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<PAGE> PAGE 2
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SIGNATURE ALEX M. CICCONE
TITLE ASSISTANT SECRETARY
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KPMG Peat Marwick LLP
112 East Pecan, Suite 2400
San Antonio, TX 78205-1585
INDEPENDENT AUDITORS' REPORT
ON INTERNAL CONTROL
The Shareholders and the Board of Directors
USAA State Tax-Free Trust:
In planning and performing our audits of the financial statements of the USAA
Florida Tax-Free Income, USAA Florida Tax-Free Money Market, USAA Texas Tax-Free
Income and USAA Texas Tax-Free Money Market Funds, separate funds of USAA State
Tax-Free Trust, for the year ended March 31, 1998, we considered internal
control, including procedures for safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our opinions on the
financial statements and to comply with the requirements of Form N-SAR, not to
provide assurance on internal control.
The management of USAA State Tax-Free Trust is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of internal control policies and procedures. Two of the objectives of
internal control are to provide management with reasonable, but not absolute,
assurance that assets are 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 internal control, errors or irregularities
may occur and may not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operations may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control 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 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 detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
procedures for safeguarding securities, that we consider to be material
weaknesses as defined above as of March 31, 1998.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG Peat Marwick LLP
May 8, 1998
