Legg Mason Partners Municipal Funds – ‘N14EL24/A’ on 10/1/97 – EX-99.12

As of:  Wednesday, 10/1/97   ·   Accession #:  91155-97-443   ·   File #:  333-12709

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Pre-Effective Amendment to Registration Statement of an Open-End Investment Company (Business Combination)   —   Form N-14
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N14EL24/A   Pre-Effective Amendment to Registration Statement      3±    16K 
                          of an Open-End Investment Company                      
                          (Business Combination)                                 
 2: EX-99.11    Miscellaneous Exhibit                                  2±     9K 
 3: EX-99.12    Miscellaneous Exhibit                                  2±    12K 
 4: EX-99.14.A  Miscellaneous Exhibit                                  3±    13K 
 5: EX-99.14.B  Miscellaneous Exhibit                                  1      7K 

EX-99.12   —   Miscellaneous Exhibit

September 23, 1997                                                              

Ohio Portfolio,                                                                 
Smith Barney Muni Funds,                                                        
388 Greenwich Street,                                                           
New York, New York 10013.                                                       

National Portfolio,                                                             
Smith Barney Muni Funds,                                                        
388 Greenwich Street,                                                           
New York, New York 10013.                                                       

Ladies and Gentlemen:                                                           

We have acted as counsel to Smith Barney Muni Funds, a          
Massachusetts business trust (the "Fund"), in connection with the               
Plan of Reorganization (the "Agreement"), included as Exhibit A to              
the Fund's Registration Statement on Form N-14, between the Ohio                
Portfolio ("Target") and the National Portfolio ("Aquiror"), each               
a series of the Fund, and we render this opinion to you pursuant                
to Section 3.4 of the Agreement.  Capitalized terms not defined                 
herein have the meanings specified in the Agreement.                            

For purposes of the opinion set forth below, we have relied,    
with your consent, upon the accuracy and completeness of (i) the                
statements and representations contained in the Agreement and in                
the Prospectus/Proxy Statement to be distributed to the                         
shareholders of Target in connection with the Reorganization and                
(ii) the statements and representations contained in the letter of              
representation from the Fund to us dated September 23, 1997.                    
With your consent, we have not attempted to verify independently                
the accuracy of any information in these documents and have                     
assumed that the statements (including the facts underlying                     
statements phrased as "expectations" or "anticipations") and                    
representations contained therein will be true on the Closing Date.             
In addition, in connection with this opinion, we have assumed                   
with your consent, that the Reorganization will be effected in                  
accordance with the Agreement.                                                  

On the basis of the foregoing, and our consideration of such    
other matters as we have considered necessary,  we advise you                   
that, in our opinion:                                                           

1.      The Reorganization will constitute a reorganization     
with in the meaning of Section 368(a)(1)(C) of the Code, and each               
of Target and Acquiror will be a "party to a reorganization"                    
within the meaning of Section 368(b) of the Code.                               

2.      Acquiror will not recognize gain or loss upon the       
receipt of Target assets in exchange solely for Acquiror shares                 
and the assumption of all stated Target liabilities.                            

3.      Target will not recognize gain or loss upon the         
transfer of Target assets in exchange solely for Acquiror shares                
and the assumption of all stated Target liabilities, or upon the                
distribution (whether actual or constructive) of Acquiror shares                
to Target shareholders.                                                         

4.      Target shareholders will not recognize gain or loss     
upon the exchange, pursuant tot he Reorganization, of their Target              
shares for Acquiror shares or upon the assumption by Aquiror of                 
all stated Target liabilities.                                                  

5.      The basis of Acquiror shares to be received by Target   
shareholders pursuant to the Reorganization will be the same as                 
the basis of Target shares surrendered in exchange therefor, and                
the holding period of Acquiror shares to be received by Target                  
shareholders will include the holding period of Target shares                   
surrendered in exchange therefor (provided that Target shares are               
capital assets in the hands of such shareholders on the Closing                 
Date).                                                                          

6.      The basis of Target assets to be acquired by Acquiror   
will be the same as the basis of such assets to Target immediately              
prior to the Reorganization, and the holding period of Target                   
assets to be acquired by Acquiror will include Target's holding                 
period therefor.                                                                

We express no opinion as to the effect of the Reorganization    
on Acquiror, Target or Target shareholders in respect of any asset              
as to which unrealized gain or loss is required to be recognized                
for U.S. federal income tax purposes at the end of each year under              
a mark-to-market system of accounting.                                          

The tax consequences described above may not apply to Target    
shareholders that acquired shares upon the exercise of employee                 
stock options or otherwise as compensation, that hold their shares              
as part of a "straddle" or "conversion transaction" or that are                 
insurance companies, securities dealers, financial institutions or              
foreign persons.                                                                

We hereby consent to the reference to us under the headings     
"Information about the Reorganization -- Federal Income Tax                     
Consequences" and "Legal Matters" in the Prospectus/Proxy                       
Statement pertaining to the Agreement and to the filing of this                 
opinion as an exhibit to the Fund's Registration Statement on Form              
N-14 filed with the Securities and Exchange Commission.  In giving              
this consent, we do not hereby admit that we are within the                     
category of persons whose consent is required under Section 7 of                
the Securities Act of 1933, as amended, or the rules and                        
regulations of the Securities and Exchange Commission thereunder.               

Very truly yours,                                                               

/s/Sullivan & Cromwell                                                          

Dates Referenced Herein

This ‘N14EL24/A’ Filing		Date		Other Filings
Filed on:		10/1/97		None on these Dates
		9/23/97
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