributing Agreement between Registrant and Seligman
Financial Services, Inc.
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 10 filed on January 29, 1993.)

(6b) Copy of Sales Agreement between Dealers and Seligman Financial
Services, Inc.*

(7) Copy of Amended Retirement Income Plan of J. & W. Seligman & Co.
Incorporated and Trust.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

(7a) Copy of Amended Employees' Thrift Plan of Union Data Service Center,
Inc. and Trust.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

(8) Copy of Custodian Agreement between Registrant and Investors Fiduciary
Trust Company
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 7 filed on November 30, 1989.)

(10) Opinion and Consent of Counsel.*

(11) Consent of Independent Auditors.*

(13) Purchase Agreement for Initial Capital for Class D shares.
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 12 filed on January 31, 1994.)

(14) Copy of Amended Individual Retirement Account Trust and Related
Documents.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

<PAGE>

PART C. OTHER INFORMATION

(14a) Copy of Amended Comprehensive Retirement Plans for Money Purchase
and/or Prototype Profit Sharing Plan.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

(14b) Copy of Amended Basic Business Retirement Plans for Money Purchase
and/or Profit Sharing Plans.
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

(14c) Copy of Amended 403(b)(7) Custodial Account Plan.
(Incorporated by Reference to Seligman New Jersey Tax-Exempt Fund,
Inc. Pre-Effective Amendment No. 1 filed on January 11, 1988.)

(14d) Copy of Amended Simplified Employee Pension Plan (SEP).
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

(14e) Copy of amended J. & W. Seligman & Co. Incorporated (SARSEP) Salary
Reduction and Other Elective Simplified Employee Pension-Individual
Retirement Accounts Contribution Agreement (Under Section 408(k) of
the Internal Revenue Code).
(Incorporated by Reference to Seligman Tax-Exempt Fund Series, Inc.
Post-Effective Amendment No. 24 filed on November 30, 1992)

(15) Copy of Amended Administration, Shareholder Services and Distribution
Plan and form of related Agreement of Registrant.
(Incorporated by Reference to the Registrant's Post-Effective
Amendment No. 12 filed on January 31, 1994.)

(16) Schedule for Computation of Tax Equivalent Yield and Schedule for
Computation of each Performance Quotation provided in Registration
Statement of Item 22.
(Incorporated by Reference to Registrant's Post-Effective Amendment
No. 6 filed on February 1, 1990.)

Item 25. Persons Controlled by or Under Common Control with Registrant - None.

Item 26. Number of Holders of Securities - As of December 31, 1994, there were
893 recordholders of Class A Shares of Beneficial Interest and 4
recordholders of Class D shares of Beneficial Interest of the
Registrant.

Item 27. Indemnification - Incorporated by Reference from the Registrant's
Registration Statement on Form N-1A and Pre-Effective Amendment Nos. 1
and 2 thereto; File No. 33-5793.

Item 28. Business and Other Connections of Investment Adviser - J. & W.
Seligman & Co. Incorporated, a Delaware corporation ("Manager"), is
the Registrant's investment manager. The Manager also serves as
investment manager to sixteen associated investment companies. They
are Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and
Information Fund, Inc., Seligman Frontier Fund, Inc., Seligman Growth
Fund, Inc., Seligman Henderson Global Fund Series, Inc., Seligman High
Income Fund Series, Seligman Income Fund, Inc., Seligman Portfolios,
Inc., Seligman New Jersey Tax-Exempt Fund, Inc., Seligman Quality
Municipal Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman
Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt Series Trust and
Tri-Continental Corporation.

The Manager has an investment advisory service division which provides
investment management or advice to private clients. The list required
by this Item 28 of officers and directors of the Manager, together
with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to
Schedules A and D or Form ADV, filed by the Manager pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-5798) was filed on
March 30, 1994.

<PAGE>

PART C. OTHER INFORMATION

Item 29. Principal Underwriters
(a) The names of each investment company (other than the
Registrant) for which each principal underwriter currently
distributing securities of the Registrant also acts as a
principal underwriter, depositor or investment adviser
follow:

Seligman Capital Fund, Inc., Seligman Cash Management Fund,
Inc., Seligman Common Stock Fund, Inc., Seligman
Communications and Information Fund, Inc., Seligman Frontier
Fund, Inc., Seligman Growth Fund, Inc., Seligman Henderson
Global Fund Series, Inc., Seligman High Income Fund Series,
Seligman Income Fund, Inc., Seligman Portfolios, Inc.,
Seligman New Jersey Tax-Exempt Fund, Inc., Seligman
Tax-Exempt Fund Series, Inc., Seligman Tax-Exempt Series
Trust.

(b) Name of each trustee, officer or partner of each principal
underwriter named in the answer to Item 21 of Part II:

Seligman Financial Services, Inc.
As of January 3, 1995

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
William C. Morris* Director Chairman of the Board and
Chief Executive Officer
Ronald T. Schroeder* Director President and Director
Fred E. Brown* Director Director
Michael J. Del Priore* Director None
William H. Hazen* Director None
Thomas G. Moles* Director None
David F. Stein* Director None
David Watts* Director None
Brian T. Zino* Director Director
Stephen J. Hodgdon* President None
Lynda M. Soleim* Regional Vice President None
14074 Rue St. Raphael Street
Del Mar, CA 92014
Gerald I. Cetrulo, III Vice President and Regional None
140 West Parkway Sales Manager
Pompton Plains, NJ 07444
D. Ian Valentine Vice President and None
307 Braehead Drive Regional Sales Manager
Fredericksburg, VA 22401
Andrew Veasey Regional Vice President None
40 Goshawk Court
Voorhees, NJ 08043
Kelli A. Wirth Regional Vice President None
8618 Hornwood Court
Charlotte, NC 28215
Judith L. Lyon Regional Vice President None
8384-H Roswell Road NE
Atlanta, GA 30350
David Meyncke Regional Vice President None
4718 Orange Grove Way
Palm Harbor, FL 34684
Bradley F. Hanson Vice President and None
9707 Xylon Court Regional Sales Manager
Bloomington, MN 55438
Melinda Nawn Regional Vice President None
5850 Squire Hill Court
Cincinnati, OH 45241

</TABLE>

<PAGE>

PART C. OTHER INFORMATION
<TABLE>
<CAPTION>

Seligman Financial Services, Inc.
As of January 3, 1995

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
------------------ --------------------- ---------------------
<S> <C> <C>
Randy D. Lierman Regional Vice President None
2627 R.D. Mize Road
Independence, MO 64057
Bradley W. Larson Vice President and None
367 Bryan Drive Regional Sales Manager
Danville, CA 94526
Herb W. Morgan Regional Vice President None
11308 Monticook Court
San Diego, CA 92127
Robert H. Ruhm Regional Vice President None
167 Derby Street
Melrose, MA 02176
Todd Volkman Regional Vice President None
4650 Cole Avenue, #216
Dallas, TX 75205
Brad Davis Regional Vice President None
255 4th Avenue, #2
Kirkland, WA 98033
Bruce Tuckey Regional Vice President None
316 Woodedge Drive
Bloomfield, MI 48304
Susan Gutterud Regional Vice President None
820 Humboldt, #6
Denver, CO 80218
Lawrence P. Vogel* Senior Vice President - Finance Vice President
Helen Simon* Vice President None
Marsha E. Jacoby* Vice President, National Accounts None
Manager
Vito Graziano* Assistant Secretary Assistant Secretary
William W. Johnson* Vice President, Order Desk None
Frank P. Marino* Assistant Vice President, Mutual
Fund Product Manager None
Aurelia Lacsamana* Treasurer None
</TABLE>

*The principal business address of each of these directors and/or officers is
100 Park Avenue, New York, New York 10017.

Item 30. Location of Accounts and Records

Custodian: Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105 and
Seligman Pennsylvania Tax-Exempt Fund Series
100 Park Avenue
New York, NY 10017

<PAGE>

PART C. OTHER INFORMATION

Item 31. Management Services - Seligman Data Corp. ("SDC") the Registrant's
shareholder service agent, has an agreement with The Shareholder
Services Group ("TSSG") pursuant to which TSSG provides a data
processing system for certain shareholder accounting and recordkeeping
functions performed by SDC, which commenced in July 1990. For the
fiscal year ended September 30, 1994 and 1993, the approximate cost of
these services were $4,597 and $5,428, respectively.

Item 32. Undertakings - The Registrant undertakes: (1) if requested to do so by
the holders of at least ten percent of its outstanding shares, to call
a meeting of shareholders for the purpose of voting upon the removal
of a director or directors and to assist in communications with other
shareholders as required by Section 16(c) of the Investment Company
Act of 1940; and (2) to furnish to each person to whom a prospectus is
delivered, a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 13 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on the 1st day of February, 1995.

SELIGMAN PENNSYLVANIA TAX-EXEMPT FUND SERIES

By: /s/ William C. Morris
--------------------------------
William C. Morris, Chairman*

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 13 has been signed below by the following persons
in the capacities indicated on February 1, 1995.
<TABLE>
<CAPTION>

Signature Title
--------- -----

<S> <C>

/s/ William C. Morris Chairman of the Trustees (Principal
------------------------------------ executive officer) and Trustee
William C. Morris*

/s/ Ronald T. Schroeder President and Trustee
------------------------------------
Ronald T. Schroeder*

/s/ Thomas G. Rose Treasurer (Principal financial
------------------------------------ and accounting officer)
Thomas G. Rose

Fred E. Brown, Trustee )
Alice S. Ilchman, Trustee )
John E. Merow, Trustee ) /s/ Brian T. Zino
Betsy S. Michel, Trustee ) ------------------------------------
Douglas R. Nichols, Jr., Trustee ) *By: Brian T. Zino, Attorney-in-fact
James C. Pitney, Trustee )
James Q. Riordan, Trustee )
Herman J. Schmidt, Trustee )
Robert L. Shafer, Trustee )
James N. Whitson, Trustee )
Brian T. Zino, Trustee )

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 34778
<INVESTMENTS-AT-VALUE> 34347
<RECEIVABLES> 690
<ASSETS-OTHER> 109
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35146
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 160
<TOTAL-LIABILITIES> 160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34820
<SHARES-COMMON-STOCK> 4630
<SHARES-COMMON-PRIOR> 4794
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 598
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (431)
<NET-ASSETS> 34986
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2308
<OTHER-INCOME> 0
<EXPENSES-NET> 440
<NET-INVESTMENT-INCOME> 1868
<REALIZED-GAINS-CURRENT> 602
<APPREC-INCREASE-CURRENT> (4457)
<NET-CHANGE-FROM-OPS> (1985)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1868
<DISTRIBUTIONS-OF-GAINS> 1253
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 183
<NUMBER-OF-SHARES-REDEEMED> 575
<SHARES-REINVESTED> 229
<NET-CHANGE-IN-ASSETS> (6310)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1249
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 191
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 440
<AVERAGE-NET-ASSETS> 38073
<PER-SHARE-NAV-BEGIN> 8.61
<PER-SHARE-NII> .39
<PER-SHARE-GAIN-APPREC> (.80)
<PER-SHARE-DIVIDEND> .39
<PER-SHARE-DISTRIBUTIONS> .26
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.55
<EXPENSE-RATIO> 1.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> SEP-30-1994
<INVESTMENTS-AT-COST> 34778
<INVESTMENTS-AT-VALUE> 34347
<RECEIVABLES> 690
<ASSETS-OTHER> 109
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35146
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 160
<TOTAL-LIABILITIES> 160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34820
<SHARES-COMMON-STOCK> 6
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 598
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (431)
<NET-ASSETS> 34986
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 2
<REALIZED-GAINS-CURRENT> 602
<APPREC-INCREASE-CURRENT> (4457)
<NET-CHANGE-FROM-OPS> (1985)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14
<NUMBER-OF-SHARES-REDEEMED> 8
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (6310)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1
<AVERAGE-NET-ASSETS> 82
<PER-SHARE-NAV-BEGIN> 8.37
<PER-SHARE-NII> .22
<PER-SHARE-GAIN-APPREC> (.83)
<PER-SHARE-DIVIDEND> .22
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.54
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

Exhibit 6

SALES AGREEMENT

covering shares of capital stock
and/or shares of beneficial interest of

THE SELIGMAN MUTUAL FUNDS

Seligman Capital Fund, Inc.
Seligman Common Stock Fund, Inc.
Seligman Communications and Information Fund, Inc.
Seligman Frontier Fund, Inc.
Seligman Growth Fund, Inc.
Seligman Henderson Global Fund Series, Inc.
Seligman High Income Fund Series
Seligman Income Fund, Inc.
Seligman New Jersey Tax-Exempt Fund, Inc.
Seligman Pennsylvania Tax-Exempt Fund Series
Seligman Tax-Exempt Fund Series, Inc.
Seligman Tax-Exempt Series Trust

between

SELIGMAN FINANCIAL SERVICES, INC.

and

------------------------------------------------------------------
Dealer

The Dealer named above and Seligman Financial Services, Inc., exclusive agent
for distribution of shares of capital stock of Seligman Capital Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman Income Fund, Inc., Seligman New
Jersey Tax-Exempt Fund, Inc., and Seligman Tax-Exempt Fund Series, Inc., and
shares of beneficial interest of Seligman High Income Fund Series, Seligman
Pennsylvania Tax-Exempt Fund, and Seligman Tax-Exempt Series Trust, agree to the
terms and conditions set forth in this agreement.

Dealer Signature
Seligman Financial Services, Inc. Acceptance

_____________________________________ _____________________________________
Principal Officer Stephen J. Hodgdon, President

SELIGMAN FINANCIAL SERVICES, INC.
_____________________________________ 100 Park Avenue
Address New York, New York 10017

_____________________________________ _____________________________________
Employer Identification No. Date

REV 1/95
<PAGE>

The Dealer and Seligman Financial Services, Inc. ("Seligman Financial
Services"), as exclusive agent for distribution of Class A and Class D Shares
(as described in the "Policies and Procedures," as set forth below) of the
Capital Stock and/or Class A and Class D Shares of beneficial interest
(collectively, the "Shares") of Seligman Capital Fund, Inc., Seligman Common
Stock Fund, Inc., Seligman Communications and Information Fund, Inc., Seligman
Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman Henderson Global Fund
Series, Inc., Seligman High Income Fund Series, Seligman Income Fund, Inc.,
Seligman New Jersey Tax-Exempt Fund, Inc., Seligman Pennsylvania Tax-Exempt
Fund, Seligman Tax-Exempt Fund Series, Inc. and Seligman Tax-Exempt Series Trust
and or any other mutual fund for which Seligman Financial Services is exclusive
agent for distribution (herein called the Funds), agree as follows:

1. The Dealer agrees to comply with the attached "Policies and Procedures"
with respect to sales of Seligman Mutual Funds offering two classes of
shares, as set forth below.

2. An order for Shares of one or more of the Funds, placed by the Dealer with
Seligman Financial Services, will be confirmed at the public offering price
as described in each Fund's current prospectus. Unless otherwise agreed
when an order is placed, the Dealer shall remit the purchase price to the
Fund, or Funds, with issuing instruction, within the period of time
prescribed by existing regulations. No wire orders under $1,000 may be
placed for initial purchases.

3. Shares of the Funds shall be offered for sale and sold by the Dealer only
at the applicable public offering price currently in effect, determined in
the manner prescribed in each Fund's prospectus. Seligman Financial
Services will make a reasonable effort to notify the Dealer of any
redetermination or suspension of the current public offering price, but
Seligman Financial Services shall be under no liability for failure to do
so.

4. On each purchase of Shares by the Dealer, the Dealer shall be entitled,
based on the Class of Shares purchased and except as provided in each
Fund's current prospectus, to a concession determined as a percentage of
the price to the investor as set forth in each Fund's current prospectus.
On each purchase of Class A Shares, Seligman Financial Services reserves
the right to receive a minimum concession of $.75 per transaction. No
concessions will be paid to the Dealer for the investment of dividends in
additional shares.

5. Except for sales to and purchases from the Dealer's retail customers, all
of which shall be made at the applicable current public offering price or
the current price bid by Seligman Financial Services on behalf of the Fund,
the Dealer agrees to buy Shares only through Seligman Financial Services
and not from any other sources and to sell shares only to Seligman
Financial Services, the Fund or its redemption agent and not to any other
purchasers.

6. By signing this Agreement, both Seligman Financial Services and the Dealer
warrant that they are members of the National Association of Securities
Dealers, Inc., and agree that termination of such membership at any time
shall terminate this Agreement forthwith regardless of the provisions of
paragraph 10 hereof. Each party further agrees to comply with all rules and
regulations of such Association and specifically to observe the following
provisions:

(a) Neither Seligman Financial Services nor the Dealer shall withhold
placing customers' orders for Shares so as to profit itself as a
result of such withholding.

(b) Seligman Financial Services shall not purchase Shares from any of the
Funds except for the purpose of covering purchase orders already
received, and the Dealer shall not purchase Shares of any of the Funds
through Seligman Financial Services other than for investment, except
for the purpose of covering purchase orders already received.

<PAGE>

(c) Seligman Financial Services shall not accept a conditional order for
Shares on any basis other than at a specified definite price. The
Dealer shall not, as principal, purchase Shares of any of the Funds
from a recordholder at a price lower than the bid price, if any, then
quoted by or for the Fund, but the Dealer shall not be prevented from
selling Shares for the account of a record owner to Seligman Financial
Services, the Fund or its redemption agent at the bid price currently
quoted by or for such Fund, and charging the investor a fair
commission for handling the transaction.

(d) If Class A Shares are repurchased by a Fund or by Seligman Financial
Services as its agent, or are tendered for redemption within seven
business days after confirmation by Seligman Financial Services of the
original purchase order of the Dealer for such Shares, (i) the Dealer
shall forthwith refund to Seligman Financial Services the full
concession allowed to the Dealer on the original sales and (ii)
Seligman Financial Services shall forthwith pay to the Fund Seligman
Financial Services' share of the "sales load" on the original sale by
Seligman Financial Services, and shall also pay to the Fund the refund
which Seligman Financial Services received under (i) above. The Dealer
shall be notified by Seligman Financial Services of such repurchase or
redemption within ten days of the date that such redemption or
repurchase is placed with Seligman Financial Services, the Fund or its
authorized agent. Termination or cancellation of this Agreement shall
not relieve the Dealer or Seligman Financial Services from the
requirements of this clause (d).

7. (a) Seligman Financial Services shall be entitled to a contingent
deferred sales load ("CDSL") on redemptions within one year of
purchase on any Class D Shares sold. With respect to omnibus accounts
in which Class D Shares are held at Seligman Data Corp. ("SDC") in the
Dealer's name, the Dealer agrees that by the tenth day of each month
it will furnish to SDC a report of each redemption in the preceding
month to which a CDSL was applicable, accompanied by a check payable
to Seligman Financial Services in payment of the CDSL due.

(b) If, with respect to a redemption of any Class D Shares sold by the
Dealer, the CDSL is waived because the redemption qualifies for a
waiver set forth in the Fund's prospectus, the Dealer shall promptly
remit to Seligman Financial Services an amount equal to the payment
made by Seligman Financial Services to the Dealer at the time of sale
with respect to such Class D Shares.

8. In all transactions between Seligman Financial Services and the Dealer
under this Agreement, the Dealer will act as principal in purchasing from
or selling to Seligman Financial Services. The dealer is not for any
purposes employed or retained as or authorized to act as broker, agent or
employee of any Fund or of Seligman Financial Services and the Dealer is
not authorized in any manner to act for any Fund or Seligman Financial
Services or to make any representations on behalf of Seligman Financial
Services. In purchasing and selling Shares of any Fund under this
Agreement, the Dealer shall be entitled to rely only upon matters stated in
the current offering prospectus of the applicable Fund and upon such
written representations, if any, as may be made by Seligman Financial
Services to the Dealer over the signature of Seligman Financial Services.

9. Seligman Financial Services will furnish to the Dealer, without charge,
reasonable quantities of the current offering prospectus of each Fund and
sales material issued from time to time by Seligman Financial Services.

10. Either Party to this Agreement may cancel this Agreement by written notice
to the other party. Such cancellation shall be effective at the close of
business on the 5th day following the date on which such notice was given.
Seligman Financial Services may modify this Agreement at any time by
written notice to the Dealer. Such notice shall be deemed to have been
given on the date upon which it was either delivered personally to the
other party or any officer or member thereof, or was mailed postage-paid,
or delivered to a telegraph office for transmission to the other party at
his or its address as shown herein.

<PAGE>

11. This Agreement shall be construed in accordance with the laws of the State
of New York and shall be binding upon both parties hereto when signed by
Seligman Financial Services and by the Dealer in the spaces provided on the
cover of this Agreement. This Agreement shall not be applicable to Shares
of a Fund in a state in which such Fund Shares are not qualified for sale.

POLICIES AND PROCEDURES

In connection with the offering by the Funds of two classes of shares, one
subject to a front-end sales load and a service fee ("Class A Shares"), and one
subject to a service fee, a distribution fee, no front-end sales load and a
contingent deferred sales load on redemptions within one year of purchase
("Class D Shares"), it is important for an investor to choose the method of
purchasing shares which best suits his or her particular circumstances. To
assist investors in these decisions, Seligman Financial Services has instituted
the following policies with respect to orders for Shares:

1. No purchase order may be placed for Class D Shares for amounts of
$4,000,000 or more.

2. Any purchase order for less than $4,000,000 may be for either Class A
or Class D Shares in light of the relevant facts and circumstances,
including:

a. the specific purchase order dollar amount;

b. the length of time the investor expects to hold his Shares; and

c. any other relevant circumstances such as the availability of
purchases under a Letter of Intent, Volume Discount, or Right of
Accumulation.

There are instances when one method of purchasing Shares may be more
appropriate than the other. For example, investors who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of a higher ongoing distribution fee. On the other hand,
an investor whose order would not qualify for such a discount may wish to have
all of his or her funds invested in Class D Shares, initially. However, if such
an investor anticipates that he or she will redeem his or her Class D Shares
within one year, the investor may, depending on the amount of the purchase, pay
an amount greater than the sales load and service fee attributable to Class A
Shares.

Appropriate supervisory personnel within your organization must ensure that
all employees receiving investor inquiries about the purchase of Shares of a
Fund advise the investor of then available pricing structures offered by the
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.

Questions relating to this policy should be directed to Stephen J. Hodgdon,
President, Seligman Financial Services at (212) 850-1217.

Exhibit 10

[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL]

January 30, 1995

Seligman Pennsylvania Tax-Exempt Fund Series
100 Park Avenue
New York, NY 10017

Ladies & Gentlemen:

With respect to Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A under the Securities Act of 1933, as amended, of Seligman
Pennsylvania Tax-Exempt Fund Series, we have reviewed the material relative to
Pennsylvania Taxes in the Registration Statement. Subject to such review, our
opinion as delivered to you and as filed with the Securities and Exchange
Commission remains unchanged.

We consent to the filing of this consent as an exhibit to the Registration
Statement and to the reference to us under the heading "Pennsylvania Taxes." In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended.

Very truly yours,

/s/ BALLARD SPAHR ANDREWS & INGERSOLL
_____________________________________

Exhibit 11

Consent of Independent Auditors

Seligman Pennsylvania Tax-Exempt Fund:

We consent to the incorporation by reference in the Statement of Additional
Information in this Post-Effective Amendment No. 13 to Registration Statement
No. 33-5793 of our report dated October 28, 1994, appearing in the annual report
to shareholders for the year ended September 30, 1994, and to the reference to
us under the caption "Financial Highlights" in the Prospectus, which is a part
of such Registration Statement.

/s/ DELOITTE & TOUCHE LLP
_________________________
DELOITTE & TOUCHE LLP
New York, New York
January 27, 1995