COLONIAL NORTH CAROLINA TAX-
EXEMPT FUND
Supplement to Prospectus dated
May 31, 1995
(Supplanting Supplement dated
July 14, 1995)
Through July 31, 1995, the
Adviser waived its fees and
reimbursed the Fund for all
expenses (exclusive of Rule
12b-1 fees, brokerage
commissions, interest, taxes
and extraordinary expenses, if
any) to the extent such
expenses did not exceed 0.10%
annually of average net assets.
Effective August 1, 1995, and
until further notice, the
Adviser is waiving fees and
reimbursing expenses (other
than the foregoing expenses)
only to the extent such
expenses otherwise would exceed
0.30% annually of average net
assets.
The State of North Carolina
recently repealed its
Intangible Personal Property
Tax formerly applicable to
shares of stock, including
shares of certain mutual funds.
The repeal is effective for
taxable years beginning after
1994.
The third sentence of the
fourth paragraph on page 1 is
revised in its entirety as
follows:
The Florida and Michigan Funds'
shares are intended to be
exempt from their respective
state's intangibles tax.
The second sentence of the
first paragraph under the
caption THE FUNDS' INVESTMENT
OBJECTIVE is revised in its
entirety as follows:
The Florida and Michigan Funds'
shares are intended to be
exempt from their respective
state's intangibles tax.
The first sentence of the first
paragraph under the caption HOW
THE FUNDS PURSUE THEIR
OBJECTIVE is revised in its
entirety as follows:
Each Fund normally invests
substantially all of its assets
in investment grade debt
securities of any maturity, the
interest on which is exempt
from federal income tax and
that state's personal income
tax (if any), other than any
alternative minimum tax (State
Bonds); in the case of the
Florida and Michigan Funds, the
State Bonds are exempt from the
state intangibles tax.
NC-36/264B-0995 September 27, 1995
