Legg Mason Partners Oregon Municipals Fund N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-7149

Legg Mason Partners Oregon Municipals Fund
(Exact name of registrant as specified in charter)

125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Legg Mason & Co., LLC
300 First Stamford Place, 4th Fl.
Stamford, CT 06902
(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 451-2010

Date of fiscal year end: April 30
Date of reporting period: October 31, 2006

ITEM 1. REPORT TO STOCKHOLDERS.

The Semi-Annual Report to Stockholders is filed herewith.

		Legg Mason Partners Oregon Municipals Fund
	Semi-Annual Report • October 31, 2006
	What’s Inside	Letter from the Chairman	I
		Fund at a Glance	1
		Fund Expenses	2
		Schedule of Investments	4
		Statement of Assets and Liabilities	12
		Statement of Operations	13
		Statements of Changes in Net Assets	14
		Financial Highlights	15
	Fund Objective	Notes to Financial Statements	18
	The Fund seeks to provide Oregon investors with as high a level of dividend income exempt from regular federal income tax* and Oregon state personal income tax as is consistent with prudent investment management and preservation of capital.	Board Approval of Management and Subadvisory   Agreements	27
		Additional Shareholder Information	30
*	Certain investors may be subject to the Federal Alternative Minimum Tax, and state and local taxes may apply. Capital gains, if any, are fully taxable. Please consult your personal tax adviser.

R. JAY GERKEN, CFA
Chairman, President and
Chief Executive Officer

Letter from the Chairman

Dear Shareholder,
The U.S. economy took a step backwards and weakened considerably during the six-month reporting period. After gross domestic product (“GDP”)ⁱ increased a modest 1.7% in the last three months of 2005, the economy rebounded sharply in the first quarter of 2006. During this time, GDP rose 5.6%, its highest reading since the third quarter of 2003. In the second quarter, GDP growth was 2.6%, according to the U.S. Commerce Department. The preliminary estimate for third quarter GDP growth was 2.2%.
     After increasing the federal funds rateⁱⁱ to 5.25% in June — its 17th consecutive rate hike — the Federal Reserve Board (“Fed”)ⁱⁱⁱ paused from raising rates at its next four meetings. In its statement accompanying the December meeting, the Fed stated, “Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market. Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters.” The Fed’s next meeting is at the end of January, and we believe any further rate movements will likely be data dependent.
     After a prolonged period of rising interest rates, both short and long-term yields declined over the reporting period. After peaking in late June—when two and 10-year Treasuries hit 5.29% and 5.25%, respectively—rates fell sharply as the Fed paused from its tightening cycle. In addition, inflationary pressures eased as oil prices, which rose to a record $78 a barrel in mid-July, subsequently fell 15% in the latter part of the third quarter.^iv Overall, during the six-months ended October 31, 2006, two-year Treasury yields fell from 4.87% to 4.71%. Over the same period, 10-year Treasury yields declined from 5.07% to 4.61%.

Legg Mason Partners Oregon Municipals Fund    I

     Looking at the municipal market, it slightly lagged its taxable bond counterparts over the six months ended October 31, 2006. Over that period, the Lehman Brothers Municipal Bond Index^v and the Lehman Brothers U.S. Aggregate Index^vi, returned 4.12% and 4.60%, respectively.

Performance Review

For the six months ended October 31, 2006, Class A shares of the Legg Mason Partners Oregon Municipals Fund, excluding sales charges, returned 3.32%. These shares underperformed the Lipper Oregon Municipal Debt Funds Category Average¹ which increased 3.35%. The Fund’s unmanaged benchmark, the Lehman Brothers Municipal Bond Index returned 4.12% for the same period.
     Certain investors may be subject to the Federal Alternative Minimum Tax, and state and local taxes may apply. Capital gains, if any, are fully taxable. Please consult your personal tax or legal adviser.

	Performance Snapshot as of October 31, 2006 (excluding sales charges) (unaudited)
		6 Months
	Oregon Municipals Fund—Class A Shares	3.32%
	Lehman Brothers Municipal Bond Index	4.12%
	Lipper Oregon Municipal Debt Funds Category Average	3.35%
	The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value, investment returns and yields will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost. Current reimbursements and/or fee waivers are voluntary, and may be reduced or terminated at any time. Absent these reimbursements or waivers, performance would have been lower. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/InvestorServices. Excluding sales charges, Class B shares returned 3.03% and Class C shares returned 3.03% for over the six months ended October 31, 2006. All share class returns assume the reinvestment of all distributions, including returns of capital, if any, at net asset value and the deduction of all Fund expenses. Returns have not been adjusted to include sales charges that may apply when shares are purchased or the deduction of taxes that a shareholder would pay on Fund distributions. The 30-Day SEC Yield for Class A, Class B and Class C were 4.02%, 3.62% and 3.63%, respectively. Absent current reimbursements or waivers, the 30-Day SEC yield for Class A, Class B and Class C shares would have been 3.88%, 3.47% and 3.48%, respectively. The 30-Day SEC Yield is the average annualized net investment income per share for the 30-day period ended October 31, 2006, and is subject to change.
1	Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended October 31, 2006, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 16 funds in the Fund’s Lipper category, and excluding sales charges.

II    Legg Mason Partners Oregon Municipals Fund

Special Shareholder Notices

As part of the continuing effort to integrate investment products managed by the advisers acquired with Citigroup Inc.’s asset management business, Legg Mason, Inc. (“Legg Mason”) recommended various Fund actions in order to streamline product offerings, standardize share class pricing features, eliminate redundancies and improve efficiencies within the organization. At Board meetings held during June and July 2006, the Fund’s Board reviewed and approved these recommendations, and provided authorization to move ahead with proxy solicitations for those matters needing shareholder approval.

     Effective August 1, 2006, Legg Mason Partners Fund Advisor, LLC (“LMPFA”) became the Fund’s investment manager and Western Asset Management Company (“Western Asset”) became the Fund’s subadviser. The portfolio managers who are responsible for the day-to-day management of the Fund remained the same immediately prior to and immediately after the date of these changes. LMPFA and Western Asset are wholly-owned subsidiaries of Legg Mason.

     Effective October 30, 2006, the manager appointed S. Kenneth Leech, Stephen A. Walsh and Robert Amodeo as additional portfolio managers of the Fund. Mr. Leech and Mr. Walsh are portfolio managers of Western Asset and have been employed by Western Asset for more than five years. Mr. Amodeo is also a portfolio manager of Western Asset and has been employed by Western Asset (or its affiliates or their predecessors) for more than five years.

     Certain changes regarding share class pricing and related matters were implemented on November 20, 2006. Please consult the Fund’s current prospectus for more information.

     The Fund was formerly known as Smith Barney Oregon Municipals Fund.

Information About Your Fund

As you may be aware, several issues in the mutual fund industry have come under the scrutiny of federal and state regulators. Affiliates of the Fund’s manager have, in recent years, received requests for information from various government regulators regarding market timing, late trading, fees, and other mutual fund issues in connection with various investigations. The regulators appear to be examining,

Legg Mason Partners Oregon Municipals Fund    III

among other things, the Fund’s response to market timing and shareholder exchange activity, including compliance with prospectus disclosure related to these subjects. The Fund is not in a position to predict the outcome of these requests and investigations.

     Important information with regard to recent regulatory developments that may affect the Fund is contained in the Notes to Financial Statements included in this report.

     As always, thank you for your confidence in our stewardship of your assets. We look forward to helping you meet your financial goals.

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

RISKS: The Fund’s investments are subject to interest rate and credit risks. As interest rates rise, bond prices fall, reducing the value of the Fund’s share price. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. As a non-diversified fund, the Fund can invest a larger percentage of its assets in fewer issues than a diversified fund. This may magnify the Fund’s losses from events affecting a particular issuer. High yield bonds involve greater credit and liquidity risks than investment grade bonds. Certain investors may be subject to the Federal Alternative Minimum Tax (“AMT”), and state and local taxes may apply. Capital gains, if any, are fully taxable. Please see the Fund’s prospectus for more information on these and other risks.

All index performance reflects no deduction for fees, expenses or taxes. Please note an investor cannot invest directly in an index.

i	Gross domestic product is a market value of goods and services produced by labor and property in a given country.
ii	The federal funds rate is the interest rate that banks with excess reserves at a Federal Reserve district bank charge other banks that need overnight loans.
iii	The Federal Reserve Board is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.
iv	Source: The Wall Street Journal, 9/29/06.
v	The Lehman Brothers Municipal Bond Index is a broad measure of the municipal bond market with maturities of at least one year.
vi	The Lehman Brothers U.S. Aggregate Index is a broad-based bond index comprised of government, corporate, mortgage and asset-backed issues, rated investment grade or higher, and having at least one year to maturity.

IV    Legg Mason Partners Oregon Municipals Fund

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report     1

Fund Expenses (unaudited)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end and back-end sales charges (loads) on purchase payments; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

     This example is based on an investment of $1,000 invested on May 1, 2006 and held for the six months ended October 31, 2006.

Actual Expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Based on Actual Total Return(1)
		Actual Total Return Without Sales Charges(2)	Beginning Account Value	Ending Account Value	Annualized Expense Ratio	Expenses Paid During the Period(3)
	Class A	3.32%	$1,000.00	$1,033.20	0.80%	$4.10
	Class B	3.03	1,000.00	1,030.30	1.36	6.96
	Class C	3.03	1,000.00	1,030.30	1.37	7.01
(1)	For the six months ended October 31, 2006.
(2)	Assumes reinvestment of all distributions, including returns of capital, if any, at net asset value and does not reflect the deduction of the applicable sales charge with respect to Class A shares or the applicable contingent deferred sales charges (“CDSC”) with respect to Class B and C shares. Total return is not annualized, as it may not be representative of the total return for the year. Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower.
(3)	Expenses (net of fee waivers and/or expense reimbursements) are equal to each class’ respective annualized expense ratio mul tiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.

2    Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Fund Expenses (unaudited) (continued)
Hypothetical Example for Comparison Purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

     Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or back-end sales charges (loads). Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

Based on Hypothetical Total Return(1)
		Hypothetical Annualized Total Return	Beginning Account Value	Ending Account Value	Annualized Expense Ratio	Expenses Paid During the Period(2)
	Class A	5.00%	$1,000.00	$1,021.17	0.80%	$4.08
	Class B	5.00	1,000.00	1,018.35	1.36	6.92
	Class C	5.00	1,000.00	1,018.30	1.37	6.97
(1)	For the six months ended October 31, 2006.
(2)	Expenses (net of fee waivers and/or expense reimbursements) are equal to each class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report     3

Schedule of Investments (October 31, 2006) (unaudited)
LEGG MASON PARTNERS OREGON MUNICIPALS FUND
	Face Amount	Rating‡	Security	Value
MUNICIPAL BONDS — 94.2%
Cogeneration Facilities — 0.2%
$	100,000	NR	Western Generation Agency, Cogeneration Project Revenue, Wauna
			Cogeneration Project, Series B, 7.250% due 1/1/09 (a)	$	100,228
Education — 6.8%
	600,000	BBB+	Multnomah County, Educational Facilities Revenue, University
			Portland Project, 6.000% due 4/1/25		637,296
			Oregon State Facilities Authority Revenue:
	500,000	Baa1(b)	Linfield College Project, Series A, 5.000% due 10/1/25		522,650
	1,210,000	AAA	Senior College in Student Housing Project A, XLCA-Insured,
			5.250% due 7/1/25		1,312,354
	1,240,000	AAA	Willamette University Project, Series A, FGIC-Insured, 5.000%
			due 10/1/34		1,315,565
	500,000	A	University of the Virgin Islands, Refunding & Improvement, Bonds,
			Series A, ACA-Insured, 6.250% due 12/1/29		543,240
			Total Education		4,331,105
Escrowed to Maturity (c) — 1.5%
	120,000	AAA	Commonwealth of Puerto Rico, Aqueduct & Sewer Authority
			Revenue, 10.250% due 7/1/09		130,571
			Umatilla County Hospital Facility Authority Revenue, Catholic
			Health Initiatives, Series A:
	465,000	AA	5.750% due 12/1/20		504,153
	285,000	AA	5.500% due 3/1/22		310,735
			Total Escrowed to Maturity		945,459
Finance — 0.8%
	500,000	A	Virgin Islands Public Finance Authority Revenue, Series A, Senior
			Lien, ACA/CBI-Insured, 5.500% due 10/1/18		521,575
General Obligation — 11.8%
	500,000	AAA	Jefferson County GO, School District No 509J, FGIC-School Board
			Guaranty, 5.250% due 6/15/16		542,655
	2,000,000	Aaa(b)	Lane County GO, Eugene School District No 4J, FSA-Insured,
			5.000% due 7/1/17		2,121,120
	500,000	NR	Northern Mariana Islands Commonwealth, GO, Series A,
			7.375% due 6/1/30		536,405
			Oregon State GO:
	2,380,000	AA-	State Board of Higher Education, Series B, 5.000% due 8/1/31 (d)		2,556,429
	210,000	AA-	Veterans Welfare, Series 80A, 5.700% due 10/1/32		213,312
	1,000,000	Aaa(b)	Rogue Community College District Oregon GO, Refunding,
			MBIA-School Board Guaranty, 5.000% due 6/15/25		1,069,230
	500,000	AAA	Tillamook County GO, School District No 9, FSA-School Board
			Guaranty, 5.250% due 6/15/22		538,695
			Total General Obligation		7,577,846
See Notes to Financial Statements.

4     Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Schedule of Investments (October 31, 2006) (unaudited) (continued)
	Face Amount	Rating‡	Security	Value
Hospitals — 17.5%
$	500,000	AA	Clackamas County, Hospital Facilities Authority Revenue,
			Gross-Willamette Falls Hospital Project, Radian-Insured,
			5.500% due 4/1/22	$	537,155
			Clackamas County, OR, Hospital Facilities Authority Revenue:
			Legacy Health System:
	500,000	AA-	5.750% due 5/1/16		543,725
	1,000,000	AA-	5.250% due 5/1/21		1,055,520
	1,000,000	Baa3(b)	Williamette Falls Hospital Project, 6.000% due 4/1/19		1,038,890
	1,000,000	AA	Hillsboro Hospital Facility Authority Revenue, Tuality Healthcare
			Project, Radian-Insured, 5.375% due 10/1/31		1,060,260
	375,000	BBB	Klamath Falls, OR, Inter Community Hospital Authority Revenue,
			Unrefunded Balance, Merle West Medical Center,
			6.250% due 9/1/31		410,370
	500,000	AA	Multnomah County Hospital Facility Authority Revenue, Providence
			Health Systems, 5.250% due 10/1/24		543,070
	1,000,000	BBB-	Puerto Rico Industrial, Tourist, Educational, Medical & Environmental
			Control Facilities, Series A, Ryder Memorial Hospital Project,
			6.700% due 5/1/24		1,007,120
	3,000,000	A+	Salem, OR, Hospital Facility Authority Revenue, Salem Hospital
			Project, Series A, 5.000% due 8/15/36		3,127,110
			Umatilla County Hospital Facility Authority Revenue, Catholic
			Health Initiatives, Series A:
	535,000	AA	5.750% due 12/1/20		582,877
	215,000	AA	5.500% due 3/1/22		233,114
	1,000,000	AA	5.000% due 5/1/22		1,062,870
			Total Hospitals		11,202,081
Housing: Multi-Family — 4.8%
	260,000	Aa2(b)	MFH Revenue Bond Pass-Through Certificates Beneficial Ownership,
			Pacific Tower Apartments, Series 6, 6.050% due 11/1/34 (a)		273,341
	500,000	Aaa(b)	Portland Housing Authority, Multi-Family Revenue, Cherry
			Blossom Apartments, Series A, GNMA-Collateralized,
			6.100% due 12/20/26 (a)		515,830
			Washington County Housing Authority, Multi-Family Revenue:
	1,000,000	NR	Affordable Housing Pool, Series A, 6.125% due 7/1/29		1,044,080
	1,000,000	Aa3(b)	Bethany Meadows Project, LOC-U.S. Bank NA, 6.250%
			due 8/1/13 (a)		1,005,140
	220,000	AAA	Terrace View Project, FNMA-Collateralized, 5.500%
			due 12/1/17 (a)		226,567
			Total Housing: Multi-Family		3,064,958
See Notes to Financial Statements.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      5

Schedule of Investments (October 31, 2006) (unaudited) (continued)
	Face Amount	Rating‡	Security	Value
Housing: Single-Family — 0.6%
$	270,000	Aa2(b)	Oregon State Housing & Community Services Department,
			Mortgage Revenue, Single-Family Mortgage Program,
			Series F, 5.550% due 7/1/30	$	277,231
	110,000	AAA	Virgin Islands HFA, Single-Family Revenue, GNMA Mortgage-Backed
			Securities Program, Series A, GNMA-Collateralized, 6.450%
			due 3/1/16 (a)		110,407
			Total Housing: Single-Family		387,638
Life Care Systems — 1.7%
	1,000,000	NR	Yamhill County Hospital Authority, Friendsview Retirement
			Community, 7.000% due 12/1/34		1,083,930
Miscellaneous — 1.3%
	300,000	NR	Lebanon Urban Renewal Agency, 5.500% due 6/1/14		313,227
	500,000	AAA	Oregon State Department of Administrative Services Lottery
			Revenue, Series B, FSA-Insured, 5.000% due 4/1/19		533,430
			Total Miscellaneous		846,657
Pre-Refunded (e) — 28.9%
Clackamas County GO:
	500,000	AA-	Canby School District No 86, School Board Guaranty,
			Call 6/15/10 @ 100, 5.250% due 6/15/20		528,070
	500,000	Aaa(b)	Lake Oswego School District No 7J, MBIA-Insured,
			Call 6/1/11 @ 100, 5.000% due 6/1/26		530,805
	2,000,000	AAA(f)	Clackamas County, Hospital Facilities Authority Revenue, Mary’s
			Woods at Marylhurst Inc., Senior Living Facilities, Series A,
			Call 5/15/09 @ 102, 6.625% due 5/15/29 (d)		2,180,720
	300,000	Aaa(b)	Deschutes County GO, Administrative School District No 1,
			Series A, FSA-School Board Guaranty, Call 6/15/11 @ 100,
			5.500% due 6/15/18		324,963
	500,000	AAA	Eugene Water Revenue, Utilities Systems, FSA-Insured,
			Call 8/1/10 @ 100, 5.875% due 8/1/30		540,760
	850,000	AA	Forest Grove, Campus Improvement & Refunding Revenue,
			Pacific University, Radian-Insured, Call 5/1/10 @ 100,
			6.300% due 5/1/25		926,763
	500,000	AAA	Jackson County GO, Central Point School District No 6, FGIC-School
			Board Guaranty, Call 6/15/10 @ 100, 5.250% due 6/15/20		528,940
	1,000,000	AAA	Klamath Falls Wastewater Revenue, AMBAC-Insured,
			Call 6/1/10 @ 100, 5.500% due 6/1/25		1,065,640
	625,000	BBB+	Klamath Falls, OR, Inter Community Hospital Authority Revenue, Merle
			West Medical Center, Call 9/1/12 @ 101, 6.250% due 9/1/31		714,288
	500,000	AAA	Lane County GO, Bethel School District No 52, FGIC-School Board
			Guaranty, Call 12/1/06 @ 100, 6.400% due 12/1/09		501,110
	500,000	AA-	Multnomah County GO, Reynolds School District No 7, School
			Board Guaranty, Call 6/15/11 @ 100, 5.125% due 6/15/20		533,680
See Notes to Financial Statements.

6      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Schedule of Investments (October 31, 2006) (unaudited) (continued)
	Face Amount	Rating‡	Security	Value
Pre-Refunded (e) — 28.9% (continued)
$	500,000	Aaa(b)	Multnomah-Clackamas County GO, Centennial School District
			No 28-302, FGIC-School Board Guaranty, Call 6/15/11 @
			100, 5.000% due 6/15/21	$	531,040
	500,000	AAA	Oregon State Department of Administrative Services, COP, Series A,
			AMBAC-Insured, Call 5/1/10 @ 101, 6.250% due 5/1/17 (g) ��		547,900
			Oregon State Department of Transportation Highway User
			Tax Revenue:
	500,000	AAA	Call 11/15/10 @ 100, 5.375% due 11/15/20		534,390
	1,000,000	AAA	FGIC-School Board Guaranty, Call 11/15/12 @ 100, 5.500%
			due 11/15/18		1,104,480
	1,000,000	AAA	Series A, Call 11/15/12 @ 100, 5.500% due 11/15/20		1,104,480
			Oregon State Health, Housing, Educational & Cultural Facilities
			Authority, Series A:
	1,000,000	Baa1(b)	Linfield College Project, Call 10/1/10 @ 101, 6.625% due
			10/1/20		1,116,930
			Western St. Chiropractic, ACA-Insured, Call 12/1/09 @ 102:
	785,000	A	6.350% due 12/1/20		862,126
	545,000	A	6.350% due 12/1/25 (d)		598,546
	295,000	AAA	Puerto Rico Housing, Bank & Finance Agency, Single-Family
			Mortgage Revenue, Affordable Housing Mortgage, Portfolio I,
			GNMA/FNMA/FHLMC-Collateralized, Call 4/1/07 @ 100,
			6.250% due 4/1/29 (a)		298,204
	500,000	AA+	Tri-County Metropolitan Transportation District Revenue, Series A,
			Call 8/1/10 @ 100, 5.375% due 8/1/20		531,160
	1,000,000	BBB+	Virgin Islands Public Finance Authority Revenue, Series A, Gross
			Receipts Taxes Loan Notes, Call 10/1/10 @ 101, 6.500%
			due 10/1/24		1,114,350
	500,000	Aaa(b)	Washington County GO, Forest Grove School District No. 15,
			FSA-School Board Guaranty, Call 6/15/11 @ 100, 5.000%
			due 6/15/21		531,040
	1,135,000	Aaa(b)	Washington, Multnomah & Yamill County GO, School District No 1J,
			MBIA-Insured, Call 6/1/11 @ 100, 5.125% due 6/1/17		1,210,875
			Total Pre-Refunded		18,461,260
Public Facilities — 4.2%
	500,000	AAA	Oregon State Bond Bank Revenue, Economic & Community
			Development Department, Series B, MBIA-Insured, 5.500%
			due 1/1/26		524,850
			Oregon State Department of Administrative Services, Series A:
	1,000,000	AAA	5.000% due 5/1/30		1,062,530
	1,000,000	AAA	FGIC-Insured, 5.000% due 11/1/32		1,068,120
			Total Public Facilities		2,655,500
Solid Waste — 3.3%
	1,975,000	NR	Wasco County, OR, Solid Waste Disposal Revenue, Waste
			Connections Inc. Project, 7.250% due 3/1/21 (a)(d)		2,123,836
See Notes to Financial Statements.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      7

Schedule of Investments (October 31, 2006) (unaudited) (continued)
	Face Amount	Rating‡	Security	Value
Tax Allocation — 1.7%
$	1,000,000	Aaa(b)	Portland, OR, Urban Renewal & Redevelopment, Series A,
			AMBAC-Insured, 5.000% due 6/15/18	$	1,090,040
Transportation — 4.1%
	1,000,000	AAA	Port of Portland Airport Revenue, Portland International Airport,
			Series B, AMBAC-Insured, 5.500% due 7/1/18 (a)		1,046,450
	500,000	CCC+	Puerto Rico Port Authority Revenue, Special Facilities, American
			Airlines Inc., Series A, 6.250% due 6/1/26 (a)		501,830
	1,000,000	AAA	Tri City Metropolitan Transportation District Oregon Revenue,
			Refunding Ltd. Tax Pledge, Series A, FSA-Insured,
			5.000% due 9/1/18		1,080,660
			Total Transportation		2,628,940
Water & Sewer — 5.0%
	150,000	Aa1(b)	Port of Umatilla, OR, Water Revenue, LOC-Bank of America,
			6.650% due 8/1/22 (a)		151,060
	3,000,000	Aaa(b)	Portland, OR, Water System Revenue, Second Lien, Series A,
			MBIA-Insured, 4.500% due 10/1/31 (d)		3,035,820
			Total Water & Sewer		3,186,880
			TOTAL INVESTMENTS BEFORE SHORT-TERM
			INVESTMENTS (Cost — $56,926,145)		60,207,933
SHORT-TERM INVESTMENTS (h) — 9.2%
General Obligation — 5.6%
			Oregon State GO:
	1,800,000	A-1+	Series 73E, SPA-Morgan Guaranty Trust & JPMorgan Chase,
			3.550%, 11/1/06		1,800,000
	1,800,000	A-1+	Series 73F, SPA-Bayerische Landesbank, 3.550%, 11/1/06		1,800,000
			Total General Obligation		3,600,000
Education — 1.3%
	800,000	VMIG1(b)	Oregon State Facilities Authority Revenue, Episcopal School
			Projects, Series A, LOC-U.S. Bank, 3.620%, 11/2/06		800,000
Hospital — 2.3%
	1,500,000	VMIG1(b)	Medford, OR, Hospital Facilities Authority Revenue, Cascade
			Manor Project, LOC-KBC Bank, 3.650%, 11/1/06		1,500,000
			TOTAL SHORT-TERM INVESTMENTS (Cost — $5,900,000)		5,900,000
			TOTAL INVESTMENTS — 103.4% (Cost — $62,826,145#)		66,107,933
			Liabilities in Excess of Other Assets — (3.4)%		(2,154,756	)
			TOTAL NET ASSETS — 100.0%	$	63,953,177
See Notes to Financial Statements.

8     Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Schedule of Investments (October 31, 2006) (unaudited) (continued)
‡	All ratings are by Standard & Poor’s Ratings Service, unless otherwise noted.
(a)	Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax (“AMT”).
(b)	Rating by Moody’s Investors Service.
(c)	Bonds are escrowed to maturity by government securities and/or U.S. government agency securities and are considered by the Manager to be triple-A rated even if issuer has not applied for new ratings.
(d)	All or a portion of this security is segregated for open futures contracts and extended settlements.
(e)	Pre-Refunded bonds are escrowed with government obligations and/or government agency securities and are considered by the Manager to be triple-A rated even if issuer has not applied for new ratings.
(f)	Rating by Fitch Ratings Service.
(g)	All or a portion of this security is held at the broker as collateral for open futures contracts.
(h)	Variable rate demand obligations have a demand feature under which the Fund can tender them back to the issuer on no more than 7 days notice. Date shown is the date of the next interest rate change.
#	Aggregate cost for federal income tax purposes is substantially the same.
	Abbreviations used in this schedule:
	ACA	—	American Capital Assurance
	AMBAC	—	Ambac Assurance Corporation
	CBI	—	Certificate of Bond Insurance
	COP	—	Certificate of Participation
	FGIC	—	Financial Guaranty Insurance Company
	FHLMC	—	Federal Home Loan Mortgage Corporation
	FNMA	—	Federal National Mortgage Association
	FSA	—	Financial Security Assurance
	GNMA	—	Government National Mortgage Association
	GO	—	General Obligation
	HFA	—	Housing Finance Authority
	LOC	—	Letter of Credit
	MBIA	—	Municipal Bond Investors Assurance Corporation
	MFH	—	Multi-Family Housing
	Radian	—	Radian Assets Assurance
	SPA	—	Standby Bond Purchase Agreement
	XLCA	—	XL Capital Assurance Inc.

See Notes to Financial Statements.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      9

Bond Ratings (unaudited)
The definitions of the applicable rating symbols are set forth below:
Standard & Poor’s Ratings Service (“Standard & Poor’s”) —Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (–) sign to show relative standings within the major rating categories.
AAA	—	Bonds rated “AAA” have the highest rating assigned by Standard & Poor’s. Capacity to pay interest and repay principal is extremely strong.
AA	—	Bonds rated “AA” have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in a small degree.
A	—	Bonds rated “A” have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB	—	Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.
BB, B, CCC, CC and C	—	Bonds rated “BB”, “B”, “CCC”, “CC” and “C” are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. “BB” represents the lowest degree of speculation and “C” the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
D	—	Bonds rated “D” are in default and payment of interest and/or repayment of principal is in arrears.
Moody’s Investors Service (“Moody’s”) — Numerical modifiers 1, 2 and 3 may be applied to each generic rating from “Aa” to “Caa,” where 1 is the highest and 3 the lowest ranking within its generic category.
Aaa	—	Bonds rated “Aaa” are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edge.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa	—	Bonds rated “Aa” are judged to be of high quality by all standards. Together with the “Aaa” group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in “Aaa” securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in “Aaa” securities.
A	—	Bonds rated “A” possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adeuate but elements may be present which suggest a susceptibility to impairment some time in the future.
Baa	—	Bonds rated “Baa” are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba	—	Bonds rated “Ba” are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and therefore not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
B	—	Bonds rated “B” are generally lack characteristics of desirable investments. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa	—	Bonds rated “Caa” are of poor standing. These may be in default, or present elements of danger may exist with respect to principal or interest.
Ca	—	Bonds rated “Ca” represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings.
C	—	Bonds rated “C” are the lowest class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.

10     Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Bond Ratings (unaudited) (continued)
Fitch Ratings Service (“Fitch”) — Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (–) sign to show relative standings within the major rating categories.
AAA	—	Bonds rated “AAA” have the highest rating assigned by Fitch. Capacity to pay interest and repay principal is extremely strong.
AA	—	Bonds rated “AA” have a very strong capacity to pay interest and repay principal and differ from he highest rated issues only in a small degree.
A	—	Bonds rated “A” have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB	—	Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.
BB, B, CCC and CC	—	Bonds rated “BB”, “B”, “CCC” and “CC” are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. “BB” represents a lower degree of speculation than “B”, and “CC” the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
NR	—	Indicates that the bond is not rated by Standard & Poor’s, Moody’s or Fitch.
Short-Term Security Ratings (unaudited)
SP-1	—	Standard & Poor’s highest rating indicating very strong or strong capacity to pay principal and interest; those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) sign.
A-1	—	Standard & Poor’s highest commercial paper and variable-rate demand obligation (VRDO) rating indicating that the degree of safety regarding timely payment is either overwhelming or verystrong; those issues determined to possess overwhelming safety characteristics are denoted with aplus (+) sign.
VMIG 1	—	Moody’s highest rating for issues having a demand feature — VRDO.
MIG1	—	Moody’s highest rating for short-term municipal obligations.
P-1	—	Moody’s highest rating for commercial paper and for VRDO prior to the advent of the VMIG 1 rating.
F-1	—	Fitch’s highest rating indicating the strongest capacity for timely payment of financial commitments; those issues determined to possess overwhelming strong credit feature are denoted with a plus (+) sign.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      11

Statement of Assets and Liabilities (October 31, 2006) (unaudited)
	ASSETS:
	Investments, at value (Cost — $62,826,145)		$	66,107,933
	Cash			20,443
	Interest receivable			957,588
	Receivable for Fund shares sold			148,636
	Prepaid expenses			4,350
	Total Assets			67,238,950
	LIABILITIES:
	Payable for securities purchased			3,086,070
	Distributions payable			88,621
	Payable to broker — variation margin on open futures contracts			48,750
	Investment management fee payable			18,775
	Deferred compensation payable			8,885
	Distribution fees payable			7,592
	Trustees’ fees payable			1,506
	Accrued expenses			25,574
	Total Liabilities			3,285,773
	Total Net Assets		$	63,953,177
	NET ASSETS:
	Par value (Note 6)		$	5,940
	Paid-in capital in excess of par value			61,923,275
	Undistributed net investment income			71,976
	Accumulated net realized loss on investments and futures contracts			(1,251,560	)
	Net unrealized appreciation on investments and futures contracts			3,203,546
	Total Net Assets		$	63,953,177
	Shares Outstanding:
		Class A		3,555,040
		Class B		758,038
		Class C		1,627,212
	Net Asset Value:
		Class A (and redemption price)		$10.79
		Class B*		$10.73
		Class C*		$10.74
	Maximum Public Offering Price Per Share:
		Class A (based on maximum initial sales charge of 4.00%)		$11.24
*	Redemption price is NAV of Class B and C shares reduced by a 4.50% and 1.00% CDSC, respectively, if shares are redeemed within one year from purchase payment (See Note 2).

See Notes to Financial Statements.

12     Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Statement of Operations (For the six months ended October 31, 2006) (unaudited)
INVESTMENT INCOME:
Interest	$	1,533,479
EXPENSES:
Investment management fee (Note 2)		151,401
Distribution fees (Notes 2 and 4)		112,593
Legal fees		41,570
Shareholder reports (Note 4)		27,098
Audit and tax		11,159
Trustees’ fees		4,287
Transfer agent fees (Note 4)		4,027
Proxy fees		1,784
Registration fees		1,520
Insurance		663
Custody fees		131
Miscellaneous expenses		3,428
Total Expenses		359,661
Less: Fee waivers and/or expense reimbursements (Notes 2 and 8)		(45,454	)
Net Expenses		314,207
Net Investment Income		1,219,272
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FUTURES CONTRACTS (NOTES 1 AND 3):
Net Realized Gain From:
Investment transactions		58,200
Futures contracts		715,457
Net Realized Gain		773,657
Change in Net Unrealized Appreciation/Depreciation From:
Investments		771,467
Futures contracts		(862,539	)
Change in Net Unrealized Appreciation/Depreciation		(91,072	)
Net Gain on Investments and Futures Contracts		682,585
Increase in Net Assets From Operations	$	1,901,857

See Notes to Financial Statements.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      13

Statements of Changes in Net Assets
For the six months ended October 31, 2006 (unaudited)
and the year ended April 30, 2006
	October 31			April 30
OPERATIONS:
Net investment income	$	1,219,272		$	2,386,243
Net realized gain (loss)		773,657			(11,798	)
Change in net unrealized appreciation/depreciation		(91,072	)		52,844
Increase in Net Assets From Operations		1,901,857			2,427,289
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 1 AND 5):
Net investment income		(1,219,062	)		(2,306,648	)
Decrease in Net Assets From Distributions to Shareholders		(1,219,062	)		(2,306,648	)
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares		10,971,510			6,999,464
Reinvestment of distributions		682,222			1,274,550
Cost of shares repurchased		(4,559,284	)		(12,486,709	)
Increase (Decrease) in Net Assets From Fund Share Transactions		7,094,448			(4,212,695	)
Increase (Decrease) in Net Assets		7,777,243			(4,092,054	)
NET ASSETS:
Beginning of period		56,175,934			60,267,988
End of period*	$	63,953,177		$	56,175,934
* Includes undistributed net investment income of:	$	71,976		$	71,766

See Notes to Financial Statements.

14     Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

 Financial Highlights 

For a share of each class of beneficial interest outstanding throughout each year ended April 30, unless otherwise noted: 

Class A Shares(1)		2006	(2)		2006			2005			2004			2003			2002
Net Asset Value,
Beginning of Period	$	10.67		$	10.65		$	10.69		$	10.70		$	10.57		$	10.33
Income (Loss) From Operations:
Net investment income		0.23			0.47			0.48			0.52			0.52			0.53
Net realized and unrealized gain (loss)		0.12			0.00	(3)		(0.03	)		(0.02	)		0.13			0.25
Total Income From Operations		0.35			0.47			0.45			0.50			0.65			0.78
Less Distributions From:
Net investment income		(0.23	)		(0.45	)		(0.49	)		(0.51	)		(0.51	)		(0.54	)
In excess of net investment income		—			—			—			—			(0.01	)		—
Total Distributions		(0.23	)		(0.45	)		(0.49	)		(0.51	)		(0.52	)		(0.54	)
Net Asset Value,
End of Period	$	10.79		$	10.67		$	10.65		$	10.69		$	10.70		$	10.57
Total Return(4)		3.32	%		4.57	%		4.31	%		4.74	%		6.29	%		7.67	%
Net Assets, End of Period (000s)	$	38,349		$	31,557		$	31,560		$	28,041		$	27,820		$	24,163
Ratios to Average Net Assets:
Gross expenses		0.95	%(5)		0.96	%		0.91	%		0.89	%		0.96	%		0.92	%
Net expenses(6)		0.80	(5)		0.81			0.75			0.74			0.81			0.77
Net investment income		4.26	(5)		4.42			4.51			4.82			4.85			4.98
Portfolio Turnover Rate		8	%		12	%		11	%		14	%		19	%		20	%

(1)	Per share amounts have been calculated using the average shares method.
(2)	For the six months ended October 31, 2006 (unaudited).
(3)	Amount represents less than $0.01 per share.
(4)	Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Total returns for periods of less than one year are not annualized.
(5)	Annualized.
(6)	Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      15

 Financial Highlights (continued) 

For a share of each class of beneficial interest outstanding throughout each year ended April 30, unless otherwise noted: 

Class B Shares(1)		2006	(2)		2006			2005			2004			2003			2002
Net Asset Value,
Beginning of Period	$	10.61		$	10.59		$	10.63		$	10.63		$	10.52		$	10.29
Income (Loss) From Operations:
Net investment income		0.20			0.41			0.42			0.46			0.45			0.47
Net realized and unrealized gain (loss)		0.12			0.00	(3)		(0.03	)		(0.01	)		0.12			0.26
Total Income From Operations		0.32			0.41			0.39			0.45			0.57			0.73
Less Distributions From:
Net investment income		(0.20	)		(0.39	)		(0.43	)		(0.45	)		(0.45	)		(0.50	)
In excess of net investment income		—			—			—			—			(0.01	)		—
Total Distributions		(0.20	)		(0.39	)		(0.43	)		(0.45	)		(0.46	)		(0.50	)
Net Asset Value,
End of Period	$	10.73		$	10.61		$	10.59		$	10.63		$	10.63		$	10.52
Total Return(4)		3.03	%		4.00	%		3.75	%		4.25	%		5.53	%		7.21	%
Net Assets, End of Period (000s)	$	8,130		$	8,994		$	10,903		$	13,057		$	15,718		$	17,014
Ratios to Average Net Assets:
Gross expenses		1.51	%(5)		1.53	%		1.46	%		1.42	%		1.54	%		1.44	%
Net expenses(6)		1.36	(5)		1.37			1.30			1.27			1.39			1.29
Net investment income		3.72	(5)		3.85			3.96			4.29			4.26			4.46
Portfolio Turnover Rate		8	%		12	%		11	%		14	%		19	%		20	%

(1)	Per share amounts have been calculated using the average shares method.
(2)	For the six months ended October 31, 2006 (unaudited).
(3)	Amount represents less than $0.01 per share.
(4)	Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Total returns for periods of less than one year are not annualized.
(5)	Annualized.
(6)	Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

16     Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

 Financial Highlights (continued) 

For a share of each class of beneficial interest outstanding throughout each year ended April 30, unless otherwise noted: 

Class C Shares(1)		2006	(2)		2006			2005			2004			2003			2002
Net Asset Value,
Beginning of Period	$	10.62		$	10.60		$	10.64		$	10.65		$	10.53		$	10.31
Income (Loss) From Operations:
Net investment income		0.20			0.41			0.42			0.45			0.46			0.46
Net realized and unrealized gain (loss)		0.12			0.01			(0.03	)		(0.01	)		0.12			0.26
Total Income From Operations		0.32			0.42			0.39			0.44			0.58			0.72
Less Distributions From:
Net investment income		(0.20	)		(0.40	)		(0.43	)		(0.45	)		(0.45	)		(0.50	)
In excess of net investment income		—			—			—			—			(0.01	)		—
Total Distributions		(0.20	)		(0.40	)		(0.43	)		(0.45	)		(0.46	)		(0.50	)
Net Asset Value,
End of Period	$	10.74		$	10.62		$	10.60		$	10.64		$	10.65		$	10.53
Total Return(3)		3.03	%		4.01	%		3.73	%		4.15	%		5.57	%		7.05	%
Net Assets, End of Period (000s)	$	17,474		$	15,625		$	17,805		$	11,669		$	10,569		$	6,001
Ratios to Average Net Assets:
Gross expenses		1.52	%(4)		1.52	%		1.45	%		1.48	%		1.54	%		1.50	%
Net expenses(5)		1.37	(4)		1.37			1.30			1.33			1.39			1.35
Net investment income		3 .69	(4)		3.86			3.96			4.23			4.28			4.39
Portfolio Turnover Rate		8	%		12	%		11	%		14	%		19	%		20	%

(1)	Per share amounts have been calculated using the average shares method.
(2)	For the six months ended October 31, 2006 (unaudited).
(3)	Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Total returns for periods of less than one year are not annualized.
(4)	Annualized.
(5)	Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      17

Notes to Financial Statements (unaudited)

1. Organization and Significant Accounting Policies
Legg Mason Partners Oregon Municipals Fund (the “Fund”), is a Massachusetts business trust. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, open-end management investment company.
     The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ.
     (a) Investment Valuation. Securities are valued at the mean between the bid and asked prices provided by an independent pricing service that are based on transactions in municipal obligations, quotations from municipal bond dealers, market transactions in comparable securities and various other relationships between securities. Securities for which market quotations are not readily available or are determined not to reflect fair value, will be valued in good faith by or under the direction of the Fund’s Board of Trustees. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value.
     (b) Financial Futures Contracts. The Fund may enter into financial futures contracts typically to hedge a portion of the portfolio. Upon entering into a financial futures contract, the Fund is required to deposit cash or securities as initial margin. Additional securities are also segregated up to the current market value of the financial futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund each day, depending on the daily fluctuation in the value of the underlying financial instruments. The Fund recognizes an unrealized gain or loss equal to the daily variation margin. When the financial futures contracts are closed, a realized gain or loss is recognized equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund’s basis in the contracts.
     The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
     (c) Securities Traded on a When-Issued Basis. The Fund may trade securities on a when-issued basis. In a when-issued transaction, the securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Purchasing such securities involves the risk of loss if the value of the securities declines prior to settlement. This transaction is subject to market fluctuations and its current value is determined in the same manner as for other securities.

18      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

     (d) Fund Concentration. Since the Fund invests primarily in obligations of issuers within Oregon, it is subject to possible concentration risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Oregon.
     (e) Security Transactions and Investment Income. Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults on an expected interest payment, the Fund’s policy is to generally halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default.
     (f ) Distributions to Shareholders. Distributions from net investment income on the shares of the Fund are declared each business day to shareholders of record and are paid monthly. The Fund intends to satisfy conditions that will enable interest from municipal securities, which is exempt from federal and certain state income taxes, to retain such tax-exempt status when distributed to the shareholders of the Fund. Distributions of net realized gains, if any, are taxable and are declared at least annually. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.
     (g) Class Accounting. Investment income, common expenses and realized/unrealized gain (loss) on investments are allocated to the various classes of the Fund on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that class.
     (h) Federal and Other Taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute substantially all of its income and net realized gains on investments, if any, to shareholders each year. Therefore, no federal income tax provision is required in the Fund’s financial statements.
     (i) Reclassification. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share.

2. Investment Management Agreement and Other Transactions with Affiliates
Prior to August 1, 2006, Smith Barney Fund Management LLC (“SBFM”), an indirect wholly-owned subsidiary of Legg Mason, Inc. (“Legg Mason”), acted as the investment manager of the Fund. Under the investment management agreement, the Fund paid an investment management fee calculated daily and paid monthly at an annual rate of 0.50% of the Fund’s average daily net assets up to $500 million and 0.48% of the Fund’s average daily net assets in excess of $500 million.
     Effective August 1, 2006, Legg Mason Partners Fund Advisor, LLC (“LMPFA”) became the Fund’s investment manager and Western Asset Management Company (“Western Asset”) became the Fund’s subadviser. The portfolio managers who are responsible for the day-to-day management of the Fund remain the same immediately

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      19

Notes to Financial Statements (unaudited) (continued)

prior to and immediately after the date of these changes. LMPFA and Western Asset are wholly-owned subsidiaries of Legg Mason.
     LMPFA provides administrative and certain oversight services to the Fund. LMPFA has delegated to the subadviser the day-to-day portfolio management of the Fund. The Fund’s investment management fee remains unchanged. For its services, LMPFA pays Western Asset 70% of the net management fee it receives from the Fund.
     During the six months ended October 31, 2006, SBFM and LMPFA waived a portion of their investment management fee in the amount of $45,421. In addition, during the six months ended October 31, 2006, the Fund was reimbursed for expenses amounting to $33.
     Citigroup Global Markets Inc. (“CGM”) and Legg Mason Investor Services, LLC (“LMIS”), serve as co-distributors of the Fund. LMIS is a wholly owned broker-dealer subsidiary of Legg Mason.
    There is a maximum initial sales charge of 4.00% for Class A shares. There is a contingent deferred sales charge (“CDSC”) of 4.50% on Class B shares, which applies if redemption occurs within one year from purchase payment. This CDSC declines thereafter by 0.50% the first year after purchase payment and thereafter by 1.00% per year until no CDSC is incurred. Class C shares have a 1.00% CDSC, which applies if redemption occurs within one year from purchase payment. In certain cases, Class A shares have a 1.00% CDSC, which applies if redemption occurs within one year from purchase payment. This CDSC only applies to those purchases of Class A shares, which, when combined with current holdings of Class A shares, equal or exceed $500,000 in the aggregate. These purchases do not incur an initial sales charge.
     For the six months ended October 31, 2006, LMIS and its affiliates did not receive sales charges from the Fund’s Class A shares. In addition, for the six months ended October 31, 2006, CDSCs paid to LMIS and its affiliates were approximately:

	Class B	Class C
CDSCs	$1,000	$1,000

     Effective November 20, 2006 the maximum initial sales charge on Class A shares of the Fund will increase from 4.00% to 4.25% for shares purchased on or after that date.
     The Fund has adopted an unfunded, non-qualified deferred compensation plan (the “Plan”) which allows non-interested trustees (“Trustees”) to defer the receipt of all or a portion of the trustees’ fees earned until a later date specified by the Trustees. The deferred fees earn a return based on notional investments selected by the Trustees. The balance of the deferred fees payable may change depending upon the investment performance. Any gains or losses incurred in the deferred balances are reported in the Statement of Operations under Trustees’ fees. Under the Plan, deferred fees are considered a general obligation of the Fund and any payments made pursuant to the Plan will be made from the Fund’s general assets. The Board of Trustees voted to discontinue offering the Plan to its members effective January 1, 2006. This change will have no effect on fees

20      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

previously deferred. As of October 31, 2006, the Fund had accrued $8,885 as deferred compensation under the Plan.
     Certain officers and one Trustee of the Fund are employees of Legg Mason or its affiliates and do not receive compensation from the Fund.

3. Investments
During the six months ended October 31, 2006, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:

Purchases	$10,129,838
Sales	4,441,058

     At October 31, 2006, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

Gross unrealized appreciation	$3,302,674
Gross unrealized depreciation	(20,886	)
Net unrealized appreciation	$3,281,788

At October 31, 2006, the Fund had the following open futures contracts:

	Number of  Contracts	Expiration  Date	Basis  Value	Market  Value	Unrealized Loss
Contracts to Sell:
U.S. Treasury Bond	65	12/06	$7,244,414	$7,322,656	$(78,242)

4. Class Specific Expenses
The Fund has adopted a Rule 12b-1distribution plan and under that plan the Fund pays a service fee with respect to its Class A, B and C shares calculated at the annual rate of 0.15% of the average daily net assets of each respective class. The Fund also pays a distribution fee with respect to its Class B and C shares calculated at the annual rate of 0.50% and 0.55% of the average daily net assets of each class, respectively. Distribution fees are accrued daily and paid monthly.
    For the six months ended October 31, 2006, class specific expenses were as follows:

	Distribution Fees	Transfer Agent Fees	Shareholder Reports Expenses
Class A	$  26,517	$1,995	$13,859
Class B	27,804	999	5,500
Class C	58,272	1,033	7,739
Total	$112,593	$4,027	$27,098

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      21

Notes to Financial Statements (unaudited) (continued)

5. Distributions to Shareholders by Class

	Six Months Ended  October 31, 2006	Year Ended  April 30, 2006
Net Investment Income:
Class A	$   752,966	$1,328,867
Class B	158,656	353,944
Class C	307,440	623,837
Total	$1,219,062	$2,306,648

6. Shares of Beneficial Interest

At October 31, 2006, the Fund had an unlimited number of shares of beneficial interest authorized with a par value of $0.001 per share. The Fund has the ability to issue multiple classes of shares. Each share of a class represents an identical interest and has the same rights, except that each class bears certain direct expenses, including those specifically related to the distribution of its shares.
     Transactions in shares of each class were as follows:

	Six Months Ended October 31, 2006					Year Ended  April 30, 2006
	Shares		Amount			Shares		Amount
Class A
Shares sold	727,615		$	7,766,650		436,717		$	4,631,292
Shares issued on reinvestment	37,451			401,181		62,914			666,911
Shares repurchased	(166,818	)		(1,782,351	)	(507,359	)		(5,380,784	)
Net Increase (Decrease)	598,248		$	6,385,480		(7,728	)	$	(82,581	)
Class B
Shares sold	31,612		$	334,742		71,862		$	756,400
Shares issued on reinvestment	7,735			82,341		17,599			185,525
Shares repurchased	(128,937	)		(1,369,140	)	(271,738	)		(2,865,045	)
Net Decrease	(89,590	)	$	(952,057	)	(182,277	)	$	(1,923,120	)
Class C
Shares sold	270,042		$	2,870,118		152,608		$	1,611,772
Shares issued on reinvestment	18,636			198,700		39,997			422,114
Shares repurchased	(132,038	)		(1,407,793	)	(401,685	)		(4,240,880	)
Net Increase (Decrease)	156,640		$	1,661,025		(209,080	)	$	(2,206,994	)

7. Capital Loss Carryforward

As of April 30, 2006, the Fund had a net capital loss carryforward of approximately $1,257,617, of which $7,477 expires in 2012 and $1,250,140 expires in 2013. These amounts will be available to offset any future taxable capital gains.

22      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

8. Regulatory Matters

On May 31, 2005, the U.S. Securities and Exchange Commission (“SEC”) issued an order in connection with the settlement of an administrative proceeding against SBFM and CGM relating to the appointment of an affiliated transfer agent for the Smith Barney family of mutual funds (the “Funds”).
     The SEC order finds that SBFM and CGM willfully violated Section 206(1) of the Investment Advisers Act of 1940 (“Advisers Act”). Specifically, the order finds that SBFM and CGM knowingly or recklessly failed to disclose to the boards of the Funds in 1999 when proposing a new transfer agent arrangement with an affiliated transfer agent that: First Data Investors Services Group (“First Data”), the Funds’ then-existing transfer agent, had offered to continue as transfer agent and do the same work for substantially less money than before; and that Citigroup Asset Management (“CAM”), the Citigroup business unit that, at the time, included the Fund’s investment manager and other investment advisory companies, had entered into a side letter with First Data under which CAM agreed to recommend the appointment of First Data as sub-transfer agent to the affiliated transfer agent in exchange for, among other things, a guarantee by First Data of specified amounts of asset management and investment banking fees to CAM and CGM. The order also finds that SBFM and CGM willfully violated Section 206(2) of the Advisers Act by virtue of the omissions discussed above and other misrepresentations and omissions in the materials provided to the Funds’ boards, including the failure to make clear that the affiliated transfer agent would earn a high profit for performing limited functions while First Data continued to perform almost all of the transfer agent functions, and the suggestion that the proposed arrangement was in the Funds’ best interests and that no viable alternatives existed. SBFM and CGM do not admit or deny any wrongdoing or liability. The settlement does not establish wrongdoing or liability for purposes of any other proceeding.
     The SEC censured SBFM and CGM and ordered them to cease and desist from violations of Sections 206(1) and 206(2) of the Advisers Act. The order requires Citigroup to pay $208.1 million, including $109 million in disgorgement of profits, $19.1 million in interest, and a civil money penalty of $80 million. Approximately $24.4 million has already been paid to the Funds, primarily through fee waivers. The remaining $183.7 million, including the penalty, has been paid to the U.S. Treasury and will be distributed pursuant to a plan submitted for the approval of the SEC. At this time, there is no certainty as to how the above-described proceeds of the settlement will be distributed, to whom such distributions will be made, the methodology by which such distributions will be allocated, and when such distributions will be made. The order also required that transfer agency fees received from the Funds since December 1, 2004, less certain expenses be placed in escrow and provided that a portion of such fees might be subsequently distributed in accordance with the terms of the order. On April 3, 2006, an aggregate amount of approximately $9 million was distributed to the affected Funds.
     The order required SBFM to recommend a new transfer agent contract to the Fund boards within 180 days of the entry of the order; if a Citigroup affiliate submitted a proposal to serve as transfer agent or sub-transfer agent, SBFM and CGM would have been

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      23

Notes to Financial Statements (unaudited) (continued)

required, at their expense, to engage an independent monitor to oversee a competitive bidding process. On November 21, 2005, and within the specified timeframe, the Fund’s Board selected a new transfer agent for the Fund. No Citigroup affiliate submitted a proposal to serve as transfer agent. Under the order, SBFM also must comply with an amended version of a vendor policy that Citigroup instituted in August 2004.
     Although there can be no assurance, the Fund’s manager does not believe that this matter will have a material adverse effect on the Fund.
     On December 1, 2005, Citigroup completed the sale of substantially all of its global asset management business, including SBFM, to Legg Mason.

9.  Legal Matters
Beginning in August 2005, five class action lawsuits alleging violations of federal securities laws and state law were filed against CGM and SBFM, (collectively, the “Defendants”) based on the May 31, 2005 settlement order issued against the Defendants by the SEC as described in Note 8. The complaints seek injunctive relief and compensatory and punitive damages, removal of SBFM as the investment manager for the Smith Barney family of funds, rescission of the Funds’ management and other contracts with SBFM, recovery of all fees paid to SBFM pursuant to such contracts, and an award of attorneys’ fees and litigation expenses.
     On October 5, 2005, a motion to consolidate the five actions and any subsequently filed, related action was filed. That motion contemplates that a consolidated amended complaint alleging substantially similar causes of action will be filed in the future.
     As of the date of this report, the Fund’s manager believes that resolution of the pending lawsuit will not have a material effect on the financial position or results of operations of the Fund or the ability of the Fund’s manager and its affiliates to continue to render services to the Funds under their respective contracts.

*     *     *

     Beginning in June 2004, class action lawsuits alleging violations of the federal securities laws were filed against CGM and a number of its then affiliates, including SBFM and Salomon Brothers Asset Management Inc. (“SBAM”), which were then investment adviser or manager to certain of the Funds (the “Managers”), substantially all of the mutual funds then managed by the Managers (the “Defendant Funds”), and Board members of the Defendant Funds (collectively, the “Defendants”). The complaints alleged, among other things, that CGM created various undisclosed incentives for its brokers to sell Smith Barney and Salomon Brothers funds. In addition, according to the complaints, the Managers caused the Defendant Funds to pay excessive brokerage commissions to CGM for steering clients towards proprietary funds. The complaints also alleged that the defendants breached their fiduciary duty to the Defendant Funds by improperly charging Rule 12b-1 fees and by drawing on fund assets to make undisclosed payments of soft dollars and excessive brokerage commissions. The complaints also alleged that the Defendant Funds failed to adequately disclose certain of the allegedly wrongful conduct. The complaints sought injunctive relief and compensatory and punitive damages, rescis-

24      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

sion of the Defendant Funds’ contracts with the Managers, recovery of all fees paid to the Managers pursuant to such contracts and an award of attorneys’ fees and litigation expenses.
     On December 15, 2004, a consolidated amended complaint (the “Complaint”) was filed alleging substantially similar causes of action. On May 27, 2005, all of the Defendants filed motions to dismiss the Complaint. On July 26, 2006, the court issued a decision and order (1) finding that plaintiffs lacked standing to sue on behalf of the shareholders of the Funds in which none of the plaintiffs had invested (including the Fund) and dismissing those Funds from the case (although stating that they could be brought back into the case if standing as to them could be established), and (2) other than one stayed claim, dismissing all of the causes of action against the remaining Defendants, with prejudice, except for the cause of action under Section 36(b) of the 1940 Act, which the court granted plaintiffs leave to repeal as a derivative claim.
     On October 16, 2006, plaintiffs filed their Second Consolidated Amended Complaint (“Second Amended Complaint”) which alleges derivative claims on behalf of nine funds identified in the Second Amended Complaint, under Section 36(b) of the 1940 Act, against CAM, SBAM, SBFM and CGM as investment advisers to the identified funds, as well as CGM as a distributor for the identified funds (collectively, the “Second Amended Complaint Defendants”). The Fund was not identified in the Second Amended Complaint. The Second Amended Complaint alleges no claims against any of the Funds or any of their Board Members. Under Section 36(b), the Second Amended Complaint alleges similar facts and seeks similar relief against the Second Amended Complaint Defendants as the Complaint.
     Additional lawsuits arising out of these circumstances and presenting similar allegations and requests for relief may be filed in the future.

10. Other Matters
On September 16, 2005, the staff of the SEC informed SBFM and SBAM that the staff is considering recommending that the SEC institute administrative proceedings against SBFM and SBAM for alleged violations of Section 19(a) and 34(b) of the 1940 Act (and related Rule 19a-1). The notification is a result of an industry wide inspection by the SEC and is based upon alleged deficiencies in disclosures regarding dividends and distributions paid to shareholders of certain funds. Section 19(a) and related Rule 19a-1 of the 1940 Act generally require funds that are making dividend and distribution payments to provide shareholders with a written statement disclosing the source of the dividends and distributions, and, in particular, the portion of the payments made from each of net investment income, undistributed net profits and/or paid-in capital. In connection with the contemplated proceedings, the staff may seek a cease and desist order and/or monetary damages from SBFM or SBAM.
     Although there can be no assurance, the Fund’s manager believes that this matter is not likely to have a material adverse effect on the Fund.

Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report      25

Notes to Financial Statements (unaudited) (continued)

11. Additional Shareholder Information
     The Fund’s Board approved certain share class modifications which, among other things, standardize share class features for all equity and fixed income funds in the fund complex. The features standardized include such things as sales loads, distribution charges and other costs. These modifications were implemented on November 20, 2006.
     The Fund’s Board also approved a number of other initiatives designed to streamline and restructure the fund complex, and has authorized seeking shareholder approval for those initiatives where shareholder approval is required. As a result, Fund shareholders have been asked to elect a new Board, approve matters that will result in the Fund being grouped for organizational and governance purposes with other funds in the fund complex, and domicile the Fund as a Maryland business trust, with all funds operating under uniform charter documents. Fund shareholders also have been asked to approve investment matters, including standardized fundamental investment policies.
     Shareholder approval was obtained on December 11, 2006. These matters generally are expected to be implemented during the first half of 2007.

12. Recent Accounting Pronouncements
During June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48 (“FIN 48” or the “Interpretation”), Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement 109. FIN 48 supplements FASB Statement 109, Accounting for Income Taxes, by defining the confidence level that a tax position must meet in order to be recognized in the financial statements. FIN 48 prescribes a comprehensive model for how a fund should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the fund has taken or expects to take on a tax return. FIN 48 requires that the tax effects of a position be recognized only if it is “more likely than not” to be sustained based solely on its technical merits. Management must be able to conclude that the tax law, regulations, case law, and other objective information regarding the technical merits sufficiently support the position’s sustainability with a likelihood of more than 50 percent. FIN 48 is effective for fiscal periods beginning after December 15, 2006, which for this Fund will be May 1, 2007. At adoption, the financial statements must be adjusted to reflect only those tax positions that are more likely than not to be sustained as of the adoption date. Management of the Fund has determined that adopting FIN 48 will not have a material impact on the Fund’s financial statements.

*     *     *

     On September 20, 2006, FASB released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. At this time, management is evaluating the implications of FAS 157 and its impact on the financial statements has not yet been determined.

26      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

Board Approval of Management and Subadvisory Agreements (unaudited)

At a meeting held in person on June 28, 2006, the Fund’s Board, including a majority of the Board Members who are not “interested persons” of the Fund or Legg Mason Partners Fund Advisor, LLC (the “Manager”) or proposed sub-investment adviser as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”), approved a new management agreement (the “New Management Agreement”) between the Fund and the Manager. The Fund’s Board, including a majority of the Independent Board Members, also approved a new subadvisory agreement between the Manager and Western Asset Management Company (the “Subadviser”) (the “New Subadvisory Agreement”). The New Management Agreement and the New Subadvisory Agreement replaced the Fund’s prior management agreement with SBFM and were entered into in connection with an internal reorganization of the Manager’s and the Subadviser’s parent organization, Legg Mason. In approving the New Management Agreement and New Subadvisory Agreement, the Board, including the Independent Board Members, considered the factors discussed below, among other things.
     The Board noted that the Manager will provide administrative and certain oversight services to the Fund, and that the Manager will delegate to the Subadviser the day-to-day portfolio management of the Fund. The Board Members reviewed the qualifications, backgrounds and responsibilities of the senior personnel that will provide oversight and general management services and the portfolio management team that would be primarily responsible for the day-to-day management of the Fund. The Board Members noted that the portfolio management team was expected to be the same as then managing the Fund.
    The Board Members received and considered information regarding the nature, extent and quality of services expected to be provided to the Fund by the Manager under the New Management Agreement and by the Subadviser under the New Subadvisory Agreement. The Board Members’ evaluation of the services expected to be provided by the Manager and the Subadviser took into account the Board Members’ knowledge and familiarity gained as Fund Board Members, including as to the scope and quality of Legg Mason’s investment management and other capabilities and the quality of its administrative and other services. The Board Members considered, among other things, information and assurances provided by Legg Mason as to the operations, facilities and organization of the Manager and the Subadviser and the qualifications, backgrounds and responsibilities of their senior personnel. The Board Members further considered the financial resources available to the Manager, the Subadviser and Legg Mason. The Board Members concluded that, overall, the nature, extent and quality of services expected to be provided under the New Management Agreement and the New Subadvisory Agreement were acceptable.
     The Board Members also received and considered performance information for the Fund as well as comparative information with respect to a peer group of funds (the “Performance Universe”) selected by Lipper, Inc. (“Lipper”), an independent provider of investment company data. The Board Members were provided with a description of the methodology Lipper used to determine the similarity of the Fund to the funds included in the Performance Universe. The Board Members noted that they had received and discussed with management, at periodic intervals, information comparing the Fund’s

Legg Mason Partners Oregon Municipals Fund      27

Board Approval of Management and Subadvisory Agreements (unaudited) (continued)

performance against, among other things, its benchmark. Based on the Board Members’ review, which included careful consideration of the factors noted above, the Board Members concluded that the performance of the Fund, under the circumstances, supported approval of the New Management Agreement and New Subadvisory Agreement.
     The Board Members reviewed and considered the management fee that would be payable by the Fund to the Manager in light of the nature, extent and quality of the management services expected to be provided by the Manager, including the fee waiver and/or expense reimbursement arrangements currently in place. Additionally, the Board Members received and considered information comparing the Fund’s management fee and overall expenses with those of comparable funds in both the relevant expense group and a broader group of funds, each selected and provided by Lipper. The Board Members also reviewed and considered the subadvisory fee that would be payable by the Manager to the Subadviser in light of the nature, extent and quality of the management services expected to be provided by the Subadviser. The Board Members noted that the Manager, and not the Fund, will pay the subadvisory fee to the Subadviser. The Board Members determined that the Fund’s management fee and the Fund’s subadvisory fees were reasonable in light of the nature, extent and quality of the services expected to be provided to the Fund under the New Management Agreement and the New Subadvisory Agreement.
     The Board Members received and considered a pro-forma profitability analysis of Legg Mason and its affiliates in providing services to the Fund, including information with respect to the allocation methodologies used in preparing the profitability data. The Board Members recognized that Legg Mason may realize economies of scale based on its internal reorganization and synergies of operations. The Board Members noted that it was not possible to predict with a high degree of confidence how Legg Mason’s and its affiliates’ profitability would be affected by its internal reorganization and by other factors including potential economies of scale, but that based on their review of the pro forma profitability analysis, their most recent prior review of the profitability of the predecessor manager and its affiliates from their relationship with the Fund and other factors considered, they determined that the management fee was reasonable. The Board Members noted that they expect to receive profitability information on an annual basis.
     In their deliberations, the Board Members also considered, and placed significant importance on, information that had been received and conclusions that had been reached by the Board in connection with the Board’s most recent approval of the Fund’s prior management agreement, in addition to information provided in connection with the Board’s evaluation of the terms and conditions of the New Management Agreement and the New Subadvisory Agreement.
     The Board Members considered Legg Mason’s advice and the advice of its counsel that the New Management Agreement and the New Subadvisory Agreement were being entered into in connection with an internal reorganization within Legg Mason, that did not involve an actual change of control or management. The Board Members further noted that the terms and conditions of the New Management Agreement are substantially identical to those of the Fund’s previous management agreement except for the identity of

28      Legg Mason Partners Oregon Municipals Fund

Board Approval of Management and Subadvisory Agreements (unaudited) (continued)

the Manager, and that the initial term of the New Management Agreement (after which it will continue in effect only if such continuance is specifically approved at least annually by the Board, including a majority of the Independent Board Members) was the same as that under the prior management agreement.
     In light of all of the foregoing, the Board, including the Independent Board Members, approved the New Management Agreement and the New Subadvisory Agreement. No single factor reviewed by the Board Members was identified as the principal factor in determining whether to approve the New Management Agreement and the New Subadvisory Agreement. The Independent Board Members were advised by separate independent legal counsel throughout the process. The Independent Board Members also discussed the proposed approval of the New Management Agreement and the New Subadvisory Agreement in private sessions with their independent legal counsel at which no representatives of the Manager or Subadviser were present.

Legg Mason Partners Oregon Municipals Fund      29

Additional Shareholder Information (unaudited)

Results of a Special Meeting of Shareholders
On December 11, 2006, a Special Meeting of Shareholders was held to vote on various proposals recently approved by the Fund’s Directors (the “Board Members”). The following tables provide the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to the following proposals: (1) Elect Board Members, (2) Regroup and Reorganize Funds, (3) Revise Fundamental Investment Policies.

Proposal 1: Elect Board Members.

				Broker
Item Voted On	Votes For	Votes Against	Abstentions	Non-Votes
Nominees:
Elliot J. Berv	3,465,893.688	69,837.774	0.000	0.000
A. Benton Cocanougher	3,465,893.688	69,837.774	0.000	0.000
Jane F. Dasher	3,466,878.525	68,852.937	0.000	0.000
Mark T. Finn	3,465,893.688	69,837.774	0.000	0.000
Rainer Greeven	3,465,893.688	69,837.774	0.000	0.000
Stephen Randolph Gross	3,465,893.688	69,837.774	0.000	0.000
Richard E. Hanson Jr.	3,465,893.688	69,837.774	0.000	0.000
Diana R. Harrington	3,466,878.525	68,852.937	0.000	0.000
Susan M. Heilbron	3,466,878.525	68,852.937	0.000	0.000
Susan B. Kerley	3,466,878.525	68,852.937	0.000	0.000
Alan G. Merten	3,465,893.688	69,837.774	0.000	0.000
R. Richardson Pettit	3,465,893.688	69,837.774	0.000	0.000
R. Jay Gerken, CFA	3,465,893.688	69,837.774	0.000	0.000

Proposal 2: Regroup and Reorganize Funds.

			Broker
Votes For	Votes Against	Abstentions	Non-Votes
3,159,043.579	60,971.493	108,858.390	206,858.000

Proposal 3: Revise Fundamental Investment Policies.

				Broker
Item Voted On	Votes For	Votes Against	Abstentions	Non-Votes
Borrowing Money	3,157,597.927	61,223.837	110,051.698	206,858.000
Underwriting	3,159,535.911	59,285.853	110,051.698	206,858.000
Lending	3,160,729.219	55,134.482	113,009.761	206,858.000
Issuing Senior Securities	3,156,855.911	61,965.853	110,051.698	206,858.000
Real Estate	3,157,850.271	60,971.493	110,051.698	206,858.000
Commodities	3,155,356.093	59,314.300	114,203.069	206,858.000
Concentration	3,161,845.245	56,820.122	110,208.095	206,858.000
Non-Fundamental	3,160,520.748	59,285.853	109,066.861	206,858.000

30      Legg Mason Partners Oregon Municipals Fund 2006 Semi-Annual Report

 
 
 
 
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Legg Mason Partners
Oregon Municipals Fund
TRUSTEES	INVESTMENT MANAGER
Dwight B. Crane	Legg Mason Partners Fund
Burt N. Dorsett	Advisor, LLC
R. Jay Gerken, CFA
Chairman	SUBADVISER
Elliott S. Jaffe	Western Asset Management
Stephen E. Kaufman	Company
Cornelius C. Rose, Jr.
	DISTRIBUTORS
	Citigroup Global Markets Inc.
	Legg Mason Investor Services, LLC
	CUSTODIAN
	State Street Bank and
	Trust Company
	TRANSFER AGENT
	PFPC Inc.
	4400 Computer Drive
	Westborough, Massachusetts
	01581
	INDEPENDENT
	REGISTERED PUBLIC
	ACCOUNTING FIRM
	KPMG LLP
	345 Park Avenue
	New York, New York 10154

This report is submitted for the general information of the shareholders of Legg Mason Partners Oregon Municipals Fund, but it may also be used as sales literature when preceded or accompanied by a current prospectus.

This report must be preceded or accompanied by a free prospectus. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before investing.

www.leggmason.com/InvestorServices

©2006 Legg Mason Investor
Services, LLC
Member NASD, SIPC

FD0820 12/06         SR06-190

Legg Mason Partners
Oregon Municipals Fund

LEGG MASON PARTNERS OREGON MUNICIPALS FUND
Legg Mason Partners Funds
125 Broad Street
10th Floor, MF-2
New York, New York 10004

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-202-942-8090. To obtain information on Form N-Q from the Fund, shareholders can call Legg Mason Partners Shareholder Services at 1-800-451-2010.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio transactions is available (1) without charge, upon request, by calling 1-800-451-2010, (2) on the Fund’s website at www.leggmason.com/InvestorServices and (3) on the SEC's website at www.sec.gov.

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Included herein under Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Not applicable.

Exhibit 99.CODE ETH

(a)(2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.CERT

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.906CERT

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.

Legg Mason Partners Oregon Municipals Fund

By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
Legg Mason Partners Oregon Municipals Fund

Date: January 8, 2007

        Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
Legg Mason Partners Oregon Municipals Fund

Date: January 8, 2007

By: /s/ Kaprel Ozsolak
Kaprel Ozsolak
Chief Financial Officer of
Legg Mason Partners Oregon Municipals Fund

Date: January 8, 2007