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012 B000001 84-01621
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012 C020001 MO
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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 9
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SIGNATURE DENNIS J MCDONNELL
TITLE PRES, CEO & TRUSTEE
1201 Louisiana, Suite 2900 Telephone 713 654 4100
Houston, TX 77002-5678 Facsimile 713 750 4717
Price Waterhouse LLP
November 11, 1996
To the Board of Directors of the
Van Kampen American Capital Texas Tax Free Income Fund
In planning and performing our audit of the financial statements of the Van
Kampen American Capital Texas Tax Free Income Fund (the"Fund") for the year
ended September 30, 1996, we considered its internal control structure,
including procedures for safeguarding securities, in order to determine our
auditing procedures for the purposes of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR and
not to provide assurance on the internal control structure.
The management of the Fund is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility estimates and
judgments by management are required to assess the expected benefits and
related costs of internal control structure policies and procedures. Two of
the objectives of an internal control structure are to provide management
with reasonable, but not absolute, assurance that assets are appropriately
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure. Errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in condition or that the
effectiveness of the design and operation may deteriorate.
November 11, 1996
To the Board of Directors
Page 2
Our consideration of the internal structure would not necessarily disclose all
matters in the internal control structure that might be material weaknesses
under standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be and not be detected within a timely period by employees
in the normal course of performing their assigned functions. However, we noted
no matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of September 30 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
Price Waterhouse LLP
N-SAR ITEM 77C
Van Kampen American Capital Texas Tax Free Income Fund
(a) A Special Meeting of Shareholders was held on October 15, 1996.
(b) The election of Trustees of Van Kampen American Capital Texas Tax Free
Income Fund (the "Texas Fund") included:
None
(c) The following were voted on at the meeting:
1) Approval of Agreement and Plan of Reorganization pursuant to
which the Texas Fund would (i) transfer all of its assets to the
Van Kampen American Capital Municipal Income Fund (the
"Municipal Fund") in exchange solely for Class A, B and C shares
of beneficial interest of the Municipal Fund and the Municipal
Fund's assumption of the liabilities of the Texas Fund, (ii)
distribute such shares of the Municipal Fund to the holders of
shares of the Texas Fund and (iii) be dissolved.
For 898,674 Against 36,015
2) In the event the proposed reorganization is not consummated,
to approve a new investment advisory agreement for the Texas
Fund.
For 1,051,542 Against 21,721
(d) Inapplicable
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> ACTXM - CLASS A
<MULTIPLIER> 1
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 15083282<F1>
<INVESTMENTS-AT-VALUE> 15673206<F1>
<RECEIVABLES> 1567946<F1>
<ASSETS-OTHER> 2277<F1>
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17243429<F1>
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 614334<F1>
<TOTAL-LIABILITIES> 614334<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8517465
<SHARES-COMMON-STOCK> 919727
<SHARES-COMMON-PRIOR> 1110686
<ACCUMULATED-NII-CURRENT> 1470<F1>
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 251328<F1>
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 589924<F1>
<NET-ASSETS> 9307454
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1211444<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> 288123<F1>
<NET-INVESTMENT-INCOME> 923321<F1>
<REALIZED-GAINS-CURRENT> 251661<F1>
<APPREC-INCREASE-CURRENT> (75409)<F1>
<NET-CHANGE-FROM-OPS> 1099574<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 549238
<DISTRIBUTIONS-OF-GAINS> 14428
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<NUMBER-OF-SHARES-REDEEMED> 301667
<SHARES-REINVESTED> 25776
<NET-CHANGE-IN-ASSETS> (2901980)<F1>
<ACCUMULATED-NII-PRIOR> (5360)<F1>
<ACCUMULATED-GAINS-PRIOR> 24601<F1>
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 109383<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 385123<F1>
<AVERAGE-NET-ASSETS> 10296003
<PER-SHARE-NAV-BEGIN> 10.03
<PER-SHARE-NII> 0
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<PER-SHARE-NAV-END> 10.12
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>
This item relates to the fund on a composite basis and
not on a class basis.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> ACTXM - CLASS B
<MULTIPLIER> 1
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 15083282<F1>
<INVESTMENTS-AT-VALUE> 15673206<F1>
<RECEIVABLES> 1567946<F1>
<ASSETS-OTHER> 2277<F1>
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17243429<F1>
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 614334<F1>
<TOTAL-LIABILITIES> 614334<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6428046
<SHARES-COMMON-STOCK> 642386
<SHARES-COMMON-PRIOR> 729051
<ACCUMULATED-NII-CURRENT> 1470<F1>
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<ACCUMULATED-NET-GAINS> 251328<F1>
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 6496572
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<INTEREST-INCOME> 1211444<F1>
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<NET-INVESTMENT-INCOME> 923321<F1>
<REALIZED-GAINS-CURRENT> 251661<F1>
<APPREC-INCREASE-CURRENT> (75409)<F1>
<NET-CHANGE-FROM-OPS> 1099574<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 323292
<DISTRIBUTIONS-OF-GAINS> 8986
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 31008
<NUMBER-OF-SHARES-REDEEMED> 134727
<SHARES-REINVESTED> 17054
<NET-CHANGE-IN-ASSETS> (2901980)<F1>
<ACCUMULATED-NII-PRIOR> (5360)<F1>
<ACCUMULATED-GAINS-PRIOR> 24601<F1>
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 109383<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 385123<F1>
<AVERAGE-NET-ASSETS> 6984002
<PER-SHARE-NAV-BEGIN> 10.03
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.468
<PER-SHARE-DISTRIBUTIONS> 0.013
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.11
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>
This item relates to the fund on a composite basis and
not on a class basis.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> ACTXM - CLASS C
<MULTIPLIER> 1
<CAPTION>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 15083282<F1>
<INVESTMENTS-AT-VALUE> 15673206<F1>
<RECEIVABLES> 1567946<F1>
<ASSETS-OTHER> 2277<F1>
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17243429<F1>
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 614334<F1>
<TOTAL-LIABILITIES> 614334<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 840862
<SHARES-COMMON-STOCK> 81492
<SHARES-COMMON-PRIOR> 107241
<ACCUMULATED-NII-CURRENT> 1470<F1>
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 251328<F1>
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 589924<F1>
<NET-ASSETS> 825069
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1211444<F1>
<OTHER-INCOME> 0
<EXPENSES-NET> 288123<F1>
<NET-INVESTMENT-INCOME> 923321<F1>
<REALIZED-GAINS-CURRENT> 251661<F1>
<APPREC-INCREASE-CURRENT> (75409)<F1>
<NET-CHANGE-FROM-OPS> 1099574<F1>
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 43961
<DISTRIBUTIONS-OF-GAINS> 1520
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17414
<NUMBER-OF-SHARES-REDEEMED> 43985
<SHARES-REINVESTED> 822
<NET-CHANGE-IN-ASSETS> (2901980)<F1>
<ACCUMULATED-NII-PRIOR> (5360)<F1>
<ACCUMULATED-GAINS-PRIOR> 24601<F1>
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 109383<F1>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 385123<F1>
<AVERAGE-NET-ASSETS> 950759
<PER-SHARE-NAV-BEGIN> 10.04
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.468
<PER-SHARE-DISTRIBUTIONS> 0.013
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.12
<EXPENSE-RATIO> 2.02
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>
This item relates to the fund on a composite basis and
not on a class basis.
</FN>
</TABLE>
