<DOCUMENT>
<TYPE>EX-99.77E LEGAL
<SEQUENCE>3
<FILENAME>legal.txt
<DESCRIPTION>LEGAL PROCEEDINGS
<TEXT>
October-05 Alliance National Municipal Income Fund

Item 77E

Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and
Exchange Commission (SEC) and the Office of the New York Attorney General
(NYAG) have been investigating practices in the mutual fund industry
identified as market timing and late trading of mutual fund shares. Certain
other regulatory authorities have also been conducting investigations into
these practices within the industry and have requested that the Adviser
provide information to them. The Adviser has been cooperating and will
continue to cooperate with all of these authorities. The shares of the Fund
are not redeemable by the Fund, but are traded on an exchange at prices
established by the market. Accordingly, the Fund and its shareholders are
not subject to the market timing and late trading practices that are the
subject of the investigations mentioned above or the lawsuits described below.
Please see below for a description of the agreements reached by the Adviser
and the SEC and NYAG in connection with the  investigations mentioned above.

Numerous lawsuits have been filed against the Adviser and certain other
defendants in which plaintiffs make claims purportedly based on or related to
the same practices that are the subject of the SEC and NYAG investigations
referred to above. Some of these lawsuits name the Fund as a party. The
lawsuits are now pending in the United States District Court for the District
of Maryland pursuant to a ruling by the Judicial Panel on Multidistrict
Litigation transferring and centralizing all of the mutual funds involving
market and late trading in the District of Maryland (the Mutual Fund MDL).
Management of the Adviser believes that these private lawsuits are not likely
to have a material adverse effect on the results of operations or financial
condition of the Fund.

On December 18, 2003, the Adviser confirmed that it had reached terms with
the SEC and the NYAG for the resolution of regulatory claims relating to
the practice of market timing mutual fund shares in some of the
AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in
an Order of the Commission (SEC Order). The agreement with the NYAG is
memorialized in an Assurance of Discontinuation dated September 1, 2004
(NYAG Order). Among the key provisions of these agreements are the following:

(i) The Adviser agreed to establish a $250 million fund (the Reimbursement
Fund) to compensate mutual fund shareholders for the adverse effects of
market timing attributable to market timing relationships described in the
SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot
share of losses suffered by the fund due to market timing, and (ii) a
proportionate share of advisory fees paid by such fund during the period of
such markettiming;

(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds, commencing
January 1, 2004, for a period of at least five years; and

(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order contemplates that the
Advisers registered investment company clients, including the Fund, will
introduce governance and compliance changes.

The shares of the Fund are not redeemable by the Fund, but are traded on
an exchange at prices established by the market. Accordingly, the Fund and
its shareholders are not subject to the market timing practices described
in the SEC Order and are not expected to participate in the Reimbursement
Fund. Since the Fund is a closed-end fund, it will not have its advisory
fee reduced pursuant to the terms of the agreements mentioned above.

On February 10, 2004, the Adviser received (i) a subpoena duces tecum from
the Office of the Attorney General of the State of West Virginia and (ii)
a request for information from West Virginias Office of the State Auditor,
Securities Commission (the West Virginia Securities Commission) (together,
the Information Requests). Both Information Requests require the Adviser
to produce documents concerning, among other things, any market timing or
late trading in the Advisers sponsored mutual funds. The Adviser responded
to the Information Requests and has been cooperating fully with the
investigation.

On April 11, 2005, a complaint entitled The Attorney General of the State
of West Virginia v. AIM Advisors, Inc., et al. (WVAG Complaint) was filed
against the Adviser, Alliance Capital Management Holding L.P. (Alliance
Holding), and various other defendants not affiliated with the Adviser. The
WVAG Complaint was filed in the Circuit Court of Marshall County, West
Virginia by the Attorney General of the State of West Virginia. The WVAG
Complaint makes factual allegations generally similar to those in certain
of the complaints related to the lawsuits discussed above. On May 31, 2005,
defendants removed the WVAG Complaint to the United States District Court for
the Northern District of West Virginia. On July 12, 2005, plaintiff moved to
remand. On October 19, 2005, the WVAG Complaint was transferred to the Mutual
fund MDL.

On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a Summary Order to Cease and Desist, and Notice
of Right to Hearing addressed to the Adviser and Alliance Holding. The
Summary Order claims that the Adviser and Alliance Holding violated the West
Virginia Uniform Securities Act, and makes factual allegations generally
similar to those in the SEC Order and the NYAG Order. The Adviser intends to
vigorously defend against the allegations in the WVAG Complaint.

On June 22, 2004, a purported class action complaint entitled Aucoin, et al.
v. Alliance Capital Management L.P., et al. (Aucoin Complaint) was filed
against the Adviser, Alliance Capital Management Holding L.P., Alliance
Capital Management Corporation, AXA Financial, Inc., AllianceBernstein
Investment Research & Management, Inc., certain current and former directors
of the AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Fund was not named as a defendant in the Aucoin Complaint.
The Aucoin Complaint was filed in the United States District Court for the
Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment
of excessive commissions and other fees from fund assets to broker-dealers
in exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts, an accounting of all fund-related fees, commissions and
soft dollar payments, and restitution of all unlawfully or discriminatorily
obtained fees and expenses.

Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.

On October 19, 2005, the District Court granted in part, and denied in part,
defendants motion to dismiss the Aucoin Complaint and as a result the only
claim remaining is plaintiffs Section 36(b).

The Adviser believes that these matters are not likely to have a material
adverse effect on the Fund or the Advisers ability to perform advisory
services relating to the Fund.

</TEXT>
</DOCUMENT>
