File No. 33-7498
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 14 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 14 [X]
(Check appropriate box or boxes.)
PREMIER CALIFORNIA MUNICIPAL BOND FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b) of Rule 485
----
X on May 20, 1994 pursuant to paragraph (b) of Rule 485
----
60 days after filing pursuant to paragraph (a) of Rule 485
----
on (date) pursuant to paragraph (a) of Rule 485
----
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for the fiscal year ended January 31, 1994 was filed on March 18,
1994.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 5, 32
5 Management of the Fund 7
5(a) Management's Discussion of Fund's *
Performance
6 Capital Stock and Other Securities 32
7 Purchase of Securities Being Offered 18
8 Redemption or Repurchase 24
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-27
13 Investment Objectives and Policies B-2
14 Management of the Fund B-10
15 Control Persons and Principal B-13
Holders of Securities
16 Investment Advisory and Other B-13
Services
_______________________
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
17 Brokerage Allocation and Other Practices B-24
18 Capital Stock and Other Securities B-27
19 Purchase, Redemption and Pricing B-15, B-17,
of Securities Being Offered B-21
20 Tax Status B-22
21 Underwriters Cover, B-15
22 Calculations of Performance Data B-25
23 Financial Statements B-49
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-29
30 Location of Accounts and Records C-38
31 Management Services C-38
32 Undertakings C-38
May 20, 1994
PREMIER CALIFORNIA MUNICIPAL BOND FUND
SUPPLEMENT TO PROSPECTUS
DATED MAY 20, 1994
The following information supplements and should be read in conjunction
with the section of the Fund's Prospectus entitled "Management of the
Fund."
The Fund's manager, The Dreyfus Corporation ("Dreyfus"), has entered into
an Agreement and Plan of Merger (the "Merger Agreement") providing for
the merger of Dreyfus with a subsidiary of Mellon Bank Corporation
("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in mid-1994, but could occur significantly later.
As a result of regulatory requirements and the terms of the Merger
Agreement, Dreyfus will seek various approvals from the Fund's board and
shareholders before completion of the merger. Shareholder approval will
be solicited by a proxy statement.
The following information supplements and should be read in conjunction
with the section of the Fund's Prospectus entitled "Performance
Information."
From time to time, advertising materials for the Fund also may refer to
Value Line Mutual Fund Survey company ratings and related analyses
supporting the rating.
023/613stkr052094
PREMIER CALIFORNIA MUNICIPAL BOND FUND
PROSPECTUS MAY 20, 1994
- -------------------------------------------------------------------------
Premier California Municipal Bond Fund (the "Fund") is an open-end,
diversified, management investment company, known as a mutual fund. Its
goal is to maximize current income exempt from Federal and State of
California personal income taxes to the extent consistent with the
preservation of capital.
By this Prospectus, Class A and Class B shares of the Fund are being
offered. Class A shares are subject to a sales charge imposed at the time
of purchase and Class B shares are subject to a contingent deferred sales
charge imposed on redemptions made within five years of purchase. Other
differences between the two Classes include the services offered to and
the expenses borne by each Class and certain voting rights, as described
herein. The Fund offers these alternatives to permit an investor to choose
the method of purchasing shares that is most beneficial given the amount
of the purchase, the length of time the investor expects to hold the shares
and other circumstances.
The Fund provides free redemption checks with respect to Class A,
which you can use in amounts of $500 or more for cash or to pay bills. You
continue to earn income on the amount of the check until it clears. You can
purchase or redeem shares by telephone using the TELETRANSFER
Privilege.
The Dreyfus Corporation professionally manages the Fund's portfolio.
This Prospectus sets forth concisely information about the Fund that
you should know before investing. It should be read and retained for future
reference.
Part B (also known as the Statement of Additional Information), dated
May 20, 1994, which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters which
may be of interest to some investors. It has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. For a
free copy, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or call 1-800-554-4611. When telephoning, ask
for Operator 666.
A MUTUAL FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES INVOLVE
CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- ----------------------------------------------------------------------
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.
- -----------------------------------------------------------------------
TABLE OF CONTENTS
Fee Table........................................... 3
Condensed Financial Information..................... 4
Alternative Purchase Methods........................ 5
Description of the Fund............................. 5
Management of the Fund.............................. 17
How to Buy Fund Shares.............................. 18
Shareholder Services................................ 21
How to Redeem Fund Shares........................... 24
Distribution Plan and Shareholder Services Plan..... 28
Dividends, Distributions and Taxes.................. 29
Performance Information............................. 31
General Information................................. 32
Page 2
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).............................. 4.50% --
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)................ -- 3.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.................................................. .55% .55%
12b-1 Fees....................................................... -- .50%
Other Expenses................................................... .38% .39%
Total Fund Operating Expenses.................................... .93% 1.44%
EXAMPLE
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) except where noted, redemption
at the end of each time period: CLASS A CLASS B CLASS B*
1 YEAR........................................................... $ 54 $ 45 $ 15
3 YEARS.......................................................... $ 73 $ 66 $ 46
5 YEARS.......................................................... $ 94 $ 89 $ 79
10 YEARS**....................................................... $ 154 $146 $146
*Assuming no redemption of Class B shares.
**Ten-year figures assume conversion of Class B shares to Class A
shares at the end of the sixth year following the date of pur-
chase.
</TABLE>
- -----------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
- ------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that investors will bear, directly or indirectly,
the payment of which will reduce investors' return on an annual basis.
Total Fund Operating Expenses are limited to the expense limitation
provisions of the Management Agreement. Long-term investors in Class B
shares could pay more in 12b-1 fees than the economic equivalent of
paying a front-end sales charge. The information in the foregoing table
does not reflect any fee waivers or expense reimbursement arrangements
that may be in effect. Certain Service Agents (as defined below) may
charge their clients direct fees for effecting transactions in Fund shares;
such fees are not reflected in the foregoing table. See "Management of the
Fund," "How to Buy Fund Shares" and "Distribution Plan and Shareholder
Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and
related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
YEAR ENDED JANUARY 31, YEAR ENDED JAN. 31,
-------------------------------------------------------------------- --------------------
1987(1) 1988 1989 1990 1991 1992 1993 1994 1993(2) 1994
-------- ----- ------ ------ ----- ------- ------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning
of year....................... $12.50 $12.92 $11.82 $12.00 $12.02 $12.23 $12.58 $12.80 $12.69 $12.81
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net............ .20 .84 .89 .89 .89 .82 .80 .77 .03 .69
Net realized and
unrealized gain (loss)
on investments.................. .42 (1.10) .18 .02 .21 .36 .39 .94 .12 .93
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT OPERATIONS........... .62 (.26) 1.07 .91 1.10 1.18 1.19 1.71 .15 1.62
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net..................... (.20) (.84) (.89) (.89) (.89) (.82) (.80) (.77) (.03) (.69)
Dividends from net realized
gain on investments............. -- -- -- -- -- (.01) (.17) (.10) -- (.10)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS............. (.20) (.84) (.89) (.89) (.89) (.83) (.97) (.87) (.03) (.79)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of year.................... $12.92 $11.82 $12.00 $12.02 $12.23 $12.58 $12.80 $13.64 $12.81 $13.64
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 21.90%(3) (1.61%) 9.52% 7.82% 9.45% 10.02% 9.78% 13.62% 25.98%(3) 12.91%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets............. -- -- -- -- .11% .47% .65% .78% 1.07%(3) 1.31%
Ratio of net investment
income to average net
assets......................... 5.60%(3) 7.22% 7.41% 7.20% 7.19% 6.62% 6.30% 5.71% 4.92%(3) 4.90%
Decrease reflected in
above expense ratios
due to undertakings by
The Dreyfus Corporation
(limited to the expense
limitation provision of the
Management Agreement)........... 1.50%(3) 1.50% 1.50% 1.26% .91% .48% .28% .15% .13%(3) .13%
Portfolio Turnover Rate.......... -- 2.77% 33.68% 28.64% 5.95% 10.29% 36.54% 26.69% 36.54% 26.69%
Net Asssets, end of year
(000's omitted)..................$1,010 $2,713 $12,063 $58,714 $166,095 $218,703 $224,555 $245,435 $325 $16,906
(1)From November 10, 1986 (commencement of operations) to January 31, 1987.
(2)From January 15, 1993 (commencement of initial offering) to January 31, 1993.
(3)Annualized.
</TABLE>
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
Page 4
ALTERNATIVE PURCHASE METHODS
The Fund offers you two methods of purchasing Fund shares; you may
choose the Class of shares that best suits your needs, given the amount of
your purchase, the length of time you expect to hold your shares and any
other relevant circumstances. Each Class A and Class B share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a maximum
initial sales charge of 4.50% of the public offering price imposed at the
time of purchase. The initial sales charge may be reduced or waived for
certain purchases. See "How to Buy Fund Shares - Class A Shares." These
shares are subject to an annual service fee at the rate of .25 of l% of the
value of the average daily net assets of Class A. The service fee is used to
compensate Dreyfus Service Corporation and certain financial
institutions, securities dealers ("Selected Dealers") and other industry
professionals (collectively, "Service Agents") for ongoing personal
services relating to shareholder accounts and services related to the
maintenance of shareholder accounts. See "Distribution Plan and
Shareholder Services Plan - Shareholder Services Plan."
Class B shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class B shares are subject to a
maximum 3% contingent deferred sales charge ("CDSC"), which is
assessed only if you redeem Class B shares within the first five years of
their purchase. See "How to Buy Fund Shares - Class B Shares" and "How
to Redeem Fund Shares - Contingent Deferred Sales Charge - Class B
Shares." These shares also are subject to an annual service fee at the rate
of .25 of 1% of the value of the average daily net assets of Class B. In
addition, Class B shares are subject to an annual distribution fee at the
rate of .50 of l% of the value of the average daily net assets of Class B.
See "Distribution Plan and Shareholder Services Plan." The distribution
fee paid by Class B will cause such Class to have a higher expense ratio
and to pay lower dividends than Class A. Approximately six years after the
date of purchase, Class B shares automatically will convert to Class A
shares, based on the relative net asset values for shares of each Class,
and will no longer be subject to the distribution fee. Class B shares that
have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and distributions.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee and CDSC on
Class B shares prior to conversion would be less than the initial sales
charge on Class A shares purchased at the same time, and to what extent,
if any, such differential would be offset by the return of Class A. In this
regard, generally, Class B shares may be more appropriate for investors
who invest less than $100,000 in Fund shares. Additionally, investors
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing
Class A shares because the accumulated continuing distribution fees on
Class B shares may exceed the initial sales charge on Class A shares
during the life of the investment. Generally, Class A shares may be more
appropriate for investors who invest $250,000 or more in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's goal is to maximize current income exempt from Federal and
State of California personal income taxes to the extent consistent with
the preservation of capital. To accomplish this goal, the Fund invests
primarily in the debt securities of the State of California, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal and State
of California personal income taxes (collectively, "California Municipal
Obligations"). To the extent acceptable California Municipal Obligations
are at any time unavailable for investment by the Fund, the
Page 5
Fund will
invest, for temporary defensive purposes, primarily in other debt
securities the interest from which is, in the opinion of bond counsel to the
issuer, exempt from Federal, but not State of California, income tax. The
Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940)
of the Fund's outstanding voting shares. There can be no assurance that the
Fund's investment objective will be achieved.
MUNICIPAL OBLIGATIONS
Debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal income tax ("Municipal
Obligations") generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development bonds
issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax
exempt industrial development bonds, in most cases, are revenue bonds
that do not carry the pledge of the credit of the issuing municipality, but
generally are guaranteed by the corporate entity on whose behalf they are
issued. Notes are short-term instruments which are obligations of the
issuing municipalities or agencies and are sold in anticipation of a bond
sale, collection of taxes or receipt of other revenues. Municipal
Obligations include municipal lease/purchase agreements which are
similar to installment purchase contracts for property or equipment
issued by municipalities. Municipal Obligations bear fixed, floating or
variable rates of interest which are determined in some instances by
formulas under which the Municipal Obligation's interest rate will change
directly or inversely to changes in interest rates or an index, or multiples
thereof, in many cases subject to a maximum and minimum. Certain
Municipal Obligations are subject to redemption at a date earlier than
their stated maturity pursuant to call options, which may be separated
from the related Municipal Obligation and purchased and sold separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least 80% of
the value of its net assets (except when maintaining a temporary
defensive position) in Municipal Obligations. At least 65% of the value of
the Fund's net assets (except when maintaining a temporary defensive
position) will be invested in bonds and debentures. At least 65% of the
value of the Fund's net assets will be invested in California Municipal
Obligations and the remainder may be invested in securities that are not
California Municipal Obligations and therefore may be subject to
California income tax. See "Risk Factors - Investing in California
Municipal Obligations" below, and "Dividends, Distributions and Taxes."
At least 70% of the value of the Fund's net assets must consist of
Municipal Obligations which, in the case of bonds, are rated no lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard &
Poor's Corporation ("S&P") or Fitch Investors Service, Inc. ("Fitch"). The
Fund may invest up to 30% of the value of its net assets in Municipal
Obligations which, in the case of bonds, are rated lower than Baa by
Moody's and BBB by S&P and Fitch and as low as the lowest rating assigned
by Moody's, S&P or Fitch. The Fund may invest in short-term Municipal
Obligations which are rated in the two highest rating categories by
Moody's, S&P or Fitch. See "Appendix B" in the Statement of Additional
Information. Municipal Obligations rated BBB by S&P or Fitch or Baa by
Moody's are considered investment grade obligations; those rated BBB by
S&P and Fitch are regarded as having an adequate capacity to pay principal
and interest, while those rated Baa by Moody's are considered medium
grade obligations which lack outstanding investment characteristics and
have speculative characteristics. Investments rated Ba or lower by
Moody's and BB or lower by
Page 6
S&P and Fitch ordinarily provide higher yields
but involve greater risk because of their speculative characteristics. The
Fund may invest in Municipal Obligations rated C by Moody's or D by S&P or
Fitch, which is such rating organizations' lowest rating and indicates that
the Municipal Obligation is in default and interest and/or repayment of
principal is in arrears. See "Risk Factors - Lower Rated Bonds" below for
a further discussion of certain risks. The Fund also may invest in
securities which, while not rated, are determined by The Dreyfus
Corporation to be of comparable quality to the rated securities in which
the Fund may invest; for purposes of the 70% requirement described in
this paragraph, such unrated securities shall be deemed to have the rating
so determined. The Fund also may invest in Taxable Investments of the
quality described below. Under normal market conditions, the weighted
average maturity of the Fund's portfolio is expected to exceed ten years.
In addition to usual investment practices, the Fund may use speculative
investment techniques such as short-selling and lending its portfolio
securities. The Fund also may purchase, hold or deal in futures contracts
and options on futures contracts. See "Investment Techniques" below.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security
also would affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of projects. As
a result, the Fund may be subject to greater risk as compared to a fund
that does not follow this practice.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified
private activity bonds, as defined in the Internal Revenue Code of 1986, as
amended (the "Code"), issued after August 7, 1986, while exempt from
Federal income tax, is a preference item for the purpose of the alternative
minimum tax. Where a regulated investment company receives such
interest, a proportionate share of any exempt-interest dividend paid by
the investment company may be treated as such a preference item to
shareholders. The Fund may invest without limitation in such Municipal
Obligations if The Dreyfus Corporation determines that their purchase is
consistent with the Fund's investment objective. See "Risk Factors -
Other Investment Considerations."
The Fund may purchase floating and variable rate demand notes and
bonds, which are tax exempt obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to demand
payment of principal at any time or at specified intervals. Variable rate
demand notes include master demand notes which are obligations that
permit the Fund to invest fluctuating amounts, which may change daily
without penalty, pursuant to direct arrangements between the Fund, as
lender, and the borrower. The interest rates on these obligations fluctuate
from time to time. Frequently, such obligations are secured by letters of
credit or other credit support arrangements provided by banks. Use of
letters of credit or other credit support arrangements will not adversely
affect the tax exempt status of these obligations. Because these
obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuers of the floating and variable rate demand
obligations in the Fund's portfolio. The Fund will not invest more than 15%
of the value of its net assets in floating or
Page 7
variable rate demand
obligations as to which the Fund cannot exercise the demand feature on
not more than seven days' notice if there is no secondary market available
for these obligations, and in other illiquid securities.
The Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds
and municipal lease/purchase agreements). A participation interest gives
the Fund an undivided interest in the Municipal Obligation in the proportion
that the Fund's participation interest bears to the total principal amount
of the Municipal Obligation. These instruments may have fixed, floating or
variable rates of interest. If the participation interest is unrated, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank that the Board of Trustees has determined meets the
prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right to
demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio. The Fund will
not invest more than 15% of the value of its net assets in participation
interests that do not have this demand feature if there is no secondary
market available for these participation interests and in other illiquid
securities.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement)
having a relatively long maturity and bearing interest at a fixed rate
substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank, broker-
dealer or other financial institution, pursuant to which such institution
grants the security holders the option, at periodic intervals, to tender
their securities to the institution and receive the face value thereof. As
consideration for providing the option, the financial institution receives
periodic fees equal to the difference between the Municipal Obligation's
fixed coupon rate and the rate, as determined by a remarketing or similar
agent at or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on the date of
such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the
Fund, will consider on an ongoing basis the creditworthiness of the issuer
of the underlying Municipal Obligation, of any custodian and of the third
party provider of the tender option. In certain instances and for certain
tender option bonds, the option may be terminable in the event of a default
in payment of principal or interest on the underlying Municipal Obligations
and for other reasons. The Fund will not invest more than 15% of the value
of its net assets in securities that are illiquid, which could include tender
option bonds as to which it cannot exercise the tender feature on not more
than seven days' notice if there is no secondary market available for these
obligations.
The Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase, at the Fund's
option, specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise of a
stand-by commitment, therefore, is subject to the ability of the seller to
make payment on demand. The Fund will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise its
rights thereunder for trading purposes. The Fund may pay for stand-by
commitments if such action is deemed necessary, thus increasing to a
degree the cost of the underlying Municipal Obligation and similarly
decreasing such security's yield to investors. The Fund also may acquire
call options on specific Municipal Obligations. The Fund generally would
purchase these call options to protect the Fund from the issuer of the
related Municipal
Page 8
Obligation redeeming, or other holder of the call option
from calling away, the Municipal Obligation before maturity. The sale by
the Fund of a call option that it owns on a specific Municipal Obligation
could result in the receipt of taxable income by the Fund.
The Fund may purchase custodial receipts representing the right to
receive certain future principal and interest payments on Municipal
Obligations which underlie the custodial receipts. A number of different
arrangements are possible. In a typical custodial receipt arrangement, an
issuer or a third party owner of Municipal Obligations deposits such
obligations with a custodian in exchange for two classes of custodial
receipts. The two classes have different characteristics, but, in each
case, payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest
rate is adjusted, and ownership changes, based on an auction mechanism.
This class's interest rate generally is expected to be below the coupon
rate of the underlying Municipal Obligations and generally is at a level
comparable to that of a Municipal Obligation of similar quality and having
a maturity equal to the period between interest rate adjustments. The
second class bears interest at a rate that exceeds the interest rate
typically borne by a security of comparable quality and maturity; this rate
also is adjusted, but in this case inversely to changes in the rate of
interest of the first class. If the interest rate on the first class exceeds
the coupon rate of the underlying Municipal Obligations, its interest rate
will exceed the rate paid on the second class. In no event will the
aggregate interest paid with respect to the two classes exceed the
interest paid by the underlying Municipal Obligations. The value of the
second class and similar securities should be expected to fluctuate more
than the value of a Municipal Obligation of comparable quality and
maturity and their purchase by the Fund should increase the volatility of
its net asset value and, thus, its price per share. These custodial receipts
are sold in private placements. The Fund also may purchase directly from
issuers, and not in a private placement, Municipal Obligations having
characteristics similar to custodial receipts. These securities may be
issued as part of a multi-class offering and the interest rate on certain
classes may be subject to a cap or floor.
The Fund may invest up to 15% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided
such investments are consistent with the Fund's investment objective.
Such securities may include securities that are not readily marketable,
such as certain securities that are subject to legal or contractual
restrictions on resale and repurchase agreements providing for settlement
in more than seven days after notice. As to these securities, the Fund is
subject to a risk that should the Fund desire to sell them when a ready
buyer is not available at a price that the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
However, if a substantial market of qualified institutional buyers
develops pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain of these securities held by the Fund, the Fund intends
to treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board of Trustees. Because it is not
possible to predict with assurance how the market for restricted
securities pursuant to Rule 144A will develop, the Fund's Board of
Trustees has directed The Dreyfus Corporation to monitor carefully the
Fund's investments in such securities with particular regard to trading
activity, availability of reliable price information and other relevant
information. To the extent that for a period of time, qualified
institutional buyers cease purchasing restricted securities pursuant to
Rule 144A, the Fund's investing in such securities may have the effect of
increasing the level of illiquidity in the Fund's portfolio during such
period.
The Fund may invest in zero coupon securities which are debt securities
issued or sold at a discount from their face value which do not entitle the
holder to any periodic payment of interest prior to maturity or a specified
redemption date (or cash payment date). The amount of the discount varies
depending on the time remaining until maturity or cash payment date,
prevailing interest rates, liquidity of the security and perceived credit
quality of the issuer. Zero coupon securities also may take the form of
debt securities that have been stripped of
Page 9
their unmatured interest
coupons, the coupons themselves and receipts or certificates representing
interests in such stripped debt obligations and coupons. The market prices
of zero coupon securities generally are more volatile than the market
prices of interest-bearing securities and are likely to respond to a greater
degree to changes in interest rates than interest-bearing securities
having similar maturities and credit qualities. The Fund may invest up to
5% of its assets in zero coupon bonds which are rated below investment
grade. See "Risk Factors - Lower Rated Bonds" and "Other Investment
Considerations" below, and "Investment Objective and Management
Policies - Risk Factors - Lower Rated Bonds" and "Dividends,
Distributions and Taxes" in the Statement of Additional Information.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in
taxable short-term investments ("Taxable Investments") consisting of:
notes of issuers having, at the time of purchase, a quality rating within
the two highest grades of Moody's, S&P or Fitch; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper rated
not lower than P-1 by Moody's, A-1 by S&P or F-1 by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic
banks, with assets of one billion dollars or more; time deposits; bankers'
acceptances and other short-term bank obligations; and repurchase
agreements in respect of any of the foregoing. Dividends paid by the Fund
that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions
and Taxes." Except for temporary defensive purposes, at no time will more
than 20% of the value of the Fund's net assets be invested in Taxable
Investments. When the Fund has adopted a temporary defensive position,
including when acceptable California Municipal Obligations are unavailable
for investment by the Fund, in excess of 35% of the Fund's net assets may
be invested in securities that are not exempt from California personal
income taxes. Under normal market conditions, the Fund anticipates that
not more than 5% of the value of its total assets will be invested in any
one category of Taxable Investments. Taxable Investments are more fully
described in the Statement of Additional Information, to which reference
hereby is made.
INVESTMENT TECHNIQUES
The Fund may employ, among others, the investment techniques
described below. Use of certain of these techniques may give rise to
taxable income.
WHEN-ISSUED SECURITIES
New issues of Municipal Obligations usually are offered on a when-
issued basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate
that will be received on the Municipal Obligations are fixed at the time
the Fund enters into the commitment. The Fund will make commitments to
purchase such Municipal Obligations only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable, although any gain realized on
such sale would be taxable. The Fund will not accrue income in respect of
a when-issued security prior to its stated delivery date. No additional
when-issued commitments will be made if more than 20% of the value of
the Fund's net assets would be so committed.
Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in value
(both generally changing in the same way, i.e., appreciating when interest
rates decline and depreciating when interest rates rise) based upon the
public's perception of the creditworthiness of the issuer and changes, real
or anticipated, in the level of interest rates. Municipal Obligations
purchased on a when-issued basis may expose the Fund to risk because
they may experience such fluctuations prior to their actual delivery.
Purchasing Municipal Obligations on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery
takes place actually may be
Page 10
higher than that obtained in the transaction
itself. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the when-issued
commitments will be established and maintained at the Fund's custodian
bank. Purchasing Municipal Obligations on a when-issued basis when the
Fund is fully or almost fully invested may result in greater potential
fluctuation in the value of the Fund's net assets and its net asset value
per share.
FUTURES TRANSACTIONS - IN GENERAL
The Fund is not a commodity pool. However, as a substitute for a
comparable market position in the underlying securities and for hedging
purposes, the Fund may engage in futures and options on futures
transactions, including those relating to indexes, as described below.
The Fund's commodities transactions must constitute bona fide hedging
or other permissible transactions pursuant to regulations promulgated by
the Commodity Futures Trading Commission. In addition, the Fund may not
engage in such transactions if the sum of the amount of initial margin
deposits and premiums paid for unexpired commodity options, other than
for bona fide hedging transactions, would exceed 5% of the liquidation
value of the Fund's assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that in the case of an option that is in-the-money at the time of purchase,
the in-the-money amount may be excluded in calculating the 5%. Pursuant
to regulations and/or published positions of the Securities and Exchange
Commission, the Fund may be required to segregate cash or high quality
money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity.
Initially, when purchasing or selling futures contracts the Fund will be
required to deposit with its custodian in the broker's name an amount of
cash or cash equivalents up to approximately 10% of the contract amount.
This amount is subject to change by the exchange or board of trade on
which the contract is traded and members of such exchange or board of
trade may impose their own higher requirements. This amount is known as
"initial margin" and is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of
the futures position, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to and from
the broker will be made daily as the price of the index or securities
underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known
as "marking-to-market." At any time prior to the expiration of a futures
contract, the Fund may elect to close the position by taking an opposite
position at the then prevailing price, which will operate to terminate the
Fund's existing position in the contract.
Although the Fund intends to purchase or sell futures contracts only if
there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any
particular time. Many futures exchanges and boards of trade limit the
amount of fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a particular contract,
no trades may be made that day at a price beyond the limit or trading may
be suspended for specified periods during the trading day. Futures contract
prices could move to the limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of futures
positions and potentially subjecting the Fund to substantial losses. If it is
not possible or the Fund determines not to close a futures position in
anticipation of adverse price movements, the Fund will be required to
make daily cash payments of variation margin. In such circumstances, an
increase in the value of the portion of the Fund's portfolio being hedged, if
any, may offset partially or completely losses on the futures contract.
However, no assurance can be given that the price of the securities being
hedged will correlate with the price movements in a futures contract and
thus provide an offset to losses on the futures contract.
In addition, to the extent the Fund is engaging in a futures transaction
as a hedging device,
Page 11
due to the risk of an imperfect correlation between
securities in the Fund's portfolio that are the subject of a hedging
transaction and the futures contract used as a hedging device, it is
possible that the hedge will not be fully effective in that, for example,
losses on the portfolio securities may be in excess of gains on the futures
contract or losses on the futures contract may be in excess of gains on the
portfolio securities that were the subject of the hedge. In futures
contracts based on indexes, the risk of imperfect correlation increases as
the composition of the Fund's portfolio varies from the composition of the
index. In an effort to compensate for the imperfect correlation of
movements in the price of the securities being hedged and movements in
the price of futures contracts, the Fund may buy or sell futures contracts
in a greater or lesser dollar amount than the dollar amount of the
securities being hedged if the historical volatility of the futures contract
has been less or greater than that of the securities. Such "over hedging"
or "under hedging" may adversely affect the Fund's net investment results
if market movements are not as anticipated when the hedge is established.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the option exercise period.
The writer of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a long position
if the option is a put). Upon exercise of the option, the assumption of
offsetting futures positions by the writer and holder of the option will be
accompanied by delivery of the accumulated cash balance in the writer's
futures margin account which represents the amount by which the market
price of the futures contract, at exercise, exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Call options sold by the Fund with respect to futures contracts will be
covered by, among other things, entering into a long position in the same
contract at a price no higher than the strike price of the call option, or by
ownership of the instruments underlying, or instruments the prices of
which are expected to move relatively consistently with the instruments
underlying, the futures contract. Put options sold by the Fund with respect
to futures contracts will be covered when, among other things, cash or
liquid securities are placed in a segregated account to fulfill the
obligation undertaken.
The Fund may utilize municipal bond index futures to protect against
changes in the market value of the Municipal Obligations in its portfolio or
which it intends to acquire. Municipal bond index futures contracts are
based on an index of long-term Municipal Obligations. The index assigns
relative values to the Municipal Obligations included in the index, and
fluctuates with changes in the market value of such Municipal Obligations.
The contract is an agreement pursuant to which two parties agree to take
or make delivery of an amount of cash based upon the difference between
the value of the index at the close of the last trading day of the contract
and the price at which the index contract was originally written. The
acquisition or sale of a municipal bond index futures contract enables the
Fund to protect its assets from fluctuations in rates on tax exempt
securities without actually buying or selling such securities.
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE
FUTURES CONTRACTS
The Fund may purchase and sell interest rate futures contracts and
options on interest rate futures contracts as a substitute for a
comparable market position and to hedge against adverse movements in
interest rates.
To the extent the Fund has invested in interest rate futures contracts
or options on interest rate futures contracts as a substitute for a
comparable market position, the Fund will be subject to the investment
risks of having purchased the securities underlying the contract.
The Fund may purchase call options on interest rate futures contracts
to hedge against a decline in interest rates and may purchase put options
on interest rate futures contracts to hedge its portfolio securities
against the risk of rising interest rates.
Page 12
If the Fund has hedged against the possibility of an increase in interest
rates adversely affecting the value of securities held in its portfolio and
rates decrease instead, the Fund will lose part or all of the benefit of the
increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations,
if the Fund has insufficient cash, it may have to sell securities to meet
daily variation margin requirements at a time when it may be
disadvantageous as to do so. These sales of securities may, but will not
necessarily, be at increased prices which reflect the decline in interest
rates.
The Fund may sell call options on interest rate futures contracts to
partially hedge against declining prices of its portfolio securities. If the
futures price at expiration of the option is below the exercise price, the
Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. The Fund may sell put options on interest rate futures
contracts to hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides a partial
hedge against any increase in the price of securities which the Fund
intends to purchase. If a put or call option sold by the Fund is exercised,
the Fund will incur a loss which will be reduced by the amount of the
premium it receives. Depending on the degree of correlation between
changes in the value of its portfolio securities and changes in the value of
its futures positions, the Fund's losses from existing options on futures
may, to some extent, be reduced or increased by changes in the value of its
portfolio securities.
The Fund also may sell options on interest rate futures contracts as
part of closing purchase transactions to terminate its options positions.
No assurance can be given that such closing transactions can be effected
or that there will be a correlation between price movements in the
options on interest rate futures and price movements in the Fund's
portfolio securities which are the subject of the hedge. In addition, the
Fund's purchase of such options will be based upon predictions as to
anticipated interest rate trends, which could prove to be inaccurate.
SHORT-SELLING
The Fund may make short sales of securities, which are transactions in
which the Fund sells a security it does not own in anticipation of a decline
in the market value of that security. To complete such a transaction, the
Fund must borrow the security to make delivery to the buyer. The Fund
then is obligated to replace the security borrowed by purchasing it at the
market price at the time of replacement. The price at such time may be
more or less than the price at which the security was sold by the Fund.
Until the security is replaced, the Fund is required to pay to the lender
amounts equal to any interest which accrues during the period of the loan.
To borrow the security, the Fund also may be required to pay a premium,
which would increase the cost of the security sold. The proceeds of the
short sale will be retained by the broker, to the extent necessary to meet
margin requirements, until the short position is closed out.
Until the Fund replaces a borrowed security in connection with a short
sale, the Fund will: (a) maintain daily a segregated account, containing
cash or U.S. Government securities, at such a level that (i) the amount
deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the securities sold short and (ii)
the amount deposited in the segregated account plus the amount deposited
with the broker as collateral will not be less than the market value of the
security at the time it was sold short; or (b) otherwise cover its short
position.
The Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on
which the Fund replaces the borrowed security. The Fund will realize a
gain if the security declines in price between those dates. This result is
the opposite of what one would expect from a cash purchase of a long
position in a security. The amount of any gain would be decreased, and the
amount of any loss increased,
Page 13
by the amount of any premium or amounts in
lieu of interest the Fund may be required to pay in connection with a short
sale.
The Fund anticipates that the frequency of short sales will vary
substantially in different periods, and it does not intend that any
specified portion of its assets, as a matter of practice, will be invested
in short sales. However, no securities will be sold short if, after effect is
given to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets. The Fund
may not sell short the securities of any single issuer listed on a national
securities exchange to the extent of more than 5% of the value of the
Fund's net assets. The Fund may not sell short the securities of any class
of an issuer to the extent, at the time of transaction, of more than 5% of
the outstanding securities of that class.
In addition to the short sales discussed above, the Fund may make short
sales "against the box," a transaction in which the Fund enters into a
short sale of a security which the Fund owns. The proceeds of the short
sale will be held by a broker until the settlement date at which time the
Fund delivers the security to close the short position. The Fund receives
the net proceeds from the short sale. At no time will the Fund have more
than 15% of the value of its net assets in deposits on short sales against
the box.
LENDING PORTFOLIO SECURITIES
From time to time, the Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. Such loans may not exceed 33
1/3 % of the value of the Fund's total assets. In connection with such
loans, the Fund will receive collateral consisting of cash, U.S. Government
securities or irrevocable letters of credit which will be maintained at all
times in an amount equal to at least 100% of the current market value of
the loaned securities. The Fund can increase its income through the
investment of such collateral. The Fund continues to be entitled to
payments in amounts equal to the interest or other distributions payable
on the loaned security and receives interest on the amount of the loan.
Such loans will be terminable at any time upon specified notice. The Fund
might experience risk of loss if the institution with which it has engaged
in a portfolio loan transaction breaches its agreement with the Fund.
CERTAIN FUNDAMENTAL POLICIES
The Fund may (i) borrow money from banks, but only for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value
of the Fund's total assets (including the amount borrowed) valued at the
lesser of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings exceed 5%
of the value of the Fund's total assets, the Fund will not make any
additional investments; (ii) pledge, hypothecate, mortgage or otherwise
encumber its assets, but only to secure borrowings for temporary or
emergency purposes; and (iii) invest up to 25% of its assets in the
securities of issuers in any industry, provided that there is no such
limitation on investments in Municipal Obligations, and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940)
of the Fund's outstanding voting shares. See "Investment Objective and
Management Policies - Investment Restrictions" in the Statement of
Additional Information.
ADDITIONAL NON-FUNDAMENTAL POLICY
The Fund may invest up to 15% of the value of its net assets in
repurchase agreements providing for settlement in more than seven days
after notice and in other illiquid securities (which securities could
include participation interests (including municipal lease/purchase
agreements) that are not subject to the demand feature described above,
and floating and variable rate demand obligations as to which the Fund
cannot exercise the related demand feature described above and as to
which there is no secondary market). See "Investment Objective and
Management Policies - Investment Restrictions" in the Statement of
Additional Information.
Page 14
RISK FACTORS
INVESTING IN CALIFORNIA MUNICIPAL OBLIGATIONS
You should consider carefully the special risks inherent in the Fund's
investment in California Municipal Obligations. These risks result from
certain amendments to the California Constitution and other statutes that
limit the taxing and spending authority of California governmental
entities, as well as from the general financial condition of the State of
California. Since the start of the State's 1990-91 fiscal year, the State
has experienced the worst economic, fiscal and budget conditions since
the 1930s. As a result, the State has experienced recurring budget
deficits for four of the last five fiscal years ending with 1991-92.
Revenues and expenditures were essentially equal in 1992-93, but the
original budget for that year projected revenues exceeding expenditures by
$2.6 billion. By June 30, 1993, according to California's Department of
Finance, the State's Reserve for Economic Uncertainties had an
accumulated deficit, on a budget basis, of approximately $2.8 billion. A
further consequence of the large budget imbalances over the last three
fiscal years has been that the State depleted its available cash resources
and has had to use a series of external borrowings to meet its cash needs.
As a result of the deterioration in the State's budget and cash situation in
fiscal years 1991-92 and 1992-93, between November 1991 and October
1992 the rating on the State's general obligation bonds was reduced by
S&P from AAA to A+, by Moody's from Aaa to Aa and by Fitch from AAA to
AA. These and other factors may have the effect of impairing the ability
of the issuers of California Municipal Obligations to pay interest on, or
repay the principal of, such California Municipal Obligations. You should
obtain and review a copy of the Statement of Additional Information
which more fully sets forth these and other risk factors.
LOWER RATED BONDS
You should carefully consider the relative risks of investing in the
higher yielding (and, therefore, higher risk) debt securities in which the
Fund may invest up to 30% of the value of its net assets. These are
securities such as those rated Ba by Moody's or BB by S&P or Fitch or as
low as the lowest rating assigned by Moody's, S&P or Fitch. They generally
are not meant for short-term investing and may be subject to certain
risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. Bonds rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate. Bonds
rated BB by S&P are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face major
ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Bonds rated BB by Fitch are
considered speculative and the payment of principal and interest may be
affected at any time by adverse economic changes. Bonds rated C by
Moody's are regarded as having extremely poor prospects of ever attaining
any real investment standing. Bonds rated D by S&P are in default and the
payment of interest and/or repayment of principal is in arrears. Bonds
rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the issuer; DDD
represents the highest potential for recovery of such bonds; and D
represents the lowest potential for recovery. Such bonds, though high
yielding, are characterized by great risk. See "Appendix B" in the
Statement of Additional Information for a general description of Moody's,
S&P and Fitch ratings of Municipal Obligations. The ratings of Moody's,
S&P and Fitch represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and, although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. Therefore,
although these
Page 15
ratings may be an initial criterion for selection of
portfolio investments, The Dreyfus Corporation also will evaluate these
securities and the ability of the issuers of such securities to pay interest
and principal. The Fund's ability to achieve its investment objective may
be more dependent on The Dreyfus Corporation's credit analysis than might
be the case for a fund that invested in higher rated securities. Once the
rating of a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold
the security.
The market price and yield of bonds rated Ba or lower by Moody's and BB
or lower by S&P and Fitch are more volatile than those of higher rated
bonds. Factors adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value. In addition,
the retail secondary market for these bonds may be less liquid than that
of higher rated bonds; adverse market conditions could make it difficult at
times for the Fund to sell certain securities or could result in lower
prices than those used in calculating the Fund's net asset value.
The Fund may invest up to 5% of the value of its net assets in zero
coupon securities and pay-in-kind bonds (bonds which pay interest through
the issuance of additional bonds) rated Ba or lower by Moody's and BB or
lower by S&P and Fitch. These securities may be subject to greater
fluctuations in value due to changes in interest rates than interest-
bearing securities and thus may be considered more speculative than
comparably rated interest-bearing securities. See "Other Investment
Considerations" below, and "Investment Objective and Management
Policies - Risk Factors - Lower Rated Bonds" and "Dividends,
Distributions and Taxes" in the Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS
Even though interest-bearing securities are investments which promise
a stable stream of income, the prices of such securities are inversely
affected by changes in interest rates and, therefore, are subject to the
risk of market price fluctuations. Certain securities that may be
purchased by the Fund, such as those with interest rates that fluctuate
directly or indirectly based on multiples of a stated index, are designed to
be highly sensitive to changes in interest rates and can subject the
holders thereof to extreme reductions of yield and possibly loss of
principal. The values of fixed-income securities also may be affected by
changes in the credit rating or financial condition of the issuing entities.
The Fund's net asset value generally will not be stable and should
fluctuate based upon changes in the value of the Fund's portfolio
securities. Securities in which the Fund invests may earn a higher level of
current income than certain shorter-term or higher quality securities
which generally have greater liquidity, less market risk and less
fluctuation in market value.
Federal income tax law requires the holder of a zero coupon security or
of certain pay-in-kind bonds to accrue income with respect to these
securities prior to the receipt of cash payments. To maintain its
qualification as a regulated investment company and avoid liability for
Federal income taxes, the Fund may be required to distribute such income
accrued with respect to these securities and may have to dispose of
portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years
unless money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for
the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for pur-
Page 16
chase by the Fund
and thus reduce the available yield. Shareholders should consult their tax
advisers concerning the effect of these provisions on an investment in the
Fund. Proposals that may restrict or eliminate the income tax exemption
for interest on Municipal Obligations may be introduced in the future. If
any such proposal were enacted that would reduce the availability of
Municipal Obligations for investment by the Fund so as to adversely affect
Fund shareholders, the Fund would reevaluate its investment objective and
policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were enacted that
would treat a type of Municipal Obligation as taxable, the Fund would treat
such security as a permissible Taxable Investment within the applicable
limits set forth herein.
Investment decisions for the Fund are made independently from those of
other investment companies advised by The Dreyfus Corporation. However,
if such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time
as the Fund, available investments or opportunities for sales will be
allocated equitably to each investment company. In some cases, this
procedure may adversely affect the size of the position obtained for or
disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of March 31, 1994, The Dreyfus Corporation managed or
administered approximately $74 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law.
The Fund's primary investment officer is A. Paul Disdier. He has held
that position since May 1988 and has been employed by The Dreyfus
Corporation since February 1988. The Fund's other investment officers are
identified under "Management of the Fund" in the Fund's Statement of
Additional Information. The Dreyfus Corporation also provides research
services for the Fund as well as for other Funds advised by The Dreyfus
Corporation through a professional staff of portfolio managers and
security analysts.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .55 of 1%
of the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case
may be. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume. For the fiscal year ended
January 31, 1994, the Fund paid The Dreyfus Corporation a management
fee at the effective annual rate of .40 of 1% of the value of the Fund's
average daily net assets pursuant to an undertaking in effect.
The Dreyfus Corporation may pay Dreyfus Service Corporation for
shareholder and distribution services from The Dreyfus Corporation's own
assets, including past profits but not including the management fee paid
by the Fund. Dreyfus Service Corporation may use part or all of such
payments to pay Service Agents in respect of these services.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
Page 17
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
Fund shares may be purchased only by clients of certain financial
institutions (which may include banks), securities dealers ("Selected
Dealers"), and other industry professionals (collectively, "Service
Agents"), except that full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund's Board, or the spouse or
minor child of any of the foregoing may purchase Class A shares directly
through Dreyfus Service Corporation. Subsequent purchases may be sent
directly to the Transfer Agent or your Service Agent. Service Agents may
receive different levels of compensation for selling different Classes of
shares. Management understands that some Service Agents may impose
certain conditions on their clients which are different from those
described in this Prospectus, and, to the extent permitted by applicable
regulatory authority, may charge their clients direct fees which would be
in addition to any amounts which might be received under the Shareholder
Services Plan. Each Service Agent has agreed to transmit to its clients a
schedule of such fees. You should consult your Service Agent in this
regard.
When purchasing Fund shares, you must specify whether the purchase is
for Class A or Class B shares. Share certificates are issued only upon your
written request. No certificates are issued for fractional shares. It is not
recommended that the Fund be used as a vehicle for Keogh, IRA or other
qualified retirement plans. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $1,000. Subsequent investments
must be at least $100. The initial investment must be accompanied by the
Fund's Account Application.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable
to "Premier California Municipal Bond Fund." Payments to open new
accounts which are mailed should be sent to Premier California Municipal
Bond Fund, P.O. Box 9387, Providence, Rhode Island 02940-9387, together
with your Account Application indicating which Class of shares is being
purchased. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to
Premier California Municipal Bond Fund, P.O. Box 105, Newark, New Jersey
07101-0105. Neither initial nor subsequent investments should be made
by third party check. Wire payments may be made if your bank account is
in a commercial bank that is a member of the Federal Reserve System or
any other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to The Bank of New York,
DDA#8900119306/Premier California Municipal Bond Fund-Class A
shares, or DDA#8900115025/Premier California Municipal Bond Fund-
Class B shares, as the case may be, for purchase of Fund shares in your
name. The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check
used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Page 18
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS
"1111."
Fund shares are sold on a continuous basis. Net asset value per share is
determined as of the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day the New York
Stock Exchange is open for business. For purposes of determining net asset
value, options and futures contracts will be valued 15 minutes after the
close of trading on the floor of the New York Stock Exchange. Net asset
value per share of each Class is computed by dividing the value of the
Fund's net assets represented by such Class (i.e., the value of its assets
less liabilities) by the total number of shares of such Class outstanding.
The Fund's investments are valued each business day by an independent
pricing service approved by the Board of Trustees and are valued at fair
value as determined by the pricing service. The pricing service's
procedures are reviewed under the general supervision of the Board of
Trustees. For further information regarding the methods employed in
valuing Fund investments, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
If an order is received by the Transfer Agent by the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time) on any business day, Fund shares will be purchased at the public
offering price determined as of the close of trading on the floor of the
New York Stock Exchange on that day. Otherwise, Fund shares will be
purchased at the public offering price determined as of the close of
trading on the floor of the New York Stock Exchange on the next business
day, except where shares are purchased through a dealer as provided
below.
Orders for the purchase of Fund shares received by dealers by the close
of trading on the floor of the New York Stock Exchange on any business day
and transmitted to Dreyfus Service Corporation by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise, the
orders will be based on the next determined public offering price. It is the
dealers' responsibility to transmit orders so that they will be received by
Dreyfus Service Corporation before the close of its business day.
CLASS A SHARES - The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
-------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
- --------------------- ---------------- --------------- ---------------------
<S> <C> <C> <C>
Less than $50,000................................... 4.50 4.70 4.25
$50,000 to less than $100,000....................... 4.00 4.20 3.75
$100,000 to less than $250,000...................... 3.00 3.10 2.75
$250,000 to less than $500,000...................... 2.50 2.60 2.25
$500,000 to less than $1,000,000.................... 2.00 2.00 1.75
$1,000,000 to less than $3,000,000.................. 1.00 1.00 1.00
$3,000,000 to less than $5,000,000.................. .50 .50 .50
$5,000,000 and over................................. .25 .25 .25
</TABLE>
Page 19
Full-time employees of NASD member firms and full-time employees of
other financial institutions which have entered into an agreement with
Dreyfus Service Corporation pertaining to the sale of Fund shares (or
which otherwise have a brokerage-related or clearing arrangement with
an NASD member firm or other financial institution with respect to sales
of Fund shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children at net asset value, provided that they have
furnished Dreyfus Service Corporation with such information as it may
request from time to time in order to verify eligibility for this privilege.
This privilege also applies to full-time employees of financial
institutions affiliated with NASD member firms whose full-time
employees are eligible to purchase Class A shares at net asset value. In
addition, Class A shares are offered at net asset value to full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a
fund advised by The Dreyfus Corporation, including members of the Fund's
Board, or the spouse or minor child of any of the foregoing.
In fiscal 1994, Dreyfus Service Corporation retained $60,338 from
sales loads on Class A shares. The dealer reallowance may be changed
from time to time but will remain the same for all dealers. Dreyfus
Service Corporation, at its own expense, may provide additional
promotional incentives to dealers that sell shares of funds advised by The
Dreyfus Corporation which are sold with a sales load, such as the Fund. In
some instances, these incentives may be offered only to certain dealers
who have sold or may sell significant amounts of such shares.
CLASS B SHARES
The public offering price for Class B shares is the net asset value per
share of that Class. No initial sales charge is imposed at the time of
purchase. A CDSC is imposed, however, on certain redemptions of Class B
shares as described under "How to Redeem Fund Shares." Dreyfus Service
Corporation compensates certain Service Agents for selling Class B
shares at the time of purchase from Dreyfus Service Corporation's own
assets. The proceeds of the CDSC and the distribution fee, in part, are used
to defray these expenses. In fiscal 1994, $17,606 was retained by Dreyfus
Service Corporation from the CDSC on Class B shares.
RIGHT OF ACCUMULATION - CLASS A SHARES
Reduced sales loads apply to any purchase of Class A shares, shares of
other funds in the Family of Premier Funds, shares of certain other funds
advised by The Dreyfus Corporation which are sold with a sales load and
shares of certain other funds acquired by a previous exchange of such
shares (hereinafter referred to as "Eligible Funds"), by you and any related
"purchaser" as defined in the Statement of Additional Information, where
the aggregate investment, including such purchase, is $50,000 or more. If,
for example, you have previously purchased and still hold Class A shares
of the Fund, or of any other Eligible Fund or combination thereof, with an
aggregate current market value of $40,000 and subsequently purchase
Class A shares of the Fund or an Eligible Fund having a current value of
$20,000, the sales load applicable to the subsequent purchase would be
reduced to 4% of the offering price. All present holdings of Eligible Funds
may be combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each subsequent
purchase.
To qualify for reduced sales loads, at the time of a purchase you or your
Service Agent must notify Dreyfus Service Corporation if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE
You may purchase Fund shares (minimum $500, maximum $150,000 per
day) by telephone if you have checked the appropriate box and supplied the
necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between the bank account designated in one of these
documents and your Fund account. Only such an account maintained in a
domestic financial
Page 20
institution which is an Automated Clearing House
member may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders.
No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER purchase of Fund shares by telephoning 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents
may impose certain conditions on their clients which are different from
those described in this Prospectus. You should consult your Service Agent
in this regard.
EXCHANGE PRIVILEGE
The Exchange Privilege enables clients of certain Service Agents to
purchase, in exchange for Class A or Class B shares of the Fund, shares of
the same Class in certain other funds managed or administered by The
Dreyfus Corporation, to the extent such shares are offered for sale in your
state of residence. These funds have different investment objectives
which may be of interest to you. If you desire to use this Privilege, you
should consult your Service Agent or Dreyfus Service Corporation to
determine if it is available and whether any conditions are imposed on its
use.
To use this Privilege, your Service Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing, by wire or by
telephone. If you previously have established the Telephone Exchange
Privilege, you may telephone exchange instructions by calling 1-800-221-
4060 or, if you are calling from overseas, call 1-401-455-3306. See "How
to Redeem Fund Shares__Procedures." Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained from
Dreyfus Service Corporation. Except in the case of Personal Retirement
Plans, the shares being exchanged must have a current value of at least
$500; furthermore, when establishing a new account by exchange, the
shares being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
Telephone exchanges may be made only if the appropriate "YES" box has
been checked on the Account Application, or a separate signed Shareholder
Services Form is on file with the Transfer Agent. Upon an exchange into a
new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Exchange Privilege, Check
Redemption Privilege, TELETRANSFER Privilege and the dividend/capital
gain distribution option (except for Dividend Sweep) selected by the
investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges of Class
A shares into funds sold with a sales load. No CDSC will be imposed on
Class B shares at the time of an exchange; however, Class B shares
acquired through an exchange will be subject on redemption to the higher
CDSC applicable to the exchanged or acquired shares. The CDSC applicable
on redemption of the acquired Class B shares will be calculated from the
date of the initial purchase of the Class B shares exchanged. If you are
exchanging Class A shares into a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares of the fund from which you are
exchanging were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to
the foregoing categories of shares. To qualify, at the time of your
exchange your Service Agent must notify Dreyfus Service Corporation. Any
such qualification is subject to confirmation of your holdings through a
check of appropriate records. See "Shareholder Services" in the Statement
of Additional Information. No fees currently are charged share-
Page 21
holders directly in connection with exchanges, although the Fund reserves the
right, upon not less than 60 days' written notice, to charge shareholders a
nominal fee in accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a semi-
monthly, monthly, quarterly or annual basis), in exchange for Class A or
Class B shares of the Fund, in shares of the same Class of other funds in
the Premier Family of Funds or certain other funds in the Dreyfus Family
of Funds of which you are currently an investor. The amount you designate,
which can be expressed either in terms of a specific dollar or share
amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth of the month according to the schedule you have selected.
Shares will be exchanged at the then-current net asset value; however, a
sales load may be charged with respect to exchanges of Class A shares
into funds sold with a sales charge. No CDSC will be imposed on Class B
shares at the time of an exchange; however, Class B shares acquired
through an exchange will be subject on redemption to the higher CDSC
applicable to the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B shares will be calculated from the
date of the initial purchase of the Class B shares exchanged. See
"Shareholder Services" in the Statement of Additional Information. The
right to exercise this Privilege may be modified or cancelled by the Fund
or the Transfer Agent. You may modify or cancel your exercise of this
Privilege at any time by writing to Premier California Municipal Bond
Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. The Fund may
charge a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss. For more information concerning this
Privilege and the funds in the Premier Family of Funds or Dreyfus Family
of Funds eligible to participate in this Privilege, or to obtain an Auto-
Exchange Authorization Form, please call toll free 1-800-645-6561.
AUTOMATIC ASSET BUILDER
AUTOMATIC Asset Builder permits you to purchase Fund shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the bank account
designated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may
be so designated. To establish an AUTOMATIC Asset Builder account, you
must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form from Dreyfus Service Corporation. You
may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to Premier California
Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587,
and the notification will be effective three business days following
receipt. The Fund may modify or terminate this Privilege at any time or
charge a service fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Government Direct Deposit Privilege enables you to purchase Fund
shares (minimum of $100 and maximum of $50,000 per transaction) by
having Federal salary, Social Security, or cer-
Page 22
tain veterans', military or
other payments from the Federal government automatically deposited into
your Fund account. You may deposit as much of such payments as you elect.
To enroll in Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may be
obtained from Dreyfus Service Corporation or your Service Agent. Death or
legal incapacity will terminate your participation in this Privilege. You
may elect at any time to terminate your participation by notifying in
writing the appropriate Federal agency. Further, the Fund may terminate
your participation upon 30 days' notice to you.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends or
dividends and capital gain distributions, if any, paid by the Fund in shares
of the same Class of another fund in the Premier Family of Funds or the
Dreyfus Family of Funds of which you are a shareholder. Shares of the
other fund will be purchased at the then-current net asset value; however,
a sales load may be charged with respect to investments in shares of a
fund sold with a sales load. If you are investing in a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load. If you are investing in a fund
that charges a CDSC, the shares purchased will be subject on redemption
to the CDSC, if any, applicable to the purchased shares. See "Shareholder
Services" in the Statement of Additional Information. Dividend ACH
permits a shareholder to transfer electronically on the payment date their
dividends or dividends and capital gain distributions, if any, from the Fund
to a designated bank account. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may
be so designated. Banks may charge a fee for this service.
For more information concerning these privileges, or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to Premier
California Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587. Enrollment in or cancellation of these privileges is effective
three business days following receipt. These privileges are available only
for existing accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dividend Sweep. The Fund may
modify or terminate these privileges at any time or charge a service fee.
No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. An application for the
Automatic Withdrawal Plan can be obtained from Dreyfus Service
Corporation. There is a service charge of 50 cents for each withdrawal
check. The Automatic Withdrawal Plan may be ended at any time by you,
the Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
Class B shares withdrawn pursuant to the Automatic Withdrawal Plan
will be subject to any applicable CDSC. Purchases of additional Class A
shares where the sales load is imposed concurrently with withdrawals of
Class A shares generally are undesirable.
LETTER OF INTENT - CLASS A SHARES
By signing a Letter of Intent form, available from Dreyfus Service
Corporation, you become eligible for the reduced sales load applicable to
the total number of Eligible Fund shares purchased in a 13-month period
pursuant to the terms and conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable
sales load, the offering price of shares you hold (on the date of submission
of the Letter of Intent) in any Eligible Fund that may be used toward
"Right of Accumulation" benefits described above may be used as a credit
toward completion of the Letter of Intent. However, the reduced sales load
will be applied only to new purchases.
Page 23
The Transfer Agent will hold in escrow 5% of the amount indicated in
the Letter of Intent for payment of a higher sales load if you do not
purchase the full amount indicated in the Letter of Intent. The escrow will
be released when you fulfill the terms of the Letter of Intent by
purchasing the specified amount. If your purchases qualify for a further
sales load reduction, the sales load will be adjusted to reflect your total
purchase at the end of 13 months. If total purchases are less than the
amount specified, you will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load
applicable to the aggregate purchases actually made. If such remittance is
not received within 20 days, the Transfer Agent, as attorney-in-fact
pursuant to the terms of the Letter of Intent, will redeem an appropriate
number of Class A shares held in escrow to realize the difference. Signing
a Letter of Intent does not bind you to purchase, or the Fund to sell, the
full amount indicated at the sales load in effect at the time of signing,
but you must complete the intended purchase to obtain the reduced sales
load. At the time you purchase Class A shares, you must indicate your
intention to do so under a Letter of Intent. Purchases pursuant to a Letter
of Intent will be made at the then-current net asset value plus the
applicable sales load in effect at the time such Letter of Intent was
executed.
HOW TO REDEEM FUND SHARES
GENERAL
You may request redemption of your Class A or Class B shares at any
time. Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value as described
below. If you hold Fund shares of more than one Class, any request for
redemption must specify the Class of shares being redeemed. If you fail to
specify the Class of shares to be redeemed or if you own fewer shares of
the Class than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions from you or
your Service Agent.
The Fund imposes no charges (other than any applicable CDSC with
respect to Class B shares) when shares are redeemed directly through
Dreyfus Service Corporation. Service Agents may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request.
The value of the shares redeemed may be more or less than their original
cost, depending on the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH AUTOMATIC ASSET
BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REQUEST TO THE
TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO
YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
TELETRANSFER PURCHASE OR AUTOMATIC ASSET BUILDER ORDER, WHICH
MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND
WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION
PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES PURSUANT TO
THE TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS
AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
TELETRANSFER PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL
NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO
COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS
EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE,
AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL
OWNERSHIP. Fund shares will not be redeemed until the Transfer Agent has
received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 30 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
Page 24
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES
A CDSC payable to Dreyfus Service Corporation is imposed on any
redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of
all payments by you for the purchase of Class B shares of the Fund held by
you at the time of redemption. No CDSC will be imposed to the extent that
the net asset value of the Class B shares redeemed does not exceed (i) the
current net asset value of Class B shares acquired through reinvestment
of dividends or capital gain distributions, plus (ii) increases in the net
asset value of your Class B shares above the dollar amount of all your
payments for the purchase of Class B shares of the Fund held by you at the
time of redemption.
If the aggregate value of the Class B shares redeemed has declined below
their original cost as a result of the Fund's performance, a CDSC may be
applied to the then-current net asset value rather than the purchase price.
In circumstances where the CDSC is imposed, the amount of the charge
will depend on the number of years from the time you purchased the Class
B shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the
purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC:
YEAR SINCE CDSC AS A % OF AMOUNT
PURCHASE PAYMENT INVESTED OR REDEMPTION
WAS MADE PROCEEDS
- ----------------- ---------------------
First.......................................... 3.00
Second......................................... 3.00
Third.......................................... 2.00
Fourth......................................... 2.00
Fifth.......................................... 1.00
Sixth.......................................... 0.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends
and distributions; then of amounts representing the increase in net asset
value of Class B shares above the total amount of payments for the
purchase of Class B shares made during the preceding five years; then of
amounts representing the cost of shares purchased five years prior to the
redemption; and finally, of amounts representing the cost of shares held
for the longest period of time within the applicable five-year period.
For example, assume an investor purchased 100 shares at $10 per share
for a cost of $1,000. Subsequently, the shareholder acquired five
additional shares through dividend reinvestment. During the second year
after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
has appreciated to $12 per share, the value of the investor's shares would
be $1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 3% (the
applicable rate in the second year after purchase) for a total CDSC of
$7.20.
WAIVER OF CDSC
The CDSC will be waived in connection with (a) redemptions made
within one year after the death or disability, as defined in Section
72(m)(7) of the Code, of the shareholder, (b) redemptions by employees
participating in qualified or non-qualified employee benefit plans or other
programs where (i) the employers or affiliated employers maintaining
such plans or programs have a minimum of 250 employees eligible for
participation in such plans or programs, or (ii) such plan's or program's
aggregate initial investment in the Dreyfus Family of
Page 25
Funds or other
products made available through Dreyfus Service Corporation exceeds one
million dollars, (c) redemptions as a result of a combination of any
investment company with the Fund by merger, acquisition of assets or
otherwise, (d) a distribution following retirement under a tax-deferred
retirement plan or upon attaining age 70 1/2 in the case of an IRA or
Keogh plan or custodial account pursuant to Section 403(b) of the Code,
and (e) redemptions by such shareholders as the Securities and Exchange
Commission or its staff may permit. If the Fund's Trustees determine to
discontinue the waiver of the CDSC, the disclosure in the Fund's
prospectus will be appropriately revised. Any Fund shares subject to a
CDSC which were purchased prior to the termination of such waiver will
have the CDSC waived as provided in the Fund's prospectus at the time of
the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption you must
notify the Transfer Agent or your Service Agent must notify Dreyfus
Service Corporation. Any such qualification is subject to confirmation of
your entitlement.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, using the Check Redemption Privilege with
respect to Class A shares only, through the TELETRANSFER Privilege or, if
you are a client of a Selected Dealer, through the Selected Dealer. If you
have given your Service Agent authority to instruct the Transfer Agent to
redeem shares and to credit the proceeds of such redemptions to a
designated account at your Service Agent, you may redeem shares only in
this manner and in accordance with the regular redemption procedure
described below. If you wish to use the other redemption methods
described below, you must arrange with your Service Agent for delivery of
the required application(s) to the Transfer Agent. Other redemption
procedures may be in effect for clients of certain Service Agents. The
Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities.
Your redemption request may direct that the redemption proceeds be
used to purchase shares of other funds advised or administered by The
Dreyfus Corporation that are not available through the Exchange Privilege.
The applicable CDSC will be charged upon the redemption of Class B
shares. Your redemption proceeds will be invested in shares of the other
fund on the next business day. Before you make such a request, you must
obtain and should review a copy of the current prospectus of the fund
being purchased. Prospectuses may be obtained from Dreyfus Service
Corporation. The prospectus will contain information concerning minimum
investment requirements and other conditions that may apply to your
purchase.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have
filed a Shareholder Services Form with the Transfer Agent. If you select
the TELETRANSFER Privilege or telephone exchange privilege, you
authorize the Transfer Agent to act on telephone instructions from any
person representing himself or herself to be you, or a representative of
your Service Agent, and reasonably believed by the Transfer Agent to be
genuine. The Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm
that instructions are genuine and, if it does not follow such procedures,
the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent instructions. Neither the Fund nor the Transfer
Agent will be liable for following telephone instructions reasonably
believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a TELETRANSFER redemption or an exchange of Fund shares. In such
cases, you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may result in
your redemption request being processed at a later time than it would
have been if TELETRANSFER redemption had been used. During the delay,
the Fund's net asset value may fluctuate.
Page 26
REGULAR REDEMPTION
Under the regular redemption procedure, you may redeem shares by
written request mailed to Premier California Municipal Bond Fund, P.O. Box
6527, Providence, Rhode Island 02940-6527. Written redemption requests
must specify the Class of shares being redeemed. Redemption requests
must be signed by each shareholder, including each owner of a joint
account, and each signature must be guaranteed. The Transfer Agent has
adopted standards and procedures pursuant to which signature-guarantees
in proper form generally will be accepted from domestic banks, brokers,
dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations, as
well as from participants in the New York Stock Exchange Medallion
Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. If you have any
questions with respect to signature-guarantees, please contact your
Service Agent or call the telephone number listed on the cover of this
Prospectus.
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE - CLASS A SHARES
If you hold Class A shares, you may request on the Account Application,
Shareholder Services Form or by later written request that the Fund
provide Redemption Checks drawn on the Fund's account. Redemption
Checks may be made payable to the order of any person in the amount of
$500 or more. Potential fluctuations in the net asset value of Class A
shares should be considered in determining the amount of the check.
Redemption Checks should not be used to close your account. Redemption
Checks are free, but the Transfer Agent will impose a fee for stopping
payment of a Redemption Check upon your request or if the Transfer Agent
cannot honor the Redemption Check due to insufficient funds or other valid
reason. You should date your Redemption Checks with the current date
when you write them. Please do not postdate your Redemption Checks. If
you do, the Transfer Agent will honor, upon presentment, even if presented
before the date of the check, all postdated Redemption Checks which are
dated within six months of presentment for payment, if they are
otherwise in good order. Class A shares for which certificates have been
issued may not be redeemed by Redemption Check. This Privilege may be
modified or terminated at any time by the Fund or the Transfer Agent upon
notice to holders of Class A shares.
TELETRANSFER PRIVILEGE
You may redeem Fund shares (minimum $500 per day) by telephone if
you have checked the appropriate box and supplied the necessary
information on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. The proceeds will be transferred
between your Fund account and the bank account designated in one of these
documents. Only such an account maintained in a domestic financial
institution which is an Automated Clearing House member may be so
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt
of the redemption request or, at your request, paid by check (maximum
$150,000 per day) and mailed to your address. Holders of jointly
registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account only up to $250,000 within
any 30-day period. The Fund reserves the right to refuse any request made
by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The
Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the TELETRANSFER Privilege, you may request a
TELETRANSFER redemption of Fund shares by telephoning 1-800-221-4060
or, if you are calling from overseas, call 1-401-455-3306. Shares issued
in certificate form are not eligible for this Privilege.
Page 27
REDEMPTION THROUGH A SELECTED DEALER
If you are a customer of a Selected Dealer, you may make redemption
requests to your Selected Dealer. If the Selected Dealer transmits the
redemption request so that it is received by the Transfer Agent prior to
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time), the redemption request will be effective on
that day. If a redemption request is received by the Transfer Agent after
the close of trading on the floor of the New York Stock Exchange, the
redemption request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Fund Shares"
for a discussion of additional conditions or fees that may be imposed upon
redemption.
In addition, Dreyfus Service Corporation will accept orders from
Selected Dealers with which it has sales agreements for the repurchase of
shares held by shareholders. Repurchase orders received by dealers by the
close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to Dreyfus Service Corporation prior to the
close of its business day (normally 5:15 p.m., New York time) are effected
at the price determined as of the close of trading on the floor of the New
York Stock Exchange on that day. Otherwise, the shares will be redeemed
at the next determined net asset value. It is the responsibility of the
Selected Dealer to transmit orders on a timely basis. The Selected Dealer
may charge the shareholder a fee for executing the order. This repurchase
arrangement is discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE - CLASS A SHARES
Upon written request, you may reinvest up to the number of Class A
shares you have redeemed, within 30 days of redemption, at the then-
prevailing net asset value without a sales load, or reinstate your account
for the purpose of exercising the Exchange Privilege. The Reinvestment
Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class A and Class B shares are subject to a Shareholder Services Plan
and Class B shares only are subject to a Distribution Plan.
DISTRIBUTION PLAN
Under the Distribution Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays Dreyfus Service
Corporation for advertising, marketing and distributing Class B shares at
an annual rate of .50 of 1% of the value of the average daily net assets of
Class B. Under the Distribution Plan, Dreyfus Service Corporation may
make payments to Service Agents in respect of these services. Dreyfus
Service Corporation determines the amounts to be paid to Service Agents.
Service Agents receive such fees in respect of the average daily value of
the Class B shares owned by their clients. From time to time, Dreyfus
Service Corporation may defer or waive receipt of fees under the
Distribution Plan while retaining the ability to be paid by the Fund under
the Distribution Plan thereafter. The fees payable to Dreyfus Service
Corporation under the Distribution Plan for advertising, marketing and
distributing Class B shares and payments to Service Agents are payable
without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN
Under the Shareholder Services Plan, the Fund pays Dreyfus Service
Corporation for the provision of certain services to the holders of Class A
and Class B shares a fee at the annual rate of .25 of 1% of the value of the
average daily net assets of Class A and Class B. The services provided may
include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the Fund and providing reports
and other information, and services related to the maintenance of
shareholder accounts. Dreyfus Service Corporation may make payments to
Service Agents in respect of these services. Dreyfus
Page 28
Service Corporation
determines the amounts to be paid to Service Agents. Each Service Agent
is required to disclose to its clients any compensation payable to it by the
Fund pursuant to the Shareholder Services Plan and any other
compensation payable by their clients in connection with the investment
of their assets in Class A or Class B shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income
on each day the New York Stock Exchange is open for business. Fund shares
begin earning income dividends on the day immediately available funds
("Federal Funds" (monies of member banks within the Federal Reserve
System which are held on deposit at a Federal Reserve Bank) ) are received
by the Transfer Agent in written or telegraphic form. If a purchase order
is not accompanied by remittance in Federal Funds, there may be a delay
between the time the purchase order becomes effective and the time the
shares purchased start earning dividends. If your payment is not made in
Federal Funds, it must be converted into Federal Funds. This usually occurs
within one business day of receipt of a bank wire and within two business
days of receipt of a check drawn on a member bank of the Federal Reserve
System. Checks drawn on banks which are not members of the Federal
Reserve System may take considerably longer to convert into Federal
Funds.
Dividends usually are paid on the last calendar day of each month and
are automatically reinvested in additional shares of the same Class from
which they were paid at net asset value without a sales load or, at your
option, paid in cash. The Fund's earnings for Saturdays, Sundays and
holidays are declared as dividends on the preceding business day. If you
redeem all shares in your account at any time during the month, all
dividends to which you are entitled will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but the Fund may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will
not make distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares of the same Class from which they were paid at net asset value
without a sales load. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the
same amount, except that the expenses attributable solely to Class A or
Class B will be borne exclusively by such Class. Class B shares will
receive lower per share dividends than Class A shares because of the
higher expenses borne by Class B. See "Fee Table."
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to
Federal income tax or California personal income taxes. To the extent that
you are obligated to pay state or local taxes outside of the State of
California, dividends earned by an investment in the Fund may represent
taxable income. Dividends and distributions derived from Taxable
Investments and from income or gain derived from securities transactions
and from the use of certain of the investment techniques described under
"Description of the Fund - Investment Techniques" will be subject to
Federal income tax. Dividends derived from Taxable Investments, together
with distributions from any net realized short-term securities gains and
all or a portion of any gains realized from the sale or other dispostion of
certain market discount bonds, paid by the Fund are subject to Federal
income tax as ordinary income whether or not reinvested. No dividend paid
by the Fund will qualify for the dividends received deduction allowable to
certain U.S. corporations. Distributions from net realized long-term
securities gains of the Fund generally are subject to Federal income tax as
long-term capital gains if you are a citizen or resident of the United
States. The Code provides that the net capital gain of an individual
generally will not be subject
Page 29
to Federal income tax at a rate in excess of
28%. Under the Code, interest on indebtedness incurred or continued to
purchase or carry Fund shares which is deemed to relate to exempt-
interest dividends is not deductible.
The Code provides for the "carryover" of some or all of the sales load
imposed on Class A shares if you exchange your Class A shares for shares
of another fund advised by The Dreyfus Corporation within 91 days of
purchase and such other fund reduces or eliminates its otherwise
applicable sales load for the purpose of the exchange. In this case, the
amount of the sales load charge for Class A shares, up to the amount of
the reduction of the sales load charge on the exchange, is not included in
the basis of your Class A shares for purposes of computing gain or loss on
the exchange, and instead is added to the basis of the fund shares received
on the exchange.
Although all or a substantial portion of the dividends paid by the Fund
may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private
activity bonds, the interest from which may be (i) a preference item for
purposes of the alternative minimum tax, (ii) a component of the
"adjusted current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the extent to
which a shareholder's Social Security benefits are taxable. If the Fund
purchases such securities, the portion of the dividends related thereto
will not necessarily be tax exempt to an investor who is subject to the
alternative minimum tax and/or tax on Social Security benefits and may
cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year. These statements set
forth the dollar amount of income exempt from Federal tax and the dollar
amount, if any, subject to Federal tax. These dollar amounts will vary
depending on the size and length of time of your investment in the Fund. If
the Fund pays dividends derived from taxable income, it intends to
designate as taxable the same percentage of the day's dividends as the
actual taxable income earned on that day bears to total income earned on
that day. Thus, the percentage of the dividend designated as taxable, if
any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be
realized, paid to a shareholder if such shareholder fails to certify either
that the TIN furnished in connection with opening an account is correct or
that such shareholder has not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return.
Furthermore, the IRS may notify the Fund to institute backup withholding
if the IRS determines a shareholder's TIN is incorrect or if a shareholder
has failed to properly report taxable dividend and interest income on a
Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended January 31, 1994 as a "regulated investment company"
under the Code. The Fund intends to continue to so qualify if such
qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income taxes to
the extent its earnings are distributed in accordance with applicable
provisions of the Code. In addition, the Fund is subject to a non-deductible
4% excise tax, measured with respect to certain undistributed amounts of
taxable investment income and capital gains, if any.
Page 30
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of shares may
be calculated on several bases, including current yield, tax equivalent
yield, average annual total return and/or total return. These total return
figures reflect changes in the price of the shares and assume that any
income dividends and/or capital gains distributions made by the Fund
during the measuring period were reinvested in shares of the same Class.
Class A total return figures include the maximum initial sales charge and
Class B total return figures include any applicable CDSC. These figures
also take into account any applicable service and distribution fees. As a
result, at any given time, the performance of Class B should be expected
to be lower than that of Class A. Performance for each Class will be
calculated separately.
Current yield refers to the Fund's annualized net investment income per
share over a 30-day period, expressed as a percentage of the maximum
offering price per share in the case of Class A or the net asset value per
share in the case of Class B at the end of the period. For purposes of
calculating current yield, the amount of net investment income per share
during that 30-day period, computed in accordance with regulatory
requirements, is compounded by assuming that it is reinvested at a
constant rate over a six-month period. An identical result is then assumed
to have occurred during a second six-month period which, when added to
the result for the first six months, provides an "annualized" yield for an
entire one-year period. Calculations of the Fund's current yield may
reflect absorbed expenses pursuant to any undertaking that may be in
effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
current yield calculated as described above.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased
with an initial payment of $1,000 and that the investment was redeemed
at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for Class A and Class B for
one, five and ten year periods, or for shorter periods depending upon the
length of time during which the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B at the beginning of the period.
Advertisements may include the percentage rate of total return or may
include the value of a hypothetical investment at the end of the period
which assumes the application of the percentage rate of total return.
Total return may also be calculated by using the net asset value per share
at the beginning of the period instead of the maximum offering price per
share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B shares.
Calculations based on the net asset value per share do not reflect the
deduction of the applicable sales charge which, if reflected, would reduce
the performance quoted.
Performance will vary from time to time and past results are not
necessarily representative of future results. Investors should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other
investment companies using a different method of calculating
performance.
Page 31
Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Lipper Analytical
Services, Inc., Moody's Bond Survey Bond Index, Lehman Brothers Municipal
Bond Index, Morningstar, Inc. and other industry publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement
and Declaration of Trust (the "Trust Agreement") dated July 24, 1985, and
commenced operations on November 10, 1986. On July 2, 1990, the Fund's
name was changed from Premier California Tax Exempt Bond Fund to
Premier California Municipal Bond Fund. The Fund is authorized to issue an
unlimited number of shares of beneficial interest, par value $.001 per
share. The Fund's shares are classified into two classes - Class A and
Class B. Each share has one vote and shareholders will vote in the
aggregate and not by class except as otherwise required by law or when
class voting is permitted by the Board of Trustees. Holders of Class A and
Class B shares will be entitled to vote on matters submitted to
shareholders pertaining to the Shareholder Services Plan and only holders
of Class B shares will be entitled to vote on matters submitted to
shareholders pertaining to the Distribution Plan.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed
by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations, a possibility which management
believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder paying such liability will be entitled to reimbursement from
the general assets of the Fund. The Trustees intend to conduct the
operations of the Fund in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund. As
discussed under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may have the right to
call a meeting of shareholders for the purpose of voting to remove
Trustees.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-
0144.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY
PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 32
__________________________________________________________________________
PREMIER CALIFORNIA MUNICIPAL BOND FUND
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 20, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier California Municipal Bond Fund (the "Fund"), dated May 20,
1994, as it may be revised from time to time. To obtain a copy of the
Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . B-10
Management Agreement . . . . . . . . . . . . . . . . . . . . B-13
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . B-15
Distribution Plan and Shareholder Services Plan. . . . . . . B-16
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . B-17
Shareholder Services . . . . . . . . . . . . . . . . . . . . B-19
Determination of Net Asset Value . . . . . . . . . . . . . . B-21
Dividends, Distributions and Taxes . . . . . . . . . . . . . B-22
Portfolio Transactions . . . . . . . . . . . . . . . . . . . B-24
Performance Information. . . . . . . . . . . . . . . . . . . B-25
Information About the Fund . . . . . . . . . . . . . . . . . B-27
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . B-27
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . B-28
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . B-40
Financial Statements . . . . . . . . . . . . . . . . . . . . B-49
Report of Independent Auditors . . . . . . . . . . . . . . . B-58
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended January 31, 1994,
computed on a monthly basis, was as follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. Service, Inc. Corporation Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
AAA Aaa AAA 20.7%
AA Aa AA 16.7
A A A 40.7
BBB Baa BBB 8.0
D D D .5
F-1+\F-1 VMIG1\MIG1, SP-1+, SP-1, .6
P-1 A1+\A1
Not Rated Not Rated Not Rated 12.8(*)
____
100.0%
======
______________________________
* Included under the Not Rated category are certain securities which,
while not rated, have been determined by the Manager to be of
comparable quality to securities in the following rating categories:
AAA/Aaa (.2%), A/A (1.2%) and Baa/BBB (9.8%).
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity or sewage or solid waste disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time or at
specified intervals. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act
of 1940, as amended (the "Act"), the identification of the issuer of
Municipal Obligations depends on the terms and conditions of the security.
When 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 security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the
non-governmental user, then such non-governmental user would be deemed to
be the sole issuer. If, however, in either case, the creating government
or some other entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue of such
government or other entity.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. The Fund will
seek to minimize these risks by not investing more than 15% of the value
of its net assets in lease obligations that contain "non-appropriation"
clauses, and by investing only in those "non-appropriation" lease
obligations where (1) the nature of the leased equipment or property is
such that its ownership or use is essential to a governmental function of
the municipality, (2) the lease payments will commence amortization of
principal at an early date resulting in an average life of seven years or
less for the lease obligation, (3) appropriate covenants will be obtained
from the municipal obligor prohibiting the substitution or purchase of
similar equipment if lease payments are not appropriated, (4) the lease
obligor has maintained good market acceptability in the past, (5) the
investment is of a size that will be attractive to institutional
investors, and (6) the underlying leased equipment has elements of
portability and/or use that enhance its marketability in the event
foreclosure on the underlying equipment is ever required. The staff of
the Securities and Exchange Commission currently considers certain lease
obligations to be illiquid. Accordingly, not more than 15% of the value
of the Fund's net assets will be invested in lease obligations that are
illiquid and in other illiquid securities. See "Investment Restriction
No. 6" below.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund. Based
on the tender option bond agreement, the Fund expects to be able to value
the tender option bond at par; however, the value of the instrument will
be monitored to assure that it is valued at fair value.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation, and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, including fees paid under the Fund's Shareholder Services Plan
with respect to Class A and Class B shares and the Distribution Plan with
respect only to Class B shares, will have the effect of reducing the yield
to investors.
Ratings of Municipal Obligations. Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the extent
that the ratings given by Moody's, S&P or Fitch for Municipal Obligations
may change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
its investments in accordance with the investment policies contained in
the Fund's Prospectus and this Statement of Additional Information. The
ratings of Moody's, S&P and Fitch represent their opinions as to the
quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective
and are not absolute standards of quality. Although these ratings may be
an initial criterion for selection of portfolio investments, the Manager
also will evaluate these securities.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option on a futures contract, the writer of the option delivers to the
holder of the option the futures position and the accumulated balance in
the writer's futures margin account, which represents the amount by which
the market price of the futures contract exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on
the futures contract. The potential loss related to the purchase of
options on futures contracts is limited to the premium paid for the option
(plus transaction costs). Because the value of the option is fixed at the
time of sale, there are no daily cash payments to reflect changes in the
value of the underlying contract; however, the value of the option does
change daily and that change would be reflected in the net asset value of
the Fund.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral.
For purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by the Fund to be
the equivalent of cash. Such loans may not exceed 33-1/3% of the value of
the Fund's total assets. From time to time, the Fund may return to the
borrower or a third party which is unaffiliated with the Fund, and which
is acting as a "placing broker," a part of the interest earned from the
investment of collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value
of the securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks,
by the right of the issuer to borrow from the U.S. Treasury; others, such
as those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government -
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so, since it is not so obligated by law. The Fund will
invest in such securities only when it is satisfied that the credit risk
with respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from
insurance from Bank Insurance Fund or the Savings Association Insurance
Fund administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating and
variable rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
or subcustodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the Securities and
Exchange Commission to be loans by the Fund. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, the Fund will enter
into repurchase agreements only with domestic banks with total assets in
excess of one billion dollars or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Manager will monitor on
an ongoing basis the value of the collateral to assure that it always
equals or exceeds the repurchase price. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Risk Factors
Investing in California Municipal Obligations. Investors should
consider carefully the special risks inherent in the Fund's investment in
California Municipal Obligations. These risks result from certain
amendments to the California Constitution and other statutes that limit
the taxing and spending authority of California governmental entities, as
well as from the general financial condition of the State of California.
Since the start of the State's 1990-91 fiscal year, the State has
experienced the worst economic, fiscal and budget conditions since the
1930s. As a result, the State has experienced recurring budget deficits
for four of the last five fiscal years ending with 1991-92. Revenues and
expenditures were essentially equal in 1992-93, but the original budget
for that year projected revenues exceeding expenditures by $2.6 billion.
By June 30, 1993, according to California's Department of Finance, the
State's Reserve for Economic Uncertainties had an accumulated deficit, on
a budget basis, of approximately $2.8 billion. A further consequence of
the large budget imbalances over the last three fiscal years has been that
the State depleted its available cash resources and has had to use a
series of external borrowings to meet its cash needs. As a result of the
deterioration in the State's budget and cash situation in fiscal years
1991-92 and 1992-93, between November 1991 and October 1992 the rating on
the State's general obligation bonds was reduced by S&P from AAA to A+, by
Moody's from Aaa to Aa and by Fitch from AAA to AA. These and other
factors may have the effect of impairing the ability of the issuers of
California Municipal Obligations to pay interest on, or repay principal
of, such California Municipal Obligations. Investors should review
Appendix A which sets forth additional information relating to investing
in California Municipal Obligations.
Lower Rated Bonds. The Fund is permitted to invest in securities
rated below Baa by Moody's and below BBB by S&P and Fitch. Such bonds,
though higher yielding, are characterized by risk. See "Description of
the Fund--Risk Factors--Lower Rated Bonds" in the Prospectus for a
discussion of certain risks and "Appendix B" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations. Although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. The Fund will
rely on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, the Manager will take
into consideration, among other things, the issuer's financial resources,
its sensitivity to economic conditions and trends, the quality of the
issuer's management and regulatory matters. It also is possible that a
rating agency might not timely change the rating on a particular issue to
reflect subsequent events. As stated above, once the rating of a bond in
the Fund's portfolio has been changed, the Manager will consider all
circumstances deemed relevant in determining whether the Fund should
continue to hold the bond.
Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities. These bonds generally are considered by Moody's, S&P
and Fitch to be predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in
the higher rating categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally
is not as liquid as the secondary market for higher rated securities. The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues
when necessary to meet the Fund's liquidity needs or in response to a
specific economic event such as a deterioration in the creditworthiness of
the issuer. The lack of a liquid secondary market for certain securities
also may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and calculating
its net asset value. Adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and
liquidity of these securities. In such cases, judgment may play a greater
role in valuation because less reliable objective data may be available.
These bonds may be particularly susceptible to economic downturns.
It is likely that any economic recession could disrupt severely the market
for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default for such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The
Fund has no arrangement with the Distributor or any other persons
concerning the acquisition of such securities, and the Manager will review
carefully the credit and other characteristics pertinent to such new
issues.
Lower rated zero coupon securities and pay-in-kind bonds, in which
the Fund may invest up to 5% of its net assets, involve special
considerations. The credit risk factors pertaining to lower rated
securities also apply to lower rated zero coupon bonds and pay-in-kind
bonds. Such zero coupon, pay-in-kind or delayed interest bonds carry an
additional risk in that, unlike bonds which pay interest throughout the
period to maturity, the Fund will realize no cash until the cash payment
date unless a portion of such securities are sold and, if the issuer
defaults, the Fund may obtain no return at all on its investment. See
"Dividends, Distributions and Taxes."
Investment Restrictions. The Fund has adopted restrictions numbered
1 through 5 and 7 through 12 as fundamental policies. These restrictions
cannot be changed without approval by the holders of a majority (as
defined in the Act) of the Fund's outstanding voting shares. Investment
restriction number 6 is not a fundamental policy and may be changed by
vote of a majority of the Trustees at any time. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus and
those arising out of transactions in futures and options.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost
or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional
investments. Transactions in futures and options and the entry into short
sales transactions do not involve any borrowing for purposes of this
restriction.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes. The
deposit of assets in escrow in connection with the writing of covered put
and call options and the purchase of securities on a when-issued or
delayed-delivery basis and collateral arrangements with respect to initial
or variation margin for futures contracts and options on futures contracts
or indexes will not be deemed to be pledges of the Fund's assets.
4. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in futures, including those
related to indexes, and options on futures or indexes.
5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take
advantage of the lower purchase price available, and except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.
6. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid (which securities could include participation interests that are
not subject to the demand feature described in the Fund's Prospectus and
floating and variable rate demand obligations as to which no secondary
market exists and the Fund cannot exercise the demand feature described in
the Fund's Prospectus on less than seven days' notice), if, in the
aggregate, more than 15% of the value of its net assets would be so
invested.
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal
Obligations secured by real estate or interests therein, or prevent the
Fund from purchasing and selling futures contracts, including those
related to indexes, and options on futures contracts or indexes.
8. Make loans to others except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to
above and in the Fund's Prospectus; however, the Fund may lend its
portfolio securities in an amount not to exceed 33-1/3% of the value of its
total assets. Any loans of portfolio securities will be made according to
guidelines established by the Securities and Exchange Commission and the
Fund's Trustees.
9. Invest more than 15% of its assets in the obligations of any one
bank for temporary defensive purposes, or invest more than 5% of its
assets in the obligations of any other issuer, except that up to 25% of
the value of the Fund's total assets may be invested, and securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased, without regard to any such
limitations. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to such limitation.
10. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
For purposes of Investment Restriction No. 10, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry."
If a percentage restriction is adhered to at the time of investment,
a later increase in percentage resulting from a change in values or assets
will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Trustee who is deemed to be an "interested person"
of the Fund (as defined in the Act) is indicated by an asterisk.
Trustees and Officers of the Fund
CLIFFORD L. ALEXANDER, JR., Trustee. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander
served as Secretary of the Army and Chairman of the Board of the
Panama Canal Company, and from 1975 to 1977 he was a member of the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson
and Alexander. He is a director of American Home Products
Corporation, The Dun & Bradstreet Corporation, MCI Communications
Corporation, Mutual of America Life Insurance Company and Equitable
Resources, a producer and distributor of natural gas and crude
petroleum. His address is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Trustee. Professor of Law, New York University School of
Law. Professor Davis has been a member of the New York University
law faculty since 1983. Prior to that time, she served for three
years as a judge in the courts of New York State; was engaged for
eight years in the practice of law, working in both corporate and
non-profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes
and teaches in the fields of evidence, constitutional theory, family
law, social sciences and the law, legal process and professional
methodology and training. Her address is c/o New York University
School of Law, 249 Sullivan Street, New York, New York 10011.
ERNEST KAFKA, Trustee. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. For
more than the past five years, Dr. Kafka has held numerous
administrative positions and has published many articles on subjects
in the field of psychoanalysis. His address is 23 East 92nd Street,
New York, New York 10128.
SAUL B. KLAMAN, Trustee. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal
Reserve System and on several Presidential Commissions and has held
numerous consulting and advisory positions in the fields of economics
and housing finance. His address is 431-B Dedham Street, The Gables,
Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Trustee. President of Lincoln Center for the Performing
Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of New York
City from September 1979 to March 1984 and Commissioner of the
Department of Housing Preservation and Development of New York City
from February 1978 to September 1979. Mr. Leventhal was an associate
and then a member of the New York law firm of Poletti Freidin
Prashker Feldman and Gartner from 1974 to 1978. He was Commissioner
of Rent and Housing Maintenance for New York City from 1972 to 1973.
His address is 70 Lincoln Center Plaza, New York, New York
10023-6583.
*RICHARD J. MOYNIHAN, Trustee, President and Investment Officer. An
employee of the Manager and an officer, director or trustee of other
investment companies advised or administered by the Manager. His
address is 200 Park Avenue, New York, New York 10166.
Each of the "non-interested" Trustees is also a trustee of General
California Municipal Money Market Fund, General New York Municipal Money
Market Fund, Premier GNMA Fund, Premier Insured Municipal Bond Fund,
Premier Municipal Bond Fund, Premier New York Municipal Bond Fund and
Premier State Municipal Bond Fund, and a director of Dreyfus Appreciation
Fund, Inc., General California Municipal Bond Fund, Inc., General
Government Securities Money Market Fund, Inc., General Money Market Fund,
Inc., General Municipal Bond Fund, Inc., General Municipal Money Market
Fund, Inc., General New York Municipal Bond Fund, Inc. and Premier Growth
Fund, Inc. Mr. Alexander is also a director of The Dreyfus Socially
Responsible Growth Fund, Inc. and The Dreyfus Third Century Fund, Inc.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
Ordinarily meetings of shareholders for the purpose of electing
Trustees will not be held unless and until such time as less than a
majority of the Trustees holding office have been elected by shareholders,
at which time the Trustees then in office will call a shareholders'
meeting for the election of Trustees. Under the Act, shareholders of
record of not less than two-thirds of the outstanding shares of the Fund
may remove a Trustee through a declaration in writing or by vote cast in
person or by proxy at a meeting called for that purpose. Under the Fund's
Agreement and Declaration of Trust, the Trustees are required to call a
meeting of shareholders for the purpose of voting upon the question of
removal of any such Trustee when requested in writing to do so by the
shareholders of record of not less than 10% of the Fund's outstanding
shares.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $12,695 for the fiscal year ended January 31,
1994 for such Trustees as a group.
Officers of the Fund Not Listed Above
A. PAUL DISDIER, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
KAREN M. HAND, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
STEPHEN C. KRIS, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
ELIE M. GENADRY, Vice President. Vice President--Institutional Sales of
the Manager, Executive Vice President of the Distributor and an
officer of other investment companies advised or administered by the
Manager.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
DONALD A. NANFELDT, Vice President. Executive Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President--Mutual Fund
Accounting of the Manager and an officer of other investment
companies advised or administered by the Manager.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
GREGORY S. GRUBER, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other
investment companies advised or administered by the Manager.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on April 20, 1994.
The following persons also are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive Officer;
Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S.
DiMartino, President, Chief Operating Officer and a director; Alan M.
Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Peter A. Santoriello, Vice President; Robert H. Schmidt, Vice
President; Kirk V. Stumpp, Vice President--New Product Development; Philip
L. Toia, Vice President--Fixed-Income Research; Katherine C. Wickham,
Assistant Vice President--Human Resources; Maurice Bendrihem, Controller;
and Mandell L. Berman, Alvin E. Friedman, Lawrence M. Greene, Abigail Q.
McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated September 5, 1986, as amended, with the
Fund, which is subject to annual approval by (i) the Fund's Board of
Trustees or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event
the continuance also is approved by a majority of the Trustees who are not
"interested persons" (as defined in the Act) of the Fund or the Manager,
by vote cast in person at a meeting called for the purpose of voting on
such approval. The Agreement was approved by shareholders on June 25,
1992 and was last approved by the Fund's Board of Trustees, including a
majority of the Trustees who are not "interested persons" of any party to
the Agreement, at a meeting held on July 21, 1993. The Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board of
Trustees or by vote of the holders of a majority of the Fund's shares, or,
on not less than 90 days' notice, by the Manager. The Agreement will
terminate automatically in the event of its assignment (as defined in the
Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Trustees. The Manager is responsible for investment
decisions, and provides the Fund with Investment Officers who are
authorized by the Board of Trustees to execute purchases and sales of
securities. The Fund's Investment Officers are A. Paul Disdier, Karen M.
Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence
Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the
Fund as well as for other funds advised by the Manager. All purchases and
sales are reported for the Trustees' review at the meeting subsequent to
such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Fund's existence,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
meetings, and any extraordinary expenses. Class A and Class B shares are
subject to an annual service fee for ongoing personal services relating to
shareholder accounts and services related to the maintenance of
shareholder accounts. In addition, Class B shares are subject to an
annual distribution fee for advertising, marketing and distributing Class
B shares pursuant to a distribution plan adopted in accordance with
Rule 12b-1 under the Act. See "Distribution Plan and Shareholder Services
Plan."
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services.
The Manager also may make such advertising and promotional expenditures,
using its own resources, as it from time to time deems appropriate.
As compensation for the Manager's services to the Fund, the Fund has
agreed to pay the Manager a monthly management fee at the annual rate of
.55 of 1% of the value of the Fund's average daily net assets. The
management fee payable for the fiscal years ended January 31, 1992, 1993
and 1994 amounted to $1,101,887, $1,209,756 and $1,365,438, respectively,
which fees were reduced by $961,606, $610,731 and $362,893, respectively,
pursuant to undertakings in effect, resulting in net fees paid to the
Manager of $140,281 in fiscal 1992, $599,025 in fiscal 1993 and $1,002,545
in fiscal 1994.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage fees, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed the expense limitation of any state having
jurisdiction over the Fund, the Fund may deduct from the payment to be
made to the Manager under the Agreement, or the Manager will bear, such
excess expense to the extent required by state law. Such deduction or
payment, if any, will be estimated daily, and reconciled and effected or
paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Premier Family of
Funds, for the funds in the Dreyfus Family of Funds and for certain other
investment companies.
Using Federal Funds. The Shareholders Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or
the Fund may attempt to notify the investor upon receipt of checks drawn
on banks that are not members of the Federal Reserve System as to the
possible delay in conversion into Federal Funds and may attempt to arrange
for a better means of transmitting the money. If the investor is a
customer of a securities dealer ("Selected Dealer") and his order to
purchase Fund shares is paid for other than in Federal Funds, the Selected
Dealer, acting on behalf of its customer, will complete the conversion
into, or itself advance, Federal Funds generally on the business day
following receipt of the customer's order. The order is effective only
when so converted and received by the Transfer Agent. An order for the
purchase of Fund shares placed by an investor with sufficient Federal
Funds or a cash balance in his brokerage account with a Selected Dealer
will become effective on the day that the order, including Federal Funds,
is received by the Transfer Agent.
Sales Loads--Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an
individual and/or spouse purchasing securities for his, her or their own
account or for the account of any minor children, or a trustee or other
fiduciary purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code of 1986, as amended (the "Code"), although more
than one beneficiary is involved; or a group of accounts established by or
on behalf of the employees of an employer or affiliated employers pursuant
to an employee benefit plan or other program (including accounts
established pursuant to Sections 403(b), 408(k) and 457 of the Code); or
an organized group which has been in existence for more than six months,
provided that it is not organized for the purpose of buying redeemable
securities of a registered investment company and provided that the
purchases are made through a central administration or a single dealer, or
by other means which result in economy of sales effort or expense.
TeleTransfer Privilege. TeleTransfer purchase orders may be made
between the hours of 8:00 a.m. and 4:00 p.m., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open. Such purchases will be credited to the shareholder's Fund account
on the next bank business day. To qualify to use the TeleTransfer
Privilege, the initial payment for purchase of Fund shares must be drawn
on, and redemption proceeds paid to, the same bank and account as are
designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Fund Shares--TeleTransfer
Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution Plan and Shareholder Services Plan."
Class A and Class B shares are subject to a Shareholder Services Plan
and Class B shares only are subject to a Distribution Plan.
Distribution Plan. Rule l2b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the Act provides, among other things, that
an investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board
of Trustees has adopted such a plan (the "Distribution Plan") with respect
to the Class B shares pursuant to which the Fund pays the Distributor for
advertising, marketing and distributing Class B shares. Under the
Distribution Plan, the Distributor may make payments to certain securities
dealers, financial institutions and other financial industry professionals
(collectively, "Service Agents") in respect of these services. The Fund's
Board of Trustees believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and holders of its Class B shares.
In some states, certain financial institutions effecting transactions in
Fund shares may be required to register as dealers pursuant to state law.
A quarterly report of the amounts expended under the Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Trustees for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of the Class B shares may bear for distribution pursuant to the
Distribution Plan without the approval of the holders of Class B shares
and that other material amendments of the Distribution Plan must be
approved by the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the Act) of the Fund or the Manager
and have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreements entered into in connection with the
Distribution Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Distribution Plan is subject
to annual approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Distribution Plan. The
Distribution Plan was last approved by the Fund's Board of Trustees,
including a majority of the Trustees who are not "interested persons," at
a meeting held on July 21, 1993. The Distribution Plan is terminable at
any time by vote of a majority of the Trustees who are not "interested
persons" and have no direct or indirect financial interest in the
operation of the Distribution Plan or in any of the related agreements
entered into in connection with the Distribution Plan, or by vote of the
holders of a majority of the Class B shares. For the year ended January
31, 1994, $45,448 was charged to the Fund, with respect to Class B, under
the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays the Distributor for the
provision of certain services to the holders of Class A and Class B
shares.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Trustees for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of the Board of Trustees, and by 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 Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. The Shareholder Services Plan
is subject to annual approval by such vote cast in person at a meeting
called for the purpose of voting on the Shareholder Services Plan. The
Shareholder Services Plan was so approved on July 21, 1993. The
Shareholder Services Plan is terminable at any time by vote of a majority
of the Trustees who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder Services
Plan or in any agreements entered into in connection with the Shareholder
Services Plan.
For the year ended January 31, 1994, $597,930 was charged to the
Fund, with respect to Class A, and $22,724 was charged to the Fund, with
respect to Class B, under the Shareholder Services Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege - Class A. An investor may indicate on
the Account Application or by later written request that the Fund provide
Redemption Checks ("Checks") drawn on the Fund's account. Checks will be
sent only to the registered owner(s) of the account and only to the
address of record. The Account Application or later written request must
be manually signed by the registered owner(s). Checks may be made payable
to the order of any person in an amount of $500 or more. When a check is
presented to the Transfer Agent for payment, the Transfer Agent, as the
investor's agent, will cause the Fund to redeem a sufficient number of
full and fractional Class A shares in the investor's account to cover the
amount of the Check. Dividends are earned until the Check clears. After
clearance, a copy of the Check will be returned to the investor.
Investors generally will be subject to the same rules and regulations that
apply to checking accounts, although election of this Privilege creates
only a shareholder-transfer agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a TeleTransfer
transaction will be effected through the Automated Clearing House ("ACH")
system unless more prompt transmittal specifically is requested.
Redemption proceeds will be on deposit in the investor's account at an ACH
member bank ordinarily two business days after receipt of the redemption
request. See "Purchase of Fund Shares--TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. Guarantees must be signed by an authorized signatory of the
guarantor and "Signature-Guaranteed" must appear with the signature. The
Transfer Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians and may accept other
suitable verification arrangements from foreign investors, such as
consular verification.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets in case of an emergency or any
time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If
the recipient sold such securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Exchange Privilege. Class A and Class B shares of the Fund may be
exchanged for shares of the respective Class of certain other funds
advised or administered by the Manager. Shares of the same Class of such
funds purchased by exchange will be purchased on the basis of relative net
asset value per share as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load
may be exchanged without a sales load for Class A shares of
other funds sold without a sales load.
C. Class A shares of funds purchased with a sales load, Class A
shares of funds acquired by a previous exchange from Class A
shares purchased with a sales load, and additional Class A
shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein
as "Purchased Shares") may be exchanged for Class A shares of
other funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at
the time the Purchased Shares were acquired), without giving
effect to any reduced loads, the difference will be deducted.
D. Class B shares of any fund may be exchanged for Class B shares
of other funds without a sales load. Class B shares of any fund
exchanged for Class B shares of another fund will be subject to
the higher applicable contingent deferred sales charge ("CDSC")
of the two funds and, for purposes of calculating CDSC rates and
conversion periods, will be deemed to have been held since the
date the Class B shares being exchanged were initially
purchased.
To accomplish an exchange under item C above, an investor's Service
Agent must notify the Transfer Agent of the investor's prior ownership of
such Class A shares and the investor's account number.
To use this Privilege, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing, by wire or by telephone. Telephone exchanges may be made only if
the appropriate "YES" box has been checked on the Account Application or a
separate signed Shareholder Services Form is on file with the Transfer
Agent. By using this Privilege, the investor authorizes the Transfer
Agent to act on telephonic, telegraphic or written exchange instructions
from any person representing himself or herself to be the investor or a
representative of the investor's Service Agent, and reasonably believed by
the Transfer Agent to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment being required for the shares of the same class of the fund
into which the exchange is being made. For Dreyfus-sponsored Keogh Plans,
IRAs and SEP-IRAs with only one participant, the minimum initial is $750.
To exchange shares held in Corporate Plans, 403(b)(7) Plans and SEP-IRAs
with more than one participant, the minimum initial investment is $100 if
the plan has at least $2,500 invested among shares of the same class of
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A or Class B shares of the
Fund, shares of the same Class of another fund in the Premier Family of
Funds or the Dreyfus Family of Funds. This Privilege is available only
for existing accounts. Shares will be exchanged on the basis of relative
net asset value as described above under "Exchange Privilege." Enrollment
in or modification or cancellation of this Privilege is effective three
business days following notification by the investor. An investor will be
notified if his account falls below the amount designated to be exchanged
under this Privilege. In this case, an investor's account will fall to
zero unless additional investments are made in excess of the designated
amount prior to the next Auto-Exchange transaction. Shares held under IRA
and other retirement plans are eligible for this Privilege. Exchanges of
IRA shares may be made between IRA accounts and from regular accounts to
IRA accounts, but not from IRA accounts to regular accounts. With respect
to all other retirement accounts, exchanges may be made only among those
accounts.
The Exchange Privilege and Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available from the
Distributor. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan. Class B
shares withdrawn pursuant to the Automatic Withdrawal Plan will be subject
to any applicable CDSC.
Dividend Sweep. Dividend Sweep allows investors to invest on the
payment date their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of the same Class of another fund in the
Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder. Shares of the same Class of other funds
purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid with respect to Class A shares
by a fund may be invested without imposition of a sales load in
Class A shares of other funds that are offered without a sales
load.
B. Dividends and distributions paid with respect to Class A shares
by a fund which does not charge a sales load may be invested in
Class A shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Dividends and distributions paid with respect to Class A shares
by a fund which charges a sales load may be invested in Class A
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are
being swept, without giving effect to any reduced loads, the
difference will be deducted.
D. Dividends and distributions paid with respect to Class B shares
by a fund may be invested without imposition of any applicable
CDSC in Class B shares of other funds and the Class B shares of
such other funds will be subject on redemption to any applicable
CDSC.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Board of Trustees. When, in the judgment of the Service,
quoted bid prices for investments are readily available and are
representative of the bid side of the market, these investments are valued
at the mean between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other
investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions. The Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations. The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Board of Trustees. Expenses and
fees, including the management fee (reduced by the expense limitation, if
any) and fees pursuant to the Shareholder Services Plan, with respect to
the Class A and Class B shares, and fees pursuant to the Distribution
Plan, with respect to the Class B shares only, are accrued daily and are
taken into account for the purpose of determining the net asset value of
the relevant Class of shares. Because of the difference in operating
expenses incurred by each Class, the per share net asset value of each
Class will differ.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified as a "regulated
investment company" under the Code for the fiscal year ended January 31,
1994 and the Fund intends to continue to so qualify so long as such
qualification is in the best interests of its shareholders. As a
regulated investment company, the Fund will pay no Federal income tax on
net investment income and net realized capital gains to the extent that
such income and gains are distributed to shareholders in accordance with
applicable provisions of the Code. To qualify as a regulated investment
company, the Fund must pay out to its shareholders at least 90% of its net
income (consisting of net investment income from tax exempt obligations
and taxable obligations, if any, and net short-term capital gains), must
derive less than 30% of its annual gross income from gain on the sale of
securities held for less than three months, and must meet certain asset
diversification and other requirements. Accordingly, the Fund may be
restricted in the selling of securities held for less than three months,
and in the utilization of certain of the investment techniques described
in the Prospectus under "Description of the Fund--Investment Techniques."
The Code, however, allows the Fund to net certain offsetting positions
making it easier for the Fund to satisfy the 30% test. The term
"regulated investment company" does not imply the supervision of
management or investment practices or policies by any government agency.
If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's total assets consists of Federal tax exempt
obligations, then the Fund may designate and pay Federal exempt-interest
dividends from interest earned on all such tax exempt obligations. Such
exempt-interest dividends may be excluded by shareholders of the Fund from
their gross income for Federal income tax purposes.
If, at the close of each quarter of its taxable year, at least 50% of
the value of the Fund's total assets consists of obligations which, when
held by an individual, the interest therefrom is exempt from California
personal income tax, and if the Fund qualifies as a management company
under the California Revenue and Taxation Code, then the Fund will be
qualified to pay dividends to its shareholders that are exempt from
California personal income tax (but not from California franchise tax)
("California exempt-interest dividends"). However, the total amount of
California exempt-interest dividends paid by the Fund to a non-corporate
shareholder with respect to any taxable year cannot exceed such
shareholder's pro-rata share of interest received by the Fund during such
year that is exempt from California taxation less any expenses and
expenditures deemed to have been paid from such interest.
For shareholders subject to the California personal income tax,
exempt-interest dividends derived from California Municipal Obligations
will not be subject to the California personal income tax. Distributions
from net realized short-term capital gains to California resident
shareholders will be subject to the California personal income tax as
ordinary income. Distributions from net realized long-term capital gains
may constitute long-term capital gains for individual California resident
shareholders. Unlike under Federal tax law, the Fund's shareholders will
not be subject to California personal income tax, or receive a credit for
California taxes paid by the Fund, on undistributed capital gains. In
addition, California tax law does not consider any portion of the exempt-
interest dividends paid an item of tax preference for the purposes of
computing the California alternative minimum tax.
Any dividend or distribution paid shortly after an investor's
purchase may have the effect of reducing the net asset value of his shares
below the cost of his investment. Such a distribution would be a return
on the investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus. In addition, the
Code provides that if a shareholder has not held his Fund shares for more
than six months (or such shorter period as the Internal Revenue Service
may prescribe by regulation) and has received an exempt-interest dividend
with respect to such shares, any loss incurred on the sale of such shares
will be disallowed to the extent of the exempt-interest dividend received.
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of any
gains realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Code. In addition, all or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income
under Section 1258. "Conversion transaction" are defined to include
certain forward, futures, options and "straddle" transactions marketed or
sold to produce capital gains, or transactions described in Treasury
regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss the Fund realizes from
certain financial futures and options transactions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Gain or loss will arise upon exercise or lapse of such futures and options
as well as from closing transactions. In addition, such futures and
options remaining unexercised at the end of the Fund's taxable year will
be treated as sold for their then fair market value, resulting in
additional gain or loss to the Fund characterized in the manner described
above.
Offsetting positions held by the Fund involving financial futures and
options transactions may be considered, for tax purposes, to constitute
"straddles." "Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, overrides or modifies the provisions of Section 1256. As
such, all or a portion of any short- or long-term capital gain from
certain "straddle" and/or conversion transactions may be recharacterized
to ordinary income.
If the Fund were treated as entering into "straddles" by reason of
its engaging in certain futures or options transactions, such "straddles"
would be characterized as "mixed straddles" if the futures or options
transactions comprising a part of such "straddles" were governed by
Section 1256. The Fund may make one or more elections with respect to
"mixed straddles." Depending on which election is made, if any, the
results to the Fund may differ. If no election is made to the extent the
"straddle" rules apply to positions established by the Fund, losses
realized by the Fund will be deferred to the extent of unrealized gain in
the offsetting position. Moreover, as a result of the "straddle" and the
conversion transaction rules, short-term capital losses on "straddle"
positions may be recharacterized as long-term capital losses, and
long-term capital gains may be treated as short-term capital gains or
ordinary income.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders. For example, the
Fund could be required to take into account annually a portion of the
discount (or deemed discount) at which such securities were issued and to
distribute such portion in order to maintain its qualification as a
regulated investment company. In such case, the Fund may have to dispose
of securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price. No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's
Investment Officers in their best judgment. The primary consideration is
prompt and effective execution of orders at the most favorable price.
Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the Manager to
supplement its own research and analysis with the views and information of
other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
The Fund's portfolio turnover rate for the fiscal years ended January
31, 1993 and 1994 was 36.54% and 26.69%, respectively. The Fund
anticipates that its annual portfolio turnover rate will not be a limiting
factor when the Fund deems it desirable to sell or purchase securities.
Therefore, depending upon market conditions, the Fund's annual portfolio
turnover rate may exceed 100% in particular years.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
Current yield for the 30-day period ended January 31, 1994 for Class
A was 4.42% and for Class B was 4.01%. The yield for each Class reflects
the current absorption of certain Fund expenses by the Manager, without
which the Fund's 30-day yield for the period ended January 31, 1994 would
have been 4.34% for Class A and 3.93% for Class B. See "Management of the
Fund" in the Prospectus. Current yield is computed pursuant to a formula
which operates as follows: The amount of the Fund's expenses accrued for
the 30-day period (net of reimbursements) is subtracted from the amount of
the dividends and interest earned (computed in accordance with regulatory
requirements) by the Fund during the period. That result is then divided
by the product of: (a) the average daily number of shares outstanding
during the period that were entitled to receive dividends, and (b) the
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B on the last day of the period less
any undistributed earned income per share reasonably expected to be
declared as a dividend shortly thereafter. The quotient is then added to
1, and that sum is raised to the 6th power, after which 1 is subtracted.
The current yield is then arrived at by multiplying the result by 2.
Based upon a combined 1994 Federal and State of California personal
income tax rate of 46.24%, the tax equivalent yield for the 30-day period
ended January 31, 1994 for Class A was 8.22% and for Class B was 7.46%.
This yield reflects the current absorption of certain Fund expenses by the
Manager, without which the tax equivalent yield for the 30-day period
ended January 31, 1994 would have been 8.07% for Class A and 7.31% for
Class B. See "Management of the Fund" in the Prospectus. Tax equivalent
yield is computed by dividing that portion of the current yield
(calculated as described above) which is tax exempt by 1 minus a stated
tax rate and adding the quotient to that portion, if any, of the yield of
the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of the
highest Federal and State of California marginal personal income tax rates
presently in effect. For Federal personal income tax purposes, a 39.60%
rate has been used. For California personal income tax purposes,
an 11.00% tax rate has been used. The tax equivalent yield figure,
however, does not reflect the potential effect of any local (including,
but not limited to, county, district or city) taxes, including applicable
surcharges. In addition, there may be pending legislation which could
affect such stated tax rates or yields. Each investor should consult its
tax adviser, and consider its own factual circumstances and applicable tax
laws, in order to ascertain the relevant tax equivalent yield.
The average annual total return for the 1, 5 and 7.227 year periods
ended January 31, 1994 for Class A was 8.54%, 9.10% and 8.05%,
respectively. The average annual total return for the 1 and 1.047 year
periods ended January 31, 1994 for Class B was 9.91% and 10.75%,
respectively. Average annual total return is calculated by determining
the ending redeemable value of an investment purchased with a hypothetical
$1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n"
is the number of years in the period) and subtracting 1 from the result.
A Class's average total return figures calculated in accordance with such
formula assume that in the case of Class A the maximum sales load had been
deducted from the hypothetical initial investment at the time of purchase
or in the case of Class B the maximum applicable CDSC has been paid upon
redemption at the end of the period.
The total return for the period November 10, 1986 to January 31, 1994
for Class A was 74.95%. Based on net asset value per share, the total
return for Class A was 83.21% for this period. The total return for the
period January 15, 1993 through January 31, 1994 for Class B was 11.28%.
Without giving effect to the applicable CDSC, the total return for Class B
was 14.28% for this period. Total return is calculated by subtracting the
amount of the Fund's maximum offering price per share at the beginning of
a stated period from the net asset value per share at the end of the
period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the maximum
offering price per share at the beginning of the period. Total return
also may be calculated based on the net asset value per share at the
beginning of the period instead of the maximum offering price per share at
the beginning of the period for Class A shares or without giving effect to
any applicable CDSC at the end of the period for Class B shares. In such
cases, the calculation would not reflect the deduction of the sales load
with respect to Class A shares or any applicable CDSC with respect to
Class B shares, which, if reflected, would reduce the performance quoted.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and are not indicative of the
Fund's past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, including those relating to or arising from actual or proposed tax
legislation. From time to time, advertising materials for the Fund may
also refer to statistical or other information concerning trends relating
to investment companies, as compiled by industry associations such as the
Investment Company Institute. From time to time, advertising materials
for the Fund also may refer to Morningstar ratings and related analysis
supporting such ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive or subscription rights and are
freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
On June 25, 1992, the Fund's shareholders approved a proposal to
change certain of the Fund's fundamental policies and investment
restrictions, among other things, to increase (i) the amount the Fund may
borrow from banks for temporary or emergency purposes, (ii) the amount of
the Fund's assets that it may pledge to secure such borrowings, (iii) the
percentage of the Fund's assets which may be invested in illiquid
securities and make such policy non-fundamental and (iv) the amount of the
Fund's portfolio securities which it may lend.
The Manager's legislative efforts led to the 1976 Congressional
Amendment to the Code permitting an incorporated mutual fund to pass
through tax exempt income to its shareholders. The Manager offered to the
public the first incorporated tax exempt fund and currently manages or
administers over $24 billion in tax exempt assets.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX A
RISK FACTORS - INVESTING
IN CALIFORNIA MUNICIPAL OBLIGATIONS
The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn
from official statements relating to securities offerings of the State of
California (the "State") and various local agencies, available as of the
date of this Statement of Additional Information. While the Fund has not
independently verified such information, it has no reason to believe that
such information is not correct in all material respects.
Recent Developments. Since the start of the State's 1990-91 fiscal
year, the State has faced the worst economic, fiscal and budget conditions
since the 1930s. Construction, manufacturing (especially aerospace),
exports and financial services, among others, have all been severely
affected. Job losses have been the worst of any post-war recession.
Unemployment reached 10% in November 1992 and is expected to remain well
above the National average through 1994. According to the State's
Department of Finance, recovery from the recession in California is not
expected in meaningful terms until 1994, notwithstanding signs of recovery
elsewhere in the nation.
The recession has seriously affected State tax revenues, which
basically mirror economic conditions. It has also caused increased
expenditures for health and welfare programs. The State has also been
facing a structural imbalance in its budget with the largest programs
supported by the General Fund (K-12 schools and community colleges, health
and welfare, and corrections) growing at rates higher than the growth
rates for the principal revenue sources of the General Fund. As a result,
the State has experienced recurring budget deficits. The Controller
reported that expenditures exceeded revenues for four of the five fiscal
years ending with 1991-92. Revenues and expenditures were essentially
equal in 1992-93, but the original budget for that year projected revenues
exceeding expenditures by $2.6 billion. By June 30, 1993, according to
the Department of Finance, the State's Reserve for Economic Uncertainties
had a deficit, on a budget basis, of approximately $2.8 billion.
A further consequence of the large budget imbalances over the last
three fiscal years has been that the State depleted its available cash
resources and has had to use a series of external borrowings to meet its
cash needs.
The Governor's Budget Proposal for 1994-95 released January 7, 1994,
projected General Fund revenues and transfers in the fiscal year of $39.7
billion (a reduction of $900 million from the original 1993-94 Budget Act)
and expenditures of $39.3 billion (an increase of $800 million over the
original 1993-94 Budget Act). The Governor's Budget proposed General Fund
revenues and transfers of $41.3 billion (including $2.0 billion from the
Federal government) and expenditures of $38.8 billion in the 1994-95
fiscal year, which would leave a balance of approximately $260 million in
the budget reserve, the Special Fund for Economic Uncertainties, at June
30, 1995 after repayment of the accumulated 1992-93 budget deficit of $2.8
billion.
On January 17, 1994, an earthquake of the magnitude of an estimated
6.8 on the Richter Scale struck Los Angeles causing significant damage to
public and private structures and facilities. The full impact of the
earthquake on Los Angeles and surrounding areas and on the State's
finances has not been determined.
As a result of the deterioration in the State's budget and cash
situation in fiscal years 1991-92 and 1992-93, the rating agencies reduced
the State's credit ratings. Between October 1991 and October 1992 the
rating on the State's general obligation bonds was reduced by S&P from
"AAA" to "A+," by Moody's from "Aaa" to "Aa" and by Fitch from "AAA" to
"AA."
State Finances. State moneys are segregated into the General Fund
and approximately 400 Special Funds. The General Fund consists of the
revenues received into the State Treasury and earnings from State
investments, which are not required by law to be credited to any other
fund. The General Fund is the principal operating fund for the majority
of governmental activities and is the depository of most major State
revenue sources.
The Special Fund for Economic Uncertainties is funded with General
Fund revenues and was established to protect the State from unforeseen
reduced levels of revenues and/or unanticipated expenditure increases.
Amounts in the Special Fund for Economic Uncertainties may be transferred
by the Controller as necessary to meet cash needs of the General Fund.
The Controller is required to return moneys so transferred without payment
of interest as soon as there are sufficient moneys in the General Fund.
For budgeting and accounting purposes, any appropriation made from the
Special Fund for Economic Uncertainties is deemed an appropriation from
the General Fund. For year-end reporting purposes, the Controller is
required to add the balance in the Special Fund for Economic Uncertainties
to the balance in the General Fund so as to show the total monies then
available for General Fund purposes.
Inter-fund borrowing has been used for many years to meet temporary
imbalances of receipts and disbursements in the General Fund. As of June
30, 1993, there were outstanding loans in the aggregate principal amount
of $43 million to the General Fund from the Special Fund for Economic
Uncertainties and outstanding loans in the aggregate principal amount of
$3.016 billion to the General Fund from the Special Funds. On June 30,
1993, the General Fund also has been supplemented with the proceeds of the
sale of $2.0 billion of revenue anticipation warrants on June 23, 1993.
Articles XIIIA and XIIIB to the State Constitution and Other Revenue
Law Changes. Prior to 1977, revenues of the State government experienced
significant growth primarily as a result of inflation and continuous
expansion of the tax base of the State. In 1978, State voters approved an
amendment to the State Constitution known as Proposition 13, which added
Article XIIIA to the State Constitution, reducing ad valorem local
property taxes by more than 50%. In addition, Article XIIIA provides that
additional taxes may be levied by cities, counties and special districts
only upon approval of not less than a two-thirds vote of the "qualified
electors" of such district, and requires not less than a two-thirds vote
of each of the two houses of the State Legislature to enact any changes in
State taxes for the purpose of increasing revenues, whether by increased
rate or changes in methods of computation.
Primarily as a result of the reductions in local property tax
revenues received by local governments following the passage of
Proposition 13, the Legislature undertook to provide assistance to such
governments by substantially increasing expenditures from the General Fund
for that purpose beginning in the 1978-79 fiscal year. In recent years,
in addition to such increased expenditures, the indexing of personal
income tax rates (to adjust such rates for the effects of inflation), the
elimination of certain inheritance and gift taxes and the increase of
exemption levels for certain other such taxes had a moderating impact on
the growth in State revenues. In addition, the State has increased
expenditures by providing a variety of tax credits, including renters' and
senior citizens' credits and energy credits.
The State is subject to an annual "appropriations limit" imposed by
Article XIIIB of the State Constitution adopted in 1979. Article XIIIB
prohibits the State from spending "appropriations subject to limitation"
in excess of the appropriations limit imposed. "Appropriations subject to
limitations" are authorizations to spend "proceeds of taxes," which
consist of tax revenues, and certain other funds, including proceeds from
regulatory licenses, user charges or other fees to the extent that such
proceeds exceed "the cost reasonably borne by such entity in providing the
regulation, product or service." One of the exclusions from these
limitations is "debt service" (defined as "appropriations required to pay
the cost of interest and redemption charges, including the funding of any
reserve or sinking fund required in connection therewith, on indebtedness
existing or legally authorized as of January 1, 1979 or on bonded
indebtedness thereafter approved" by the voters). In addition,
appropriations required to comply with mandates of courts or the Federal
government and, pursuant to Proposition 111 enacted in June 1990,
appropriations for qualified capital outlay projects and appropriations of
revenues derived from any increase in gasoline taxes and motor vehicle
weight fees above January 1, 1990 levels are not included as
appropriations subject to limitation. In addition, a number of recent
initiatives were structured or proposed to create new tax revenues
dedicated to certain specific uses, with such new taxes expressly exempted
from the Article XIIIB limits (e.g., increased cigarette and tobacco taxes
enacted by Proposition 99 in 1988). The appropriations limit also may be
exceeded in cases of emergency. However, unless the emergency arises from
civil disturbance or natural disaster declared by the Governor, and the
appropriations are approved by two-thirds of the Legislature, the
appropriations limit for the next three years must be reduced by the
amount of the excess.
The State's appropriations limit in each year is based on the limit
for the prior year, adjusted annually for changes in California per capita
personal income and changes in population, and adjusted, when applicable,
for any transfer of financial responsibility of providing services to or
from another unit of government. The measurement of change in population
is a blended average of statewide overall population growth, and change in
attendance at local school and community college ("K-14") districts. As
amended by Proposition 111, the appropriations limit is tested over
consecutive two-year periods. Any excess of the aggregate "proceeds of
taxes" received over such two-year periods above the combined
appropriations limits for those two years is divided equally between
transfers to K-14 districts and refunds to taxpayers.
As originally enacted in 1979, the State's appropriations limit was
based on its 1978-79 fiscal year authorizations to expend proceeds of
taxes and was adjusted annually to reflect changes in cost of living and
population (using different definitions, which were modified by
Proposition 111). Commencing with the 1991-92 fiscal year, the State's
appropriations limit is adjusted annually based on the actual 1986-87
limit, and as if Proposition 111 had been in effect. The State
Legislature has enacted legislation to implement Article XIIIB which
defines certain terms used in Article XIIIB and sets forth the methods for
determining the State's appropriations limit. Government Code Section
7912 requires an estimate of the State's appropriations limit to be
included in the Governor's Budget, and thereafter to be subject to the
budget process and established in the Budget Act.
For the 1990-91 fiscal year, the State appropriations limit was $32.7
billion, and appropriations subject to limitation were $7.51 billion under
the limit. The limit for the 1991-92 fiscal year was $34.2 billion, and
appropriations subject to limitations were $3.8 billion under the limit.
The limit for the 1992-93 fiscal year was $35.01 billion, and the
appropriations subject to limitation were $4.2 billion under the limit.
The estimated limits for the 1993-94 and 1994-95 fiscal years is $36.56
billion and $36.61 billion, respectively, and the estimated appropriations
subject to limitation are $3.77 billion and $5.49 billion, respectively,
under the limit.
In November 1988, State voters approved Proposition 98, which changed
State funding of public education below the university level and the
operation of the State's appropriations limit, primarily by guaranteeing
K-14 schools a minimum share of General Fund revenues. Under Proposition
98 (as modified by Proposition 111, which was enacted in June 1990), K-14
schools are guaranteed the greater of (a) 40.3% of General Fund revenues
("Test 1"), (b) the amount appropriated to K-14 schools in the prior year,
adjusted for changes in the cost of living (measured as in Article XIIIB
by reference to California per capita personal income) and enrollment
("Test 2"), or (c) a third test, which would replace the second test in
any year when the percentage growth in per capita General Fund revenues
from the prior year plus .5% is less than the percentage growth in
California per capita personal income ("Test 3"). Under "Test 3," schools
would receive the amount appropriated in the prior year adjusted for
changes in enrollment and per capita General Fund revenues, plus an
additional small adjustment factor. If "Test 3" is used in any year, the
difference between "Test 3" and "Test 2" would become a "credit" to
schools which would be the basis of payments in future years when per
capita General Fund revenue growth exceeds per capita personal income
growth.
Proposition 98 permits the Legislature by two-thirds vote of both
houses, with the Governor's concurrence, to suspend the K-14 schools'
minimum funding formula for a one-year period. In the fall of 1989, the
Legislature and the Governor utilized this provision to avoid having 40.3%
of revenues generated by a special supplemental sales tax enacted for
earthquake relief go to K-14 schools. Proposition 98 also contains
provisions transferring certain State tax revenues in excess of the
Article XIIIB limit to K-14 schools.
The 1991-92 Budget Act, applying "Test 2" of Proposition 98,
appropriated approximately $18.5 billion for K-14 schools pursuant to
Proposition 98. During the course of the fiscal year, revenues proved to
be substantially below expectations. By the time the Governor's Budget
was introduced in January 1992, it became clear that per capita growth in
General Fund revenues for 1991-92 would be far smaller than the growth in
California per capita personal income and the Governor's Budget therefore
reflected a reduction in Proposition 98 funding in 1991-92 by applying
"Test 3" rather than "Test 2."
In response to the changing revenue situation and to fully fund the
Proposition 98 guarantee in both the 1991-92 and 1992-93 fiscal years
without exceeding it, the Legislature enacted several bills as part of the
1992-93 budget package which responded to the fiscal crisis in education
funding. Fiscal year 1991-92 Proposition 98 appropriations for K-14
schools were reduced by $1.083 billion. In order to not adversely impact
cash received by school districts, however, a short-term loan was
appropriated from the non-Proposition 98 State General Fund. The
Legislature then appropriated $16.6 billion to K-14 schools for 1992-93
(the minimum guaranteed by Proposition 98), but designated $1.083 billion
of this amount to "repay" the prior year loan, thereby reducing cash
outlays in 1992-93 by that amount. In addition to reducing the 1991-92
fiscal year appropriations for K-14 schools by $1.083 billion and
converting the amount to a loan (the "inter-year adjustment"), Chapter
703, Statutes of 1992 also made an adjustment to "Test 1," based on the
additional $1.2 billion of local property taxes that were shifted to
schools and community colleges. The "Test 1" percentage changed from 40%
to 37%. Additionally, Chapter 703 contained a provision that if an
appellate court should determine that the "Test 1" recalculation or the
inter-year adjustment is unconstitutional, unenforceable or invalid,
Proposition 98 would be suspended for the 1992-93 fiscal year, with the
result that K-14 schools would receive the amount intended by the 1992-93
Budget Act compromise.
The State Controller stated in October 1992 that, because of a
drafting error in Chapter 703, he could not implement the $1.083 billion
reduction of the 1991-92 school funding appropriation, which was part of
the inter-year adjustment. The Legislature untimely enacted corrective
legislation as part of the 1993-94 Budget package to implement the $1.083
billion inter-year adjustment as originally intended.
In the 1992-93 Budget Act, a new loan of $732 million was made to K-
12 schools in order to maintain per-average daily attendance ("ADA")
funding at the same level as 1991-92, at $4,187. An additional loan of
$241 million was made to community college districts. These loans are to
be repaid from future Proposition 98 entitlements. Including both State
and local funds, and adjusting for the loans and repayments, on a cash
basis, total Proposition 98 K-12 funding in 1992-93 increased to $21.5
billion, 2.4% more than the amount in 1992-93 ($21.0 billion).
Based on revised State tax revenues and estimated decreased reported
pupil enrollment, the 1993-94 Budget Act projected that the 1992-93
Proposition 98 Budget Act appropriations of $16.6 billion exceeded a
revised minimum guarantee by $313 million. As a result, the 1993-94
Budget Act reverted $25 million in 1992-93 appropriations to the General
Fund. Limiting the reversion to this amount ensures that per ADA funding
for general purposes will remain at the prior year level. The 1993-94
Budget Act also designated $98 million in 1992-93 appropriations toward
satisfying prior years' guarantee levels, an obligation that resulted
primarily from updating State tax revenues for 1991-92, and designates
$190 million as a loan repayable from 1993-94 funding.
The 1993-94 Budget Act projected the Proposition 98 minimum funding
level at $13.5 billion based on the "Test 3" calculation where the
guarantee is determined by the change in per capita growth in General Fund
revenues, which are projected to decrease on a year-over-year basis. This
amount also takes into account increased property taxes transferred to
school districts from other local governments.
Legislation accompanying the 1993-94 Budget Act (Chapter 66/93)
provided a new loan of $609 million to K-12 schools in order to maintain
per ADA funding at $4,187 and a loan of $178 million to community
colleges. These loans have been combined with the K-14 1992-93 loans into
one loan totalling $1.760 billion. Repayment of this loan would be from
future years' Proposition 98 entitlements, and would be conditioned on
maintaining current funding levels per pupil for K-12 schools. Chapter 66
also reduced the "Test 1" percentage to 33% to reflect the property tax
shift among local government agencies.
Sources of Tax Revenue. The California personal income tax, which in
1992-93 contributed about 44% of General Fund revenues, is closely modeled
after the Federal income tax law. It is imposed on net taxable income
(gross income less exclusions and deductions). The tax is progressive
with rates ranging from 1% to 11%. Personal, dependent, and other credits
are allowed against the gross tax liability. In addition, taxpayers may
be subject to an alternative minimum tax ("AMT") which is much like the
Federal AMT. This is designed to ensure that excessive use of tax
preferences does not reduce taxpayers' liabilities below some minimum
level. Legislation enacted in July 1991 added two new marginal tax rates,
at 10% and 11%, effective for tax years 1991 through 1995. After 1995,
the maximum personal income tax rate is scheduled to return to 9.3%, and
the AMT rate is scheduled to drop from 8.5% to 7%.
The personal income tax is adjusted annually by the change in the
consumer price index to prevent taxpayers from being pushed into higher
tax brackets without a real increase in income.
The sales tax is imposed upon retailers for the privilege of selling
tangible personal property in California. Most retail sales and leases
are subject to the tax. However, exemptions have been provided for
certain essentials such as food for home consumption, prescription drugs,
gas, electricity and water. Sales tax accounted for about 38% of General
Fund revenue in 1992-93. Bank and corporation tax revenues comprised
about 12% of General Fund revenue in 1992-93. In 1989, Proposition 99
added a 25 cents per pack excise tax on cigarettes, and a new equivalent
excise tax on other tobacco products. Legislation enacted in 1993 added
an additional 2 cents per pack for the purpose of funding breast cancer
research.
General Financial Condition of the State. Revenues in the most
recent fiscal years have been unusually difficult to forecast with a high
degree of accuracy due in major part to the volatility in the personal
income tax. The 1986-87 through 1989-90 fiscal years were affected by
both the Federal Tax Reform Act of 1986 and subsequent conforming State
legislation. The difficulty with recent forecasts has occurred because
taxpayers have changed their behavior as a result of these events.
Capital gains are now fully taxed. This revenue component is subject to
taxpayer discretion and is very sensitive to change in tax law, market
conditions and individual circumstances. Capital gains have always been a
volatile item and since it is contributing a greater percentage of total
revenue, it makes these collections subject to greater variance.
Primarily because of changes to the Federal and State tax statutes,
revenues for the fiscal year 1987-88 were approximately $1.1 billion less
than originally estimated. This shortfall in revenues was made up through
the application of approximately $900 million from the Special Fund for
Economic Uncertainties ("SFEU") and a variety of expenditure reduction
actions initiated by the Governor. As a result, the Special Fund for
Economic Uncertainties was substantially depleted by June 30, 1988.
The State entered the 1988-89 fiscal year with essentially no budget
reserve. The 1988-89 Budget Act called for significant spending cuts to
balance expected revenues and expenditures and to provide an estimated
balance of approximately $600 million in the Special Fund for Economic
Uncertainties at year-end.
Revenues for the 1989-90 fiscal year were approximately $517.7
million less than presented in the Governor's Budget in January 1990 and
$1.021 billion less than estimated in July 1989, primarily owing to lower
than estimated receipts from individual and corporate taxes. The
shortfall in revenues was made up through the transfer of moneys from the
Special Fund for Economic Uncertainties and a variety of expenditure
reduction actions initiated by the Administration. As a result, the
Special Fund for Economic Uncertainties was fully depleted by June 30,
1990.
The California State Controller reported that the State's General
Fund ended the 1990-91 fiscal year with a negative budgetary basis balance
of $1.316 billion. In order to pay necessary cash expenses through June
1991, including payment of $4.1 billion of 1990 Revenue Anticipation Notes
which were due June 28, 1991, the General Fund borrowed $1.390 billion
from the SFEU and $3.266 billion from other Special Funds as of the end of
the fiscal year. Data on General Fund revenues for the 1990-91 fiscal
year show that revenues in all major categories (except insurance taxes)
were lower than receipts in 1989-90, the first time this has happened on a
year-over-year basis since the 1930s.
The 1991-92 Budget Act projected General Fund expenditures of $43.4
billion and Special Fund expenditures of $10.6 billion. The Department of
Finance estimated that there would be a balance in the SFEU on June 30,
1992 of $1.2 billion. An estimated $14.3 billion "budget gap" was closed
through a combination of temporary and permanent changes in laws and one-
time budget adjustments. The major features of the budget compromise
were: program funding reductions totaling $5.1 billion; a total of $5.1
billion of increased State tax revenues; savings of $2.1 billion by
returning certain health and welfare programs to counties; and additional
miscellaneous savings or revenue gains and one-time accounting charges
totaling $2.0 billion.
The 1991-92 Budget Act was based on economic forecasts showing
recovery from the recession would begin in summer or fall of 1991, but
revenues lagged behind projections from the start of the 1991-92 fiscal
year. By the time the Governor's Budget for 1992-93 was prepared in late
1991, it was evident that the recession had been much more severe in the
State than was thought earlier, and that it was continuing longer than
anticipated. As a result, revenues for the 1991-92 fiscal year were much
lower than originally estimated and expenditures were higher, particularly
in health and welfare programs.
As a result of the revenue shortfalls accumulating for the previous
two fiscal years, the Controller in April 1992 indicated that cash
resources (including borrowing from Special Funds) would not be sufficient
to meet all General Fund obligations due on June 30 and July 1, 1992. On
June 25, 1992, the Controller issued $475 million of 1992 Revenue
Anticipation Warrants (the "1992 Warrants") in order to provide funds to
cover all necessary payments from the General Fund at the end of the 1991-
92 fiscal year and on July 1, 1992. The 1992 Warrants were paid on July
24, 1992. In addition to the 1992 Warrants the Controller reported that
as of June 30, 1992, the General Fund had borrowed $1.336 billion from the
SFEU and $4.699 billion from other Special Funds, using all but about $183
million of borrowable cash resources.
To balance the 1992-93 Governor's Budget, program reductions
totalling $4.365 billion and revenue and transfer increase of $872 million
were proposed for the 1991-92 and 1992-93 fiscal years. Economic
performance in the State continued to be sluggish after the 1992-93
Governor's Budget was prepared. By the time of the "May Revision", issued
on May 20, 1992, the Administration estimated that the 1992-93 Budget
needed to address a gap of about $7.9 billion, much of which was needed to
repay the accumulated budget deficits of the previous two years.
In early 1992, the Director of Finance acknowledged that actual
economic conditions were worse than the projections in the Governor's
Budget. Because the State had accumulated a significant budget deficit
over two consecutive years, and the continuing recession depressed revenue
estimates for the coming year, the State faced a major challenge to enact
a balanced budget. The State also began the 1992-93 fiscal year with
essentially no cash reserves. By June 1992, it was estimated that
approximately $7.9 billion of budget actions would be required to end the
1992-93 fiscal year without a budget deficit. The severity of the budget
actions needed led to a long delay in adopting the budget.
With the failure to enact a budget by July 1, 1992, the State had no
legal authority to pay many of its vendors until the budget was passed.
Starting on July 1, 1992, the Controller was required to issue "registered
warrants" in lieu of normal warrants backed by cash to pay many State
obligations. Available cash was used to pay constitutionally mandated and
priority obligations, such as debt service on bonds and revenue
anticipation warrants. Between July 1 and September 4, 1992, the
Controller issued an aggregate of approximately $3.8 billion of registered
warrants payable from the General Fund, all of which were called for
redemption by September 4, 1992 following enactment of the 1992-93 Budget
Act and issuance by the State of $3.3 billion of interim notes.
The Legislature enacted the 1992-93 Budget Bill on August 29, 1992,
and it was signed by the Governor on September 2, 1992. The 1992-93
Budget Act provides for expenditures of $57.4 billion and consists of
General Fund expenditures of $40.8 billion and Special Fund and Bond Fund
expenditures of $16.6 billion. The Department of Finance estimates there
will be a balance in the SFEU of $28 million on June 30, 1993.
The $7.9 billion budget gap was closed through a combination of
increased revenues and transfers and expenditure cuts such as:
1. General Fund savings in health and welfare programs
totaling $1.6 billion.
2. General Fund reductions of $1.9 billion for K-12 schools
and community colleges. This was accomplished by requiring schools to
repay $1.1 billion in excess appropriations from 1991-92.
3. Redirecting property taxes from cities ($200 million) and
counties ($525 million) to schools. These shifts are permanent and will
reduce the State General Funds obligation for schools. The State will
also redirect property taxes from special districts ($375 million) and
redevelopment agencies ($200 million) to schools. The shift from
redevelopment agencies is a one-time shift.
4. Program cuts for higher education totaling $415 million
($246 million for The University of California, $143 million for
California State University, and $26 million for the Student Aid
Commission). These reductions are partially offset by $141 million in
increased student fees.
5. A total of $1.6 billion of transfers and accelerated
collections of State revenues by conforming State schedules for estimated
payments for personal income and bank and corporate taxes with federal
schedules ($105 million), accelerating settlement of outstanding tax
disputes ($300 million), reaching an agreement with the Federal government
to repay federal contractors over a ten-year period beginning in 1992-93,
rather than making a lump sum payment in 1992-93 ($580 million),
accelerating liquidation of unclaimed properties through the sale of all
unclaimed securities received prior to July 1, 1992, rather than
maintaining them for three years ($70 million), transfers from Special
Funds ($423 million), and other miscellaneous actions ($122 million).
6. Approximately $1.0 billion from various additional program
reductions.
In May 1993, the Department of Finance projected that the General
Fund would end the fiscal year on June 30, 1993 with an accumulated budget
deficit of about $2.8 billion, and a negative fund balance of about $2.2
billion (the difference being certain reserves for encumbrances and school
funding costs). As a result, the State issued $5 billion of revenue
anticipation notes and warrants.
The Governor's 1993-94 Budget, introduced on January 8, 1993,
proposed General Fund expenditures of $37.3 billion, with projected
revenues of $39.9 billion. It also proposed Special Fund expenditures of
$12.4 billion and Special Fund revenues of $12.1 billion. The 1993-94
fiscal year represents the third consecutive year the Governor and the
Legislature were faced with a very difficult budget environment, requiring
revenue actions and expenditure cuts totaling billions of dollars to
produce a balanced budget. To balance the budget in the face of declining
revenues, the Governor proposed a series of revenue shifts from local
government, reliance on increased Federal aid and reductions in state
spending.
The "May Revision" of the Governor's Budget, released on May 20,
1993, indicated that the revenue projections of the January Budget
Proposal were tracking well, with the full year 1992-93 about $80 million
higher than the January projection. Personal income tax revenue was
higher than projected, sales tax was close to target, and bank and
corporation taxes were lagging behind projections. The May Revision
projected the State would have an accumulated deficit of about $2.75
billion by June 30, 1993. The Governor proposed to eliminate this deficit
over an 18-month period. He also agreed to retain the 0.5% sales tax
scheduled to expire June 30 for a six-month period, dedicated to local
public safety purposes, with a November election to determine a permanent
extension. Unlike previous years, the Governor's Budget and May Revision
did not calculate a "gap" to be closed, but rather set forth revenue and
expenditure forecasts and proposals designed to produce a balanced budget.
The 1993-94 Budget Act was signed by the Governor on June 30, 1993,
along with implementing legislation. The Governor vetoed about $71
million in spending. With enactment of the Budget Act, the State carried
out its regular cash flow borrowing program for the fiscal year, which
included the issuance of approximately $2 billion of revenue anticipation
notes maturing on June 28, 1994.
The 1993-94 Budget Act was predicated on General Fund revenues and
transfers estimated at $40.6 billion, about $700 million higher than the
January Governor's Budget, but still about $400 million below 1992-93 (and
the second consecutive year of actual decline). The principal reasons for
declining revenues were the continued weak economy and the expiration (or
repeal) of three fiscal steps taken in 1991 -- a half cent temporary sales
tax, a deferral of operating loss carry forwards, and repeal by initiative
of a sales tax on candy and snack foods.
The 1993-94 Budget Act also assumed Special Fund revenues of $11.9
billion, an increase of 2.9% over 1992-93.
The 1993-94 Budget Act included General Fund expenditures of $38.5
billion (a 6.3% reduction from projected 1992-93 expenditures of $41.1
billion), in order to keep a balanced budget within the available
revenues. The Budget also included Special Fund expenditures of $12.1
billion, a 4.2% increase.
The 1993-94 Budget Act contained no General Fund tax/revenue
increases other than a two year suspension of the renters' tax credit.
The 1994-95 Governor's Budget released January 7, 1994 indicated that
the continued sluggish performance of the State's economy will have an
adverse effect on results for the 1993-94 fiscal year. Revenues were
projected to be $39.7 billion, about $900 million less than the 1993-94
Budget Act, even though revenues in the first half of the fiscal year were
very close to original projections.
In March 1994, expenditures for the 1993-94 fiscal year were
projected in the 1994-95 Governor's Budget to be $39.3 billion, about $800
million above the original 1993-94 Budget Act. The main reasons for this
change are increased health welfare caseloads, lower local property taxes
(which require State support for K-14 education to make up the shortfall),
and lower than expected Federal government payments for immigration-
related costs. The 1994-95 Governor's Budget does not reflect possible
additional General Fund costs in the 1993-94 fiscal year for earthquake
relief.
The February 1994 Bulletin of the Department of Finance indicated
that revenues in January 1994 (and for year-to-date) were very slightly
lower than the projections in the 1994-95 Governor's Budget, but it is
thought that these variances are primarily due to cash flow factors,
including delays in receipt of some revenues because of the earthquake in
Los Angeles.
Recent Economic Trends. California is experiencing its deepest
recession since the 1930s. The State's tax revenue experience clearly
reflects sharp declines in employment, income and retail sales on a scale
not seen in over 50 years. The 1994-95 Governor's Budget, released
January 7, 1994, assumes the State will remain in recessionary conditions
through 1994, with a modest upturn beginning late in 1994 or in 1995, a
year later than predicted in the May 1993 Department of Finance economic
projection. However, economic signals remain mixed, and recovery is still
an expectation rather than a reality. Pre-recession job levels are not
expected to be reached until 1998.
California has yet to share in the national economic upturn.
Throughout 1993, nonagricultural wage and salary employment--the broadest,
most currently available measure of regional economic activity--continued
to decline. Since reaching a peak in the Spring of 1990, California has
lost over 850,000 payroll jobs, making this by far the longest and deepest
downturn of the post-World War II era. By contrast, in both the 1969-70
and 1981-82 recessions, the State had recovered its job losses by two
years after the start of the recession.
Major cuts in federal defense spending are now recognized as the main
source of the recession and the largest obstacle to recovery. This year
and for the next several years to come, the principal question in the
California outlook is when and whether other elements in the State's
economy can muster sufficient strength to overcome the continuing drag to
defense cuts. This forecast does not contemplate a significant recovery
in 1994, but anticipates stabilization of the economy and a modest
recovery in 1995. This pattern produces an annual average decline in
nonfarm employment of 0.6%, an improvement from last year's 1.4% drop and
the similar 1.5% decline in 1992. Next year, employment is forecast to
increase a modest 0.7%.
Personal income growth in 1993 was held below 1% due to tax-driven
bonus activity which artificially boosted income in 1992. Following
President Clinton's election, bonus and stock option payments added $5 to
$6 billion to fourth quarter 1992 personal income, as individuals shifted
income to avoid promised Federal tax increase. With income having fallen
sharply in the first quarter, it is clear that this surge was "borrowed"
from 1993.
Personal income is expected to increase 4% this year and 5% in 1995,
reflecting a more normal relationship between employment and income.
California--along with other areas of the nation--continues to
experience the effects of corporate downsizing. By 1995, it is expected
that a substantial portion of this restructuring will have run its course.
A more stable situation in finance, the utilities and air transportation,
for example, should allow modest gains in total employment by next year.
The rate of decline in defense-related aerospace is forecast to
moderate slowly over the next several years, from a 17% plunge last year,
to 14% in 1994 and 11% in 1995.
Finally, the Department of Finance noted that California would be hit
hard by the latest round of Federal military base closings and force
realignments, which will be implemented over the remaining years of the
decade. California was estimated to have 22% of the nation's defense
spending, but might suffer 25-30% of the defense spending cuts over the
next five years. The Department also estimates that the recent Federal
Budget Reconciliation Act will have a disproportionate and negative impact
on California. California would suffer 19.5% of the outlay reductions,
which rely heavily on defense budget cuts, and the State, with many high
income taxpayers, will pay nearly 14.5% of the tax increases, compared to
12% of the nation's population.
APPENDIX B
Description of S&P, Moody's & Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree.
A
Principal and interest payments on bonds in this category are
regarded as safe. This rating describes the third strongest capacity for
payment of debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local
economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse
circumstances, any one such weakness might impair the ability of the
issuer to meet debt obligations at some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management
performance appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of
debt service. The difference between "A" and "BBB" rating is that the
latter shows more than one fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only one deficiency among
the factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the
pledged revenues could show substantial variations, with the revenue flow
possibly being subject to erosion over time. Basic security provisions
are no more than adequate. Management performance could be stronger.
BB, B, CCC, CC, C
Debt rated BB, B, CCC, CC or C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation and C the
highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayment of principal.
In the event of adverse business, financial or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or
repayment of principal is in arrears.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus designation to show relative standing
within the major ratings categories.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus sign (+)
designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
SP-3
The issuers of these municipal notes exhibit speculative capacity to
pay principal and interest.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no
more than 365 days. Issues assigned an A rating are regarded as having
the greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus sign
(+) designation.
A-2
Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for
issues designated A-1.
A-3
Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment some
time in the future.
Baa
Bonds which are rated Baa are considered as medium- grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category
and in categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower
end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns a MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
MIG 3/VMIG 3
This designation denotes favorable quality. All security elements
are accounted for but there is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
MIG 4/VMIG 4
This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and, although
not distinctly or predominantly speculative, there is specific risk.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets
and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations.
This ordinarily will be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have
an acceptable capacity for repayment of short-term promissory obligations.
The effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and the requirements
for relatively high financial leverage. Adequate alternate liquidity is
maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal
is considered to be strong, but may be more vulnerable to adverse changes
in economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment
grade is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of
interest and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor. DDD represents the highest
potential for recovery on these bonds and D represents the lowest
potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the AAA category covering
12-36 months or the DDD, DD or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not
as great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS-100.0% AMOUNT VALUE
------------ ------------
<S> <C> <C>
CALIFORNIA-92.8%
Alameda, Special Tax (Community Facilities District Number 1) 7.75%, 9/1/2019....... $ 2,000,000 $ 2,123,720
Alameda Housing Authority, Multi-Family Housing Revenue
(Independence Apartment Project) 7.50%, 2/20/2031 (Collateralized; FNMA)........ 1,715,000 1,867,103
Anaheim Public Financing Authority, Tax Allocation Revenue
(Redevelopment Project Alpha) 10.27%, 12/28/2018 (Insured; MBIA) (a)............ 2,000,000 2,570,000
Antelope Valley Hospital District, Insured COP 7.30%, 1/1/2006...................... 2,400,000 2,673,528
Bakersfield, COP (Wastewater Treatment Plant 3 Project) 8%, 1/1/2010................ 250,000 284,340
California Department of Water Resources, Revenue (Central Valley Project)
9.803%, 12/1/2026 (a,b)......................................................... 3,900,000 4,504,500
California Educational Facilities Authority, Revenue:
(Refunding - Saint Mary's College) 5%, 10/1/2012................................ 3,000,000 2,904,270
(Santa Clara University) 6.25%, 2/1/2016........................................ 3,500,000 3,763,970
California Health Facilities Financing Authority, Revenue:
(Children's Hospital of Los Angeles) 7.125%, 6/1/2021........................... 2,000,000 2,399,500
(Eskaton Properties)
7.50%, 5/1/2020 (Insured; California Health Facilities Construction Insurance) 4,000,000 4,825,640
(Health Dimensions):
7%, 5/1/2020................................................................ 6,000,000 6,714,480
Refunding 7.50%, 5/1/2015................................................... 855,000 979,992
(Saint Francis Memorial Hospital) 5.875%, 11/1/2023............................. 4,500,000 4,849,335
California Housing Finance Agency, Home Mortgage Revenue:
8.10%, 8/1/2007................................................................. 300,000 327,984
8.30%, 8/1/2019................................................................. 265,000 278,658
Zero Coupon, 8/1/2023........................................................... 14,450,000 1,569,126
7.50%, 8/1/2029................................................................. 1,425,000 1,555,687
8%, 8/1/2029.................................................................... 860,000 921,060
7.60%, 8/1/2030................................................................. 1,920,000 2,061,120
7.70%, 8/1/2030................................................................. 1,200,000 1,309,476
7.875%, 8/1/2031................................................................ 1,025,000 1,066,430
California Pollution Control Financing Authority:
RRR (Waste Management Inc.) 7.15%, 2/1/2011..................................... 2,000,000 2,267,000
Solid Waste Disposal Revenue (North County Recycling Center)
6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (c)........................ 2,500,000 2,775,600
California Public Works Board, Lease Revenue:
(Department of Corrections - Madera State Prison) 6%, 6/1/2010.................. 3,000,000 3,240,990
(Secretary of State) 6.75%, 12/1/2012........................................... 2,375,000 2,652,234
(University of California Projects) 5.55%, 6/1/2010............................. 4,000,000 4,103,640
California State:
6.90%, 4/1/2005................................................................. 2,000,000 2,372,940
6.125%, 10/1/2011............................................................... 2,875,000 3,233,139
7.375%, 2/1/2019................................................................ 980,000 996,101
California Statewide Communities Development Authority, COP, Revenue, Refunding:
(Pacific Homes) 5.90%, 4/1/2009................................................. 4,340,000 4,507,915
(Triad Healthcare) 6.25%, 8/1/2006.............................................. 2,000,000 2,114,140
Central Valley Financing Authority, Cogeneration Project Revenue
(Carson Ice - General Project) 6%, 7/1/2009..................................... 4,500,000 4,641,525
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
CALIFORNIA (CONTINUED)
Compton, COP, Refunding 7.50%, 8/1/2015 (LOC; Mitsui Trust and Banking) (c)......... $ 2,000,000 $ 2,253,040
Contra Costa County, Home Mortgage Revenue 8.25%, 6/1/2021 (Collateralized; GNMA)... 350,000 509,849
Fontana Redevelopment Agency:
Multi-Family Housing Mortgage Revenue, Refunding (Village Drive)
7.15%, 5/1/2028 (Insured; FHA).............................................. 2,500,000 2,708,950
Tax Allocation Revenue (North Fontana Redevelopment Project) 7.25%, 9/1/2020.... 4,250,000 4,825,705
Glendora Public Finance Authority, Tax Allocation Revenue 7.625%, 9/1/2010.......... 2,000,000 2,265,580
Huntington Beach, COP, Revenue (Civic Center Project) 7.90%, 8/1/2016............... 250,000 273,110
Irvine Ranch Water District Joint Powers Agency, Local Pool Revenue:
7.875%, 2/15/2023............................................................... 750,000 836,752
8.25%, 8/15/2023................................................................ 2,500,000 2,814,250
Lake Elsinore Public Financing Authority, Local Agency Revenue:
7.50%, 10/1/2010................................................................ 3,000,000 3,203,730
8%, 10/1/2020................................................................... 1,640,000 1,704,698
Los Angeles City, Revenue:
Single Family Home Mortgage 7.55%, 12/1/2023 (Collateralized; GNMA)............. 400,000 434,812
Wastewater Systems:
6.80%, 8/1/1998............................................................. 1,500,000 1,714,530
Refunding 7.10%, 6/1/2018................................................... 3,000,000 3,402,510
Los Angeles Convention and Exhibition Center Authority, COP, Revenue, Refunding:
7.375%, 8/15/2018............................................................... 700,000 830,396
7%, 8/15/2020................................................................... 2,000,000 2,334,800
Los Angeles County:
COP, Revenue
(Civic Center Heating and Refrigeration Project) 8%, 6/1/2010............... 250,000 297,255
Transportation Commission, Sales Tax Revenue:
6.90%, 7/1/2021............................................................. 2,500,000 2,976,200
Refunding 6.50%, 7/1/2013................................................... 5,260,000 5,754,756
Los Angeles County Building Authority, Revenue, Refunding:
5.60%, 5/1/2008................................................................. 4,445,000 4,672,362
5.625%, 5/1/2011................................................................ 5,250,000 5,489,348
Los Angeles Department of Water and Power, Electric Plant Revenue
6.125%, 1/15/2033 (a,b)......................................................... 10,000,000 10,533,400
Los Angeles Harbor Department, Revenue 7.60%, 10/1/2018............................. 750,000 890,858
Los Banos, COP 7.65%, 9/1/2019...................................................... 500,000 600,360
Mount Shasta, HR, COP (Mercy Medical Center) 7.25%, 7/1/2019........................ 1,915,000 2,136,010
Nevada County, COP (Western Nevada Co. Solid Waste) 7.50%, 6/1/2021................. 2,200,000 2,493,304
Northern California Power Agency, Public Power Revenue:
9.73%, 7/1/2018 (a,b)........................................................... 5,000,000 6,462,500
(Refunding - Geothermal Project No. 3):
7%, 7/1/2007................................................................ 1,000,000 1,087,350
5.85%, 7/1/2010............................................................. 4,000,000 4,284,520
(Refunding - Hydroelectric Project No. 1) 7.15%, 7/1/2024....................... 4,475,000 4,996,606
Oakdale Public Finance Authority, Revenue (Center City Redevelopment Project)
7.90%, 7/1/2019................................................................. 1,750,000 1,875,912
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
CALIFORNIA (CONTINUED)
Orange County, Special Tax (Community Facilities District No. 87):
7.75%, 8/15/2014................................................................ $ 2,375,000 $ 2,580,485
7.80%, 8/15/2015................................................................ 2,000,000 2,345,320
Orange County Local Transportation Authority, Sales Tax Revenue
(First Senior - Measure M) 6%, 2/15/2007........................................ 3,000,000 3,302,940
Orange Cove, Irrigation District Revenue, COP (Rehabilitation Project)
7.25%, 2/1/2012................................................................. 3,000,000 3,299,310
Oxnard Union High School District, COP 7.70%, 11/1/2019............................. 750,000 906,000
Richmond Joint Powers Financing Authority, Revenue 7.25%, 5/15/2013................. 1,500,000 1,572,300
Riverside County, SFMR 7.80%, 5/1/2021 (Collateralized; GNMA)....................... 1,250,000 1,743,837
Rosamond Community Services District, Improvement Bond
(Assessment District No. 1) 7.90%, 9/2/2013..................................... 1,795,000 1,859,997
Roseville, Special Tax (Community Facilities District No. 1) 7.70%, 9/1/2020........ 2,000,000 2,096,080
Sacramento County:
SFMR 7.80%, 10/1/2023 (Collateralized: FNMA and GNMA)........................... 385,000 404,442
Special Tax (Community Facilities District No. 1):
8.20%, 12/1/2010............................................................ 2,250,000 2,510,460
8.25%, 12/1/2020............................................................ 2,000,000 2,228,760
Sacramento Schools Insurance Authority, Revenue (Workers Compensation Program)
5.75%, 6/1/2003................................................................. 3,985,000 4,239,044
San Diego City:
Port Facilities Revenue, Refunding
(National Steel and Shipbuilding Co.) 6.60%, 12/1/2002...................... 3,000,000 3,230,580
(Public Safety Communication Project):
6.65%, 7/15/2010............................................................ 2,100,000 2,525,082
6.65%, 7/15/2011............................................................ 2,240,000 2,702,202
San Diego County Water Authority, Water Revenue, COP 8.834%, 5/1/2008 (a)........... 2,000,000 2,295,000
San Francisco City and County Public Utilities Commission, Water Revenue, Refunding
6%, 11/1/2015................................................................... 2,000,000 2,103,940
San Jose Financing Authority, Revenue, Refunding (Convention Center Project)
6.40%, 9/1/2022................................................................. 6,860,000 7,351,656
San Marcos Public Facilities Authority, Revenue, Refunding
(Public Improvement - Civic Center) 6.15%, 8/1/2013............................. 2,320,000 2,338,676
Santa Cruz, HR (Dominican Santa Cruz Hospital) 7%, 12/1/2013........................ 750,000 811,342
Santa Monica, Wastewater Enterprise Revenue 4.75%, 1/1/2010 (Insured; AMBAC)........ 2,895,000 2,794,515
Santa Rosa Wastewater Services Facilities District, Refunding 7.80%, 7/2/2015....... 750,000 867,157
Sequoia Hospital District, Revenue, Refunding:
7.50%, 9/1/2008................................................................. 825,000 952,900
7.60, 9/1/2014.................................................................. 750,000 883,860
Simi Valley, Single Family Residential Mortgage Revenue 7.625%, 8/1/2022 (d)........ 2,000,000 1,000,000
Southern California Home Finance Authority, SFMR
7.625%, 10/1/2023 (Collateralized; GNMA)........................................ 1,085,000 1,202,603
Sulpher Springs Union School District, COP 7.15%, 2/1/2011 (Insured; AMBAC)......... 440,000 513,828
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
CALIFORNIA (CONTINUED)
University of California, COP (UCLA Central Chiller/Cogeneration)
7%, 11/1/2018................................................................... $ 3,340,000 $ 3,921,227
Upland, HR, COP (San Antonio Community Hospital):
7.125%, 1/1/2011................................................................ 1,000,000 1,076,540
7.80%, 1/1/2018................................................................. 750,000 890,790
Vista, Multi-Family Housing Revenue (Vista Hacienda Project) 6.95%, 4/1/2017........ 3,000,000 3,257,670
Waterford Public Financing Authority, Revenue 8.20%, 9/15/2020...................... 3,800,000 4,145,686
Watsonville Mammoth Lakes, COP 7.50%, 6/1/1999...................................... 110,000 110,164
U.S. RELATED-7.2%
Commonwealth of Puerto Rico 7.70%, 7/1/2020......................................... 3,750,000 4,590,450
Puerto Rico Electric Power Authority, Power Revenue, Refunding:
7%, 7/1/2007.................................................................... 2,000,000 2,271,940
7.125%, 7/1/2014................................................................ 5,500,000 6,252,125
Virgin Islands Territory (Hugo Insurance Claims Fund Program) 7.75%, 10/1/2006...... 1,830,000 2,151,988
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011.. 3,000,000 3,485,850
------------
TOTAL INVESTMENTS (cost $233,413,201) $259,935,342
============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation HR Hospital Revenue
COP Certificate of Participation LOC Letter of Credit
FHA Federal Housing Administration MBIA Municipal Bond Insurance Association
FNMA Federal National Mortgage Association RRR Resources Recovery Revenue
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
</TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (E) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
AAA Aaa AAA 19.2%
AA Aa AA 16.3
A A A 41.1
BBB Baa BBB 9.5
D D D .3
Not Rated(f) Not Rated(f) Not Rated(f) 13.6
------
100.0%
======
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At January 31,
1994, these securities amounted to $ 21,500,400 or 8.2% of net assets.
(c) Secured by letters of credit.
(d) Non-income producing security; interest payments in default.
(e) Fitch currently provides creditworthiness information for a limited amount
of investments.
(f) Securities which, while not rated by Fitch, Moody's or Standard & Poor's
have been determined by the Fund's Board of Trustees to be of comparable
quality to those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $233,413,201)-see statement...................................... $259,935,342
Interest receivable........................................................ 4,089,671
Receivable for shares of Beneficial Interest subscribed.................... 480,168
Prepaid expenses........................................................... 32,439
------------
264,537,620
LIABILITIES:
Due to The Dreyfus Corporation............................................. $ 165,342
Payable for shares of Beneficial Interest redeemed......................... 358,738
Accrued expenses and other liabilities..................................... 1,672,438 2,196,518
------------ ------------
NET ASSETS..................................................................... $262,341,102
============
REPRESENTED BY:
Paid-in capital............................................................ $235,315,239
Accumulated undistributed net realized gain on investments................. 503,722
Accumulated net unrealized appreciation on investments-Note 3.............. 26,522,141
------------
NET ASSETS at value............................................................ $262,341,102
============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)................ 17,995,923
============
Class B Shares
(unlimited number of $.001 par value shares authorized)................ 1,239,186
============
NET ASSET VALUE per share:
Class A Shares
($245,435,214 / 17,995,923 shares)..................................... $13.64
======
Class B Shares
($16,905,888 / 1,239,186 shares)....................................... $13.64
======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 16,103,166
EXPENSES:
Management fee-Note 2(a)............................................... $ 1,365,438
Shareholder servicing costs-Note 2(c).................................. 722,143
Professional fees...................................................... 66,975
Prospectus and shareholders' reports................................... 55,628
Distribution fees (Class B Shares)-Note 2(b)........................... 45,448
Custodian fees......................................................... 27,256
Trustees' fees and expenses-Note 2(d).................................. 12,695
Registration fees...................................................... 10,672
Miscellaneous.......................................................... 43,207
------------
2,349,462
Less-reduction in management fee due to
undertakings-Note 2(a)............................................. 362,893
------------
TOTAL EXPENSES................................................. 1,986,569
------------
INVESTMENT INCOME-NET.......................................... 14,116,597
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3.................................... $ 1,865,591
Net unrealized appreciation on investments................................. 15,121,644
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................ 16,987,235
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 31,103,832
============
</TABLE>
See notes to financial statements.
<TABLE>
PREMIER CALIFORNIA MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
----------------------------
OPERATIONS: 1993 1994
------------ ------------
<S> <C> <C>
Investment income-net...................................................... $ 13,846,190 $ 14,116,597
Net realized gain on investments........................................... 2,702,691 1,865,591
Net unrealized appreciation on investments for the year.................... 4,081,950 15,121,644
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 20,630,831 31,103,832
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares......................................................... (13,845,857) (13,671,122)
Class B shares......................................................... (333) (445,475)
Net realized gain on investments:
Class A shares......................................................... (2,888,295) (1,751,692)
Class B shares......................................................... __ (106,093)
------------ ------------
TOTAL DIVIDENDS.................................................... (16,734,485) (15,974,382)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 29,849,236 26,262,438
Class B shares......................................................... 323,478 17,148,970
Dividends reinvested:
Class A shares......................................................... 7,602,581 7,074,547
Class B shares......................................................... 430 366,127
Cost of shares redeemed:
Class A shares......................................................... (35,494,819) (27,275,575)
Class B shares......................................................... __ (1,244,937)
------------ ------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS....... 2,280,906 22,331,570
------------ ------------
TOTAL INCREASE IN NET ASSETS................................... 6,177,252 37,461,020
NET ASSETS:
Beginning of year.......................................................... 218,702,830 224,880,082
------------ ------------
End of year................................................................ $224,880,082 $262,341,102
============ ============
</TABLE>
<TABLE>
SHARES
--------------------------------------------------------------
CLASS A CLASS B
---------------------------- ----------------------------
YEAR ENDED JANUARY 31, YEAR ENDED JANUARY 31,
---------------------------- ----------------------------
CAPITAL SHARE TRANSACTIONS: 1993 1994 1993* 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold.................................... 2,356,783 1,965,588 25,385 1,279,001
Shares issued for dividends reinvested......... 600,089 526,710 34 27,085
Shares redeemed................................ (2,799,253) (2,036,874) __ (92,319)
------------ ------------ ------------ ------------
NET INCREASE IN SHARES OUTSTANDING..... 157,619 455,424 25,419 1,213,767
============ ============ ============ ============
</TABLE>
- ------------------------
* From January 15, 1993 (commencement of initial offering) through January
31, 1993.
See notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated May 20, 1994.
See notes to financial statements.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified, open-end management investment company.
Dreyfus Service Corporation ("Distributor") acts as the distributor of
the Fund's shares. The Distributor is a wholly-owned subsidiary of The
Dreyfus Corporation ("Manager").
The Fund offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B
shares are subject to a contingent deferred sales charge imposed at
the time of redemption on redemptions made within five years of
purchase. Other differences between the two Classes include the
services offered to and the expenses borne by each Class and certain
voting rights.
(A) PORTFOLIO VALUATION: The Fund's investments are valued each
business day by an independent pricing service ("Service") approved
by the Board of Trustees. Investments for which quoted bid prices in
the judgment of the Service are readily available and are
representative of the bid side of the market are valued at the mean
between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by the
Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio
securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and
loss from securities transactions are recorded on the identified cost
basis. Interest income, adjusted for amortization of premiums and,
when appropriate, discounts on investments, is earned from
settlement date and recognized on the accrual basis. Securities
purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in
municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect
the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends
are paid monthly. Dividends from net realized capital gain are
normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net
realized capital gain can be offset by capital loss carryovers, if any, it
is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax
exempt dividends, by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of income and net
realized capital gain sufficient to relieve it from all, or substantially
all, Federal income taxes.
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .55
of 1% of the average daily value of the Fund's net assets and is
payable monthly. The Agreement provides for an expense
reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state
having jurisdiction over the Fund for any full fiscal year. The most
stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such
expenses (exclusive of distribution expenses and certain expenses as
described above) exceed 2 1/2% of the first $30 million, 2% of the
next $70 million and 1 1/2% of the excess over $100 million of the
average value of the Fund's net assets in accordance with California
"blue sky" regulations. However, the Manager had undertaken from
February 1, 1993 through January 19, 1994, to
PREMIER CALIFORNIA MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
reduce the management fee paid by the Fund to the extent that the
Fund's aggregate expenses (excluding certain expenses as described
above) exceeded specified annual percentages of the Fund's average
daily net assets. The Manager has currently undertaken from January
20, 1994 through July 1, 1994, to waive receipt of the management
fee payable to it by the Fund in excess of an annual rate of .50 of 1%
of the average daily value of the Fund's net assets. The reduction in
management fee, pursuant to the undertakings, amounted to
$362,893 for the year ended January 31, 1994.
The undertaking may be modified by the Manager from time to
time, provided that the resulting expense reimbursement would not
be less than the amount required pursuant to the Agreement.
The Distributor retained $60,338 during the year ended January 31,
1994 from commissions earned on sales of Fund's Class A shares.
The Distributor retained $17,606 during the year ended January 31,
1994 from contingent deferred sales charges imposed upon
redemptions of the Fund's Class B shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor, at
an annual rate of .50 of 1% of the value of the Fund's Class B shares
average daily net assets, for costs and expenses in connection with
advertising, marketing and distributing the Fund's Class B shares. The
Distributor may make payments to one or more Service Agents (a
securities dealer, financial institution, or other industry professional)
based on the value of the Fund's Class B shares owned by clients of
the Service Agent.
During the year ended January 31, 1994, $45,448 was charged to
the Fund pursuant to the Class B Distribution Plan.
(C) Under the Shareholder Services Plan, the Fund pays the
Distributor, at an annual rate of .25 of 1 % of the value of the average
daily net assets of Class A and Class B shares for servicing
shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and
other information, and services related to the maintenance of
shareholder accounts. The Distributor may make payments to Service
Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the year ended January 31,
1994, $597,930 and $22,724 were charged to the Class A and Class B
shares, respectively, pursuant to the Shareholder Services Plan.
(D) Certain officers and trustees of the Fund are "affiliated
persons," as defined in the Act, of the Manager and/or the Distributor.
Each trustee who is not an "affiliated person" receives an annual fee
of $1,000 and an attendance fee of $250 per meeting.
(E) On December 5, 1993, the Manager entered into an agreement
and Plan of Merger providing for the merger of the Manager with a
subsidiary of Mellon Bank Corporation ("Mellon").
Following the Merger, it is planned that the Manager will be a
direct subsidiary of Mellon Bank, N.A. Closing of this merger is subject
to a number of contingencies, including the receipt of certain
regulatory approvals and the approvals of the stockholders of the
Manager and of Mellon. The merger is expected to occur in mid-1994,
but could occur later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment
Company Act of 1940, and thus a termination of such Agreement, the
Manager will seek prior approval from the Fund's Board and
shareholders.
NOTE 3-SECURITIES TRANSACTIONS:
Purchases and sales of securities amounted to $138,335,408 and
$118,413,717, respectively, for the year ended January 31, 1994, and
consisted entirely of municipal bonds and short-term municipal
investments.
At January 31, 1994, accumulated net unrealized appreciation on
investments was $26,522,141, consisting of $27,574,379 gross
unrealized appreciation and $1,052,238 gross unrealized depreciation.
At January 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
PREMIER CALIFORNIA MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER CALIFORNIA MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and
liabilities of Premier California Municipal Bond Fund, including the
statement of investments, as of January 31, 1994, and the related
statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of
January 31, 1994 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier California Municipal Bond Fund at January 31,
1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the indicated years, in
conformity with generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
March 7, 1994
PREMIER CALIFORNIA MUNICIPAL BOND FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits - List
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information --
Class A - For the period from November 10, 1986
(commencement of operations) to January 31, 1987
and for each of the seven years in the period ended
January 31, 1994.
Class B - For the period from January 15, 1993
(commencement of public offering) to January 31,
1993 and for the year ended January 31, 1994.
Included in Part B of the Registration Statement:
Statement of Investments -- January 31, 1994.
Statement of Assets and Liabilities -- January 31,
1994.
Statement of Operations -- year ended January 31,
1994.
Statement of Changes in Net Assets -- for the years
ended January 31, 1993 and 1994.
Notes to Financial Statements.
Report of Ernst & Young, Independent Auditors, dated
March 7, 1994.
Schedule Nos. I through VII and other financial statement
information, for which provision is made in the applicable
accounting regulations of the Securities and Exchange
Commission, are either omitted because they are not required
under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or
notes which are included in Part B of the Registration
Statement.
Item 24. Financial Statements and Exhibits - List (continued)
(b) Exhibits:
(1)(a) Registrant's Amended and Restated Agreement and Declaration of
Trust is incorporated by reference to Exhibit (1)(a) of Post-
Effective Amendment No. 9 to the Registration Statement on Form
N-1A, filed on October 30, 1992.
(2) Registrant's By-Laws.
(5) Management Agreement between the Registrant and The Dreyfus
Corporation is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 9 to the Registration Statement on
Form N-1A, filed on October 30, 1992.
(6)(a) Distribution Agreement between the Registrant and Dreyfus
Service Corporation is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 9 to the Registration
Statement on Form N-1A, filed on October 30, 1992.
(6)(b) Forms of Service Agreements are incorporated by reference to
Exhibit (6)(b) of Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A, filed on October 30, 1992.
(6)(c) Forms of Distribution Plan Agreements are incorporated by
reference to Exhibit (6)(c) of Post-Effective Amendment No. 9 to
the Registration Statement on Form N-1A, filed on October 30,
1992.
(8)(a) Registrant's Custody Agreement is incorporated by reference to
Exhibit (8)(a) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on May 30, 1990.
(8)(b) Registrant's Sub-Custodial Agreements.
(9) Shareholder Services Plan.
(10) Opinion and consent of Registrant's counsel are incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on September 10,
1986.
(11) Consent of Independent Auditors.
(15) Distribution Plan.
(16) Schedules of Computation of Performance Data.
Other Exhibits: (a) Powers-of-Attorney of Registrant's Trustees and
officers are incorporated by reference to Other
Exhibits: (a) of Post-Effective Amendment No. 6
to the Registration Statement on Form N-1A, filed
on April 10, 1991.
(b) The Certificate of Corporate Secretary is
incorporated by reference to Other Exhibits:
(b) of Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A, filed on
April 10, 1991.
Item 25. Persons Controlled by or under Common Control with Registrant
Not Applicable
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders as of April 20, 1994
Beneficial Interest
(par value $.001)
Class A 4,022
Class B 581
Item 27. Indemnification
The Statement as to the general effect of any contract,
arrangements or statute under which a trustee, officer,
underwriter or affiliated person of the Registrant is
indemnified is incorporated by reference to Item 27 of Part C of
Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-1A, filed on September 10, 1986.
Reference is also made to the Distribution Agreement filed as
Exhibit (6)(a) of Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A, filed on October 30, 1992.
Item 28. Business and Other Connections of Investment Adviser
Investment Adviser - The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for sponsored
investment companies registered under the Investment Company Act
of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-investment
adviser to and/or administrator of several investment companies.
Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as distributor of shares of investment
companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as sub-investment adviser and/or
administrator. Dreyfus Management, Inc., another wholly-owned
subsidiary, provides investment management services to various
pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and Investment
Chairman of the Board and Officer:
Chief Executive Officer Dreyfus Capital Growth Fund (A Premier
Fund)++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus New Leaders Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc. ++;
The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
HOWARD STEIN Dreyfus Land Development Corporation*;
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Strategic Growth, L.P. ++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Dreyfus Growth Allocation Fund, Inc.++
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
President:
Dreyfus Consumer Life Insurance Company*;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
FN Network Tax Free Money Market Fund,
Inc.++;
HOWARD STEIN Seven Six Seven Agency, Inc.*;
(cont'd) World Balanced Fund++++;
Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Consumer Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
JOSEPH S. DiMARTINO Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Trustee and Investment Officer:
Premier GNMA Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director and Corporate Member:
Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
JOSEPH S. DiMARTINO Director:
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Fund ++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
LAWRENCE M. GREENE Dreyfus New Leaders Fund, Inc.++;
(cont'd) Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
Dreyfus Growth Opportunity Fund, Inc.++;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
Director:
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond
Fund, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Intermediate Municipal Bond
Fund, Inc.++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New York Tax Exempt Bond
Fund, Inc.++;
Dreyfus Ohio Municipal Money Market
Fund, Inc.++;
Trustee:
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Cash Management++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt
Bond Fund++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
DAVID W. BURKE Dreyfus Pennsylvania Municipal Money
(cont'd) Market Fund++;
Dreyfus Short-Intermediate Government
Fund++
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++
ELIE M. GENADRY President:
Vice President - Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Vice President:
The Dreyfus Trust Company++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
Dreyfus Consumer Life Insurance Company*;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
DANIEL C. MACLEAN Dreyfus New York Insured Tax Exempt Bond
(cont'd) Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
DANIEL C. MACLEAN Premier New York Municipal Bond Fund++;
(cont'd) Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
DANIEL C. MACLEAN Dreyfus Strategic Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN Dreyfus New Jersey Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
JEFFREY N. NACHMAN General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
JEFFREY N. NACHMAN First Prairie U.S. Treasury Securities
(Cont'd) Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.*;
Vice President:
Dreyfus Personal Management, Inc.*
ROBERT H. SCHMIDT President and Director:
Vice President Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
Formerly, Chairman and Chief Executive
Officer:
Levine, Huntley, Schmidt & Beaver
250 Park Avenue
New York, New York 10017
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- Director:
Income Research The Dreyfus Security Savings Bank F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Vice President:
Assistant Vice President - Dreyfus Consumer Life Insurance
Human Resources Company++;
Formerly, Assistant Commissioner:
Department of Parks and Recreation of the
City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Treasurer and Assistant Secretary:
Assistant Vice President The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
JOHN J. PYBURN Dreyfus New York Tax Exempt Intermediate
(cont'd) Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
JOHN J. PYBURN Premier California Municipal Bond Fund++;
(cont'd) Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Consumer Life Insurance Company*;
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
MARK N. JACOBS Dreyfus Municipal Bond Fund, Inc.++;
(cont'd) Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
MARK N. JACOBS Dreyfus Insured Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
MARK N. JACOBS General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund, (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
CHRISTINE PAVALOS Dreyfus Global Bond Fund, Inc.++;
(cont'd) Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus 100% U.S. Treasury Intermediate
(cont'd) Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
CHRISTINE PAVALOS General Municipal Money Market Fund,
(cont'd) Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus Michigan Municipal Money Market Fund, Inc.
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus Ohio Municipal Money Market Fund, Inc.
57) Dreyfus 100% U.S. Treasury Intermediate Term Fund
58) Dreyfus 100% U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus 100% U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Pennsylvania Municipal Money Market Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) Dreyfus Short-Term Income Fund, Inc.
66) The Dreyfus Socially Responsible Growth Fund, Inc.
67) Dreyfus Strategic Growth, L.P.
68) Dreyfus Strategic Income
69) Dreyfus Strategic Investing
70) Dreyfus Tax Exempt Cash Management
71) The Dreyfus Third Century Fund, Inc.
72) Dreyfus Treasury Cash Management
73) Dreyfus Treasury Prime Cash Management
74) Dreyfus Variable Investment Fund
75) Dreyfus-Wilshire Target Funds, Inc.
76) Dreyfus Worldwide Dollar Money Market Fund, Inc.
77) First Prairie Cash Management
78) First Prairie Diversified Asset Fund
79) First Prairie Money Market Fund
80) First Prairie Municipal Money Market Fund
81) First Prairie Tax Exempt Bond Fund, Inc.
82) First Prairie U.S. Government Income Fund
83) First Prairie U.S. Treasury Securities Cash Management
84) FN Network Tax Free Money Market Fund, Inc.
85) General California Municipal Bond Fund, Inc.
86) General California Municipal Money Market Fund
87) General Government Securities Money Market Fund, Inc.
88) General Money Market Fund, Inc.
89) General Municipal Bond Fund, Inc.
90) General Municipal Money Market Fund, Inc.
91) General New York Municipal Bond Fund, Inc.
92) General New York Municipal Money Market Fund
93) Pacific American Fund
94) Peoples Index Fund, Inc.
95) Peoples S&P MidCap Index Fund, Inc.
96) Premier Insured Municipal Bond Fund
97) Premier California Municipal Bond Fund
98) Premier GNMA Fund
99) Premier Growth Fund, Inc.
100) Premier Municipal Bond Fund
101) Premier New York Municipal Bond Fund
102) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board None
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director None
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President Vice
President
Henry D. Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President Vice
President
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President and None
Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Vice
President
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President Vice
President
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
James Barr
Newton, MA Regional Vice President None
Mary B. Brundage
Pasadena, CA Regional Vice President None
Edward Donley
Latham, NY Regional Vice President None
Thomas Ellis
Ranchero Murietta, CA Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Richard P. Kundracik
Waterford, MI Regional Vice President None
Michael Lane
Beaver Falls, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Robert J. Richardson
Houston, TX Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President Vice
President
Donald A. Nanfeldt* Executive Vice President Vice
President
Kathleen M. Lewis++ Vice President-Institutional None
Sales Manager
Charles Cardona** Senior Vice President- None
Institutional Services
Stacy Alexander* Vice President-Bank Wholesale None
Eric Almquist* Vice President-Eastern Regional None
Sales Manager
James E. Baskin+++++++ Vice President-Institutional Sales None
Kenneth Bernstein
Boca Raton, FL Vice President-Bank Wholesale None
Stephen Burke* Vice President-Bank Wholesaler None
Sales Manager
Laurel A. Diedrick
Burrows*** Vice President-Bank Wholesale None
Gary F. Callahan
Somerville, NJ Vice President-Bank Wholesale None
Daniel L. Clawson++++ Vice President-Institutional Sales None
Anthony T. Corallo
San Francisco, CA Vice President-Institutional Sales None
Bonnie M. Cymbryla
Brewerton, NY Vice President-Bank Wholesale None
William Davis
Bellevue, WA Vice President None
William E. Findley**** Vice President None
Mary Genet***** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Bank Wholesale None
Nancy Knee++++ Vice President-Bank Wholesale None
Bradford Lange* Vice President-Bank Wholesale None
Eva Machek***** Vice President-Institutional Sales None
Bradley R. Maybury
Seattle, WA Vice President-Bank Wholesale None
Mary McCabe*** Vice President-Bank Wholesale None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President-Bank Wholesale- None
National Accounts Manager
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President-Bank Wholesale None
Lorianne Pinto* Vice President-Bank Wholesale None
Douglas Rentschler
Grosse Point Park, MI Vice President-Bank Wholesale None
Leah Ryan**** Vice President-Institutional Sales None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President-Institutional None
Administration
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Brant Snavely
Charlotte, NC Vice President-Bank Wholesale None
Thomas Stallings
Richmond, VA Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Thomas Winnick
Malverne, PA Vice President-Bank Wholesale None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Mary Rogers** Assistant Vice President-
Institutional Servicing None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President Vice
President
Robert W. Stone* Executive Vice President None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
William Gallagher* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To furnish each person to whom a prospectus is delivered with a
copy of its latest annual report to shareholders, upon request
and without charge.
(2) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, and
State of New York on the 19th day of May, 1994.
PREMIER CALIFORNIA MUNICIPAL BOND FUND
(Registrant)
By: /s/ Richard J. Moynihan*
_________________________________________
RICHARD J. MOYNIHAN, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated.
Signature Title Date
________________________________ ___________________ ___________
/s/ Richard J. Moynihan* President (Principal 5/19/94
________________________________ Executive Officer) and
Richard J. Moynihan Trustee
/s/ John J. Pyburn* Treasurer (Principal 5/19/94
________________________________ Financial and
John J. Pyburn Accounting Officer)
/s/ Clifford L. Alexander, Jr.* Trustee 5/19/94
________________________________
Clifford L. Alexander, Jr.
/s/ Peggy C. Davis* Trustee 5/19/94
________________________________
Peggy C. Davis
/s/ Ernest Kafka* Trustee 5/19/94
________________________________
Ernest Kafka
/s/ Saul B. Klaman* Trustee 5/19/94
________________________________
Saul B. Klaman
/s/ Nathan Leventhal* Trustee 5/19/94
________________________________
Nathan Leventhal
*By:___________________________________
Robert R. Mullery,
Attorney-in-Fact
INDEX OF EXHIBITS
Page
(2) Registrant's By-Laws. . . . . . . . . . . . . . . .
(8)(b) Registrant's Sub-Custodial Agreements . . . . . . .
(9) Shareholder Services Plan . . . . . . . . . . . . .
(11) Consent of Ernst & Young, Independent
Auditors. . . . . . . . . . . . . . . . . . . . . .
(15) Distribution Plan . . . . . . . . . . . . . . . . .
(16) Schedules of Computation of
Performance Data. . . . . . . . . . . . . . . . . .
BY-LAWS
OF
PREMIER CALIFORNIA TAX EXEMPT BOND FUND
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time to time in
effect (the "Declaration of Trust"), of the above-captioned Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the
Trust shall be located in New York, New York. Its resident agent in
Massachusetts shall be CT Corporation System, 2 Oliver Street, Boston,
Massachusetts, or such other person as the Trustees from time to time may
select.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the
Trustees from time to time may determine, provided that notice of the first
regular meeting following any such determination shall be given to absent
Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be
held at any time and at any place designated in the call of the meeting
when called by the President or the Treasurer or by two or more Trustees,
sufficient notice thereof being given to each Trustee by the Secretary or
an Assistant Secretary or by the officer or the Trustees calling the
meeting.
2.3 Notice of Special Meetings. It shall be sufficient notice
to a Trustee of a special meeting to send notice by mail at least forty-
eight hours or by telegram at least twenty-four hours before the meeting
addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by
telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any Trustee if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice
to him or her. Neither notice of a meeting nor a waiver of a notice need
specify the purposes of the meeting.
2.4 Notice of Certain Actions by Consent. If in accordance with
the provisions of the Declaration of Trust any action is taken by the
Trustees by a written consent of less than all of the Trustees, then prompt
notice of any such action shall be furnished to each Trustee who did not
execute such written consent, provided that the effectiveness of such
action shall not be impaired by any delay or failure to furnish such
notice.
ARTICLE 3
Officers
3.1 Enumeration; Qualification. The officers of the Trust shall
be a President, a Treasurer, a Secretary, and such other officers, if any,
as the Trustees from time to time may in their discretion elect. The Trust
also may have such agents as the Trustees from time to time may in their
discretion appoint. Officers may be but need not be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 Election. The President, the Treasurer and the Secretary
shall be elected by the Trustees upon the occurrence of any vacancy in any
such office. Other officers, if any, may be elected or appointed by the
Trustees at any time. Vacancies in any such other office may be filled at
any time.
3.3 Tenure. The President, Treasurer and Secretary shall hold
office in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent
shall retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provision of these By-Laws,
each officer shall have, in addition to the duties and powers herein and in
the Declaration of Trust set forth, such duties and powers as commonly are
incident to the office occupied by him or her as if the Trust were
organized as a Massachusetts business corporation or such other duties and
powers as the Trustees may from time to time designate.
3.5 President. Unless the Trustees otherwise provide, the
President shall preside at all meetings of the shareholders and of the
Trustees. Unless the Trustees otherwise provide, the President shall be
the chief executive officer.
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder
servicing or similar agent, shall be in charge of the valuable papers,
books of account and accounting records of the Trust, and shall have such
other duties and powers as may be designated from time to time by the
Trustees or by the President.
3.7 Secretary. The Secretary shall record all proceedings of
the shareholders and the Trustees in books to be kept therefor, which books
or a copy thereof shall be kept at the principal office of the Trust. In
the absence of the Secretary from any meeting of the shareholders or
Trustees, an Assistant Secretary, or if there be none or if he or she is
absent, a temporary Secretary chosen at such meeting shall record the
proceedings thereof in the aforesaid books.
3.8 Resignations and Removals. Any Trustee or officer may
resign at any time by written instrument signed by him or her and delivered
to the President or Secretary or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be
effective at some other time. The Trustees may remove any officer elected
by them with or without cause. Except to the extent expressly provided in
a written agreement with the Trust, no Trustee or officer resigning and no
officer removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on
account of such removal.
ARTICLE 4
Committees
4.1 Appointment. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees otherwise
may determine, any such committee may make rules for conduct of its
business.
4.2 Quorum; Voting. A majority of the members of any Committee
of the Trustees shall constitute a quorum for the transaction of business,
and any action of such a Committee may be taken at a meeting by a vote of a
majority of the members present (a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the time and in
the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may
deem desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
Except as from time to time otherwise provided by the Trustees,
the fiscal year of the Trust shall end on July 31st in each year.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced die with the
word "Massachusetts," together with the name of the Trust and the year of
its organization cut or engraved thereon but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and in its
absence shall not impair the validity of, any document, instrument or other
paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases may
authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed
by the President, any Vice President, or by the Treasurer and need not bear
the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Sale of Shares. Except as otherwise determined by the
Trustees, the Trust will issue and sell for cash or securities from time to
time, full and fractional shares of its shares of beneficial interest, such
shares to be issued and sold at a price of not less than net asset value
per share as from time to time determined in accordance with the
Declaration of Trust and these By-Laws and, in the case of fractional
shares, at a proportionate reduction in such price. In the case of shares
sold for securities, such securities shall be valued in accordance with the
provisions for determining value of assets of the Trust as stated in the
Declaration of Trust and these By-Laws. The officers of the Trust are
severally authorized to take all such actions as may be necessary or
desirable to carry out this Section 9.1.
9.2 Share Certificates. In lieu of issuing certificates for
shares, the Trustees or the transfer agent either may issue receipts
therefor or may keep accounts upon the books of the Trust for the record
holders of such shares, who shall in either case, for all purposes
hereunder, be deemed to be the holders of certificates for such shares as
if they had accepted such certificates and shall be held to have expressly
assented and agreed to the terms hereof.
The Trustees at any time may authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a
certificate stating the number of shares owned by him, in such form as
shall be prescribed from time to time by the Trustees. Such certificate
shall be signed by the President or Vice President and by the Treasurer or
Assistant Treasurer. Such signatures may be facsimile if the certificate
is signed by a transfer agent, or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate shall cease
to be such officer before such certificate is issued, it may be issued by
the Trust with the same effect as if he or she were such officer at the
time of its issue.
9.3 Loss of Certificates. The Trust, or if any transfer agent
is appointed for the Trust, the transfer agent with the approval of any two
officers of the Trust, is authorized to issue and countersign replacement
certificates for the shares of the Trust which have been lost, stolen or
destroyed subject to the deposit of a bond or other indemnity in such form
and with such security, if any, as the Trustees may require.
9.4 Discontinuance of Issuance of Certificates. The Trustees at
any time may discontinue the issuance of share certificates and by written
notice to each shareholder, may require the surrender of share certificates
to the Trust for cancellation. Such surrender and cancellation shall not
affect the ownership of shares in the Trust.
ARTICLE 10
Indemnification
10.1 Trustees, Officers, etc. The Trust shall indemnify each of
its Trustees and officers (including persons who serve at the Trust's
request as directors, officers or trustees of another organization in which
the Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a "Covered Person") against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees
reasonably incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened,
while in office or thereafter, by reason of being or having been such a
Trustee or officer, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the
merits in any such action, suit or other proceeding not to have acted in
good faith in the reasonable belief that such Covered Person's action was
in the best interests of the Trust and except that no Covered Person shall
be indemnified against any liability to the Trust or its Shareholders to
which such Covered Person would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person (but
excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Trust in advance
of the final disposition or any such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Covered Person to repay
amounts so paid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article,
provided that (a) such Covered Person shall provide security for his
undertaking, (b) the Trust shall be insured against losses arising by
reason of such Covered Person's failure to fulfill his undertaking, or (c)
a majority of the Trustees who are disinterested persons and who are not
Interested Persons (as that term is defined in the Investment Company Act
of 1940) (provided that a majority of such Trustees then in office act on
the matter), or independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (but not a full
trial-type inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
10.2 Compromise Payment. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise) without
an adjudication in a decision on the merits by a court, or by any other
body before which the proceeding was brought, that such Covered Person
either (a) did not act in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust or (b) is
liable to the Trust or its Shareholders by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of such Covered Person's office, indemnification shall be
provided if (a) approved as in the best interest of the Trust, after notice
that it involves such indemnification, by at least a majority of the
Trustees who are disinterested persons and are not Interested Persons
(provided that a majority of such Trustees then in office act on the
matter), upon a determination, based upon a review of readily available
facts (but not a full trial-type inquiry) that such Covered Person acted in
good faith in the reasonable belief that such Covered Person's action was
in the best interests of the Trust and is not liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts
(but not a full trial-type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust and that
such indemnification would not protect such Covered Person against any
liability to the Trust to which such Covered Person would otherwise be
subject by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Any approval pursuant to this Section shall not prevent the recovery from
any Covered Person of any amount paid to such Covered Person in accordance
with this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good
faith in the reasonable belief that such Covered Person's action was in the
best interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office.
10.3 Indemnification Not Exclusive. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to
which any such Covered Person may be entitled. As used in this Article 10,
the term "Covered Person" shall include such person's heirs, executors and
administrators, and a "disinterested person" is a person against whom none
of the actions, suits or other proceedings in question or another action,
suit, or other proceeding on the same or similar grounds is then or has
been pending. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability
insurance on behalf of such person.
10.4 Limitation: Notwithstanding any provisions in the
Declaration of Trust and these By-Laws pertaining to indemnification, all
such provisions are limited by the following undertaking set forth in the
rules promulgated by the Securities and Exchange Commission:
In the event that a claim for indemnification is
asserted by a Trustee, officer or controlling person of the
Trust in connection with the registered securities of the Trust, the Trust
will not make such indemnification unless (i) the Trust has submitted,
before a court or other body, the question of whether the person to be
indemnified was liable by reason of wilful misfeasance, bad faith, gross
negligence, or reckless disregard of duties, and has obtained a final
decision on the merits that such person was not liable by reason of such
conduct or (ii) in the absence of such decision, the Trust shall have
obtained a reasonable determination, based upon a review of the facts, that
such person was not liable by virtue of such conduct, by (a) the vote of a
majority of Trustees who are neither interested persons as such term is
defined in the Investment Company Act of 1940, nor parties to the
proceeding or (b) an independent legal counsel in a written opinion.
The Trust will not advance attorneys' fees or other
expenses incurred by the person to be indemnified unless the
Trust shall have (i) received an undertaking by or on behalf of such person
to repay the advance unless it is ultimately determined that such person is
entitled to indemnification and one of the following conditions shall have
occurred: (x) such person shall provide security for his undertaking, (y)
the Trust shall be insured against losses arising by reason of any lawful
advances or (z) a majority of the disinterested, non-party Trustees of the
Trust, or an independent legal counsel in a written opinion, shall have
determined that based on a review of readily available facts there is
reason to believe that such person ultimately will be found entitled to
indemnification.
ARTICLE 11
Shareholders
11.1 Meetings. A meeting of the shareholders shall be called by
the Secretary whenever ordered by the Trustees, or requested in writing by
the holder or holders of at least 10% of the outstanding shares entitled to
vote at such meeting. If the meeting is a meeting of the shareholders of
one or more series of shares, but not a meeting of all shareholders of the
Trust, then only the shareholders of such one or more series shall be
entitled to notice of and to vote at the meeting. If the Secretary, when
so ordered or requested, refuses or neglects for more than five days to
call such meeting, the Trustees, or the shareholders so requesting may, in
the name of the Secretary, call the meeting by giving notice thereof in the
manner required when notice is given by the Secretary.
11.2 Access to Shareholder List. Shareholders of record may
apply to the Trustees for assistance in communicating with other
shareholders for the purpose of calling a meeting in order to vote upon the
question of removal of a Trustee. When 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 shares having a net asset value
of at least $25,000 or at least 1% of the outstanding shares, whichever is
less, so apply, the Trustees shall within five business days either:
(i) afford to such applicants access to a list of names and
addresses of all shareholders as recorded on the books of the Trust; or
(ii) inform such applicants of the approximate number of
shareholders of record and the approximate cost of mailing material to them
and, within a reasonable time thereafter, mail, at the applicants'
expense, materials submitted by the applicants, to all such shareholders of
record. The Trustees shall not be obligated to mail materials which they
believe to be misleading or in violation of applicable law.
11.3 Record Dates. For the purpose of determining the
shareholders of any series who are entitled to vote or act at any meeting
or any adjournment thereof, or who are entitled to receive payment of any
dividend or of any other distribution, the Trustees from time to time may
fix a time, which shall be not more than 90 days before the date of any
meeting of shareholders or the date of payment of any dividend or of any
other distribution, as the record date for determining the shareholders of
such series having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or
distribution, and in such case only shareholders of record on such record
date shall have such right notwithstanding any transfer of shares on the
books of the Trust after the record date; or without fixing such record
date the Trustees may for any such purposes close the register or transfer
books for all or part of such period.
11.4 Place of Meetings. All meetings of the shareholders shall
be held at the principal office of the Trust or at such other place within
the United States as shall be designated by the Trustees or the President
of the Trust.
11.5 Notice of Meetings. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes of the
meeting, shall be given at least ten days before the meeting to each
shareholder entitled to vote thereat by leaving such notice with him or at
his residence or usual place of business or by mailing it, postage prepaid,
and addressed to such shareholder at his address as it appears in the
records of the Trust. Such notice shall be given by the Secretary or an
Assistant Secretary or by an officer designated by the Trustees. No notice
of any meeting of shareholders need be given to a shareholder if a written
waiver of notice, executed before or after the meeting by such shareholder
or his attorney thereunto duly authorized, is filed with the records of the
meeting.
11.6 Ballots. No ballot shall be required for any election
unless requested by a shareholder present or represented at the meeting and
entitled to vote in the election.
11.7 Proxies. Shareholders entitled to vote may vote either in
person or by proxy in writing dated not more than six months before the
meeting named therein, which proxies shall be filed with the Secretary or
other person responsible to record the proceedings of the meeting before
being voted. Unless otherwise specifically limited by their terms, such
proxies shall entitle the holders thereof to vote at any adjournment of
such meeting but shall not be valid after the final adjournment of such
meeting.
ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the Trustees,
or by one or more writings signed by such a majority.
Dated: September 5, 1986
SUBCUSTODIAN AGREEMENT
The undersigned custodian (the "custodian") for the
investment company identified below (the "Fund") hereby appoints
on the following terms and conditions Bankers Trust Company as
subcustodian (the "Subcustodian") for it and the Subcustodian
hereby accepts such appointment on the following terms and con-
ditions as of the date set forth below.
1. QUALIFICATION. The Custodian and the Subcustodian
each represents to the other and to the Fund that it is
qualified to act as a custodian for a registered investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act").
2. SUBCUSTODY. The Subcustodian agrees to maintain a
separate account and to hold segregated at all times from
the Subcustodian's securities and from all other customers'
securities held by the Subcustodian, all the Fund's
securities and evidence of rights thereto ("Fund
Securities") deposited, from time to time by the Custodian
with the Subcustodian. The Subcustodian will accept, hold or
dispose of and take other actions with respect to Fund
Securities in accordance with the Instructions of the
Custodian given in the manner set forth in Section 4 and
will take certain other actions as specified in Section 3.
The Subcustodian hereby waives any claim against or lien on
any Fund Securities. The Subcustodian may take steps to
register and continue to hold Fund Securities in the name of
the Subcustodian's nominee and shall take such other steps
as the Subcustodian believes necessary or appropriate to
carry out efficiently the terms of this Agreement. To the
extent that ownership of Fund Securities may be recorded by
a book entry system maintained by any transfer agent or
registrar for such Fund Securities or by Depository Trust
Company, the Subcustodian may hold Fund Securities as a book
entry reflecting the ownership of such Fund Securities by
its nominee and need not possess certificates or any other
evidence of ownership of Fund Securities.
3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except
as otherwise instructed pursuant to Section 4, the
Subcustodian will (i) present all Fund Securities requiring
presentation for any payment thereon, (ii) distribute to the
Custodian cash received thereon, (iii) collect and
distribute to the Custodian interest and any dividends and
distributions on Fund Securities, (iv) at the request of the
Custodian, or on its behalf, execute any necessary
declarations or certificates of ownership (provided by the
Custodian or on its behalf) under any tax law now or here-
after in effect, (v) forward to the Custodian, or notify it
by telephone of, confirmations, notices, proxies or proxy
soliciting materials relating to the Fund Securities
received by it as registered holder (and the Custodian
agrees to forward same to the Fund), and (vi) promptly
report to the Custodian any missed payment or other default
upon any Fund Securities known to it as Subcustodian
hereunder (the Subcustodian shall be deemed to have
knowledge of any payment default on any Fund Securities in
respect of which it acts as paying agent). All cash
distributions from the Subcustodian to the Custodian will be
in same day funds, on the same day that same day funds are
received by the Subcustodian unless such distribution
required instructions from the Custodian which were not
timely received. Promptly after the Subcustodian is
furnished with any report of its independent public
accountants on an examination of its internal accounting
controls and procedures for safeguarding securities held in
its custody as subcustodian under this Agreement or under
similar agreements, the Subcustodian will furnish a copy
thereof to the Custodian.
4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of
the Custodian designated from time to time by letter to the
Subcustodian, signed by the President or any Vice President
and any Assistant Vice President, Assistant Secretary or
Assistant Treasurer of the Custodian, as an officer of the
Custodian authorized to give instructions to the
Subcustodian with respect to Fund Securities (an "Authorized
Officer"), shall be authorized to instruct the Subcustodian
as to the acceptance, holding, presentation, disposition or
any other action with respect to Fund Securities from time
to time by telephone, or in writing signed by such
Authorized Officer and delivered by tested telex, tested
computer printout or such other reasonable method as the
Custodian and Subcustodian shall agree is designed to
prevent unauthorized officer's instructions; provided,
however, the Subcustodian is authorized to accept and act
upon orders from the Custodian, whether given orally, by
telephone or otherwise, which the Subcustodian reasonably
believes to be given by an authorized person. The
Subcustodian will promptly transmit to the Custodian all
receipts and transaction confirmations in respect of Fund
Securities as to which the Subcustodian has received any
instructions. The Authorized Officers shall be as set forth
on Exhibit A attached hereto and, as amended from time to
time, made a part hereof.
5. LIABILITIES. (i) The Subcustodian shall not be
liable for any action taken or omitted to be taken in
carrying out the terms and provision of this Agreement if
done without willful malfeasance, bad faith, gross
negligence or reckless disregard of its obligations and
duties under this Agreement. Except as otherwise set forth
herein, the Subcustodian shall have no responsibility for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters
relating to the Fund Securities (except at the instructions
of the Custodian), nor for informing the Custodian with
respect thereto, whether or not the Subcustodian has, or is
deemed to have, knowledge of the aforesaid. The Subcustodian
is under no duty to supervise or to provide investment
counseling or advice to the Custodian or to the Fund
relative to the purchase, sale, retention or other
disposition of any Fund Securities held hereunder. The
Subcustodian shall for the benefit of the Custodian and the
Fund use the same care with respect to receiving,
safekeeping, handling and delivery of Fund Securities as it
uses in respect of its own securities.
(ii) The Subcustodian will indemnify, defend and save
harmless the Custodian and the Fund from and against all
loss, liability, claims and demands incurred by the
Custodian or the Fund arising out of or in connection with
the Subcustodian's willful malfeasance, bad faith, gross
negligence or reckless disregard of its obligations and
duties under this Agreement.
(iii) The Custodian agrees to be responsible for and
indemnify the Subcustodian and any nominee in whose name the
Fund Securities are registered, from and against all loss,
liability, claims and demands incurred by the Subcustodian
and the nominee in connection with the performance of any
activity pursuant to this Agreement, done in good faith and
without negligence, including any expenses, taxes or other
charges which the Subcustodian is required to pay in
connection therewith.
6. Each party may terminate this Agreement at any time
by not less than ten (10) business days' prior written
notice. In the event that such notice is given, the
Subcustodian shall make delivery of the Fund Securities held
in the Subcustodian account to the Custodian or to any third
party within the Borough of Manhattan, specified by the
Custodian in writing within ten (10) days of receipt of the
termination notice, at the Custodian's expense.
7. All communications required or permitted to be given
under this Agreement, unless otherwise agreed by the
parties, shall be addressed a follows:
(i) to the Subcustodian:
Bankers Trust Company
1 Bankers Trust Plaza
14th Floor
New York, NY 10015
Attention: Barara Walter
RMO Safekeeping Unit
(ii) to the Custodian:
The Bank of New York
110 Washington Street
New York, New York 10286
8. MISCELLANEOUS: this Agreement (i) shall be
governed by and construed in accordance with the laws of the
State of New York, (ii) may be executed in counterparts each
of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may be amended by
the parties hereto in writing.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: April 13, 1992
THE BANK OF NEW YORK
Custodian
By: ______________________________________
Title: ____________________________________
As Custodian For
PREMIER CALIFORNIA
MUNICIPAL BOND FUND
BANKERS TRUST COMPANY
As Subcustodian
By: ___________________________________
Title: ___________________________________
EXHIBIT A
TO SUBCUSTODIAN AGREEMENT
DATED: APRIL 13, 1992
The Authorized Officers pursuant to Section 4 of the
Agreement shall be:
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
Dated: April 13, 1992
THE BANK OF NEW YORK
As Custodian
By: ___________________________
Title: ________________________
SUBCUSTODIAN AGREEMENT
The undersigned custodian (the "Custodian") for the
investment company identified in Schedule A attached
(collectively, the "Funds") hereby appoints on the following
terms and conditions Chemical Bank as subcustodian (the
"Subcustodian") for it and the Subcustodian hereby accepts such
appointment on the following terms and conditions as of the date
set forth below.
1. QUALIFICATION. The Custodian and the Subcustodian
each represent to the other and to each Fund that it is
qualified to act as custodian for a registered investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act").
2. SUBCUSTODY. The Subcustodian agrees to hold in a
separate account, segregated at all times from all other
accounts maintained by the Subcustodian, all securities and
evidence of rights thereto of each of the Funds
(collectively, "Fund Securities") deposited, from time to
time by the Custodian with the Subcustodian. The
Subcustodian will accept, hold or dispose of and take such
other reasonable actions with respect to Fund Securities, in
addition to those specified in Section 3, in accordance with
the instructions of the Custodian relating to Fund
Securities given in the manner set forth in Section 4
("Instructions"). The Subcustodian hereby waives any claim
against, or lien on, any Fund Securities for any claim
hereunder. Registered Fund Securities may be held in the
name of the Subcustodian or nominee. To the extent that
ownership of Fund Securities may be recorded by a book entry
system maintained by any transfer agent or registrar for
such Fund Securities (including, but not limited to, any
such system operated by the Subcustodian) or by Depositary
Trust Company, the Subcustodian may hold Fund Securities as
a book entry reflecting the ownership of such Fund
Securities by it or its nominee and need not possess
certificates or any other evidence of ownership.
3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except
as otherwise instructed pursuant to Section 4, the
Subcustodian will (i) present all Fund Securities requiring
presentation for any payment thereon, (ii) distribute to the
Custodian cash received thereupon, (iii) collect and
distribute to the Custodian interest and any dividends and
distributions on Fund Securities, (iv) forward to the
Custodian all confirmations, notices, proxies or proxy
soliciting materials relating to the Fund Securities
received by it (and the Custodian agrees to forward same to
the Fund), (v) report to the Custodian any missed payment or
other default upon any Fund Securities known to it as
Subcustodian hereunder, (the Subcustodian shall be deemed to
have knowledge of any payment default on any Fund Securities
in respect of which it acts as paying agent); all cash
distributions from the Subcustodian to the Custodian will be
on same day funds, or the same day that same day funds are
received by the Subcustodians unless such distribution
required instructions from the Custodian which were not
timely received, and (vi) at the request of the Custodian,
or on its behalf, execute any necessary declarations or
certificates of ownership (provided by the Custodian or on
its behalf) under any tax law nor or hereafter in effect.
The Subcustodian will furnish to the Custodian, upon the
Custodian's request, any report of the Subcustodian's
independent public accountants on an examination of its
internal accounting controls and procedures for safeguarding
securities held in its custody for the account of others.
4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of
the Custodian designated from time to time by letter to the
Subcustodian, signed by the President or any Vice President
and any Assistant Vice President, Assistant Secretary or
Assistant Treasurer of the Custodian, as an officer of the
Custodian authorized to give Instructions to the
Subcustodian with respect to Fund Securities (an "Authorized
Officer") shall be authorized to instruct the Subcustodian
as to the acceptance, holding, voting, presentation,
disposition or any other action with respect to Fund
Securities from time to time in writing signed by such
Authorized Officer and delivered by hand, mail, telecopier,
tested telex, tested computer printout or such other
reasonable method as the Custodian and Subcustodian shall
agree is designed to prevent unauthorized officer's
instructions. The Subcustodian is also authorized to accept
an act upon Instructions regardless of the manner in which
given (whether orally, by telephone or otherwise) if the
Subcustodian reasonably believes such Instructions are given
by an Authorized Officer. The Subcustodian will promptly
transmit to the Custodian all receipts, confirmations or
other transactional evidence received by it in respect of
Fund Securities as to which the Subcustodian has received
any Instructions. Instructions and other communications to
the Subcustodian shall be given to Chemical Bank, 55 Water
Street, Room 504, New York, New York, Attention: Debt
Securities Administration, Phone: (212)820-5616 Telex:
(212)269-8510 (or to such other address as the Custodian
or the Fund or Funds giving such notice, shall specify by
notice to the Subcustodian.
5. THE SUBCUSTODIAN. The Subcustodian shall not be
liable for any action taken or omitted to be taken in
carrying out the terms and provisions of this Agreement if
done without willful malfeasance, bad faith, negligence or
reckless disregard of its obligations and duties under this
Agreement.
The Subcustodian shall not have any responsibility for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters
relating to the Fund Securities, except upon Instructions
from the Custodian, nor for informing the Custodian with
respect thereto, unless the Subcustodian has knowledge or is
deemed to have knowledge of the aforesaid. The Subcustodian
shall be deemed to have knowledge in circumstances where it
is acting as tender agent or paying agent for the Fund
Securities. The Subcustodian shall not be under a duty to
supervise or to provide advice (other than notice) to the
Custodian or any of the Funds relative to any purchase,
sale, retention or other disposition of any Fund Securities
held hereunder. The Subcustodian shall for the benefit of
the Custodian and the Funds be required to exercise the same
care with respect to the receiving, safekeeping, handling
and delivery of Fund Securities than it customarily
exercises in respect of its own securities.
The Subcustodian will indemnify, defend and save
harmless the Custodian and the Funds from any loss or
liability incurred by the Custodian arising out of or in
connection with the Subcustodian's willful malfeasance, bad
faith, negligence or reckless disregard of its obligations
and duties under this Agreement; PROVIDED, HOWEVER, that the
Subcustodian shall in no event be liable for any special,
indirect or consequential damages.
The Custodian agrees to be responsible for, and will
indemnify, defend and save harmless the Subcustodian (or any
nominee in whose name any Fund Securities are registered)
for, any loss or liability incurred by the Subcustodian (or
such nominee) arising out of or in connection with any
action taken by the Subcustodian (or such nominee) in
accordance with any Instructions or any other action taken
by the Subcustodian (or such nominee) in good faith and
without negligence pursuant to this Agreement, including any
expenses, taxes or other charges which the Subcustodian (or
such nominee) is required to incur or pay in connection
therewith.
6. RESIGNATION. The Subcustodian may resign as such
at any time upon not less than five business days' prior
written notice to the Custodian. In the event of such
resignation or any other termination of this Agreement, the
Subcustodian shall deliver all Fund Securities then held by
it to the Custodian, or as otherwise directed by the
Custodian pursuant to Instructions received by the
Subcustodian, at the Custodian's expense; PROVIDED, HOWEVER,
that the Subcustodian shall not be required to effect any
such delivery outside the Borough of Manhattan.
7. MISCELLANEOUS. This Agreement (i) shall be
governed by and construed in accordance with the laws of the
State of New York, (ii) may be executed in counterparts each
of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may be amended
only by written agreement executed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: ______________________________
By: ______________________________
[Address]
Telephone:
Telex:
As Custodian for the Funds Listed
in Schedule A attached
CHEMICAL BANK
By: ______________________________
PREMIER CALIFORNIA MUNICIPAL BOND FUND
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Shareholder
Services Plan (the "Plan") under which the Fund would pay the
Fund's distributor, Dreyfus Service Corporation (the
"Distributor"), for providing personal services and/or
maintaining shareholder accounts. The Distributor would be
permitted to pay certain financial institutions, securities
dealers and other industry professionals (collectively, "Service
Agents") in respect of these services. The Plan is not to be
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "Act"), and the fee under the Plan is
intended to be a "service fee" as defined in Article III,
Section 26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan should be implemented
and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use Fund assets for such
purposes.
In voting to approve the implementation of such a
plan, the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor a fee at an
annual rate of .25 of 1% of the value of the Fund's average
daily net assets attributable to each class of Fund shares, in
respect of the provision of personal services to shareholders of
the respective class and/or maintenance of shareholder accounts.
The Distributor shall determine the amounts to be paid to
Service Agents and the basis on which such payments will be
made. Payments to a Service Agent are subject to compliance by
the Service Agent with the terms of any related Plan agreement
between the Service Agent and the Distributor.
2. For the purposes of determining the fees payable
under this Plan, the value of the net assets attributable to
each class of Fund shares shall be computed in the manner
specified in the Fund's Declaration of Trust for the computation
of the value of the Fund's net assets attributable to such a
class.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by a majority of the Board members, including a
majority of the Board members who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of this Plan or in
any agreements entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods ending September 5, provided such
continuance is approved at least annually in the manner provided
in paragraph 4 hereof.
6. This Plan may be amended at any time by the
Board, provided that any material amendments of the terms of
this Plan shall become effective only upon approval as provided
in paragraph 4 hereof.
7. This Plan is terminable without penalty at any
time by vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and
property of the Fund and shall not be binding upon any Trustee,
officer or shareholder of the Fund individually.
Dated: October 19, 1992
Effective: January 15, 1993
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated March 7, 1994, in this Registration Statement (Form N-1A 33-7498)
of Premier California Municipal Bond Fund.
ERNST & YOUNG
New York, New York
May 17, 1994
PREMIER CALIFORNIA MUNICIPAL BOND FUND
DISTRIBUTION PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Distribution
Plan (the "Plan") relating to its Class B shares in accordance
with Rule 12b-1 promulgated under the Investment Company Act of
1940, as amended (the "Act"). Under the Plan, the Fund would
pay the Fund's distributor, Dreyfus Service Corporation (the
"Distributor"), for advertising, marketing and distributing the
Fund's Class B shares. The Distributor would be permitted to
pay certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") in
respect of these services. If the proposal is to be
implemented, the Act and Rule 12b-1 require that a written plan
describing all material aspects of the proposed financing be
adopted by the Fund.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan should be implemented
and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use assets attributable to
the Fund's Class B shares for such purposes.
In voting to approve the implementation of such a
plan, the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and holders of its Class B shares.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor a fee at an
annual rate of .50 of 1% of the value of the Fund's average
daily net assets attributable to Class B for advertising,
marketing and distributing the Fund's Class B shares. The
Distributor may pay one or more Service Agents a fee in respect
of these services. The Distributor shall determine the amounts
to be paid to Service Agents and the basis on which such
payments will be made. Payments to a Service Agent are subject
to compliance by the Service Agent with the terms of any related
Plan agreement between the Service Agent and the Distributor.
2. For the purposes of determining the fees payable
under this Plan, the value of the net assets attributable to
Class B shall be computed in the manner specified in the Fund's
Declaration of Trust for the computation of the value of the
Fund's net assets attributable to such a class.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by (a) holders of a majority of the Fund's outstanding
Class B shares, and (b) a majority of the Board members,
including a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4(b)
hereof.
6. This Plan may be amended at any time by the
Board, provided that (a) any amendment to increase materially
the costs which the Fund may bear pursuant to this Plan shall be
effective only upon approval by a vote of holders of a majority
of the Fund's outstanding Class B shares, and (b) any material
amendments of the terms of this Plan shall become effective only
upon approval as provided in paragraph 4(b) hereof.
7. This Plan is terminable without penalty at any
time by (a) vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, or (b) vote of holders of a majority of the
Fund's outstanding Class B shares.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and
property of the Fund and shall not be binding upon any Trustee,
officer or shareholder of the Fund individually.
Dated: October 19, 1992
Effective: January 15, 1993
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 1/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 1/31/94 of a $1,000
hypothetical investment made on 11/10/86 (inception)
7.227
1000( 1 + T ) = 1,749.52
T = 8.05%
==========
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from inception through 1/31/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 13.64 + ( 13.64 x 0.6790 ) ] - 12.50
--------------------------------------------
12.50
T = 83.21%
========
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS A
SEC 30 DAY YIELD CALCULATION
INCOME 1/2/94 - 1/31/94 $1,115,414.28
EXPENSES 1/2/94 - 1/31/94 $175,413.00
Average Shares Entitled to Dividend
1/2/94 - 1/31/94 18,017,368.743
Maximum Offering Price per share 1/31/94 $14.28
x = 1,115,414.28 - 175,413.00
------------------------------------------
18,017,368.743 x 14.28
x = 0.003653
6
30 Day yield = 2 [( 1 + x) -1]
6
30 Day yield = 2 [ ( 1 + 0.003653 ) -1]
30 Day yield = 4.42%
=================
TAX EQUIVALENT YIELD
Taxable portion of yield = 0.00%
Tax exempt portion of yield = 4.42%
----------------
Yield = 4.42%
================
Federal & State Tax Bracket = 46.24%
================
4.42
Tax Equivalent Yield = -------------------- = 8.22%
( 1 - 0.4624 ) ================
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 1/31/93 through 1/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 1/31/94 of a $1,000
hypothetical investment made on 1/31/93
1.00
1000( 1 + T ) = 1,085.35
T = 8.54%
============
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 1/31/89 through 1/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 1/31/94 of a $1,000
hypothetical investment made on 1/31/89
5.00
1000( 1 + T ) = 1,545.90
T = 9.10%
============
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from inception through 1/31/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = Maximum Offering Price at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 13.64 + ( 13.64 x 0.6790 ) ] - 13.09
--------------------------------------------
13.09
T = 74.95%
========
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS B
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 1/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 1/31/94 of a $1,000
hypothetical investment made on 1/15/93 (inception)
1.047
1000( 1 + T ) = 1,112.77
T = 10.75%
==========
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS B
TOTAL RETURN COMPUTATION
Total return computation from inception through 1/31/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 13.64 + ( 13.64 x 0.0632 ) ] - 12.69
--------------------------------------------
12.69
T = 14.28%
========
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS B
SEC 30 DAY YIELD CALCULATION
INCOME 1/2/94 - 1/31/94 $73,926.61
EXPENSES 1/2/94 - 1/31/94 $19,944.28
Average Shares Entitled to Dividend
1/2/94 - 1/31/94 1,193,781.106
NAV per share 1/31/94 $13.64
x = 73,926.61 - 19,944.28
------------------------------------------
1,193,781.106 x 13.64
x = 0.003315
6
30 Day yield = 2 [( 1 + x) -1]
6
30 Day yield = 2 [ ( 1 + 0.003315 ) -1]
30 Day yield = 4.01%
=================
TAX EQUIVALENT YIELD
Taxable portion of yield = 0.00%
Tax exempt portion of yield = 4.01%
----------------
Yield = 4.01%
================
Federal & State Tax Bracket = 46.24%
================
4.01
Tax Equivalent Yield = -------------------- = 7.46%
( 1 - 0.4624 ) ================
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS B
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 1/31/93 through 1/31/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 1/31/94 of a $1,000
hypothetical investment made on 1/31/93
1.00
1000( 1 + T ) = 1,099.08
T = 9.91%
============
PREMIER CALIFORNIA MUNICIPAL BOND FUND - CLASS B
TOTAL RETURN COMPUTATION
Total return computation from inception through 1/31/94
based upon the following formula:
[ C + ( C x B ) ] - A D x ( E x F )
--------------------- --- -------------
T = A G
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
D = Applicable CDSC
E = Lower of A or C
F = Original shares
G = Original investment
T = Total return
T = [ 13.64 + (13.64 x 0.0632 ) ] - 12.69 -- 0.03 x ( 12.69 x 78.802 )
----------------------------------------- ------------------------
12.69 1000
T = 11.28%
======
