VAN KAMPEN MERRITT CALIFORNIA QUALITY MUNICIPAL TRUST, N-30D, 1995-10-27

VAN KAMPEN MERRITT CALIFORNIA QUALITY MUNICIPAL TRUST
N-30D, 1995-10-27

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<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------

<S> <C>
Letter to Shareholders................. 1
Performance Results.................... 3
Portfolio of Investments............... 4
Statement of Assets and Liabilities.... 9
Statement of Operations................ 10
Statement of Changes in Net Assets..... 11
Financial Highlights................... 12
Notes to Financial Statements.......... 13
Independent Auditors' Report........... 17
Dividend Reinvestment Plan............. 18
</TABLE>

- --------------------------------------------------------------------------------
Letter to Shareholders
- --------------------------------------------------------------------------------

October 12, 1995

Dear Shareholder:
The first eight months of 1995 have been very positive for most investors.
Both the fixed-income and stock markets have made considerable gains for
the period ended August 31, 1995.
This year serves as a reminder of just how quickly markets can move and how
difficult it can be to predict the timing of those movements. Moreover, this
year reinforces the importance of maintaining a long-term perspective and
reaffirms the principle that it is time---not timing---that leads to
investment success.

[PHOTO]
Dennis J. McDonnell and Don G. Powell

Economic Overview
Due in large part to the Federal Reserve Board's efforts to tighten monetary
supply in 1994, the economy has slowed significantly this year. Evidence of
this guided slowdown was reflected in gross domestic product for the second
quarter, which grew at an annual rate of 1.3 percent, substantially lower than
its first quarter rate of 2.7 percent and fourth quarter 1994 rate of 5.1
percent. While other key economic data, including unemployment rates and housing
starts, have shown mixed signs during recent months, the general trends for the
year continue to support a "soft landing" scenario.
Comfortable with the economy's rate of growth and level of inflation, the Fed
reversed its trend of raising interest rates and lowered short-term rates by
0.25 percent on July 6. Financial markets, perceiving the Fed's monetary
initiatives had taken hold without driving the economy into a recession, rallied
through much of the year. With slowing growth, interest rates declined and the
value of many fixed-income investments rose (bond yields and prices move in the
opposite direction). For example, the yield on 30-year Treasury securities fell
from 7.88 percent at the end of December to 6.66 percent at the end of August,
while its price rose more than 14 percent. Likewise, the yield on the Bond
Buyer's Municipal Bond Index fell from 7.28 percent at the end of December
to 6.30 percent at the end of August. Although municipal bond yields have
declined, they are still offering competitive yields, particularly to those
investors in higher tax brackets.
Closer to home, the California municipal bond market suffered from the default
of Orange County securities and the county's June 27 election, in which voters
turned down a half-cent sales tax increase to repay the obligations. We are
pleased to report that the Trust was not materially impacted by the Orange
County bankruptcy or the subsequent defeat of a half-cent sales tax proposal.
More than 40 percent of the Trust's portfolio is rated AAA, the highest rating
assigned to municipal bonds by Standard and Poor's Ratings Group.

(Continued on page two)

Performance Summary
The Trust produced a tax-exempt distribution rate of 7.00 percent<F3>, based
on the closing stock price of $15.00 per common share on August 31, 1995. Since
income from the Trust is exempt from federal and state income tax, it is also
important to compare the Trust's distribution rate to an equivalent taxable
rate. For example, for California residents in the combined marginal tax bracket
of 43 percent, the Trust's distribution rate represents a yield equivalent to a
taxable investment earning 12.28 percent<F4>. Additionally, for the one-year
period ended August 31, 1995, the Trust generated a total return at market
price of 3.95 percent<F1>, which includes reinvestment of dividends and capital
gains.
One element influencing the performance of the municipal market this year has
been the ongoing debate over tax reform. While there has been varied speculation
about the impact of reform, no one is certain about what will happen.
Consequently, the municipal market may continue to experience short-term market
fluctuations as various proposals come to the forefront. We will keep a close
watch over any new developments and evaluate the potential impact they may have
on your investment in the Trust.

Outlook
We believe the Fed will move cautiously before it continues to lower
short-term rates, waiting for further signs that the economy has settled into a
slow growth pattern. We anticipate the economy will grow at an annual rate
between 2 and 3 percent in the second half of the year, and that inflation will
run at an annualized rate between 3.1 and 3.3 percent. Based upon a generally
modest growth and low inflation outlook, we believe fixed-income
markets---including municipal bonds---will continue to make positive gains.
As interest rates continue to fall in response to further easing by the Fed,
we believe yields on short-term municipal bonds will continue to move
significantly lower than long-term municipal bonds. Lower short-term rates
typically translate into lower leveraging costs for the Trust, which provides
increased opportunities for higher earnings over time. We believe the Trust's
portfolio is well positioned to take advantage of a declining and sustained
short-term interest rate environment.
Once again, it is important to remember that financial markets will inevitably
experience highs and lows, but by maintaining a long-term investment
perspective, you may ride the ups and downs of the markets more easily as you
pursue your investment goals.
Thank you for your continued confidence in your investment with Van Kampen
American Capital and for the privilege of working with you in seeking to reach
your financial goals.

Sincerely,

Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Investment Advisory Corp. Investment Advisory Corp.

<TABLE>
Performance Results for the Period Ended August 31, 1995
Van Kampen Merritt California Quality Municipal Trust
(NYSE Ticker Symbol-VQC)
<CAPTION>
<S> <C>
Total Returns
One-year total return based on market price<F1>..................... 3.95%
One-year total return based on NAV<F2>.............................. 10.02%

Distribution Rates
Distribution rate as a % of initial offer common stock price<F3>.... 7.00%
Taxable-equivalent distribution rate as a % of initial offer common
stock price<F4>..................................................... 12.28%
Distribution rate as a % of closing common stock price<F3>.......... 7.00%
Taxable-equivalent distribution rate as a % of closing common stock
price<F4>........................................................... 12.28%

Share Valuations
Net asset value..................................................... $ 16.13
Closing common stock price.......................................... $ 15.000
One-year high common stock price (09/08/94)......................... $ 15.750
One-year low common stock price (11/14/94).......................... $ 11.875
Preferred share rate<F5>............................................ 3.74%

<FN>
<F1>Total return based on market price assumes an investment at the market price at
the beginning of the period indicated, reinvestment of all distributions for the
period in accordance with the Trust's dividend reinvestment plan, and sale of
all shares at the closing stock price at the end of the period indicated.

<F2>Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.

<F3>Distribution rate represents the monthly annualized distributions of the Trust
at the end of the period and not the earnings of the Trust.

<F4>The taxable-equivalent distribution rate is calculated assuming a 43% combined
federal and state tax bracket, which takes into consideration the deductibility
of individual state taxes paid.

<F5>See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.

A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).

Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
</TABLE>

<TABLE>
Portfolio of Investments
August 31, 1995
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds
California 92.8%
$ 1,610 Blythe, CA Redev Agy Redev Proj No 1 Tax Alloc
Ser A Rfdg .............................................. 7.500% 05/01/23 $ 1,691,595
2,310 California Hlth Fac Fin Auth Rev Insd CA Lutheran Homes
(Prerefunded @ 10/01/00) ................................ 7.500 10/01/11 2,660,750
1,800 California Hlth Fac Fin Auth Rev Kaiser Permanente Ser A
......................................................... 7.000 12/01/10 1,940,832
330 California Hsg Fin Agy Rev Home Mtg Ser D (FHA Gtd) ..... 7.875 08/01/31 345,038
2,370 California Hsg Fin Agy Rev Home Mtg Ser E (FHA Gtd) ..... 8.350 08/01/19 2,535,639
1,125 California Hsg Fin Agy Rev Home Mtg Ser F (FHA Gtd) ..... 6.750 08/01/11 1,176,750
2,120 California Hsg Fin Agy Rev Insd Hsg Ser E (MBIA Insd).... 7.000 08/01/26 2,221,272
3,000 California Hsg Fin Agy Rev Multi Unit Rental Hsg Ser C
II ...................................................... 6.850 08/01/15 3,108,960
8,190 California Hsg Fin Agy Rev Multi Unit Rental Hsg Ser C
II ...................................................... 6.875 08/01/24 8,389,181
10,000 California Pollutn Ctl Fin Auth Pollutn Ctl Rev Southern
CA Edison Co (Embedded Cap) (AMBAC Insd) ................ 6.000 07/01/27 9,815,500
4,000 California Pollutn Ctl Fin Auth Pollutn Ctl Rev Southern
CA Edison Co Ser B (AMBAC Insd) ......................... 6.400 12/01/24 4,083,400
7,800 California Pollutn Ctl Fin Auth Solid Waste Disp Rev
North Cnty Recycling Ser A .............................. 6.750 07/01/17 8,109,036
1,000 California St Veteran Ser Bd (AMBAC Insd) ............... 6.200 02/01/16 1,001,460
3,655 California St Cpn Muni Rcpts ............................ * 03/01/08 1,808,202
3,655 California St Cpn Muni Rcpts ............................ * 09/01/09 1,634,845
9,600 California St Prin Muni Rcpts ........................... * 09/01/09 4,293,984
1,125 California Statewide Cmntys Dev Auth Rev Ctfs Partn
Saint Joseph Hlth (AMBAC Insd) .......................... 6.100 07/01/07 1,201,230
9,000 California Statewide Cmntys Dev Corp Ctfs Partn Insd
United Westn Med Cent ................................... 6.750 12/01/21 9,308,880
6,500 Capistrano, CA Unified Sch Dist Cmnty Fac Dist Spl Tax
No 87-1 ................................................. 8.375 10/01/20 6,939,010
1,620 Carson, CA Impt Bond Act 1915 Assmt Dist No 92-1 ........ 7.375 09/02/22 1,660,824
1,000 Central Contra Costa, CA Sanitation Dist Rev Wastewtr
Fac Impt Proj (MBIA Insd) ............................... 6.250 09/01/11 1,049,490
1,870 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................... * 08/01/97 1,730,685

4 See Notes to Financial Statements
</TABLE>

<TABLE>
Portfolio of Investments (Continued)
August 31, 1995
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (Continued)
$ 1,860 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................. *% 02/01/98 $ 1,679,059
1,930 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................. * 08/01/98 1,705,734
1,940 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................. * 02/01/99 1,667,469
2,000 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................. * 08/01/99 1,681,380
1,895 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................. * 02/01/00 1,544,141
2,055 Central San Joaquin Vly, CA Risk Mgmt Auth Rev Pooled
Workers C ............................................. * 02/01/01 1,589,378
2,680 Chula Vista, CA Redev Agy Tax Alloc Sr Bayfront Ser D
Rfdg <F2> ............................................. 8.625 09/01/24 2,970,164
1,176 Contra Costa Cnty, CA Multi Family Hsg Rev Crescent
Park Apts Proj B (GNMA Collateralized) ................ 7.800 12/20/14 1,319,096
1,000 Contra Costa Cnty, CA Pub Fin Auth Tax Alloc Rev Ser A
....................................................... 7.100 08/01/22 1,035,260
1,955 Delano, CA Ctfs Partn Ser A ........................... 9.250 01/01/22 2,228,113
990 Fairfield, CA Hsg Auth Mtg Rev Creekside Estates Proj
Rfdg .................................................. 7.875 02/01/15 990,000
10,000 Foothill/Eastern Tran Agy Cap Apprec Sr Lien Ser A .... * 01/01/27 1,133,700
2,000 Foothill/Eastern Tran Agy Conv Cap Apprec Sr Lien Ser
A <F4>................................................. 0/7.050 01/01/10 1,096,800
1,500 Huntington Beach, CA Pub Fin Auth Rev Huntington Beach
Redev Proj ............................................ 7.000 08/01/24 1,413,435
2,140 Inglewood, CA Redev Agy Tax Alloc Century Redev Proj
Ser A ................................................. 6.125 07/01/13 2,057,931
665 Inglewood, CA Redev Agy Tax Alloc Century Redev Proj
Ser A ................................................. 6.125 07/01/23 617,758
3,205 Lompoc, CA Wtr & Wastewtr Impts Fin Auth Rev Wtr &
Wastewtr Sys Fin Proj A (MBIA Insd) ................... 6.700 03/01/22 3,372,269
5,000 Long Beach, CA Harbor Rev Ser A (MBIA Insd) ........... 7.375 05/15/09 5,441,100
7,000 Los Angeles Cnty, CA Ctfs Partn Multi Cap Fac Proj
(Embedded Swap) ....................................... 7.900 11/01/11 7,348,880
12,000 Los Angeles Cnty, CA Pension Oblig Ctfs Ltd Muni Oblig
Ser A (MBIA Insd) <F3> <F4> ........................... 0/6.900 06/30/08 12,668,400
</TABLE>

5 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
August 31, 1995
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (Continued)
$ 1,935 Los Angeles, CA Cmnty Redev Agy Ctfs Partn Allright
Garage ................................................... 7.550% 11/01/08 $ 2,046,127
1,780 Los Angeles, CA Single Family Home Mtg Rev Pgm A (GNMA
Collateralized) .......................................... 6.875 06/01/25 1,842,514
825 Mendota & Parlier, CA Unified Sch Dist Ctfs Partn Cap
Outlay Fin Pgm ........................................... 7.400 01/01/06 867,578
195 Mendota & Parlier, CA Unified Sch Dist Ctfs Partn Cap
Outlay Fin Pgm ........................................... 7.500 01/01/11 204,046
635 Mendota & Parlier, CA Unified Sch Dist Ctfs Partn Cap
Outlay Fin Pgm ........................................... 7.550 01/01/17 662,178
1,000 Montebello, CA Unified Sch Dist Ctfs Partn Cap Impts Proj. 6.300 06/01/11 997,900
2,490 Mount Diablo, CA Hosp Dist Rev Ser A (Embedded Cap)
(AMBAC Insd) ............................................. 5.125 12/01/23 2,197,027
2,250 Orange Cnty, CA Cmnty Fac Dist Spl Tax No 87 5B Rancho
Santa Margarit (Prerefunded @ 08/15/02) (MBIA Insd) ...... 7.500 08/15/17 2,652,592
3,000 Orange Cnty, CA Recovery Ser A Rfdg (MBIA Insd) .......... 5.750 06/01/15 2,890,050
2,000 Paradise, CA Irrigation Dist Rev Ctfs Partn Wtr Sys Pr.... 6.400 01/01/14 2,002,540
1,165 Paramount, CA Redev Agy Tax Alloc (MBIA Insd) ............ 6.250 08/01/09 1,233,246
6,000 Paramount, CA Redev Agy Tax Alloc Redev Proj Area No 1
Ser B (MBIA Insd) ........................................ * 08/01/26 775,020
1,500 Pasadena, CA Spl Tax Cmnty Fac Dist No 1 Civic Cent West.. * 12/01/07 665,130
2,000 Pasadena, CA Spl Tax Cmnty Fac Dist No 1 Civic Cent West.. * 12/01/17 421,960
4,000 Pittsburg, CA Pub Fin Auth Wastewtr Rev (Prerefunded @
06/01/01) (FGIC Insd) .................................... 6.800 06/01/22 4,540,560
2,000 Port Oakland, CA Port Rev Ser A (BIGI Insd) .............. 7.600 11/01/16 2,141,120
1,000 Port of Oakland, CA Spl Fac Rev Mitsui O.S.K. Line Ltd
Ser A .................................................... 6.800 01/01/19 1,021,820
1,265 Redding, CA Redev Agy Tax Alloc Market Street Redev Proj
Ser A .................................................... 6.700 09/01/23 1,269,870
5,000 Sacramento, CA City Fin Auth Rev (Prerefunded @ 11/01/01). 6.800 11/01/20 5,712,150
6,000 San Diego Cnty, CA Wtr Auth Wtr Rev Ctfs Partn Ser 91 B
(Inverse Fltg) (MBIA Insd) ............................... 8.370 04/08/21 6,202,500
2,650 San Diego, CA Indl Dev Rev San Diego Gas & Elec Ser A
(MBIA Insd) .............................................. 6.400 09/01/18 2,737,768
</TABLE>

6 See Notes to Financial Statements

<TABLE>
Portfolio of Investments (Continued)
August 31, 1995
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (Continued)
$ 11,000 San Diego, CA Indl Dev Rev San Diego Gas & Elec Ser A
(Embedded Cap) (AMBAC Insd) .......................... 6.210% 09/01/19 $ 11,033,000
2,305 San Francisco, CA City & Cnty Redev Agy Hotel Tax Rev
(Cap Guar Insd) ...................................... 6.750 07/01/15 2,479,074
5,000 San Francisco, CA City & Cnty Redev Agy Lease Rev
George Moscone ....................................... * 07/01/08 2,356,050
3,520 San Francisco, CA City & Cnty Redev Agy Lease Rev
George Moscone ....................................... * 07/01/09 1,539,190
4,250 San Francisco, CA City & Cnty Redev Agy Lease Rev
George Moscone ....................................... * 07/01/12 1,500,845
2,130 San Francisco, CA City & Cnty Redev Agy Lease Rev
George Moscone ....................................... * 07/01/14 653,250
800 San Francisco, CA City & Cnty Redev Agy Lease Rev
George Moscone (Cap Guar Insd) ....................... 6.750 07/01/15 859,744
1,000 San Jose, CA Arpt Rev (AMBAC Insd) ................... 7.500 03/01/18 1,094,570
1,000 San Jose, CA Single Family Mtg Rev Ser A ............. * 04/01/16 293,220
1,000 Santa Clara Cnty, CA Fin Auth Lease Rev VMC Fac
Replacement Proj Ser A (AMBAC Insd) .................. 6.875 11/15/14 1,087,540
2,000 Santa Clarita, CA Cmnty Fac Dist Spl Tax No 92-1
Ser A ................................................ 7.450 11/15/10 2,080,640
1,790 Southern CA Home Fin Auth Single Family Mtg Rev Pgm B
(GNMA Collateralized) ................................ 6.900 10/01/24 1,857,071
5,000 Southern CA Pub Pwr Auth Pwr Proj Rev Multi Projs .... 6.750 07/01/12 5,360,300
2,750 Tulare, CA Loc Hosp Dist Hlth Fac Rev Ser A .......... 6.750 12/01/21 2,839,017
1,195 University of CA Rev Ser A (Connie Lee Insd) ......... 5.600 09/01/08 1,196,518
1,255 University of CA Rev Ser A (Connie Lee Insd) ......... 5.700 09/01/09 1,255,000
2,785 Yolo Cnty, CA Hsg Auth Mtg Rev FHA Insd Mtg Waggener
Ranch Proj (FHA Gtd) ................................. 7.000 10/01/33 2,876,209
------------
213,711,564
------------
</TABLE>

7 See Notes to Financial Statements

4,830 Puerto Rico Elec Pwr Auth Pwr Rev Ser P ............... 7.000 07/01/21 5,295,322
2,500 Puerto Rico Hsg Fin Single Family Mtg Rev
Portfolio 1 C (GNMA Collateralized) ................... 6.850 10/15/23 2,623,200
--------------
7,918,522
--------------
U. S. Virgin Islands 3.1%
6,750 Virgin Islands Pub Fin Auth Rev Matching
Fd Ln Nts Ser A Rfdg .................................. 7.250 10/01/18 7,135,290
--------------
Total Long-Term Investments 99.8%
(Cost $217,659,107) <F1>......................................................... 229,776,236
Short-Term Investments at Amortized Cost 0.1%...................................... 300,000
Other Assets in Excess of Liabilities 0.1%........................................ 122,005
--------------
Net Assets 100%.................................................................... $ 230,198,241
--------------
--------------
*Zero coupon bond

<FN>

<F1> At August 31, 1995, cost for federal income tax purposes is $217,659,107;
the aggregate gross unrealized appreciation is $12,888,110 and the
aggregate gross unrealized depreciation is $770,981, resulting in net
unrealized appreciation of $12,117,129.

<F2> Securities purchased on a when issued or delayed delivery basis.

<F3> Assets segregated as collateral for when issued or delayed delivery
purchase commitments.

<F4> Security is currently a zero coupon bond which will convert to a coupon
paying bond at a predetermined date.

</TABLE>

The following table summarizes the portfolio composition at August 31, 1995,
based upon quality ratings issued by Standard & Poor's. For securities not rated
by Standard & Poor's, the Moody's rating is used.

<TABLE>
Portfolio Composition by Credit Quality
<CAPTION>
<S> <C>
AAA........... 42.9%
AA............ 2.6
A............. 26.3
BBB........... 10.9
BB............ 0.6
Non-Rated..... 16.7
------
100.0%
------
------
</TABLE>

8 See Notes to Financial Statements

<TABLE>
Statement of Assets and Liabilities
August 31, 1995
- ----------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Assets:
Investments, at Market Value (Cost $217,659,107) (Note 1)..................... $ 229,776,236
Short-Term Investments (Note 1)............................................... 300,000
Cash.......................................................................... 27,933
Receivables:
Interest.................................................................... 3,278,660
Investments Sold............................................................ 30,000
Unamortized Organizational Expenses (Note 1).................................. 6,438
---------------
Total Assets.............................................................. 233,419,267
---------------
Liabilities:
Payables:
Investments Purchased....................................................... 2,680,000
Income Distributions - Common and Preferred Shares.......................... 220,221
Investment Advisory Fee (Note 2)............................................ 135,229
Administrative Fee (Note 2)................................................. 38,637
Accrued Expenses.............................................................. 146,939
---------------
Total Liabilities......................................................... 3,221,026
---------------
Net Assets.................................................................... $ 230,198,241
---------------
---------------
Net Assets Consist of:
Preferred Shares ($.01 par value, authorized 100,000,000 shares, 1,500 issued
with liquidation preference of $50,000 per share) (Note 5).................. $ 75,000,000
---------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 9,623,295 shares issued and outstanding) ................ 96,233
Paid in Surplus .............................................................. 142,409,372
Net Unrealized Appreciation on Investments.................................... 12,117,129
Accumulated Undistributed Net Investment Income............................... 1,602,546
Accumulated Net Realized Loss on Investments.................................. (1,027,039)
---------------
Net Assets Applicable to Common Shares.................................... 155,198,241
---------------
Net Assets.................................................................... $ 230,198,241
---------------
---------------
Net Asset Value Per Common Share ($155,198,241 divided
by 9,623,295 shares outstanding)............................................ $ 16.13
---------------
---------------
</TABLE>
9 See Notes to Financial Statements

<TABLE>
Statement of Operations
For the Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Investment Income:
Interest........................................................ $ 14,671,179
---------------
Expenses:
Investment Advisory Fee (Note 2)................................ 1,556,940
Administrative Fee (Note 2)..................................... 444,840
Preferred Share Maintenance (Note 5)............................ 205,365
Legal (Note 2).................................................. 23,199
Trustees Fees and Expenses (Note 2)............................. 21,742
Amortization of Organizational Expenses (Note 1)................ 5,993
Other........................................................... 202,021
---------------
Total Expenses.............................................. 2,460,100
---------------
Net Investment Income........................................... $ 12,211,079
---------------
---------------
Realized and Unrealized Gain/Loss on Investments:
Realized Gain/Loss on Investments:
Proceeds from Sales........................................... $ 36,451,072
Cost of Securities Sold....................................... (37,038,560)
---------------
Net Realized Loss on Investments ............................... (587,488)
---------------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period....................................... 6,489,672
End of the Period............................................. 12,117,129

---------------
Net Unrealized Appreciation on Investments During the Period.... 5,627,457
---------------
Net Realized and Unrealized Gain on Investments................. $ 5,039,969
---------------
---------------
Net Increase in Net Assets from Operations...................... $ 17,251,048
---------------
---------------
</TABLE>

10 See Notes to Financial Statements

<TABLE>
Statement of Changes in Net Assets
For the Years Ended August 31, 1995 and 1994
- -----------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended Year Ended
August 31, 1995 August 31, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment Income.............................................. $ 12,211,079 $ 12,374,994
Net Realized Loss on Investments................................... (587,488) (413,254)
Net Unrealized Appreciation/Depreciation on
Investments During the Period.................................... 5,627,457 (15,869,196)
--------------- ---------------
Change in Net Assets from Operations .............................. 17,251,048 (3,907,456)
--------------- ---------------
Distributions from Net Investment Income:
Common Shares.................................................... (10,104,283) (10,104,349)
Preferred Shares................................................. (2,997,032) (2,264,701)
--------------- ---------------

(13,101,315) (12,369,050)
--------------- ---------------
Distributions from and in Excess of Net Realized
Gain on Investments (Note 1):
Common Shares.................................................... (21,171) (523,507)
Preferred Shares................................................. (5,130) (90,413)
--------------- ---------------

(26,301) (613,920)
--------------- ---------------
Total Distributions................................................ (13,127,616) (12,982,970)
--------------- ---------------
Net Change in Net Assets from Investment Activities................ 4,123,432 (16,890,426)

Net Assets:
Beginning of the Period............................................ 226,074,809 242,965,235
--------------- ---------------
End of the Period (Including undistributed net investment income of
$1,602,546 and $2,492,782, respectively)......................... $ 230,198,241 $ 226,074,809
--------------- ---------------
--------------- ---------------
</TABLE>

11 See Notes to Financial Statements

<TABLE>
Financial Highlights
The following schedule presents financial highlights for one common share
of the Trust outstanding throughout the periods indicated.
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
September 27, 1991
(Commencement
Year Ended August 31 of Investment
----------------------------------- Operations) to
1995 1994 1993 August 31, 1992
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period <F1>................... $ 15.699 $ 17.454 $ 15.816 $ 14.805
---------- ----------- ---------- -------------------
Net Investment Income................ 1.269 1.286 1.305 1.038
Net Realized and Unrealized
Gain/Loss on Investments........... .523 (1.693) 1.658 .870
---------- ----------- ---------- -------------------
Total from Investment Operations....... 1.792 (.407) 2.963 1.908
---------- ----------- ---------- -------------------
Less:
Distributions from Net
Investment Income:
Paid to Common Shareholders........ 1.050 1.050 .981 .698
Common Share Equivalent
of Distributions Paid to
Preferred Shareholders........... .311 .235 .206 .199
Distributions from and in Excess
of Net Realized Gain on
Investments (Note1):
Paid to Common Shareholders........ .002 .054 .110 -0-
Common Share Equivalent
of Distributions Paid to
Preferred Shareholders............. .001 .009 .028 -0-
---------- ----------- ---------- -------------------
Total Distributions.................... 1.364 1.348 1.325 .897
---------- ----------- ---------- -------------------
Net Asset Value, End of the Period..... $ 16.127 $ 15.699 $ 17.454 $ 15.816
---------- ----------- ---------- -------------------
Market Price Per Share
at End of the Period................. $ 15.000 $ 15.500 $ 16.750 $ 15.125
Total Investment Return at Market
Price (Non-Annualized) <F2>.......... 3.95% (.90%) 18.66% 5.69%
Total Return at Net Asset
Value (Non-Annualized) <F3>.......... 10.02% (3.81%) 17.89% 11.80%
Net Assets at End of the Period
(In millions)........................ $ 230.2 $ 226.1 $ 243.0 $ 227.2
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares (Annualized)........... 1.66% 1.62% 1.58% 1.55%
Ratio of Expenses to Average
Net Assets (Annualized).............. 1.10% 1.10% 1.07% 1.09%
Ratio of Net Investment Income
to Average Net Assets Applicable to
Common Shares
(Annualized) <F4>.................... 6.22% 6.34% 6.70% 6.09%
Portfolio Turnover..................... 15.75% 6.56% 26.10% 93.29%

<FN>
<F1> Net asset value at September 27, 1991, is adjusted for common and
preferred share offering costs of $.195 per common share.

<F2> Total investment return at market price reflects the change in market
value of the common shares for the period indicated with reinvestment of
dividends in accordance with the Trust's dividend reinvestment plan.

<F3> Total return at net asset value (NAV) reflects the change in the value of
the Trust's asset with reinvestment of dividends based upon NAV.

<F4> Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.

</TABLE>

12 See Notes to Financial Statements

Notes to Financial Statements
August 31, 1995
- --------------------------------------------------------------------------------

1. Significant Accounting Policies
Van Kampen Merritt California Quality Municipal Trust (the "Trust") is
registered as a diversified closed-end management investment company under the
Investment Company Act of 1940, as amended. The Trust commenced investment
operations on September 27, 1991.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.

A. Security Valuation - Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost.

B. Security Transactions - Security transactions are recorded on a trade date
basis.Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.

C. Investment Income - Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of
each applicable security.

D. Organizational Expenses - The Trust has reimbursed Van Kampen American
Capital Distributors, Inc. or its affiliates (collectively "VKAC") for costs
incurred in connection with the Trust's organization and initial registration
in the amount of $30,000. These costs are being amortized on a straight line
basis over the 60-month period ending September 26, 1996. Van Kampen American
Capital Investment Advisory Corp. (the"Adviser") has agreed that in the event
any of the initial shares of the Trust originally purchased by VKAC are
redeemed during the amortization period, the Trust will be reimbursed for any
unamortized organizational expenses in the same proportion as the number of
shares redeemed bears to the number of initial shares held at the time of
redemption.

E. Federal Income Taxes - It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substan-

Notes to Financial Statements (Continued)
August 31, 1995
- --------------------------------------------------------------------------------

tially all of its taxable income to its shareholders. Therefore, no provision
for federal income taxes is required.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At August 31, 1995, the Trust had an accumulated capital loss
carry forward for tax purposes of $549,842, which will expire on August 31,
2003. Net realized gains or losses may differ for financial and tax reporting
purposes primarily as a result of post October 31 losses which may not be
recognized for tax purposes until the first day of the following fiscal year.

F. Distribution of Income and Gains - The Trust declares and pays dividends from
net investment income to common shareholders monthly. Net realized gains, if
any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included in ordinary income for tax
purposes.

2. Investment Advisory Agreement and Other Transactions with Affiliates
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .70% of the average net assets of the Trust. In addition, the Trust
will pay a monthly administrative fee to VKAC, the Trust's Administrator, at an
annual rate of .20% of the average net assets of the Trust. The administrative
services provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Trust, of which a trustee of the Trust is an affiliated person.
For the year ended August 31, 1995, the Trust recognized expenses of
approximately $19,000 representing VKAC's or the Adviser's cost of providing
accounting and legal services to the Trust.
Certain officers and trustees of the Trust are also officers and directors of
the Adviser and VKAC. The Trust does not compensate its officers or trustees
who are officers of the Adviser or VKAC.

Notes to Financial Statements (Continued)
August 31, 1995
- --------------------------------------------------------------------------------

The Trust has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC. The Trust's liability under the
deferred compensation and retirement plans at August 31, 1995, was approximately
$22,800.
At August 31, 1995, VKAC owned 6,700 common shares of the Trust.

3. Investment Transactions
Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the year ended August 31, 1995, were $34,626,766 and
$37,038,560, respectively.

4. Derivative Financial Instruments
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation on investments. Upon disposition, a realized gain or
loss is recognized accordingly.
Indexed Securities are identified in the portfolio of investments. The price
of these securities may be more volatile than the price of a comparable fixed
rate security.
A. An Inverse Floating security is one where the coupon is inversely indexed
to a short term floating interest rate multiplied by a specified factor. As the
floating rate rises, the coupon is reduced. Conversely, as the floating rate
declines, the coupon is increased. These instruments are typically used by the
Trust to enhance the yield of the portfolio.
B. An Embedded Cap security includes a cap strike level such that the coupon
payment may be supplemented by cap payments if the floating rate index upon
which the cap is based rises above the strike level. The Trust invests in these
instruments as a hedge against a rise in the short-term interest rates which it
pays on its preferred shares.
C. An Embedded Swap security includes a swap component such that the fixed
coupon component of the underlying bond is adjusted by the difference between
the security's fixed swap rate and the floating swap index. As the floating rate
rises, the coupon is reduced. Conversely, as the floating rate declines, the
coupon is increased. These instruments are typically used by the Trust to
enhance the yield of the portfolio.

Notes to Financial Statements (Continued)
August 31, 1995
- --------------------------------------------------------------------------------

5. Preferred Shares
The Trust has outstanding 1,500 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every 28 days through an
auction process. The rate in effect on August 31, 1995, was 3.74%. During the
year ended August 31, 1995, the rates ranged from 3.160% to 4.875%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests, and the APS are subject to
mandatory redemption if the tests are not met.

Independent Auditors' Report

The Board of Trustees and Shareholders of
Van Kampen Merritt California Quality Municipal Trust:

We have audited the accompanying statement of assets and liabilities of Van
Kampen Merritt California Quality Municipal Trust (the "Trust"), including the
portfolio of investments, as of August 31, 1995, 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 the financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Trust'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
August 31, 1995, by correspondence with the custodian and brokers. 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 Van
Kampen Merritt California Quality Municipal Trust as of August 31, 1995, 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 periods presented, in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP
Chicago, Illinois
October 4, 1995

Dividend Reinvestment Plan

The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust Company,
as your Plan Agent, will automatically invest your dividends and capital gains
distributions in Common Shares of the Trust for your account.

How to Participate
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be
re-registered in your own name which will enable your participation in the Plan.

How the Plan Works
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common Shares and are carried to three
decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.

Costs of the Plan
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.

Tax Implications
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of divi-
dends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.

Right to Withdraw
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at:
One Parkview Plaza, Oakbrook Terrace, IL 60181
Attn: Closed-End Funds

Funds Distributed by Van Kampen American Capital

GLOBAL AND INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund

EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund

FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income

TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Limited Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund

THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund

Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.

Van Kampen Merritt California Quality Municipal Trust

Officers and Trustees

Don G. Powell*
Chairman and Trustee

Dennis J. McDonnell*
President and Trustee

David C. Arch
Trustee

Rod Dammeyer
Trustee

Howard J Kerr
Trustee

Theodore A. Myers
Trustee

Hugo F. Sonnenschein
Trustee

Wayne W. Whalen*
Trustee

Peter W. Hegel*
Vice President

Ronald A. Nyberg*
Vice President and Secretary

Edward C. Wood, III*
Vice President and Treasurer

Scott E. Martin*
Assistant Secretary

Weston B. Wetherell*
Assistant Secretary

Nicholas Dalmaso*
Assistant Secretary

John L. Sullivan*
Controller

Steven M. Hill*
Assistant Treasurer

Investment Adviser

Van Kampen American Capital
Investment Advisory Corp.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

Custodian and
Transfer Agent

State Street Bank
and Trust Company
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Chicago, Illinois 60606

Independent Auditors

KPMG Peat Marwick LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601

*"Interested" persons of the Trust, as defined in the Investment Company Act of
1940.

SM denotes a service mark of
Van Kampen American Capital Distributors, Inc.