Edgar Filing: COLONIAL HIGH INCOME MUNICIPAL TRUST

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

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

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

Check the appropriate box:

[ ] Preliminary Proxy Statement

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

COLONIAL HIGH INCOME MUNICIPAL TRUST
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
COLONIAL INTERMARKET INCOME TRUST I
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
COLONIAL INSURED MUNICIPAL FUND
COLONIAL NEW YORK INSURED MUNICIPAL FUND
COLONIAL MUNICIPAL INCOME TRUST
COLONIAL INTERMEDIATE HIGH INCOME FUND

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

--------------------------------------------------------------------------------
2

COLONIAL CLOSED-END FUNDS

August 6, 2001

Dear Shareholder:

The Funds listed in the Notice of Annual Meeting of Shareholders will hold an
annual meeting on September 26, 2001, at 2:00 p.m., to vote on the proposals
listed in the proxy statement.

Liberty Financial Companies, Inc. ("Liberty Financial"), the parent company of
the Funds' investment advisor, has entered into an agreement to sell its asset
management business, including the Funds' investment advisor, to Fleet National
Bank ("Fleet"), an indirect wholly owned subsidiary of FleetBoston Financial
Corporation, a U.S. financial holding company. The sale will cause the Funds'
current advisory agreements to terminate. In order for the management of each
Fund to continue uninterrupted after the sale, we are asking you to approve new
advisory agreements for the Funds. The proposed new advisory agreements are
substantially identical to the Funds' current advisory agreements, except as
described in the attached proxy statement. NO CHANGES IN ADVISORY FEE RATES OR
SERVICES ARE BEING PROPOSED.

Your vote is very important. The Boards of Trustees of the Funds listed in the
Notice of Annual Meeting have approved the new advisory agreements and recommend
that you vote in favor of the new advisory agreements. The Boards of Trustees
also recommend that you vote in favor of the persons proposed for election as
Trustees at the annual meeting. Please complete, sign and date the enclosed
proxy card and return it in the enclosed postage-paid return envelope. This will
ensure that your vote is counted, even if you cannot attend the meeting in
person.

It is important that you vote promptly. If you have any questions about voting,
please call 888-832-5694.

Sincerely,

/s/ Stephen E. Gibson
STEPHEN E. GIBSON
President

G-60/586G-0601

THIS PAGE IS INTENTIONALLY LEFT BLANK.
4

IMPORTANT NEWS
FOR FUND SHAREHOLDERS

WHILE WE ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED PROXY
STATEMENT, HERE IS A BRIEF OVERVIEW OF MATTERS TO BE VOTED UPON.

QUESTIONS AND ANSWERS

Q. What am I being asked to vote "For" in this proxy?

A. You are being asked to vote for proposals to:

1. Approve a new investment advisory agreement for your Fund with your
Fund's current investment advisor, on substantially identical terms as
the current investment advisory agreement. NO CHANGE IN ADVISORY FEE
RATES OR SERVICES IS BEING PROPOSED.

2. Elect Trustees for your Fund.

Q. Why am I being asked to vote on new agreements?

A. Liberty Financial Companies, Inc. ("Liberty Financial"), the parent company
of the investment advisor to the Funds listed in the Notice of Annual Meeting
of Shareholders, has entered into an agreement to sell its asset management
business, including the Funds' investment advisor, to Fleet National Bank
("Fleet"), an indirect wholly owned subsidiary of FleetBoston Financial
Corporation, a U.S. financial holding company. The sale will result in the
termination of the current investment advisory agreements. The sale will not
be completed unless a number of conditions are met. One of the conditions of
the sale is that shareholders of a percentage of the Funds and other accounts
managed by Liberty Financial affiliates must approve the proposed new
agreements. Your Fund's Board of Trustees has approved, and recommends you
approve, the new agreements applicable to your Fund.

Q. What prompted the sale of Liberty Financial's asset management business to
Fleet?

A. On November 1, 2000, Liberty Financial announced that it had retained CS
First Boston to help explore strategic alternatives, including the possible
sale of Liberty Financial. Liberty Financial ultimately determined to sell
its asset management business to Fleet.
5

Q. How will the sale of Liberty Financial's asset management business
potentially benefit me?

A. The Funds' Board of Trustees believes that there may be benefits of scale
from combining the asset management businesses of Fleet and Liberty
Financial, including the ability to attract and retain key personnel, greater
access to resources for investment professionals of the advisor, enhanced
technology and customer service, and the expected availability of additional
investment options for shareholders of the Funds.

Q. How do the proposed new agreements differ from the current agreements?

A. The proposed agreements are substantially identical to the current
agreements. They differ only in their beginning dates and terms and certain
other minor provisions. A comparison of the proposed new agreements is
included in the proxy statement under the heading "New Advisory Agreements."

Q. Will this change the advisory fees on my Fund?

A. No. Advisory fees will remain the same.

Q. Will there be any advisor changes?

A. No. The advisor that currently manages the Funds is expected to continue to
manage the Funds after the sale of Liberty Financial's asset management
business, using the same investment strategies and objectives currently in
place.

Q. How does the Board of Trustees recommend that I vote on these proposals?

A. The Board of Trustees recommends that you vote "FOR" each of the proposals.
The Board believes that each of these proposals is in the best interests of
your Fund and its shareholders.

Q. How can I vote my proxy?

A. For your convenience, there are several ways you can vote:

- By Mail: vote, sign and return the enclosed proxy card

- In Person: September 26, 2001, at 2:00 p.m. at One Financial Center,
Boston, Massachusetts

- By Telephone or Internet (not available for all shareholders; eligible
shareholders will receive an insert with instructions).

IT IS IMPORTANT THAT YOU VOTE PROMPTLY.

THIS PAGE IS INTENTIONALLY LEFT BLANK.
8

BOSTON, MASSACHUSETTS 02111

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 26, 2001

The Annual Meeting of the shareholders of each Fund will be held on September
26, 2001 at 2:00 p.m. at One Financial Center, Boston, Massachusetts for these
purposes:

1. To approve a new Investment Advisory Agreement for each Fund;

2. To elect Trustees as outlined below;

2.A. Colonial High Income Municipal Trust:

(i) Nine Trustees to be elected by the holders of common shares of
beneficial interest, no par value, of the Fund (the "Common
Shares") and Municipal Auction Rate Cumulative Preferred Shares
(the "Preferred Shares"), voting together as a single class; and

(ii) Two Trustees to be elected by the holders of Preferred Shares only,
voting as a single class.

2.B. Colonial Investment Grade Municipal Trust:

(i) Nine Trustees to be elected by the holders of Common Shares and
Preferred Shares, voting together as a single class; and

(ii) Two Trustees to be elected by the holders of Preferred Shares only,
voting as a single class.

2.C. Colonial InterMarket Income Trust I: Elect eleven Trustees.
9

2.D. Colonial California Insured Municipal Fund:

(i) Nine Trustees to be elected by the holders of Common Shares and
Preferred Shares, voting together as a single class; and

(ii) Two Trustees to be elected by the holders of Preferred Shares only,
voting as a single class.

2.E. Colonial Insured Municipal Fund:

(i) Nine Trustees to be elected by the holders of Common Shares and
Preferred Shares, voting together as a single class; and

(ii) Two Trustees to be elected by the holders of Preferred Shares only,
voting as a single class.

2.F. Colonial New York Insured Municipal Fund:

(i) Nine Trustees to be elected by the holders of Common Shares and
Preferred Shares, voting together as a single class; and

(ii) Two Trustees to be elected by the holders of Preferred Shares only,
voting as a single class.

2.G. Colonial Municipal Income Trust:

(i) Nine Trustees to be elected by the holders of Common Shares and
Preferred Shares, voting together as a single class; and

(ii) Two Trustees to be elected by the holders of Preferred Shares only,
voting together as a single class.

2.H. Colonial Intermediate High Income Fund: Elect eleven Trustees; and

3. To consider and act upon any other matters that properly come before the
meeting and any adjourned session of the meeting.
10

Shareholders of record at the close of business on July 16, 2001 are entitled to
notice of and to vote at the meeting and any adjourned session.

By order of the Boards of Trustees,

William J. Ballou
Secretary of each Fund
August 6, 2001

PLEASE RESPOND. YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. YOU CAN VOTE EASILY AND QUICKLY BY MAIL, IN PERSON, OR BY PHONE OR INTERNET
(NOT AVAILABLE FOR ALL SHAREHOLDERS; ELIGIBLE SHAREHOLDERS WILL RECEIVE AN
INSERT WITH INSTRUCTIONS).

THIS PAGE IS INTENTIONALLY LEFT BLANK.
12

PROXY STATEMENT

BOSTON, MASSACHUSETTS 02111

The Trustees of the Funds (the "Trustees") are soliciting proxies from the
shareholders of each of the Funds in connection with the Annual Meeting of
Shareholders of each Fund (the "Meeting"). The Meeting has been called to be
held on September 26, 2001 at 2:00 p.m. at One Financial Center, Boston,
Massachusetts. The meeting notice, this Proxy Statement and proxy cards are
being sent to shareholders beginning on or about August 6, 2001.

The only items of business that the Trustees expect will come before the Meeting
are:

(1) approval of a new Investment Advisory Agreement for each Fund (the "New
Advisory Agreement") with Colonial Management Associates, Inc. (the
"Advisor" or "Colonial"); and

(2) the election of Trustees.

Both proposals affect each Fund, and therefore the vote of every shareholder is
being solicited with respect to each proposal as it affects his or her Fund.

1
13

PROPOSAL 1

NEW ADVISORY AGREEMENTS

As explained below, the proposed New Advisory Agreement for each Fund is
substantially identical (except for its term and date and certain other
non-material changes) to the Investment Advisory Agreement currently in effect
for that Fund (the "Current Advisory Agreement").

The reason the Trustees are proposing a New Advisory Agreement for each Fund is
that the Current Advisory Agreement will terminate when the Advisor's parent
company, Liberty Financial Companies, Inc. ("LFC"), sells the Advisor and its
other subsidiaries that operate its asset management business (the "Asset
Management Segment") to Fleet National Bank, a national banking association
("Fleet"). As a result of this acquisition, the Advisor and the other
subsidiaries will become direct or indirect, wholly owned subsidiaries of Fleet.
The Investment Company Act of 1940, as amended (the "Investment Company Act"),
provides generally that the advisory agreement of an investment company must
provide for automatic termination if assigned, such as when the investment
advisor or its parent company undergoes a significant change of ownership.

In addition, LFC has agreed to sell, in a separate transaction, all of the
issued and outstanding capital stock of the subsidiaries constituting the
annuity segment of LFC's business to Sun Life Assurance Company of Canada, a
Canadian corporation (the "Annuity Sale"). The sale of the Asset Management
Segment to Fleet and the Annuity Sale are not conditioned on each other. LFC has
entered into a Merger Agreement with Liberty Mutual Insurance Company (the
majority stockholder of LFC), which provides that, following the acquisition of
the Asset Management Segment by Fleet and the Annuity Sale, LFC Acquisition
Corporation, a wholly owned subsidiary of Liberty Mutual Insurance Company, will
merge with and into LFC, with LFC being the surviving corporation (the
"Merger"). In connection with the Merger, holders of LFC common stock, other
than LFC, Liberty Mutual and their respective direct and indirect subsidiaries
and other than those holders of LFC common stock who validly perfect and
exercise their appraisal rights under Massachusetts law, will be entitled to
receive an amount of cash equal to $33.44, subject to adjustment, per share of
common stock. Once such merger consideration is paid, such shares will be
cancelled.

2
14

The Trustees have carefully considered the matter and have concluded that it is
appropriate to enter into the New Advisory Agreement for each Fund, so that the
Advisor can continue, following the acquisition of the Asset Management Segment
by Fleet, to manage each Fund on the same terms as are now in effect. The
Trustees also have approved an interim advisory agreement for each Fund pursuant
to Rule 15a-4 under the Investment Company Act, which will be entered into
immediately following the closing of the acquisition of the Asset Management
Segment by Fleet only if the Fund has not at that time received the requisite
shareholder vote for the New Advisory Agreement at the Meeting. See the section
"Basis for the Trustees' Recommendations" below for further information on this
interim agreement.

The acquisition of the Asset Management Segment by Fleet will occur only if
various conditions are satisfied (or waived by the parties, if permitted by
law). Those conditions include, among others, the receipt of certain government
approvals, approval or consent from investment advisory clients of the Advisor
and other LFC affiliates (including mutual fund clients) which represent a
specified percentage of LFC's total assets under management as of March 31,
2001, the avoidance of a certain level of net redemptions from portfolios
managed by the Advisor and certain of its affiliates that make up the Asset
Management Segment and approval of the acquisition by the requisite vote of the
shareholders of LFC. LFC currently expects that the acquisition will occur
during the latter part of 2001, but the acquisition could be delayed. If the
acquisition does not occur, the New Advisory Agreements would not be needed
because the automatic termination of the Current Advisory Agreements would not
occur.

Under the Investment Company Act, a Fund cannot enter into a New Advisory
Agreement unless the shareholders of that Fund vote to approve the New Advisory
Agreement. The Meeting is being held to seek shareholder approval of the New
Advisory Agreement for each Fund. NO CHANGE IN ADVISORY FEE RATES OR SERVICES IS
BEING PROPOSED.

Shareholders of each Fund will vote separately on the New Advisory Agreement for
that Fund. Each share is entitled to cast one vote, and fractional shares are
entitled to a proportionate fractional vote.

THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE TO APPROVE THE
NEW ADVISORY AGREEMENT FOR THEIR FUND.

3
15

DESCRIPTION OF THE NEW ADVISORY AGREEMENTS

The New Advisory Agreement for each Fund is substantially identical (but for a
few non-material changes) to the Current Advisory Agreement for that Fund,
except that the date of each New Advisory Agreement will be the date that Fleet
acquires the Asset Management Segment, or such later date on which the
shareholders of the Fund approve the New Advisory Agreement, and the initial
term of each New Advisory Agreement expires on July 31, 2003. Appendix A to this
Proxy Statement sets forth information about the Current Advisory Agreements,
including the dates of the Current Advisory Agreements and the advisory fee
rates under both the New Advisory Agreements and the Current Advisory
Agreements. Appendix B to this Proxy Statement contains the form of the New
Advisory Agreement applicable to each Fund. Each Current Advisory Agreement and
each New Advisory Agreement matches the form in Appendix B, except for items
specific to a Fund such as the Fund's name and fee rate, and the dates of the
Agreements. The next several paragraphs briefly summarize some important
provisions of the New Advisory Agreements, but for a complete understanding of
the Agreements, you should read Appendices A and B.

The New Advisory Agreement for each Fund essentially provides that the Advisor,
under the Trustees' supervision, will (1) decide what securities to buy and sell
for the Fund's portfolio, (2) select brokers and dealers to carry out portfolio
transactions for the Fund, and (3) provide officers, office space and certain
administrative services to the Fund.

The New Advisory Agreement for each Fund provides that it will continue in
effect for an initial period beginning on the date Fleet acquires the Asset
Management Segment, or such later date on which the shareholders of the Fund
approve the New Advisory Agreement, and ending on July 31, 2003. After that, it
will continue in effect from year to year as long as the continuation is
approved at least annually (i) by the Trustees or by vote of a majority of the
outstanding voting securities of the Fund, and (ii) by vote of a majority of the
Trustees who are not "interested persons," as that term is defined in the
Investment Company Act, of the Fund or the Advisor (those Trustees who are not
"interested persons" of the Fund or the Advisor are referred to below as the
"Independent Trustees").

4
16

The New Advisory Agreement for each Fund may be terminated without penalty by
vote of the Trustees or by vote of a majority of the outstanding voting
securities of the Fund, on sixty days' written notice to the Advisor, or by the
Advisor upon sixty days' written notice to the Fund, and each terminates
automatically in the event of its "assignment" as defined in the Investment
Company Act. The Investment Company Act defines "assignment" to include, in
general, transactions in which a significant change in the ownership of an
investment advisor or its parent company occurs (such as the acquisition of the
Asset Management Segment by Fleet).

The New Advisory Agreement for each Fund provides that the Advisor will not be
liable to the Fund or its shareholders, except for liability arising from the
Advisor's willful misfeasance, bad faith, gross negligence or reckless disregard
of duty.

Pursuant to pricing and bookkeeping or service agreements, Colonial is
responsible for providing certain services to the Funds. The aggregate pricing
and bookkeeping or service fees paid by each Fund to Colonial for the most
recently completed fiscal year are set forth in Appendix E. Whether or not the
proposed new Advisory Agreements are approved, the pricing and bookkeeping or
service agreement for each Fund will remain in effect.

BASIS FOR THE TRUSTEES' RECOMMENDATIONS

The Trustees initially met on June 11, 2001 to discuss the proposed acquisition
of the Asset Management Segment by Fleet. At that meeting, representatives of
LFC made a presentation regarding the terms of the proposed acquisition, and
representatives of Fleet made a presentation regarding Fleet's structure and
asset management business and their plans as they existed at that time for the
Asset Management Segment. At a meeting held on June 19, 2001, LFC and Fleet
provided the Trustees with additional information that they had requested, and
the Trustees also completed their annual review of the contracts for each Fund.
The Trustees determined at the June 19, 2001 meeting to recommend that each
Fund's shareholders vote to approve the New Advisory Agreement for their Fund.
At a meeting held on July 23, 2001, the Trustees gave further consideration to
the proposed acquisition and reaffirmed their recommendation that shareholders
vote to approve the New Advisory Agreements.

5
17

In coming to that determination, the Trustees gave particular consideration to
matters relating to the possible effects on the Advisor and the Funds of the
acquisition of the Asset Management Segment by Fleet. Among other things, the
Trustees considered:

- the stated intention of Fleet not to make immediate changes to the investment
management services provided by the Advisor and to collaborate with the
Advisor, in consultation with the Boards of the Funds, to develop and
implement a strategy for integrating the investment management business of the
Advisor with Fleet's investment management business;

- certain actions taken by LFC and the Advisor to help retain and incent their
key personnel;

- the general reputation and the financial resources of Fleet and its parent
organization;

- the potential benefits of scale from combining the asset management businesses
of Fleet and LFC, including the ability to attract and retain key personnel
and enhance technology and customer service;

- the expected additional investment options available to shareholders of the
Funds;

- the impact of the acquisition of the Asset Management Segment on the different
types of investors in the Funds;

- the stated intention of Fleet to consult with the Boards of the Funds prior to
removing or reducing any voluntary fee waivers or expense limitations; and

- the stated intention of Fleet of providing investment professionals of the
Advisor with access to greater resources as a result of the acquisition.

In addition, the Trustees considered a wide range of information of the type
they regularly consider when determining whether to continue a Fund's advisory
agreement as in effect from year to year. The Trustees considered information
about, among other things:

- the Advisor and its personnel (including particularly those personnel with
responsibilities for providing services to the Funds), resources and
investment process;

- the terms of the New Advisory Agreements;
6
18

- the scope and quality of the services that the Advisor has been providing to
the Funds;

- the investment performance of each Fund and of similar funds managed by other
advisors;

- the advisory fee rates payable to the Advisor by the Funds and by other funds
and client accounts managed by the Advisor and payable by similar funds
managed by other advisors (Appendix C to this Proxy Statement contains
information comparing each Fund's advisory fee schedule to the fee schedule
for other funds managed by the Advisor that have investment objectives similar
to those of the particular Fund).

- the total expense ratios of the Funds and of similar funds managed by other
advisors; and

- compensation payable by the Funds to affiliates of the Advisor for other
services (see Appendix E to this Proxy Statement for more information about
that compensation).

In addition, the Trustees considered that the agreement relating to the
acquisition by Fleet provides that Fleet will (subject to certain
qualifications) use all reasonable efforts to assure compliance with Section
15(f) of the Investment Company Act. Section 15(f) provides that a mutual fund
investment advisor or its affiliates may receive benefits or compensation in
connection with a change of control of the investment advisor (such as Fleet's
acquisition of the Asset Management Segment) if two conditions are satisfied.
First, for three years after the change of control, at least 75% of the members
of the board of any registered investment company advised by the advisor must
consist of persons who are not "interested persons," as defined in the
Investment Company Act, of the advisor. (No changes in the current composition
of the Trustees are required to satisfy that condition.) Second, no "unfair
burden" may be imposed on any such registered investment company as a result of
the change of control transaction or any express or implied terms, conditions or
understandings applicable to the transaction. "Unfair burden" means any
arrangement, during the two years after the transaction, by which the investment
advisor or any "interested person" of the advisor receives or is entitled to
receive any compensation, directly or indirectly, from such investment company
or its security holders (other than fees for bona fide investment advisory or
other services) or from any other person in connection with the purchase or sale
of securities or other property to, from or on behalf of such investment
company.

7
19

After carefully considering the information described above, the Trustees,
including the Independent Trustees, unanimously voted to approve the New
Advisory Agreement for each Fund and to recommend that each Fund's shareholders
vote to approve the New Advisory Agreement for their Fund.

In the event that the shareholders have not approved the New Advisory Agreements
at the Meeting, the Advisor will enter into interim advisory agreements pursuant
to Rule 15a-4 under the Investment Company Act, which will take effect
immediately following the acquisition of the Asset Management Segment by Fleet
(at which time the Current Advisory Agreements will terminate due to an
assignment). These interim advisory agreements will be in substantially the
forms set forth in Appendix B but also will include certain provisions required
by Rule 15a-4 (such as a maximum term of 150 days, a provision that a Fund's
Board of Trustees or a majority of the Fund's shareholders may terminate the
agreement at any time without penalty on not more than 10 days' written notice,
and a provision that the compensation earned by the Advisor thereunder will be
held in an interest-bearing escrow account until shareholder approval of the New
Advisory Agreements is obtained, after which the amount in the escrow account
(together with any interest) will be paid to the Advisor). If a Fund has not
received the requisite shareholder approval for a New Advisory Agreement within
150 days after the closing of the acquisition, the Trustees will consider other
appropriate arrangements subject to approval in accordance with the Investment
Company Act.

INFORMATION ABOUT THE ADVISOR AND THE FLEET/LFC TRANSACTION

COLONIAL MANAGEMENT ASSOCIATES, INC.

Colonial Management Associates, Inc. ("Colonial"), a Massachusetts corporation,
located at One Financial Center, Boston, Massachusetts 02111, is a wholly owned
subsidiary of Liberty Funds Group LLC ("LFG"), also located at One Financial
Center, Boston, Massachusetts 02111, which in turn is a direct wholly owned
subsidiary of Liberty Financial Services, Inc. ("LFS"), which is a direct wholly
owned subsidiary of LFC. LFC is a direct majority-owned subsidiary of LFC
Management Corporation, which in turn is a direct wholly owned subsidiary of
Liberty Corporate Holdings, Inc., which in turn is a direct wholly owned
subsidiary of LFC Holdings, Inc., which in turn is a direct wholly owned
subsidiary of Liberty Mutual Equity Corporation, which in

8
20

turn is a direct wholly owned subsidiary of Liberty Mutual Insurance Company
("Liberty Mutual"). As of June 30, 2001, LFC Management Corporation owned 70.46%
of the common stock of LFC and the balance was held by the public and listed on
the New York Stock Exchange. LFC is a diversified and integrated asset
management organization which provides insurance and investment products to
individuals and institutions. The principal executive offices of LFS and LFC are
located at 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210. Liberty
Mutual is an underwriter of workers' compensation insurance and a property and
casualty insurer in the United States, organized under the laws of Massachusetts
in 1912. The principal business activities of Liberty Mutual's subsidiaries
other than LFC are property-casualty insurance, insurance services and life
insurance (including group life and health insurance products) marketed through
its own sales force. The principal executive offices of LFC Management
Corporation, Liberty Corporate Holdings, Inc., and LFC Holdings, Inc., Liberty
Mutual and Liberty Mutual Equity Corporation are located at 175 Berkeley Street,
Boston, Massachusetts 02117.

Colonial and/or its affiliate, Colonial Advisory Services, Inc., has rendered
investment advisory services to investment company, institutional and other
clients since 1931. Colonial currently serves as investment advisor or
administrator for 48 open-end and 9 closed-end management investment company
portfolios. As of May 31, 2001, Colonial managed and/or administered over $17
billion in assets.

The directors of Colonial are Stephen E. Gibson, Joseph R. Palombo and Kevin M.
Carome. Mr. Gibson is the President and Chief Executive Officer of Colonial. Mr.
Palombo is an Executive Vice President of Colonial. Mr. Carome is a Senior Vice
President of Colonial. The business address of Messrs. Gibson and Palombo is One
Financial Center, Boston, Massachusetts 02111. The business address of Mr.
Carome is 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210.

In addition, the following individuals who are officers of the Funds are also
officers of Colonial: William J. Ballou, Barry Finkle, Ellen Harrington, Kevin
S. Jacobs, Russell L. Kane and Vincent P. Pietropaolo.

DESCRIPTION OF THE TRANSACTION

On June 4, 2001, LFC announced that it had entered into a Stock Purchase
Agreement with Fleet (the "Purchase Agreement"). Under the

9
21

Purchase Agreement, Fleet would acquire the Asset Management Segment for a
purchase price of $900 million, plus the assumption of approximately $110
million in debt. This price may be adjusted:

- upward or downward based on increases or decreases in the amount of portfolios
managed by the subsidiaries that make up the Asset Management Segment
(excluding the effects of market action) from December 31, 2000 until a date
prior to the closing as the result of purchases of and exchanges into and
withdrawals from and exchanges out of those portfolios. The maximum purchase
price adjustment under this provision would be $180 million;

- upward or downward based on increases or decreases in the tangible net worth
of the Asset Management Segment from April 1, 2001 through a date prior to the
closing;

- downward based on decreases of more than 20% (excluding the effects of sales
and redemptions) in the market values of the assets under management of the
Asset Management Segment between March 31, 2001 and a date prior to the
closing; and

- upward or downward based on the estimated value of amounts owing to or by LFC
at the time of closing in respect of taxes with respect to the income of the
Asset Management Segment and the settlement of certain inter-company accounts,
agreements and arrangements between LFC and the subsidiaries that make up the
Asset Management Segment.

The transaction will not occur unless various conditions are satisfied (or
waived by the parties, if permitted by law). One of these conditions is
obtaining approval or consent from investment advisory clients of the Advisor
and other LFC affiliates that constitute the Asset Management Segment (including
fund clients) whose accounts represent 80% of the Asset Management Segment's
assets under management as of March 31, 2001. Because of these conditions,
approval or disapproval by a Fund's shareholders of a New Advisory Agreement for
their Fund, taken together with other clients' consents or approvals, could
affect whether or not the transaction occurs. As described below, certain
officers of the Funds will receive certain material payments or benefits if the
transaction occurs. The transaction will result in the automatic termination of
the Current Advisory Agreements. If for some reason the transaction does not
occur, the automatic termination of the Current Advisory Agreements will not
occur, and the New Advisory Agreements will not be

10
22

entered into, even if they have been approved by the Funds' shareholders.

Simultaneously with the signing of the Purchase Agreement, at Fleet's request,
Liberty Mutual and LFC entered into a license agreement with Fleet which
provides that upon the closing of the acquisition of the Asset Management
Segment, Fleet will have a perpetual, royalty free, non-transferable,
non-sublicensable, non-exclusive license to use the Liberty mark and trade name,
the Statue of Liberty design and other associated marks and trade names used in
connection with the Asset Management Segment's business. The license agreement
also contains other covenants and provisions more fully set forth in the Fleet
license agreement. Neither Liberty Mutual nor LFC will receive compensation or
other consideration under the Fleet license agreement.

As a result of the acquisition, the Advisor and certain of its affiliates that
constitute the Asset Management Segment would become wholly owned, direct or
indirect subsidiaries of Fleet. Fleet is a wholly owned subsidiary of
FleetBoston Financial Corporation, a Boston, Massachusetts-based financial
holding company. Fleet and its affiliates offer a comprehensive array of
financial solutions to approximately 20 million customers in more than 20
countries. Their key lines of business include:

- CONSUMER AND INVESTMENT SERVICES -- includes domestic retail banking to
consumer and small business customers, community banking, student loan
processing, credit card services, and investment services, including mutual
funds and investments, retirement planning, large institutional asset
management and brokerage;

- CORPORATE AND GLOBAL BANKING -- includes commercial finance, including
asset-based lending and leasing; international banking in key Latin American
markets; corporate banking, including specialized industry and institutional
lending; and middle market lending, including commercial lending, government
banking services, trade services and cash management; and

- CAPITAL MARKETS -- includes investment banking services, brokerage,
market-making and principal investing.

CERTAIN INTERESTS OF FUND TRUSTEES AND OFFICERS. Substantially all full-time
employees of LFC and its subsidiaries (including officers of the Funds and one
officer of certain subsidiaries of LFC who is also a Trustee of the Funds)
participate in the Liberty Financial Companies, Inc. and Subsidiaries
Non-Commissioned Employee Severance and Retention Plan or the Liberty Financial
Companies, Inc. and Subsidiar-

11
23

ies Commissioned Employees Severance and Retention Plan (the "Retention Plans").
The Retention Plans provide for cash retention bonuses and the full vesting upon
a change of control of all outstanding options to purchase shares of stock of
LFC ("LFC Options") and shares of restricted stock of LFC ("Restricted Stock")
for which the target price in the applicable restricted stock agreement is less
than the value of LFC common stock on the date of the change of control, even
though some of these LFC Options and Restricted Stock would not otherwise have
vested or become fully exercisable prior to the change of control. The Retention
Plans also provide for enhanced severance benefits to substantially all
employees upon a change of control and additional payments to cover excise tax
obligations. With respect to employees of the subsidiaries that constitute the
Asset Management Segment, a change of control will be deemed to occur under the
Retention Plans upon the completion of the Fleet transaction.

CERTAIN BROKERAGE MATTERS

In their consideration of the New Advisory Agreements, the Trustees took account
of the Advisor's practices regarding the selection and compensation of brokers
and dealers that execute portfolio transactions for the Funds, and the brokers'
and dealers' provision of brokerage and research services to the Advisor. The
Advisor has informed the Trustees that it does not expect to change these
practices as a result of Fleet's acquisition of the Asset Management Segment. A
summary of these brokerage and soft-dollar practices is set forth in Appendix D.

The Advisor may cause portfolio transactions for the Funds to be executed by
AlphaTrade Inc. ("AlphaTrade"), a brokerage firm that is affiliated with the
Advisor because it is owned by the Advisor. The Funds pay brokerage commissions
to AlphaTrade for executing these portfolio transactions. Appendix E contains
information about these commission payments.

REQUIRED VOTE. For each Fund, as applicable, the vote required to approve the
New Advisory Agreement is the lesser of (1) 67% of the shares of that Fund that
are present at the Meeting, if the holders of more than 50% of the shares of the
Fund outstanding as of the record date are present or represented by proxy at
the Meeting, or (2) more than 50% of the shares of the Fund outstanding on the
record date. If the required vote is not obtained for any Fund, the Trustees
will consider what other actions to take in the best interests of the Funds.

12
24

PROPOSAL 2

ELECTION OF TRUSTEES

In connection with the combination of the Boards of Trustees of the Liberty
Funds Complex and the Stein Roe Funds Complex in 2000 and the election of
Trustees by shareholders at this Meeting, the classifications of the Trustees
(which determine the year in which the term of each Trustee will expire) were
reorganized to be as shown for each Fund below. Therefore, you are being asked
to vote on all classes of Trustees this year, not only those where term expires
in 2001.

2.A. COLONIAL HIGH INCOME MUNICIPAL TRUST.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Palombo and Theobald, (who have each agreed to serve) are proposed for election
as Trustees of the Fund and are to be elected by the holders of Common Shares
and Municipal Auction Rate Cumulative Preferred Shares ("Preferred Shares"),
voting together as a single class. Messrs. Macera and Stitzel (who have each
agreed to serve) are proposed for election as Trustees of the Fund and are to be
elected by the holders of Preferred Shares only, voting as a single class. The
Board of Trustees currently consists of Mss. Kelly and Verville, and Messrs.
Hacker, Lowry, Macera, Mayer, Nelson, Neuhauser, Palombo, Stitzel and Theobald.

The Board of Trustees (other than Messrs. Macera and Stitzel) is divided into
the following three classes, each with a term expiring in the year indicated
(assuming the persons listed above are elected at the Meeting), and shall be
voted on by both the Common Shares and Preferred Shares:

2002 2003 2004
---- ---- ----

Mr. Hacker Ms. Kelly Mr. Mayer
Mr. Lowry Mr. Palombo Mr. Nelson
Mr. Neuhauser Ms. Mr. Theobald
Verville

Messrs. Macera and Stitzel are subject to re-election annually by the holders of
Preferred Shares of the Fund.

REQUIRED VOTE

With respect to Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer,
Nelson, Neuhauser, Palombo and Theobald, the affirmative vote of a plurality of
the holders of the Common Shares and Preferred Shares

13
25

of the Fund present at the Meeting in person or by proxy, voting together as a
single class, is required for the election of each such Trustee. Since the
number of Trustees to be elected by the holders of Common Shares and Preferred
Shares, voting together as a single class, is fixed at nine, this means that the
nine persons receiving the highest number of votes will be elected as Trustees
of the Fund. With respect to the election of Messrs. Macera and Stitzel, the
affirmative vote of a plurality of the holders of Preferred Shares of the Fund
present at the Meeting in person or by proxy is required for the election of
each such Trustee. Since the number of Trustees to be elected by the holders of
Preferred Shares is fixed at two, this means that the two persons receiving the
highest number of votes will be elected as Trustees of the Fund.

2.B. COLONIAL INVESTMENT GRADE MUNICIPAL TRUST.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Palombo and Theobald, (who have each agreed to serve) are proposed for election
as Trustees of the Fund and are to be elected by the holders of Common Shares
and Preferred Shares, voting together as a single class. Messrs. Macera and
Stitzel (who have each agreed to serve) are proposed for election as Trustees of
the Fund and are to be elected by the holders of Preferred Shares only, voting
as a single class. The Board of Trustees currently consists of Mss. Kelly and
Verville, and Messrs. Hacker, Lowry, Macera, Mayer, Nelson, Neuhauser, Palombo,
Stitzel and Theobald.

2002 2003 2004
---- ---- ----

Mr. Lowry Mr. Hacker Mr. Mayer
Mr. Nelson Ms. Kelly Mr. Neuhauser
Ms. Verville Mr. Palombo Mr. Theobald

Messrs. Macera and Stitzel are subject to re-election annually by the holders of
the Preferred Shares.

14
26

REQUIRED VOTE

With respect to the election of Mss. Kelly and Verville, and Messrs. Hacker,
Lowry, Mayer, Nelson, Neuhauser, Palombo and Theobald, the affirmative vote of a
plurality of the holders of the Common Shares and Preferred Shares of the Fund
present at the Meeting in person or by proxy, voting together as a single class,
is required for the election of each such Trustee. Since the number of Trustees
to be elected by the holders of Common Shares and Preferred Shares, voting
together as a single class, is fixed at nine, this means that the nine persons
receiving the highest number of votes will be elected as Trustees of the Fund.
With respect to the election of Messrs. Macera and Stitzel, the affirmative vote
of a plurality of the holders of Preferred Shares of the Fund present at the
Meeting in person or by proxy is required for the election of each such Trustee.
Since the number of Trustees to be elected by the holders of Preferred Shares is
fixed at two, this means that the two persons receiving the highest number of
votes will be elected as Trustees of the Fund.

2.C. COLONIAL INTERMARKET INCOME TRUST I.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Macera, Mayer, Nelson,
Neuhauser, Palombo, Stitzel and Theobald, (who have each agreed to serve) are
proposed for election as Trustees of the Fund. The Board of Trustees currently
consists of Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Macera, Mayer,
Nelson, Neuhauser, Palombo, Stitzel and Theobald.

The Board of Trustees is divided into the following three classes, each with a
term expiring in the year indicated (assuming the persons listed above are
elected at the Meeting):

2002 2003 2004
---- ---- ----

Mr. Lowry Mr. Hacker Mr. Macera
Mr. Mayer Ms. Kelly Mr. Neuhauser
Mr. Stitzel Mr. Nelson Mr. Palombo
Ms. Verville Mr. Theobald

REQUIRED VOTE

The affirmative vote of a plurality of the holders of shares of beneficial
interest of the Fund present at the Meeting in person or by proxy is

15
27

required for the election of each Trustee. Since the number of Trustees for the
Fund is fixed at eleven, this means that the eleven persons receiving the
highest number of votes will be elected as Trustees of the Fund.

2.D. COLONIAL CALIFORNIA INSURED MUNICIPAL FUND.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Palombo and Theobald, (who have each agreed to serve) are proposed for election
as Trustees of the Fund and are to be elected by the holders of Common Shares
and Preferred Shares, voting together as a single class. Messrs. Macera and
Stitzel (who have each agreed to serve) are proposed for election as Trustees of
the Fund and are to be elected by the holders of Preferred Shares only, voting
as a single class. The Board of Trustees currently consists of Mss. Kelly and
Verville, and Messrs. Hacker, Lowry, Macera, Mayer, Nelson, Neuhauser, Palombo,
Stitzel and Theobald.

2002 2003 2004
---- ---- ----

Mr. Hacker Mr. Lowry Mr. Neuhauser
Ms. Kelly Mr. Mayer Mr. Theobald
Mr. Palombo Mr. Nelson Ms. Verville

Messrs. Macera and Stitzel are subject to re-election annually by the holders of
Preferred Shares.

REQUIRED VOTE

16
28

the nine persons receiving the highest number of votes will be elected as
Trustees of the Fund. With respect to the election of Messrs. Macera and
Stitzel, the affirmative vote of a plurality of the holders of Preferred Shares
of the Fund present at the Meeting in person or by proxy is required for the
election of each such Trustee. Since the number of Trustees to be elected by the
holders of Preferred Shares is fixed at two, this means that the two persons
receiving the highest number of votes will be elected as Trustees of the Fund.

2.E. COLONIAL INSURED MUNICIPAL FUND.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Palombo and Theobald, (who have each agreed to serve) are proposed for election
as Trustees of the Fund and are to be elected by the holders of Common Shares
and Preferred Shares, voting together as a single class. Messrs. Macera and
Stitzel (who have each agreed to serve) are proposed for election as Trustees of
the Fund and are to be elected by the holders of Preferred Shares only, voting
as a single class. The Board of Trustees currently consists of Mss. Kelly and
Verville, and Messrs. Hacker, Lowry, Macera, Mayer, Nelson, Neuhauser, Palombo,
Stitzel and Theobald.

2002 2003 2004
---- ---- ----

Mr. Hacker Mr. Lowry Mr. Neuhauser
Ms. Kelly Mr. Mayer Mr. Theobald
Mr. Palombo Mr. Nelson Ms. Verville

Messrs. Macera and Stitzel are subject to re-election annually by the holders of
Preferred Shares.

REQUIRED VOTE

17
29

Meeting in person or by proxy, voting together as a single class, is required
for the election of each such Trustee. Since the number of Trustees to be
elected by the holders of Common Shares and Preferred Shares, voting together as
a single class, is fixed at nine, this means that the nine persons receiving the
highest number of votes will be elected as Trustees of the Fund. With respect to
the election of Messrs. Macera and Stitzel, the affirmative vote of a plurality
of the holders of Preferred Shares of the Fund present at the Meeting in person
or by proxy is required for the election of each such Trustee. Since the number
of Trustees to be elected by the holders of Preferred Shares is fixed at two,
this means that the two persons receiving the highest number of votes will be
elected as Trustees of the Fund.

2.F. COLONIAL NEW YORK INSURED MUNICIPAL FUND.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Palombo and Theobald, (who have each agreed to serve) are proposed for election
as Trustees of the Fund and are to be elected by the holders of Common Shares
and Preferred Shares, voting together as a single class. Messrs. Macera and
Stitzel (who have each agreed to serve) are proposed for election as Trustees of
the Fund and are to be elected by the holders of Preferred Shares only, voting
as a single class. The Board of Trustees currently consists of Mss. Kelly and
Verville, and Messrs. Hacker, Lowry, Macera, Mayer, Nelson, Neuhauser, Palombo,
Stitzel and Theobald.

2002 2003 2004
---- ---- ----

Mr. Hacker Mr. Lowry Mr. Neuhauser
Ms. Kelly Mr. Mayer Mr. Theobald
Mr. Palombo Mr. Nelson Ms. Verville

Messrs. Macera and Stitzel are subject to re-election annually by the holders of
Preferred Shares.

18
30

REQUIRED VOTE

2.G. COLONIAL MUNICIPAL INCOME TRUST.

Mss. Kelly and Verville, and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Palombo and Theobald, (who have each agreed to serve) are proposed for election
as Trustees of the Fund and are to be elected by the holders of Common Shares
and Preferred Shares, voting together as a single class. Messrs. Macera and
Stitzel (who have each agreed to serve) are proposed for election as Trustees of
the Fund and are to be elected by the holders of Preferred Shares only, voting
as a single class. The Board of Trustees currently consists of Mss. Kelly and
Verville, and Messrs. Hacker, Lowry, Macera, Mayer, Nelson, Neuhauser, Palombo,
Stitzel and Theobald.

2002 2003 2004
---- ---- ----

Mr. Mayer Mr. Hacker Mr. Lowry
Mr. Palombo Ms. Kelly Mr. Neuhauser
Ms. Mr. Nelson Mr. Theobald
Verville

19
31

Messrs. Macera and Stitzel are subject to re-election annually by the holders of
Preferred Shares.

REQUIRED VOTE

2.H. COLONIAL INTERMEDIATE HIGH INCOME FUND.

The Board of Trustees is divided into the following three classes, each with a
term expiring in the year indicated (assuming the persons listed above are
elected at the Meeting):

2002 2003 2004
---- ---- ----

Mr. Lowry Mr. Hacker Mr. Macera
Mr. Mayer Ms. Kelly Mr. Stitzel
Mr. Nelson Mr. Neuhauser Mr. Theobald
Mr. Palombo Ms. Verville

20
32

REQUIRED VOTE

The affirmative vote of a plurality of the holders of shares of beneficial
interest of the Fund present at the Meeting in person or by proxy is required
for the election of each Trustee. Since the number of Trustees to be elected for
the Fund is fixed at eleven, this means that the eleven persons receiving the
highest number of votes will be elected as Trustees of the Fund.

FOR INFORMATION REGARDING THE BOARD OF TRUSTEES AND EXECUTIVE OFFICERS OF YOUR
FUND, SEE APPENDICES G AND H TO THIS PROXY STATEMENT.

TRUSTEES' COMPENSATION

The members of the Board of Trustees of each Fund serve as Trustees of the
Liberty Funds Complex and Stein Roe Funds Complex, for which service each
Trustee, except for Mr. Palombo, receives an annual retainer of $45,000, and
attendance fees of $8,000 for each regular joint Board meeting and $1,000 for
each special joint Board meeting. The Board of Trustees holds six regular joint
Board meetings each year. Committee chairs receive an additional annual retainer
of $5,000. Other Committee members receive an additional annual retainer of
$1,000, and receive $1,000 for each special meeting attended on a day other than
a regular joint Board meeting day. Two-thirds of the Trustees' fees are
allocated among the Liberty Funds Complex and Stein Roe Funds Complex based on
their relative net assets, and one-third of the fees is divided equally among
the respective Funds in the Liberty Funds Complex and Stein Roe Funds Complex.

The Boards of Trustees of the Liberty Funds Complex and the Stein Roe Funds
Complex were combined in 2000. The Funds do not provide pension or retirement
plan benefits to the Trustees. However, certain Trustees who served on the Board
of Trustees of the Liberty Funds Complex and did not continue on the combined
Board of Trustees of the Liberty Funds Complex and Stein Roe Funds Complex will
receive payments at an annual rate equal to their 1999 Trustee compensation for
the lesser of two years or until the date they would otherwise have retired at
age 72. LFC and the Funds of the Liberty Funds Complex will each bear one-half
of the cost of the payments; the portion of the payment borne by the Liberty
Funds Complex will be allocated among the Liberty Funds Complex based on each
Fund's share of the Trustee

21
33

fees for 2000. In addition, two Trustees who served on the Board of Trustees of
the Stein Roe Funds Complex and did not continue on the combined Board of
Trustees of the Liberty Funds Complex and Stein Roe Funds Complex have received
or will receive payments in connection with their service. One Trustee received
a payment of $50,000 upon completion of his service and another will receive
four quarterly payments at an annual rate equal to his 1999 Trustee
compensation. LFC and the Funds of the Stein Roe Funds Complex will each bear
one-half of the cost of the payments to these Trustees; the Stein Roe Funds'
portion of the payments will be allocated among the Funds based on each Fund's
share of the Trustee fees for 2000.

FOR INFORMATION REGARDING THE COMPENSATION RECEIVED BY THE TRUSTEES OF YOUR FUND
FOR SERVING AS TRUSTEES FOR THE FISCAL YEARS ENDED OCTOBER 31, 2000 (FOR
COLONIAL INTERMEDIATE HIGH INCOME FUND) AND NOVEMBER 30, 2000 (FOR ALL OTHER
FUNDS), AND FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2000, SEE APPENDIX I TO
THIS PROXY STATEMENT.

TRUSTEES' MEETINGS AND COMMITTEES

THE FOLLOWING APPLIES TO ALL FUNDS EXCEPT COLONIAL INTERMEDIATE HIGH INCOME
FUND:

During the fiscal year ended November 30, 2000, each Board of Trustees held six
meetings.

The Audit Committee, consisting at the time of Ms. Verville and Messrs.
Bleasdale, Grinnell, Lowry, Macera and Moody, met four times during the fiscal
year ended November 30, 2000. The Committee now consists of Ms. Verville and
Messrs. Hacker, Macera, Nelson and Neuhauser. The Committee recommends to the
Trustees the independent accountants to serve as auditors, reviews with the
independent accountants the results of the auditing engagement and the internal
accounting procedures and controls, and considers the independence of the
independent accountants, the range of their audit services and their fees.

The Funds' Audit Committee is comprised of only "Independent" Trustees (as
defined in the regulations of the New York Stock Exchange (NYSE)) of the Funds,
who also are not "interested persons" (as

22
34

defined in the Investment Company Act of 1940) of the Funds. The Audit Committee
reviews the process of preparing and reviewing financial statement and other
audit-related matters as they arise throughout the year. The Audit Committee
makes recommendations to the full Board as to the firm of independent
accountants to be selected. In making its recommendations, the Audit Committee
reviews the nature and scope of the services to be provided.

In discharging its oversight responsibility as to the audit process, the Audit
Committee discussed with management the process for preparation and review of
the audited financial statements for the last fiscal year. The Audit Committee
also reviewed the non-audit services provided by the independent accountants of
the Fund. Each Fund's independent accountants, PricewaterhouseCoopers LLP
("PWC"), discussed with the Board the matters required to be discussed by
Statement on Auditing Standards No. 61. In addition, the Audit Committee
obtained from the independent accountants a formal written statement consistent
with Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," describing all relationships between the independent
accountants and the Funds that might bear on the independent accountants'
independence. The Audit Committee also discussed with the independent
accountants any relationships that may impact their objectivity and independence
and satisfied itself as to the independent accountants' independence. The Board
also reviewed the fees charged by such independent accountants for the various
services provided and reviewed the Fund's internal accounting procedures and
controls.

The Funds' Boards of Trustees have adopted a written charter which sets forth
the Audit Committee's structure, duties and powers, and methods of operation and
which is attached hereto as Appendix J. Each member of the Audit Committee must
be financially literate and at least one member must have prior accounting
experience or related financial management expertise. The Funds' Boards of
Trustees have determined, in accordance with applicable regulations of the NYSE
and the American Stock Exchange ("AMEX"), that each member of the Audit
Committee is financially literate and has prior accounting experience or related
financial management expertise. All members of the Audit Committee meet the
independence standards of both the NYSE and AMEX.

23
35

FEES PAID TO INDEPENDENT ACCOUNTANTS

1. Audit Fees

For the audit of the Funds' annual financial statements for the fiscal year
ended October 31, 2000 or November 30, 2000 included in each Fund's annual
report to shareholders for that fiscal year, the Funds paid or accrued the
following amounts to PWC:

Colonial High Income Municipal
Trust $23,300
Colonial Investment Grade
Municipal Trust $19,800
Colonial InterMarket Income
Trust I $24,800
Colonial California Insured
Municipal Fund $19,000
Colonial Insured Municipal Fund $19,000
Colonial New York Insured
Municipal Fund $19,000
Colonial Municipal Income Trust $23,300
Colonial Intermediate High
Income Fund $29,000

2. Financial Information Systems Design and Implementation Fees

For the fiscal year ended October 31, 2000 or November 30, 2000, the Funds, the
Advisor, and entities controlling, controlled by or under common control with
the Advisor which provide services to the Funds did not pay or accrue any fees
for financial information systems design and implementation services by PWC.

24
36

3. All Other Fees

For the fiscal year ended October 31, 2000 or November 30, 2000, the Funds paid
the following fees for tax services and all other services provided by PWC:

TAX ALL OTHER
SERVICES SERVICES
-------- ---------

Colonial High Income Municipal Trust $3,300 $6,000
Colonial Investment Grade Municipal
Trust $4,700 $6,000
Colonial InterMarket Income Trust I $3,900 $ 0
Colonial California Insured
Municipal Fund $5,000 $6,000
Colonial Insured Municipal Fund $5,000 $6,000
Colonial New York Insured Municipal
Fund $5,000 $6,000
Colonial Municipal Income Trust $4,700 $6,000
Colonial Intermediate High Income
Fund $3,400 $1,500

In addition, the Advisor, and entities controlling, controlled by or under
common control with the Advisor which provide services to the Funds, paid or
accrued aggregate fees of $653,000 for the fiscal year ended November 30, 2000
($628,000 for the fiscal year ended October 31, 2000) for all other services
provided by PWC.

The Audit Committee has determined that the provision of the services described
above is compatible with maintaining the independence of PWC.

The Compensation Committee, consisting at the time of Ms. Collins and Messrs.
Grinnell, Neuhauser and Stitzel, met once during the fiscal year ended November
30, 2000. The Governance Committee assumed the duties of the Compensation
Committee in December, 2000. The Governance Committee reviews the compensation
of the Board of Trustees.

The Governance Committee, consisting at the time of Messrs. Bleasdale, Lowry,
Mayer and Moody and Ms. Verville, met three times during the fiscal year ended
November 30, 2000. The Committee now consists of Ms. Verville and Messrs.
Hacker, Lowry, Mayer and Theobald. The Committee in its sole discretion
recommends to the Trustees among

25
37

other things, nominees for Trustee and for appointments to various committees.
The Governance Committee will consider candidates for Trustee recommended by
shareholders. Written recommendations with supporting information should be
directed to the Committee, in care of the Fund.

During the fiscal year ended November 30, 2000, each of the current Trustees
attended more than 75% of the meetings of the Board of Trustees and the
committees of which such Trustee is a member.

If any of the nominees listed above becomes unavailable for election, the
enclosed proxy will be voted for a substitute candidate in the discretion of the
proxy holder(s).

THE FOLLOWING APPLIES TO COLONIAL INTERMEDIATE HIGH INCOME FUND:

During the fiscal year ended October 31, 2000, the Board of Trustees held six
meetings.

The Audit Committee, consisting at the time of Ms. Verville and Messrs.
Bleasdale, Grinnell, Lowry, Macera and Moody, met four times during the fiscal
year ended October 31, 2000. The Committee now consists of Ms. Verville and
Messrs. Hacker, Macera, Nelson and Neuhauser. The Committee recommends to the
Trustees the independent accountants to serve as auditors, reviews with the
independent accountants the results of the auditing engagement and the internal
accounting procedures and controls, and considers the independence of the
independent accountants, the range of their audit services and their fees.

Additional discussion of the Audit Committee and the fees paid to PWC by the
Funds, the Advisor, and entities controlling, controlled by or under common
control with the Advisor which provide services to the Funds, appear on the
previous pages.

The Compensation Committee, consisting at the time of Ms. Collins and Messrs.
Grinnell, Neuhauser and Stitzel, met once during the fiscal year ended October
31, 2000. The Governance Committee assumed the duties of the Compensation
Committee in December, 2000. The Committee reviews the compensation of the Board
of Trustees.

The Governance Committee, consisting at the time of Messrs. Bleasdale, Lowry,
Mayer and Moody, and Ms. Verville, met three times during the fiscal year ended
October 31, 2000. The Committee now consists of

26
38

Ms. Verville and Messrs. Hacker, Lowry, Mayer and Theobald. The Committee in its
sole discretion recommends to the Trustees among other things, nominees for
Trustee and for appointments to various committees. The Governance Committee
will consider candidates for Trustee recommended by shareholders. Written
recommendations with supporting information should be directed to the Committee,
in care of the Fund.

During the fiscal year ended October 31, 2000, each of the current Trustees
attended more than 75% of the meetings of the Board of Trustees and the
committees of which such Trustee is a member.

If any of the nominees listed above becomes unavailable for election, the
enclosed proxy will be voted for a substitute candidate in the discretion of the
proxy holder(s).

COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, and Section
30(f) of the Investment Company Act require the Board of Trustees and executive
officers of any Fund, persons who own more than ten percent of any Fund's equity
securities ("Section 16 reporting persons"), the Fund's investment advisor and
affiliated persons of the Fund's investment advisor to file with the Securities
and Exchange Commission (SEC) initial reports of ownership and reports of
changes in ownership of the Fund's shares and to furnish the Fund with copies of
all Section 16(a) forms they file. Based solely upon a review of copies of such
reports furnished to the Funds and on representations that no other reports were
required during the fiscal year ended November 30, 2000 (October 31, 2000 for
Colonial Intermediate High Income Fund), the Funds believe that Section 16
reporting persons complied with all Section 16(a) filings applicable to them.

OTHER INFORMATION

FUND ANNUAL AND SEMI-ANNUAL REPORTS. THE FUNDS HAVE PREVIOUSLY SENT THEIR
ANNUAL REPORTS AND ANY SUBSEQUENT SEMI-ANNUAL REPORTS TO THEIR SHAREHOLDERS. YOU
CAN OBTAIN A COPY OF THESE REPORTS WITHOUT CHARGE BY WRITING TO THE ADVISOR AT
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111, OR BY CALLING 800-426-3750.

27
39

OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS. Shareholders of record at the
close of business on July 16, 2001 are entitled to notice of and to vote at the
Meeting and any adjourned session. Appendix F to this Proxy Statement lists for
each Fund the total number of shares outstanding as of July 16, 2001 for each
class of the Fund's shares entitled to vote at the Meeting. It also identifies
holders of more than 5% of any class of shares of each Fund and contains
information about the shareholdings in the Funds by the Trustees and the
executive officers of the Funds.

INFORMATION ABOUT PROXIES AND THE CONDUCT OF THE MEETING

SOLICITATION OF PROXIES. Proxies will be solicited primarily by mailing this
Proxy Statement and its enclosures, but proxies may also be solicited through
further mailings, telephone calls, personal interviews or e-mail by officers of
the Funds or by employees or agents of the Advisor or of LFC and its affiliated
companies. In addition, Georgeson Shareholder Communications Inc. has been
engaged to assist in the solicitation of proxies, at an estimated cost of
$55,000.

COSTS OF SOLICITATION. All of the costs of the Meeting, including the costs of
soliciting proxies, will be paid by LFC or Fleet. None of these costs will be
borne by the Funds or their shareholders.

VOTING AND TABULATION OF PROXIES. Shares represented by duly executed proxies
will be voted as instructed on the proxy. If no instructions are given, the
proxy will be voted in favor of the relevant New Advisory Agreement and in favor
of the nominees for election as Trustees. You may vote by any one of the
following methods: (1) by mailing the enclosed proxy card or (2) by telephone or
through use of the Internet (not available for all shareholders; eligible
shareholders will receive an insert with instructions). If you mail the enclosed
proxy and no choice is indicated for a proposal listed in the attached Notice of
Meeting, your proxy will be voted in favor of that proposal, including all of
the nominees for election as Trustees. Votes made through use of the Internet or
by telephone must have an indicated choice in order to be accepted. At any time
before it has been voted, your proxy may be revoked in one of the following
ways: (i) by sending a signed, written letter of revocation to the Secretary of
the Funds, (ii) by properly executing a later-dated proxy (by any of the methods
of voting described above), or (iii) by attending the Meeting, requesting return
of any previously delivered proxy and voting in person.

28
40

Votes cast in person or by proxy at the Meeting will be counted by persons
appointed by the Funds as tellers for the Meeting (the "Tellers"). For each of
the Colonial California Insured Municipal Trust, Colonial Insured Municipal
Fund, Colonial New York Insured Municipal Fund and Colonial Municipal Income
Trust, 30% of the shares of the Fund outstanding on the record date and entitled
to vote, present in person or represented by proxy, constitutes a quorum for the
transaction of business by the shareholders of that Fund at the Meeting. For
each of the Colonial High Income Municipal Trust, Colonial Investment Grade
Municipal Trust, Colonial Intermediate High Income Fund and Colonial InterMarket
Income Trust I, a majority of the shares entitled to vote of the Fund,
outstanding on the record date and entitled to vote, present in person or
represented by proxy, constitutes a quorum for the transaction of business by
the shareholders of that Fund at the Meeting. In determining whether a quorum is
present, the Tellers will count shares represented by proxies that reflect
abstentions, and "broker non-votes," as shares that are present and entitled to
vote. With respect to approval of the New Advisory Agreements, these shares,
which will be counted as present but not as voting in favor of any proposal,
will have the same effect as if they cast votes against the proposal. With
respect to the election of Trustees, withheld authority, abstentions and broker
non-votes have no effect on the outcome of voting. "Broker non-votes" are shares
held by brokers or nominees as to which (i) the broker or nominee does not have
discretionary voting power and (ii) the broker or nominee has not received
instructions from the beneficial owner or other person who is entitled to
instruct how the shares will be voted.

ADJOURNMENTS; OTHER BUSINESS. If any Fund has not received enough votes by the
time of the Meeting to approve that Fund's New Advisory Agreement, the persons
named as proxies may propose that the Meeting be adjourned one or more times as
to that Fund to permit further solicitation of proxies. Any adjournment requires
the affirmative vote of more than 50% of the total number of shares of that Fund
that are present in person or by proxy when the adjournment is being voted on.
The persons named as proxies will vote in favor of any such adjournment all
proxies that they are entitled to vote in favor of the relevant Fund's New
Advisory Agreement. They will vote against any such adjournment any proxy that
directs them to vote against the New Advisory Agreement. They will not vote any
proxy that directs them to abstain from voting on the New Advisory Agreement.

29
41

The Meeting has been called to transact any business that properly comes before
it. The only business that management of the Funds intends to present or knows
that others will present is the approval of the New Advisory Agreements and the
election of Trustees. If any other matters properly come before the Meeting, and
on all matters incidental to the conduct of the Meeting, the persons named as
proxies intend to vote the proxies in accordance with their judgment, unless the
Secretary of the Funds has previously received written contrary instructions
from the shareholder entitled to vote the shares.

SHAREHOLDER PROPOSALS AT FUTURE MEETINGS. Shareholder proposals to be included
in the Funds' proxy materials for the 2002 Annual Meeting of Shareholders of
each Fund must be received by the Fund a reasonable time before it mails its
proxy materials for that meeting. Shareholders who wish to make a proposal at
the 2002 Annual Meeting that will not be included in the Funds' proxy materials
must notify the relevant Fund a reasonable time before it begins to print and
mail its proxy materials for that meeting. If a shareholder who wishes to submit
a proposal fails to timely notify the Fund, the proxies solicited for the
meeting will have discretionary authority to vote on the shareholder's proposal
if it is properly brought before the meeting. If a shareholder makes a timely
notification, the proxies may still exercise discretionary voting authority
under circumstances consistent with the SEC's proxy rules. You may submit
shareholder proposals to the Secretary of the Funds, One Financial Center,
Boston, Massachusetts 02111-2621.

30
42

APPENDIX A

ADVISORY AGREEMENTS

-------------------------------------------------------------------------------------
DESCRIPTION OF DATE OF LAST
TRUSTEE ACTION SUBMISSION OF
REGARDING CURRENT ADVISORY
ADVISORY FEE RATE CURRENT ADVISORY AGREEMENT FOR
SCHEDULE (AS A DATE OF AGREEMENT SINCE SHAREHOLDER
PERCENTAGE OF CURRENT BEGINNING OF APPROVAL AND
AVERAGE WEEKLY ADVISORY FUND'S LAST REASON FOR
NAME OF FUND NET ASSETS) AGREEMENT FISCAL YEAR SUBMISSION
-------------------------------------------------------------------------------------

Colonial 0.75% of Average March 27, On June 19, On May 26,
InterMarket Weekly Managed 1995 2001, the 1999,
Income Trust Assets (which (amended and Trustees shareholders
I include assets restated approved the approved the
representing June 16, current current amended
leverage) 1999) advisory and restated
agreement advisory
agreement
-------------------------------------------------------------------------------------
Colonial 0.65% plus 20% on September 1, On June 19, On June 28,
Intermediate any leverage 2000 2001, the 2000,
High Income income Trustees shareholders
Fund approved the approved the
current current amended
advisory and restated
agreement advisory
agreement
-------------------------------------------------------------------------------------
Colonial 0.65%(1) October 25, On June 19, On October 25,
California 1999 2001, the 1999, the sole
Insured Trustees shareholder
Municipal approved the approved the
Fund current current
advisory advisory
agreement agreement
-------------------------------------------------------------------------------------
Colonial New 0.65%(2) October 25, On June 19, On October 25,
York Insured 1999 2001, the 1999, the sole
Municipal Trustees shareholder
Fund approved the approved the
current current
advisory advisory
agreement agreement
-------------------------------------------------------------------------------------
Colonial 0.65%(3) October 25, On June 19, On October 25,
Insured 1999 2001, the 1999, the sole
Municipal Trustees shareholder
Fund approved the approved the
current current
advisory advisory
agreement agreement
-------------------------------------------------------------------------------------

A-1
43

Colonial 0.65% March 27, On June 19, On February 15,
Investment 1995 2001, the 1995,
Grade Trustees shareholders
Municipal approved the approved a form
Trust current of the current
advisory advisory
agreement agreement
-------------------------------------------------------------------------------------
Colonial 0.80% March 27, On June 19, On February 15,
High Income 1995 2001, the 1995,
Municipal Trustees shareholders
Trust approved the approved a form
current of the current
advisory advisory
agreement agreement
-------------------------------------------------------------------------------------
Colonial 0.65% March 27, On June 19, On February 15,
Municipal 1995 2001, the 1995,
Income Trust Trustees shareholders
approved the approved a form
current of the current
advisory advisory
agreement agreement
-------------------------------------------------------------------------------------

(1) The Fund's advisor has agreed to waive the Fund's management fees in the
following amounts, expressed as a percentage of average weekly total net
assets: 0.30% for the first 5 years of the Fund's operations; 0.25% in year
6; 0.20% in year 7; 0.15% in year 8; 0.10% in year 9 and 0.05% in year 10.

(2) The Fund's advisor has agreed to waive the Fund's management fees in the
following amounts, expressed as a percentage of average weekly total net
assets: 0.30% for the first 5 years of the Fund's operations; 0.25% in year
6; 0.20% in year 7; 0.15% in year 8; 0.10% in year 9 and 0.05% in year 10.

(3) From January 2, 2001 through November 30, 2001 (on an annualized basis) and
for the following years ended November 30, the Fund's advisor has agreed to
waive the Fund's management fees (as a percentage of average weekly total
net assets) as follows: 2001 -- 0.30%; 2002 -- 0.30%; 2003 -- 0.30%;
2004 -- 0.30%; 2005 -- 0.25%; 2006 -- 0.20%; 2007 -- 0.15%; 2008 -- 0.10%;
2009 -- 0.05%.

A-2
44

APPENDIX B

NOTE: THE BRACKETED TEXT APPEARS ONLY IN THE ADVISORY AGREEMENTS FOR THE FUNDS
INDICATED.

FORM OF INVESTMENT ADVISORY AGREEMENT

MANAGEMENT AGREEMENT

AGREEMENT dated as of [ ], 2001, between COLONIAL [ ]
FUND, a Massachusetts business trust (Fund), and COLONIAL MANAGEMENT ASSOCIATES,
INC., a Massachusetts corporation (Advisor).

In consideration of the promises and covenants herein, the parties agree as
follows:

1. The Advisor will manage the investment of the assets of the Fund in
accordance with its investment policies and will perform the other services
herein set forth, subject to the supervision of the Board of Trustees of the
Fund.

2. In carrying out its investment management obligations, the Advisor shall:

(a) evaluate such economic, statistical and financial information and
undertake such investment research as it shall believe advisable; (b) purchase
and sell securities and other investments for the Fund in accordance with the
procedures approved by the Board of Trustees; and (c) report results to the
Board of Trustees.

3. The Advisor shall furnish at its expense the following:

(a) office space, supplies, facilities and equipment; (b) executive and other
personnel for managing the affairs of the Fund (including preparing financial
information of the Fund and reports and tax returns required to be filed with
public authorities, but exclusive of those related to custodial, transfer,
dividend and plan agency services, determination of net asset value and
maintenance of records required by Section 31(a) of the Investment Company Act
of 1940, as amended, and the rules thereunder (1940 Act)); and (c)
compensation of Trustees who are directors, officers, partners or employees of
the Advisor or its affiliated persons (other than a registered investment
company).

B-1
45

4. The Advisor shall be free to render similar services to others so long as its
services hereunder are not impaired thereby.

5. The Fund shall pay the Advisor monthly a fee at the annual rate of [ ]% of
the average weekly net assets of the Fund.

[FOR COLONIAL INTERMEDIATE HIGH INCOME FUND ONLY: In addition, the Fund shall
pay the Advisor monthly a fee equal to 20% of the Fund's Leverage Income;
provided, however, if the Fund's Leverage Income is less than zero then the
Advisor shall pay the Fund 20% of the Fund's Leverage Income.

"LEVERAGE INCOME" SHALL MEAN:

(gross income of the (% of Fund's average (interest and other
Fund for such daily total assets borrowing expenses
month) X represented by - associated with
leverage as of the leverage for such
last day of such month)]
month)

6. If the operating expenses of the Fund for any fiscal year exceed the most
restrictive applicable expense limitation for any state in which shares are
sold, the Advisor's fee shall be reduced by the excess but not to less than
zero.

[FOR ALL FUNDS EXCEPT COLONIAL INTERMEDIATE HIGH INCOME FUND: Operating
expenses shall not include brokerage, interest, taxes, deferred organization
expenses and extraordinary expenses, if any. The Advisor may waive its
compensation (and, bear expenses of the Fund) to the extent that expenses of
the Fund exceed any expense limitation the Advisor declares to be effective.]

7. This Agreement shall become effective as of the date of its execution, and
(a) unless otherwise terminated, shall continue until two years from its date
of execution and from year to year thereafter so long as approved annually in
accordance with the 1940 Act; (b) may be terminated without penalty on sixty
days' written notice to the Advisor either by vote of the Board of Trustees
of the Fund or by vote of a majority of the outstanding voting securities of
the Fund; (c) shall automatically terminate in the event of its assignment;
and (d) may be terminated without penalty by the Advisor on sixty days'
written notice to the Fund.

8. This Agreement may be amended in accordance with the 1940 Act.

B-2
46

9. For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting securities", "affiliated person" and "assignment" shall
have their respective meanings defined in the 1940 Act and exemptions and
interpretations issued by the Securities and Exchange Commission under the
1940 Act.

10.In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Advisor, or reckless disregard of its obligations and duties
hereunder, the Advisor shall not be subject to any liability to the Fund, to
any shareholder of the Fund or to any other person, firm or organization, for
any act or omission in the course of, or connected with, rendering services
hereunder.

COLONIAL [ ] FUND

By:

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

Title: [ ]

COLONIAL MANAGEMENT

ASSOCIATES, INC.

By:

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

Title: [ ]

A copy of the document establishing the Fund is filed with the Secretary of The
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Fund individually but only upon the assets of the Fund.

B-3
47

THIS PAGE IS INTENTIONALLY LEFT BLANK.
48

APPENDIX C

CERTAIN OTHER MUTUAL FUNDS ADVISED BY THE ADVISOR

The Advisor acts as investment advisor or sub-advisor to the following other
mutual funds that have investment objectives similar to the Funds', for
compensation at the annual percentage rates of the corresponding average net
asset levels of those funds set forth below.

COLONIAL HIGH INCOME MUNICIPAL TRUST

---------------------------------------------------------------------------------------
FEE ADVISOR'S
NET ASSETS OF RATE RELATIONSHIP TO
OTHER FUNDS OTHER FUNDS AT (AS A % OF OTHER FUND
WITH MAY 31, AVERAGE NET (ADVISOR OR
ADVISOR SIMILAR OBJECTIVES 2001 ASSETS) SUB-ADVISOR)
---------------------------------------------------------------------------------------

Colonial Colonial Municipal $260.2 million 0.65% Advisor
Income Trust
---------------------------------------------------------------------------------------
Colonial Liberty High Yield $138.3 million 0.60%; Advisor
Municipal Fund 0.55% over
$1
billion;
0.50% over
$3
billion;
0.45% over
$4 billion
on
combined
assets
---------------------------------------------------------------------------------------

COLONIAL INTERMARKET INCOME TRUST I

---------------------------------------------------------------------------------------
ADVISOR'S
NET ASSETS OF RELATIONSHIP TO
OTHER FUNDS OTHER FUNDS AT OTHER FUND
WITH MAY 31, FEE (ADVISOR OR
ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR)
---------------------------------------------------------------------------------------

Colonial Liberty Strategic $1.7 billion 0.65%; Advisor
Income Fund 0.60% in
excess of
$1
billion;
0.55% in
excess of
$2 billion
---------------------------------------------------------------------------------------
Colonial Colonial $146.1 million 0.45% Sub-Advisor
Strategic Income
Fund, Variable
Series
---------------------------------------------------------------------------------------

C-1
49

COLONIAL MUNICIPAL INCOME TRUST

Colonial Colonial High $339.4 million 0.80% Advisor
Income Municipal
Trust
---------------------------------------------------------------------------------------
Colonial Liberty High Yield $138.3 million 0.60%; Advisor
Municipal Fund 0.55% over
$1
billion;
0.50% over
$3
billion;
0.45% over
$4 billion
on
combined
assets
---------------------------------------------------------------------------------------

C-2
50

APPENDIX D

BROKERAGE PRACTICES

The following is a summary of the brokerage practices of the Advisor:

BROKERAGE AND RESEARCH SERVICES. Consistent with the Conduct Rules of the
National Association of Securities Dealers, Inc., and subject to seeking "best
execution" (as defined below) and such other policies as the Trustees may
determine, the Advisor may consider sales of shares of the funds as a factor in
the selection of broker-dealers to execute securities transactions for a fund.

The Advisor places the transactions of the funds with broker-dealers selected by
the Advisor and, if applicable, negotiates commissions. Broker-dealers may
receive brokerage commissions on portfolio transactions, including the purchase
and writing of options, the effecting of closing purchase and sale transactions,
and the purchase and sale of underlying securities upon the exercise of options
and the purchase or sale of other instruments. The Funds from time to time also
execute portfolio transactions with such broker-dealers acting as principals.
The Funds do not intend to deal exclusively with any particular broker-dealer or
group of broker-dealers.

It is the Advisor's policy generally to seek best execution, which is to place
the funds' transactions where the funds can obtain the most favorable
combination of price and execution services in particular transactions or
provided on a continuing basis by a broker-dealer, and to deal directly with a
principal market maker in connection with over-the-counter transactions, except
when it is believed that best execution is obtainable elsewhere. In evaluating
the execution services of, including the overall reasonableness of brokerage
commissions paid to, a broker-dealer, consideration is given to, among other
things, the firm's general execution and operational capabilities, and to its
reliability, integrity and financial condition.

Securities transactions of the Funds may be executed by broker-dealers who also
provide research services (as defined below) to the Advisor and the Funds. The
Advisor may use all, some or none of such research services in providing
investment advisory services to each of its investment company and other
clients, including the Funds. To the extent that such services are used by the
Advisor, they tend to reduce

D-1
51

the Advisor's expenses. In the Advisor's opinion, it is impossible to assign an
exact dollar value for such services.

The Trustees have authorized the Advisor to cause the Funds to pay a
broker-dealer which provides brokerage and research services to the Advisor an
amount of commission for effecting a securities transaction, including the sale
of an option or a closing purchase transaction, for the funds in excess of the
amount of commission which another broker-dealer would have charged for
effecting that transaction. As provided in Section 28(e) of the Securities
Exchange Act of 1934, "brokerage and research services" include advice as to the
value of securities, the advisability of investing in, purchasing or selling
securities and the availability of securities or purchasers or sellers of
securities; furnishing analyses and reports concerning issues, industries,
securities, economic factors and trends and portfolio strategy and performance
of accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). The Advisor must
determine in good faith that such greater commission is reasonable in relation
to the value of the brokerage and research services provided by the executing
broker-dealer viewed in terms of that particular transaction or the Advisor's
overall responsibilities to the Funds and all its other clients.

The Trustees have authorized the Advisor to utilize the services of a clearing
agent with respect to all call options written by Funds that write options and
to pay such clearing agent commissions of a fixed amount per share (currently
1.25 cents) on the sale of the underlying security upon the exercise of an
option written by a Fund.

The Advisor may use the services of AlphaTrade Inc. (ATI), a registered
broker-dealer and subsidiary of the Advisor, when buying or selling equity
securities for a Fund's portfolio pursuant to procedures adopted by the Trustees
and 1940 Act Rule 17e-1. Under the Rule, the Advisor must ensure that
commissions a Fund pays ATI on portfolio transactions are reasonable and fair
compared to commissions received by other broker-dealers in connection with
comparable transactions involving similar securities being bought or sold at
about the same time. The Advisor will report quarterly to the Trustees on all
securities transactions placed through ATI so that the Trustees may consider
whether such trades complied with these procedures and the Rule. ATI employs
electronic trading methods by which it seeks to obtain best price and execution
for the Fund, and will use a clearing broker to settle trades.

D-2
52

APPENDIX E

COMPENSATION PAID BY A FUND TO THE ADVISOR AND AFFILIATES

FOR EACH FUND'S LAST FISCAL YEAR

($ IN THOUSANDS)

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

NET TRANSFER
AGENCY AND NET FEES FOR NET DISTRIBUTION
NET NET SHAREHOLDER PRICING AND AND SHAREHOLDER
ADVISORY ADMINISTRATIVE SERVICING BOOKKEEPING SERVICING (12B-1)
FEE PAID FEES PAID TO FEES PAID TO SERVICES PAID TO FEES PAID TO
TO ADVISOR'S ADVISOR'S ADVISOR'S ADVISOR'S
NAME OF FUND ADVISOR AFFILIATES AFFILIATES AFFILIATES AFFILIATES
----------------------------------------------------------------------------------------------------------------------------

Colonial InterMarket Income Trust I $811 $0 $0 $32 $0
----------------------------------------------------------------------------------------------------------------------------

Colonial Intermediate High Income Fund 807 0 0 49 0
----------------------------------------------------------------------------------------------------------------------------

Colonial California Insured Municipal Fund 219(a) 0 0 21 0
----------------------------------------------------------------------------------------------------------------------------

Colonial New York Insured Municipal Fund 0(b) 0 0 18 0
----------------------------------------------------------------------------------------------------------------------------

Colonial Insured Municipal Fund 330 0 0 29 0
----------------------------------------------------------------------------------------------------------------------------

Colonial Investment Grade Municipal Trust 1,156 0 0 48 0
----------------------------------------------------------------------------------------------------------------------------

Colonial High Income Municipal Trust 2,734 0 0 86 0
----------------------------------------------------------------------------------------------------------------------------

Colonial Municipal Income Trust 1,698 0 0 66 0
----------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------- -------------------------------
PERCENTAGE OF
NET BROKERAGE FUND'S TOTAL
COMMISSIONS ON BROKERAGE
FUND'S PORTFOLIO COMMISSIONS
TRANSACTIONS PAID TO
PAID TO ADVISOR'S ADVISOR'S
BROKERAGE BROKERAGE
NAME OF FUND AFFILIATES AFFILIATES
--------------------------------------------------- -------------------------------

Colonial InterMarket Income Trust I $0 $0
--------------------------------------------------------------------------------------------------
Colonial Intermediate High Income Fund 0 0
-----------------------------------------------------------------------------------------------------------------
Colonial California Insured Municipal Fund 0 0
----------------------------------------------------------------------------------------------------------------------------
Colonial New York Insured Municipal Fund 0 0
----------------------------------------------------------------------------------------------------------------------------
Colonial Insured Municipal Fund 0 0
----------------------------------------------------------------------------------------------------------------------------
Colonial Investment Grade Municipal Trust 0 0
----------------------------------------------------------------------------------------------------------------------------
Colonial High Income Municipal Trust 0 0
----------------------------------------------------------------------------------------------------------------------------
Colonial Municipal Income Trust 0 0
----------------------------------------------------------------------------------------------------------------------------

(a) For the year ended November 30, 2000, Colonial Management Associates, Inc.
waived advisory fees of approximately $108,000.

(b) For the year ended November 30, 2000, Colonial Management Associates, Inc.
waived and assumed expenses of approximately $42,000.

E-1
53

THIS PAGE IS INTENTIONALLY LEFT BLANK.
54

APPENDIX F

SHARES OUTSTANDING AND ENTITLED TO VOTE

On July 16, 2001, the Funds had outstanding and entitled to vote at the meeting
the following shares of beneficial interest:

COMMON PREFERRED
FUND SHARES SHARES
---- -------------- ---------

Colonial High Income Municipal Trust
(CHIMT) 31,078,028.000 4,800(1)
Colonial Investment Grade Municipal Trust
(CIGMT) 11,509,000.000 2,400
Colonial InterMarket Income Trust I
(CIITI)(2) 11,009,000.000 0
Colonial California Insured Municipal
Fund (CCIMF) 2,767,557.667 978
Colonial Insured Municipal Fund (CIMF) 4,227,253.667 1,492
Colonial New York Insured Municipal Fund
(CNYIMF) 1,606,899.667 564
Colonial Municipal Income Trust (CMIT) 27,645,113.000 3,600
Colonial Intermediate High Income Fund
(CIHIF)(3) 20,573,620.049 0

(1) Consists of 2,400 Series T Shares and 2,400 Series W Shares.

(2) Colonial InterMarket Income Trust I has only one class of shares
outstanding. For purposes of this Proxy Statement only, these shares may be
referred to as "Common Shares."

(3) Colonial Intermediate High Income Fund has only one class of shares
outstanding. For purposes of this Proxy Statement only, these shares may be
referred to as "Common Shares."

OWNERSHIP OF SHARES

As of July 16, 2001, each Fund believes that the Trustees and officers of each
Fund, as a group, owned less than one percent of each class of shares of the
Fund.

F-1
55

Shareholders of record at the close of business on July 16, 2001, will have one
vote for each share held. On July 16, 2001, the following persons were known to
beneficially own of record more than 5% of the outstanding securities of the
Funds:

NUMBER PERCENTAGE
CLASS OF SHARES OF SHARES
FUND OF SHARES NAME AND ADDRESS OWNED OWNED
---- --------- ------------------ -------------- ----------

CHIMT Common 27,171,615.000 87.43
CIGMT Common Cede & Co. Fast* 9,947,653.000 86.43
CIITI Common 7 Hanover Square 9,686,764.000 87.99
CCIMF Common 23rd Floor 2,668,003.000 96.40
CIMF Common New York, NY 10004 4,126,178.498 97.61
CNYIMF Common (for all Funds) 1,586,548.000 98.73
CMIT Common 22,763,009.000 82.34
CIHIF Common 18,651,974.217 90.66

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

*Shares are believed only to be held as nominee.

F-2
56

APPENDIX G

TRUSTEE INFORMATION

The following table sets forth certain information about the Boards of Trustees
of the Liberty Funds:

SHARES AND
PERCENT OF
EACH FUND
BENEFICIALLY
NAME TRUSTEE PRINCIPAL OCCUPATION(1) OWNED AT
(AGE) SINCE AND DIRECTORSHIPS JULY 16, 2001
----- ------- ----------------------- -------------

Douglas A. Hacker 2000 Executive Vice President and Chief (2)
(45) Financial Officer of UAL, Inc.
(airline) since July, 1999; Senior
Vice President and Chief Financial
Officer of UAL, Inc. prior
thereto.
Janet Langford Kelly 2000 Executive Vice (2)
(43) President -- Corporate Development
and Administration, General
Counsel, and Secretary, Kellogg
Company (food manufacturer), since
September, 1999; Senior Vice
President, Secretary and General
Counsel, Sara Lee Corporation
(branded, packaged,
consumer-products manufacturer)
prior thereto.
Richard W. Lowry 1995 Private Investor since August, (2)
(65) 1987 (formerly Chairman and Chief
Executive Officer, U.S. Plywood
Corporation (building products
manufacturer)).
Salvatore Macera 1998 Private Investor since 1981 (2)
(70) (formerly Executive Vice President
and Director of Itek Corporation
(electronics) from 1975 to 1981).

G-1
57

SHARES AND
PERCENT OF
EACH FUND
BENEFICIALLY
NAME TRUSTEE PRINCIPAL OCCUPATION(1) OWNED AT
(AGE) SINCE AND DIRECTORSHIPS JULY 16, 2001
----- ------- ----------------------- -------------

William E. Mayer(3) 1994 Managing Partner, Park Avenue (2)
(61) Equity Partners (venture capital)
since 1998 (formerly Founding
Partner, Development Capital, LLC
from November, 1996 to 1998; Dean
and Professor, College of Business
and Management, University of
Maryland from October, 1992 to
November, 1996); Director, Johns
Manville (building products
manufacturer); Lee Enterprises
(print and on-line media); WR
Hambrecht & Co (financial service
provider); Systech Retail Systems
(retail industry technology
provider).
Charles R. Nelson 2000 Van Voorhis Professor, Department (2)
(58) of Economics, University of
Washington; consultant on economic
and statistical matters.
John J. Neuhauser 1985 Academic Vice President and Dean (2)
(58) of Faculties since August, 1999,
Boston College (formerly Dean,
Boston College School of
Management from September, 1977 to
September, 1999).

G-2
58

SHARES AND
PERCENT OF
EACH FUND
BENEFICIALLY
NAME TRUSTEE PRINCIPAL OCCUPATION(1) OWNED AT
(AGE) SINCE AND DIRECTORSHIPS JULY 16, 2001
----- ------- ----------------------- -------------

Joseph R. Palombo(4) 2000 Chief Operations Officer of Mutual (2)
(48) Funds, Liberty Financial
Companies, Inc. (Liberty
Financial) since August, 2000;
Executive Vice President and
Director of Colonial Management
Associates, Inc. (Colonial) since
April, 1999; Executive Vice
President and Chief Administrative
Officer of Liberty Funds Group LLC
(LFG) since April, 1999; Director
of Stein Roe since September,
2000; Trustee and Chairman of the
Board of Stein Roe Mutual Funds
since October, 2000; Manager of
Stein Roe Floating Rate Limited
Liability Company since October,
2000 (formerly Vice President of
the Liberty Funds from April 1999
to August, 2000; Chief Operating
Officer, Putnam Mutual Funds from
1994 to 1998).
Thomas E. Stitzel 1998 Business Consultant since 1999; (2)
(65) (formerly Professor of Finance
from 1975 to 1999 and Dean from
1977 to 1991, College of Business,
Boise State University); Chartered
Financial Analyst.
Thomas C. Theobald 2000 Managing Director, William Blair (2)
(64) Capital Partners (private equity
investing) since 1994; (formerly
Chief Executive Officer and
Chairman of the Board of
Directors, Continental Bank
Corporation); Director of Xerox
Corporation (business products and
services), Anixter International
(network support equipment
distributor), Jones Lang LaSalle
(real estate management services)
and MONY Group (life insurance)).

G-3
59

SHARES AND
PERCENT OF
EACH FUND
BENEFICIALLY
NAME TRUSTEE PRINCIPAL OCCUPATION(1) OWNED AT
(AGE) SINCE AND DIRECTORSHIPS JULY 16, 2001
----- ------- ----------------------- -------------

Anne-Lee Verville 1998 Consultant since 1997 (formerly (2)
(56) General Manager, Global Education
Industry from 1994 to 1997, and
President, Applications Solutions
Division from 1991 to 1994, IBM
Corporation (global education and
global applications)); Director of
Enesco Group, Inc.;
Learnsomething.com.

At December 31, 2000, the Liberty Funds Complex consisted of 49 open-end and 9
closed-end management investment portfolios (including each of the Funds) in the
Liberty Funds Group -- Boston and 17 open-end management investment portfolios
in the Liberty Variable Investment Trust (together, the "Liberty Funds
Complex").

At December 31, 2000, the Stein Roe Funds Complex consisted of the Liberty
Floating Rate Fund, the Stein Roe Floating Rate Limited Liability Company,
Liberty-Stein Roe Institutional Floating Rate Income Fund, and the following
open-end mutual funds: 4 series of Liberty-Stein Roe Funds Income Trust, 1
series of Liberty-Stein Roe Funds Trust, 4 series of Liberty-Stein Roe Funds
Municipal Trust, 12 series of Liberty-Stein Roe Funds Investment Trust, 4 series
of Liberty-Stein Roe Advisor Trust, 5 series of SteinRoe Variable Investment
Trust, and 12 portfolios of SR&F Base Trust (together, the "Stein Roe Funds
Complex").

On December 27, 2000, the Liberty Funds Complex and the Stein Roe Funds Complex
were combined and reorganized into one fund complex. Effective on December 27,
2000, the Trustees listed above serve as Trustees for all the Funds in both the
Liberty Funds Complex and the Stein Roe Funds Complex except for the SteinRoe
Variable Investment Trust. The Trustees listed above, except Ms. Kelly and
Messrs. Hacker, Nelson and Theobald, began serving as trustees for the SteinRoe
Variable Investment Trust on April 5, 2001. Ms. Kelly and Messrs. Hacker,
Nelson, and Theobald served as Trustees for the SteinRoe Variable Investment
Trust prior to April 5, 2001.

G-4
60

---------------
(1) Except as otherwise noted, each individual has held the office indicated or
other offices in the same company for the last five years.

(2) On July 16, 2001, the Trustees and officers of each Fund as a group
beneficially owned less than 1% of the then outstanding shares of each Fund.

(3) Mr. Mayer is an "interested person" as defined in the Investment Company Act
because he is a Director of WR Hambrecht + Co. (a registered broker-
dealer).

(4) Mr. Palombo is an "interested person" as defined in the Investment Company
Act because he is an affiliate of each Fund's investment advisor and an
employee of certain affiliates of the Advisor.

G-5
61

THIS PAGE IS INTENTIONALLY LEFT BLANK.
62

APPENDIX H

OFFICER INFORMATION

The following table sets forth certain information about the executive officers
of the Liberty Funds Complex:

SHARES AND
PERCENT OF
EACH FUND
EXECUTIVE BENEFICIALLY
NAME OFFICER OFFICE WITH FUND; OWNED AT
(AGE) SINCE PRINCIPAL OCCUPATION(1) JULY 16, 2001
----- --------- ----------------------- -------------

Stephen E. Gibson 1998 President of the Liberty Funds (2)
(47) Complex since November, 1998;
President of the Liberty Funds
since June, 1998; Chairman of the
Board since July, 1998, Chief
Executive Officer and President
since December, 1996 and
Director, since July, 1996, of
the Advisor (formerly Executive
Vice President from July, 1996 to
December, 1996); Director, Chief
Executive Officer and President,
LFG since December, 1998
(formerly Director, Chief
Executive Officer and President,
The Colonial Group, Inc. (TCG)
from December, 1996 to December,
1998); President since January,
2000 and Director, since
September, 2000, SR&F (formerly
Vice Chairman from January, 2000
to September, 2000 and Assistant
Chairman from August, 1998 to
January, 2000); Managing Director
of Marketing, Putnam Investments
prior thereto.

H-1
63

SHARES AND
PERCENT OF
EACH FUND
EXECUTIVE BENEFICIALLY
NAME OFFICER OFFICE WITH FUND; OWNED AT
(AGE) SINCE PRINCIPAL OCCUPATION(1) JULY 16, 2001
----- --------- ----------------------- -------------

J. Kevin Connaughton 2000 Treasurer of the Liberty Funds (2)
(37) Complex and of the Liberty
All-Star Funds since December,
2000 (formerly Controller of the
Liberty Funds Complex and of the
Liberty All-Star Funds from
February, 1998 to October, 2000);
Treasurer of the Stein Roe Funds
Complex since February 2001
(formerly Controller from May,
2000 to February, 2001) Vice
President of the Advisor since
February, 1998 (formerly Senior
Tax Manager, Coopers & Lybrand,
LLP from April, 1996 to January,
1998; Vice President, 440
Financial Group/ First Data
Investor Services Group from
March, 1994 to April, 1996).
William J. Ballou 2000 Secretary of the Liberty Funds (2)
(36) Complex and of the Liberty
All-Star Funds since October,
2000 (formerly Assistant
Secretary from October, 1997 to
October, 2000); Secretary of the
Stein Roe Funds Complex since
February, 2001 (formerly
Assistant Secretary from May,
2000 to February, 2001); Senior
Vice President and Senior Counsel
of the Advisor and LFG since
April, 2001 (formerly Vice
President and Counsel from
October, 1997 to March, 2001);
and Assistant Secretary since
December, 1998 of LFG (formerly
Associate Counsel, Massachusetts
Financial Services Company from
May, 1995 to September, 1997).

H-2
64

SHARES AND
PERCENT OF
EACH FUND
EXECUTIVE BENEFICIALLY
NAME OFFICER OFFICE WITH FUND; OWNED AT
(AGE) SINCE PRINCIPAL OCCUPATION(1) JULY 16, 2001
----- --------- ----------------------- -------------

Kevin M. Carome 1999 Executive Vice President of the (2)
(45) Liberty Funds Complex and of the
Liberty All-Star Funds since
October, 2000; Executive Vice
President of the Stein Roe Funds
Complex since May, 1999 (formerly
Vice President from April, 1998
to May, 1999, Assistant Secretary
from April, 1998 to February,
2000 and Secretary from February,
2000 to May, 2000); Chief Legal
Officer of Liberty Financial
since August, 2000; Senior Vice
President, Legal since January,
1999 of LFG; Executive Vice
President and Assistant Secretary
of Stein Roe since January, 2001
(formerly General Counsel and
Secretary of Stein Roe from
January, 1998 to December, 1999);
(formerly Vice President and
Associate General Counsel of
Liberty Financial from August,
1993 to December, 1998).
Michelle G. Azrialy 2001 Controller of the Liberty Funds (2)
(32) Complex and of the Liberty
All-Star Funds since May, 2001;
Vice President of LFG since
March, 2001 (formerly Assistant
Vice President of Fund
Administration from September,
2000 to February, 2001;
Compliance Manager of Fund
Administration from September,
1999 to August, 2000) (formerly
Assistant Treasurer, Chase Global
Fund Services -- Boston from
August, 1996 to September, 1999;
Senior Accountant,
PricewaterhouseCoopers LLP from
June, 1991 to July, 1994).

H-3
65

SHARES AND
PERCENT OF
EACH FUND
EXECUTIVE BENEFICIALLY
NAME OFFICER OFFICE WITH FUND; OWNED AT
(AGE) SINCE PRINCIPAL OCCUPATION(1) JULY 16, 2001
----- --------- ----------------------- -------------

Vicki Benjamin 2001 Chief Accounting Officer of the (2)
(39) Liberty Funds Complex, Stein Roe
Funds Complex and Liberty
All-Star Funds since June, 2001;
Vice President of LFG since
April, 2001 (formerly Vice
President, Corporate Audit, State
Street Bank and Trust Company
from May, 1998 to April, 2001;
Senior Audit Manager, Coopers &
Lybrand from December, 1989 to
May, 1998).

---------------
(1) Except as otherwise noted, each individual has held the office indicated or
other offices in the same company for the last five years.

(2) On July 16, 2001, the Trustees and officers of each Fund as a group
beneficially owned less than 1% of the then outstanding shares of the Fund.

H-4
66

APPENDIX I.1.

TRUSTEES COMPENSATION

For the fiscal years and calendar years noted, the Trustees received the
following compensation for serving as Trustees(1):

--------------------------------------------------------------------------------------
CIHIF CIGMT CIITI
AGGREGATE AGGREGATE AGGREGATE
COMPENSATION FROM COMPENSATION FROM COMPENSATION FROM
FUND FOR THE FISCAL FUND FOR THE FISCAL FUND FOR THE FISCAL
TRUSTEE YEAR ENDED 10/31/00 YEAR ENDED 11/30/00 YEAR ENDED 11/30/00
--------------------------------------------------------------------------------------

Robert J. Birnbaum(2) $ 77 $ 76 $ 74
--------------------------------------------------------------------------------------
Tom Bleasdale(3) 1,002(4) 1,132(5) 937(6)
--------------------------------------------------------------------------------------
John V. Carberry(7) NA NA NA
--------------------------------------------------------------------------------------
Lora S. Collins(8) 941 1,013 840
--------------------------------------------------------------------------------------
James E. Grinnell(9) 973 1,078 892
--------------------------------------------------------------------------------------
Douglas A. Hacker(10) 0 0 0
--------------------------------------------------------------------------------------
Janet Langford Kelly(11) 0 0 0
--------------------------------------------------------------------------------------
Richard W. Lowry 943 1,047 867
--------------------------------------------------------------------------------------
Salvatore Macera 935 1,035 857
--------------------------------------------------------------------------------------
William E. Mayer 958 1,056 875
--------------------------------------------------------------------------------------
James L. Moody, Jr.(12) 997(13) 1,121(14) 928(15)
--------------------------------------------------------------------------------------
Charles R. Nelson(16) 0 0 0
--------------------------------------------------------------------------------------
John J. Neuhauser 952 1,071 888
--------------------------------------------------------------------------------------
Joseph R. Palombo(17) NA NA NA
--------------------------------------------------------------------------------------
Thomas E. Stitzel 945 1,024 849
--------------------------------------------------------------------------------------
Robert L. Sullivan(18) 415 432 398
--------------------------------------------------------------------------------------
Thomas C. Theobald(19) 0 0 0
--------------------------------------------------------------------------------------
Anne-Lee Verville 860(20) 1,008(21) 839(22)
--------------------------------------------------------------------------------------

I-1
67

--------------------------------------------------------------------------------------
CCIMF CIMF CNYIMF
AGGREGATE AGGREGATE AGGREGATE
COMPENSATION FROM COMPENSATION FROM COMPENSATION FROM
FUND FOR THE FISCAL FUND FOR THE FISCAL FUND FOR THE FISCAL
TRUSTEE YEAR ENDED 11/30/00 YEAR ENDED 11/30/00 YEAR ENDED 11/30/00
--------------------------------------------------------------------------------------

Robert J. Birnbaum(23) $ 20 $ 19 $ 5
--------------------------------------------------------------------------------------
Tom Bleasdale(24) 659(25) 759(26) 527(27)
--------------------------------------------------------------------------------------
John V. Carberry(28) NA NA NA
--------------------------------------------------------------------------------------
Lora S. Collins(29) 590 679 471
--------------------------------------------------------------------------------------
James E. Grinnell(30) 628 724 502
--------------------------------------------------------------------------------------
Douglas A. Hacker(31) 0 0 0
--------------------------------------------------------------------------------------
Janet Langford Kelly(32) 0 0 0
--------------------------------------------------------------------------------------
Richard W. Lowry 611 704 489
--------------------------------------------------------------------------------------
Salvatore Macera 604 695 482
--------------------------------------------------------------------------------------
William E. Mayer 615 708 490
--------------------------------------------------------------------------------------
James L. Moody, Jr.(33) 652(34) 751(35) 521(36)
--------------------------------------------------------------------------------------
Charles R. Nelson(37) 0 0 0
--------------------------------------------------------------------------------------
John J. Neuhauser 625 719 499
--------------------------------------------------------------------------------------
Joseph R. Palombo(38) NA NA NA
--------------------------------------------------------------------------------------
Thomas E. Stitzel 597 687 477
--------------------------------------------------------------------------------------
Robert L. Sullivan(39) 221 244 150
--------------------------------------------------------------------------------------
Thomas C. Theobald(40) 0 0 0
--------------------------------------------------------------------------------------
Anne-Lee Verville 583(41) 671(42) 463(43)
--------------------------------------------------------------------------------------

I-2
68

--------------------------------------------------------------------------------------
TOTAL COMPENSATION
CMIT CHIMT FROM THE FUND
AGGREGATE AGGREGATE COMPLEX PAID TO THE
COMPENSATION FROM COMPENSATION FROM TRUSTEES FOR THE
FUND FOR THE FISCAL FUND FOR THE FISCAL CALENDAR YEAR ENDED
TRUSTEE YEAR ENDED 11/30/00 YEAR ENDED 11/30/00 12/31/00(44)
--------------------------------------------------------------------------------------

Robert J. Birnbaum(45) $ 94 $ 109 NA
--------------------------------------------------------------------------------------
Tom Bleasdale(46) 1,433(47) 1,712(48) $106,000(49)
--------------------------------------------------------------------------------------
John V. Carberry(50) NA NA NA
--------------------------------------------------------------------------------------
Lora S. Collins(51) 1,283 1,532 96,000
--------------------------------------------------------------------------------------
James E. Grinnell(52) 1,365 1,630 102,000
--------------------------------------------------------------------------------------
Douglas A. Hacker(53) 0 0 0
--------------------------------------------------------------------------------------
Janet Langford Kelly(54) 0 0 0
--------------------------------------------------------------------------------------
Richard W. Lowry 1,325 1,583 99,000
--------------------------------------------------------------------------------------
Salvatore Macera 1,311 1,566 98,000
--------------------------------------------------------------------------------------
William E. Mayer 1,337 1,597 100,000
--------------------------------------------------------------------------------------
James L. Moody, Jr.(55) 1,419(56) 1,695(57) 105,000(58)
--------------------------------------------------------------------------------------
Charles R. Nelson(59) 0 0 0
--------------------------------------------------------------------------------------
John J. Neuhauser 1,355 1,620 101,210
--------------------------------------------------------------------------------------
Joseph R. Palombo(60) NA NA NA
--------------------------------------------------------------------------------------
Thomas E. Stitzel 1,297 1,549 97,000
--------------------------------------------------------------------------------------
Robert L. Sullivan(61) 537 628 33,683
--------------------------------------------------------------------------------------
Thomas C. Theobald(62) 0 0 0
--------------------------------------------------------------------------------------
Anne-Lee Verville 1,276(63) 1,487(64) 94,667(65)
--------------------------------------------------------------------------------------

(1) The Funds do not currently provide pension or retirement plan benefits to
the Trustees.

(2) Retired as a Trustee of the Fund and the Liberty Funds Complex on December
31, 1999.

(3) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(4) For the fiscal year ended October 31, 2000, compensation includes $467
payable in later years as deferred compensation.

(5) For the fiscal year ended November 30, 2000, compensation includes $554
payable in later years as deferred compensation.

(6) For the fiscal year ended November 30, 2000, compensation includes $455
payable in later years as deferred compensation.

I-3
69

(7) Resigned as a Trustee of the Fund and the Liberty Funds Complex on August
4, 2000. Mr. Carberry did not receive compensation because he was an
affiliated Trustee and employee of Liberty Financial.

(8) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(9) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(10) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(11) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(12) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(13) Total compensation of $997 for the fiscal year ended October 31, 2000, was
paid on January 31, 2001.

(14) Total compensation of $1,121 for the fiscal year ended November 30, 2000,
was paid on January 31, 2001.

(15) Total compensation of $928 for the fiscal year ended November 30, 2000, was
paid on January 31, 2001.

(16) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(17) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000. Mr. Palombo did not receive compensation because he
was an affiliated Trustee and employee of the Advisor.

(18) Resigned as a Trustee of the Fund and the Liberty Funds Complex on April
20, 2000.

(19) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(20) Total compensation of $860 for the fiscal year ended October 31, 2000, will
be paid in later years as deferred compensation.

(21) Total compensation of $1,008 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(22) Total compensation of $839 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(23) Retired as a Trustee of the Fund and the Liberty Funds Complex on December
31, 1999.

(24) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(25) For the fiscal year ended November 30, 2000, compensation includes $321
payable in later years as deferred compensation.

I-4
70

(26) For the fiscal year ended November 30, 2000, compensation includes $372
payable in later years as deferred compensation.

(27) For the fiscal year ended November 30, 2000, compensation includes $258
payable in later years as deferred compensation.

(28) Resigned as a Trustee of the Fund and the Liberty Funds Complex on August
4, 2000. Mr. Carberry did not receive compensation because he was an
affiliated Trustee and employee of Liberty Financial.

(29) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(30) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(31) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(32) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(33) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(34) Total compensation of $652 for the fiscal year ended November 30, 2000, was
paid on January 31, 2001.

(35) Total compensation of $751 for the fiscal year ended November 30, 2000, was
paid on January 31, 2001.

(36) Total compensation of $521 for the fiscal year ended November 30, 2000, was
paid on January 31, 2001.

(37) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(38) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000. Mr. Palombo did not receive compensation because he
was an affiliated Trustee and employee of the Advisor.

(39) Resigned as a Trustee of the Fund and the Liberty Funds Complex on April
20, 2000.

(40) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(41) Total compensation of $583 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(42) Total compensation of $671 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(43) Total compensation of $463 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(44) On December 31, 2000, the funds consisted of 49 open-end and 9 closed-end
management investment portfolios in the Liberty Funds Group-Boston

I-5
71

and 17 open-end management investment portfolios in the Liberty Variable
Investment Trust (LVIT) (together, the Liberty Funds Complex).

(45) Retired as a Trustee of the Fund and the Liberty Funds Complex on December
31, 1999.

(46) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(47) For the fiscal year ended November 30, 2000, compensation includes $702
payable in later years as deferred compensation.

(48) For the fiscal year ended November 30, 2000, compensation includes $839
payable in later years as deferred compensation.

(49) For the calendar year ended December 31, 2000, compensation includes
$52,000 payable in later years as deferred compensation.

(50) Resigned as a Trustee of the Fund and the Liberty Funds Complex on August
4, 2000. Mr. Carberry did not receive compensation because he was an
affiliated Trustee and employee of Liberty Financial.

(51) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(52) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(53) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(54) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(55) Resigned as a Trustee of the Fund and the Liberty Funds Complex on December
27, 2000.

(56) Total compensation of $1,419 for the fiscal year ended November 30, 2000,
was paid on January 31, 2001.

(57) Total compensation of $1,695 for the fiscal year ended November 30, 2000,
was paid on January 31, 2001.

(58) Total compensation of $105,000 for the calendar year ended December 31,
2000, was paid on January 31, 2001.

(59) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(60) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000. Mr. Palombo did not receive compensation because he
was an affiliated Trustee and employee of the Advisor.

I-6
72

(61) Resigned as a Trustee of the Fund and the Liberty Funds Complex on April
20, 2000.

(62) Elected by the shareholders of the other funds in the Liberty Funds Complex
on December 27, 2000.

(63) Total compensation of $1,276 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(64) Total compensation of $1,487 for the fiscal year ended November 30, 2000,
will be paid in later years as deferred compensation.

(65) Total compensation of $94,667 for the calendar year ended December 31,
2000, will be paid in later years as deferred compensation.

I-7
73

APPENDIX I.2.

TRUSTEES' COMPENSATION

For the calendar year ended December 31, 2000, some of the Trustees received the
following compensation in their capacities as Trustees or Directors of the
Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc., and Liberty
Funds Trust IX(66) (together, Liberty All-Star Funds(67)):

TOTAL COMPENSATION FROM
LIBERTY ALL-STAR FUNDS
FOR THE CALENDAR YEAR ENDED
TRUSTEE DECEMBER 31, 2000(68)
------- ---------------------------

Robert J. Birnbaum $25,000
John V. Carberry(69) N/A
James E. Grinnell $25,000
Richard W. Lowry $25,000
William E. Mayer $25,000
John J. Neuhauser $25,000
Joseph R. Palombo(70) NA

(66) On January 25, 2001, the shareholders of Liberty All-Star Growth & Income
Fund, the only series of Liberty Funds Trust IX, approved the acquisition
of the fund by Liberty Growth & Income Fund, one of the funds in the
Liberty Funds Complex. The acquisition was effected on February 9, 2001.

(67) The Liberty All-Star Funds do not currently provide pension or retirement
plan benefits to the trustees/directors.

(68) Liberty All-Star Funds are advised by Liberty Asset Management Company
(LAMCO). LAMCO is an indirect wholly owned subsidiary of Liberty Financial
(an intermediate parent of the Advisor).

(69) Retired as a trustee/director of the All-Star Funds on August 4, 2000, and
did not receive compensation because he was an affiliated trustee/director
and an employee of Liberty Financial.

(70) Did not receive compensation because he was an affiliated trustee/director
and an employee of Colonial.

I-8
74

APPENDIX J

AUDIT COMMITTEE CHARTER

I. Composition of the Audit Committee. The Audit Committee shall be comprised
of at least three Trustees, each of whom shall have no relationship to the
Liberty group of mutual funds (the "Funds") that may interfere with the
exercise of their independence from management and the Funds and shall
otherwise satisfy the applicable membership requirements under the rules of
the New York Stock Exchange, Inc., National Association of Securities
Dealers, Inc. and American Stock Exchange, Inc.

II. Purposes of the Audit Committee. The purposes of the Audit Committee are
to assist the Board of Trustees:

1. in its oversight of: the Funds' accounting and financial reporting
policies and practices, the adequacy of accounting services provided by
management, its internal audit controls and procedures, and its
staffing of accounting functions with suitably qualified individuals.
As appropriate, such oversight includes the internal controls of
certain service providers;

2. in its oversight of the quality and objectivity of the Funds' financial
statements and independent audit thereof;

3. in selecting or nominating) the outside auditors to be proposed for
shareholder approval in any proxy statement, evaluating and, where
deemed appropriate, replacing the outside auditors;

4. in evaluating the independence of the outside auditors and reviewing
their performance, scope of work and compensation;

5. in reviewing the results of audits;

6. in reviewing the controls and procedures employed by, and reports from,
the Funds' custodian; and

7. in its oversight of the accounting and financial procedures and
controls and the valuation practices of the Funds' managers and
administrators, including compliance with the Funds' investment
policies, restrictions and tax qualification requirements.

The function of the Audit Committee is oversight. Management for the Fund
is responsible for the preparation, presentation and

J-1
75

integrity of the Funds' financial statements. Management and its internal
accounting department are responsible for maintaining appropriate
accounting and financial reporting principles and policies and internal
controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The outside auditors are
responsible for planning and carrying out a proper audit and reviews. The
outside auditors for the Funds is/are ultimately accountable to the Board
of Trustees and Audit Committee of the Funds. The Board of Trustees and the
Audit Committee have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the outside auditor (or to
nominate the outside auditor to be proposed for shareholder approval in any
proxy statement).

III. Meetings of the Audit Committee. The Audit Committee shall meet at least
twice annually, or more frequently if circumstances dictate. The Audit
Committee shall set its agenda and the places and times of its meetings.
The Audit Committee may meet alone and outside the presence of management
personnel with any certified public accountant and auditor firm rendering
reports to the Audit Committee or the Board of Trustees and with outside
legal counsel.

IV. Duties and Powers of the Audit Committee. To carry out its purposes, the
Audit Committee shall have the following duties and powers:

1. The Audit Committee shall review and discuss the audited financial
statements and other financial information with management and the
independent auditors for the Funds. Such review and discussion will
include management letters, auditor recommendations to management, and
the valuation procedures and fair valuation methodologies employed with
regard to the Funds.

2. The Audit Committee shall review and discuss with the independent
auditors:

a. the scope of audits and audit reports;

b. the personnel, staffing, qualifications and experience of the
auditor;

c. the compensation of the auditor; and

J-2
76

d. the independence of the auditor, regarding which the Audit
Committee shall secure from the auditor the information required by
Independence Standards Board Standard No. 1. The Audit Committee
shall actively engage in a dialogue with the outside auditor with
respect to any disclosed relationships or services that may impact
the objectivity and independence of the outside auditor. The Audit
Committee also shall be responsible for recommending that the Board
of Trustees take appropriate action in response to the outside
auditor's report to satisfy itself of the outside auditor's
independence.

3. The Audit Committee also shall review and discuss with the independent
auditors the matters required to be discussed pursuant to SAS 61,
including the following:

a. the quality, not just the acceptability under generally accepted
accounting principles, of the accounting principles applied by the
Funds in their financial reporting;

b. the level of responsibility assumed by the auditors in the
preparation of the audit;

c. the initial selection of and changes in significant accounting
policies or their application, and the effect of significant
accounting policies in controversial or emerging areas for which
there is a lack of authoritative consensus or guidance;

d. the process used by management for the Funds in formulating
particularly sensitive accounting estimates and the basis for the
auditor's conclusions regarding the reasonableness of those
estimates;

e. the auditor's responsibility for other information in documents
containing audited financial statements, any procedures performed,
and the results;

f. any disagreements with management, whether or not satisfactorily
resolved, about matters that individually or in the aggregate could
be significant to the entity's financial statements or the
auditor's report;

J-3
77

g. any consultations with other accountants and significant matters
that were the subject of such consultations;

h. any major issues discussed with management in connection with the
initial or recurring retention of the auditor, including the
application of accounting principles and auditing standards; and

i. any serious difficulties relating to the performance of the audit
that the auditor encountered with management.

4. The Audit Committee shall provide a recommendation to the Board of
Trustees regarding whether the audited financial statements of the Fund
should be included in the annual report to shareholders of the Funds.

5. The Audit Committee shall prepare the report, including any
recommendation of the Audit Committee, required by the rules of the
Securities and Exchange Commission to be included in the Funds' annual
proxy statements.

6. The Audit Committee shall review this charter at least annually and
recommend any changes to the full Board of Trustees; and

7. The Audit Committee shall report its activities to the full Board of
Trustees on a regular basis and make such recommendations with respect
to the above and other matters as the Audit Committee may deem
necessary or appropriate.

V. Resources and Authority of the Audit Committee. The Audit Committee shall
have the resources and authority appropriate to discharge its
responsibilities, including the authority to engage outside auditors for
special audits, reviews and other procedures and to retain special counsel
and other experts or consultants at the expense of the Funds.

J-4
78

THIS PAGE IS INTENTIONALLY LEFT BLANK.
79

THIS PAGE IS INTENTIONALLY LEFT BLANK.
80

THIS PAGE IS INTENTIONALLY LEFT BLANK.
81

TWO CONVENIENT WAYS TO VOTE YOUR PROXY

The enclosed proxy statement provides details on important issues affecting your
Liberty Funds. The Board of Trustees recommends that you vote for all proposals.

You have the option of voting your proxies over the Internet or by
telephone -- it's easy and confidential!

If you are voting by Internet or telephone, you should NOT mail your proxy card.

Vote by Internet:

- Read the proxy statement and have your proxy card available.

- Go to www.libertyfunds.com.

- Click on the proxy link and follow the instructions provided.

Vote by telephone:

- Read the proxy statement and have your proxy card available.

- When you are ready to vote, call toll free 877-779-8683.

- Enter the voter control number located on the upper left corner of your
proxy card.

- Follow the instructions provided to cast your vote. A representative will
be available to answer questions.

INTERNET AND TELEPHONE VOTING ARE AVAILABLE 24 HOURS A DAY, SEVEN DAYS A
WEEK. If you have any questions or concerns, please call 888-832-5694.
82
COLONIAL HIGH INCOME MUNICIPAL TRUST

PLEASE VOTE PROMPTLY
**************************

Your vote is important, no matter how many shares you own. Please vote on the
reverse side of this proxy card and sign in the space(s) provided. Return your
completed proxy card in the enclosed envelope today.

You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be
counted.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The signers of this
proxy hereby appoint William J. Ballou, Kevin M. Carome, Ellen Harrington,
Russell L. Kane, Robert R. Leveille, Joseph R. Palombo and Vincent P.
Pietropaolo each of them proxies of the signers, with power of substitution to
vote at the Annual Meeting of Shareholders to be held at Boston, Massachusetts,
on Wednesday, September 26, 2001, and at any adjournments, as specified herein,
and in accordance with their best judgement, on any other business that may
properly come before this meeting.

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.
83
Please mark
[X] votes as in
this example.

This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted FOR each item below. This proxy will be
voted in accordance with the holder's best judgment as to any other matter. The
Board of Trustees recommends a vote FOR the following items:

1. Proposal to approve a new 2. Proposal to elect nine Trustees.
investment advisory Nominees:(01) Douglas A. Hacker,
agreement. (02) Janet Langford Kelly,
(03) Richard W. Lowry,
(04) William G. Mayer,
FOR AGAINST ABSTAIN (05) Charles Nelson,
[ ] [ ] [ ] (06) John J. Neuhauser,
(07) Joseph R. Palombo,
(08) Thomas C. Theobald
and (09) Anne-Lee Verville,

FOR [ ] [ ] WITHHOLD
ALL FROM ALL
NOMINEES NOMINEES

[ ]
----------------------------------------------
(INSTRUCTION: To withhold authority to vote
for any individual nominee, write that
nominee's name in the space provided above.)

MARK HERE FOR ADDRESS CHANGE AND NOTE [ ]
NEW ADDRESS AT LEFT

Please sign exactly as name(s) appear(s) hereon.
Joint owners should sign personally. When signing
as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name
by President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.

Signature: Date: Signature: Date:
----------------- ------- ----------------- ------
84
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
PLEASE VOTE PROMPTLY
************

You may receive additional proxies for other accounts. These are not
duplicates; you should sign and return each proxy card in order for your votes
to be counted.

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.

85
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.

1. Proposal to approve a new investment advisory agreement.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. Proposal to elect nine Trustees.
Nominees: (01) Douglas A. Hacker, (02) Janet Langford Kelly,
(03) Richard W. Lowry, (04) William E. Meyer, (05) Charles Nelson,
(06) John J. Neuhauser, (07) Joseph R. Palombo, (08) Thomas C. Theobald
and (09) Anne-Lee Varville.

FOR ALL NOMINEES WITHHOLD FROM ALL NOMINEES
[ ] [ ]

[ ] _______________________________________________________________________
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name in the space provided above.)

MARK HERE FOR ADDRESS CHANGE AND NOTE NEW ADDRESS AT LEFT [ ]

Please sign exactly as name(s) appear(s) hereon. Joint owners should sign
personally. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.

Signature: ____________________________________________ Date: __________________

86
COLONIAL INTERMARKET INCOME TRUST I
PLEASE VOTE PROMPTLY
****************

Your vote is important, no matter held at Boston, Massachusetts, on
how many shares you own. Please Wednesday, September 26, 2001, and
vote on the reverse side of this at any adjournments, as specified
proxy card and sign in the space(s) herein, and in accordance with
provided. Return your completed their best judgement, on any other
proxy card in the enclosed envelope business that may properly come
today. before this meeting.

You may receive additional proxies
for other accounts. These are not AFTER CAREFUL REVIEW, THE BOARD OF
duplicates; you should sign and TRUSTEES UNANIMOUSLY HAS
return each proxy card in order for RECOMMENDED A VOTE "FOR" ALL
your votes to be counted. MATTERS.

87
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

This proxy, when properly executed,
----------------------------------- will be voted in the manner directed
COLONIAL INTERMARKET INCOME TRUST I herein and, absent direction, will be
----------------------------------- voted FOR each item below. This proxy
will be voted in accordance with the
holder's best judgment as to any other
MARK HERE FOR ADDRESS CHANGE AND matter.
NOTE NEW ADDRESS BELOW. [ ] The Board of Trustees recommends a vote
FOR the following items:
CONTROL NUMBER:
1. Proposal to approve a new investment
advisory agreement.

For Against Abstain

[ ] [ ] [ ]

2. Proposal to elect eleven Trustees.

For All
Nominees
For All With- Except
Nominees held as Noted

[ ] [ ] [ ]

(01) Douglas A. Hacker (07) John J. Neuhauser
(02) Janet Langford Kelly (08) Joseph R. Palombo
(03) Richard W. Lowry (09) Thomas E. Stitzel
(04) Salvatore Macera (10) Thomas C. Theobald
(05) William E. Mayer (11) Anne-Lee Verville
(06) Charles Nelson

Please be sure to sign Date INSTRUCTION: To withhold authority to
and date this Proxy. vote for any individual nominee(s),
------------------------------------ mark the "For All Nominees Except as
Noted" box and strike a line through
the name(s) of the nominee(s). Your
shares will be voted for the remaining
nominee(s).
---------------- -------------
Shareholder sign Co-owner sign RECORD DATE SHARES:
here here

88
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND

PLEASE VOTE PROMPTLY

********************

You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be
counted.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The signers of this
proxy hereby appoint William J. Ballou, Kevin M. Carome, Ellen Harrington,
Russell L. Kane, Robert R. Leveille, Joseph R. Palombo and Vincent P.
Pietropaolo each of them proxies of the signers, with power of substitution
to vote at the Annual Meeting of Shareholders to be held at Boston,
Massachusetts, on Wednesday, September 26, 2001, and at any adjournments, as
specified herein, and in accordance with their best judgement, on any other
business that may properly come before this meeting.

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.

89
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
AND, ABSENT DIRECTION, WILL BE VOTED FOR EACH ITEM BELOW. THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE HOLDER'S BEST JUDGMENT AS TO ANY OTHER MATTER. THE
BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS:

1. Proposal to approve a new investment advisory agreement.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. Proposal to elect nine Trustees.
Nominees: (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard
W. Lowry, (04) William E. Mayer, (05) Charles Nelson, (06) John
J. Neuhauser, (07) Joseph R. Palombo, (08) Thomas C. Theobald and
(09) Anne-Lee Verville.

FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ]
--------------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided
above.)

MARK HERE FOR ADDRESS CHANGE AND NOTE [ ]
NEW ADDRESS AT LEFT

Please sign exactly as name(s) appear(s) hereon. Joint owners
should sign personally. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.

Signature: Date: Signature: Date:
------------------ ------ ------------------ ------

90
COLONIAL INSURED MUNICIPAL FUND

PLEASE VOTE PROMPTLY

********************

You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be
counted.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The signers of this
proxy hereby appoint William J. Ballou, Kevin M. Carome, Ellen Harrington,
Russell L. Kane, Robert R. Leveille, Joseph R. Palombo and Vincent P.
Pietropaolo each of them proxies of the signers, with power of substitution
to vote at the Annual Meeting of Shareholders to be held at Boston,
Massachusetts, on Wednesday, September 26, 2001, and at any adjournments, as
specified herein, and in accordance with their best judgement, on any other
business that may properly come before this meeting.

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.

91
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

1. Proposal to approve a new investment advisory agreement.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. Proposal to elect nine Trustees.

Nominees: (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard
W. Lowry, (04) William E. Mayer, (05) Charles Nelson, (06) John
J. Neuhauser, (07) Joseph R. Palombo, (08) Thomas C. Theobald and
(09) Anne-Lee Verville.

FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ]
--------------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided
above.)

MARK HERE FOR ADDRESS CHANGE AND NOTE [ ]
NEW ADDRESS AT LEFT

Please sign exactly as name(s) appear(s) hereon. Joint owners
should sign personally. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.

Signature: Date: Signature: Date:
------------------ ------ ------------------ ------

92
COLONIAL NEW YORK INSURED MUNICIPAL FUND

PLEASE VOTE PROMPTLY

********************

You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be
counted.

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.

93
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

1. Proposal to approve a new investment advisory agreement.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ]
--------------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided
above.)

MARK HERE FOR ADDRESS CHANGE AND NOTE [ ]
NEW ADDRESS AT LEFT

Please sign exactly as name(s) appear(s) hereon. Joint owners
should sign personally. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.

Signature: Date: Signature: Date:
------------------ ------ ------------------ ------

94
COLONIAL MUNICIPAL INCOME TRUST
PLEASE VOTE PROMPTLY
****************

You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be
counted.

AFTER CAREFUL REVIEW, THE BOARD OF TRUSTEES UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.

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

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------
COLONIAL MUNICIPAL INCOME TRUST This proxy, when properly executed, will
------------------------------- be voted in the manner directed herein
and, absent direction, will be voted FOR
MARK HERE FOR ADDRESS CHANGE AND [ ] each item below. This proxy will be
NOTE NEW ADDRESS BELOW. voted in accordance with the holder's
best judgment as to any other matter.
CONTROL NUMBER:
The Board of Trustees recommends a
vote FOR the following items:

1. Proposal to approve
a new investment advisory
agreement.

For Against Abstain
[ ] [ ] [ ]

2. Proposal to elect
nine Trustees.

For All
Nominees
For All With- Except
Nominees hold as Noted
[ ] [ ] [ ]

(01) Douglas A. Hacker (06) John J. Neuhauser
(02) Janet Langford Kelly (07) Joseph R. Palombo
(03) Richard W. Lowry (08) Thomas C. Theobald
(04) William E. Mayer (09) Anne-Lee Verville
(05) Charles Nelson

Please be sure to sign and date this INSTRUCTION: To withhold authority
Proxy. to vote for any individual
Date nominee(s), mark the "For All
------------ Nominees Except as Noted" box and
strike a line through the name(s)
of the nominee(s). Your shares will
be voted for the remaining
nominee(s).

-------------------------------------
Shareholder sign here

RECORD DATE SHARES:
-------------------------------------
Co-owner sign here
96
PROXY

COLONIAL INTERMEDIATE HIGH INCOME FUND

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Leveille, Joseph R. Palombo, and
Vincent P. Peitropaolo, each of them proxies of the undersigned, with power of
substitution to vote at the Annual Meeting of Shareholders to be held at Boston,
Massachusetts, on Wednesday, September 26, 2001, and at any adjournments, as
specified herein, and in accordance with their best judgment, on any other
business that may properly come before this meeting.

Please vote on the reverse side of this proxy card and sign in the space(s)
provided. Return your completed proxy card in the enclosed envelope today. After
careful review, the Board of Trustees unanimously has recommended a vote "FOR"
all matters.

----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
97
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted FOR each item below. This proxy will be
voted in accordance with the holder's best judgement as to any other matter.
The Board of Trustees recommends a vote FOR the following items:

1. Proposal to approve a new investment advisory agreement.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

2. Proposal to elect eleven Trustees.

Nominees: (01) Douglas A. Hacker, (02) Janet Langford Kelly,
(03) Richard W. Lowry, (04) Salvatore Macera,
(05) William E. Mayer, (06) Charles Nelson, (07) John J. Neuhauser,
(08) Joseph R. Palombo, (09) Thomas E. Stitzel,
(10) Thomas C. Theobald and (11) Anne-Lee Verville.

FOR ALL WITHHOLD FROM
NOMINEES ALL NOMINEES

[ ] [ ]

[ ] _______________________________

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provide above)

MARK HERE FOR ADDRESS CHANGE AND NOTE NEW ADDRESS AT LEFT
[ ]

Please sign exactly as name(s) appear(s) hereon. Joint owners should sign
personally. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.

Signature: ______________ Date: _______ Signature: ____________ Date: __________
98
COLONIAL HIGH INCOME MUNICIPAL TRUST

MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
(SERIES T SHARES AND SERIES W SHARES)

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Levelle, Joseph R. Palombo and
Vincent P. Plotropacio, each of them proxies of the undersigned, with power of
substitution, to vote at the Annual Meeting of Shareholders of Colonial High
Income Municipal Trust to be held in Boston, Massachusetts, on Wednesday,
September 26, 2001, and at any adjournments, as follows on the reverse side of
this card.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
AND, ABSENT DIRECTION, WILL BE VOTED FOR THE ITEMS ON THE REVERSE SIDE. THIS
PROXY WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S BEST JUDGMENT AS TO ANY
OTHER MATTER.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS SET FORTH ON
THE REVERSE SIDE.

-----------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
-----------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

99
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------------------------------------------------------
COLONIAL HIGH INCOME MUNICIPAL TRUST
-------------------------------------------------------------------------------

Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]

CONTROL NUMBER:

Please be sure to sign and date this Proxy. Date
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. (Item 1 of the
Notice)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. ELECTION OF ELEVEN TRUSTEES. (Item 2 of the Notice)

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

(01) Douglas A. Hacker (07) John J. Neuhauser
(02) Janet Langford Kelly (08) Joseph R. Palombo
(03) Richard W. Lowry (09) Thomas E. Stitzel
(04) Salvatore Macara (10) Thomas C. Theobald
(05) William E. Meyer (11) Anne-Lee Verville
(06) Charles Nelson

Instructor: To withhold authority to vote for any individual nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).

3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

Please sign exactly as name(s) appear(s) hereon. Joint owners should each sign
personally. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.

RECORD DATE SHARES:
-------------------------------------------------------------------------------

100
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST

MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Levelle, Joseph R. Palombo and
Vincent P. Plotropacio, each of them proxies of the undersigned, with power of
substitution, to vote at the Annual Meeting of Shareholders of Colonial
Investment Grade Municipal Trust to be held in Boston, Massachusetts, on
Wednesday, September 26, 2001, and at any adjournments, as follows on the
reverse side of this card.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS SET FORTH ON
THE REVERSE SIDE.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

101
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------------------------------------------------------
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
-------------------------------------------------------------------------------

Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]

CONTROL NUMBER:

Please be sure to sign and date this Proxy. Date
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. (Item 1 of the
Notice)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. ELECTION OF ELEVEN TRUSTEES. (Item 2 of the Notice)

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

RECORD DATE SHARES:
-------------------------------------------------------------------------------

102
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND

MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Levelle, Joseph R. Palombo and
Vincent P. Plotropacio, each of them proxies of the undersigned, with power of
substitution, to vote at the Annual Meeting of Shareholders of Colonial
California Insured Municipal Fund to be held in Boston, Massachusetts, on
Wednesday, September 26, 2001, and at any adjournments, as follows on the
reverse side of this card.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS SET FORTH ON
THE REVERSE SIDE.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

103
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------------------------------------------------------
COLONIAL CALIFORNIA INSURED MUNICIPAL TRUST
-------------------------------------------------------------------------------

Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]

CONTROL NUMBER:

Please be sure to sign and date this Proxy. Date
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. (Item 1 of the
Notice)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. ELECTION OF ELEVEN TRUSTEES. (Item 2 of the Notice)

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

RECORD DATE SHARES:
-------------------------------------------------------------------------------

104
COLONIAL INSURED MUNICIPAL FUND

MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Levelle, Joseph R. Palombo and
Vincent P. Plotropacio, each of them proxies of the undersigned, with power of
substitution, to vote at the Annual Meeting of Shareholders of Colonial Insured
Municipal Fund to be held in Boston, Massachusetts, on Wednesday, September 26,
2001, and at any adjournments, as follows on the reverse side of this card.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS SET FORTH ON
THE REVERSE SIDE.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

105
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------------------------------------------------------
COLONIAL INSURED MUNICIPAL FUND
-------------------------------------------------------------------------------

Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]

CONTROL NUMBER:

Please be sure to sign and date this Proxy. Date
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. (Item 1 of the
Notice)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. ELECTION OF ELEVEN TRUSTEES. (Item 2 of the Notice)

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

RECORD DATE SHARES:
-------------------------------------------------------------------------------

106
COLONIAL NEW YORK INSURED MUNICIPAL FUND

MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Levelle, Joseph R. Palombo and
Vincent P. Plotropacio, each of them proxies of the undersigned, with power of
substitution, to vote at the Annual Meeting of Shareholders of Colonial New York
Insured Municipal Fund to be held in Boston, Massachusetts, on Wednesday,
September 26, 2001, and at any adjournments, as follows on the reverse side of
this card.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS SET FORTH ON
THE REVERSE SIDE.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

107
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------------------------------------------------------
COLONIAL NEW YORK INSURED MUNICIPAL FUND
-------------------------------------------------------------------------------

Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]

CONTROL NUMBER:

Please be sure to sign and date this Proxy. Date
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. (Item 1 of the
Notice)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. ELECTION OF ELEVEN TRUSTEES. (Item 2 of the Notice)

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

RECORD DATE SHARES:
-------------------------------------------------------------------------------

108
COLONIAL MUNICIPAL INCOME TRUST

MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES

THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned shareholder hereby appoints William J. Ballou, Kevin M. Carome,
Ellen Harrington, Russell L. Kane, Robert R. Levelle, Joseph R. Palombo and
Vincent P. Plotropacio, each of them proxies of the undersigned, with power of
substitution, to vote at the Annual Meeting of Shareholders of Colonial
Municipal Income Trust, to be held in Boston, Massachusetts, on Wednesday,
September 26, 2001, and at any adjournments, as follows on the reverse side of
this card.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS SET FORTH ON
THE REVERSE SIDE.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

109
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

-------------------------------------------------------------------------------
COLONIAL MUNICIPAL INCOME TRUST
-------------------------------------------------------------------------------

Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]

CONTROL NUMBER:

Please be sure to sign and date this Proxy. Date
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. (Item 1 of the
Notice)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. ELECTION OF ELEVEN TRUSTEES. (Item 2 of the Notice)

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

3. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.

RECORD DATE SHARES:
-------------------------------------------------------------------------------