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 811-04250
SELIGMAN MUNICIPAL SERIES TRUST
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 9/30
Date of reporting period: 9/30
Annual Report
and Prospectus (SELIGMAN LOGO)
SELIGMAN MUNICIPAL FUNDS
SELIGMAN NATIONAL MUNICIPAL FUND
SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND
SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND
SELIGMAN MINNESOTA MUNICIPAL FUND
SELIGMAN NEW YORK MUNICIPAL FUND
ANNUAL REPORT FOR THE
PERIOD ENDED SEPTEMBER 30, 2009
(Prospectus also enclosed)
EACH FUND SEEKS TO PROVIDE SHAREHOLDERS WITH INCOME
EXEMPT FROM REGULAR INCOME TAX.
<Table>
This annual report includes a prospectus that
describes in detail each Fund's objective,
investment strategy, risks, sales charges,
fees and other matters of interest. Please
read the prospectus carefully before you
invest or send money. (SINGLE STRATEGY FUNDS ICON)
</Table>
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Seligman National Municipal
Fund.......................... 3
Seligman California Municipal
High-Yield Fund............... 5
Seligman California Municipal
Quality Fund.................. 7
Seligman Minnesota Municipal
Fund.......................... 9
Seligman New York Municipal
Fund.......................... 11
Manager Commentary................. 13
The Funds' Long-term Performance... 18
Fund Expenses Example.............. 28
Portfolios of Investments.......... 31
Statements of Assets and
Liabilities...................... 64
Statements of Operations........... 66
Statements of Changes in Net
Assets........................... 68
Financial Highlights............... 71
Notes to Financial Statements...... 76
Report of Independent Registered
Public Accounting Firm........... 89
Federal Income Tax Information..... 90
Board Members and Officers......... 92
Proxy Voting....................... 95
Change in Independent Registered
Public Accounting Firm........... 96
</Table>
RIVERSOURCE FAMILY OF FUNDS
The RiverSource Family of Funds
includes funds branded
"RiverSource," "RiverSource
Partners," "Seligman" and
"Threadneedle." These funds
share the same Board of
Directors/Trustees and
officers.
- --------------------------------------------------------------------------------
2 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
Seligman National Municipal Fund
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman National Municipal Fund (the Fund) Class A shares (excluding sales
charge) increased 15.19% for the 12 months ended Sept. 30, 2009.
> The Fund outperformed its benchmark, the Barclays Capital Municipal Bond
Index, which gained 14.85% during the same period.
> The Fund outperformed its peer group, as measured by the Lipper General
Municipal Debt Funds Index, which rose 14.73% for the annual period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman National Municipal Fund Class A (excluding sales
charge) +15.19% +5.20% +4.47% +4.96%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------------
Lipper General Municipal Debt Funds Index +14.73% +3.71% +4.03% +5.04%
- ------------------------------------------------------------------------------------------------
Lipper General Municipal Debt Funds Average +13.29% +3.10% +3.43% +4.56%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index and average descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting seligman.com or calling 1(800) 221-2450.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of Class C may vary from that shown because of differences in fees
and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
Class C shares of the Fund.
The indices and average do not reflect the effects of sales charges, expenses
(excluding Lipper) and taxes. It is not possible to invest directly in an index
or an average.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2009
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 12/31/83) +15.19% +5.20% +4.47% +4.96%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +14.62% +4.41% +3.62% +4.06%
- -------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 12/31/83) +9.78% +3.51% +3.45% +4.45%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +13.62% +4.41% +3.62% +4.06%
- -------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% CDSC if shares are sold within one year
after purchase.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
Seligman National Municipal Fund
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
X HIGH
MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 17.68 years
- ----------------------------------------------------
Effective duration(2) 6.43 years
- ----------------------------------------------------
Weighted average bond rating(3) AA
- ----------------------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
NATIONAL MUNICIPAL FUND TOP TEN STATES (at Sept. 30, 2009; % of
portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
California 10.2%
- ---------------------------------------------------------------------------
Ohio 8.9%
- ---------------------------------------------------------------------------
South Carolina 7.8%
- ---------------------------------------------------------------------------
Massachusetts 7.6%
- ---------------------------------------------------------------------------
Michigan 5.1%
- ---------------------------------------------------------------------------
Illinois 5.0%
- ---------------------------------------------------------------------------
Texas 4.6%
- ---------------------------------------------------------------------------
New York 4.5%
- ---------------------------------------------------------------------------
Florida 4.5%
- ---------------------------------------------------------------------------
Oregon 4.1%
- ---------------------------------------------------------------------------
</Table>
NATIONAL MUNICIPAL FUND QUALITY BREAKDOWN
(at Sept. 30, 2009; % of portfolio assets excluding cash equivalents
and equities)
- ---------------------------------------------------------------------
<Table>
<Caption>
AAA bonds 28.7%
- ---------------------------------------------------------------------------
AA bonds 28.3%
- ---------------------------------------------------------------------------
A bonds 32.1%
- ---------------------------------------------------------------------------
BBB bonds 8.7%
- ---------------------------------------------------------------------------
Non-rated bonds 2.2%
- ---------------------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC, (the Investment Manager), rates a security using
an internal rating system when Moody's doesn't provide a rating.
There are risks associated with an investment in a municipal bond fund,
including credit risk, interest rate risk, and prepayment and extension risk.
See the Fund's prospectus for information on these and other risks associated
with the Fund. In general, bond prices rise when interest rates fall and vice
versa. This effect is more pronounced for longer-term securities.
Income from tax-exempt funds may be subject to state and local taxes and a
portion of income may be subject to the federal and/or state alternative minimum
tax for certain investors. Federal income tax rules will apply to any capital
gains distribution.
- --------------------------------------------------------------------------------
4 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
Seligman California Municipal High-Yield Fund
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman California Municipal High-Yield Fund (the Fund) Class A shares
(excluding sales charge) rose 12.73% for the 12 months ended Sept. 30, 2009.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which gained 14.85% for the same period.
> The Fund underperformed its peer group, the Lipper California Municipal Debt
Funds Index, which increased 13.61% during the annual period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman California Municipal High-Yield Fund Class A
(excluding sales charge) +12.73% +4.70% +4.54% +5.41%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------------
Lipper California Municipal Debt Funds Index +13.61% +3.12% +3.75% +4.90%
- ------------------------------------------------------------------------------------------------
Lipper California Municipal Debt Funds Average +13.07% +2.69% +3.50% +4.65%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index and average descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting seligman.com or calling 1(800) 221-2450.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of Class C may vary from that shown because of differences in fees
and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
Class C shares of the Fund.
The indices and average do not reflect the effects of sales charges, expenses
(excluding Lipper) and taxes. It is not possible to invest directly in an index
or an average.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2009
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 11/20/84) +12.73% +4.70% +4.54% +5.41%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +11.94% +3.77% +3.61% +4.47%
- -------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 11/20/84) +7.34% +3.01% +3.53% +4.90%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +10.94% +3.77% +3.61% +4.47%
- -------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% CDSC if shares are sold within one year
after purchase.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
Seligman California Municipal High-Yield Fund
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
HIGH
X MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 21.64 years
- ----------------------------------------------------
Effective duration(2) 8.20 years
- ----------------------------------------------------
Weighted average bond rating(3) A+
- ----------------------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
CALIFORNIA MUNICIPAL HIGH-YIELD FUND QUALITY BREAKDOWN (at Sept. 30,
2009; % of bond portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
AAA bonds 9.1%
- ---------------------------------------------------------------------------
AA bonds 29.0%
- ---------------------------------------------------------------------------
A bonds 47.9%
- ---------------------------------------------------------------------------
BBB bonds 14.0%
- ---------------------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC (the Investment Manager), rates a security using an
internal rating system when Moody's doesn't provide a rating.
There are risks associated with an investment in a municipal bond fund,
including credit risk, interest rate risk, prepayment and extension risk, and
geographic concentration risk. See the Fund's prospectus for information on
these and other risks associated with the Fund. In general, bond prices rise
when interest rates fall and vice versa. This effect is more pronounced for
longer-term securities. Non-investment grade securities, commonly called "high-
yield" or "junk" bonds, generally have more volatile prices and carry more risk
to principal and income than investment grade securities.
Because the Fund concentrates its investments in municipal securities issued by
a single state and its municipalities, specific events or factors affecting a
particular state can cause more volatility in the Fund than a fund that is more
geographically diversified. Income from tax-exempt funds may be subject to state
and local taxes and a portion of income may be subject to the federal and/or
state alternative minimum tax for certain investors. Federal income tax rules
will apply to any capital gains distribution.
- --------------------------------------------------------------------------------
6 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
Seligman California Municipal Quality Fund
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman California Municipal Quality Fund (the Fund) Class A shares
(excluding sales charge) gained 13.42% for the 12 months ended Sept. 30, 2009.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which rose 14.85% for the same period.
> The Fund underperformed its peer group, the Lipper California Municipal Debt
Funds Index, which increased 13.61% for the annual period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman California Municipal Quality Fund Class A
(excluding sales charge) +13.42% +4.36% +4.02% +5.16%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------------
Lipper California Municipal Debt Funds Index +13.61% +3.12% +3.75% +4.90%
- ------------------------------------------------------------------------------------------------
Lipper California Municipal Debt Funds Average +13.07% +2.69% +3.50% +4.65%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index and average descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting seligman.com or calling 1(800) 221-2450.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of Class C may vary from that shown because of differences in fees
and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
Class C shares of the Fund.
The indices and average do not reflect the effects of sales charges, expenses
(excluding Lipper) and taxes. It is not possible to invest directly in an index
or an average.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2009
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 11/20/84) +13.42% +4.36% +4.02% +5.16%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +12.52% +3.45% +3.08% +4.23%
- -------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 11/20/84) +7.96% +2.69% +3.02% +4.65%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +11.52% +3.45% +3.08% +4.23%
- -------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% CDSC if shares are sold within one year
after purchase.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 7
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
Seligman California Municipal Quality Fund
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
X HIGH
MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 19.19 years
- ----------------------------------------------------
Effective duration(2) 5.86 years
- ----------------------------------------------------
Weighted average bond rating(3) AA
- ----------------------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
CALIFORNIA MUNICIPAL QUALITY FUND QUALITY BREAKDOWN (at Sept. 30,
2009; % of bond portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
AAA bonds 17.9%
- ---------------------------------------------------------------------------
AA bonds 45.6%
- ---------------------------------------------------------------------------
A bonds 36.5%
- ---------------------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC (the Investment Manager), rates a security using an
internal rating system when Moody's doesn't provide a rating.
There are risks associated with an investment in a municipal bond fund,
including credit risk, interest rate risk, prepayment and extension risk, and
geographic concentration risk. See the Fund's prospectus for information on
these and other risks associated with the Fund. In general, bond prices rise
when interest rates fall and vice versa. This effect is more pronounced for
longer-term securities.
Because the Fund concentrates its investments in municipal securities issued by
a single state and its municipalities, specific events or factors affecting a
particular state can cause more volatility in the Fund than a fund that is more
geographically diversified. Income from tax-exempt funds may be subject to state
and local taxes and a portion of income may be subject to the federal and/or
state alternative minimum tax for certain investors. Federal income tax rules
will apply to any capital gains distribution.
- --------------------------------------------------------------------------------
8 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
Seligman Minnesota Municipal Fund
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman Minnesota Municipal Fund (the Fund) Class A shares (excluding sales
charge) advanced 11.04% for the 12 months ended Sept. 30, 2009
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which rose 14.85% for the same period.
> The Fund underperformed its peer group, as measured by the Lipper Minnesota
Municipal Debt Funds Index, which gained 13.33% for the annual period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund Class A (excluding sales
charge) +11.04% +4.44% +3.85% +4.81%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------------
Lipper Minnesota Municipal Debt Funds Index +13.33% +4.15% +4.08% +4.95%
- ------------------------------------------------------------------------------------------------
Lipper Minnesota Municipal Debt Funds Average +12.56% +3.83% +3.88% +4.75%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index and average descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting seligman.com or calling 1(800) 221-2450.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of Class C may vary from that shown because of differences in fees
and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
Class C shares of the Fund.
The indices and average do not reflect the effects of sales charges, expenses
(excluding Lipper) and taxes. It is not possible to invest directly in an index
or an average.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2009
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 12/30/83) +11.04% +4.44% +3.85% +4.81%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +10.22% +3.56% +2.95% +3.89%
- -------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 12/30/83) +5.79% +2.77% +2.85% +4.29%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +9.22% +3.56% +2.95% +3.89%
- -------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% CDSC if shares are sold within one year
after purchase.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 9
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
Seligman Minnesota Municipal Fund
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
X HIGH
MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 14.71 years
- ----------------------------------------------------
Effective duration(2) 6.19 years
- ----------------------------------------------------
Weighted average bond rating(3) AA
- ----------------------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
MINNESOTA MUNICIPAL FUND QUALITY BREAKDOWN (at Sept. 30, 2009; % of
bond portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
AAA bonds 54.4%
- ---------------------------------------------------------------------------
AA bonds 18.0%
- ---------------------------------------------------------------------------
A bonds 20.8%
- ---------------------------------------------------------------------------
BBB bonds 6.8%
- ---------------------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC, (the Investment Manager), rates a security using
an internal rating system when Moody's doesn't provide a rating. Ratings for
0.4% of the bond portfolio assets were determined through internal analysis.
There are risks associated with an investment in a municipal bond fund,
including credit risk, interest rate risk, prepayment and extension risk, and
geographic concentration risk. See the Fund's prospectus for information on
these and other risks associated with the Fund. In general, bond prices rise
when interest rates fall and vice versa. This effect is more pronounced for
longer-term securities.
Because the Fund concentrates its investments in municipal securities issued by
a single state and its municipalities, specific events or factors affecting a
particular state can cause more volatility in the Fund than a fund that is more
geographically diversified. Income from tax-exempt funds may be subject to state
and local taxes and a portion of income may be subject to the federal and/or
state alternative minimum tax for certain investors. Federal income tax rules
will apply to any capital gains distribution.
- --------------------------------------------------------------------------------
10 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
Seligman New York Municipal Fund
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman New York Municipal Fund (the Fund) Class A shares (excluding sales
charge) rose 13.02% for the 12 months ended Sept. 30, 2009.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which gained 14.85% for the same period.
> The Fund underperformed its peer group, as measured by the Lipper New York
Municipal Debt Funds Index, which increased 14.60% for the annual period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman New York Municipal Fund Class A (excluding sales
charge) +13.02% +4.70% +4.33% +5.34%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------------
Lipper New York Municipal Debt Funds Index +14.60% +3.86% +3.96% +5.02%
- ------------------------------------------------------------------------------------------------
Lipper New York Municipal Debt Funds Average +14.12% +3.52% +3.74% +4.82%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index and average descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting seligman.com or calling 1(800) 221-2450.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of Class C may vary from that shown because of differences in fees
and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
Class C shares of the Fund.
The indices and average do not reflect the effects of sales charges, expenses
(excluding Lipper) and taxes. It is not possible to invest directly in an index
or an average.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2009
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 1/31/84) +13.02% +4.70% +4.33% +5.34%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +12.19% +3.81% +3.40% +4.43%
- -------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 4/22/85) +7.66% +3.01% +3.33% +4.84%
- -------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +11.19% +3.81% +3.40% +4.43%
- -------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% CDSC if shares are sold within one year
after purchase.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 11
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
Seligman New York Municipal Fund
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
X HIGH
MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 18.61 years
- ----------------------------------------------------
Effective duration(2) 5.67 years
- ----------------------------------------------------
Weighted average bond rating(3) AA+
- ----------------------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
NEW YORK MUNICIPAL FUND QUALITY BREAKDOWN (at Sept. 30, 2009; % of
bond portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
AAA bonds 40.1%
- ---------------------------------------------------------------------------
AA bonds 35.8%
- ---------------------------------------------------------------------------
A bonds 22.9%
- ---------------------------------------------------------------------------
BBB bonds 1.2%
- ---------------------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC, (the Investment Manager), rates a security using
an internal rating system when Moody's doesn't provide a rating.
There are risks associated with an investment in a municipal bond fund,
including credit risk, interest rate risk, prepayment and extension risk, and
geographic concentration risk. See the Fund's prospectus for information on
these and other risks associated with the Fund. In general, bond prices rise
when interest rates fall and vice versa. This effect is more pronounced for
longer-term securities.
Because the Fund concentrates its investments in municipal securities issued by
a single state and its municipalities, specific events or factors affecting a
particular state can cause more volatility in the Fund than a fund that is more
geographically diversified. Income from tax-exempt funds may be subject to state
and local taxes and a portion of income may be subject to the federal and/or
state alternative minimum tax for certain investors. Federal income tax rules
will apply to any capital gains distribution.
- --------------------------------------------------------------------------------
12 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
Catherine Stienstra assumed management of the Seligman Municipal Funds from
Thomas G. Moles and Eileen A. Comerford effective April 6, 2009. In March 2009,
the Seligman Select Municipal Fund was merged into the Seligman National
Municipal Fund. In July 2009, 14 Seligman state-specific municipal funds were
merged into Seligman National Municipal Fund.
Dear Shareholder,
Four of the five Seligman Municipal Funds (the Funds) underperformed the
Barclays Capital Municipal Bond Index (Barclays Index) for the 12 months ended
Sept. 30, 2009. Seligman National Municipal Fund outperformed the Barclays
Index. All Fund returns are for Class A shares, excluding sales charge, and all
returns are for the 12 months ended Sept. 30, 2009.
> SELIGMAN NATIONAL MUNICIPAL FUND increased 15.19%.
> SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND rose 12.73%.
> SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND gained 13.42%.
> SELIGMAN MINNESOTA MUNICIPAL FUND advanced 11.04%.
> SELIGMAN NEW YORK MUNICIPAL FUND rose 13.02%.
A broad barometer applicable to each of the Funds, the Barclays Capital
Municipal Bond Index, was up 14.85% for the same 12-month period.
SIGNIFICANT PERFORMANCE FACTORS
Generating positive double-digit absolute returns, the tax-exempt fixed income
market significantly outpaced both the U.S. equity market and the taxable fixed
income market, as represented by the Barclays U.S. Aggregate Bond Index, for the
annual period. Such strong performance actually masks what were two distinct
portions during the 12 months ended Sept. 30, 2009 for the tax-exempt fixed
income market.
From the start of the annual period in October 2008 through the end of 2008, the
tax-exempt bond market faced significant challenges. In mid-September, just
weeks before the start of the annual period, Lehman Brothers declared
bankruptcy. As a result, a number of financial institutions went out of
business, were forced into merging or were taken over by the U.S. government.
Liquidity dried up and demand for municipal bonds dramatically slowed as the
institutional buyer base shrunk considerably due to consolidation within the
industry and balance sheet pressures among the survivors. There was a great deal
of de-leveraging by mutual funds, forced selling by hedge funds, and after-
shocks from the unwinding of tender option bond programs.* Investors grew
increasingly cautious. At the same time, supply was largely sidelined and/or
postponed due to the lack of demand. Given these difficult conditions, by the
end of December the ratio of 10-year municipal bond yields to 10-year Treasury
yields had reached a new all-time high of 186%. The slope of the tax-exempt bond
yield curve steepened significantly during these months, as short-term tax-
exempt yields declined, driven largely by the Federal Reserve System's (the
Fed's) dramatic interest rate cuts, and longer-dated municipal bond yields rose.
Beginning in January 2009, demand for municipal securities increased, boosted by
the entry or re-entry of several big name crossover, institutional and
individual buyers into the tax-exempt market and by the introduction of several
federal stimulus programs. For example, the American Recovery and Reinvestment
Act (ARRA), signed into law in February 2009, created new demand for municipal
bonds via provisions that altered the Tax Equity and Fiscal Responsibility Act
(TEFRA) of 1982 and the Tax Reform Act (TRA) of 1986. Among ARRA's provisions
were those that increased the limits on bank qualified(** )bonds, provided
relief in the Alternative Minimum Tax (AMT) rules, expanded tax-exempt financing
opportunities for select manufacturing facilities and created new forms of tax-
exempt bonds. ARRA also created a new Build America Bond program, which
authorizes state and local governments to issue Build America Bonds as taxable
bonds in 2009 and 2010 to finance any capital expenditures for which they
otherwise could issue tax-exempt government bonds. State and local governments
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 13
MANAGER COMMENTARY (continued) -------------------------------------------------
receive a direct federal subsidy payment for a portion of their borrowing costs
on Build America Bonds equal to 35% of the total coupon interest paid to
investments. This new program was intended to assist state and local governments
in financing capital projects at lower borrowing costs and to stimulate the
economy and create jobs. It also would take supply out of the municipal bond
market, especially at the longer end of the tax-exempt bond yield curve. The
first Build America Bond deal came to market in April 2009.
As the municipal bond market rallied, yields were driven lower and the tax-
exempt bond yield curve flattened significantly from January through September
2009, meaning the difference in yields between shorter-term and longer-term
municipal securities narrowed. During these same months, flows into municipal
bond mutual funds were very strong, as expectations of higher marginal personal
income tax rates ahead and concerns regarding reduced municipal bond supply
dominated. Lower quality municipal bonds outperformed their higher quality
counterparts, and longer-dated municipal bonds outperformed shorter-maturity
tax-exempt securities. The ratio of 10-year municipal bond yields to 10-year
Treasury yields plummeted in 2009 year-to-date through September 30 toward a
historical average of approximately 80%.
For the annual period as a whole, yields declined across the tax-exempt bond
yield curve, or spectrum of maturities. The yield curve steepened, as yields
fell more at the shorter-term end of the yield curve than at the longer-term
end.
Prior to taking over management of the Funds in early April, all five of the
Seligman Municipal Funds were generally positioned with a conservative stance
that served them well amidst the financial market turmoil of the last months of
2008. The Funds had significant positions in cash and in pre-refunded bonds***,
which performed well. The Funds also had a tilt toward higher quality investment
grade municipal bonds. The Funds had a shorter duration than the Barclays Index,
which helped as tax-exempt bond rates increased toward the end of 2008. Duration
is a measure of a fund's sensitivity to changes in interest rates. These very
same factors that comprised the Funds' conservative strategy detracted from
performance during the first quarter of 2009 when a changing supply/demand
balance in the municipal bond market supported the beginning of a rally.
From early April, when we assumed management of the Funds, through the end of
September 2009, we began to shift the Funds' portfolio stance in accordance with
prospectus-mandated strategy guidelines as we sought to better take advantage of
unprecedented market conditions. The following is a brief summary of the major
factors that impacted each of the Seligman Municipal Funds' performance during
the second half of the fiscal year.
> SELIGMAN NATIONAL MUNICIPAL FUND benefited from its sizable positions in the
strongly-performing health care and IDR/PCR sectors. On the other hand, the
Fund's results were hurt by having only modest exposure to the tobacco and
transportation sectors, which also outpaced the Barclays Index. A
significant position in the pre-refunded sector further detracted as did its
duration positioning. The Fund is not permitted to invest in non-investment
grade securities. This, coupled with an underweighting in lower-quality,
investment grade securities detracted from results, for, as mentioned, lower
quality bonds outperformed their higher quality counterparts during the
market rally. The Fund had a shorter duration than the Barclays Index, which
hurt as tax-exempt yields declined.
- --------------------------------------------------------------------------------
14 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
> SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND was helped by the fact that we
extended its duration to be longer than that of the Barclays Index during
months when tax-exempt bond yields were being driven lower. However, more
than offsetting this positive was the detracting effect of less-than-
Barclays Index allocations to the tobacco and IDR/PCR sectors, which
outperformed the Barclays Index during these months. IDR (Industrial
Development Revenue) and PCR (Pollution Control Revenue) bonds are private
activity bonds backed by a corporation. While a significant exposure to the
health care sector contributed positively to Fund results, issue selection
within this sector detracted.
> SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND was helped most by its sizable
exposure to the higher education and water and sewer sectors. However,
having no exposure to the tobacco sector and only a modest allocation to the
IDR/PCR sector, both of which performed strongly, detracted. Further hurting
the Fund's results was a significant position in pre-refunded bonds, which
lagged during the second half of the fiscal year. Duration positioning had a
rather neutral effect on the Fund's results during the same time frame.
> SELIGMAN MINNESOTA MUNICIPAL FUND's results were boosted by its significant
allocation to education bonds, which performed well. Conversely, having only
modest exposure to the strongly-performing health care and IDR/PCR sectors
detracted. This Fund was also hurt by its shorter duration than the Barclays
Index, as tax-exempt bond yields were declining.
> SELIGMAN NEW YORK MUNICIPAL FUND was helped most by its significant
allocation to the strongly-performing education and dedicated tax sectors
and by its longer duration than the Barclays Index, as tax-exempt bond
yields declined. Offsetting these positives, however, was the detracting
effect of having no exposure to the tobacco sector and only modest exposure
to the health care sector, which also performed well during these months.
The results of all five of the Seligman Municipal Funds were hurt during the
second half of the fiscal year by having no exposure to the high yield sector.
With the exception of the Seligman California Municipal High-Yield Fund, the
Seligman Municipal Funds have an investment mandate, per their prospectus, to
not invest in the high yield sector. Seligman California Municipal High-Yield
Fund, while permitted to invest in the high yield sector, held no position in
these bonds during the period. Similarly, each of the Seligman Municipal Funds,
with the exception of Seligman California Municipal High-Yield Fund, was
negatively impacted by having only modest exposure to bonds rated BBB. As
indicated, lower quality bonds outperformed higher quality bonds during the six
months ended Sept. 30, 2009. Thus, high yield outperformed investment grade, and
bonds rated BBB outpaced those rated AAA. Seligman California Municipal High-
Yield Fund had a significant allocation to bonds rated BBB, which contributed
positively to its results during the second half of the fiscal year.
CHANGES TO THE FUNDS' PORTFOLIOS
Upon taking over the management of the Seligman Municipal Funds in early April,
we made some gradual and incremental changes within each of the five portfolios,
as we sought to enhance total return without taking on undue risk. Shifting from
a conservative strategy to one seeking to take advantage of improved technical
factors within the municipal bond market, we invested cash in tax-exempt bonds
across a variety of sectors. We also reduced the Funds' exposure to pre-refunded
bonds, increased their allocation to bonds rated A and BBB, and lengthened
duration relative to the Barclays Index. We broadened diversification within
each of the Funds across sectors and in the number of positions held.
> IN SELIGMAN NATIONAL MUNICIPAL FUND, we increased exposure to the health
care and education sectors and trimmed its allocation to the utilities
sector. Overall, the Fund's portfolio turnover rate for the annual period
was 107%. (The Fund's high turnover rate is a result of the mergers of
Seligman Select Municipal Fund and 14 state-specific Seligman Municipal
Funds into the Fund during the period.)
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 15
MANAGER COMMENTARY (continued) -------------------------------------------------
> IN SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND, we increased exposure to
general obligation bonds and to water and sewer bonds. We decreased its
allocation to the health care sector. Overall, the Fund's portfolio turnover
rate for the annual period was 63%.
> IN SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND, we increased exposure to
general obligation bonds and to the health care sector. We decreased its
position in the utilities sector. Overall, the Fund's portfolio turnover
rate for the annual period was 46%.
> IN SELIGMAN MINNESOTA MUNICIPAL FUND, we increased allocations to the
general obligation, health care and water and sewer sectors. Overall, the
Fund's portfolio turnover rate for the annual period was 29%.
> IN SELIGMAN NEW YORK MUNICIPAL FUND, we reduced its exposure to state
general obligation bonds. We increased its allocations to the higher
education, water and sewer and dedicated tax sectors. Overall, the Fund's
portfolio turnover rate for the annual period was 53%.
OUR FUTURE STRATEGY
At the end of September, we viewed the prospects for the tax-exempt bond market
to be quite attractive. We believed that the tax-exempt bond market would
continue to outperform U.S. Treasury securities, due primarily to favorable
supply/demand technical factors. Demand was anticipated to remain strong, given
widespread expectations for higher federal, and in many cases, state and local,
income taxes. At the same time, new issuance of municipal bonds was down
materially year-to-date through Sept. 30, 2009, a trend, we believed, that was
likely to continue for some time. Such declining supply was due in part to the
effect of the Build America Bonds.
Importantly, despite headlines regarding municipal and state budget gaps, the
credit quality of the U.S. tax-exempt market generally remained in sound
condition, compared to other fixed income classes during the annual period and
the default rate among issuers remained historically low.
We believe the Fed is likely to keep the targeted federal funds rate in the
near-zero range for an extended period of time, and so we expect to maintain the
Funds' duration longer than that of the Barclays Index. Given our view of market
conditions, we also believe that the tax-exempt bond yield curve may well
continue to flatten during the remaining months of 2009 and, as a result, we
expect to maintain the Funds' yield curve flattening bias for the near term.
As we expect credit quality spreads to continue tightening over the coming
months, we intend to seek lower-rated investment grade bonds, i.e. those with
ratings in the A and BBB categories, as we go forward in all five Funds. We
expect to move the Funds' allocations to bonds in these credit categories to a
moderately greater weighting than the Barclays Index. We intend to only
opportunistically invest in city and local municipal debt, as the pressures of
lower property values are likely to heighten before they ease. We will, of
course, continue to carefully monitor the fundamentals of the issuers and their
budgets, seeking to avoid bonds issued by those under ratings pressure.
As always, and ever more so in the current environment, deep research resources,
a forward-looking investment process and truly actively managed portfolios are
keys, in our view, to meeting the Funds' investment objectives over the long
term. Each Fund's emphasis continues to be on generating a high level of income
generally exempt from federal income tax as well as from the respective state
and local taxes (for all funds other than Seligman National Municipal Fund).
Catherine Stienstra
Portfolio Manager
- --------------------------------------------------------------------------------
16 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
*Tender option bond programs are programs in which investors effectively earn
the fixed rates on long term bonds whose purchase is financed by paying
something close to the Bond Market Association Municipal Swap Index rate.
This leveraged trade, where investors borrow at low short rates to earn
significantly higher returns further out on the yield curve, is referred to
as a "carry trade."
**Bank qualified bonds are issued by communities that qualify as "small
issuers," i.e. issuers that issue no more than $10 million worth of tax-
exempt bonds annually. ARRA increased the limit on the amount of bank
qualified bonds that can be designated by a "small issuer" during calendar
years 2009 and 2010 from $10 million per year to $30 million per year.
***Pre-refunded bonds, also known as advance refunding, is a procedure in which
a bond issuer floats a second bond at a lower interest rate and the proceeds
from the sale of the second bond are invested, usually in Treasury
securities, which in turn, are held in escrow collateralizing the first bond.
Advance refunded bonds no longer represent the credit risk profile of the
original borrower, and given the high credit quality of the escrow account
they often increase in value -- sometimes significantly.
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a fund in the RiverSource Family of Funds are
based on numerous factors, may not be relied on as an indication of trading
intent on behalf of any fund in the RiverSource Family of Funds.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 17
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
Seligman National Municipal Fund
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Seligman National Municipal Fund Class A shares (from 10/1/99 to
9/30/09) as compared to the performance of the Barclays Capital Municipal Bond
Index, the Lipper General Municipal Debt Funds Index and the Lipper General
Municipal Debt Funds Average. In comparing the Fund's Class A shares to these
indices and average, you should take into account the fact that the Fund's
performance reflects the maximum initial sales charge of 4.75%, while such
charges are not reflected in the performance of the indices and average. Returns
for the Fund include the reinvestment of any distributions paid during each
period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting seligman.com. Also see "Past
Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2009
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN NATIONAL MUNICIPAL FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,978 $11,090 $11,849 $15,499
- ------------------------------------------------------------------------------------------
Average annual total return +9.78% +3.51% +3.45% +4.45%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $11,485 $11,619 $12,628 $17,522
- ------------------------------------------------------------------------------------------
Average annual total return +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------
LIPPER GENERAL MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $11,473 $11,155 $12,184 $16,343
- ------------------------------------------------------------------------------------------
Average annual total return +14.73% +3.71% +4.03% +5.04%
- ------------------------------------------------------------------------------------------
LIPPER GENERAL MUNICIPAL DEBT FUNDS AVERAGE(3)
Cumulative value of $10,000 $11,329 $10,959 $11,837 $15,690
- ------------------------------------------------------------------------------------------
Average annual total return +13.29% +3.10% +3.43% +4.56%
- ------------------------------------------------------------------------------------------
</Table>
Results for Class C can be found on page 3.
- --------------------------------------------------------------------------------
18 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN NATIONAL MUNICIPAL FUND
CLASS A LINE GRAPH)
<Table>
<Caption>
SELIGMAN
NATIONAL MUNICIPAL
FUND CLASS BARCLAYS CAPITAL LIPPER GENERAL LIPPER GENERAL
A (INCLUDES MUNICIPAL BOND MUNICIPAL DEBT MUNICIPAL DEBT
SALES CHARGE) INDEX(1) FUNDS INDEX(2) FUNDS AVERAGE(3)
------------------ ------------------ -------------- ----------------
9/99 $ 9,550 $10,000 $10,000 $10,000
12/99 9,338 9,922 9,860 9,839
3/00 9,703 10,212 10,137 10,121
6/00 9,778 10,367 10,258 10,228
9/00 10,017 10,617 10,499 10,466
12/00 10,490 11,082 10,954 10,906
3/01 10,652 11,328 11,181 11,118
6/01 10,677 11,401 11,244 11,180
9/01 10,956 11,721 11,530 11,464
12/01 10,861 11,650 11,409 11,344
3/02 10,930 11,760 11,505 11,439
6/02 11,217 12,190 11,900 11,821
9/02 11,573 12,769 12,431 12,326
12/02 11,584 12,769 12,393 12,281
3/03 11,718 12,922 12,484 12,354
6/03 11,969 13,255 12,830 12,683
9/03 11,954 13,266 12,850 12,688
12/03 12,167 13,447 13,054 12,883
3/04 12,349 13,680 13,228 13,066
6/04 12,082 13,356 12,933 12,762
9/04 12,451 13,876 13,413 13,216
12/04 12,576 14,050 13,594 13,383
3/05 12,592 14,045 13,590 13,371
6/05 12,823 14,456 13,995 13,733
9/05 12,847 14,438 13,988 13,718
12/05 12,959 14,543 14,097 13,810
3/06 13,031 14,579 14,163 13,854
6/06 13,078 14,584 14,165 13,850
9/06 13,309 15,081 14,651 14,301
12/06 13,451 15,248 14,816 14,447
3/07 13,603 15,371 14,926 14,538
6/07 13,584 15,269 14,826 14,426
9/07 13,736 15,547 14,965 14,559
12/07 13,887 15,760 15,020 14,613
3/08 13,833 15,663 14,807 14,401
6/08 13,894 15,762 14,917 14,500
9/08 13,453 15,257 14,244 13,833
12/08 13,441 15,370 13,602 13,277
3/09 13,906 16,019 14,335 13,924
6/09 14,393 16,357 14,931 14,440
9/09 15,499 17,522 16,343 15,690
</Table>
(1) The Barclays Capital Municipal Bond Index, an unmanaged index, is made up of
a representative list of general obligation, revenue, insured and pre-
refunded bonds. The index is frequently used as a general measure of tax-
exempt bond market performance. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper General Municipal Debt Funds Index (the Lipper Index) includes
the 30 largest municipal debt funds tracked by Lipper Inc. The Lipper
Index's returns include net reinvested dividends.*
(3) The Lipper General Municipal Debt Funds Average (the Lipper Average)
measures the performance of funds that invest primarily in municipal debt
issues in the top four credit ratings. The Lipper Average's returns include
net reinvested dividends.*
* On Oct. 1, 2009, the Lipper Index replaced the Lipper Average as the Fund's
secondary benchmark. The Lipper Average includes all funds categorized by
Lipper within the broad universe of funds in the Lipper Average, whereas the
Lipper Index includes only a select peer group from the Lipper Average, as
described above. This change was made to bring the selection of the Seligman
Fund secondary benchmarks in line with the practice of the RiverSource
Family of Funds, which would permit a common shareholder experience and
provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included
for a one-year transition period. Thereafter, only the Lipper Index will be
included.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 19
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
Seligman California Municipal High-Yield Fund
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Seligman California Municipal High-Yield Fund Class A shares (from
10/1/99 to 9/30/09) as compared to the performance of the Barclays Capital
Municipal Bond Index, the Lipper California Municipal Debt Funds Index and the
Lipper California Municipal Debt Funds Average. In comparing the Fund's Class A
shares to these indices and average, you should take into account the fact that
the Fund's performance reflects the maximum initial sales charge of 4.75%, while
such charges are not reflected in the performance of the indices and average.
Returns for the Fund include the reinvestment of any distributions paid during
each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting seligman.com. Also see "Past
Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2009
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,734 $10,929 $11,896 $16,171
- ------------------------------------------------------------------------------------------
Average annual total return +7.34% +3.01% +3.53% +4.90%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $11,485 $11,619 $12,628 $17,522
- ------------------------------------------------------------------------------------------
Average annual total return +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------
LIPPER CALIFORNIA MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $11,361 $10,966 $12,021 $16,133
- ------------------------------------------------------------------------------------------
Average annual total return +13.61% +3.12% +3.75% +4.90%
- ------------------------------------------------------------------------------------------
LIPPER CALIFORNIA MUNICIPAL DEBT FUNDS AVERAGE(3)
Cumulative value of $10,000 $11,307 $10,829 $11,877 $15,770
- ------------------------------------------------------------------------------------------
Average annual total return +13.07% +2.69% +3.50% +4.65%
- ------------------------------------------------------------------------------------------
</Table>
Results for Class C can be found on page 5.
- --------------------------------------------------------------------------------
20 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN CALIFORNIA MUNICIPAL
HIGH-YIELD FUND CLASS A LINE GRAPH)
<Table>
<Caption>
SELIGMAN CALIFORNIA
MUNICIPAL HIGH-YIELD
FUND CLASS BARCLAYS CAPITAL LIPPER CALIFORNIA LIPPER CALIFORNIA
A (INCLUDES MUNICIPAL BOND MUNICIPAL DEBT MUNICIPAL DEBT
SALES CHARGE) INDEX(1) FUNDS INDEX(2) FUNDS AVERAGE(3)
-------------------- ------------------ ----------------- ------------------
9/99 $ 9,550 $10,000 $10,000 $10,000
12/99 9,331 9,922 9,821 9,803
3/00 9,772 10,212 10,166 10,146
6/00 9,934 10,367 10,312 10,286
9/00 10,267 10,617 10,639 10,612
12/00 10,673 11,082 11,093 11,047
3/01 10,812 11,328 11,249 11,192
6/01 10,835 11,401 11,235 11,173
9/01 11,267 11,721 11,641 11,581
12/01 11,165 11,650 11,527 11,456
3/02 11,133 11,760 11,545 11,467
6/02 11,468 12,190 11,928 11,846
9/02 11,998 12,769 12,561 12,460
12/02 11,947 12,769 12,446 12,351
3/03 12,057 12,922 12,522 12,421
6/03 12,298 13,255 12,833 12,718
9/03 12,296 13,266 12,783 12,670
12/03 12,501 13,447 13,013 12,889
3/04 12,764 13,680 13,224 13,089
6/04 12,510 13,356 12,911 12,775
9/04 12,948 13,876 13,423 13,277
12/04 13,114 14,050 13,613 13,460
3/05 13,197 14,045 13,635 13,481
6/05 13,489 14,456 14,061 13,891
9/05 13,548 14,438 14,059 13,886
12/05 13,630 14,543 14,170 13,992
3/06 13,708 14,579 14,235 14,041
6/06 13,791 14,584 14,225 14,026
9/06 14,089 15,081 14,712 14,496
12/06 14,263 15,248 14,880 14,647
3/07 14,421 15,371 14,991 14,754
6/07 14,412 15,269 14,877 14,630
9/07 14,562 15,547 14,992 14,723
12/07 14,746 15,760 15,025 14,737
3/08 14,668 15,663 14,741 14,462
6/08 14,867 15,762 14,875 14,581
9/08 14,344 15,257 14,201 13,912
12/08 14,064 15,370 13,402 13,119
3/09 14,492 16,019 14,101 13,788
6/09 14,799 16,357 14,558 14,252
9/09 16,171 17,522 16,133 15,770
</Table>
(1) The Barclays Capital Municipal Bond Index, an unmanaged index, is made up of
a representative list of general obligation, revenue, insured and pre-
refunded bonds. The index is frequently used as a general measure of tax-
exempt bond market performance. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper California Municipal Debt Funds Index (the Lipper Index) includes
the 30 largest California municipal debt funds tracked by Lipper Inc. The
Lipper Index's returns include net reinvested dividends.*
(3) The Lipper California Municipal Debt Funds Average (the Lipper Average)
measures the performance of funds that limit their assets to those
securities exempt from taxation in the state of California. The Lipper
Average's returns include net reinvested dividends.*
* On Oct. 1, 2009, the Lipper Index replaced the Lipper Average as the Fund's
secondary benchmark. The Lipper Average includes all funds categorized by
Lipper within the broad universe of funds in the Lipper Average, whereas the
Lipper Index includes only a select peer group from the Lipper Average, as
described above. This change was made to bring the selection of the Seligman
Fund secondary benchmarks in line with the practice of the RiverSource
Family of Funds, which would permit a common shareholder experience and
provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included
for a one-year transition period. Thereafter, only the Lipper Index will be
included.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 21
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
Seligman California Municipal Quality Fund
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Seligman California Municipal Quality Fund Class A shares (from
10/1/99 to 9/30/09) as compared to the performance of the Barclays Capital
Municipal Bond Index, the Lipper California Municipal Debt Funds Index and the
Lipper California Municipal Debt Funds Average. In comparing the Fund's Class A
shares to these indices and average, you should take into account the fact that
the Fund's performance reflects the maximum initial sales charge of 4.75%, while
such charges are not reflected in the performance of the indices and average.
Returns for the Fund include the reinvestment of any distributions paid during
each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting seligman.com. Also see "Past
Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2009
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,796 $10,830 $11,606 $15,787
- ------------------------------------------------------------------------------------------
Average annual total return +7.96% +2.69% +3.02% +4.65%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $11,485 $11,619 $12,628 $17,522
- ------------------------------------------------------------------------------------------
Average annual total return +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------
LIPPER CALIFORNIA MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $11,361 $10,966 $12,021 $16,133
- ------------------------------------------------------------------------------------------
Average annual total return +13.61% +3.12% +3.75% +4.90%
- ------------------------------------------------------------------------------------------
LIPPER CALIFORNIA MUNICIPAL DEBT FUNDS AVERAGE(3)
Cumulative value of $10,000 $11,307 $10,829 $11,877 $15,770
- ------------------------------------------------------------------------------------------
Average annual total return +13.07% +2.69% +3.50% +4.65%
- ------------------------------------------------------------------------------------------
</Table>
Results for Class C can be found on page 7.
- --------------------------------------------------------------------------------
22 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN CALIFORNIA MUNICIPAL QUALITY FUND
CLASS A LINE GRAPH)
<Table>
<Caption>
SELIGMAN CALIFORNIA
MUNICIPAL QUALITY
FUND CLASS BARCLAYS CAPITAL LIPPER CALIFORNIA LIPPER CALIFORNIA
A (INCLUDES MUNICIPAL BOND MUNICIPAL DEBT MUNICIPAL DEBT
SALES CHARGE) INDEX(1) FUNDS INDEX(2) FUNDS AVERAGE(3)
------------------- ------------------ ----------------- -----------------
9/99 $ 9,550 $10,000 $10,000 $10,000
12/99 9,341 9,922 9,821 9,803
3/00 9,811 10,212 10,166 10,146
6/00 9,968 10,367 10,312 10,286
9/00 10,301 10,617 10,639 10,612
12/00 10,849 11,082 11,093 11,047
3/01 10,996 11,328 11,249 11,192
6/01 10,920 11,401 11,235 11,173
9/01 11,403 11,721 11,641 11,581
12/01 11,317 11,650 11,527 11,456
3/02 11,233 11,760 11,545 11,467
6/02 11,645 12,190 11,928 11,846
9/02 12,234 12,769 12,561 12,460
12/02 12,128 12,769 12,446 12,351
3/03 12,240 12,922 12,522 12,421
6/03 12,522 13,255 12,833 12,718
9/03 12,434 13,266 12,783 12,670
12/03 12,616 13,447 13,013 12,889
3/04 12,795 13,680 13,224 13,089
6/04 12,515 13,356 12,911 12,775
9/04 12,960 13,876 13,423 13,277
12/04 13,147 14,050 13,613 13,460
3/05 13,136 14,045 13,635 13,481
6/05 13,465 14,456 14,061 13,891
9/05 13,467 14,438 14,059 13,886
12/05 13,552 14,543 14,170 13,992
3/06 13,586 14,579 14,235 14,041
6/06 13,605 14,584 14,225 14,026
9/06 13,890 15,081 14,712 14,496
12/06 13,980 15,248 14,880 14,647
3/07 14,078 15,371 14,991 14,754
6/07 14,073 15,269 14,877 14,630
9/07 14,238 15,547 14,992 14,723
12/07 14,388 15,760 15,025 14,737
3/08 14,324 15,663 14,741 14,462
6/08 14,456 15,762 14,875 14,581
9/08 13,917 15,257 14,201 13,912
12/08 14,003 15,370 13,402 13,119
3/09 14,426 16,019 14,101 13,788
6/09 14,638 16,357 14,558 14,252
9/09 15,787 17,522 16,133 15,770
</Table>
(1) The Barclays Capital Municipal Bond Index, an unmanaged index, is made up of
a representative list of general obligation, revenue, insured and pre-
refunded bonds. The index is frequently used as a general measure of tax-
exempt bond market performance. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper California Municipal Debt Funds Index (the Lipper Index) includes
the 30 largest California municipal debt funds tracked by Lipper Inc. The
Lipper Index's returns include net reinvested dividends.*
(3) The Lipper California Municipal Debt Funds Average (the Lipper Average)
measures the performance of funds that limit their assets to those
securities exempt from taxation in the state of California. The Lipper
Average's returns include net reinvested dividends.*
* On Oct. 1, 2009, the Lipper Index replaced the Lipper Average as the Fund's
secondary benchmark. The Lipper Average includes all funds categorized by
Lipper within the broad universe of funds in the Lipper Average, whereas the
Lipper Index includes only a select peer group from the Lipper Average, as
described above. This change was made to bring the selection of the Seligman
Fund secondary benchmarks in line with the practice of the RiverSource
Family of Funds, which would permit a common shareholder experience and
provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included
for a one-year transition period. Thereafter, only the Lipper Index will be
included.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 23
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
Seligman Minnesota Municipal Fund
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Seligman Minnesota Municipal Fund Class A shares (from 10/1/99 to
9/30/09) as compared to the performance of the Barclays Capital Municipal Bond
Index, the Lipper Minnesota Municipal Debt Funds Index and the Lipper Minnesota
Municipal Debt Funds Average. In comparing the Fund's Class A shares to these
indices and average, you should take into account the fact that the Fund's
performance reflects the maximum initial sales charge of 4.75%, while such
charges are not reflected in the performance of the indices and average. Returns
for the Fund include the reinvestment of any distributions paid during each
period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting seligman.com. Also see "Past
Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2009
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN MINNESOTA MUNICIPAL FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,579 $10,854 $11,506 $15,271
- ------------------------------------------------------------------------------------------
Average annual total return +5.79% +2.77% +2.85% +4.29%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $11,485 $11,619 $12,628 $17,522
- ------------------------------------------------------------------------------------------
Average annual total return +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------
LIPPER MINNESOTA MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $11,333 $11,297 $12,213 $16,207
- ------------------------------------------------------------------------------------------
Average annual total return +13.33% +4.15% +4.08% +4.95%
- ------------------------------------------------------------------------------------------
LIPPER MINNESOTA MUNICIPAL DEBT FUNDS AVERAGE(3)
Cumulative value of $10,000 $11,256 $11,194 $12,096 $15,737
- ------------------------------------------------------------------------------------------
Average annual total return +12.56% +3.83% +3.88% +4.75%
- ------------------------------------------------------------------------------------------
</Table>
Results for Class C can be found on page 9.
- --------------------------------------------------------------------------------
24 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN MINNESOTA MUNICIPAL FUND
CLASS A LINE GRAPH)
<Table>
<Caption>
SELIGMAN MINNESOTA
MUNICIPAL FUND
CLASS A BARCLAYS CAPITAL LIPPER MINNESOTA LIPPER MINNESOTA
(INCLUDES SALES MUNICIPAL BOND MUNICIPAL DEBT MUNICIPAL DEBT
CHARGE) INDEX(1) FUNDS INDEX(2) FUNDS AVERAGE(3)
------------------ ------------------ ---------------- ----------------
9/99 $ 9,550 $10,000 $10,000 $10,000
12/99 9,412 9,922 9,845 9,804
3/00 9,718 10,212 10,093 10,061
6/00 9,840 10,367 10,204 10,163
9/00 10,062 10,617 10,437 10,395
12/00 10,572 11,082 10,861 10,807
3/01 10,759 11,328 11,058 11,001
6/01 10,807 11,401 11,127 11,062
9/01 11,071 11,721 11,398 11,335
12/01 11,022 11,650 11,354 11,288
3/02 11,084 11,760 11,453 11,374
6/02 11,402 12,190 11,802 11,711
9/02 11,868 12,769 12,276 12,167
12/02 11,883 12,769 12,292 12,163
3/03 12,002 12,922 12,462 12,324
6/03 12,227 13,255 12,748 12,605
9/03 12,227 13,266 12,754 12,603
12/03 12,419 13,447 12,932 12,795
3/04 12,565 13,680 13,136 12,989
6/04 12,259 13,356 12,853 12,704
9/04 12,642 13,876 13,269 13,119
12/04 12,755 14,050 13,439 13,286
3/05 12,725 14,045 13,422 13,284
6/05 12,981 14,456 13,801 13,651
9/05 13,007 14,438 13,782 13,632
12/05 13,047 14,543 13,887 13,731
3/06 13,071 14,579 13,923 13,771
6/06 13,097 14,584 13,920 13,759
9/06 13,402 15,081 14,345 14,170
12/06 13,488 15,248 14,485 14,308
3/07 13,562 15,371 14,588 14,405
6/07 13,550 15,269 14,490 14,303
9/07 13,740 15,547 14,651 14,423
12/07 13,906 15,760 14,764 14,479
3/08 13,917 15,663 14,678 14,379
6/08 13,976 15,762 14,794 14,494
9/08 13,751 15,257 14,300 13,948
12/08 14,053 15,370 13,963 13,429
3/09 14,416 16,019 14,788 14,299
6/09 14,530 16,357 15,168 14,689
9/09 15,271 17,522 16,207 15,737
</Table>
(1) The Barclays Capital Municipal Bond Index, an unmanaged index, is made up of
a representative list of general obligation, revenue, insured and pre-
refunded bonds. The index is frequently used as a general measure of tax-
exempt bond market performance. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Minnesota Municipal Debt Funds Index (the Lipper Index) includes
the 10 largest Minnesota municipal debt funds tracked by Lipper Inc. The
Lipper Index's returns include net reinvested dividends.*
(3) The Lipper Minnesota Municipal Debt Funds Average (the Lipper Average)
measures the performance of funds that limit their assets to those
securities exempt from taxation in the state of Minnesota. The Lipper
Average's returns include net reinvested dividends.*
* On Oct. 1, 2009, the Lipper Index replaced the Lipper Average as the Fund's
secondary benchmark. The Lipper Average includes all funds categorized by
Lipper within the broad universe of funds in the Lipper Average, whereas the
Lipper Index includes only a select peer group from the Lipper Average, as
described above. This change was made to bring the selection of the Seligman
Fund secondary benchmarks in line with the practice of the RiverSource
Family of Funds, which would permit a common shareholder experience and
provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included
for a one-year transition period. Thereafter, only the Lipper Index will be
included.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 25
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
Seligman New York Municipal Fund
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Seligman New York Municipal Fund Class A shares (from 10/1/99 to
9/30/09) as compared to the performance of the Barclays Capital Municipal Bond
Index, the Lipper New York Municipal Debt Funds Index and the Lipper New York
Municipal Debt Funds Average. In comparing the Fund's Class A shares to these
indices and average, you should take into account the fact that the Fund's
performance reflects the maximum initial sales charge of 4.75%, while such
charges are not reflected in the performance of the indices and average. Returns
for the Fund include the reinvestment of any distributions paid during each
period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting seligman.com. Also see "Past
Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2009
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN NEW YORK MUNICIPAL FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,766 $10,930 $11,778 $16,075
- ------------------------------------------------------------------------------------------
Average annual total return +7.66% +3.01% +3.33% +4.84%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $11,485 $11,619 $12,628 $17,522
- ------------------------------------------------------------------------------------------
Average annual total return +14.85% +5.13% +4.78% +5.77%
- ------------------------------------------------------------------------------------------
LIPPER NEW YORK MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $11,460 $11,203 $12,143 $16,319
- ------------------------------------------------------------------------------------------
Average annual total return +14.60% +3.86% +3.96% +5.02%
- ------------------------------------------------------------------------------------------
LIPPER NEW YORK MUNICIPAL DEBT FUNDS AVERAGE(3)
Cumulative value of $10,000 $11,412 $11,094 $12,015 $16,098
- ------------------------------------------------------------------------------------------
Average annual total return +14.12% +3.52% +3.74% +4.82%
- ------------------------------------------------------------------------------------------
</Table>
Results for Class C can be found on page 11.
- --------------------------------------------------------------------------------
26 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN NEW YORK MUNICIPAL FUND
CLASS A LINE GRAPH)
<Table>
<Caption>
SELIGMAN NEW
YORK MUNICIPAL LIPPER NEW LIPPER NEW
FUND CLASS BARCLAYS CAPITAL YORK MUNICIPAL YORK MUNICIPAL
A (INCLUDES MUNICIPAL BOND DEBT FUNDS DEBT FUNDS
SALES CHARGE) INDEX(1) INDEX(2) AVERAGE(3)
-------------- ------------------ ------------------ --------------------
9/99 $ 9,550 $10,000 $10,000 $10,000
12/99 9,370 9,922 9,829 9,838
3/00 9,747 10,212 10,134 10,146
6/00 9,913 10,367 10,266 10,272
9/00 10,155 10,617 10,508 10,511
12/00 10,776 11,082 11,024 11,017
3/01 10,965 11,328 11,240 11,229
6/01 11,035 11,401 11,321 11,315
9/01 11,261 11,721 11,573 11,552
12/01 11,151 11,650 11,464 11,436
3/02 11,276 11,760 11,593 11,567
6/02 11,574 12,190 11,965 11,938
9/02 12,157 12,769 12,549 12,491
12/02 12,148 12,769 12,499 12,445
3/03 12,330 12,922 12,587 12,518
6/03 12,602 13,255 12,913 12,840
9/03 12,551 13,266 12,917 12,843
12/03 12,787 13,447 13,117 13,051
3/04 12,946 13,680 13,283 13,216
6/04 12,617 13,356 12,961 12,902
9/04 13,004 13,876 13,436 13,366
12/04 13,175 14,050 13,586 13,525
3/05 13,189 14,045 13,575 13,523
6/05 13,514 14,456 13,978 13,909
9/05 13,520 14,438 13,956 13,884
12/05 13,608 14,543 14,037 13,964
3/06 13,646 14,579 14,092 14,022
6/06 13,639 14,584 14,079 14,003
9/06 14,008 15,081 14,565 14,479
12/06 14,130 15,248 14,722 14,629
3/07 14,223 15,371 14,819 14,714
6/07 14,176 15,269 14,718 14,610
9/07 14,393 15,547 14,874 14,750
12/07 14,604 15,760 14,982 14,844
3/08 14,547 15,663 14,770 14,636
6/08 14,635 15,762 14,915 14,771
9/08 14,222 15,257 14,241 14,075
12/08 14,525 15,370 13,732 13,511
3/09 14,895 16,019 14,431 14,215
6/09 15,113 16,357 14,981 14,782
9/09 16,075 17,522 16,319 16,098
</Table>
(1) The Barclays Capital Municipal Bond Index, an unmanaged index, is made up of
a representative list of general obligation, revenue, insured and pre-
refunded bonds. The index is frequently used as a general measure of tax-
exempt bond market performance. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper New York Municipal Debt Funds Index (the Lipper Index) includes
the 30 largest New York municipal debt funds tracked by Lipper Inc. The
Lipper Index's returns include net reinvested dividends.*
(3) The Lipper New York Municipal Debt Funds Average (the Lipper Average)
measures the performance of funds that limit their assets to those
securities exempt from taxation in the state of New York. The Lipper
Average's returns include net reinvested dividends.*
* On Oct. 1, 2009, the Lipper Index replaced the Lipper Average as the Fund's
secondary benchmark. The Lipper Average includes all funds categorized by
Lipper within the broad universe of funds in the Lipper Average, whereas the
Lipper Index includes only a select peer group from the Lipper Average, as
described above. This change was made to bring the selection of the Seligman
Fund secondary benchmarks in line with the practice of the RiverSource
Family of Funds, which would permit a common shareholder experience and
provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included
for a one-year transition period. Thereafter, only the Lipper Index will be
included.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 27
FUND EXPENSES EXAMPLES ---------------------------------------------------------
(UNAUDITED)
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments; and (2) ongoing costs,
which may include management fees; distribution and service (12b-1) fees; and
other Fund fees and expenses. The examples are 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. In addition to
the ongoing expenses which the Fund bears directly, the Fund's shareholders
indirectly bear the ongoing expenses of any funds in which the Fund invests
(also referred to as "acquired funds"), including affiliated and non-affiliated
pooled investment vehicles (including mutual funds and exchange traded funds).
The Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the ongoing expenses charged by acquired funds using
the expense ratio of each of the acquired funds as of the acquired fund's most
recent shareholder report.
The examples are based on an investment of $1,000 invested at the beginning of
the period and held for the six months ended Sept. 30, 2009.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% 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 this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of 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 transactional costs were included,
your costs would have been higher.
Seligman National Municipal Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2009 SEPT. 30, 2009 THE PERIOD(a) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,114.50 $4.66(c) .88%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.66 $4.46(c) .88%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,111.00 $8.68(c) 1.64%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.85 $8.29(c) 1.64%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Sept. 30, 2009: +11.45%
for Class A and +11.10% for Class C.
(c) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Nov. 30, 2010, unless
sooner terminated at the discretion of the Fund's Board, such that net
expenses (excluding fees and expenses of acquired funds), will not exceed
0.79% for Class A and 1.54% for Class C. Any amounts waived will not be
reimbursed by the Fund. This change was effective June 13, 2009. Had this
change been in place for the entire six month period ended Sept. 30, 2009,
the actual expenses paid would have been $4.19 for Class A and $8.15 for
Class C; the hypothetical expenses paid would have been $4.00 for Class A
and $7.79 for Class C.
- --------------------------------------------------------------------------------
28 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal High-Yield Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2009 SEPT. 30, 2009 THE PERIOD(a) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,115.90 $4.99(c) .94%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.36 $4.76(c) .94%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,111.30 $9.16(c) 1.73%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.39 $8.74(c) 1.73%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Sept. 30, 2009: +11.59%
for Class A and +11.13% for Class C.
(c) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Nov. 30, 2010, unless
sooner terminated at the discretion of the Fund's Board, such that net
expenses (excluding fees and expenses of acquired funds), will not exceed
0.79% for Class A and 1.54% for Class C. Any amounts waived will not be
reimbursed by the Fund. This change was effective June 13, 2009. Had this
change been in place for the entire six month period ended Sept. 30, 2009,
the actual expenses paid would have been $4.19 for Class A and $8.15 for
Class C; the hypothetical expenses paid would have been $4.00 for Class A
and $7.79 for Class C.
Seligman California Municipal Quality Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2009 SEPT. 30, 2009 THE PERIOD(a) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,094.30 $5.09(c) .97%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.21 $4.91(c) .97%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,090.30 $9.33(c) 1.78%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.14 $9.00(c) 1.78%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Sept. 30, 2009: +9.43%
for Class A and +9.03% for Class C.
(c) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Nov. 30, 2010, unless
sooner terminated at the discretion of the Fund's Board, such that net
expenses (excluding fees and expenses of acquired funds), will not exceed
0.79% for Class A and 1.54% for Class C. Any amounts waived will not be
reimbursed by the Fund. This change was effective June 13, 2009. Had this
change been in place for the entire six month period ended Sept. 30, 2009,
the actual expenses paid would have been $4.15 for Class A and $8.07 for
Class C; the hypothetical expenses paid would have been $4.00 for Class A
and $7.79 for Class C.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 29
FUND EXPENSES EXAMPLES (continued) ---------------------------------------------
Seligman Minnesota Municipal Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2009 SEPT. 30, 2009 THE PERIOD(a) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,059.30 $4.96(c) .96%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.26 $4.86(c) .96%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,054.90 $8.96(c) 1.74%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.34 $8.80(c) 1.74%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Sept. 30, 2009: +5.93%
for Class A and +5.49% for Class C.
(c) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Nov. 30, 2010, unless
sooner terminated at the discretion of the Fund's Board, such that net
expenses (excluding fees and expenses of acquired funds), will not exceed
0.79% for Class A and 1.54% for Class C. Any amounts waived will not be
reimbursed by the Fund. This change was effective June 13, 2009. Had this
change been in place for the entire six month period ended Sept. 30, 2009,
the actual expenses paid would have been $4.08 for Class A and $7.93 for
Class C; the hypothetical expenses paid would have been $4.00 for Class A
and $7.79 for Class C.
Seligman New York Municipal Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2009 SEPT. 30, 2009 THE PERIOD(a) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,079.20 $4.95(c) .95%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.31 $4.81(c) .95%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,074.80 $9.05(c) 1.74%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.34 $8.80(c) 1.74%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Sept. 30, 2009: +7.92%
for Class A and +7.48% for Class C.
(c) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Nov. 30, 2010, unless
sooner terminated at the discretion of the Fund's Board, such that net
expenses (excluding fees and expenses of acquired funds), will not exceed
0.79% for Class A and 1.54% for Class C. Any amounts waived will not be
reimbursed by the Fund. This change was effective June 13, 2009. Had this
change been in place for the entire six month period ended Sept. 30, 2009,
the actual expenses paid would have been $4.12 for Class A and $8.01 for
Class C; the hypothetical expenses paid would have been $4.00 for Class A
and $7.79 for Class C.
- --------------------------------------------------------------------------------
30 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman National Municipal Fund
SEPT. 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (97.3%)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
ALASKA (1.1%)
Alaska Energy Authority
Refunding Revenue Bonds
Bradley Lake
4th Series 2000 (FSA)
07-01-20 6.00% $4,145,000 $5,025,232
07-01-21 6.00 2,395,000 2,914,715
Alaska Housing Finance Corporation
Revenue Bonds
Series 1997A-2 A.M.T.
06-01-24 5.75 40,000 40,829
---------------
Total 7,980,776
- -------------------------------------------------------------------------------------
ARIZONA (0.5%)
Arizona State Transportation Board
Revenue Bonds
Maricopa County Regional Area Road Fund
Series 2007
07-01-25 5.00 1,500,000 1,652,070
Arizona Water Infrastructure Finance Authority Revenue Bonds
Water Quality
Series 2008A
10-01-22 5.00 1,500,000 1,738,350
---------------
Total 3,390,420
- -------------------------------------------------------------------------------------
CALIFORNIA (9.9%)
Abag Finance Authority for Nonprofit Corporations Revenue Bonds
Sharp Healthcare
Series 2009
08-01-39 6.25 4,000,000 4,275,360
California Health Facilities Financing Authority Revenue Bonds
Providence Health & Services
Series 2009B
10-01-39 5.50 5,250,000 5,496,750
County of Sacramento
Revenue Bonds
Series 2009B
07-01-39 5.75 4,000,000 4,434,440
Foothill Eastern Transportation Corridor Agency Refunding Revenue Bonds
Series 1999
01-15-40 5.75 4,100,000 3,997,459
Golden State Tobacco Securitization Corporation Asset-backed Revenue Bonds
Series 2007A-1
06-01-47 5.13 6,750,000 5,062,702
San Diego Public Facilities Financing Authority Revenue Bonds
Series 1999A (National/FGIC)
05-15-29 5.00 2,630,000 2,658,220
San Francisco City & County Redevelopment Financing Authority
Tax Allocation Bonds
Mission Bay South Redevelopment Agency
Series 2009D
08-01-39 6.63 500,000 527,855
State of California
Refunding Unlimited General Obligation Bonds
Series 2007
08-01-30 4.50 5,550,000 5,254,907
State of California
Unlimited General Obligation Bonds
Series 2008
08-01-34 5.00 11,250,000 11,313,112
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2005
03-01-27 5.50 1,000,000 1,070,120
03-01-32 5.00 1,500,000 1,508,940
08-01-35 5.00 8,000,000 8,031,599
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2007
11-01-37 5.00 3,000,000 3,009,780
12-01-37 5.00 1,700,000 1,705,542
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2009
04-01-38 6.00 5,000,000 5,513,750
University of California
Revenue Bonds
Series 2009Q
05-15-34 5.00 5,750,000 6,182,630
---------------
Total 70,043,166
- -------------------------------------------------------------------------------------
COLORADO (3.1%)
City & County of Denver
Unlimited General Obligation Bonds
Justice System Facilities & Zoo
Series 2005
08-01-21 5.00 400,000 454,804
08-01-25 5.00 1,000,000 1,091,420
City of Westminster
Revenue Bonds
Post Project
Series 2007D (FSA)
12-01-23 5.00 1,240,000 1,388,118
Colorado Health Facilities Authority
Revenue Bonds
Evangelical Lutheran
Series 2009A
06-01-38 6.13 750,000 774,608
Colorado Health Facilities Authority
Revenue Bonds
Leavenworth Sisters of Charity
Series 1998 (National)
12-01-25 5.00 2,250,000 2,251,418
Colorado Health Facilities Authority
Unrefunded Revenue Bonds
Series 2000
12-01-25 6.90 680,000 705,296
Colorado State Board of Governors
Revenue Bonds
Series 2008A (FSA)
03-01-27 5.00 1,250,000 1,359,063
Colorado Water Resources & Power Development Authority
Unrefunded Revenue Bonds
Series 2001A
09-01-21 5.00 45,000 47,833
Douglas & Elbert Counties School District
Unlimited General Obligation Improvement Bonds
Series 2007A
12-15-23 5.00 1,250,000 1,396,025
Platte River Power Authority
Revenue Bonds
Series 2007GG (FSA)
06-01-18 5.00 1,000,000 1,175,840
Platte River Power Authority
Revenue Bonds
Series 2009HH
06-01-24 5.00 1,000,000 1,139,890
Regional Transportation District
Refunding Revenue Bonds
Series 2007A
11-01-24 5.25 1,000,000 1,216,890
University of Colorado Hospital Authority
Refunding Revenue Bonds
Series 1997A (AMBAC)
11-15-22 5.25 1,000,000 1,000,510
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 31
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
COLORADO (CONT.)
University of Colorado Hospital Authority
Refunding Revenue Bonds
Series 2009A
11-15-29 6.00% $5,000,000 $5,323,599
University of Colorado
Revenue Bonds
Series 2006A (AMBAC)
06-01-23 5.00 1,000,000 1,095,840
Western State College
Revenue Bonds
Series 2009
05-15-39 5.00 1,000,000 1,038,900
---------------
Total 21,460,054
- -------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (0.3%)
District of Columbia
Refunding Revenue Bonds
2nd Series 2009B
12-01-23 5.00 2,000,000 2,314,460
- -------------------------------------------------------------------------------------
FLORIDA (4.5%)
City of Ocala
Revenue Bonds
Series 2007A (National)
10-01-24 5.00 2,985,000 3,168,816
County of Broward
Revenue Bonds
Series 2001J-I (AMBAC) A.M.T.
10-01-26 5.25 2,000,000 2,007,700
County of Polk
Refunding & Improvement Revenue Bonds
Series 2006 (National)
12-01-20 5.00 1,040,000 1,120,808
County of St. Johns
Revenue Bonds
Series 2006 (AMBAC)
10-01-26 5.00 1,000,000 1,056,170
Florida Housing Finance Corporation
Revenue Bonds
Homeowner Mtge
Series 2000-11 (FSA) A.M.T.
01-01-32 5.95 320,000 320,586
Florida Ports Financing Commission
Revenue Bonds
State Transportation Trust Fund
Series 1996 (National) A.M.T.
06-01-27 5.38 2,500,000 2,500,350
Florida State Board of Education
Revenue Bonds
Series 2007A (AMBAC)
07-01-18 5.00 2,000,000 2,227,440
Marion County Hospital District
Refunding & Improvement Revenue Bonds
Health Systems -- Munroe Regional
Series 2007
10-01-29 5.00 1,000,000 926,080
Marion County Hospital District
Unrefunded Revenue Bonds
Health Systems -- Munroe General
Series 1999
10-01-24 5.63 10,000 10,028
Orange County Health Facilities Authority
Revenue Bonds
Orlando Regional Healthcare
Series 2008C
10-01-35 5.25 1,000,000 962,960
Orange County School Board
Certificate of Participation
Series 2005B (AMBAC)
08-01-25 5.00 2,440,000 2,542,529
Reedy Creek Improvement District
Unlimited General Obligation Bonds
Series 2005A (AMBAC)
06-01-25 5.00 5,000,000 5,161,450
Reedy Creek Improvement District
Unrefunded Revenue Bonds
Series 1997-1 (AMBAC)
10-01-19 5.13 230,000 230,219
Sarasota County Public Hospital Board
Refunding Revenue Bonds
Sarasota Memorial Hospital
Series 1998B (National)
07-01-28 5.50 6,980,000 7,570,090
South Florida Water Management District
Certificate of Participation
Series 2006 (AMBAC)
10-01-26 5.00 1,400,000 1,486,534
---------------
Total 31,291,760
- -------------------------------------------------------------------------------------
GEORGIA (2.6%)
Barnesville-Lamar County Industrial Development Authority
Revenue Bonds
Gordon College Properties
Series 2004A
08-01-25 5.00 1,250,000 1,267,600
Cartersville Development Authority
Refunding Revenue Bonds
Anheuser-Busch Project
Series 2002 A.M.T.
02-01-32 5.95 1,250,000 1,260,838
City of Atlanta
Revenue Bonds
Series 2000B (National/FGIC) A.M.T.
01-01-30 5.63 2,000,000 2,014,300
City of Atlanta
Revenue Bonds
Series 2004 (FSA)
11-01-25 5.75 1,000,000 1,239,910
City of Augusta
Refunding Revenue Bonds
Series 2007 (FSA)
10-01-22 5.00 500,000 567,165
Fulton County Development Authority
Revenue Bonds
Georgia Tech Athletic Association
Series 2001 (AMBAC)
10-01-32 5.13 1,270,000 1,281,113
Georgia State Housing & Finance Authority
Revenue Bonds
Single Family Mortgage
Series 1999A-2 A.M.T.
06-01-29 5.20 1,615,000 1,615,065
Gwinnett County Hospital Authority
Revenue Bonds
Gwinnett Hospital Systems Incorporated Project
Series 2004B
10-01-29 5.00 1,250,000 1,326,525
Metropolitan Atlanta Rapid Transit Authority
Refunding Revenue Bonds
Series 1992N
07-01-18 6.25 500,000 584,060
Metropolitan Atlanta Rapid Transit Authority
Refunding Revenue Bonds
Series 2007A (AMBAC/FGIC)
07-01-26 5.25 1,000,000 1,228,960
Private Colleges & Universities Authority
Revenue Bonds
Mercer University Project
Series 1991 Escrowed to Maturity (National)
11-01-15 6.50 1,500,000 1,787,595
Savannah Economic Development Authority
Refunding Revenue Bonds
International Paper Company Projects
Series 2004A
05-01-21 4.95 1,250,000 1,195,738
State of Georgia
Refunding Unlimited General Obligation Bonds
Series 2004C
07-01-17 5.50 750,000 876,398
Upper Oconee Basin Water Authority
Refunding Revenue Bonds
Series 2005 (National)
07-01-24 5.00 1,000,000 1,061,430
Valdosta & Lowndes County
Revenue Bonds
South Georgia Medical Center Project
Series 2002 (AMBAC)
10-01-27 5.25 1,250,000 1,264,363
---------------
Total 18,571,060
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
32 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
IDAHO (0.2%)
Idaho Health Facilities Authority
Revenue Bonds
Trinity Health Group
Series 2008B
12-01-23 6.00% $1,000,000 $1,134,120
- -------------------------------------------------------------------------------------
ILLINOIS (4.9%)
Illinois Finance Authority
Revenue Bonds
Central Dupage Health
Series 2009
11-01-27 5.00 13,050,000 13,779,755
Illinois Finance Authority
Revenue Bonds
Riverside Health System
Series 2009
11-15-35 6.25 4,200,000 4,431,714
Illinois Finance Authority
Revenue Bonds
Rush University Medical Center
Series 2009C
11-01-39 6.63 750,000 825,075
Illinois Finance Authority
Revenue Bonds
Sherman Health System
Series 2007A
08-01-37 5.50 4,250,000 4,007,538
Illinois Finance Authority
Revenue Bonds
Silver Cross & Medical Centers
Series 2009
08-15-38 6.88 8,000,000 8,545,920
St. Charles County Public Water Supply District No. 2
Certification of Participation
Series 1999B (National)
12-01-25 5.10 1,000,000 1,000,450
State of Illinois
Revenue Bonds
Series 2005 (FSA)
06-15-28 5.00 2,000,000 2,114,640
---------------
Total 34,705,092
- -------------------------------------------------------------------------------------
INDIANA (1.8%)
Ball State University
Revenue Bonds
Student Fee
Series 2008N (FSA)
07-01-23 5.00 1,850,000 2,053,630
County of St. Joseph
Revenue Bonds
Notre Dame Du Lac Project
Series 2009
03-01-36 5.00 5,000,000 5,395,049
Indiana Finance Authority
Revenue Bonds
Parkview Health System
Series 2009A
05-01-31 5.75 3,000,000 3,134,700
Indiana Health & Educational Facilities Financing Authority
Refunding Revenue Bonds
Clarian Health Obligation Group
Series 2006B
02-15-33 5.00 1,000,000 951,000
Purdue University
Revenue Bonds
Student Fees
Series 2009X
07-01-23 5.25 1,000,000 1,171,900
---------------
Total 12,706,279
- -------------------------------------------------------------------------------------
LOUISIANA (3.6%)
Ascension Parish Parishwide School District
Refunding Unlimited General Obligation Bonds
Series 2009
03-01-20 3.50 385,000 394,860
Calcasieu Parish Industrial Development Board
Revenue Bonds
Conoco Income Project
Series 1996 A.M.T.
12-01-26 5.75 2,500,000 2,501,375
City of Baton Rouge
Refunding Revenue Bonds
Series 2008A-2 (FSA)
08-01-24 5.00 900,000 1,008,927
City of Lafayette
Refunding Revenue Bonds
Series 2006C (AMBAC)
05-01-21 5.00 1,000,000 1,107,790
City of New Orleans
Unlimited General Obligation Public Improvement Bonds
Series 2002 (FGIC)
12-01-31 5.35 2,250,000 2,278,575
East Baton Rouge Mortgage Finance Authority
Refunding Revenue Bonds
Series 1993B (GNMA/FNMA)
10-01-25 5.40 390,000 390,261
Jefferson Parish Hospital Service District No. 2
Revenue Bonds
Series 1998 (FSA)
07-01-28 5.00 1,000,000 985,570
Jefferson Sales Tax District
Refunding Revenue Bonds
Series 2009B
12-01-22 4.50 1,000,000 1,062,450
Jefferson Sales Tax District
Revenue Bonds
Series 2007B (AMBAC)
12-01-20 5.25 1,000,000 1,102,220
Lafayette Parish School Board
Refunding Revenue Bonds
Public Schools
Series 2008 (FSA)
04-01-19 5.00 1,000,000 1,161,910
Louisiana Housing Finance Agency
Revenue Bonds
Home Ownership Program
Series 2008A (GNMA/FNMA/FHLMC)
12-01-23 4.88 1,040,000 1,092,363
Louisiana Public Facilities Authority
Refunding Revenue Bonds
Southern Baptist Hospital Incorporated Project
Series 1986 Escrowed to Maturity
05-15-12 8.00 2,865,000 3,170,896
Louisiana Public Facilities Authority
Refunding Revenue Bonds
Tulane University Project
Series 2007A-1 (National)
02-15-26 5.00 1,000,000 1,058,690
Louisiana Public Facilities Authority
Revenue Bonds
Hurricane Recovery Program
Series 2007 (AMBAC)
06-01-20 5.00 1,000,000 1,063,190
Louisiana State Citizens Property Insurance Corporation
Revenue Bonds
Series 2009C-4
06-01-24 6.13 1,000,000 1,070,700
Louisiana State University & Agricultural & Mechanical College
Revenue Bonds
Auxiliary
Series 2007 (FSA)
07-01-27 5.00 1,000,000 1,081,270
Parish of East Baton Rouge
Revenue Bonds
Road and Street Improvements
Series 2009
08-01-25 5.00 250,000 278,853
Parish of East Baton Rouge
Revenue Bonds
Series 2009A
02-01-34 5.25 1,000,000 1,068,390
Port New Orleans Board of Commissioners
Revenue Bonds
Series 2002 (National/FGIC) A.M.T.
04-01-32 5.00 1,250,000 1,148,725
St. Tammany Parishwide School District No. 12
Unlimited General Obligation Bonds
Series 2008
03-01-23 4.50 1,000,000 1,071,980
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 33
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
LOUISIANA (CONT.)
Sulphur Housing & Mortgage Finance Trust
Revenue Bonds
Series 1979 Escrowed to Maturity
12-01-10 7.25% $805,000 $847,939
---------------
Total 24,946,934
- -------------------------------------------------------------------------------------
MARYLAND (2.7%)
City of Baltimore
Refunding Revenue Bonds
Wastewater Projects
Series 2002A (National/FGIC)
07-01-42 5.13 2,000,000 2,040,820
City of Baltimore
Revenue Bonds
Consolidated Coal Sales
Series 1984A
10-01-11 6.50 2,500,000 2,500,550
County of Anne Arundel
Refunding Tax Allocation Bonds
Arundel Mills Project
Series 2004
07-01-24 5.13 1,205,000 1,333,899
County of Baltimore
Revenue Bonds
Catholic Health Initiatives
Series 2006A
09-01-26 5.00 1,500,000 1,596,360
Maryland Health & Higher Educational Facilities Authority
Refunding Revenue Bonds
Johns Hopkins University
Series 2001B
07-01-41 5.00 2,000,000 2,032,400
Maryland Health & Higher Educational Facilities Authority
Revenue Bonds
Anne Arundel Medical Center
Series 1998 (FSA)
07-01-28 5.13 1,500,000 1,508,640
Maryland Health & Higher Educational Facilities Authority
Revenue Bonds
Carroll County General Hospital
Series 2002
07-01-37 6.00 2,250,000 2,306,993
Maryland State Department of Transportation Certificate of Participation
Series 2000 A.M.T.
10-15-25 5.50 2,375,000 2,409,224
Maryland State Department of Transportation
Revenue Bonds
Series 2008
02-15-21 5.00 1,000,000 1,161,820
Morgan State University Academic & Auxiliary Facilities
Revenue Bonds
Series 2003A (National/FGIC)
07-01-32 5.00 450,000 459,527
Washington Suburban Sanitation District
Unlimited General Obligation Bond
Water Supply
Series 2005
06-01-18 5.00 1,500,000 1,704,165
---------------
Total 19,054,398
- -------------------------------------------------------------------------------------
MASSACHUSETTS (7.5%)
City of Boston
Revenue Bonds
Series 1993A
11-01-19 5.25 4,000,000 4,630,840
City of Boston
Unlimited General Obligation Bonds
Series 2007A
03-01-22 5.00 2,330,000 2,659,484
Commonwealth of Massachusetts
Limited General Obligation Bonds
Consolidated Loan
Series 2009C
07-01-38 4.50 1,500,000 1,538,040
Martha's Vineyard Land Bank
Revenue Bonds
Series 2002 (AMBAC)
05-01-32 5.00 3,000,000 3,084,060
Massachusetts Bay Transportation Authority
Revenue Bonds
Series 2005A
07-01-24 5.00 1,000,000 1,208,990
Massachusetts Development Finance Agency
Revenue Bonds
Boston College
Series 2009Q-2
07-01-29 5.00 1,455,000 1,607,339
Massachusetts Development Finance Agency
Revenue Bonds
WGBH Educational Foundation
Series 2002A (AMBAC)
01-01-42 5.75 4,000,000 4,590,879
Massachusetts Health & Educational Facilities Authority
Revenue Bonds
Berklee College of Music
Series 2007A
10-01-21 5.00 1,500,000 1,644,015
Massachusetts Health & Educational Facilities Authority
Revenue Bonds
Partners Healthcare Systems
Series 1997A (National)
07-01-24 5.38 4,890,000 4,895,086
Massachusetts Health & Educational Facilities Authority
Revenue Bonds
Tuft University Series 2009M
02-15-28 5.50 1,000,000 1,236,890
Massachusetts Health & Educational Facilities Authority
Unrefunded Revenue Bonds
South Shore Hospital
Series 1999F
07-01-29 5.75 1,845,000 1,852,435
Massachusetts Housing Finance Agency
Revenue Bonds
Single Family
Series 2008-139
12-01-28 5.13 1,000,000 1,035,680
Massachusetts Housing Finance Authority
Revenue Bonds
Series 1999A (AMBAC) A.M.T.
07-01-30 5.50 190,000 188,127
Massachusetts School Building Authority
Revenue Bonds
Series 2005A (FSA)
08-15-23 5.00 11,000,000 12,362,130
Massachusetts State Water Pollution Abatement
Revenue Bonds
Pool Program
Series 1999-5
08-01-29 5.50 1,000,000 1,011,570
Massachusetts State Water Pollution Abatement
Revenue Bonds
State Revolving Fund
Series 1999-14
08-01-21 5.00 750,000 887,370
Massachusetts Water Resources Authority
Refunding Revenue Bonds
Series 2005A (National)
08-01-24 5.25 3,000,000 3,407,100
Newton Massachusetts
Limited General Obligation Bonds
State Qualified School
Series 2009A
04-01-25 4.13 2,295,000 2,449,913
Town of Braintree
Limited General Obligation Bonds
Municipal Purpose Loan
Series 2009
05-15-27 5.00 2,000,000 2,220,820
---------------
Total 52,510,768
- -------------------------------------------------------------------------------------
MICHIGAN (5.1%)
Capital Region Airport Authority
Refunding Revenue Bonds
Series 2002B (National) A.M.T.
07-01-21 5.25 2,000,000 2,023,060
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
34 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
MICHIGAN (CONT.)
Charter Township of Canton
Limited General Obligation Bonds
Capital Improvement
Series 2007 (FSA)
04-01-21 5.00% $530,000 $594,051
City of Detroit
Prerefunded Revenue Bonds
2nd Lien
Series 2005A (National)
07-01-30 5.00 2,295,000 2,680,904
City of Detroit
Revenue Bonds
Sr Lien
Series 2005A (National/FGIC)
07-01-27 5.00 1,290,000 1,314,097
Grand Traverse County Hospital Finance Authority
Unrefunded Revenue Bonds
Munson
Series 1998A (AMBAC)
07-01-28 5.00 110,000 107,763
Kalamazoo Public Schools
Unlimited General Obligation Refunding Bonds
Building & Site
Series 2006 (FSA)
05-01-24 5.00 1,285,000 1,400,856
Michigan Municipal Bond Authority
Revenue Bonds
Drinking Water State Revolving Fund
Series 2004
10-01-22 5.00 3,850,000 4,250,400
Michigan Public Power Agency
Refunding Revenue Bonds
Belle River Project
Series 2002A (National)
01-01-17 5.25 1,500,000 1,730,070
01-01-18 5.25 1,150,000 1,330,585
Michigan State Hospital Finance Authority
Refunding Revenue Bonds
Henry Ford Health System
Series 2006A
11-15-18 5.00 750,000 765,728
Michigan State Hospital Finance Authority
Refunding Revenue Bonds
Oakwood Obligated Group
Series 1998A (FSA)
08-15-25 5.13 4,000,000 4,023,159
Michigan State Hospital Finance Authority
Refunding Revenue Bonds
Sparrow Obligated Group
Series 2005 (National)
11-15-26 5.00 1,500,000 1,504,290
Michigan State Hospital Finance Authority
Revenue Bonds
Trinity Health Center Group
Series 2006A
12-01-26 5.00 4,000,000 4,165,919
State of Michigan
Refunding Revenue Bonds
Series 1998A (National)
11-01-26 5.00 5,000,000 5,054,850
State of Michigan
Refunding Revenue Bonds
Series 2005 (FSA)
05-15-22 5.25 2,000,000 2,452,940
State of Michigan
Refunding Revenue Bonds
Series 2006 (FSA)
05-15-24 5.00 2,000,000 2,176,320
---------------
Total 35,574,992
- -------------------------------------------------------------------------------------
MISSOURI (3.3%)
Cape Girardeau County Industrial Development Authority
Revenue Bonds
St. Francis Medial Center
Series 2009
06-01-39 5.75 500,000 528,830
City of St. Louis
Refunding Revenue Bonds
Lambert Intl Airport
Series 2007A (FSA)
07-01-23 5.00 1,000,000 1,075,700
City of St. Louis
Revenue Bonds
Lambert-St. Louis International
Series 2009A-1
07-01-34 6.63 300,000 321,669
Clackamas County School District #7J Lake Osweg
Unlimited General Obligation Refunding Bonds
Series 2005 (FSA)
06-01-23 5.25 1,000,000 1,236,520
County of Boone
Revenue Bonds
Boone Hospital Center
Series 2008
08-01-28 5.75 500,000 525,755
Hannibal Industrial Development Authority
Refunding Revenue Bonds
Series 2006
03-01-22 5.00 1,000,000 984,520
Kansas City Metropolitan Community College Building
Refunding Revenue Bonds
Junior College Improvement and Leasehold
Series 2006 (National/FGIC)
07-01-17 5.00 1,000,000 1,123,340
Metropolitan St. Louis Sewer District
Revenue Bonds
Series 2004A (National)
05-01-24 5.00 2,800,000 2,984,156
Missouri Development Finance Board
Revenue Bonds
Procter & Gamble Paper Products
Series 1999 A.M.T.
03-15-29 5.20 2,000,000 2,079,780
Missouri Housing Development Commission
Revenue Bonds
Single Family Homeowners Loan
Series 1997B-2 (GMNA/FNMA) A.M.T.
09-01-28 5.90 60,000 61,105
Missouri State Board of Public Buildings
Revenue Bonds
Series 2001A
05-01-26 5.13 1,750,000 1,804,933
Missouri State Environmental Improvement & Energy Resources Authority
Revenue Bonds
Drinking Water
Series 2002B
07-01-23 5.00 1,000,000 1,075,970
Missouri State Health & Educational Facilities Authority
Refunding Revenue Bonds
Lester E. Cox Medical Center
Series 1993I (National)
06-01-15 5.25 2,500,000 2,703,975
Missouri State Health & Educational Facilities Authority
Revenue Bonds
Washington University
Series 2007B
01-15-21 4.20 1,000,000 1,083,280
Southeast Missouri Correctional Facility
Refunding Revenue Bonds
Series 1992 Escrowed to Maturity
10-15-16 5.75 2,000,000 2,355,939
St. Charles Community College
Refunding Unlimited General Obligation Bonds
Series 2009
02-15-26 4.00 500,000 521,850
St. Louis Industrial Development Authority
Refunding
Revenue Bonds
Anheuser-Busch Project
Series 1991
05-01-16 6.65 1,250,000 1,432,288
University of Missouri
Revenue Bonds
System Facilities
Series 2006A
11-01-26 5.00 1,000,000 1,088,410
---------------
Total 22,988,020
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 35
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
NEW HAMPSHIRE (0.4%)
New Hampshire Health & Education Facilities Authority
Revenue Bonds
Dartmouth-Hitchcock
Series 2009
08-01-38 6.00% $2,500,000 $2,660,200
- -------------------------------------------------------------------------------------
NEW JERSEY (3.2%)
New Jersey Economic Development Authority
Refunding Revenue Bonds
Seeing Eye Incorporated Project
Series 2005 (AMBAC)
12-01-24 5.00 1,000,000 1,012,230
New Jersey Economic Development Authority
Revenue Bonds
New Jersey-American Water Company Incorporated
Series 1997B (National/FGIC) A.M.T.
05-01-32 5.38 8,000,000 7,881,280
New Jersey Educational Facilities Authority
Refunding Revenue Bonds
Stevens Institute of Technology
Series 2007A
07-01-22 5.25 1,250,000 1,353,200
New Jersey Educational Facilities Authority
Revenue Bonds
Princeton University
Series 2007E
07-01-28 5.00 1,250,000 1,386,138
New Jersey Educational Facilities Authority
Revenue Bonds
William Paterson University
Series 2008C (Assured Guaranty)
07-01-24 5.00 1,000,000 1,092,480
New Jersey Environmental Infrastructure Trust
Revenue Bonds
Environmental Infrastructure
Series 2005A (AMBAC)
09-01-22 5.00 1,230,000 1,385,927
New Jersey Health Care Facilities Financing Authority
Revenue Bonds
Hackensack University Medical Center
Series 2000
01-01-34 6.00 2,450,000 2,467,934
New Jersey Health Care Facilities Financing Authority
Revenue Bonds
Meridian Health Systems Obligation Group
Series 1999 (FSA)
07-01-24 5.38 2,255,000 2,271,281
New Jersey Health Care Facilities Financing Authority
Revenue Bonds
Virtua Health
Series 2009
07-01-33 5.75 750,000 790,568
New Jersey Health Care Facilities Financing Authority
Unrefunded Revenue Bonds
Atlantic City Medical
Series 2002
07-01-25 5.75 1,110,000 1,145,753
New Jersey State Housing & Mortgage Finance Agency
Revenue Bonds
Series 2000A-1 (FSA) A.M.T.
11-01-31 6.35 1,500,000 1,507,845
New Jersey State Housing & Mortgage Finance Agency
Revenue Bonds
Series 2000E-1 (FSA)
05-01-25 5.75 215,000 216,972
---------------
Total 22,511,608
- -------------------------------------------------------------------------------------
NEW MEXICO (0.9%)
New Mexico Hospital Equipment Loan Council
Revenue Bonds
Presbyterian Healthcare
Series 2009
08-01-39 5.00 6,500,000 6,570,070
- -------------------------------------------------------------------------------------
NEW YORK (4.5%)
City of New York
Unlimited General Obligation Bonds
Series 2005C (FSA)
08-01-17 5.00 6,000,000 6,738,600
New York City Municipal Water Finance Authority Revenue Bonds
Series 2005C (National)
06-15-27 5.00 8,000,000 8,560,080
New York City Transitional Finance Authority
Revenue Bonds
Fiscal 2009
Series 2009S-4
01-15-25 5.13 2,000,000 2,240,620
New York State Dormitory Authority
Revenue Bonds
North Shore-Long Island Jewish Health System
Series 2009A
05-01-37 5.50 2,000,000 2,072,240
New York State Dormitory Authority
Revenue Bonds
Rockefeller University
Series 2009C
07-01-40 5.00 2,500,000 2,708,500
New York State Environmental Facilities
Revenue Bonds
Revolving Funds
New York City Municipal Water
Series 2008A
06-15-28 5.00 1,000,000 1,106,960
Port Authority of New York & New Jersey
Revenue Bonds
Consolidated 144th
Series 1997 (AMBAC)
10-01-28 5.00 1,000,000 1,084,690
Port Authority of New York & New Jersey
Revenue Bonds
Consolidated 148th
Series 2007
08-15-22 5.00 500,000 564,160
Port Authority of New York & New Jersey
Revenue Bonds
JFK Intl Air Terminal #6 Special Project
Series 1997 (National) A.M.T.
12-01-22 5.75 6,500,000 6,405,165
---------------
Total 31,481,015
- -------------------------------------------------------------------------------------
NORTH CAROLINA (2.3%)
Buncombe County Metropolitan Sewerage District
Refunding Revenue Bonds
Series 2003 (National)
07-01-20 5.00 685,000 742,882
City of High Point
Revenue Bonds
Series 2008 (FSA)
11-01-28 5.00 350,000 384,262
City of Highpoint
Revenue Bonds
Series 2004 (National/FGIC)
11-01-23 5.00 250,000 268,470
City of Wilmington
Refunding Revenue Bonds
Series 2005 (FSA)
06-01-25 5.00 500,000 539,735
County of Cumberland
Refunding Certification of Participation
Improvement Projects
Series 2009B-1
12-01-24 5.00 500,000 564,690
County of Durham
Unlimited General Obligation Bonds
Public Improvements
Series 2006B
06-01-22 5.00 750,000 846,555
County of Forsyth
Certification of Participation
Series 2005
02-01-26 5.00 750,000 802,785
North Carolina Capital Facilities Finance Agency
Revenue Bonds
Duke University Project
Series 2009B
10-01-38 5.00 300,000 325,500
North Carolina Capital Facilities Finance Agency
Revenue Bonds
Wake Forest University
Series 2009
01-01-39 4.50 300,000 306,132
North Carolina Eastern Municipal Power Agency
Refunding Revenue Bonds
Series 2005A (AMBAC)
01-01-20 5.25 6,000,000 6,421,200
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
36 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
NORTH CAROLINA (CONT.)
North Carolina Finance Agency
Revenue Bonds
Home Ownership
Series 2000-8-A A.M.T.
07-01-28 6.40% $135,000 $141,205
North Carolina Infrastructure Finance
Certification of Participation
Repair & Renovation Projects
Series 2006A (National)
06-01-17 5.00 500,000 572,040
North Carolina Municipal Power Agency #1 Catawba
Revenue Bonds
Series 2008C
01-01-20 5.25 500,000 561,080
North Carolina Municipal Power Agency No. 1 Catawba
Revenue Bonds
Series 1986 Escrowed to Maturity
01-01-20 5.00 1,750,000 2,042,478
North Carolina Municipal Power Agency
Revenue Bonds
Series 2009A
01-01-26 5.50 300,000 323,421
State of North Carolina
Revenue Bonds
Annual Appropriation
Series 2009A
05-01-27 5.00 305,000 343,830
Wake County Industrial Facilities & Pollution Control Financing Authority
Refunding Revenue Bonds
Carolina Power & Light Company Project
Series 2002
02-01-17 5.38 1,000,000 1,042,400
---------------
Total 16,228,665
- -------------------------------------------------------------------------------------
NORTH DAKOTA (0.1%)
County of Ward
Revenue Bonds
Trinity Obligated Group
Series 2006
07-01-25 5.13 1,000,000 954,650
- -------------------------------------------------------------------------------------
OHIO (8.7%)
Buckeye Tobacco Settlement Financing Authority
Asset-backed Senior Turbo Revenue Bonds
Series 2007A-2
06-01-47 5.88 5,400,000 4,369,950
City of Avon
Limited General Obligation Bonds
Series 2009B
12-01-38 5.00 1,150,000 1,220,254
City of Cincinnati
Unlimited General Obligation Bonds
Various Purpose
Series 2008A
12-01-23 5.00 875,000 994,236
City of Cleveland
Revenue Bonds
Series 2007P
01-01-24 5.00 2,000,000 2,222,400
City of Cleveland
Revenue Bonds
Series 2008B-1 (National)
11-15-28 5.00 500,000 524,975
City of Columbus
Revenue Bonds
Systems
Series 2008A
06-01-27 5.00 4,000,000 4,425,920
City of Columbus
Unlimited General Obligation Bonds
Various Purpose
Series 2006
12-15-21 5.00 1,435,000 1,637,005
City of Strongsville
Limited General Obligation Bonds
Various Purpose
Series 2009
12-01-33 4.63 500,000 509,900
12-01-34 4.63 1,000,000 1,020,180
Columbus City School District
Unlimited General Obligation Bonds
School Facilities Construction & Improvement
Series 2009
12-01-33 4.75 1,000,000 1,049,780
County of Franklin
Revenue Bonds
Children's Hospital Project
Series 2005 (National/FGIC)
05-01-25 5.00 1,000,000 1,041,960
County of Hamilton
Refunding Revenue Bonds
Sub Series 2006A (AMBAC)
12-01-26 5.00 1,000,000 1,043,360
County of Hamilton
Refunding Revenue Bonds
Sub Series 2006A (FSA/AMBAC)
12-01-32 5.00 1,000,000 1,054,730
County of Hamilton
Revenue Bonds
Greater Cincinnati Metropolitan Sewer District
Series 2007A
12-01-25 5.00 3,425,000 3,795,106
County of Hamilton
Revenue Bonds
Metro Sewer District
Series 2006A (National)
12-01-26 5.00 1,000,000 1,087,070
County of Montgomery
Limited General Obligation Refunding & Improvement Bonds
Various Purpose
Series 2005 (National)
12-01-24 5.00 2,600,000 2,812,472
Ohio Housing Finance Agency
Revenue Bonds
Mtge-Backed Securities Program
Series 2008 (GNMA/FNMA/FHLMC)
09-01-28 5.25 1,245,000 1,308,009
Ohio Housing Finance Agency
Revenue Bonds
Residential
Series 1997B (GNMA) A.M.T.
09-01-29 5.40 770,000 773,111
Ohio State Turnpike Commission
Refunding Revenue Bonds
Series 1998A (National/FGIC)
02-15-26 5.50 3,000,000 3,675,270
Ohio State Turnpike Commission
Revenue Bonds
Series 2001 (AMBAC)
02-15-31 5.25 1,500,000 1,542,210
Ohio State University
Revenue Bonds
Series 2002A
12-01-31 5.13 1,000,000 1,056,920
Ohio State University
Revenue Bonds
Series 2005A
06-01-25 5.00 3,000,000 3,235,200
Ohio State Water Development Authority
Refunding Revenue Bonds
Drinking Water Fund
Series 2005
12-01-21 5.25 3,890,000 4,792,323
12-01-22 5.25 2,625,000 3,245,760
Ohio State Water Development Authority
Revenue Bonds
Series 1983 Escrowed to Maturity
12-01-10 9.38 220,000 227,889
Ohio State Water Development Authority
Revenue Bonds
Sewer Facilities
Anheuser-Busch Project
Series 1999 A.M.T.
08-01-38 6.00 1,000,000 1,000,110
State of Ohio
Refunding Revenue Bonds
Case Western Reserve
Series 2008C
12-01-29 5.00 2,000,000 2,123,780
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 37
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
OHIO (CONT.)
State of Ohio
Revenue Bonds
Denison University 2007 Project
Series 2007
11-01-23 5.00% $4,000,000 $4,513,839
State of Ohio
Revenue Bonds
Mental Health Capital Facilities
2nd Series 2003B (FSA)
06-01-13 5.00 2,230,000 2,522,375
State of Ohio
Revenue Bonds
University of Dayton Project
Series 2009
12-01-24 5.50 3,000,000 3,335,100
---------------
Total 62,161,194
- -------------------------------------------------------------------------------------
OREGON (4.1%)
Benton County Hospital Facilities Authority
Refunding Revenue Bonds
Samaritan Health Services Project
Series 1998
10-01-28 5.13 2,000,000 1,993,980
City of Salem
Limited General Obligation Bonds
Series 2009
06-01-27 4.38 1,000,000 1,043,650
Clackamas County Hospital Facility Authority Refunding Revenue Bonds
Legacy Health System
Series 2001
05-01-21 5.25 1,000,000 1,032,710
Clackamas County Hospital Facility Authority
Revenue Bonds
Legacy Health System
Series 1999
02-15-18 5.25 1,500,000 1,517,085
Clackamas County School District #62C Oregon City
Revenue Bonds
Series 2009A
12-01-25 4.25 1,690,000 1,764,462
County of Washington
Limited General Obligation Refunding Bonds
Series 2006
06-01-19 5.00 970,000 1,120,166
06-01-20 5.00 1,300,000 1,492,465
Multnomah County Hospital Facilities Authority
Revenue Bonds
Providence Health System
Series 2004
10-01-24 5.25 1,000,000 1,055,240
North Clackamas Parks & Recreation District
Revenue Bonds
Recreational Facilities
Series 2013 Escrowed to Maturity
04-01-13 5.70 1,110,000 1,212,065
Northern Wasco County Peoples Utility District
Revenue Bonds
McNary Dam Fishway Project
Series 1993
12-01-24 5.20 2,000,000 2,006,160
Oregon Health & Science University
Revenue Bonds
Series 2009A
07-01-39 5.75 2,000,000 2,136,780
Oregon Health & Science University
Unrefunded Revenue Bonds
Series 1995A (National)
07-01-28 5.25 390,000 390,059
Oregon State Bond Bank
Revenue Bonds
Economic & Community Development
Series 2000B (National)
01-01-26 5.50 620,000 633,832
Oregon State Department of Administrative Services
Certificate of Participation
Series 2001B (AMBAC)
05-01-26 5.00 2,000,000 2,061,000
Oregon State Facilities Authority
Revenue Bonds
Linfield College Project
Series 2005A
10-01-25 5.00 750,000 758,910
Oregon State Facilities Authority
Revenue Bonds
Willamette University Projects
Series 2007A
10-01-27 5.00 1,500,000 1,527,525
Oregon State Health Housing Educational & Cultural Facilities Authority
Revenue Bonds
Linfield College Project
Series 1998A
10-01-23 5.25 2,000,000 2,001,340
Oregon State Housing & Community Services Department
Revenue Bonds
Series 2000A A.M.T.
07-01-42 6.05 2,000,000 2,010,140
Oregon State Housing & Community Services Department
Revenue Bonds
Single Family Mortgage Program
Series 2005A
07-01-20 4.40 575,000 588,334
Polk, Marion & Benton School District #13J
Unlimited General Obligation Bonds
Central School District
Series 2009A
06-15-29 4.38 1,300,000 1,350,505
Umatilla County Hospital Facility Authority
Revenue Bonds
Catholic Health Initiatives
Series 2002A Escrowed to Maturity
03-01-32 5.50 1,000,000 1,100,590
---------------
Total 28,796,998
- -------------------------------------------------------------------------------------
PENNSYLVANIA (2.8%)
Allegheny County Higher Education Building Authority
Revenue Bonds
Duquesne University
Series 2008
03-01-28 5.00 490,000 513,643
Allegheny County Hospital Development Authority
Revenue Bonds
University of Pittsburgh Medical Center
Series 2009
08-15-39 5.63 1,000,000 1,076,450
Berks County Municipal Authority
Revenue Bonds
Reading Hospital Medical Center Project
Series 1993 (National)
10-01-14 5.70 855,000 932,010
County of Bucks
Unlimited General Obligation Bonds
Series 2008
05-01-23 5.25 350,000 410,998
County of Montgomery
Unlimited General Obligation Bonds
Series 2008
08-15-17 5.25 430,000 520,502
Cumberland County Municipal Authority
Revenue Bonds
AICUP Bond Financing Program-Dickson College
Series 2009
11-01-39 5.00 1,200,000 1,206,564
Delaware County Industrial Development Authority
Revenue Bonds
Philadelphia Suburban Water Facilities
Series 2001 (AMBAC) A.M.T.
10-01-31 5.35 3,000,000 3,037,260
Delaware Valley Regional Financial Authority
Revenue Bonds
Series 2006C
07-01-27 7.75 1,000,000 1,401,980
Northampton County General Purpose Authority
Revenue Bonds
County Agreement
Series 2001 (FSA)
10-01-30 5.25 1,000,000 1,059,130
Pennsylvania Economic Development Financing Authority
Revenue Bonds
Proctor & Gamble Paper Project
Series 2001 A.M.T.
03-01-31 5.38 1,000,000 1,048,910
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
38 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
PENNSYLVANIA (CONT.)
Pennsylvania Higher Educational Facilities Authority
Revenue Bonds
Thomas Jefferson University
Series 2006B (AMBAC)
09-01-19 5.25% $3,435,000 $3,926,651
Pennsylvania Higher Educational Facilities Authority
Unrefunded Revenue Bonds
Drexel University
Series 1997 (National)
05-01-22 5.75 1,050,000 1,052,604
Pennsylvania State University
Revenue Bonds
Series 2005
09-01-24 5.00 1,250,000 1,365,287
Pennsylvania State University
Revenue Bonds
Series 2009A
03-01-29 4.38 250,000 259,640
Philadelphia Municipal Authority
Revenue Bonds
Lease
Series 2009
04-01-34 6.50 200,000 215,262
Philadelphia Redevelopment Authority
Revenue Bonds
Series 1986B Escrowed to Maturity (GNMA)
06-01-17 9.00 450,000 650,808
State of Pennsylvania
Refunding Unlimited General Obligation Bonds
Series 2004
07-01-17 5.38 530,000 639,668
---------------
Total 19,317,367
- -------------------------------------------------------------------------------------
PUERTO RICO (3.0%)(e)
Puerto Rico Electric Power Authority
Refunding Revenue Bonds
Series 2007UU (FSA)
07-01-23 5.00 1,000,000 1,059,200
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2003NN (National)
07-01-21 5.25 3,500,000 3,773,805
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2008WW
07-01-23 5.38 2,500,000 2,673,425
Puerto Rico Highway & Transportation Authority
Prerefunded Revenue Bonds
Series 1996Y
07-01-36 5.50 7,900,000 9,638,158
Puerto Rico Highway & Transportation Authority
Revenue Bonds
Series 2003AA (National)
07-01-20 5.50 500,000 538,020
Puerto Rico Industrial Tourist Educational Medical & Environmental Central Facilities
Finance Authority Revenue Bonds
Inter American University
Series 1998A (National)
10-01-22 5.00 2,500,000 2,503,575
Puerto Rico Port Authority
Revenue Bonds
Series 1991D (FGIC) A.M.T.
07-01-14 7.00 630,000 631,770
---------------
Total 20,817,953
- -------------------------------------------------------------------------------------
SOUTH CAROLINA (7.7%)
City of Charleston
Refunding Revenue Bonds
Series 2009A
01-01-24 5.00 500,000 567,705
City of Rock Hill
Refunding & Improvement Revenue Bonds
Series 2003 (FSA)
01-01-30 5.00 4,000,000 4,103,440
Coastal Carolina University
Unrefunded Revenue Bonds
Series 1999 (AMBAC)
06-01-26 5.30 1,810,000 1,830,869
County of Berkeley
Unlimited General Obligation Refunding & Improvement Bonds
Series 2003 (FSA)
09-01-28 5.00 4,000,000 4,226,880
County of Berkeley
Unrefunded Revenue Bonds
Series 2003 (National)
06-01-23 5.25 245,000 264,010
County of Georgetown
Refunding Revenue Bonds
International Paper Company Project
Series 2000A
03-15-14 5.95 1,000,000 1,053,420
County of Lexington
Refunding & Improvement Revenue Bonds
Series 1997 (FSA)
11-01-26 5.13 2,000,000 2,020,420
County of Lexington
Refunding Revenue Bonds
Series 2007
11-01-20 5.00 1,000,000 1,049,440
Grand Strand Water & Sewer Authority
Revenue Bonds
Series 2001 (FSA)
06-01-31 5.00 4,000,000 4,101,120
Horry County School District
Unlimited General Obligation Bonds
Series 2002A
03-01-22 5.13 2,760,000 3,000,699
North Charleston Sewer District
Revenue Bonds
Improvement
Series 1992B (National)
07-01-12 6.38 960,000 1,016,294
Piedmont Municipal Power Agency
Refunding Revenue Bonds
Series 1991 (National/FGIC)
01-01-21 6.25 1,250,000 1,498,975
South Carolina Jobs-Economic Development Authority Refunding & Improvement Revenue
Bonds
Palmetto Health
Series 2009
08-01-39 5.75 2,350,000 2,395,755
South Carolina Jobs-Economic Development Authority
Revenue Bonds
Anderson Area Medical Center
Series 1999
02-01-18 5.25 3,000,000 3,033,240
South Carolina Jobs-Economic Development Authority
Unrefunded Revenue Bonds
Bon Secours
Series 2002B
11-15-30 5.63 3,165,000 3,208,581
South Carolina State Housing Finance & Development Authority
Revenue Bonds
Series 1999A-2 (FSA) A.M.T.
07-01-29 5.40 585,000 585,117
South Carolina State Ports Authority
Revenue Bonds
Series 1998 (FSA) A.M.T.
07-01-26 5.30 10,000,000 10,056,000
South Carolina State Public Service Authority Refunding Revenue Bonds
Series 2005
01-01-21 5.25 5,000,000 5,655,099
South Carolina State Public Service Authority Revenue Bonds
Santee Cooper
Series 2006A (National)
01-01-27 5.00 2,600,000 2,818,712
South Carolina State Public Service Authority
Revenue Bonds
Santee Cooper
Series 2008A
01-01-28 5.38 250,000 285,703
South Carolina State Public Service Authority
Revenue Bonds
Series 2007A (AMBAC)
01-01-18 5.00 1,000,000 1,156,950
---------------
Total 53,928,429
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 39
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
TENNESSEE (0.3%)
Shelby County Health Educational & Housing Facilities Board
Revenue Bonds
St. Jude's Children's Research Hospital
Series 2006
07-01-26 5.00% $2,000,000 $2,144,100
- -------------------------------------------------------------------------------------
TEXAS (3.9%)
City of Austin
Refunding Revenue Bonds
Series 2006A (AMBAC)
11-15-20 5.00 5,440,000 5,950,435
City of Dallas
Limited General Obligation Bonds
Series 2005
02-15-25 5.00 820,000 879,401
City of Houston
Revenue Bonds
Sub Lien
Series 2000A (FSA) A.M.T.
07-01-30 5.63 3,000,000 3,015,420
City of San Antonio
Prerefunded Revenue Bonds
Series 1997 Escrowed to Maturity
02-01-20 5.50 1,055,000 1,312,610
Dallas-Fort Worth Intl Airport Facilities Improvement
Revenue Bonds
Series 2000A (National/FGIC) A.M.T.
11-01-30 5.75 5,000,000 5,003,200
Harris County Health Facilities Development
Revenue Bonds
St. Luke's Episcopal Hospital Project
Series 1991 Escrowed to Maturity
02-15-21 6.75 2,000,000 2,006,220
Potter County Industrial Development
Refunding Revenue Bonds
Southwestern Public Service Project
Series 1996 (AMBAC)
09-01-16 5.75 4,750,000 4,768,193
University of Texas
Refunding Revenue Bonds
Series 2007B
07-01-23 5.25 1,000,000 1,247,480
West Harris County Regional Water Authority
Revenue Bonds
Series 2009
12-15-35 5.00 3,000,000(f) 3,072,090
---------------
Total 27,255,049
- -------------------------------------------------------------------------------------
UTAH (0.4%)
Intermountain Power Agency
Refunding Revenue Bonds
Series 2008A
07-01-22 5.25 500,000 530,225
Utah Transit Authority
Revenue Bonds
Series 2008A
06-15-25 5.00 2,000,000 2,251,400
---------------
Total 2,781,625
- -------------------------------------------------------------------------------------
VIRGIN ISLANDS (0.4%)
Virgin Islands Public Finance Authority
Refunding Revenue Bonds
Sr Lien
Series 1998A
10-01-22 5.50 2,500,000 2,513,050
- -------------------------------------------------------------------------------------
VIRGINIA (0.2%)
Virginia Resources Authority
Revenue Bonds
State Revolving Fund
Series 2009
10-01-26 5.00 1,500,000 1,728,180
- -------------------------------------------------------------------------------------
WASHINGTON (0.4%)
Chelan County Public Utility District #1
Revenue Bonds
Chelan Hydro
Series 2001B (National) A.M.T.
01-01-36 5.60 2,500,000 2,520,650
- -------------------------------------------------------------------------------------
WISCONSIN (2.9%)
City of La Crosse
Refunding Revenue Bonds
Northern States Power Company Project
Series 1996 A.M.T.
11-01-21 6.00 6,000,000 6,224,399
Wisconsin Health & Educational Facilities Authority
Revenue Bonds
Meriter Hospital
Series 2009
12-01-38 6.00 5,225,000 5,479,719
Wisconsin Health & Educational Facilities Authority
Revenue Bonds
Prohealth Care Incorporated Obligation Group
Series 2009
02-15-32 6.63 1,000,000 1,053,850
02-15-39 6.63 6,725,000 7,355,333
---------------
Total 20,113,301
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $643,513,803) $683,156,403
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (1.6%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUE(b,c,d) YIELD MATURITY VALUE (a)
CALIFORNIA (0.1%)
City of Irvine
Limited Obligation Special Assessment Bonds
District #93-14
V.R.D.N. Series 2000 (Bank of America)
09-02-25 0.28% $600,000 $600,000
- -------------------------------------------------------------------------------------
CONNECTICUT (0.6%)
Connecticut Housing Finance Authority
Revenue Bonds
V.R.D.N. Series 2009 (JP Morgan Chase)
05-15-39 0.30 4,715,000 4,715,000
- -------------------------------------------------------------------------------------
TENNESSEE (0.2%)
Clarksville Public Building Authority
Revenue Bonds
Pooled Financing
Tennessee Municipal Bond Fund
V.R.D.N. Series 2003 (Bank of America)
01-01-33 0.30 1,535,000 1,535,000
- -------------------------------------------------------------------------------------
TEXAS (0.7%)
Tarrant County Cultural Education Facilities
Finance Corporation
Revenue Bonds
Hendrick Medical Center
V.R.D.N. Series 2009 (JP Morgan Chase)
09-01-25 0.30 4,600,000 4,600,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $11,450,000) $11,450,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (--%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund 16,099 $16,099
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $16,099) $16,099
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $654,979,902)(g) $694,622,502
=====================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
40 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) The following abbreviations may be used in the portfolio security
descriptions to identify the insurer of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AMBAC -- Ambac Assurance Corporation
BHAC -- Berkshire Hathaway Assurance Corporation
BIG -- Bond Investors Guarantee
BNY -- Bank of New York
CGIC -- Capital Guaranty Insurance Company
CIFG -- IXIS Financial Guaranty
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- MBIA Insurance Corporation
TCRS -- Transferable Custodial Receipts
XLCA -- XL Capital Assurance
</Table>
(c) The following abbreviations may be used in the portfolio descriptions:
<Table>
A.M.T. -- Alternative Minimum Tax -- At Sept. 30, 2009, the value
of securities subject to alternative minimum tax
represented 10.3% of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
</Table>
(d) The Fund is entitled to receive principal and interest from the party, if
indicated in parentheses, after a day or a week's notice or upon maturity.
The maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2009.
(e) Municipal obligations include debt obligations issued by or on behalf of
states, territories, possessions, or sovereign nations within the
territorial boundaries of the United States. The securities represented
3.0% of net assets at Sept. 30, 2009.
(f) At Sept. 30, 2009, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$3,046,670. See Note 2 to the financial statements.
(g) At Sept. 30, 2009, the cost of securities for federal income tax purposes
was $654,966,846 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $40,224,031
Unrealized depreciation (568,375)
--------------------------------------------------------------------------------------
Net unrealized appreciation $39,655,656
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 41
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierachy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in a valuation model may include, but are not limited
to, financial statement analysis, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Sept. 30, 2009:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2009
----------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- ---------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $683,156,403 $-- $683,156,403
- ---------------------------------------------------------------------------------------------------------------
Total Bonds -- 683,156,403 -- 683,156,403
- ---------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 11,450,000 -- 11,450,000
Money Market Fund(a) 16,099 -- -- 16,099
- ---------------------------------------------------------------------------------------------------------------
Total Other 16,099 11,450,000 -- 11,466,099
- ---------------------------------------------------------------------------------------------------------------
Total $16,099 $694,606,403 $-- $694,622,502
- ---------------------------------------------------------------------------------------------------------------
</Table>
(a) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2009.
- --------------------------------------------------------------------------------
42 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 43
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman California Municipal High-Yield Fund
SEPT. 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (94.3%)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
AIRPORT (1.3%)
County of Sacramento
Revenue Bonds
Series 2009B
07-01-39 5.75% $450,000 $498,875
- -------------------------------------------------------------------------------------
CITY (5.9%)
City of Berkeley
Unlimited General Obligation Bonds
Neighborhood Branch Measure
Series 2009FF
09-01-35 5.00 1,000,000 1,054,400
City of Martinez
Unlimited General Obligation Bonds
Election of 2008
Series 2009A
08-01-34 5.00 1,100,000 1,155,759
---------------
Total 2,210,159
- -------------------------------------------------------------------------------------
COLLEGE (12.8%)
California Educational Facilities Authority
Revenue Bonds
California Lutheran University
Series 2008
10-01-21 5.25 665,000 682,263
California Educational Facilities Authority
Revenue Bonds
Scripps College
Series 2001
08-01-31 5.00 2,000,000 2,019,060
California Educational Facilities Authority
Revenue Bonds
University of the Pacific
Series 2006
11-01-25 5.00 1,485,000 1,515,368
University of California
Revenue Bonds
Series 2009Q
05-15-34 5.00 500,000 537,620
---------------
Total 4,754,311
- -------------------------------------------------------------------------------------
ELECTRIC (1.4%)
City of Vernon
Revenue Bonds
Series 2009A
08-01-21 5.13 500,000 531,495
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (15.6%)
California Health Facilities Financing Authority
Revenue Bonds
Adventist Health System West
Series 2009A
09-01-39 5.75 1,000,000 1,033,540
California Health Facilities Financing Authority
Revenue Bonds
Providence Health & Services
Series 2009B
10-01-39 5.50 750,000 785,250
California Health Facilities Financing Authority
Revenue Bonds
St. Joseph Health System
Series 2009A
07-01-29 5.50 700,000 736,078
California Municipal Finance Authority
Certificate of Participation
Community Hospital Center
Series 2009
02-01-39 5.50 750,000(e) 744,540
California Statewide Communities Development Authority
Revenue Bonds
Sutter Health
Series 2002B
08-15-42 5.63 500,000 505,970
Washington Township Health Care District
Revenue Bonds
Series 1999
07-01-29 5.25 2,000,000 1,992,519
---------------
Total 5,797,897
- -------------------------------------------------------------------------------------
HOUSING -- SINGLE FAMILY (7.1%)
California Housing Finance Agency
Revenue Bonds
Multifamily Housing III
Series 1999A A.M.T.
02-01-36 5.38 2,280,000 2,098,010
California Housing Finance Authority
Revenue Bonds
Series 1997B-3 A.M.T.
08-01-28 5.40 550,000 550,611
---------------
Total 2,648,621
- -------------------------------------------------------------------------------------
LEASE (8.9%)
Los Angeles Municipal Improvement Corporation
Revenue Bonds
Cap Equipment
Series 2008A
09-01-24 5.00 1,000,000 1,058,970
Modesto Irrigation District
Certificate of Participation
Refunding & Capital Improvements Bonds
Series 1999B
07-01-22 5.30 2,240,000 2,240,650
---------------
Total 3,299,620
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (2.6%)
Golden State Tobacco Securitization Corporation
Asset-backed Revenue Bonds
Series 2007A-1
06-01-47 5.13 1,300,000 975,039
- -------------------------------------------------------------------------------------
SALES OR USE TAX (4.9%)
Puerto Rico Highway & Transportation Authority
Prerefunded Revenue Bonds
Series 1996Y
07-01-36 5.50 1,500,000(d) 1,830,030
- -------------------------------------------------------------------------------------
SCHOOL (4.4%)
Lakeside Union Elementary School District
Unlimited General Obligation Bonds
Series 2009
08-01-33 5.00 1,590,000 1,643,583
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- ASSESSMENT (2.8%)
Palmdale Civic Authority
Refunding Revenue Bonds
Redevelopment Project #1
Series 2009A
07-01-27 6.00 1,000,000 1,059,710
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- TAX ALLOCATION (2.9%)
Bakersfield Redevelopment Agency
Tax Allocation Bonds
Old Town Kern Pioneer
Series 2009A
08-01-29 7.50 340,000 342,768
Bakersfield Redevelopment Agency
Tax Allocation Bonds
Southeast Bakersfield
Series 2009B
08-01-29 7.25 200,000 205,200
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Mission Bay South Redevelopment
Series 2009D
08-01-29 6.38 500,000 525,865
---------------
Total 1,073,833
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- TAX INCREMENT (2.0%)
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Redevelopment Projects
Series 2009B
08-01-28 6.13 700,000 744,317
- -------------------------------------------------------------------------------------
STATE (11.2%)
State of California
Unlimited General Obligation Bonds
Series 2008
08-01-34 5.00 1,250,000 1,257,012
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
44 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal High-Yield Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
STATE (CONT.)
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2005
03-01-32 5.00% $1,000,000 $1,005,960
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2009
04-01-25 5.63 500,000 550,130
04-01-31 5.75 750,000 806,228
04-01-38 6.00 500,000 551,375
---------------
Total 4,170,705
- -------------------------------------------------------------------------------------
TOLL ROAD (3.9%)
Foothill Eastern Transportation Corridor Agency
Refunding Revenue Bonds
Series 1999
01-15-40 5.75 1,500,000 1,462,485
- -------------------------------------------------------------------------------------
WATER & SEWER (6.6%)
Los Angeles Department of Water & Power
Revenue Bonds
Power System
Series 2009A
07-01-24 5.00 1,000,000 1,131,150
Orange County Water District
Refunding Certificate of Participation
Series 2009
08-15-39 5.00 750,000 799,935
San Diego Public Facilities Financing Authority
Revenue Bonds
Series 2009A
05-15-34 5.25 500,000 537,090
---------------
Total 2,468,175
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $33,635,395) $35,168,855
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (0.9%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUE(b,c,f) YIELD MATURITY VALUE(a)
COLLEGE
California Educational Facilities Authority
Revenue Bonds
Chapman University
V.R.D.N. Series 2008C (Bank of America)
10-01-26 0.28% $320,000 $320,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $320,000) $320,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.3%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund 106,546 $106,546
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $106,546) $106,546
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $34,061,941)(g) $35,595,401
=====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) The following abbreviations may be used in the portfolio security
descriptions to identify the insurer of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AMBAC -- Ambac Assurance Corporation
BHAC -- Berkshire Hathaway Assurance Corporation
BIG -- Bond Investors Guarantee
BNY -- Bank of New York
CGIC -- Capital Guaranty Insurance Company
CIFG -- IXIS Financial Guaranty
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- MBIA Insurance Corporation
TCRS -- Transferable Custodial Receipts
XLCA -- XL Capital Assurance
</Table>
(c) The following abbreviations may be used in the portfolio descriptions:
<Table>
A.M.T. -- Alternative Minimum Tax -- At Sept. 30, 2009, the value
of securities subject to alternative minimum tax
represented 7.1% of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
</Table>
(d) Municipal obligations include debt obligations issued by or on behalf of
states, territories, possessions, or sovereign nations within the
territorial boundaries of the United States. The securities represented
4.9% of net assets at Sept. 30, 2009.
(e) At Sept. 30, 2009, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$726,608. See Note 2 to the financial statements.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 45
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman California Municipal High-Yield Fund
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(f) The Fund is entitled to receive principal and interest from the party, if
indicated in parentheses, after a day or a week's notice or upon maturity.
The maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2009.
(g) At Sept. 30, 2009, the cost of securities for federal income tax purposes
was $34,061,576 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $1,761,180
Unrealized depreciation (227,355)
--------------------------------------------------------------------------------------
Net unrealized appreciation $1,533,825
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
46 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal High-Yield Fund
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in a valuation model may include, but are not limited
to, financial statement analysis, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Sept. 30, 2009:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2009
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- --------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $35,168,855 $-- $35,168,855
- --------------------------------------------------------------------------------------------------------------
Total Bonds -- 35,168,855 -- 35,168,855
- --------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 320,000 -- 320,000
Money Market Fund(a) 106,546 -- -- 106,546
- --------------------------------------------------------------------------------------------------------------
Total Other 106,546 320,000 -- 426,546
- --------------------------------------------------------------------------------------------------------------
Total $106,546 $35,488,855 $-- $35,595,401
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2009.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 47
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman California Municipal High-Yield Fund
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
48 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman California Municipal Quality Fund
SEPT. 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (98.1%)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
AIRPORT (5.1%)
County of Sacramento
Revenue Bonds
Series 2008A (FSA)
07-01-25 5.00% $1,500,000 $1,634,040
County of Sacramento
Revenue Bonds
Series 2009B
07-01-39 5.75 550,000 609,736
---------------
Total 2,243,776
- -------------------------------------------------------------------------------------
CITY (5.2%)
City of Berkeley
Unlimited General Obligation Bonds
Neighborhood Branch Measure
Series 2009FF
09-01-35 5.00 975,000 1,028,040
City of Martinez
Unlimited General Obligation Bonds
Election of 2008
Series 2009A
08-01-34 5.00 1,200,000 1,260,828
---------------
Total 2,288,868
- -------------------------------------------------------------------------------------
COLLEGE (22.9%)
California Educational Facilities Authority
Revenue Bonds
Pepperdine University
Series 1999A
11-01-29 5.00 2,000,000 2,021,320
California Educational Facilities Authority
Revenue Bonds
Scripps College
Series 2007 (National)
11-01-25 5.00 1,315,000 1,411,626
California Educational Facilities Authority
Revenue Bonds
University of San Diego
Series 1999 (AMBAC)
10-01-28 5.00 3,000,000 3,031,019
California State University
Revenue Bonds
Systemwide
Series 2007A (FSA)
11-01-27 5.00 1,750,000 1,882,440
University of California
Revenue Bonds
Series 2008L
05-15-26 5.00 1,500,000 1,652,295
---------------
Total 9,998,700
- -------------------------------------------------------------------------------------
ELECTRIC (10.3%)
Anaheim Public Financing
Authority Revenue Bonds
Anaheim Electric Systems
\Distribution
Series 2009
10-01-25 5.00 1,500,000 1,660,110
City of Redding
Certificate of Participation
Series 2008A (FSA)
06-01-27 5.00 865,000 908,380
City of Riverside
Revenue Bonds
Series 2008D (FSA)
10-01-28 5.00 1,325,000 1,428,496
Sacramento Municipal Utility District
Refunding Revenue Bonds
Series 2004T (National/FGIC)
05-15-24 5.25 500,000 520,345
---------------
Total 4,517,331
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (10.8%)
California Health Facilities Financing Authority
Revenue Bonds
Adventist Health System West
Series 2009A
09-01-39 5.75 1,000,000 1,033,540
California Health Facilities Financing Authority
Revenue Bonds
Providence Health & Services
Series 2009B
10-01-39 5.50 800,000 837,600
California Health Facilities Financing Authority
Revenue Bonds
St. Joseph Health System
Series 2009A
07-01-29 5.50 800,000 841,232
California Statewide Communities Development Authority
Revenue Bonds
Kaiser Permanente
Series 2002A
11-01-32 5.50 2,000,000 2,031,040
---------------
Total 4,743,412
- -------------------------------------------------------------------------------------
LEASE (11.0%)
Eastern Municipal Water District
Certificate of Participation
Series 1991 (National/FGIC)
07-01-12 6.75 1,935,000 2,096,495
Modesto Irrigation District
Certificate of Participation
Capital Improvements
Series 2009A
10-01-29 5.75 1,500,000 1,695,690
San Mateo County Board of Education
Refunding Certificate of Participation
Series 2009
06-01-35 5.25 1,000,000 1,028,180
---------------
Total 4,820,365
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (0.9%)
California Infrastructure & Economic Development
Bank
Revenue Bonds
Walt Disney Family Museum
Series 2008
02-01-33 5.25 400,000 409,460
- -------------------------------------------------------------------------------------
SALES OR USE TAX (5.5%)
San Francisco Bay Area Transit Financing Authority
Unrefunded Revenue Bonds
Series 1998 (AMBAC)
07-01-28 5.00 1,530,000 1,540,480
San Mateo County Transportation District
Revenue Bonds
Series 2009A
06-01-19 5.00 755,000 889,013
---------------
Total 2,429,493
- -------------------------------------------------------------------------------------
SCHOOL (3.5%)
California Statewide Communities Development Authority
Revenue Bonds
Polytechnic School
Series 2009
12-01-34 5.00 735,000(d) 771,412
Los Angeles Unified School District
Unlimited General Obligation Bonds
Series 2009D
01-01-34 5.00 750,000 782,902
---------------
Total 1,554,314
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- ASSESSMENT (2.4%)
Palmdale Civic Authority
Refunding Revenue Bonds
Redevelopment Project #1
Series 2009A
07-01-27 6.00 1,000,000 1,059,710
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 49
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman California Municipal Quality Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
SPECIAL DISTRICT -- TAX INCREMENT (1.3%)
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Mission Bay North Redevelopment
Series 2009C
08-01-29 6.00% $535,000 $551,457
- -------------------------------------------------------------------------------------
STATE (3.4%)
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2005
03-01-32 5.00 1,500,000 1,508,940
- -------------------------------------------------------------------------------------
WATER & SEWER (15.8%)
California State Department of Water Resources
Revenue Bonds
Central Valley Project
Series 2008AE
12-01-27 5.00 1,500,000 1,666,935
Los Angeles Department of Water & Power
Revenue Bonds
Series 2001A
07-01-41 5.13 1,000,000 1,017,300
Orange County Water District
Refunding Certificate of Participation
Series 2009
08-15-39 5.00 1,000,000 1,066,580
Sacramento Regional County Sanitation District
Refunding Revenue Bonds
Series 2001 (AMBAC)
12-01-27 5.00 2,000,000 2,051,420
San Diego Public Facilities Financing Authority
Revenue Bonds
Series 2009A
05-15-34 5.25 1,000,000 1,074,180
---------------
Total 6,876,415
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $40,705,127) $43,002,241
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (0.7%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUE(b,c,e) YIELD MATURITY VALUE(a)
COMBINED UTILITY
City of Santa Clara
Subordinated Revenue Bonds
V.R.D.N. Series 2008A (Bank of America)
07-01-34 0.28% $300,000 $300,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $300,000) $300,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.1%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund 58,663 $58,663
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $58,663) $58,663
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $41,063,790)(f) $43,360,904
=====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) The following abbreviations may be used in the portfolio security
descriptions to identify the insurer of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AMBAC -- Ambac Assurance Corporation
BHAC -- Berkshire Hathaway Assurance Corporation
BIG -- Bond Investors Guarantee
BNY -- Bank of New York
CGIC -- Capital Guaranty Insurance Company
CIFG -- IXIS Financial Guaranty
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- MBIA Insurance Corporation
TCRS -- Transferable Custodial Receipts
XLCA -- XL Capital Assurance
</Table>
(c) The following abbreviations may be used in the portfolio descriptions:
<Table>
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
</Table>
(d) At Sept. 30, 2009, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$762,820. See Note 2 to the financial statements.
- --------------------------------------------------------------------------------
50 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal Quality Fund
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(e) The Fund is entitled to receive principal and interest from the party, if
indicated in parentheses, after a day or a week's notice or upon maturity.
The maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2009.
(f) At Sept. 30, 2009, the cost of securities for federal income tax purposes
was $41,062,888 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $2,298,026
Unrealized depreciation (10)
--------------------------------------------------------------------------------------
Net unrealized appreciation $2,298,016
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 51
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman California Municipal Quality Fund
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in a valuation model may include, but are not limited
to, financial statement analysis, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Sept. 30, 2009:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2009
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $43,002,241 $-- $43,002,241
- -----------------------------------------------------------------------------------------------------------------------
Total Bonds -- 43,002,241 -- 43,002,241
- -----------------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 300,000 -- 300,000
Money Market Fund(a) 58,663 -- -- 58,663
- -----------------------------------------------------------------------------------------------------------------------
Total Other 58,663 300,000 -- 358,663
- -----------------------------------------------------------------------------------------------------------------------
Total $58,663 $43,302,241 $-- $43,360,904
- -----------------------------------------------------------------------------------------------------------------------
</Table>
(a) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2009.
- --------------------------------------------------------------------------------
52 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal Quality Fund
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 53
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman Minnesota Municipal Fund
SEPT. 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (97.6%)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
CITY (3.7%)
City of Minneapolis
Prerefunded Unlimited General Obligation Bonds
Various Purpose
Series 2001
12-01-16 5.00% $570,000 $621,349
City of Minneapolis
Unrefunded Unlimited General Obligation Bonds
Various Purpose
Series 2001
12-01-16 5.00 1,870,000 2,032,465
---------------
Total 2,653,814
- -------------------------------------------------------------------------------------
COLLEGE (14.6%)
Minnesota Higher Education Facilities Authority
Revenue Bonds
Bethel University Sixth Series 2007R
05-01-23 5.50 275,000 275,492
Minnesota Higher Education Facilities Authority
Revenue Bonds
St. Catherine's College
Series 2002-5-N1
10-01-32 5.38 1,000,000 934,370
Minnesota Higher Education Facilities Authority
Revenue Bonds
St. John's University
6th Series 2005G
10-01-22 5.00 3,500,000 3,755,185
Minnesota Higher Education Facilities Authority
Revenue Bonds
St. Olaf College
Series 2007O
10-01-22 5.00 3,040,000 3,294,144
Minnesota Higher Education Facilities Authority
Revenue Bonds
University of St. Thomas
6th Series 2009X
04-01-39 5.25 1,100,000 1,163,448
University of Minnesota
Revenue Bonds
Series 2009C
12-01-21 5.00 995,000 1,158,648
---------------
Total 10,581,287
- -------------------------------------------------------------------------------------
COUNTY (6.6%)
County of Anoka
Unlimited General Obligation Bonds
Capital Improvements
Series 2008A
02-01-23 5.00 1,000,000 1,133,640
County of Ramsey
Unlimited General Obligation Bonds
Capital Improvement Plan
Series 2003A
02-01-17 5.00 1,395,000 1,548,882
Dakota County Community Development Authority
Unlimited General Obligation Bonds
Senior Housing Facility
Series 2001
01-01-19 5.25 2,000,000 2,102,140
---------------
Total 4,784,662
- -------------------------------------------------------------------------------------
ELECTRIC (19.0%)
City of Rochester
Prerefunded Revenue Bonds
Series 2000 (AMBAC)
12-01-24 5.25 2,000,000 2,108,280
12-01-30 5.25 1,000,000 1,054,140
Minnesota State Municipal Power Agency
Revenue Bonds
Series 2005
10-01-30 5.00 500,000 523,460
Northern Municipal Power Agency
Revenue Bonds
Series 2007A (AMBAC)
01-01-26 5.00 1,000,000 1,064,580
Northern Municipal Power Agency
Revenue Bonds
Series 2008A
01-01-21 5.00 1,000,000 1,101,390
Southern Minnesota Municipal Power Agency
Revenue Bonds
Capital Appreciation
Zero Coupon
Series 1994A (National)
01-01-26 5.00 5,000,000(e) 2,476,500
Western Minnesota Municipal Power Agency
Revenue Bonds
Series 1977A Escrowed to Maturity
01-01-16 6.38 4,855,000 5,508,240
---------------
Total 13,836,590
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (14.0%)
City of Breckenridge
Revenue Bonds
Catholic Health Initiatives
Series 2004A
05-01-30 5.00 775,000 797,336
City of Maple Grove
Revenue Bonds
Maple Grove Hospital Corporation
Series 2007
05-01-37 5.25 750,000 743,483
City of Shakopee
Revenue Bonds
St. Francis Regional Medical Center
Series 2004
09-01-25 5.10 2,000,000 1,959,359
City of St. Cloud
Revenue Bonds
St. Cloud Hospital Obligation Group
Series 2000A (FSA)
05-01-30 5.88 3,750,000 3,811,499
Minnesota Agricultural & Economic Development Board
Unrefunded Revenue Bonds
Evangelical
Series 1997 (AMBAC)
12-01-22 5.15 1,175,000 1,175,635
St. Paul Housing & Redevelopment Authority
Revenue Bonds
HealthPartners Obligation Group Project
Series 2006
05-15-36 5.25 1,500,000 1,392,525
Staples United Hospital District
Unlimited General Obligation Bonds
Health Care Facilities-Lakewood
Series 2004
12-01-34 5.00 250,000 255,808
---------------
Total 10,135,645
- -------------------------------------------------------------------------------------
HOUSING -- SINGLE FAMILY (1.4%)
Minnesota Housing Finance Authority
Revenue Bonds
Residential Housing Finance
Series 2008A
07-01-23 4.65 995,000 1,027,646
- -------------------------------------------------------------------------------------
LEASE (2.1%)
Minnetrista Economic Development Authority
Revenue Bonds
Series 2009A
02-01-28 4.50 285,000 292,800
02-01-29 4.63 200,000 206,456
02-01-31 4.75 400,000 411,960
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
54 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
LEASE (CONT.)
St. Paul Housing & Redevelopment Authority
Revenue Bonds
Parking Facility -- RiverCenter Parking Ramp
Series 2009
05-01-24 4.50% $580,000 $621,012
---------------
Total 1,532,228
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (5.6%)
State of Minnesota
Revenue Bonds
Series 2000
06-01-30 6.00 4,000,000 4,090,840
- -------------------------------------------------------------------------------------
SCHOOL (5.9%)
Hopkins Independent School District No. 270
Unlimited General Obligation Bonds
Series 2009B
(School District Credit Enhancement Program)
02-01-27 4.00 1,500,000 1,524,510
Mounds View Independent School District No. 621
Unlimited General Obligation Refunding Revenue Bonds
School Building
Series 2009A
(School District Credit Enhancement Program)
02-01-22 4.00 530,000 551,661
Rocori Area Schools Independent School District #750
Unlimited General Obligation Bonds
School Building
Series 2009B
(School District Credit Enhancement Program)
02-01-34 4.75 2,100,000 2,238,453
---------------
Total 4,314,624
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- TAX ALLOCATION (1.7%)
City of Buffalo
Unlimited General Obligation Bonds
Series 2009D
08-01-25 4.00 1,180,000 1,201,972
- -------------------------------------------------------------------------------------
SPECIAL PURPOSE CERTIFICATES -- GENERAL OBLIGATIONS (6.0%)
Metropolitan Council Minneapolis-St. Paul Area
Refunding Unlimited General Obligations Waste Water
Series 2005B
05-01-25 5.00 4,000,000 4,373,440
- -------------------------------------------------------------------------------------
STATE (4.9%)
State of Minnesota
Unlimited General Obligation Bonds
Series 2006
06-01-20 5.00 1,000,000 1,139,940
State of Minnesota
Unlimited General Obligation Refunding Bonds
Various Purpose
Series 2009F
08-01-21 5.00 2,000,000 2,435,880
---------------
Total 3,575,820
- -------------------------------------------------------------------------------------
WATER & SEWER (12.1%)
City of Rochester
Unlimited General Obligation Bonds
Waste Water
Series 2004A
02-01-25 5.00 3,305,000 3,607,936
City of St. Paul
Revenue Bonds
Series 2009C
12-01-28 4.00 1,270,000 1,292,403
Minnesota Public Facilities Authority
Revenue Bonds
Series 2005A
03-01-19 5.00 3,480,000 3,900,315
---------------
Total 8,800,654
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $66,806,387) $70,909,222
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (1.0%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUE(b,c,d) YIELD MATURITY VALUE(a)
Minnesota Higher Education Facilities Authority
Revenue Bonds
St. Olaf College
V.R.D.N. 5th Series 2002M2 (Harris)
10-01-20 0.35% $700,000 $700,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $700,000) $700,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.2%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund 113,765 $113,765
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $113,765) $113,765
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $67,620,152)(f) $71,722,987
=====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) The following abbreviations may be used in the portfolio security
descriptions to identify the insurer of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AMBAC -- Ambac Assurance Corporation
BHAC -- Berkshire Hathaway Assurance Corporation
BIG -- Bond Investors Guarantee
BNY -- Bank of New York
CGIC -- Capital Guaranty Insurance Company
CIFG -- IXIS Financial Guaranty
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- MBIA Insurance Corporation
TCRS -- Transferable Custodial Receipts
XLCA -- XL Capital Assurance
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 55
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
Seligman Minnesota Municipal Fund
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(c) The following abbreviations may be used in the portfolio descriptions:
<Table>
A.M.T. -- Alternative Minimum Tax
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
</Table>
(d) The Fund is entitled to receive principal and interest from the party, if
indicated in parentheses, after a day or a week's notice or upon maturity.
The maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2009.
(e) For zero coupons, the interest rate disclosed represents the annualized
effective yield on the date of acquisition
(f) At Sept. 30, 2009, the cost of securities for federal income tax purposes
was $67,615,686 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $4,157,215
Unrealized depreciation (49,914)
--------------------------------------------------------------------------------------
Net unrealized appreciation $4,107,301
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
56 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in a valuation model may include, but are not limited
to, financial statement analysis, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Sept. 30, 2009:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2009
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $70,909,222 $-- $70,909,222
- -----------------------------------------------------------------------------------------------------------------------
Total Bonds -- 70,909,222 -- 70,909,222
- -----------------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 700,000 -- 700,000
Money Market Fund(a) 113,765 -- -- 113,765
- -----------------------------------------------------------------------------------------------------------------------
Total Other 113,765 700,000 -- 813,765
- -----------------------------------------------------------------------------------------------------------------------
Total $113,765 $71,609,222 $-- $71,722,987
- -----------------------------------------------------------------------------------------------------------------------
</Table>
(a) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2009.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 57
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
Seligman Minnesota Municipal Fund
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
58 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman New York Municipal Fund
SEPT. 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (97.9%)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
CITY (6.5%)
City of New York
Prerefunded Unlimited General Obligation Bonds
Series 2000A
05-15-30 6.00% $2,900,000 $3,031,688
City of New York
Unlimited General Obligation Bonds
Series 2005C (FSA)
08-01-17 5.00 750,000 842,325
City of New York
Unlimited General Obligation Bonds
Series 2009I-1
04-01-27 5.13 1,500,000 1,654,770
City of New York
Unrefunded Unlimited General Obligation Bonds
Series 1995C
08-15-24 7.25 5,000 5,024
City of New York
Unrefunded Unlimited General Obligation Bonds
Series 2000A
05-15-30 6.00 25,000 25,580
---------------
Total 5,559,387
- -------------------------------------------------------------------------------------
COLLEGE (24.1%)
New York State Dormitory Authority
Revenue Bonds
Brooklyn Law School
Series 2003B (XLCA)
07-01-30 5.13 1,000,000 1,006,870
New York State Dormitory Authority
Revenue Bonds
Cornell University
Series 2006A
07-01-35 5.00 1,000,000 1,062,250
New York State Dormitory Authority
Revenue Bonds
Cornell University
Series 2009A
07-01-27 5.00 2,500,000 2,820,674
New York State Dormitory Authority
Revenue Bonds
New York University
Series 2007A (AMBAC)
07-01-24 5.00 2,000,000 2,203,480
New York State Dormitory Authority
Revenue Bonds
North Shore-Long Island Jewish Health System
Series 2009A
05-01-37 5.50 1,250,000 1,295,150
New York State Dormitory Authority
Revenue Bonds
Pratt Institute
Series 2009C (Assured Guaranty)
07-01-39 5.13 1,000,000 1,070,850
New York State Dormitory Authority
Revenue Bonds
Rockefeller University
Series 2009A
07-01-27 4.75 600,000 670,428
New York State Dormitory Authority
Revenue Bonds
Rockefeller University
Series 2009C
07-01-40 5.00 1,500,000 1,625,100
New York State Dormitory Authority
Revenue Bonds
St. John's University
Series 2007A (National)
07-01-32 5.25 1,000,000 1,048,560
New York State Dormitory Authority
Revenue Bonds
St. John's University
Series 2007C (National)
07-01-26 5.25 1,205,000 1,377,990
New York State Dormitory Authority
Revenue Bonds
State University Dorm Facilities
Series 2007
07-01-25 5.00 2,000,000 2,141,700
New York State Dormitory Authority
Revenue Bonds
University of Rochester
Series 2009A
07-01-39 5.13 1,350,000 1,442,313
New York State Dormitory Authority
Revenue Bonds
Yeshiva University
Series 2001 (AMBAC)
07-01-30 5.00 1,250,000 1,262,850
New York State Dormitory Authority
Revenue Bonds
Yeshiva University
Series 2009
09-01-38 5.00 500,000 532,160
Rensselaer County Industrial Development Agency
Revenue Bonds
Polytechnic Institute Dorm Project
Series 1999A
08-01-29 5.13 1,000,000 1,005,230
---------------
Total 20,565,605
- -------------------------------------------------------------------------------------
COUNTY (2.5%)
County of Suffolk
Unlimited General Obligation Bonds
Public Improvement
Series 2009A
05-15-26 4.25 2,000,000 2,098,240
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (5.7%)
New York State Dormitory Authority
Revenue Bonds
Mental Health Services Facilities Improvements
Series 2007C (FSA)
08-15-26 5.00 2,000,000 2,157,020
New York State Dormitory Authority
Revenue Bonds
Mental Health Services Facilities Improvements
Series 2009
02-15-18 5.50 1,000,000 1,157,820
New York State Dormitory Authority
Revenue Bonds
Vassar Brothers Hospital
Series 1997 (FSA)
07-01-25 5.38 1,500,000 1,513,515
---------------
Total 4,828,355
- -------------------------------------------------------------------------------------
HEALTH CARE -- NURSING HOME (2.9%)
New York State Housing Finance Agency
Revenue Bonds
Phillips Village Housing Project
Series 1994A (FHA) A.M.T.
08-15-17 7.75 2,410,000 2,435,281
- -------------------------------------------------------------------------------------
HOUSING -- SINGLE FAMILY (0.8%)
New York Mtge Agency
Revenue Bonds
Homeowners Mtge
Series 1998-69 A.M.T.
10-01-28 5.50 435,000 435,887
New York Mtge Agency
Revenue Bonds
Series 1999-82 A.M.T.
04-01-30 5.65 280,000 280,118
---------------
Total 716,005
- -------------------------------------------------------------------------------------
INDUSTRIAL-POLLUTION -- IDR (6.5%)
New York Liberty Development Corporation
Revenue Bonds
Goldman Sachs Headquarters
Series 2005
10-01-35 5.25 1,500,000 1,536,570
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 59
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman New York Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE(b,c) RATE AMOUNT VALUE(a)
INDUSTRIAL-POLLUTION -- IDR (CONT.)
New York State Energy Research & Development Authority
Revenue Bonds
Brooklyn Union Gas Project
Series 1996 (National)
01-01-21 5.50% $4,000,000 $4,003,960
---------------
Total 5,540,530
- -------------------------------------------------------------------------------------
INDUSTRIAL-POLLUTION -- PCR (2.5%)
Onondaga County Industrial Development Agency
Revenue Bonds
Bristol-Meyers Squibb Project
Series 1994 A.M.T.
03-01-24 5.75 2,000,000 2,144,200
- -------------------------------------------------------------------------------------
LEASE (2.7%)
New York Local Govt Assistance
Refunding Revenue Bonds
Sr Lien
Series 2007A
04-01-19 5.00 2,000,000 2,292,260
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (7.4%)
Metropolitan Transportation Authority
Prerefunded Revenue Bonds
Series 1998A (FGIC)
04-01-23 5.00 1,000,000 1,182,240
Metropolitan Transportation Authority
Refunding Revenue Bond
Series 2002A
01-01-29 5.13 2,950,000 3,027,762
New York State Dormitory Authority
Revenue Bonds
School Districts Financing Program
Series 2009C
10-01-36 5.13 1,000,000 1,057,330
Trust for Cultural Resources
Revenue Bonds
Museum Modern Art
Series 2001D (AMBAC)
07-01-31 5.13 1,000,000 1,029,820
---------------
Total 6,297,152
- -------------------------------------------------------------------------------------
PORT DISTRICT (3.2%)
Port Authority of New York & New Jersey
Revenue Bonds
Consolidated 93rd
Series 1994
06-01-94 6.13 2,250,000 2,712,353
- -------------------------------------------------------------------------------------
SALES OR USE TAX (2.2%)
Nassau County Interim Finance Authority
Revenue Bonds
Secured Sales Tax
Series 2009A
11-15-24 5.00 250,000 287,530
New York City Transitional Finance Authority
Unrefunded Revenue Bonds
Secured Future Tax
Series 2001B
05-01-30 5.00 1,500,000 1,550,505
---------------
Total 1,838,035
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- SPECIAL TAX (12.1%)
Metropolitan Transportation Authority
Revenue Bonds
Series 2009B
11-15-34 5.00 2,000,000 2,110,479
New York City Transitional Finance Authority
Revenue Bonds
Fiscal 2009
Series 2009S-3
01-15-22 5.00 1,000,000 1,133,160
New York City Transitional Finance Authority
Subordinated Revenue Bonds
Secured Future Tax
Series 2007B
11-01-26 5.00 1,035,000 1,141,978
New York State Dormitory Authority
Revenue Bonds
Education
Series 2009A
03-15-28 5.00 1,545,000 1,709,234
New York State Dormitory Authority
Revenue Bonds
Series 2009A
02-15-34 5.00 1,400,000 1,507,352
New York State Housing Finance Agency
Revenue Bonds
Economic Development & Housing
Series 2009A
03-15-39 5.00 1,000,000 1,073,200
New York State Urban Development
Revenue Bonds
State Personal Income Tax
Series 2009B-1
03-15-36 5.00 1,500,000 1,612,245
---------------
Total 10,287,648
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- TAX INCREMENT (2.6%)
New York State Urban Development
Prerefunded Revenue Bonds
Personal Income Tax State Facilities
Series 2002A
03-15-32 5.25 2,000,000 2,216,840
- -------------------------------------------------------------------------------------
TOLL ROAD (7.0%)
New York State Thruway Authority
Revenue Bonds
Series 2005A (National)
04-01-25 5.00 500,000 534,870
New York State Thruway Authority
Revenue Bonds
Series 2005F (AMBAC)
01-01-25 5.00 2,600,000 2,762,422
Triborough Bridge & Tunnel Authority
Prerefunded Revenue Bonds
General Purpose
Series 1999B
01-01-30 5.50 1,800,000 2,269,026
Triborough Bridge & Tunnel Authority Unfunded Revenue Bonds
General Purpose
Series 2001A
01-01-32 5.00 380,000 388,497
---------------
Total 5,954,815
- -------------------------------------------------------------------------------------
WATER & SEWER (9.2%)
New York City Municipal Water Finance Authority
Prerefunded Revenue Bonds
Series 2000
06-15-33 5.50 4,000,000 4,186,360
New York City Municipal Water Finance Authority
Refunding Revenue Bonds
Series 2006C
06-15-33 4.75 1,440,000 1,496,045
New York City Municipal Water Finance Authority
Revenue Bonds
Series 2008CC
06-15-34 5.00 2,000,000 2,144,220
---------------
Total 7,826,625
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $77,565,099) $83,313,331
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (0.7%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUE(b,c,d) YIELD MATURITY VALUE(a)
City of New York
Unlimited General Obligation Bonds
V.R.D.N. Sub Series 2005E-2 (Bank of America)
08-01-34 0.28% $600,000 $600,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $600,000) $600,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.3%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund 259,378 $259,378
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $259,378) $259,378
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $78,424,477)(e) $84,172,709
=====================================================================================
</Table>
- --------------------------------------------------------------------------------
60 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman New York Municipal Fund
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) The following abbreviations may be used in the portfolio security
descriptions to identify the insurer of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AMBAC -- Ambac Assurance Corporation
BHAC -- Berkshire Hathaway Assurance Corporation
BIG -- Bond Investors Guarantee
BNY -- Bank of New York
CGIC -- Capital Guaranty Insurance Company
CIFG -- IXIS Financial Guaranty
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- MBIA Insurance Corporation
TCRS -- Transferable Custodial Receipts
XLCA -- XL Capital Assurance
</Table>
(c) The following abbreviations may be used in the portfolio descriptions:
<Table>
A.M.T. -- Alternative Minimum Tax -- At Sept. 30, 2009, the value
of securities subject to alternative minimum tax
represented 6.2% of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
</Table>
(d) The Fund is entitled to receive principal and interest from the party, if
indicated in parentheses, after a day or a week's notice or upon maturity.
The maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2009.
(e) At Sept. 30, 2009, the cost of securities for federal income tax purposes
was $78,423,568 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $5,774,749
Unrealized depreciation (25,608)
--------------------------------------------------------------------------------------
Net unrealized appreciation $5,749,141
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 61
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman New York Municipal Fund
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in a valuation model may include, but are not limited
to, financial statement analysis, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Sept. 30, 2009:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2009
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- --------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $83,313,331 $-- $83,313,331
- --------------------------------------------------------------------------------------------------------------
Total Bonds -- 83,313,331 -- 83,313,331
- --------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 600,000 -- 600,000
Money Market Fund(a) 259,378 -- -- 259,378
- --------------------------------------------------------------------------------------------------------------
Total Other 259,378 -- -- 859,378
- --------------------------------------------------------------------------------------------------------------
Total $259,378 $83,913,331 $-- $84,172,709
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2009.
- --------------------------------------------------------------------------------
62 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman New York Municipal Fund
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 63
STATEMENTS OF ASSETS AND LIABILITIES -------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN
SELIGMAN CALIFORNIA CALIFORNIA
NATIONAL MUNICIPAL MUNICIPAL
MUNICIPAL HIGH-YIELD QUALITY
SEPT. 30, 2009 FUND FUND FUND
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $654,963,803,
$33,955,395 and $41,005,127) $694,606,403 $35,488,855 $43,302,241
Money market fund (identified cost $16,099, $106,546 and
$58,663) 16,099 106,546 58,663
- ----------------------------------------------------------------------------------------------------------
Total investments in securities (identified cost
$654,979,902, $34,061,941 and $41,063,790) 694,622,502 35,595,401 43,360,904
Cash 87 -- --
Capital shares receivable 515,010 2,911 50,048
Accrued interest receivable 9,416,700 487,814 699,699
Receivable for investment securities sold 3,474,662 2,475,009 607,766
- ----------------------------------------------------------------------------------------------------------
Total assets 708,028,961 38,561,135 44,718,417
- ----------------------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 435,668 21,130 20,452
Capital shares payable 1,079,906 -- 1,040
Payable for investment securities purchased -- 423,134 --
Payable for securities purchased on a forward-commitment
basis 3,046,670 726,608 762,820
Accrued investment management services fees 7,877 418 491
Accrued distribution fees 157,438 15,259 18,037
Accrued transfer agency fees 570,735 28,323 33,851
Accrued administrative services fees 1,317 71 84
Other accrued expenses 316,861 41,373 47,625
- ----------------------------------------------------------------------------------------------------------
Total liabilities 5,616,472 1,256,316 884,400
- ----------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding shares $702,412,489 $37,304,819 $43,834,017
- ----------------------------------------------------------------------------------------------------------
REPRESENTED BY
Shares of beneficial interest/capital stock -- $.001 par
value $ 86,526 $ 5,573 $ 6,551
Additional paid-in capital 652,694,106 35,198,432 40,917,237
Undistributed net investment income 601,989 119,365 316,665
Accumulated net realized gain (loss) 9,387,268 447,989 296,450
Unrealized appreciation (depreciation) on investments 39,642,600 1,533,460 2,297,114
- ----------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
shares $702,412,489 $37,304,819 $43,834,017
- ----------------------------------------------------------------------------------------------------------
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $665,767,573 $31,142,713 $40,319,393
Class C $ 36,644,916 $ 6,162,106 $ 3,514,624
Outstanding shares of beneficial interest/capital
stock: Class A shares 82,031,969 4,653,633 6,023,523
Class C shares 4,493,860 919,720 527,353
Net asset value per share: Class A(1) $ 8.12 $ 6.69 $ 6.69
Class C $ 8.15 $ 6.70 $ 6.66
- ----------------------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A for Seligman National
Municipal Fund, Seligman California Municipal High-Yield Fund and Seligman
California Municipal Quality Fund is $8.52, $7.02 and $7.02, respectively.
The offering price is calculated by dividing the net asset value by 1.0
minus the maximum sales charge of 4.75%.
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
64 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN
MINNESOTA NEW YORK
MUNICIPAL MUNICIPAL
SEPT. 30, 2009 FUND FUND
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $67,506,387 and
$78,165,099) $71,609,222 $83,913,331
Money market fund (identified cost $113,765 and $259,378) 113,765 259,378
- -------------------------------------------------------------------------------------------
Total investments in securities (identified cost $67,620,152 and
$78,424,477) 71,722,987 84,172,709
Capital shares receivable 23,599 125,489
Accrued interest receivable 1,005,035 1,050,350
Receivable for investment securities sold 1,534,860 45,000
- -------------------------------------------------------------------------------------------
Total assets 74,286,481 85,393,548
- -------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 35,829 45,825
Capital shares payable 68,605 64,186
Payable for investment securities purchased 1,392,900 --
Accrued investment management services fees 816 954
Accrued distribution fees 30,182 35,205
Accrued transfer agency fees 56,310 66,126
Accrued administrative services fees 139 163
Other accrued expenses 47,243 41,075
- -------------------------------------------------------------------------------------------
Total liabilities 1,632,024 253,534
- -------------------------------------------------------------------------------------------
Net assets applicable to outstanding shares $72,654,457 $85,140,014
- -------------------------------------------------------------------------------------------
REPRESENTED BY
Shares of beneficial interest/capital stock -- $.001 par value $ 9,326 $ 10,226
Additional paid-in capital 67,804,440 78,417,819
Undistributed net investment income 100,560 217,169
Accumulated net realized gain (loss) 637,296 746,568
Unrealized appreciation (depreciation) on investments 4,102,835 5,748,232
- -------------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding shares $72,654,457 $85,140,014
- -------------------------------------------------------------------------------------------
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $71,247,393 $76,943,770
Class C $ 1,407,064 $ 8,196,244
Outstanding shares of beneficial interest/capital
stock: Class A shares 9,145,572 9,243,243
Class C shares 180,200 982,659
Net asset value per share: Class A(1) $ 7.79 $ 8.32
Class C $ 7.81 $ 8.34
- --------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A for Seligman Minnesota
Municipal Fund and Seligman New York Municipal Fund is $8.18 and $8.73,
respectively. The offering price is calculated by dividing the net asset
value by 1.0 minus the maximum sales charge of 4.75%.
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 65
STATEMENTS OF OPERATIONS -------------------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN
SELIGMAN CALIFORNIA CALIFORNIA
NATIONAL MUNICIPAL MUNICIPAL
MUNICIPAL HIGH-YIELD QUALITY
YEAR ENDED SEPT. 30, 2009 FUND FUND FUND
INVESTMENT INCOME
Income:
Interest $ 8,271,791 $1,817,374 $1,940,254
Income distributions from money market fund -- 78 78
- ------------------------------------------------------------------------------------------------------
Total Income 8,271,791 1,817,452 1,940,332
- ------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees 1,147,080 164,150 192,624
Distribution fees
Class A 461,232 42,842 54,798
Class C 105,746 54,350 34,584
Transfer agency fees
Class A 473,406 91,023 112,717
Class C 16,922 16,867 10,428
Administrative services fees 42,999 7,436 8,837
Compensation of board members 7,480 1,000 1,177
Custodian fees 151,059 19,404 22,462
Printing and postage 178,879 13,280 15,252
Registration fees 35,172 37,147 36,885
Professional fees 8,078 37,722 35,984
Other 6,524 6,484 8,244
- ------------------------------------------------------------------------------------------------------
Total expenses 2,634,577 491,705 533,992
Expenses waived/reimbursed by the Investment Manager and its
affiliates (325,186) (82,104) (59,171)
- ------------------------------------------------------------------------------------------------------
Total net expenses 2,309,391 409,601 474,821
- ------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 5,962,400 1,407,851 1,465,511
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security transactions 13,905,752 453,487 445,315
Net change in unrealized appreciation (depreciation) on
investments 31,081,735 2,360,069 3,370,334
- ------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 44,987,487 2,813,556 3,815,649
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $50,949,887 $4,221,407 $5,281,160
- ------------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
66 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN
MINNESOTA NEW YORK
MUNICIPAL MUNICIPAL
YEAR ENDED SEPT. 30, 2009 FUND FUND
INVESTMENT INCOME
Income:
Interest $2,800,335 $3,467,388
Income distributions from money market fund 152 191
- -----------------------------------------------------------------------------------------
Total income 2,800,487 3,467,579
- -----------------------------------------------------------------------------------------
Expenses:
Investment management services fees 324,501 352,211
Distribution fees
Class A 99,128 99,753
Class C 9,092 67,646
Transfer agency fees
Class A 213,953 201,617
Class C 2,747 20,070
Administrative services fees 14,896 17,197
Compensation of board members 1,974 2,188
Custodian fees 33,091 34,090
Printing and postage 9,020 13,957
Registration fees 43,095 36,609
Professional fees 34,901 35,026
Other 7,205 10,455
- -----------------------------------------------------------------------------------------
Total expenses 793,603 890,819
Expenses waived/reimbursed by the Investment Manager and its
affiliates (61,106) (56,769)
- -----------------------------------------------------------------------------------------
Total net expenses 732,497 834,050
- -----------------------------------------------------------------------------------------
Investment income (loss) -- net 2,067,990 2,633,529
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security transactions 598,926 730,889
Net change in unrealized appreciation (depreciation) on
investments 4,558,427 5,945,470
- -----------------------------------------------------------------------------------------
Net gain (loss) on investments 5,157,353 6,676,359
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $7,225,343 $9,309,888
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 67
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SELIGMAN CALIFORNIA
SELIGMAN NATIONAL MUNICIPAL HIGH-YIELD
MUNICIPAL FUND FUND
YEAR ENDED SEPT. 30, 2009 2008 2009 2008
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 5,962,400 $ 2,276,472 $ 1,407,851 $ 1,384,899
Net realized gain (loss) on investments 13,905,752 10,099 453,487 (21,722)
Net change in unrealized appreciation (depreciation) on
investments 31,081,735 (3,631,708) 2,360,069 (2,057,347)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 50,949,887 (1,345,137) 4,221,407 (694,170)
- -----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (8,615,539) (2,117,877) (1,201,634) (1,196,136)
Class C (317,681) (52,895) (174,139) (112,958)
Class D* N/A (18,396) N/A (56,269)
Net realized gain
Class A -- -- -- (61,428)
Class C -- -- -- (4,879)
Class D* N/A -- N/A (5,958)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions (8,933,220) (2,189,168) (1,375,773) (1,437,628)
- -----------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Proceeds from sales
Class A shares 45,075,085 8,841,148 2,870,854 6,983,035
Class C shares 4,697,103 634,498 1,027,098 787,185
Class D shares* N/A 158,301 N/A 62,248
Fund mergers
Class A shares 632,443,068 N/A N/A N/A
Class C shares 30,091,669 N/A N/A N/A
Reinvestment of distributions at net asset value
Class A shares 5,176,170 1,271,880 813,149 793,065
Class C shares 194,986 32,239 136,630 80,849
Class D shares* N/A 13,445 N/A 27,865
Conversions from Class D to Class C
Class C shares N/A 990,454 N/A 2,681,736
Class D shares* N/A (990,454) N/A (2,681,736)
Payments for redemptions
Class A shares (114,383,759) (8,272,011) (5,803,643) (3,735,594)
Class C shares (2,525,320) (1,065,197) (859,822) (118,189)
Class D shares* N/A (241,178) N/A (172,739)
Redemption fees (Note 5) 996,789 N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from share transactions 601,765,791 1,373,125 (1,815,734) 4,707,725
- -----------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 643,782,458 (2,161,180) 1,029,900 2,575,927
Net assets at beginning of year 58,630,031 60,791,211 36,274,919 33,698,992
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 702,412,489 $58,630,031 $37,304,819 $36,274,919
- -----------------------------------------------------------------------------------------------------------------------
Undistributed net investment income $ 601,989 $ 237,109 $ 119,365 $ 94,589
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Effective May 16, 2008, Class D shares converted to Class C shares.
Certain line items from the prior year have been renamed to conform to the
current year presentation.
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
68 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SELIGMAN CALIFORNIA SELIGMAN MINNESOTA
MUNICIPAL QUALITY FUND MUNICIPAL FUND
YEAR ENDED SEPT. 30, 2009 2008 2009 2008
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,465,511 $ 1,532,414 $ 2,067,990 $ 2,536,132
Net realized gain (loss) on investments 445,315 131,082 598,926 78,101
Net change in unrealized appreciation (depreciation) on
investments 3,370,334 (2,531,624) 4,558,427 (2,510,397)
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 5,281,160 (868,128) 7,225,343 103,836
- ---------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (1,288,969) (1,408,168) (2,239,614) (2,431,239)
Class C (91,117) (54,560) (21,873) (7,422)
Class D* N/A (20,614) N/A (5,645)
Net realized gain
Class A (136,084) (296,071) (78,863) (354,523)
Class C (14,299) (12,743) (676) (632)
Class D* N/A (6,610) N/A (1,652)
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (1,530,469) (1,798,766) (2,341,026) (2,801,113)
- ---------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Proceeds from sales
Class A shares 10,660,189 4,107,709 8,249,458 1,792,495
Class C shares 2,104,035 442,413 961,391 109,000
Class D shares* N/A 1,243,747 N/A --
Reinvestment of distributions at net asset value
Class A shares 959,148 1,067,477 1,579,523 1,931,345
Class C shares 60,280 56,045 14,841 5,426
Class D shares* N/A 18,499 N/A 5,423
Conversions from Class D to Class C
Class C shares N/A 1,932,862 N/A 333,095
Class D shares* N/A (1,932,862) N/A (333,095)
Payments for redemptions
Class A shares (8,857,523) (6,174,732) (8,255,188) (6,991,935)
Class C shares (1,837,796) (943,067) (187,030) (15,868)
Class D shares* N/A (139,565) N/A --
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from share transactions 3,088,333 (321,474) 2,362,995 (3,164,114)
- ---------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 6,839,024 (2,988,368) 7,247,312 (5,861,391)
Net assets at beginning of year 36,994,993 39,983,361 65,407,145 71,268,536
- ---------------------------------------------------------------------------------------------------------------------
Net assets at end of year $43,834,017 $36,994,993 $72,654,457 $65,407,145
- ---------------------------------------------------------------------------------------------------------------------
Undistributed net investment income $ 316,665 $ 237,015 $ 100,560 $ 333,756
- ---------------------------------------------------------------------------------------------------------------------
</Table>
* Effective May 16, 2008, Class D shares converted to Class C shares.
Certain line items from the prior year have been renamed to conform to the
current year presentation.
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 69
STATEMENTS OF CHANGES IN NET ASSETS (continued) --------------------------------
<Table>
<Caption>
SELIGMAN NEW YORK
MUNICIPAL FUND
YEAR ENDED SEPT. 30, 2009 2008
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 2,633,529 $ 2,628,462
Net realized gain (loss) on investments 730,889 387
Net change in unrealized appreciation (depreciation) on
investments 5,945,470 (3,365,375)
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 9,309,888 (736,526)
- --------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (2,427,660) (2,368,951)
Class C (182,412) (150,611)
Class D* N/A (43,124)
Net realized gain
Class A -- (282,803)
Class C -- (19,812)
Class D* N/A (9,243)
- --------------------------------------------------------------------------------------------
Total distributions (2,610,072) (2,874,544)
- --------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Proceeds from sales
Class A shares 22,642,685 3,513,126
Class C shares 3,368,290 619,578
Class D shares* N/A 435,756
Reinvestment of distributions at net asset value
Class A shares 1,747,802 1,810,054
Class C shares 91,806 84,590
Class D shares* N/A 42,676
Conversions from Class D to Class C
Class C shares N/A 2,328,264
Class D shares* N/A (2,328,264)
Payments for redemptions
Class A shares (11,468,114) (4,832,253)
Class C shares (831,554) (1,885,638)
Class D shares* N/A (130,381)
- --------------------------------------------------------------------------------------------
Increase (decrease) in net assets from share transactions 15,550,915 (342,492)
- --------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 22,250,731 (3,953,562)
Net assets at beginning of year 62,889,283 66,842,845
- --------------------------------------------------------------------------------------------
Net assets at end of year $ 85,140,014 $62,889,283
- --------------------------------------------------------------------------------------------
Undistributed net investment income $ 217,169 $ 209,391
- --------------------------------------------------------------------------------------------
</Table>
* Effective May 16, 2008, Class D shares converted to Class C shares.
Certain line items from the prior year have been renamed to conform to the
current year presentation.
The accompanying Notes to Financial Statements are an integral part of these
statements.
- --------------------------------------------------------------------------------
70 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand each Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. Per share net investment income amounts
are calculated based on average shares outstanding during the period. Total
returns assume reinvestment of all dividends and distributions. Total returns do
not reflect payment of sales charges, if any, and are not annualized for periods
of less than one year.
Seligman National Municipal Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.31 $7.74 $7.81 $7.88 $7.97
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .20 .29 .33 .35 .34
Net gains (losses) (both realized and
unrealized) .86 (.44) (.08) (.07) (.09)
- ------------------------------------------------------------------------------------------------------
Total from investment operations 1.06 (.15) .25 .28 .25
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.28) (.28) (.32) (.35) (.34)
- ------------------------------------------------------------------------------------------------------
Redemption fees (Note 5 to Financial
Statements) .03(a) -- -- -- --
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.12 $7.31 $7.74 $7.81 $7.88
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 15.19% (2.07%) 3.21% 3.58% 3.18%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(B)
Gross expenses prior to expense
waiver/reimbursement 1.09% .95% .90% .92% .94%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c) .95% .95% .90% .92% .94%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.57% 3.77% 4.19% 4.46% 4.29%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $666 $56 $58 $66 $68
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 107% 16% 29% --% 5%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.31 $7.75 $7.81 $7.88 $7.97
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .14 .22 .26 .28 .27
Net gains (losses) (both realized and
unrealized) .92 (.45) (.07) (.07) (.09)
- ------------------------------------------------------------------------------------------------------
Total from investment operations 1.06 (.23) .19 .21 .18
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.22) (.21) (.25) (.28) (.27)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.15 $7.31 $7.75 $7.81 $7.88
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 14.62% (3.07%) 2.42% 2.66% 2.25%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(B)
Gross expenses prior to expense
waiver/reimbursement 1.86% 1.85% 1.80% 1.82% 1.84%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c) 1.71% 1.85% 1.80% 1.82% 1.84%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.81% 2.87% 3.29% 3.56% 3.39%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $37 $2 $2 $2 $3
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 107% 16% 29% --% 5%
- ------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) Per share amount is calculated based on average shares outstanding during
the period.
(b) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(c) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 71
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
Seligman California Municipal High-Yield Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $6.18 $6.55 $6.60 $6.62 $6.65
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .26 .27 .28 .28 .26
Net gains (losses) (both realized and
unrealized) .51 (.36) (.06) (.02) .04
- ------------------------------------------------------------------------------------------------------
Total from investment operations .77 (.09) .22 .26 .30
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.26) (.27) (.27) (.28) (.26)
Distributions from realized gains -- (.01) -- -- (.07)
- ------------------------------------------------------------------------------------------------------
Total distributions (.26) (.28) (.27) (.28) (.33)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.69 $6.18 $6.55 $6.60 $6.62
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 12.73% (1.51%) 3.35% 3.99% 4.63%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.27% 1.02% .95% 1.00% 1.02%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.04% .92% .85% .90% .92%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.16% 4.14% 4.25% 4.26% 3.97%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $31 $31 $29 $30 $31
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 4% 8% --% 1%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $6.18 $6.56 $6.61 $6.63 $6.66
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .20 .21 .22 .22 .20
Net gains (losses) (both realized and
unrealized) .53 (.37) (.06) (.02) .04
- ------------------------------------------------------------------------------------------------------
Total from investment operations .73 (.16) .16 .20 .24
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.21) (.21) (.21) (.22) (.20)
Distributions from realized gains -- (.01) -- -- (.07)
- ------------------------------------------------------------------------------------------------------
Total distributions (.21) (.22) (.21) (.22) (.27)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.70 $6.18 $6.56 $6.61 $6.63
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 11.94% (2.54%) 2.42% 3.06% 3.69%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 2.13% 1.92% 1.85% 1.90% 1.92%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.89% 1.82% 1.75% 1.80% 1.82%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.30% 3.24% 3.35% 3.35% 3.07%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $6 $5 $2 $3 $2
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 63% 4% 8% --% 1%
- ------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(b) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
72 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal Quality Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $6.13 $6.57 $6.69 $6.79 $6.89
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .23 .26 .28 .28 .28
Net gains (losses) (both realized and
unrealized) .58 (.40) (.12) (.07) (.02)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .81 (.14) .16 .21 .26
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.23) (.25) (.27) (.28) (.27)
Distributions from realized gains (.02) (.05) (.01) (.03) (.09)
- ------------------------------------------------------------------------------------------------------
Total distributions (.25) (.30) (.28) (.31) (.36)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.69 $6.13 $6.57 $6.69 $6.79
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 13.42% (2.26%) 2.51% 3.14% 3.90%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.24% .99% .92% .94% .94%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.09% .99% .92% .94% .94%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.67% 3.97% 4.17% 4.19% 4.04%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $40 $34 $38 $42 $47
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 13% 5% --% --%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $6.10 $6.54 $6.66 $6.76 $6.87
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .17 .20 .22 .22 .21
Net gains (losses) (both realized and
unrealized) .58 (.40) (.12) (.07) (.02)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .75 (.20) .10 .15 .19
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.17) (.19) (.21) (.22) (.21)
Distributions from realized gains (.02) (.05) (.01) (.03) (.09)
- ------------------------------------------------------------------------------------------------------
Total distributions (.19) (.24) (.22) (.25) (.30)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.66 $6.10 $6.54 $6.66 $6.76
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 12.52% (3.15%) 1.60% 2.23% 2.84%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 2.10% 1.89% 1.82% 1.84% 1.84%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.96% 1.89% 1.82% 1.84% 1.84%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.80% 3.07% 3.27% 3.29% 3.13%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $3 $2 $2 $3
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 13% 5% --% --%
- ------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(b) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 73
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
Seligman Minnesota Municipal Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A --------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.26 $7.55 $7.67 $7.75 $7.83
- -----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .23 .27 .30 .31 .31
Net gains (losses) (both realized and
unrealized) .56 (.26) (.11) (.08) (.09)
- -----------------------------------------------------------------------------------------------------
Total from investment operations .79 .01 .19 .23 .22
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.25) (.26) (.30) (.30) (.30)
Distributions from realized gains (.01) (.04) (.01) (.01) --
- -----------------------------------------------------------------------------------------------------
Total distributions (.26) (.30) (.31) (.31) (.30)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $7.79 $7.26 $7.55 $7.67 $7.75
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN 11.04% .07% 2.52% 3.04% 2.90%
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.14% .91% .88% .89% .92%
- -----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.06% .91% .88% .89% .92%
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) 3.02% 3.62% 4.01% 4.04% 3.96%
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $71 $65 $71 $78 $85
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 16% 4% 11% 8%
- -----------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C --------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.27 $7.56 $7.68 $7.75 $7.83
- -----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .16 .20 .24 .24 .24
Net gains (losses) (both realized and
unrealized) .58 (.26) (.12) (.07) (.09)
- -----------------------------------------------------------------------------------------------------
Total from investment operations .74 (.06) .12 .17 .15
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.19) (.19) (.23) (.23) (.23)
Distributions from realized gains (.01) (.04) (.01) (.01) --
- -----------------------------------------------------------------------------------------------------
Total distributions (.20) (.23) (.24) (.24) (.23)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $7.81 $7.27 $7.56 $7.68 $7.75
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN 10.22% (.83%) 1.59% 2.16% 1.95%
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.98% 1.81% 1.78% 1.79% 1.82%
- -----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.86% 1.81% 1.78% 1.79% 1.82%
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) 2.19% 2.72% 3.11% 3.14% 3.06%
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $1 $-- $-- $--
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 16% 4% 11% 8%
- -----------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(b) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
74 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman New York Municipal Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.63 $8.07 $8.19 $8.26 $8.27
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .28 .32 .34 .35 .33
Net gains (losses) (both realized and
unrealized) .70 (.40) (.12) (.06) (.01)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .98 (.08) .22 .29 .32
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.29) (.32) (.34) (.34) (.33)
Distributions from realized gains -- (.04) (.00)(a) (.02) (.00)(a)
- ------------------------------------------------------------------------------------------------------
Total distributions (.29) (.36) (.34) (.36) (.33)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.32 $7.63 $8.07 $8.19 $8.26
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 13.02% (1.19%) 2.76% 3.61% 3.96%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(B)
Gross expenses prior to expense
waiver/reimbursement 1.11% .89% .85% .88% .90%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c) 1.04% .89% .85% .88% .90%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.60% 4.04% 4.22% 4.25% 4.03%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $77 $58 $61 $64 $70
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 53% 0% 16% --% 10%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.64 $8.08 $8.20 $8.27 $8.29
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .22 .25 .27 .27 .26
Net gains (losses) (both realized and
unrealized) .70 (.41) (.13) (.05) (.02)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .92 (.16) .14 .22 .24
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.22) (.24) (.26) (.27) (.26)
Distributions from realized gains -- (.04) (.00)(a) (.02) (.00)(a)
- ------------------------------------------------------------------------------------------------------
Total distributions (.22) (.28) (.26) (.29) (.26)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.34 $7.64 $8.08 $8.20 $8.27
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 12.19% (2.07%) 1.83% 2.68% 2.91%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(B)
Gross expenses prior to expense
waiver/reimbursement 1.96% 1.79% 1.75% 1.78% 1.80%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c) 1.88% 1.79% 1.75% 1.78% 1.80%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.73% 3.14% 3.32% 3.35% 3.13%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $8 $5 $4 $5 $5
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 53% 0% 16% --% 10%
- ------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) A capital gain of $0.003 and $0.002 was paid for the years ended Sept. 30,
2007 and 2005, respectively.
(b) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(c) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 75
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Seligman Municipal Series Trust is currently composed of individual state tax-
exempt funds, including Seligman California Municipal High-Yield Fund
(California High-Yield) and Seligman California Municipal Quality Fund
(California Quality). Seligman Municipal Fund Series, Inc. is currently composed
of tax-exempt funds, including Seligman National Municipal Fund (National),
Seligman Minnesota Municipal Fund (Minnesota), and Seligman New York Municipal
Fund (New York). Each Fund in Seligman Municipal Series Trust has unlimited
shares of beneficial interest. Each Fund in Seligman Municipal Fund Series, Inc.
has 100 million authorized shares of capital stock.
Each Fund normally invests at least 80% of its net assets in municipal
securities that pay interest that is exempt from regular federal income taxes
and (except National) regular personal income taxes in its respective state.
Income may be subject to the federal alternative minimum tax and, where
applicable, state alternative minimum tax. Capital gain distributions are
subject to federal, state and local taxes.
Each Fund offers Class A and Class C shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class C shares may be subject to a contingent deferred sales charge (CDSC).
Effective May 16, 2008, Class D shares converted to Class C shares and as of
that date the Funds no longer offer Class D shares.
Both classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees) differ among classes. Income, expenses (other than class specific
expenses) and realized and unrealized gains or losses on investments are
allocated to each class of shares based upon its relative net assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ADOPTION OF NEW ACCOUNTING STANDARD
In June 2009, the Financial Accounting Standards Board (FASB) established the
FASB Accounting Standards Codification(TM) (Codification) as the single source
of authoritative accounting principles recognized by the FASB in the preparation
of financial statements in conformity with U.S. generally accepted accounting
principles (GAAP). The Codification supersedes existing non-grandfathered, non-
SEC accounting and reporting standards. The Codification did not change GAAP but
rather organized it into a hierarchy where all guidance within the Codification
carries an equal level of authority. The Codification became effective for
financial statements issued for interim and annual periods ending after Sept.
15, 2009. The Codification did not have a material effect on the Fund's
financial statements.
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price. Debt
securities are generally traded in the over-the-counter market and are valued by
an independent pricing service using an evaluated bid. When market quotes are
not readily available, the pricing service, in determining fair values of debt
securities, takes into consideration such factors as current quotations by
broker/dealers, coupon, maturity, quality, type of issue, trading
characteristics, and other yield and risk factors it deems relevant in
determining valuations. The procedures adopted by each Fund's Board of
Directors/Trustees (the Board) generally contemplate the use of fair valuation
in the event that price quotations or valuations are not readily available,
price quotations or valuations from other sources are not reflective of market
value and thus deemed unreliable, or a significant event has occurred in
relation to a security or class of securities that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
- --------------------------------------------------------------------------------
76 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
SECURITIES PURCHASED ON A FORWARD-COMMITMENT BASIS
Delivery and payment for securities that have been purchased by the Funds on a
forward-commitment basis, including when-issued securities and other forward-
commitments, can take place one month or more after the transaction date. During
this period, such securities are subject to market fluctuations, and they may
affect each Fund's net assets the same as owned securities. Each Fund designates
cash or liquid securities at least equal to the amount of its forward-
commitments. At Sept. 30, 2009, outstanding when-issued securities were as
follows:
<Table>
<Caption>
FUND AMOUNT
- ---------------------------------------------------------------------------------------
National $3,046,670
California High-Yield 726,608
California Quality 762,820
</Table>
GUARANTEES AND INDEMNIFICATIONS
Under each Fund's organizational documents, its officers and directors/trustees
are indemnified against certain liabilities arising out of the performance of
their duties to each Fund. In addition, certain of each Fund's contracts with
its service providers contain general indemnification clauses. Each Fund's
maximum exposure under these arrangements is unknown since the amount of any
future claims that may be made against each Fund cannot be determined and each
Fund has no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
Each Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) and tax-
exempt ordinary income to shareholders. No provision for income or excise taxes
is thus required. Each Fund is treated as a separate entity for federal income
tax purposes.
Management of the Funds has concluded that there are no significant uncertain
tax positions that would require recognition in the financial statements.
Generally, the tax authorities can examine all the tax returns filed for the
last three years.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and paid monthly, are
reinvested in additional shares of each Fund at net asset value or payable in
cash. Capital gains, when available, are distributed along with the last income
dividend of the calendar year.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income, if any, is recognized on the ex-dividend date and
interest income, including amortization of premium, market discount and original
issue discount using the effective interest method, is accrued daily.
3. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
On Nov. 7, 2008, RiverSource Investments, LLC (RiverSource Investments)
announced the closing of its acquisition (the Acquisition) of J. & W. Seligman &
Co. Incorporated (JWS). With the Acquisition completed and the shareholders of
the Funds having previously approved (at a Special meeting held in November
2008) new Investment Management Services Agreements between RiverSource
Investments and the Funds, RiverSource Investments became the new Investment
Manager of the Funds effective Nov. 7, 2008.
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. Effective June 15,
2009 for California High-Yield, California Quality, Minnesota and New York and
Aug. 31, 2009 for National, the management fee is equal to a percentage of each
Fund's average daily net assets that declines from 0.41% to 0.25% as each Fund's
net assets increase. Prior to June 15, 2009 for California High-Yield,
California Quality, Minnesota and New York and Aug. 31, 2009 for National, the
Investment Manager received an annual fee equal to 0.50% of
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 77
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
each Fund's average daily net assets. The management fee for the year ended
Sept. 30, 2009 was the following percentage of each Fund's average daily net
assets:
<Table>
<Caption>
FUND PERCENTAGE
- ----------------------------------------------------------------------------------------
National 0.49%
California High-Yield 0.47
California Quality 0.47
Minnesota 0.47
New York 0.47
</Table>
The reduction in the investment management services fee schedule on June 15,
2009 for California High-Yield, California Quality, Minnesota and New York and
Aug. 31, 2009 for National is related to the elimination of the administrative
portion of the management fee that is now being charged separately to each Fund
through the Administrative Services Agreement with Ameriprise Financial, Inc.
(Ameriprise Financial), parent company of RiverSource Investments. See
Administrative services fees below for more information.
For the year ended Sept. 30, 2009, RiverSource Investments and JWS received the
following management fees:
<Table>
<Caption>
RIVERSOURCE
FUND INVESTMENTS JWS
- --------------------------------------------------------------------------------------------
National $1,117,903 $29,177
California High-Yield 150,270 13,880
California Quality 173,967 18,657
Minnesota 292,031 32,470
New York 321,074 31,137
</Table>
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, effective June 15, 2009 for
California High-Yield, California Quality, Minnesota and New York and Aug. 31,
2009 for National, each Fund pays Ameriprise Financial a fee for administration
and accounting services equal to a percentage of each Fund's average daily net
assets that declines from 0.07% to 0.04% as each Fund's net assets increase. The
fee for the year ended Sept. 30, 2009 was 0.02% of each Fund's average daily net
assets.
Prior to June 15, 2009 for California High-Yield, California Quality, Minnesota
and New York and Aug. 31, 2009 for National, Ameriprise Financial administered
certain aspects of each Fund's business and other affairs for no additional fee.
The fees payable under the Administrative Services Agreement beginning on June
15, 2009 for California High-Yield, California Quality, Minnesota and New York
and Aug. 31, 2009 for National, are offset by corresponding decreases in the
investment management fees charged to each Fund and the elimination of separate
fees that were previously payable to State Street Bank and Trust Company, in its
capacity as each Fund's prior administrative agent. Prior to Nov. 7, 2008,
administrative services were provided to each Fund by JWS as part of the former
management agreement with each Fund.
OTHER FEES
Other expenses are for, among other things, certain expenses of each Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to each Fund and the Board. For the period from Nov. 7,
2008 through Sept. 30, 2009, other expenses paid to this company were as
follows:
<Table>
<Caption>
FUND AMOUNT
- -------------------------------------------------------------------------------------
National $1,086
California High-Yield 228
California Quality 259
Minnesota 437
New York 436
</Table>
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of each Fund under the 1940 Act may defer receipt of their
compensation. Deferred amounts are treated as though equivalent dollar amounts
had been invested in shares of each Fund or other funds in the RiverSource
Family of Funds. Each Fund's liability for these amounts is adjusted for market
value changes and remains in the funds until distributed in accordance with the
Plan.
- --------------------------------------------------------------------------------
78 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains Fund shareholder accounts and records and provides Fund
shareholder services. Effective June 15, 2009, each Fund pays the Transfer Agent
an annual account-based fee at a rate equal to $20.50 for Class A and $21.00 for
Class C for this service. The Transfer Agent also charges an annual fee of $3
per account serviced directly by each Fund or its designated agent for Class A
and Class C shares. The Transfer Agent charges an annual fee of $5 per inactive
account, charged on a pro rata basis for the 12 month period from the date the
account becomes inactive. These fees are included in the transfer agency fees in
the Statements of Operations.
Prior to June 15, 2009, Seligman Data Corp. (SDC) owned by six associated
investment companies, provided shareholder servicing and transfer agency
services to each Fund, as well as certain other Seligman funds. In January 2009,
the Board approved each Fund's termination of the shareholder servicing and
transfer agency relationship with SDC and the engagement of RiverSource Service
Corporation to provide shareholder servicing and transfer agency services. As a
result of the Board's termination of the shareholder servicing and transfer
agency relationship with SDC (which was SDC's sole business), SDC has exited the
transfer agent business, effective June 15, 2009.
For the period from Oct. 1, 2008 through June 15, 2009, SDC charged each Fund
for shareholder account and transfer agent services in accordance with a
methodology approved by each Fund's Board. Costs of SDC directly attributable to
the classes of each Fund were charged to those classes in proportion to their
relative net asset values. The remaining charges were allocated to all classes
by SDC pursuant to a formula based on their net assets, shareholder transaction
volumes and number of shareholder accounts. These charges to each Fund were as
follows:
<Table>
<Caption>
FUND AMOUNT
- --------------------------------------------------------------------------------------
National $244,333
California High-Yield 53,333
California Quality 55,533
Minnesota 105,959
New York 100,280
</Table>
In connection with the termination of each Fund's relationship with SDC, each
Fund incurred certain non-recurring charges including charges relating to the
remaining periods of SDC's leases (the Non-Recurring Charges). These Non-
Recurring Charges were incurred over a period from Jan. 28, 2009 to June 12,
2009. The amount of Non-Recurring Charges and the percentage of each Fund's
average daily net assets for the year ended Sept. 30, 2009 were as follows:
<Table>
<Caption>
FUND AMOUNT PERCENTAGE
- --------------------------------------------------------------------------------------------
National $205,185 0.09%
California High-Yield 49,247 0.14
California Quality 58,497 0.14
Minnesota 97,735 0.14
New York 111,286 0.15
</Table>
These Non-Recurring Charges are included in transfer agency fees in the
Statements of Operations. The Non-Recurring charges are included in the Fund's
total expenses and are, therefore, subject to any expense waivers/reimbursements
described below.
Each Fund together with certain other associated investment companies (together,
the Guarantors), have severally, but not jointly, guaranteed the performance and
observance of all the terms and conditions of a lease entered into by SDC,
including the payment of rent by SDC (the Guaranty). The lease and the Guaranty
expire in January 2019. At Sept. 30, 2009, each Fund's total potential future
obligation under the Guaranty over the life of the Guaranty is as follows:
<Table>
<Caption>
FUND AMOUNT
- ---------------------------------------------------------------------------------------
National $1,029,645
California High-Yield 51,140
California Quality 61,078
Minnesota 101,604
New York 119,358
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 79
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The liability remaining for Non-Recurring Charges related to the Guaranty is
included within accrued transfer agency fees in the Statements of Assets and
Liabilities. At Sept. 30, 2009, these amounts are as follows:
<Table>
<Caption>
FUND AMOUNT
- ---------------------------------------------------------------------------------------
National $569,743(*)
California High-Yield 28,282
California Quality 33,803
Minnesota 56,209
New York 66,042
</Table>
* In connection with the fund merger as described in Note 10, National assumed
the obligations of the funds which were acquired.
DISTRIBUTION FEES
Each Fund has an agreement with RiverSource Fund Distributors, Inc. (formerly
Seligman Services, Inc.) (the Distributor) for distribution and shareholder
services. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1,
each Fund pays a fee at an annual rate of up to 0.25% of each Fund's average
daily net assets attributable to Class A shares and a fee at an annual rate of
up to 1.00% of each Fund's average daily net assets attributable to Class C
shares.
For Class C shares, of the 1.00% fee, up to 0.75% was reimbursed for
distribution expenses. The amount of distribution expenses incurred by the
Distributor and not yet reimbursed (unreimbursed expense) for each Fund was
approximately as follows:
<Table>
<Caption>
FUND CLASS C
- --------------------------------------------------------------------------------------
National $453,000
California High-Yield 217,000
California Quality 251,000
Minnesota 100,000
New York 286,000
</Table>
These amounts are based on the most recent information available as of July 31,
2009, and may be recovered from future payments under the distribution plan or
CDSCs. To the extent the unreimbursed expense has been fully recovered, the
distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing each Fund's shares for the year ended Sept. 30, 2009 are as
follows:
<Table>
<Caption>
FUND CLASS A CLASS C
- -------------------------------------------------------------------------------------------
National $219,075 $3,271
California High-Yield 37,312 4
California Quality 60,005 --
Minnesota 65,551 1,165
New York 164,785 1,847
</Table>
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended Sept. 30, 2009, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that each Fund's net expenses
(excluding fees and expenses of acquired funds*), were as follows:
<Table>
<Caption>
FUND CLASS A CLASS C
- -------------------------------------------------------------------------------------------
National 0.95% 1.71%
California High-Yield 1.04 1.89
California Quality 1.09 1.96
Minnesota 1.06 1.86
New York 1.04 1.88
</Table>
Under an agreement that was effective until June 13, 2009, the Fund's Investment
Manager (RiverSource Investments) and predecessor investment manager (JWS), at
their discretion, each agreed to waive a portion of its fees to limit the
management fee rate of California High-Yield to 0.40% of the Fund's average
daily net assets.
- --------------------------------------------------------------------------------
80 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
For the period from Oct. 1, 2008 through June 13, 2009, the amount of expenses
waived/reimbursed by RiverSource Investments and JWS for California High-Yield
was $19,645 for Class A and $3,518 for Class C.
Effective June 13, 2009 the Investment Manager and its affiliates have
contractually agreed to waive certain fees and expenses until Nov. 30, 2010 for
each Fund, unless sooner terminated at the discretion of the Board, such that
net expenses (excluding fees and expenses of acquired funds*), will not exceed
the following percentage of the class' average daily net assets:
<Table>
Class A........................................................................ 0.79%
Class C........................................................................ 1.54
</Table>
For the period from June 13, 2009 through Sept. 30, 2009, the transfer agency
fees and other expenses waived/reimbursed at the class level were as follows:
<Table>
<Caption>
FUND CLASS A CLASS C
- -------------------------------------------------------------------------------------------
National $163,569 $8,084
California Quality 4,634 399
Minnesota 6,034 113
New York 2,378 272
</Table>
For the period from June 13, 2009 through Sept. 30, 2009, the management fees
waived/reimbursed at the Fund level were as follows:
<Table>
<Caption>
FUND AMOUNT
- --------------------------------------------------------------------------------------
National $153,533
California High-Yield 58,941
California Quality 54,138
Minnesota 54,959
New York 54,119
</Table>
* In addition to the fees and expenses which each Fund bears directly, each
Fund indirectly bears a pro rata share of the fees and expenses of the funds
in which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and each Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by each Fund will vary.
4. SECURITIES TRANSACTIONS
For the year ended Sept. 30, 2009, cost of purchases and proceeds from sales of
securities (other than short-term obligations) aggregated for each Fund were as
follows:
<Table>
<Caption>
FUND PURCHASES PROCEEDS
- ----------------------------------------------------------------------------------------------
National $870,878,247* $301,490,294**
California High-Yield 21,419,758 20,816,728
California Quality 22,006,551 17,699,614
Minnesota 23,323,310 18,645,384
New York 51,928,823 37,353,801
</Table>
Realized gains and losses are determined on an identified cost basis.
* Including $616,152,439 from the funds that were acquired in the fund mergers
as described in Note 10. These amounts are excluded for purposes of
calculating the Fund's portfolio turnover rate.
** Including $46,764,200 from securities sold to realign the Fund's portfolio
immediately following the mergers as described in Note 10. These amounts are
excluded for purposes of calculating the Funds portfolio turnover rate.
5. REDEMPTION FEES
Class A shares issued by Seligman National Fund to former stockholders of
Seligman Select Municipal Fund in connection with the fund merger (see Note 10)
on March 27, 2009 are subject to a redemption fee of 2% if the shares are sold
within one year following the acquisition. The redemption fee is retained by
Seligman National Fund and is recorded as additional paid-in capital.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 81
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
6. SHARE TRANSACTIONS
Transactions in shares for each Fund for the periods indicated were as follows:
<Table>
<Caption>
NATIONAL CALIFORNIA HIGH-YIELD
----------------------- ---------------------
YEAR ENDED SEPT. 30, 2009 2008 2009 2008
- -------------------------------------------------------------------------------------------------------
CLASS A
Sold 6,001,981 1,150,287 470,216 1,077,537
Fund merger 82,654,273 N/A N/A N/A
Reinvested distributions 668,709 165,149 129,987 121,917
Redeemed (15,015,369) (1,083,873) (945,232) (574,417)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) 74,309,594 231,563 (345,029) 625,037
- -------------------------------------------------------------------------------------------------------
CLASS C
Sold 618,059 82,706 169,001 120,759
Fund merger 3,875,447 N/A N/A N/A
Reinvested distributions 25,017 4,191 19,017 12,445
Converted from Class D* N/A 127,801 N/A 410,679
Redeemed (323,416) (139,138) (141,925) (18,185)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) 4,195,107 75,560 46,093 525,698
- -------------------------------------------------------------------------------------------------------
CLASS D
Sold N/A 20,354 N/A 9,491
Reinvested distributions N/A 1,738 N/A 4,265
Converted to Class C* N/A (127,801) N/A (410,679)
Redeemed N/A (31,202) N/A (26,724)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) N/A (136,911) N/A (423,647)
- -------------------------------------------------------------------------------------------------------
<Caption>
CALIFORNIA QUALITY MINNESOTA
----------------------- ---------------------
YEAR ENDED SEPT. 30, 2009 2008 2009 2008
- -------------------------------------------------------------------------------------------------------
CLASS A
Sold 1,725,823 636,316 1,106,231 238,625
Reinvested distributions 154,467 164,543 212,517 256,814
Redeemed (1,424,314) (955,690) (1,109,881) (937,522)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) 455,976 (154,831) 208,867 (442,083)
- -------------------------------------------------------------------------------------------------------
CLASS C
Sold 341,722 69,215 449,044 14,411
Reinvested distributions 9,837 8,689 1,984 721
Converted from Class D* N/A 298,742 N/A 44,119
Redeemed (294,718) (145,984) (346,032) (2,093)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) 56,841 230,662 104,996 57,158
- -------------------------------------------------------------------------------------------------------
CLASS D
Sold N/A 192,846 N/A --
Reinvested distributions N/A 2,861 N/A 719
Converted to Class C* N/A (298,742) N/A (44,119)
Redeemed N/A (21,538) N/A --
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) N/A (124,573) N/A (43,400)
- -------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
82 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
NEW YORK
---------------------
YEAR ENDED SEPT. 30, 2009 2008
- -------------------------------------------------------------------------------------------------------
CLASS A
Sold 2,890,575 441,976
Reinvested distributions 222,566 225,523
Redeemed (1,463,530) (604,293)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) 1,649,611 63,206
- -------------------------------------------------------------------------------------------------------
CLASS C
Sold 428,298 77,573
Reinvested distributions 11,650 10,535
Converted from Class D* N/A 289,225
Redeemed (105,324) (237,988)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) 334,624 139,345
- -------------------------------------------------------------------------------------------------------
CLASS D
Sold N/A 54,091
Reinvested distributions N/A 5,292
Converted to Class C* N/A (289,225)
Redeemed N/A (16,136)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) N/A (245,978)
- -------------------------------------------------------------------------------------------------------
</Table>
* Effective May 16, 2008, Class D shares converted to Class C shares.
Certain line items from the prior year have been renamed to conform to the
current year presentation.
7. BANK BORROWINGS
Each Fund, has entered into a revolving credit facility with a syndicate of
banks led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby each
Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility became effective Oct.
15, 2009, replacing the prior credit facilities. The credit facility agreement,
which is a collective agreement between each Fund and certain other funds in the
RiverSource Family of Funds, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each Fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (A)
1.25% per annum plus (B) if one-month LIBOR Reference Rate exceeds the federal
funds rate, the amount of such excess. Each borrowing under the credit facility
matures no later than 60 days after the date of borrowing. Each Fund also pays a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.10% per annum, in addition to an upfront fee equal to its pro
rata share of 0.04% of the amount of the credit facility.
For the period from June 17, 2009 through to Oct. 15, 2009, the credit facility
agreement, which was a collective agreement between each Fund, and certain other
funds in the RiverSource Family of Funds, severally and not jointly, permitted
collective borrowings up to $475 million. Interest was charged to each Fund
based on its borrowings at a rate equal to the federal funds rate plus 0.75%.
Each Fund also paid a commitment fee equal to its pro rata share of the amount
of the credit facility at a rate of 0.06% per annum.
Prior to June 17, 2009, each Fund participated in a joint $200 million committed
line of credit that was shared by substantially all funds in the Seligman Group
of Investment Companies. The Board had limited each Fund's borrowings to 10% of
its net assets. Borrowings pursuant to the credit facility were subject to
interest at a rate equal to the overnight federal funds rate plus 0.50%. Each
Fund incurred a commitment fee of 0.12% per annum on its share of the unused
portion of the credit facility. The credit facility may have been drawn upon
only for temporary purposes and was subject to certain other customary
restrictions. Each Fund had no borrowings during the year ended Sept. 30, 2009.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 83
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
8. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of market discount. The
character of distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the year that the
income or realized gains (losses) were recorded by the Fund.
In the Statements of Assets and Liabilities, as a result of permanent book-to-
tax differences, undistributed net investment income has been increased
(decreased) and accumulated net realized gain (loss) has been increased
(decreased), resulting in a net reclassification adjustment to additional paid-
in capital by the following:
<Table>
<Caption>
ADDITIONAL
PAID-IN-CAPITAL
UNDISTRIBUTED ACCUMULATED NET REDUCTION
FUND NET INVESTMENT INCOME REALIZED GAIN (LOSS) (INCREASE)
- ----------------------------------------------------------------------------------------------------------------
National $373,780 $(373,787) $(7)
California High-Yield (7,302) 7,302 --
California Quality (5,775) 5,775 --
Minnesota (39,699) 39,699 --
New York (15,679) 15,679 --
</Table>
The tax characters of distributions paid for the years indicated were as
follows:
<Table>
<Caption>
YEAR ENDED SEPT. 30,
2009 2008
------------------------ ------------------------
ORDINARY LONG-TERM ORDINARY LONG-TERM
FUND INCOME CAPITAL GAIN INCOME CAPITAL GAIN
- ---------------------------------------------------------------------------------------------------------
National $8,933,220 -- $2,189,168 --
California High-Yield 1,375,773 -- 1,365,363 $ 72,265
California Quality 1,380,086 $150,383 1,483,342 315,424
Minnesota 2,261,487 79,539 2,444,306 356,807
New York 2,610,072 -- 2,562,686 311,858
</Table>
Tax-exempt interest distributions of the cash basis distributions paid for the
years indicated were as follows:
<Table>
<Caption>
FUND 2009 2008
- ----------------------------------------------------------------------------------------
National 96.84% 100%
California High-Yield 99.63 100
California Quality 93.44 100
Minnesota 99.63 100
New York 99.63 100
</Table>
At Sept. 30, 2009, the components of distributable earnings on a tax basis for
each Fund were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNREALIZED
UNDISTRIBUTED ACCUMULATED ACCUMULATED APPRECIATION
FUND TAX-EXEMPT INCOME LONG-TERM GAIN REALIZED LOSS (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
National $1,039,469 $11,487,226 $(2,099,958) $39,640,788
California High-Yield 140,938 447,989 -- 1,533,017
California Quality 356,402 277,225 -- 2,297,054
Minnesota 140,090 630,748 -- 4,105,682
New York 263,962 746,569 -- 5,747,263
</Table>
As a result of the mergers (Note 10) National acquired a capital loss carry-over
of $2,099,958 which is limited by the Internal Revenue Code Section 382.
- --------------------------------------------------------------------------------
84 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
9. RISKS RELATING TO CERTAIN INVESTMENTS
DIVERSIFICATION RISK
Each Fund other than National is non-diversified. A non-diversified fund may
invest more of its assets in fewer issuers than if it were a diversified fund.
Because each investment has a greater effect on a Fund's performance, that Fund
may be more exposed to the risks of loss and volatility than a fund that invests
more broadly.
GEOGRAPHIC CONCENTRATION RISK
Because state-specific tax-exempt funds invest primarily in the municipal
securities issued by the state and political sub-divisions of the state, each
Fund (except National) will be particularly affected by political and economic
conditions and developments in the state in which it invests. This vulnerability
to factors affecting the single-state Funds' tax-exempt investments will be
significantly greater than that of a more geographically diversified fund, which
may result in greater losses and volatility. The value of municipal securities
owned by a Fund also may be adversely affected by future changes in federal or
state income tax laws.
10. FUND MERGERS
At the close of business on March 27, 2009, National acquired the assets and
assumed the identified liabilities of Seligman Select Municipal Fund, Inc.
(Select Municipal). The reorganization was completed after stockholders approved
the plan on Feb. 5, 2009.
The aggregate net assets of National immediately before the acquisition were
$80,713,171 and the combined net assets immediately after the acquisition were
$218,815,535.
The merger was accomplished by a tax-free exchange of 13,290,689 shares of
Select Municipal valued at $138,102,364. In exchange for the Select Municipal
shares and net assets, National issued 18,687,716 Class A shares.
The components of Select Municipal's net assets after adjustments for any
permanent book-to-tax differences at the merger date were as follows:
<Table>
<Caption>
NET UNREALIZED
APPRECIATION
TOTAL (DEPRECIATION) ON ACCUMULATED NET UNDISTRIBUTED NET
NET ASSETS CAPITAL STOCK INVESTMENTS REALIZED GAIN (LOSS) INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Select Municipal $138,102,364 $144,194,042 $(5,053,026) $(2,043,036) $1,004,384
</Table>
At the close of business on July 10, 2009, National acquired the assets and
assumed the identified liabilities of the following funds: Seligman Colorado
Municipal Class (Seligman Colorado Municipal Fund), Seligman Georgia Municipal
Class (Seligman Georgia Municipal Fund), Seligman Louisiana Municipal Class
(Seligman Louisiana Municipal Fund), Seligman Maryland Municipal Class (Seligman
Maryland Municipal Fund), Seligman Massachusetts Municipal Class (Seligman
Massachusetts Municipal Fund), Seligman Michigan Municipal Class (Seligman
Michigan Municipal Fund), Seligman Missouri Municipal Class (Seligman Missouri
Municipal Fund), Seligman Ohio Municipal Class (Seligman Ohio Municipal Fund),
Seligman Oregon Municipal Class (Seligman Oregon Municipal Fund) and Seligman
South Carolina Municipal Class (Seligman South Carolina Municipal Fund), each a
series of Seligman Municipal Fund Series, Inc.; Seligman Florida Municipal
Series (Seligman Florida Municipal Fund) and Seligman North Carolina Municipal
Series (Seligman North Carolina Municipal Fund), each a series of Seligman
Municipal Series Trust; Seligman New Jersey Municipal Fund, Inc. (Seligman New
Jersey Municipal Fund); and Seligman Pennsylvania Municipal Fund Series
(Seligman Pennsylvania Municipal Fund). The reorganizations were completed after
shareholders of each fund approved the plan on June 2, 2009.
The aggregate net assets of National immediately before these acquisitions were
$186,000,943 and the combined net assets immediately after the acquisitions were
$710,433,316.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 85
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The mergers were accomplished by the following tax-free exchanges:
<Table>
<Caption>
VALUE OF SHARES SHARES ISSUED BY
SHARES EXCHANGED EXCHANGED NATIONAL
- -------------------------------------------------------------------------------------------------------------
Seligman Colorado Municipal Fund
Class A 4,107,991 $30,581,832 3,957,024
Class C 166,567 1,237,719 159,402
- -------------------------------------------------------------------------------------------------------------
Seligman Florida Municipal Fund
Class A 2,495,683 18,292,947 2,367,153
Class C 339,424 2,495,635 321,415
- -------------------------------------------------------------------------------------------------------------
Seligman Georgia Municipal Fund
Class A 3,076,141 22,650,408 2,930,853
Class C 141,760 1,047,379 134,877
- -------------------------------------------------------------------------------------------------------------
Seligman Louisiana Municipal Fund
Class A 3,120,284 23,528,742 3,044,780
Class C 236,947 1,785,809 229,989
- -------------------------------------------------------------------------------------------------------------
Seligman Maryland Municipal Fund
Class A 4,219,413 33,396,957 4,321,513
Class C 313,152 2,482,608 319,726
- -------------------------------------------------------------------------------------------------------------
Seligman Massachusetts Municipal Fund
Class A 7,216,167 55,985,242 7,244,180
Class C 442,182 3,432,933 442,125
- -------------------------------------------------------------------------------------------------------------
Seligman Michigan Municipal Fund
Class A 7,967,137 62,918,566 8,141,366
Class C 272,237 2,147,274 276,550
- -------------------------------------------------------------------------------------------------------------
Seligman Missouri Municipal Fund
Class A 3,324,463 24,831,482 3,213,046
Class C 115,556 863,300 111,181
- -------------------------------------------------------------------------------------------------------------
Seligman New Jersey Municipal Fund
Class A 3,220,292 22,646,008 2,930,266
Class C 363,298 2,597,493 334,524
- -------------------------------------------------------------------------------------------------------------
Seligman North Carolina Municipal Fund
Class A 1,650,725 12,818,567 1,658,628
Class C 258,757 2,009,401 258,790
- -------------------------------------------------------------------------------------------------------------
Seligman Ohio Municipal Fund
Class A 10,564,417 82,580,796 10,686,083
Class C 190,994 1,502,684 193,528
- -------------------------------------------------------------------------------------------------------------
Seligman Oregon Municipal Fund
Class A 4,953,087 37,366,614 4,835,156
Class C 347,202 2,616,055 336,918
- -------------------------------------------------------------------------------------------------------------
Seligman Pennsylvania Municipal Fund
Class A 1,630,858 12,405,665 1,605,323
Class C 137,507 1,044,524 134,514
- -------------------------------------------------------------------------------------------------------------
Seligman South Carolina Municipal Fund
Class A 6,968,963 54,356,879 7,031,186
Class C 619,594 4,828,854 621,908
- -------------------------------------------------------------------------------------------------------------
</Table>
The components of net assets for each of the acquired funds (after adjustments
for any permanent book-to-tax differences) at the merger date were as follows:
<Table>
<Caption>
NET UNREALIZED
APPRECIATION
TOTAL CAPITAL (DEPRECIATION) ON ACCUMULATED NET UNDISTRIBUTED NET
NET ASSETS STOCK INVESTMENTS REALIZED GAIN (LOSS) INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Colorado Municipal Fund $ 31,819,551 $ 30,313,233 $ 1,347,167 $ 1 $ 159,150
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Florida Municipal Fund 20,788,582 20,601,686 181,798 (74,724) 79,822
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Georgia Municipal Fund 23,697,787 24,219,528 36,139 (651,949) 94,069
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
86 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
NET UNREALIZED
APPRECIATION
TOTAL CAPITAL (DEPRECIATION) ON ACCUMULATED NET UNDISTRIBUTED NET
NET ASSETS STOCK INVESTMENTS REALIZED GAIN (LOSS) INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Louisiana Municipal Fund $ 25,314,551 $ 25,277,775 $ (71,348) $ 1 $ 108,123
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Maryland Municipal Fund 35,879,565 34,150,803 1,600,668 -- 128,094
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Massachusetts Municipal
Fund 59,418,175 55,919,899 3,266,186 3 232,087
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Michigan Municipal Fund 65,065,840 64,437,930 912,343 (696,733) 412,300
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Missouri Municipal Fund 25,694,782 24,680,323 850,692 (2) 163,769
- ----------------------------------------------------------------------------------------------------------------------------
Seligman New Jersey Municipal Fund 25,243,501 24,704,583 444,542 -- 94,376
- ----------------------------------------------------------------------------------------------------------------------------
Seligman North Carolina Municipal
Fund 14,827,968 13,860,454 894,286 -- 73,228
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Ohio Municipal Fund 84,083,480 80,375,799 3,338,349 (2) 369,334
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Oregon Municipal Fund 39,982,669 38,796,204 991,431 -- 195,034
- ----------------------------------------------------------------------------------------------------------------------------
Seligman Pennsylvania Municipal Fund 13,450,189 12,562,528 816,236 -- 71,425
- ----------------------------------------------------------------------------------------------------------------------------
Seligman South Carolina Municipal
Fund 59,165,733 57,894,002 1,038,372 -- 233,359
- ----------------------------------------------------------------------------------------------------------------------------
Total $524,432,373 $507,794,747 $15,646,861 $(1,423,405) $2,414,170
- ----------------------------------------------------------------------------------------------------------------------------
</Table>
11. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statements of Assets and Liabilities
through Nov. 20, 2009, the date of issuance of each Fund's financial statements.
There were no events or transactions that occurred during the period that
materially impacted the amounts or disclosures in the Funds' financial
statements.
12. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court,
asking the U.S. Supreme Court to stay the District Court proceedings while the
U.S. Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In
late 2003, Seligman conducted an extensive internal review concerning mutual
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 87
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
fund trading practices. Seligman's review, which covered the period 2001-2003,
noted one arrangement that permitted frequent trading in certain open-end
registered investment companies managed by Seligman (the Seligman Funds); this
arrangement was in the process of being closed down by Seligman before September
2003. Seligman identified three other arrangements that permitted frequent
trading, all of which had been terminated by September 2002. In January 2004,
Seligman, on a voluntary basis, publicly disclosed these four arrangements to
its clients and to shareholders of the Seligman Funds. Seligman also provided
information concerning mutual fund trading practices to the SEC and the Office
of the Attorney General of the State of New York (NYAG).
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund
Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the
Seligman Parties), alleging, in substance, that the Seligman Parties permitted
various persons to engage in frequent trading and, as a result, the prospectus
disclosure used by the registered investment companies then managed by Seligman
was and had been misleading. The NYAG included other related claims and also
claimed that the fees charged by Seligman to the Seligman Funds were excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement
resolved all outstanding matters between the Seligman Parties and the NYAG. In
addition to the foregoing matter, the New York staff of the SEC indicated in
September 2005 that it was considering recommending to the Commissioners of the
SEC the instituting of a formal action against Seligman and Seligman Advisors,
Inc. relating to frequent trading in the Seligman Funds. Seligman responded to
the staff in October 2005 that it believed that any action would be both
inappropriate and unnecessary, especially in light of the fact that Seligman had
previously resolved the underlying issue with the Independent Directors of the
Seligman Funds and made recompense to the affected Seligman Funds. There have
been no further developments with the SEC on this matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
88 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS OF
SELIGMAN NATIONAL MUNICIPAL FUND,
SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND,
SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND,
SELIGMAN MINNESOTA MUNICIPAL, AND
SELIGMAN NEW YORK MUNICIPAL FUND:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Seligman National Municipal Fund, Seligman
Minnesota Municipal Fund and Seligman New York Municipal Fund (three of the
portfolios constituting the Seligman Municipal Fund Series, Inc.), and Seligman
California Municipal High-Yield Fund and Seligman California Municipal Quality
Fund (two of the portfolios constituting the Seligman Municipal Series Trust)
(the Funds) as of September 30, 2009, and the related statements of operations,
the statements of changes in net assets, and the financial highlights for the
year then ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The statements of changes in net assets and the financial highlights of
the Funds for the periods presented through September 30, 2008, were audited by
other auditors whose report dated November 26, 2008, expressed an unqualified
opinion on those financial statements and financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of September 30, 2009, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the 2009 financial statements and financial highlights audited
by us as referred to above present fairly, in all material respects, the
financial position of each of the Funds listed above constituting portfolios
within Seligman Municipal Fund Series, Inc. and Seligman Municipal Series Trust
at September 30, 2009, the results of their operations, changes in their net
assets and the financial highlights for the year then ended, in conformity with
U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
November 20, 2009
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 89
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
Each Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Seligman National Municipal Fund
Fiscal year ended Sept. 30, 2009
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 96.84%
</Table>
Tax-exempt distributions are exempt from federal income taxes and should not be
included in the shareholders' gross income. The income from this Fund is subject
to the alternative minimum tax (AMT). The AMT percentage for Sept. 30, 2009 was
9.31%.
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
Seligman California Municipal High-Yield Fund
Fiscal year ended Sept. 30, 2009
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 99.63%
</Table>
Tax-exempt distributions are exempt from federal income taxes and should not be
included in the shareholders' gross income. The income from this Fund is subject
to the alternative minimum tax (AMT). The AMT percentage for Sept. 30, 2009 was
9.91%.
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
Seligman California Municipal Quality Fund
Fiscal year ended Sept. 30, 2009
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 93.44%
CAPITAL GAIN DISTRIBUTION - the Fund designates $150,383 to be taxed as
long-term capital gain.
</Table>
Tax-exempt distributions are exempt from federal income taxes and should not be
included in the shareholders' gross income. The income from this Fund is subject
to the alternative minimum tax (AMT). The AMT percentage for Sept. 30, 2009 was
4.02%.
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
Seligman Minnesota Municipal Fund
Fiscal year ended Sept. 30, 2009
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 99.63%
CAPITAL GAIN DISTRIBUTION - the Fund designates $79,539 to be taxed as long-
term capital gain.
</Table>
Tax-exempt distributions are exempt from federal income taxes and should not be
included in the shareholders' gross income. The income from this Fund is subject
to the alternative minimum tax (AMT). The AMT percentage for Sept. 30, 2009 was
0.00%.
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
90 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman New York Municipal Fund
Fiscal year ended Sept. 30, 2009
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 99.63%
</Table>
Tax-exempt distributions are exempt from federal income taxes and should not be
included in the shareholders' gross income. The income from this Fund is subject
to the alternative minimum tax (AMT). The AMT percentage for Sept. 30, 2009 was
12.41%.
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 91
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
The RiverSource Family of Funds that each Board member oversees consists of 132
funds, which includes 100 RiverSource funds and 32 Seligman funds. Board members
serve until the next regular shareholders' meeting or until he or she reaches
the mandatory retirement age established by the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 2006 Attorney
Minneapolis, MN 55402
Age 55
- ------------------------------------------------------------------------------------------------------------------------------
Arne H. Carlson Board member since Chair, RiverSource Family of Funds, 1999-2006; former None
901 S. Marquette Ave. 1999 Governor of Minnesota
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 2007 Leadership (consulting company)
Minneapolis, MN 55402
Age 55
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 2004 College; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 1985
Minneapolis, MN 55402
Age 74
- ------------------------------------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member since Former Managing Director, Shikiar Asset Management American Progressive
901 S. Marquette Ave. 2005 Insurance
Minneapolis, MN 55402
Age 74
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 2007, College Inc. (manufactures
Minneapolis, MN 55402 Board member since irrigation systems)
Age 70 2002
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member since Retired President and Chief Executive Officer and None
901 S. Marquette Ave. 2008 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 66
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 2004 real estate and asset management company)
Minneapolis, MN 55402
Age 57
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member since Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. 2008 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 68 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 2002 since 2003 (biotechnology); former President, Forester Pharmaceuticals,
Minneapolis, MN 55402 Biotech Inc.
Age 65 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
92 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
- --------------------------------------------------------------------------------
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member since President -- U.S. Asset Management and Chief Investment None
53600 Ameriprise 2001, Officer, Ameriprise Financial, Inc. since 2005;
Financial Center Vice President since President, Chairman of the Board and Chief Investment
Minneapolis, MN 55474 2002 Officer, RiverSource Investments, LLC since 2001;
Age 49 Director, President and Chief Executive Officer,
Ameriprise Certificate Company since 2006; Chairman of
the Board and Chief Executive Officer, RiverSource
Distributors, Inc. since 2006 and of RiverSource Fund
Distributors, Inc. since 2008; Senior Vice
President -- Chief Investment Officer, Ameriprise
Financial, Inc., 2001-2005
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling the RiverSource Family of
Funds at 1(800) 221-2450; contacting your financial intermediary; or visiting
riversource.com/funds (for RiverSource and Threadneedle funds) or seligman.com
(for Seligman funds).
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Patrick T. Bannigan President since 2006 Director and Senior Vice President -- Asset Management,
172 Ameriprise Financial Products and Marketing, RiverSource Investments, LLC
Center and Director and Vice President -- Asset Management,
Minneapolis, MN 55474 Products and Marketing, RiverSource Distributors, Inc.
Age 43 since 2006 and of RiverSource Fund Distributors, Inc.
since 2008; Managing Director and Global Head of
Product, Morgan Stanley Investment Management, 2004-
2006; President, Touchstone Investments, 2002-2004
- --------------------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President since Executive Vice President -- Equity and Fixed Income,
172 Ameriprise Financial 2004 Ameriprise Financial, Inc. and RiverSource Investments,
Center LLC since 2006; Vice President -- Investments,
Minneapolis, MN 55474 Ameriprise Certificate Company since 2003; Senior Vice
Age 45 President -- Fixed Income, Ameriprise Financial, Inc.,
2002-2006 and RiverSource Investments, LLC, 2004-2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Chief Administrative Officer, RiverSource Investments,
5228 Ameriprise Financial 2006 LLC since 2009; Vice President -- Asset Management and
Center Minneapolis, MN Trust Company Services, RiverSource Investments, LLC,
55474 2006-2009; Vice President -- Operations and Compliance,
Age 44 RiverSource Investments, LLC, 2004-2006; Director of
Product Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since 2002 Vice President -- Investment Accounting, Ameriprise
105 Ameriprise Financial Financial, Inc. since 2002; Chief Financial Officer,
Center RiverSource Distributors, Inc. since 2006 and of
Minneapolis, MN 55474 RiverSource Fund Distributors, Inc. since 2008
Age 54
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset Management,
5228 Ameriprise Financial General Counsel and Ameriprise Financial, Inc. since 2005; Chief Counsel,
Center Secretary since 2006 RiverSource Distributors, Inc. and Chief Legal Officer
Minneapolis, MN 55474 and Assistant Secretary, RiverSource Investments, LLC
Age 50 since 2006; Chief Counsel, RiverSource Fund
Distributors, Inc. since 2008; Vice President, General
Counsel and Secretary, Ameriprise Certificate Company
since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc., 2004-2005;
Senior Vice President and Chief Compliance Officer,
USBancorp Asset Management, 2002-2004
- --------------------------------------------------------------------------------------------------------
Eleanor T.M. Hoagland Chief Compliance Chief Compliance Officer, RiverSource Investments, LLC,
100 Park Avenue Officer since 2009 Kenwood Capital Management LLC, Ameriprise Certificate
New York, NY 10010 Company and RiverSource Service Corporation since 2009;
Age 58 Chief Compliance Officer for each of the Seligman funds
since 2004; Anti-Money Laundering Prevention Officer
and Identity Theft Prevention Officer for each of the
Seligman funds since 2008; Managing Director, J. & W.
Seligman & Co. Incorporated and Vice-President for each
of the Seligman funds, 2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 93
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer,
Center since 2004 Ameriprise Financial, Inc. since 2004; Compliance
Minneapolis, MN 55474 Director, Ameriprise Financial, Inc., 2004-2008
Age 45
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
94 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling the RiverSource Family of Funds at 1(800) 221-2450; contacting your
financial intermediary; visiting riversource.com/funds (for RiverSource or
Threadneedle funds) or seligman.com (for Seligman funds); or searching the
website of the Securities and Exchange Commission (SEC) at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio
securities is filed with the SEC by August 31 for the most recent 12-month
period ending June 30 of that year, and is available without charge by visiting
riversource.com/funds (for RiverSource or Threadneedle funds) or seligman.com
(for Seligman funds); or searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT 95
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
On March 11, 2009, Ernst & Young LLP was selected as the Funds' independent
registered public accounting firm for the 2009 fiscal year. A majority of each
Fund's Board of Directors/Trustees, including a majority of the Independent
Directors/Trustees, approved the appointment of Ernst & Young LLP effective
March 18, 2009. The predecessor independent registered public accounting firm's
reports on each Fund's financial statements for the year ended Sept. 30, 2008
and the year ended Sept. 30, 2007 contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles. During such fiscal periods and through March 11, 2009
there were no disagreements between the Funds and the predecessor independent
registered public accounting firm on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures,
which such disagreements, if not resolved to the satisfaction of the predecessor
independent registered public accounting firm, would have caused them to make
reference to the subject matter of the disagreement in connection with their
reports on the financial statements for such fiscal periods.
- --------------------------------------------------------------------------------
96 SELIGMAN MUNICIPAL FUNDS -- 2009 ANNUAL REPORT
(SELIGMAN LOGO)
SELIGMAN MUNICIPAL FUNDS
734 Ameriprise Financial Center
Minneapolis, MN 55474
SELIGMAN.COM
This report must be accompanied or preceded by the Fund's
current prospectus. Seligman mutual funds are part of the
RiverSource Family of Funds, and are distributed by
RiverSource Fund Distributors, Inc., Member FINRA, and
managed by RiverSource Investments, LLC. RiverSource and
Threadneedle are part of Ameriprise Financial, Inc.
Seligman is an offering brand of RiverSource Investments.
(C)2009 RiverSource Investments, LLC. SL-9902 A (11/09)
Item 2. (a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial
officer. A copy of the code of ethics is filed as an exhibit to this
form N-CSR.
(b) During the period covered by this report, there were not any
amendments to the provisions of the code of ethics adopted in 2(a)
above.
(c) During the period covered by this report, there were not any
implicit or explicit waivers to the provisions of the code of ethics
adopted in 2(a).
Item 3. The Registrant's board of directors has determined that independent
directors Pamela G. Carlton, Jeffrey Laikind, John F. Maher and Anne P.
Jones, each qualify as audit committee financial experts.
Item 4. Principal Accountant Fees and Services
Fund - Related Fees
(a) Audit Fees. The fees for the year ended Sept. 30, to Ernst & Young LLP for
professional services rendered for the audit of the annual financial
statements for Seligman Municipal Series Trust were as follows:
2009 - $53,000
(b) Audit-Related Fees. The fees for the year ended Sept. 30, to Ernst & Young
LLP for additional audit-related services rendered for Seligman Municipal
Series Trust were as follows:
2009 - $2,500
(c) Tax Fees. The fees for the year ended Sept. 30, to Ernst & Young LLP for
tax compliance related services rendered for Seligman Municipal Series
Trust were as follows:
2009 - $6,360
(d) All Other Fees. The fees for the year ended Sept. 30, to Ernst & Young LLP
for additional professional services rendered for Seligman Municipal Series
Trust were as follows:
2009 - $0
(e) (1) Audit Committee Pre-Approval Policy. Pursuant to Sarbanes-Oxley
pre-approval requirements, all services to be performed by Ernst & Young
LLP for the registrant and to the registrant's investment adviser and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant must be
pre-approved by the audit committee.
(e) (2) 100% of the services performed for items (b) through (d) above during
2009 were pre-approved by the audit committee.
(f) Not applicable.
(g) Non-Audit Fees. The fees for the year ended Sept. 30, to Ernst & Young LLP
by the registrant for non-audit fees and by the registrant's investment
adviser, and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant were as
follows:
2009 - $831,346
(h) 100% of the services performed in item (g) above during 2009 were
pre-approved by the Ameriprise Financial Audit Committee and/or the
RiverSource Mutual Funds Audit Committee.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. Investments.
(a) The complete schedule of investments is included in Item 1 of this Form
N-CSR.
(b) Not applicable.
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. Purchase 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) Based upon their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date
of this Form N-CSR, the registrant's Principal Financial Officer and
Principal Executive Officer have concluded that those disclosure
controls and procedures provide reasonable assurance that the material
information required to be disclosed by the registrant on this report
is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal controls over
financial reporting 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 has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
Item 12. Exhibits.
(a)(1) Code of ethics as applies to the Registrant's principal
executive officer and principal financial officer, as required to be
disclosed under Item 2 of Form N-CSR, is attached as Ex. 99.CODE ETH.
(a)(2) Separate certification for the Registrant's principal executive
officer and principal financial officer, as required by Section 302 of
the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment
Company Act of 1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment
Company Act of 1940, is attached as EX.99.906 CERT.
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, thereunto duly authorized.
(Registrant) Seligman Municipal Series Trust
By /s/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date December 2, 2009
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/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date December 2, 2009
By /s/ Jeffrey P. Fox
----------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial
Officer
Date December 2, 2009