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: September 30
Date of reporting period: September 30, 2010
Item 1. Reports to Stockholders.
Annual Report
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
SELIGMAN MUNICIPAL FUNDS
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED SEPTEMBER 30, 2010
(Prospectus also enclosed)
EACH FUND SEEKS TO PROVIDE SHAREHOLDERS WITH INCOME EXEMPT FROM REGULAR INCOME
TAX.
Seligman National Municipal Fund
Seligman California Municipal High-Yield Fund
Seligman California Municipal Quality Fund
Seligman Minnesota Municipal Fund
Seligman New York Municipal Fund
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.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance
Seligman National Municipal
Fund.......................... 2
Seligman California Municipal
High-Yield Fund............... 3
Seligman California Municipal
Quality Fund.................. 4
Seligman Minnesota Municipal
Fund.......................... 5
Seligman New York Municipal
Fund.......................... 6
Manager Commentary................. 7
The Funds' Long-term Performance... 14
Fund Expenses Example.............. 24
Portfolios of Investments.......... 27
Statements of Assets and
Liabilities...................... 60
Statements of Operations........... 62
Statements of Changes in Net
Assets........................... 64
Financial Highlights............... 67
Notes to Financial Statements...... 73
Report of Independent Registered
Public Accounting Firm........... 86
Federal Income Tax Information..... 87
Board Members and Officers......... 89
Approval of Investment Management
Services Agreement............... 92
Proxy Voting....................... 93
</Table>
In August 2010, the Board of Directors/Trustees of Seligman National Municipal
Fund, Seligman California Municipal High-Yield Fund, Seligman California
Municipal Quality Fund, Seligman Minnesota Municipal Fund and Seligman New
York Municipal Fund (each, a "Fund" and collectively, the "Funds") approved a
proposal to merge the Fund with and into the corresponding acquiring fund
listed in the table below (each, an "Acquiring Fund"). Each merger is expected
to be a tax-free reorganization for U.S. federal income tax purposes. More
information about each Acquiring Fund and the definitive terms of each of the
proposed mergers will be included in proxy materials.
<Table>
<Caption>
FUND ACQUIRING FUND
- -------------------------------------------------------------------------------------
Seligman National Municipal Fund Columbia Tax-Exempt Fund
- -------------------------------------------------------------------------------------
Seligman California Municipal High- Columbia California Tax-Exempt Fund
Yield Fund
- -------------------------------------------------------------------------------------
Seligman California Municipal Columbia California Tax-Exempt Fund
Quality Fund
- -------------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund Columbia Minnesota Tax-Exempt Fund
(formerly known as RiverSource Minnesota Tax-
Exempt Fund)
- -------------------------------------------------------------------------------------
Seligman New York Municipal Fund Columbia New York Tax-Exempt Fund
- -------------------------------------------------------------------------------------
</Table>
Each of the mergers is subject to certain conditions, including final approval
by shareholders of the Fund. It is currently anticipated that proxy materials
regarding the mergers will be distributed to shareholders of the Funds later
this year or in early 2011, and that meetings of shareholders to consider the
mergers will be held in the first half of 2011.
SEE THE FUNDS' PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUNDS.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
Seligman National Municipal Fund
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman National Municipal Fund (the Fund) Class A shares (excluding sales
charge) gained 5.41% for the 12 months ended Sept. 30, 2010.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which increased 5.81% during the same period.
> The Fund underperformed its peer group, as measured by the Lipper General
Municipal Debt Funds Index, which rose 5.77% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman National Municipal Fund Class A (excluding
sales charge) +5.41% +5.99% +4.95% +5.02%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +5.81% +6.04% +5.13% +5.73%
- ------------------------------------------------------------------------------------------------
Lipper General Municipal Debt Funds Index (unmanaged) +5.77% +4.92% +4.32% +5.11%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index 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 columbiamanagement.com or calling 800.345.6611.
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 do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2010
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 12/31/83) +5.41% +5.99% +4.95% +5.02%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +4.75% +5.19% +4.12% +4.14%
- ------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 12/31/83) +0.46% +4.27% +3.94% +4.51%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +3.76% +5.19% +4.12% +4.14%
- ------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% contingent deferred sales charge (CDSC) if
shares are sold within one year after purchase.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 12.97 years
- ----------------------------------------------------
Effective duration(2) 9.74 years
- ----------------------------------------------------
</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.
- --------------------------------------------------------------------------------
2 SELIGMAN MUNICIPAL FUNDS -- 2010 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) gained 5.57% for the 12 months ended Sept. 30, 2010.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which increased 5.81% during the same period.
> The Fund underperformed its peer group, as measured by the Lipper California
Municipal Debt Funds Index, which rose 5.75% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman California Municipal High-Yield Fund Class A
(excluding sales charge) +5.57% +5.44% +4.73% +5.21%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +5.81% +6.04% +5.13% +5.73%
- ------------------------------------------------------------------------------------------------
Lipper California Municipal Debt Funds Index (unmanaged) +5.75% +4.40% +3.94% +4.84%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index 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 columbiamanagement.com or calling 800.345.6611.
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 do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2010
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 11/20/84) +5.57% +5.44% +4.73% +5.21%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +4.78% +4.56% +3.83% +4.29%
- ------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 11/20/84) +0.61% +3.73% +3.71% +4.70%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +3.79% +4.56% +3.83% +4.29%
- ------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% contingent deferred sales charge (CDSC) if
shares are sold within one year after purchase.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 15.82 years
- ----------------------------------------------------
Effective duration(2) 11.14 years
- ----------------------------------------------------
</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.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 3
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 4.53% for the 12 months ended Sept. 30, 2010.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which increased 5.81% during the same period.
> The Fund underperformed its peer group, as measured by the Lipper California
Municipal Debt Funds Index, which rose 5.75% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman California Municipal Quality Fund Class A
(excluding sales charge) +4.53% +5.04% +4.15% +4.82%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +5.81% +6.04% +5.13% +5.73%
- ------------------------------------------------------------------------------------------------
Lipper California Municipal Debt Funds Index (unmanaged) +5.75% +4.40% +3.94% +4.84%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index 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 columbiamanagement.com or calling 800.345.6611.
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 do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2010
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 11/20/84) +4.53% +5.04% +4.15% +4.82%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +3.75% +4.18% +3.27% +3.91%
- ------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 11/20/84) -0.39% +3.34% +3.13% +4.31%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +2.76% +4.18% +3.27% +3.91%
- ------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% contingent deferred sales charge (CDSC) if
shares are sold within one year after purchase.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 12.10 years
- ----------------------------------------------------
Effective duration(2) 10.71 years
- ----------------------------------------------------
</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.
- --------------------------------------------------------------------------------
4 SELIGMAN MUNICIPAL FUNDS -- 2010 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) gained 5.45% for the 12 months ended Sept. 30, 2010.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which increased 5.81% during the same period.
> The Fund underperformed its peer group, as measured by the Lipper Minnesota
Municipal Debt Funds Index, which rose 5.84% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund Class A (excluding
sales charge) +5.45% +5.42% +4.36% +4.81%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +5.81% +6.04% +5.13% +5.73%
- ------------------------------------------------------------------------------------------------
Lipper Minnesota Municipal Debt Funds Index (unmanaged) +5.84% +5.40% +4.47% +5.10%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index 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 columbiamanagement.com or calling 800.345.6611.
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 do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2010
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 12/30/83) +5.45% +5.42% +4.36% +4.81%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +4.66% +4.59% +3.49% +3.91%
- ------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 12/30/83) +0.42% +3.71% +3.34% +4.30%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +3.66% +4.59% +3.49% +3.91%
- ------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% contingent deferred sales charge (CDSC) if
shares are sold within one year after purchase.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 10.71 years
- ----------------------------------------------------
Effective duration(2) 8.86 years
- ----------------------------------------------------
</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.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 5
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) gained 5.34% for the 12 months ended Sept. 30, 2010.
> The Fund underperformed its benchmark, the Barclays Capital Municipal Bond
Index, which increased 5.81% during the same period.
> The Fund underperformed its peer group, as measured by the Lipper New York
Municipal Debt Funds Index, which rose 6.02% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Sept. 30, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------
Seligman New York Municipal Fund Class A (excluding
sales charge) +5.34% +5.57% +4.61% +5.25%
- ------------------------------------------------------------------------------------------------
Barclays Capital Municipal Bond Index (unmanaged) +5.81% +6.04% +5.13% +5.73%
- ------------------------------------------------------------------------------------------------
Lipper New York Municipal Debt Funds Index (unmanaged) +6.02% +5.17% +4.39% +5.11%
- ------------------------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for index 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 columbiamanagement.com or calling 800.345.6611.
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 do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2010
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A (inception 1/31/84) +5.34% +5.57% +4.61% +5.25%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +4.42% +4.69% +3.71% +4.32%
- ------------------------------------------------------------------------------------------------
With sales charge
Class A (inception 4/22/85) +0.39% +3.88% +3.60% +4.73%
- ------------------------------------------------------------------------------------------------
Class C (inception 5/27/99) +3.43% +4.69% +3.71% +4.32%
- ------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class C shares may be subject to a 1% contingent deferred sales charge (CDSC) if
shares are sold within one year after purchase.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 13.71 years
- ----------------------------------------------------
Effective duration(2) 9.20 years
- ----------------------------------------------------
</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.
- --------------------------------------------------------------------------------
6 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
Kimberly Campbell assumed management of the Seligman National Municipal Fund on
October 1, 2010, just after the close of the annual period. Catherine Stienstra
continued in her role as manager of the remaining Seligman Municipal Funds.
Dear Shareholder,
Each of the Seligman Municipal Funds (the Funds) underperformed the Barclays
Capital Municipal Bond Index (Barclays Index) for the 12 months ended Sept. 30,
2010. All Fund returns are for Class A shares, excluding sales charge, and all
returns are for the 12 months ended Sept. 30, 2010.
- - SELIGMAN NATIONAL MUNICIPAL FUND increased 5.41%.
- - SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND rose 5.57%.
- - SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND gained 4.53%.
- - SELIGMAN MINNESOTA MUNICIPAL FUND advanced 5.45%.
- - SELIGMAN NEW YORK MUNICIPAL FUND rose 5.34%.
A broad barometer applicable to each of the Funds, the Barclays Index, was up
5.81% for the same 12-month period.
SIGNIFICANT PERFORMANCE FACTORS
Generating healthy positive absolute returns, the tax-exempt fixed income market
nevertheless experienced volatility during the annual period given concerns
regarding the possible contagion of peripheral Europe's sovereign debt troubles,
mixed U.S. economic data, and news coverage of state and local U.S.
municipalities' budgetary shortfalls, as revenue from sales, property and
corporate individual incomes taxes all declined significantly. Still, there were
several technical factors that contributed to the tax-exempt bond market's
gains.
First, the introduction of the Build America Bond (BAB) program in early 2009
ushered in a new paradigm for the tax-exempt bond market during the annual
period, skewing the supply/demand equation and creating attractive technicals.
The BAB program, introduced via the American Recovery and Reinvestment Act
(ARRA), authorized state and local governments to issue BABs as taxable bonds in
2009 and 2010 to finance any capital expenditures for which they otherwise could
issue tax-exempt governmental bonds. State and local governments receive a
direct federal subsidy payment for a portion of their borrowing costs on BABs
equal to 35% of the total coupon interest paid to investors. During the annual
period, this reimbursement of borrowing costs allowed municipalities to borrow
more cheaply in the taxable market than in the tax-exempt market, thereby
reducing overall tax-exempt issuance.
Meanwhile, demand for tax-exempt bonds was strong, fueled in part by the
absolute values offered relative to other fixed income sectors. Near-zero yields
offered by money market mutual funds served to entice investors to take on
somewhat more interest rate risk and longer durations to achieve higher yields.
The anticipation of higher marginal personal income tax rates on the state and
local levels and the possibility that the Bush tax cuts on the top two federal
tax brackets may expire further served to boost demand for tax-exempt bonds. In
July and August, the tax-exempt bond market rallied strongly before correcting
modestly in September, as investors appeared to be more comfortable with
improving fundamentals, including lower default rates and reports of growth,
albeit modest, in municipal revenues. Flows into municipal bond mutual funds
were strong during the annual period.
Application of a global rating scale also caught the attention of municipal bond
investors. Moody's and Fitch, two of the three major credit rating agencies,
announced in March a long-anticipated launch in April 2010 of a "recalibration"
of their ratings for municipal securities, based upon the more broadly-
recognized global criteria used for corporate debt. The effect of this change
was higher credit quality ratings for most municipal bond issuers, which, in
turn, was expected to reduce borrowing costs as these issuers came to market.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
As the municipal bond market rallied overall, yields were driven lower across
the tax-exempt bond yield curve, or spectrum of maturities. Lower-quality,
higher-yielding municipal bonds outperformed their higher-quality, lower-
yielding counterparts, and longer-dated municipal bonds outperformed shorter-
maturity tax-exempt securities.
Given these market conditions, the Seligman Municipal Funds benefited most
during the annual period from their significant allocations to bonds rated A and
BBB across a variety of sectors. A-rated and BBB-rated credits materially
outperformed higher-quality tax-exempt bonds for the fiscal year. Seligman
California Municipal Quality Fund was, of course, the exception, as it is
mandated by prospectus to invest only in bonds rated A or higher. Given its
higher quality mandate, its performance relative to the Barclays Index lagged
most.
Further boosting the Funds' results was the combined effect of duration and
yield curve positioning. Each of the Seligman Municipal Funds had a longer
duration than the Barclays Index. Such positioning proved prudent as tax-exempt
bond rates declined during the annual period. Duration is a measure of the
Funds' sensitivity to changes in interest rates. Each Fund also had an emphasis
on securities at the longer-term end of the yield curve. As mentioned earlier,
longer-dated municipal bonds outperformed shorter-maturity tax-exempt securities
during the annual period.
Another positive contributing factor to each of the Seligman Municipal Funds'
performance during the annual period was a significant allocation to education
bonds. Similarly, sizable holdings in hospital bonds buoyed each of the Funds'
performance, with the exception of Seligman New York Municipal Fund. Seligman
New York Municipal Fund was hurt by having only a modest exposure to the
hospital sector, but was so positioned as there was little New York hospital
bond supply available.
Seligman California Municipal Quality Fund benefited during the fiscal year from
its significant holdings in water and sewer bonds. Seligman California Municipal
High-Yield Fund benefited from its significant allocation to and security
selection within housing bonds. Security selection within the state and local
general obligation bond sectors further boosted Seligman California Municipal
High-Yield Fund's performance.
Conversely, detracting from each of the Seligman Municipal Funds' results was a
short Treasury future position held since April 2010. The position was
established as a hedge against rising interest rates, anticipated initially when
it appeared that the U.S. economy was emerging from recession in rather robust
fashion. However, instead what materialized was a classic flight to quality on
the back of concerns regarding sovereign debt crises in peripheral Europe,
financial regulatory reform legislation and loss of stimulus-driven momentum in
domestic economic data. Evidence of the economy being in a soft patch included
second quarter 2010 GDP revised down from a 2.4% advance estimate to just 1.6%
annualized, a significant decline from the prior two quarters. As investor
appetite for risk waned dramatically, U.S. Treasuries rallied particularly
strongly, with interest rates moving lower across the yield curve.
In all five Funds, having only a modest position in transportation bonds
detracted, as this was one of the stronger performing sectors during the annual
period. Each of the Funds was further hurt by having a lesser exposure to state
general obligation bonds than the Barclays Index, as these general obligation
bonds performed well. Seligman New York Municipal Fund was negatively affected
by having only modest exposures to both local general obligation bonds and water
and sewer bonds, sectors that outpaced the Barclays Index. Seligman California
Municipal High-Yield Fund was similarly hurt by having a lesser exposure to
water and sewer bonds than the Barclays Index.
- --------------------------------------------------------------------------------
8 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
CHANGES TO THE FUNDS' PORTFOLIOS
During the annual period, we added to each of the Seligman Municipal Funds'
exposure to longer-dated municipal bonds, with the exception of Seligman New
York Municipal Fund, where we maintained its already sizable allocation to
longer-dated bonds. As mentioned earlier, longer-dated maturities outpaced
shorter-dated maturities, and thus such positioning added value. In four of the
Funds, we decreased positions in AAA-rated bonds and added to allocations to A-
rated and BBB-rated bonds. Again, because lower quality outpaced higher quality
during the annual period, this change boosted the Funds' results. In Seligman
California Municipal Quality Fund, which has a mandated higher quality bias, we
incrementally added to its exposure to A-rated bonds, which helped.
From a sector perspective, in four of the five Funds, we increased exposure to
hospital bonds. (As already indicated, there was little New York hospital bond
supply available.) In Seligman Minnesota Municipal Fund, Seligman New York
Municipal Fund and Seligman National Municipal Fund, we increased exposure to
education bonds.
OUR FUTURE STRATEGY
As of the end of September, we view the prospects for the tax-exempt bond market
to be relatively attractive. We believe the tax-exempt bond market may continue
to perform well due primarily to favorable supply/demand technical factors. From
our perspective, demand may remain strong given widespread expectations for
higher federal, and in many cases, state and local, income taxes. At the same
time, new issuance of tax-exempt municipal bonds appear likely to continue to
decline. Further, although we believe budget pressures will likely persist for
state and local governments, revenues did, as mentioned earlier, increase during
the third calendar quarter, which may indicate the beginnings of a turnaround.
In our view, the combination of slowly improving credit fundamentals and strong
technicals will continue to argue for municipal bonds to perform well over the
coming months.
It appears the Federal Reserve Board (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 presently expect to maintain the Funds' duration longer than that of the
Barclays Index. That said, we may seek to modify the extent of the long duration
position in select Funds, including Seligman National Municipal Fund. As we
expect the differential in yields between variously rated municipal bonds to
narrow 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,
with the exception, naturally, of Seligman California Municipal Quality Fund,
where we intend to focus on A-rated bonds. We presently expect to maintain the
Funds' allocations to bonds in these credit categories at a moderately greater
weighting than in the Barclays Index. While we presently intend to maintain a
sizable position in the health care sector, we may seek opportunities to reduce
exposure given the recent outperformance in the hospital sector and the
potential impact of pending legislation on hospitals. In all, we believe the
Funds should be well positioned given our view of market conditions ahead.
That said, there remained several key variables at the end of the annual period
that could significantly alter tax-exempt bond market conditions in the coming
months. For example, it is not yet known whether the Build America Bond program
will be extended past 2010. Further, it has yet to be decided whether the Bush
tax cuts will expire at the end of December. It has also yet to be seen how the
pace of U.S. economic growth will fare without significant stimulus-driven
momentum. We will, of course, carefully monitor these
> In our view, the combination of slowly improving credit fundamentals and
strong technicals will continue to argue for municipal bonds to perform well
over the coming months.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
and other variables and depending on the ultimate outcome of these questions, we
will not hesitate to adjust the Funds' duration, yield curve, credit quality
and/or sector positioning accordingly.
Seligman National Municipal Fund
TOP TEN STATES(1) (at Sept. 30, 2010)
- ---------------------------------------------------------------------
<Table>
Ohio 10.9%
- ---------------------------------------------------------------------------
California 10.3%
- ---------------------------------------------------------------------------
Massachusetts 6.7%
- ---------------------------------------------------------------------------
South Carolina 6.3%
- ---------------------------------------------------------------------------
Florida 5.1%
- ---------------------------------------------------------------------------
Illinois 4.7%
- ---------------------------------------------------------------------------
Georgia 4.5%
- ---------------------------------------------------------------------------
Wisconsin 4.4%
- ---------------------------------------------------------------------------
New York 4.2%
- ---------------------------------------------------------------------------
Louisiana 4.2%
- ---------------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding Cash &
Cash Equivalents.)
Seligman National Municipal Fund
QUALITY BREAKDOWN(1) (at Sept. 30, 2010)
- ---------------------------------------------------------------------
<Table>
AAA rating 21.0%
- ---------------------------------------------------------------------------
AA rating 22.2%
- ---------------------------------------------------------------------------
A rating 41.3%
- ---------------------------------------------------------------------------
BBB rating 13.6%
- ---------------------------------------------------------------------------
Non-rated 1.9%
- ---------------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total fixed income securities
(excluding Cash & Cash Equivalents.)
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.
Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) rates a security using an internal
rating system when Moody's doesn't provide a rating. Ratings for 1.8% of the
bond portfolio assets were determined through internal analysis.
Seligman California Municipal High-Yield Fund
QUALITY BREAKDOWN(1) (at Sept. 30, 2010)
- ---------------------------------------------------------------------
<Table>
AAA rating 4.2%
- ---------------------------------------------------------------------------
AA rating 23.5%
- ---------------------------------------------------------------------------
A rating 57.4%
- ---------------------------------------------------------------------------
BBB rating 14.1%
- ---------------------------------------------------------------------------
Non-investment grade 0.8%
- ---------------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total fixed income securities
(excluding Cash & Cash Equivalents).
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.
Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) rates a security using an internal
rating system when Moody's doesn't provide a rating.
- --------------------------------------------------------------------------------
10 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal Quality Fund
QUALITY BREAKDOWN(1) (at Sept. 30, 2010)
- ---------------------------------------------------------------------
<Table>
AAA rating 14.4%
- ---------------------------------------------------------------------------
AA rating 43.7%
- ---------------------------------------------------------------------------
A rating 41.9%
- ---------------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total fixed income securities
(excluding Cash & Cash Equivalents).
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.
Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) rates a security using an internal
rating system when Moody's doesn't provide a rating.
Seligman Minnesota Municipal Fund
QUALITY BREAKDOWN(1) (at Sept. 30, 2010)
- ---------------------------------------------------------------------
<Table>
AAA rating 41.0%
- ---------------------------------------------------------------------------
AA rating 12.6%
- ---------------------------------------------------------------------------
A rating 37.3%
- ---------------------------------------------------------------------------
BBB rating 8.7%
- ---------------------------------------------------------------------------
Non-rated 0.4%
- ---------------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total fixed income securities
(excluding Cash & Cash Equivalents.)
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.
Columbia Management Investment Advisers, LLC (formerly known as 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.
Seligman New York Municipal Fund
QUALITY BREAKDOWN(1) (at Sept. 30, 2010)
- ---------------------------------------------------------------------
<Table>
AAA rating 29.9%
- ---------------------------------------------------------------------------
AA rating 38.4%
- ---------------------------------------------------------------------------
A rating 26.5%
- ---------------------------------------------------------------------------
BBB rating 5.2%
- ---------------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total fixed income securities
(excluding Cash & Cash Equivalents).
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.
Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) rates a security using an internal
rating system when Moody's doesn't provide a rating.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 11
MANAGER COMMENTARY (continued) -------------------------------------------------
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, as applicable.
Catherine Stienstra
Portfolio Manager
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 Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for a Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of any Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
12 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
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 10/1/00 to
9/30/10) as compared to the performance of the Barclays Capital Municipal Bond
Index and the Lipper General Municipal Debt Funds Index. In comparing the Fund's
Class A shares to these indices, 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. 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 columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN NATIONAL MUNICIPAL FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,046 $11,335 $12,129 $15,553
- -------------------------------------------------------------------------------------------------
Average annual total return +0.46% +4.27% +3.94% +4.51%
- -------------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $10,581 $11,925 $12,841 $17,459
- -------------------------------------------------------------------------------------------------
Average annual total return +5.81% +6.04% +5.13% +5.73%
- -------------------------------------------------------------------------------------------------
LIPPER GENERAL MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $10,577 $11,550 $12,357 $16,464
- -------------------------------------------------------------------------------------------------
Average annual total return +5.77% +4.92% +4.32% +5.11%
- -------------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 2.
- --------------------------------------------------------------------------------
14 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN NATIONAL MUNICIPAL FUND
LINE GRAPH)
<Table>
<Caption>
SELIGMAN NATIONAL
MUNICIPAL FUND
CLASS A BARCLAYS CAPITAL LIPPER GENERAL
(INCLUDES SALES MUNICIPAL BOND MUNICIPAL DEBT
CHARGE) INDEX(1) FUNDS INDEX(2)
----------------- ------------------ --------------
10/1/00 $ 9,525 $10,000 $10,000
12/00 9,975 10,437 10,434
3/01 10,128 10,669 10,650
6/01 10,152 10,738 10,710
9/01 10,417 11,040 10,983
12/01 10,327 10,972 10,867
3/02 10,393 11,076 10,959
6/02 10,665 11,481 11,335
9/02 11,004 12,026 11,840
12/02 11,014 12,026 11,805
3/03 11,142 12,171 11,891
6/03 11,380 12,485 12,220
9/03 11,367 12,494 12,240
12/03 11,569 12,665 12,434
3/04 11,742 12,884 12,600
6/04 11,488 12,579 12,319
9/04 11,839 13,069 12,776
12/04 11,958 13,232 12,948
3/05 11,973 13,228 12,944
6/05 12,193 13,615 13,330
9/05 12,216 13,598 13,323
12/05 12,322 13,697 13,427
3/06 12,391 13,731 13,490
6/06 12,436 13,736 13,492
9/06 12,654 14,204 13,955
12/06 12,790 14,361 14,112
3/07 12,934 14,477 14,217
6/07 12,916 14,381 14,121
9/07 13,061 14,643 14,254
12/07 13,205 14,843 14,307
3/08 13,153 14,752 14,104
6/08 13,211 14,846 14,208
9/08 12,792 14,369 13,567
12/08 12,781 14,476 12,955
3/09 13,223 15,087 13,654
6/09 13,686 15,406 14,222
9/09 14,737 16,503 15,567
12/09 14,494 16,344 15,352
3/10 14,681 16,549 15,584
6/10 14,933 16,885 15,852
9/10 15,553 17,459 16,464
</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 includes the 30 largest
municipal debt funds tracked by Lipper Inc. The index's returns include net
reinvested dividends.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 15
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
10/1/00 to 9/30/10) as compared to the performance of the Barclays Capital
Municipal Bond Index and the Lipper California Municipal Debt Funds Index. In
comparing the Fund's Class A shares to these indices, 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. 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 columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN CALIFORNIA MUNICIPAL HIGH-YIELD FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,061 $11,160 $12,000 $15,839
- -------------------------------------------------------------------------------------------------
Average annual total return +0.61% +3.73% +3.71% +4.70%
- -------------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $10,581 $11,925 $12,841 $17,459
- -------------------------------------------------------------------------------------------------
Average annual total return +5.81% +6.04% +5.13% +5.73%
- -------------------------------------------------------------------------------------------------
LIPPER CALIFORNIA MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $10,575 $11,380 $12,134 $16,038
- -------------------------------------------------------------------------------------------------
Average annual total return +5.75% +4.40% +3.94% +4.84%
- -------------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 3.
- --------------------------------------------------------------------------------
16 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN CALIFORNIA MUNICIPAL
HIGH-YIELD FUND LINE GRAPH)
<Table>
<Caption>
SELIGMAN CALIFORNIA
MUNICIPAL HIGH-YIELD
FUND CLASS BARCLAYS CAPITAL LIPPER CALIFORNIA
A (INCLUDES MUNICIPAL BOND MUNICIPAL DEBT
SALES CHARGE) INDEX(1) FUNDS INDEX(2)
-------------------- ------------------ -----------------
10/1/00 $ 9,525 $10,000 $10,000
12/00 9,902 10,437 10,427
3/01 10,031 10,669 10,573
6/01 10,052 10,738 10,560
9/01 10,453 11,040 10,942
12/01 10,358 10,972 10,834
3/02 10,329 11,076 10,852
6/02 10,640 11,481 11,212
9/02 11,131 12,026 11,806
12/02 11,084 12,026 11,699
3/03 11,185 12,171 11,770
6/03 11,409 12,485 12,062
9/03 11,408 12,494 12,015
12/03 11,597 12,665 12,231
3/04 11,842 12,884 12,429
6/04 11,606 12,579 12,136
9/04 12,013 13,069 12,617
12/04 12,166 13,232 12,796
3/05 12,243 13,228 12,816
6/05 12,515 13,615 13,216
9/05 12,569 13,598 13,215
12/05 12,645 13,697 13,319
3/06 12,717 13,731 13,380
6/06 12,795 13,736 13,371
9/06 13,071 14,204 13,828
12/06 13,232 14,361 13,986
3/07 13,379 14,477 14,091
6/07 13,371 14,381 13,984
9/07 13,510 14,643 14,091
12/07 13,680 14,843 14,122
3/08 13,608 14,752 13,856
6/08 13,793 14,846 13,982
9/08 13,307 14,369 13,348
12/08 13,048 14,476 12,597
3/09 13,445 15,087 13,254
6/09 13,730 15,406 13,684
9/09 15,002 16,503 15,164
12/09 14,593 16,344 14,823
3/10 14,918 16,549 15,078
6/10 15,202 16,885 15,392
9/10 15,839 17,459 16,038
</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 includes the 30 largest
California municipal debt funds tracked by Lipper Inc. The index's returns
include net reinvested dividends.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 17
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
10/1/00 to 9/30/10) as compared to the performance of the Barclays Capital
Municipal Bond Index and the Lipper California Municipal Debt Funds Index. In
comparing the Fund's Class A shares to these indices, 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. 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 columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN CALIFORNIA MUNICIPAL QUALITY FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $9,961 $11,035 $11,668 $15,261
- -------------------------------------------------------------------------------------------------
Average annual total return -0.39% +3.34% +3.13% +4.31%
- -------------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $10,581 $11,925 $12,841 $17,459
- -------------------------------------------------------------------------------------------------
Average annual total return +5.81% +6.04% +5.13% +5.73%
- -------------------------------------------------------------------------------------------------
LIPPER CALIFORNIA MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $10,575 $11,380 $12,134 $16,038
- -------------------------------------------------------------------------------------------------
Average annual total return +5.75% +4.40% +3.94% +4.84%
- -------------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
18 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN CALIFORNIA MUNICIPAL
QUALITY FUND LINE GRAPH)
<Table>
<Caption>
SELIGMAN CALIFORNIA
MUNICIPAL QUALITY
FUND CLASS BARCLAYS CAPITAL LIPPER CALIFORNIA
A (INCLUDES MUNICIPAL BOND MUNICIPAL DEBT
SALES CHARGE) INDEX(1) FUNDS INDEX(2)
------------------- ------------------ -----------------
10/1/00 $ 9,525 $10,000 $10,000
12/00 10,032 10,437 10,427
3/01 10,168 10,669 10,573
6/01 10,098 10,738 10,560
9/01 10,544 11,040 10,942
12/01 10,465 10,972 10,834
3/02 10,387 11,076 10,852
6/02 10,768 11,481 11,212
9/02 11,313 12,026 11,806
12/02 11,214 12,026 11,699
3/03 11,319 12,171 11,770
6/03 11,579 12,485 12,062
9/03 11,498 12,494 12,015
12/03 11,666 12,665 12,231
3/04 11,831 12,884 12,429
6/04 11,572 12,579 12,136
9/04 11,984 13,069 12,617
12/04 12,157 13,232 12,796
3/05 12,147 13,228 12,816
6/05 12,451 13,615 13,216
9/05 12,453 13,598 13,215
12/05 12,532 13,697 13,319
3/06 12,563 13,731 13,380
6/06 12,581 13,736 13,371
9/06 12,844 14,204 13,828
12/06 12,927 14,361 13,986
3/07 13,018 14,477 14,091
6/07 13,014 14,381 13,984
9/07 13,166 14,643 14,091
12/07 13,304 14,843 14,122
3/08 13,246 14,752 13,856
6/08 13,368 14,846 13,982
9/08 12,869 14,369 13,348
12/08 12,949 14,476 12,597
3/09 13,340 15,087 13,254
6/09 13,536 15,406 13,684
9/09 14,598 16,503 15,164
12/09 14,344 16,344 14,823
3/10 14,512 16,549 15,078
6/10 14,682 16,885 15,392
9/10 15,261 17,459 16,038
</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 includes the 30 largest
California municipal debt funds tracked by Lipper Inc. The index's returns
include net reinvested dividends.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 19
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 10/1/00 to
9/30/10) as compared to the performance of the Barclays Capital Municipal Bond
Index and the Lipper Minnesota Municipal Debt Funds Index. In comparing the
Fund's Class A shares to these indices, 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. 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 columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN MINNESOTA MUNICIPAL FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,042 $11,155 $11,785 $15,243
- -------------------------------------------------------------------------------------------------
Average annual total return +0.42% +3.71% +3.34% +4.30%
- -------------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $10,581 $11,925 $12,841 $17,459
- -------------------------------------------------------------------------------------------------
Average annual total return +5.81% +6.04% +5.13% +5.73%
- -------------------------------------------------------------------------------------------------
LIPPER MINNESOTA MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $10,584 $11,708 $12,446 $16,435
- -------------------------------------------------------------------------------------------------
Average annual total return +5.84% +5.40% +4.47% +5.10%
- -------------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 5.
- --------------------------------------------------------------------------------
20 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN MINNESOTA MUNICIPAL FUND
LINE GRAPH)
<Table>
<Caption>
SELIGMAN MINNESOTA
MUNICIPAL FUND
CLASS A BARCLAYS CAPITAL LIPPER MINNESOTA
(INCLUDES SALES MUNICIPAL BOND MUNICIPAL DEBT
CHARGE) INDEX(1) FUNDS INDEX(2)
------------------ ------------------ ----------------
10/1/00 $ 9,525 $10,000 $10,000
12/00 10,008 10,437 10,406
3/01 10,185 10,669 10,595
6/01 10,230 10,738 10,661
9/01 10,479 11,040 10,921
12/01 10,433 10,972 10,879
3/02 10,492 11,076 10,973
6/02 10,793 11,481 11,308
9/02 11,234 12,026 11,763
12/02 11,249 12,026 11,778
3/03 11,361 12,171 11,940
6/03 11,574 12,485 12,215
9/03 11,574 12,494 12,220
12/03 11,756 12,665 12,391
3/04 11,894 12,884 12,587
6/04 11,604 12,579 12,315
9/04 11,967 13,069 12,714
12/04 12,074 13,232 12,877
3/05 12,046 13,228 12,860
6/05 12,288 13,615 13,224
9/05 12,313 13,598 13,205
12/05 12,351 13,697 13,306
3/06 12,373 13,731 13,340
6/06 12,398 13,736 13,338
9/06 12,687 14,204 13,744
12/06 12,768 14,361 13,879
3/07 12,838 14,477 13,978
6/07 12,827 14,381 13,884
9/07 13,006 14,643 14,038
12/07 13,164 14,843 14,146
3/08 13,174 14,752 14,064
6/08 13,229 14,846 14,175
9/08 13,016 14,369 13,702
12/08 13,303 14,476 13,378
3/09 13,646 15,087 14,169
6/09 13,754 15,406 14,533
9/09 14,455 16,503 15,529
12/09 14,319 16,344 15,440
3/10 14,501 16,549 15,622
6/10 14,713 16,885 15,910
9/10 15,243 17,459 16,435
</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 includes the 10 largest
Minnesota municipal debt funds tracked by Lipper Inc. The index's returns
include net reinvested dividends.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 21
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 10/1/00 to
9/30/10) as compared to the performance of the Barclays Capital Municipal Bond
Index and the Lipper New York Municipal Debt Funds Index. In comparing the
Fund's Class A shares to these indices, 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. 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 columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Sept. 30, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
SELIGMAN NEW YORK MUNICIPAL FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,039 $11,209 $11,933 $15,883
- ------------------------------------------------------------------------------------------
Average annual total return +0.39% +3.88% +3.60% +4.73%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL MUNICIPAL BOND INDEX(1)
Cumulative value of $10,000 $10,581 $11,925 $12,841 $17,459
- ------------------------------------------------------------------------------------------
Average annual total return +5.81% +6.04% +5.13% +5.73%
- ------------------------------------------------------------------------------------------
LIPPER NEW YORK MUNICIPAL DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $10,602 $11,632 $12,396 $16,466
- ------------------------------------------------------------------------------------------
Average annual total return +6.02% +5.17% +4.39% +5.11%
- ------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
22 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN SELIGMAN NEW YORK MUNICIPAL FUND
LINE GRAPH)
<Table>
<Caption>
SELIGMAN NEW
YORK MUNICIPAL LIPPER NEW
FUND CLASS BARCLAYS CAPITAL YORK MUNICIPAL
A (INCLUDES MUNICIPAL BOND DEBT FUNDS
SALES CHARGE) INDEX(1) INDEX(2)
-------------- ------------------ ------------------
10/1/00 $ 9,525 $10,000 $10,000
12/00 10,108 10,437 10,491
3/01 10,285 10,669 10,697
6/01 10,351 10,738 10,774
9/01 10,563 11,040 11,014
12/01 10,459 10,972 10,910
3/02 10,576 11,076 11,033
6/02 10,857 11,481 11,387
9/02 11,403 12,026 11,942
12/02 11,395 12,026 11,895
3/03 11,566 12,171 11,979
6/03 11,820 12,485 12,289
9/03 11,773 12,494 12,293
12/03 11,994 12,665 12,484
3/04 12,143 12,884 12,641
6/04 11,835 12,579 12,335
9/04 12,198 13,069 12,786
12/04 12,358 13,232 12,930
3/05 12,371 13,228 12,919
6/05 12,676 13,615 13,303
9/05 12,682 13,598 13,282
12/05 12,764 13,697 13,359
3/06 12,800 13,731 13,411
6/06 12,794 13,736 13,399
9/06 13,139 14,204 13,861
12/06 13,253 14,361 14,011
3/07 13,341 14,477 14,103
6/07 13,297 14,381 14,007
9/07 13,500 14,643 14,156
12/07 13,699 14,843 14,258
3/08 13,645 14,752 14,057
6/08 13,727 14,846 14,194
9/08 13,340 14,369 13,553
12/08 13,624 14,476 13,069
3/09 13,972 15,087 13,734
6/09 14,176 15,406 14,257
9/09 15,079 16,503 15,531
12/09 14,935 16,344 15,352
3/10 15,106 16,549 15,598
6/10 15,352 16,885 15,880
9/10 15,883 17,459 16,466
</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 includes the 30 largest New
York municipal debt funds tracked by Lipper Inc. The index's returns include
net reinvested dividends.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 23
FUND EXPENSES EXAMPLES ---------------------------------------------------------
(UNAUDITED)
As a shareholder of a Fund, you incur two types of costs: (i) transaction costs,
including sales charges (loads) on purchase payments; and (ii) ongoing costs,
which may include management fees; distribution and service (Rule 12b-1) fees;
and other Fund fees and expenses. These examples are intended to help you
understand your ongoing costs (in dollars) of investing in each 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 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). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the expense ratio of each of the acquired funds as of the acquired fund's
most recent shareholder report.
These examples are based on an investment of $1,000 invested at the beginning of
the period indicated and held until Sept. 30, 2010.
ACTUAL EXPENSES
The first line of each table provides information about actual account values
and actual expenses for each class. 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" (or "Direct expenses paid during the period", if applicable) to estimate
the expenses you paid on your account during this period. You can also estimate
the direct and indirect expenses you paid over the period (if applicable) by
using the number in the first line under the heading "Direct and indirect
expenses paid during the period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of each table provides information about hypothetical account
values and hypothetical expenses based on each actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. 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 each 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 each 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 each 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, 2010 SEPT. 30, 2010 THE PERIOD(a) EXPENSE RATIO
- -----------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,058.10 $4.08 .79%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.11 $4.00 .79%
- -----------------------------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,055.40 $7.93 1.54%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.35 $7.79 1.54%
- -----------------------------------------------------------------------------------------------
</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, 2010: +5.81%
for Class A and +5.54% for Class C.
- --------------------------------------------------------------------------------
24 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal High-Yield Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2010 SEPT. 30, 2010 THE PERIOD(a) EXPENSE RATIO
- -----------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,061.70 $4.08 .79%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.11 $4.00 .79%
- -----------------------------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,057.70 $7.94 1.54%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.35 $7.79 1.54%
- -----------------------------------------------------------------------------------------------
</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, 2010: +6.17%
for Class A and +5.77% for Class C.
Seligman California Municipal Quality Fund
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
APRIL 1, 2010 SEPT. 30, 2010 THE PERIOD(a) THE PERIOD(b)
- -----------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,051.50 $4.06 $4.11
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.11 $4.00 $4.05
- -----------------------------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,047.80 $7.91 $7.96
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.35 $7.79 $7.84
- -----------------------------------------------------------------------------------------------
</Table>
ANNUALIZED EXPENSE RATIOS
<Table>
<Caption>
FUND'S ACQUIRED FUND TOTAL FUND AND
ANNUALIZED FEES AND ACQUIRED FUND FEES
EXPENSE RATIO EXPENSES AND EXPENSES
- -----------------------------------------------------------------------------------
Class A .79% .01% .80%
- -----------------------------------------------------------------------------------
Class C 1.54% .01% 1.55%
- -----------------------------------------------------------------------------------
</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) Expenses are equal to the annualized expense ratio for each class as
indicated above, plus the acquired fund fees and expenses, multiplied by the
average account value over the period, multiplied by 183/365 (to reflect the
one-half year period).
(c) Based on the actual return for the six months ended Sept. 30, 2010: +5.15%
for Class A and +4.78% for Class C.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 25
FUND EXPENSES EXAMPLES (continued) ---------------------------------------------
Seligman Minnesota Municipal Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2010 SEPT. 30, 2010 THE PERIOD(a) EXPENSE RATIO
- -----------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,051.10 $4.06 .79%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.11 $4.00 .79%
- -----------------------------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,048.50 $7.91 1.54%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.35 $7.79 1.54%
- -----------------------------------------------------------------------------------------------
</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, 2010: +5.11%
for Class A and +4.85% for Class C.
Seligman New York Municipal Fund
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
APRIL 1, 2010 SEPT. 30, 2010 THE PERIOD(a) EXPENSE RATIO
- -----------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,051.50 $4.06 .79%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.11 $4.00 .79%
- -----------------------------------------------------------------------------------------------
Class C
- -----------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,047.50 $7.90 1.54%
- -----------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.35 $7.79 1.54%
- -----------------------------------------------------------------------------------------------
</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, 2010: +5.15%
for Class A and +4.75% for Class C.
- --------------------------------------------------------------------------------
26 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman National Municipal Fund
SEPT. 30, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (97.0%)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
ALABAMA (0.2%)
Selma Industrial Development Board
Revenue Bonds
Gulf Opportunity Zone-International Paper
Series 2010
05-01-34 5.800% $1,100,000 $1,142,537
- -------------------------------------------------------------------------------------
ALASKA (1.2%)
Alaska Energy Authority
Refunding Revenue Bonds
Bradley Lake 4th Series 2000 (AGM)
07-01-20 6.000 4,145,000 5,048,362
07-01-21 6.000 2,395,000 2,920,343
---------------
Total 7,968,705
- -------------------------------------------------------------------------------------
ARIZONA (0.9%)
Arizona Transportation Board
Revenue Bonds
Maricopa County Regional Area Road Fund
Series 2007
07-01-25 5.000 1,500,000 1,683,060
Arizona Water Infrastructure Finance Authority
Revenue Bonds
Water Quality
Series 2008A
10-01-22 5.000 1,500,000 1,741,305
Maricopa County Pollution Control Corp.
Refunding Revenue Bonds
Southern California Education Co.
Series 2000B-RMKT
06-01-35 5.000 2,175,000 2,237,031
---------------
Total 5,661,396
- -------------------------------------------------------------------------------------
CALIFORNIA (10.1%)
Abag Finance Authority for Nonprofit Corporations
Revenue Bonds
Sharp Healthcare
Series 2009
08-01-39 6.250 4,000,000 4,486,840
California Health Facilities Financing Authority
Revenue Bonds
Cedars-Sinai Medical Center
Series 2009
08-15-39 5.000 1,850,000 1,872,385
California Health Facilities Financing Authority
Revenue Bonds
Providence Health Services
Series 2009B
10-01-39 5.500 5,250,000 5,635,140
California Statewide Communities Development Authority
Revenue Bonds
John Muir Health
Series 2006A
08-15-32 5.000 1,000,000 1,000,950
County of Sacramento
Revenue Bonds
Senior Series 2009B
07-01-39 5.750 4,000,000 4,402,200
Foothill-Eastern Transportation Corridor Agency
Refunding Revenue Bonds
Series 1999
01-15-40 5.750 4,100,000 4,003,158
Golden State Tobacco Securitization Corp.
Asset-Backed Revenue Bonds
Senior Series 2007A-1
06-01-47 5.125 990,000 673,477
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Mission Bay South Redevelopment
Series 2009D
08-01-39 6.625 500,000 548,585
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2005
03-01-32 5.000 1,500,000 1,519,815
08-01-35 5.000 8,000,000 8,054,080
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2007
12-01-32 5.000 2,000,000 2,033,600
11-01-37 5.000 3,000,000 3,023,010
12-01-37 5.000 1,700,000 1,713,124
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2008
03-01-27 5.500 1,000,000 1,083,430
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2009
04-01-38 6.000 5,000,000 5,558,650
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2010
03-01-40 5.500 6,000,000 6,338,280
State of California
Unlimited General Obligation Refunding Bonds
Series 2007
08-01-30 4.500 5,550,000 5,414,469
University of California
Revenue Bonds
General
Series 2009Q
05-15-34 5.000 5,750,000 6,181,364
Yosemite Community College District
Unlimited General Obligation Bonds
Capital Appreciation Election of 2004
Zero Coupon
Series 2010D
08-01-31 6.461 5,000,000(g) 1,441,250
---------------
Total 64,983,807
- -------------------------------------------------------------------------------------
COLORADO (2.5%)
City & County of Denver
Unlimited General Obligation Bonds
Justice System Facilities & Zoo
Series 2005
08-01-25 5.000 1,000,000 1,120,570
City of Westminster
Revenue Bonds
Post Project
Series 2007D (AGM)
12-01-23 5.000 1,240,000 1,390,623
Colorado Health Facilities Authority
Revenue Bonds
Evangelical Lutheran
Series 2009A
06-01-38 6.125 750,000 771,330
Colorado Health Facilities Authority
Unrefunded Revenue Bonds
Series 2000
12-01-25 6.900 680,000 695,803
Colorado State Board of Governors
Revenue Bonds
Series 2008A (AGM)
03-01-27 5.000 1,250,000 1,363,025
Platte River Power Authority
Revenue Bonds
Series 2009HH
06-01-24 5.000 1,000,000 1,153,120
Regional Transportation District
Refunding Revenue Bonds
Series 2007A
11-01-24 5.250 1,000,000 1,240,230
University of Colorado Hospital Authority
Refunding Revenue Bonds
Series 1997A (AMBAC)
11-15-22 5.250 1,000,000 1,000,750
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 27
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
COLORADO (CONT.)
University of Colorado Hospital Authority
Refunding Revenue Bonds
Series 2009A
11-15-29 6.000% $5,000,000 $5,411,950
University of Colorado
Revenue Bonds
Series 2006A (AMBAC)
06-01-23 5.000 1,000,000 1,101,490
Western State College
Revenue Bonds
Series 2009
05-15-39 5.000 1,000,000 1,050,390
---------------
Total 16,299,281
- -------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA (0.4%)
District of Columbia
Refunding Revenue Bonds
2nd Series 2009B
12-01-23 5.000 2,000,000 2,299,980
- -------------------------------------------------------------------------------------
FLORIDA (4.9%)
City of Ocala
Revenue Bonds
Series 2007A (NPFGC)
10-01-24 5.000 2,985,000 3,224,367
County of Broward
Revenue Bonds
Series 2001J-I (AMBAC) A.M.T.
10-01-26 5.250 2,000,000 2,021,560
County of Polk
Improvement Refunding Revenue Bonds
Series 2006 (NPFGC)
12-01-20 5.000 1,040,000 1,124,458
County of St. Johns
Revenue Bonds
Series 2006 (AMBAC)
10-01-26 5.000 1,000,000 1,069,400
Florida Housing Finance Corp.
Revenue Bonds
Homeowner Mortgage
Series 2000-11 (AGM) A.M.T.
01-01-32 5.950 310,000 310,270
Florida Ports Financing Commission
Revenue Bonds
State Transportation Trust Fund
Series 1996 (NPFGC) A.M.T.
06-01-27 5.375 2,500,000 2,501,325
Florida State Board of Education
Revenue Bonds
Series 2007A (AMBAC)
07-01-18 5.000 2,000,000 2,339,340
Marion County Hospital District
Improvement Refunding Revenue Bonds
Health Systems -- Munroe Regional
Series 2007
10-01-29 5.000 1,000,000 1,005,870
Marion County Hospital District
Unrefunded Revenue Bonds
Health Systems -- Munroe
Series 1999
10-01-24 5.625 10,000 10,008
Orange County Health Facilities Authority
Revenue Bonds
Orlando Regional Healthcare
Series 2008C
10-01-35 5.250 1,000,000 1,017,640
Orange County School Board
Certificate of Participation
Series 2005B (AMBAC)
08-01-25 5.000 2,440,000 2,561,511
Reedy Creek Improvement District
Unlimited General Obligation Bonds
Series 2005A (AMBAC)
06-01-25 5.000 5,000,000 5,254,250
Reedy Creek Improvement District
Unrefunded Revenue Bonds
Series 1997-1 (AMBAC)
10-01-19 5.125 230,000 230,382
Sarasota County Public Hospital Board
Refunding Revenue Bonds
Sarasota Memorial Hospital
Series 1998B (NPFGC)
07-01-28 5.500 6,980,000 7,646,730
South Florida Water Management District
Certificate of Participation
Series 2006 (AMBAC)
10-01-26 5.000 1,400,000 1,478,638
---------------
Total 31,795,749
- -------------------------------------------------------------------------------------
GEORGIA (4.4%)
Barnesville-Lamar County Industrial Development Authority
Revenue Bonds
Gordon College Properties
Series 2004A
08-01-25 5.000 1,250,000 1,279,675
Cartersville Development Authority
Refunding Revenue Bonds
Anheuser-Busch Project
Series 2002 A.M.T.
02-01-32 5.950 1,250,000 1,268,225
City of Atlanta
Revenue Bonds
General
Series 2000B (NPFGC/FGIC) A.M.T.
01-01-30 5.625 2,000,000 2,013,600
City of Atlanta
Revenue Bonds
Series 2004 (AGM)
11-01-25 5.750 1,000,000 1,210,720
DeKalb County Hospital Authority
Revenue Bonds
DeKalb Medical Center, Inc. Project
Series 2010
09-01-40 6.125 6,250,000 6,458,375
Fulton County Development Authority
Revenue Bonds
Georgia Tech Athletic Association
Series 2001 (AMBAC)
10-01-32 5.125 1,270,000 1,274,267
Gainesville & Hall County Hospital Authority
Revenue Bonds
Northeast Georgia Healthcare
Series 2010A
02-15-45 5.500 7,500,000 7,648,050
Georgia Housing & Finance Authority
Revenue Bonds
Single Family Mortgage
Subordinated Series 1999A-2 A.M.T.
06-01-29 5.200 1,615,000 1,615,533
Gwinnett County Hospital Authority
Revenue Bonds
Gwinnett Hospital Systems, Inc. Project
Series 2004B
10-01-29 5.000 1,250,000 1,303,800
Metropolitan Atlanta Rapid Transit Authority
Refunding Revenue Bonds
Series 1992N
07-01-18 6.250 500,000 589,225
Metropolitan Atlanta Rapid Transit Authority
Refunding Revenue Bonds
Series 2007A (NPFGC/FGIC)
07-01-26 5.250 1,000,000 1,220,020
Upper Oconee Basin Water Authority
Refunding Revenue Bonds
Series 2005 (NPFGC)
07-01-24 5.000 1,000,000 1,103,820
Valdosta & Lowndes County Hospital Authority
Revenue Bonds
South Georgia Medical Center Project
Series 2002 (AMBAC)
10-01-27 5.250 1,250,000 1,270,788
---------------
Total 28,256,098
- -------------------------------------------------------------------------------------
HAWAII (0.3%)
Hawai'i Pacific Health
Revenue Bonds
Series 2010A
07-01-40 5.500 1,425,000 1,424,872
Hawai'i Pacific Health
Revenue Bonds
Series 2010B
07-01-30 5.625 270,000 285,225
07-01-40 5.750 360,000 374,965
---------------
Total 2,085,062
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
28 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
IDAHO (0.2%)
Idaho Health Facilities Authority
Revenue Bonds
Trinity Health Group
Series 2008B
12-01-23 6.000% $1,000,000 $1,154,720
- -------------------------------------------------------------------------------------
ILLINOIS (4.5%)
Illinois Finance Authority
Refunding Revenue Bonds
Swedish Covenant
Series 2010A
08-15-38 6.000 3,925,000 4,035,136
Illinois Finance Authority
Revenue Bonds
Riverside Health System
Series 2009
11-15-35 6.250 4,200,000 4,510,548
Illinois Finance Authority
Revenue Bonds
Rush University Medical Center
Series 2009C
11-01-39 6.625 750,000 827,588
Illinois Finance Authority
Revenue Bonds
Sherman Health System
Series 2007A
08-01-37 5.500 9,250,000 8,971,759
Illinois Finance Authority
Revenue Bonds
Silver Cross & Medical Centers
Series 2009
08-15-38 6.875 8,000,000 8,948,319
State of Illinois
Revenue Bonds
Series 2005 (AGM)
06-15-28 5.000 2,000,000 2,081,460
---------------
Total 29,374,810
- -------------------------------------------------------------------------------------
INDIANA (0.8%)
Indiana Finance Authority
Refunding Revenue Bonds
Clarian Health Obligation Group
Series 2006B
02-15-33 5.000 1,000,000 991,960
Indiana Finance Authority
Revenue Bonds
Parkview Health System
Series 2009A
05-01-31 5.750 3,000,000 3,178,980
Purdue University
Revenue Bonds
Student Fee
Series 2009X
07-01-23 5.250 1,000,000 1,180,470
---------------
Total 5,351,410
- -------------------------------------------------------------------------------------
KANSAS (0.4%)
Wyandotte County-Kansas City Unified Government
Revenue Bonds
Capital Appreciation Sales Tax Subordinated Lien
Zero Coupon
Series 2010
06-01-21 6.096 5,100,000(g) 2,900,829
- -------------------------------------------------------------------------------------
KENTUCKY (1.8%)
County of Ohio
Refunding Revenue Bonds
Big Rivers Electric Corp. Project
Series 2010A
07-15-31 6.000 3,100,000 3,227,751
Kentucky Economic Development Finance Authority
Revenue Bonds
Kings Daughters Medical
Series 2010
02-01-40 5.000 3,650,000 3,709,678
Kentucky Economic Development Finance Authority
Revenue Bonds
Owensboro Medical Health System
Series 2010A
03-01-45 6.500 4,575,000 4,899,962
---------------
Total 11,837,391
- -------------------------------------------------------------------------------------
LOUISIANA (4.1%)
Calcasieu Parish Industrial Development Board, Inc.
Revenue Bonds
Conoco, Inc. Project
Series 1996 A.M.T.
12-01-26 5.750 2,500,000 2,502,075
City of New Orleans
Unlimited General Obligation Public Improvement Bonds
Series 2002 (FGIC)
12-01-31 5.350 2,250,000 2,277,833
City/Parish of East Baton Rouge
Refunding Revenue Bonds
Series 2008A-2 (AGM)
08-01-24 5.000 900,000 1,012,923
City/Parish of East Baton Rouge
Revenue Bonds
Road & Street Improvements
Series 2009
08-01-25 5.000 250,000 280,500
East Baton Rouge Mortgage Finance Authority
Refunding Revenue Bonds
Mortgage-Backed
Series 1993B (GNMA/FNMA)
10-01-25 5.400 355,000 355,380
East Baton Rouge Sewerage Commission
Revenue Bonds
Series 2009A
02-01-34 5.250 1,000,000 1,088,550
Jefferson Parish Hospital Service District No. 2
Revenue Bonds
Series 1998 (AGM)
07-01-28 5.000 1,000,000 1,003,660
Jefferson Sales Tax District
Refunding Revenue Bonds
Series 2009B
12-01-22 4.500 1,000,000 1,094,570
Jefferson Sales Tax District
Revenue Bonds
Series 2007B (AMBAC)
12-01-20 5.250 1,000,000 1,147,400
Lafayette Consolidated Government
Refunding Revenue Bonds
Series 2006C (AMBAC)
05-01-21 5.000 1,000,000 1,109,730
Louisiana Housing Finance Agency
Revenue Bonds
Home Ownership Program
Series 2008A (GNMA/FNMA/FHLMC)
12-01-23 4.875 910,000 975,756
Louisiana Public Facilities Authority
Refunding Revenue Bonds
Southern Baptist Hospital, Inc. Project
Series 1986 Escrowed to Maturity
05-15-12 8.000 1,980,000 2,104,403
Louisiana Public Facilities Authority
Refunding Revenue Bonds
Tulane University Project
Series 2007A-1 (NPFGC)
02-15-26 5.000 1,000,000 1,062,680
Louisiana Public Facilities Authority
Revenue Bonds
Hurricane Recovery Program
Series 2007 (AMBAC)
06-01-20 5.000 1,000,000 1,093,900
Louisiana State Citizens Property Insurance Corp.
Revenue Bonds
Series 2009C-4-RMKT
06-01-24 6.125 1,000,000 1,077,380
Louisiana State University & Agricultural & Mechanical College
Revenue Bonds
Auxiliary
Series 2007 (AGM)
07-01-27 5.000 1,000,000 1,083,210
New Orleans Aviation Board
Revenue Bonds
Consolidated Rental Car
Series 2009A
01-01-40 6.500 4,650,000 4,960,992
Port New Orleans Board of Commissioners
Revenue Bonds
Series 2002 (NPFGC/FGIC) A.M.T.
04-01-32 5.000 1,250,000 1,199,125
St. Tammany Parish Wide School District No. 12
Unlimited General Obligation Bonds
Series 2008
03-01-23 4.500 1,000,000 1,086,880
---------------
Total 26,516,947
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 29
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
MARYLAND (1.4%)
City of Baltimore
Refunding Revenue Bonds
Wastewater Projects
Series 2002A (NPFGC/FGIC)
07-01-42 5.125% $2,000,000 $2,028,460
Maryland Health & Higher Educational Facilities Authority
Refunding Revenue Bonds
Johns Hopkins University
Series 2001B
07-01-41 5.000 2,000,000 2,018,560
Maryland Health & Higher Educational Facilities Authority
Revenue Bonds
Carroll County General Hospital
Series 2002
07-01-37 6.000 2,250,000 2,296,575
Maryland State Department of Transportation
Certificate of Participation
Series 2000 A.M.T.
10-15-25 5.500 2,375,000 2,400,294
Morgan State University
Revenue Bonds
Series 2003A (NPFGC/FGIC)
07-01-32 5.000 450,000 459,707
---------------
Total 9,203,596
- -------------------------------------------------------------------------------------
MASSACHUSETTS (6.6%)
City of Newton
Limited General Obligation Bonds
State Qualified School
Series 2009A
04-01-25 4.125 2,295,000 2,496,478
Commonwealth of Massachusetts
Limited General Obligation Bonds
Consolidated Loan
Series 2009C
07-01-38 4.500 1,500,000 1,542,555
Martha's Vineyard Land Bank
Revenue Bonds
Series 2002 (AMBAC)
05-01-32 5.000 3,000,000 3,071,430
Massachusetts Bay Transportation Authority
Revenue Bonds
Senior Series 2005A
07-01-24 5.000 1,000,000 1,217,030
Massachusetts Development Finance Agency
Revenue Bonds
Boston College
Series 2009Q-2
07-01-29 5.000 1,455,000 1,600,966
Massachusetts Development Finance Agency
Revenue Bonds
WGBH Educational Foundation
Series 2002A (AMBAC)
01-01-42 5.750 4,000,000 4,662,119
Massachusetts Educational Financing Authority
Revenue Bonds
Issue I
Series 2010B A.M.T.
01-01-31 5.700 9,000,000 9,326,430
Massachusetts Health & Educational Facilities Authority
Revenue Bonds
Berklee College of Music
Series 2007A
10-01-21 5.000 1,500,000 1,654,335
Massachusetts Health & Educational Facilities Authority
Revenue Bonds
Tufts University
Series 2009M
02-15-28 5.500 1,000,000 1,252,700
Massachusetts Health & Educational Facilities Authority
Unrefunded Revenue Bonds
South Shore
Series 1999F
07-01-29 5.750 1,845,000 1,851,827
Massachusetts Housing Finance Agency
Revenue Bonds
Rental Mortgage
Series 1999A (AMBAC) A.M.T.
07-01-30 5.500 190,000 190,177
Massachusetts Housing Finance Agency
Revenue Bonds
Single Family
Series 2008-139
12-01-28 5.125 1,000,000 1,053,350
Massachusetts School Building Authority
Revenue Bonds
Series 2005A (AGM)
08-15-23 5.000 6,000,000 6,752,340
Massachusetts Water Resources Authority
Refunding Revenue Bonds
General
Series 2005A (NPFGC)
08-01-24 5.250 3,000,000 3,420,630
Town of Braintree
Limited General Obligation Bonds
Municipal Purpose Loan
Series 2009
05-15-27 5.000 2,000,000 2,264,560
---------------
Total 42,356,927
- -------------------------------------------------------------------------------------
MICHIGAN (2.5%)
Capital Region Airport Authority
Refunding Revenue Bonds
Series 2002B (NPFGC) A.M.T.
07-01-21 5.250 2,000,000 2,034,140
Charter Township of Canton
Limited General Obligation Bonds
Capital Improvement
Series 2007 (AGM)
04-01-21 5.000 530,000 595,365
City of Detroit
Revenue Bonds
Senior Lien
Series 2005A (NPFGC/FGIC)
07-01-27 5.000 1,290,000 1,315,581
Grand Traverse County Hospital Finance Authority
Refunding Revenue Bonds
Munson
Series 1998A (AMBAC)
07-01-28 5.000 110,000 110,012
Kalamazoo Public Schools
Unlimited General Obligation Refunding Bonds
Building & Site
Series 2006 (AGM)
05-01-24 5.000 1,285,000 1,388,083
Michigan Municipal Bond Authority
Revenue Bonds
Drinking Water State Revolving Fund
Series 2004
10-01-22 5.000 3,850,000 4,311,076
Michigan State Hospital Finance Authority
Refunding Revenue Bonds
Sparrow Obligated Group
Series 2005 (NPFGC)
11-15-26 5.000 1,500,000 1,529,040
State of Michigan
Refunding Revenue Bonds
Series 2005 (AGM)
05-15-22 5.250 2,000,000 2,428,300
State of Michigan
Refunding Revenue Bonds
Series 2006 (AGM)
05-15-24 5.000 2,000,000 2,172,000
---------------
Total 15,883,597
- -------------------------------------------------------------------------------------
MINNESOTA (2.2%)
City of St. Louis Park
Refunding Revenue Bonds
Park Nicollet Health Services
Series 2009
07-01-39 5.750 13,500,000 14,044,455
- -------------------------------------------------------------------------------------
MISSISSIPPI (0.3%)
Mississippi Business Finance Corp.
Revenue Bonds
Series 2009A
05-01-24 4.700 1,250,000 1,284,088
05-01-37 5.000 815,000 828,048
---------------
Total 2,112,136
- -------------------------------------------------------------------------------------
MISSOURI (2.4%)
City of St. Louis
Refunding Revenue Bonds
Lambert International Airport
Series 2007A (AGM)
07-01-23 5.000 1,000,000 1,093,240
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
30 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
MISSOURI (CONT.)
City of St. Louis
Revenue Bonds
Lambert-St. Louis International
Series 2009A-1
07-01-34 6.625% $300,000 $326,424
County of Boone
Revenue Bonds
Boone Hospital Center
Series 2008
08-01-28 5.750 500,000 530,010
Hannibal Industrial Development Authority
Refunding Revenue Bonds
Series 2006
03-01-22 5.000 1,000,000 1,010,210
Kansas City Metropolitan Community Colleges Building Corp. Refunding Revenue Bonds
Junior College Improvement and Leasehold
Series 2006 (NPFGC/FGIC)
07-01-17 5.000 1,000,000 1,144,680
Metropolitan St. Louis Sewer District
Revenue Bonds
Series 2004A (NPFGC)
05-01-24 5.000 2,800,000 3,074,960
Missouri Development Finance Board
Revenue Bonds
Procter & Gamble Paper Products
Series 1999 A.M.T.
03-15-29 5.200 2,000,000 2,176,880
Missouri State Environmental Improvement & Energy
Resources Authority
Unrefunded Revenue Bonds
Drinking Water
Series 2002
07-01-23 5.000 265,000 284,851
Missouri State Health & Educational Facilities Authority
Refunding Revenue Bonds
Lester E. Cox Medical Center
Series 1993I (NPFGC)
06-01-15 5.250 2,500,000 2,772,600
St. Charles Community College
Unlimited General Obligation Refunding Bonds
Series 2009
02-15-26 4.000 500,000 536,965
St. Louis Industrial Development Authority
Refunding Revenue Bonds
Anheuser-Busch Co. Project
Series 1991
05-01-16 6.650 1,250,000 1,492,938
University of Missouri
Revenue Bonds
System Facilities
Series 2006A
11-01-26 5.000 1,000,000 1,085,800
---------------
Total 15,529,558
- -------------------------------------------------------------------------------------
NEBRASKA (0.4%)
Douglas County Hospital Authority No. 2
Revenue Bonds
Health Facilities Immanuel Obligation Group
Series 2010
01-01-40 5.625 875,000 905,861
Lancaster County Hospital Authority No. 1
Revenue Bonds
Immanuel Obligation Group
Series 2010
01-01-40 5.625 1,625,000 1,682,314
---------------
Total 2,588,175
- -------------------------------------------------------------------------------------
NEVADA (0.7%)
County of Clark
Revenue Bonds
Las Vegas-McCarran International Airport
Series 2010A
07-01-34 5.125 4,250,000 4,432,580
- -------------------------------------------------------------------------------------
NEW HAMPSHIRE (0.9%)
New Hampshire Business Finance Authority
Revenue Bonds
Elliot Hospital Obligation Group
Series 2009A
10-01-39 6.125 2,750,000 2,856,920
New Hampshire Health & Education Facilities Authority
Revenue Bonds
Dartmouth-Hitchcock
Series 2009
08-01-38 6.000 2,500,000 2,710,050
---------------
Total 5,566,970
- -------------------------------------------------------------------------------------
NEW JERSEY (3.3%)
New Jersey Economic Development Authority
Refunding Revenue Bonds
Seeing Eye, Inc. Project
Series 2005 (AMBAC)
12-01-24 5.000 1,000,000 1,018,680
New Jersey Economic Development Authority
Revenue Bonds
MSU Student Housing Project -- Provident
Series 2010
06-01-31 5.750 950,000 1,010,021
New Jersey Economic Development Authority
Revenue Bonds
New Jersey-American Water Co., Inc.
Series 1997B (NPFGC/FGIC) A.M.T.
05-01-32 5.375 8,000,000 7,999,840
New Jersey Educational Facilities Authority
Refunding Revenue Bonds
Stevens Institute of Technology
Series 2007A
07-01-22 5.250 1,250,000 1,347,725
New Jersey Educational Facilities Authority
Revenue Bonds
Princeton University
Series 2007E
07-01-28 5.000 1,250,000 1,393,650
New Jersey Educational Facilities Authority
Revenue Bonds
William Paterson University
Series 2008C
07-01-24 5.000 1,000,000 1,114,680
New Jersey Environmental Infrastructure Trust
Prerefunded Revenue Bonds
Environmental
Series 2007A
09-01-22 5.000 10,000 11,894
New Jersey Environmental Infrastructure Trust
Unrefunded Revenue Bonds
Environmental
Series 2007A
09-01-22 5.000 1,220,000 1,375,159
New Jersey Health Care Facilities Financing Authority
Revenue Bonds
Meridian Health Systems Obligation Group
Series 1999 (AGM)
07-01-24 5.375 2,255,000 2,257,458
New Jersey Health Care Facilities Financing Authority
Revenue Bonds
Virtua Health
Series 2009
07-01-33 5.750 750,000 807,030
New Jersey Health Care Facilities Financing Authority
Unrefunded Revenue Bonds
Atlantic City Medical
Series 2002
07-01-25 5.750 1,110,000 1,144,765
New Jersey Housing & Mortgage Finance Agency
Revenue Bonds
Series 2000A-1 (AGM) A.M.T.
11-01-31 6.350 1,500,000 1,501,874
New Jersey Housing & Mortgage Finance Agency
Revenue Bonds
Series 2000E-1 (AGM)
05-01-25 5.750 215,000 215,269
---------------
Total 21,198,045
- -------------------------------------------------------------------------------------
NEW MEXICO (1.0%)
New Mexico Hospital Equipment Loan Council
Revenue Bonds
Presbyterian Healthcare
Series 2009
08-01-39 5.000 6,500,000 6,729,645
- -------------------------------------------------------------------------------------
NEW YORK (4.1%)
Brooklyn Arena Local Development Corp. Revenue Bonds
Barclays Center Project
Series 2009
07-15-30 6.000 1,500,000 1,612,575
New York City Municipal Water Finance Authority
Revenue Bonds
Series 2005C (NPFGC)
06-15-27 5.000 8,000,000 8,772,560
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 31
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
NEW YORK (CONT.)
New York City Transitional Finance Authority
Revenue Bonds
Fiscal 2009
Series 2009S-4
01-15-25 5.125% $2,000,000 $2,218,380
New York State Dormitory Authority
Revenue Bonds
North Shore Long Island Jewish
Series 2009A
05-01-37 5.500 2,000,000 2,101,780
New York State Dormitory Authority
Revenue Bonds
Rockefeller University
Series 2009C
07-01-40 5.000 2,500,000 2,727,300
New York State Environmental Facilities Corp.
Revenue Bonds
Revolving Funds
New York City Municipal Water
Series 2008A
06-15-28 5.000 1,000,000 1,117,710
Port Authority of New York & New Jersey
Revenue Bonds
Consolidated 144th
Series 2006
10-01-28 5.000 1,000,000 1,092,460
Port Authority of New York & New Jersey
Revenue Bonds
JFK International Air Terminal #6 Special Project
Series 1997 (NPFGC) A.M.T.
12-01-22 5.750 6,500,000 6,515,665
The Erie County Industrial Development Agency
Revenue Bonds
Buffalo City School District
Series 2009A
05-01-31 5.000 500,000 539,410
---------------
Total 26,697,840
- -------------------------------------------------------------------------------------
NORTH CAROLINA (0.5%)
City of High Point
Revenue Bonds
Series 2008 (AGM)
11-01-28 5.000 350,000 385,651
County of Cumberland
Refunding Certificate of Participation
Improvement Projects
Series 2009B-1
12-01-24 5.000 500,000 568,540
County of Forsyth
Certificate of Participation
Series 2005
02-01-26 5.000 750,000 800,153
North Carolina Capital Facilities Finance Agency
Revenue Bonds
Duke University Project
Series 2009B
10-01-38 5.000 300,000 323,460
North Carolina Capital Facilities Finance Agency
Revenue Bonds
Wake Forest University
Series 2009
01-01-39 4.500 300,000 304,740
North Carolina Eastern Municipal Power Agency
Revenue Bonds
Series 2009A
01-01-26 5.500 300,000 333,573
North Carolina Housing Finance Agency
Revenue Bonds
Home Ownership
Series 2000-8-A A.M.T.
07-01-28 6.400 95,000 97,255
State of North Carolina
Revenue Bonds
Annual Appropriation
Series 2009A
05-01-27 5.000 305,000 345,678
---------------
Total 3,159,050
- -------------------------------------------------------------------------------------
NORTH DAKOTA (0.4%)
County of Ward
Revenue Bonds
Trinity Obligated Group
Series 2006
07-01-25 5.125 1,000,000 987,190
07-01-29 5.125 1,840,000 1,782,739
---------------
Total 2,769,929
- -------------------------------------------------------------------------------------
OHIO (10.5%)
Buckeye Tobacco Settlement Financing Authority
Asset-Backed Senior Turbo Revenue Bonds
Series 2007A-2
06-01-47 5.875 5,125,000 3,747,503
City of Avon
Limited General Obligation Bonds
Series 2009B
12-01-38 5.000 1,150,000 1,220,357
City of Cincinnati
Unlimited General Obligation Bonds
Various Purpose
Series 2008A
12-01-23 5.000 875,000 998,121
City of Cleveland
Revenue Bonds
Series 2007P
01-01-24 5.000 2,000,000 2,229,900
City of Cleveland
Revenue Bonds
Series 2008B-1 (NPFGC)
11-15-28 5.000 500,000 534,595
City of Columbus
Revenue Bonds
Systems
Series 2008A
06-01-27 5.000 4,000,000 4,455,120
City of Columbus
Unlimited General Obligation Bonds
Various Purpose
Series 2006A
12-15-21 5.000 1,435,000(f) 1,626,200
City of Strongsville
Limited General Obligation Bonds
Various Purpose
Series 2009
12-01-33 4.625 500,000 518,395
12-01-34 4.625 1,000,000 1,033,980
Columbus City School District
Unlimited General Obligation Bonds
School Facilities Construction & Improvement
Series 2009
12-01-33 4.750 1,000,000 1,050,700
County of Franklin
Improvement Revenue Bonds
The Children's Hospital Project
Series 2005C (NPFGC/FGIC)
05-01-25 5.000 1,000,000 1,038,090
County of Hamilton
Improvement Revenue Bonds
Greater Cincinnati Metropolitan
Series 2007A
12-01-25 5.000 3,425,000 3,824,013
County of Hamilton
Improvement Revenue Bonds
Metropolitan Sewer District
Series 2006A (NPFGC)
12-01-26 5.000 1,000,000 1,095,900
County of Hamilton
Refunding Revenue Bonds
Subordinated Series 2006A (AGM/AMBAC)
12-01-32 5.000 1,000,000 1,063,130
County of Hamilton
Refunding Revenue Bonds
Subordinated Series 2006A (AMBAC)
12-01-26 5.000 1,000,000 1,068,230
County of Montgomery
Limited General Obligation Refunding & Improvement Bonds
Various Purpose
Series 2005 (NPFGC)
12-01-24 5.000 2,600,000 2,803,528
Ohio Higher Educational Facility Commission
Revenue Bonds
Kenyon College Project
Series 2010
07-01-44 5.000 10,000,000 10,438,699
Ohio Housing Finance Agency
Revenue Bonds
Mortgage-Backed Securities Program
Series 2008F (GNMA/FNMA/FHLMC)
09-01-28 5.250 945,000 1,007,663
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
32 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
OHIO (CONT.)
Ohio State Turnpike Commission
Refunding Revenue Bonds
Series 1998A (NPFGC/FGIC)
02-15-26 5.500% $3,000,000 $3,628,710
Ohio State Turnpike Commission
Revenue Bonds
Series 2001 (AMBAC)
02-15-31 5.250 1,500,000 1,520,070
Ohio State Water Development Authority
Refunding Revenue Bonds
Drinking Water Fund
Series 2005
12-01-21 5.250 3,890,000 4,834,492
12-01-22 5.250 2,625,000 3,279,334
Ohio State Water Development Authority
Revenue Bonds
Sewer Facilities
Anheuser-Busch Project
Series 1999 A.M.T.
08-01-38 6.000 1,000,000 1,000,790
State of Ohio
Refunding Revenue Bonds
Case Western Reserve
Series 2008C
12-01-29 5.000 2,000,000 2,150,580
State of Ohio
Revenue Bonds
Denison University 2007 Project
Series 2007
11-01-23 5.000 4,000,000 4,525,440
State of Ohio
Revenue Bonds
University of Dayton Project
Series 2009
12-01-24 5.500 3,000,000 3,391,110
The Ohio State University
Prerefunded Revenue Bonds
Series 2002A
12-01-31 5.125 1,000,000 1,063,490
The Ohio State University
Revenue Bonds
Series 2005A
06-01-25 5.000 3,000,000 3,340,920
---------------
Total 68,489,060
- -------------------------------------------------------------------------------------
OREGON (2.3%)
Benton County Hospital Facilities Authority
Unrefunded Revenue Bonds
Samaritan Health
Series 1998
10-01-28 5.125 655,000 655,072
City of Salem
Limited General Obligation Bonds
Series 2009
06-01-27 4.375 1,000,000 1,054,940
Clackamas County School District No. 7J Lake Oswego
Unlimited General Obligation Refunding Bonds
Series 2005 (AGM)
06-01-23 5.250 1,000,000 1,228,290
Clackamas County Service District No. 1
Revenue Bonds
Series 2009A
12-01-25 4.250 1,690,000 1,812,846
Oregon Health & Science University
Revenue Bonds
Series 2009A
07-01-39 5.750 2,000,000 2,143,180
Oregon Health & Science University
Unrefunded Revenue Bonds
Series 1995A (NPFGC)
07-01-28 5.250 390,000 390,137
Oregon State Department of Administrative Services
Certificate of Participation
Series 2001B (AMBAC)
05-01-26 5.000 2,000,000 2,037,960
Oregon State Facilities Authority
Revenue Bonds
Linfield College Project
Series 2005A
10-01-25 5.000 750,000 775,455
Oregon State Facilities Authority
Revenue Bonds
Willamette University Projects
Series 2007A
10-01-27 5.000 1,500,000 1,551,000
Oregon State Housing & Community Services Department
Revenue Bonds
Single Family Mortgage Program
Series 2005A
07-01-20 4.400 550,000 567,045
Polk, Marion & Benton Counties School District No. 13J Central
Unlimited General Obligation Bonds
Series 2009A
06-15-29 4.375 1,300,000 1,349,049
Umatilla County Hospital Facility Authority
Prerefunded Revenue Bonds
Catholic Health Initiatives
Series 2002A
03-01-32 5.500 1,000,000 1,071,210
---------------
Total 14,636,184
- -------------------------------------------------------------------------------------
PENNSYLVANIA (3.6%)
Allegheny County Higher Education Building Authority
Revenue Bonds
Duquesne University
Series 2008
03-01-28 5.000 490,000 515,710
Allegheny County Hospital Development Authority
Revenue Bonds
University of Pittsburgh Medical Center
Series 2009
08-15-39 5.625 1,000,000 1,049,410
Berks County Municipal Authority
Revenue Bonds
Reading Hospital Medical Center Project
Series 1993 (NPFGC)
10-01-14 5.700 700,000 755,559
County of Bucks
Unlimited General Obligation Bonds
Series 2008
05-01-23 5.250 350,000 411,852
Cumberland County Municipal Authority
Revenue Bonds
Aicup Financing Program-Dickinson College
Series 2009
11-01-39 5.000 1,200,000 1,217,460
Delaware County Industrial Development Authority
Revenue Bonds
Philadelphia Suburban Water Facilities
Series 2001 (AMBAC) A.M.T.
10-01-31 5.350 3,000,000 3,050,040
Delaware Valley Regional Financial Authority
Revenue Bonds
Series 1997C (AMBAC)
07-01-27 7.750 1,000,000 1,372,200
Northampton County General Purpose Authority
Revenue Bonds
County Agreement
Series 2001 (AGM)
10-01-30 5.250 1,000,000 1,064,450
Pennsylvania Economic Development Financing Authority
Revenue Bonds
Proctor & Gamble Paper Project
Series 2001 A.M.T.
03-01-31 5.375 1,000,000 1,093,490
Pennsylvania Higher Educational Facilities Authority
Revenue Bonds
Edinboro University Foundation
Series 2010
07-01-43 6.000 725,000 753,116
Pennsylvania Higher Educational Facilities Authority
Revenue Bonds
Thomas Jefferson University
Series 2010
03-01-40 5.000 3,500,000 3,687,985
Pennsylvania Higher Educational Facilities Authority
Unrefunded Revenue Bonds
Drexel University
Series 1997 (NPFGC)
05-01-22 5.750 1,050,000 1,053,759
Pennsylvania State University
Revenue Bonds
Series 2005
09-01-24 5.000 1,250,000 1,409,500
Philadelphia Municipal Authority
Revenue Bonds
Lease
Series 2009
04-01-34 6.500 200,000 221,742
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 33
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
PENNSYLVANIA (CONT.)
Philadelphia Redevelopment Authority
Subordinated Revenue Bonds
Series 1986B Escrowed to Maturity (GNMA)
06-01-17 9.000% $450,000 $644,630
Washington County Industrial Development Authority
Revenue Bonds
Washington Jefferson College
Series 2010
11-01-36 5.000 4,850,000 5,033,135
---------------
Total 23,334,038
- -------------------------------------------------------------------------------------
PUERTO RICO (2.2%)(e)
Puerto Rico Electric Power Authority
Refunding Revenue Bonds
Series 2007UU (AGM)
07-01-23 5.000 1,000,000 1,081,960
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2003NN (NPFGC)
07-01-21 5.250 3,500,000 3,949,294
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2008WW
07-01-23 5.375 2,500,000 2,737,500
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2010XX
07-01-40 5.250 3,000,000 3,130,050
Puerto Rico Highway & Transportation Authority
Revenue Bonds
Series 2003AA (NPFGC)
07-01-20 5.500 500,000 551,540
Puerto Rico Industrial Tourist Educational Medical &
Environmental Central Facilities Financing Authority
Revenue Bonds
Intermediate American University
Series 1998A (NPFGC)
10-01-22 5.000 2,500,000 2,500,775
---------------
Total 13,951,119
- -------------------------------------------------------------------------------------
SOUTH CAROLINA (6.0%)
City of Rock Hill
Improvement Refunding Revenue Bonds
Series 2003A (AGM)
01-01-30 5.000 4,000,000 4,135,200
Coastal Carolina University
Unrefunded Revenue Bonds
Series 1999 (AMBAC)
06-01-26 5.300 1,810,000 1,821,023
County of Berkeley
Unlimited General Obligation Refunding & Improvement Bonds
Series 2003 (AGM)
09-01-28 5.000 4,000,000 4,291,480
County of Berkeley
Unrefunded Revenue Bonds
Systems
Series 2003 (NPFGC)
06-01-23 5.250 245,000 265,337
County of Georgetown
Refunding Revenue Bonds
International Paper Co. Project
Series 2000A
03-15-14 5.950 1,000,000 1,112,550
Grand Strand Water & Sewer Authority
Revenue Bonds
Series 2001 (AGM)
06-01-31 5.000 4,000,000 4,075,440
Lexington County Health Services District, Inc.
Improvement Refunding Revenue Bonds
Series 1997 (AGM)
11-01-26 5.125 2,000,000 2,001,920
Piedmont Municipal Power Agency
Refunding Revenue Bonds
Electric
Series 1991 (NPFGC/FGIC)
01-01-21 6.250 1,250,000 1,553,688
South Carolina Jobs-Economic Development Authority
Improvement Refunding Revenue Bonds
Palmetto Health
Series 2009
08-01-39 5.750 2,350,000 2,411,970
South Carolina Jobs-Economic Development Authority
Unrefunded Revenue Bonds
Bon Secours
Series 2002B
11-15-30 5.625 3,165,000 3,216,336
South Carolina State Housing Finance & Development Authority
Revenue Bonds
Series 1999A-2 (AGM) A.M.T.
07-01-29 5.400 535,000 535,262
South Carolina State Ports Authority
Revenue Bonds
Series 1998 (AGM) A.M.T.
07-01-26 5.300 10,000,000 10,012,400
South Carolina State Public Service Authority
Revenue Bonds
Santee Cooper
Series 2006A (NPFGC)
01-01-27 5.000 2,600,000 2,827,135
South Carolina State Public Service Authority
Revenue Bonds
Santee Cooper
Series 2008A
01-01-28 5.375 250,000 287,003
---------------
Total 38,546,744
- -------------------------------------------------------------------------------------
TEXAS (3.0%)
Bexar County Health Facilities Development Corp.
Revenue Bonds
Army Retirement Residence Project
Series 2010
07-01-45 6.200 1,100,000 1,139,765
Capital Area Cultural Education Facilities Finance Corp.
Revenue Bonds
Roman Catholic Diocese
Series 2005B-RMKT
04-01-45 6.125 550,000 566,561
City of Dallas
Limited General Obligation Bonds
Series 2005
02-15-25 5.000 820,000 871,430
City of Houston
Revenue Bonds
Subordinated Lien
Series 2000A (AGM) A.M.T.
07-01-30 5.625 3,000,000 3,001,890
City of San Antonio
Prerefunded Revenue Bonds
Series 1997 Escrowed to Maturity
02-01-20 5.500 1,055,000 1,340,304
Dallas-Fort Worth International Airport Facilities
Improvement Corp.
Revenue Bonds
Series 2000A (NPFGC/FGIC) A.M.T.
11-01-30 5.750 5,000,000 5,006,700
Harris County Health Facilities Development Corp.
Revenue Bonds
St. Luke's Episcopal Hospital Project
Series 1991 Escrowed to Maturity
02-15-21 6.750 2,000,000 2,348,560
University of Texas
Refunding Revenue Bonds
Series 2007B
07-01-23 5.250 1,000,000 1,237,520
Uptown Development Authority
Tax Allocation Bonds
Infrastructure Improvement Facilities
Series 2009
09-01-29 5.500 500,000 522,180
West Harris County Regional Water Authority
Revenue Bonds
Series 2009
12-15-35 5.000 3,000,000 3,107,280
---------------
Total 19,142,190
- -------------------------------------------------------------------------------------
UTAH (0.3%)
Utah Transit Authority
Revenue Bonds
Series 2008A
06-15-25 5.000 2,000,000 2,268,960
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
34 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman National Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
VIRGINIA (0.3%)
Virginia Resources Authority
Revenue Bonds
State Revolving Fund
Series 2009
10-01-26 5.000% $1,500,000 $1,740,285
- -------------------------------------------------------------------------------------
WASHINGTON (1.0%)
Chelan County Public Utility District No. 1
Revenue Bonds
Chelan Hydro
Series 2001B (NPFGC) A.M.T.
01-01-36 5.600 2,500,000 2,523,400
Washington Health Care Facilities Authority
Revenue Bonds
Overlake Hospital Medical Center
Series 2010
07-01-30 5.500 3,000,000 3,098,040
Washington Higher Education Facilities Authority
Refunding Revenue Bonds
Whitworth University Project
Series 2009
10-01-40 5.625 1,050,000 1,077,962
---------------
Total 6,699,402
- -------------------------------------------------------------------------------------
WEST VIRGINIA (0.1%)
West Virginia Economic Development Authority
Refunding Revenue Bonds
Appalachian Power Amos
Series 2010A
12-01-38 5.375 800,000 817,232
- -------------------------------------------------------------------------------------
WISCONSIN (4.3%)
City of La Crosse
Refunding Revenue Bonds
Northern States Power Co. Project
Series 1996 A.M.T.
11-01-21 6.000 6,000,000 6,834,840
Monroe Redevelopment Authority
Revenue Bonds
Monroe Clinic, Inc.
Series 2009
02-15-39 5.875 5,000,000 5,198,900
Wisconsin Health & Educational Facilities Authority
Revenue Bonds
Aurora Health Care, Inc.
Series 2010A
04-15-39 5.625 1,375,000 1,441,674
Wisconsin Health & Educational Facilities Authority
Revenue Bonds
Meriter Hospital, Inc.
Series 2009
12-01-38 6.000 5,225,000 5,542,732
Wisconsin Health & Educational Facilities Authority
Revenue Bonds
ProHealth Care, Inc. Obligation Group
Series 2009
02-15-32 6.625 1,000,000 1,052,350
02-15-39 6.625 6,725,000 7,430,924
---------------
Total 27,501,420
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $587,811,794) $627,027,859
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (0.6%)
ISSUE EFFECTIVE AMOUNT PAYABLE
DESCRIPTION(b,c,d) YIELD AT MATURITY VALUE(a)
FLORIDA (0.1%)
Polk County School Board
Certificate of Participation
Master Lease Program
V.R.D.N. Series 2009A (Wells Fargo Bank)
01-01-28 0.280% $400,000 $400,000
- -------------------------------------------------------------------------------------
IOWA (0.3%)
Iowa Finance Authority
Revenue Bonds
Iowa Health System
V.R.D.N. Series 2009A (JPMorgan Chase Bank)
02-15-35 0.300 2,000,000 2,000,000
Iowa Finance Authority
Revenue Bonds
Iowa Health System
V.R.D.N. Series 2009D (Bank of America)
02-15-35 0.310 200,000 200,000
---------------
Total 2,200,000
- -------------------------------------------------------------------------------------
SOUTH CAROLINA (0.2%)
South Carolina Educational Facilities Authority
Revenue Bonds
Furman University
V.R.D.N. Series 2006B (Wells Fargo Bank)
10-01-39 0.280 1,500,000 1,500,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $4,100,000) $4,100,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (--%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund, 0.030% 209,642(h) $209,642
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $209,642) $209,642
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $592,121,436)(i) $631,337,501
=====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT SEPT. 30, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5-year (122) $(14,745,797) Jan. 2011 $(130,762)
U.S. Treasury Note, 10-year (159) (20,041,454) Dec. 2010 (286,950)
- ----------------------------------------------------------------------------------------------------------------
Total $(417,712)
- ----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 35
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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 and/or guarantor of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AGCP -- Assured Guaranty Corporation
AGM -- Assured Guaranty Municipal 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
GNMA -- Government National Mortgage Association
MGIC -- Mortgage Guaranty Insurance Corporation
NPFGC -- National Public Finance Guarantee 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, 2010, the value
of securities subject to alternative minimum tax
represented 12.18% 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 maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2010.
(e) The fund may invest in debt obligations issued by or on behalf of
territories and possessions of the United States and sovereign nations
within the borders of the United States. These securities amounted to 2.16%
of net assets at Sept. 30, 2010.
(f) At Sept. 30, 2010, investments in securities included securities valued at
$471,884 that were partially pledged as collateral to cover initial margin
deposits on open interest rate futures contracts.
(g) For zero coupons, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(h) The rate shown is the seven-day current annualized yield at Sept. 30, 2010.
(i) At Sept. 30, 2010, the cost of securities for federal income tax purposes
was $594,123,699 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $37,666,870
Unrealized depreciation (453,068)
--------------------------------------------------------------------------------------
Net unrealized appreciation $37,213,802
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
36 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
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
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
(to include NAV for open-end mutual funds). 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 valuations may include, but are not limited to,
financial statement analysis, capital account balances, 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, 2010:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2010
----------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS INPUTS(B) INPUTS TOTAL
- ---------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $627,027,859 $-- $627,027,859
- ---------------------------------------------------------------------------------------------------------------
Total Bonds -- 627,027,859 -- 627,027,859
- ---------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 4,100,000 -- 4,100,000
Unaffiliated Money Market Fund(c) 209,642 -- -- 209,642
- ---------------------------------------------------------------------------------------------------------------
Total Other 209,642 4,100,000 -- 4,309,642
- ---------------------------------------------------------------------------------------------------------------
Investments in Securities 209,642 631,127,859 -- 631,337,501
Derivatives(d)
Liabilities
Futures Contracts (417,712) -- -- (417,712)
- ---------------------------------------------------------------------------------------------------------------
Total $(208,070) $631,127,859 $-- $630,919,789
- ---------------------------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 37
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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 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 800.345.6611.
- --------------------------------------------------------------------------------
38 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman California Municipal High-Yield Fund
SEPT. 30, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (96.6%)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
ADVANCED REFUNDED (1.8%)
Puerto Rico Highway & Transportation Authority
Prerefunded Revenue Bonds
Series 1996Y
07-01-36 5.500% $500,000(e) $613,225
- -------------------------------------------------------------------------------------
AIRPORT (1.4%)
County of Sacramento
Revenue Bonds
Senior Series 2009B
07-01-39 5.750 450,000 495,248
- -------------------------------------------------------------------------------------
CITY (6.5%)
City of Berkeley
Unlimited General Obligation Bonds
Neighborhood Branch Measure
Series 2009FF
09-01-35 5.000 1,000,000 1,053,390
City of Martinez
Unlimited General Obligation Bonds
Election of 2008
Series 2009A
08-01-34 5.000 1,100,000 1,177,759
---------------
Total 2,231,149
- -------------------------------------------------------------------------------------
COLLEGE (8.5%)
California Educational Facilities Authority
Revenue Bonds
California Lutheran University
Series 2008
10-01-21 5.250 665,000 712,508
California Educational Facilities Authority
Revenue Bonds
Loyola Marymount University
Series 2010A
10-01-40 5.125 175,000 182,103
California Educational Facilities Authority
Revenue Bonds
Scripps College
Series 2001
08-01-31 5.000 1,500,000 1,508,325
University of California
Revenue Bonds
General
Series 2009Q
05-15-34 5.000 500,000 537,510
---------------
Total 2,940,446
- -------------------------------------------------------------------------------------
ELECTRIC (2.1%)
City of Vernon
Revenue Bonds
Series 2009A
08-01-21 5.125 500,000 532,225
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2010XX
07-01-40 5.250 175,000(e) 182,586
---------------
Total 714,811
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (21.7%)
California Health Facilities Financing Authority
Revenue Bonds
Adventist Health System West
Series 2009A
09-01-39 5.750 1,000,000 1,048,259
California Health Facilities Financing Authority
Revenue Bonds
Cedars-Sinai Medical Center
Series 2009
08-15-39 5.000 750,000 759,075
California Health Facilities Financing Authority
Revenue Bonds
Providence Health Services
Series 2009B
10-01-39 5.500 750,000 805,020
California Health Facilities Financing Authority
Revenue Bonds
St. Joseph Health System
Series 2009A
07-01-29 5.500 700,000 749,609
California Municipal Finance Authority
Revenue Bonds
Community Hospital Center
Series 2009
02-01-39 5.500 750,000 750,885
California Statewide Communities Development Authority
Revenue Bonds
John Muir Health
Series 2006A
08-15-32 5.000 550,000 550,523
California Statewide Communities Development Authority
Revenue Bonds
Sutter Health
Series 2002B
08-15-42 5.625 500,000 505,940
City of Torrance
Revenue Bonds
Torrance Memorial Medical Center
Series 2010A
09-01-30 5.000 450,000 458,087
Palomar Pomerado Health
Certificate of Participation
Series 2009
11-01-39 6.750 350,000 387,531
Washington Township Health Care District
Revenue Bonds
Series 1999
07-01-29 5.250 1,500,000 1,502,399
---------------
Total 7,517,328
- -------------------------------------------------------------------------------------
HOUSING -- MULTI-FAMILY (6.4%)
California Housing Finance Agency
Revenue Bonds
Multifamily Housing III
Series 1999A A.M.T.
02-01-36 5.375 2,280,000 2,204,828
- -------------------------------------------------------------------------------------
LEASE (3.0%)
Los Angeles Municipal Improvement Corp.
Revenue Bonds
Cap Equipment
Series 2008A
09-01-24 5.000 1,000,000 1,047,210
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (0.9%)
Golden State Tobacco Securitization Corp.
Asset-Backed Revenue Bonds
Senior Series 2007A-1
06-01-47 5.125 450,000 306,126
- -------------------------------------------------------------------------------------
SCHOOL (6.9%)
Lakeside Union Elementary School District
Unlimited General Obligation Bonds
Series 2009
08-01-33 5.000 1,590,000 1,652,042
Yosemite Community College District
Unlimited General Obligation Bonds
Capital Appreciation Election of 2004
Zero Coupon
Series 2010D
08-01-31 6.461 2,500,000(d) 720,625
---------------
Total 2,372,667
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- TAX ALLOCATION (10.6%)
Bakersfield Redevelopment Agency
Tax Allocation Bonds
Old Town Kern-Pioneer
Series 2009A
08-01-29 7.500 330,000 337,422
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 39
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman California Municipal High-Yield Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
SPECIAL DISTRICT -- TAX ALLOCATION (CONT.)
Bakersfield Redevelopment Agency
Tax Allocation Bonds
Southeast Bakersfield
Series 2009B
08-01-29 7.250% $195,000 $202,699
Folsom Redevelopment Agency
Tax Allocation Bonds
Central Folsom Redevelopment Project
Series 2009
08-01-29 5.125 200,000 201,754
08-01-36 5.500 200,000 200,122
Palmdale Civic Authority
Refunding Revenue Bonds
Redevelopment Project No. 1
Series 2009A
07-01-27 6.000 1,000,000 1,083,369
Riverside County Redevelopment Agency
Tax Allocation Bonds
Housing
Series 2010A
10-01-39 6.000 300,000 310,956
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Mission Bay South Redevelopment
Series 2009D
08-01-29 6.375 500,000 546,710
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Redevelopment Projects
Series 2009B
08-01-28 6.125 700,000 773,528
---------------
Total 3,656,560
- -------------------------------------------------------------------------------------
STATE (14.6%)
State of California
Unlimited General Obligation Bonds
Series 2008
08-01-34 5.000 500,000 505,460
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2005
03-01-32 5.000 1,000,000 1,013,210
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2007
12-01-32 5.000 500,000 508,400
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2009
04-01-25 5.625 500,000 560,295
04-01-31 5.750 750,000 827,325
04-01-38 6.000 500,000 555,865
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2010
03-01-40 5.500 1,000,000 1,056,380
---------------
Total 5,026,935
- -------------------------------------------------------------------------------------
TOLL ROAD (5.0%)
Foothill-Eastern Transportation Corridor Agency
Refunding Revenue Bonds
Series 1999
01-15-40 5.750 1,500,000 1,464,570
San Joaquin Hills Transportation Corridor Agency
Revenue Bonds
Senior Lien
Series 1993
01-01-33 5.000 300,000 251,247
---------------
Total 1,715,817
- -------------------------------------------------------------------------------------
WATER & SEWER (7.2%)
Los Angeles Department of Water & Power
Revenue Bonds
Power System
Series 2009A
07-01-24 5.000 1,000,000 1,142,460
Orange County Water District
Refunding Certificate of Participation
Series 2009
08-15-39 5.000 750,000 800,805
San Diego Public Facilities Financing Authority
Revenue Bonds
Senior Series 2009A
05-15-34 5.250 500,000 544,430
---------------
Total 2,487,695
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $31,586,252) $33,330,045
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (1.5%)
SHARES VALUE(a)
JPMorgan Tax-Free Money
Market Fund, 0.030% 516,388(f) $516,388
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $516,388) $516,388
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $32,102,640)(g) $33,846,433
=====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
At Sept. 30, 2010, $19,600 was held in a margin deposit account as collateral to
cover initial margin requirements on open interest rate futures contracts.
FUTURES CONTRACTS OUTSTANDING AT SEPT. 30, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5-year (7) $(846,070) Jan. 2011 $(7,495)
U.S. Treasury Note, 10-year (10) (1,260,469) Dec. 2010 (18,062)
- ----------------------------------------------------------------------------------------------------------------
Total $(25,557)
- ----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
40 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal High-Yield 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
AGM -- Assured Guaranty Municipal 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
GNMA -- Government National Mortgage Association
MGIC -- Mortgage Guaranty Insurance Corporation
NPFGC -- National Public Finance Guarantee 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, 2010, the value
of securities subject to alternative minimum tax
represented 6.39% 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) For zero coupons, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(e) The fund may invest in debt obligations issued by or on behalf of
territories and possessions of the United States and sovereign nations
within the borders of the United States. These securities amounted to 2.31%
of net assets at Sept. 30, 2010.
(f) The rate shown is the seven-day current annualized yield at Sept. 30, 2010.
(g) At Sept. 30, 2010, the cost of securities for federal income tax purposes
was $32,205,143 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $1,779,552
Unrealized depreciation (138,262)
--------------------------------------------------------------------------------------
Net unrealized appreciation $1,641,290
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 41
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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
(to include NAV for open-end mutual funds). 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, 2010:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2010
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS INPUTS(B) INPUTS TOTAL
- --------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $33,330,045 $-- $33,330,045
- --------------------------------------------------------------------------------------------------------------
Total Bonds -- 33,330,045 -- 33,330,045
- --------------------------------------------------------------------------------------------------------------
Other
Unaffiliated Money Market Fund(c) 516,388 -- -- 516,388
- --------------------------------------------------------------------------------------------------------------
Total Other 516,388 -- -- 516,388
- --------------------------------------------------------------------------------------------------------------
Investments in Securities 516,388 33,330,045 -- 33,846,433
Derivatives(d)
Liabilities
Futures Contracts (25,557) -- -- (25,557)
- --------------------------------------------------------------------------------------------------------------
Total $490,831 $33,330,045 $-- $33,820,876
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
42 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
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 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 800.345.6611.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 43
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman California Municipal Quality Fund
SEPT. 30, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (97.2%)
COUPON PRINCIPAL
ISSUE DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
AIRPORT (5.7%)
County of Sacramento
Revenue Bonds
Senior Series 2008A (AGM)
07-01-25 5.000% $1,500,000 $1,635,585
County of Sacramento
Revenue Bonds
Senior Series 2009B
07-01-39 5.750 550,000 605,303
---------------
Total 2,240,888
- -------------------------------------------------------------------------------------
CITY (5.9%)
City of Berkeley
Unlimited General Obligation Bonds
Neighborhood Branch Measure
Series 2009FF
09-01-35 5.000 975,000 1,027,055
City of Martinez
Unlimited General Obligation Bonds
Election of 2008
Series 2009A
08-01-34 5.000 1,200,000 1,284,828
---------------
Total 2,311,883
- -------------------------------------------------------------------------------------
COLLEGE (13.9%)
California Educational Facilities Authority
Revenue Bonds
Loyola Marymount University
Series 2010A
10-01-40 5.125 225,000 234,133
California Educational Facilities Authority
Revenue Bonds
Scripps College
Series 2007 (NPFGC)
11-01-25 5.000 1,315,000 1,409,654
California State University
Revenue Bonds
Systemwide
Series 2007A (AGM)
11-01-27 5.000 1,250,000 1,349,475
California Statewide Communities Development Authority
Revenue Bonds
Polytechnic School
Series 2009
12-01-34 5.000 735,000 756,190
University of California
Revenue Bonds
Series 2008L
05-15-26 5.000 1,500,000 1,680,404
---------------
Total 5,429,856
- -------------------------------------------------------------------------------------
ELECTRIC (11.6%)
Anaheim Public Financing Authority
Revenue Bonds
Anaheim Electric Systems Distribution
Series 2009
10-01-25 5.000 1,500,000 1,659,585
City of Redding
Certificate of Participation
Series 2008A (AGM)
06-01-27 5.000 865,000 919,253
City of Riverside
Revenue Bonds
Series 2008D (AGM)
10-01-28 5.000 1,325,000 1,417,790
Southern California Public Power Authority
Revenue Bonds
Milford Wind Corridor Project
Series 2010-1
07-01-30 5.000 500,000 546,820
---------------
Total 4,543,448
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (18.9%)
California Health Facilities Financing Authority
Revenue Bonds
Adventist Health System West
Series 2009A
09-01-39 5.750 1,000,000 1,048,260
California Health Facilities Financing Authority
Revenue Bonds
Cedars-Sinai Medical Center
Series 2009
08-15-39 5.000 900,000 910,890
California Health Facilities Financing Authority
Revenue Bonds
Providence Health Services
Series 2009B
10-01-39 5.500 800,000 858,688
California Health Facilities Financing Authority
Revenue Bonds
Scripps Health
Series 2010A
11-15-36 5.000 750,000 766,500
California Health Facilities Financing Authority
Revenue Bonds
St. Joseph Health System
Series 2009A
07-01-29 5.500 800,000 856,696
California Statewide Communities Development Authority
Revenue Bonds
John Muir Health
Series 2009
07-01-39 5.125 500,000 505,055
California Statewide Communities Development Authority
Revenue Bonds
Kaiser Permanente
Series 2002A
11-01-32 5.500 2,000,000 2,032,939
City of Torrance
Revenue Bonds
Torrance Memorial Medical Center
Series 2010A
09-01-30 5.000 450,000 458,087
---------------
Total 7,437,115
- -------------------------------------------------------------------------------------
LEASE (10.6%)
Eastern Municipal Water District
Certificate of Participation
Series 1991 (NPFGC/FGIC)
07-01-12 6.750 1,330,000 1,408,723
Modesto Irrigation District
Certificate of Participation
Capital Improvements
Series 2009A
10-01-29 5.750 1,500,000 1,683,030
San Mateo County Board of Education
Refunding Certificate of Participation
Series 2009
06-01-35 5.250 1,000,000 1,035,130
---------------
Total 4,126,883
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (1.1%)
California Infrastructure & Economic Development Bank
Revenue Bonds
Series 2008
02-01-33 5.250 400,000 414,724
- -------------------------------------------------------------------------------------
SCHOOL (3.9%)
Los Angeles Unified School District
Unlimited General Obligation Bonds
Series 2009D
01-01-34 5.000 750,000 785,123
Yosemite Community College District
Unlimited General Obligation Bonds
Capital Appreciation Election of 2004
Zero Coupon
Series 2010D
08-01-31 6.461 2,500,000(d) 720,625
---------------
Total 1,505,748
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- TAX ALLOCATION (5.2%)
Palmdale Civic Authority
Refunding Revenue Bonds
Redevelopment Project No. 1
Series 2009A
07-01-27 6.000 1,000,000 1,083,370
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
44 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman California Municipal Quality Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUE DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
SPECIAL DISTRICT -- TAX ALLOCATION (CONT.)
Riverside County Redevelopment Agency
Tax Allocation Bonds
Housing
Series 2010A
10-01-39 6.000% $350,000 $362,782
San Francisco City & County Redevelopment Agency
Tax Allocation Bonds
Mission Bay North Redevelopment
Series 2009C
08-01-29 6.000 535,000 577,554
---------------
Total 2,023,706
- -------------------------------------------------------------------------------------
STATE (7.1%)
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2007
12-01-32 5.000 500,000 508,400
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2009
10-01-29 5.000 500,000 519,090
State of California
Unlimited General Obligation Bonds
Various Purpose
Series 2010
03-01-40 5.500 500,000 528,190
State of California
Unlimited General Obligation Refunding Bonds
Series 2009A
07-01-21 5.250 500,000 589,810
State of California
Unlimited General Obligation Refunding Bonds
Various Purpose
Series 2008
04-01-38 5.000 610,000 614,551
---------------
Total 2,760,041
- -------------------------------------------------------------------------------------
WATER & SEWER (13.3%)
Los Angeles Department of Water & Power
Revenue Bonds
Series 2001A
07-01-41 5.125 1,000,000 1,006,220
Orange County Water District
Refunding Certificate of Participation
Series 2009
08-15-39 5.000 1,000,000 1,067,740
Sacramento County Sanitation Districts Financing Authority
Refunding Revenue Bonds
Series 2001 (AMBAC)
12-01-27 5.000 2,000,000 2,037,079
San Diego Public Facilities Financing Authority
Revenue Bonds
Senior Series 2009A
05-15-34 5.250 1,000,000 1,088,860
---------------
Total 5,199,899
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $35,728,095) $37,994,191
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (0.6%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUE DESCRIPTION(b,c,f) YIELD MATURITY VALUE(a)
Irvine Ranch Water District
Unlimited General Obligation Bonds
Various Improvement
V.R.D.N. Series 2009B A.M.T.
(Bank of America)
10-01-41 0.250% $250,000 $250,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $250,000) $250,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.9%)
SHARES VALUE(a)
JPMorgan Tax-Free Money
Market Fund, 0.030% 350,531(e) $350,531
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $350,531) $350,531
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $36,328,626)(g) $38,594,722
=====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
At Sept. 30, 2010, $20,400 was held in a margin deposit account as collateral to
cover initial margin requirements on open interest rate futures contracts.
FUTURES CONTRACTS OUTSTANDING AT SEPT. 30, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5-year (8) $(966,937) Jan. 2011 $(8,770)
U.S. Treasury Note, 10-year (10) (1,260,469) Dec. 2010 (18,062)
- ----------------------------------------------------------------------------------------------------------------
Total $(26,832)
- ----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 45
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman California Municipal Quality 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
AGM -- Assured Guaranty Municipal 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
GNMA -- Government National Mortgage Association
MGIC -- Mortgage Guaranty Insurance Corporation
NPFGC -- National Public Finance Guarantee 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, 2010, the value
of securities subject to alternative minimum tax
represented 0.64% 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) For zero coupons, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(e) The rate shown is the seven-day current annualized yield at Sept. 30, 2010.
(f) 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, 2010.
(g) At Sept. 30, 2010, the cost of securities for federal income tax purposes
was $36,437,736 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $2,161,762
Unrealized depreciation (4,776)
--------------------------------------------------------------------------------------
Net unrealized appreciation $2,156,986
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
46 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
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
(to include NAV for open-end mutual funds). 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 valuations may include, but are not limited to,
financial statement analysis, capital account balances, 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, 2010:
<Table>
<Caption>
FAIR VALUE AT SEPT. 30, 2010
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS INPUTS(B) INPUTS TOTAL
- --------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $37,994,191 $-- $37,994,191
- --------------------------------------------------------------------------------------------------------------
Total Bonds -- 37,994,191 -- 37,994,191
- --------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 250,000 -- 250,000
Unaffiliated Money Market Fund(c) 350,531 -- -- 350,531
- --------------------------------------------------------------------------------------------------------------
Total Other 350,531 250,000 -- 600,531
- --------------------------------------------------------------------------------------------------------------
Investments in Securities 350,531 38,244,191 -- 38,594,722
Derivatives(d)
Liabilities
Futures Contracts (26,832) -- -- (26,832)
- --------------------------------------------------------------------------------------------------------------
Total $323,699 $38,244,191 $-- $38,567,890
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 47
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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 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 800.345.6611.
- --------------------------------------------------------------------------------
48 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman Minnesota Municipal Fund
SEPT. 30, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (98.2%)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
ADVANCED REFUNDED (5.5%)
Western Minnesota Municipal Power Agency
Revenue Bonds
Series 1977A Escrowed to Maturity
01-01-16 6.375% $3,280,000 $3,749,270
- -------------------------------------------------------------------------------------
AIRPORT (3.3%)
Minneapolis-St. Paul Metropolitan Airports Commission
Refunding Revenue Bonds
Senior Series 2009B A.M.T.
01-01-22 5.000 480,000 514,474
Minneapolis-St. Paul Metropolitan Airports Commission
Revenue Bonds
Senior Series 2010A
01-01-35 5.000 1,625,000 1,740,456
---------------
Total 2,254,930
- -------------------------------------------------------------------------------------
CITY (0.8%)
City of Moorhead
Unlimited General Obligation Bonds
Flood Mitigation
Series 2009B
02-01-29 4.500 500,000 524,055
- -------------------------------------------------------------------------------------
COLLEGE (16.5%)
Minnesota Higher Education Facilities Authority
Revenue Bonds
Bethel University
Sixth Series 2007R
05-01-23 5.500 275,000 284,336
Minnesota Higher Education Facilities Authority
Revenue Bonds
Carleton College
Series 2010D
03-01-40 5.000 415,000 446,864
Minnesota Higher Education Facilities Authority
Revenue Bonds
College of St. Catherine
Series 2002-5-N1
10-01-32 5.375 1,000,000 1,004,420
Minnesota Higher Education Facilities Authority
Revenue Bonds
Gustavas Adolfus College
Series 2010-7B
10-01-35 4.750 210,000 214,631
Minnesota Higher Education Facilities Authority
Revenue Bonds
Hamline University
7th Series 2010E
10-01-29 5.000 100,000 103,097
Minnesota Higher Education Facilities Authority
Revenue Bonds
St. John's University
6th Series 2005G
10-01-22 5.000 3,500,000 3,777,864
Minnesota Higher Education Facilities Authority
Revenue Bonds
St. Olaf College
6th Series 2007O
10-01-22 5.000 3,040,000 3,325,061
Minnesota Higher Education Facilities Authority
Revenue Bonds
University of St. Thomas
6th Series 2009X
04-01-39 5.250 1,100,000 1,160,643
Minnesota Higher Education Facilities Authority
Revenue Bonds
University of St. Thomas
7th Series 2009A
10-01-39 5.000 1,000,000 1,053,320
---------------
Total 11,370,236
- -------------------------------------------------------------------------------------
COUNTY (5.8%)
County of Anoka
Unlimited General Obligation Bonds
Capital Improvements
Series 2008A
02-01-23 5.000 1,000,000 1,138,330
Dakota County Community Development Agency
Prerefunded Unlimited General Obligation Bonds
Senior Housing Facility
Series 2001
01-01-19 5.250 2,000,000(g) 2,120,040
Dakota County Community Development Agency
Unlimited General Obligation Bonds
Series 2010A
01-01-26 4.000 680,000 723,806
---------------
Total 3,982,176
- -------------------------------------------------------------------------------------
ELECTRIC (8.4%)
Minnesota Municipal Power Agency
Revenue Bonds
Series 2005
10-01-30 5.000 500,000 523,390
Northern Municipal Power Agency
Revenue Bonds
Series 2007A (AMBAC)
01-01-26 5.000 1,000,000 1,081,980
Northern Municipal Power Agency
Revenue Bonds
Series 2008A
01-01-21 5.000 1,000,000 1,117,010
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2010XX
07-01-40 5.250 300,000(e) 313,005
Southern Minnesota Municipal Power Agency
Revenue Bonds
Capital Appreciation
Zero Coupon
Series 1994A (NPFGC)
01-01-26 5.007 5,000,000(f) 2,732,850
---------------
Total 5,768,235
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (19.3%)
City of Breckenridge
Revenue Bonds
Catholic Health Initiatives
Series 2004A
05-01-30 5.000 500,000 516,365
City of Maple Grove
Revenue Bonds
Maple Grove Hospital Corp.
Series 2007
05-01-37 5.250 750,000 757,028
City of Rochester
Revenue Bonds
Olmsted Medical Center
Series 2010
07-01-30 5.875 275,000 282,887
City of Shakopee
Revenue Bonds
St. Francis Regional Medical Center
Series 2004
09-01-25 5.100 2,000,000 2,004,619
City of St. Cloud
Revenue Bonds
Centracare Health System
Series 2010A
05-01-30 5.125 1,000,000 1,052,170
City of St. Louis Park
Refunding Revenue Bonds
Park Nicollet Health Services
Series 2009
07-01-39 5.750 1,500,000 1,560,494
Minneapolis & St. Paul Housing & Redevelopment Authority
Revenue Bonds
Children's Health Care Facilities
Series 2010A
08-15-35 5.250 1,000,000 1,037,390
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 49
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman Minnesota Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
HEALTH CARE -- HOSPITAL (CONT.)
Minnesota Agricultural & Economic Development Board
Unrefunded Revenue Bonds
Evangelical
Series 1997 (AMBAC)
12-01-22 5.150% $1,175,000 $1,175,787
St. Paul Housing & Redevelopment Authority
Revenue Bonds
Allina Health Systems
Series 2009A-1
11-15-29 5.250 1,250,000 1,306,138
St. Paul Housing & Redevelopment Authority
Revenue Bonds
Gillette Children's Specialty
Series 2009
02-01-27 5.000 1,300,000 1,330,160
02-01-29 5.000 525,000 534,639
St. Paul Housing & Redevelopment Authority
Revenue Bonds
HealthPartners Obligation Group Project
Series 2006
05-15-36 5.250 1,500,000 1,456,710
Staples United Hospital District
Unlimited General Obligation Bonds
Health Care Facilities-Lakewood
Series 2004
12-01-34 5.000 250,000 257,465
---------------
Total 13,271,852
- -------------------------------------------------------------------------------------
HEALTH CARE -- OTHER (1.0%)
City of Minneapolis
Revenue Bonds
National Marrow Donor Program
Series 2010
08-01-25 4.875 650,000 661,609
- -------------------------------------------------------------------------------------
HOUSING -- MULTI-FAMILY (0.4%)
Austin Housing & Redevelopment Authority
Refunding Revenue Bonds
Chauncey & Courtyard Apartments
Series 2010
01-01-31 5.000 250,000 263,098
- -------------------------------------------------------------------------------------
HOUSING -- SINGLE FAMILY (3.0%)
Minnesota Housing Finance Agency
Revenue Bonds
Residential Housing Finance
Series 2008A
07-01-23 4.650 955,000 1,003,514
Minnesota Housing Finance Agency
Revenue Bonds
Series 2009
01-01-40 5.100 990,000 1,019,512
---------------
Total 2,023,026
- -------------------------------------------------------------------------------------
LEASE (2.3%)
Minnetrista Economic Development Authority
Revenue Bonds
Series 2009A
02-01-28 4.500 285,000 296,942
02-01-29 4.625 200,000 208,860
02-01-31 4.750 400,000 416,852
St. Paul Housing & Redevelopment Authority
Revenue Bonds
Parking Facility -- RiverCenter Parking Ramp
Series 2009
05-01-24 4.500 580,000 633,017
---------------
Total 1,555,671
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (6.7%)
City of Minneapolis
Revenue Bonds
Blake School Project
Series 2010
09-01-21 4.000 215,000 231,736
St. Paul Housing & Redevelopment Authority
Refunding Revenue Bonds
Parking Facilities Project
Series 2010A
08-01-35 5.000 300,000 309,390
State of Minnesota
Revenue Bonds
Series 2000
06-01-30 6.000 4,000,000 4,016,520
---------------
Total 4,557,646
- -------------------------------------------------------------------------------------
SALES OR USE TAX (2.0%)
Puerto Rico Sales Tax Financing Corp.
Revenue Bonds
1st Subordinated
Series 2010C
08-01-41 5.250 1,325,000(e) 1,390,296
- -------------------------------------------------------------------------------------
SCHOOL (5.5%)
Hopkins Independent School District No. 270
Unlimited General Obligation Bonds
Series 2009B
(School District Credit Enhancement Program)
02-01-27 4.000 1,500,000 1,569,240
Rocori Area Schools Independent School District No. 750
Unlimited General Obligation Bonds
School Building
Series 2009B
(School District Credit Enhancement Program)
02-01-34 4.750 2,100,000 2,227,428
---------------
Total 3,796,668
- -------------------------------------------------------------------------------------
SPECIAL PURPOSE CERTIFICATES -- GENERAL OBLIGATIONS (6.4%)
Metropolitan Council
Unlimited General Obligation Refunding Bonds
Waste Water
Series 2005B
05-01-25 5.000 4,000,000 4,368,960
- -------------------------------------------------------------------------------------
WATER & SEWER (11.3%)
City of Rochester
Unlimited General Obligation Bonds
Waste Water
Series 2004A
02-01-25 5.000 3,305,000 3,599,839
City of St. Paul
Revenue Bonds
Series 2009C
12-01-28 4.000 1,270,000 1,317,079
Minnesota Public Facilities Authority
Revenue Bonds
Series 2005A
03-01-19 5.000 2,480,000 2,798,878
---------------
Total 7,715,796
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $63,009,357) $67,253,524
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (0.2%)
AMOUNT
ISSUE EFFECTIVE PAYABLE AT
DESCRIPTION(b,c,d) YIELD MATURITY VALUE(a)
Minneapolis & St. Paul Housing & Redevelopment Authority
Revenue Bonds
Allina Health Systems
V.R.D.N. Series 2009B-1 (JP Morgan Chase Bank)
11-15-35 0.300% $125,000 $125,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $125,000) $125,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (--%)
SHARES VALUE(a)
JPMorgan Tax-Free Money
Market Fund, 0.030% 11,649(h) $11,649
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $11,649) $11,649
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $63,146,006)(i) $67,390,173
=====================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
50 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT SEPT. 30, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5-year (14) $(1,692,141) Jan. 2011 $(14,990)
U.S. Treasury Note, 10-year (17) (2,142,797) Dec. 2010 (30,588)
- ----------------------------------------------------------------------------------------------------------------
Total $(45,578)
- ----------------------------------------------------------------------------------------------------------------
</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 and/or guarantor of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AGCP -- Assured Guaranty Corporation
AGM -- Assured Guaranty Municipal 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
GNMA -- Government National Mortgage Association
MGIC -- Mortgage Guaranty Insurance Corporation
NPFGC -- National Public Finance Guarantee 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, 2010, the value
of securities subject to alternative minimum tax
represented 0.75% 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 maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2010.
(e) The fund may invest in debt obligations issued by or on behalf of
territories and possessions of the United States and sovereign nations
within the borders of the United States. These securities amounted to 2.49%
of net assets at Sept. 30, 2010.
(f) For zero coupons, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(g) At Sept. 30, 2010, investments in securities included securities valued at
$49,296 that were partially pledged as collateral to cover initial margin
deposits on open interest rate futures contracts.
(h) The rate shown is the seven-day current annualized yield at Sept. 30, 2010.
(i) At Sept. 30, 2010, the cost of securities for federal income tax purposes
was $63,263,525 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $4,126,648
Unrealized depreciation (--)
--------------------------------------------------------------------------------------
Net unrealized appreciation $4,126,648
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 51
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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
(to include NAV for open-end mutual funds). 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 valuations may include, but are not limited to,
financial statement analysis, capital account balances, 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, 2010:
<Table>
<Caption>
Fair value at Sept. 30, 2010
--------------------------------------------------------------
Level 1 Level 2
quoted prices other Level 3
in active significant significant
markets for observable unobservable
DESCRIPTION(a) identical assets inputs(b) inputs Total
- --------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $67,253,524 $-- $67,253,524
- --------------------------------------------------------------------------------------------------------------
Total Bonds -- 67,253,524 -- 67,253,524
- --------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 125,000 -- 125,000
Unaffiliated Money Market Fund(c) 11,649 -- -- 11,649
- --------------------------------------------------------------------------------------------------------------
Total Other 11,649 125,000 -- 136,649
- --------------------------------------------------------------------------------------------------------------
Investments in Securities 11,649 67,378,524 -- 67,390,173
Derivatives(d)
Liabilities
Futures Contracts (45,578) -- -- (45,578)
- --------------------------------------------------------------------------------------------------------------
Total $(33,929) $67,378,524 $-- $67,344,595
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
52 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
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 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 800.345.6611.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 53
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Seligman New York Municipal Fund
SEPT. 30, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
MUNICIPAL BONDS (97.5%)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
ADVANCED REFUNDED (4.0%)
New York State Urban Development Corp.
Prerefunded Revenue Bonds
Personal Income Tax State Facilities
Series 2002A
03-15-32 5.250% $1,000,000 $1,069,870
Triborough Bridge & Tunnel Authority
Prerefunded Revenue Bonds
General Purpose
Series 1999B
01-01-30 5.500 1,800,000 2,341,134
---------------
Total 3,411,004
- -------------------------------------------------------------------------------------
CITY (2.7%)
City of New York
Unlimited General Obligation Bonds
Series 2010B
08-01-21 5.000 500,000 586,705
City of New York
Unlimited General Obligation Bonds
Subordinated Series 2009I-1
04-01-27 5.125 1,500,000 1,680,270
City of New York
Unrefunded Unlimited General Obligation Bonds
Series 1995C
08-15-24 7.250 5,000 5,025
---------------
Total 2,272,000
- -------------------------------------------------------------------------------------
COLLEGE (26.9%)
Hempstead Town Local Development Corp.
Revenue Bonds
Molloy College Project
Series 2009
07-01-39 5.750 1,000,000 1,070,110
Madison County Capital Resource Corp.
Revenue Bonds
Colgate University Project
Series 2010A
07-01-40 5.000 1,000,000 1,076,690
Nassau County Industrial Development Agency
Refunding Revenue Bonds
New York Institute of Technology Project
Series 2000A
03-01-26 4.750 725,000 747,192
New York State Dormitory Authority
Revenue Bonds
Brooklyn Law School
Series 2003B (XLCA)
07-01-30 5.125 1,000,000 1,024,270
New York State Dormitory Authority
Revenue Bonds
Cornell University
Series 2006A
07-01-35 5.000 1,000,000 1,066,750
New York State Dormitory Authority
Revenue Bonds
Cornell University
Series 2009A
07-01-27 5.000 2,000,000 2,282,681
New York State Dormitory Authority
Revenue Bonds
Manhattan Marymount College
Series 2009
07-01-29 5.250 1,000,000 1,034,670
New York State Dormitory Authority
Revenue Bonds
Mount Sinai School of Medicine
Series 2009
07-01-39 5.125 1,000,000 1,027,250
New York State Dormitory Authority
Revenue Bonds
New York University
Series 2007A (AMBAC)
07-01-24 5.000 2,000,000 2,209,301
New York State Dormitory Authority
Revenue Bonds
Pratt Institute
Series 2009C
07-01-39 5.125 1,000,000 1,064,840
New York State Dormitory Authority
Revenue Bonds
Rockefeller University
Series 2009A
07-01-27 4.750 600,000 675,354
New York State Dormitory Authority
Revenue Bonds
Rockefeller University
Series 2009C
07-01-40 5.000 1,500,000 1,636,380
New York State Dormitory Authority
Revenue Bonds
St. John's University
Series 2007A (NPFGC)
07-01-32 5.250 1,000,000 1,058,700
New York State Dormitory Authority
Revenue Bonds
St. John's University
Series 2007C (NPFGC)
07-01-26 5.250 1,205,000 1,398,137
New York State Dormitory Authority
Revenue Bonds
University of Rochester
Series 2009A
07-01-39 5.125 1,350,000 1,447,740
New York State Dormitory Authority
Revenue Bonds
Yeshiva University
Series 2001 (AMBAC)
07-01-30 5.000 1,250,000 1,258,175
New York State Dormitory Authority
Revenue Bonds
Yeshiva University
Series 2009
09-01-38 5.000 500,000 529,105
Rensselaer County Industrial Development Agency
Revenue Bonds
Polytechnic Institute Dorm Project
Series 1999A
08-01-29 5.125 1,000,000 1,003,950
Yonkers Industrial Development Agency
Revenue Bonds
Sarah Lawrence College Project
Series 2001A
06-01-29 6.000 1,000,000 1,096,840
---------------
Total 22,708,135
- -------------------------------------------------------------------------------------
COUNTY (2.5%)
County of Suffolk
Unlimited General Obligation Public Improvement Bonds
Series 2009A
05-15-26 4.250 2,000,000 2,127,640
- -------------------------------------------------------------------------------------
ELECTRIC (0.5%)
Puerto Rico Electric Power Authority
Revenue Bonds
Series 2010XX
07-01-40 5.250 400,000(e) 417,340
- -------------------------------------------------------------------------------------
HEALTH CARE -- HOSPITAL (8.6%)
New York State Dormitory Authority
Revenue Bonds
Mental Health Services Facilities Improvements
Series 2007C (AGM)
08-15-26 5.000 2,000,000 2,189,139
New York State Dormitory Authority
Revenue Bonds
Mental Health Services Facilities Improvements
Series 2009
02-15-18 5.500 1,000,000 1,190,860
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
54 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman New York Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
HEALTH CARE -- HOSPITAL (CONT.)
New York State Dormitory Authority
Revenue Bonds
Mount Sinai Hospital
Series 2010A
07-01-26 5.000% $1,050,000 $1,117,883
New York State Dormitory Authority
Revenue Bonds
North Shore Long Island Jewish
Series 2009A
05-01-37 5.500 1,250,000 1,313,613
New York State Dormitory Authority
Revenue Bonds
Vassar Brothers Hospital
Series 1997 (AGM)
07-01-25 5.375 1,500,000 1,505,040
---------------
Total 7,316,535
- -------------------------------------------------------------------------------------
HOUSING -- MULTI-FAMILY (5.3%)
Amherst Development Corp.
Revenue Bonds
UBF Facility Student Housing Corp.
Series 2010A (AGM)
10-01-45 4.625 1,500,000 1,516,770
New York City Housing Development Corp.
Revenue Bonds
Series 2009M
11-01-45 5.150 750,000 768,795
New York State Housing Finance Agency
Revenue Bonds
Phillips Village Project
Series 1994A (FHA) A.M.T.
08-15-17 7.750 2,180,000 2,203,173
---------------
Total 4,488,738
- -------------------------------------------------------------------------------------
HOUSING -- SINGLE FAMILY (0.8%)
New York Mortgage Agency
Revenue Bonds
Homeowners Mortgage
Series 1998-69 A.M.T.
10-01-28 5.500 425,000 425,264
New York Mortgage Agency
Revenue Bonds
Series 1999-82 A.M.T.
04-01-30 5.650 240,000 240,168
---------------
Total 665,432
- -------------------------------------------------------------------------------------
INDUSTRIAL-POLLUTION -- IDR (4.7%)
New York State Energy Research & Development Authority
Revenue Bonds
Brooklyn Union Gas Co. Project
Series 1996 (NPFGC)
01-01-21 5.500 4,000,000 4,014,320
- -------------------------------------------------------------------------------------
INDUSTRIAL-POLLUTION -- PCR (2.8%)
Onondaga County Industrial Development Agency
Revenue Bonds
Bristol-Meyers Squibb Co. Project
Series 1994 A.M.T.
03-01-24 5.750 2,000,000 2,333,420
- -------------------------------------------------------------------------------------
LEASE (5.9%)
New York Local Government Assistance Corp.
Refunding Revenue Bonds
Senior Lien
Series 2007A
04-01-19 5.000 2,000,000 2,306,800
New York State Dormitory Authority
Revenue Bonds
School Districts Financing Program
Series 2009C
10-01-36 5.125 1,000,000 1,067,200
The Erie County Industrial Development Agency
Revenue Bonds
Buffalo City School District
Series 2009A
05-01-31 5.000 1,500,000 1,618,230
---------------
Total 4,992,230
- -------------------------------------------------------------------------------------
MISCELLANEOUS REVENUE (5.2%)
Metropolitan Transportation Authority
Refunding Revenue Bonds
Series 2002A
01-01-29 5.125 2,950,000 3,096,674
New York City Trust for Cultural Resources
Refunding Revenue Bonds
Museum of Modern Art
Series 2010-1A
10-01-17 5.000 250,000 299,053
New York City Trust for Cultural Resources
Revenue Bonds
Museum of Modern Art
Series 2001D (AMBAC)
07-01-31 5.125 1,000,000 1,049,900
---------------
Total 4,445,627
- -------------------------------------------------------------------------------------
PORT DISTRICT (3.3%)
Port Authority of New York & New Jersey
Revenue Bonds
Consolidated 93rd
Series 1994
06-01-94 6.125 2,250,000 2,773,710
- -------------------------------------------------------------------------------------
SALES OR USE TAX (4.2%)
Nassau County Interim Finance Authority
Revenue Bonds
Sales Tax Secured
Series 2009A
11-15-24 5.000 250,000 290,070
New York City Transitional Finance Authority
Unrefunded Revenue Bonds
Future Tax Secured
Series 2001B
05-01-30 5.000 1,500,000 1,564,095
Puerto Rico Sales Tax Financing Corp.
Revenue Bonds
1st Subordinated
Series 2010C
08-01-41 5.250 1,650,000(e) 1,731,312
---------------
Total 3,585,477
- -------------------------------------------------------------------------------------
SPECIAL DISTRICT -- SPECIAL TAX (12.2%)
Metropolitan Transportation Authority
Revenue Bonds
Series 2009B
11-15-34 5.000 2,000,000 2,151,560
New York City Transitional Finance Authority
Revenue Bonds
Fiscal 2009
Series 2009S-3
01-15-22 5.000 1,000,000 1,114,640
New York City Transitional Finance Authority
Subordinated Revenue Bonds
Future Tax Secured
Series 2007B
11-01-26 5.000 1,035,000 1,150,009
New York State Dormitory Authority
Revenue Bonds
Education
Series 2009A
03-15-28 5.000 1,545,000 1,724,158
New York State Dormitory Authority
Revenue Bonds
Series 2009A
02-15-34 5.000 1,400,000 1,505,966
New York State Housing Finance Agency
Revenue Bonds
Economic Development & Housing
Series 2009A
03-15-39 5.000 1,000,000 1,071,890
New York State Urban Development Corp.
Revenue Bonds
State Personal Income Tax
Series 2009B-1
03-15-36 5.000 1,500,000 1,612,290
---------------
Total 10,330,513
- -------------------------------------------------------------------------------------
TOLL ROAD (3.6%)
New York State Thruway Authority
Revenue Bonds
Series 2005A (NPFGC)
04-01-25 5.000 500,000 548,830
New York State Thruway Authority
Revenue Bonds
Series 2005F (AMBAC)
01-01-25 5.000 2,000,000 2,129,700
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 55
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
Seligman New York Municipal Fund
<Table>
<Caption>
MUNICIPAL BONDS (CONTINUED)
ISSUE COUPON PRINCIPAL
DESCRIPTION(b,c) RATE AMOUNT VALUE(a)
TOLL ROAD (CONT.)
Triborough Bridge & Tunnel Authority
Unrefunded Revenue Bonds
General Purpose
Series 2001A
01-01-32 5.000% $380,000 $393,638
---------------
Total 3,072,168
- -------------------------------------------------------------------------------------
WATER & SEWER (4.3%)
New York City Municipal Water Finance Authority
Refunding Revenue Bonds
Series 2006C
06-15-33 4.750 1,440,000 1,488,614
New York City Municipal Water Finance Authority
Revenue Bonds
Series 2008CC
06-15-34 5.000 2,000,000 2,139,640
---------------
Total 3,628,254
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $76,431,069) $82,582,543
- -------------------------------------------------------------------------------------
<Caption>
MUNICIPAL NOTES (1.2%)
AMOUNT
ISSUE EFFECTIVE PAYABLE
DESCRIPTION(b,c,d) YIELD AT MATURITY VALUE(a)
New York City Municipal Water Finance Authority
Revenue Bonds
Adjusted 2nd General Fiscal 2008-BB-5
V.R.D.N. Series 2007 (Bank of America)
06-15-33 0.230% $1,000,000 $1,000,000
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL NOTES
(Cost: $1,000,000) $1,000,000
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (--%)
SHARES VALUE(a)
JPMorgan Tax-Free Money Market Fund, 0.030% 12,160(f) $12,160
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $12,160) $12,160
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $77,443,229)(g) $83,594,703
=====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
At Sept. 30, 2010, $43,000 was held in a margin deposit account as collateral to
cover initial margin requirements on open interest rate futures contracts.
FUTURES CONTRACTS OUTSTANDING AT SEPT. 30, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 5-year (17) $(2,054,742) Jan. 2011 $(18,338)
U.S. Treasury Note, 10-year (21) (2,646,985) Dec. 2010 (38,165)
- ----------------------------------------------------------------------------------------------------------------
Total $(56,503)
- ----------------------------------------------------------------------------------------------------------------
</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 and/or guarantor of the issue:
<Table>
ACA -- ACA Financial Guaranty Corporation
AGCP -- Assured Guaranty Corporation
AGM -- Assured Guaranty Municipal 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
GNMA -- Government National Mortgage Association
MGIC -- Mortgage Guaranty Insurance Corporation
NPFGC -- National Public Finance Guarantee Corporation
TCRS -- Transferable Custodial Receipts
XLCA -- XL Capital Assurance
</Table>
- --------------------------------------------------------------------------------
56 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman New York 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 -- At Sept. 30, 2010, the value
of securities subject to alternative minimum tax
represented 6.14% 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 maturity date disclosed represents the final maturity. Interest rate
varies to reflect current market conditions; rate shown is the effective
rate on Sept. 30, 2010.
(e) The fund may invest in debt obligations issued by or on behalf of
territories and possessions of the United States and sovereign nations
within the borders of the United States. These securities amounted to 2.54%
of net assets at Sept. 30, 2010.
(f) The rate shown is the seven-day current annualized yield at Sept. 30, 2010.
(g) At Sept. 30, 2010, the cost of securities for federal income tax purposes
was $77,731,106 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $5,870,752
Unrealized depreciation (7,155)
--------------------------------------------------------------------------------------
Net unrealized appreciation $5,863,597
--------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 57
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
(to include NAV for open-end mutual funds). 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 valuations may include, but are not limited to,
financial statement analysis, capital account balances, 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, 2010:
<Table>
<Caption>
Fair value at Sept. 30, 2010
--------------------------------------------------------------
Level 1 Level 2
quoted prices other Level 3
in active significant significant
markets for observable unobservable
DESCRIPTION(a) identical assets inputs(b) inputs Total
- --------------------------------------------------------------------------------------------------------------
Bonds
Municipal Bonds $-- $82,582,543 $-- $82,582,543
- --------------------------------------------------------------------------------------------------------------
Total Bonds -- 82,582,543 -- 82,582,543
- --------------------------------------------------------------------------------------------------------------
Other
Municipal Notes -- 1,000,000 -- 1,000,000
Unaffiliated Money Market Fund(c) 12,160 -- -- 12,160
- --------------------------------------------------------------------------------------------------------------
Total Other 12,160 1,000,000 -- 1,012,160
- --------------------------------------------------------------------------------------------------------------
Investments in Securities 12,160 83,582,543 -- 83,594,703
Derivatives(d)
Liabilities
Futures Contracts (56,503) -- -- (56,503)
- --------------------------------------------------------------------------------------------------------------
Total $(44,343) $83,582,543 $-- $83,538,200
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Sept. 30, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
58 SELIGMAN MUNICIPAL FUNDS -- 2010 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 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 800.345.6611.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 59
STATEMENTS OF ASSETS AND LIABILITIES -------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN SELIGMAN
NATIONAL CALIFORNIA MUNICIPAL CALIFORNIA MUNICIPAL
MUNICIPAL HIGH-YIELD QUALITY
SEPT. 30, 2010 FUND FUND FUND
ASSETS
Investments in securities, at value
(identified cost $591,911,794, $31,586,252 and
$35,978,095) $631,127,859 $33,330,045 $38,244,191
Money market fund
(identified cost $209,642, $516,388 and $350,531) 209,642 516,388 350,531
- ------------------------------------------------------------------------------------------------------------------------
Total investments in securities
(identified cost $592,121,436, $32,102,640 and
$36,328,626) 631,337,501 33,846,433 38,594,722
Receivable from Investment Manager 343 308 315
Capital shares receivable 318,264 5,352 142
Accrued interest receivable 9,095,066 378,899 582,381
Receivable for investment securities sold 8,289,601 340,150 --
Variation margin receivable on futures contracts 11,670 766 719
Margin deposits on futures contracts -- 19,600 20,400
- ------------------------------------------------------------------------------------------------------------------------
Total assets 649,052,445 34,591,508 39,198,679
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 572,223 30,652 32,423
Capital shares payable 1,562,189 67 --
Accrued investment management services fees 7,286 388 439
Accrued distribution fees 5,137 354 335
Accrued transfer agency fees 15,632 825 942
Accrued administrative services fees 1,224 66 75
Other accrued expenses 584,835 67,994 73,575
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,748,526 100,346 107,789
- ------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding shares $646,303,919 $34,491,162 $39,090,890
- ------------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Shares of beneficial interest/capital stock -- $.001
par value $ 80,416 $ 5,185 $ 5,909
Additional paid-in capital 604,770,674 32,675,142 36,741,493
Undistributed net investment income 108,584 15,120 15,779
Accumulated net realized gain (loss) 2,545,892 77,479 88,445
Unrealized appreciation (depreciation) on investments 38,798,353 1,718,236 2,239,264
- ------------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding shares $646,303,919 $34,491,162 $39,090,890
- ------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $612,804,736 $28,747,011 $35,845,008
Class C $ 33,499,183 $ 5,744,151 $ 3,245,882
Outstanding shares of beneficial
interest/capital stock: Class A 76,266,935 4,322,399 5,416,521
Class C 4,149,355 862,661 492,661
Net asset value per share: Class A(1) $ 8.03 $ 6.65 $ 6.62
Class C $ 8.07 $ 6.66 $ 6.59
- ------------------------------------------------------------------------------------------------------------------------
</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 $8.43, $6.98 and $6.95, 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 this
statement.
- --------------------------------------------------------------------------------
60 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN
MINNESOTA NEW YORK
MUNICIPAL MUNICIPAL
SEPT. 30, 2010 FUND FUND
ASSETS
Investments in securities, at value
(identified cost $63,134,357 and $77,431,069) $67,378,524 $83,582,543
Money market fund
(identified cost $11,649 and $12,160) 11,649 12,160
- -------------------------------------------------------------------------------------------------------
Total investments in securities
(identified cost $63,146,006 and $77,443,229) 67,390,173 83,594,703
Receivable from Investment Manager 302 334
Capital shares receivable 6,025 189,152
Accrued interest receivable 903,037 1,041,084
Receivable for investment securities sold 369,421 5,141
Variation margin receivable on futures contracts 1,203 1,500
Margin deposits on futures contracts -- 43,000
- -------------------------------------------------------------------------------------------------------
Total assets 68,670,161 84,874,914
- -------------------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 55,867 69,271
Capital shares payable 43 15,530
Accrued investment management services fees 770 951
Accrued distribution fees 503 755
Accrued transfer agency fees 1,647 2,017
Accrued administrative services fees 131 162
Other accrued expenses 94,482 101,951
- -------------------------------------------------------------------------------------------------------
Total liabilities 153,443 190,637
- -------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding shares $68,516,718 $84,684,277
- -------------------------------------------------------------------------------------------------------
REPRESENTED BY
Shares of beneficial interest/capital stock -- $.001 par value $ 8,783 $ 10,192
Additional paid-in capital 63,651,964 78,134,939
Undistributed net investment income 16,519 172
Accumulated net realized gain (loss) 640,863 444,003
Unrealized appreciation (depreciation) on investments 4,198,589 6,094,971
- -------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding shares $68,516,718 $84,684,277
- -------------------------------------------------------------------------------------------------------
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $66,906,242 $76,164,778
Class C $ 1,610,476 $ 8,519,499
Outstanding shares of beneficial interest/capital stock: Class A 8,577,335 9,168,458
Class C 205,970 1,023,526
Net asset value per share: Class A(1) $ 7.80 $ 8.31
Class C $ 7.82 $ 8.32
- -------------------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A for Seligman Minnesota
Municipal Fund and Seligman New York Municipal Fund is $8.19 and $8.72,
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 this
statement.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 61
STATEMENTS OF OPERATIONS -------------------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN SELIGMAN
NATIONAL CALIFORNIA MUNICIPAL CALIFORNIA MUNICIPAL
MUNICIPAL HIGH-YIELD QUALITY
YEAR ENDED SEPT. 30, 2010 FUND FUND FUND
INVESTMENT INCOME
Income:
Interest $32,655,211 $1,817,757 $1,930,631
Income distributions from money market fund 1,205 197 298
- -----------------------------------------------------------------------------------------------------------------------------
Total income 32,656,416 1,817,954 1,930,929
- -----------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees 2,692,664 142,520 164,593
Distribution fees
Class A 1,554,737 72,075 91,856
Class C 348,526 59,310 34,022
Transfer agency fees
Class A 356,797 13,343 16,958
Class C 20,439 2,801 1,611
Administrative services fees 451,886 24,333 28,101
Compensation of board members 19,326 1,021 1,180
Custodian fees 71,725 3,140 1,990
Printing and postage 82,330 10,146 10,340
Registration fees 40,130 30,078 28,460
Professional fees 36,782 33,267 33,858
Other (111,624) 6,291 8,527
- -----------------------------------------------------------------------------------------------------------------------------
Total expenses 5,563,718 398,325 421,496
Expenses waived/reimbursed by the Investment Manager and
its affiliates (113,950) (79,231) (78,837)
- -----------------------------------------------------------------------------------------------------------------------------
Total net expenses 5,449,768 319,094 342,659
- -----------------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 27,206,648 1,498,860 1,588,270
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 9,700,242 208,704 226,524
Futures contracts (2,310,417) (132,422) (138,038)
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 7,389,825 76,282 88,486
Net change in unrealized appreciation (depreciation) on
investments (844,247) 184,776 (57,850)
- -----------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 6,545,578 261,058 30,636
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $33,752,226 $1,759,918 $1,618,906
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
62 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SELIGMAN SELIGMAN
MINNESOTA NEW YORK
MUNICIPAL MUNICIPAL
YEAR ENDED SEPT. 30, 2010 FUND FUND
INVESTMENT INCOME
Income:
Interest $3,143,515 $3,992,000
Income distributions from money market fund 465 431
- ------------------------------------------------------------------------------------------------------------------------------
Total income 3,143,980 3,992,431
- ------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees 277,610 341,577
Distribution fees
Class A 165,688 187,241
Class C 14,346 84,151
Transfer agency fees
Class A 36,904 30,463
Class C 826 3,522
Administrative services fees 47,397 58,318
Compensation of board members 1,982 2,446
Custodian fees 2,469 7,190
Printing and postage 16,822 16,004
Registration fees 25,560 30,260
Professional fees 33,548 33,741
Other 15,729 12,831
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 638,881 807,744
Expenses waived/reimbursed by the Investment Manager and its affiliates (93,216) (86,471)
- ------------------------------------------------------------------------------------------------------------------------------
Total net expenses 545,665 721,273
- ------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 2,598,315 3,271,158
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 1,055,272 868,110
Futures contracts (240,126) (295,647)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 815,146 572,463
Net change in unrealized appreciation (depreciation) on investments 95,754 346,739
- ------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 910,900 919,202
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $3,509,215 $4,190,360
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 63
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SELIGMAN NATIONAL SELIGMAN CALIFORNIA
MUNICIPAL FUND MUNICIPAL HIGH-YIELD FUND
YEAR ENDED SEPT. 30, 2010 2009 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 27,206,648 $ 5,962,400 $ 1,498,860 $ 1,407,851
Net realized gain (loss) on investments 7,389,825 13,905,752 76,282 453,487
Net change in unrealized appreciation (depreciation) on
investments (844,247) 31,081,735 184,776 2,360,069
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 33,752,226 50,949,887 1,759,918 4,221,407
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (26,487,332) (8,615,539) (1,365,491) (1,201,634)
Class C (1,223,738) (317,681) (236,383) (174,139)
Net realized gain
Class A (13,491,860) -- (371,289) --
Class C (748,905) -- (76,734) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (41,951,835) (8,933,220) (2,049,897) (1,375,773)
- ------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Proceeds from sales
Class A shares 28,721,510 45,075,085 1,640,431 2,870,854
Class C shares 3,100,126 4,697,103 698,473 1,027,098
Fund mergers
Class A shares N/A 632,443,068 N/A N/A
Class C shares N/A 30,091,669 N/A N/A
Reinvestment of distributions at net asset value
Class A shares 26,419,280 5,176,170 1,099,632 813,149
Class C shares 1,286,631 194,986 190,423 136,630
Payments for redemptions
Class A shares (100,348,448) (114,383,759) (4,893,610) (5,803,643)
Class C shares (7,123,720) (2,525,320) (1,259,027) (859,822)
Redemption fees (Note 6) 15,079 996,789 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from share transactions (47,929,542) 601,765,791 (2,523,678) (1,815,734)
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement (Note 10) 20,581 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (56,108,570) 643,782,458 (2,813,657) 1,029,900
Net assets at beginning of year 702,412,489 58,630,031 37,304,819 36,274,919
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 646,303,919 $ 702,412,489 $34,491,162 $37,304,819
- ------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income $ 108,584 $ 601,989 $ 15,120 $ 119,365
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
64 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SELIGMAN CALIFORNIA SELIGMAN MINNESOTA
MUNICIPAL QUALITY FUND MUNICIPAL FUND
YEAR ENDED SEPT. 30, 2010 2009 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,588,270 $ 1,465,511 $ 2,598,315 $ 2,067,990
Net realized gain (loss) on investments 88,486 445,315 815,146 598,926
Net change in unrealized appreciation (depreciation) on
investments (57,850) 3,370,334 95,754 4,558,427
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 1,618,906 5,281,160 3,509,215 7,225,343
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (1,753,208) (1,288,969) (2,636,350) (2,239,614)
Class C (135,948) (91,117) (46,006) (21,873)
Net realized gain
Class A (271,973) (136,084) (795,681) (78,863)
Class C (24,518) (14,299) (15,898) (676)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (2,185,647) (1,530,469) (3,493,935) (2,341,026)
- ------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Proceeds from sales
Class A shares 2,840,834 10,660,189 3,066,720 8,249,458
Class C shares 285,537 2,104,035 560,398 961,391
Reinvestment of distributions at net asset value
Class A shares 1,309,779 959,148 2,499,305 1,579,523
Class C shares 27,469 60,280 43,983 14,841
Payments for redemptions
Class A shares (8,098,135) (8,857,523) (9,914,394) (8,255,188)
Class C shares (541,870) (1,837,796) (409,031) (187,030)
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from share transactions (4,176,386) 3,088,333 (4,153,019) 2,362,995
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (4,743,127) 6,839,024 (4,137,739) 7,247,312
Net assets at beginning of year 43,834,017 36,994,993 72,654,457 65,407,145
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $39,090,890 $43,834,017 $68,516,718 $72,654,457
- ------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income $ 15,779 $ 316,665 $ 16,519 $ 100,560
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 65
STATEMENTS OF CHANGES IN NET ASSETS (continued) --------------------------------
<Table>
<Caption>
SELIGMAN NEW YORK
MUNICIPAL FUND
YEAR ENDED SEPT. 30, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 3,271,158 $ 2,633,529
Net realized gain (loss) on investments 572,463 730,889
Net change in unrealized appreciation (depreciation) on investments 346,739 5,945,470
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 4,190,360 9,309,888
- ------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (3,192,323) (2,427,660)
Class C (295,832) (182,412)
Net realized gain
Class A (786,601) --
Class C (88,427) --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (4,363,183) (2,610,072)
- ------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Proceeds from sales
Class A shares 5,583,991 22,642,685
Class C shares 1,159,954 3,368,290
Reinvestment of distributions at net asset value
Class A shares 2,839,044 1,747,802
Class C shares 199,511 91,806
Payments for redemptions
Class A shares (9,036,972) (11,468,114)
Class C shares (1,028,442) (831,554)
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from share transactions (282,914) 15,550,915
- ------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (455,737) 22,250,731
Net assets at beginning of year 85,140,014 62,889,283
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $84,684,277 $ 85,140,014
- ------------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income $ 172 $ 217,169
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
66 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the 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 (loss)
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 2010 2009 2008 2007 2006
Net asset value, beginning of period $8.12 $7.31 $7.74 $7.81 $7.88
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .33 .20 .29 .33 .35
Net gains (losses) (both realized and
unrealized) .08 .86 (.44) (.08) (.07)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .41 1.06 (.15) .25 .28
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.33) (.28) (.28) (.32) (.35)
Distributions from realized gains (.17) -- -- -- --
- ------------------------------------------------------------------------------------------------------
Total distributions (.50) (.28) (.28) (.32) (.35)
- ------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement .00(a) -- -- -- --
- ------------------------------------------------------------------------------------------------------
Redemption fees (Note 6 to Financial
Statements) .00(a) .03(b) -- -- --
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.03 $8.12 $7.31 $7.74 $7.81
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.41%(c) 15.19% (2.07%) 3.21% 3.58%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement .81% 1.09% .95% .90% .92%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) .79% .95% .95% .90% .92%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.18% 2.57% 3.77% 4.19% 4.46%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $613 $666 $56 $58 $66
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 20% 107% 16% 29% --%
- ------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 67
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
Seligman National Municipal Fund (continued)
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $8.15 $7.31 $7.75 $7.81 $7.88
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .27 .14 .22 .26 .28
Net gains (losses) (both realized and
unrealized) .09 .92 (.45) (.07) (.07)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .36 1.06 (.23) .19 .21
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.27) (.22) (.21) (.25) (.28)
Distributions from realized gains (.17) -- -- -- --
- ------------------------------------------------------------------------------------------------------
Total distributions (.44) (.22) (.21) (.25) (.28)
- ------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement .00(a) -- -- -- --
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.07 $8.15 $7.31 $7.75 $7.81
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.75%(c) 14.62% (3.07%) 2.42% 2.66%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.56% 1.86% 1.85% 1.80% 1.82%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.54% 1.71% 1.85% 1.80% 1.82%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.43% 1.81% 2.87% 3.29% 3.56%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $33 $37 $2 $2 $2
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 20% 107% 16% 29% --%
- ------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) Rounds to less than $0.01 per share.
(b) Per share amount is calculated based on average shares outstanding during
the period.
(c) During the year ended Sept. 30, 2010, the Fund received proceeds from a
regulatory settlement. There was no impact to the total return for each
class.
(d) 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.
(e) The Investment Manager and its affiliates 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.
- --------------------------------------------------------------------------------
68 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
Seligman California Municipal High-Yield Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.69 $6.18 $6.55 $6.60 $6.62
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .29 .26 .27 .28 .28
Net gains (losses) (both realized and
unrealized) .06 .51 (.36) (.06) (.02)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .35 .77 (.09) .22 .26
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.31) (.26) (.27) (.27) (.28)
Distributions from realized gains (.08) -- (.01) -- --
- ------------------------------------------------------------------------------------------------------
Total distributions (.39) (.26) (.28) (.27) (.28)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.65 $6.69 $6.18 $6.55 $6.60
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.57% 12.73% (1.51%) 3.35% 3.99%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.02% 1.27% 1.02% .95% 1.00%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) .79% 1.04% .92% .85% .90%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.44% 4.16% 4.14% 4.25% 4.26%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $29 $31 $31 $29 $30
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 18% 63% 4% 8% --%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.70 $6.18 $6.56 $6.61 $6.63
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .24 .20 .21 .22 .22
Net gains (losses) (both realized and
unrealized) .06 .53 (.37) (.06) (.02)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .30 .73 (.16) .16 .20
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.26) (.21) (.21) (.21) (.22)
Distributions from realized gains (.08) -- (.01) -- --
- ------------------------------------------------------------------------------------------------------
Total distributions (.34) (.21) (.22) (.21) (.22)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.66 $6.70 $6.18 $6.56 $6.61
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.78% 11.94% (2.54%) 2.42% 3.06%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.77% 2.13% 1.92% 1.85% 1.90%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.54% 1.89% 1.82% 1.75% 1.80%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.69% 3.30% 3.24% 3.35% 3.35%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $6 $6 $5 $2 $3
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 18% 63% 4% 8% --%
- ------------------------------------------------------------------------------------------------------
</Table>
(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 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 -- 2010 ANNUAL REPORT 69
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
Seligman California Municipal Quality Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.69 $6.13 $6.57 $6.69 $6.79
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .26 .23 .26 .28 .28
Net gains (losses) (both realized and
unrealized) .02 .58 (.40) (.12) (.07)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .28 .81 (.14) .16 .21
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.30) (.23) (.25) (.27) (.28)
Distributions from realized gains (.05) (.02) (.05) (.01) (.03)
- ------------------------------------------------------------------------------------------------------
Total distributions (.35) (.25) (.30) (.28) (.31)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.62 $6.69 $6.13 $6.57 $6.69
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.53% 13.42% (2.26%) 2.51% 3.14%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement .99% 1.24% .99% .92% .94%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) .79% 1.09% .99% .92% .94%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.02% 3.67% 3.97% 4.17% 4.19%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $36 $40 $34 $38 $42
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 21% 46% 13% 5% --%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.66 $6.10 $6.54 $6.66 $6.76
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .21 .17 .20 .22 .22
Net gains (losses) (both realized and
unrealized) .02 .58 (.40) (.12) (.07)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .23 .75 (.20) .10 .15
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.25) (.17) (.19) (.21) (.22)
Distributions from realized gains (.05) (.02) (.05) (.01) (.03)
- ------------------------------------------------------------------------------------------------------
Total distributions (.30) (.19) (.24) (.22) (.25)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.59 $6.66 $6.10 $6.54 $6.66
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 3.75% 12.52% (3.15%) 1.60% 2.23%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.74% 2.10% 1.89% 1.82% 1.84%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.54% 1.96% 1.89% 1.82% 1.84%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.27% 2.80% 3.07% 3.27% 3.29%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $3 $4 $3 $2 $2
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 21% 46% 13% 5% --%
- ------------------------------------------------------------------------------------------------------
</Table>
(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 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.
- --------------------------------------------------------------------------------
70 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
Seligman Minnesota Municipal Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A --------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.79 $7.26 $7.55 $7.67 $7.75
- -----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .29 .23 .27 .30 .31
Net gains (losses) (both realized and
unrealized) .11 .56 (.26) (.11) (.08)
- -----------------------------------------------------------------------------------------------------
Total from investment operations .40 .79 .01 .19 .23
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.30) (.25) (.26) (.30) (.30)
Distributions from realized gains (.09) (.01) (.04) (.01) (.01)
- -----------------------------------------------------------------------------------------------------
Total distributions (.39) (.26) (.30) (.31) (.31)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $7.80 $7.79 $7.26 $7.55 $7.67
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN 5.45% 11.04% .07% 2.52% 3.04%
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement .93% 1.14% .91% .88% .89%
- -----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) .79% 1.06% .91% .88% .89%
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) 3.85% 3.02% 3.62% 4.01% 4.04%
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $67 $71 $65 $71 $78
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 31% 29% 16% 4% 11%
- -----------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C --------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.81 $7.27 $7.56 $7.68 $7.75
- -----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .24 .16 .20 .24 .24
Net gains (losses) (both realized and
unrealized) .11 .58 (.26) (.12) (.07)
- -----------------------------------------------------------------------------------------------------
Total from investment operations .35 .74 (.06) .12 .17
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.25) (.19) (.19) (.23) (.23)
Distributions from realized gains (.09) (.01) (.04) (.01) (.01)
- -----------------------------------------------------------------------------------------------------
Total distributions (.34) (.20) (.23) (.24) (.24)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $7.82 $7.81 $7.27 $7.56 $7.68
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN 4.66% 10.22% (.83%) 1.59% 2.16%
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.68% 1.98% 1.81% 1.78% 1.79%
- -----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.54% 1.86% 1.81% 1.78% 1.79%
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) 3.09% 2.19% 2.72% 3.11% 3.14%
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2 $1 $1 $-- $--
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 31% 29% 16% 4% 11%
- -----------------------------------------------------------------------------------------------------
</Table>
(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 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 -- 2010 ANNUAL REPORT 71
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
Seligman New York Municipal Fund
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS A ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $8.32 $7.63 $8.07 $8.19 $8.26
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .33 .28 .32 .34 .35
Net gains (losses) (both realized and
unrealized) .09 .70 (.40) (.12) (.06)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .42 .98 (.08) .22 .29
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.34) (.29) (.32) (.34) (.34)
Distributions from realized gains (.09) -- (.04) (.00)(a) (.02)
- ------------------------------------------------------------------------------------------------------
Total distributions (.43) (.29) (.36) (.34) (.36)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.31 $8.32 $7.63 $8.07 $8.19
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.34% 13.02% (1.19%) 2.76% 3.61%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement .89% 1.11% .89% .85% .88%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c) .79% 1.04% .89% .85% .88%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.00% 3.60% 4.04% 4.22% 4.25%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $76 $77 $58 $61 $64
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 18% 53% 0% 16% --%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED SEPT. 30,
CLASS C ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $8.34 $7.64 $8.08 $8.20 $8.27
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .27 .22 .25 .27 .27
Net gains (losses) (both realized and
unrealized) .08 .70 (.41) (.13) (.05)
- ------------------------------------------------------------------------------------------------------
Total from investment operations .35 .92 (.16) .14 .22
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.28) (.22) (.24) (.26) (.27)
Distributions from realized gains (.09) -- (.04) (.00)(a) (.02)
- ------------------------------------------------------------------------------------------------------
Total distributions (.37) (.22) (.28) (.26) (.29)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.32 $8.34 $7.64 $8.08 $8.20
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 4.42% 12.19% (2.07%) 1.83% 2.68%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.64% 1.96% 1.79% 1.75% 1.78%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c) 1.54% 1.88% 1.79% 1.75% 1.78%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.25% 2.73% 3.14% 3.32% 3.35%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $9 $8 $5 $4 $5
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 18% 53% 0% 16% --%
- ------------------------------------------------------------------------------------------------------
</Table>
(a) A capital gain of $0.003 was paid for the year ended Sept. 30, 2007.
(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 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 -- 2010 ANNUAL REPORT
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). All Funds other than National are non-diversified. All Funds
are open-end management investment companies as defined in the Investment
Company Act of 1940, as amended (the 1940 Act). 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).
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
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. Other expenses on the Statements of Operations include adjustments as a
result of a change in estimated expenses for the year ended Sept. 30, 2010.
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 from the
primary exchange. 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.
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, 2010, each Fund had no outstanding forward-
commitments.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 73
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
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 tax returns filed for the last
three years.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and payable monthly, when
available, are reinvested in additional shares of each Fund at net asset value
or payable in cash. Capital gains, when available, are normally 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. INVESTMENTS IN DERIVATIVES
Each Fund may invest in certain derivative instruments, which are transactions
whose values depend on or are derived from (in whole or in part) the value of
one or more other assets, such as securities, currencies, commodities or
indices. Such derivative instruments may be used to maintain cash reserves while
maintaining exposure to certain other assets, to offset anticipated declines in
values of investments, to facilitate trading, to reduce transaction costs, and
to pursue higher investment returns. Each Fund may also use derivative
instruments to mitigate certain investment risks, such as foreign currency
exchange rate risk, interest rate risk, and credit risk. Investments in
derivative instruments may expose each Fund to certain additional risks,
including those detailed below.
FUTURES TRANSACTIONS
Each Fund may buy and sell financial futures contracts traded on any U.S. or
foreign exchange to produce incremental earnings, hedge existing positions or
protect against market changes in the value of equities, interest rates or
foreign currencies. Each Fund may also buy and write put and call options on
these futures contracts. A futures contract represents a commitment for the
future purchase or sale of an asset at a specified price on a specified date.
Futures and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
Upon entering into a futures contract, each Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by each Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. Each Fund recognizes a realized gain or loss when the contract is closed
or expires.
Upon entering into futures contracts, each Fund bears the risk of interest
rates, exchange rates or securities prices moving unexpectedly, in which case,
each Fund may not achieve the anticipated benefits of the futures contracts and
may realize a loss. Additional risks include counterparty credit risk, the
possibility of an illiquid market, and that a change in the value of the
contract or option may not correlate with changes in the value of the underlying
securities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of each Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on each Fund's operations over the period including realized gains
- --------------------------------------------------------------------------------
74 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
NATIONAL
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT SEPT. 30, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- ---------------------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -----------------------------------------------------------------------------------------------------------------------
Net assets -- unrealized
Interest rate contracts N/A N/A* depreciation on investments $417,712*
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio of
Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED SEPT. 30, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ----------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- ----------------------------------------------------------------------------------------------
Interest rate contracts $(2,310,417)
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN INCOME
- ---------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- ---------------------------------------------------------------------------------------------
Interest rate contracts $(417,712)
- ---------------------------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross notional amount of short contracts outstanding was approximately $34.8
million at Sept. 30, 2010. The monthly average gross notional amount for short
contracts was $16.5 million for the year Sept. 30, 2010. The fair value of such
contracts at Sept. 30, 2010 is set forth in the table above.
CALIFORNIA HIGH-YIELD
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT SEPT. 30, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- ---------------------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -----------------------------------------------------------------------------------------------------------------------
Net assets -- unrealized
Interest rate contracts N/A N/A depreciation on investments $25,557*
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio of
Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED SEPT. 30, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ---------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- ---------------------------------------------------------------------------------------------
Interest rate contracts $(132,422)
- ---------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- --------------------------------------------------------------------------------------------
Interest rate contracts $(25,557)
- --------------------------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross notional amount of short contracts outstanding was approximately $2.1
million at Sept. 30, 2010. The monthly average gross notional amount for short
contracts was $1.0 million for the year Sept. 30, 2010. The fair value of such
contracts at Sept. 30, 2010 is set forth in the table above.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 75
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
CALIFORNIA QUALITY
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT SEPT. 30, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- ---------------------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -----------------------------------------------------------------------------------------------------------------------
Net assets -- unrealized
Interest rate contracts N/A N/A depreciation on investments $26,832*
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio of
Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED SEPT. 30, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ---------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- ---------------------------------------------------------------------------------------------
Interest rate contracts $(138,038)
- ---------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- --------------------------------------------------------------------------------------------
Interest rate contracts $(26,832)
- --------------------------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross notional amount of short contracts outstanding was approximately $2.2
million at Sept. 30, 2010. The monthly average gross notional amount for short
contracts was $1.0 million for the year Sept. 30, 2010. The fair value of such
contracts at Sept. 30, 2010 is set forth in the table above.
MINNESOTA
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT SEPT. 30, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- ---------------------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -----------------------------------------------------------------------------------------------------------------------
Net assets -- unrealized
Interest rate contracts N/A N/A depreciation on investments $45,578*
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio of
Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED SEPT. 30, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ---------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- ---------------------------------------------------------------------------------------------
Interest rate contracts $(240,126)
- ---------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- --------------------------------------------------------------------------------------------
Interest rate contracts $(45,578)
- --------------------------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross notional amount of short contracts outstanding was approximately $3.8
million at Sept. 30, 2010. The monthly average gross notional amount for short
contracts was $1.7 million for the year Sept. 30, 2010. The fair value of such
contracts at Sept. 30, 2010 is set forth in the table above.
- --------------------------------------------------------------------------------
76 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NEW YORK
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT SEPT. 30, 2010
<Table>
<Caption>
ASSET DERIVATIVES
------------------------------- LIABILITY DERIVATIVES
STATEMENT OF ASSETS ---------------------------------------------
RISK EXPOSURE AND LIABILITIES STATEMENT OF ASSETS AND
CATEGORY LOCATION FAIR VALUE LIABILITIES LOCATION FAIR VALUE
- -----------------------------------------------------------------------------------------------------------------------
Net assets -- unrealized
Interest rate contracts N/A N/A depreciation on investments $56,503*
- -----------------------------------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio of
Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED SEPT. 30, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ---------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- ---------------------------------------------------------------------------------------------
Interest rate contracts $(295,647)
- ---------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- --------------------------------------------------------------------------------------------
Interest rate contracts $(56,503)
- --------------------------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross notional amount of short contracts outstanding was approximately $4.7
million at Sept. 30, 2010. The monthly average gross notional amount for short
contracts was $2.1 million for the year Sept. 30, 2010. The fair value of such
contracts at Sept. 30, 2010 is set forth in the table above.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, Columbia Management
Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the
Investment Manager) determines which securities will be purchased, held or sold.
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. The
management fee for the year ended Sept. 30, 2010 was 0.41% of each Fund's
average daily net assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, 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, 2010 was 0.07% of each
Fund's average daily net assets.
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 year ended Sept. 30,
2010, other expenses paid to this company were as follows:
<Table>
<Caption>
FUND AMOUNT
- ---------------------------------------------------------------------------------------
National $1,987
California High-Yield 106
California Quality 124
Minnesota 208
New York 240
</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
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 77
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
invested in shares of each Fund or certain other funds managed by the Investment
Manager. 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.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Funds.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A and Class C shares that varied by class. In addition, the
Transfer Agent charged an annual fee per inactive account and received
reimbursement from the Fund for certain out-of-pocket expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and asset-based fees, calculated based
on assets held in omnibus accounts (other than omnibus accounts for which
American Enterprise Investment Services, Inc. is the broker of record or
accounts where the beneficial shareholder is a customer of Ameriprise Financial
Services, Inc.), which are intended to reimburse the Transfer Agent for certain
sub-transfer agent fees (exclusive of BFDS fees). The Transfer Agent pays the
fees of BFDS for services as sub-transfer agent and is not entitled to
reimbursement for such fees from the Funds.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Funds and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Funds.
For the year ended Sept. 30, 2010, the Funds' effective transfer agent fee rate
as a percentage of average net assets was as follows:
<Table>
<Caption>
CLASS A CLASS C
- -------------------------------------------------------------------------------------------
National 0.06% 0.06%
California High-Yield 0.05 0.05
California Quality 0.05 0.05
Minnesota 0.06 0.06
New York 0.04 0.04
</Table>
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 Seligman
Data Corp. (SDC), the former transfer agent, including the payment of rent by
SDC (the Guaranty). The lease and the Guaranty expire in January 2019. At Sept.
30, 2010, each Fund's total potential future obligation over the life of the
Guaranty is as follows:
<Table>
<Caption>
FUND AMOUNT
- ----------------------------------------------------------------------------------------
National $922,988
California High-Yield 45,842
California Quality 54,751
Minnesota 91,079
New York 106,994
</Table>
The liability remaining is included within other accrued expenses in the
Statements of Assets and Liabilities. At Sept. 30, 2010, these amounts are as
follows:
<Table>
<Caption>
FUND AMOUNT
- ----------------------------------------------------------------------------------------
National $466,718*
California High-Yield 23,167
California Quality 27,690
Minnesota 46,045
New York 54,100
</Table>
* In connection with the fund mergers as described in Note 11, National assumed
the obligations of the funds which were acquired.
- --------------------------------------------------------------------------------
78 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
DISTRIBUTION FEES
Each Fund has an agreement with Columbia Management Investment Distributors,
Inc. (formerly known as RiverSource Fund Distributors, Inc.) (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, each Fund paid 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 $2,282,000
California High-Yield 203,000
California Quality 242,000
Minnesota 93,000
New York 265,000
</Table>
These amounts are based on the most recent information available as of July 31,
2010, 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, 2010 are as
follows:
<Table>
<Caption>
FUND CLASS A CLASS C
- -------------------------------------------------------------------------------------------
National $302,612 $6,974
California High-Yield 10,163 1,993
California Quality 15,379 314
Minnesota 31,807 475
New York 37,183 404
</Table>
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended Sept. 30, 2010, 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>
CLASS PERCENTAGE
- -----------------------------------------------------------------------------------------
Class A 0.79%
Class C 1.54
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
<Caption>
FUND CLASS A CLASS C
- -------------------------------------------------------------------------------------------
National $107,417 $6,533
California High-Yield 4,694 1,022
California Quality 5,936 590
Minnesota 10,394 252
New York 7,994 997
</Table>
The management fees waived/reimbursed at the Fund level were as follows:
<Table>
<Caption>
FUND AMOUNT
- ---------------------------------------------------------------------------------------
California High-Yield $73,515
California Quality 72,311
Minnesota 82,570
New York 77,480
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 79
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and reimburse certain expenses until Nov. 30, 2011, unless sooner
terminated at the sole discretion of the Board, such that net expenses
(excluding fees and expenses of acquired funds*), will not exceed the following
percentage of each Fund's class' average daily net assets:
<Table>
<Caption>
CLASS PERCENT
- ----------------------------------------------------------------------------------------
Class A 0.79%
Class C 1.54
</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.
5. SECURITIES TRANSACTIONS
For the year ended Sept. 30, 2010, 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 $131,038,725 $195,652,017
California High-Yield 6,241,850 8,509,551
California Quality 8,198,849 13,375,227
Minnesota 20,643,619 25,489,193
New York 14,574,061 16,511,470
</Table>
Realized gains and losses are determined on an identified cost basis.
6. REDEMPTION FEES
Class A shares issued by National to former stockholders of Seligman Select
Municipal Fund in connection with the fund merger (see Note 11) 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 National and
is recorded as additional paid-in capital.
7. 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, 2010 2009 2010 2009
- ------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 3,655,983 6,001,981 252,911 470,216
Fund merger N/A 82,654,273 N/A N/A
Reinvested distributions 3,382,618 668,709 171,057 129,987
Redeemed (12,803,635) (15,015,369) (755,202) (945,232)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (5,765,034) 74,309,594 (331,234) (345,029)
- ------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 391,554 618,059 107,622 169,001
Fund merger N/A 3,875,447 N/A N/A
Reinvested distributions 164,100 25,017 29,613 19,017
Redeemed (900,159) (323,416) (194,294) (141,925)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (344,505) 4,195,107 (57,059) 46,093
- ------------------------------------------------------------------------------------------------------------------
<Caption>
CALIFORNIA QUALITY MINNESOTA NEW YORK
---------------------- ------------------------ ----------------------
YEAR ENDED SEPT. 30, 2010 2009 2010 2009 2010 2009
- ------------------------------------------------------------------------------------------------------------------
CLASS A
Sold 439,806 1,725,823 402,388 1,106,231 686,588 2,890,575
Reinvested distributions 202,609 154,467 328,135 212,517 349,673 222,566
Redeemed (1,249,417) (1,424,314) (1,298,760) (1,109,881) (1,111,046) (1,463,530)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (607,002) 455,976 (568,237) 208,867 (74,785) 1,649,611
- ------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
80 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
CALIFORNIA QUALITY MINNESOTA NEW YORK
---------------------- ------------------------ ----------------------
YEAR ENDED SEPT. 30, 2010 2009 2010 2009 2010 2009
- ------------------------------------------------------------------------------------------------------------------
CLASS C
Sold 44,551 341,722 73,520 449,044 142,617 428,298
Reinvested distributions 4,268 9,837 5,759 1,984 24,543 11,650
Redeemed (83,511) (294,718) (53,509) (346,032) (126,293) (105,324)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (34,692) 56,841 25,770 104,996 40,867 334,624
- ------------------------------------------------------------------------------------------------------------------
</Table>
8. 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 agreement became effective
on Oct. 15, 2009, replacing a prior credit facility. The credit facility
agreement, which is a collective agreement between each Fund and certain other
funds managed by the Investment Manager, 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 (i) 1.25% per annum plus (ii) if one-month LIBOR 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. Prior to Oct. 15,
2009, the credit facility agreement, which was a collective agreement between
each Fund and certain other funds managed by the Investment Manager, 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%. The 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, in
addition to an upfront fee equal to its pro rata share of 0.02% of the amount of
the credit facility. Each Fund had no borrowings during the year ended Sept. 30,
2010.
9. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of futures contracts and
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 were recorded by the
Fund.
In the Statement 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
ACCUMULATED PAID-IN-CAPITAL
UNDISTRIBUTED NET REDUCTION
FUND NET INVESTMENT INCOME REALIZED GAIN (LOSS) (INCREASE)
- ----------------------------------------------------------------------------------------------------------------
National $11,017 $9,564 $(20,581)
California High-Yield (1,231) 1,231 --
California Quality -- -- --
Minnesota -- -- --
New York -- -- --
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 81
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
2010 2009
------------------------- ------------------------
YEAR ENDED SEPT. 30, ORDINARY LONG-TERM ORDINARY LONG-TERM
FUND INCOME CAPITAL GAIN INCOME CAPITAL GAIN
- ---------------------------------------------------------------------------------------------------------
National $27,711,070 $14,240,765 $8,933,220 --
California High-Yield 1,601,874 448,023 1,375,773 --
California Quality 1,908,383 277,264 1,380,086 $150,383
Minnesota 2,688,971 804,964 2,261,487 79,539
New York 3,488,155 875,028 2,610,072 --
</Table>
Tax-exempt interest distributions of the cash basis distributions paid for the
years indicated were as follows:
<Table>
<Caption>
FUND 2010 2009
- -----------------------------------------------------------------------------------------
National 99.77% 96.84%
California High-Yield 99.81 99.63
California Quality 97.76 93.44
Minnesota 99.73 99.63
New York 99.92 99.63
</Table>
At Sept. 30, 2010, the components of distributable earnings on a tax basis for
each Fund were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED UNREALIZED
TAX-EXEMPT ACCUMULATED REALIZED APPRECIATION
FUND INCOME LONG-TERM GAIN LOSS (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------
National $610,704 $4,634,597 $-- $36,779,751
California High-Yield 51,727 174,881 -- 1,614,879
California Quality 78,302 168,446 -- 2,129,163
Minnesota 233,561 598,908 -- 4,079,369
New York 273,867 560,377 -- 5,805,056
</Table>
For the year ended Sept. 30, 2010, $1,559,751 of capital loss carry-over was
utilized and/or expired unused for National.
10. PROCEEDS FROM REGULATORY SETTLEMENT
During the year ended Sept. 30, 2010, as a result of a settlement of an
administrative proceeding brought by the Securities and Exchange Commission
against an unaffiliated third party relating to market timing and/or late
trading of mutual funds, National received $20,581, which represented National's
portion of the proceeds from the settlement (National was not a party to the
proceeding). The proceeds received by National were recorded as an increase to
additional paid-in capital.
11. 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 ACCUMULATED
TOTAL CAPITAL (DEPRECIATION) ON NET UNDISTRIBUTED NET
NET ASSETS 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>
- --------------------------------------------------------------------------------
82 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
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), 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.
The mergers were accomplished by the following tax-free exchanges:
<Table>
<Caption>
SHARES VALUE OF SHARES SHARES ISSUED BY
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
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 83
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
<Table>
<Caption>
SHARES VALUE OF SHARES SHARES ISSUED BY
EXCHANGED EXCHANGED NATIONAL
- ---------------------------------------------------------------------------------------------------------
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 ACCUMULATED
TOTAL CAPITAL (DEPRECIATION) ON 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
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>
12. RISKS RELATING TO CERTAIN INVESTMENTS
NON-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, economic,
regulatory or other events or conditions 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.
13. 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 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 each Fund's financial statements, other than as
noted below.
The Board of Directors/Trustees of each Fund has approved in principle the
following proposed mergers:
Seligman National Municipal Fund into Columbia Tax-Exempt Fund
Seligman California Municipal High-Yield Fund into Columbia California Tax-
Exempt Fund
Seligman California Municipal Quality Fund into Columbia California Tax-Exempt
Fund
- --------------------------------------------------------------------------------
84 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Seligman Minnesota Municipal Fund into Columbia Minnesota Tax-Exempt Fund
Seligman New York Municipal Fund into Columbia New York Tax-Exempt Fund
It is currently anticipated that a Special Meeting of Shareholders will be held
during the first half of 2011 to vote on the above proposals.
14. 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 legacy
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 (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the 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. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the decision on Jones v. Harris
Associates. On June 4, 2010, the Eighth Circuit remanded the Gallus case to the
District Court for further consideration in light of the Supreme Court's
decision in Jones v. Harris Associates.
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 funds' Boards of Directors/Trustees.
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.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 85
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 FUND,
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, 2010, and the related statements of operations
for the year then ended, and the statements of changes in net assets and the
financial highlights for each of the two years in the period 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 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 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, 2010, 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 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, 2010, the results of their operations for the year then ended, and
the changes in their net assets and the financial highlights for each of the two
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
November 19, 2010
- --------------------------------------------------------------------------------
86 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
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, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 99.77%
CAPITAL GAIN DISTRIBUTION - the Fund designates $14,240,765 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, 2010 was
11.81%.
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, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-interest dividends.................................... 99.81%
CAPITAL GAIN DISTRIBUTION - the Fund designates $448,023 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, 2010 was
7.81%.
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, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-interest dividends.................................... 97.76%
</Table>
CAPITAL GAIN DISTRIBUTION - the Fund designates $277,264 to be taxed as long-
term capital gain.
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, 2010 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.
Seligman Minnesota Municipal Fund
Fiscal year ended Sept. 30, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 99.73%
</Table>
CAPITAL GAIN DISTRIBUTION - the Fund designates $804,964 to be taxed as long-
term capital gain.
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, 2010 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.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 87
FEDERAL INCOME TAX INFORMATION (continued) ------------------------------------
(UNAUDITED)
Seligman New York Municipal Fund
Fiscal year ended Sept. 30, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Exempt-Interest Dividends.................................... 99.92%
</Table>
CAPITAL GAIN DISTRIBUTION - the Fund designates $875,028 to be taxed as long-
term capital gain.
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, 2010 was
8.22%.
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.
- --------------------------------------------------------------------------------
88 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
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.
Each Board member oversees 150 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Arne H. Carlson Board member since Chair, RiverSource and Threadneedle Funds, 1999-2006; None
901 S. Marquette Ave. 1/5/99 former Governor of Minnesota
Minneapolis, MN 55402
Age 76
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 59
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 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. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 89
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
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 FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006; Senior Vice
President -- Columbia Management Advisors, LLC, April
2003 -- December 2004; President, Columbia Funds,
Liberty Funds and Stein Roe Funds, February
2004 -- October 2004
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 46 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Director of Product
Development -- Mutual Funds, Ameriprise Financial,
Inc., 2001-2004
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006;
Senior Vice President and Chief Compliance Officer,
USBancorp Asset Management, 2002-2004
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
90 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010; Director of Corporate Compliance and Conflicts
Officer, MFS Investment Management (investment
management), August 2004 -- May 2005
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 91
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
Columbia Management Investment Advisers, LLC ("Columbia Management" or the
"investment manager"), formerly known as RiverSource Investments, LLC, a wholly-
owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"), serves
as the investment manager to Seligman National Municipal Fund, Seligman
California Municipal High-Yield Fund, Seligman California Municipal Quality
Fund, Seligman Minnesota Municipal Fund and Seligman New York Municipal Fund
(each, a "Fund" and collectively, the "Funds"). Under an investment management
services agreement (the "IMS Agreement"), Columbia Management provides
investment advice and other services to the Funds and all funds branded
Columbia, RiverSource, Seligman and Threadneedle.
On an annual basis, the Funds' Board of Directors/Trustees (the "Board"),
including the independent Board members (the "Independent Directors"), considers
renewal of the IMS Agreement. Columbia Management prepared detailed reports for
the Board and its Contracts Committee in March and April 2010, including reports
based on data provided by independent organizations and a comprehensive response
to each item of information requested by independent legal counsel to the
Independent Directors ("Independent Legal Counsel") in a letter to the
investment manager, to assist the Board in making this determination. All of the
materials presented in March and April 2010 were first supplied in draft form to
designated representatives of the Independent Directors, i.e., Independent Legal
Counsel, the Chair of the Board and the Chair of the Contracts Committee
(including materials relating to each Fund's expense cap), and the final
materials were revised to reflect comments provided by these Board
representatives. In addition, throughout the year, the Board (or its committees)
reviews information prepared by Columbia Management addressing the services
Columbia Management provides and each Fund's performance. The Board accords
particular weight to the work, deliberations and conclusions of the Contracts
Committee, the Investment Review Committee and the Compliance Committee in
determining whether to continue the IMS Agreement. At the April 6-8, 2010 in-
person Board meeting, Independent Legal Counsel reviewed with the Independent
Directors, including in an executive session without management, various factors
relevant to the Board's consideration of advisory agreements and the Board's
legal responsibilities related to such consideration. Following an analysis and
discussion of the factors identified below, the Board, including all of the
Independent Directors, approved renewal of the IMS Agreement.
Nature, Extent and Quality of Services Provided by Columbia Management: The
Board analyzed various reports and presentations it had received detailing the
services performed by Columbia Management, as well as its expertise, resources
and capabilities. The Board specifically considered many developments during the
past year concerning the services provided by Columbia Management, including, in
particular, the continued investment in, and resources dedicated to, the Funds'
operations, most notably, management's announcement of the massive investment
made in the acquisition of the long-term asset management business of Columbia
Management Group, LLC (the "Columbia Transaction") and the completed integration
of J. & W. Seligman & Co. Incorporated, acquisitions which should continue to
enhance investment capabilities and provide access to a greater depth of
experienced portfolio managers in key categories. The Board noted, in
particular, that upon the close of the Columbia Transaction, the investment
manager will have grown to 10 investment offices (compared to 6 in 2009). In
addition, the Board reviewed information concerning the investment manager's new
Chief Investment Officer upon the close of the Columbia Transaction, including
the application of his particular investment philosophy, which is intended to
enhance the risk and portfolio management oversight of the entire fund family.
Moreover, in connection with the Board's evaluation of the overall package of
services provided by Columbia Management, the Board considered the quality of
the administrative and transfer agency services provided by Columbia
Management's affiliates to the Funds. The Board also reviewed the financial
condition of Columbia Management and its affiliates, and each entity's ability
to carry out its responsibilities under the IMS Agreement. Further, the Board
considered Columbia Management's ability to retain key personnel in certain
targeted areas and its expectations in this regard. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by Columbia Management). The Board
concluded that the services being performed under the IMS Agreement were of a
reasonably high quality.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that Columbia Management and its
affiliates were in a position to continue to provide a high quality and level of
services to the Funds.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of each Fund. In this regard, the Board
considered detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of each Fund, the
performance of a benchmark index, the percentage ranking of each Fund among its
comparison group and the
- --------------------------------------------------------------------------------
92 SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
net assets of each Fund. The Board observed that the investment performance of
Seligman National Municipal Fund was appropriate in light of the particular
management style of the Fund, and the investment performance of Seligman
California Municipal High-Yield Fund, Seligman California Municipal Quality
Fund, Seligman Minnesota Municipal Fund and Seligman New York Municipal Fund
reflected the interrelationship of market conditions with the particular
investment strategies employed by the portfolio management team of the Funds.
Comparative Fees, Costs of Services Provided and the Profits Realized By
Columbia Management and its Affiliates from their Relationships with the Funds:
The Board reviewed comparative fees and the costs of services to be provided
under the IMS Agreement. The Board members considered detailed comparative
information set forth in an annual report on fees and expenses, including, among
other things, data (prepared by an independent organization) showing a
comparison of each Fund's expenses with median expenses paid by funds in its
peer group, as well as data showing each Fund's contribution to Columbia
Management's profitability. They also reviewed information in the report showing
the fees charged by Columbia Management to other client accounts (with similar
investment strategies to those of the Funds).
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the legacy RiverSource Funds' family, while assuring that the overall
fees for each fund (with few defined exceptions) are generally in line with the
"pricing philosophy" (i.e., that the total expense ratio of each fund, with few
exceptions, is at or below the median expense ratio of funds in the same
comparison group). The Board took into account that each Fund's total expense
ratio (after considering continued expense caps/waivers) was below the peer
group's median expense ratio shown in the reports. Based on its review, the
Board concluded that each Fund's management fee was fair and reasonable in light
of the extent and quality of services that the Fund receives.
The Board also considered various preliminary integration plans in connection
with the Columbia Transaction which, if implemented, would impact the fee
structures of various legacy RiverSource Funds. The Board was satisfied with the
principles underlying these plans, which, at their preliminary stage, are
designed to achieve a rational, consistent pricing model across the combined
fund families, as well as preserve the "pricing philosophy" of the legacy
RiverSource Funds.
The Board also considered the expected profitability of Columbia Management and
its affiliates in connection with Columbia Management providing investment
management services to the Funds. In this regard, the Board referred to a
detailed profitability report, discussing the profitability to Columbia
Management and Ameriprise Financial from managing and operating the Funds,
including data showing comparative profitability over the past two years. In
this regard, the Board observed slightly reduced profitability in 2009 vs. 2008.
The Board also considered the services acquired by the investment manager
through the use of commission dollars paid by the legacy RiverSource Funds on
portfolio transactions. The Board noted that the fees paid by the Funds should
permit the investment manager to offer competitive compensation to its
personnel, make necessary investments in its business and earn an appropriate
profit. The Board concluded that profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by Columbia Management as each Fund grows and took
note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 8, 2010, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement for each Fund for an additional annual period.
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 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; 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 columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
SELIGMAN MUNICIPAL FUNDS -- 2010 ANNUAL REPORT 93
(COLUMBIA MANAGEMENT LOGO)
SELIGMAN MUNICIPAL FUNDS
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
This report must be accompanied or preceded by the Funds'
current prospectus. The Funds are distributed by Columbia
Management Investment Distributors, Inc., member FINRA,
and managed by Columbia Management Investment Advisers,
LLC. All rights reserved.
(C)2010 Columbia Management Investment Advisers, LLC. SL-9902 C (11/10)
Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial officer.
(b) During the period covered by this report, there were not any amendments
to a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were no waivers,
including any implicit waivers, from a provision of the code of ethics
described in 2(a) above that relates to one or more of the items set forth
in paragraph (b) of this item's instructions.
Item 3. Audit Committee Financial Expert.
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
(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:
2010 - $52,974 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 related to the 2010
semiannual financial statement review, the 2010 transfer agent 17Ad-13
review and other consultations and services required to complete the audit
for Seligman Municipal Series Trust were as follows:
2010 - $2,692 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:
2010 - $6,392 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:
2010 - $0 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
2010 and 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:
2010 - $2,405,045 2009 - $831,346
(h) 100% of the services performed in item (g) above during 2010 and 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 registrant's "Schedule 1 - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) 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. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer, based on their evaluation of the registrant's disclosure controls
and procedures as of a date within 90 days of the filing of this report,
have concluded that such controls and procedures are adequately designed to
ensure that information required to be disclosed by the registrant in Form
N-CSR is accumulated and communicated to the registrant's management,
including principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
(b) There was no change in the registrant's internal controls over
financial reporting that occurred during the registrant's second fiscal
quarter of the period covered by this 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 required to be disclosed under Item 2 of Form N-CSR,
is attached as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit
99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Seligman Municipal Series Trust
By /s/ J. Kevin Connaughton
----------------------------------
J. Kevin Connaughton
President and Principal Executive
Officer
Date November 19, 2010
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/ J. Kevin Connaughton
----------------------------------
J. Kevin Connaughton
President and Principal Executive
Officer
Date November 19, 2010
By /s/ Jeffrey P. Fox
----------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial
Officer
Date November 19, 2010