CMA
CMA PENNSYLVANIA
MUNICIPAL MONEY FUND
Annual Report
March 31, 1997
MERRILL LYNCH
BULL LOGO
<PAGE>
Officers and Trustees
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Edward J. Andrews--Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Steven T. Lewis--Vice President
Darrin J. SanFillippo--Vice President
Kevin A. Schiatta--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
[FN]
*For inquiries regarding your CMA account, call (800) CMA-INFO
[(800) 262-4636].
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. The Fund
seeks to maintain a consistent $1.00 net asset value per share,
although this cannot be assured. An investment in the Fund is
neither insured nor guaranteed by the US Government. Statements and
other information herein are as dated and are subject to change.
CMA Pennsylvania
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
<PAGE>
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1997, CMA Pennsylvania Municipal Money
Fund paid shareholders a net annualized yield of 2.89%*. As of March
31, 1997, the Fund's 7-day yield was 2.83%.
Investment Outlook and Strategy
During the beginning of the six-month period ended March 31, 1997,
economic activity in the Commonwealth of Pennsylvania was relatively
stagnant. The manufacturing sector continued to grow, but at a
slightly slower pace than in recent months. Additionally,
nonresidential construction, while improving the first seven months
of 1996, declined as we approached 1996 year-end. During 1996,
payroll jobs increased less than 4%. However, despite the
commonwealth's economy moderating during the first half of the six-
month period, Pennsylvania continued to record solid tax
collections. Through the first half of fiscal year 1997,
Pennsylvania reported general revenue collections 6.5% above the
comparable period last year and 2% above budget estimates.
Consequently, the various Pennsylvania municipalities who also
benefited from this positive revenue stream continue to issue a
minimal amount of short-term municipal notes. As 1997 started,
January's State Business Outlook Survey suggested that manu-
facturing activity regained some momentum. According to the survey,
current economic activity returned to positive levels following a
negative reading in December 1996. The survey reflects that
manufacturing forecasts for the next six months point to continued
steady growth ahead. Specifically, the current General Activity
Index increased 11.3% in January 1997 from a revised reading of 6.2%
in December 1996.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
During the six-month period ended March 31, 1997, economic
statistics continued to paint an ideal picture of the US economy.
For a majority of the period, a combination of steady growth and low
inflation kept Federal Reserve Board policymakers on hold. For
example, despite strong holiday sales spurred by healthy increases
in personal income, the consensus remained that monetary policy
would be on hold for the near term. However, during most of this
period, a lack of fixed-rate supply combined with traditional
inflows during early December 1996 and January 1997 kept yields on
fixed-rate notes relatively unattractive compared to those on
variable rate demand notes. Both the flat short-term tax-exempt
yield curve and a bias for tighter monetary policy caused us to use
the Fund's commercial paper to maintain a relatively neutral average
portfolio maturity, while selectively purchasing fixed-rate notes
when yields were attractive. The Fund had also used this strategy
during the six-month period ended September 30, 1996, since similar
conditions prevailed during that time period. Furthermore, the
purchase of fixed-rate notes at attractive levels during July 1996
and August 1996 enhanced the Fund's performance for the recent
fiscal year.
<PAGE>
As the six-month period ended March 31, 1997 concluded, continued
strength in a majority of economic statistics revealed the potential
for impressive growth during the first quarter of 1997. Therefore,
with the likelihood of an interest rate hike and the expected rise
in yields on variable rate products in April because of outflows
during tax time, we decided to position the Fund more defensively.
In October 1996, the average portfolio maturity was in the 45-day
range, but by the end of March, the average portfolio maturity was
in the 40-day range. On March 25, 1997, the Federal Reserve Board
increased the Federal Funds rate by 25 basis points (0.25%) to 5.5%.
During the six-month period ended March 31, 1997, Pennsylvania's
short-term issuance totaled $1.2 billion. Diversification and credit
quality remain paramount to the Fund, and we will continue to
closely monitor the everchanging marketplace.
In Conclusion
We thank you for your support of CMA Pennsylvania Municipal Money
Fund, and we look forward to serving your investment needs in the
months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
<PAGE>
(Darrin J. SanFillippo)
Darrin J. SanFillippo
Vice President and Portfolio Manager
April 28, 1997
We are pleased to announce that Darrin J. SanFillippo is responsible
for the day-to-day management of CMA Pennsylvania Municipal Money
Fund. Mr. SanFillippo has been employed by Merrill Lynch Asset
Management L.P. since 1988, becoming Assistant Vice President in the
Tax-Exempt Bond Department in 1994.
Portfolio Abbreviations for CMA Pennsylvania Municipal Money Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
TAN Tax Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UPDATES Unit Price Daily Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania-- Allegheny County, Pennsylvania, Hospital Development Authority
96.1% Revenue Bonds, VRDN (a):
$ 1,000 (Allegheny General Hospital), Series B, 3.45% due 9/01/2010 $ 1,000
400 (Presbyterian University Hospital), Series B2, 3.50% due 3/01/2018 400
6,500 Allegheny County, Pennsylvania, IDA, Pollution Revenue Bonds (Duquesne
Light Project), CP, Series A, 3.70% due 2/05/1998 6,500
9,900 Allegheny County, Pennsylvania, IDA, Revenue Bonds (United Jewish
Federation Project), VRDN, Series A, 3.60% due 10/01/2026 (a) 9,900
6,000 Allegheny County, Pennsylvania, IDA, Revenue Refunding Bonds
(Commercial Development Parkway Center Mall Project), VRDN, Series A,
3.60% due 5/01/2009 (a) 6,000
Beaver County, Pennsylvania, IDA, PCR:
4,200 (Duquesne Light Project), CP, 3.60% due 7/09/1997 4,200
5,100 (Duquesne Light Project), CP, AMT, Series A, 3.50% due 7/15/1997 5,100
1,000 (Duquesne Light Project), CP, Series 94, 2.60% due 4/01/1997 1,000
4,000 Refunding (Atlantic Richfield Project), VRDN, 3.45% due 12/01/2020 (a) 4,000
10,000 Refunding (Toledo Edison Project), CP, Series E, 3.70% due 12/04/1997 10,000
Berks County, Pennsylvania IDA, IDR:
4,100 (Citizens Utilities Co. Projects), CP, AMT, Series A, 3.45% due 6/13/1997 4,100
2,425 (Valley Forge Company, Inc. Project), VRDN, AMT, Series A,
3.85% due 9/01/2006 (a) 2,425
4,830 Bucks County, Pennsylvania, IDA, Environmental Improvement Revenue
Refunding Bonds (USX Corporate Project), 3.45% due 8/05/1997 4,830
Carbon County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Panther Creek Partners), CP, AMT:
4,050 Series A, 3.55% due 5/14/1997 4,050
4,445 Series A, 3.50% due 7/15/1997 4,445
6,200 Series A, 3.50% due 7/25/1997 6,200
2,550 Series B, 3.40% due 4/10/1997 2,550
14,540 Series B, 3.60% due 7/09/1997 14,540
2,000 Delaware County, Pennsylvania, Authority Revenue Bonds (Widener
University Inc.), VRDN, 3.60% due 7/01/2014 (a) 2,000
500 Delaware County, Pennsylvania, IDA, PCR (BP Oil Inc. Project), UPDATES,
3.70% due 12/01/2009 (a) 500
Eagle Tax Exempt Trust, VRDN (a):
4,300 Series 94, 3.61% due 5/01/2008 4,300
5,700 Series 96C, 3.56% due 5/01/2014 5,700
5,900 Series A, 3.46% due 7/01/2025 5,900
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania Emmaus, Pennsylvania, General Authority Revenue Bonds, VRDN (a):
(continued) $ 3,300 Sub-Series B-12, 3.55% due 3/01/2024 $ 3,300
3,300 Sub-Series C-8, 3.55% due 3/01/2024 3,300
5,400 Sub-Series E-7, 3.55% due 3/01/2024 5,400
3,500 Sub-Series F-7, 3.55% due 3/01/2024 3,500
5,000 Sub-Series F-8, 3.55% due 3/01/2024 5,000
6,800 Sub-Series G-7, 3.55% due 3/01/2024 6,800
2,700 Erie County, Pennsylvania, IDA, Revenue Bonds (McInnes Steel Co.),
VRDN, AMT, 3.80% due 11/01/2001 (a) 2,700
8,900 Geisinger, Pennsylvania, Health System Revenue Bonds, VRDN, Series B,
3.70% due 7/01/2022 (a) 8,900
10,000 Harrisburg, Pennsylvania, Revenue Bonds (Pool Financing Authority
Fund), VRDN, 3.60% due 7/01/2021 (a) 10,000
2,000 Jeannette, Pennsylvania, Health Service Authority, Hospital Revenue
Bonds (Jeannette District Memorial Hospital), VRDN, Series B, 3.60%
due 11/01/2018 (a) 2,000
5,940 Lancaster County, Pennsylvania, Hospital Authority, Health Center
Revenue Bonds (Masonic Homes Project), VRDN, 3.65% due 7/01/2027 (a) 5,940
2,000 Montgomery County, Pennsylvania, GO, VRDN, UT, 3.55% due 11/15/2001 (a) 2,000
18,000 Montgomery County, Pennsylvania, Higher Education and Health Authority
Revenue Bonds (Pennsylvania Higher Education & Health Loan), VRDN,
Series A, 3.70% due 8/01/2021 (a) 18,000
Montgomery County, Pennsylvania, IDA, Revenue Bonds
(Merck & Co. Project), Series A:
10,000 CP, 3.40% due 4/16/1997 10,000
1,700 VRDN, 3.90% due 10/01/2017 (a) 1,700
4,250 Montgomery County, Pennsylvania, IDA, Revenue Refunding Bonds (Commercial
Development--Valley Forge Plaza), VRDN, 3.40% due 12/01/2013 (a) 4,250
3,850 Montour County, Pennsylvania, IDA, PCR (Merck & Co. Project), VRDN,
Series A, 3.65% due 10/01/2003 (a) 3,850
3,500 Moon, Pennsylvania, IDA, Commercial Development Revenue Bonds (One
Thorn Run Center Project), VRDN, Series A, 3.60% due 11/01/2015 (a) 3,500
5,000 Northeastern Pennsylvania, Hospital and Education Authority Revenue
Bonds (Allhealth Pooled Financing Program), VRDN, 3.70% due 7/01/2026 (a) 5,000
Pennsylvania Economic Development Financing Authority, Economic
Development Revenue Bonds, VRDN (a):
1,200 (Erie Forge & Steel Project), AMT, Series B-4, 3.75% due 12/01/1999 1,200
1,600 (Erie Plating Company Project), AMT, Series B-5, 3.75% due 12/01/2004 1,600
5,300 (Gutchess Hardwoods Project), Series B, 3.60% due 4/01/2005 5,300
5,000 AMT, Series D-7, 3.75% due 8/01/2022 5,000
2,000 AMT, Series F-5, 3.75% due 12/01/2006 2,000
2,000 AMT, Series I-3, 3.75% due 12/01/2011 2,000
1,170 (Wendt Dunnington Co. Project), VRDN, AMT, 3.55% due 9/01/2010 (a) 1,170
Pennsylvania Energy Development Authority, Energy Development Revenue
Bonds, VRDN, AMT (a):
5,650 (BIW Ebensburg Project), 3.45% due 12/01/2011 5,650
14,000 (Piney Creek Project), Series A, 3.50% due 12/01/2011 14,000
900 (Piney Creek Project), Series C, 3.50% due 12/01/2011 900
4,000 Pennsylvania Intergovermental Cooperative Authority, Special Tax
Revenue Refunding Bonds (Philadelphia Funding Project), 5% due
6/15/1997 (c) 4,010
Pennsylvania State Higher Education Assistance Agency, Student Loan
Revenue Bonds, VRDN (a):
3,100 AMT, Series A, 3.50% due 1/01/2018 3,100
15,000 AMT, Series A, 3.30% due 3/01/2027 15,000
1,800 Series C, 3.50% due 7/01/2018 1,800
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Pennsylvania $ 3,400 Pennsylvania State Higher Educational Facilities Authority, College
(concluded) and University Revenue Refunding Bonds (Pennsylvania College of
Optometry), VRDN, 3.40% due 3/01/2026 (a) $ 3,400
Pennsylvania State Higher Educational Facilities Authority, Revenue
Refunding Bonds, Series C (a):
7,300 (Carnegie Mellon University), VRDN, 3.70% due 11/01/2029 7,300
10,000 (Thomas Jefferson University), ACES, 3.50% due 5/30/1997 10,000
10,000 Pennsylvania State, TAN, First Series, 4.50% due 6/30/1997 10,018
2,560 Philadelphia, Pennsylvania, Authority for Industrial Development
Revenue Bonds (David Michael & Co. Inc.), VRDN, AMT, 3.85% due
10/01/2006 (a) 2,560
Philadelphia, Pennsylvania, Hospitals and Higher Educational
Facilities Authority, Hospital Revenue Bonds, VRDN (a):
4,600 (Children's Hospital of Philadelphia Project), 3.70% due 3/01/2027 4,600
2,280 Refunding (Pennsylvania Hospital), Series B, 3.40% due 7/01/2023 (c) 2,280
4,425 Philadelphia, Pennsylvania, Redevelopment Authority, M/F Housing Revenue
Refunding Bonds (Courts Project), VRDN, Series A, 3.40% due 6/01/2025 (a) 4,425
14,545 Philadelphia, Pennsylvania, School District, TRAN, 4.50% due 6/30/1997 14,567
22,200 Philadelphia, Pennsylvania, TRAN, Series A, 4.50% due 6/30/1997 22,235
1,450 Pittsburgh, Pennsylvania, Urban Redevelopment Authority, S/F Mortgage
Revenue Bonds, AMT, Series C, 3.65% due 6/01/1997 (b) 1,450
2,200 Red Lion, Pennsylvania, Area School District, TRAN, 4.25% due 6/30/1997 2,202
3,400 Scranton-Lackawanna, Pennsylvania, Health and Welfare Authority,
Hospital Facilities Revenue Refunding Bonds (Mercy Health Systems),
VRDN, Series A, 3.45% due 12/01/2021 (a) 3,400
15,000 Temple University of the Commonwealth System of Higher Education,
Pennsylvania, University Funding Obligations, 4.625% due 5/20/1997 15,018
Venango, Pennsylvania, IDA, Resource Recovery Revenue Bonds (Scrubgrass
Project), CP, AMT:
2,000 3.40% due 4/10/1997 2,000
9,100 Refunding, Series A, 3.50% due 7/11/1997 9,100
4,300 Refunding, Series B, 3.40% due 4/10/1997 4,300
3,000 Westmoreland County, Pennsylvania, IDA, Revenue Bonds (National
Waste and Energy Corp.--Valley Landfill Expansion Project), AMT,
4.375% due 5/01/1997 3,000
13,000 York, Pennsylvania, General Pooled Financing Authority Revenue Bonds,
VRDN, 3.50% due 9/01/2026 (a) 13,000
<PAGE>
Puerto Rico-- Puerto Rico Commonwealth, Government Development
4.0% Bank Revenue Bonds, CP:
5,000 3.25% due 4/03/1997 5,000
3,000 3.10% due 4/08/1997 3,000
9,000 3.50% due 4/09/1997 9,000
Total Investments (Cost--$429,365*)--100.1% 429,365
Liabilities in Excess of Other Assets--(0.1%) (469)
----------
Net Assets--100.0% $ 428,896
==========
<FN>
(a)The interest rate is subject to change periodically based on
certain indexes. The interest rate shown is the rate in effect at
March 31, 1997.
(b)GNMA Collateralized.
(c)FGIC Insured.
*Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost--$429,364,743) (Note 1a) $ 429,364,743
Cash 83,162
Interest receivable 3,346,944
Prepaid registration fees and other assets (Note 1d) 22,163
---------------
Total assets 432,817,012
---------------
Liabilities:
Payables:
Securities purchased $ 3,500,000
Investment adviser (Note 2) 181,321
Distributor (Note 2) 127,692
Dividends to shareholders (Note 1e) 196
Beneficial interest redeemed 30 3,809,239
---------------
Accrued expenses and other liabilities 111,704
---------------
Total liabilities 3,920,943
---------------
Net Assets $ 428,896,069
===============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $ 42,892,078
Paid-in capital in excess of par 386,028,378
Accumulated realized capital losses--net (Note 4) (24,387)
---------------
Net Assets--Equivalent to $1.00 per share based on 428,920,781 shares of
beneficial interest outstanding $ 428,896,069
===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1997
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 14,404,354
Expenses:
Investment advisory fees (Note 2) $ 2,013,273
Distribution fees (Note 2) 496,888
Transfer agent fees (Note 2) 102,555
Registration fees (Note 1d) 64,766
Accounting services (Note 2) 59,661
Professional fees 53,522
Printing and shareholder reports 34,490
Custodian fees 33,645
Pricing fees 7,255
Trustees' fees and expenses 3,930
Other 5,563
---------------
Total expenses 2,875,548
---------------
Investment income--net 11,528,806
Realized Loss on Investments--Net (Note 1c) (1,453)
---------------
Net Increase in Net Assets Resulting from Operations $ 11,527,353
===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
March 31,
1997 1996
Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income--net $ 11,528,806 $ 12,163,742
Realized loss on investments--net (1,453) --
--------------- ---------------
Net increase in net assets resulting from operations 11,527,353 12,163,742
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net (11,525,719) (12,163,742)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (11,525,719) (12,163,742)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 1,355,806,175 1,486,225,661
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 11,525,515 12,166,441
--------------- ---------------
1,367,331,690 1,498,392,102
Cost of shares redeemed (1,355,166,461) (1,435,297,725)
--------------- ---------------
Net increase in net assets derived from beneficial interest
transactions 12,165,229 63,094,377
--------------- ---------------
Net Assets:
Total increase in net assets 12,166,863 63,094,377
Beginning of year 416,729,206 353,634,829
--------------- ---------------
End of year $ 428,896,069 $ 416,729,206
=============== ===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .03 .03 .03 .02 .02
---------- ---------- ---------- ---------- ----------
Total from investment operations .03 .03 .03 .02 .02
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.03) (.03) (.03) (.02) (.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.89% 3.20% 2.65% 1.87% 2.29%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses .71% .72% .71% .72% .72%
========== ========== ========== ========== ==========
Investment income--net 2.86% 3.13% 2.64% 1.85% 2.22%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $ 428,896 $ 416,729 $ 353,635 $ 336,853 $ 318,954
========== ========== ========== ========== ==========
See Notes to Financial Statements.
</TABLE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Pennsylvania Municipal Money Fund (the "Fund") is part of CMA
Multi-State Municipal Series Trust (the "Trust"). The Fund is
registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. The following
is a summary of significant accounting policies followed by the
Fund.
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be
the next coupon date on which the interest rate is to be adjusted.
In the case of a floating rate instrument, the remaining maturity is
the demand notice payment period.
<PAGE>
(b) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders--The Fund declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax and back-up withholding tax withheld) in
additional fund shares at net asset value. Dividends are declared
from the total of net investment income, excluding discounts earned
other than original issue discounts. Net realized capital gains, if
any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more
frequently than annually in order to maintain the Fund's net asset
value at $1.00 per share.
(f) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of $3,087
have been reclassified between accumulated net realized capital
losses and undistributed net investment income. These
reclassifications have no effect on net asset value per share.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: 0.50%
of the first $500 million of average daily net assets; 0.425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion; and 0.375% of average daily net assets in excess of $1
billion.
<PAGE>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the
annual rate of 0.125% of average daily net assets of the Fund. The
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares
of the Fund and for providing direct personal services to
shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by
MLPF&S in processing share orders and administering shareholder
accounts.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per
share.
4. Capital Loss Carryforward:
At March 31, 1997, the Fund had a net capital loss carryforward of
approximately $24,000, of which $13,000 expires in 2002 and $11,000
expires in 2003. This amount will be available to offset like amounts
of any future taxable gains.
<AUDIT-REPORT>
CMA PENNSYLVANIA MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Pennsylvania Municipal Money Fund
of CMA Multi-State Municipal Series Trust:
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We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA Penn-
sylvania Municipal Money Fund of CMA Multi-State Municipal Series
Trust as of March 31, 1997, the related statements of operations for
the year then ended and changes in net assets for each of the years
in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at March
31, 1997 by correspondence with the custodian and broker. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CMA Pennsylvania Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1997, the results of its operations,
the changes in its net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 2, 1997
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Pennsylvania Municipal Money Fund of CMA Multi-State Municipal
Series Trust during its taxable year ended March 31, 1997 qualify as
tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during the year.
Please retain this information for your records.
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