CMA MICHIGAN
MUNICIPAL MONEY FUND
Annual Report
March 31, 1998
MERRILL LYNCH BULL LOGO
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 Michigan
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1998, CMA Michigan Municipal Money Fund
paid shareholders a net annualized yield of 3.07%.* As of March 31,
1998, the Fund's 7-day yield was 2.97%.
Economic Environment and
Investment Strategy
During the six-month period ended March 31, 1998, Michigan's
financial performance and position continued to exhibit notable
strength. This performance is a result of steady economic growth at
the state level, combined with the effects of continued expenditure
controls. The state was also able to increase its budget
stabilization fund to over $1.1 billion, a level that provides a
good foundation for Michigan's future operations. Consequently,
during January, Standard & Poor's Corp. (S&P) raised its rating on
the state's $655 million in general obligation debt to AA+ from AA.
At the same time, S&P affirmed the SP1+ rating on the state's
outstanding cash flow notes and reported that the upgrades were
based on a significant increase in state financial reserves,
improved cash flows and a significantly lower-than-expected
settlement of a lawsuit against the state for a lack of funding to
state-mandated special education programs.
During the six months ended March 31, 1998, lawmakers approved
legislation that will improve problems pertaining to the state's
seasonal cash position. As a result of state assumption of a large
portion of financing public schools, the state faced annual cash
flow weakness and dependence upon balances in its rainy day and
other common cash funds. However, this new legislation, which
restructured the timing of payments to school districts under the
state-aid formula, will alleviate short-term cash flow shortfalls
and free up the rainy day fund to meet potential future revenue
deficiencies. Other factors supporting the upgrade include steady
employment growth and a relatively low per capita debt burden. For
example, compared to a year ago, December's labor force increased by
65,000 and employment moved up by 97,000, while unemployment fell by
32,000, resulting in a year-over-year decline of 0.7% in Michigan's
unemployment rate. Most recently, the state reported its February
unemployment rate at 4.0%, still below the national rate of 4.6% for
the same period. Finally, Governor Engler signed three new tax cuts
into law by year-end, which are expected to save taxpayers more than
$110 each annually. These cuts included a $200 increase in personal
exemptions, a $600 per child deduction and an increased tuition tax
credit.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Throughout the fiscal year ended March 31, 1998, we maintained a
relatively neutral average portfolio maturity. We significantly
extended the Fund's average maturity only when the short-term tax-
exempt yield curve steepened. This steepening occurred at tax time
in April 1997 when cash outflows drove up yields on short-term tax-
exempt securities and, more prominently, in late summer 1997 when
states issued their annual cash flow notes. However, for most of the
fiscal year, a decrease in total fixed-rate issuance resulting from
healthy state economies and continued cash inflows kept the short-
term tax-exempt yield curve relatively flat. For example, yields on
90-day tax-exempt commercial paper performed on average with those
on short-term tax-exempt notes maturing in six months--one year for
most of the period. Thus, for a majority of that time, we used tax-
exempt commercial paper when we wanted to pursue a more aggressive
strategy.
Furthermore, during the year ended March 31, 1998, assets of tax-
exempt money market funds rose by $25.6 billion, an increase of over
17%. The Fund, which began the fiscal year in the 25-day range,
concluded the period in the 35-day range. Our strategy allowed the
Fund to perform on average relative to similar Michigan tax-exempt
money market funds for the year ended March 31, 1998. Finally, we
continue to focus on diversification and credit quality when
choosing Fund investments, and we constantly monitor the ever-
changing marketplace and adapt our investment strategy when
necessary.
In Conclusion
We thank you for your support of CMA Michigan Municipal Money Fund,
and we look forward to serving your investment needs in the future.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Darrin J. SanFillippo)
Darrin J. SanFillippo
Vice President and Portfolio Manager
May 1, 1998
CMA MICHIGAN MUNICIPAL MONEY FUND
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].
Portfolio Abbreviations for CMA Michigan Municipal Money Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
DATES Daily AdjustableTax-Exempt Securities
FLOATS Floating Rate Securities
HDA Housing Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
MSTR Municipal Securities Trust Receipts
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
SAN State Aid Notes
TAN Tax Anticipation Notes
TEAMS Tax-Exempt Adjustable Municipal Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan-- $ 1,320 Battle Creek, Michigan, Housing Corporation, Housing Revenue Bonds
94.4% (Georgetown Estates Project), VRDN, Series 1997-A, 3.65% due 2/01/2027 (a) $ 1,320
890 Bedford Township, Michigan, Economic Development Corporation Revenue
Bonds (Form-Tech Steel Inc. Project), VRDN, 3.89% due 3/01/2010 (a) 890
4,500 Beecher, Michigan, Community School District, SAN, 4.125% due 6/30/1998 4,502
4,500 Berrien County, Michigan, Economic Development Corporation, Economic
Development Revenue Bonds (Arlington Corporation Project), VRDN, AMT,
3.95% due 9/01/2016 (a) 4,500
4,000 Chelsea, Michigan, Economic Development Corporation, Limited Obligation
Revenue Bonds (Silver Maples of Chelsea), VRDN, 3.70% due 5/15/2028 (a) 4,000
Delta County, Michigan, Economic Development Corporation, Environmental
Improvement Revenue Bonds (Mead Escambia Paper) (a):
2,300 DATES, Series F, 3.70% due 12/01/2013 2,300
2,900 Refunding, VRDN, Series D, 3.70% due 12/01/2023 2,900
Detroit, Michigan, Water Supply System Revenue Bonds, MSTR, VRDN (a)(c):
3,500 Series SG-64, 3.80% due 7/01/2025 3,500
2,000 Series SGB-6, 3.80% due 7/01/2025 2,000
1,205 Farmington Hills, Michigan, Economic Development Corporation, Limited
Obligation Revenue Refunding Bonds (Brookfield Building Association), VRDN,
3.75% due 11/01/2010 (a) 1,205
3,000 Fenton, Michigan, Area Public Schools, SAN, 4.25% due 6/30/1998 3,002
2,200 Flint, Michigan, Economic Development Corporation, Economic Development
Revenue Bonds (Plastics Research), VRDN, AMT, 3.80% due 9/01/2004 (a) 2,200
4,500 Garden City, Michigan, School District, SAN, UT, 4.70% due 4/01/1998 4,500
3,400 Genesee County, Michigan, Economic Development Corporation, Limited
Obligation, Economic Development Revenue Bonds (MM&E Inc. Project), VRDN,
3.80% due 7/01/2005 (a) 3,400
2,300 Georgetown Charter Township, Michigan, IDR, Limited Obligation (J&F Steel
Corporation), VRDN, AMT, 3.80% due 2/01/2009 (a) 2,300
3,325 Grand Rapids, Michigan, Economic Development Corporation, Economic
Development Revenue Refunding Bonds (Amway Hotel Corporation Project),
VRDN, Series B, 3.65% due 8/01/2017 (a) 3,325
555 Grand Rapids, Michigan, Economic Development Corporation, Limited Obligation
Revenue Refunding Bonds (Calder), VRDN, Series A, 3.65% due 10/01/2011 (a) 555
2,560 Grand Rapids, Michigan, IDR, Refunding (Etheridge Company Project), VRDN,
AMT, 3.75% due 7/01/2009 (a) 2,560
2,600 Grand Rapids, Michigan, Water Supply System, Revenue Refunding Bonds, VRDN,
3.60% due 1/01/2020 (a)(b) 2,600
445 Grosse Point, Michigan, Public Library, TAN, 4.28% due 4/03/1998 445
3,700 Kent Hospital Finance Authority, Michigan, Hospital Facilities Revenue Bonds
(Butterworth Hospital), ACES, Series A, 3.65% due 1/15/2020 (a) 3,700
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan $ 880 Lenawee County, Michigan, Economic Development Corporation, Limited Obligation
(continued) Revenue Bonds (The Wyatt Project), VRDN, 3.90% due 5/01/2002 (a) $ 880
1,000 Marquette County, Michigan, Economic Development Corporation, Limited
Obligation Revenue Bonds (Pioneer Laboratories), VRDN, Series B, 3.65% due
6/01/2012 (a) 1,000
450 Melvindale, Michigan, Economic Development Corporation, Limited Obligation
Revenue Refunding Bonds (North American Steel Project), VRDN, 3.65% due
6/01/1998 (a) 450
920 Michigan Higher Education Facilities Authority, Limited Obligation Revenue Bonds
(Davenport Collateral Business Project), VRDN, 3.70% due 3/01/2027 (a) 920
Michigan Municipal Bond Authority Revenue Notes:
3,500 RAN, Series C, 4.50% due 9/18/1998 3,509
1,750 Series A, 4.75% due 5/01/1998 1,751
30,375 Series B, 4.50% due 7/02/1998 30,433
2,000 Series D, 5% due 9/18/1998 2,005
Michigan State Building Authority Revenue Bonds:
12,830 CP, 3.40% due 4/09/1998 12,830
3,000 (Facilities Program), Series I, 4.50% due 10/01/1998 3,014
Michigan State, HDA, Limited Obligation Revenue Bonds:
4,000 (Bloomfield), TEAMS, CP, 3.50% due 5/14/1998 4,000
1,200 (Laurel Valley), TEAMS, VRDN, 3.70% due 12/01/2007 (a) 1,200
4,000 (Sand Creek Apartments, Phase 1 Project), VRDN, AMT, 3.80% due 1/01/2029 (a) 4,000
2,000 (Woodland Meadows Apartments Project), VRDN, AMT, 3.65% due 3/01/2013 (a) 2,000
7,000 Michigan State, HDA, M/F Housing Revenue Bonds, CP, AMT, Series A,
3.40% due 4/01/1998 7,000
4,500 Michigan State, HDA, Rental Housing Revenue Refunding Bonds, VRDN, Series B,
3.60% due 4/01/2019 (a) 4,500
Michigan State Hospital Finance Authority, Revenue Refunding Bonds:
1,200 (Mid-Michigan Obligation Group), Series A, 3.80% due 6/01/1998 (d) 1,200
1,000 (Sisters of Mercy), Series P, 4.10% due 8/15/1998 (c) 1,002
18,600 Michigan State Notes, CP, UT, 4.50% due 9/30/1998 18,677
Michigan State Strategic Fund, Limited Obligation Revenue Bonds, VRDN (a):
3,000 (AACOA Estrusions Inc. Project), AMT, 3.80% due 2/01/2008 3,000
7,500 (AVL North America Inc. Project), 3.80% due 4/01/2011 7,500
900 (Adaptive Manufacturing L.L.C. Project), AMT, 3.90% due 8/01/2016 900
865 (Akemi Inc. Project), AMT, 3.90% due 3/01/2021 865
1,600 (Applied Textiles Inc. Project), AMT, 3.80% due 7/01/2008 1,600
450 (BBPV Project), AMT, Series A-2, 3.85% due 1/01/2014 450
1,430 (BCM&N Project), AMT, 3.75% due 6/01/2020 1,430
2,600 (Baron Drawn Steel), IDR, AMT, 3.90% due 12/01/2006 2,600
2,500 (Cincinnati Milacron Inc. Project), AMT, 3.95% due 4/15/2005 2,500
3,400 (Dott Industries Inc. Project), AMT, 3.80% due 6/01/2001 3,400
1,500 (Gollin Block & Supply Company), AMT, 3.65% due 7/01/2012 1,500
1,345 (Hercules Drawn Steel Project), AMT, 3.89% due 8/01/2006 1,345
1,500 (Inalfa-Hollandia Inc. Project), AMT, 3.90% due 5/01/2016 1,500
2,000 (Ingersoll CM System Inc. Project), AMT, 3.80% due 12/01/2011 2,000
5,500 (Karona Inc.), AMT, 3.90% due 12/01/2015 5,500
115 (Kay Screen Printing Inc.), AMT, Series A, 3.95% due 1/01/1999 115
3,165 (Monarch Hydraulics Inc. Project), AMT, 3.80% due 7/01/2016 3,165
2,000 (Norbert Industries Inc. Project), AMT, UT, 3.65% due 4/01/2006 2,000
1,000 (Nothern Pure Ice Company Project), 3.35% due 3/01/2015 1,000
960 (Nuvar Properties L.L.C. Project), AMT, 3.80% due 7/01/2026 960
2,300 (Park Realty L.L.C.), AMT, Series A, 3.80% due 9/01/2026 2,300
1,145 (Perfection Steel Inc. Project), AMT, 3.80% due 3/01/2002 1,145
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1998 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
Michigan Michigan State Strategic Fund, Limited Obligation Revenue Bonds,
(concluded) VRDN (a) (concluded):
$ 2,025 (R.H. Wyner Associates Inc. Project), AMT, 3.80% due 10/01/2026 $ 2,025
2,000 Refunding (Consumers Power Company Project), Series A, 3.70% due 6/15/2010 2,000
2,500 Refunding (Detroit Edison Company), Series CC, 3.70% due 9/01/2030 2,500
1,000 Refunding (Grandview Plaza Project), 3.90% due 12/15/2010 1,000
4,850 Refunding (Lake Shore Inc.), AMT, 3.85% due 11/01/2019 4,850
440 Refunding (Park Village Pines Project), 3.65% due 5/01/2006 440
6,285 (Riverwalk Properties L.L.C. Project), AMT, 3.90% due 8/01/2021 6,285
400 Series C-4, 3.85% due 1/01/2009 400
1,250 (TEI Investments L.L.C. Project), AMT, 3.90% due 2/01/2022 1,250
4,275 (Temperance Enterprises Co.), AMT, 3.90% due 8/01/2011 4,275
1,475 (Tom Miller Inc. Project), AMT, 3.75% due 12/01/2009 1,475
2,700 (Universal Tube, Inc. Project), AMT, 3.80% due 8/01/2011 2,700
3,500 (Waltec American Forgings), 3.85% due 10/01/2009 3,500
425 (Whitehall Industries), AMT, Series A-6, 3.85% due 1/01/2014 425
6,000 Michigan State Strategic Fund, PCR, Refunding (Consumers Power Project), VRDN,
Series A, 3.70% due 4/15/2018 (a) 6,000
7,500 Michigan State Trunk Line, FLOATS, Series SG-44, 3.80% due 11/15/2024 (a)(b) 7,500
2,000 Muskegon County, Michigan, Economic Development Corporation, Limited
Obligation Revenue Bonds (Baker College), VRDN, 3.70% due 12/01/2021 (a) 2,000
2,200 Niles, Michigan, Community Schools, SAN, 4.10% due 5/28/1998 2,201
2,000 Oscoda, Michigan, Area Schools District, SAN, 4.25% due 5/11/1998 2,001
1,700 Royal Oak, Michigan, Hospital Finance Authority Revenue Bonds
(William Beaumont Hospital), VRDN, Series L, 3.70% due 1/01/2027 (a) 1,700
175 Sterling Heights, Michigan, Economic Development Corporation, Limited
Obligation Revenue Refunding Bonds (Sterling Shopping Center), VRDN,
3.70% due 12/01/2010 (a) 175
University of Michigan, University Revenue Bonds, VRDN, Series A (a):
4,300 (Hospital), 3.70% due 12/01/2027 4,300
9,890 (Medical Service Plan), 3.70% due 12/01/2027 9,890
8,200 Refunding (Hospital), 3.70% due 12/01/2019 8,200
6,900 Wayne Charter County, Michigan, Airport Revenue Refunding Bonds (Detroit
Metropolitan County), VRDN, AMT, Series A, 3.75% due 12/01/2016 (a) 6,900
1,200 Westwood, Michigan, Community School District, SAN, 4.03% due 6/30/1998 1,201
800 Wyoming, Michigan, Economic Development Corporation, Revenue Refunding
Bonds (Family One Inc. Project), VRDN, AMT, 3.80% due 11/01/2019 (a) 800
Puerto Rico-- 5,500 Puerto Rico Commonwealth Government Development Bonds, CP, 3.10% due
4.6% 4/09/1998 5,500
2,500 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, VRDN, Series X, 3.375% due 7/01/1999 (a) 2,500
6,000 Puerto Rico, Electric Power Authority, Power Revenue Bonds, MSTR, VRDN,
Series SGA-43, 3.60% due 7/01/2022 (a)(c) 6,000
Total Investments (Cost--$302,843*)--99.0% 302,843
Other Assets Less Liabilities--1.0% 3,203
--------
Net Assets--100.0% $306,046
========
<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, 1998.
See Notes to Financial Statements.
(b)FGIC Insured.
(c)MBIA Insured.
(d)FSA Insured.
*Cost for Federal income tax purposes.
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1998
<S> <C> <C>
Assets:
Investments, at value (identified cost--$302,843,135) (Note 1a) $ 302,843,135
Cash 350,040
Interest receivable 3,125,436
Prepaid registration fees and other assets (Note 1d) 10,972
--------------
Total assets 306,329,583
--------------
Liabilities:
Payables:
Investment adviser (Note 2) $ 133,613
Distributor (Note 2) 90,103 223,716
--------------
Accrued expenses and other liabilities 59,501
--------------
Total liabilities 283,217
--------------
Net Assets $ 306,046,366
==============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $ 30,620,174
Paid-in capital in excess of par 275,581,568
Accumulated realized capital losses--net (Note 4) (155,376)
--------------
Net Assets--Equivalent to $1.00 per share based on 306,201,742 shares of
beneficial interest outstanding $ 306,046,366
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1998
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 10,574,515
Expenses:
Investment advisory fees (Note 2) $ 1,420,153
Distribution fees (Note 2) 351,653
Transfer agent fees (Note 2) 55,103
Professional fees 52,809
Accounting services (Note 2) 49,333
Registration fees (Note 1d) 43,723
Custodian fees 25,410
Pricing fees 8,560
Trustees' fees and expenses 2,083
--------------
Total expenses 2,008,827
--------------
Investment income--net 8,565,688
Realized Loss on Investments--Net (Note 1c) (5,036)
--------------
Net Increase in Net Assets Resulting from Operations $ 8,560,652
==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
March 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <C> <C>
Operations:
Investment income--net $ 8,565,688 $ 7,159,379
Realized loss on investments--net (5,036) (18,304)
-------------- --------------
Net increase in net assets resulting from operations 8,560,652 7,141,075
-------------- --------------
Dividends to Shareholders (Note 1e):
Investment income--net (8,565,688) (7,159,379)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (8,565,688) (7,159,379)
-------------- --------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 1,337,768,909 1,149,598,981
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 8,565,686 7,159,224
-------------- --------------
1,346,334,595 1,156,758,205
Cost of shares redeemed (1,313,252,528) (1,131,314,536)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 33,082,067 25,443,669
-------------- --------------
Net Assets:
Total increase in net assets 33,077,031 25,425,365
Beginning of year 272,969,335 247,543,970
-------------- --------------
End of year $ 306,046,366 $ 272,969,335
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA MICHIGAN 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: 1998 1997 1996 1995 1994
<S> <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 .03 .02
-------- -------- -------- -------- --------
Total from investment operations .03 .03 .03 .03 .02
-------- -------- -------- -------- --------
Less dividends from investment income--net (.03) (.03) (.03) (.03) (.02)
-------- -------- -------- -------- --------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Investment Return 3.07% 2.90% 3.12% 2.57% 1.81%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses .71% .72% .73% .73% .72%
======== ======== ======== ======== ========
Investment income--net 3.02% 2.84% 3.05% 2.54% 1.79%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $306,046 $272,969 $247,544 $220,171 $236,435
======== ======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Michigan 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.
(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.
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.
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.
CMA MICHIGAN MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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, 1998, the Fund had a net capital loss carryforward of
approximately $155,000, of which $62,000 expires in 2001, $4,000
expires in 2002, $50,000 expires in 2003, $32,000 expires in 2005
and $7,000 expires in 2006. This amount will be available to offset
like amounts of any future taxable gains.
<AUDIT-REPORT>
CMA MICHIGAN MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA Michigan Municipal Money Fund of
CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA Michigan
Municipal Money Fund of CMA Multi-State Municipal Series Trust as of
March 31, 1998, 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, 1998 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CMA Michigan Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1998, 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 5, 1998
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid daily by CMA
Michigan Municipal Money Fund of CMA Multi-State Municipal Series
Trust during its taxable year ended March 31, 1998 qualify as tax-
exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during its taxable year ended March 31, 1998.
Please retain this information for your records.
