Registration No. 2-91683
                                                             File No. 811-4054

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                  FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933                                                                [X]

Pre-Effective Amendment No. _____                                        [   ]


Post-Effective Amendment No. 31                                            [X]


                                    and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                                [X]


Amendment No. 30                                                           [X]


                   OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS
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              (Exact Name of Registrant as Specified in Charter)

            6803 South Tucson Way, Centennial, Colorado 80112-3924
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             (Address of Principal Executive Offices) (Zip Code)

                                (303) 768-3200
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             (Registrant's Telephone Number, including Area Code)

                             Robert G. Zack, Esq.
                            OppenheimerFunds, Inc.

         Two World Financial Center, 225 Liberty Street, 11th Floor,

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                         New York, New York 10281-1008

                   (Name and Address of Agent for Service)


It is proposed that this filing will become effective (check appropriate box):
[   ] Immediately upon filing pursuant to paragraph (b)
[X ]  On November 26, 2004 pursuant to paragraph (b)
[   ] 60 days after filing pursuant to paragraph (a)(1)
[   ] On _______________pursuant to paragraph (a)(1)
[   ] 75 days after filing pursuant to paragraph (a)(2)
[   ] On _______________ pursuant to paragraph (a)(2) of Rule 485


If appropriate, check the following box:

[   ] This  post-effective  amendment  designates a new  effective  date for a
      previously filed post-effective amendment.

Oppenheimer
AMT-Free New York Municipals
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                                                   Oppenheimer AMT-Free New
Prospectus dated November 26, 2004       York Municipals (formerly "Oppenheimer
                                         New York Municipal Fund") is a mutual
                                         fund. It seeks current income exempt
                                         from federal, New York State and New
                                         York City personal income taxes by
                                         investing in municipal securities,
                                         while attempting to preserve capital.


                                               This Prospectus contains
                                         important information about the Fund's
                                         objective, its investment policies,
                                         strategies and risks. It also contains
As with all mutual funds, the            important information about how to buy
Securities and Exchange Commission has   and sell shares of the Fund and other
not approved or disapproved the Fund's   account features. Please read this
securities nor has it determined that    Prospectus carefully before you invest
this Prospectus is accurate or           and keep it for future reference about
complete.  It is a criminal offense to   your account.
represent otherwise.
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                                                (logo) OppenheimerFunds
                                                The Right Way to Invest









CONTENTS

                  A B O U T  T H E  F U N D

3                 The Fund's Investment Objective and Principal Investment
                  Strategies

4                 Main Risks of Investing in the Fund

5                 The Fund's Past Performance

6                 Fees and Expenses of the Fund

7                 About the Fund's Investments

10                How the Fund is Managed

                  A B O U T  Y O U R  A C C O U N T

11                How to Buy Shares
                  Class A Shares
                  Class B Shares
                  Class C Shares

18                Special Investor Services
                  AccountLink
                  PhoneLink
                  OppenheimerFunds Internet Website

19                How to Sell Shares

                  By Mail
                  By Telephone
                  By Wire
                  By Checkwriting


22                How to Exchange Shares

24                Shareholder Account Rules and Policies

25                Dividends, Capital Gains and Taxes

27                Financial Highlights







A B O U T  T H E  F U N D

The Fund's Investment Objective and Principal Investment
Strategies

WHAT IS THE FUND'S  INVESTMENT  OBJECTIVE?  The Fund seeks the maximum current
income exempt from federal,  New York State and New York City income taxes for
individual investors consistent with preservation of capital.


WHAT DOES THE FUND  MAINLY  INVEST  IN?  The Fund  invests  mainly in New York
municipal  securities  that pay  interest  exempt  from  federal  and New York
personal  income taxes.  These  primarily  include  municipal bonds (which are
long-term  obligations),   municipal  notes  (short-term   obligations),   and
interests in municipal  leases.  Most of the  securities the Fund buys must be
"investment  grade" (the four highest  rating  categories  of national  rating
organizations,  such as Standard & Poor's Rating  Services  ("S&P") or Moody's
Investors Service, Inc. ("Moody's")).


      Under normal market  conditions  the Fund attempts to invest 100% of its
assets in municipal  securities  exempt from federal personal income taxes. As
a  non-fundamental  investment  policy,  the  Fund  will  not  hold  municipal
securities  the interest on which would be subject to the federal  alternative
minimum  tax  on  individuals  and  corporations.  As  fundamental  investment
policies, the Fund invests:
   o  At least 80% of its assets in municipal securities, and
   o  At least 80% of its net assets (plus borrowings for investment
      purposes) in New York municipal securities.

      The Fund does not limit its  investments  to  securities of a particular
maturity   range,   and  may  hold  short-,   intermediate-,   and   long-term
securities.  However,  it currently focuses on longer-term  securities to seek
higher yields.  The Fund's  investments are more fully explained in "About the
Fund's Investments," below.

HOW DO THE  PORTFOLIO  MANAGERS  DECIDE  WHAT  SECURITIES  TO BUY OR SELL?  In
selecting  securities  for the Fund,  the portfolio  managers  look  primarily
throughout New York for municipal securities,  using a variety of factors that
may  change  over  time  and  may  vary in  particular  cases.  The  portfolio
managers currently look for:

   o  Securities that provide high current triple tax-free income.
   o  A wide  range of  securities  of  different  issuers  within  the state,
      including   different   agencies  and   municipalities   for   portfolio
      diversification to help spread credit risks.
o     Primarily   investment-grade   securities   that   offer   high   income
      opportunities.

   o  Unrated bonds that might  provide high income and  securities of smaller
      issuers that might be overlooked by other investors and funds.

WHO IS THE FUND  DESIGNED FOR? The Fund is designed for  individual  investors
who are seeking income exempt from federal (including the federal  alternative
minimum  tax),  New York State and New York City  personal  income  taxes.  It
does not seek  capital  gains or growth.  Because  it  invests  in  tax-exempt
securities,  the Fund is not  appropriate  for retirement plan accounts or for
investors  seeking  capital  growth.  The Fund is  intended  to be a long-term
investment, but is not a complete investment program.

Main Risks of Investing in the Fund

      All investments  have risks to some degree.  The Fund's  investments are
subject to changes in their  value from a number of factors  described  below.
There is also the risk that poor security  selection by the Fund's  investment
Manager,  OppenheimerFunds,  Inc., will cause the Fund to  underperform  other
funds having a similar objective.

CREDIT RISK.  Municipal  securities  are subject to credit  risk.  Credit risk
is the risk that the issuer of a debt  security  might not make  interest  and
principal  payments on the  security  as they become due. If the issuer  fails
to pay interest,  the Fund's income might be reduced,  and if the issuer fails
to repay principal,  the value of that security and of the Fund's shares might
be  reduced.  Because  the Fund can  invest  as much as 25% of its  assets  in
municipal  securities below investment grade to seek higher income, the Fund's
credit  risks are greater  than those of funds that buy only  investment-grade
bonds.  A downgrade in an issuer's  credit  rating or other adverse news about
an issuer can reduce the market value of that issuer's securities.


INTEREST  RATE  RISKS.  Municipal  securities  are  debt  securities  that are
subject to  changes  in value when  prevailing  interest  rates  change.  When
prevailing  interest  rates  fall,  the  values  of  already-issued  municipal
securities  generally rise. When prevailing interest rates rise, the values of
already-issued  municipal  securities  generally  fall, and the securities may
sell at a discount  from their  face  amount.  The  magnitude  of these  price
changes is generally  greater for  securities  having longer  maturities.  The
Fund  currently  focuses on  longer-term  securities  to seek  higher  income.
Therefore, its share prices may fluctuate more when interest rates change.

TOBACCO SETTLEMENT REVENUE BONDS.  The Fund may invest a significant portion
of its investments in tobacco settlement revenue bonds. Tobacco settlement
revenue bonds are secured by an issuing state's proportionate share in the
Master Settlement Agreement ("MSA"). The MSA is an agreement, reached out of
court in November 1998 between 46 states and nearly all the U.S. tobacco
manufacturers (approximately 99% of the current combined market share of
tobacco manufacturers). The MSA provides for payments annually by the
manufacturers to the states and jurisdictions in perpetuity, in exchange for
releasing all claims against the manufacturers and a pledge of no further
litigation. Tobacco manufacturers pay into a master escrow trust based on
their market share, and each state receives a fixed percentage of the payment
as set forth in the MSA.

      A number of states have  securitized  the future flow of those  payments
by selling bonds pursuant to indentures,  some through  distinct  governmental
entities created for such purpose.  The bonds are backed by the future revenue
flow that is used for  principal  and interest  payments on the bonds.  Annual
payments on the bonds,  and thus risk to the Fund, are highly dependent on the
receipt  of  future  settlement  payments  to the  state  or its  governmental
entity,  as well as  several  other  factors.  The  actual  amount  of  future
settlement payments,  therefore, is dependent on many factors,  including, but
not limited to, annual domestic cigarette  shipments,  cigarette  consumption,
inflation and the financial capability of participating tobacco companies.  As
a result,  payments made by tobacco manufacturers could be negatively impacted
if the  decrease in tobacco  consumption  is  significantly  greater  than the
forecasted  decline.  A market  share  loss by the MSA  companies  to  non-MSA
participating  tobacco  manufacturers would cause a downward adjustment in the
payment  amounts.  A  participating  manufacturer  filing for bankruptcy  also
could cause delays or  reductions  in bond  payments.  The MSA itself has been
subject to legal challenges and has, to date, withstood those challenges.  The
Statement of Additional  Information  contains more detailed information about
the Fund's investments in tobacco settlement revenue bonds.

BORROWING FOR  LEVERAGE.  As a  fundamental  policy,  the Fund can borrow from
banks in amounts  up to one third of its total  assets  (including  the amount
borrowed)  less all  liabilities  and  indebtedness  other than  borrowings to
purchase  portfolio  securities.  It may  also  borrow  up to 5% of its  total
assets for  temporary  purposes from any person.  This use of "leverage"  will
subject  the Fund to  greater  costs,  including  interest  owed on the amount
borrowed,  than funds that do not borrow for  leverage,  and may also make the
Fund's share price more sensitive to interest rate changes.


RISK OF FOCUSING INVESTMENTS IN NEW YORK MUNICIPAL SECURITIES.  While the
Fund's fundamental policies do not allow it to concentrate 25% or more of its
assets in a single industry, municipal securities are not considered an
"industry" under that policy. The Fund is "diversified" as to 75% of its
assets, which means that, as to 75% of its assets, it cannot invest more than
5% of its total assets in securities of any one issuer, or own more than 10%
of that issuer's voting securities.  However, the Fund can invest a
substantial percentage of its assets in the obligations of the State of New
York or particular New York municipal governments, authorities or agencies.


      On  September  11, 2001,  terrorist  attacks  destroyed  the World Trade
Center,  resulting in substantial  loss of life and damaged other buildings in
the vicinity.  The attack also resulted in disruption of public transportation
and business and  displacement  of residents in the immediate  vicinity of the
World Trade Center.  Although New York City has been largely reimbursed by the
federal  government  for all of its direct costs and expenses for response and
remediation  of the World Trade  Center  site,  it is not possible to quantify
with any  certainty  the  long-term  impact of the  September 11 attack on the
city  and its  economy.  The  Statement  of  Additional  Information  contains
further information concerning special investment  considerations for New York
municipal  securities,  including  the effect of the events of  September  11,
2001 on New York City and New York State.


      Having  a  high  percentage  of its  assets  invested  in the  municipal
securities  of a single state and its municipal  subdivisions  could result in
fluctuations   in  the  Fund's  share  prices  and  income  due  to  economic,
regulatory or political problems in New York.

HOW RISKY IS THE FUND OVERALL?  The risks  described above  collectively  form
the  overall  risk  profile of the Fund and can affect the value of the Fund's
investments,  its  investment  performance,  and  the  prices  of its  shares.
Particular  investments  and investment  strategies  also entail risks.  These
risks mean that you can lose money by investing  in the Fund.  When you redeem
your  shares,  they may be worth  more or less  than  what you paid for  them.
There is no  assurance  that the Fund will achieve its  investment  objective.
The value of the Fund's  investments  and share  prices  will change over time
due to a number of  factors.  They  include  changes  in general  bond  market
movements,  the change in value of  particular  bonds or the  income  they pay
because of an event  affecting the issuer,  or changes in interest  rates that
can affect bond prices overall.

      Because  the  Fund  focuses  its   investments  in  New  York  municipal
securities,  it will be  vulnerable  to economic,  political and market events
that  affect  issuers of New York  municipal  securities.  Those  changes  can
affect the value of the Fund's  investments  and its prices per share.  In the
OppenheimerFunds  spectrum,  the Fund is more  conservative than some types of
bond funds,  such as high yield bond funds,  but has greater  risks than funds
that  invest  only in  investment-grade  bonds or that  are  more  diversified
geographically.

An investment in the Fund is not a deposit of any bank, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

The Fund's Past Performance


The bar chart and table  below show one measure of the risks of  investing  in
the Fund,  by  showing  changes  in the  Fund's  performance  (for its Class A
shares)  from year to year for the last 10  calendar  years and by showing how
the average annual total returns of the Fund's  shares,  both before and after
taxes,  compared to those of a broad-based market index. The after-tax returns
for the other classes of shares will vary,


The  after-tax  returns are shown for Class A shares  only and are  calculated
using the historical  highest  individual federal marginal income tax rates in
effect  during the  periods  shown,  and do not reflect the impact of state or
local taxes.  In certain cases,  the figure  representing  "Return After Taxes
on Distributions  and Sale of Fund Shares" may be higher than the other return
figures for the same period.  A higher after-tax return results when a capital
loss occurs upon  redemption and translates into an assumed tax deduction that
benefits  the  shareholder.  The  after-tax  returns are  calculated  based on
certain  assumptions  mandated by regulation and your actual after-tax returns
may differ from those shown,  depending on your individual tax situation.  The
Fund's  past   investment   performance,   before  and  after  taxes,  is  not
necessarily an indication of how the Fund will perform in the future.

Annual Total Returns (Class A) (as of 12/31 each year)

[See appendix to prospectus for data in bar chart showing annual total
returns]

Sales charges and taxes are not included in the calculations of return in
this bar chart, and if those charges and taxes were included, the returns
would be less than those shown.

For the period from 1/01/04  through  9/30/04,  the cumulative  return (not
annualized)  before  taxes for Class A shares was 2.41%.  During the period
shown in the bar chart,  the highest return (not  annualized)  before taxes
for a calendar  quarter  was 7.90%  (1Qtr `95) and the lowest  return  (not
annualized) before taxes for a calendar quarter was -6.15% (1Qtr '94).


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Average Annual Total Returns                                    10 Years
for the  periods  ended  December                             (or life of
31, 2003                            1 Year      5 Years     class, if less)

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Class  A  Shares   (inception

8/16/84)                             1.87%       3.80%           4.51%
  Return Before Taxes                1.87%       3.80%           4.51%
  Return After Taxes on              3.06%       3.97%           4.59%
  Distributions
  Return   After   Taxes   on
  Distributions  and  Sale of
  Fund Shares

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Lehman Brothers Municipal Bond       5.31%       5.83%           6.03%1
Index (reflects no deduction for

fees, expenses or taxes)
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Class   B    Shares    (inception    1.04%       3.66%           4.54%

3/01/93)
----------------------------------            --------------------------------
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Class   C    Shares    (inception   5.12%        4.01%           5.08%

8/29/95)
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1.From 12/31/93.

The Fund's average annual total returns include applicable sales charges:  for
Class A, the current maximum  initial sales charge of 4.75%;  for Class B, the
contingent  deferred  sales  charges of 5% (1-year) and 2%  (5-year);  and for
Class C, the 1%  contingent  deferred  sales  charge  for the  1-year  period.
Because  Class B shares  convert to Class A shares 72 months  after  purchase,
Class B "life-of-class"  performance does not include any contingent  deferred
sales charge and uses Class A  performance  for the period  after  conversion.
The returns measure the performance of a hypothetical  account and assume that
all  dividends  and  capital  gains  distributions  have  been  reinvested  in
additional  shares.  The  performance of the Fund's Class A shares is compared
to the Lehman  Brothers  Municipal Bond Index,  an unmanaged  index of a broad
range of  investment-grade  municipal  bonds. The index  performance  reflects
reinvestment  of  income,  but  does  not  reflect  transaction  costs,  fees,
expenses or taxes.  The index includes  municipal  securities from many states
while the Fund focuses on New York municipal securities.

Fees and Expenses of the Fund


The following  tables are meant to help you  understand  the fees and expenses
you may pay if you buy and hold  shares of the  Fund.  The Fund pays a variety
of  expenses   directly  for   management   of  its  assets,   administration,
distribution of its shares and other  services.  Those expenses are subtracted
from the Fund's  assets to  calculate  the Fund's net asset  values per share.
All  shareholders  therefore pay those expenses  indirectly.  Shareholders pay
other  expenses  directly,  such as  sales  charges  and  account  transaction
charges.  The numbers below are based on the Fund's expenses during its fiscal
year ended September 30, 2004.


Shareholder Fees (charges paid directly from your investment):
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                                 Class A Shares  Class B Shares   Class C Shares
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Maximum Sales Charge (Load) on
purchases (as % of offering           4.75%           None             None
price)
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Maximum Deferred Sales Charge
(Load) (as % of the lower of
the original offering price or                         5%2
redemption proceeds)                  None1                            1%3
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Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
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                                Class A Shares                   Class C Shares
                                                Class B Shares
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Management Fees4                     0.54%           0.54%            0.54%

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Distribution and/or Service          0.22%           1.00%            1.00%
(12b-1) Fees

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Other Expenses5                      0.15%           0.15%            0.15%

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Total Annual Operating               0.91%           1.69%            1.69%
Expenses6

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Expenses may vary in future years.

1.    A contingent deferred sales charge may apply to redemptions of
   investments of $1 million or more of Class A shares. See "How to Buy
   Shares" for details.
2.    Applies to redemptions in first year after purchase. The contingent
   deferred sales charge declines to 1% in the sixth year and is eliminated
   after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Effective  September 1, 2003, the Manager  voluntarily agreed to waive a
   portion of its  management  fee at an annual rate of either  0.05% or 0.10%
   of each  class'  average  daily net  assets  based on the  Fund's  trailing
   one-year  performance at the end of each preceding  calendar  quarter.  The
   waiver  was  terminated  January  1,  2004.  After the  waiver,  the actual
   management fee for the last fiscal year for each class was 0.51%.
5.    "Other  Expenses"  include  transfer  agent  fees,  custodial  fees  and
   accounting  and legal  expenses  that the Fund pays per fiscal year for all
   classes.  The  Transfer  Agent has  voluntarily  undertaken  to the Fund to
   limit the  transfer  agent  fees to 0.35% of  average  daily net assets per
   fiscal  year for each  share  class.  That  undertaking  may be  amended or
   withdrawn  at any time.  For each of the Fund's  classes the fee waiver had
   no impact on the percentage of "Other  Expenses"  incurred  during the last
   fiscal year.
6.    After the "Management  Fee" waiver  described  above,  the "Total Annual
   Operating  Expenses" as a percentage of average daily net assets were 0.88%
   for Class A, 1.66% for Class B and 1.66% for Class C.


EXAMPLES.  The  following  examples  are intended to help you compare the cost
of investing  in the Fund with the cost of  investing  in other mutual  funds.
The examples  assume that you invest  $10,000 in a class of shares of the Fund
for  the  time  periods   indicated,   and   reinvest   your   dividends   and
distributions.

      The first example  assumes that you redeem all of your shares at the end
of those  periods.  The second  example  assumes  you keep your  shares.  Both
examples also assume that your  investment  has a 5% return each year and that
the class's  operating  expenses  remain the same.  Your  actual  costs may be
higher  or  lower  because  expenses  will  vary  over  time.  Based  on these
assumptions your expenses would be as follows:

----------------------------------------------------------------------------
If shares are redeemed:   1 Year      3 Years     5 Years      10 Years
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Class A Shares            $564        $753        $957         $1,546

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Class B Shares            $673        $837        $1,125       $1,6111

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Class C Shares            $273        $537        $925         $2,014

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If shares are not         1 Year      3 Years     5 Years      10 Years
redeemed:
----------------------------------------------------------------------------
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Class A Shares            $564        $753        $957         $1,546

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Class B Shares            $173        $537        $925         $1,6111

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Class C Shares            $173        $537        $925         $2,014

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In the first example, expenses include the initial sales charge for Class A
and the applicable Class B or Class C contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class
B and Class C expenses do not include contingent deferred sales charges.
1. Class B expense for years 7 through 10 are based on Class A expenses since
Class B shares automatically convert to Class A shares 72 months after
purchase.

About the Fund's Investments


THE FUND'S  PRINCIPAL  INVESTMENT  POLICIES AND RISKS.  The  allocation of the
Fund's portfolio among different  investments will vary over time based on the
Manager's  evaluation  of economic  and market  trends.  The Fund's  portfolio
might not always include all of the different  types of investments  described
in this prospectus.

      The Manager  tries to reduce  risks by  selecting a wide  variety of New
York municipal  investments  and by carefully  researching  securities  before
they  are  purchased.  However,  changes  in  the  overall  market  prices  of
municipal  securities and the income they pay can occur at any time. The share
prices  and yield of the Fund will  change  daily  based on  changes in market
prices of securities,  interest rates and market conditions and in response to
other economic events. The Statement of Additional  Information  contains more
detailed information about the Fund's investment policies and risks.


Municipal  Securities.  The Fund buys municipal bonds and notes,  certificates
      of  participation in municipal  leases and other debt  obligations.  The
      Fund  invests  mainly  in  New  York  municipal  securities,  which  are
      municipal  securities  that  are not  subject  (in the  opinion  of bond
      counsel  to the  issuer at the time they are  issued)  to New York State
      personal income tax. These are debt  obligations  issued by the State of
      New York and its  political  subdivisions  (such as cities,  towns,  and
      counties),  and their agencies,  instrumentalities and authorities.  The
      term "New York municipal  securities"  may also include debt  securities
      of   the   governments   of   certain   possessions,   territories   and
      commonwealths  of the  United  States  if the  interest  paid  on  those
      securities is not subject to New York personal income tax.

      The  Fund  can  also  buy  other  municipal  securities,  issued  by the
      governments  of the other states and the  District of Columbia,  as well
      as  their  political   subdivisions,   authorities  and  agencies,   and
      securities  issued by any  commonwealths,  territories or possessions of
      the United States, or their respective  agencies,  instrumentalities  or
      authorities,  if the  interest  paid on the  security  is not subject to
      federal  personal  income  tax (in the  opinion  of bond  counsel to the
      issuer at the time the security is issued).


What is A Municipal Security? A municipal security is essentially a loan by
      the buyer to the issuer of the security. The issuer promises to pay
      back the principal amount of the loan and normally pays interest exempt
      from federal personal income taxes.


      Municipal  securities  are issued to raise money for a variety of public
      or private  purposes,  including  financing state or local  governments,
      financing specific projects or public facilities.  The Fund can buy both
      long-term  and  short-term  municipal  securities.  Long-term  municipal
      securities (which are generally  referred to as "bonds") have a maturity
      of more  than one  year  when  issued.  The Fund  generally  focuses  on
      long-term securities, to seek higher income.


      The Fund can buy municipal  securities  that are "general  obligations,"
      secured  by the  issuer's  pledge of its full  faith,  credit and taxing
      power for the payment of principal and  interest.  The Fund can also can
      buy  "revenue  obligations"  whose  interest  is  payable  only from the
      revenues derived from a particular  facility or class of facilities,  or
      a specific  excise tax or other  revenue  source such as, e.g.,  tobacco
      revenue settlement bonds. Some of these revenue  obligations are private
      activity  bonds  that  pay  interest  that may be a tax  preference  for
      investors subject to alternative minimum tax.


   o  Municipal  Lease  Obligations.  Municipal  leases  are used by state and
      local  governments  to  obtain  funds  to  acquire  land,  equipment  or
      facilities.  The Fund can invest in certificates of  participation  that
      represent a  proportionate  interest in  payments  made under  municipal
      lease  obligations.  Most municipal leases,  while secured by the leased
      property,  are not  general  obligations  of the  issuing  municipality.
      They  often   contain   "non-appropriation"   clauses  under  which  the
      municipal  government  has no  obligation  to make lease or  installment
      payments  in  future  years  unless  money is  appropriated  on a yearly
      basis.  If  the  government  stops  making  payments  or  transfers  its
      payment  obligations  to a private  entity,  the  obligation  could lose
      value or become taxable.

Ratings  of  Municipal  Securities  the  Fund  Buys.  Most  of  the  municipal
      securities  the  Fund  buys  are  "investment  grade"  at  the  time  of
      purchase.  The Fund limits its investments in municipal  securities that
      at the time of purchase are not  "investment-grade" to not more than 25%
      of its total  assets.  "Investment  grade"  securities  are those  rated
      within the four  highest  rating  categories  of Moody's,  S&P or Fitch,
      Inc.  or  another  nationally  recognized  rating  organization,  or (if
      unrated)  judged by the Manager to be comparable to securities  rated as
      investment  grade.  Rating  definitions of rating  organizations  are in
      Appendix A to the  Statement of  Additional  Information.  If a security
      is not rated,  the Manager  will use its  judgment to assign a rating to
      the security comparable to that of a rating organization.  If the rating
      of a  security  is  reduced  after  the Fund  buys  it,  the Fund is not
      required  automatically  to  dispose  of  that  security.  However,  the
      Manager will  evaluate  those  securities  to determine  whether to keep
      them in the Fund's portfolio.

      The  Manager  may rely to some  extent on credit  ratings by  nationally
      recognized  rating  organizations  in  evaluating  the  credit  risk  of
      securities  selected for the Fund's  portfolio.  It may also use its own
      research  and  analysis  to  evaluate  risks.  Many  factors  affect  an
      issuer's  ability to make  timely  payments,  and the credit  risks of a
      particular security may change over time.

   o  Special Credit Risks of  Lower-Grade  Securities.  Municipal  securities
      that are below  investment  grade  (these  are  sometimes  called  "junk
      bonds") may be subject to greater price  fluctuations  and risks of loss
      of income and  principal  than  investment-grade  municipal  securities.
      Securities that are (or that have fallen) below  investment grade have a
      greater risk that the issuers might not meet their debt obligations.

CAN THE FUND'S INVESTMENT  OBJECTIVE AND POLICIES CHANGE?  The Fund's Board of
Trustees can change  non-fundamental  policies without  shareholder  approval,
although   significant  changes  will  be  described  in  amendments  to  this
Prospectus.  Fundamental  policies cannot be changed without the approval of a
majority  of the Fund's  outstanding  voting  shares.  The  Fund's  investment
objective is a fundamental  policy.  Other  investment  restrictions  that are
fundamental  policies are listed in the Statement of  Additional  Information.
An  investment  policy  is  not  fundamental  unless  this  Prospectus  or the
Statement of Additional Information says that it is.

OTHER  INVESTMENT  STRATEGIES.  To seek its  objective,  the Fund can also use
the investment  techniques and strategies  described  below. The Manager might
not always use all of them.  These  techniques  have  risks  although  some of
them are designed to help reduce overall investment or market risks.


Floating  Rate/Variable  Rate  Obligations.  Some  municipal  securities  have
      variable or floating  interest  rates.  Variable rates are adjustable at
      stated periodic  intervals.  Floating rates are  automatically  adjusted
      according to a specified  market rate, such as a percentage of the prime
      rate of a bank or the 91-day U.S. Treasury Bill rate.
   o  Inverse  Floaters  Have  Special  Risks.  Variable  rate bonds  known as
      "inverse  floaters"  pay  interest  at rates  that move in the  opposite
      direction of yields on short-term  bonds in response to market  changes.
      As interest rates rise,  inverse  floaters  produce less current income,
      and their market value can become volatile.  Inverse floaters are a type
      of "derivative  security."  Some have a "cap," so that if interest rates
      rise above the "cap," the security pays additional  interest income.  If
      rates  do not  rise  above  the  "cap,"  the  Fund  will  have  paid  an
      additional  amount for a feature  that proves  worthless.  The Fund will
      not invest more than 20% of its total assets in inverse floaters.


"When-Issued"  and  "Delayed-Delivery"  Transactions.  The Fund  can  purchase
      municipal  securities on a "when-issued"  basis and can purchase or sell
      securities  on a "delayed-  delivery"  basis.  Between the  purchase and
      settlement,  no payment is made for the security and no interest accrues
      to the buyer  from the  investment.  There is a risk of loss to the Fund
      if  the  value  of  the  when-issued  security  declines  prior  to  the
      settlement  date.  No  income  accrues  to  the  Fund  on a  when-issued
      security  until the Fund  receives  the  security on  settlement  of the
      trade.
Puts and Stand-By  Commitments.  The Fund can acquire  "stand-by  commitments"
      or "puts" with  respect to  municipal  securities.  The Fund obtains the
      right to sell the  securities  at a set price on  demand to the  issuing
      broker-dealer or bank. However,  securities having this feature may have
      a lower  interest rate.  The Fund will acquire  stand-by  commitments or
      puts solely to enhance portfolio liquidity.
Illiquid and Restricted  Securities.  Investments may be illiquid because they
      do not have an active trading market,  making it difficult to value them
      or  dispose  of them  promptly  at an  acceptable  price.  A  restricted
      security has a contractual  restriction  on its resale or cannot be sold
      publicly  until it is registered  under the  Securities Act of 1933. The
      Fund  will not  invest  more  than  15% of its net  assets  in  illiquid
      securities.  Certain restricted  securities that are eligible for resale
      to qualified institutional  purchasers may not be subject to that limit.
      The  Manager  monitors  holdings of  illiquid  securities  on an ongoing
      basis to  determine  whether to sell any  holdings to maintain  adequate
      liquidity.
Temporary Defensive and Interim  Investments.  In times of adverse or unstable
      market,  economic  or  political  conditions,  the Fund can invest up to
      100% of its total assets in  temporary  defensive  investments  that are
      inconsistent   with  the   Fund's   principal   investment   strategies.
      Generally,   they  would  be  high  quality,   short-term  money  market
      instruments such as U.S. government securities,  highly rated commercial
      paper,   short-term   corporate  debt  obligations,   bank  deposits  or
      repurchase agreements.  The Fund can also hold these types of securities
      pending  the  investment  of  proceeds  from the sale of Fund  shares or
      portfolio securities or to meet anticipated  redemptions of Fund shares.
      To the  extent  the Fund  invests  in  these  securities,  it might  not
      achieve its investment objective.

How the Fund is Managed

THE  MANAGER.  The  Manager  chooses  the Fund's  investments  and handles its
day-to-day  business.  The  Manager  carries  out its  duties,  subject to the
policies  established  by the Fund's  Board of Trustees,  under an  investment
advisory agreement that states the Manager's  responsibilities.  The agreement
sets the fees the Fund pays to the Manager and  describes  the  expenses  that
the Fund is responsible to pay to conduct its business.

      The Manager has been an  investment  advisor  since  January  1960.  The
Manager and its subsidiaries and controlled  affiliates managed more than $155
billion in assets as of September 30, 2004,  including other Oppenheimer funds
with more than 7 million shareholder  accounts.  The Manager is located at Two
World Financial  Center,  225 Liberty Street,  11th Floor,  New York, New York
10281-1008.


Portfolio  Managers.  The  Fund is  managed  by a  portfolio  management  team
      comprised  of  Ronald  Fielding  and  other   investment   professionals
      selected  from  the  Manager's   Rochester   Division.   This  portfolio
      management team is primarily  responsible for the day-to-day  management
      of the Fund's  portfolio.  Mr.  Fielding is a Senior Vice  President  of
      the Manager  (since  January  1996).  Mr.  Fielding  serves in a similar
      capacity for other Oppenheimer funds.


Advisory Fees.  Under the  investment  advisory  agreement,  the Fund pays the
      Manager an advisory  fee at an annual  rate that  declines as the Fund's
      assets  grow:  0.60% of the first $200  million  of  average  annual net
      assets, 0.55% of the next $100 million,  0.50% of the next $200 million,
      0.45% of the next  $250  million,  0.40% of the next $250  million,  and
      0.35% of average  annual net assets in excess of $1 billion.  The Fund's
      management  fee for its last fiscal year ended  September 30, 2004,  was
      0.54% of average  annual net assets for each class of shares.  Effective
      September 1, 2003, the Manager  voluntarily agreed to waive a portion of
      its  management  fee by an annual  rate  equal to 0.10% of each  class's
      average   daily  net  assets   while  the  Fund's   trailing   one  year
      performance at  the end of the  preceding  calendar  quarter  was in the
      fifth  quintile  of the Fund's  Lipper  peer group  (or 0.05% if in  the
      fourth  quintile).  The  foregoing  advisory  fee  waiver  automatically
      terminates while the Fund's trailing one-year  performance at the end of
      the  preceding  calendar  quarter  was in  the  first,  second  or third
      quintile  of  the  Fund's  Lipper  peer  group,  and  did  so  terminate
      effective  January 1, 2004.  The waiver may be amended or  withdrawn  by
      the  Manager  at any time.  As such,  after the  management  fee for the
      last fiscal year ended  September  30, 2004,  after the waiver was 0.51%
      of average annual net assets for each class of shares.

PENDING LITIGATION
      Six law suits have been filed as putative derivative and class actions
      against the Fund's investment Manager, Distributor and Transfer Agent,
      some of the Oppenheimer funds including the Fund and Directors or
      Trustees of some of those funds. The complaints allege that the Manager
      charged excessive fees for distribution and other costs, improperly
      used assets of the funds in the form of directed brokerage commissions
      and 12b-1 fees to pay brokers to promote sales of Oppenheimer funds,
      and failed to properly disclose the use of fund assets to make those
      payments in violation of the Investment Company Act and the Investment
      Advisers Act of 1940. The complaints further allege that by permitting
      and/or participating in those actions, the defendant Directors or
      Trustees breached their fiduciary duties to fund shareholders under the
      Investment Company Act and at common law. Those law suits were filed on
      August 31, 2004 and, September 3, 2004, September 14, 2004, September
      14, 2004, September 21, 2004 and September 22, 2004, respectively, in
      the U. S. District Court for the Southern District of New York. By
      order dated October 27, 2004, these six actions, and future related
      actions, were consolidated by the District Court into a single
      consolidated proceeding in contemplation of the filing of a superceding
      consolidated and amended complaint. The present complaints seek
      unspecified compensatory and punitive damages, rescission of the funds'
      investment advisory agreements, an accounting of all fees paid, and an
      award of attorneys' fees and litigation expenses.

      The Manager and the Distributor believe the claims asserted in these
      law suits to be without merit, and intend to defend the suits
      vigorously. The Manager and the Distributor do not believe that the
      pending actions are likely to have a material adverse effect on the
      Fund or on their ability to perform their respective investment
      advisory or distribution agreements with the Fund.


A B O U T  Y O U R  A C C O U N T

How to Buy Shares

You can buy shares several ways, as described below.  The Fund's  Distributor,
OppenheimerFunds  Distributor,  Inc., may appoint  servicing  agents to accept
purchase (and redemption)  orders.  The  Distributor,  in its sole discretion,
may reject any purchase order for the Fund's shares.


Buying  Shares  Through  Your Dealer.  You can buy shares  through any dealer,
      broker or  financial  institution  that has a sales  agreement  with the
      Distributor.  Your dealer will place your order with the  Distributor on
      your behalf. A broker or dealer may charge for the service.
Buying  Shares  Through  the  Distributor.  Complete an  OppenheimerFunds  new
      account   application   and   return   it  with  a  check   payable   to
      "OppenheimerFunds  Distributor,  Inc." Mail it to P.O. Box 5270, Denver,
      Colorado  80217.  If you  don't  list a dealer on the  application,  the
      Distributor  will act as your agent in buying the  shares.  However,  we
      recommend  that you discuss  your  investment  with a financial  advisor
      before you make a purchase to be sure that the Fund is  appropriate  for
      you.

o     Paying by Federal Funds Wire.  Shares purchased  through the Distributor
   may be paid for by Federal  Funds wire.  The minimum  investment is $2,500.
   Before  sending  a  wire,  call  the   Distributor's   Wire  Department  at
   1.800.225.5677  to  notify  the  Distributor  of the  wire  and to  receive
   further instructions.
o     Buying Shares Through  OppenheimerFunds  AccountLink.  With AccountLink,
      you  pay for  shares  by  electronic  funds  transfers  from  your  bank
      account.  Shares are  purchased  for your account by a transfer of money
      from your bank  account  through  the  Automated  Clearing  House  (ACH)
      system.  You can  provide  those  instructions  automatically,  under an
      Asset Builder Plan, described below, or by telephone  instructions using
      OppenheimerFunds  PhoneLink,  also  described  below.  Please  refer  to
      "AccountLink," below for more details.
o     Buying Shares  Through Asset Builder Plans.  You may purchase  shares of
      the Fund  automatically  each month from your account at a bank or other
      financial  institution  under an Asset  Builder  Plan with  AccountLink.
      Details  are in the  Asset  Builder  Application  and the  Statement  of
      Additional Information.

WHAT IS THE MINIMUM  AMOUNT YOU MUST INVEST?  In most cases,  you can buy Fund
shares  with a  minimum  initial  investment  of  $1,000  and make  additional
investments  at any time  with as little as $50.  There are  reduced  minimums
available under the following special investment plans:
o     By using an Asset  Builder Plan or Automatic  Exchange Plan (details are
      in the Statement of  Additional  Information),  or government  allotment
      plan,  you can make  subsequent  investments  (after  making the initial
      investment  of $500)  for as  little  as $50.  For any  type of  account
      established  under one of these plans  prior to  November  1, 2002,  the
      minimum additional investment will remain $25.
o     The  minimum  investment  requirement  does  not  apply  to  reinvesting
      dividends  from  the  Fund or  other  Oppenheimer  funds (a list of them
      appears in the Statement of Additional Information,  or you can ask your
      dealer or call the Transfer Agent),  or reinvesting  distributions  from
      unit investment trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD?  Shares are sold at their  offering price which
is the net asset value per share plus any initial  sales charge that  applies.
The  offering  price that  applies  to a  purchase  order is based on the next
calculation  of the  net  asset  value  per  share  that  is  made  after  the
Distributor  receives the purchase order at its offices in Colorado,  or after
any agent appointed by the Distributor receives the order.


Net Asset  Value.  The Fund  calculates  the net asset  value of each class of
      shares as of the close of The New York Stock Exchange (the  "Exchange"),
      on each  day the  Exchange  is open  for  trading  (referred  to in this
      Prospectus as a "regular  business day").  The Exchange  normally closes
      at 4:00 P.M.,  Eastern  time,  but may close  earlier on some days.  All
      references to time in this Prospectus mean "Eastern time."

         The net asset  value  per  share for a class of shares on a  "regular
      business  day" is  determined  by  dividing  the value of the Fund's net
      assets  attributable to that class by the number of shares of that class
      outstanding  on that  day.  To  determine  net  asset  values,  the Fund
      assets are valued  primarily on the basis of current market  quotations.
      If market  quotations  are not readily  available  or do not  accurately
      reflect  fair value for a security (in the  Manager's  judgment) or if a
      security's value has been materially  affected by events occurring after
      the  close  of  the   exchange  or  market  on  which  the  security  is
      principally  traded,  that security may be valued by another method that
      the Board of Trustees believes accurately reflects the fair value.

         The  Board  has  adopted  valuation  procedures  for the Fund and has
      delegated the day-to-day  responsibility  for fair value  determinations
      to the Manager's Valuation  Committee.  Fair value determinations by the
      Manager are subject to review,  approval and  ratification  by the Board
      at  its  next   scheduled   meeting  after  the  fair   valuations   are
      determined.  In  determining  whether  current market prices are readily
      available  and  reliable,   the  Manager  monitors  the  information  it
      receives  in  the   ordinary   course  of  its   investment   management
      responsibilities  for significant  events that it believes in good faith
      will affect the market  prices of the  securities of issuers held by the
      Fund.  Those  may  include  events   affecting   specific  issuers  (for
      example,  a  halt  in  trading  of the  securities  of an  issuer  on an
      exchange during the trading day) or events affecting  securities markets
      (for  example,  a foreign  securities  market  closes early because of a
      natural disaster).

            If,  after the close of the  principal  market on which a security
      held by the Fund is traded  and  before  the time as of which the Fund's
      net asset values are  calculated  that day, a  significant  event occurs
      that the Manager  learns of and believes in the exercise of its judgment
      will  cause a  material  change in the value of that  security  from the
      closing  price of the  security on the  principal  market on which it is
      traded,  the  Manager  will use its best  judgment  to  determine a fair
      value for that security.

            The  Manager  believes  that  foreign  securities  values  may  be
      affected  by  volatility  that  occurs in U.S.  markets on a trading day
      after  the close of  foreign  securities  markets.  The  Manager's  fair
      valuation  procedures  therefore  include a  procedure  whereby  foreign
      securities  prices  may be "fair  valued"  to take  those  factors  into
      account.

The Offering  Price.  To receive the offering price for a particular  day, the
      Distributor or its designated  agent must receive your order by the time
      the  Exchange  closes  that day. If your order is received on a day when
      the  Exchange is closed or after it has closed,  the order will  receive
      the next offering price that is determined after your order is received.
Buying Through a Dealer. If you buy shares through a dealer,  your dealer must
      receive the order by the close of the  Exchange  and  transmit it to the
      Distributor  so that it is received  before the  Distributor's  close of
      business on a regular  business day (normally 5:00 P.M.) to receive that
      day's  offering   price,   unless  your  dealer  has  made   alternative
      arrangements  with the  Distributor.  Otherwise,  the order will receive
      the next offering price that is determined.

------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER?  The Fund offers  investors  three
different  classes  of  shares.  The  different  classes  of shares  represent
investments in the same  portfolio of securities,  but the classes are subject
to different  expenses and will likely have different  share prices.  When you
buy  shares,  be sure to specify  the class of shares.  If you do not choose a
class, your investment will be made in Class A shares.
------------------------------------------------------------------------------
------------------------------------------------------------------------------

------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class A Shares.  If you buy Class A shares,  you pay an initial  sales  charge
      (on investments up to $1 million).  The amount of that sales charge will
      vary  depending  on the amount you invest.  The sales  charge  rates are
      listed in "How Can You Buy Class A Shares?" below.
------------------------------------------------------------------------------
Class B  Shares.  If you buy Class B  shares,  you pay no sales  charge at the
      time of purchase,  but you will pay an annual  asset-based sales charge.
      If you  sell  your  shares  within  6 years  of  buying  them,  you will
      normally  pay  a  contingent  deferred  sales  charge.  That  contingent
      deferred sales charge varies  depending on how long you own your shares,
      as described in "How Can You Buy Class B Shares?" below.
------------------------------------------------------------------------------
Class C  Shares.  If you buy Class C  shares,  you pay no sales  charge at the
      time of purchase,  but you will pay an annual  asset-based sales charge.
      If you sell your  shares  within 12  months  of  buying  them,  you will
      normally pay a contingent  deferred  sales charge of 1.0%,  as described
      in "How Can You Buy Class C Shares?" below.
------------------------------------------------------------------------------

WHICH CLASS OF SHARES  SHOULD YOU CHOOSE?  Once you decide that the Fund is an
appropriate  investment  for you,  the decision as to which class of shares is
best  suited to your  needs  depends  on a number of  factors  that you should
discuss  with your  financial  advisor.  Some factors to consider are how much
you plan to  invest  and how long you plan to hold  your  investment.  If your
goals and  objectives  change  over time and you plan to  purchase  additional
shares,  you should  re-evaluate  those factors to see if you should  consider
another class of shares.  The Fund's  operating costs that apply to a class of
shares  and the  effect  of the  different  types  of  sales  charges  on your
investment will vary your investment results over time.

      The  discussion  below is not  intended  to be  investment  advice  or a
recommendation,   because  each  investor's   financial   considerations   are
different.  The discussion below assumes that you will purchase only one class
of shares and not a  combination  of shares of different  classes.  Of course,
these  examples are based on  approximations  of the effects of current  sales
charges  and  expenses  projected  over  time,  and do not  detail  all of the
considerations  in  selecting  a class of  shares.  You  should  analyze  your
options carefully with your financial advisor before making that choice.
How Long Do You Expect to Hold Your  Investment?  While future financial needs
      cannot be predicted with certainty,  knowing how long you expect to hold
      your investment  will assist you in selecting the  appropriate  class of
      shares. Because of the effect of class-based expenses,  your choice will
      also  depend on how much you plan to invest.  For  example,  the reduced
      sales  charges  available  for larger  purchases  of Class A shares may,
      over time,  offset the effect of paying an initial  sales charge on your
      investment,  compared  to the  effect  over time of  higher  class-based
      expenses on shares of Class B or Class C.

   o  Investing  for  the  Shorter  Term.  While  the  Fund is  meant  to be a
      long-term  investment,  if you have a relatively  short-term  investment
      horizon  (that is,  you plan to hold your  shares  for not more than six
      years),  you  should  most  likely  invest  in Class A or Class C shares
      rather  than Class B shares.  That is because of the effect of the Class
      B contingent  deferred  sales charge if you redeem within six years,  as
      well as the  effect  of the  Class B  asset-based  sales  charge  on the
      investment  return  for  that  class in the  short-term.  Class C shares
      might be the  appropriate  choice  (especially  for  investments of less
      than  $100,000),  because  there is no initial  sales  charge on Class C
      shares,  and the  contingent  deferred  sales  charge  does not apply to
      amounts you sell after holding them one year.

      However,  if you plan to invest more than $100,000 for the shorter term,
      then as your  investment  horizon  increases  toward six years,  Class C
      shares might not be as advantageous  as Class A shares.  That is because
      the  annual  asset-based  sales  charge  on Class C shares  will  have a
      greater  impact on your  account  over the longer  term than the reduced
      front-end  sales  charge  available  for  larger  purchases  of  Class A
      shares.


      If you invest $1 million or more, in most cases Class A shares will be
      the most advantageous choice, no matter how long you intend to hold
      your shares. The Distributor will not accept purchase orders of
      $100,000 or more for Class B shares or $1 million or more of Class C
      shares from a single investor.  Dealers or other financial
      intermediaries purchasing shares for their customers in omnibus
      accounts are responsible for compliance with those limits.


o     Investing for the Longer Term.  If you are investing  less than $100,000
      for the  longer-term,  for example for retirement,  and do not expect to
      need  access to your money for seven  years or more,  Class B shares may
      be appropriate.

Are There  Differences  in Account  Features  That Matter to You? Some account
      features  may not be  available  to  Class B and  Class C  shareholders.
      Other  features  may not be  advisable  (because  of the  effect  of the
      contingent  deferred sales charge) for Class B and Class C shareholders.
      Therefore,  you  should  carefully  review  how  you  plan  to use  your
      investment account before deciding which class of shares to buy.


      Additionally,  the dividends payable to Class B and Class C shareholders
      will be reduced by the  additional  expenses borne by those classes that
      are not  borne  by  Class A  shares,  such  as the  Class B and  Class C
      asset-based  sales  charges  described  below  and in the  Statement  of
      Additional Information.  Also, checkwriting is not available on accounts
      subject to a contingent deferred sales charge.

How Do Share Classes Affect Payments to Your Broker?  A financial  advisor may
      receive different  compensation for selling one class of shares than for
      selling  another  class.  It is important  to remember  that Class B and
      Class C contingent  deferred sales charges and asset-based sales charges
      have the same purpose as the front-end  sales charge on sales of Class A
      shares:  to compensate the  Distributor  for concessions and expenses it
      pays to dealers  and  financial  institutions  for selling  shares.  The
      Distributor  may pay additional  compensation  from its own resources to
      securities  dealers or  financial  institutions  based upon the value of
      shares of the Fund owned by the dealer or financial  institution for its
      own account or for its customers.

HOW CAN YOU BUY  CLASS A  SHARES?  Class A shares  are sold at their  offering
price,  which is  normally  net asset  value  plus an  initial  sales  charge.
However,  in some  cases,  described  below,  purchases  are not subject to an
initial sales charge,  and the offering price will be the net asset value.  In
other cases, reduced sales charges may be available,  as described below or in
the Statement of  Additional  Information.  Out of the amount you invest,  the
Fund receives the net asset value to invest for your account.

      The sales  charge  varies  depending on the amount of your  purchase.  A
portion of the sales  charge may be retained by the  Distributor  or allocated
to your dealer as concession.  The  Distributor  reserves the right to reallow
the  entire  concession  to  dealers.  The  current  sales  charge  rates  and
concessions paid to dealers and brokers are as follows:







 ---------------------------------------------------------------------------
 Amount of Purchase       Front-End Sales  Front-End Sales   Concession As
                                           Charge As a
                          Charge As a      Percentage of
                          Percentage of    Net               Percentage of
                          Offering Price   Amount Invested   Offering Price
 ---------------------------------------------------------------------------
 ---------------------------------------------------------------------------
 Less than $50,000             4.75%             4.98%           4.00%
 ---------------------------------------------------------------------------
 ---------------------------------------------------------------------------
 $50,000 or more but           4.50%             4.71%           4.00%
 less than $100,000
 ---------------------------------------------------------------------------
 ---------------------------------------------------------------------------
 $100,000 or more but          3.50%             3.63%           3.00%
 less than $250,000
 ---------------------------------------------------------------------------
 ---------------------------------------------------------------------------
 $250,000 or more but          2.50%             2.56%           2.25%
 less than $500,000
 ---------------------------------------------------------------------------
 ---------------------------------------------------------------------------
 $500,000 or more but          2.00%             2.04%           1.80%
 less than $1 million
 ---------------------------------------------------------------------------


SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS.  Appendix C to the Statement of
Additional  Information details the conditions for the waiver of sales charges
that apply in certain  cases and the special  sales charge rates that apply to
purchases of shares of the Fund by certain  groups,  or in other special types
of  transactions.  To receive a waiver or special sales charge rate,  you must
advise the  Distributor  when  purchasing  shares or the  Transfer  Agent when
redeeming shares that a special condition applies.

Can You Reduce Class A Sales Charges?  You and your spouse may be eligible to
buy Class A shares of the Fund at reduced sales charge rates set forth in the
table above under the Fund's "Right of Accumulation" or a "Letter of Intent."
The Fund reserves the right to modify or to cease offering these programs at
any time.
o     Right of Accumulation. To reduce the Class A front-end sales charge
         under the rates in the table above that apply to larger
         purchases, you can add to the amount of your current purchase
         the value of investments currently being made by you and your
         spouse (or previously made by you and your spouse and still
         held) in Class A and Class B shares of the Fund and other
         Oppenheimer funds (a list is in the Statement of Additional
         Information under "How to Buy Shares - The Oppenheimer
         Funds"). You may not include Class A shares of Oppenheimer
         Money Market Fund, Inc. or Oppenheimer Cash Reserves on which
         you did not pay a sales charge for this purpose. In totaling
         your holdings, you may count shares held in your individual
         accounts (including IRAs and 403(b) plans), your joint
         accounts with your spouse, or accounts you or your spouse hold
         as trustees or custodians on behalf of your children who are
         minors. A fiduciary can count all shares purchased for a
         trust, estate or other fiduciary account (including employee
         benefit plans for the same employer) that has multiple
         accounts. To qualify for this Right of Accumulation, if you
         are buying shares directly from the Fund you must inform the
         Fund's Distributor of your eligibility and holdings at the
         time of your purchase. If you are buying shares through your
         financial intermediary you must notify your intermediary of
         your eligibility for this Right of Accumulation at the time of
         your purchase.

               To count shares of eligible Oppenheimer funds held in
         accounts at other intermediaries under this Right of
         Accumulation, you may be requested to provide the Distributor
         or your current intermediary (depending on the way you are
         buying your shares) a copy of each account statement showing
         your current holdings of the Fund or other eligible
         Oppenheimer funds, including statements for accounts held by
         you and your spouse or in retirement plans or trust or
         custodial accounts for minor children as described above. The
         Distributor or intermediary through which you are buying
         shares will combine the value of all your eligible Oppenheimer
         fund accounts based on the current offering price per share to
         determine what Class A sales charge breakpoints you may
         qualify for on your current purchase.

o     Letters of Intent. You may also reduce the Class A front-end sales
         charge on current purchases of shares of the Fund under the
         rates in the table above by submitting a Letter of Intent to
         the Distributor. A Letter of Intent is a written statement of
         your intention to purchase Class A and/or Class B shares of
         the Fund (and other Oppenheimer funds except Class A shares of
         Oppenheimer Money Market Fund and Oppenheimer Cash Reserves)
         over a 13-month period. The total amount of your intended
         purchases of Class A and Class B shares will determine the
         reduced sales charge rate that will apply to Class A shares of
         the Fund purchased during that period. You can include
         purchases made up to 90 days before the date of the Letter.
         Submitting a Letter of Intent does not obligate you to
         purchase the specified amount of shares.  You can also apply
         the Right of Accumulation to these purchases.

            If you do not complete the Letter of Intent, the front-end
         sales charge you paid on your purchases will be recalculated
         to reflect the actual value of shares you purchased.  A
         certain portion of your shares will be held in escrow by the
         Fund's Transfer Agent for this purpose. Please refer to "How
         to Buy Shares - Letters of Intent" in the Fund's Statement of
         Additional Information for more complete information.

Other Special Sales Charge Arrangements and Waivers.  The Fund and the
Distributor offer other opportunities to purchase shares without
front-end or contingent deferred sales charges under the programs
described below. The Fund reserves the right to amend or discontinue
these programs at any time without prior notice.
o     Dividend Reinvestment.  Dividends and/or capital gains distributions
         received by a shareholder from the Fund may be reinvested in
         shares of the Fund or any of the other Oppenheimer funds
         without sales charge, at the net asset value per share in
         effect on the payable date. You must notify the Transfer Agent
         in writing to elect this option and must have an existing
         account in the fund selected for reinvestment.
o     Exchanges of Shares.  Shares of the Fund may be exchanged for shares of
         certain other Oppenheimer funds at net asset value per share
         at the time of exchange, without sales charge, and shares of
         the Fund can be purchased by exchange of shares of certain
         other Oppenheimer funds on the same basis. Please refer to
         "How to Exchange Shares" in this Prospectus and in the
         Statement of Additional Information for more details,
         including a discussion of circumstances in which sales charges
         may apply on exchanges.
o     Reinvestment Privilege.  Within six months of a redemption of certain
         Class A and Class B shares, the proceeds may be reinvested in
         Class A shares of the Fund without sales charge. This
         privilege applies to redemptions of Class A shares that were
         subject to an initial sales charge or Class A or Class B
         shares that were subject to a contingent deferred sales charge
         when redeemed. The investor must ask the Transfer Agent for
         that privilege at the time of reinvestment and must identify
         the account from which the redemption was made.
Other Special Reductions and Waivers. The Fund and the Distributor offer
additional arrangements to reduce or eliminate front-end sales charges or to
waive contingent deferred sales charges for certain types of transactions and
for certain classes of investors (primarily retirement plans that purchase
shares in special programs through the Distributor). These are described in
greater detail in Appendix C to the Statement of Additional Information,
which is also available on the OppenheimerFunds website, at
www.oppenheimerfunds.com (under the hyperlinks "Access Accounts and Services
------------------------
- Investor Service Center"). To receive a waiver or special sales charge rate
under these programs, the purchaser must notify the Distributor (or other
financial intermediary through which shares are being purchased) at the time
of purchase or notify the Transfer Agent at the time of redeeming shares for
those waivers that apply to contingent deferred sales charges.


Class A Contingent Deferred Sales Charge.  There is no initial sales charge on
      purchases of Class A shares of any one or more of the Oppenheimer  funds
      aggregating $1 million or more. The  Distributor  pays dealers of record
      concessions  in an amount  equal to 0.50% of  purchases of $1 million or
      more (other than purchases by retirement plans,  which are not permitted
      in the Fund).  That  concession  will not be paid on purchases of shares
      by exchange or that were previously  subject to a front-end sales charge
      and dealer concession.

      If you redeem any of those shares  within an 18 month  "holding  period"
      measured from the beginning of the calendar month of their  purchase,  a
      contingent  deferred  sales  charge  (called  the  "Class  A  contingent
      deferred sales  charge") may be deducted from the  redemption  proceeds.
      That sales charge will be equal to 1.0% of the lesser of:
o     the  aggregate  net asset  value of the  redeemed  shares at the time of
      redemption  (excluding  shares purchased by reinvestment of dividends or
      capital gain distributions) or
o     the original net asset value of the redeemed shares.

      The  Class A  contingent  deferred  sales  charge  will not  exceed  the
      aggregate  amount of the concessions the Distributor paid to your dealer
      on all  purchases  of Class A shares of all  Oppenheimer  funds you made
      that were subject to the Class A contingent deferred sales charge.

HOW CAN YOU BUY CLASS B  SHARES?  Class B shares  are sold at net asset  value
per share  without an initial  sales  charge.  However,  if Class B shares are
redeemed  within six years from the  beginning of the calendar  month of their
purchase,  a  contingent  deferred  sales  charge  will be  deducted  from the
redemption  proceeds.  The Class B contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing  distribution-related
services to the Fund in connection with the sale of Class B shares.
      The amount of the  contingent  deferred  sales charge will depend on the
number of years  since you  invested  and the dollar  amount  being  redeemed,
according to the following schedule for the Class B contingent  deferred sales
charge holding period:

--------------------------------------------------------------------------------
Years Since Beginning of Month in    Contingent Deferred Sales Charge on
Which Purchase Order was Accepted    Redemptions in That Year (As % of Amount
                                     Subject to Charge)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
0 - 1                                5.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 - 2                                4.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2 - 3                                3.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3 - 4                                3.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4 - 5                                2.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
5 - 6                                1.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
More than 6                          None
--------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent
deferred sales charge, all purchases are considered to have been made on the
first regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares.  Class B shares automatically  convert
      to Class A shares 72 months after you  purchase  them.  This  conversion
      feature  relieves Class B shareholders of the  asset-based  sales charge
      that  applies  to Class B shares  under  the  Class B  Distribution  and
      Service Plan,  described  below. The conversion is based on the relative
      net asset value of the two  classes,  and no sales load or other  charge
      is  imposed.  When any Class B shares that you hold  convert,  any other
      Class  B  shares  that  were  acquired  by  reinvesting   dividends  and
      distributions  on the  converted  shares  will also  convert  to Class A
      shares.  For further  information on the conversion  feature and its tax
      implications,  see "Class B  Conversion"  in the Statement of Additional
      Information.

How Can you Buy Class C  Shares?  Class C shares  are sold at net asset  value
per share  without an initial  sales  charge.  However,  if Class C shares are
redeemed  within a  holding  period  of 12 months  from the  beginning  of the
calendar month of their purchase,  a contingent  deferred sales charge of 1.0%
will be  deducted  from  the  redemption  proceeds.  The  Class  C  contingent
deferred sales charge is paid to compensate the  Distributor  for its expenses
of providing  distribution-related services to the Fund in connection with the
sale of Class C shares.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Service  Plan for Class A  Shares.  The Fund has  adopted  a Service  Plan for
      Class A shares.  It  reimburses  the  Distributor  for a portion  of its
      costs  incurred  for  services  provided to  accounts  that hold Class A
      shares.  Reimbursement  is made  quarterly  at an  annual  rate of up to
      0.25% of the  average  annual  net assets of Class A shares of the Fund.
      The  Distributor  currently  uses  all of  those  fees  to pay  dealers,
      brokers,  banks and other financial institutions quarterly for providing
      personal  service and  maintenance  of accounts of their  customers that
      hold Class A shares.

Distribution  and Service  Plans for Class B and Class C Shares.  The Fund has
      adopted  Distribution  and Service  Plans for Class B and Class C shares
      to pay the Distributor for its services and costs in distributing  Class
      B and Class C shares and servicing  accounts.  Under the plans, the Fund
      pays the  Distributor  an annual  asset-based  sales charge of 0.75% per
      year on  Class B shares  and on Class C  shares.  The  Distributor  also
      receives a service fee of up to 0.25% per year under each plan.

      The  asset-based  sales  charge and service  fees  increase  Class B and
      Class C expenses  by 1.00% of the net assets per year of the  respective
      class.  Because  these  fees  are paid out of the  Fund's  assets  on an
      ongoing  basis,  over time  these  fees will  increase  the cost of your
      investment and may cost you more than other types of sales charges.

      The  Distributor  uses  the  service  fees  to  compensate  dealers  for
      providing  personal  services for accounts  that hold Class B or Class C
      shares. The Distributor  normally pays the 0.25% service fees to dealers
      in advance  for the first year after the shares are sold by the  dealer.
      After the shares  have been held for a year,  the  Distributor  pays the
      service fees to dealers on a quarterly basis.

      The  Distributor  currently  pays a sales  concession  of  3.75%  of the
      purchase  price of Class B shares to dealers  from its own  resources at
      the time of sale.  Including  the advance of the service  fee, the total
      amount  paid by the  Distributor  to the  dealer  at the time of sale of
      Class  B  shares  is  therefore  4.00%  of  the  purchase   price.   The
      Distributor  normally retains the Class B asset-based sales charge.  See
      the Statement of Additional Information for exceptions.

      The  Distributor  currently  pays a sales  concession  of  0.75%  of the
      purchase  price of Class C shares to dealers  from its own  resources at
      the time of sale.  Including  the advance of the service  fee, the total
      amount  paid by the  Distributor  to the  dealer  at the time of sale of
      Class  C  shares  is  therefore  1.00%  of  the  purchase   price.   The
      Distributor pays the asset-based  sales charge as an ongoing  concession
      to the dealer on Class C shares  that have been  outstanding  for a year
      or more. The Distributor  normally retains the Class C asset-based sales
      charge  during the first year after  Class C shares are  purchased.  See
      the Statement of Additional Information for exceptions.


      Under certain circumstances, the Distributor will pay the full Class B
      or Class C asset-based sales charge and the service fee to the dealer
      beginning in the first year after purchase of such shares in lieu of
      paying the dealer the sales concession and the advance of the first
      year's service fee at the time of purchase, if there is a special
      agreement between the dealer and the Distributor.  In those
      circumstances, the sales concession will not be paid to the dealer.

      In addition, the Manager and the Distributor may make substantial
      payments to dealers or other financial intermediaries and service
      providers for distribution and/or shareholder servicing activities, out
      of their own resources, including the profits from the advisory fees
      the Manager receives from the Fund.  Some of these distribution-related
      payments may be made to dealers or financial intermediaries for
      marketing, promotional or related expenses; these payments are often
      referred to as "revenue sharing."  In some circumstances, those types
      of payments may create an incentive for a dealer or financial
      intermediary or its representatives to recommend or offer shares of the
      Fund or other Oppenheimer funds to its customers.  You should ask your
      dealer or financial intermediary for more details about any such
      payments it receives.


Special Investor Services

ACCOUNTLINK.  You can use our  AccountLink  feature to link your Fund  account
with an account at a U.S. bank or other financial  institution.  It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
    o transmit funds  electronically to purchase shares by telephone  (through
      a service  representative or by PhoneLink) or automatically  under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption  proceeds or transmit  dividends
      and  distributions  directly  to your  bank  account.  Please  call  the
      Transfer Agent for more information.
      You may purchase  shares by  telephone  only after your account has been
established.  To purchase shares in amounts up to $250,000 through a telephone
representative,  call the Distributor at 1.800.225.5677.  The purchase payment
will be debited from your bank account.

      AccountLink  privileges  should be requested on your Application or your
dealer's  settlement  instructions  if you buy your  shares  through a dealer.
After your account is established,  you can request AccountLink  privileges by
sending  signature-guaranteed  instructions  and proper  documentation  to the
Transfer Agent.  AccountLink  privileges will apply to each shareholder listed
in the  registration on your account as well as to your dealer  representative
of record unless and until the Transfer  Agent receives  written  instructions
terminating or changing those privileges.  After you establish AccountLink for
your  account,  any  change  of  bank  account  information  must  be  made by
signature-guaranteed   instructions  to  the  Transfer  Agent  signed  by  all
shareholders who own the account.

PHONELINK.  PhoneLink is the OppenheimerFunds  automated telephone system that
enables   shareholders   to   perform   a  number  of   account   transactions
automatically   using  a   touch-tone   phone.   PhoneLink   may  be  used  on
already-established  Fund accounts after you obtain a Personal  Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.
Purchasing  Shares.  You may  purchase  shares in  amounts up to  $100,000  by
      phone, by calling 1.800.225.5677.  You must have established AccountLink
      privileges  to link  your  bank  account  with the Fund to pay for these
      purchases.
Exchanging Shares. With the  OppenheimerFunds  Exchange  Privilege,  described
      below,  you can exchange  shares  automatically  by phone from your Fund
      account   to  another   OppenheimerFunds   account   you  have   already
      established by calling the special PhoneLink number.
Selling Shares.  You can redeem shares by telephone  automatically  by calling
      the  PhoneLink  number and the Fund will send the  proceeds  directly to
      your  AccountLink  bank  account.  Please refer to "How to Sell Shares,"
      below for details.

CAN YOU SUBMIT TRANSACTION  REQUESTS BY FAX? You may send requests for certain
types of  account  transactions  to the  Transfer  Agent by fax  (telecopier).
Please call  1.800.225.5677  for information  about which  transactions may be
handled  this way.  Transaction  requests  submitted by fax are subject to the
same rules and  restrictions  as written and telephone  requests  described in
this Prospectus.

OPPENHEIMERFUNDS  INTERNET WEBSITE. You can obtain information about the Fund,
as well as your account balance, on the OppenheimerFunds  Internet website, at
www.oppenheimerfunds.com.  Additionally,  shareholders  listed in the  account
------------------------
registration   (and  the  dealer  of  record)  may  request   certain  account
transactions  through a special  section of that website.  To perform  account
transactions  or obtain account  information  online,  you must first obtain a
user I.D. and password on that  website.  If you do not want to have  Internet
account  transaction  capability  for your  account,  please call the Transfer
Agent at  1.800.225.5677.  At times,  the website may be  inaccessible  or its
transaction features may be unavailable.

AUTOMATIC  WITHDRAWAL  AND  EXCHANGE  PLANS.  The Fund has several  plans that
enable  you  to  sell  shares   automatically  or  exchange  them  to  another
OppenheimerFunds  account on a regular  basis.  Please call the Transfer Agent
or consult the Statement of Additional Information for details.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular  business day.
Your  shares will be sold at the next net asset  value  calculated  after your
order is received  in proper  form  (which  means that it must comply with the
procedures  described  below) and is accepted by the Transfer Agent.  The Fund
lets you sell your  shares by writing a letter,  by wire,  by using the Fund's
checkwriting  privilege,  or by  telephone.  You  can  also  set up  Automatic
Withdrawal  Plans to redeem shares on a regular  basis.  If you have questions
about any of these  procedures,  and especially if you are redeeming shares in
a special  situation,  such as due to the death of the owner,  please call the
Transfer Agent first, at 1.800.225.5677, for assistance.

Certain  Requests Require a Signature  Guarantee.  To protect you and the Fund
      from fraud,  the  following  redemption  requests must be in writing and
      must  include  a  signature  guarantee  (although  there  may  be  other
      situations that also require a signature guarantee):

   o  You wish to redeem more than $100,000 and receive a check.
   o  The redemption  check is not payable to all  shareholders  listed on the
      account statement.
   o  The  redemption  check  is not sent to the  address  of  record  on your
      account statement.
   o  Shares are being  transferred  to a Fund account with a different  owner
      or name.

   o  Shares are being  redeemed by someone  (such as an Executor)  other than
      the owners.

Where Can You Have Your Signature  Guaranteed?  The Transfer Agent will accept
      a guarantee of your  signature  by a number of  financial  institutions,
      including:
o     a U.S. bank, trust company, credit union or savings association,
o     a foreign bank that has a U.S. correspondent bank,
o     a U.S. registered dealer or broker in securities,  municipal  securities
      or government securities, or
o     a  U.S.   national   securities   exchange,   a  registered   securities
      association or a clearing agency.
      If you are  signing  on behalf of a  corporation,  partnership  or other
business or as a fiduciary, you must also include your title in the signature.

Sending Redemption  Proceeds by Wire. While the Fund normally sends your money
      by check,  you can arrange to have the  proceeds of shares you sell sent
      by Federal  Funds wire to a bank  account  you  designate.  It must be a
      commercial  bank that is a member of the Federal  Reserve  wire  system.
      The minimum  redemption you can have sent by wire is $2,500.  There is a
      $10 fee for  each  request.  To find out how to set up this  feature  on
      your  account  or  to  arrange  a  wire,  call  the  Transfer  Agent  at
      1.800.225.5677.

Checkwriting.  To  write  checks  against  your  Fund  account,  request  that
privilege  on your  account  application,  or contact the  Transfer  Agent for
signature  cards.  They must be signed  (with a  signature  guarantee)  by all
owners of the account and  returned to the  Transfer  Agent so that checks can
be sent to you to use.  Shareholders  with joint accounts can elect in writing
to have checks paid over the signature of one owner. If you previously  signed
a  signature  card to  establish  checkwriting  in another  Oppenheimer  fund,
simply  call  1.800.225.5677  to request  checkwriting  for an account in this
Fund with the same registration as the other account.

o     Checks can be written to the order of whomever you wish,  but may not be
      cashed  at the  bank  the  checks  are  payable  through  or the  Fund's
      custodian bank.
o     Checkwriting  privileges  are not available for accounts  holding shares
      that are subject to a contingent deferred sales charge.
o     Checks  must be written  for at least  $500.  Checks  written  below the
      stated  amount on the check will not be accepted.  However,  if you have
      existing  checks  indicating a $100 minimum,  you may still use them for
      amounts of $100 or more.
o     Checks  cannot be paid if they are  written  for more than your  account
      value.  Remember,  your  shares  fluctuate  in value and you  should not
      write a check close to the total account value.
o     You may not write a check that would  require the Fund to redeem  shares
      that were  purchased by check or Asset Builder Plan payments  within the
      prior 10 days.
o     Don't use your checks if you changed  your Fund  account  number,  until
      you receive new checks.


HOW DO you SELL SHARES BY MAIL? Write a letter of instruction that includes:
   o  Your name,
   o  The Fund's name,
   o  Your Fund account number (from your account statement),
   o  The dollar amount or number of shares to be redeemed,
   o  Any special payment instructions,
   o  Any share certificates for the shares you are selling,
   o  The  signatures  of all  registered  owners  exactly  as the  account is

      registered, and
   o  Any special  documents  requested by the Transfer Agent to assure proper
      authorization of the person asking to sell the shares.

Use the following address for            Send courier or express mail
requests by mail:                        requests to:
OppenheimerFunds Services                OppenheimerFunds Services
P.O. Box 5270                            10200 E. Girard Avenue, Building D
Denver, Colorado 80217                   Denver, Colorado 80231

HOW DO you SELL SHARES BY  TELEPHONE?  You and your dealer  representative  of
record  may also sell your  shares by  telephone.  To receive  the  redemption
price  calculated  on a particular  regular  business  day,  your call must be
received by the Transfer  Agent by the close of the Exchange  that day,  which
is  normally  4:00 P.M.,  but may be earlier on some days.  You may not redeem
shares under a share certificate by telephone.
   o  To redeem shares through a service  representative  or  automatically on
      PhoneLink, call 1.800.225.5677.
      Whichever  method you use,  you may have a check sent to the  address on
the account  statement,  or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone  Redemptions  Paid by  Check.  Up to  $100,000  may be  redeemed  by
      telephone  in any  seven-day  period.  The check  must be payable to all
      owners of record of the  shares  and must be sent to the  address on the
      account  statement.  This  service  is not  available  within 30 days of
      changing the address on an account.

Telephone  Redemptions  Through  AccountLink  or by Wire.  There are no dollar
      limits  on  telephone   redemption  proceeds  sent  to  a  bank  account
      designated when you establish AccountLink.  Normally the ACH transfer to
      your bank is initiated on the business day after the redemption.  You do
      not receive  dividends on the proceeds of the shares you redeemed  while
      they are waiting to be transferred.

      If you have  requested  Federal Funds wire  privileges for your account,
      the wire of the redemption  proceeds will normally be transmitted on the
      next bank  business  day  after  the  shares  are  redeemed.  There is a
      possibility  that the wire may be delayed up to seven days to enable the
      Fund to sell  securities to pay the  redemption  proceeds.  No dividends
      are accrued or paid on the  proceeds  of shares that have been  redeemed
      and are awaiting transmittal by wire.

CAN  YOU  SELL  SHARES  THROUGH  your  DEALER?   The   Distributor   has  made
arrangements  to repurchase  Fund shares from dealers and brokers on behalf of
their  customers.  Brokers or dealers  may  charge for that  service.  If your
shares are held in the name of your dealer,  you must redeem them through your
dealer.

HOW  CONTINGENT  DEFERRED SALES CHARGES  AFFECT  REDEMPTIONS.  If you purchase
shares  subject to a Class A,  Class B or Class C  contingent  deferred  sales
charge and redeem any of those shares  during the  applicable  holding  period
for the  class  of  shares,  the  contingent  deferred  sales  charge  will be
deducted from the  redemption  proceeds  (unless you are eligible for a waiver
of that  sales  charge  based on the  categories  listed in  Appendix C to the
Statement of Additional  Information and you advise the Transfer Agent of your
eligibility for the waiver when you place your redemption request.)

      A  contingent  deferred  sales charge will be based on the lesser of the
net  asset  value of the  redeemed  shares  at the time of  redemption  or the
original net asset value.  A contingent  deferred  sales charge is not imposed
on:
o     the amount of your  account  value  represented  by an  increase  in net
      asset value over the initial purchase price,
o     shares  purchased by the  reinvestment  of  dividends  or capital  gains
      distributions, or
o     shares redeemed in the special circumstances  described in Appendix C to
      the Statement of Additional Information
      To determine  whether a contingent  deferred  sales charge  applies to a
redemption, the Fund redeems shares in the following order:
   1. shares   acquired  by   reinvestment  of  dividends  and  capital  gains
      distributions,
   2. shares held for the holding period that applies to the class, and
   3. shares held the longest during the holding period.
      Contingent  deferred  sales  charges are not charged  when you  exchange
shares of the Fund for  shares of other  Oppenheimer  funds.  However,  if you
exchange them within the applicable  contingent  deferred sales charge holding
period,  the  holding  period  will carry  over to the fund  whose  shares you
acquire.  Similarly,  if you acquire shares of this Fund by exchanging  shares
of another  Oppenheimer  fund that are still subject to a contingent  deferred
sales charge holding period, that holding period will carry over to this Fund.

How to Exchange Shares

To exchange shares, you must meet several conditions:
   o  Shares of the fund  selected for exchange  must be available for sale in
      your state of residence.
   o  The prospectuses of both funds must offer the exchange privilege.
   o  You must hold the shares you buy when you establish  your account for at

      least  seven days  before you can  exchange  them.  After the account is
      open seven days, you can exchange shares any regular business day.

   o  You must  meet the  minimum  purchase  requirements  for the fund  whose
      shares you purchase by exchange.
   o  Before exchanging into a fund, you must obtain and read its prospectus.
      Shares  of a  particular  class of the Fund  may be  exchanged  only for
shares of the same class in the other Oppenheimer funds. For example,  you can
exchange  Class A shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange transactions.  For tax
purposes,  exchanges  of shares  involve a sale of the  shares of the fund you
own and a  purchase  of the  shares of the other  fund,  which may result in a
capital  gain  or  loss.  Please  refer  to "How to  Exchange  Shares"  in the
Statement of Additional Information for more details.

      You  can  find a list  of  Oppenheimer  funds  currently  available  for
exchanges in the Statement of Additional  Information or obtain one by calling
a service representative at 1.800.225.5677.  That list can change from time to
time.

HOW DO you SUBMIT EXCHANGE REQUESTS?  Exchanges may be requested in writing or
by telephone:

Written Exchange Requests.  Submit an OppenheimerFunds  Exchange Request form,
      signed by all owners of the account.  Send it to the  Transfer  Agent at
      the  address  on  the  back  cover.   Exchanges  of  shares  held  under
      certificates  cannot be processed unless the Transfer Agent receives the
      certificates with the request.
Telephone  Exchange  Requests.  Telephone exchange requests may be made either
      by calling a service  representative or by using PhoneLink for automated
      exchanges by calling  1.800.225.5677.  Telephone  exchanges  may be made
      only  between  accounts  that are  registered  with the same name(s) and
      address.  Shares  held  under  certificates  may  not  be  exchanged  by
      telephone.


ARE THERE  LIMITATIONS ON EXCHANGES?  There are certain exchange  policies you
should be aware of:
o     Shares are redeemed from one fund and are normally purchased from the
      other fund in the same transaction on the same regular business
      day on which the Transfer Agent or its agent (such as a financial
      intermediary holding the investor's shares in an omnibus account)
      receives an exchange request that conforms to the policies
      described above.  It must be received by the close of The New
      York Stock Exchange that day, which is normally 4:00 P.M. but may
      be earlier on some days.  The Transfer Agent may delay the
      reinvestment of the proceeds of an exchange up to five business
      days if it determines in its discretion that an earlier
      transmittal of the redemption proceeds to the receiving fund
      would be detrimental to the Fund from which the exchange is made
      or to the receiving fund.
o     The interests of the Fund's shareholders and the Fund's ability to
      manage its investments may be adversely affected when its shares are
      repeatedly exchanged over the short term.  When large dollar amounts
      are involved, the Fund's implementation of its investment strategies
      may be negatively affected or the Fund might have to raise or retain
      more cash than the portfolio manager would normally retain, to meet
      unanticipated redemptions.  Frequent exchange activity also may force
      the Fund to sell portfolio securities at disadvantageous times to raise
      the cash needed to meet those exchange requests.  These factors might
      hurt the Fund's performance.  When the Transfer Agent in its discretion
      believes frequent trading activity by any person, group or account
      would have a disruptive effect on the Fund's ability to manage its
      investments, the Fund and the Transfer Agent may reject purchase orders
      and/or exchanges into the Fund.  The history of exchange activity in
      all accounts known by the Transfer Agent to be under common ownership
      or control within the Oppenheimer funds complex may be considered by
      the Transfer Agent, with respect to the review of exchanges involving
      this Fund as part of the Transfer Agent's procedures to detect and
      deter excessive exchange activity.  The Transfer Agent may permit
      exchanges that it believes in the exercise of its judgment are not
      disruptive.  The Transfer Agent might not be able to detect frequent
      exchange activity conducted by the underlying owners of shares held in
      omnibus accounts, and therefore might not be able to effectively
      prevent frequent exchange activity in those accounts.  There is no
      guarantee that the Transfer Agent's controls and procedures will be
      successful to identify investors who engage in excessive trading
      activity or to curtail that activity.

      As stated above, the Fund permits dealers or financial intermediaries
      to submit exchange requests on behalf of their customers (unless the
      customer has revoked that authority).  The Manager, the Distributor
      and/or the Transfer Agent have agreements with a limited number of
      broker-dealers and investment advisers permitting them to submit
      exchange orders in bulk on behalf of their clients, provided that those
      broker-dealers or advisers agree to restrictions on their exchange
      activity (which are more stringent than the restrictions that apply to
      other shareholders).  Those restrictions include limitations on the
      funds available for exchanges, the requirement to give advance notice
      of exchanges to the Transfer Agent, and limits on the amount of client
      assets that may be invested in a particular fund.  The Fund and its
      Transfer Agent may restrict or refuse bulk exchange requests submitted
      by a financial intermediary on behalf of a large number of accounts
      (including pursuant to the arrangements described above) if, in the
      Transfer Agent's judgment exercised in its discretion, those exchanges
      would be disruptive to either fund in the exchange transaction.

   o  The Fund may amend, suspend or terminate the exchange privilege at any
      time. The Fund may refuse any exchange order and is currently not
      obligated to provide notice before rejecting an exchange order.
   o  If the  Transfer  Agent  cannot  exchange  all the  shares  you  request
      because of a  restriction  cited  above,  only the shares  eligible  for
      exchange will be exchanged.

Shareholder Account Rules and Policies


More information about the Fund's policies and procedures for buying,  selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual  "Minimum  Balance  Fee" is assessed on each Fund  account with a
      value of less than $500.  The fee is  automatically  deducted  from each
      applicable  Fund  account  annually  on or  about  the  second  to  last
      "regular  business  day" of  September.  See the Statement of Additional
      Information  (shareholders  may visit the  OppenheimerFunds  website) to
      learn how you can avoid this fee and for circumstances  under which this
      fee will not be assessed.

The  offering  of  shares  may be  suspended  during  any  period in which the
      determination  of net asset value is suspended,  and the offering may be
      suspended by the Board of Trustees at any time the Board  believes it is
      in the Fund's best interest to do so.
Telephone transaction  privileges for purchases,  redemptions or exchanges may
      be modified,  suspended or terminated by the Fund at any time.  The Fund
      will provide you notice  whenever it is required to do so by  applicable
      law.  If an account has more than one owner,  the Fund and the  Transfer
      Agent  may  rely  on  the  instructions  of  any  one  owner.  Telephone
      privileges   apply  to  each  owner  of  the   account  and  the  dealer
      representative  of record  for the  account  unless the  Transfer  Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone  calls to verify data  concerning
      transactions  and has adopted other procedures to confirm that telephone
      instructions   are  genuine,   by  requiring   callers  to  provide  tax
      identification  numbers and other account data or by using PINs,  and by
      confirming  such  transactions  in writing.  The Transfer  Agent and the
      Fund will not be liable for losses or expenses  arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer  requests will not be honored until the Transfer  Agent
      receives all required  documents in proper form.  From time to time, the
      Transfer Agent in its  discretion may waive certain of the  requirements
      for redemptions stated in this Prospectus.
Dealers that perform account  transactions  for their clients by participating
      in NETWORKING through the National Securities  Clearing  Corporation are
      responsible  for obtaining  their  clients'  permission to perform those
      transactions,  and are responsible to their clients who are shareholders
      of the  Fund if the  dealer  performs  any  transaction  erroneously  or
      improperly.
The  redemption  price for shares  will vary from day to day because the value
      of the  securities in the Fund's  portfolio  fluctuates.  The redemption
      price,  which is the net asset value per share, will normally differ for
      each class of shares.  The  redemption  value of your shares may be more
      or less than their original cost.
Payment for redeemed  shares  ordinarily  is made in cash.  It is forwarded by
      check,  or through  AccountLink  or by Federal Funds wire (as elected by
      the  shareholder)  within seven days after the Transfer  Agent  receives
      redemption   instructions  in  proper  form.   However,   under  unusual
      circumstances  determined  by the  Securities  and Exchange  Commission,
      payment may be delayed or  suspended.  For  accounts  registered  in the
      name of a  broker-dealer,  payment  will  normally be  forwarded  within
      three business days after redemption.
The Transfer  Agent may delay  processing  any type of  redemption  payment as
      described under "How to Sell Shares" for recently  purchased shares, but
      only until the purchase  payment has cleared.  That delay may be as much
      as 10 days from the date the shares  were  purchased.  That delay may be
      avoided  if you  purchase  shares by  Federal  Funds  wire or  certified
      check,  or  arrange  with  your bank to  provide  telephone  or  written
      assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary  redemptions  of  small  accounts  may be made by the  Fund if the
      account  value has  fallen  below $200 for  reasons  other than the fact
      that the market value of shares has dropped. In some cases,  involuntary
      redemptions  may be made to repay the  Distributor  for losses  from the
      cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual  circumstances  (such as a lack
      of liquidity in the Fund's  portfolio to meet  redemptions).  This means
      that the redemption  proceeds will be paid with liquid  securities  from
      the Fund's  portfolio.  If the Fund redeems your shares in kind, you may
      bear  transaction  costs and will bear  market  risks until such time as
      such securities are converted into cash.
Federal  regulations  may require  the Fund to obtain your name,  your date of
      birth  (for a  natural  person),  your  residential  street  address  or
      principal  place of business and your Social Security  Number,  Employer
      Identification  Number or other government  issued  identification  when
      you open an account.  Additional  information may be required in certain
      circumstances  or to open corporate  accounts.  The Fund or the Transfer
      Agent may use this  information to attempt to verify your identity.  The
      Fund  may  not  be  able  to  establish  an  account  if  the  necessary
      information  is not received.  The Fund may also place limits on account
      transactions  while it is in the  process of  attempting  to verify your
      identity.  Additionally,  if the Fund is unable to verify your  identity
      after your  account is  established,  the Fund may be required to redeem
      your shares and close your account.
"Backup  withholding"  of federal  income tax may be applied  against  taxable
      dividends,  distributions and redemption proceeds (including  exchanges)
      if you fail to furnish the Fund your correct,  certified Social Security
      or Employer Identification Number when you sign your application,  or if
      you under-report your income to the Internal Revenue Service.
To avoid sending  duplicate  copies of materials to households,  the Fund will
      mail only one copy of each  prospectus,  annual and  semi-annual  report
      and annual notice of the Fund's  privacy policy to  shareholders  having
      the same last name and address on the Fund's records.  The consolidation
      of these  mailings,  called  householding,  benefits  the  Fund  through
      reduced mailing expense.

      If you want to receive multiple copies of these materials,  you may call
      the Transfer Agent at  1.800.225.5677.  You may also notify the Transfer
      Agent  in  writing.  Individual  copies  of  prospectuses,  reports  and
      privacy  notices  will be  sent to you  commencing  30  days  after  the
      Transfer Agent receives your request to stop householding.

Dividends, Capital Gains and Taxes

DIVIDENDS.  The Fund intends to declare dividends separately for each class of
shares from net tax-exempt  income and/or net taxable  investment  income each
regular  business day and to pay those dividends to shareholders  monthly on a
date selected by the Board of Trustees.  Daily  dividends will not be declared
or paid on  newly-purchased  shares until  Federal  Funds are available to the
Fund from the purchase payment for such shares.


       The Fund  attempts  to pay  dividends  on Class A shares at a  constant
level.  There  is no  assurance  that it will be able to do so.  The  Board of
Trustees may change the targeted  dividend  level at any time,  without  prior
notice  to  shareholders.   The  amount  of  those  dividends  and  any  other
distributions  paid on other  classes of shares may vary over time,  depending
on market  conditions,  the composition of the Fund's portfolio,  and expenses
borne by the  particular  class of shares.  Dividends and other  distributions
paid on Class A shares will  generally  be higher than for Class B and Class C
shares,  which  normally have higher  expenses  than Class A shares.  The Fund
cannot guarantee that it will pay any dividends or other distributions.


Capital Gains.  Although the Fund does not seek capital gains,  it may realize
capital  gains on the sale of portfolio  securities.  If it does,  it may make
distributions  out of  any  net  short-term  or  long-term  capital  gains  in
December  of each  year.  The  Fund  may make  supplemental  distributions  of
dividends  and capital gains  following the end of its fiscal year.  There can
be no assurance  that the Fund will pay any capital gains  distributions  in a
particular year. Long-term capital gains will be separately  identified in the
tax information the Fund sends you after the end of the calendar year.
WHAT  CHOICES  DO YOU HAVE FOR  RECEIVING  DISTRIBUTIONS?  When you open  your
account,  specify on your  application  how you want to receive your dividends
and distributions. You have four options:
Reinvest  All  Distributions  in the  Fund.  You can  elect  to  reinvest  all
      dividends and capital gains  distributions  in additional  shares of the
      Fund.
Reinvest   Dividends  or  Capital  Gains.  You  can  elect  to  reinvest  some
      distributions (dividends,  short-term capital gains or long-term capital
      gains  distributions)  in the Fund while  receiving  the other  types of
      distributions  by check or having them sent to your bank account through
      AccountLink.
Receive All  Distributions  in Cash.  You can elect to receive a check for all
      dividends  and  capital  gains  distributions  or have them sent to your
      bank through AccountLink.
Reinvest  Your  Distributions  in Another  OppenheimerFunds  Account.  You can
      reinvest  all  distributions  in the same  class of  shares  of  another
      OppenheimerFunds account you have established.

Taxes.  Dividends  paid  from  net  investment  income  earned  by the Fund on
municipal  securities  will be excludable from gross income for federal income
tax purposes.

      Dividends  and capital  gains  distributions  may be subject to federal,
state or local taxes. Any short-term  capital gain  distributions  are taxable
to you as ordinary  income.  Any  long-term  capital  gain  distributions  are
taxable to you as long-term  capital gains,  no matter how long you have owned
shares  in the  Fund.  The  Fund  may  derive  gains  in part  from  municipal
obligations the Fund purchased  below their principal or face values.  All, or
a portion of these gains may be taxable to you as ordinary  income rather than
capital gains.  Whether you reinvest your  distributions in additional  shares
or take them in cash, the tax treatment is the same.

      Exempt-interest  dividends earned by residents of New York should not be
subject to federal,  state,  or local income taxes.  The portion of the Fund's
dividends that are  attributable  to income earned on other  obligations  (not
New York municipal  securities) will normally be subject to New York State and
City personal income tax.

     Every  year the Fund will send you and the IRS a  statement  showing  the
amount of any taxable  distribution  you  received in the previous  year.  The
Fund  will  also  send  you  a  separate   statement   summarizing  the  total
distributions paid by the Fund.


     The  Fund  intends  each  year  to  qualify  as a  "regulated  investment
company"  under the  Internal  Revenue  Code,  but  reserves  the right not to
qualify.  It qualified  during its last fiscal year.  The Fund, as a regulated
investment company,  will not be subject to federal income taxes on any of its
income,  provided  that  it  satisfies  certain  income,  diversification  and
distribution requirements.


Remember, There May be Taxes on Transactions.  Because the Fund's share prices
      fluctuate,  you  may  have a  capital  gain  or loss  when  you  sell or
      exchange your shares.  A capital gain or loss is the difference  between
      the price you paid for the  shares and the price you  received  when you
      sold them. Any capital gain is subject to capital gains tax.
Returns of Capital  Can Occur.  In certain  cases,  distributions  made by the
      Fund may be considered a non-taxable  return of capital to shareholders.
      If that occurs, it will be identified in notices to shareholders

      This  information is only a summary of certain  federal and state income
tax  information  about  your  investment.  You should  consult  with your tax
advisor about the effect of an investment in the Fund on your  particular  tax
situation.

Financial Highlights


The Financial Highlights Table is presented to help you understand the Fund's
financial performance for the past five fiscal years.  Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG llp, the Fund's
independent registered public accounting firm, whose report, along with the
Fund's financial statements, is included in the Statement of Additional
Information, which is available upon request.

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

CLASS A     YEAR ENDED SEPTEMBER 30,                      2004           2003            2002            2001           2000
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $   12.31     $    12.75      $    12.67     $     12.15     $    12.24
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .72            .71             .68             .67            .64
Net realized and unrealized gain (loss)                    .11           (.44)            .06             .50           (.09)
                                                     -------------------------------------------------------------------------
Total from investment operations                           .83            .27             .74            1.17            .55
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.69)          (.71)           (.66)           (.65)          (.64)
Distributions from net realized gain                        --             --              --              --             -- 1
                                                     -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.69)          (.71)           (.66)           (.65)          (.64)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $   12.45     $    12.31      $    12.75     $     12.67     $    12.15
                                                     =========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        6.91%          2.07%           6.11%           9.77%          4.78%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)             $ 539,834     $  533,563      $  536,126     $   530,464     $  509,288
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                    $ 536,613     $  531,977      $  525,519     $   526,333     $  529,839
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                     5.84%          5.57%           5.44%           5.30%          5.45%
Total expenses                                            0.91%          0.93%           0.89%           0.84%          0.89%
Expenses after payments and waivers
and reduction to custodian expenses                       0.88%           N/A 4,5         N/A 4           N/A 4          N/A 4
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                      6%            63%             73%             10%            26%

1. Less than $0.005 per share.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of management fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  28 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

CLASS B     YEAR ENDED SEPTEMBER 30,                      2004           2003            2002            2001           2000
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $   12.32     $    12.75      $    12.68     $     12.16     $    12.25
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .62            .60             .58             .56            .53
Net realized and unrealized gain (loss)                    .10           (.42)            .06             .51           (.07)
                                                     -------------------------------------------------------------------------
Total from investment operations                           .72            .18             .64            1.07            .46
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.59)          (.61)           (.57)           (.55)          (.55)
Distributions from net realized gain                        --             --              --              --             -- 1
                                                     -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.59)          (.61)           (.57)           (.55)          (.55)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $   12.45     $    12.32      $    12.75     $     12.68     $    12.16
                                                     =========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        5.99%          1.36%           5.22%           8.94%          3.98%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)             $  27,555     $   32,851      $   40,896     $    46,422     $   49,671
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                    $  30,212     $   36,000      $   42,021     $    48,115     $   60,299
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                     5.05%          4.77%           4.67%           4.53%          4.68%
Total expenses                                            1.69%          1.71%           1.66%           1.61%          1.67%
Expenses after payments and waivers
and reduction to custodian expenses                       1.66%           N/A 4,5         N/A 4           N/A 4          N/A 4
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                      6%            63%             73%             10%            26%

1. Less than $0.005 per share.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of management fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  29 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------

CLASS C     YEAR ENDED SEPTEMBER 30,                      2004           2003            2002            2001           2000
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $   12.32     $    12.75      $    12.68     $     12.15      $   12.24
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .62            .60             .57             .56            .56
Net realized and unrealized gain (loss)                    .10           (.42)            .07             .52           (.10)
                                                     -------------------------------------------------------------------------
Total from investment operations                           .72            .18             .64            1.08            .46
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.59)          (.61)           (.57)           (.55)          (.55)
Distributions from net realized gain                        --             --              --              --             -- 1
                                                     -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.59)          (.61)           (.57)           (.55)          (.55)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $   12.45     $    12.32      $    12.75     $     12.68      $   12.15
                                                     =========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        5.99%          1.35%           5.22%           9.03%          3.97%
------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)             $  15,723     $   13,080      $   10,603     $     8,251      $   5,954
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                    $  14,598     $   11,852      $    9,183     $     6,979      $   6,121
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
------------------------------------------------------------------------------------------------------------------------------
Net investment income                                     5.04%          4.78%           4.66%           4.51%          4.68%
Total expenses                                            1.69%          1.72%           1.66%           1.61%          1.66%
Expenses after payments and waivers
and reduction to custodian expenses                       1.66%           N/A 4,5         N/A 4           N/A 4          N/A 4
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                      6%            63%             73%             10%            26%

1. Less than $0.005 per share.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of management fees less than 0.01%.

INFORMATION AND SERVICES

For More Information on Oppenheimer AMT-Free New York Municipals

The following additional information about the Fund is available without
charge upon request:

STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It
is incorporated by reference into this Prospectus (which means it is legally
part of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

How to Get More Information
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and
other information about the Fund or your account:

------------------------------------------------------------------------------
By Telephone:                 Call OppenheimerFunds Services toll-free:
                              1.800.CALL OPP (225.5677)
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By Mail:                      Write to:
                              OppenheimerFunds Services
                              P.O. Box 5270
                              Denver, Colorado 80217-5270
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On the Internet:              You can send us a request by e-mail or read or

                              download documents (other than the Statement
                              of Additional Information) on the

                              OppenheimerFunds website:
                              www.oppenheimerfunds.com
                              ------------------------
------------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1.202.942.8090.  Reports and other information
about the Fund are available on the EDGAR database on the SEC's Internet
website at www.sec.gov. Copies may be obtained after payment of a duplicating
           -----------
fee by electronic request at the SEC's e-mail address: publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.

No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by:                [logo]   OppenheimerFunds
Distributor, Inc.
The Fund's SEC File No. 811-4054

PR0360.001.1104
Printed on recycled paper







                        APPENDIX TO THE PROSPECTUS OF
                   OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

      Graphic material included in the Prospectus of Oppenheimer AMT-Free New
York Municipals ("the Fund") "Annual Total Returns (Class A) (as of 12/31
each year)":

      A bar chart will be included in the Prospectus of the Fund depicting
the annual total returns of a hypothetical investment in Class A shares of
the Fund for each of the ten most recent calendar years, without deducting
sales charges.  Set forth below are the relevant data points that will appear
in the bar chart:

--------------------------------------------------------------------
      Calendar Year Ended:              Annual Total Returns
--------------------------------------------------------------------
--------------------------------------------------------------------

--------------------------------------------------------------------
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12/31/94                                       -8.79%
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12/31/95                                       17.62%
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12/31/96                                       4.13%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/97                                       9.16%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/98                                       5.83%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/99                                       -4.46%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/00                                       11.35%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/01                                       4.46%
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12/31/02                                       6.44%
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12/31/03                                       6.95%

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Oppenheimer AMT-Free New York Municipals
------------------------------------------------------------------------------------

6803 S. Tucson Way, Centennial, Colorado 80112-3924
1.800.CALL OPP (225.5677)


Statement of Additional Information dated November 26, 2004

      This Statement of Additional Information is not a Prospectus.  This document
contains additional information about the Fund and supplements information in the
Prospectus dated November 26, 2004.  It should be read together with the Prospectus,
which may be obtained by writing to the Fund's Transfer Agent, OppenheimerFunds
Services, at P.O. Box 5270, Denver, Colorado 80217 or by calling the Transfer Agent at
the toll-free number shown above or by downloading it from the OppenheimerFunds
Internet website at www.oppenheimerfunds.com.


Contents
                                                                          Page
About the Fund

Additional Information About the Fund's Investment Policies and Risks.........
     The Fund's Investment Policies...........................................
     Municipal Securities.....................................................
     Other Investment Techniques and Strategies...............................
     Other Investment Restrictions............................................

How the Fund is Managed.......................................................
     Organization and History.................................................
     Board of Trustees and Oversight Committees...............................
     Trustees and Officers of the Fund........................................
     The Manager .............................................................
Brokerage Policies of the Fund................................................
Distribution and Service Plans................................................
Performance of the Fund.......................................................

About Your Account

How To Buy Shares.............................................................
How To Sell Shares............................................................
How to Exchange Shares........................................................
Dividends, Capital Gains and Taxes............................................
Additional Information About the Fund.........................................
Financial Information About the Fund
Independent Registered Public Accounting Firm's Report........................
Financial Statements .........................................................


Appendix A: Municipal Bond Ratings Definitions.............................A-1
Appendix B: Municipal Bond Industry Classifications........................B-1
Appendix C: OppenheimerFunds Special Sales Charge Arrangements and Waivers.C-1







A B O U T  T H E  F U N D

Additional Information About the Fund's Investment Policies and Risks

      The investment objective, the principal investment policies and the main risks of
the Fund are described in the Prospectus.  This Statement of Additional Information
contains supplemental information about those policies and risks and the types of
securities that the Fund's investment Manager, OppenheimerFunds, Inc., (the "Manager")
can select for the Fund. Additional information is also provided about the strategies
that the Fund may use to try to achieve its objective.


The Fund's Investment Policies.  The composition of the Fund's portfolio and the
techniques and strategies that the Fund's Manager may use in selecting portfolio
securities will vary over time.  The Fund is not required to use all of the investment
techniques and strategies described below in seeking its objective. It may use some of
the special investment techniques and strategies at some times or not at all. The Fund
does not make investments with the objective of seeking capital growth. However, the
values of the securities held by the Fund may be affected by changes in general
interest rates and other factors prior to their maturity. Because the current value of
debt securities varies inversely with changes in prevailing interest rates, if interest
rates increase after a security is purchased, that security will normally fall in
value.  Conversely, should interest rates decrease after a security is purchased,
normally its value will rise.


      However, those fluctuations in value will not generally result in realized gains
or losses to the Fund unless the Fund sells the security prior to the security's
maturity. A debt security held to maturity is redeemable by its issuer at full
principal value plus accrued interest. The Fund does not usually intend to dispose of
securities prior to their maturity, but may do so for liquidity purposes, or because of
other factors affecting the issuer that cause the Manager to sell the particular
security. In that case, the Fund could realize a capital gain or loss on the sale.

      There are variations in the credit quality of municipal securities, both within a
particular rating classification and between classifications. These variations depend
on numerous factors. The yields of municipal securities depend on a number of factors,
including general conditions in the municipal securities market, the size of a
particular offering, the maturity of the obligation and rating (if any) of the issue.
These factors are discussed in greater detail below.

Municipal Securities.  The types of municipal securities in which the Fund may invest
are described in the Prospectus under "About the Fund's Investments." Municipal
securities are generally classified as general obligation bonds, revenue bonds and
notes. A discussion of the general characteristics of these principal types of
municipal securities follows below.

      |X|   Municipal Bonds.  We have classified longer term municipal securities as
"municipal bonds." The principal classifications of long-term municipal bonds are
"general obligation" and "revenue" (including "industrial development") bonds. They may
have fixed, variable or floating rates of interest, as described below.

      Some bonds may be "callable," allowing the issuer to redeem them before their
maturity date.  To protect bondholders, callable bonds may be issued with provisions
that prevent them from being called for a period of time.  Typically, that is 5 to 10
years from the issuance date.  When interest rates decline, if the call protection on a
bond has expired, it is more likely that the issuer may call the bond.  If that occurs,
the Fund might have to reinvest the proceeds of the called bond in bonds that pay a
lower rate of return.

         |_|      General Obligation Bonds.  The basic security behind general
obligation bonds is the issuer's pledge of its full faith and credit and taxing, if
any, power for the repayment of principal and the payment of interest. Issuers of
general obligation bonds include states, counties, cities, towns, and regional
districts.  The proceeds of these obligations are used to fund a wide range of public
projects, including construction or improvement of schools, highways and roads, and
water and sewer systems. The rate of taxes that can be levied for the payment of debt
service on these bonds may be limited or unlimited. Additionally, there may be limits
as to the rate or amount of special assessments that can be levied to meet these
obligations.


         |_|      Revenue Bonds.  The principal security for a revenue bond is
generally the net revenues derived from a particular facility, group of facilities, or,
in some cases, the proceeds of a special excise tax or other specific revenue source
such as a state's or local government's proportionate share of the tobacco Master
Settlement Agreement. Further information on those tobacco settlement revenue bonds is
provided below in "Tobacco Settlement Revenue Bonds".  Revenue bonds are issued to
finance a wide variety of capital projects. Examples include electric, gas, water and
sewer systems; highways, bridges, and tunnels; port and airport facilities; colleges
and universities; and hospitals.


      Although the principal security for these types of bonds may vary from bond to
bond, many provide additional security in the form of a debt service reserve fund that
may be used to make principal and interest payments on the issuer's obligations.
Housing finance authorities have a wide range of security, including partially or fully
insured mortgages, rent subsidized and/or collateralized mortgages, and/or the net
revenues from housing or other public projects.  Some authorities provide further
security in the form of a state's ability (without obligation) to make up deficiencies
in the debt service reserve fund.

         |_|      Industrial Development Bonds.  Industrial development bonds are
considered municipal bonds if the interest paid is exempt from federal income tax. They
are issued by or on behalf of public authorities to raise money to finance various
privately operated facilities for business and manufacturing, housing, sports, and
pollution control.  These bonds may also be used to finance public facilities such as
airports, mass transit systems, ports, and parking.  The payment of the principal and
interest on such bonds is dependent solely on the ability of the facility's user to
meet its financial obligations and the pledge, if any, of real and personal property
financed by the bond as security for those payments.

         |_|      Private Activity Municipal Securities.  The Tax Reform Act of 1986
(the "Tax Reform Act") reorganized, as well as amended, the rules governing tax
exemption for interest on certain types of municipal securities.  The Tax Reform Act
generally did not change the tax treatment of bonds issued in order to finance
governmental operations.  Thus, interest on general obligation bonds issued by or on
behalf of state or local governments, the proceeds of which are used to finance the
operations of such governments, continues to be tax-exempt.  However, the Tax Reform
Act limited the use of tax-exempt bonds for non-governmental (private) purposes.  More
stringent restrictions were placed on the use of proceeds of such bonds.  Interest on
certain private activity bonds is taxable under the revised rules.  There is an
exception for "qualified" tax-exempt private activity bonds, for example, exempt
facility bonds including certain industrial development bonds, qualified mortgage
bonds, qualified Section 501(c)(3) bonds, and qualified student loan bonds.

      In addition, limitations as to the amount of private activity bonds which each
state may issue were revised downward by the Tax Reform Act, which will reduce the
supply of such bonds.  The Fund invests only in those private activity bonds that are
issued by non-profit corporations.  The interest from these private activity bonds are
free from the alternative minimum tax.  The value of the Fund's portfolio could be
affected if there is a reduction in the availability of such bonds.

      Interest on certain private activity bonds issued after August 7, 1986, which
continues to be tax-exempt, will be treated as a tax preference item subject to the
alternative minimum tax to which certain taxpayers are subject.  The Fund will not hold
municipal securities the interest on which (and thus a proportionate share of the
exempt-interest dividends paid by the Fund) would be subject to the federal alternative
minimum tax on individuals and corporations.

      To determine whether a municipal security is treated as a taxable private
activity bond, it is subject to a test for: (a) a trade or business use and security
interest, or (b) a private loan restriction. Under the trade or business use and
security interest test, an obligation is a private activity bond if: (i) more than 10%
of the bond proceeds are used for private business purposes and (ii) 10% or more of the
payment of principal or interest on the issue is directly or indirectly derived from
such private use or is secured by the privately used property or the payments related
to the use of the property. For certain types of uses, a 5% threshold is substituted
for this 10% threshold.

      The term "private business use" means any direct or indirect use in a trade or
business carried on by an individual or entity other than a state or municipal
governmental unit.  Under the private loan restriction, the amount of bond proceeds
that may be used to make private loans is limited to the lesser of 5% or $5.0 million
of the proceeds.  Thus, certain issues of municipal securities could lose their
tax-exempt status retroactively if the issuer fails to meet certain requirements as to
the expenditure of the proceeds of that issue or the use of the bond-financed facility.
The Fund makes no independent investigation of the issuers of such bonds or their use
of proceeds of the bonds.  If the Fund should hold a bond that loses its tax-exempt
status retroactively, there might be an adjustment to the tax-exempt income previously
distributed to shareholders.


      |X|  Tobacco Settlement Revenue Bonds. The Fund may invest a significant
portion of its assets in tobacco settlement revenue bonds.  As of the Fund's fiscal
year ended September 30, 2004, 26.1% of the Fund's assets were invested in tobacco
revenue settlement bonds.

Tobacco settlement revenue bonds are secured by an issuing state's proportionate
share in the Master Settlement Agreement ("MSA"). The MSA is an agreement, reached
out of court in November 1998 between 46 states and nearly all the U.S. tobacco
manufacturers (approximately 99% of the current combined market share of tobacco
manufacturers). The MSA provides for payments annually by the manufacturers to the
states and jurisdictions in perpetuity, in exchange for releasing all claims
against the manufacturers and a pledge of no further litigation. Tobacco
manufacturers pay into a master escrow trust based on their market share, and each
state receives a fixed percentage of the payment as set forth in the MSA.

A number of states have  securitized  the future  flow of those  payments by selling
bonds pursuant to indentures,  some through distinct  governmental  entities created
for such purpose.  The bonds are backed by the future  revenue flow that is used for
principal  and interest  payments on the bonds.  Annual  payments on the bonds,  and
thus risk to the Fund,  are highly  dependent  on the  receipt of future  settlement
payments to the state or its governmental  entity, as well as several other factors.
The actual amount of future  settlement  payments,  therefore,  is dependent on many
factors,  including,  but not  limited  to,  annual  domestic  cigarette  shipments,
cigarette  consumption,  inflation  and the financial  capability  of  participating
tobacco  companies.  As a result,  payments made by tobacco  manufacturers  could be
negatively impacted if the decrease in tobacco consumption is significantly  greater
than the  forecasted  decline.  A market share loss by the MSA  companies to non-MSA
participating  tobacco  manufacturers  would  cause  a  downward  adjustment  in the
payment  amounts.  A  participating  manufacturer  filing for bankruptcy  also could
cause  delays or  reductions  in bond  payments.  The MSA itself has been subject to
legal challenges and has, to date, withstood those challenges.

On September 21, 2004, a civil trial (United States v. Philip Morris, et. al.)
began in U.S. district court nearly five years after the U.S. Department of Justice
first filed charges against the tobacco industry. The federal government alleges
that the major tobacco companies defrauded and misled the American public about the
health risks associated with smoking cigarettes. The civil lawsuit seeks a
disgorgement of $280 billion, representing industry profits, and funding for
cessation and counter-advertising programs, and release of all industry documents.
The named defendant tobacco companies represent approximately 98% of the tobacco
industry's market share. The tobacco industry denies any wrongdoing and counters
that it has greatly modified its practices, including warning labels on cigarette
packs since the 1960s and agreeing to the MSA with the states. A negative outcome
to the trial would adversely affect the MSA companies and, in turn, could
potentially cause delays or reductions in bond payments by those companies.
However, to date, it is not possible to predict the outcome of the litigation.



      |X|   Municipal Notes.  Municipal securities having a maturity (when the security
is issued) of less than one (1) year are generally known as municipal notes. Municipal
notes generally are used to provide for short-term working capital needs. Some of the
types of municipal notes the Fund can invest in are described below.

         |_|      Tax Anticipation Notes.  These are issued to finance working capital
needs of municipalities.  Generally, they are issued in anticipation of various
seasonal tax revenue, such as income, sales, use or other business taxes, and are
payable from these specific future taxes.

         |_|      Revenue Anticipation Notes.  These are notes issued in expectation of
receipt of other types of revenue, such as federal revenues available under federal
revenue-sharing programs.

         |_|      Bond Anticipation Notes.  Bond anticipation notes are issued to
provide interim financing until long-term financing can be arranged.  The long-term
bonds that are issued typically also provide the money for the repayment of the notes.

         |_|      Construction Loan Notes.  These are sold to provide project
construction financing until permanent financing can be secured.  After successful
completion and acceptance of the project, it may receive permanent financing through
public agencies, such as the Federal Housing Administration.

      |X|   Tax-Exempt Commercial Paper.  This type of short-term obligation (usually
having a maturity of two hundred seventy (270) days or less) is issued by a
municipality to meet current working capital needs.

      |X|   Municipal Lease Obligations.  The Fund's investments in municipal lease
obligations may be through certificates of participation that are offered to investors
by public entities. Municipal leases may take the form of a lease or an installment
purchase contract issued by a state or local government authority to obtain funds to
acquire a wide variety of equipment and facilities.

      Some municipal lease securities may be deemed to be "illiquid" securities. Their
purchase by the Fund would be limited as described below in "Illiquid Securities." From
time to time the Fund may invest more than 5% of its net assets in municipal lease
obligations that the Manager has determined to be liquid under guidelines set by the
Board of Trustees.

      Those guidelines require the Manager to evaluate:
      o  the frequency of trades and price quotations for such securities;
      o  the number of dealers or other potential buyers willing to purchase or sell
      such securities;
      o  the availability of market-makers; and
      o  the nature of the trades for such securities.

      Municipal leases have special risk considerations. Although lease obligations do
not constitute general obligations of the municipality for which the municipality's
taxing power is pledged, a lease obligation is ordinarily backed by the municipality's
covenant to budget for, appropriate and make the payments due under the lease
obligation.  However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for that purpose on a
yearly basis.  While the obligation might be secured by the lease, it might be difficult
to dispose of that property in case of a default.

      Projects financed with certificates of participation generally are not subject to
state constitutional debt limitations or other statutory requirements that may apply to
other municipal securities.  Payments by the public entity on the obligation underlying
the certificates are derived from available revenue sources.  That revenue might be
diverted to the funding of other municipal service projects.  Payments of interest
and/or principal with respect to the certificates are not guaranteed and do not
constitute an obligation of a state or any of its political subdivisions.

      In addition to the risk of "non-appropriation," municipal lease securities do not
have as highly liquid a market as conventional municipal bonds.  Municipal leases, like
other municipal debt obligations, are subject to the risk of non-payment of interest or
repayment of principal by the issuer. The ability of issuers of municipal leases to
make timely lease payments may be adversely affected in general economic downturns and
as relative governmental cost burdens are reallocated among federal, state and local
governmental units.  A default in payment of income would result in a reduction of
income to the Fund.  It could also result in a reduction in the value of the municipal
lease and that, as well as a default in repayment of principal, could result in a
decrease in the net asset value of the Fund.

      |X|   Ratings of Municipal Securities.  Ratings by ratings organizations such as
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Services, a
division of the McGraw-Hill Company, Inc. ("S&P") and Fitch, Inc. ("Fitch") represent
the respective rating agency's opinions of the credit quality of the municipal
securities they undertake to rate. However, their ratings are general opinions and are
not guarantees of quality. Municipal securities that have the same maturity, coupon and
rating may have different yields, while other municipal securities that have the same
maturity and coupon but different ratings may have the same yield.

      Subsequent to its purchase by the Fund, a municipal security may cease to be
rated or its rating may be reduced below the minimum required for purchase by the
Fund.  Neither event requires the Fund to sell the security, but the Manager will
consider such events in determining whether the Fund should continue to hold the
security.  To the extent that ratings given by Moody's, S&P, or Fitch change as a
result of changes in those rating organizations or their rating systems, the Fund will
attempt to use comparable ratings as standards for investments in accordance with the
Fund's investment policies.

      The Fund may buy municipal securities that are "pre-refunded." The issuer's
obligation to repay the principal value of the security is generally collateralized
with U.S. government securities placed in an escrow account.  This causes the
pre-refunded security to have essentially the same risks of default as a AAA-rated
security.

      A list of the rating definitions of Moody's, S&P, and Fitch for municipal
securities is contained in Appendix A to this Statement of Additional Information. The
Fund can purchase securities that are unrated by nationally recognized rating
organizations. The Manager will make its own assessment of the credit quality of
unrated issues the Fund buys. The Manager will use criteria similar to those used by
the rating agencies, and assign a rating category to a security that is comparable to
what the Manager believes a rating agency would assign to that security.  However, the
Manager's rating does not constitute a guarantee of the quality of a particular issue.


         |_|      Special Risks of Lower-Grade Securities. The Fund may invest in
municipal securities rated below investment grade up to the limits described in the
prospectus. Lower grade securities may have a higher yield than securities rated in the
higher rating categories. In addition to having a greater risk of default than
higher-grade securities, there may be less of a market for these securities. As a
result they may be harder to sell at an acceptable price. The additional risks mean
that the Fund may not receive the anticipated level of income from these securities,
and the Fund's net asset value may be affected by declines in the value of lower-grade
securities. However, because the added risk of lower quality securities might not be
consistent with the Fund's policy of preservation of capital, the Fund limits its
investments in lower quality securities.


      While securities rated "Baa" by Moody's or "BBB" by S&P are investment grade,
they may be subject to special risks and have some speculative characteristics.


Special Investment Considerations - New York Municipal Securities.  As explained in
the Prospectus, the Fund's investments are highly sensitive to the fiscal stability
of New York State (referred to in this section as the "State") and its
subdivisions, agencies, instrumentalities or authorities, including New York City
(the "City"), which issue nearly all of the municipal securities in which the Fund
invests.  The following information on the risk factors from concentrating in New
York municipal securities is only a summary, based on the State's Annual
Information Statement dated September 19, 2004, and on publicly-available official
statements relating to offerings by issuers of New York municipal securities on or
prior to June 17, 2003 with respect to offerings of New York State, and on or prior
to November 5, 2004 with respect to offerings by the City.  No representation is
made as to the accuracy of this information.

      During the mid-1970s, the State, some of its agencies, instrumentalities and
public benefit corporations (the "Authorities"), and certain of the State's
municipalities faced serious financial difficulties. To address many of these
financial problems, the State developed various programs, many of which were
successful in reducing the financial crisis.  Any further financial problems
experienced by these Authorities or municipalities could have a direct adverse
effect on the New York municipal securities in which the Fund invests.

      |X| Factors Affecting Investments in New York State Securities.  On January
20, 2004, the Governor presented the Executive Budget for 2004-05 to the New York
State Legislature containing the Financial Plan for 2004-05 (the "2004-05 Executive
Budget" or "Executive Budget").   On August 11, 2004, the New York Legislature
completed action on the budget for the 2004-05 fiscal year.  The New York Division
of the Budget ("DOB") has prepared the 2004-05 Enacted Budget Financial Plan
("2004-05 Financial Plan" or "Financial Plan") which reflected the actions of the
Legislature and the Governor as of September 19, 2004, the date of the Annual
Information Statement that contained excerpts from the 2004-05 Financial Plan.

      DOB has estimated that, in comparison to the Executive Budget, the
Legislature has identified $1.1 billion in new General Fund (the major operating
fund of the State) resources to fund $1.5 billion in additions and $280 million in
new costs, leaving an imbalance of roughly $600 to $700 million in 2004-05 and gaps
of approximately $6 billion in 2005-06 and $8 billion in 2006-07.

      The Governor has vetoed General Fund spending additions valued at $235
million in 2004-05, reducing the projected General Fund imbalance in the 2004-05
fiscal year to approximately $400 million.  The vetoes are expected to generate
comparable savings in 2005-06 and 2006-07.  The Governor also vetoed $1.6 billion
in new bonding for capital spending approved by the Legislature.  Under the State
Constitution, the Legislature may take action on the Governor's vetoes through
December 31, 2004, or enact additional appropriations, subject to gubernatorial
veto, at any time during the 2004-05 fiscal year.

      DOB, in close cooperation with State agencies, expected to develop a Fiscal
Management Plan intended to balance the 2004-05 budget and reduce the outyear
gaps.  DOB expected that the Fiscal Management Plan would produce savings
sufficient to balance the 2004-05 fiscal year reduce the outyear gaps to the range
of $5-6 billion in 2005-06 and roughly $7 billion in 2006-07.  DOB expected that
with a Fiscal Management Plan, the State would not need to borrow from the rainy
day reserve of $794 million to end the fiscal year in balance on a cash basis in
the General Fund.

      DOB projected that spending in all State funds would total $101.2 billion in
2004-05, a 4.0% increase above actual 2003-04 results.  When 2003-04 spending is
adjusted to reflect certain deferrals, adjusted 2004-05 spending in all State funds
increases by $5.8 billion or 6.1% over 2003-04 levels.

      Many complex political, social and economic forces influence the State's
economy and finances, which may in turn affect the State's Financial Plan.  These
forces may affect the state from fiscal year to fiscal year and are influenced by
governments, institutions, and events that are not subject to the State's control.
The Financial Plan is also necessarily based upon forecasts of national and State
economic activity.  Economic forecasts have frequently failed to predict accurately
the timing and magnitude of changes in the national and State economies.  DOB
believed that its estimates related to the performance of the State and national
economies were reasonable.  However, there can be no assurance that actual results
will not differ materially and adversely from the forecast.

      Based on DOB's projections, the 2004-05 Financial Plan depends in part on the
implementation of a fiscal management plan to maintain budget balance in that
fiscal year.  The plan under development by DOB was expected to contain a range of
actions that could be implemented administratively, as well as proposals that might
require legislative approval.

      As of the close of 2003-04, balances in the State's principal reserves to
guard against unbudgeted risks totaled $815 million.  The reserves included $794
million in the Tax Stabilization Reserve Fund and $21 million in the Contingency
Reserve Fund for litigation.  To permanently improve the State's reserve levels,
the Governor has proposed legislation to increase both the maximum size of the
State's rainy day fund from 2 percent to 5 percent of General Fund spending, and
the maximum annual deposits from two-tenths of one percent to five-tenths of one
percent of spending.  Absent this legislation, the State reported that the Fund
will reach its statutory maximum balance of 2 percent or $840 million with the next
annual deposit.

      Aside from the $21 million in the Contingency Reserve Fund, the Financial
Plan did not set aside specific reserves to cover potential costs that could
materialize as a result of adverse rulings in pending litigation, Federal
disallowances, or other Federal actions that could adversely affect the State's
projections of receipts and disbursements.

      The Federal government has been auditing Medicaid claims submitted since 1993
under the School Supportive Health Services Program.  The State reported that these
audits had not yet been finalized, and, as a result, the liability of the State and
school districts for any disallowances could not be determined.  Federal
regulations include an appeals process that could postpone repayment of any
disallowances.  The Financial Plan assumed that the Federal government would fully
reimburse these costs.

      In addition, a portion of Federal Medicaid payments related to School
Supportive Health Services have been deferred by the Federal Centers for Medicare
and Medicaid Services pending finalization of audits.  Since the State has
continued to reimburse local school districts for these costs, these Federal
deferrals, if not resolved, could negatively impact the Financial Plan.
Alternatively, if the State were to suspend reimbursement, local governments could
be adversely affected.

      An ongoing risk to the Financial Plan arises from the potential impact of
certain litigation and Federal disallowances pending against the State, which could
produce adverse effects on the States projections of receipts and disbursements.
For example, the Federal government has issued a draft disallowance for certain
claims, and deferred the payment of other claims, submitted by school districts
related to school supportive health services.  The State reported that it was
unclear what impact, if any, such disallowances may have on the 2004-05 Financial
Plan or in the future.  The 2004-05 Financial Plan assumed no significant Federal
disallowances or other Federal actions that could adversely affect State finances.

      New York is the third most populous state in the nation and has a relatively
high level of personal wealth.  The State's economy is diverse, with a
comparatively large share of the nation's financial activities, information,
education and health services employment, and a very small share of the nation's
farming and mining activity.  The State's location and its air transport facilities
and natural harbors have made it an important link in international commerce.
Travel and tourism constitute an important part of the economy.  Like the rest of
the nation, New York has a declining proportion of its workforce engaged in
manufacturing, and an increasing proportion engaged in service industries.

      Relative to the nation, the State has a smaller share of manufacturing and
construction and a larger share of service-related industries.  The State's
financial activities sector share, as measured by wages, is particularly large
relative to the nation.  The State has projected that it is likely to be less
affected than the nation as a whole during an economic recession that is
concentrated in manufacturing and construction, but likely to be more affected by
any economic downturn that is concentrated in the services sector.

      The State reported that the September 11, 2001 terrorist attach had a more
devastating impact on the New York economy than on any other state.  New York City
is still recovering from the severity of the blow.  However, there was evidence
that the State economy has emerged from recession and that the State's economic
expansion, estimated to have begun in August 2003, would be sustainable.  The State
economy had added over 72,000 private sector jobs since August 2003.  Total State
employment was projected to rise 0.5 percent in 2004, following a decline of 0.6
percent in 2003.  Wage income was projected to rise 5.6 percent in 2004, following
growth of only 1.4 percent in 2003.  Employment, wage, and total personal income
growth projected for 2004 were more closer to historical averages for New York and
reflected the belief that the State economy was on an expansionary path.  The
unemployment rate was projected to fall from 6.3 percent in 2003 to 6.2 percent for
2004.

      In addition to the risks associated with the national economic forecast, the
State reported that there exist specific risks to the State economy.   Chief among
them is a weaker performance within the financial sector than was projected.
Higher energy prices and a new round of global instability appeared to be having a
more negative impact on equity markets than on the economy as a whole.  A weaker
than expected financial market performance could result in lower bonus payment
growth than projected, though this impact would be largely felt during the first
quarter of 2005.

      The State reported its view that although growth had slowed from the brisk
pace of the second half of 2003 and the first quarter of 2004, the national economy
was continuing to expand, due in large part to momentum generated by favorable
monetary and fiscal policies.  The economy was expected to accelerate to above
trend growth during the second half of 2004, following growth of only 2.8 percent
for the second quarter.  The overall strength of the national economy permitted the
Federal Reserve Board to embark upon a "measured" course of monetary tightening at
the end of June 2004.  Nevertheless, interest rates were expected to remain
relatively accommodative.  Low interest rates and a strengthening world economy
were expected to maintain a favorable environment for both business investment and
international trade.  DOB had slightly lowered the forecast for real U.S. Gross
Domestic Product (GDP) from that presented with the Executive Budget.  Real U.S.
GDP was projected to grow 4.3 percent in 2004, followed by slightly above trend
growth of 3.3 percent for 2005.

      Corporate profits from current production grew 16.8 percent in 2003, followed
by an additional growth of 22.9 percent in the first half of 2004 compared with the
first half of 2003.  However, the State expressed the view that strong profit
growth had combined with heightened uncertainty due to high energy prices national
security concerns to create an unusual degree of volatility in the labor market.
Since August 2003, the national economy had gained almost half of the private
sector jobs that were lost during the 2001 recession and its aftermath, with over
one million private sector jobs created during the first five months of 2004.
However, labor market growth had slowed to a trickle in June and July 2004.  DOB
expected moderate growth of 1.1 percent in employment for 2004, following a decline
of 0.3 percent for 2003.  The unemployment rate was projected to decline to 5.5
percent in 2004 from 6.0 percent in 2003.  Consistent with a strengthening labor
market, wages and salaries were expected to grow 5.1% for 2004, following growth of
2.6% for 2003.  Total personal income was expected to grow 5.4% for this year,
following growth of 3.2% for 2003.  Projections for personal income and wages for
2004 represented upward revisions compared to the Executive Budget forecast.
However, these revisions to the forecast were largely due to revisions to the
underlying data by the Bureau of Economic Analysis for 2003.

      A benchmark oil price had risen to a record new high in August 2004.
Unexpectedly high world demand, attacks upon production facilities in the Middle
East, and uncertainty in Russia have all contributed significantly to the rise in
oil prices.  These developments resulted in an upward revision to the DOB forecast
for consumer inflation, as represented by growth in the Consumer Price Index (CPI),
to 2.7% for 2004.  Nevertheless, the energy market continued to pose a risk to the
DOB forecast for inflation.  High energy prices also presented a risk to domestic
and global economic growth.  Lower global growth could result in lower than
anticipated exports.  In contrast, better than expected economic conditions might
encourage firms to invest more and hire more workers than expected, resulting in
higher wages and higher consumption spending as well.  A lower dollar could lead to
higher exports, and therefore, higher output growth than projected.

      |X| The 2004-05 Financial Plan.  The State reported that the State's total
General Fund receipts in support of the 2004-05 Financial Plan were projected to be
$42.7 billion, an increase of $328 million (0.8%) from 2003-04.  This total
included $31.6 billion in taxes, $2.4 billion in miscellaneous receipts, and $8.6
billion in transfers from other Funds.  The increase largely reflected the combined
impact of an improving economy and net-revenue increases adopted in 2004 and with
the 2003-04 budget, offset by the loss of the one-time benefit of tobacco
securitization receipts in 2003-04 ($4.2 billion).

      General Fund Personal Income Tax (PIT) receipts were projected to increase
by  $2.7 billion (17.2%) from 2003-04.  This was attributed to continued economic
improvement in 2004, enactment of a three-year temporary tax increase from
2003-2005, and a robust settlement for 2003 tax returns.  This amount was slightly
offset by a larger deposit into the PIT Refund Reserve Account and a higher deposit
into the Revenue Bond Tax Fund.

      General Fund user taxes and fees receipts for 2004-05 were projected to total
$8.7 billion, an increase of $700 million (8.8 percent) from reported 2003-04
collections. The projected growth in sales tax cash receipts of $777 million
(10.7%) was attributed to the enactment of a temporary increase in the overall tax
rate (to 4.25%) and a change in the clothing and footwear exemption.  Growth in the
sales tax base, after adjusting for tax law changes and other factors, was
projected at 5.5%.

      General Fund business tax receipts in 2004-05 were projected to total $3.7
billion, an increase of $301 million (8.8%) from 2003-04 collections.  This
increase was attributed to the continued economic recovery as reflected in the
corporate franchise tax.  Business tax receipts for 2004-05 were revised up by $5
million from the Executive Budget level, to reflect the Legislature's rejection of
an Executive Budget proposal to allow biotechnology companies to transfer net
operating losses.

      General Fund other taxes, which include estate and gift tax, real property
gains tax, and pari-mutuel taxes, were projected to total $764 million in 2004-05,
which is $4 million below 2003-04's amount, but $2 million above the Executive
Budget estimate.  The State reported that previously enacted legislation to repeal
both the real property gains tax and the gift tax, and to reduce the estate and
pari-mutuel taxes, had significantly reduced collection from these resources.

      General Fund miscellaneous receipts were projected to reach nearly $2.4
billion, a decrease of $3.5 billion from 2003-04.  After adjusting for the receipt
of one-time tobacco securitization proceeds ($4.2 billion) in 2003-04, the annual
increase was projected at $721 million.  This increase was attributed to the
acceleration of $225 million in housing SONYMA balances from 2005-06 into 2004-05,
and the receipt of $182 million from the Tobacco Settlement Fund.

      Transfers from other Funds to the General Fund were expected to total $8.6
billion, an increase of $748 million from 2003-04.  This annual increase was
comprised of higher transfers from the Revenue Bond Tax Fund ($368 million), the
Local Government Assistance Corporation Fund ($187 million), and all other funds
($354 million), offset by lower transfers from the Clean Water/Clean Air Fund ($61
million).

      The State projected General Fund disbursements of $43.0 billion in 2004-05,
an increase of $974 million (2.3%) from 2003-04, and $1.1 billion from the
Executive Budget level.

      Local assistance spending was projected to be $29.4 billion in 2004-05, an
increase of $2.0 billion (7.2%) from the prior year.  This spending increase was
attributed to higher spending in Medicaid ($463 million), Higher Education Services
Corporation ($352 million), school aid ($466 million), special education programs
($132 million), Office of Children and Family Services ($61 million) and the
community projects fund ($58 million).

      State Operations accounts for the cost of running the Executive, Legislative
and Judicial branches of government and was projected to total $7.5 billion in
2004-05, an increase of $445 million (6.3%) from 2003-04.  Personal service costs
(e.g., State employee payroll) comprised 73 percent of State Operations spending
and the remaining 27 percent represented non-personal service costs for contracts,
rent, supplies, and other operating expenses.

      Spending for General State Charges was projected to be $3.7 billion in
2004-05, an increase of $457 million (14.2%) over 2003-04.  This annual increase
was due mostly to rising costs of employee health benefits (an increase of $225
million to $2.1 billion), higher costs related to employer pension contributions
(an increase of $159 million to $654 million) and $49 million in fringe benefit
increases relating to collective bargaining settlements.

      Transfers to Other Funds were projected to total $2.5 billion in 2004-05, and
included General Fund transfers to support debt service ($1.7 billion), capital
projects ($196 million), and other funds ($542 million).

      The State projected that the General Fund would end the 2004-05 fiscal year
with a $1.1 billion fund balance, comprising $794 million in the Tax Stabilization
Reserve Fund, $312 million in the Community Projects Fund, and $21 million in the
Contingency Reserve Fund for litigation.

      |_|   State Governmental Funds Group.  Substantially all State non-pension
financial operations are accounted for in the State's governmental funds group.
Governmental funds include the following four fund types, the State's projections
of receipts and disbursements in which comprise the State's Financial Plan:

      o     the General Fund, which is the major operating fund of the State and
receives all receipts that are not required by law to be deposited in another fund,
including most State tax receipts and certain fees, transfers from other funds and
miscellaneous receipts from other sources;

      o     Special Revenue Funds, which account for the proceeds of specific
revenue sources (other than expendable trusts or major capital projects), such as
federal grants, that are legally restricted to specified purposes;

      o     Capital Projects Funds, which account for financial resources of the
State to be used for the acquisition or construction of major capital facilities
(other than those financed by Special Revenue Funds, Proprietary Funds and
Fiduciary Funds); and

      o     Debt Service Funds, which account for the accumulation of resources
(including receipts from certain taxes, transfers from other funds and
miscellaneous revenues, such as dormitory room rental fees, which are dedicated by
statute for payment of lease-purchase rentals) for the payment of general long-term
debt service and related costs and payments under lease-purchase and
contractual-obligation financing arrangements.

      |_|   Local Government Assistance Corporation.  In 1990, as part of a State
fiscal reform program, legislation was enacted creating Local Government Assistance
Corporation (LGAC), a public benefit corporation empowered to issue long-term
obligations to fund payments to local governments that had been traditionally
funded through the State's annual seasonal borrowing.  The legislation also
dedicated revenues equal to one percent of the State sales and use tax to pay debt
service on these bonds.  As of June 1995, LGAC had issued bonds and notes to
provide net proceeds of $4.7 billion, completing the program.  The issuance of
these long-term obligations, which are to be amortized over no more than 30 years,
was expected to eliminate the need for continued short-term seasonal borrowing.

      The legislation also imposed a limitation on the annual seasonal borrowing of
the State except in cases where the Governor and the legislative leaders have
certified the need for additional seasonal borrowing, based on emergency or
extraordinary factors or factors unanticipated at the time of adoption of the
budget, and provided a schedule for eliminating it over time.  Any seasonal
borrowing is required by law to be eliminated by the fourth fiscal year after the
limit was first exceeded (i.e., no tax and revenue anticipation note (TRAN)
seasonal borrowing in the fifth year).  This provision limiting the State's
seasonal borrowing practices was included as a covenant with LGAC's bondholders in
the resolution authorizing such bonds.  No restrictions were placed upon the
State's ability to issue deficit notes.

      The impact of the LGAC reforms, as well as other changes in revenue and
spending patterns, is that the State has been able to meet its cash flow needs
throughout the fiscal year without relying on short-term seasonal borrowings.

      |X|   Authorities.  The fiscal stability of the State is related to the
fiscal stability of its public Authorities.  Authorities refer to public benefit
corporations, created pursuant to State law, other than local authorities.
Authorities have various responsibilities, including those which finance, construct
and/or operate revenue-producing public facilities.  Authorities are not subject to
the constitutional restrictions on the incurrence of debt that apply to the State
itself, and may issue bonds and notes within the amounts and restrictions set forth
in their legislative authorization.  The State's access to the public credit
markets could be impaired and the market price of its outstanding debt may be
materially and adversely affected if any of its Authorities were to default on
their respective obligations, especially those involving State-supported or
State-related debt. As of December 31, 2003, there were 18 public authorities that
had outstanding debt of $100 million or more, and the aggregate outstanding debt,
including refunding bonds, of these State public authorities was $114.9 billion,
only a portion of which constituted State-supported or State-related debt.

      Authorities generally pay their operating expenses and debt service costs
from revenues generated by the projects they finance or operate, such as tolls
charged for the use of highways, bridges or tunnels, charges for public power,
electric and gas utility services, rentals charged for housing units and charges
for occupancy at medical care facilities.  In addition, State legislation
authorizes several financing techniques for Authorities.  There are statutory
arrangements providing for State local assistance payments otherwise payable to
localities to be made under certain circumstances to Authorities.  Although the
State has no obligation to provide additional assistance to localities whose local
assistance payments have been paid to Authorities under these arrangements, the
affected localities could seek additional State assistance if local assistance
payments are diverted.  Some Authorities also receive moneys from State
appropriations to pay for the operating costs of certain of their programs.

      |X|   Ratings of the State's Securities.  As of June 17, 2003, S&P had rated
the State's general obligation bonds "AA," Moody's had rated those bonds "A2" and
Fitch had rated those bonds "AA-".

      Ratings reflect only the views of the ratings organizations, and an
explanation of the significance of a rating must be obtained from the rating agency
furnishing the rating.  There is no assurance that a particular rating will
continue for any given period of time or that any such rating will not be revised
downward or withdrawn entirely if, in the judgment of the agency originally
establishing the rating, circumstances so warrant. A downward revision or
withdrawal of a rating may have an effect on the market price of the State and
municipal securities in which the Fund invests.

      |X|   The State's General Obligation Debt.  As of March 31, 2004, the State
had approximately $3.8 billion in general obligation bonds outstanding.  Principal
and interest due on general obligation bonds were $509 million for the 2003-04
fiscal year and were estimated to be $486 million for the State's 2004-05 fiscal
year.

      |X|   Pending Litigation.  The State is a defendant in numerous legal
proceedings pertaining to matters incidental to the performance of routine
governmental operations.  That litigation includes, but is not limited to, claims
asserted against the State involving State finances and programs and arising from
alleged violations of civil rights, alleged torts, alleged breaches of contracts,
real property proceedings and other alleged violations of State and Federal laws.
These proceedings could affect adversely the financial condition of the State in
the 2004-05 fiscal year or thereafter.

      The State reported its belief that the 2004-05 Financial plan included
sufficient reserves to offset the costs associated with the payment of judgments
that may be required during the 2004-05 fiscal year.  These reserves included (but
were not limited to) amounts appropriated for Court of Claims payments and
projected fund balances in the General Fund.  In addition, any amounts ultimately
required to be paid by the State may not be subject to settlement or may be paid
over a multi-year period.  There could be no assurance given, however, that adverse
decisions in legal proceedings against the State would not exceed the amount of all
potential 2004-05 Financial Plan resources available for the payment of judgments,
and could therefore adversely affect the ability of the State to maintain a
balanced 2004-05 Financial Plan.

      In addition, the State is party to other claims and litigation that either
its legal counsel has advised are not probable that the State will suffer adverse
court decisions or the State has determined are not material.  Although the amounts
of potential losses, if any, are not presently determinable, it was the State's
opinion that its ultimate liability in these cases is not expected to have a
material adverse effect on the State's financial position in the 2004-05 fiscal
year or thereafter.

      |X|   Other Functions.  Certain localities in addition to the City have
experienced financial problems and have requested and received additional State
assistance during the last several State fiscal years. The potential impact on the
State of any future requests by localities for additional oversight or financial
assistance was not included in the projections of the State's receipts and
disbursements for the State's 2004-05 fiscal year or thereafter.

      |X|   Factors Affecting Investments in New York City Municipal Securities.
The City has a highly diversified economic base, with a substantial volume of
business activity in the service, wholesale and retail trade and manufacturing
industries and is the location of many securities, banking, law, accounting, news
media and advertising firms.

      The City is a major seaport and focal point for international business.  Many
of the major corporations headquartered in the City are multinational in scope and
have extensive foreign operations.  Numerous foreign-owned companies in the United
States are also headquartered in the City.  These firms, which have increased in
number substantially over the past decade, are found in all sectors of the City's
economy, but are concentrated in trade, manufacturing sales offices, tourism and
finance.  The City is the location of the headquarters of the United Nations, and
several affiliated organizations maintain their principal offices in the City.  A
large diplomatic community exists in the City to staff the missions to the United
Nations and the foreign consulates.

      Economic activity in the City has experienced periods of growth and recession
and can be expected to experience periods of growth and recession in the future.
The City experienced a recession in the early 1970s through the middle of that
decade, followed by a period of expansion in the late 1970s through the late
1980s.  The City fell into recession again in the early 1990s which was followed by
an expansion that lasted until 2001.  The City's financial plan assumed that the
economic slowdown that began in 2001 as a result of the September 11 attack, a
national economic recession, and a downturn in the securities industry had largely
ended.  The financial plan assumed continued recovery of the City's economy in
calendar years 2004 and 2005.

      The City reported that recovery, clean up and repair efforts in the wake of
the September 11, 2001 terrorist attacks on the World Trade Center have resulted in
substantial expenditures.  The City has been largely reimbursed by the federal
government for all of its direct costs for response and remediation of the World
Trade Center site.  In addition, the State authorized the Transitional Finance
Authority (the "TFA") to have outstanding $2.5 billion of bonds and notes to pay
costs related to or arising from the September 11 attack, of which the TFA had
outstanding approximately $2 billion.  The City believed it was not possible to
quantify with any certainty the long-term impact of the September 11 attack on the
City and its economy.

      For each of the 1981 through 2004 fiscal years, the City's General Fund had
an operating surplus, before discretionary and other transfers, and achieved
balanced operating results as reported in accordance with then applicable generally
accepted accounting principles ("GAAP") after discretionary and other transfers.
The City has been required to close substantial gaps between forecast revenues and
forecast expenditures in order to maintain balanced operating results. There can be
no assurance that the City will continue to maintain balanced operating results as
required by State law without tax or other revenue increases or reductions in City
services or entitlement programs, which could adversely affect the City's economic
base.

      The Mayor is responsible for preparing the City's financial plan, including
the City's financial plan for the 2005 through 2008 fiscal years submitted to the
Control Board on June 29, 2004 (the "June Financial Plan") and modification to the
June Financial Plan submitted to the Control Board on October 21, 2004 (as so
modified, the "2005-2008 Financial Plan", or "Financial Plan").  The City's
projections set forth in the Financial Plan are based on various assumptions and
contingencies which are uncertain and which may not materialize.

      Implementation of the Financial Plan is dependent upon the City's ability to
market its securities successfully.  Implementation of the Financial Plan is also
dependent upon the ability to market the securities of other financing entities,
including the New York City Municipal Water Finance Authority ("Water Authority"),
which issues debt secured by water and sewer revenues.  In addition, the City
issues revenue and tax anticipation notes to finance its seasonal working capital
requirements.  The success of projected public sales of City, Water Authority, TFA
and other bonds and notes will be subject to prevailing market conditions.  Future
developments concerning the City and public discussion of such developments, as
well as prevailing market conditions, may affect the market for outstanding City
general obligation bonds and notes.

      |X|   The City's 2004-2008 Financial Plan.  For the 2003 fiscal year, the
City's General Fund had an operating surplus of $1.928 billion, before
discretionary and other transfers, and achieved balanced operating results in
accordance with GAAP, after discretionary and other transfers.  The 2004 fiscal
year was the twenty-fourth consecutive year that the City had achieved an operating
surplus, before discretionary and other transfers, and balanced operating results,
after discretionary and other transfers.

      The Financial Plan projected revenues and expenditures for the 2005 fiscal
year balanced in accordance with GAAP, and projected gaps of $3.0 billion, $4.2
billion and $3.3 billion in fiscal years 2006 through 2008, respectively.  The
Financial Plan included an out-year gap-closing program to reduce expenditures and
increase revenues by a total of $3.0 billion in fiscal years 2005 and 2006, and
$1.9 billion and $1.7 billion in fiscal years 2007 and 2008, respectively.

      Changes in projected revenues since the June Financial Plan included: (i)
increases in projected tax revenues of $577 million, $589 million, $544 million and
$524 million in fiscal years 2005 through 2008, respectively, resulting primarily
from increases in real property transaction and property tax revenues, and
increases in baseline projections of non-property taxes as a result of strong
fiscal year 2004 collections, partially offset by decreases in personal income,
business income and sales taxes as a result of lower forecast securities industry
profits in calendar year 2004; (ii) increases in non-tax revenues of $33 million in
fiscal year 2005, reflecting primarily increased investment earnings; and (iii)
reductions in anticipated State assistance of $201 million, $196 million, $94
million, and $77 million in fiscal years 2005 through 2008.  Changes in projected
expenditures since the June Financial Plan included (i) increased energy costs of
$40 million in fiscal year 2005 and $65 million in each of fiscal years 2006
through 2008; (ii) increases in education spending of $87 million in fiscal year
2005; and (iii) decreases in debt service costs of $72 million and $27 million in
fiscal years 2005 and 2006, respectively, and decreases in debt service of $39
million and $48 million in fiscal years 2007 and 2008, respectively.

      The Financial Plan also reflected legislation enacted by the State
Legislature pursuant to which the LGAC is to make available to the City or its
assignee $170 million annually.  The City had assigned the $170 million annual
payment to the Sales Tax Asset Receivable Corporation ("STAR Corp."), a local
development corporation created to issue bonds to finance the cost of debt service
on bonds of the Municipal Assistance Corporation For The City of New York ("MAC")
otherwise payable from City sales tax revenues.  On September 2004, the first $170
million annual payment was received by STAR Corp. which completed its financing on
November 4, 2004.  The proceeds of the STAR Corp. financing were expected be used
to reimburse the City for $622 million of revenues retained by MAC and to provide
MAC with an amount sufficient to defease the outstanding debt.  The City expected
the economic impact on the City's budget of the STAR Corp. financing to make
available to the City approximately $1.0 billion in fiscal year 2005 and $500
million annually in fiscal years 2006 through 2008 by eliminating future City
revenues retained by MAC for its debt service and reimbursing the City for revenues
already retained in the 2004 and 2005 fiscal years.

      The Financial Plan makes provisions for wage increases for all City employees
for the 2002-05 round of bargaining consistent with the settlement with District
Council 37 of the American Federation of State, County and Municipal Employees.  In
addition, the economic and financial condition of the City may be affected by the
various financial, social, economic, geo-political and other factors which have a
material effect on the City.

      The Financial Plan is based on numerous assumptions, including the condition
of the City's and the region's economies and the concomitant receipt of
economically sensitive tax revenues in the amounts projected.  The Financial Plan
is subject to various other uncertainties and contingencies relating to, among
other factors, the effects on the City economy of the September 11 attack, the
extent, if any, to which wage increases for City employees exceed the annual wage
costs assumed for the 2004 through 2008 fiscal years; realization of projected
interest earnings for pension fund assets and current assumptions with respect to
wages for City employees affecting the City's required pension fund contributions;
the willingness and ability of the State to provide the aid contemplated by the
Financial Plan and to take various other actions to assist the City; the ability of
HHC and other such entities to maintain balanced budgets; the willingness of the
federal government to provide the amount of federal aid contemplated in the
Financial Plan; the impact on City revenues and expenditures of federal and State
welfare reform and any future legislation affecting Medicare or other entitlement
programs; adoption of the City's budgets by the City Council in substantially the
forms submitted by the Mayor; the ability of the City to implement cost reduction
initiatives and the success with which the City controls expenditures; the impact
of conditions in the real estate market on real estate tax revenues; and the
ability of the City and other financing entities to market their securities
successfully in the public credit markets.  Certain of these assumptions have been
questioned by the City Comptroller and other public officials.

      From time to time, the City Comptroller and other public officials issue
reports and make public statements regarding the City's financial condition,
commenting on, among other matters, the City's financial plans, projected revenues
and expenditures and actions by the City to eliminate projected operating
deficits.  Some of these reports and statements have warned that the City may have
underestimated certain expenditures and overestimated certain revenues and have
suggested that the City may not have adequately provided for future contingencies.
Certain of these reports have analyzed the City's future economic and social
conditions and have questioned whether the City has the capacity to generate
sufficient revenues in the future to meet the costs of its expenditure increases
and to provide necessary services.  It is reasonable to expect that reports and
statements will continue to be issued and to engender public comment.

      On February 12, 2004, the City Comptroller released a report on the adopted
budget for fiscal year 2005 and the June Financial Plan.  The report concluded that
the City has adopted a fiscal year 2005 budget that is likely to end the year in
balance, with reserves available to the City which appear to be sufficient to
offset risks identified by the City Comptroller.  However, the report noted that
the subsequent years of the June Financial Plan continue to contain multi-billion
dollar deficits because the City's expenses continue to outpace the growth of its
revenues.  In his report, the City Comptroller identified net risks of $516
million, $524 million, $471 million and $301 million in fiscal years 2005 through
2008, respectively, which, when added to the gaps in the June Financial Plan,
result in gaps of $516 million, $4.2 billion, $5.0 billion and $4.0 billion in
fiscal years 2005 through 2008, respectively.  The risks and possible resources set
forth in the City Comptroller's report include:  (i) the possibility that taxes
could be less than projected in the June Financial Plan by $146 million, $190
million, and $137 million in fiscal years 2005 through 2007, respectively, and
greater than projected in the June Financial Plan by $33 million in fiscal year
2008; (ii) possible increased overtime expenditures of $121 million in fiscal year
2005 and $75 million in each of fiscal years 2006 through 2008; and (iii) a
possible $200 million annual shortfall in State gap-closing assistance assumed in
the June Financial Plan for fiscal years 2005 through 2008, which reflects
shortfalls in assistance in the Governor's Executive Budget and which depends upon
the results of the State budget negotiation process.

      Various actions proposed in the Financial Plan are uncertain.  If these
measures cannot be implemented, the City will be required to take other actions to
decrease expenditures or increase revenues to maintain a balanced financial plan.

      The projections and assumptions contained in the Financial Plan are subject
to revision which may involve substantial change, and no assurance can be given
that these estimates and projections, which include actions which the City expects
will be taken but which are not within the City's control, will be realized.

      |X|   Ratings of the City's Bonds.  As of November 5, 2004, Moody's, S&P and
Fitch rated the City's general obligations bonds A2, A and A+, respectively.  These
ratings reflect only the views of Moody's, S&P and Fitch from which an explanation
of the significance of such ratings may be obtained.  There is no assurance that
those ratings will continue for any given period of time or that they will not be
revised downward or withdrawn entirely.  Any such downward revision or withdrawal
could have an adverse effect on the market prices of the City's bonds.  On November
26, 2002, S&P issued a negative outlook on City bonds and on May 27, 2003 changed
the outlook to stable.  On November 15, 2001, Moody's issued a negative outlook on
City bonds and on January 28, 2004 revised the outlook to stable.  On December 23,
2002, Fitch issued a negative outlook on City bonds and on December 8, 2003 changed
the outlook to stable.

      |X|   The City's Outstanding Indebtedness.  As of September 30, 2004, the
City and the Municipal Assistance Corporation for the City of New York had,
respectively, $30.783 billion and $1.757 billion of outstanding net long-term debt.

      For its normal operations, the City depends on aid from the State both to
enable the City to balance its budget and to meet its cash requirements.  There can
be no assurance that there will not be delays or reductions in State aid to the
City from the amounts projected; that State budgets in future fiscal years will be
adopted by the April 1 statutory deadline, or interim appropriations will be
enacted; or that any such reductions or delays will not have adverse effects on the
City's cash flow or expenditures.  In addition, the Federal budget negotiation
process could result in a reduction or a delay in the receipt of Federal grants
which could have adverse effects on the City's cash flow or revenues.

|X|   Pending Litigation.  The City is a defendant in lawsuits pertaining to material
matters and claims asserted that are incidental to performing routine governmental and
other functions. That litigation includes, but is not limited to, actions commenced and
claims asserted against the City arising out of alleged constitutional violations,
torts, breaches of contract, and other violations of law and condemnation proceedings.
While the ultimate outcome and fiscal impact, if any, on the City of such proceedings
and claims were not predictable, adverse determinations in certain of them might have a
material adverse effect upon the City's ability to carry out the Financial Plan.  For
the fiscal year ended on June 30, 2004, the City paid $591 million for judgments and
claims, $159.8 million of which was reimbursed by the Health & Hospitals Corporation.
The Financial Plan includes provisions for the payment of judgments and claims of
$612.2 million, $640.7 million, $675.5 million and $717.8 million for the 2005 through
2008 fiscal years, respectively.  The City has estimated that its potential future
liability for outstanding claims against it as of June 30, 2004 amounted to
approximately $4.4 billion.


Other  Investment  Techniques and  Strategies.  In seeking its  objective,  the Fund may
from time to time employ the types of investment  strategies and  investments  described
below.  It is not  required to use all of these  strategies  at all times,  and at times
may not use them.

      |X|   Floating Rate and Variable Rate Obligations.  Variable rate demand
obligations have a demand feature that allows the Fund to tender the obligation to the
issuer or a third party prior to its maturity.  The tender may be at par value plus
accrued interest, according to the terms of the obligations.

      The interest rate on a floating rate demand note is based on a stated prevailing
market rate, such as a bank's prime rate, the ninety one (91) day U.S. Treasury Bill
rate, or some other standard, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand note is also based on a stated
prevailing market rate but is adjusted automatically at specified intervals of not less
than one (1) year.  Generally, the changes in the interest rate on such securities
reduce the fluctuation in their market value.  As interest rates decrease or increase,
the potential for capital appreciation or depreciation is less than that for fixed-rate
obligations of the same maturity. The Manager may determine that an unrated floating
rate or variable rate demand obligation meets the Fund's quality standards by reason of
being backed by a letter of credit or guarantee issued by a bank that meets those
quality standards.

      Floating rate and variable rate demand notes that have a stated maturity in
excess of one (1) year may have features that permit the holder to recover the
principal amount of the underlying security at specified intervals not exceeding one
(1) year and upon no more than  thirty (30) days' notice.  The issuer of that type of
note normally has a corresponding right in its discretion, after a given period, to
prepay the outstanding principal amount of the note plus accrued interest. Generally
the issuer must provide a specified number of days' notice to the holder.

      |X|   Inverse Floaters and Other Derivative Investments.  The Fund will invest in
inverse floaters to seek higher tax-exempt yields than are available from fixed-rate
bonds that have comparable maturities and credit ratings.  Inverse floaters may offer
relatively high current income, reflecting the spread between short-term and long-term
tax-exempt interest rates. As long as the municipal yield curve remains relatively
steep and short term rates remain relatively low, owners of inverse floaters will have
the opportunity to earn interest at above-market rates because they receive interest at
the higher long-term rates but have paid for bonds with lower short-term rates. If the
yield curve flattens and shifts upward, an inverse floater will lose value more quickly
than a conventional long-term bond. In some cases, the holder of an inverse floater may
have an option to convert the floater to a fixed-rate bond, pursuant to a "rate-lock"
option.

      Some inverse floaters have a feature known as an interest rate "cap" as part of
the terms of the investment.  Investing in inverse floaters that have interest rate
caps might be part of a portfolio strategy to try to maintain a high current yield for
the Fund when the Fund has invested in inverse floaters that expose the Fund to the
risk of short-term interest rate fluctuations.  "Embedded" caps can be used to hedge a
portion of the Fund's exposure to rising interest rates.  When interest rates exceed a
pre-determined rate, the cap generates additional cash flows that offset the decline in
interest rates on the inverse floater, and the hedge is successful.  However, the Fund
bears the risk that if interest rates do not rise above the pre-determined rate, the
cap (which is purchased for additional cost) will not provide additional cash flows and
will expire worthless.

      Inverse floaters are a form of derivative investment. Certain derivatives, such
as options, futures, indexed securities and entering into swap agreements, can be used
to increase or decrease the Fund's exposure to changing security prices, interest rates
or other factors that affect the value of securities. However, these techniques could
result in losses to the Fund, if the Manager judges market conditions incorrectly or
employs a strategy that does not correlate well with the Fund's other investments.
These techniques can cause losses if the counterparty does not perform its promises. An
additional risk of investing in municipal securities that are derivative investments is
that their market value could be expected to vary to a much greater extent than the
market value of municipal securities that are not derivative investments but have
similar credit quality, redemption provisions and maturities.

      |X|   When-Issued and Delayed-Delivery Transactions.  The Fund can purchase
securities on a "when-issued" basis, and may purchase or sell such securities on a
"delayed-delivery" or "forward commitment" basis. "When-issued" or "delayed delivery"
refers to securities whose terms and indenture are available and for which a market
exists, but which are not available for immediate delivery.

      When such transactions are negotiated the price (which is generally expressed in
yield terms) is fixed at the time the commitment is made. Delivery and payment for the
securities take place at a later date.  Normally the settlement date is within six (6)
months of the purchase of municipal bonds and notes.  However, the Fund may, from time
to time, purchase municipal securities having a settlement date more than six (6)
months and possibly as long as two (2) years or more after the trade date. The
securities are subject to change in value from market fluctuation during the settlement
period. The value at delivery may be less than the purchase price. For example, changes
in interest rates in a direction other than that expected by the Manager before
settlement will affect the value of such securities and may cause loss to the Fund. No
income begins to accrue to the Fund on a when-issued security until the Fund receives
the security at settlement of the trade.

      The Fund will engage in when-issued transactions in order to secure what is
considered to be an advantageous price and yield at the time of entering into the
obligation.  When the Fund engages in when-issued or delayed-delivery transactions, it
relies on the buyer or seller, as the case may be, to complete the transaction.  Its
failure to do so may cause the Fund to lose the opportunity to obtain the security at a
price and yield it considers advantageous.

      When the Fund engages in when-issued and delayed-delivery transactions, it does
so for the purpose of acquiring or selling securities consistent with its investment
objective and policies or for delivery pursuant to options contracts it has entered
into, and not for the purpose of investment leverage. Although the Fund will enter into
when-issued or delayed-delivery purchase transactions to acquire securities, the Fund
may dispose of a commitment prior to settlement.  If the Fund chooses to dispose of the
right to acquire a when-issued security prior to its acquisition or to dispose of its
right to deliver or receive against a forward commitment, it may incur a gain or loss.


      At the time the Fund makes a commitment to purchase or sell a security on a
when-issued or forward commitment basis, it records the transaction on its books and
reflects the value of the security purchased. In a sale transaction, it records the
proceeds to be received, in determining its net asset value. The Fund will identify on
its books liquid securities of any type at least equal to the value of purchase
commitments until the Fund pays for the investment.


      When-issued transactions and forward commitments can be used by the Fund as a
defensive technique to hedge against anticipated changes in interest rates and prices.
For instance, in periods of rising interest rates and falling prices, the Fund might
sell securities in its portfolio on a forward commitment basis to attempt to limit its
exposure to anticipated falling prices.  In periods of falling interest rates and
rising prices, the Fund might sell portfolio securities and purchase the same or
similar securities on a when-issued or forward commitment basis, to obtain the benefit
of currently higher cash yields.

      |X|   Zero-Coupon Securities.  The Fund may buy zero-coupon and delayed interest
municipal securities.  Zero-coupon securities do not make periodic interest payments
and are sold at a deep discount from their face value.  The buyer recognizes a rate of
return determined by the gradual appreciation of the security, which is redeemed at
face value on a specified maturity date. This discount depends on the time remaining
until maturity, as well as prevailing interest rates, the liquidity of the security and
the credit quality of the issuer.  In the absence of threats to the issuer's credit
quality, the discount typically decreases as the maturity date approaches.  Some
zero-coupon securities are convertible, in that they are zero-coupon securities until a
predetermined date, at which time they convert to a security with a specified coupon
rate.

      Because zero-coupon securities pay no interest and compound semi-annually at the
rate fixed at the time of their issuance, their value is generally more volatile than
the value of other debt securities.  Their value may fall more dramatically than the
value of interest-bearing securities when interest rates rise.  When prevailing
interest rates fall, zero-coupon securities tend to rise more rapidly in value because
they have a fixed rate of return.

      The Fund's investment in zero-coupon securities may cause the Fund to recognize
income and make distributions to shareholders before it receives any cash payments on
the zero-coupon investment.  To generate cash to satisfy those distribution
requirements, the Fund may have to sell portfolio securities that it otherwise might
have continued to hold or to use cash flows from other sources such as the sale of Fund
shares.

      |X|   Puts and Standby Commitments.  When the Fund buys a municipal security
subject to a standby commitment to repurchase the security, the Fund is entitled to
same-day settlement from the purchaser. The Fund receives an exercise price equal to
the amortized cost of the underlying security plus any accrued interest at the time of
exercise.  A put purchased in conjunction with a municipal security enables the Fund to
sell the underlying security within a specified period of time at a fixed exercise
price.

      The Fund might purchase a standby commitment or put separately in cash or it
might acquire the security subject to the standby commitment or put (at a price that
reflects that additional feature). The Fund will enter into these transactions only
with banks and securities dealers that, in the Manager's opinion, present minimal
credit risks.  The Fund's ability to exercise a put or standby commitment will depend
on the ability of the bank or dealer to pay for the securities if the put or standby
commitment is exercised.  If the bank or dealer should default on its obligation, the
Fund might not be able to recover all or a portion of any loss sustained from having to
sell the security elsewhere.

      Puts and standby commitments are not transferable by the Fund. They terminate if
the Fund sells the underlying security to a third party.  The Fund intends to enter
into these arrangements to facilitate portfolio liquidity, although such arrangements
might enable the Fund to sell a security at a pre-arranged price that may be higher
than the prevailing market price at the time the put or standby commitment is
exercised.  However, the Fund might refrain from exercising a put or standby commitment
if the exercise price is significantly higher than the prevailing market price, to
avoid imposing a loss on the seller that could jeopardize the Fund's business
relationships with the seller.

      A put or standby commitment increases the cost of the security and reduces the
yield otherwise available from the security. Any consideration paid by the Fund for the
put or standby commitment will be reflected on the Fund's books as unrealized
depreciation while the put or standby commitment is held, and a realized gain or loss
when the put or commitment is exercised or expires. Interest income received by the
Fund from municipal securities subject to puts or stand-by commitments may not qualify
as tax exempt in its hands if the terms of the put or stand-by commitment cause the
Fund not to be treated as the tax owner of the underlying municipal securities.

      |X|                 Repurchase Agreements.  The Fund may acquire securities
subject to repurchase agreements.  It may do so for liquidity purposes to meet
anticipated redemptions of Fund shares, or pending the investment of the proceeds from
sales of Fund shares, or pending the settlement of portfolio securities transactions.

       In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to an approved vendor for delivery on an agreed upon future
date. The resale price exceeds the purchase price by an amount that reflects an
agreed-upon interest rate effective for the period during which the repurchase
agreement is in effect.  Approved vendors include U.S. commercial banks, U.S. branches
of foreign banks or broker-dealers that have been designated a primary dealer in
government securities. They must meet credit requirements set by the Manager from time
to time.

      The majority of these transactions run from day to day. Delivery pursuant to
resale typically will occur within one to five (5) days of the purchase.  Repurchase
agreements having a maturity beyond seven (7) days are subject to the Fund's limits on
holding illiquid investments. There is no limit on the amount of the Fund's net assets
that may be subject to repurchase agreements of seven (7) days or less.

      Repurchase agreements, considered "loans" under the Investment Company Act of
1940 (the "Investment Company Act"), are collateralized by the underlying security.
The Fund's repurchase agreements require that at all times while the repurchase
agreement is in effect, the collateral's value must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the Manager will
impose creditworthiness requirements to confirm that the vendor is financially sound
and will continuously monitor the collateral's value. However, if the vendor fails to
pay the resale price on the delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability to do so.

      Pursuant to an Exemptive Order issued by the Securities and Exchange Commission
(the "SEC"), the Fund, along with other affiliated entities managed by the Manager, may
transfer uninvested cash balances into one or more joint repurchase accounts. These
balances are invested in one or more repurchase agreements, secured by U.S. government
securities. Securities that are pledged as collateral for repurchase agreements are
held by a custodian bank until the agreements mature. Each joint repurchase arrangement
requires that the market value of the collateral be sufficient to cover payments of
interest and principal; however, in the event of default by the other party to the
agreement, retention or sale of the collateral may be subject to legal proceedings.

|X|   Illiquid Securities.  The Fund has percentage limitations that apply to
purchases of illiquid securities, as stated in the Prospectus. As a matter of
fundamental policy, the Fund cannot purchase any securities that are subject to
restrictions on resale.

|X|   Borrowing for Leverage.  The Investment Company Act imposes certain
restrictions on the borrowing activities of mutual funds.  The restrictions on
borrowing are designed to protect shareholders and their investment in a fund by
limiting a fund's ability to leverage its assets.  Leverage exists when a fund has the
right to a return on an investment that exceeds the amount the fund contributed to the
investment.  Borrowing money to make an investment is an example of how a fund
leverages its assets.  The use of leverage exposes shareholders and their investments
in a fund to a greater risk of loss.  For example, borrowing may cause the value of a
fund's shares to be more volatile than if the fund did not borrow.  A fund's borrowing
policy must be a fundamental investment policy.  Currently, under the Investment
Company Act, a mutual fund may borrow only from banks and the maximum amount it may
borrow is up to one-third of its total assets (including the amount borrowed) less all
liabilities and indebtedness other than borrowing. The Fund may also borrow up to 5% of
its total assets for temporary purposes from any person. Under the Investment Company
Act, there is a rebuttable presumption that a loan is temporary if it is repaid within
60 days and not extended or renewed.

      The Fund will pay interest on these loans, and that interest expense will raise
the overall expenses of the Fund and reduce its returns.  If it does borrow, its
expenses will be greater than comparable funds that do not borrow for leverage.  The
interest on a loan might be more (or less) than the yield on the securities purchased
with the loan proceeds.  Additionally, the Fund's net asset value per share might
fluctuate more than that of funds that do not borrow.

|X|   Loans of Portfolio Securities.  To attempt to raise income or raise cash for
liquidity purposes, the Fund may lend its portfolio securities to brokers, dealers and
other financial institutions approved by the Fund's Board of Trustees.  These loans are
limited to not more than 25% of the value of the Fund's total assets. The Fund
presently does not intend to lend securities, but if it does, the value of loaned
securities is not expected to exceed 5% of the value of the Fund's total assets. Income
from securities loans does not constitute exempt-interest income for the purpose of
paying tax-exempt dividends.

      There are risks in connection with securities lending.  The Fund might experience
a delay in receiving additional collateral to secure a loan, or a delay in recovery of
the loaned securities. The Fund must receive collateral for a loan. Under current
applicable regulatory requirements (which are subject to change), on each business day
the loan collateral must be at least equal to the value of the loaned securities.  It
must consist of cash, bank letters of credit, securities of the U.S. government or its
agencies or instrumentalities, or other cash equivalents in which the Fund is permitted
to invest.  To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the letter.  The
terms of the letter of credit and the issuing bank both must be satisfactory to the
Fund.

      When it lends securities, the Fund receives amounts equal to the dividends or
interest on the loaned securities.  It also receives one or more of (a) negotiated loan
fees, (b) interest on securities used as collateral, and (c) interest on short-term
debt securities purchased with the loan collateral. Either type of interest may be
shared with the borrower.  The Fund may pay reasonable finder's, custodian and
administrative or other fees in connection with these loans.  The terms of the Fund's
loans must meet applicable tests under the Internal Revenue Code and must permit the
Fund to reacquire loaned securities on five (5) days' notice or in time to vote on any
important matter.


|X|   Hedging.  The Fund can use hedging to attempt to protect against declines in
the market value of its portfolio, to permit the Fund to retain unrealized gains in the
value of portfolio securities that have appreciated, or to facilitate selling
securities for investment reasons. To do so the Fund could:
      o  sell interest rate futures or municipal bond index futures,
      o  buy puts on such futures or securities, or
      o  write covered calls on securities, municipal bond indices, interest rate
         futures or municipal bond index futures. Covered calls can also be written on
         debt securities to attempt to increase the Fund's income, but that income
         would not be tax-exempt. Therefore it is unlikely that the Fund would write
         covered calls for that purpose.

      The Fund can also use hedging to establish a position in the debt securities
market as a temporary substitute for purchasing individual debt securities. In that
case the Fund would normally seek to purchase the securities, and then terminate that
hedging position. For this type of hedging, the Fund could:
      o  buy interest rate futures or municipal bond index futures, or
      o  buy calls on such futures or on securities.

      The Fund is not obligated to use hedging instruments, even though it is permitted
to use them in the Manager's discretion, as described below.  The Fund's strategy of
hedging with futures and options on futures will be incidental to the Fund's investment
activities in the underlying cash market. The particular hedging instruments the Fund
can use are described below. The Fund may employ new hedging instruments and strategies
when they are developed, if those investment methods are consistent with the Fund's
investment objective and are permissible under applicable regulations governing the
Fund.

|_|   Futures.  The Fund can buy and sell futures contracts relating to interest
rates (these are called "interest rate futures") and municipal bond indices (these are
referred to as "municipal bond index futures").  As a fundamental policy, these are the
only futures contracts the Fund can buy and sell.

      An interest rate future obligates the seller to deliver (and the purchaser to
take) cash or a specific type of debt security to settle the futures transaction.
Either party could also enter into an offsetting contract to close out the futures
position.

      A "municipal bond index" assigns relative values to the municipal bonds in the
index, and is used as the basis for trading long-term municipal bond futures
contracts.  Municipal bond index futures are similar to interest rate futures except
that settlement is made only in cash.  The obligation under the contract may also be
satisfied by entering into an offsetting contract. The strategies which the Fund
employs in using municipal bond index futures are similar to those with regard to
interest rate futures.

      No money is paid or received by the Fund on the purchase or sale of a future.
Upon entering into a futures transaction, the Fund will be required to deposit an
initial margin payment in cash or U.S. government securities with the futures
commission merchant (the "futures broker").  Initial margin payments will be deposited
with the Fund's custodian bank in an account registered in the futures broker's name.
However, the futures broker can gain access to that account only under certain
specified conditions.  As the future is marked to market (that is, its value on the
Fund's books is changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures broker daily.

      At any time prior to the expiration of the future, the Fund can elect to close
out its position by taking an opposite position at which time a final determination of
variation margin is made and additional cash is required to be paid by or released to
the Fund.  Any gain or loss is then realized by the Fund on the future for tax
purposes.  Although interest rate futures by their terms call for settlement by the
delivery of debt securities, in most cases the obligation is fulfilled without such
delivery by entering into an offsetting transaction.  All futures transactions are
effected through a clearing house associated with the exchange on which the contracts
are traded.

      The Fund may concurrently buy and sell futures contracts in a strategy
anticipating that the future the Fund purchased will perform better than the future the
Fund sold.  For example, the Fund might buy municipal bond futures and concurrently
sell U.S. Treasury Bond futures (a type of interest rate future).  The Fund would
benefit if municipal bonds outperform U.S. Treasury Bonds on a duration-adjusted
basis.

      Duration is a volatility measure that refers to the expected percentage change in
the value of a bond resulting from a change in general interest rates (measured by each
1% change in the rates on U.S. Treasury securities).  For example, if a bond has an
effective duration of three (3) years, a 1% increase in general interest rates would be
expected to cause the value of the bond to decline about 3%.  There are risks that this
type of futures strategy will not be successful. U.S. Treasury bonds might perform
better on a duration-adjusted basis than municipal bonds, and the assumptions about
duration that were used might be incorrect (in this case, the duration of municipal
bonds relative to U.S. Treasury Bonds might have been greater than anticipated).

|_|   Put and Call Options.  The Fund can buy and sell certain kinds of put options
(puts) and call options (calls). These strategies are described below.

|_|   Writing Covered Call Options.  The Fund can write (that is, sell) call
options. The Fund's call writing is subject to a number of restrictions:
(1)   After the Fund writes a call, not more than 25% of the Fund's total assets
    may be subject to calls.
(2)   Calls the Fund sells must be listed on a securities or commodities exchange
    or quoted on NASDAQ, the automated quotation system of The Nasdaq Stock Market,
    Inc. or traded in the over-the-counter market.
(3)   Each call the Fund writes must be "covered" while it is outstanding. That
    means the Fund must own the investment on which the call was written.
(4)   The Fund may write calls on futures contracts whether or not it owns them.

      When the Fund writes a call on a security, it receives cash (a premium).  The
Fund agrees to sell the underlying investment to a purchaser of a corresponding call on
the same security during the call period at a fixed exercise price regardless of market
price changes during the call period.  The call period is usually not more than nine
(9) months.  The exercise price may differ from the market price of the underlying
security.  The Fund has retained the risk of loss that the price of the underlying
security may decline during the call period.  That risk may be offset to some extent by
the premium the Fund receives.  If the value of the investment does not rise above the
call price, it is likely that the call will lapse without being exercised.  In that
case the Fund would keep the cash premium and the investment.

      When the Fund writes a call on an index, it receives cash (a premium).  If the
buyer of the call exercises it, the Fund will settle the transaction by paying an
amount of cash equal to the difference between the closing price of the call and the
exercise price, multiplied by a specified multiple that determines the total value of
the call for each point of difference.  If the value of the underlying investment does
not rise above the call price, it is likely that the call will lapse without being
exercised.  In that case the Fund would keep the cash premium.

      The Fund's custodian bank, or a securities depository acting for the custodian
bank, will act as the Fund's escrow agent through the facilities of the Options
Clearing Corporation ("OCC"), as to the investments on which the Fund has written calls
traded on exchanges, or as to other acceptable escrow securities.  In that way, no
margin will be required for such transactions. OCC will release the securities on the
expiration of the calls or upon the Fund's entering into a closing purchase transaction.

      When the Fund writes an over-the-counter ("OTC") option, it will enter into an
arrangement with a primary U.S. government securities dealer which will establish a
formula price at which the Fund will have the absolute right to repurchase that OTC
option.  The formula price would generally be based on a multiple of the premium
received for the option, plus the amount by which the option is exercisable below the
market price of the underlying security (that is, the option is "in-the-money").  When
the Fund writes an OTC option, it will treat as illiquid (for purposes of its
restriction on illiquid securities) the mark-to-market value of any OTC option held by
it, unless the option is subject to a buy-back agreement by the executing broker.  The
Securities and Exchange Commission is evaluating whether OTC options should be
considered liquid securities. The procedure described above could be affected by the
outcome of that evaluation.

      To terminate its obligation on a call it has written, the Fund may purchase a
corresponding call in a "closing purchase transaction."  The Fund will then realize a
profit or loss, depending upon whether the net of the amount of the option transaction
costs and the premium received on the call the Fund wrote was more or less than the
price of the call the Fund purchased to close out the transaction.  A profit may also
be realized if the call lapses unexercised, because the Fund retains the underlying
investment and the premium received.  Any such profits are considered short-term
capital gains for federal tax purposes, as are premiums on lapsed calls. When
distributed by the Fund they are taxable as ordinary income.

|_|   Writing Uncovered Call Options on Futures Contracts. The Fund may also write
calls on futures contracts without owning the futures contract or securities
deliverable under the contract. To do so, at the time the call is written, the Fund
must cover the call by segregating in escrow an equivalent dollar value of liquid
assets. The Fund will identify additional liquid assets on its books if the value of
the escrowed assets drops below 100% of the current value of the future.  Because of
this escrow requirement, in no circumstances would the Fund's receipt of an exercise
notice as to that future put the Fund in a "short" futures position.

|_|   Purchasing Calls and Puts.  The Fund may buy calls only on securities,
broadly-based municipal bond indices, municipal bond index futures and interest rate
futures. It may also buy calls to close out a call it has written, as discussed above.
Calls the Fund buys must be listed on a securities or commodities exchange, or quoted
on NASDAQ, or traded in the over-the-counter market. A call or put option may not be
purchased if the purchase would cause the value of all the Fund's put and call options
to exceed 5% of its total assets.

      When the Fund purchases a call (other than in a closing purchase transaction), it
pays a premium. For calls on securities that the Fund buys, it has the right to buy the
underlying investment from a seller of a corresponding call on the same investment
during the call period at a fixed exercise price. The Fund benefits only if (1) the
call is sold at a profit or (2) the call is exercised when the market price of the
underlying investment is above the sum of the exercise price plus the transaction costs
and premium paid for the call.  If the call is not either exercised or sold (whether or
not at a profit), it will become worthless at its expiration date. In that case the
Fund will lose its premium payment and the right to purchase the underlying investment.
Calls on municipal bond indices, interest rate futures and municipal bond index futures
are settled in cash rather than by delivering the underlying investment. Gain or loss
depends on changes in the securities included in the index in question (and thus on
price movements in the debt securities market generally) rather than on changes in
price of the individual futures contract.

      The Fund may buy only those puts that relate to securities that the Fund owns,
broadly-based municipal bond indices, municipal bond index futures or interest rate
futures (whether or not the Fund owns the futures). The Fund may not sell puts other
than puts it has previously purchased.

      Buying a put on an investment the Fund does not own (such as an index or future)
permits the Fund to resell the put or to buy the underlying investment and sell it at
the exercise price. The resale price will vary inversely to the price of the underlying
investment. If the market price of the underlying investment is above the exercise
price and, as a result, the put is not exercised, the put will become worthless on its
expiration date.

      When the Fund purchases a put, it pays a premium. The Fund then has the right to
sell the underlying investment to a seller of a corresponding put on the same
investment during the put period at a fixed exercise price. Puts on municipal bond
indices are settled in cash. Buying a put on a debt security, interest rate future or
municipal bond index future the Fund owns enables it to protect itself during the put
period against a decline in the value of the underlying investment below the exercise
price.  If the market price of the underlying investment is equal to or above the
exercise price and as a result the put is not exercised or resold, the put will become
worthless at its expiration date. In that case the Fund will lose its premium payment
and the right to sell the underlying investment.  A put may be sold prior to expiration
(whether or not at a profit).

|_|   Risks of Hedging with Options and Futures.  The use of hedging instruments
requires special skills and knowledge of investment techniques that are different than
what is required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly, hedging
strategies may reduce the Fund's returns. The Fund could also experience losses if the
prices of its futures and options positions were not correlated with its other
investments.

      The Fund's option activities could affect its portfolio turnover rate and
brokerage commissions.  The exercise of calls written by the Fund might cause the Fund
to sell related portfolio securities, thus increasing its turnover rate.  The exercise
by the Fund of puts on securities will cause the sale of underlying investments,
increasing portfolio turnover.  Although the decision whether to exercise a put it
holds is within the Fund's control, holding a put might cause the Fund to sell the
related investments for reasons that would not exist in the absence of the put.

      The Fund could pay a brokerage commission each time it buys a call or put, sells
a call or put, or buys or sells an underlying investment in connection with the
exercise of a call or put.  Such commissions might be higher on a relative basis than
the commissions for direct purchases or sales of the underlying investments.  Premiums
paid for options are small in relation to the market value of the underlying
investments. Consequently, put and call options offer large amounts of leverage. The
leverage offered by trading in options could result in the Fund's net asset value being
more sensitive to changes in the value of the underlying investment.

      If a covered call written by the Fund is exercised on an investment that has
increased in value, the Fund will be required to sell the investment at the call price.
It will not be able to realize any profit if the investment has increased in value
above the call price.

      There is a risk in using short hedging by selling interest rate futures and
municipal bond index futures or purchasing puts on municipal bond indices or futures to
attempt to protect against declines in the value of the Fund's securities.  The risk is
that the prices of such futures or the applicable index will correlate imperfectly with
the behavior of the cash (that is, market) prices of the Fund's securities. It is
possible for example, that while the Fund has used hedging instruments in a short
hedge, the market might advance and the value of debt securities held in the Fund's
portfolio might decline.  If that occurred, the Fund would lose money on the hedging
instruments and also experience a decline in value of its debt securities.  However,
while this could occur over a brief period or to a very small degree, over time the
value of a diversified portfolio of debt securities will tend to move in the same
direction as the indices upon which the hedging instruments are based.

      The risk of imperfect correlation increases as the composition of the Fund's
portfolio diverges from the securities included in the applicable index.  To compensate
for the imperfect correlation of movements in the price of debt securities being hedged
and movements in the price of the hedging instruments, the Fund might use hedging
instruments in a greater dollar amount than the dollar amount of debt securities being
hedged. It might do so if the historical volatility of the prices of the debt
securities being hedged is greater than the historical volatility of the applicable
index.

      The ordinary spreads between prices in the cash and futures markets are subject
to distortions due to differences in the natures of those markets.  All participants in
the futures markets are subject to margin deposit and maintenance requirements.  Rather
than meeting additional margin deposit requirements, investors may close out futures
contracts through offsetting transactions which could distort the normal relationship
between the cash and futures markets. From the point of view of speculators, the
deposit requirements in the futures markets are less onerous than margin requirements
in the securities markets.  Therefore, increased participation by speculators in the
futures markets may cause temporary price distortions.

      The Fund may use hedging instruments to establish a position in the municipal
securities markets as a temporary substitute for the purchase of individual securities
(long hedging). It is possible that the market might decline.  If the Fund then
concludes not to invest in such securities because of concerns that there might be
further market decline or for other reasons, the Fund will realize a loss on the
hedging instruments that is not offset by a reduction in the purchase price of the
securities.
      An option position may be closed out only on a market that provides secondary
trading for options of the same series. There is no assurance that a liquid secondary
market will exist for a particular option.  If the Fund could not effect a closing
purchase transaction due to a lack of a market, it would have to hold the callable
investment until the call lapsed or was exercised, and could experience losses.

|_|   Interest Rate Swap Transactions.  In an interest rate swap, the Fund and
another party exchange their right to receive or their obligation to pay interest on a
security.  For example, they might swap a right to receive floating rate payments for
fixed rate payments.  The Fund can enter into swaps only on securities it owns.  The
Fund may not enter into swaps with respect to more than 25% of its total assets.  Also,
the Fund will identify liquid assets on its books (such as cash or U.S. government
securities) to cover any amounts it could owe under swaps that exceed the amounts it is
entitled to receive, and it will adjust that amount daily, as needed.  Income from
interest rate swaps may be taxable.

      Swap agreements entail both interest rate risk and credit risk.  There is a risk
that, based on movements of interest rates in the future, the payments made by the Fund
under a swap agreement will have been greater than those received by it.  Credit risk
arises from the possibility that the counterparty will default.  If the counterparty to
an interest rate swap defaults, the Fund's loss will consist of the net amount of
contractual interest payments that the Fund has not yet received.  The Manager will
monitor the creditworthiness of counterparties to the Fund's interest rate swap
transactions on an ongoing basis.

      The Fund can enter into swap transactions with appropriate counterparties
pursuant to master netting agreements.  A master netting agreement provides that all
swaps done between the Fund and that counterparty under the master agreement shall be
regarded as parts of an integral agreement. If on any date amounts are payable under
one or more swap transactions, the net amount payable on that date shall be paid.  In
addition, the master netting agreement may provide that if one party defaults generally
or on one swap, the counterparty can terminate the swaps with that party.  Under master
netting agreements, if there is a default resulting in a loss to one party, that
party's damages are calculated by reference to the average cost of a replacement swap
with respect to each swap.  The gains and losses on all swaps are then netted, and the
result is the counterparty's gain or loss on termination. The termination of all swaps
and the netting of gains and losses on termination is generally referred to as
"aggregation."


|_|   Regulatory Aspects of Hedging Instruments.  The Commodity Futures Trading
 Commission ("CFTC") recently eliminated limitations on futures trading by certain
 regulated entities including registered investment companies. Consequently registered
 investment companies may engage in unlimited futures transactions and options thereon
 provided that the Fund claims an exclusion from regulation as a commodity pool
 operator.  The Fund has claimed such an exclusion from registration as a commodity
 pool operator under the Commodity Exchange Act ("CEA"). The Fund may use futures and
 options for hedging and non-hedging purposes to the extent consistent with its
 investment objective, internal risk management guidelines adopted by the Manager (as
 they may be amended from time to time), and as otherwise set forth in the Fund's
 prospectus or this statement of additional information.


      Transactions in options by the Fund are subject to limitations established by the
option exchanges. The exchanges limit the maximum number of options that may be written
or held by a single investor or group of investors acting in concert. Those limits
apply regardless of whether the options were written or purchased on the same or
different exchanges, or are held in one or more accounts or through one or more
different exchanges or through one or more brokers.  Thus, the number of options that
the Fund may write or hold may be affected by options written or held by other
entities, including other investment companies having the same adviser as the Fund (or
an adviser that is an affiliate of the Fund's adviser).  The exchanges also impose
position limits on futures transactions.  An exchange may order the liquidation of
positions found to be in violation of those limits and may impose certain other
sanctions.

      Under interpretations of staff members of the Securities and Exchange Commission
regarding applicable provisions of the Investment Company Act, when the Fund purchases
an interest rate future or municipal bond index future, it must segregate cash or
readily marketable short-term debt instruments in an amount equal to the purchase price
of the future, less the margin deposit applicable to it.

|X|   Temporary Defensive Investments.  The securities the Fund can invest in for
temporary defensive purposes include the following:
o     short-term municipal securities;
o     obligations issued or guaranteed by the U.S. government or its agencies or
         instrumentalities;
o     corporate debt securities rated within the three highest grades by a
         nationally recognized rating agency;
o     commercial paper rated "A-1" by S&P, or having a comparable rating by another
         nationally-recognized rating agency; and
o     certificates of deposit of domestic banks with assets of $1 billion or more.

|X|   Portfolio Turnover.  A change in the securities held by the Fund from buying
and selling investments is known as "portfolio turnover." Short-term trading increases
the rate of portfolio turnover and could increase the Fund's transaction costs.
However, the Fund ordinarily incurs little or no brokerage expense because most of the
Fund's portfolio transactions are principal trades that do not require payment of
brokerage commissions.


      The Fund ordinarily does not trade securities to achieve capital gains, because
they would not be tax-exempt income. To a limited degree, the Fund may engage in
short-term trading to attempt to take advantage of short-term market variations. It may
also do so to dispose of a portfolio security prior to its maturity. That might be done
if, on the basis of a revised credit evaluation of the issuer or other considerations,
the Manager believes such disposition is advisable or the Fund needs to generate cash
to satisfy requests to redeem Fund shares.  In those cases, the Fund may realize a
capital gain or loss on its investments.  The Fund's annual portfolio turnover rate
during the prior five fiscal years is provided in the Financial Highlights table at the
end of the Fund's prospectus.


|X|   Taxable  Investments.  While the Fund can  invest up to 20% of its net  assets
in  investments  that generate  income  subject to income taxes,  it does not anticipate
investing  substantial  amounts of its assets in taxable investments under normal market
conditions or as part of its normal trading  strategies  and policies.  To the extent it
invests  in taxable  securities,  the Fund  would not be able to meet its  objective  of
providing  tax exempt  income to its  shareholders.  Taxable  investments  include,  for
example,  hedging  instruments,   repurchase  agreements,  and  some  of  the  types  of
securities the Fund would buy for temporary defensive purposes.



Other Investment Restrictions


|X|   What Are  "Fundamental  Policies?"  Fundamental  policies  are those  policies
that the Fund has  adopted to govern  its  investments  that can be changed  only by the
vote of a "majority" of the Fund's outstanding  voting securities.  Under the Investment
Company Act, such a "majority"  vote is defined as the vote of the holders of the lesser
of:
      o  67% or more of the shares  present  or  represented  by proxy at a  shareholder
         meeting,  if the holders of more than 50% of the outstanding shares are present
         or represented by proxy, or
      o  more than 50% of the outstanding shares.

      The Fund's investment  objective is a fundamental policy. Other policies described
in the Prospectus or this Statement of Additional  Information are "fundamental" only if
they are  identified  as such.  The Fund's Board of Trustees can change  non-fundamental
policies  without  shareholder  approval.  However,  significant  changes to  investment
policies  will  be  described  in  supplements  or  updates  to the  Prospectus  or this
Statement  of  Additional  Information,  as  appropriate.  The Fund's  most  significant
investment policies are described in the Prospectus.

|_|   Does the Fund Have Additional  Fundamental Policies?  The following investment
restrictions are fundamental policies of the Fund:

o     The  Fund  cannot  invest  in  securities  or  other  investments  other  than
municipal securities, the temporary investments described in its Prospectus,  repurchase
agreements,   covered  calls,   private  activity   municipal   securities  and  hedging
instruments  described  in  "About  the Fund" in the  Prospectus  or this  Statement  of
Additional Information.

o     The  Fund  cannot  make  loans,  except  to the  extent  permitted  under  the
Investment Company Act, the rules or regulations  thereunder or any exemption  therefrom
that is applicable to the Fund, as such statute,  rules or regulations may be amended or
interpreted from time to time.

o     The Fund may not  borrow  money,  except  to the  extent  permitted  under the
Investment Company Act, the rules or regulations  thereunder or any exemption  therefrom
that is applicable to the Fund, as such statute,  rules or regulations may be amended or
interpreted from time to time.

o     With respect to 75% of its assets, the Fund cannot purchase  securities issued
or  guaranteed  by any one issuer  (other than the U.S.  government  or its  agencies or
instrumentalities),  if more than 5% of the Fund's  total  assets  would be  invested in
securities  of that  issuer or the Fund  would  then own more than 10% of that  issuer's
voting securities.

o     The Fund cannot invest 25% or more of its total assets in any  industry.  That
limit does not apply to securities  issued or  guaranteed by the U.S.  government or its
agencies and  instrumentalities or securities issued by investment  companies.  Nor does
that limit apply to municipal securities in general or to New York municipal securities.

o     The Fund cannot  invest in real  estate,  physical  commodities  or  commodity
contracts,  except to the extent  permitted under the Investment  Company Act, the rules
or  regulations  thereunder  or any  exemption  therefrom,  as such  statute,  rules  or
regulations may be amended or interpreted from time to time.

o     The Fund  cannot  underwrite  securities  or  invest  in  securities  that are
subject to restrictions on resale.

o     The Fund  cannot  buy or sell  futures  contracts  other  than  interest  rate
futures and municipal bond index futures.

o     The Fund cannot issue "senior  securities," but this does not prohibit certain
investment  activities  for which assets of the Fund are  designated as  segregated,  or
margin,  collateral  or  escrow  arrangements  are  established,  to cover  the  related
obligations.  Examples of those activities  include borrowing money,  reverse repurchase
agreements,  delayed-delivery  and  when-issued  arrangements  for portfolio  securities
transactions and contracts to buy or sell derivatives,  hedging instruments,  options or
futures.

      Additionally,  as a non-fundamental  investment  policy, the Fund cannot invest in
securities  of other  investment  companies,  except to the extent  permitted  under the
Investment Company Act, the rules or regulations  thereunder or any exemption therefrom,
as such statute, rules or regulations may be amended or interpreted from time to time.

      Unless the  Prospectus  or  Statement  of  Additional  Information  states  that a
percentage  restriction  applies on an ongoing  basis,  it applies  only at the time the
Fund makes an investment  (except in the case of borrowing and  investments  in illiquid
securities).  In that  case the Fund  need not sell  securities  to meet the  percentage
limits if the value of the investment increases in proportion to the size of the Fund.

Diversification.  The Fund  intends to be  "diversified"  as  defined in the  Investment
Company Act and to satisfy the restrictions  against investing too much of its assets in
any "issuer" as set forth in the restrictions  above. In implementing  this policy,  the
identification  of  the  issuer  of a  municipal  security  depends  on  the  terms  and
conditions  of the  security.  When the assets  and  revenues  of an agency,  authority,
instrumentality  or  other  political   subdivision  are  separate  from  those  of  the
government  creating it and the  security  is backed only by the assets and  revenues of
the subdivision, agency, authority or instrumentality,  the latter would be deemed to be
the sole issuer.  Similarly,  if an  industrial  development  bond is backed only by the
assets and revenues of the  non-governmental  user, then that user would be deemed to be
the sole  issuer.  However,  if in either  case the  creating  government  or some other
entity guarantees a security,  the guarantee would be considered a separate security and
would be treated as an issue of that government or other entity.


      In implementing the Fund's policy not to concentrate its investments,  the Manager
will consider a non-governmental  user of facilities financed by industrial  development
bonds as being  in a  particular  industry.  That is done  even  though  the  bonds  are
municipal  securities,  as to which the Fund has no  concentration  limitation.  In this
regard, the Fund's  concentration  policy is not applicable to the Fund's investments in
tobacco  settlement  revenue  bonds  because  those  municipal  bonds are  issued by the
respective  states or their  instrumentalities,  who are not  members  of any  industry.
Although this application of the concentration  restriction is not a fundamental  policy
of the Fund, it will not be changed without shareholder approval.


How the Fund Is Managed

Organization and History.  The Fund is an open-end,  diversified  management  investment
company with an unlimited number of authorized shares of beneficial  interest.  The Fund
was organized as a Massachusetts business trust in 1984.

      Classes of Shares. The Trustees are authorized,  without shareholder  approval, to
create new series and classes of shares.  The Trustees may  reclassify  unissued  shares
of the Fund into  additional  series or classes of shares.  The Trustees also may divide
or  combine  the shares of a class  into a greater  or lesser  number of shares  without
changing the proportionate  beneficial  interest of a shareholder in the Fund. Shares do
not have cumulative  voting rights or preemptive or subscription  rights.  Shares may be
voted in person or by proxy at shareholder meetings.

      The Fund currently has three classes of shares: Class A, Class B and Class C.
All classes invest in the same investment portfolio.  Each class of shares:
o     has its own dividends and distributions,
o     pays certain expenses which may be different for the different classes,
o     may have a different net asset value,
o     may have separate voting rights on matters in which interests of one class
         are different from interests of another class, and
o     votes as a class on matters that affect that class alone.

      Shares are freely transferable, and each share of each class has one vote at
shareholder meetings, with fractional shares voting proportionally on matters submitted
to the vote of shareholders.  Each share of the Fund represents an interest in the Fund
proportionately equal to the interest of each other share of the same class.


      Meetings of  Shareholders.  As a  Massachusetts  business  trust,  the Fund is not
required to hold, and does not plan to hold,  regular annual  meetings of  shareholders,
but may do so from time to time on  important  matters or when  required to do so by the
Investment  Company Act or other  applicable law.  Shareholders  have the right,  upon a
vote or declaration in writing of two-thirds of the  outstanding  shares of the Fund, to
remove a Trustee or to take other action described in the Fund's Declaration of Trust.


      The Trustees will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of 10% of its outstanding
shares.  If the Trustees receive a request from at least 10 shareholders stating that
they wish to communicate with other shareholders to request a meeting to remove a
Trustee, the Trustees will then either make the Fund's shareholder list available to
the applicants or mail their communication to all other shareholders at the applicants'
expense. The shareholders making the request must have been shareholders for at least
six months and must hold shares of the Fund valued at $25,000 or more or constituting
at least 1% of the Fund's outstanding shares. The Trustees may also take other action
as permitted by the Investment Company Act.

      Shareholder and Trustee Liability.  The Fund's Declaration of Trust contains an
express disclaimer of shareholder or Trustee liability for the Fund's obligations. It
also provides for indemnification and reimbursement of expenses out of the Fund's
property for any shareholder held personally liable for its obligations.  The
Declaration of Trust also states that upon request, the Fund shall assume the defense
of any claim made against a shareholder for any act or obligation of the Fund and shall
satisfy any judgment on that claim.  Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner" under
certain circumstances. However, the risk that a Fund shareholder will incur financial
loss from being held liable as a "partner" of the Fund is limited to the relatively
remote circumstances in which the Fund would be unable to meet its obligations.

      The Fund's contractual arrangements state that any person doing business with the
Fund (and each shareholder of the Fund) agrees under its Declaration of Trust to look
solely to the assets of the Fund for satisfaction of any claim or demand that may arise
out of any dealings with the Fund. Additionally, the Trustees shall have no personal
liability to any such person, to the extent permitted by law.

Board of Trustees and Oversight Committees. The Fund is governed by a Board of
Trustees, which is responsible for protecting the interests of shareholders under
Massachusetts law. The Trustees meet periodically throughout the year to oversee the
Fund's activities, review its performance, and review the actions of the Manager.


      The Board of Trustees has an Audit Committee, a Regulatory & Oversight Committee,
a Governance Committee, and a Proxy Committee.  The Audit Committee is comprised solely
of Independent Trustees.  The members of the Audit Committee are Joel Motley
(Chairman), Mary Miller, Edward V. Regan and Kenneth Randall. The Audit Committee held
7 meetings during the Fund's fiscal year ended September 30, 2004. The Audit Committee
provides the Board with recommendations regarding the selection of the Fund's
independent auditor. The Audit Committee also reviews the scope and results of audits
and the audit fees charged, reviews reports from the Fund's independent auditor
concerning the Fund's internal accounting procedures, and controls and reviews reports
of the Manager's internal auditor, among other duties as set forth in the Committee's
charter.

      The members of the Regulatory & Oversight Committee are Robert Galli (Chairman),
Joel Motley and Phillip Griffiths. The Regulatory & Oversight Committee held 6 meetings
during the Fund's fiscal year ended September 30, 2004. The Regulatory & Oversight
Committee evaluates and reports to the Board on the Fund's contractual arrangements,
including the Investment Advisory and Distribution Agreements, transfer and shareholder
service agreements and custodian agreements as well as the policies and procedures
adopted by the Fund to comply with the Investment Company Act and other applicable law,
among other duties as set forth in the Committee's charter.

      The members of the Governance Committee are Phillip Griffiths (Chairman), Kenneth
Randall and Russell S. Reynolds, Jr.  The Governance Committee held 7 meetings during
the Fund's fiscal year ended September 30, 2004. The Governance Committee reviews the
Fund's governance guidelines, the adequacy of the Fund's Codes of Ethics, and develops
qualification criteria for Board members consistent with the Fund's governance
guidelines, among other duties set forth in the Committee's charter.

      The members of the Proxy Committee are Edward Regan (Chairman), Russell S.
Reynolds, Jr. and John Murphy.  The Proxy Committee held 1 meeting during the Fund's
fiscal year ended September 30, 2004.  The Proxy Committee provides the Board with
recommendations for proxy voting and monitors proxy voting by the Fund.

Trustees and Officers of the Fund. Except for Mr. Murphy, each of the Trustees is an
"Independent Trustee," as defined under the Investment Company Act.  Mr. Murphy is an
"Interested Trustee," because he is affiliated with the Manager by virtue of his
positions as an officer and director of the Manager, and as a shareholder of its parent
company.

      The Fund's Trustees and officers and their positions held with the Fund and
length of service in such position(s) and their principal occupations and business
affiliations during the past five years are listed in the chart below. The information
for the Trustees also includes the dollar range of shares of the Fund as well as the
aggregate dollar range of shares beneficially owned in any of the Oppenheimer funds
overseen by the Trustees. All of the Trustees are also trustees or directors of the
following publicly offered Oppenheimer funds (referred to as "Board I Funds", except
for Mr. Murphy, who is trustee or director for 14 of the Board I Funds):


Oppenheimer AMT-Free Municipals            Oppenheimer Global Opportunities Fund
Oppenheimer AMT-Free New York Municipals   Oppenheimer Gold & Special Minerals Fund
Oppenheimer California Municipal Fund      Oppenheimer Growth Fund
Oppenheimer Balanced Fund                  Oppenheimer International Growth Fund

                                           Oppenheimer  International  Small Company

Oppenheimer Capital Appreciation Fund      Fund
Oppenheimer Capital Preservation Fund      Oppenheimer Money Market Fund, Inc.
Oppenheimer Developing Markets Fund        Oppenheimer Multi-Sector Income Trust
Oppenheimer Discovery Fund                 Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Growth Fund           Oppenheimer Series Fund, Inc.
Oppenheimer Emerging Technologies Fund     Oppenheimer U.S. Government Trust
Oppenheimer Enterprise Fund
Oppenheimer Global Fund


      In addition to being a trustee or director of the Board I Funds, Mr. Galli is
also a director or trustee of 10 other portfolios in the OppenheimerFunds complex.
Present or former officers, directors, trustees and employees (and their immediate
family members) of the Fund, the Manager and its affiliates, and retirement plans
established by them for their employees are permitted to purchase Class A shares of the
Fund and the other Oppenheimer funds at net asset value without sales charge. The sales
charges on Class A shares is waived for that group because of the economies of sales
efforts realized by the Distributor.


      Messrs. Fielding, Gillespie, Miao, Murphy, Petersen, Vandehey, Vottiero, Wixted
and Zack and Mses. Bloomberg, Ives and Lee respectively hold the same offices with one
or more of the other Board I Funds as with the Fund.  As of October 29, 2004, the
Trustees and officers of the Fund, as a group, owned of record or beneficially 2.73% of
the Fund's Class A shares.  The foregoing statement does not reflect ownership of
shares of the Fund held of record by an employee benefit plan for employees of the
Manager, other than the shares beneficially owned under the plan by the officers of the
Fund listed above. In addition, each Independent Trustee, and his or her family
members, do not own securities of either the Manager or Distributor of the Board I
Funds or any person directly or indirectly controlling, controlled by or under common
control with the Manager or Distributor.

|X|   Affiliated Transactions and Material Business Relationships. Mr. Reynolds has
reported he has a controlling interest in The Directorship Group, Inc. ("The
Directorship Search Group"), a director recruiting firm that provided consulting
services to Massachusetts Mutual Life Insurance Company (which controls the Manager)
for fees of $137,500 for calendar year ended December 31, 2002. Mr. Reynolds reported
that The Directorship Search Group did not provide consulting services to Massachusetts
Mutual Life Insurance Company during the calendar year ended December 31, 2003, and
does not expect to provide any such services in the calendar year ended December 31,
2004.


      The Independent Trustees have unanimously (except for Mr. Reynolds, who
abstained) determined that the consulting arrangements between The Directorship Search
Group and Massachusetts Mutual Life Insurance Company were not material business or
professional relationships that would compromise Mr. Reynolds' status as an Independent
Trustee. Nonetheless, to assure certainty as to determinations of the Board and the
Independent Trustees as to matters upon which the Investment Company Act or the rules
thereunder require approval by a majority of Independent Trustees, Mr. Reynolds will
not be counted for purposes of determining whether a quorum of Independent Trustees was
present or whether a majority of Independent Trustees approved the matter.


The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, CO
80112-3924. Each Trustee serves for an indefinite term, until his or her resignation,
retirement, death or removal. Ms. Mary Miller was elected to the Board I Funds
effective August 13, 2004 and did not hold shares of Board I Funds during the calendar
year ended December 31, 2003.


---------------------------------------------------------------------------------------
                                 Independent Trustees
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Name,             Principal Occupation(s) During Past 5        Dollar     Aggregate
                                                                          Dollar
                                                                          Range of
                                                                          Shares
                                                                          Beneficially
                                                                          Owned in
                                                               Range of   any of the
Position(s) Held  Years;                                       Shares     Oppenheimer
with Fund,        Other Trusteeships/Directorships Held by     BeneficiallFunds
Length of         Trustee; Number of Portfolios in Fund        Owned in   Overseen by
Service, Age      Complex Currently Overseen by Trustee        the Fund   Trustee
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

                                                               As of December 31, 2003

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Clayton K.        Of Counsel (since June 1993) Hogan &            $0
Yeutter,          Hartson (a law firm); a director (since
Chairman of the   2002) of Danielson Holding Corp. Formerly a
Board of          director of Weyerhaeuser Corp. (1999-April
Trustees since    2004), Caterpillar, Inc. (1993-December
2003;             2002), ConAgra Foods (1993-2001), Texas
Trustee since     Instruments (1993-2001) and FMC Corporation
1991              (1993-2001). Oversees 25 portfolios in the            Over $100,000
Age:  73          OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Robert G. Galli,  A trustee or director of other Oppenheimer      $0    Over $100,000
Trustee since     funds. Oversees 35 portfolios in the
1993              OppenheimerFunds complex.

Age: 71

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Phillip A.        A director (since 1991) of the Institute        $0    Over $100,000
Griffiths,        for Advanced Study, Princeton, N.J., a

Trustee since     director (since 2001) of GSI Lumonics, a
1999              trustee (since 1983) of Woodward Academy, a
Age: 66           Senior Advisor (since 2001) of The Andrew

                  W. Mellon Foundation. A member of: the
                  National Academy of Sciences (since 1979),
                  American Academy of Arts and Sciences
                  (since 1995), American Philosophical
                  Society (since 1996) and Council on Foreign
                  Relations (since 2002). Formerly a director
                  of Bankers Trust New York Corporation
                  (1994-1999). Oversees 25 portfolios in the
                  OppenheimerFunds complex.
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Mary F. Miller,   Formerly a Senior Vice President and            $0          $0
Trustee since     General Auditor, American Express Company
Age: 61           (July 1998-February 2003). Member of
                  Trustees of the American Symphony Orchestra
                  (October 1998 to present). Oversees 25
                  portfolios in the OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Joel W. Motley,   Director (since January 2002) Columbia          $0    $10,001-$50,000
Trustee since     Equity Financial Corp. (privately-held
2002              financial adviser); Managing Director
Age: 52           (since January 2002) Carmona Motley, Inc.
                  (privately-held financial adviser).
                  Formerly a Managing Director of Carmona
                  Motley Hoffman Inc. (privately-held
                  financial adviser) (January 1998-December
                  2001). Oversees 25 portfolios in the
                  OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Kenneth A.        A director (since February 1972) of             $0    Over $100,000
Randall,          Dominion Resources, Inc. (electric utility
Trustee since     holding company); formerly a director of
1980              Prime Retail, Inc. (real estate investment
Age: 77           trust) and Dominion Energy, Inc. (electric
                  power and oil & gas producer), President
                  and Chief Executive Officer of The
                  Conference Board, Inc. (international
                  economic and business research) and a
                  director of Lumbermens Mutual Casualty
                  Company, American Motorists Insurance
                  Company and American Manufacturers Mutual
                  Insurance Company. Oversees 25 portfolios
                  in the OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Edward V. Regan,  President, Baruch College, CUNY; a director     $0    $10,001-$50,000
Trustee since     of RBAsset (real estate manager); a
1993              director of OffitBank; formerly Trustee,
Age: 74           Financial Accounting Foundation (FASB and
                  GASB), Senior Fellow of Jerome Levy
                  Economics Institute, Bard College, Chairman
                  of Municipal Assistance Corporation for the
                  City of New York, New York State
                  Comptroller and Trustee of New York State
                  and Local Retirement Fund. Oversees 25
                  investment companies in the
                  OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Russell S.        Chairman (since 1993) of The Directorship       $0    $10,001-$50,000
Reynolds, Jr.,    Search Group, Inc. (corporate governance
Trustee since     consulting and executive recruiting); a
1989              Life Trustee of International House
Age: 72           (non-profit educational organization); a
                  former trustee of The Historical Society of
                  the Town of Greenwich. Oversees 25
                  portfolios in the OppenheimerFunds complex.

---------------------------------------------------------------------------------------


      The address of Mr. Murphy in the chart below is Two World Financial Center, 225
Liberty Street, New York, NY 10281-1008. Mr. Murphy serves for an indefinite term,
until his resignation, retirement, death or removal.


-------------------------------------------------------------------------------------
                           Interested Trustee and Officer
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name,             Principal   Occupation(s)   During  Past  5 Dollar     Aggregate
                                                                         Dollar
                                                                         Range of
                                                                         Shares
                                                                         Beneficially
                                                                         Owned in
                                                              Range of   any of the
Position(s) Held  Years;                                      Shares     Oppenheimer
with Fund,        Other  Trusteeships/Directorships  Held  by BeneficiallFunds
Length of         Trustee;   Number  of  Portfolios  in  Fund Owned in   Overseen by
Service, Age      Complex Currently Overseen by Trustee       the Fund   Trustee
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                                                                As of December 31,

                                                                       2003

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

John V. Murphy,   Chairman,   Chief  Executive   Officer  and
President and     director  (since  June 2001) and  President     $0        Over
Trustee           (since  September  2000)  of  the  Manager;             $100,000
since 2001        President  and a  director  or  trustee  of
Age: 55           other  Oppenheimer  funds;  President and a
                  director  (since July 2001) of  Oppenheimer
                  Acquisition  Corp.  (the  Manager's  parent
                  holding   company)   and   of   Oppenheimer
                  Partnership   Holdings,   Inc.  (a  holding
                  company  subsidiary  of  the  Manager);   a
                  director    (since    November   2001)   of
                  OppenheimerFunds   Distributor,   Inc.   (a
                  subsidiary of the Manager);  Chairman and a
                  director  (since July 2001) of  Shareholder
                  Services,    Inc.   and   of    Shareholder
                  Financial  Services,  Inc.  (transfer agent
                  subsidiaries  of  the  Manager);  President
                  and  a  director   (since   July  2001)  of
                  OppenheimerFunds    Legacy    Program    (a
                  charitable  trust  program  established  by
                  the  Manager);  a director of the following
                  investment  advisory  subsidiaries  of  the
                  Manager:     OFI    Institutional     Asset
                  Management,    Inc.,    Centennial    Asset
                  Management Corporation,  Trinity Investment
                  Management  Corporation and Tremont Capital
                  Management,  Inc.  (since  November  2001),
                  HarbourView  Asset  Management  Corporation
                  and OFI Private  Investments,  Inc.  (since
                  July 2001);  President  (since  November 1,
                  2001) and a director  (since  July 2001) of
                  Oppenheimer  Real Asset  Management,  Inc.;
                  Executive  Vice President  (since  February
                  1997)   of   Massachusetts    Mutual   Life
                  Insurance  Company  (the  Manager's  parent
                  company);  a director  (since June 1995) of
                  DLB  Acquisition   Corporation  (a  holding
                  company  that  owns the  shares  of  Babson
                  Capital  Management  LLC);  a member of the
                  Investment  Company  Institute's  Board  of
                  Governors  (elected  to serve from  October
                  3,  2003  through   September   30,  2006).
                  Formerly,     Chief    Operating    Officer
                  (September  2000-June 2001) of the Manager;
                  President     and     trustee     (November
                  1999-November    2001)   of   MML    Series
                  Investment      Fund     and     MassMutual
                  Institutional  Funds  (open-end  investment
                  companies);     a    director    (September
                  1999-August  2000) of C.M.  Life  Insurance
                  Company;    President,    Chief   Executive
                  Officer     and     director     (September
                  1999-August  2000)  of MML Bay  State  Life
                  Insurance   Company;   a   director   (June
                  1989-June  1998) of  Emerald  Isle  Bancorp
                  and Hibernia  Savings Bank (a  wholly-owned
                  subsidiary   of  Emerald   Isle   Bancorp).
                  Oversees 63 portfolios as  Trustee/Director
                  and  21   portfolios   as  Officer  in  the
                  OppenheimerFunds complex.

-------------------------------------------------------------------------------------


     The address of the Officers in the chart below is as follows: Messrs. Gillespie,
Miao and Zack and Messes. Bloomberg and Lee, Two World Financial Center, 225 Liberty
Street, New York, NY 10281-1008. Messrs. Vandehey, Vottiero, Petersen and Wixted and
Ms. Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924. Mr. Fielding, 350 Linden Oaks,
Rochester, NY 14625.  Each Officer serves for an indefinite term or until his or her
resignation, death or removal.


-------------------------------------------------------------------------------------
                                Officers of the Fund
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Address, Age,     Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund and Length of
Service
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Ronald H. Fielding,     Senior Vice President of the Manager since January 1996;
Vice President and      Chairman of the Rochester Division of the Manager since
Portfolio Manager       January 1996; an officer of 10 portfolios in the
since 2002              OppenheimerFunds complex.
Age:  55

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Mark S. Vandehey,       Senior Vice President and Chief Compliance Officer (since
Vice President and      March 2004) of the Manager; Vice President (since June
Chief Compliance        1983) of OppenheimerFunds Distributor, Inc., Centennial
Officer since 2004      Asset Management Corporation and Shareholder Services, Inc.
Age:  54                Formerly (until February 2004) Vice President and Director
                        of Internal Audit of OppenheimerFunds, Inc. An officer of
                        84 portfolios in the Oppenheimer funds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer since 1999    the  Manager;  Treasurer  of  HarbourView  Asset  Management
Age: 45                 Corporation,    Shareholder   Financial   Services,    Inc.,
                        Shareholder   Services,   Inc.,   Oppenheimer   Real   Asset
                        Management   Corporation,    and   Oppenheimer   Partnership
                        Holdings,   Inc.   (since  March   1999),   of  OFI  Private
                        Investments,  Inc. (since March 2000),  of  OppenheimerFunds
                        International  Ltd.  and  OppenheimerFunds  plc  (since  May
                        2000), of OFI Institutional  Asset  Management,  Inc. (since
                        November 2000),  and of  OppenheimerFunds  Legacy Program (a
                        Colorado   non-profit   corporation)   (since   June  2003);
                        Treasurer and Chief  Financial  Officer  (since May 2000) of
                        OFI  Trust  Company  (a  trust  company  subsidiary  of  the
                        Manager);   Assistant   Treasurer   (since  March  1999)  of
                        Oppenheimer  Acquisition Corp.  Formerly Assistant Treasurer
                        of   Centennial   Asset   Management    Corporation   (March
                        1999-October  2003)  and  OppenheimerFunds   Legacy  Program
                        (April  2000-June  2003);   Principal  and  Chief  Operating
                        Officer   (March   1995-March   1999)   at   Bankers   Trust
                        Company-Mutual  Fund  Services  Division.  An  officer of 84
                        portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Brian Petersen,         Assistant  Vice  President of the Manager since August 2002;
Assistant Treasurer     formerly   Manager/Financial  Product  Accounting  (November
since 2004              1998-July 2002) of the Manager.  An officer of 84 portfolios
Age: 34                 in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Philip Vottiero,        Vice President/Fund Accounting of the Manager since March
Assistant Treasurer     2002. Formerly Vice President/Corporate Accounting of the
since 2002              Manager (July 1999-March 2002) prior to which he was Chief
Age: 41                 Financial Officer at Sovlink Corporation (April 1996-June
                        1999). An officer of 84 portfolios in the OppenheimerFunds
                        complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert G. Zack,         Executive  Vice  President  (since January 2004) and General
Secretary since 2001    Counsel  (since  February  2002)  of  the  Manager;  General
Age: 56                 Counsel  and  a  director   (since  November  2001)  of  the
                        Distributor;   General  Counsel  (since  November  2001)  of
                        Centennial   Asset  Management   Corporation;   Senior  Vice
                        President  and  General  Counsel  (since  November  2001) of
                        HarbourView  Asset  Management  Corporation;  Secretary  and
                        General   Counsel  (since   November  2001)  of  Oppenheimer
                        Acquisition  Corp.;   Assistant  Secretary  and  a  director
                        (since October 1997) of OppenheimerFunds  International Ltd.
                        and  OppenheimerFunds  plc;  Vice  President  and a director
                        (since November 2001) of Oppenheimer  Partnership  Holdings,
                        Inc.; a director (since  November 2001) of Oppenheimer  Real
                        Asset  Management,  Inc.;  Senior  Vice  President,  General
                        Counsel and a director  (since November 2001) of Shareholder
                        Financial Services,  Inc.,  Shareholder Services,  Inc., OFI
                        Private  Investments,  Inc.  and  OFI  Trust  Company;  Vice
                        President (since November 2001) of  OppenheimerFunds  Legacy
                        Program;  Senior Vice  President and General  Counsel (since
                        November 2001) of OFI Institutional Asset Management,  Inc.;
                        a  director  (since  June 2003) of  OppenheimerFunds  (Asia)
                        Limited.  Formerly Senior Vice President (May  1985-December
                        2003), Acting General Counsel (November  2001-February 2002)
                        and Associate  General  Counsel (May  1981-October  2001) of
                        the Manager;  Assistant  Secretary of Shareholder  Services,
                        Inc.  (May  1985-November   2001),   Shareholder   Financial
                        Services,    Inc.   (November   1989-November   2001);   and
                        OppenheimerFunds  International Ltd. (October  1997-November
                        2001).  An officer of 84 portfolios in the  OppenheimerFunds
                        complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Kathleen T. Ives,       Vice  President  (since  June 1998) and Senior  Counsel  and
Assistant Secretary     Assistant  Secretary  (since  October  2003) of the Manager;
since 2001              Vice President  (since 1999) and Assistant  Secretary (since
Age: 39                 October  2003)  of  the  Distributor;   Assistant  Secretary
                        (since   October  2003)  of  Centennial   Asset   Management
                        Corporation;  Vice President and Assistant  Secretary (since
                        1999) of Shareholder  Services,  Inc.;  Assistant  Secretary
                        (since  December  2001) of  OppenheimerFunds  Legacy Program
                        and of Shareholder  Financial  Services,  Inc..  Formerly an
                        Assistant Counsel (August  1994-October  2003) and Assistant
                        Vice President of the Manager  (August  1997-June  1998). An
                        officer of 84 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Dina C. Lee,            Assistant  Vice  President  and  Assistant  Counsel  of  the
Assistant Secretary     Manager  (since  December  2000);  formerly an attorney  and
since 2004              Assistant  Secretary  of  Van  Eck  Global  (until  December
Age: 34                 2000).  An officer of 84 portfolios in the  OppenheimerFunds

                        complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Lisa I. Bloomberg,      Vice  President and  Associate  Counsel of the Manager since
Assistant Secretary     May  2004;  formerly  First  Vice  President  and  Associate
since 2004              General  Counsel of UBS Financial  Services Inc.  (formerly,
Age:  36                PaineWebber  Incorporated)  (May 1999 - April 2004) prior to
                        which she was an Associate at Skaden,  Arps, Slate,  Meagher
                        & Flom, LLP (September  1996 - April 1999). An officer of 84
                        portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Phillip S. Gillespie,   Senior  Vice  President  and Deputy  General  Counsel of the
Assistant Secretary     Manager since  September 2004.  Formerly Mr.  Gillespie held
since 2004              the  following   positions  at  Merrill   Lynch   Investment
Age:  40                Management:  First  Vice  President  (2001-September  2004);
                        Director  (from  2000) and Vice  President  (1998-2000).  An
                        officer of 74 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Wayne Miao,             Assistant  Vice  President  and  Assistant  Counsel  of  the
Assistant Secretary     Manager since June 2004.  Formerly an Associate  with Sidley
since 2004              Austin  Brown & Wood LLP  (September  1999 - May  2004).  An
Age:  31                officer of 74 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------


|X|   Remuneration of Trustees. The officers of the Fund and one of the Trustees of
the Fund (Mr. Murphy) who are affiliated with the Manager receive no salary or fee from
the Fund. The Trustees of the Fund received the compensation shown below from the Fund
with respect to the Fund's fiscal year ended September 30, 2004. The compensation from
all 25 of the Board I Funds (including the Fund) represents compensation received for
serving as a director or trustee and member of a committee (if applicable) of the
boards of those funds during the calendar year ended December 31, 2003.


--------------------------------------------------------------------------------------
Trustee Name and Other   Aggregate   Retirement      Estimated           Total
                                                                   Compensation From
                                                       Annual       All Oppenheimer
                                      Benefits       Retirement     Funds For Which
                                     Accrued as    Benefits to be  Individual Serves

Fund Position(s) (as    CompensationPart of Fund     Paid Upon             As
applicable)             from Fund1    Expenses      Retirement2     Trustee/Director

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Clayton K. Yeutter

Chairman of the Board    $3,025 3      $3,264         $61,306           $152,079

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Robert G. Galli
Regulatory & Oversight

Committee Chairman        $2,251       $2,122         $80,9234         $213,5365

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Phillip Griffiths

Governance Committee
Chairman and
Regulatory & Oversight
Committee Member          $2,2676      $1,012         $23,309           $74,500

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

Joel W. Motley
Audit Committee
Chairman and
Regulatory & Oversight
Committee Member          $2,3897       $360          $14,530           $68,900

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

Kenneth A. Randall        $2,079         $0           $79,622           $93,989

Audit Committee Member
and Governance
Committee Member
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

Russell S. Reynolds,
Jr.
Proxy Committee Member
and Governance
Committee Member          $1,786       $2,151         $60,720           $77,002

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

Mary Miller
Audit Committee Member8     $0           $0              $0                $0

--------------------------------------------------------------------------------------


Messrs.  Levy,  Lipstein and Ms.  Moynihan  retired as Trustees from the Board I
Funds effective  January 1, 2003, March 31, 2003,  October 31, 2004 and July 31,
2003, respectively.  For the fiscal year ended September 30, 2004, Mr. Spiro and
Ms.  Moynihan  received  $1,116 and $186 aggregate  compensation  from the Fund,
respectively.  For calendar year ended December 31, 2003, Messrs. Levy, Lipstein
and Spiro and Ms. Moynihan each received $43,425,  $75,076, $64,080 and $88,229,
respectively from all of the Oppenheimer funds for which they served as Trustee.
Aggregate  Compensation  From Fund includes fees and deferred  compensation,  if
any, for a Trustee.

1. Aggregate Compensation from Fund includes fees and deferred compensation,  if
any, for a Trustee.

2. Estimated Annual  Retirement Benefits to be Paid Upon Retirement is based
on a straight life payment plan election with the assumption that a Trustee will
retire at the age of 75 and is  eligible  (after 7 years of  service) to receive
retirement  plan  benefits  as  described  below  under   "Retirement  Plan  for
Trustees."

3. Includes $756 deferred by Mr.  Yeutter under the Deferred  Compensation  Plan
described below.

4.  Includes  $36,990  estimated  to be paid to Mr.  Galli for  serving as a
trustee or director of 10 other Oppenheimer funds that are not Board I Funds.

5. Includes $96,000 paid to Mr. Galli for serving as a trustee or director of 10
other Oppenheimer funds that are not Board I Funds.

6. Includes  $2,267 deferred by Mr.  Griffiths  under the Deferred  Compensation
Plan described below.

7. Includes  $956  deferred by Mr. Motley under Deferred  Compensation  Plan
described below.

8. Mary Miller was appointed as a Trustee of the Fund effective August 13, 2004.

|X|  Retirement  Plan for Trustee.  The Fund has adopted a retirement  plan that
provides for payments to retired Independent Trustees. Payments are up to 80% of
the average  compensation paid during a Trustee's five years of service in which
the highest  compensation was received.  A Trustee must serve as trustee for any
of the  Board I Funds  for at least  seven  years in  order to be  eligible  for
retirement plan benefits and must serve for at least 15 years to be eligible for
the maximum  benefit.  Each  Trustee's  retirement  benefits  will depend on the
amount of the Trustee's future compensation and length of service.

|X| Deferred Compensation Plan for Trustees. The Board of Trustees has adopted a
Deferred  Compensation Plan for Independent  Trustees that enables them to elect
to defer  receipt of all or a portion of the annual  fees they are  entitled  to
receive from the Fund. Under the plan, the compensation deferred by a Trustee is
periodically adjusted as though an equivalent amount had been invested in shares
of one or more Oppenheimer funds selected by the Trustee. The amount paid to the
Trustee under the plan is determined  based upon the performance of the selected
funds.

     Deferral of Trustees'  fees under the plan will not  materially  affect the
Fund's assets,  liabilities or net income per share.  The plan will not obligate
the Fund to retain the services of any Trustee or to pay any particular level of
compensation  to any  Trustee.  Pursuant to an Order issued by the SEC, the Fund
may  invest  in the  funds  selected  by the  Trustee  under  the  plan  without
shareholder  approval for the limited  purpose of  determining  the value of the
Trustee's deferred fee account.

     |X| Major Shareholders.  As of October 29, 2004, the only persons who owned
of record or who were  known by the Fund to own  beneficially  5% or more of the
Fund's outstanding securities of any class were the following:

     Citigroup Global Mkts Inc,  109801250,  Attn:  Cindy Tempesta,  7th Fl, 333
West 34th Street,  New York,  NY  10001-2483,  which owned  203,991.275  Class B
shares  (9.25% of the Class B shares  then  outstanding)  for the benefit of its
customers .

     MLPF&S For the sole benefit of its customers,  Attn: Fund  Admn/#97A90,
4800 Deer Lake Dr E, Fl 3, Jacksonville,  FL 32246-6484, which owned 167,550.983
Class B shares (7.59% of the Class B shares then outstanding) for the benefit of
its customers.

     Citigroup Global Mkts Inc,  109801250,  Attn:  Cindy Tempesta,  7th Fl, 333
West 34th Street,  New York,  NY  10001-2483,  which owned  142,375.028  Class C
shares  (11.10% of the Class C shares then  outstanding)  for the benefit of its
customers.

     MLPF&S For the sole benefit of its customers,  Attn: Fund  Admn/#97HF4,
4800 Deer Lake Dr E, Fl 3, Jacksonville,  FL 32246-6484, which owned 133,821.766
Class C shares (10.43% of the Class C shares then  outstanding)  for the benefit
of its customers.


     The Manager. The Manager is wholly-owned by Oppenheimer  Acquisition Corp.,
     a  holding  company  controlled  by  Massachusetts  Mutual  Life  Insurance
     Company,   a  global,   diversified   insurance  and   financial   services
     organization.

     |X| Code of Ethics.  The Fund, the Manager and the Distributor  have a Code
of Ethics.  It is designed to detect and prevent  improper  personal  trading by
certain employees, including portfolio managers, that would compete with or take
advantage of the Fund's portfolio transactions.  Covered persons include persons
with  knowledge of the  investments  and  investment  intentions of the Fund and
other funds  advised by the  Manager.  The Code of Ethics does permit  personnel
subject to the Code to invest in securities,  including  securities  that may be
purchased or held by the Fund, subject to a number of restrictions and controls.
Compliance  with the Code of Ethics is carefully  monitored  and enforced by the
Manager.

     The Code of Ethics is an exhibit to the Fund's registration statement filed
with the SEC and can be reviewed and copied at the SEC's Public  Reference  Room
in Washington,  D.C. You can obtain  information about the hours of operation of
the Public  Reference  Room by calling  the SEC at  1.202.942.8090.  The Code of
Ethics can also be viewed as part of the Fund's  registration  statement  on the
SEC's EDGAR database at the SEC's Internet website at www.sec.gov. Copies may be
obtained,  after paying a duplicating fee, by electronic request at the following
E-mail address:  publicinfo@sec.gov.,  or by  writing to the SEC's Public Reference
Section, Washington, D.C. 20549-0102.

     |X| Portfolio  Proxy Voting.  The Fund has adopted  Portfolio  Proxy Voting
     Policies  and  Procedures  under which the Fund votes  proxies  relating to
     securities  ("portfolio  proxies")  held by the Fund.  The  Fund's  primary
     consideration in voting portfolio proxies is the financial interests of the
     Fund  and  its   shareholders.   The  Fund  has  retained  an  unaffiliated
     third-party as its agent to vote portfolio  proxies in accordance  with the
     Fund's  Portfolio Proxy Voting  Guidelines and to maintain  records of such
     portfolio proxy voting.  The Proxy Voting Guidelines  include provisions to
     address conflicts of interest that may arise between the Fund and OFI where
     an OFI directly-controlled affiliate manages or administers the assets of a
     pension plan of a company  soliciting the proxy. The Fund's Portfolio Proxy
     Voting Guidelines on routine and non-routine proxy proposals are summarized
     below.

o The Fund votes with the  recommendation of the issuer's  management on routine
matters,   including   election  of  directors   nominated  by  management   and
ratification of auditors, unless circumstances indicate otherwise.

o In general, the Fund opposes anti-takeover  proposals and supports elimination
of anti-takeover proposals, absent unusual circumstances.

o The Fund  supports  shareholder  proposals  to  reduce a  super-majority  vote
requirement,  and opposes  management  proposals  to add a  super-majority  vote
requirement.

o The Fund  opposes  proposals to classify  the board of  directors.

o The Fund supports proposals to eliminate cumulative voting.

o The Fund opposes re-pricing of stock options.
--------------------------------------------------------------------------------------


o The Fund generally considers executive compensation questions such as
stock option plans and  bonus plans to be ordinary business activity.
The Fund analyzes stock option plans, paying particular  attention to
their dilutive effect.  While the Fund generally supports management  proposals,
the Fund opposes plans it considers to be excessive.


     The Fund is required to file new Form N-PX,  with its  complete  proxy voting
record for the 12 months ended June 30th, no later than August 31st of each year.
The Fund's Form N-PX filing is available  (i) without  charge,  upon  request,  by
calling the Fund toll-free at  1.800.525.7048  and (ii)  the SEC's website
at www.sec.gov.


     |X| The  Investment  Advisory  Agreement.  The  Manager  provides  investment
advisory  and  management  services  to the Fund  under an  investment  advisory
agreement  between the Manager and the Fund. The Manager  selects  securities for
the  Fund's  portfolio  and  handles  its day-to day  business.  That  agreement
requires the Manager,  at its expense,  to provide the Fund with adequate office
space,  facilities  and  equipment.  It also requires the Manager to provide and
supervise the activities of all administrative and clerical personnel required to
provide effective corporate  administration for the Fund. Those responsibilities
include the  compilation  and  maintenance  of records  with respect to the Fund
operations,  the preparation and filing of specified reports, and the composition
of proxy  materials and  registration  statements for continuous  public sale of
shares of the Fund.

     The Fund pays  expenses  not  expressly  assumed by the  Manager  under the
advisory agreement.  The investment advisory agreement lists examples of expenses
paid by the  Fund.  The major  categories  relate to  interest,  taxes,  fees to
Independent  Trustees,  legal and audit  expenses,  custodian and transfer  agent
expenses,  share  issuance  costs,  certain  printing  and  registration  costs,
brokerage commissions,  and non-recurring  expenses,  including litigation cost.
The management  fees paid by the Fund to the Manager are calculated at the rates
described  in the  Prospectus,  which are applied to the assets of the Fund as a
whole.  The fees are  allocated  to each class of shares based upon the relative
proportion of the Fund's net assets  represented  by that class.  The management
fees paid by the Fund to the  Manager  during  its last three  fiscal  years are
listed below.

Fiscal Year Ended 9/30            Management Fees Paid to OppenheimerFunds, Inc.
--------------------------------------------------------------------------------------
----------------------------------------------------------------------------
          2002                               $3,095,247
----------------------------------------------------------------------------
----------------------------------------------------------------------------

          2003                               $3,109,3061

----------------------------------------------------------------------------
----------------------------------------------------------------------------

          2004                               $3,118,498

----------------------------------------------------------------------------

      1  Effective September 1, 2003, the Manager voluntarily agreed to waive a
         portion of its management fee of annual rate equal to 0.10% of each
         class's average daily net assets.  The management fee waiver for the
         fiscal year ended September 30, 2003 was $45,159. The waiver terminated
         effective January 1, 2004.

      The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or reckless
disregard for its obligations and duties under the investment advisory agreement, the
Manager is not liable for any loss the Fund sustains for any investment, adoption of
any investment policy or the purchase, sale or retention of any security.


      The agreement permits the Manager to act as investment advisor for any other
person, firm or corporation and to use the name "Oppenheimer" in connection with other
investment companies for which it may act as investment advisor or general distributor.
If the Manager shall no longer act as investment advisor to the Fund, the Manager may
withdraw the Fund's right to use the name "Oppenheimer" as part of its name.

         |X|      Annual Approval of Investment Advisory Agreement. Each year, the
Board of Trustees including a majority of the Independent Trustees is required to
approve the renewal of the investment advisory agreement. The Investment Company Act
requires that the Board request and evaluate and the Manager provide such information
as may be reasonably necessary to evaluate the terms of the investment advisory
agreement.  The Board employs an independent consultant to prepare a report that
provides such information as the Board requests for this purpose.

      The Board also receives information about the 12b-1 distribution fees the Fund
pays.  These distribution fees are reviewed and approved at a different time of the
year.

      The Board reviewed the foregoing information in arriving at its decision to renew
the investment advisory agreement.  Among other factors, the Board considered:
o     The nature, cost, and quality of the services provided to the Fund and its
         shareholders;
o     The profitability of the Fund to the Manager;
o     The investment performance of the Fund in comparison to regular market
         indices;
o     Economies of scale that may be available to the Fund from the Manager;
o     Fees paid by other mutual funds for similar services;
o     The value and quality of any other benefits or services received by the Fund
         from its relationship with the Manager; and
o     The direct and indirect benefits the Manager received from its relationship
         with the Fund.  These included services provided by the Distributor and the
         Transfer Agent, and brokerage and soft dollar arrangements permissible under
         Section 28(e) of the Securities Exchange Act.

      The Board considered that the Manager must be able to pay and retain high quality
personnel at competitive rates to provide services to the Fund.  The Board also
considered that maintaining the financial viability of the Manager is important so that
the Manager will be able to continue to provide quality services to the Fund and its
shareholders in adverse times.  The Board also considered the investment performance of
other mutual funds advised by the Manager. The Board is aware that there are
alternatives to the use of the Manager.

      These matters were also considered by the Independent Trustees meeting separately
from the full Board with experienced Counsel to the Fund who assisted the Board in its
deliberations.  The Fund's Counsel is independent of the Manager within the meaning and
intent of the SEC Rules regarding the independence of counsel.

      After careful deliberation, the Board, including the Independent Trustees,
concluded that it was in the best interest of shareholders to continue the investment
advisory agreement for another year. In arriving at a decision, the Board did not
single out any one factor or group of factors as being more important than other
factors, but considered all factors together.  The Board judged the terms and
conditions of the investment advisory agreement, including the investment advisory fee,
in light of all of the surrounding circumstances.

Brokerage Policies of the Fund


Brokerage Provisions of the Investment Advisory Agreement. One of the duties of the
Manager under the investment advisory agreement is to buy and sell portfolio securities
for the Fund. The investment advisory agreement allows the Manager to use
broker-dealers to effect the Fund's portfolio transactions. The Manager is authorized
by the advisory agreement to employ broker-dealers, including "affiliated" brokers, as
that term is defined in the Investment Company Act) that, in the Manager's best
judgment based on all relevant factors, will implement the Fund's policy to obtain, at
reasonable expense, the "best execution" of portfolio transactions. "Best execution"
refers to prompt and reliable execution at the most favorable price obtainable. The
Manager need not seek competitive commission bidding. However, the Manager is expected
to minimize the commissions paid to the extent consistent with the interest and
policies of the Fund as established by its Board of Trustees.

Under the investment advisory agreement, in choosing brokers to execute portfolio
transactions for the Fund, the Manager may select brokers (other than affiliates) that
provide brokerage and/or research services to the Fund and/or the other accounts over
which the Manager or its affiliates have investment discretion.  The commission paid to
those brokers may be higher than another qualified broker would charge, if the Manager
makes a good faith determination that the commission is fair and reasonable in relation
to the services provided.


Subject to those other considerations, as a factor in selecting brokers for the Fund's
portfolio transactions, the Manager may also consider sales of shares of the Fund and
other investment companies managed by the Manager or its affiliates.


Subject to those considerations, as a factor in selecting brokers for the Fund's
portfolio transactions, the investment advisory agreement also permits the Manager
to consider sales of shares of the Fund and other investment companies for which
the Manager or an affiliate serves as investment adviser.  Notwithstanding that
authority, and with the concurrence of the Fund's Board, the Manager has determined
not to consider sales of shares of the Fund and other investment companies for
which the Manager or an affiliate serves as investment adviser as a factor in
selecting brokers for the Fund's portfolio transactions.  However, the Manager may
continue to effect portfolio transactions through brokers who sell shares of the
Fund.


Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the
Fund subject to the provisions of the investment advisory agreement and the procedures
and rules described above. Generally the Manager's portfolio traders allocate brokerage
based upon recommendations from the Manager's portfolio managers. In certain instances,
portfolio managers may directly place trades and allocate brokerage. In either case,
the Manager's executive officers supervise the allocation of brokerage.

      Most securities purchases made by the Fund are in principal transactions at net
prices. The Fund usually deals directly with the selling or purchasing principal or
market maker without incurring charges for the services of a broker on its behalf
unless the Manager determines that a better price or execution may be obtained by using
the services of a broker. Therefore, the Fund does not incur substantial brokerage
costs. Portfolio securities purchased from underwriters include a commission or
concession paid by the issuer to the underwriter in the price of the security.
Portfolio securities purchased from dealers include a spread between the bid and asked
price.

      The Fund seeks to obtain prompt execution of orders at the most favorable net
prices. In an option transaction, the Fund ordinarily uses the same broker for the
purchase or sale of the option and any transaction in the investment to which the
option relates. Other funds advised by the Manager have investment objectives and
policies similar to those of the Fund. Those other funds may purchase or sell the
same securities as the Fund at the same time as the Fund, which could affect the
supply and price of the securities. When possible, the Manager tries to combine
concurrent orders to purchase or sell the same security by more than one of the
accounts managed by the Manager or its affiliates. The transactions under those
combined orders are averaged as to price and allocated in accordance with the
purchase or sale orders actually placed for each account.

      The investment advisory agreement permits the Manager to allocate brokerage for
research services. The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its affiliates.
Investment research received by the Manager for the commissions paid by those other
accounts may be useful both to the Fund and one or more of the Manager's other
accounts. Investment research services may be supplied to the Manager by a third party
at the instance of a broker through which trades are placed.

      Investment research services include information and analyses on particular
companies and industries as well as market or economic trends and portfolio strategy,
market quotations for portfolio evaluations, information systems, computer hardware
and similar products and services. If a research service also assists the Manager in a
non-research capacity (such as bookkeeping or other administrative functions), then
only the percentage or component that provides assistance to the Manager in the
investment decision-making process may be paid in commission dollars.

      The research services provided by brokers broaden the scope and supplement the
research activities of the Manager. That research provides additional views and
comparisons for consideration and helps the Manager to obtain market information for
the valuation of securities that are either held in the Fund's portfolio or are being
considered for purchase. The Manager provides information to the Board of the Fund
about the commissions paid to brokers furnishing research services, together with the
Manager's representation that the amount of such commissions was reasonably related to
the value or benefit of such services.

------------------------------------------------------------------------------
 Fiscal Year Ended 9/30:     Total Brokerage Commissions Paid by the Fund1
------------------------------------------------------------------------------
------------------------------------------------------------------------------
           2002                                 $68,096
------------------------------------------------------------------------------
------------------------------------------------------------------------------

           2003                                   $02

------------------------------------------------------------------------------
------------------------------------------------------------------------------

           2004                                   $02

------------------------------------------------------------------------------

1. Amounts do not include spreads or commissions on principal transactions on a net trade basis.
2. In the fiscal years ended 9/30/03 and 9/30/04, there were no transactions
directed to brokers for research services, and the amount of the commissions paid
to broker-dealers for those services was $0.


Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public offering
of the Fund's classes of shares. The Distributor bears the expenses normally
attributable to sales, including advertising and the cost of printing and mailing
prospectuses, other than those furnished to existing shareholders. The Distributor is
not obligated to sell a specific number of shares.

      The sales charges and concessions paid to, or retained by, the Distributor from
the sale of shares during the Fund's three most recent fiscal years, and the contingent
deferred sales charges retained by the Distributor on the redemption of shares for the
three most recent fiscal years are shown in the tables below.

 ------------------------------------------------------------------------------
 Fiscal   Aggregate     Class A       Concessions   Concessions  Concessions
          Front-End     Front-End
          Sales         Sales         on Class A    on Class B   on Class C
 Year     Charges on    Charges       Shares        Shares       Shares
 Ended    Class A       Retained by   Advanced by   Advanced by  Advanced by

 9/30:    Shares        Distributor1  Distributor2  Distributor2 Distributor2

 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
   2002     $518,402      $112,880       $2,026       $281,132      $26,138
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
   2003     $449,336      $206,771      $573,956      $297,722      $45,734
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

   2004     $607,361      $107,233       $32,889      $148,225     $126,603

 ------------------------------------------------------------------------------
1. Includes amounts retained by a broker-dealer  that is an affiliate or a parent of
   the distributor.

2.    The Distributor  advances  concession payments to dealers for certain sales of
   Class A  shares  and for  sales  of  Class B and  Class  C  shares  from  its own
   resources at the time of sale.



 ------------------------------------------------------------------------------
     Fiscal Year      Class A Contingent  Class B Contingent      Class C
                                                                Contingent
                                            Deferred Sales    Deferred Sales
                        Deferred Sales     Charges Retained  Charges Retained
                     Charges Retained by          by                by
     Ended 9/30:         Distributor         Distributor        Distributor
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
        2002                  $0               $109,114           $1,825
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
        2003               $11,400             $115,811           $7,800
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

        2004                $8,955             $101,212           $2,386

 ------------------------------------------------------------------------------

Distribution and Service Plans. The Fund has adopted a Service Plan for Class A shares
and Distribution and Service Plans for Class B and Class C shares under Rule 12b-1 of
the Investment Company Act. Under those plans the Fund pays the Distributor for all or
a portion of its costs incurred in connection with the distribution and/or servicing of
the shares of the particular class. Each plan has been approved by a vote of the Board
of Trustees, including a majority of the Independent Trustees1, cast in person at a
meeting called for the purpose of voting on that plan.


      Under the Plans, the Manager and the Distributor may make payments to
affiliates.  In their sole discretion, they may also from time to time make substantial
payments from their own resources, which include the profits the Manager derives from
the advisory fees it receives from the Fund, to compensate brokers, dealers, financial
institutions and other intermediaries for providing distribution assistance and/or
administrative services or that otherwise promote sales of the Fund's shares.  These
payments, some of which may be referred to as "revenue sharing," may relate to the
Fund's inclusion on a financial intermediary's preferred list of funds offered to its
clients

Financial intermediaries, brokers and dealers may receive other payments from the
Distributor or the Manager from their own resources in connection with the
promotion and/or sale of shares of the Fund, including payments to defray expenses
incurred in connection with educational seminars and meetings.  The Manager or
Distributor may share expenses incurred by financial intermediaries in conducting
training and educational meetings about aspects of the Fund for employees of the
intermediaries or for hosting client seminars or meetings at which the Fund is
discussed.  In their sole discretion, the Manager and/or the Distributor may
increase or decrease the amount of payments they make from their own resources for
these purposes.


      Unless a plan is terminated as described below, the plan continues in effect from
year to year but only if the Fund's Board of Trustees and its Independent Trustees
specifically vote annually to approve its continuance. Approval must be by a vote cast
in person at a meeting called for the purpose of voting on continuing the plan. A plan
may be terminated at any time by the vote of a majority of the Independent Trustees or
by the vote of the holders of a "majority" (as defined in the Investment Company Act)
of the outstanding shares of that class.

      The Board of Trustees and the Independent Trustees must approve all material
amendments to a plan. An amendment to increase materially the amount of payments to be
made under a plan must be approved by shareholders of the class affected by the
amendment. Because Class B shares of the Fund automatically convert into Class A shares
72 months after purchase, the Fund must obtain the approval of both Class A and Class B
shareholders for a proposed material amendment to the Class A plan that would
materially increase payments under the plan. That approval must be by a "majority" (as
defined in the Investment Company Act) of the shares of each class, voting separately
by class.

      While the plans are in effect, the Treasurer of the Fund shall provide separate
written reports on the plans to the Board of Trustees at least quarterly for its
review. The reports shall detail the amount of all payments made under a plan, and the
purpose for which the payments were made. Those reports are subject to the review and
approval of the Independent Trustees.

      Each plan states that while it is in effect, the selection and nomination of
those Trustees of the Fund who are not "interested persons" of the Fund is committed to
the discretion of the Independent Trustees. This does not prevent the involvement of
others in the selection and nomination process as long as the final decision as to
selection or nomination is approved by a majority of the Independent Trustees.

      Under the plans for a class, no payment will be made to any recipient in any
quarter in which the aggregate net asset value of all Fund shares of that class held by
the recipient for itself and its customers does not exceed a minimum amount, if any,
that may be set from time to time by a majority of the Independent Trustees


|X|   Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and other
financial institutions (they are referred to as "recipients") for personal services and
account maintenance services they provide for their customers who hold Class A shares.
The services include, among others, answering customer inquiries about the Fund,
assisting in establishing and maintaining accounts in the Fund, making the Fund's
investment plans available and providing other services at the request of the Fund or
the Distributor. The Class A service plan permits reimbursements to the Distributor at
a rate of up to 0.25% of average annual net assets of Class A shares. The Board has set
the rate at that level. The Distributor does not receive or retain the service fee on
Class A shares in accounts for which the Distributor has been listed as the
broker-dealer of record. While the plan permits the Board to authorize payments to the
Distributor to reimburse itself for services under the plan, the Board has not yet done
so. The Distributor makes payments to plan recipients quarterly at an annual rate not
to exceed 0.25% of the average annual net assets consisting of Class A shares held in
the accounts of the recipients or their customers.

      For the fiscal year ended September 30, 2004 payments under the Class A Plan
totaled $1,204,094, of which $5,362 was retained by the Distributor under the
arrangement described above, and included $21,665 paid to an affiliate of the
Distributor's parent company. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares for any fiscal year may not be recovered in subsequent years.
The Distributor may not use payments received under the Class A plan to pay any of its
interest expenses, carrying charges, other financial costs, or allocation of overhead.


      |X|   Class B and Class C Distribution and Service Plan Fees. Under each
plan, distribution and service fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each regular
business day during the period. Each plan provides for the Distributor to be
compensated at a flat rate, whether the Distributor's distribution expenses are
more or less than the amounts paid by the Fund under the plan during the period for
which the fee is paid. The types of services that recipients provide are similar to
the services provided under the Class A service plan, described above.

      Each Plan permits the Distributor to retain both the asset-based sales
charges and the service fee on shares or to pay recipients the service fee on a
quarterly basis, without payment in advance. However, the Distributor currently
intends to pay the service fee to recipients in advance for the first year after
Class B and Class C shares are purchased. After the first year shares are
outstanding, after their purchase, the Distributor makes service fee payments
quarterly on those shares. The advance payment is based on the net asset value of
shares sold. Shares purchased by exchange do not qualify for an advance service fee
payment. If Class B or Class C shares are redeemed during the first year after
their purchase, the recipient of the service fees on those shares will be obligated
to repay the Distributor a pro rata portion of the advance payment made on those
shares.

      The asset-based sales charge and service fees increase Class B and Class C
expenses by 1.00% of the net assets per year of the respective class.

      The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the first
year the shares are outstanding. It pays the asset-based sales charge as an ongoing
concession to the recipient on Class C shares outstanding for a year or more. If a
dealer has a special agreement with the Distributor, the Distributor will pay the Class
B and/or Class C service fee and the asset-based sales charge to the dealer quarterly
in lieu of paying the sales concession and service fee in advance at the time of
purchase.

      The asset-based sales charge on Class B and Class C shares allows investors to
buy shares without a front-end sales charge while allowing the Distributor to
compensate dealers that sell those shares. The Fund pays the asset-based sales charge
to the Distributor for its services rendered in distributing Class B and Class C
shares. The payments are made to the Distributor in recognition that the Distributor:
o     pays sales concessions to authorized brokers and dealers at the time of sale
         and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the service
         fee payment to recipients under the plans, or may provide such financing
         from its own resources or from the resources of an affiliate,
o     employs personnel to support distribution of Class B and Class C shares,
o     bears the costs of sales literature, advertising and prospectuses (other than
         those furnished to current shareholders) and state "blue sky" registration
         fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B and Class
         C shares without receiving payment under the plans and therefore may not
         be able to offer such Classes for sale absent the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that charge
         12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund shares,
o     may experience increased difficulty selling the Fund's shares if payments
         under the plan are discontinued because most competitor funds have plans
         that pay dealers for rendering distribution services as much or more than
         the amounts currently being paid by the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost, the
         same quality distribution sales efforts and services, or to obtain such
         services from brokers and dealers, if the plan payments were to be
         discontinued.


      Class B or Class C shares may not be purchased by an investor directly from
the Distributor without the investor designating another broker-dealer of record.
If the investor no longer has another broker-dealer of record for an existing
account, the Distributor is automatically designated as the broker-dealer of
record, but solely for the purpose of acting as the investor's agent to purchase
the shares.  In those cases, the Distributor retains the asset-based sales charge
paid on Class B and Class C shares, but does not retain any service fees as to the
assets represented by that account.

      During a calendar year, the Distributor's actual expenses in selling Class B
and Class C shares may be more than the payments it receives from the contingent
deferred sales charges collected on redeemed shares and from the asset-based sales
charges paid to the Distributor by the Fund under the distribution and service
plans. Those excess expenses are carried over on the Distributor's books and may be
recouped from asset-based sales charge payments from the Fund in future years.
However, the Distributor has voluntarily agreed to cap the amount of expenses under
the plans that may be carried over from year to year and recouped that relate to
(i) expenses the Distributor has incurred that represent compensation and expenses
of its sales personnel and (ii) other direct distribution costs it has incurred,
such as sales literature, state registration fees, advertising and prospectuses
used to offer Fund shares. The cap on the carry-over of those categories of
expenses is set at 0.70% of annual gross sales of shares of the Fund. If those
categories of expenses exceed the capped amount, the Distributor bears the excess costs.
If the Class B or Class C plan were to be terminated by the Fund, the Fund's
Board of Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares prior to the termination of the plan.


 -------------------------------------------------------------------------------

  Distribution Fees Paid to the Distributor for the Fiscal Year Ended 9/30/04

 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Class:            Total     Amount Retained   Distributor's    Distributor's
                                                 Aggregate       Unreimbursed
                                                Unreimbursed    Expenses as %
                 Payments                      Expenses Under   of Net Assets
                Under Plan    by Distributor        Plan           of Class
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class B Plan    $301,961        $235,017        $1,451,503         5.27%

 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class C Plan    $145,611        $45,045          $249,885          1.59%

 -------------------------------------------------------------------------------

   1 Includes $1,250 paid to an affiliate of the Distributor's parent company.
   2 Includes $4,006 paid to an affiliate of the Distributor's parent company.

   All payments under the Class B and the Class C plans are subject to the
limitations imposed by the Conduct Rules of the National Association of Securities
Dealers, Inc. on payments of asset-based sales charges and service fees.


Performance of the Fund


Explanation of Performance Terminology. The Fund uses a variety of terms to illustrate
its performance. These terms include "standardized yield," "tax-equivalent yield,"
"dividend yield," "average annual total return," "cumulative total return," "average
annual total return at net asset value" and "total return at net asset value." An
explanation of how yields and total returns are calculated is set forth below. The
charts below show the Fund's performance as of the Fund's most recent fiscal year end.
You can obtain current performance information by calling the Fund's Transfer Agent at
1.800.225.5677 or by visiting the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


      The Fund's illustrations of its performance data in advertisements must comply
with rules of the SEC. Those rules describe the types of performance data that may be
used and how it is to be calculated. In general, any advertisement by the Fund of its
performance data must include the average annual total returns for the advertised class
of shares of the Fund.

      Use of standardized performance calculations enables an investor to compare the
Fund's performance to the performance of other funds for the same periods. However, a
number of factors should be considered before using the Fund's performance information
as a basis for comparison with other investments:
o     Yields and total returns measure the performance of a hypothetical account in
         the Fund over various periods and do not show the performance of each
         shareholder's account. Your account's performance will vary from the model
         performance data if your dividends are received in cash, or you buy or
         sell shares during the period, or you bought your shares at a different
         time and price than the shares used in the model.
o     The Fund's performance returns may not reflect the effect of taxes on
         dividends and capital gains distributions.
o     An investment in the Fund is not insured by the FDIC or any other government
         agency.
o     The principal value of the Fund's shares, and its yields and total returns
         are not guaranteed and normally will fluctuate on a daily basis.
o     When an investor's shares are redeemed, they may be worth more or less than
         their original cost.
o     Yields and total returns for any given past period represent historical
         performance information and are not, and should not be considered, a
         prediction of future yields or returns.

      The performance of each class of shares is shown separately, because the
performance of each class of shares will usually be different. That is because of the
different kinds of expenses each class bears. The yields and total returns of each
class of shares of the Fund are affected by market conditions, the quality of the
Fund's investments, the maturity of those investments, the types of investments the
Fund holds, and its operating expenses that are allocated to the particular class.

|X|   Yields. The Fund uses a variety of different yields to illustrate its current
returns. Each class of shares calculates its yield separately because of the different
expenses that affect each class.

o     Standardized Yield. The "standardized yield" (sometimes referred to just as
"yield") is shown for a class of shares for a stated 30-day period. It is not based on
actual distributions paid by the Fund to shareholders in the 30-day period, but is a
hypothetical yield based upon the net investment income from the Fund's portfolio
investments for that period. It may therefore differ from the "dividend yield" for the
same class of shares, described below.

      Standardized yield is calculated using the following formula set forth in rules
adopted by the SEC, designed to assure uniformity in the way that all funds calculate
their yields:

 Standardized Yield = 2a-b +1)6 -1]
                       ---
                     [(
                       cd

      The symbols above represent the following factors:
      a =  dividends and interest earned during the 30-day period.
      b =  expenses accrued for the period (net of any expense assumptions).
      c =  the average daily number of shares of that class outstanding during the
           30-day period that were entitled to receive dividends.
      d =  the maximum offering price per share of that class on the last day of
           the period, adjusted for undistributed net investment income.

      The standardized yield for a particular 30-day period may differ from the yield
for other periods. The SEC formula assumes that the standardized yield for a 30-day
period occurs at a constant rate for a six-month period and is annualized at the end of
the six-month period. Additionally, because each class of shares is subject to
different expenses, it is likely that the standardized yields of the Fund's classes of
shares will differ for any 30-day period.

o     Dividend Yield. The Fund may quote a "dividend yield" for each class of its
shares. Dividend yield is based on the dividends paid on a class of shares during the
actual dividend period. To calculate dividend yield, the dividends of a class declared
during a stated period are added together, and the sum is multiplied by 12 (to
annualize the yield) and divided by the maximum offering price on the last day of the
dividend period. The formula is shown below:

     Dividend Yield = dividends paid x 12/maximum offering price (payment date)

      The maximum offering price for Class A shares includes the current maximum
initial sales charge. The maximum offering price for Class B and Class C shares is the
net asset value per share, without considering the effect of contingent deferred sales
charges. The Class A dividend yield may also be quoted without deducting the maximum
initial sales charge.

o     Tax-Equivalent Yield. The "tax-equivalent yield" of a class of shares is the
 equivalent yield that would have to be earned on a taxable investment to achieve the
 after-tax results represented by the Fund's tax-equivalent yield. It adjusts the
 Fund's standardized yield, as calculated above, by a stated tax rate. Using different
 tax rates to show different tax equivalent yields shows investors in different tax
 brackets the tax equivalent yield of the Fund based on their own tax bracket.

      The tax-equivalent yield is based on a 30-day period, and is computed by dividing
the tax-exempt portion of the Fund's current yield (as calculated above) by one minus a
stated income tax rate. The result is added to the portion (if any) of the Fund's
current yield that is not tax-exempt.

      The tax-equivalent  yield may be used to compare the tax effects of income derived
from the Fund with income from taxable  investments  at the tax rates  stated.  Your tax
bracket is determined by your federal and state taxable  income (the net amount  subject
to federal and state income tax after deductions and exemptions).

--------------------------------------------------------------------------------

            The Fund's Yields for the 30-Day Periods Ended 9/30/04

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class of   Standardized   Dividend Yield    Tax-Equivalent     Tax-Equivalent
                                            Yield (40.01%      Yield (42.90%

                                               Combined      Combined Federal,
Shares                                     Federal/New York   State & City Tax
               Yield                         Tax Bracket)         Bracket)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
          Without After   Without After   Without  After
                                                             Without
                                                             Sales    After
          Sales   Sales   Sales   Sales   Sales    Sales      Charge  Sales
          Charge  Charge  Charge  Charge   Charge   Charge             Charge
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class A    5.71%   5.44%   5.59%   5.32%   9.52%     9.07%    10.00%    9.52%

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class B    4.92%    N/A    4.86%    N/A    8.20%      N/A     8.62%      N/A

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Class C    4.92%    N/A    4.87%    N/A    8.20%      N/A     8.62%      N/A

--------------------------------------------------------------------------------

      |X|   Total Return Information. There are different types of "total returns" to
measure the Fund's performance. Total return is the change in value of a hypothetical
investment in the Fund over a given period, assuming that all dividends and capital
gains distributions are reinvested in additional shares and that the investment is
redeemed at the end of the period. Because of differences in expenses for each class of
shares, the total returns for each class are separately measured. The cumulative total
return measures the change in value over the entire period (for example, 10 years). An
average annual total return shows the average rate of return for each year in a period
that would produce the cumulative total return over the entire period. However, average
annual total returns do not show actual year-by-year performance. The Fund uses
standardized calculations for its total returns as prescribed by the SEC. The
methodology is discussed below.

      In calculating total returns for Class A shares, the current maximum sales charge
of 4.75% (as a percentage of the offering price) is deducted from the initial
investment ("P" in the formula below) (unless the return is shown without sales charge,
as described below). For Class B shares, payment of the applicable contingent deferred
sales charge is applied, depending on the period for which the return is shown: 5.0% in
the first year, 4.0% in the second year, 3.0% in the third and fourth years, 2.0% in
the fifth year, 1.0% in the sixth year and none thereafter. For Class C shares, the
1.0% contingent deferred sales charge is deducted for returns for the one-year period.

o     Average Annual Total Return. The "average annual total return" of each class
is an average annual compounded rate of return for each year in a specified number of
years. It is the rate of return based on the change in value of a hypothetical initial
investment of $1,000 ("P" in the formula below) held for a number of years ("n" in the
formula) to achieve an Ending Redeemable Value ("ERV" in the formula) of that
investment, according to the following formula:

      ERV      - 1  Average Annual Total
            l/n     Return
      ------
       P

o     Average Annual Total Return (After Taxes on Distributions). The "average
annual total return (after taxes on distributions)" of Class A shares is an average
annual compounded rate of return for each year in a specified number of years, adjusted
to show the effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any distributions made
by the Fund during the specified period. It is the rate of return based on the change
in value of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n" in the formula) to achieve an ending value ("ATVD" in the
formula) of that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the following
formula:

           - 1 = Average Annual Total Return (After Taxes on
ATVD   l/n     Distributions)
---
  P

o     Average Annual Total Return (After Taxes on Distributions and Redemptions).
The "average annual total return (after taxes on distributions and redemptions)" of
Class A shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes (calculated
using the highest individual marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund during the specified period
and the effect of capital gains taxes or capital loss tax benefits (each calculated
using the highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period. It is the
rate of return based on the change in value of a hypothetical initial investment of
$1,000 ("P" in the formula below) held for a number of years ("n" in the formula) to
achieve an ending value ("ATVDR" in the formula) of that investment, after taking into
account the effect of taxes on fund distributions and on the redemption of Fund shares,
according to the following formula:

ATVDR       - 1  = Average Annual Total Return (After Taxes on Distributions
---
l/n              and Redemptions)
  P

o     Cumulative Total Return. The "cumulative total return" calculation measures
the change in value of a hypothetical investment of $1,000 over an entire period of
years. Its calculation uses some of the same factors as average annual total return,
but it does not average the rate of return on an annual basis. Cumulative total return
is determined as follows:

  ERV - P   = Total Return
------------
     P

o     Total Returns at Net Asset Value. From time to time the Fund may also quote a
cumulative or an average annual total return "at net asset value" (without deducting
sales charges) for each class of shares. Each is based on the difference in net asset
value per share at the beginning and the end of the period for a hypothetical
investment in that class of shares (without considering front-end or contingent
deferred sales charges) and takes into consideration the reinvestment of dividends and
capital gains distributions.

---------------------------------------------------------------------------------

             The Fund's Total Returns for the Periods Ended 9/30/04

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
           Cumulative Total             Average Annual Total Returns



Class of
Shares         Returns
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                  1-Year          5-Years          10-Years
                                                                  (or life of
                                                                    class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
          After     Without  After   Without  After    Without After    Without
          Sales     Sales    Sales   Sales    Sales    Sales   Sales    Sales
           Charge    Charge  Charge   Charge   Charge  Charge   Charge   Charge
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class A    70.62%1  79.13%1   1.83%   6.91%    4.87%    5.90%   5.49%    6.00%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class B    71.12%2  71.12%2   0.99%   5.99%    4.74%    5.07%   5.52%    5.52%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class C    53.91%3  53.91%3   4.99%   5.99%    5.08%    5.08%   4.86%1   4.86%1

---------------------------------------------------------------------------------

1.          Inception of Class A:   8/16/84.
2.    Inception of Class B:   3/1/93.
3.          Inception of Class C:   8/29/95.


---------------------------------------------------------------------------------
         Average Annual Total Returns for Class A Shares1 (After Taxes)

                         For the Periods Ended 9/30/04

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                 1-Year           5-Years          10-Years
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

After Taxes on Distributions      1.83%            4.87%             5.48%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

After Taxes on                    3.12%            4.95%             5.49%

Distributions and
Redemption of Fund Shares
---------------------------------------------------------------------------------
1.    Inception of Class A shares: 8/16/84.

Other Performance Comparisons. The Fund compares its performance annually to that of an
appropriate broadly-based market index in its Annual Report to shareholders. You can
obtain that information by contacting the Transfer Agent at the addresses or telephone
numbers shown on the cover of this Statement of Additional Information. The Fund may
also compare its performance to that of other investments, including other mutual
funds, or use rankings of its performance by independent ranking entities. Examples of
these performance comparisons are set forth below.

      |X|   Lipper Rankings. From time to time the Fund may publish the ranking of the
performance of its classes of shares by Lipper, Inc. ("Lipper"). Lipper is a
widely-recognized independent mutual fund monitoring service. Lipper monitors the
performance of regulated investment companies, including the Fund, and ranks their
performance for various periods in categories based on investment styles. The Lipper
performance rankings are based on total returns that include the reinvestment of
capital gain distributions and income dividends but do not take sales charges or taxes
into consideration. Lipper also publishes "peer-group" indices of the performance of
all mutual funds in a category that it monitors and averages of the performance of the
funds in particular categories. Lipper also publishes "Lipper Leader" awards in
various categories.


|X|   Morningstar Ratings. From time to time the Fund may publish the star rating
of the performance of its classes of shares by Morningstar, Inc., an independent mutual
fund monitoring service. Morningstar rates and ranks mutual funds in broad investment
categories: domestic stock funds, international stock funds, taxable bond funds and
municipal bond funds. The Fund is rated among the Municipal New York bond category.


      Morningstar proprietary star ratings reflect historical risk-adjusted total
investment return. For each fund with at least a three-year history, Morningstar
calculates a Morningstar Rating(TM)based on a Morningstar Risk-Adjusted Return measure
that accounts for variation in a fund's monthly performance (including the effects of
sales charges, loads, and redemption fees), placing more emphasis on downward
variations and rewarding consistent performance.   The top 10% of funds in each
category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars,
the next 22.5% receive 2 stars, and the bottom 10% receive 1 star.  (Each share class
is counted as a fraction of one fund within this scale and rated separately, which may
cause slight variations in the distribution percentages.) The Overall Morningstar
Rating for a fund is derived from a weighted average of the performance figures
associated with its three-, five-and ten-year (if applicable) Morningstar Rating
metrics.

      |X|   Performance Rankings and Comparisons by Other Entities and Publications.
From time to time the Fund may include in its advertisements and sales literature
performance information about the Fund cited in newspapers and other periodicals such
as The New York Times, The Wall Street Journal, Barron's, or similar publications. That
information may include performance quotations from other sources, including Lipper and
Morningstar. The performance of the Fund's classes of shares may be compared in
publications to the performance of various market indices or other investments, and
averages, performance rankings or other benchmarks prepared by recognized mutual fund
statistical services.

      Investors may also wish to compare the returns on the Fund's share classes to the
return on fixed-income investments available from banks and thrift institutions. Those
include certificates of deposit, ordinary interest-paying checking and savings
accounts, and other forms of fixed or variable time deposits, and various other
instruments such as Treasury bills. However, the Fund's returns and share price are not
guaranteed or insured by the FDIC or any other agency and will fluctuate daily, while
bank depository obligations may be insured by the FDIC and may provide fixed rates of
return. Repayment of principal and payment of interest on Treasury securities is backed
by the full faith and credit of the U.S. government.

      From time to time, the Fund may publish rankings or ratings of the Manager or
Transfer Agent, and of the investor services provided by them to shareholders of the
Oppenheimer funds, other than performance rankings of the Oppenheimer funds
themselves.  Those ratings or rankings of shareholder and investor services by third
parties may include comparisons of their services to those provided by other mutual
fund families selected by the rating or ranking services. They may be based upon the
opinions of the rating or ranking service itself, using its research or judgment, or
based upon surveys of investors, brokers, shareholders or others.

      From time to time the Fund may include in its advertisements and sales literature
the total return performance of a hypothetical investment account that includes shares
of the Fund and other Oppenheimer funds. The combined account may be part of an
illustration of an asset allocation model or similar presentation. The account
performance may combine total return performance of the Fund and the total return
performance of other Oppenheimer funds included in the account. Additionally, from time
to time, the Fund's advertisements and sales literature may include, for illustrative
or comparative purposes, statistical data or other information about general or
specific market and economic conditions. That may include, for example,
o     information about the performance of certain securities or commodities
         markets or segments of those markets,
o     information about the performance of the economies of particular countries or
         regions,
o     the earnings of companies included in segments of particular industries,
         sectors, securities markets, countries or regions,
o     the availability of different types of securities or offerings of securities,
o     information relating to the gross national or gross domestic product of the
         United States or other countries or regions,
o     comparisons of various market sectors or indices to demonstrate performance,
         risk, or other characteristics of the Fund.

ABOUT your account

How to Buy Shares

Additional information is presented below about the methods that can be used to buy
shares of the Fund. Appendix C contains more information about the special sales charge
arrangements offered by the Fund, and the circumstances in which sales charges may be
reduced or waived for certain classes of investors.


When you purchase shares of the Fund, your ownership interest in the shares of the Fund
will be recorded as a book entry on the records of the Fund.  The Fund will not issue
or re-register physical share certificates.


AccountLink. When shares are purchased through AccountLink, each purchase must be at
least $50 and shareholders must invest at least $500 before an Asset Builder Plan
          ---
(described below) can be established on a new account. Accounts established prior to
November 1, 2002 will remain at $25 for additional purchases. Shares will be purchased
on the regular business day the Distributor is instructed to initiate the Automated
Clearing House ("ACH") transfer to buy the shares. Dividends will begin to accrue on
shares purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the close of The
New York Stock Exchange ("the Exchange"). The Exchange normally closes at 4:00 P.M.,
but may close earlier on certain days. If Federal Funds are received on a business day
after the close of the Exchange, the shares will be purchased and dividends will begin
to accrue on the next regular business day. The proceeds of ACH transfers are normally
received by the Fund three days after the transfers are initiated. If the proceeds of
the ACH transfer are not received on a timely basis, the Distributor reserves the right
to cancel the purchase order. The Distributor and the Fund are not responsible for any
delays in purchasing shares resulting from delays in ACH transmissions.

Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge rate may
be obtained for Class A shares under Right of Accumulation and Letters of Intent
because of the economies of sales efforts and reduction in expenses realized by the
Distributor, dealers and brokers making such sales. No sales charge is imposed in
certain other circumstances described in Appendix C to this Statement of Additional
Information because the Distributor or dealer or broker incurs little or no selling
expenses.

      A fiduciary can count all shares purchased for a trust, estate or other fiduciary
account (including one or more employee benefit plans of the same employer) that has
multiple accounts. The Distributor will add the value, at current offering price, of
the shares you previously purchased and currently own to the value of current purchases
to determine the sales charge rate that applies. The reduced sales charge will apply
only to current purchases. You must request it when you buy shares.

|X|   The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which
the Distributor acts as the distributor and currently include the following:


Oppenheimer AMT-Free Municipals              Oppenheimer Limited Term Municipal Fund
Oppenheimer AMT-Free New York Municipals     Oppenheimer Main Street Fund
Oppenheimer Balanced Fund                    Oppenheimer Main Street Opportunity Fund
Oppenheimer Bond Fund                        Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund        Oppenheimer MidCap Fund
Oppenheimer Capital Appreciation Fund        Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund        Oppenheimer Pennsylvania Municipal Fund
                                             Oppenheimer Principal Protected Main
Oppenheimer Capital Income Fund              Street Fund

                                             Oppenheimer Principal Protected Main

Oppenheimer Champion Income Fund             Street Fund II

                                             Oppenheimer Principal Protected Main

Oppenheimer Convertible Securities Fund      Street Fund III
Oppenheimer Developing Markets Fund          Oppenheimer Quest Balanced Fund

                                             Oppenheimer Quest Capital Value Fund,

Oppenheimer Disciplined Allocation Fund      Inc.

                                             Oppenheimer Quest International Value

Oppenheimer Discovery Fund                   Fund, Inc.
Oppenheimer Emerging Growth Fund             Oppenheimer Quest Opportunity Value Fund
Oppenheimer Emerging Technologies Fund       Oppenheimer Quest Value Fund, Inc.
Oppenheimer Enterprise Fund                  Oppenheimer Real Asset Fund
Oppenheimer Equity Fund, Inc.                Oppenheimer Real Estate Fund
Oppenheimer Global Fund                      Oppenheimer Rochester National Municipals
Oppenheimer Global Opportunities Fund        Oppenheimer Select Value Fund
Oppenheimer Gold & Special Minerals Fund     Oppenheimer Senior Floating Rate Fund
Oppenheimer Growth Fund                      Oppenheimer Small Cap Value Fund
Oppenheimer High Yield Fund                  Oppenheimer Strategic Income Fund
Oppenheimer International Bond Fund          Oppenheimer Total Return Bond Fund
Oppenheimer International Growth Fund        Oppenheimer U.S. Government Trust
Oppenheimer International Small Company Fund Oppenheimer Value Fund
Oppenheimer International Value Fund         Limited-Term New York Municipal Fund
Oppenheimer Limited Term California
Municipal Fund                               Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund
And the following money market funds:        Rochester Fund Municipals


Oppenheimer Cash Reserves                    Centennial Government Trust
Oppenheimer Money Market Fund, Inc.          Centennial Money Market Trust
Centennial America Fund, L. P.               Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust       Centennial Tax Exempt Trust

      There is an initial sales charge on the purchase of Class A shares of each of the
Oppenheimer funds described above except the money market. Under certain circumstances
described in this Statement of Additional Information, redemption proceeds of certain
money market fund shares may be subject to a contingent deferred sales charge.

Letters of Intent. Under a Letter of Intent ("Letter"), if you purchase Class A shares
or Class A and Class B shares of the Fund and other Oppenheimer funds during a 13-month
period, you can reduce the sales charge rate that applies to your purchases of Class A
shares. The total amount of your intended purchases of both Class A and Class B shares
will determine the reduced sales charge rate for the Class A shares purchased during
that period. You can include purchases made up to 90 days before the date of the
Letter. Letters do not consider Class C shares you purchase or may have purchased.

      A Letter is an investor's statement in writing to the Distributor of the
intention to purchase Class A shares or Class A and Class B shares of the Fund (and
other Oppenheimer funds) during a 13-month period (the "Letter period"). At the
investor's request, this may include purchases made up to 90 days prior to the date of
the Letter. The Letter states the investor's intention to make the aggregate amount of
purchases of shares which, when added to the investor's holdings of shares of those
funds, will equal or exceed the amount specified in the Letter. Purchases made by
reinvestment of dividends or distributions of capital gains and purchases made at net
asset value without sales charge do not count toward satisfying the amount of the
Letter.

      A Letter enables an investor to count the Class A and Class B shares purchased
under the Letter to obtain the reduced sales charge rate on purchases of Class A shares
of the Fund (and other Oppenheimer funds) that applies under the Right of Accumulation
to current purchases of Class A shares. Each purchase of Class A shares under the
Letter will be made at the offering price (including the sales charge) that applies to
a single lump-sum purchase of shares in the amount intended to be purchased under the
Letter.

      In submitting a Letter, the investor makes no commitment to purchase shares.
However, if the investor's purchases of shares within the Letter period, when added to
the value (at offering price) of the investor's holdings of shares on the last day of
that period, do not equal or exceed the intended purchase amount, the investor agrees
to pay the additional amount of sales charge applicable to such purchases. That amount
is described in "Terms of Escrow," below (those terms may be amended by the Distributor
from time to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent subject to the
Terms of Escrow. Also, the investor agrees to be bound by the terms of the Prospectus,
this Statement of Additional Information and the application used for a Letter. If
those terms are amended, as they may be from time to time by the Fund, the investor
agrees to be bound by the amended terms and that those amendments will apply
automatically to existing Letters.

      If the total eligible purchases made during the Letter period do not equal or
exceed the intended purchase amount, the concessions previously paid to the dealer of
record for the account and the amount of sales charge retained by the Distributor will
be adjusted to the rates applicable to actual total purchases. If total eligible
purchases during the Letter period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set forth in the
Prospectus, the sales charges paid will be adjusted to the lower rate. That adjustment
will be made only if and when the dealer returns to the Distributor the excess of the
amount of concessions allowed or paid to the dealer over the amount of concessions that
apply to the actual amount of purchases. The excess concessions returned to the
Distributor will be used to purchase additional shares for the investor's account at
the net asset value per share in effect on the date of such purchase, promptly after
the Distributor's receipt thereof.


      The Transfer Agent will not hold shares in escrow for purchases of shares of the
Fund and other Oppenheimer funds by OppenheimerFunds prototype 401(k) plans under a
Letter. If the intended purchase amount under a Letter entered into by an
OppenheimerFunds prototype 401(k) plan is not purchased by the plan by the end of the
Letter period, there will be no adjustment of concessions paid to the broker-dealer or
financial institution of record for accounts held in the name of that plan.


      In determining the total amount of purchases made under a Letter, shares redeemed
by the investor prior to the termination of the Letter period will be deducted. It is
the responsibility of the dealer of record and/or the investor to advise the
Distributor about the Letter when placing any purchase orders for the investor during
the Letter period. All of such purchases must be made through the Distributor.

      |X|   Terms of Escrow That Apply to Letters of Intent.

      1. Out of the initial purchase (or subsequent purchases if necessary) made
pursuant to a Letter, shares of the Fund equal in value up to 5% of the intended
purchase amount specified in the Letter shall be held in escrow by the Transfer Agent.
For example, if the intended purchase amount is $50,000, the escrow shall be shares
valued in the amount of $2,500 (computed at the offering price adjusted for a $50,000
purchase). Any dividends and capital gains distributions on the escrowed shares will be
credited to the investor's account.

      2. If the total minimum investment specified under the Letter is completed within
the 13-month Letter period, the escrowed shares will be promptly released to the
investor.

      3. If, at the end of the 13-month Letter period the total purchases pursuant to
the Letter are less than the intended purchase amount specified in the Letter, the
investor must remit to the Distributor an amount equal to the difference between the
dollar amount of sales charges actually paid and the amount of sales charges which
would have been paid if the total amount purchased had been made at a single time. That
sales charge adjustment will apply to any shares redeemed prior to the completion of
the Letter. If the difference in sales charges is not paid within twenty days after a
request from the Distributor or the dealer, the Distributor will, within sixty days of
the expiration of the Letter, redeem the number of escrowed shares necessary to realize
such difference in sales charges. Full and fractional shares remaining after such
redemption will be released from escrow. If a request is received to redeem escrowed
shares prior to the payment of such additional sales charge, the sales charge will be
withheld from the redemption proceeds.

      4. By signing the Letter, the investor irrevocably constitutes and appoints
the Transfer Agent as attorney-in-fact to surrender for redemption any or all
escrowed shares.

5.    The shares eligible for purchase under the Letter (or the holding of which
may be counted toward completion of a Letter) include:
(a)   Class A shares sold with a front-end sales charge or subject to a Class A
            contingent deferred sales charge,
(b)   Class B shares of other Oppenheimer funds acquired subject to a contingent
            deferred sales charge, and
(c)   Class A or Class B shares acquired by exchange of either (1) Class A shares
            of one of the other Oppenheimer funds that were acquired subject to a
            Class A initial or contingent deferred sales charge or (2) Class B
            shares of one of the other Oppenheimer funds that were acquired subject
            to a contingent deferred sales charge.

      6. Shares held in escrow hereunder will automatically be exchanged for shares of
another fund to which an exchange is requested, as described in the section of the
Prospectus entitled "How to Exchange Shares" and the escrow will be transferred to that
other fund.

Asset Builder Plans. As explained in the Prospectus, you must initially establish your
account with $500. Subsequently, you can establish an Asset Builder Plan to
automatically purchase additional shares directly from a bank account for as little as
$50. For those accounts established prior to November 1, 2002 and which have previously
established Asset Builder Plans, additional purchases will remain at $25. Shares
purchased by Asset Builder Plan payments from bank accounts are subject to the
redemption restrictions for recent purchases described in the Prospectus. Asset Builder
Plans are available only if your bank is an ACH member. Asset Builder Plans may not be
used to buy shares for OppenheimerFunds employer-sponsored qualified retirement
accounts. Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves to
use their fund account to make monthly automatic purchases of shares of up to four
other Oppenheimer funds.

      If you make payments from your bank account to purchase shares of the Fund, your
bank account will be debited automatically. Normally the debit will be made two
business days prior to the investment dates you selected on your application. Neither
the Distributor, the Transfer Agent or the Fund shall be responsible for any delays in
purchasing shares that result from delays in ACH transmissions.

      Before you establish Asset Builder payments, you should obtain a prospectus of
the selected fund(s) from your financial advisor (or the Distributor) and request an
application from the Distributor. Complete the application and return it. You may
change the amount of your Asset Builder payment or you can terminate these automatic
investments at any time by writing to the Transfer Agent. The Transfer Agent requires a
reasonable period (approximately 10 days) after receipt of your instructions to
implement them. The Fund reserves the right to amend, suspend or discontinue offering
Asset Builder plans at any time without prior notice.

Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's shares
(for example, when a purchase check is returned to the Fund unpaid) causes a loss to be
incurred when the net asset values of the Fund's shares on the cancellation date is
less than on the purchase date. That loss is equal to the amount of the decline in the
net asset value per share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to compensate the Fund for
the loss, the Distributor will do so. The Fund may reimburse the Distributor for that
amount by redeeming shares from any account registered in that investor's name, or the
Fund or the Distributor may seek other redress.

Classes of Shares. Each class of shares of the Fund represents an interest in the same
portfolio of investments of the Fund. However, each class has different shareholder
privileges and features. The net income attributable to Class B or Class C shares and
the dividends payable on Class B or Class C shares will be reduced by incremental
expenses borne solely by that class. Those expenses include the asset-based sales
charges to which Class B and Class C are subject.

      The availability of different classes of shares permits an investor to choose the
method of purchasing shares that is more appropriate for the investor. That may depend
on the amount of the purchase, the length of time the investor expects to hold shares,
and other relevant circumstances. Class A shares normally are sold subject to an
initial sales charge. While Class B and Class C shares have no initial sales charge,
the purpose of the deferred sales charge and asset-based sales charge on Class B and
Class C shares is the same as that of the initial sales charge on Class A shares - to
compensate the Distributor and brokers, dealers and financial institutions that sell
shares of the Fund. A salesperson who is entitled to receive compensation from his or
her firm for selling Fund shares may receive different levels of compensation for
selling one class of shares rather than another.


      The Distributor will not accept a purchase order of $100,000 or more for Class B
shares or a purchase order of $1 million or more to purchase Class C shares on behalf
of a single investor (not including dealer "street name" or omnibus accounts).


      |X|   Class B Conversion. Under current interpretations of applicable federal
income tax law by the Internal Revenue Service, the conversion of Class B shares to
Class A shares 72 months after purchase is not treated as a taxable event for the
shareholder. If those laws or the IRS interpretation of those laws should change, the
automatic conversion feature may be suspended. In that event, no further conversions of
Class B shares would occur while that suspension remained in effect. Although Class B
shares could then be exchanged for Class A shares on the basis of relative net asset
value of the two classes, without the imposition of a sales charge or fee, such
exchange could constitute a taxable event for the shareholder, and absent such
exchange, Class B shares might continue to be subject to the asset-based sales charge
for longer than six years.

      |X|   Allocation of Expenses. The Fund pays expenses related to its daily
operations, such as custodian fees, Trustees' fees, transfer agency fees, legal fees
and auditing costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset values of
shares, and therefore are indirectly borne by shareholders through their investment.

      The methodology for calculating the net asset value, dividends and distributions
of the Fund's share classes recognizes two types of expenses. General expenses that do
not pertain specifically to any one class are allocated pro rata to the shares of all
classes. The allocation is based on the percentage of the Fund's total assets that is
represented by the assets of each class, and then equally to each outstanding share
within a given class. Such general expenses include management fees, legal, bookkeeping
and audit fees, printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current shareholders, fees
to unaffiliated Trustees, custodian expenses, share issuance costs, organization and
start-up costs, interest, taxes and brokerage commissions, and non-recurring expenses,
such as litigation costs.

      Other expenses that are directly attributable to a particular class are allocated
equally to each outstanding share within that class. Examples of such expenses include
distribution and service plan (12b-1) fees, transfer and shareholder servicing agent
fees and expenses and shareholder meeting expenses (to the extent that such expenses
pertain only to a specific class).


Fund Account Fees. As stated in the Prospectus, a $12 annual "Minimum Balance Fee"
is assessed on each Fund account with a share balance valued under $500. The
Minimum Balance Fee is automatically deducted from each such Fund account on or
about the second to last business day of September.

   Listed below are certain cases in which the Fund has elected, in its discretion,
   not to assess the Fund Account Fees.  These exceptions are subject to change:
   A fund account whose shares were acquired after September 30th of the prior year;
o     A fund account that has a balance below $500 due to the automatic conversion
      of shares from Class B to Class A shares. However, once all Class B shares
      held in the account have been converted to Class A shares the new account
      balance may become subject to the Minimum Balance Fee;
o     Accounts of shareholders who elect to access their account documents
      electronically via eDoc Direct;
o     A fund account that has only certificated shares and, has a balance below
      $500 and is being escheated;
o     Accounts of shareholders that are held by broker-dealers under the NSCC
      Fund/SERV system;
o     Accounts held under the Oppenheimer Legacy Program and/or holding certain
      Oppenheimer Variable Account Funds;
o     Omnibus accounts holding shares pursuant to the Pinnacle, Ascender, Custom
      Plus, Recordkeeper Pro and Pension Alliance Retirement Plan programs; and
o     A fund account that falls below the $500 minimum solely due to market

      fluctuations within the 12-month period preceding the date the fee is
      deducted.

To access account documents electronically via eDocs Direct, please visit the
Service Center on our website at www.oppenheimerfunds.com or call 1.888.470.0862
                                 ------------------------
for instructions.


      The Fund reserves the authority to modify Fund Account Fees in its discretion.

Determination of Net Asset Values Per Share. The net asset values per share of each
class of shares of the Fund are determined as of the close of business of the Exchange
on each day that the Exchange is open. The calculation is done by dividing the value of
the Fund's net assets attributable to a class by the number of shares of that class
that are outstanding. The Exchange normally closes at 4:00 P.M., Eastern time, but may
close earlier on some other days (for example, in case of weather emergencies or on
days falling before a U.S. holiday).  All references to time in this Statement of
Additional Information mean "Eastern time." The Exchange's most recent annual
announcement regarding holidays and days when the market may close early is available
on the Exchange's website at www.nyse.com.


      Dealers other than Exchange members may conduct trading in municipal securities
on days on which the Exchange is closed (including weekends and holidays) or after 4:00
P.M. on a regular business day. Because the Fund's net asset values will not be
calculated on those days, the Fund's net asset values per share may be significantly
affected on such days when shareholders may not purchase or redeem shares.

      |X|   Securities Valuation. The Fund's Board of Trustees has established
procedures for the valuation of the Fund's securities. In general those procedures are
as follows:

o     Long-term debt securities having a remaining maturity in excess of 60 days
are valued based on the mean between the "bid" and "asked" prices determined by a
portfolio pricing service approved by the Fund's Board of Trustees or obtained by the
Manager from two active market makers in the security on the basis of reasonable
inquiry.
o     The following securities are valued at the mean between the "bid" and "asked"
prices determined by a pricing service approved by the Fund's Board of Trustees or
obtained by the Manager from two active market makers in the security on the basis of
reasonable inquiry:
(1)   debt instruments that have a maturity of more than 397 days when issued,
(2)   debt instruments that had a maturity of 397 days or less when issued and have
               a remaining maturity of more than 60 days, and
(3)   non-money market debt instruments that had a maturity of 397 days or less
               when issued and which have a remaining maturity of 60 days or less.
o     The following securities are valued at cost, adjusted for amortization of
premiums and accretion of discounts:
(1)   money market debt securities held by a non-money market fund that had a
               maturity of less than 397 days when issued that have a remaining
               maturity of 60 days or less, and
(2)   debt instruments held by a money market fund that have a remaining maturity
               of 397 days or less.
o     Securities (including restricted securities) not having readily-available
market quotations are valued at fair value determined under the Board's procedures. If
the Manager is unable to locate two market makers willing to give quotes, a security
may be priced at the mean between the "bid" and "asked" prices provided by a single
active market maker (which in certain cases may be the "bid" price if no "asked" price
is available).

      In the case of municipal securities, when last sale information is not generally
available, the Manager may use pricing services approved by the Board of Trustees. The
pricing service may use "matrix" comparisons to the prices for comparable instruments
on the basis of quality, yield and maturity. Other special factors may be involved
(such as the tax-exempt status of the interest paid by municipal securities). The
Manager will monitor the accuracy of the pricing services. That monitoring may include
comparing prices used for portfolio valuation to actual sales prices of selected
securities.


      Puts, calls, futures and municipal bond index futures are valued at the last sale
price on the principal exchange on which they are traded or on Nasdaq(R), as applicable,
as determined by a pricing service approved by the Board of Trustees or by the Manager.
If there were no sales that day, they shall be valued at the last sale price on the
preceding trading day if it is within the spread of the closing "bid" and "asked"
prices on the principal exchange or on Nasdaq(R)on the valuation date. If not, the value
shall be the closing bid price on the principal exchange or on Nasdaq(R)on the valuation
date. If the put, call or future is not traded on an exchange or on Nasdaq(R), it shall
be valued by the mean between "bid" and "asked" prices obtained by the Manager from two
active market makers. In certain cases that may be at the "bid" price if no "asked"
price is available.


      When the Fund writes an option, an amount equal to the premium received is
included in the Fund's Statement of Assets and Liabilities as an asset. An equivalent
credit is included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the option. In determining
the Fund's gain on investments, if a call or put written by the Fund is exercised, the
proceeds are increased by the premium received. If a call or put written by the Fund
expires, the Fund has a gain in the amount of the premium. If the Fund enters into a
closing purchase transaction, it will have a gain or loss, depending on whether the
premium received was more or less than the cost of the closing transaction.  If the
Fund exercises a put it holds, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the Fund.


How to Sell Shares

The information below supplements the terms and conditions for redeeming shares set
forth in the Prospectus.

Checkwriting. When a check is presented to United Missouri Bank (the "Bank") for
clearance, the Bank will ask the Fund to redeem a sufficient number of full and
fractional shares in the shareholder's account to cover the amount of the check. This
enables the shareholder to continue receiving dividends on those shares until the check
is presented to the Fund. Checks may not be presented for payment at the offices of the
Bank or the Fund's custodian. This limitation does not affect the use of checks for the
payment of bills or to obtain cash at other banks. The Fund reserves the right to
amend, suspend or discontinue offering checkwriting privileges at any time.  The Fund
will provide you notice whenever it is required to do so by applicable law.

      In choosing to take advantage of the Checkwriting privilege, by signing the
account application or by completing a Checkwriting card, each individual who signs:
(1)   for individual accounts, represents that they are the registered owner(s) of
           the shares of the Fund in that account;
(2)   for accounts for corporations, partnerships, trusts and other entities,
           represents that they are an officer, general partner, trustee or other
           fiduciary or agent, as applicable, duly authorized to act on behalf of the
           registered owner(s);
(3)   authorizes the Fund, its Transfer Agent and any bank through which the Fund's
           drafts (checks) are payable to pay all checks drawn on the Fund account of
           such person(s) and to redeem a sufficient amount of shares from that account
           to cover payment of each check;
(4)   specifically acknowledges that if they choose to permit checks to be honored
           if there is a single signature on checks drawn against joint accounts, or
           accounts for corporations, partnerships, trusts or other entities, the
           signature of any one signatory on a check will be sufficient to authorize
           payment of that check and redemption from the account, even if that account
           is registered in the names of more than one person or more than one
           authorized signature appears on the Checkwriting card or the application, as
           applicable;
(5)   understands that the Checkwriting privilege may be terminated or amended at
           any time by the Fund and/or the Fund's bank; and
(6)   acknowledges and agrees that neither the Fund nor its bank shall incur any
           liability for that amendment or termination of checkwriting privileges or
           for redeeming shares to pay checks reasonably believed by them to be
           genuine, or for returning or not paying checks that have not been accepted
           for any reason.

Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of redemption
proceeds may be delayed if the Fund's custodian bank is not open for business on a day
when the Fund would normally authorize the wire to be made, which is usually the Fund's
next regular business day following the redemption. In those circumstances, the wire
will not be transmitted until the next bank business day on which the Fund is open for
business. No dividends will be paid on the proceeds of redeemed shares awaiting
transfer by Federal Funds wire.

Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest
all or part of the redemption proceeds of:
o     Class A shares purchased subject to an initial sales charge or Class A shares
         on which a contingent deferred sales charge was paid, or
o     Class B shares that were subject to the Class B contingent deferred sales
         charge when redeemed.

      The reinvestment may be made without sales charge only in Class A shares of the
Fund or any of the other Oppenheimer funds into which shares of the Fund are
exchangeable as described in "How to Exchange Shares" below. Reinvestment will be at
the net asset value next computed after the Transfer Agent receives the reinvestment
order. The shareholder must ask the Transfer Agent for that privilege at the time of
reinvestment. This privilege does not apply to Class C shares. The Fund may amend,
suspend or cease offering this reinvestment privilege at any time as to shares redeemed
after the date of such amendment, suspension or cessation.

      Any capital gain that was realized when the shares were redeemed is taxable, and
reinvestment will not alter any capital gains tax payable on that gain. If there has
been a capital loss on the redemption, some or all of the loss may not be tax
deductible, depending on the timing and amount of the reinvestment. Under the Internal
Revenue Code, if the redemption proceeds of Fund shares on which a sales charge was
paid are reinvested in shares of the Fund or another of the Oppenheimer funds within 90
days of payment of the sales charge, the shareholder's basis in the shares of the Fund
that were redeemed may not include the amount of the sales charge paid. That would
reduce the loss or increase the gain recognized from the redemption. However, in that
case the sales charge would be added to the basis of the shares acquired by the
reinvestment of the redemption proceeds.

Payments "In Kind". The Prospectus states that payment for shares tendered for
redemption is ordinarily made in cash. However, under certain circumstances, the Board
of Trustees of the Fund may determine that it would be detrimental to the best
interests of the remaining shareholders of the Fund to make payment of a redemption
order wholly or partly in cash. In that case, the Fund may pay the redemption proceeds
in whole or in part by a distribution "in kind" of liquid securities from the portfolio
of the Fund, in lieu of cash.

      The Fund has elected to be governed by Rule 18f-1 under the Investment Company
Act. Under that rule, the Fund is obligated to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. If shares are redeemed in kind, the redeeming shareholder might incur
brokerage or other costs in selling the securities for cash. The Fund will value
securities used to pay redemptions in kind using the same method the Fund uses to value
its portfolio securities described above under "Determination of Net Asset Values Per
Share." That valuation will be made as of the time the redemption price is determined.

Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the
involuntary redemption of the shares held in any account if the aggregate net asset
value of those shares is less than $200 or such lesser amount as the Board may fix. The
Board of Trustees will not cause the involuntary redemption of shares in an account if
the aggregate net asset value of such shares has fallen below the stated minimum solely
as a result of market fluctuations. If the Board exercises this right, it may also fix
the requirements for any notice to be given to the shareholders in question (not less
than 30 days). The Board may alternatively set requirements for the shareholder to
increase the investment, or set other terms and conditions so that the shares would not
be involuntarily redeemed.

Transfers of Shares. A transfer of shares to a different registration is not an event
that triggers the payment of sales charges. Therefore, shares are not subject to the
payment of a contingent deferred sales charge of any class at the time of transfer to
the name of another person or entity. It does not matter whether the transfer occurs by
absolute assignment, gift or bequest, as long as it does not involve, directly or
indirectly, a public sale of the shares. When shares subject to a contingent deferred
sales charge are transferred, the transferred shares will remain subject to the
contingent deferred sales charge. It will be calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at the same time
as the transferring shareholder.

      If less than all shares held in an account are transferred, and some but not all
shares in the account would be subject to a contingent deferred sales charge if
redeemed at the time of transfer, the priorities described in the Prospectus under "How
to Buy Shares" for the imposition of the Class B or Class C contingent deferred sales
charge will be followed in determining the order in which shares are transferred.

Special Arrangements for Repurchase of Shares from Dealers and Brokers. The Distributor
is the Fund's agent to repurchase its shares from authorized dealers or brokers on
behalf of their customers. Shareholders should contact their broker or dealer to
arrange this type of redemption. The repurchase price per share will be the net asset
value next computed after the Distributor receives an order placed by the dealer or
broker. However, if the Distributor receives a repurchase order from a dealer or broker
after the close of the Exchange on a regular business day, it will be processed at that
day's net asset value if the order was received by the dealer or broker from its
customers prior to the time the Exchange closes. Normally, the Exchange closes at 4:00
P.M., but may do so earlier on some days. Additionally, the order must have been
transmitted to and received by the Distributor prior to its close of business that day
(normally 5:00 P.M.).

      Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been redeemed
upon the Distributor's receipt of the required redemption documents in proper form. The
signature(s) of the registered owners on the redemption documents must be guaranteed as
described in the Prospectus.

Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund valued at
$5,000 or more can authorize the Transfer Agent to redeem shares (having a value of at
least $50) automatically on a monthly, quarterly, semi-annual or annual basis under an
Automatic Withdrawal Plan. Shares will be redeemed three business days prior to the
date requested by the shareholder for receipt of the payment. Automatic withdrawals of
up to $1,500 per month may be requested by telephone if payments are to be made by
check payable to all shareholders of record. Payments must also be sent to the address
of record for the account and the address must not have been changed within the prior
30 days. Required minimum distributions from OppenheimerFunds-sponsored retirement
plans may not be arranged on this basis.

      Payments are normally made by check, but shareholders having AccountLink
privileges (see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the account application or by
signature-guaranteed instructions sent to the Transfer Agent. Shares are normally
redeemed pursuant to an Automatic Withdrawal Plan three business days before the
payment transmittal date you select in the account application. If a contingent
deferred sales charge applies to the redemption, the amount of the check or payment
will be reduced accordingly.

      The Fund cannot guarantee receipt of a payment on the date requested. The Fund
reserves the right to amend, suspend or discontinue offering these plans at any time
without prior notice. Because of the sales charge assessed on Class A share purchases,
shareholders should not make regular additional Class A share purchases while
participating in an Automatic Withdrawal Plan. Class B and Class C shareholders should
not establish automatic withdrawal plans, because of the potential imposition of the
contingent deferred sales charge on such withdrawals (except where the contingent
deferred sales charge is waived as described in Appendix C to this Statement of
Additional Information).

      By requesting an Automatic Withdrawal or Exchange Plan, the shareholder agrees to
the terms and conditions that apply to such plans, as stated below. These provisions
may be amended from time to time by the Fund and/or the Distributor. When adopted, any
amendments will automatically apply to existing Plans.

      |X|   Automatic Exchange Plans. Shareholders can authorize the Transfer Agent to
exchange a pre-determined amount of shares of the Fund for shares (of the same class)
of other Oppenheimer funds automatically on a monthly, quarterly, semi-annual or annual
basis under an Automatic Exchange Plan. The minimum amount that may be exchanged to
each other fund account is $50. Instructions should be provided on the OppenheimerFunds
Application or signature-guaranteed instructions. Exchanges made under these plans are
subject to the restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional Information.

      |X|   Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to
meet withdrawal payments. Shares acquired without a sales charge will be redeemed
first. Shares acquired with reinvested dividends and capital gains distributions will
be redeemed next, followed by shares acquired with a sales charge, to the extent
necessary to make withdrawal payments. Depending upon the amount withdrawn, the
investor's principal may be depleted. Payments made under these plans should not be
considered as a yield or income on your investment.

      The Transfer Agent will administer the investor's Automatic Withdrawal Plan as
agent for the shareholder(s) (the "Planholder") who executed the plan authorization and
application submitted to the Transfer Agent. Neither the Fund nor the Transfer Agent
shall incur any liability to the Planholder for any action taken or not taken by the
Transfer Agent in good faith to administer the plan. Share certificates will not be
issued for shares of the Fund purchased for and held under the plan, but the Transfer
Agent will credit all such shares to the account of the Planholder on the records of
the Fund. Any share certificates held by a Planholder may be surrendered unendorsed to
the Transfer Agent with the plan application so that the shares represented by the
certificate may be held under the plan.

      For accounts subject to Automatic Withdrawal Plans, distributions of capital
gains must be reinvested in shares of the Fund, which will be done at net asset value
without a sales charge. Dividends on shares held in the account may be paid in cash or
reinvested.

      Shares will be redeemed to make withdrawal payments at the net asset value per
share determined on the redemption date. Checks or AccountLink payments representing
the proceeds of Plan withdrawals will normally be transmitted three business days
prior to the date selected for receipt of the payment, according to the choice
specified in writing by the Planholder. Receipt of payment on the date selected cannot
be guaranteed.

      The amount and the interval of disbursement payments and the address to which
checks are to be mailed or AccountLink payments are to be sent may be changed at any
time by the Planholder by writing to the Transfer Agent. The Planholder should allow
at least two weeks' time after mailing such notification for the requested change to
be put in effect. The Planholder may, at any time, instruct the Transfer Agent by
written notice to redeem all, or any part of, the shares held under the plan. That
notice must be in proper form in accordance with the requirements of the then-current
Prospectus of the Fund. In that case, the Transfer Agent will redeem the number of
shares requested at the net asset value per share in effect and will mail a check for
the proceeds to the Planholder.

      The Planholder may terminate a Plan at any time by writing to the Transfer Agent.
The Fund may also give directions to the Transfer Agent to terminate a Plan. The
Transfer Agent will also terminate a Plan upon its receipt of evidence satisfactory to
it that the Planholder has died or is legally incapacitated. Upon termination of a Plan
by the Transfer Agent or the Fund, shares that have not been redeemed will be held in
uncertificated form in the name of the Planholder. The account will continue as a
dividend-reinvestment, uncertificated account unless and until proper instructions are
received from the Planholder, his or her executor or guardian, or another authorized
person.

      If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act as
agent in administering the Plan.

How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer funds having
more than one class of shares may be exchanged only for shares of the same class of
other Oppenheimer funds. Shares of Oppenheimer funds that have a single class without a
class designation are deemed "Class A" shares for this purpose. You can obtain a
current list showing which funds offer which classes of shares by calling the
Distributor.

o     All of the Oppenheimer funds currently offer Class A, B, C, N and Y shares
      with the following exceptions:

      The following funds only offer Class A shares:

      Centennial America Fund, L.P.        Centennial Money Market Trust
      Centennial California Tax Exempt     Centennial New York Tax Exempt
      Trust                                Trust
      Centennial Government Trust          Centennial Tax Exempt Trust



      The following funds do not offer Class N shares:

   Limited Term New York Municipal Fund    Oppenheimer Money Market Fund, Inc.
   Oppenheimer AMT-Free Municipals         Oppenheimer New Jersey Municipal Fund
   Oppenheimer AMT-Free New York           Oppenheimer Principal Protected Main
   Municipals                              Street Fund II
   Oppenheimer California Municipal Fund   Oppenheimer Pennsylvania Municipal

                                           Fund

   Oppenheimer International Value Fund    Oppenheimer Rochester National
                                           Municipals
   Oppenheimer Limited Term California     Oppenheimer Senior Floating Rate Fund
   Municipal Fund
   Oppenheimer Limited Term Municipal      Rochester Fund Municipals
   Fund



      The following funds do not offer Class Y shares:

   Limited Term New York Municipal Fund   Oppenheimer International Small Company
                                          Fund
   Oppenheimer AMT-Free Municipals       Oppenheimer Limited Term Municipal Fund
   Oppenheimer AMT-Free New York         Oppenheimer New Jersey Municipal Fund
   Municipals
   Oppenheimer Balanced Fund             Oppenheimer Pennsylvania Municipal Fund
   Oppenheimer California Municipal Fund Oppenheimer Principal Protected Main
                                         Street Fund
   Oppenheimer Capital Income Fund       Oppenheimer Principal Protected Main
                                         Street Fund II
   Oppenheimer Cash Reserves             Oppenheimer Principal Protected Main
                                         Street Fund III
   Oppenheimer Champion Income Fund      Oppenheimer Quest Capital Value Fund, Inc.
   Oppenheimer Convertible Securities    Oppenheimer Quest International Value

   Fund                                  Fund, Inc.

   Oppenheimer Disciplined Allocation    Oppenheimer Rochester National Municipals
   Fund
   Oppenheimer Developing Markets Fund   Oppenheimer Senior Floating Rate Fund
   Oppenheimer Gold & Special Minerals   Oppenheimer Small Cap Value Fund
   Fund
   Oppenheimer International Growth      Oppenheimer Total Return Bond Fund
   Fund


     o  Oppenheimer  Money  Market  Fund,  Inc.  only offers Class A and Class Y
     shares.

     o Class Y shares of  Oppenheimer  Real Asset Fund may not be exchanged  for
     shares of any other fund.

     o Class B,  Class C and Class N shares of  Oppenheimer  Cash  Reserves  are
     generally available only by exchange from the same class of shares of other
     Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.

     o  Class  M  shares  of  Oppenheimer  Convertible  Securities  Fund  may be
     exchanged only for Class A shares of other Oppenheimer  funds. They may not
     be acquired  by  exchange  of shares of any class of any other  Oppenheimer
     funds except Class A shares of Oppenheimer Money Market Fund or Oppenheimer
     Cash Reserves acquired by exchange of Class M shares.

     o Class X shares of Limited Term New York  Municipal  Fund may be exchanged
     only for Class B shares of other  Oppenheimer funds and no exchanges may be
     made to Class X shares.

     o Shares of Oppenheimer Capital  Preservation Fund may not be exchanged for
     shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves or
     Oppenheimer  Limited-Term  Government  Fund.  Only  participants in certain
     retirement  plans may purchase shares of Oppenheimer  Capital  Preservation
     Fund, and only those  participants may exchange shares of other Oppenheimer
     funds for shares of Oppenheimer Capital Preservation Fund.

     o Class A shares of  Oppenheimer  funds may be exchanged at net asset value
     for shares of any money market fund offered by the  Distributor.  Shares of
     any money market fund purchased without a sales charge may be exchanged for
     shares of Oppenheimer funds offered with a sales charge upon payment of the
     sales charge. They may also be used to purchase shares of Oppenheimer funds
     subject to an early withdrawal charge or contingent deferred sales charge.

     o  Shares  of  Oppenheimer  Money  Market  Fund,  Inc.  purchased  with the
     redemption  proceeds  of shares of other  mutual  funds  (other  than funds
     managed by the  Manager or its  subsidiaries)  redeemed  within the 30 days
     prior to that  purchase may  subsequently  be exchanged for shares of other
     Oppenheimer  funds  without  being  subject to an initial  sales  charge or
     contingent  deferred  sales  charge.  To qualify  for that  privilege,  the
     investor  or  the  investor's   dealer  must  notify  the   Distributor  of
     eligibility for this privilege at the time the shares of Oppenheimer  Money
     Market Fund,  Inc. are purchased.  If requested,  they must supply proof of
     entitlement to this privilege.

     o Shares of the Fund acquired by reinvestment of dividends or distributions
     from any of the other  Oppenheimer  funds or from any unit investment trust
     for which reinvestment arrangements have been made with the Distributor may
     be exchanged at net asset value for shares of any of the Oppenheimer funds.

     o  Shares  of  Oppenheimer  Principal  Protected  Main  Street  Fund may be
     exchanged  at net asset value for shares of any of the  Oppenheimer  funds.
     However,  shareholders  are not  permitted  to  exchange  shares  of  other
     Oppenheimer funds for shares of Oppenheimer Principal Protected Main Street
     Fund until after the expiration of the warranty period (8/5/2010).

     o Shares of  Oppenheimer  Principal  Protected  Main  Street Fund II may be
     exchanged  at net asset value for shares of any of the  Oppenheimer  funds.
     However,  shareholders  are not  permitted  to  exchange  shares  of  other
     Oppenheimer funds for shares of Oppenheimer Principal Protected Main Street
     Fund II until after the expiration of the warranty period (2/4/2011).

     o Shares of  Oppenheimer  Principal  Protected  Main Street Fund III may be
     exchanged  at net asset value for shares of any of the  Oppenheimer  funds.
     However,  shareholders  are not  permitted  to  exchange  shares  of  other
     Oppenheimer funds for shares of Oppenheimer Principal Protected Main Street
     Fund III until after the expiration of the warranty period (12/06/2011).


     The Fund may amend,  suspend or  terminate  the  exchange  privilege at any
time.  Although the Fund may impose these  changes at any time,  it will provide
you with notice of those changes  whenever it is required to do so by applicable
law. It may be required to provide 60 days' notice prior to materially  amending
or  terminating  the exchange  privilege.  That 60 day notice is not required in
extraordinary circumstances.

     |X| How Exchanges Affect Contingent  Deferred Sales Charges.  No contingent
deferred  sales charge is imposed on exchanges of shares of any class  purchased
subject to a contingent deferred sales charge, with the following exceptions:

     o When  Class A  shares  of any  Oppenheimer  fund  (other  than  Rochester
National Municipals and Rochester Fund Municipals) acquired by exchange of Class
A shares of any  Oppenheimer  fund  purchased  subject  to a Class A  contingent
deferred sales charge are redeemed  within 18 months measured from the beginning
of the calendar month of the initial  purchase of the exchanged  Class A shares,
the Class A contingent deferred sales charge is imposed on the redeemed shares.

     o When Class A shares of Rochester  National  Municipals and Rochester Fund
Municipals  acquired  by  exchange  of Class A shares  of any  Oppenheimer  fund
purchased  subject to a Class A  contingent  deferred  sales charge are redeemed
within 24 months of the beginning of the calendar month of the initial  purchase
of the exchanged Class A shares, the Class A contingent deferred sales charge is
imposed on the redeemed shares.

     o If any Class A shares of another  Oppenheimer fund that are exchanged for
Class A shares of Oppenheimer Senior Floating Rate Fund are subject to the Class
A contingent  deferred sales charge of the other Oppenheimer fund at the time of
exchange,  the holding period for that Class A contingent  deferred sales charge
will carry over to the Class A shares of Oppenheimer  Senior  Floating Rate Fund
acquired in the exchange. The Class A shares of Oppenheimer Senior Floating Rate
Fund acquired in that  exchange will be subject to the Class A Early  Withdrawal
Charge of Oppenheimer  Senior Floating Rate Fund if they are repurchased  before
the expiration of the holding period.

     o When Class A shares of Oppenheimer  Cash Reserves and  Oppenheimer  Money
Market Fund, Inc. acquired by exchange of Class A shares of any Oppenheimer fund
purchased  subject to a Class A  contingent  deferred  sales charge are redeemed
within  the Class A  holding  period of the fund  from  which  the  shares  were
exchanged,  the Class A contingent  deferred sales charge of the fund from which
the shares were exchanged is imposed on the redeemed shares.


     o With respect to Class B shares (other than Limited-Term  Government Fund,
Limited Term Municipal Fund,  Limited Term New York Municipal Fund,  Oppenheimer
Capital  Preservation Fund and Oppenheimer Senior Floating Rate Fund), the Class
B  contingent  deferred  sales  charge is imposed on Class B shares  acquired by
exchange if they are  redeemed  within six years of the initial  purchase of the
exchanged Class B shares.

     o With respect to Class B shares of Limited-Term  Government Fund,  Limited
Term Municipal Fund, Limited Term New York Municipal Fund,  Oppenheimer  Capital
Preservation  Fund and  Oppenheimer  Senior  Floating  Rate  Fund,  the  Class B
contingent  deferred  sales  charge is  imposed  on Class B shares  acquired  by
exchange  if they are  redeemed  within 5 years of the  initial  purchase of the
exchanged Class B shares.


     o With  respect to Class C shares,  the Class C contingent  deferred  sales
charge is imposed on Class C shares  acquired by  exchange if they are  redeemed
within 12 months of the initial purchase of the exchanged Class C shares.


     With respect to Class N shares, a 1% contingent  deferred sales charge will
be imposed  if the  retirement  plan (not  including  IRAs and 403(b)  plans) is
terminated  or Class N shares  of all  Oppenheimer  funds are  terminated  as an
investment  option of the plan and Class N shares are redeemed  within 18 months
after the plan's  first  purchase of Class N shares of any  Oppenheimer  fund or
with respect to an individual retirement plan or 403(b) plan, Class N shares are
redeemed  within 18 months of the plan's first purchase of Class N shares of any
Oppenheimer fund.

When Class B, Class C or Class N shares are redeemed to effect an exchange,  the
priorities described in "How To Buy Shares" in the Prospectus for the imposition
of the Class B, Class C or Class N  contingent  deferred  sales  charge  will be
followed  in  determining  the order in which the shares are  exchanged.  Before
exchanging  shares,  shareholders  should take into account how the exchange may
affect  any  contingent  deferred  sales  charge  that  might be  imposed in the
subsequent redemption of remaining shares.


     Shareholders  owning shares of more than one class must specify which class
of shares they wish to exchange.

     |X| Limits on Multiple  Exchange  Orders.  The Fund  reserves  the right to
reject  telephone or written  exchange  requests  submitted in bulk by anyone on
behalf of more than one account.  The Fund may accept  requests for exchanges of
up to 50  accounts  per day from  representatives  of  authorized  dealers  that
qualify for this privilege.

     |X| Telephone  Exchange  Requests.  When exchanging shares by telephone,  a
shareholder  must have an existing  account in the fund to which the exchange is
to be made.  Otherwise,  the  investors  must obtain a  prospectus  of that fund
before the exchange  request may be submitted.  If all telephone  lines are busy
(which  might  occur,  for  example,   during  periods  of  substantial   market
fluctuations),  shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.

     |X| Processing  Exchange  Requests.  Shares to be exchanged are redeemed on
the regular  business day the  Transfer  Agent  receives an exchange  request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are  purchased on the  Redemption  Date,  but such  purchases  may be delayed by
either  fund up to  five  business  days  if it  determines  that  it  would  be
disadvantaged  by an immediate  transfer of the  redemption  proceeds.  The Fund
reserves the right, in its discretion,  to refuse any exchange  request that may
disadvantage it. For example,  if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price  that  might be  disadvantageous  to the  Fund,  the Fund may  refuse  the
request.

     When you exchange some or all of your shares from one fund to another,  any
special  account  feature such as an Asset Builder Plan or Automatic  Withdrawal
Plan will be switched to the new fund account unless you tell the Transfer Agent
not  to do so.  However,  special  redemption  and  exchange  features  such  as
Automatic Exchange Plans and Automatic Withdrawal Plans cannot be switched to an
account in Oppenheimer Senior Floating Rate Fund.

     In connection with any exchange request, the number of shares exchanged may
be less than the number  requested if the exchange or the number requested would
include  shares  subject  to a  restriction  cited  in the  Prospectus  or  this
Statement of Additional Information,  or would include shares covered by a share
certificate  that is not  tendered  with the request.  In those cases,  only the
shares available for exchange without restriction will be exchanged.

     The different  Oppenheimer  funds  available  for exchange  have  different
investment objectives,  policies and risks. A shareholder should assure that the
fund selected is  appropriate  for his or her  investment and should be aware of
the tax  consequences  of an  exchange.  For  federal  income tax  purposes,  an
exchange  transaction  is  treated as a  redemption  of shares of one fund and a
purchase of shares of another.  "Reinvestment  Privilege," above, discusses some
of the tax  consequences of  reinvestment of redemption  proceeds in such cases.
The  Fund,  the  Distributor,  and the  Transfer  Agent are  unable  to  provide
investment,  tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.

Dividends, Capital Gains and Taxes

Dividends and Distributions.  Dividends will be payable on shares held of record
at the time of the previous  determination  of net asset value,  or as otherwise
described in "How to Buy Shares."  Daily  dividends will not be declared or paid
on newly purchased  shares until such time as Federal Funds (funds credited to a
member  bank's  account at the  Federal  Reserve  Bank) are  available  from the
purchase  payment for such  shares.  Normally,  purchase  checks  received  from
investors  are  converted  to Federal  Funds on the next  business  day.  Shares
purchased through dealers or brokers normally are paid for by the third business
day following the placement of the purchase order.

     Shares  redeemed  through the  regular  redemption  procedure  will be paid
dividends  through  and  including  the day on which the  redemption  request is
received by the  Transfer  Agent in proper form.  Dividends  will be declared on
shares  repurchased  by a dealer or broker for three business days following the
trade  date (that is, up to and  including  the day prior to  settlement  of the
repurchase).  If all shares in an account are redeemed, all dividends accrued on
shares  of the  same  class  in the  account  will be  paid  together  with  the
redemption proceeds.

     The Fund's  practice of  attempting to pay dividends on Class A shares at a
constant  level  requires  the Manager to monitor the Fund's  portfolio  and, if
necessary, to select higher-yielding securities when it is deemed appropriate to
seek income at the level  needed to meet the target.  Those  securities  must be
within  the  Fund's  investment  parameters,  however.  The Fund  expects to pay
dividends  at a  targeted  level  from  its  net  investment  income  and  other
distributable income without any impact on the net asset values per share.

     Dividends,  distributions  and  proceeds of the  redemption  of Fund shares
represented  by checks  returned to the Transfer  Agent by the Postal Service as
undeliverable  will be invested in shares of Oppenheimer Money Market Fund, Inc.
Reinvestment  will be made as  promptly  as  possible  after the  return of such
checks  to the  Transfer  Agent,  to  enable  the  investor  to earn a return on
otherwise  idle funds.  Unclaimed  accounts may be subject to state  escheatment
laws, and the Fund and the Transfer Agent will not be liable to  shareholders or
their representatives for compliance with those laws in good faith.

     The amount of a  distribution  paid on a class of shares may vary from time
to time depending on market conditions, the composition of the Fund's portfolio,
and expenses  borne by the Fund or borne  separately  by a class.  Dividends are
calculated  in the same manner,  at the same time and on the same day for shares
of each class. However,  dividends on Class B and Class C shares are expected to
be lower  than  dividends  on Class A shares.  That is due to the  effect of the
asset-based  sales charge on Class B and Class C shares.  Those  dividends  will
also  differ in amount as a  consequence  of any  difference  in net asset value
among the different classes of shares.

Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares. The
federal tax treatment of the Fund's  distributions is briefly highlighted in the
Prospectus.   The  following  is  only  a  summary  of  certain  additional  tax
considerations generally affecting the Fund and its shareholders.

     The tax  discussion  in the  Prospectus  and this  Statement of  Additional
Information is based on tax law in effect on the date of the Prospectus and this
Statement of Additional  Information.  Those laws and regulations may be changed
by legislative,  judicial, or administrative action,  sometimes with retroactive
effect. State and local tax treatment of exempt-interest dividends and potential
capital gain distributions from regulated  investment  companies may differ from
the  treatment  under the  Internal  Revenue  Code  described  below.  Potential
purchasers  of shares of the Fund are urged to consult  their tax advisers  with
specific reference to their own tax circumstances as well as the consequences of
federal, state and local tax rules affecting an investment in the Fund.

     Qualification as a Regulated Investment Company. The Fund has elected to be
taxed as a regulated  investment  company  under  Subchapter  M of the  Internal
Revenue Code of 1986, as amended. As a regulated investment company, the Fund is
not subject to federal  income tax on the portion of its net  investment  income
(that is, taxable interest, dividends, and other taxable ordinary income, net of
expenses)  and  capital  gain net income  (that is, the excess of net  long-term
capital  gains  over net  short-term  capital  losses)  that it  distributes  to
shareholders.

     If the  Fund  qualifies  as a  "regulated  investment  company"  under  the
Internal  Revenue Code, it will not be liable for federal  income tax on amounts
it pays as dividends and other  distributions.  That  qualification  enables the
Fund to "pass  through" its income and realized  capital  gains to  shareholders
without having to pay tax on them. The Fund qualified as a regulated  investment
company in its last  fiscal  year and  intends to qualify in future  years,  but
reserves the right not to qualify.  The Internal  Revenue Code contains a number
of complex  tests to determine  whether the Fund  qualifies.  The Fund might not
meet those tests in a particular year. If it does not qualify,  the Fund will be
treated  for tax  purposes as an ordinary  corporation  and will  receive no tax
deduction   for  payments  of  dividends   and  other   distributions   made  to
shareholders.  In such an instance, all of the Fund's dividends would be taxable
to shareholders.

     To qualify as a regulated  investment company,  the Fund must distribute at
least 90% of its investment  company  taxable  income (in brief,  net investment
income and the excess of net short-term  capital gain over net long-term capital
loss) and at least 90% of its net  tax-exempt  income for the taxable year.  The
Fund must also satisfy certain other  requirements of the Internal Revenue Code,
some of which are  described  below.  Distributions  by the Fund made during the
taxable year or, under specified circumstances, within 12 months after the close
of the taxable year,  will be considered  distributions  of income and gains for
the  taxable  year  and  will  therefore   count  toward   satisfaction  of  the
above-mentioned requirement.

     To qualify as a regulated investment company, the Fund must derive at least
90% of its gross income from dividends,  interest, certain payments with respect
to  securities  loans,  gains  from the sale or  other  disposition  of stock or
securities or foreign currencies (to the extent such currency gains are directly
related to the regulated investment company's principal business of investing in
stock or securities) and certain other income.

     In addition to satisfying the  requirements  described above, the Fund must
satisfy  an  asset  diversification  test in  order to  qualify  as a  regulated
investment company.  Under that test, at the close of each quarter of the Fund's
taxable  year,  at least 50% of the value of the Fund's  assets must  consist of
cash  and  cash  items  (including  receivables),  U.S.  government  securities,
securities of other  regulated  investment  companies,  and  securities of other
issuers. As to each of those issuers,  the Fund must not have invested more than
5% of the value of the Fund's total assets in securities of each such issuer and
the Fund must not hold more than 10% of the  outstanding  voting  securities  of
each such  issuer.  No more than 25% of the  value of its  total  assets  may be
invested  in the  securities  of any one  issuer  (other  than  U.S.  government
securities and securities of other regulated investment companies), or in two or
more  issuers  which the Fund  controls  and which  are  engaged  in the same or
similar trades or businesses.  For purposes of this test,  obligations issued or
guaranteed by certain agencies or  instrumentalities  of the U.S. government are
treated as U.S. government securities.

|X| Excise Tax on Regulated  Investment  Companies.  Under the Internal  Revenue
Code,  by December  31 each year,  the Fund must  distribute  98% of its taxable
investment income earned from January 1 through December 31 of that year and 98%
of its capital  gains  realized in the period from  November 1 of the prior year
through  October 31 of the current  year.  If it does not,  the Fund must pay an
excise tax on the amounts not distributed.  It is presently anticipated that the
Fund  will  meet  those  requirements.  To meet  this  requirement,  in  certain
circumstances the Fund might be required to liquidate  portfolio  investments to
make sufficient distributions to avoid excise tax liability.  However, the Board
of Trustees and the Manager might  determine in a particular  year that it would
be in the  best  interests  of  shareholders  for  the  Fund  not to  make  such
distributions  at  the  required  levels  and  to  pay  the  excise  tax  on the
undistributed  amounts.  That would reduce the amount of income or capital gains
available for distribution to shareholders.

|X|  Taxation  of Fund  Distributions.  The Fund  intends to  qualify  under the
Internal Revenue Code during each fiscal year to pay "exempt-interest dividends"
to its shareholders.  To satisfy this qualification,  at the end of each quarter
of its  taxable  year,  at least 50% of the  value of the  Fund's  total  assets
consists of  obligations  as defined in Section  103(a) of the Internal  Revenue
Code, as amended. Exempt-interest dividends that are derived from net investment
income earned by the Fund on municipal  securities will be excludable from gross
income of shareholders  for federal income tax purposes.  To the extent the Fund
fails to  qualify  to pay  exempt-interest  dividends  in any given  form,  such
dividends  would be included  in the gross  income of  shareholders  for federal
income tax purposes.

     Net investment income includes the allocation of amounts of income from the
municipal  securities in the Fund's  portfolio that are free from federal income
taxes.  This  allocation  will be made by the use of one  designated  percentage
applied  uniformly to all income dividends paid during the Fund's tax year. That
designation  will  normally be made  following the end of each fiscal year as to
income dividends paid in the prior year. The percentage of income  designated as
tax-exempt  may  substantially  differ from the  percentage of the Fund's income
that was tax-exempt for a given period.

     A portion of the exempt-interest  dividends paid by the Fund may be an item
of tax preference for shareholders  subject to the federal  alternative  minimum
tax.  The  amount of any  dividends  attributable  to tax  preference  items for
purposes of the alternative  minimum tax will be identified when tax information
is distributed by the Fund.

     A shareholder  receiving a dividend from income earned by the Fund from one
or more of the following  sources must treat the dividend as ordinary  income in
the  computation of the  shareholder's  gross income,  regardless of whether the
dividend is reinvested:

     (1) certain taxable temporary investments (such as certificates of deposit,
repurchase agreements,  commercial paper and obligations of the U.S. government,
its agencies and instrumentalities);

     (2) income from securities loans;

     (3) income or gains from options or futures,

     (4) any net short-term capital gain; and

     (5) any market discount amortization on tax-exempt bonds.

     The  Fund's  dividends  will  not be  eligible  for the  dividends-received
deduction for corporations.  Shareholders  receiving Social Security or railroad
retirement benefits should be aware that exempt-interest  dividends are a factor
in  determining  whether (and the extent to which) such  benefits are subject to
federal income tax.  Losses  realized by  shareholders on the redemption of Fund
shares within six months of purchase will be disallowed  for federal  income tax
purposes to the extent of exempt-interest dividends received on such shares.

     In any year in which the Fund qualifies as a regulated  investment  company
under the  Internal  Revenue  Code,  the Fund will also be exempt  from New York
corporate  income and franchise  taxes. It will also be qualified under New York
law to pay exempt-interest dividends that will be exempt from New York State and
New York City personal income taxes.  That exemption  applies to the extent that
the Fund's  distributions  are  attributable  to interest on New York  municipal
securities.  Distributions  from the Fund  attributable  to income from  sources
other than New York municipal  securities and U.S.  government  obligations will
generally be subject to New York State and New York City  personal  income taxes
as ordinary income.


     Distributions  by the Fund from investment  income and long- and short-term
capital  gains will  generally  not be  excludable  from taxable net  investment
income in determining New York corporate franchise tax and New York City general
corporation tax for corporate  shareholders of the Fund.  Additionally,  certain
distributions  paid to corporate  shareholders  of the Fund may be includable in
income subject to the New York alternative minimum tax.


     The Fund may either retain or distribute  to  shareholders  its net capital
gain for each taxable year.  The Fund  currently  intends to distribute any such
amounts. If the net capital gain is distributed and designated as a capital gain
distribution, it will be taxable to shareholders as a long-term capital gain and
will be properly  identified in reports sent to  shareholders in January of each
year.  Such treatment will apply no matter how long the shareholder has held his
or her  shares  or  whether  that gain was  recognized  by the Fund  before  the
shareholder acquired his or her shares.

     If the Fund elects to retain its net capital gain, the Fund will be subject
to tax on it at the 35% corporate tax rate. If the Fund elects to retain its net
capital gain, the Fund will provide to shareholders of record on the last day of
its taxable year information  regarding their pro rata share of the gain and tax
paid. As a result,  each  shareholder  will be required to report his or her pro
rata  share of such gain on their tax return as  long-term  capital  gain,  will
receive a  refundable  tax credit for  his/her pro rata share of tax paid by the
Fund on the gain,  and will  increase  the tax basis  for  his/her  shares by an
amount equal to the deemed distribution less the tax credit.

     Distributions  by the Fund will be treated in the  manner  described  above
regardless  of  whether  the  distributions  are paid in cash or  reinvested  in
additional  shares of the Fund (or of another  fund).  Shareholders  receiving a
distribution  in the form of  additional  shares will be treated as  receiving a
distribution in an amount equal to the fair market value of the shares received,
determined as of the reinvestment date.


     The Fund will be  required  in certain  cases to  withhold  28% of ordinary
income  dividends (not  including  "exempt-interest  dividends"),  capital gains
distributions  (including  short-term  and  long-term) and the proceeds of the -
redemption of shares,  paid to any  shareholder  (1) who has failed to provide a
correct  taxpayer  identification  number  or to properly  certify  that
number when required,  (2) who is subject to backup  withholding  for failure to
report the  receipt of  interest or  dividend  income  properly,  or (3) who has
failed to  certify  to the Fund that the  shareholder  is not  subject to backup
withholding  or is an  "exempt  recipient"  (such  as a  corporation).  Any  tax
withheld by the Fund is remitted by the Fund to the U.S. Treasury and all income
and any tax withheld is identified in reports mailed to  shareholders in January
of each year.


|X| Tax Effects of  Redemptions  of Shares.  If a  shareholder  redeems all or a
portion of his/her shares,  the shareholder will recognize a gain or loss on the
redeemed shares in an amount equal to the difference between the proceeds of the
redeemed shares and the shareholder's adjusted tax basis in the shares. All or a
portion  of  any  loss  recognized  in  that  manner  may be  disallowed  if the
shareholder  purchases  other  shares of the Fund within 30 days before or after
the redemption.

     In general,  any gain or loss arising from the  redemption of shares of the
Fund will be  considered  capital  gain or loss,  if the  shares  were held as a
capital asset. It will be long-term capital gain or loss if the shares were held
for more than one year. However, any capital loss arising from the redemption of
shares held for six months or less will be treated as a long-term  capital  loss
to the extent of the amount of capital gain dividends  received on those shares.
Special holding period rules under the Internal  Revenue Code apply in this case
to  determine  the  holding  period  of  shares  and  there  are  limits  on the
deductibility of capital losses in any year.

|X| Foreign Shareholders. Under U.S. tax law, taxation of a shareholder who is a
foreign person (to include,  but not limited to, a nonresident alien individual,
a  foreign  trust,  a  foreign  estate,  a  foreign  corporation,  or a  foreign
partnership)  primarily  depends on whether the foreign person's income from the
Fund is  effectively  connected  with the conduct of a U.S.  trade or  business.
Typically,   ordinary  income  dividends  paid  (not  including  exempt-interest
dividends paid by the Fund) from a mutual fund are not  considered  "effectively
connected" income.


     Ordinary  income  dividends  that are paid by the Fund (and are  deemed not
"effectively connected income") to foreign persons will be subject to a U.S. tax
withheld  by the Fund at a rate of 30%,  provided  the Fund  obtains a  properly
completed and signed  Certificate of Foreign Status. The tax rate may be reduced
if the  foreign  person's  country of  residence  has a tax treaty with the U.S.
allowing for a reduced tax rate on ordinary  income  dividends paid by the Fund.
Any tax  withheld by the Fund is remitted by the Fund to the U.S.  Treasury  and
all income and any tax withheld is identified in reports mailed to  shareholders
in March of each year.

     If the ordinary income  dividends from the Fund are  effectively  connected
with the conduct of a U.S.  trade or business,  then the foreign  person may
claim an exemption from the U.S. tax described above provided the Fund obtains a
properly  completed and signed  Certificate  of Foreign  Status.  If the foreign
person fails to provide a certification of his/her foreign status, the Fund will
be required to withhold U.S. tax at a rate of 28% on ordinary  income  dividends
(not  including  "exempt-interest   dividends"),   capital  gains  distributions
(including  short-term  and  long-term)  and the proceeds of the  redemption  of
shares,  paid to any foreign person. Any tax withheld by the Fund is remitted by
the Fund to the U.S.  Treasury and all income and any tax withheld is identified
in reports mailed to shareholders in March of each year.


     The tax  consequences to foreign persons  entitled to claim the benefits of
an applicable tax treaty may be different from those described  herein.  Foreign
shareholders  are urged to consult  their own tax advisors or the U.S.  Internal
Revenue  Service with respect to the particular tax  consequences  to them of an
investment in the Fund,  including  the  applicability  of the U.S.  withholding
taxes described above.

Dividend  Reinvestment  in Another Fund.  Shareholders  of the Fund may elect to
reinvest all dividends and/or capital gains  distributions in shares of the same
class of any of the other Oppenheimer  funds listed above.  Reinvestment will be
made  without  sales  charge at the net  asset  value per share in effect at the
close of business on the payable date of the dividend or distribution.  To elect
this option,  the shareholder must notify the Transfer Agent in writing and must
have an existing  account in the fund selected for  reinvestment.  Otherwise the
shareholder first must obtain a prospectus for that fund and an application from
the Distributor to establish an account.  Dividends  and/or  distributions  from
shares of certain other Oppenheimer funds (other than Oppenheimer Cash Reserves)
may be invested in shares of this Fund on the same basis.

Additional Information About the Fund

The Distributor.  The Fund's shares are sold through dealers,  brokers and other
financial  institutions  that  have  a  sales  agreement  with  OppenheimerFunds
Distributor,  Inc.,  a  subsidiary  of the  Manager  that  acts  as  the  Fund's
Distributor.  The Distributor also distributes  shares of the other  Oppenheimer
funds and is sub-distributor for funds managed by a subsidiary of the Manager.

The Transfer Agent.  OppenheimerFunds  Services, the Fund's Transfer Agent, is a
division  of  the  Manager.   It  is  responsible  for  maintaining  the  Fund's
shareholder  registry  and  shareholder   accounting  records,  and  for  paying
dividends  and  distributions  to  shareholders.  It  also  handles  shareholder
servicing and administrative  functions.  It serves as the Transfer Agent for an
annual per account  fee.  It also acts as  shareholder  servicing  agent for the
other  Oppenheimer  funds.  Shareholders  should  direct  inquiries  about their
accounts to the Transfer Agent at the address and toll-free numbers shown on the
back cover.

The Custodian Bank.  Citibank,  N.A. is the custodian of the Fund's assets.  The
custodian's  responsibilities  include  safeguarding  and controlling the Fund's
portfolio  securities  and handling the delivery of such  securities to and from
the Fund.  It is the practice of the Fund to deal with the custodian in a manner
uninfluenced by any banking relationship the custodian may have with the Manager
and its  affiliates.  The Fund's cash  balances  with the custodian in excess of
$100,000  are not  protected  by  federal  deposit  insurance.  Those  uninsured
balances at times may be substantial.


Independent   Registered   Public  Accounting  Firm.  KPMG  LLP  served  as  the
Independent  Registered Public Accounting Firm for the Fund. KPMG LLP audits the
Fund's financial statements and performs other related audit services.  KPMG LLP
also acts as the independent  registered  public accounting firm for the Manager
and certain  other funds  advised by the Manager and its  affiliates.  Audit and
non-audit  services provided by KPMG LLP to the Fund must be pre-approved by the
Audit Committee.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

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THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer AMT-Free New York Municipals, including the statement of
investments, as of September 30, 2004, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

      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.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of September 30, 2004, by correspondence
with the custodian. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

      In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer AMT-Free New York Municipals as of September 30, 2004, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with U.S.
generally accepted accounting principles.


KPMG LLP

Denver, Colorado
October 21, 2004


STATEMENT OF INVESTMENTS  September 30, 2004
--------------------------------------------------------------------------------

   PRINCIPAL                                                                                                         VALUE
      AMOUNT                                                                    COUPON         MATURITY         SEE NOTE 1
--------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--102.4%
--------------------------------------------------------------------------------------------------------------------------
NEW YORK--93.3%
$ 14,500,000   Albany IDA (Charitable Leadership)                                5.750%      07/01/2026      $  14,864,095
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Albany IDA (Charitable Leadership)                                6.000       07/01/2019          1,077,360
--------------------------------------------------------------------------------------------------------------------------
   1,140,000   Albany IDA (Sage Colleges)                                        5.250       04/01/2019          1,172,536
--------------------------------------------------------------------------------------------------------------------------
     500,000   Albany IDA (Sage Colleges)                                        5.300       04/01/2029            502,045
--------------------------------------------------------------------------------------------------------------------------
      30,000   Albany Parking Authority                                          5.625       07/15/2025             31,681
--------------------------------------------------------------------------------------------------------------------------
      30,000   Allegany County IDA (Houghton College)                            5.250       01/15/2024             30,629
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Amherst IDA (Daemen College)                                      6.000       10/01/2021          1,057,300
--------------------------------------------------------------------------------------------------------------------------
   5,895,000   Brookhaven IDA (Alternatives for Children)                        7.550       02/01/2033          6,103,211
--------------------------------------------------------------------------------------------------------------------------
   9,235,000   Brookhaven IDA (Dowling College)                                  6.750       11/01/2032          9,182,453
--------------------------------------------------------------------------------------------------------------------------
     350,000   Broome County IDA (University Plaza)                              5.200       08/01/2030            353,465
--------------------------------------------------------------------------------------------------------------------------
     250,000   Broome County IDA (University Plaza)                              5.200       08/01/2036            251,783
--------------------------------------------------------------------------------------------------------------------------
     750,000   Buffalo Municipal Water Finance Authority, Series B               5.000       07/01/2027            769,080
--------------------------------------------------------------------------------------------------------------------------
      30,000   East Rochester Hsg. Authority (St. John's Meadows)                5.750       08/01/2037             32,744
--------------------------------------------------------------------------------------------------------------------------
   1,095,000   Erie County IDA (DePaul Properties)                               5.750       09/01/2028            843,906
--------------------------------------------------------------------------------------------------------------------------
     200,000   Erie County IDA (DePaul Properties)                               6.500       09/01/2018            185,570
--------------------------------------------------------------------------------------------------------------------------
   5,600,000   Erie County IDA (Medaille College)                                7.625       04/01/2035          5,670,224
--------------------------------------------------------------------------------------------------------------------------
   9,050,000   Erie County IDA (The Episcopal Church Home)                       5.875       02/01/2018          9,265,209
--------------------------------------------------------------------------------------------------------------------------
   9,875,000   Erie County IDA (The Episcopal Church Home)                       6.000       02/01/2028         10,015,126
--------------------------------------------------------------------------------------------------------------------------
     150,000   Erie County Tobacco Asset Securitization Corp.                    6.125       07/15/2030            144,899
--------------------------------------------------------------------------------------------------------------------------
   6,100,000   Erie County Tobacco Asset Securitization Corp.                    6.250       07/15/2040          5,908,948
--------------------------------------------------------------------------------------------------------------------------
   5,500,000   Erie County Tobacco Asset Securitization Corp.                    6.500       07/15/2032          5,530,745
--------------------------------------------------------------------------------------------------------------------------
   3,750,000   Geneva IDA (Hobart & William Smith Colleges)                      5.375       02/01/2033          3,937,163
--------------------------------------------------------------------------------------------------------------------------
   5,500,000   Hempstead IDA
               (Working Organization for Retarded Children)                      6.900       08/01/2033          5,526,345
--------------------------------------------------------------------------------------------------------------------------
   1,790,000   Herkimer County IDA
               (Herkimer County College Foundation)                              6.250       08/01/2034          1,869,172
--------------------------------------------------------------------------------------------------------------------------
   5,750,000   L.I. Power Authority RITES 1                                     14.177 2     09/01/2033          6,188,380
--------------------------------------------------------------------------------------------------------------------------
   4,395,000   L.I. Power Authority, Series A                                    5.125       09/01/2029          4,487,163
--------------------------------------------------------------------------------------------------------------------------
      30,000   L.I. Power Authority, Series A                                    5.250       12/01/2026             30,749
--------------------------------------------------------------------------------------------------------------------------
      25,000   L.I. Power Authority, Series A                                    5.300       12/01/2019             27,385
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Lyons Community Health Initiatives Corp.                          5.550       09/01/2024          1,032,730
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Monroe County IDA (Cloverwood Senior Living)                      6.875       05/01/2033            920,380
--------------------------------------------------------------------------------------------------------------------------
   1,965,000   Monroe County IDA (DePaul Community Facilities)                   5.875       02/01/2028          1,623,208
--------------------------------------------------------------------------------------------------------------------------
      40,000   Monroe County IDA (Rochester Institute of Technology)             5.250       04/01/2019             40,033
--------------------------------------------------------------------------------------------------------------------------
     525,000   Monroe County IDA (Rochester Institute of Technology)             5.375       04/01/2029            513,807
--------------------------------------------------------------------------------------------------------------------------
     460,000   Monroe County Tobacco Asset Securitization Corp.                  6.375       06/01/2035            458,717
--------------------------------------------------------------------------------------------------------------------------
   4,000,000   Monroe Newpower Corp.                                             5.500       01/01/2034          4,116,520
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Monroe Newpower Corp.                                             5.625       01/01/2026          1,043,050
--------------------------------------------------------------------------------------------------------------------------
  18,000,000   MTA Service Contract, Series A                                    5.125       01/01/2029         18,414,540


                  17 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

   PRINCIPAL                                                                                                         VALUE
      AMOUNT                                                                    COUPON         MATURITY         SEE NOTE 1
--------------------------------------------------------------------------------------------------------------------------
NEW YORK Continued
$    640,000   Nassau County IDA (ALIA-ACDS)                                     6.125%      09/01/2018      $     649,965
--------------------------------------------------------------------------------------------------------------------------
   2,135,000   Nassau County IDA (ALIA-AP)                                       7.000       09/01/2028          2,164,847
--------------------------------------------------------------------------------------------------------------------------
     895,000   Nassau County IDA (ALIA-CMA)                                      6.125       09/01/2018            908,935
--------------------------------------------------------------------------------------------------------------------------
     990,000   Nassau County IDA (ALIA-CSMR)                                     6.125       09/01/2018          1,005,414
--------------------------------------------------------------------------------------------------------------------------
     670,000   Nassau County IDA (ALIA-EFLI)                                     6.125       09/01/2018            680,432
--------------------------------------------------------------------------------------------------------------------------
     510,000   Nassau County IDA (ALIA-HAII)                                     6.125       09/01/2018            517,941
--------------------------------------------------------------------------------------------------------------------------
     595,000   Nassau County IDA (ALIA-NCMRS)                                    6.125       09/01/2018            604,264
--------------------------------------------------------------------------------------------------------------------------
   2,775,000   Nassau County IDA (Hispanic Counseling Center)                    7.625       06/01/2033          2,791,844
--------------------------------------------------------------------------------------------------------------------------
      35,000   Newport Highlands HDC                                             6.100       08/01/2024             35,115
--------------------------------------------------------------------------------------------------------------------------
   2,500,000   Niagara County IDA (American Ref-Fuel Company)                    5.550       11/15/2024          2,671,575
--------------------------------------------------------------------------------------------------------------------------
     500,000   Niagara County Tobacco Asset Securitization Corp.                 6.250       05/15/2034            490,375
--------------------------------------------------------------------------------------------------------------------------
     285,000   Niagara County Tobacco Asset Securitization Corp.                 6.250       05/15/2040            276,094
--------------------------------------------------------------------------------------------------------------------------
   7,645,000   Niagara Falls City School District COP                            5.375       06/15/2028          8,029,008
--------------------------------------------------------------------------------------------------------------------------
   3,665,000   NY Counties Tobacco Trust I (TASC)                                6.500       06/01/2035          3,685,194
--------------------------------------------------------------------------------------------------------------------------
  14,550,000   NY Counties Tobacco Trust II (TASC)                               5.625       06/01/2035         12,979,619
--------------------------------------------------------------------------------------------------------------------------
      20,000   NY Counties Tobacco Trust II (TASC)                               5.750       06/01/2043             17,745
--------------------------------------------------------------------------------------------------------------------------
   1,800,000   NY Counties Tobacco Trust III                                     6.000       06/01/2043          1,710,684
--------------------------------------------------------------------------------------------------------------------------
      35,000   NYC GO                                                            5.000       08/01/2022             35,812
--------------------------------------------------------------------------------------------------------------------------
   1,270,000   NYC GO                                                            5.250       03/15/2032          1,307,287
--------------------------------------------------------------------------------------------------------------------------
   2,500,000   NYC GO                                                            5.375       12/01/2026          2,616,250
--------------------------------------------------------------------------------------------------------------------------
   1,300,000   NYC GO                                                            5.500       06/01/2022          1,415,258
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC GO                                                            5.875       08/01/2019          1,118,230
--------------------------------------------------------------------------------------------------------------------------
   7,775,000   NYC GO                                                            6.125       08/01/2025          8,509,738
--------------------------------------------------------------------------------------------------------------------------
     160,000   NYC GO                                                            6.125       08/01/2025            179,654
--------------------------------------------------------------------------------------------------------------------------
       5,000   NYC GO                                                            7.500       02/01/2019              5,021
--------------------------------------------------------------------------------------------------------------------------
   1,562,261   NYC HDC (Keith Plaza)                                             6.500       02/15/2018          1,643,733
--------------------------------------------------------------------------------------------------------------------------
   2,372,646   NYC HDC (Seaview Towers)                                          6.500       01/15/2018          2,496,380
--------------------------------------------------------------------------------------------------------------------------
     100,000   NYC Health & Hospital Corp.                                       5.375       02/15/2026            102,246
--------------------------------------------------------------------------------------------------------------------------
   1,945,000   NYC Health & Hospital Corp.                                       5.450       02/15/2026          1,997,593
--------------------------------------------------------------------------------------------------------------------------
   1,445,000   NYC IDA (American Council of Learned Societies)                   5.250       07/01/2027          1,500,127
--------------------------------------------------------------------------------------------------------------------------
   2,760,000   NYC IDA (Beth Abraham Health Services)                            6.500       02/15/2022          2,865,046
--------------------------------------------------------------------------------------------------------------------------
     500,000   NYC IDA (Beth Abraham Health Services)                            6.500       11/15/2027            512,765
--------------------------------------------------------------------------------------------------------------------------
   2,100,000   NYC IDA (Beth Abraham Health Services)                            6.500       11/15/2034          2,154,327
--------------------------------------------------------------------------------------------------------------------------
   6,000,000   NYC IDA (Calhoun School)                                          6.625       12/01/2034          5,972,100
--------------------------------------------------------------------------------------------------------------------------
   3,965,000   NYC IDA
               (Community Resource Developmentally Disabled)                     7.500       08/01/2026          4,035,181
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYC IDA (Eger Harbor House)                                       5.875       05/20/2044          1,103,180
--------------------------------------------------------------------------------------------------------------------------
  12,000,000   NYC IDA (Legal Aid Society)                                       8.600       11/01/2033          6,000,480
--------------------------------------------------------------------------------------------------------------------------
   3,700,000   NYC IDA (Lycee Francais De New York)                              5.375       06/01/2023          3,784,397
--------------------------------------------------------------------------------------------------------------------------
   4,000,000   NYC IDA (Lycee Francais De New York)                              6.800       06/01/2028          4,149,560


                  18 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

   PRINCIPAL                                                                                                         VALUE
      AMOUNT                                                                    COUPON         MATURITY         SEE NOTE 1
--------------------------------------------------------------------------------------------------------------------------
NEW YORK Continued
$  2,100,000   NYC IDA (Polytechnic University)                                  6.000%      11/01/2020      $   1,947,687
--------------------------------------------------------------------------------------------------------------------------
   4,080,000   NYC IDA (Polytechnic University)                                  6.125       11/01/2030          3,724,673
--------------------------------------------------------------------------------------------------------------------------
   1,380,000   NYC IDA (PSCH)                                                    6.375       07/01/2033          1,455,141
--------------------------------------------------------------------------------------------------------------------------
   1,490,000   NYC IDA (Staten Island University Hospital)                       6.450       07/01/2032          1,412,684
--------------------------------------------------------------------------------------------------------------------------
   6,020,000   NYC IDA (The Child School)                                        7.550       06/01/2033          6,133,417
--------------------------------------------------------------------------------------------------------------------------
  15,785,000   NYC IDA (Touro College)                                           6.350       06/01/2029         15,185,170
--------------------------------------------------------------------------------------------------------------------------
   5,600,000   NYC IDA (Urban Resource Institute)                                7.375       11/01/2033          5,546,520
--------------------------------------------------------------------------------------------------------------------------
   5,600,000   NYC IDA (Vocational Instruction)                                  7.750       02/01/2033          5,825,008
--------------------------------------------------------------------------------------------------------------------------
   4,245,000   NYC IDA (YMCA of Greater NY)                                      5.250       08/01/2021          4,393,702
--------------------------------------------------------------------------------------------------------------------------
   3,000,000   NYC Municipal Water Finance Authority                             5.000       06/15/2032          3,039,870
--------------------------------------------------------------------------------------------------------------------------
      75,000   NYC Municipal Water Finance Authority                             5.125       06/15/2030             76,234
--------------------------------------------------------------------------------------------------------------------------
     155,000   NYC Municipal Water Finance Authority                             5.250       06/15/2029            161,203
--------------------------------------------------------------------------------------------------------------------------
   8,000,000   NYC Municipal Water Finance Authority                             5.500       06/15/2033          8,562,880
--------------------------------------------------------------------------------------------------------------------------
      20,000   NYS DA (Dept. of Health)                                          5.500       07/01/2025             21,333
--------------------------------------------------------------------------------------------------------------------------
   5,750,000   NYS DA (Ithaca College)                                           5.250       07/01/2026          6,012,200
--------------------------------------------------------------------------------------------------------------------------
     220,000   NYS DA (Judicial Facilities Lease)                                7.375       07/01/2016            271,869
--------------------------------------------------------------------------------------------------------------------------
   1,620,000   NYS DA (Lenox Hill Hospital Obligated Group)                      5.500       07/01/2030          1,671,921
--------------------------------------------------------------------------------------------------------------------------
       5,000   NYS DA (Mental Health)                                            5.375       02/15/2026              5,254
--------------------------------------------------------------------------------------------------------------------------
     525,000   NYS DA (Montefiore Medical Center)                                5.450       08/01/2029            550,683
--------------------------------------------------------------------------------------------------------------------------
   9,250,000   NYS DA
               (MSH/NYU Hospital Center/HJDOI Obligated Group)                   6.500       07/01/2025          9,405,215
--------------------------------------------------------------------------------------------------------------------------
  10,000,000   NYS DA (Mt. Sinai/NYU Health)                                     6.000       07/01/2026         10,036,100
--------------------------------------------------------------------------------------------------------------------------
   9,330,000   NYS DA (Mt. Sinai/NYU Health)                                     6.250       07/01/2022          9,378,703
--------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYS DA (School District Financing)                                5.750       10/01/2030          5,604,350
--------------------------------------------------------------------------------------------------------------------------
   4,000,000   NYS DA (SS Joachim & Anne Residence)                              5.250       07/01/2027          4,094,280
--------------------------------------------------------------------------------------------------------------------------
      40,000   NYS DA (St. Joseph's Hospital Health Center)                      5.250       07/01/2018             42,044
--------------------------------------------------------------------------------------------------------------------------
      65,000   NYS DA (St. Vincent's Hospital & Medical Center)                  7.375       08/01/2011             65,285
--------------------------------------------------------------------------------------------------------------------------
  13,090,000   NYS DA (State University Educational Facilities)                  5.250       05/15/2015         14,649,674
--------------------------------------------------------------------------------------------------------------------------
   2,510,000   NYS DA (State University Educational Facilities)                  5.250       05/15/2021          2,798,976
--------------------------------------------------------------------------------------------------------------------------
   5,000,000   NYS DA (Upstate Community College)                                5.000       07/01/2028          5,107,350
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   NYS DA (Winthrop University Hospital)                             5.500       07/01/2023          1,042,210
--------------------------------------------------------------------------------------------------------------------------
      85,000   NYS EFC (NYS Water Services)                                      6.600       09/15/2012             85,343
--------------------------------------------------------------------------------------------------------------------------
      20,000   NYS EFC (NYS Water Services)                                      7.200       03/15/2011             20,091
--------------------------------------------------------------------------------------------------------------------------
   5,395,000   NYS HFA RITES 1                                                  10.291 2     11/01/2015          5,805,721
--------------------------------------------------------------------------------------------------------------------------
      45,000   NYS Medcare (Hospital & Nursing Home)                             5.400       08/15/2033             45,310
--------------------------------------------------------------------------------------------------------------------------
   2,800,000   NYS Medcare (Long Term Health Care)                               6.400       11/01/2014          2,810,360
--------------------------------------------------------------------------------------------------------------------------
      80,000   NYS Medcare (St. Luke's Hospital)                                 5.625       08/15/2018             82,656
--------------------------------------------------------------------------------------------------------------------------
   3,000,000   NYS UDC (Personal Income Tax)                                     5.125       03/15/2027          3,089,820
--------------------------------------------------------------------------------------------------------------------------
   1,750,000   NYS UDC RITES 1                                                  14.215 2     03/15/2025          1,976,415


                  19 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

   PRINCIPAL                                                                                                         VALUE
      AMOUNT                                                                    COUPON         MATURITY         SEE NOTE 1
--------------------------------------------------------------------------------------------------------------------------
NEW YORK Continued
$    250,000   Oneida County IDA
               (Mohawk Valley Handicapped Services)                              5.300%      03/15/2019      $     257,985
--------------------------------------------------------------------------------------------------------------------------
      55,000   Onondaga County IDA (Salina Free Library)                         5.500       12/01/2022             58,270
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Orange County IDA (Glen Arden)                                    5.625       01/01/2018            889,660
--------------------------------------------------------------------------------------------------------------------------
     275,000   Orange County IDA (Glen Arden)                                    5.700       01/01/2028            225,277
--------------------------------------------------------------------------------------------------------------------------
   1,500,000   Otsego County IDA (Hartwick College)                              5.900       07/01/2022          1,369,770
--------------------------------------------------------------------------------------------------------------------------
   8,880,000   Port Authority NY/NJ (Delta Air Lines)                            6.950       06/01/2008          8,711,546
--------------------------------------------------------------------------------------------------------------------------
   2,475,000   Rensselaer County Tobacco Asset Securitization Corp.              5.625       06/01/2035          2,207,873
--------------------------------------------------------------------------------------------------------------------------
   2,000,000   Rensselaer County Tobacco Asset Securitization Corp.              5.750       06/01/2043          1,774,460
--------------------------------------------------------------------------------------------------------------------------
   1,060,000   Rockland County Tobacco Asset Securitization Corp.                5.625       08/15/2035            945,361
--------------------------------------------------------------------------------------------------------------------------
   3,150,000   Rockland County Tobacco Asset Securitization Corp.                5.750       08/15/2043          2,794,397
--------------------------------------------------------------------------------------------------------------------------
   2,500,000   Saratoga County IDA (Saratoga Hospital)                           5.125       12/01/2033          2,562,325
--------------------------------------------------------------------------------------------------------------------------
   9,515,000   SONYMA, Series 29 RITES 1                                         8.968 2     10/01/2024          9,653,824
--------------------------------------------------------------------------------------------------------------------------
     250,000   SONYMA, Series 83                                                 5.550       10/01/2027            259,105
--------------------------------------------------------------------------------------------------------------------------
   4,000,000   Suffolk County IDA (ALIA-IGHL)                                    7.250       12/01/2033          4,101,360
--------------------------------------------------------------------------------------------------------------------------
     150,000   Suffolk County IDA (Dowling College)                              6.625       06/01/2024            148,842
--------------------------------------------------------------------------------------------------------------------------
   1,500,000   Suffolk County IDA (Jefferson's Ferry)                            7.200       11/01/2019          1,564,800
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Suffolk County IDA (L.I. Network Community Services)              7.550       02/01/2034          1,010,270
--------------------------------------------------------------------------------------------------------------------------
     100,000   Syracuse IDA (Crouse Irving Companies)                            5.250       01/01/2017            104,107
--------------------------------------------------------------------------------------------------------------------------
      25,000   Triborough Bridge & Tunnel Authority                              5.000       01/01/2020             26,390
--------------------------------------------------------------------------------------------------------------------------
   3,585,000   Triborough Bridge & Tunnel Authority RITES 1                     14.115 2     11/15/2032          3,838,101
--------------------------------------------------------------------------------------------------------------------------
   2,560,000   Triborough Bridge & Tunnel Authority RITES 1                     14.126 2     11/15/2027          2,796,237
--------------------------------------------------------------------------------------------------------------------------
  10,000,000   Triborough Bridge & Tunnel Authority RITES 1                     14.126 2     11/15/2032         10,706,000
--------------------------------------------------------------------------------------------------------------------------
   4,550,000   Triborough Bridge & Tunnel Authority RITES 1                     14.615 2     11/15/2029          5,109,832
--------------------------------------------------------------------------------------------------------------------------
   2,500,000   Triborough Bridge & Tunnel Authority RITES 1                     15.215 2     11/15/2023          3,212,450
--------------------------------------------------------------------------------------------------------------------------
  94,960,000   TSASC, Inc. (TFABs)                                               5.750       07/15/2032         90,466,493
--------------------------------------------------------------------------------------------------------------------------
   1,205,000   TSASC, Inc. (TFABs)                                               6.250       07/15/2027          1,219,123
--------------------------------------------------------------------------------------------------------------------------
  19,345,000   TSASC, Inc. (TFABs)                                               6.250       07/15/2034         19,524,715
--------------------------------------------------------------------------------------------------------------------------
     800,000   TSASC, Inc. (TFABs)                                               6.375       07/15/2039            812,256
--------------------------------------------------------------------------------------------------------------------------
   1,700,000   Ulster County IDA (Benedictine Hospital)                          6.450       06/01/2024          1,665,524
--------------------------------------------------------------------------------------------------------------------------
   3,000,000   Utica IDA (Utica College Civic Facility)                          5.750       08/01/2028          2,986,230
--------------------------------------------------------------------------------------------------------------------------
   1,250,000   Utica IDA (Utica College Civic Facility)                          6.750       12/01/2021          1,295,188
--------------------------------------------------------------------------------------------------------------------------
     175,000   Westchester County Healthcare Corp.                               6.000       11/01/2030            173,056
--------------------------------------------------------------------------------------------------------------------------
     250,000   Westchester County IDA (Guiding Eyes for the Blind)               5.375       08/01/2024            256,145
--------------------------------------------------------------------------------------------------------------------------
     500,000   Westchester County IDA (Kendal on Hudson)                         6.500       01/01/2034            508,835
--------------------------------------------------------------------------------------------------------------------------
   1,930,000   Westchester County IDA (Rippowam-Cisqua School)                   5.750       06/01/2029          1,957,001
--------------------------------------------------------------------------------------------------------------------------
     320,000   Westchester County IDA (Schnurmacher Center)                      6.500       11/01/2013            332,538
--------------------------------------------------------------------------------------------------------------------------
     600,000   Westchester County IDA (Schnurmacher Center)                      6.500       11/01/2033            626,568
--------------------------------------------------------------------------------------------------------------------------
      55,000   Yonkers IDA (Community Devel. Properties)                         6.625       02/01/2026             59,165
                                                                                                             -------------
                                                                                                               544,294,198


                  20 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

   PRINCIPAL                                                                                                        VALUE
      AMOUNT                                                                   COUPON         MATURITY         SEE NOTE 1
--------------------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--9.1%
$  8,375,000   Guam GO, Series A                                                5.400%      11/15/2018      $   8,236,478
--------------------------------------------------------------------------------------------------------------------------
   1,085,000   Guam GO, Series A                                                6.000       09/01/2006          1,085,163
--------------------------------------------------------------------------------------------------------------------------
   5,250,000   Guam Power Authority, Series A                                   5.125       10/01/2029          5,417,580
--------------------------------------------------------------------------------------------------------------------------
  10,000,000   Guam Power Authority, Series A                                   5.250       10/01/2034         10,476,900
--------------------------------------------------------------------------------------------------------------------------
   5,275,000   Puerto Rico Children's Trust Fund (TASC)                         5.625       05/15/2043          4,634,457
--------------------------------------------------------------------------------------------------------------------------
   3,720,000   Puerto Rico Highway & Transportation Authority, Series D         5.250       07/01/2038          3,827,024
--------------------------------------------------------------------------------------------------------------------------
   6,000,000   Puerto Rico Highway & Transportation Authority, Series G         5.000       07/01/2042          6,016,440
--------------------------------------------------------------------------------------------------------------------------
   4,305,000   Puerto Rico ITEMECF
               (Polytechnic University of Puerto Rico)                          5.000       08/01/2022          4,307,454
--------------------------------------------------------------------------------------------------------------------------
   2,950,000   Puerto Rico Public Finance Corp., Series E                       5.500       08/01/2029          3,345,418
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   Puerto Rico Public Finance Corp., Series E                       5.500       08/01/2029          1,054,800
--------------------------------------------------------------------------------------------------------------------------
   1,000,000   University of V.I. , Series A                                    5.375       06/01/2034          1,027,050
--------------------------------------------------------------------------------------------------------------------------
   1,700,000   V.I. Public Finance Authority (Gross Receipts Taxes Loan)        5.000       10/01/2031          1,701,989
--------------------------------------------------------------------------------------------------------------------------
   1,485,000   V.I. Public Finance Authority, Series A                          5.500       10/01/2022          1,528,986
--------------------------------------------------------------------------------------------------------------------------
     250,000   V.I. Water & Power Authority                                     5.300       07/01/2018            255,699
                                                                                                            --------------
                                                                                                               52,915,438

--------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $583,627,033)--102.4%                                                       597,209,636
--------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS--(2.4)                                                                  (14,098,302)
                                                                                                            --------------
NET ASSETS--100.0%                                                                                          $ 583,111,334
                                                                                                            ==============

FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Illiquid security. See Note 5 of Notes to Financial Statements.

2. Represents the current interest rate for a variable rate bond known as an
"inverse floater." See Note 1 of Notes to Financial Statements.


                  21 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
SUMMARY OF RATINGS  September 30, 2004 / Unaudited
--------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS BY RATING CATEGORY, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:

RATINGS                                                                 PERCENT
--------------------------------------------------------------------------------
AAA                                                                        12.5%
AA                                                                         14.6
A                                                                           8.5
BBB                                                                        39.8
BB                                                                          8.8
B                                                                           1.6
CCC                                                                         1.5
Not Rated                                                                  12.7
                                                                       ---------
Total                                                                     100.0%
                                                                       =========

Bonds rated by any nationally recognized statistical rating organization are
included in the equivalent Standard & Poor's rating category. As a general
matter, unrated bonds may be backed by mortgage liens or equipment liens on the
underlying property, and also may be guaranteed. Bonds which are backed by a
letter of credit or by other financial institutions or agencies may be assigned
an investment-grade rating by the Manager, which reflects the quality of the
guarantor, institution or agency. Unrated bonds may also be assigned a rating
when the issuer has rated bonds outstanding with comparable credit
characteristics, or when, in the opinion of the Manager, the bond itself
possesses credit characteristics which allow for rating. The unrated bonds in
the portfolio are predominantly smaller issuers which have not applied for a
bond rating. Only those unrated bonds which subsequent to purchase have not been
designated investment grade by the Manager are included in the "Not Rated"
category.

To simplify the listings of securities, abbreviations are used per the table
below:

ACDS       Association for Children with Down
           Syndrome
ALIA       Alliance of Long Island Agencies
AP         Advantage Planning, Inc.
CMA        Community Mainstreaming Associates,
           Inc.
COP        Certificates of Participation
CSMR       Community Services for the Mentally
           Retarded
DA         Dormitory Authority
EFC        Environmental Facilities Corp.
EFLI       Epilepsy Foundation of L.I., Inc.
GO         General Obligation
HAII       Homes Anew II, Inc.
HDC        Housing Development Corp.
HFA        Housing Finance Agency/Authority
HJDOI      Hospital for Joint Diseases Orthopedic
           Institute
IDA        Industrial Development Agency
IGHL       Independent Group Home for Living
ITEMECF    Industrial, Tourist, Educational, Medical
           and Environmental Community Facilities
L.I.       Long Island
MSH/NYU    Mount Sinai Hospital/New York
           University
MTA        Metropolitan Transportation Authority
NCMRS      Nassau Community Mental Retardation
           Services Co.
NY/NJ      New York/New Jersey
NYC        New York City
NYS        New York State
NYU        New York University
RITES      Residual Interest Tax Exempt Security
SONYMA     State of New York Mortgage Agency
TASC       Tobacco Settlement Asset-Backed Bonds
TFABs      Tobacco Flexible Amortization Bonds
UDC        Urban Development Corp.
V.I.       United States Virgin Islands
YMCA       Young Men's Christian Association


                  22 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

DISTRIBUTION OF INVESTMENTS BY INDUSTRY OF ISSUE, AS A PERCENTAGE OF TOTAL
INVESTMENTS AT VALUE, IS AS FOLLOWS:

INDUSTRY                                        MARKET VALUE       PERCENT
---------------------------------------------------------------------------
Tobacco Settlements                           $  155,582,155          26.1%
Higher Education                                  88,629,906          14.8
Not-for-Profit Organization                       71,977,693          12.1
Highways/Railways                                 53,947,014           9.0
Hospital/Health Care                              44,465,324           7.4
Electric Utilities                                32,043,426           5.4
Adult Living Facilities                           31,574,109           5.3
Education                                         27,600,825           4.6
General Obligation                                24,567,161           4.1
Water Utilities                                   12,714,701           2.1
Multifamily Housing                               11,722,121           2.0
Single Family Housing                              9,912,929           1.7
Airlines                                           8,711,546           1.5
Municipal Leases                                   8,360,042           1.4
Sales Tax Revenue                                  7,631,193           1.3
Special Tax                                        5,066,235           0.8
Resource Recovery                                  2,671,575           0.4
Parking Fee Revenue                                   31,681            --
                                              -----------------------------
Total                                         $  597,209,636         100.0%
                                              =============================

As of September 30, 2004, none of the securities were subject to alternative
minimum tax.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  23 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

STATEMENT OF ASSETS AND LIABILITIES  September 30, 2004
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
ASSETS
------------------------------------------------------------------------------------------------------
Investments, at value (cost $583,627,033)--see accompanying statement of investments    $ 597,209,636
------------------------------------------------------------------------------------------------------
Cash                                                                                          623,821
------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest                                                                                   10,361,681
Shares of beneficial interest sold                                                            715,764
Other                                                                                          15,927
                                                                                        --------------
Total assets                                                                              608,926,829

------------------------------------------------------------------------------------------------------
LIABILITIES
------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Notes payable to bank (interest rate 2.6800% at September 30, 2004)                        23,000,000
Shares of beneficial interest redeemed                                                      1,493,608
Dividends                                                                                     689,814
Distribution and service plan fees                                                            327,194
Trustees' compensation                                                                        126,282
Interest expense                                                                               46,382
Shareholder communications                                                                     36,434
Transfer and shareholder servicing agent fees                                                  28,654
Other                                                                                          67,127
                                                                                        --------------
Total liabilities                                                                          25,815,495

------------------------------------------------------------------------------------------------------
NET ASSETS                                                                              $ 583,111,334
                                                                                        ==============

------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest                                              $      46,853
------------------------------------------------------------------------------------------------------
Additional paid-in capital                                                                572,031,358
------------------------------------------------------------------------------------------------------
Accumulated net investment income                                                           2,446,369
------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments                                               (4,995,849)
------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments                                                 13,582,603
                                                                                        --------------
NET ASSETS                                                                              $ 583,111,334
                                                                                        ==============


                  24 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

-----------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
-----------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $539,833,671
and 43,376,599 shares of beneficial interest outstanding)                               $       12.45
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price)                                                                         $       13.07
-----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $27,554,559 and
2,213,251 shares of beneficial interest outstanding)                                    $       12.45
-----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $15,723,104 and
1,263,132 shares of beneficial interest outstanding)                                    $       12.45

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  25 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

STATEMENT OF OPERATIONS  For the Year Ended September 30, 2004
--------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
------------------------------------------------------------------------------------------------------
Interest                                                                                $  39,052,719

------------------------------------------------------------------------------------------------------
EXPENSES
------------------------------------------------------------------------------------------------------
Management fees                                                                             3,118,498
------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                                     1,204,094
Class B                                                                                       301,961
Class C                                                                                       145,611
------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                                       311,497
Class B                                                                                        18,813
Class C                                                                                         9,740
------------------------------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                                           606
Class B                                                                                           413
Class C                                                                                            10
------------------------------------------------------------------------------------------------------
Interest expense                                                                              396,296
------------------------------------------------------------------------------------------------------
Custodian fees and expenses                                                                    33,303
------------------------------------------------------------------------------------------------------
Trustees' compensation                                                                         27,656
------------------------------------------------------------------------------------------------------
Other                                                                                          63,603
                                                                                        --------------
Total expenses                                                                              5,632,101
Less reduction to custodian expenses                                                             (756)
Less payments and waivers of expenses                                                        (156,446)
                                                                                        --------------
Net expenses                                                                                5,474,899

------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                                      33,577,820

------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
------------------------------------------------------------------------------------------------------
Net realized gain on investments                                                              451,186
------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments                                        3,740,499

------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                    $  37,769,505
                                                                                        ==============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  26 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------

YEAR ENDED SEPTEMBER 30,                                                   2004                  2003
------------------------------------------------------------------------------------------------------
OPERATIONS
------------------------------------------------------------------------------------------------------
Net investment income                                             $  33,577,820         $  31,920,176
------------------------------------------------------------------------------------------------------
Net realized gain                                                       451,186             3,976,493
------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                 3,740,499           (24,736,955)
                                                                  ------------------------------------
Net increase in net assets resulting from operations                 37,769,505            11,159,714

------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------------------------------------------------------------
Dividends from net investment
income:
Class A                                                             (29,863,870)          (29,702,221)
Class B                                                              (1,440,068)           (1,724,048)
Class C                                                                (697,461)             (566,285)

------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                                 937,726            16,406,594
Class B                                                              (5,643,739)           (6,602,592)
Class C                                                               2,556,172             2,897,386

------------------------------------------------------------------------------------------------------
NET ASSETS
------------------------------------------------------------------------------------------------------
Total increase (decrease)                                             3,618,265            (8,131,452)
------------------------------------------------------------------------------------------------------
Beginning of period                                                 579,493,069           587,624,521
                                                                  ------------------------------------
End of period (including accumulated net investment income
of $2,446,369 and $869,948, respectively)                         $ 583,111,334         $ 579,493,069
                                                                  ====================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  27 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

CLASS A     YEAR ENDED SEPTEMBER 30,                      2004           2003            2002            2001           2000
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $   12.31     $    12.75      $    12.67     $     12.15     $    12.24
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .72            .71             .68             .67            .64
Net realized and unrealized gain (loss)                    .11           (.44)            .06             .50           (.09)
                                                     -------------------------------------------------------------------------
Total from investment operations                           .83            .27             .74            1.17            .55
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.69)          (.71)           (.66)           (.65)          (.64)
Distributions from net realized gain                        --             --              --              --             -- 1
                                                     -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.69)          (.71)           (.66)           (.65)          (.64)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $   12.45     $    12.31      $    12.75     $     12.67     $    12.15
                                                     =========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        6.91%          2.07%           6.11%           9.77%          4.78%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)             $ 539,834     $  533,563      $  536,126     $   530,464     $  509,288
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                    $ 536,613     $  531,977      $  525,519     $   526,333     $  529,839
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                     5.84%          5.57%           5.44%           5.30%          5.45%
Total expenses                                            0.91%          0.93%           0.89%           0.84%          0.89%
Expenses after payments and waivers
and reduction to custodian expenses                       0.88%           N/A 4,5         N/A 4           N/A 4          N/A 4
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                      6%            63%             73%             10%            26%

1. Less than $0.005 per share.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of management fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  28 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

CLASS B     YEAR ENDED SEPTEMBER 30,                      2004           2003            2002            2001           2000
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $   12.32     $    12.75      $    12.68     $     12.16     $    12.25
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .62            .60             .58             .56            .53
Net realized and unrealized gain (loss)                    .10           (.42)            .06             .51           (.07)
                                                     -------------------------------------------------------------------------
Total from investment operations                           .72            .18             .64            1.07            .46
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.59)          (.61)           (.57)           (.55)          (.55)
Distributions from net realized gain                        --             --              --              --             -- 1
                                                     -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.59)          (.61)           (.57)           (.55)          (.55)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $   12.45     $    12.32      $    12.75     $     12.68     $    12.16
                                                     =========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        5.99%          1.36%           5.22%           8.94%          3.98%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)             $  27,555     $   32,851      $   40,896     $    46,422     $   49,671
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                    $  30,212     $   36,000      $   42,021     $    48,115     $   60,299
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                     5.05%          4.77%           4.67%           4.53%          4.68%
Total expenses                                            1.69%          1.71%           1.66%           1.61%          1.67%
Expenses after payments and waivers
and reduction to custodian expenses                       1.66%           N/A 4,5         N/A 4           N/A 4          N/A 4
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                      6%            63%             73%             10%            26%

1. Less than $0.005 per share.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of management fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  29 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------

CLASS C     YEAR ENDED SEPTEMBER 30,                      2004           2003            2002            2001           2000
------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                 $   12.32     $    12.75      $    12.68     $     12.15      $   12.24
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .62            .60             .57             .56            .56
Net realized and unrealized gain (loss)                    .10           (.42)            .07             .52           (.10)
                                                     -------------------------------------------------------------------------
Total from investment operations                           .72            .18             .64            1.08            .46
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.59)          (.61)           (.57)           (.55)          (.55)
Distributions from net realized gain                        --             --              --              --             -- 1
                                                     -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.59)          (.61)           (.57)           (.55)          (.55)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                       $   12.45     $    12.32      $    12.75     $     12.68      $   12.15
                                                     =========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        5.99%          1.35%           5.22%           9.03%          3.97%
------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)             $  15,723     $   13,080      $   10,603     $     8,251      $   5,954
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                    $  14,598     $   11,852      $    9,183     $     6,979      $   6,121
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
------------------------------------------------------------------------------------------------------------------------------
Net investment income                                     5.04%          4.78%           4.66%           4.51%          4.68%
Total expenses                                            1.69%          1.72%           1.66%           1.61%          1.66%
Expenses after payments and waivers
and reduction to custodian expenses                       1.66%           N/A 4,5         N/A 4           N/A 4          N/A 4
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                      6%            63%             73%             10%            26%

1. Less than $0.005 per share.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions reinvested in additional shares
on the reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of management fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  30 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer AMT-Free New York Municipals (the Fund), is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Funds investment objective is to seek the maximum current income
exempt from federal, New York State and New York City income taxes for
individual investors consistent with the preservation of capital. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).

      The Fund offers Class A, Class B and Class C shares. Class A shares are
sold at their offering price, which is normally net asset value plus a front-end
sales charge. Class B and Class C shares are sold without a front-end sales
charge but may be subject to a contingent deferred sales charge (CDSC). All
classes of shares have identical rights and voting privileges with respect to
the Fund in general and exclusive voting rights on matters that affect that
class alone. Earnings, net assets and net asset value per share may differ due
to each class having its own expenses, such as transfer and shareholder
servicing agent fees and shareholder communications, directly attributable to
that class. Class A, B and C have separate distribution and/or service plans.
Class B shares will automatically convert to Class A shares six years after the
date of purchase.

      The following is a summary of significant accounting policies consistently
followed by the Fund.

--------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Trustees. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair value is determined in good faith using consistently applied
procedures under the supervision of the Board of Trustees. Short-term "money
market type" debt securities with remaining maturities of sixty days or less are
valued at amortized cost (which approximates market value).


                  31 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

INVERSE FLOATING RATE SECURITIES. The Fund invests in inverse floating rate
securities that pay interest at a rate that varies inversely with short-term
interest rates. Certain of these securities may be leveraged, whereby the
interest rate varies inversely at a multiple of the change in short-term rates.
As interest rates rise, inverse floaters produce less current income. The price
of such securities is more volatile than comparable fixed rate securities. The
Fund will invest no more than 20% of its total assets in inverse floaters.
Inverse floaters amount to $49,286,960 as of September 30, 2004. Including the
effect of leverage, inverse floaters represent 18% of the Fund's total assets as
of September 30, 2004.

--------------------------------------------------------------------------------
SECURITY CREDIT RISK. There are certain risks arising from geographic
concentration in any state. Certain revenue or tax related events in a state may
impair the ability of certain issuers of municipal securities to pay principal
and interest on their obligations.

--------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.

The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.

                                                             NET UNREALIZED
                                                               APPRECIATION
                                                           BASED ON COST OF
                                                             SECURITIES AND
  UNDISTRIBUTED    UNDISTRIBUTED           ACCUMULATED    OTHER INVESTMENTS
  NET INVESTMENT       LONG-TERM                  LOSS   FOR FEDERAL INCOME
  INCOME                    GAIN    CARRYFORWARD 1,2,3         TAX PURPOSES
  -------------------------------------------------------------------------
    $  2,863,847            $ --         $   1,457,318        $  10,044,066

1. As of September 30, 2004, the Fund had $1,457,318 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of September 30, 2004,
details of the capital loss carryforward was as follows:

                         EXPIRING
                         -------------------------
                         2009          $ 1,457,318

2. During the fiscal year ended September 30, 2004, the Fund utilized $393,609
of capital loss carryforward to offset capital gains realized in that fiscal
year.

3. During the fiscal year ended September 30, 2003, the Fund utilized $2,846,086
of capital loss carryforward to offset capital gains realized in that fiscal
year.


                  32 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

The tax character of distributions paid during the years ended September 30,
2004 and September 30, 2003 was as follows:


                                          YEAR ENDED            YEAR ENDED
                                  SEPTEMBER 30, 2004    SEPTEMBER 30, 2003
    ----------------------------------------------------------------------
    Distributions paid from:
    Exempt-interest dividends          $  32,001,399         $  31,992,554

The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of September 30, 2004 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.

    Federal tax cost of securities            $   587,165,570
                                              ================

    Gross unrealized appreciation             $    19,199,586
    Gross unrealized depreciation                  (9,155,520)
                                              ----------------
    Net unrealized appreciation               $    10,044,066
                                              ================

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended
September 30, 2004, the Fund's projected benefit obligations were increased by
$12,271 and payments of $10,000 were made to retired trustees, resulting in an
accumulated liability of $108,068 as of September 30, 2004.

      The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
daily and paid monthly. Capital gain distributions, if any, are declared and
paid annually.

--------------------------------------------------------------------------------
INVESTMENT INCOME. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.


                  33 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
represents earnings on cash balances maintained by the Fund.

--------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.

--------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.

--------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:

                          YEAR ENDED SEPTEMBER 30, 2004      YEAR ENDED SEPTEMBER 30, 2003
                                SHARES           AMOUNT           SHARES            AMOUNT
-------------------------------------------------------------------------------------------
CLASS A
Sold                         3,850,924    $  48,207,057        5,818,730    $   71,829,097
Dividends and/or
distributions reinvested     1,587,925       19,824,440        1,668,859        20,587,368
Redeemed                    (5,394,003)     (67,093,771)      (6,201,237)      (76,009,871)
                          -----------------------------------------------------------------
Net increase                    44,846    $     937,726        1,286,352    $   16,406,594
                          =================================================================

-------------------------------------------------------------------------------------------
CLASS B
Sold                           348,550    $   4,364,065          709,641    $    8,780,005
Dividends and/or
distributions reinvested        74,760          934,320           98,823         1,220,174
Redeemed                      (877,035)     (10,942,124)      (1,347,750)      (16,602,771)
                          -----------------------------------------------------------------
Net decrease                  (453,725)   $  (5,643,739)        (539,286)   $   (6,602,592)
                          =================================================================

-------------------------------------------------------------------------------------------
CLASS C
Sold                           366,324    $   4,608,949          453,368    $    5,622,411
Dividends and/or
distributions reinvested        35,480          442,749           31,731           391,119
Redeemed                      (200,686)      (2,495,526)        (254,461)       (3,116,144)
                          -----------------------------------------------------------------
Net increase                   201,118    $   2,556,172          230,638    $    2,897,386
                          =================================================================

--------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended September 30, 2004, were
$40,942,462 and $33,243,438, respectively.


                  34 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

--------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.60% of the first $200 million of average annual net assets,
0.55% of the next $100 million, 0.50% of the next $200 million, 0.45% of the
next $250 million, 0.40% of the next $250 million, and 0.35% of average annual
net assets in excess of $1 billion.

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended September 30, 2004, the Fund paid
$338,366 to OFS for services to the Fund.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.

--------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B AND CLASS C SHARES. The Fund has
adopted Distribution and Service Plans for Class B and Class C shares to
compensate the Distributor for its services in connection with the distribution
of those shares and servicing accounts. Under the plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% per year on Class B and
Class C shares. The Distributor also receives a service fee of up to 0.25% per
year under each plan. If either the Class B or Class C plan is terminated by the
Fund or by the shareholders of a class, the Board of Trustees and its
independent trustees must determine whether the Distributor shall be entitled to
payment from the Fund of all or a portion of the service fee and/or asset-based
sales charge in respect to shares sold prior to the effective date of such
termination. The Distributor's aggregate uncompensated expenses under the plan
at September 30, 2004 for Class B and Class C shares were $1,451,503 and
$249,885, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.

--------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and


                  35 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued

the CDSC retained by the Distributor on the redemption of shares is shown in the
table below for the period indicated.

                                                    CLASS A           CLASS B           CLASS C
                                  CLASS A        CONTINGENT        CONTINGENT        CONTINGENT
                                FRONT-END          DEFERRED          DEFERRED          DEFERRED
                            SALES CHARGES     SALES CHARGES     SALES CHARGES     SALES CHARGES
                              RETAINED BY       RETAINED BY       RETAINED BY       RETAINED BY
YEAR ENDED                    DISTRIBUTOR       DISTRIBUTOR       DISTRIBUTOR       DISTRIBUTOR
-----------------------------------------------------------------------------------------------
September 30, 2004             $  107,233           $ 8,955         $ 101,212           $ 2,386
-----------------------------------------------------------------------------------------------

PAYMENTS AND WAIVERS OF EXPENSES. The Manager voluntarily agreed to waive a
portion of its advisory fee at an annual rate equal to 0.10% of each class's
average daily net assets while the Fund's trailing one year performance at the
end of the preceding calendar quarter is in the fifth quintile of the Fund's
Lipper peer group. The Manager will voluntarily waive a portion of its advisory
fee at an annual rate equal to 0.05% of each class's average daily net assets
while the Fund's trailing one-year performance at the end of the preceding
calendar quarter is in the fourth quintile of the Fund's Lipper peer group.
During the year ended September 30, 2004, the Manager waived $146,728. The
foregoing advisory fee waiver automatically terminates when the Fund's trailing
one-year performance at the end of the preceding calendar quarter is in the
first, second or third quintile of the Fund's Lipper peer group, and did so
terminate effective January 1, 2004.

      OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class.
During the year ended September 30, 2004, OFS waived $9,487, $144 and $87 for
Class A, Class B and Class C shares, respectively. This undertaking may be
amended or withdrawn at any time.

--------------------------------------------------------------------------------
5. ILLIQUID SECURITIES

As of September 30, 2004, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. The aggregate value
of illiquid securities subject to this limitation as of September 30, 2004 was
$49,286,960, which represents 8.45% of the Fund's net assets.

--------------------------------------------------------------------------------
6. BANK BORROWINGS

The Fund may borrow up to one third of its total assets from a bank to purchase
portfolio securities, to meet redemption obligations or for temporary and
emergency purposes. The purchase of securities with borrowed funds creates
leverage in the Fund. The Fund has entered into an agreement which enables it to
participate with certain other Oppenheimer funds in a committed, unsecured line
of credit with a bank, which permits borrowings up to $540 million,
collectively. Interest is charged to each fund, based on its borrowings, at a
rate equal to the Federal Funds Rate plus 0.75%. The Fund also pays a


                  36 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

commitment fee equal to its pro rata share of the average unutilized amount of
the credit facility at a rate of 0.09% per annum.

      The Fund had borrowings outstanding of $23,000,000 at September 30, 2004
at an interest rate of 2.68%. For the year ended September 30, 2004, the average
month-end loan balance was $20,376,902 at an average daily interest rate of
1.88%. The Fund had gross borrowings and gross loan repayments of $79,100,000
and $79,900,000, respectively, during the year ended September 30, 2004. The
maximum amount of borrowings outstanding at any month-end was $29,900,000. The
Fund paid commitment fees of $5,878 and interest of $391,581 during the year
ended September 30, 2004.

--------------------------------------------------------------------------------
7. LITIGATION

Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well
as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund,
and nine Directors/ Trustees of certain of the Funds (collectively, the
"Directors/Trustees"). The complaints allege that the Manager charged excessive
fees for distribution and other costs, improperly used assets of the Funds in
the form of directed brokerage commissions and 12b-1 fees to pay brokers to
promote sales of the Funds, and failed to properly disclose the use of Fund
assets to make those payments in violation of the Investment Company Act of 1940
and the Investment Advisers Act of 1940. The complaints further allege that by
permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law. By order dated October 27, 2004, these
six actions, and future related actions, were consolidated by the U.S. District
Court for the Southern District of New York into a single consolidated
proceeding in contemplation of the filing of a superceding consolidated and
amended complaint.

      OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.


                  37 | OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

                       A-7

                    Appendix A

        MUNICIPAL BOND RATINGS DEFINITIONS
        ----------------------------------

Below are summaries of the rating definitions used by the  nationally-recognized
rating agencies listed below for municipal  securities.  Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate. The
summaries below are based upon publicly  available  information  provided by the
rating organizations.

Moody's Investors Service, Inc. ("Moody's")

Municipal  Ratings are opinions of the investment  quality of issuers and issues
in the U.S. municipal and tax-exempt markets. As such, these ratings incorporate
Moody's assessment of the default probability and loss severity of these issuers
and issues.

Municipal  Ratings are based upon the analysis of four primary factors  relating
to municipal finance:  economy,  debt, finances,  and  administration/management
strategies.  Each of the factors is evaluated individually and for its effect on
the other  factors  in the  context of the  municipality's  ability to repay its
debt.

MUNICIPAL LONG-TERM RATING DEFINITIONS

Aaa:  Issuers or issues rated Aaa  demonstrate  the  strongest  creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

Aa: Issuers or issues rated Aa demonstrate very strong creditworthiness relative
to other US municipal or tax-exempt issuers or issues.

A: Issuers or issues rated A present above-average  creditworthiness relative to
other US municipal or tax-exempt issuers or issues.

Baa: Issuers or issues rated Baa represent average creditworthiness  relative to
other US municipal or tax- exempt issuers or issues.

Ba:  Issuers  or  issues  rated Ba  demonstrate  below-average  creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

B: Issuers or issues rated B demonstrate weak creditworthiness relative to other
US municipal or tax- exempt issuers or issues.

Caa: Issuers or issues rated Caa demonstrate very weak creditworthiness relative
to other US municipal or tax-exempt issuers or issues.

Ca:  Issuers or issues  rated Ca  demonstrate  extremely  weak  creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

C: Issuers or issues rated C demonstrate the weakest  creditworthiness  relative
to other US municipal or tax-exempt issuers or issues.

Moody's  applies  numerical  modifiers  1,  2,  and  3 in  each  generic  rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid- range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

MIG/VMIG RATINGS: U.S. SHORT-TERM RATINGS In municipal debt issuance,  there are
three  rating   categories  for  short-term   obligations  that  are  considered
investment grade. These ratings are designated as Moody's Investment Grade (MIG)
and are divided into three levels -- MIG 1 through MIG 3.

In addition,  those short-term  obligations that are of speculative  quality are
designated SG, or speculative grade.

In the case of variable rate demand obligations  (VRDOs), a two-component rating
is assigned.  The first element  represents  Moody's evaluation of the degree of
risk  associated  with  scheduled  principal and interest  payments.  The second
element  represents Moody's evaluation of the degree of risk associated with the
demand feature, using the MIG rating scale.

The short-term  rating  assigned to the demand feature of VRDOs is designated as
VMIG.  When either the long- or short-term  aspect of a VRDO is not rated,  that
piece is designated NR, e.g., Aaa/NR or NR/VMIG 1.

MIG ratings expire at note maturity.  By contrast,  VMIG rating expirations will
be a function of each issue's specific structural or credit features.

MIG 1/VMIG 1: Denotes superior credit quality.  Excellent protection is afforded
by established  cash flows,  highly reliable  liquidity  support or demonstrated
broad-based access to the market for refinancing.

MIG 2/VMIG 2: Denotes  strong credit  quality.  Margins of protection  are ample
although not as large as in the preceding group.

MIG  3/VMIG 3:  Denotes  acceptable  credit  quality.  Liquidity  and  cash-flow
protection may be narrow, and market access for refinancing is likely to be less
well established.

SG: Denotes  speculative-grade credit quality. Debt instruments in this category
may lack margins of protection.


Standard & Poor's Ratings Services ("Standard &  Poor's"), a division of
The McGraw-Hill Companies, Inc.

LONG-TERM  ISSUE  CREDIT  RATINGS  Issue  credit  ratings  are based in  varying
degrees, on the following considerations:

o Likelihood  of  payment-capacity  and  willingness  of the obligor to meet its
financial  commitment  on an  obligation  in  accordance  with the  terms of the
obligation;

o Nature of and provisions of the obligation; and

o Protection  afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy
and other laws affecting creditors' rights.

     The issue  ratings  definitions  are expressed in terms of default risk. As
such, they pertain to senior  obligations of an entity.  Junior  obligations are
typically rated lower than senior obligations,  to reflect the lower priority in
bankruptcy, as noted above.

AAA: An obligation rated `AAA' has the highest rating assigned by Standard &
Poor's.  The  obligor's  capacity  to  meet  its  financial  commitment  on  the
obligation is extremely strong.






AA: An obligation rated `AA' differs from the highest-rated  obligations only in
small  degree.  The obligor's  capacity to meet its financial  commitment on the
obligation is very strong.

A: An obligation  rated `A' are somewhat more susceptible to the adverse effects
of  changes  in  circumstances  and  economic  conditions  than  obligations  in
higher-rated  categories.  However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: An obligation rated `BBB' exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened  capacity  of the  obligor to meet its  financial  commitment  on the
obligation.

BB, B, CCC, CC, and C

An  obligation  rated `BB',  `B',  `CCC',  `CC',  and `C' are regarded as having
significant  speculative  characteristics.  `BB'  indicates  the least degree of
speculation and `C' the highest.  While such  obligations  will likely have some
quality  and  protective  characteristics,  these  may be  outweighed  by  large
uncertainties or major exposures to adverse conditions.

BB: An  obligation  rated  `BB' are less  vulnerable  to  nonpayment  than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business,  financial,  or economic  conditions,  which could lead to the
obligor's   inadequate  capacity  to  meet  its  financial   commitment  on  the
obligation.

B: An obligation  rated `B' are more vulnerable to nonpayment  than  obligations
rated `BB',  but the obligor  currently  has the capacity to meet its  financial
commitment  on  the  obligation.   Adverse  business,   financial,  or  economic
conditions will likely impair the obligor's  capacity or willingness to meet its
financial commitment on the obligation.

CCC: An obligation  rated `CCC' are currently  vulnerable to nonpayment  and are
dependent upon favorable  business,  financial,  and economic conditions for the
obligor to meet its  financial  commitment  on the  obligation.  In the event of
adverse business,  financial, or economic conditions,  the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated `CC' are currently highly vulnerable to nonpayment.

C: The `C' rating may be used to cover a situation  where a bankruptcy  petition
has been filed or similar action has been taken, but payments on this obligation
are being continued.

D: An obligation  rated `D' are in payment  default.  The `D' rating category is
used when  payments  on an  obligation  are not made on the date due even if the
applicable grace period has not expired,  unless Standard &  Poor's believes
that such payments  will be made during such grace  period.  The `D' rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.

The 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.







c: The `c' subscript is used to provide additional information to investors that
the  bank  may  terminate  its  obligation  to  purchase  tendered  bonds if the
long-term credit rating of the issuer is below an investment-grade  level and/or
the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional rating
assumes the  successful  completion  of the  project  financed by the debt being
rated and  indicates  that  payment of debt service  requirements  is largely or
entirely dependent upon the successful,  timely completion of the project.  This
rating, however, while addressing credit quality subsequent to completion of the
project,  makes no comment  on the  likelihood  of or the risk of  default  upon
failure of such  completion.  The investor should exercise his own judgment with
respect to such likelihood and risk.

Continuance of the ratings is contingent  upon Standard &  Poor's receipt of
an executed  copy of the escrow  agreement or closing  documentation  confirming
investments and cash flows.

r: The `r' highlights  derivative,  hybrid,  and certain other  obligations that
Standard  &   Poor's   believes  may  experience  high  volatility  or  high
variability in expected returns as a result of noncredit risks. Examples of such
obligations  are  securities  with  principal  or  interest  return  indexed  to
equities,   commodities,   or  currencies;   certain  swaps  and  options;   and
interest-only  and  principal-only  mortgage  securities.  The absence of an `r'
symbol should not be taken as an indication  that an obligation  will exhibit no
volatility or variability in total return.

N.R. Not rated.

Debt  obligations of issuers  outside the United States and its  territories are
rated on the same basis as domestic  corporate and municipal issues. The ratings
measure  the  creditworthiness  of the  obligor  but do not  take  into  account
currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present  commercial  bank  regulations  issued by the  Comptroller  of the
Currency,  bonds rated in the top four  categories  (`AAA',  `AA',  `A',  `BBB',
commonly known as  investment-grade  ratings) generally are regarded as eligible
for  bank  investment.   Also,  the  laws  of  various  states  governing  legal
investments  impose certain rating or other standards for  obligations  eligible
for investment by savings  banks,  trust  companies,  insurance  companies,  and
fiduciaries in general.

SHORT-TERM  ISSUE CREDIT RATINGS  Short-term  ratings are generally  assigned to
those obligations considered short-term in the relevant market. In the U.S., for
example,  that means  obligations with an original  maturity of no more than 365
days-including commercial paper.

A-1: A  short-term  obligation  rated "A-1" is rated in the highest  category by
Standard & Poor's.  The obligor's capacity to meet its financial  commitment
on the  obligation is strong.  Within this  category,  certain  obligations  are
designated  with a plus sign (+). This indicates that the obligor's  capacity to
meet its financial commitment on these obligations is extremely strong.







A-2: A short-term  obligation  rated "A-2" is somewhat more  susceptible  to the
adverse  effects  of changes  in  circumstances  and  economic  conditions  than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3:  A  short-term   obligation  rated  "A-3"  exhibits   adequate   protection
parameters.  However,  adverse economic conditions or changing circumstances are
more likely to lead to a weakened  capacity of the obligor to meet its financial
commitment on the obligation.

B:  A  short-term  obligation  rated  "B"  is  regarded  as  having  significant
speculative characteristics.  The obligor currently has the capacity to meet its
financial  commitment  on  the  obligation;  however,  it  faces  major  ongoing
uncertainties which could lead to the obligor's  inadequate capacity to meet its
financial commitment on the obligation.

C: A short-term  obligation rated "C" is currently  vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D: A  short-term  obligation  rated "D" is in  payment  default.  The "D" rating
category  is used when  payments on an  obligation  are not made on the date due
even if the  applicable  grace period has not  expired,  unless  Standard  &
Poor's  believes that such  payments will be made during such grace period.  The
"D" rating  also will be used upon the filing of a  bankruptcy  petition  or the
taking of a similar action if payments on an obligation are jeopardized.

Notes. A Standard &  Poor's note rating  reflects the liquidity  factors and
market  access  risks  unique  to notes.  Notes due in three  years or less will
likely receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating.  The following  criteria will be used in making
that assessment:

     o.....Amortization schedule-the larger the final maturity relative to other
maturities, the more likely it will be treated as a note; and
     o Source of  payment-the  more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very strong
capacity to pay debt service is given a (+) designation.

SP-2:   Satisfactory   capacity  to  pay  principal  and  interest,   with  some
vulnerability  to adverse  financial  and economic  changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.


Fitch,  Inc.  International  credit  ratings assess the capacity to meet foreign
currency or local  currency  commitments.  Both  "foreign  currency"  and "local
currency" ratings are internationally comparable assessments. The local currency
rating measures the probability of payment within the relevant sovereign state's
currency and  jurisdiction  and therefore,  unlike the foreign  currency rating,
does not take account of the possibility of foreign exchange  controls  limiting
transfer into foreign currency.

INTERNATIONAL  LONG-TERM  CREDIT RATINGS The following  ratings scale applies to
foreign currency and local currency ratings. Investment Grade:

AAA:  Highest Credit  Quality.  "AAA" ratings  denote the lowest  expectation of
credit risk. They are assigned only in the case of exceptionally strong capacity
for timely payment of financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events.

AA: Very High Credit  Quality.  "AA" ratings  denote a very low  expectation  of
credit  risk.  They  indicate  a very  strong  capacity  for  timely  payment of
financial  commitments.   This  capacity  is  not  significantly  vulnerable  to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The
capacity for timely payment of financial  commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB: Good Credit Quality.  "BBB" ratings  indicate that there is currently a low
expectation  of credit  risk.  The  capacity  for timely  payment  of  financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

Speculative Grade:

BB:  Speculative.  "BB" ratings  indicate that there is a possibility  of credit
risk  developing,  particularly  as the result of adverse  economic  change over
time.  However,  business or  financial  alternatives  may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.

B: Highly  Speculative.  "B" ratings  indicate that  significant  credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met. However,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC,  CC C: High  Default  Risk.  Default is a real  possibility.  Capacity  for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default.  The ratings of  obligations in this category are based
on their prospects for achieving partial or full recovery in a reorganization or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around  90%-100% of  outstanding  amounts and accrued  interest.  "DD" indicates
potential  recoveries  in the  range of  50%-90%,  and "D" the  lowest  recovery
potential, i.e., below 50%.

Entities  rated  in  this  category  have  defaulted  on  some  or all of  their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization
process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.  Plus (+) and minus (-) signs may be
appended to a rating  symbol to denote  relative  status within the major rating
categories.  Plus and minus  signs are not  added to the  "AAA"  category  or to
categories below "CCC," nor to short-term ratings other than "F1" (see below).

INTERNATIONAL  SHORT-TERM  CREDIT RATINGS The following ratings scale applies to
     foreign currency and local currency ratings. A short-term rating has a time
     horizon of less than 12 months for most  obligations,  or up to three years
     for U.S. public finance securities, and thus places greater emphasis on the
     liquidity necessary to meet financial commitments in a timely manner.

F1:  Highest credit quality.  Strongest capacity for timely payment of financial
     commitments.  May have an added  "+" to  denote  any  exceptionally  strong
     credit feature.

F2:  Good  credit  quality.  A  satisfactory  capacity  for  timely  payment  of
     financial  commitments,  but the margin of safety is not as great as in the
     case of higher ratings.

F3:  Fair credit quality.  Capacity for timely payment of financial  commitments
     is adequate. However, near-term adverse changes could result in a reduction
     to non-investment grade.

B:   Speculative.  Minimal capacity for timely payment of financial commitments,
     plus  vulnerability to near-term  adverse changes in financial and economic
     conditions.

C:   High  default  risk.  Default is a real  possibility.  Capacity for meeting
     financial  commitments  is  solely  reliant  upon  a  sustained,  favorable
     business and economic environment.

D:   Default. Denotes actual or imminent payment default.









                       B-1
                    Appendix B

             Municipal Bond Industry
                 Classifications

      Adult Living Facilities
      Airlines
Education
Electric Utilities
Gas Utilities
General Obligation
Higher Education
Highways/Railways
Hospital/Healthcare
Hotels, Restaurants & Leisure
Manufacturing, Durable Goods
Manufacturing, Non Durable Goods
Marine/Aviation Facilities
Multi-Family Housing
Municipal Leases
Non Profit Organization
Paper, Containers & Packaging
Parking Fee Revenue
Pollution Control
Resource Recovery
Sales Tax Revenue
Sewer Utilities
Single Family Housing
Special Assessment
Special Tax
Sports Facility Revenue
Student Loans
Telephone Utilities
Tobacco
Water Utilities














                                        C-11

                                        C-1
                                     Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class A
shares2 of the Oppenheimer funds or the contingent deferred sales charge that may
apply to Class A, Class B or Class C shares may be waived.3  That is because of the
economies of sales efforts realized by OppenheimerFunds Distributor, Inc.,
(referred to in this document as the "Distributor"), or by dealers or other
financial institutions that offer those shares to certain classes of investors.

Not all waivers apply to all funds. For example, waivers relating to Retirement
Plans do not apply to Oppenheimer municipal funds, because shares of those funds
are not available for purchase by or on behalf of retirement plans. Other waivers
apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus and
Statement of Additional Information of the applicable Oppenheimer funds, the term
"Retirement Plan" refers to the following types of plans:
         1) plans qualified under Sections 401(a) or 401(k) of the Internal Revenue
            Code,
         2) non-qualified deferred compensation plans,
         3) employee benefit plans4
         4) Group Retirement Plans5
         5) 403(b)(7) custodial plan accounts
         6) Individual Retirement Accounts ("IRAs"), including traditional IRAs,
            Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the "Transfer
Agent") of the particular Oppenheimer fund. These waivers and special arrangements
may be amended or terminated at any time by a particular fund, the Distributor,
and/or OppenheimerFunds, Inc. (referred to in this document as the "Manager").


Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
o







    Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
------------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial
Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge
(unless a waiver applies).

      There is no initial sales charge on purchases of Class A shares of any of the
Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent deferred sales charge if redeemed within 18
months (24 months in the case of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver described elsewhere in
this Appendix applies to the redemption). Additionally, on shares purchased under
these waivers that are subject to the Class A contingent deferred sales charge, the
Distributor will pay the applicable concession described in the Prospectus under
"Class A Contingent Deferred Sales Charge."6 This waiver provision applies to:
o     Purchases of Class A shares aggregating $1 million or more.
o     Purchases of Class A shares by a Retirement Plan that was permitted to
         purchase such shares at net asset value but subject to a contingent
         deferred sales charge prior to March 1, 2001. That included plans (other
         than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares costing
         $500,000 or more, 2) had at the time of purchase 100 or more eligible
         employees or total plan assets of $500,000 or more, or 3) certified to the
         Distributor that it projects to have annual plan purchases of $200,000 or
         more.
o     Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are
         made:
         1) through a broker, dealer, bank or registered investment adviser that
            has made special arrangements with the Distributor for those purchases,
            or
         2) by a direct rollover of a distribution from a qualified Retirement Plan
            if the administrator of that Plan has made special arrangements with
            the Distributor for those purchases.
o     Purchases of Class A shares by Retirement Plans that have any of the
         following record-keeping arrangements:
         1) The record keeping is performed by Merrill Lynch Pierce Fenner & Smith,
            Inc. ("Merrill Lynch") on a daily valuation basis for the Retirement
            Plan. On the date the plan sponsor signs the record-keeping service
            agreement with Merrill Lynch, the Plan must have $3 million or more of
            its assets invested in (a) mutual funds, other than those advised or
            managed by Merrill Lynch Investment Management, L.P. ("MLIM"), that are
            made available under a Service Agreement between Merrill Lynch and the
            mutual fund's principal underwriter or distributor, and  (b)  funds
            advised or managed by MLIM (the funds described in (a) and (b) are
            referred to as "Applicable Investments").
         2) The record keeping for the Retirement Plan is performed on a daily
            valuation basis by a record keeper whose services are provided under a
            contract or arrangement between the Retirement Plan and Merrill Lynch.
            On the date the plan sponsor signs the record keeping service agreement
            with Merrill Lynch, the Plan must have $3 million or more of its assets
            (excluding assets invested in money market funds) invested in
            Applicable Investments.
         3) The record keeping for a Retirement Plan is handled under a service
            agreement with Merrill Lynch and on the date the plan sponsor signs
            that agreement, the Plan has 500 or more eligible employees (as
            determined by the Merrill Lynch plan conversion manager).
o






               Waivers of Class A Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------------

A. Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.

Class A shares purchased by the following investors are not subject to any Class A
sales charges (and no concessions are paid by the Distributor on such purchases):
o     The Manager or its affiliates.

o     Present or former officers, directors, trustees and employees (and their
         "immediate families") of the Fund, the Manager and its affiliates, and
         retirement plans established by them for their employees. The term
         "immediate family" refers to one's spouse, children, grandchildren,
         grandparents, parents, parents-in-law, brothers and sisters, sons- and
         daughters-in-law, a sibling's spouse, a spouse's siblings, aunts, uncles,
         nieces and nephews; relatives by virtue of a remarriage (step-children,
         step-parents, etc.) are included.

o     Registered management investment companies, or separate accounts of insurance
         companies having an agreement with the Manager or the Distributor for that
         purpose.
o     Dealers or brokers that have a sales agreement with the Distributor, if they
         purchase shares for their own accounts or for retirement plans for their
         employees.
o     Employees and registered representatives (and their spouses) of dealers or
         brokers described above or financial institutions that have entered into
         sales arrangements with such dealers or brokers (and which are identified
         as such to the Distributor) or with the Distributor. The purchaser must
         certify to the Distributor at the time of purchase that the purchase is
         for the purchaser's own account (or for the benefit of such employee's
         spouse or minor children).
o     Dealers, brokers, banks or registered investment advisors that have entered
         into an agreement with the Distributor providing specifically for the use
         of shares of the Fund in particular investment products made available to
         their clients. Those clients may be charged a transaction fee by their
         dealer, broker, bank or advisor for the purchase or sale of Fund shares.
o     Investment advisors and financial planners who have entered into an agreement
         for this purpose with the Distributor and who charge an advisory,
         consulting or other fee for their services and buy shares for their own
         accounts or the accounts of their clients.
o     "Rabbi trusts" that buy shares for their own accounts, if the purchases are
         made through a broker or agent or other financial intermediary that has
         made special arrangements with the Distributor for those purchases.
o     Clients of investment advisors or financial planners (that have entered into
         an agreement for this purpose with the Distributor) who buy shares for
         their own accounts may also purchase shares without sales charge but only
         if their accounts are linked to a master account of their investment
         advisor or financial planner on the books and records of the broker, agent
         or financial intermediary with which the Distributor has made such special
         arrangements . Each of these investors may be charged a fee by the broker,
         agent or financial intermediary for purchasing shares.
o     Directors, trustees, officers or full-time employees of OpCap Advisors or its
         affiliates, their relatives or any trust, pension, profit sharing or other
         benefit plan which beneficially owns shares for those persons.
o     Accounts for which Oppenheimer Capital (or its successor) is the investment
         advisor (the Distributor must be advised of this arrangement) and persons
         who are directors or trustees of the company or trust which is the
         beneficial owner of such accounts.
o     A unit investment trust that has entered into an appropriate agreement with
         the Distributor.
o     Dealers, brokers, banks, or registered investment advisers that have entered
         into an agreement with the Distributor to sell shares to defined
         contribution employee retirement plans for which the dealer, broker or
         investment adviser provides administration services.
o     Retirement Plans and deferred compensation plans and trusts used to fund
         those plans (including, for example, plans qualified or created under
         sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in
         each case if those purchases are made through a broker, agent or other
         financial intermediary that has made special arrangements with the
         Distributor for those purchases.
o     A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors)
         whose Class B or Class C shares of a Former Quest for Value Fund were
         exchanged for Class A shares of that Fund due to the termination of the
         Class B and Class C TRAC-2000 program on November 24, 1995.
o     A qualified Retirement Plan that had agreed with the former Quest for Value
         Advisors to purchase shares of any of the Former Quest for Value Funds at
         net asset value, with such shares to be held through DCXchange, a
         sub-transfer agency mutual fund clearinghouse, if that arrangement was
         consummated and share purchases commenced by December 31, 1996.

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions.

Class A shares issued or purchased in the following transactions are not subject to
sales charges (and no concessions are paid by the Distributor on such purchases):
o     Shares issued in plans of reorganization, such as mergers, asset acquisitions
         and exchange offers, to which the Fund is a party.
o     Shares purchased by the reinvestment of dividends or other distributions
         reinvested from the Fund or other Oppenheimer funds (other than
         Oppenheimer Cash Reserves) or unit investment trusts for which
         reinvestment arrangements have been made with the Distributor.
      |_|   Shares purchased with the proceeds of maturing principal units of any
         Qualified Unit Investment Liquid Trust Series.
o     Shares purchased by the reinvestment of loan repayments by a participant in a
         Retirement Plan for which the Manager or an affiliate acts as sponsor.

C. Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
o     To make Automatic Withdrawal Plan payments that are limited annually to no
         more than 12% of the account value adjusted annually.
o     Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account Rules
         and Policies," in the applicable fund Prospectus).
o     For distributions from Retirement Plans, deferred compensation plans or other
         employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal Revenue

            Code) of the participant or beneficiary. The death or disability must
            occur after the participant's account was established.

         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
         Hardship withdrawals, as defined in the plan.7
         5) Under a Qualified Domestic Relations Order, as defined in the Internal
            Revenue Code, or, in the case of an IRA, a divorce or separation
            agreement described in Section 71(b) of the Internal Revenue Code.
         6) To meet the minimum distribution requirements of the Internal Revenue
            Code.
         7) To make "substantially equal periodic payments" as described in Section
            72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.8
         10)      Participant-directed redemptions to purchase shares of a mutual
            fund (other than a fund managed by the Manager or a subsidiary of the
            Manager) if the plan has made special arrangements with the
            Distributor.
         11)      Plan termination or "in-service distributions," if the redemption
            proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.
o     For distributions from 401(k) plans sponsored by broker-dealers that have
         entered into a special agreement with the Distributor allowing this waiver.
o     For distributions from retirement plans that have $10 million or more in plan
         assets and that have entered into a special agreement with the Distributor.
o     For distributions from retirement plans which are part of a retirement plan
         product or platform offered by certain banks, broker-dealers, financial
         advisors, insurance companies or record keepers which have entered into a
         special agreement with the Distributor.
o       Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------------

The Class B, Class C and Class N contingent deferred sales charges will not be
applied to shares purchased in certain types of transactions or redeemed in certain
circumstances described below.

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be waived
for redemptions of shares in the following cases:
o     Shares redeemed involuntarily, as described in "Shareholder Account Rules and
         Policies," in the applicable Prospectus.
o     Redemptions from accounts other than Retirement Plans following the death or
         disability of the last surviving shareholder. The death or disability must
         have occurred after the account was established, and for disability you
         must provide evidence of a determination of disability by the Social
         Security Administration.
o     The contingent deferred sales charges are generally not waived following the
         death or disability of a grantor or trustee for a trust account. The
         contingent deferred sales charges will only be waived in the limited case
         of the death of the trustee of a grantor trust or revocable living trust
         for which the trustee is also the sole beneficiary. The death or
         disability must have occurred after the account was established, and for
         disability you must provide evidence of a determination of disability by
         the Social Security Administration.
o     Distributions from accounts for which the broker-dealer of record has entered
         into a special agreement with the Distributor allowing this waiver.
o     Redemptions of Class B shares held by Retirement Plans whose records are
         maintained on a daily valuation basis by Merrill Lynch or an independent
         record keeper under a contract with Merrill Lynch.
o     Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial institutions that have entered into a
         special arrangement with the Distributor for this purpose.

o     Redemptions of Class C shares of an Oppenheimer fund in amounts of $1 million
         or more requested in writing by a Retirement Plan sponsor and submitted
         more than 12 months after the Retirement Plan's first purchase of Class C
         shares, if the redemption proceeds are invested to purchase Class N shares
         of one or more Oppenheimer funds.

o     Distributions9 from Retirement Plans or other employee benefit plans for any
         of the following purposes:
         1) Following the death or disability (as defined in the Internal Revenue
            Code) of the participant or beneficiary. The death or disability must
            occur after the participant's account was established in an Oppenheimer
            fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.10
         5) To make distributions required under a Qualified Domestic Relations
            Order or, in the case of an IRA, a divorce or separation agreement
            described in Section 71(b) of the Internal Revenue Code.
         6) To meet the minimum distribution requirements of the Internal Revenue
            Code.
         7) To make "substantially equal periodic payments" as described in Section
            72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.11
         9) On account of the participant's separation from service.12
         10)      Participant-directed redemptions to purchase shares of a mutual
            fund (other than a fund managed by the Manager or a subsidiary of the
            Manager) offered as an investment option in a Retirement Plan if the
            plan has made special arrangements with the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled over
            directly to an OppenheimerFunds-sponsored IRA.

         12)      For distributions from a participant's account under an Automatic
            Withdrawal Plan after the participant reaches age 59 1/2, as long as the
            aggregate value of the distributions does not exceed 10% of the
            account's value, adjusted annually.

         13)      Redemptions of Class B shares under an Automatic Withdrawal Plan
            for an account other than a Retirement Plan, if the aggregate value of
            the redeemed shares does not exceed 10% of the account's value,
            adjusted annually.
         14)      For distributions from 401(k) plans sponsored by broker-dealers
            that have entered into a special arrangement with the Distributor
            allowing this waiver.

o     Redemptions of Class B shares or Class C shares under an Automatic Withdrawal
         Plan from an account other than a Retirement Plan if the aggregate value
         of the redeemed shares does not exceed 10% of the account's value annually.


B. Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B and Class C shares
sold or issued in the following cases:
o     Shares sold to the Manager or its affiliates.
o     Shares sold to registered management investment companies or separate
         accounts of insurance companies having an agreement with the Manager or
         the Distributor for that purpose.
o     Shares issued in plans of reorganization to which the Fund is a party.
o     Shares sold to present or former officers, directors, trustees or employees
         (and their "immediate families" as defined above in Section I.A.) of the
         Fund, the Manager and its affiliates and retirement plans established by
         them for their employees.

o







 Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who
                   Were Shareholders of Former Quest for Value Funds
-------------------------------------------------------------------------------------

The initial and contingent deferred sales charge rates and waivers for Class A,
Class B and Class C shares described in the Prospectus or Statement of Additional
Information of the Oppenheimer funds are modified as described below for certain
persons who were shareholders of the former Quest for Value Funds.  To be eligible,
those persons must have been shareholders on November 24, 1995, when
OppenheimerFunds, Inc. became the investment advisor to those former Quest for
Value Funds.  Those funds include:

   Oppenheimer Quest Value Fund, Inc.           Oppenheimer Small Cap Value Fund
   Oppenheimer Quest Balanced Fund              Oppenheimer Quest International
   Value Fund, Inc.

   Oppenheimer Quest Opportunity Value Fund

      These arrangements also apply to shareholders of the following funds when
they merged (were reorganized) into various Oppenheimer funds on November 24, 1995:

   Quest for Value U.S. Government Income Fund  Quest for Value New York Tax-Exempt
   Fund
   Quest for Value Investment Quality Income Fund     Quest for Value National
   Tax-Exempt Fund
   Quest for Value Global Income Fund     Quest for Value California Tax-Exempt Fund

      All of the funds listed above are referred to in this Appendix as the "Former
Quest for Value Funds."  The waivers of initial and contingent deferred sales
charges described in this Appendix apply to shares of an Oppenheimer fund that are
either:
o     acquired by such shareholder pursuant to an exchange of shares of an
         Oppenheimer fund that was one of the Former Quest for Value Funds, or
o     purchased by such shareholder by exchange of shares of another Oppenheimer
         fund that were acquired pursuant to the merger of any of the Former Quest
         for Value Funds into that other Oppenheimer fund on November 24, 1995.

A. Reductions or Waivers of Class A Sales Charges.

o     Reduced Class A Initial Sales Charge Rates for Certain Former Quest for Value
Funds Shareholders.

Purchases by Groups and Associations.  The following table sets forth the initial
sales charge rates for Class A shares purchased by members of "Associations" formed
for any purpose other than the purchase of securities. The rates in the table apply
if that Association purchased shares of any of the Former Quest for Value Funds or
received a proposal to purchase such shares from OCC Distributors prior to November
24, 1995.

--------------------------------------------------------------------------------
                      Initial Sales       Initial Sales Charge   Concession as
Number of Eligible    Charge as a % of    as a % of Net Amount   % of Offering
Employees or Members  Offering Price      Invested               Price
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
9 or Fewer                   2.50%                2.56%              2.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
At  least  10 but not        2.00%                2.04%              1.60%
more than 49
--------------------------------------------------------------------------------

------------------------------------------------------------------------------------
      For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but those
shares are subject to the Class A contingent deferred sales charge described in the
applicable fund's Prospectus.






      Purchases made under this arrangement qualify for the lower of either the
sales charge rate in the table based on the number of members of an Association, or
the sales charge rate that applies under the Right of Accumulation described in the
applicable fund's Prospectus and Statement of Additional Information. Individuals
who qualify under this arrangement for reduced sales charge rates as members of
Associations also may purchase shares for their individual or custodial accounts at
these reduced sales charge rates, upon request to the Distributor.

o     Waiver of Class A Sales Charges for Certain Shareholders.  Class A shares
purchased by the following investors are not subject to any Class A initial or
contingent deferred sales charges:
o     Shareholders who were shareholders of the AMA Family of Funds on February 28,
            1991 and who acquired shares of any of the Former Quest for Value Funds
            by merger of a portfolio of the AMA Family of Funds.
o     Shareholders who acquired shares of any Former Quest for Value Fund by merger
            of any of the portfolios of the Unified Funds.

o     Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.
The Class A contingent deferred sales charge will not apply to redemptions of Class
A shares purchased by the following investors who were shareholders of any Former
Quest for Value Fund:

      Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder with
whom that dealer has a fiduciary relationship, under the Employee Retirement Income
Security Act of 1974 and regulations adopted under that law.

B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

o     Waivers for Redemptions of Shares Purchased Prior to March 6, 1995.  In the
following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund into
the fund or by exchange from an Oppenheimer fund that was a Former Quest for Value
Fund or into which such fund merged. Those shares must have been purchased prior to
March 6, 1995 in connection with:
o     withdrawals under an automatic withdrawal plan holding only either Class B or
            Class C shares if the annual withdrawal does not exceed 10% of the
            initial value of the account value, adjusted annually, and
o     liquidation of a shareholder's account if the aggregate net asset value of
            shares held in the account is less than the required minimum value of
            such accounts.

o     Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but
Prior to November 24, 1995. In the following cases, the contingent deferred sales
charge will be waived for redemptions of Class A, Class B or Class C shares of an
Oppenheimer fund. The shares must have been acquired by the merger of a Former
Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that was
a Former Quest For Value Fund or into which such Former Quest for Value Fund
merged. Those shares must have been purchased on or after March 6, 1995, but prior
to November 24, 1995:
o     redemptions following the death or disability of the shareholder(s) (as
            evidenced by a determination of total disability by the U.S. Social
            Security Administration);
o     withdrawals under an automatic withdrawal plan (but only for Class B or Class
            C shares) where the annual withdrawals do not exceed 10% of the initial
            value of the account value; adjusted annually, and

o     liquidation of a shareholder's account if the aggregate net asset value of
            shares held in the account is less than the required minimum account
            value.

      A shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Oppenheimer fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Oppenheimer fund
within 90 days after redemption.
o       Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer
      Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc.
---------------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A and
Class B shares described in the respective Prospectus (or this Appendix) of the
following Oppenheimer funds (each is referred to as a "Fund" in this section):
   Oppenheimer U. S. Government Trust,
   Oppenheimer Bond Fund,
   Oppenheimer Value Fund and
   Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were shareholders
of the following funds (referred to as the "Former Connecticut Mutual Funds") on
March 1, 1996, when OppenheimerFunds, Inc. became the investment adviser to the
Former Connecticut Mutual Funds:
   Connecticut Mutual Liquid Account         Connecticut Mutual Total Return Account
   Connecticut Mutual Government Securities Account   CMIA LifeSpan Capital
   Appreciation Account
   Connecticut Mutual Income Account         CMIA LifeSpan Balanced Account
   Connecticut Mutual Growth Account         CMIA Diversified Income Account

A. Prior Class A CDSC and Class A Sales Charge Waivers.

o     Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and
the other Former Connecticut Mutual Funds are entitled to continue to make
additional purchases of Class A shares at net asset value without a Class A initial
sales charge, but subject to the Class A contingent deferred sales charge that was
in effect prior to March 18, 1996 (the "prior Class A CDSC"). Under the prior Class
A CDSC, if any of those shares are redeemed within one year of purchase, they will
be assessed a 1% contingent deferred sales charge on an amount equal to the current
market value or the original purchase price of the shares sold, whichever is
smaller (in such redemptions, any shares not subject to the prior Class A CDSC will
be redeemed first).

      Those shareholders who are eligible for the prior Class A CDSC are:
         1) persons whose purchases of Class A shares of a Fund and other Former
            Connecticut Mutual Funds were $500,000 prior to March 18, 1996, as a
            result of direct purchases or purchases pursuant to the Fund's policies
            on Combined Purchases or Rights of Accumulation, who still hold those
            shares in that Fund or other Former Connecticut Mutual Funds, and
         2) persons whose intended purchases under a Statement of Intention entered
            into prior to March 18, 1996, with the former general distributor of
            the Former Connecticut Mutual Funds to purchase shares valued at
            $500,000 or more over a 13-month period entitled those persons to
            purchase shares at net asset value without being subject to the Class A
            initial sales charge

      Any of the Class A shares of a Fund and the other Former Connecticut Mutual
Funds that were purchased at net asset value prior to March 18, 1996, remain
subject to the prior Class A CDSC, or if any additional shares are purchased by
those shareholders at net asset value pursuant to this arrangement they will be
subject to the prior Class A CDSC.


o






      Class A Sales Charge Waivers. Additional Class A shares of a Fund may be
purchased without a sales charge, by a person who was in one (or more) of the
categories below and acquired Class A shares prior to March 18, 1996, and still
holds Class A shares:
         1) any purchaser, provided the total initial amount invested in the Fund
            or any one or more of the Former Connecticut Mutual Funds totaled
            $500,000 or more, including investments made pursuant to the Combined
            Purchases, Statement of Intention and Rights of Accumulation features
            available at the time of the initial purchase and such investment is
            still held in one or more of the Former Connecticut Mutual Funds or a
            Fund into which such Fund merged;
         2) any participant in a qualified plan, provided that the total initial
            amount invested by the plan in the Fund or any one or more of the
            Former Connecticut Mutual Funds totaled $500,000 or more;
         3) Directors of the Fund or any one or more of the Former Connecticut
            Mutual Funds and members of their immediate families;
         4) employee benefit plans sponsored by Connecticut Mutual Financial
            Services, L.L.C. ("CMFS"), the prior distributor of the Former
            Connecticut Mutual Funds, and its affiliated companies;
         5) one or more members of a group of at least 1,000 persons (and persons
            who are retirees from such group) engaged in a common business,
            profession, civic or charitable endeavor or other activity, and the
            spouses and minor dependent children of such persons, pursuant to a
            marketing program between CMFS and such group; and
         6) an institution acting as a fiduciary on behalf of an individual or
            individuals, if such institution was directly compensated by the
            individual(s) for recommending the purchase of the shares of the Fund
            or any one or more of the Former Connecticut Mutual Funds, provided the
            institution had an agreement with CMFS.

      Purchases of Class A shares made pursuant to (1) and (2) above may be subject
to the Class A CDSC of the Former Connecticut Mutual Funds described above.

      Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the Panorama Separate Account
which is beyond the applicable surrender charge period and which was used to fund a
qualified plan, if that holder exchanges the variable annuity contract proceeds to
buy Class A shares of the Fund.

B. Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix, above,
the contingent deferred sales charge will be waived for redemptions of Class A and
Class B shares of a Fund and exchanges of Class A or Class B shares of a Fund into
Class A or Class B shares of a Former Connecticut Mutual Fund provided that the
Class A or Class B shares of the Fund to be redeemed or exchanged were (i) acquired
prior to March 18, 1996 or (ii) were acquired by exchange from an Oppenheimer fund
that was a Former Connecticut Mutual Fund. Additionally, the shares of such Former
Connecticut Mutual Fund must have been purchased prior to March 18, 1996:
   1) by the estate of a deceased shareholder;
   2) upon the disability of a shareholder, as defined in Section 72(m)(7) of the
      Internal Revenue Code;
   3) for retirement distributions (or loans) to participants or beneficiaries from
      retirement plans qualified under Sections 401(a) or 403(b)(7)of the Code, or
      from IRAs, deferred compensation plans created under Section 457 of the Code,
      or other employee benefit plans;
   as tax-free returns of excess contributions to such retirement or employee
      benefit plans;
   5) in whole or in part, in connection with shares sold to any state, county, or
      city, or any instrumentality, department, authority, or agency thereof, that
      is prohibited by applicable investment laws from paying a sales charge or
      concession in connection with the purchase of shares of any registered
      investment management company;
   6) in connection with the redemption of shares of the Fund due to a combination
      with another investment company by virtue of a merger, acquisition or similar
      reorganization transaction;
   7) in connection with the Fund's right to involuntarily redeem or liquidate the
      Fund;
   8) in connection with automatic redemptions of Class A shares and Class B shares
      in certain retirement plan accounts pursuant to an Automatic Withdrawal Plan
      but limited to no more than 12% of the original value annually; or

   9) as involuntary redemptions of shares by operation of law, or under procedures
      set forth in the Fund's Articles of Incorporation, or as adopted by the Board
      of Directors of the Fund.

o        Special Reduced Sales Charge for Former Shareholders of Advance America
                                       Funds, Inc.
------------------------------------------------------------------------------------


Shareholders of Oppenheimer AMT-Free Municipals, Oppenheimer U.S. Government Trust,
Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund who acquired
(and still hold) shares of those funds as a result of the reorganization of series
of Advance America Funds, Inc. into those Oppenheimer funds on October 18, 1991,
and who held shares of Advance America Funds, Inc. on March 30, 1990, may purchase
Class A shares of those four Oppenheimer funds at a maximum sales charge rate of
4.50%.

o           Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
                               Convertible Securities Fund
------------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this section)
may sell Class M shares at net asset value without any initial sales charge to the
classes of investors listed below who, prior to March 11, 1996, owned shares of the
Fund's then-existing Class A and were permitted to purchase those shares at net
asset value without sales charge:
o     the Manager and its affiliates,
o     present or former officers, directors, trustees and employees (and their
         "immediate families" as defined in the Fund's Statement of Additional
         Information) of the Fund, the Manager and its affiliates, and retirement
         plans established by them or the prior investment advisor of the Fund for
         their employees,
o     registered management investment companies or separate accounts of insurance
         companies that had an agreement with the Fund's prior investment advisor
         or distributor for that purpose,
o     dealers or brokers that have a sales agreement with the Distributor, if they
         purchase shares for their own accounts or for retirement plans for their
         employees,
o     employees and registered representatives (and their spouses) of dealers or
         brokers described in the preceding section or financial institutions that
         have entered into sales arrangements with those dealers or brokers (and
         whose identity is made known to the Distributor) or with the Distributor,
         but only if the purchaser certifies to the Distributor at the time of
         purchase that the purchaser meets these qualifications,
o     dealers, brokers, or registered investment advisors that had entered into an
         agreement with the Distributor or the prior distributor of the Fund
         specifically providing for the use of Class M shares of the Fund in
         specific investment products made available to their clients, and
|_|   dealers, brokers or registered investment advisors that had entered into an
         agreement with the Distributor or prior distributor of the Fund's shares
         to sell shares to defined contribution employee retirement plans for which
         the dealer, broker, or investment advisor provides administrative services.






------------------------------------------------------------------------------------
Oppenheimer AMT-Free New York Municipals
------------------------------------------------------------------------------------

Internet Website:
     www.oppenheimerfunds.com
     ------------------------

Investment Adviser

     OppenheimerFunds, Inc.
     Two World Financial Center
     225 Liberty Street - 11th Floor
     New York, New York 10281-1008


Distributor

     OppenheimerFunds Distributor, Inc.
     Two World Financial Center
     225 Liberty Street - 11th Floor
     New York, New York 10281-1008


Transfer Agent
     OppenheimerFunds Services
     P.O. Box 5270
     Denver, Colorado 80217
     1.800.CALL OPP (225.5677)

Custodian Bank

     Citibank, N.A.
     111 Wall Street
     New York, New York 10005

Independent Registered Public Accounting Firm
     KPMG LLP

     707 Seventeenth Street
     Denver, Colorado 80202

Legal Counsel
     Mayer, Brown, Rowe & Maw LLP
     1675 Broadway
     New York, New York 10019-5820

     1234
     PX0360.001.1104




1 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to those
Trustees who are not "interested persons" of the Fund and who do not have any
direct or indirect financial interest in the operation of the distribution plan or
any agreement under the plan.
2 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
3 In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered
closed-end fund, references to contingent deferred sales charges mean the Fund's
Early Withdrawal Charges and references to "redemptions" mean "repurchases" of
shares.
4 An "employee benefit plan" means any plan or arrangement, whether or not it is
"qualified" under the Internal Revenue Code, under which Class N shares of an
Oppenheimer fund or funds are purchased by a fiduciary or other administrator for
the account of participants who are employees of a single employer or of affiliated
employers. These may include, for example, medical savings accounts, payroll
deduction plans or similar plans. The fund accounts must be registered in the name
of the fiduciary or administrator purchasing the shares for the benefit of
participants in the plan.
5 The term "Group Retirement Plan" means any qualified or non-qualified retirement
plan for employees of a corporation or sole proprietorship, members and employees
of a partnership or association or other organized group of persons (the members of
which may include other groups), if the group has made special arrangements with
the Distributor and all members of the group participating in (or who are eligible
to participate in) the plan purchase shares of an Oppenheimer fund or funds through
a single investment dealer, broker or other financial institution designated by the
group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b)
plans other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or funds
through a single investment dealer, broker or other financial institution that has
made special arrangements with the Distributor.
6 However, that concession will not be paid on purchases of shares in amounts of $1
million or more (including any right of accumulation) by a Retirement Plan that
pays for the purchase with the redemption proceeds of Class C shares of one or more
Oppenheimer funds held by the Plan for more than one year.
7 This provision does not apply to IRAs.

8 This provision only applies to qualified retirement plans and 403(b)(7) custodial
plans after your separation from service in or after the year you reached age 55.
9 The distribution must be requested prior to Plan termination or the elimination
of the Oppenheimer funds as an investment option under the Plan.
10 This provision does not apply to IRAs.

11 This provision does not apply to loans from 403(b)(7) custodial plans and loans
from the OppenheimerFunds-sponsored Single K retirement plan.
12 This provision does not apply to 403(b)(7) custodial plans if the participant is
less than age 55, nor to IRAs.

                   OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

                                  FORM N-1A

                                    PART C

                              OTHER INFORMATION


Item 22.  Exhibits
------------------

(a)  (i) Amendment No. 2 to the Amended and Restated Declaration of Trust
dated May 19, 2003:  Previously filed with the Registrant's Post-Effective
Amendment No. 29, 11/21/03 and incorporated herein by reference.

     (ii)Amendment No. 1 to the Amended and Restated Declaration of Trust
dated January 14, 2003:  Previously filed with the Registrant's
Post-Effective Amendment No. 29, 11/21/03 and incorporated herein by
reference.


     (iii)  Amended and Restated Declaration of Trust dated August 15, 2002:
Previously filed with Registrant's Post-Effective Amendment No. 28, 11/21/02
and incorporated herein by reference.

(b)  By-Laws as amended through December 14, 2000: Previously filed with
Registrant's Post-Effective Amendment No. 27, 1/24/02 and incorporated herein
by reference.


(c)  (i) Specimen Class A Share Certificate: Previously filed with the
Registrant's Post-Effective Amendment No. 29, 11/21/03 and incorporated
herein by reference.

     (ii)Specimen Class B Share Certificate: Previously filed with the
Registrant's Post-Effective Amendment No. 29, 11/21/03 and incorporated
herein by reference.

     (iii)  Specimen Class C Share Certificate: Previously filed with the
Registrant's Post-Effective Amendment No. 29, 11/21/03 and incorporated
herein by reference.


(d)      Investment Advisory Agreement dated October 22, 1990: Previously
filed with Registrant's Post-Effective Amendment No. 8, 12/3/90, refiled with
Registrant's Post-Effective Amendment No. 14, 1/27/95, pursuant to Item 102
of Regulation S-T and incorporated herein by reference.

(e)  (i) General Distributor's Agreement dated December 10, 1992:  Previously
filed with Registrant's Post-Effective Amendment No. 12, 11/26/93, and
incorporated herein by reference.

     (ii)Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

     (iii)  Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.

     (iv)Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
incorporated herein by reference.
     (v) Form of Trust Company Fund/SERV Purchase Agreement of
OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 45 to the Registration Statement of Oppenheimer High Yield Fund
(Reg. No. 2-62076), 10/26/01, and incorporated herein by reference.

     (vi)Form of Trust Company Agency Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective Amendment No. 45 to
the Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/26/01, and incorporated herein by reference.


(f)  (i) Amended and Restated Retirement Plan for Non-Interested Trustees or
Directors dated 8/9/01: Previously filed with Post-Effective Amendment No. 34
to the Registration Statement of Oppenheimer Gold & Special Minerals Fund
(Reg. No. 2-82590), 10/25/01, and incorporated herein by reference.


     (ii)Form of Deferred Compensation Plan for Disinterested
Trustees/Directors:  Filed with Post-Effective Amendment No. 26 to the
Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No.
2-82590), 10/28/98, and incorporated herein by reference.

(g)  (i) Global Custodial Services Agreement dated July 15, 2003, between
Registrant and Citibank, N.A.: Previously filed with the Pre-Effective
Amendment No. 1 to the Registration Statement of Oppenheimer International
Large-Cap Core Trust (Reg. No. 333-106014), 8/5/03, and incorporated herein
by reference.

     (ii)Amended and Restated Foreign Custody Manager Agreement dated May 31,
2001, as amended July 15, 2003, between Registrant and Citibank, N.A:
Previously filed with the Pre-Effective Amendment No. 1 to the Registration
Statement of Oppenheimer International Large-Cap Core Trust (Reg. No.
333-106014), 8/5/03, and incorporated herein by reference.

(h)      Not applicable.

(i)      Opinion and Consent of Counsel dated July 3, 1984:  Previously filed
with Registrant's Pre-Effective Amendment No. 1 to Registrant's Registration
Statement 7/12/84 , refiled with Registrant's Post-Effective Amendment No.
14, 1/27/95 pursuant to Item 102 of Regulation S-T and incorporated herein by
reference.


(j)      Independent Registered Public Accounting Firm:  Filed herewith.


(k)      Not applicable.

(l)      Investment Letter from OppenheimerFunds, Inc. to Registrant dated
June 29, 1984:  Filed with Pre-Effective amendment No. 1 to Registrant's
Registration Statement, 7/12/84, refiled with Registrant's Post-Effective
Amendment No. 14, 1/27/95, pursuant to Item 102 of Regulation S-T and
incorporated herein by reference.


(m)  (i) Amended and Restated Service Plan and Agreement for Class A shares
dated April 15, 2004: Filed herewith.


     (ii)Amended and Restated Distribution and Service Plan and Agreement for
Class B shares dated February 12, 1998:  Previously filed with Registrant's
Post-Effective Amendment No. 25, 1/21/00, and incorporated herein by
reference.


     (iii)  Amended and Restated Distribution and Service Plan and Agreement
for Class C shares dated February 18, 2004:  Filed herewith.

(n)  Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through
9/15/04: Previously filed with Post-Effective Amendment No. 24 to the
Registration Statement of Oppenheimer Cash Reserves Fund (Reg. No. 33-23223),
9/27/04, and incorporated herein by reference.

(o)  (i) Powers of Attorney for John V. Murphy, Brian Wixted and all
Trustees/Directors except for Mary Miller: Previously filed with
Post-Effective Amendment No. 62 to the Registration Statement of Oppenheimer
Growth Fund (Reg. No. 2-45272), 10/22/04, and incorporated herein by
reference.

     (ii) Powers of Attorney for Mary Miller: Previously filed with
Post-Effective Amendment No. 79 to the Registration Statement of Oppenheimer
Global Fund (Reg. No. 2-31661), 11/26/04, and incorporated herein by
reference.


(p)      Amended and Restated Code of Ethics of the Oppenheimer Funds dated
May 15, 2002 under Rule 17j-1 of the Investment Company Act of 1940:
Previously filed with Post-Effective Amendment No. 29 to the Registration
Statement of Oppenheimer Discovery Fund (Reg. No. 33-371), 11/21/02, and
incorporated herein by reference.


Item 23. - Persons Controlled by or Under Common Control with the Fund
----------------------------------------------------------------------


None.


Item 24. - Indemnification
--------------------------

Reference is made to the provisions of Article Seven of Registrant's Amended
and Restated Declaration of Trust filed as Exhibit 22(a) to this Registration
Statement, and incorporated herein by reference.


Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.


Item 25. - Business and Other Connections of the Investment Adviser
-------------------------------------------------------------------

(a)   OppenheimerFunds,  Inc. is the investment adviser of the Registrant;  it
and certain  subsidiaries  and  affiliates  act in the same  capacity to other
investment companies,  including without limitation those described in Parts A
and B hereof and listed in Item 25(b) below.


 (b)  There  is  set  forth  below  information  as  to  any  other  business,
profession,  vocation  or  employment  of a  substantial  nature in which each
officer and director of  OppenheimerFunds,  Inc. is, or at any time during the
past two fiscal  years has been,  engaged  for  his/her  own account or in the
capacity of director, officer, employee, partner or trustee.

---------------------------------------------------------------------------------
Name and Current Position
with OppenheimerFunds, Inc.    Other Business and Connections During the Past
                               Two Years
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lizbeth Aaron-DiGiovanni,      Formerly Vice President (April 2000) and First
Vice President                 Vice President (2003-July 2004) of Citigroup
                               Global Markets Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy L. Abbuhl,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan,                   Vice President of OppenheimerFunds Distributor,
Vice President                 Inc. and Centennial Asset Management
                               Corporation; Senior Vice President of
                               Shareholders Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Michael Amato,                 None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Erik Anderson,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Tracey Beck Apostolopoulos,    Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante,             Secretary of OppenheimerFunds Distributor, Inc.,
Vice President & Secretary     Centennial Asset Management Corporation,
                               Oppenheimer Partnership Holdings, Inc.,
                               Oppenheimer Real Asset Management, Inc.,
                               Shareholder Financial Services, Inc.,
                               Shareholder Services, Inc., HarbourView Asset
                               Management Corporation, OFI Private Investments,
                               Inc., OFI Institutional Asset Management, Inc.
                               and OppenheimerFunds Legacy Program; Assistant
                               Secretary of OFI Trust Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hany S. Ayad,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert Baker,                  None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Michael Banta,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joanne Bardell,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Baum,                    None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeff Baumgartner,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Connie Bechtolt,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lalit K. Behal                 Assistant Secretary of HarbourView Asset
Assistant Vice President       Management Corporation.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert,             Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gerald Bellamy,                Assistant Vice President of OFI Institutional
Assistant Vice President       Asset Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Erik S. Berg,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rajeev Bhaman,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Billings,                Formerly President of Lorac Technologies, Inc.
Assistant Vice President       (June 1997-July 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Binning,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert J. Bishop,              Treasurer (since October 2003) of
Vice President                 OppenheimerFunds, Inc. and Centennial Asset

                               Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John R. Blomfield,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lisa I. Bloomberg,             Formerly First Vice President and Associate
Vice   President  &  Associate General Counsel of UBS Financial Services Inc.
Counsel                        (May 1999-May 2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Veronika Boesch                None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chad Boll,                     None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Antulio N. Bomfim,             A senior economist with the Federal Reserve
Vice President                 Board (June 1992-October 2003).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

John C. Bonnell,               Formerly a Portfolio  Manager at Strong Financial
Vice President                 Corporation (May 1999-May 2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Michelle Borre Massick,        None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

John Boydell,                  None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Michael Bromberg,              None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lowell Scott Brooks,           Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joan Brunelle,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Buckmaster,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Burke,                    None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Geoffrey Caan,                 Formerly Vice President of ABN AMRO NA, Inc.
Vice President                 (June 2002-August 2003).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Catherine Carroll,             None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debra Casey,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lisa Chaffee,                  None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Charles Chibnik,               None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brett Clark,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
H.C. Digby Clements,           None
Vice   President:    Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter V. Cocuzza,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Cornwell,                Vice President of Centennial Asset Management
Vice President                 Corporation, Shareholder Financial Services,
                               Inc. and Shareholder Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott Cottier,                 None
Vice   President:    Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lauren Coulston,               None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

George Curry,                  None.
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie C. Cusker,               None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Damian,                   None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John M. Davis,                 Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruggero de'Rossi,              Vice President of HarbourView Asset Management
Senior Vice President          Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig P. Dinsell,              None
Executive Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Randall C. Dishmon,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rebecca K. Dolan               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven D. Dombrower,           Senior Vice President of OFI Private
Vice President                 Investments, Inc.; Vice President of
                               OppenheimerFunds Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Doyle,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bruce C. Dunbar,               None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Brian Dvorak,                  None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Edmiston,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel R. Engstrom,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Robert Erven             Formerly an Assistant Vice President/Senior
Assistant Vice President       Trader with Morgan Stanley Investment Management
                               (1999-April 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

George R. Evans,               None
Senior  Vice   President   and
Director   of    International
Equities

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward N. Everett,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathy Faber,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

David Falicia,                 Assistant Secretary (as of July 2004) of
Assistant Vice President       HarbourView Asset Management Corporation.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott T. Farrar,               Vice President of OFI Private Investments, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Thomas Farrell,                None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Emmanuel Ferreira,             Formerly a portfolio manager with Lashire
Vice President                 Investments (July 1999-December 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding,            Vice President of OppenheimerFunds Distributor,
Chairman: Rochester Division   Inc.; Director of ICI Mutual Insurance Company;
                               Governor of St. John's College; Chairman of the
                               Board of Directors of International Museum of
                               Photography at George Eastman House.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Bradley G. Finkle              None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Finley,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jordan Hayes Foster,           Vice President of OFI Institutional Asset
Vice President                 Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Foxhoven,                Assistant Vice President of OppenheimerFunds
Assistant Vice President       Legacy Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Colleen M. Franca,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dominic Freud,                 Formerly, a Partner and European Equity
Vice President                 Portfolio manager at SLS Management (January
                               2002-February 2003) prior to which he was head
                               of the European equities desk and managing
                               director at SG Cowen (May 1994-January 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dan Gagliardo,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hazem Gamal,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dan P. Gangemi,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Seth Gelman,                   None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Subrata Ghose,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles W. Gilbert,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Phillip S. Gillespie           Formerly, First Vice President at Merrill Lynch
Senior Vice President          Investment Management (2001-September 2004)

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan C. Gilston,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill E. Glazerman,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bejamin J. Gord,               Vice President of HarbourView Asset Management
Vice President                 Corporation and of OFI Institutional Asset
                               Management, Inc. Formerly Executive Director
                               with Miller Anderson Sherrerd, a division of
                               Morgan Stanley Investment Management. (April
                               1992-March 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Granger,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert B. Grill,               None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Haley,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marilyn Hall,                  None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kelly Haney,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve Hauenstein,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas B. Hayes,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dennis Hess,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Joseph Higgins,                Vice President of OFI Institutional Asset
Vice President                 Management, Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dorothy F. Hirshman,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Hoelscher,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko,               Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott T. Huebl,                Assistant Vice President of OppenheimerFunds
Vice President                 Legacy Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Margaret Hui,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Huttlin,                  Vice President (Director of the International
Vice President                 Division) of OFI Institutional Asset Management,
                               Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Corry E. Hyer                  None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James G. Hyland,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve P. Ilnitzki,             None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kelly Bridget Ireland,         Vice President (since January 2004) of
Vice President                 OppenheimerFunds Distributor Inc. Formerly,
                               Director of INVESCO Distributors Inc. (April
                               2000-December 2003).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kathleen T. Ives,              Vice President and Assistant Secretary of
Vice President, Senior         OppenheimerFunds Distributor, Inc. and
Counsel and Secretary          Shareholder Services, Inc.; Assistant Secretary

                               of Centennial Asset Management Corporation,
                               OppenheimerFunds Legacy Program and Shareholder
                               Financial Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Jaume,                 Senior Vice President of HarbourView Asset
Vice President                 Management Corporation and OFI Institutional
                               Asset Management, Inc.; Director of OFI Trust
                               Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Frank V. Jennings,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Jennings,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Michael Johnson,          Formerly Vice President, Senior
Assistant Vice President       Analyst/Portfolio Manager at Aladdin Capital
                               Holdings Inc. (February 2001-May 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles Kandilis,              Formerly managing director of Kandilis Capital
Assistant Vice President       Management (September 1993-August 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer E. Kane,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lynn O. Keeshan,               Assistant Treasurer of OppenheimerFunds Legacy
Senior Vice President          Program
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas W. Keffer,              None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cristina J. Keller,            Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh,                 Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Martin S. Korn,                None
Senior Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Dimitrios Kourkoulakos,        None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Kramer,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Paul Kunz,                     None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Lamentino,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

John W. Land,                  Formerly Human Resources Manager at Goldman
Assistant Vice President       Sachs (October 2000-July 2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange,                  Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Latino,                   Formerly a Senior Trader/Portfolio Engineer at
Assistant Vice President       Jacobs Levy Equity Management (June 1996-August
                               2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kristina Lawrence,             Formerly Assistant Vice President of
Vice President                 OppenheimerFunds, Inc. (November 2002-March
                               2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Guy E. Leaf,                   Formerly a Vice President of Merrill Lynch
Vice President                 (January 2000-September 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Gayle Leavitt,                 None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher M. Leavy,          None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dina C. Lee,                   Assistant Secretary of OppenheimerFunds Legacy
Assistant   Vice  President  & Program.
Assistant Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Randy Legg,                    Formerly an associate with Dechert LLP
Assistant   Vice  President  & (September 1998-January 2004).
Assistant Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Leitzinger,              Senior Vice President of Shareholder Services,
Vice President                 Inc.; Vice President of Shareholder Financial
                               Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Justin Leverenz,               Formerly, a research/technology analyst at
Vice President                 Goldman Sachs, Taiwan (May 2002-May 2004)

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael S. Levine,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gang Li,                       None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Shanquan Li,                   None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Daniel Lifshey                 None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mitchell J. Lindauer,          None
Vice   President  &  Assistant
General Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bill Linden,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa B. Lischin,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David P. Lolli,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel G. Loughran             None
Vice   President:    Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patricia Lovett,               Vice President of Shareholder Financial
Vice President                 Services, Inc. and Senior Vice President of
                               Shareholder Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dongyan Ma,                    Formerly an Assistant Vice President with
Assistant Vice President       Standish Mellon Asset Management (October
                               2001-October 2003).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve Macchia,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Mark Madden,                   Formerly a Managing Director, Global Emerging
Vice President                 Markets Team at Pioneer Investments (November
                               2000-August 2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Magee,                 Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kathleen Mandzij,              Formerly Marketing Manager - Sales Force
Assistant Vice President       Marketing (March 2003-June 2004) of
                               OppenheimerFunds, Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jerry Madzij,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angelo G. Manioudakis          Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation and of OFI Institutional
                               Asset Management, Inc. Formerly Executive
                               Director and portfolio manager for Miller,
                               Anderson & Sherrerd, a division of Morgan
                               Stanley Investment Management (August 1993-April
                               2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia,                  Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Susan Mattisinko,              Assistant Secretary (as of January 2004) of
Vice President and Associate   HarbourView Asset Management Corporation,
Counsel                        OppenheimerFunds Legacy Program, OFI Private
                               Investments, Inc. and OFI Institutional Asset
                               Management, Inc. Formerly an Associate at Sidley
                               Austin Brown and Wood LLP (1995 - October 2003).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elizabeth McCormack,           Assistant Secretary of HarbourView Asset
Assistant Vice President       Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph McGovern,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Charles L. McKenzie,           Chairman of the Board and Director of OFI Trust
Senior Vice President          Company; Chief Executive Officer, President,

                               Senior Managing Director and Director of
                               HarbourView Asset Management Corporation and OFI
                               Institutional Asset Management, Inc.; President,
                               Chairman and Director of Trinity Investment
                               Management Corporation
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lucienne Mercogliano           None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Wayne Miao,                    Formerly an Associate with Sidley Austin Brown &
Assistant Vice President and   Wood LLP (September 1999 - May 2004).
Assistant Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew J. Mika,                None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nikolaos D. Monoyios,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles Moon,                  Vice President of HarbourView Asset Management
Vice President                 Corporation and of OFI Institutional Asset
                               Management, Inc. Formerly an Executive Director
                               and Portfolio Manager with Miller Anderson &
                               Sherrerd, a division of Morgan Stanley
                               Investment Management (June 1999-March 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Murphy,                   Director of OppenheimerFunds Distributor, Inc.,
Chairman, President, Chief     Centennial Asset Management Corporation,
Executive Officer & Director   HarbourView Asset Management Corporation, OFI
                               Private Investments, Inc., OFI Institutional
                               Asset Management, Inc. and Tremont Advisers,
                               Inc.; Director of Trinity Investments Management
                               Corporation; President and Management Director
                               of Oppenheimer Acquisition Corp.; President and
                               Director of Oppenheimer Partnership Holdings,
                               Inc., Oppenheimer Real Asset Management, Inc.;
                               Chairman and Director of Shareholder Financial
                               Services, Inc. and Shareholder Services, Inc.;
                               Executive Vice President of MassMutual Life
                               Insurance Company; director of DLB Acquisition
                               Corp.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas J. Murray,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Nadler,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta,               Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jesper Nergaard,               None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Nichols,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Norman,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Matthew O'Donnell,             None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John O'Hare,                   Formerly Executive Vice President and Portfolio
Vice President                 Manager (June 2000 - August 2003) and Portfolio
                               Manager and Senior Vice President (August 1997 -
                               June 2000) at Geneva Capital Management, Ltd.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lerae A. Palumbo,              None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David P. Pellegrino,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Allison C. Pells,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert H. Pemble,              None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lori L. Penna,                 None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Petersen,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Marmeline Petion-Midy,         None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

David Pfeffer,                 Senior Vice President of HarbourView Asset
Senior Vice President and      Management Corporation since February 2004.
Chief Financial Officer        Formerly, Director and Chief Financial Officer
                               at Citigroup Asset Management (February
                               2000-February 2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James F. Phillips,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Scott Phillips,                None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Gary Pilc,                     None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jason Pizzorusso,,             None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

David Poiesz,                  Formerly a Senior Portfolio Manager at Merrill
Senior Vice President, Head    Lynch (October 2002-May 2004). Founding partner
of Growth Equity Investments   of RiverRock, a hedge fund product (April
                               1999-July 2001).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jeffrey Portnoy,               None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raghaw Prasad,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

David Preuss,                  None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jane C. Putnam,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael E. Quinn,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie S. Radtke,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Norma J. Rapini,               None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Brian N. Reid,                 None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marc Reinganum,                Formerly (until August 2002) Vaughn Rauscher
Vice President                 Chair in Financial Investments and Director,
                               Finance Institute of Southern Methodist
                               University, Texas.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Reiter,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kristina Richardson,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Claire Ring,                   None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Robertson,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Antoinette Rodriguez,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stacey Roode,                  Formerly, Assistant Vice President of Human
Vice President                 Resources of OFI (200-July 2002)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey S. Rosen,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stacy Roth,                    None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James H. Ruff,                 President and Director of OppenheimerFunds
Executive Vice President       Distributor, Inc. and Centennial Asset
                               Management Corporation; Executive Vice President
                               of OFI Private Investments, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Ruotolo,                Vice Chairman, Treasurer, Chief Financial
Executive Vice President,      Officer and Management Director of Oppenheimer
Chief Financial Officer and    Acquisition Corp.; President and Director of
Director                       Shareholder Services, Inc. and Shareholder
                               Financial Services, Inc.; Director of Trinity
                               Investment Management Corporation; Chairman of
                               the Board, Chief Executive Officer, President
                               and Director of OFI Trust Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kim Russomanno,                None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Timothy Ryan,                  Formerly a research analyst in the large
Vice President                 equities group at Credit Suisse Asset Management
                               (August 2001-June 2004)

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rohit Sah,                     None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Valerie Sanders,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Karen Sandler,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rudi Schadt,                   Formerly a consultant for Arthur Andersen
Vice President                 (August 2001-February 2002); director, senior
                               quantitative analyst at Brinson Partners
                               (September 2000,April 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ellen P. Schoenfeld,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maria Schulte,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott A. Schwegel,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Allan P. Sedmak                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer L. Sexton,            Senior Vice President of OFI Private
Vice President                 Investments, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Nava Sharma,                   Formerly, Manager at BNP Paribas Cooper Neff
Vice President                 Advisors (May 2001-April 2002).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bonnie Sherman,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David C. Sitgreaves,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward James Sivigny           Formerly a Director for ABN Amro Securities
Assistant Vice President       (July 2001-July 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Enrique H. Smith,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Louis Sortino,                 None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Keith J. Spencer,              None
Senior Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard A. Stein,              None
Vice   President:    Rochester
Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Arthur P. Steinmetz,           Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Stevens,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregory J. Stitt,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John P. Stoma,                 Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wayne Strauss,                 None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Stricker,              Vice President of Shareholder Services, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Deborah A. Sullivan,           Since December 2001, Secretary of OFI Trust
Assistant Vice President and   Company.
Assistant Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mary Sullivan,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman,               Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan B. Switzer,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Brian C. Szilagyi,             Manager of Compliance at Berger Financial Group
Assistant Vice President       LLC (May 2001-March 2003); Director of Financial
                               Reporting and Compliance at First Data
                               Corporation (April 2003-June 2004).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles,                 Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Paul Temple,                   None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jeaneen Terrio,                None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Toner,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eamon Tubridy,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith Tucker,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cameron Ullyat,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Angela Uttaro,                 None
Assistant Vice President:
Rochester Division

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Mark S. Vandehey,              Vice President of OppenheimerFunds Distributor,
Senior Vice President and      Inc., Centennial Asset Management Corporation
Chief Compliance Officer       and Shareholder Services, Inc. Formerly, (until
                               March 2004) Vice President of OppenheimerFunds,
                               Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maureen Van Norstrand,         None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Rene Vecka,                    Formerly Vice President of Shareholder Services,
Assistant Vice President,      Inc. (September 2000-July 2003).
Rochester Division

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermette,              Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillip F. Vottiero,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lisa Walsh,                    None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Patricia Walters,              None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa M. Ward,                Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jerry A. Webman,               Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher D. Weiler,         None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Adam Weiner,                   None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barry D. Weiss,                Vice President of HarbourView Asset Management
Vice President                 Corporation
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melissa Lynn Weiss,            Formerly an Associate at Hoguet Newman & Regal,
Vice President                 LLP (January 1998-May 2002).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christine Wells,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph J. Welsh,               Vice President of HarbourView Asset Management
Vice President                 Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Diederick Wermolder,           Director of OppenheimerFunds International Ltd.
Senior Vice President          And OppenheiemerFunds plc; Senior Vice President
                               (Managing Director of the International
                               Division) of OFI Institutional Asset Management,
                               Inc. .; Director of OppenheimerFunds (Asia)
                               Limited.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine M. White,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.; member of the American
                               Society of Pension Actuaries (ASPA) since 1995.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Annabel Whiting,               None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

William L. Wilby,              None
Senior Vice President and
Senior Investment Officer,
Director of Equities

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna M. Winn,                 President, Chief Executive Officer and Director
Senior Vice President          of OFI Private Investments, Inc.; Director and
                               President of OppenheimerFunds Legacy Program;
                               Senior Vice President of OppenheimerFunds
                               Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian W. Wixted,               Treasurer of HarbourView Asset Management
Senior Vice President and      Corporation; OppenheimerFunds International
Treasurer                      Ltd., Oppenheimer Partnership Holdings, Inc.,

                               Oppenheimer Real Asset Management, Inc.,
                               Shareholder Services, Inc., Shareholder
                               Financial Services, Inc., OFI Private
                               Investments, Inc., OFI Institutional Asset
                               Management, Inc., OppenheimerFunds plc and
                               OppenheimerFunds Legacy Program; Treasurer and
                               Chief Financial Officer of OFI Trust Company;
                               Assistant Treasurer of Oppenheimer Acquisition
                               Corp.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carol Wolf,                    Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation; serves on the Board of
                               the Colorado Ballet.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kurt Wolfgruber,               Director of Tremont Capital Management, Inc.,

Executive   Vice    President, HarbourView Asset Management Corporation and OFI

Chief  Investment  Officer and Institutional Asset Management, Inc. (since June
Director                       2003)

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Caleb C. Wong,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward C. Yoensky,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucy Zachman,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert G. Zack                 General Counsel and Director of OppenheimerFunds
Executive Vice President and   Distributor, Inc.; General Counsel of Centennial
General Counsel                Asset Management Corporation; Senior Vice
                               President and General Counsel of HarbourView
                               Asset Management Corporation and OFI
                               Institutional Asset Management, Inc.; Senior
                               Vice President, General Counsel and Director of
                               Shareholder Financial Services, Inc.,
                               Shareholder Services, Inc., OFI Private
                               Investments, Inc. and OFI Trust Company; Vice
                               President and Director of Oppenheimer
                               Partnership Holdings, Inc.; Director and
                               Assistant Secretary of OppenheimerFunds plc;
                               Secretary and General Counsel of Oppenheimer
                               Acquisition Corp.; Director and Assistant
                               Secretary of OppenheimerFunds International
                               Ltd.; Director of Oppenheimer Real Asset
                               Management, Inc. and OppenheimerFunds (Asia
                               Limited); Vice President of OppenheimerFunds
                               Legacy Program.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Neal A. Zamore,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark D. Zavanelli,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alex Zhou,                     None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Arthur J. Zimmer,              Senior Vice President (since April 1999) of
Senior Vice President          HarbourView Asset Management Corporation.
---------------------------------------------------------------------------------

The Oppenheimer Funds include the following:

Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust

The address of the  Oppenheimer  funds  listed  above,  Shareholder  Financial
Services,  Inc.,  Shareholder  Services,  Inc.,   OppenheimerFunds   Services,
Centennial   Asset   Management   Corporation,   Centennial   Capital   Corp.,
Oppenheimer Real Asset Management,  Inc. and  OppenheimerFunds  Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.


The address of OppenheimerFunds,  Inc.,  OppenheimerFunds  Distributor,  Inc.,
HarbourView Asset Management  Corporation,  Oppenheimer  Partnership Holdings,
Inc.,  Oppenheimer  Acquisition  Corp.,  OFI Private  Investments,  Inc.,  OFI
Institutional  Asset  Management,  Inc. and  Oppenheimer  Trust Company is Two
World Financial  Center,  225 Liberty Street,  11th Floor,  New York, New York
10281-1008.


The address of Tremont  Advisers,  Inc. is 555 Theodore  Fremd  Avenue,  Suite
206-C, Rye, New York 10580.

The  address  of  OppenheimerFunds  International  Ltd.  is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment  Management  Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.


Item 26. Principal Underwriter
------------------------------

(a)   OppenheimerFunds Distributor, Inc. is the Distributor of the
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which OppenheimerFunds, Inc. is
the investment adviser, as described in Part A and B of this Registration
Statement and listed in Item 25(b) above (except Oppenheimer Multi-Sector
Income Trust) and for MassMutual Institutional Funds.


(b)   The directors and officers of the Registrant's principal underwriter
are:

---------------------------------------------------------------------------------
Name & Principal                Position & Office         Position and Office
Business Address                with Underwriter          with Registrant
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante(1)            Secretary                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Barker                    Vice President            None
2901B N. Lakewood Avenue
Chicago, IL 60657
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert(1)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop(1)             Treasurer                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas S. Blankenship          Vice President            None
17011 Wood Bark Road
Springs, TX 77379
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Blinzler(1)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David A Borrelli                Vice President            None
105 Black Calla Ct.
San Ramon, CA 94583
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Michelle Brennan(2)             Assistant Vice President  None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
L. Scott Brooks(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin E. Brosmith               Senior Vice President     None
5 Deer Path
South Natlick, MA 01760
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey W. Bryan                Vice President            None
1048 Malaga Avenue
Coral Gables, FL 33134
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Patrick Campbell                Assistant Vice President  None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Chonofsky                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert A. Coli                  Vice President            None
12 White Tail Lane
Bedminster, NJ 07921
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey D. Damia(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Davis(2)                   Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen J. Demetrovits(2)       Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kristi Diehl(1)                 Assistant Vice President  None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph A. DiMauro               Vice President            None
522 Lakeland Avenue
Grosse Pointe, MI 48230
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Dombrower(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George P. Dougherty             Vice President            None
328 Regency Drive
North Wales, PA 19454
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cliff H. Dunteman               Vice President            None
N 53 27761 Bantry Road
Sussex, WI 53089-45533
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Eiler(2)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent M. Elwell                  Vice President            None
35 Crown Terrace
Yardley, PA 19067
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregg A. Everett                Vice President            None
4328 Auston Way
Palm Harbor, FL 34685-4017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Fahey                 Senior Vice President     None
2 Pheasant Drive
Ringoes, NJ 08551
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric C. Fallon                  Vice President            None
10 Worth Circle
Newton, MA 02458
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Joseph Fernandez                Vice President            None
1717 Richbourg Park Drive
Brentwood, TN 37027

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark J. Ferro(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding(3)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Eric Fishel                     Vice President            None
3A Lawnwood Place, Apt. 1
Charlestown, MA 02129

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick W. Flynn (1)            Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John ("J) Fortuna(2)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucio Giliberti                 Vice President            None
6 Cyndi Court
Flemington, NJ 08822
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raquel Granahan(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ralph Grant                     Senior Vice President     None
10 Boathouse Close
Mt. Pleasant, SC 29464
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael D. Guman                Vice President            None
3913 Pleasant Avenue
Allentown, PA 18103
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kevin J. Healy(2)               Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Clifford W. Heidinger           Vice President            None
111 Ipswich Road
Boxford, MA 01921
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillipe D. Hemery              Vice President            None
5 Duck Pond Lane
Ramsey, NJ 07446
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kevin Hennessey                 Vice President            None
10206 Emerald Woods Avenue
Orlando, FL 32836

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elyse R. Jurman Herman          Vice President            None
3150 Equestrian Drive
Boca Raton, FL 33496
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy G. Hetson                 Vice President            None
4 Craig Street
Jericho, NY 11753
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William E. Hortz(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Andrew Humble                   Vice President            None
419 Phillips Avenue
Glen Ellyn, IL 60137

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Husch(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Stephen Ilnitzki(2)             Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives(1)             Vice President &          Assistant Secretary
                                Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Nivan Jaleeli                   Vice President            None
13622 E. Geronimo Road
Scottsdale, AZ 85259

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric K. Johnson(1)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark D. Johnson                 Vice President            None
15792 Scenic Green Court
Chesterfield, MO 63017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina J. Keller(2)          Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian G. Kelly                  Vice President            None
76 Daybreak Road
Southport, CT 06490
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Klassen(1)                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Klein                   Senior Vice President     None
4820 Fremont Avenue So.
Minneapolis, MN 55409
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Knott(1)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dean Kopperud(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brent A. Krantz                 Senior Vice President     None
P. O. Box 1313
Seahurst, WA 98062
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David T. Kuzia                  Vice President            None
19102 Miranda Circle
Omaha, NE 68130
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul R. LeMire                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Eric J. Liberman(2)             Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa Lischin(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James V. Loehle                 Vice President            None
30 Wesley Hill Lane
Warwick, NY 10990
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Thomas Loncar(1)                Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Montana Low                     Vice President            None
1636 N. Wells Street, Apt. 3411
Chicago, IL 60614
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Lyman                     Vice President            None
7578 Massachusetts Pl
Rancho Cucamonga, CA 91730
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John J. Lynch                   Vice President            None
6325 Bryan Parkway
Dallas, TX 75214
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Michael Malik                   Vice President            None
126 Bernard Street
San Francisco, CA 94109

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven C. Manns                 Vice President            None
1627 N. Hermitage Avenue
Chicago, IL 60622
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Todd A. Marion                  Vice President            None
24 Midland Avenue
Cold Spring Harbor, NY 11724
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Sandie Massaro(2)               Assistant Vice President  None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Theresa-Marie Maynier           Vice President            None
2421 Charlotte Drive
Charlotte, NC 28203
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anthony P. Mazzariello          Vice President            None
8 Fairway Road
Sewickley, PA 15143
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John C. McDonough               Vice President            None
3812 Leland Street
Chevy Chase, MD 20815
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent C. McGowan                 Vice President            None
9510 190th Place SE
Edmonds, WA 98020
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Craig Meister                   Vice President            None
1880 Hemlock Circle
Abinston, PA 19001

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Melehan                  Vice President            None
906 Bridgeport Court
San Marcos, CA 92069
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Mezzanotte                 Vice President            None
16 Cullen Way
Exeter, NH 03833
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Clint Modler(1)                 Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Moser(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

David W. Mountford              Vice President            None
7820 Banyan Terrace
Tamarac, FL 33321

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy(2)               Director                  President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy Jean Murray               Vice President            None
32 Carolin Road
Upper Montclair, NJ 07043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin P. Neznek(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradford Norford                Vice President            None
2217 Ivan Street #911
Dallas, TX 75201
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan Panzer                     Vice President            None
6755 Ridge Mill Lane
Atlanta, GA 30328
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Perkes                 Vice President            None
8734 Shady Shore Drive
Frisco, TX 75034
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles K. Pettit               Vice President            None
22 Fall Meadow Drive
Pittsford, NY 14534
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Presutti(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elaine Puleo-Carter(2)          Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Minnie Ra                       Vice President            None
100 Dolores Street, #203
Carmel, CA 93923
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Dustin Raring                   Vice President            None
27 Blakemore Drive
Ladera Ranch, CA 92797

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael A. Raso                 Vice President            None
3 Vine Place
Larchmont, NY 10538
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Richard Rath                    Vice President            None
46 Mt. Vernon Avenue
Alexandria, VA 22301

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Rentschler              Vice President            None
677 Middlesex Road
Grosse Pointe Park, MI 48230
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruxandra Risko(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David R. Robertson(2)           Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Ian Roche                       Vice President            None
7070 Bramshill Circle
Bainbridge, OH 44023

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth A. Rosenson             Vice President            None
24753 Vantage Pt. Terrace
Malibu, CA 90265
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James H. Ruff(2)                President & Director      None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Matthew Rutig                   Vice President            None
199 North Street
Ridgefield, CT 06877

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Sabow                    Vice President            None
6617 Southcrest Drive
Edina, MN 55435
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Saunders                   Vice President            None
911 North Orange Avenue #401
Orlando, FL 32801
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill E. Schmitt (Crockett)(2)   Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jill Schmitt                    Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Schmitt(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

William Schories(2)             Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Sharp                      Vice President            None
862 McNeill Circle
Woodland, CA 95695
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debbie A. Simon                 Vice President            None
1 W. Superior Street, Apt. 4101
Chicago, IL 60610
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Bruce Smith             Vice President            None
8927 35th Street W.
University Place, WA 98466
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

John Spensley                   Vice President            None
12863 Tradd Street, Apt. 1D
Carmel, IN 46032

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Steven Stablein                 Vice President            None
2131 Dunnigan NE
Grand Rapids, MI 49525

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan Stein                     Vice President            None
5897 NW 120th Terrace
Coral Springs, FL 33076
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Stoma(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Wayne Strauss(3)                Assistant Vice President  None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Summe                  Vice President            None
2479 Legends Way
Crestview Hills, KY 41017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George T. Sweeney               Senior Vice President     None
5 Smoke House Lane
Hummelstown, PA 17036
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Taylor(2)                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David G. Thomas                 Vice President            None
16628 Elk Run Court
Leesburg, VA 20176
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Barrie L. Tiedemann             Vice President            None
2592 S. Belvoir Blvd.
University Heights, OH 44118

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan K.Toma                    Vice President            None
7311 W. 145th Terrace
Overland Park, KS 66223
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Mark Vandehey(1)                Vice President            Vice President and
                                                          Chief Compliance
                                                          Officer

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermete                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Lediard Ward            Vice President            None
1400 Cottonwood Valley Circle
N.
Irving, TX 75038
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa Ward(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael J. Weigner              Vice President            None
4905 W. San Nicholas Street
Tampa, FL 33629
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donn Weise                      Vice President            None
3249 Earlmar Drive
Los Angeles, CA 90064
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Chris Werner(1)                 Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine White(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Wilson(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna Winn(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cary Patrick Wozniak            Vice President            None
18808 Bravata Court
San Diego, CA 92128
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Charles Young              Vice President            None
3914 Southwestern
Houston, TX 77005
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jill Zachman(2)                 Vice President            None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack(2)               General Counsel &         Secretary
                                Director
---------------------------------------------------------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial  Center,  225 Liberty Street,  11th Floor, New York, NY

10281-1008

(3)350 Linden Oaks, Rochester, NY 14623

(c)   Not applicable.




Item 27. Location of Accounts and Records
-----------------------------------------


The  accounts,  books  and  other  documents  required  to  be  maintained  by
Registrant  pursuant to Section  31(a) of the  Investment  Company Act of 1940
and rules  promulgated  thereunder are in the possession of  OppenheimerFunds,
Inc. at its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.


Item 28. Management Services
----------------------------


Not applicable


Item 29. Undertakings
---------------------


Not applicable.










                                  SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 26th day of November, 2004.


                              OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS

                              By:  /s/ John V. Murphy*
                              ----------------------------------------------
                              John V. Murphy, President,
                              Principal Executive Officer & Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                 Title                           Date
----------                 -----                           ----


/s/ Clayton K. Yeutter*    Chairman of the                 November 26, 2004
---------------------------                                Board of Trustees
Clayton K.Yeutter

/s/ John V. Murphy*        President, Principal Executive  November 26, 2004
-------------------------- Officer & Trustee
John V. Murphy

/s/ Brian W. Wixted*       Treasurer, Principal Financial  November 26, 2004
-------------------------  and Accounting Officer
Brian W. Wixted

/s/ Robert G. Galli*       Trustee                         November 26, 2004

--------------------
Robert G. Galli


/s/ Phillip A. Griffiths*  Trustee                         November 26, 2004

----------------------
Phillip A. Griffiths


/s/ Joel W. Motley*        Trustee                         November 26, 2004

--------------------
Joel W. Motley


/s/ Mary F. Miller*        Trustee                         November 26, 2004
--------------------
Mary F. Miller

/s/ Kenneth A. Randall*    Trustee                         November 26, 2004

-------------------------
Kenneth A. Randall


/s/ Edward V. Regan*       Trustee                         November 26, 2004

-----------------------
Edward V. Regan

/s/ Russell S. Reynolds, Jr.*                              TrusteeNovember

26, 2004

----------------------------
Russell S. Reynolds, Jr.



*By: /s/ Robert G. Zack
-----------------------------------------
Robert G. Zack, Attorney-in-Fact








                   OPPENHEIMER AMT-FREE NEW YORK MUNICIPALS


                       Post Effective Amendment No. 30


                                Exhibit Index


Exhibit No. Description
----------- -----------


22(j)       Independent Registered Public Accounting Firm's Consent

22(m)(i)    Amended and Restated Service Plan and Agreement for Class A shares

22(m)(iii)  Amended and Restated Distribution and Service Plan and Agreement
            for Class C shares

























I:\LEGAL\N1A\360_(AMT-FreeNYMunicipals)\2003\360 Part C 485(b) Nov 03.doc