Form 485BPOS VAN KAMPEN MERRITT UTILITY INCOME TRUST SERIES 3

Post-effective amendment

What is Form 485BPOS?
  • Accession No.: 0000891093-97-000668 Act: 33 File No.: 033-32228 Film No.: 97586280
  • CIK: 0000857793
  • Submitted: 1997-04-24

AMENDMENT TO 485 TXT

                                      File No. 33-32228   
CIK #857793
                                    
                                    
                   Securities and Exchange Commission
                      Washington, D. C. 20549-1004
                                    
                                    
                             Post-Effective
                            Amendment No. 11
                                    
                                    
                                   to
                                Form S-6
                                    
                                    
                                    
          For Registration under the Securities Act of 1933 of
           Securities of Unit Investment Trusts Registered on
                               Form N-8B-2

                                    
                                    
            Van Kampen Merritt Utility Income Trust, Series 3
                          (Exact Name of Trust)
                                    
                                    
             Van Kampen American Capital Distributors, Inc.
                        (Exact Name of Depositor)
                                    
                           One Parkview Plaza
                    Oakbrook Terrace, Illinois 60181
      (Complete address of Depositor's principal executive offices)


Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention:  Don G. Powell                      Attention: Mark J. Kneedy
One Parkview Plaza                             111 West Monroe Street
Oakbrook Terrace, Illinois 60181               Chicago, Illinois 60603

            (Name and complete address of agents for service)


    ( X ) Check  if it is proposed that this filing will become effective
          on April 24, 1997 pursuant to paragraph (b) of Rule 485.
                 
SERIES 3

802,393 Units

PROSPECTUS PART ONE

NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.Please retain both parts of this Prospectus for future reference.

THE TRUST

The above-named series of Van Kampen Merritt Utility Income Trust (the "
Trust" ) consists of a fixed portfolio of equity securities of companies
diversified within the electric public utility industry (the "
Securities" ). Each Unit represents a fractional undivided interest in the
capital and net dividend income of the Trust (see "Summary of Essential
Financial Information" in this Part One and "The Trust" in Part
Two). 

The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust. 

PUBLIC OFFERING PRICE

The Public Offering Price of the Units is equal to the aggregate underlying
value of the Securities in the portfolio of such Trust divided by the number
of Units outstanding, plus the applicable sales charge. See "Summary of
Essential Financial Information" in this Part One. 

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

The Date of this Prospectus is April 16, 1997

Van Kampen American Capital

VAN KAMPEN MERRITT UTILITY INCOME TRUST, SERIES 3
Summary of Essential Financial Information
As of March 5, 1997

   Sponsor:  Van Kampen American Capital Distributors, Inc.
Supervisor:  Van Kampen American Capital Investment Advisory Corp.
             (An affiliate of the Sponsor)
 Evaluator:  American Portfolio Evaluation Services
             (A division of an affiliate of the Sponsor)
   Trustee:  The Bank of New York 

<TABLE>
<CAPTION>
                                                                                                                 VUIT
                                                                                                       --------------
<S>                                                                                                    <C>           
General Information                                                                                                  
Number of Units.......................................................................................        802,393
Fractional Undivided Interest in Trust per Unit.......................................................      1/802,393
Public Offering Price:                                                                                               
 Aggregate Value of Securities in Portfolio <F1>...................................................... $   17,604,116
 Aggregate Value Securities per Unit (including accumulated dividends)................................ $        22.10
 Sales charge 1.5% (1.5231% of Aggregate Value of Securities excluding principal cash per Unit)<F2>... $          .34
 Principal Cash per Unit.............................................................................. $           --
 Public Offering Price per Unit <F1><F2><F3>.......................................................... $        22.44
Redemption Price per Unit............................................................................. $        22.10
Excess of Public Offering Price per Unit over Redemption Price per Unit............................... $          .34
</TABLE>

<TABLE>
<CAPTION>
<S>                                   <C>
Supervisor's Annual Supervisory Fee...Maximum of $.005 per Unit                                                                    
Evaluator's Annual Fee <F5>...........Maximum of $.005 per Unit                                                                    
                                      Evaluations for purpose of sale, purchase or redemption of Units are made as of 4:00
                                      P.M. Eastern time on days of trading on the New York Stock Exchange next following
                                      receipt of an order for a sale or purchase of Units or receipt by The Bank of New
                                      York of Units tendered for redemption.
Mandatory Termination Date............September 1, 1997                                                                            
                                      The Trust Agreement may be terminated if the net asset value of the Trust is less than       
Minimum Termination Value.............$3,000,000.                                                                                  
</TABLE>

<TABLE>
<CAPTION>
Special Information                                               
                                                                  
<S>                                                       <C>     
Calculation of Estimated Net Annual Dividends Per Unit            
 Estimated Annual Dividends per Unit <F4>................ $1.39   
 Less: Estimated Annual Expense per Unit................. $.03    
 Estimated Net Annual Dividends per Unit................. $1.36   
</TABLE>

<TABLE>
<CAPTION>
<S>                    <C>                              
Trustee's Annual Fee...$0.016 per Unit                  
Record Date............TENTH  day of the month          
Distribution Date......TWENTY-FIFTH day of the month    
</TABLE>

- ----------
Securities listed on a national securities exchange are valued at the last
closing sale price, or if no such price exists, at the closing bid prices.

Effective on each September 1, commencing September 1, 1991 the secondary
sales charge will decrease by 1/2 of 1% to a minimum sales charge of 1.5%. See
"Public Offering-Offering Price" in Part Two.

Plus accumulated dividends.

The Estimated Annual Dividends are based on the most recent quarterly dividend.

Notwithstanding information to the contrary in Part Two of this Prospectus,
the Trust Indenture provides that as compensation for its services, the
Evaluator shall receive a fee of $.005 per Unit. This fee may be adjusted for
increases in consumer prices for services under the category "All Services
Less Rent of Shelter" in the Consumer Price Index.

PORTFOLIO

In selecting Securities for the Trust, the following factors, among others,
were considered by the Sponsor: (a) the quality of the Securities, (b) the
yield and price of the Securities relative to other similar securities and (c)
the likelihood that earnings and dividends will continue or increase. 

The Trust consists of 18 different issues of Securities, which are primarily
issued by electric public utility companies listed on the New York Stock
Exchange. 

PER UNIT INFORMATION 

<TABLE>
<CAPTION>
                                                                           1989<F1>      1990           1991          1992         
                                                                          ------------- -------------- ------------- --------------
<S>                                                                       <C>           <C>            <C>            <C>          
Net asset value per Unit at beginning of period.......................... $      19.51  $       19.67  $      18.23          21.28 
                                                                          ============= ============== ============= ==============
Net asset value per Unit at end of period................................ $      19.67  $       18.23  $      21.28          22.43 
                                                                          ============= ============== ============= ==============
Distributions to Unitholders of investment income including accumulated                                                            
dividends paid on Units redeemed (average Units outstanding for entire                                                             
period) <F2>............................................................. $         --  $        1.25  $       1.43           1.40 
                                                                          ============= ============== ============= ==============
Distributions to Unitholders from Equity Security redemption proceeds                                                              
(average Units outstanding for entire period)............................ $         --  $          --  $        .51             -- 
                                                                          ============= ============== ============= ==============
Unrealized appreciation (depreciation) of Equity Securities (per  Unit                                                             
outstanding at end of period)............................................ $        .16  $       (.52)  $       3.87           1.04 
                                                                          ============= ============== ============= ==============
Units outstanding at end of period.......................................      175,000      1,344,908      1,290,965     1,269,220 

- ----------
<FN>
<F1>For the period from December 20, 1989 (initial date of deposit) through
December 31, 1989.

<F2>Unitholders receive distributions on a monthly basis.
</TABLE>

PER UNIT INFORMATION (continued) 

<TABLE>
<CAPTION>
                                                                                         1993          1994        1995        1996
                                                                               -------------- ------------- ----------- -----------
<S>                                                                            <C>            <C>           <C>         <C>        
Net asset value per Unit at beginning of period............................... $       22.43  $      22.57  $     19.10 $     23.05
                                                                               ============== ============= =========== ===========
Net asset value per Unit at end of period..................................... $       22.57  $       19.10 $     23.05 $     21.97
                                                                               ============== ============= =========== ===========
Distributions to Unitholders of investment income including accumulated                                                            
dividends on Units redeemed (average Units outstanding for entire period) <F2> $        1.42  $        1.42 $      1.40 $      1.40
                                                                               ============== ============= =========== ===========
Distributions to Unitholders from Equity Security redemption proceeds                                                              
(average Units outstanding for entire period)................................. $          --  $          -- $        -- $        --
                                                                               ============== ============= =========== ===========
Unrealized appreciation (depreciation) of Equity Securities (per  Unit                                                             
outstanding at end of period)................................................. $         .09  $      (4.04) $      3.92 $    (1.46)
                                                                               ============== ============= =========== ===========
Units outstanding at end of period............................................     1,238,553   1,094,829        975,174     834,851
</TABLE>

- ----------
For the period from December 20, 1989 (initial date of deposit) through
December 31, 1989.

Unitholders receive distributions on a monthly basis.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen Merritt Utility Income Trust, Series 3:

We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of Van Kampen Merritt
Utility Income Trust, Series 3 as of December 31, 1996, and the related
statements of operations and changes in net assets for the three years ended
December 31, 1996. These statements are the responsibility of the Trustee and
the Sponsor. Our responsibility is to express an opinion on such statements
based on our audit. 

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1996 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion. 

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Kampen Merritt Utility
Income Trust, Series 3 as of December 31, 1996, and the results of operations
and changes in net assets for the three years ended December 31, 1996, in
conformity with generally accepted accounting principles. 

GRANT THORNTON LLP

Chicago, Illinois
March 14, 1997

VAN KAMPEN MERRITT UTILITY INCOME TRUST 
SERIES 3
Statements of Condition 
December 31, 1996

<TABLE>
<CAPTION>
                                                                                                  VUIT
<S>                                                                                     <C>           
Trust property                                                                                        
 Cash.................................................................................. $      109,525
 Securities at market value, (cost $14,207,833) (note 1)...............................     18,160,365
 Accumulated dividends.................................................................         48,984
 Receivable for securities sold........................................................         24,392
                                                                                        $   18,343,266
                                                                                        ==============
Liabilities and interest to Unitholders                                                               
 Redemptions payable................................................................... $        1,183
 Interest to Unitholders...............................................................     18,342,083
                                                                                        $   18,343,266
                                                                                        ==============
Analyses of Net Assets                                                                                
Interest of Unitholders (834,851 Units of fractional undivided interest outstanding)                  
 Cost to original investors of 1,350,000 Units (note 1)................................ $   25,230,570
 Less initial underwriting commission (note 3).........................................        287,952
                                                                                        --------------
                                                                                            24,942,618
 Less redemption of Units (515,149 Units)..............................................     10,441,556
                                                                                        --------------
                                                                                            14,501,062
Undistributed net investment income                                                                   
 Net investment income.................................................................     11,407,835
 Less distributions to Unitholders.....................................................     11,225,155
                                                                                        --------------
                                                                                               182,680
 Realized gain (loss) on Security sale or redemption...................................        377,832
 Unrealized appreciation (depreciation) of Securities (note 2).........................      3,952,532
 Distributions to Unitholders of Security sale or redemption proceeds..................      (672,023)
 Net asset value to Unitholders........................................................ $   18,342,083
                                                                                        ==============
Net asset value per Unit (834,851 Units outstanding)................................... $        21.97
                                                                                        ==============
</TABLE>

The accompanying notes are an integral part of these statements.

<TABLE>
VAN KAMPEN MERRITT UTILITY INCOME TRUST, SERIES 3
Statements of Operations
Years ended 
December 31,

<CAPTION>
                                                                                     1994          1995            1996
                                                                      ------------------- ------------- ---------------
<S>                                                                   <C>                 <C>           <C>            
Investment income                                                                                                      
 Dividend income..................................................... $         1,690,309 $   1,469,625 $     1,272,201
Expenses                                                                                                               
 Trustee fees and expenses...........................................              23,036        20,872          18,823
 Evaluator fees......................................................               6,046         6,921           6,483
 Supervisory fees....................................................               4,547         4,882           5,771
                                                                      ------------------- ------------- ---------------
 Total expenses......................................................              33,629        32,675          31,077
                                                                      ------------------- ------------- ---------------
 Net investment income...............................................           1,656,680     1,436,950       1,241,124
Realized gain (loss) from Security sale or redemption                                                                  
 Proceeds............................................................           2,722,497     2,439,682       3,044,243
 Cost................................................................           2,602,846     2,231,653       2,895,912
                                                                      ------------------- ------------- ---------------
 Realized gain (loss)................................................             119,651       208,029         148,331
Net change in unrealized appreciation (depreciation) of Securities...         (4,426,300)     3,822,597     (1,220,357)
                                                                      ------------------- ------------- ---------------
 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS......$       (2,649,969) $   5,467,576 $       169,098
                                                                      =================== ============= ===============
</TABLE>

<TABLE>
Statements of Changes in Net Assets
Years ended 
December 31,

<CAPTION>
                                                                                               1994            1995            1996
                                                                                ------------------- --------------- ---------------
<S>                                                                             <C>                 <C>             <C>            
Increase (decrease) in net assets                                                                                                  
Operations:                                                                                                                        
 Net investment income......................................................... $         1,656,680 $     1,436,950 $     1,241,124
 Realized gain (loss) on Security sale or redemption...........................             119,651         208,029         148,331
 Net change in unrealized appreciation (depreciation) of Securities............         (4,426,300)       3,822,597     (1,220,357)
                                                                                ------------------- --------------- ---------------
 Net increase (decrease) in net assets resulting from operations...............         (2,649,969)       5,467,576         169,098
Distributions to Unitholders from:                                                                                                 
 Net investment income.........................................................         (1,670,130)     (1,452,486)     (1,266,754)
 Securities sale or redemption proceeds........................................                  --              --              --
Redemption of Units                                                                     (2,722,300)     (2,445,667)     (3,039,344)
                                                                                ------------------- --------------- ---------------
 Total increase (decrease).....................................................         (7,042,399)       1,569,423     (4,137,000)
Net asset value to Unitholders                                                                                                     
 Beginning of period...........................................................          27,952,059      20,909,660      22,479,083
 Additional Securities purchased from proceeds of unit sales...................                  --              --              --
                                                                                ------------------- --------------- ---------------
 End of period (including undistributed net investment income of $223,846,                                                         
$208,310 and $182,680, respectively)........................................... $        20,909,660 $    22,479,083 $    18,342,083
                                                                                =================== =============== ===============
</TABLE>

The accompanying notes are an integral part of these statements.

<TABLE>
VAN KAMPEN MERRITT UTILITY INCOME TRUST
PORTFOLIO as of December 31, 
1996

<CAPTION>
                                                                           Standard                                     
                                                                           & Poor's                        December 31, 
                                                                           Earnings                                1996
                                                                                and                                     
Port-         Number                                                       Dividend                              Market 
folio             of                                                        Ranking      Market Value             Value 
Item           Shares Name of Issuer                                       (Note 2)          Per Share         (Note 1) 
- --------- ----------- ------------------------------------------------- ------------ ----------------- -----------------
<S>        <C>        <C>                                               <C>          <C>               <C>              
A              29,485              Allegheny Power System Incorporated           A-  $          30.375 $         895,607
- ------------------------------------------------------------------------------------------------------------------------
B              25,921             American Electric Power Incorporated           B+             41.125         1,066,001
- ------------------------------------------------------------------------------------------------------------------------
C              31,619             Atlantic Energy Incorporated of N.J.           A-             17.125           541,475
- ------------------------------------------------------------------------------------------------------------------------
D              31,867                      Central Maine Power Company            B             11.625           370,454
- ------------------------------------------------------------------------------------------------------------------------
E              45,392                               Cinergy Corporation           B             33.375         1,514,958
- ------------------------------------------------------------------------------------------------------------------------
F              39,696                   Delmarva Power & Light Company           B+             20.375           808,806
- ------------------------------------------------------------------------------------------------------------------------
G              71,023                           DPL Group Incorporated            A-            24.500         1,740,064
- ------------------------------------------------------------------------------------------------------------------------
H              34,915                  Houston Industries Incorporated           B+             22.625           789,952
- ------------------------------------------------------------------------------------------------------------------------
I              32,480                     IES Industries, Incorporated           B+             29.875           970,340
- ------------------------------------------------------------------------------------------------------------------------
J              48,406                Kansas City Power & Light Company            A-            28.500         1,379,571
- ------------------------------------------------------------------------------------------------------------------------
K              32,014                      New England Electric System            A-            34.875         1,116,488
- ------------------------------------------------------------------------------------------------------------------------
L              38,842        New York State Electric & Gas Corporation            B             21.625           839,958
- ------------------------------------------------------------------------------------------------------------------------
M              31,075                              Ohio Edison Company            B             22.750           706,956
- ------------------------------------------------------------------------------------------------------------------------
N              36,534    Public Service Enterprises Group Incorporated           B+             27.250           995,552
- ------------------------------------------------------------------------------------------------------------------------
O              41,658                Puget Sound Power & Light Company           B+             24.000           999,792
- ------------------------------------------------------------------------------------------------------------------------
P              71,807                                 Southern Company           A-             22.625         1,624,633
- ------------------------------------------------------------------------------------------------------------------------
Q              24,776              Southwestern Public Service Company           A-             35.375           876,451
- ------------------------------------------------------------------------------------------------------------------------
R              23,982                           Union Electric Company           A-             38.500           923,307
          -----------                                                                                  -----------------
              691,492                                                                                  $      18,160,365
          ===========                                                                                  =================
</TABLE>

The accompanying notes are an integral part of these statements. 

VAN KAMPEN MERRITT UTILITY INCOME TRUST, SERIES 3
Notes to Financial Statements
December 31, 1994, 1995 and 1996

- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Security Valuation - Securities listed on a national securities exchange are
valued at the last closing sales price, or if no such price exists, at the
closing bid price. 

Security Cost - The original cost to the Trust of the Securities was based,
for Securities listed on a national securities exchange, on the closing sale
prices on the exchange, or if no such price existed, at the last offer prices
in each case, on the day of the various Dates of Deposit. 

Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as
described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any. 

Federal Income Taxes -  Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal income taxes. 

Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis. 

NOTE 2 - PORTFOLIO 

Ranking - All rankings are by Standard & Poor's, A Division of McGraw-Hill.
The rankings shown represent the latest published ratings of the Securities.
For a brief description of ranking symbols and their related meanings, see
"Description of Earnings and Dividend Rankings" in Part Two. 

Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at December 31, 1996 is as follows: 

<TABLE>
<CAPTION>
<S>                         <C>              
Unrealized Appreciation     $       4,405,624
Unrealized Depreciation             (453,092)
                            -----------------
                            $       3,952,532
                            =================
</TABLE>

NOTE 3 - OTHER 

Marketability - Although it is not obligated to do so, the Sponsor intends to
maintain a market for Units and to continuously offer to purchase Units at
prices, subject to change at any time, based upon the value of the Securities
in the portfolio of the Trust valued as described in Note 1, plus accumulated
dividends to the date of settlement. If the supply of Units exceeds demand, or
for other business reasons, the Sponsor may discontinue purchases of Units at
such prices. In the event that a market is not maintained for the Units, a
Unitholder desiring to dispose of his Units may be able to do so only by
tendering such Units to the Trustee for redemption at the redemption price. 

Cost to Investors - The cost to original investors was based on the underlying
value of the Securities per Unit on the date of an investor's purchase, plus a
sales charge of 4.5% of the public offering price which is equivalent to
4.712% of the aggregate offering price of the Securities. The secondary market
cost to investors is based on the determination of the underlying value of the
Securities per Unit on the date of an investor's purchase plus a sales charge
of 4.5% of the public offering price which is 4.712% of the underlying value
of the Securities. Effective on each September 1, commencing September 1,
1991, the secondary sales charge will decrease by 1/2 of 1% to a minimum sales
charge of 1.5%. 

Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.005 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index. 

NOTE 4 - REDEMPTION OF UNITS

During the three years ended December 31, 1994, 1995 and 1996, 143,724 Units,
119,655 Units and 140,323 Units, respectively, were presented for redemption. 


VAN KAMPEN MERRITT UTILITY INCOME TRUST and
VAN KAMPEN AMERICAN CAPITAL UTILITY INCOME TRUST

PROSPECTUS

Part Two

INTRODUCTION

The Trust. Van Kampen Merritt Utility Income Trust or Van Kampen American
Capital Utility Income Trust (the "Trust" ) is a unit investment trust
which offers investors the opportunity to purchase Units representing
proportionate interests in a fixed portfolio of equity securities of companies
diversified within the public utility industry. Unless terminated earlier, the
Trust will terminate on the Mandatory Termination Date stated under "
Summary of Essential Financial Information" in Part One of this Prospectus
and any securities then held will, within a reasonable time thereafter, be
liquidated or distributed by the Trustee. Any Securities liquidated at
termination will be sold at the then current market value for such Securities;
therefore, the amount distributable in cash to a Unitholder upon termination
may be more or less than the amount such Unitholder paid for his Units.

Attention Foreign Investors. If you are not a United States citizen or
resident, distributions from the Trust will generally be subject to U.S.
Federal withholding taxes; however, under certain circumstances treaties
between the United States and other countries may reduce or eliminate such
withholding tax. See "Federal Taxation." Such investors should consult
their tax advisers regarding the imposition of U.S. withholding on
distributions.

Objectives of the Trust. The objectives of the Trust are a high level of
dividend income and capital appreciation through investment in a fixed
portfolio of equity securities of companies diversified within the public
utility industry. Many of these companies have established a history of paying
regular dividends and of increasing their dividends over time. See "
Objectives and Securities Selection" . There is no assurance that the Trust
will achieve its objectives.

Public Offering Price. The secondary market Public Offering Price of each
Trust will include the aggregate underlying value of the Securities in the
Trust, the applicable sales charge as described herein, and cash, if any, in
the Income and Capital Accounts held or owned by the Trust. The minimum
purchase is 100 Units for Series 8 and subsequent Series, 250 Units (50 Units
for a tax-sheltered retirement plan) for Series 3 through Series 7 and five
Units (one for a tax-sheltered retirement plan) for Series 2. See "Public
Offering" .

Estimated Annual Distributions. The estimated annual dividend distributions
per unit will vary with changes in fees and expenses of the Trust, with
changes in dividends received and with the sale or liquidation of Securities;
therefore, there is no assurance that the estimated annual dividend
distribution will be realized in the future.          

Distributions. Distributions of dividends received by the Trust will be made
monthly. Distributions of funds in the Capital Account, if any, will be made
in December of each year. See "Rights of Unitholders-Distributions of
Income and Capital" .

Units of the Trust are not deposits or obligations of, or guaranteed by, any
bank and are not federally insured or otherwise protected by the Federal
Reserve Board or any other agency and involve investment risk, including the
possible loss of principal. 

NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.

Both parts of this Prospectus should be retained for future reference. 

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSIONOR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE. 

This Prospectus is dated as of the date of the Prospectus Part I accompanying
this Prospectus Part II.

Van Kampen American Capital

Termination. Commencing on the Mandatory Termination Date Equity Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Equity Securities. Written notice of any termination of the Trust specifying
the time or times at which Unitholders may surrender their certificates for
cancellation shall be given by the Trustee to each Unitholder at his address
appearing on the registration books of the Trust maintained by the Trustee. At
least 30 days prior to the Mandatory Termination Date the Trustee will provide
written notice thereof to all Unitholders and will include with such notice a
form to enable Unitholders to elect a distribution of share of Equity
Securities if such Unitholder owns the applicable number of Units of the
Trust, rather than to receive payment in cash for such Unitholder's pro rata
share of the amounts realized upon the disposition by the Trustee of Equity
Securities. All Unitholders will receive cash in lieu of any fractional
shares. To be effective, the election form, together with surrendered
certificates, if issued, an other documentation required by the Trustee, must
be returned to the trustee at least five business days prior to the Mandatory
Termination Date. Unitholders not electing a distribution of shares of Equity
Securities will receive a cash distribution from the sale of the remaining
Securities within a reasonable time after the Trust is terminated. See "
Trust Administration--Amendment or Termination." 

Reinvestment Option. Unitholders of any Van Kampen American Capital-sponsored
unit investment trust may utilize their redemption or termination proceeds to
purchase units of any other Van Kampen American Capital trust in the initial
offering period accepting rollover investments subject to a reduced sales
charge to the extent stated in the related prospectus (which may be deferred
in certain cases). Unitholders also have the opportunity to have their
distributions reinvested into an open-ended management investment company as
described herein. See "Rights of Unitholders--Reinvestment Option." 

Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers, the general condition of the
stock market, volatile interest rates and risks related to an investment in
public utility issuers. See "Risk Factors" . 

THE TRUST

Van Kampen Merritt Utility Income Trust or Van Kampen American Capital Utility
Income Trust (the "Trust" ) is a unit investment trust created under
the laws of the State of New York pursuant to a Trust Indenture and Agreement
(the "Trust Agreement" ), among Van Kampen American Capital
Distributors, Inc., as Sponsor, The Bank of New York as Trustee, and American
Portfolio Evaluation Services, a division of Van Kampen American Capital
Investment Advisory Corp., as Evaluator (or their predecessors).

The Trust may be an appropriate medium for investors who desire to participate
in a portfolio of public utility equity securities with greater
diversification than they might be able to acquire individually.
Diversification of the Trust's assets will not eliminate the risk of loss
always inherent in the ownership of securities. See "Trust Portfolio" .

Each Unit represents a fractional undivided interest in the Trust. To the
extent that any Units are redeemed by the Trustee, the fractional undivided
interest in the Trust represented by each unredeemed Unit will increase
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.

OBJECTIVES AND SECURITIES SELECTION

The objectives of the Trust are to provide investors with a high level of
dividend income and capital appreciation. Investors should be aware that the
objectives of a high level of dividend income and capital appreciation are
likely to be contradictory; thus, the Trust's portfolio is comprised of
securities which result in a compromise between these objectives. The
portfolio of the Trust is described under "Trust Portfolio" herein and
"Portfolio" in Part One of this Prospectus. The securities deposited
in the Trust pursuant to the Trust Agreement are referred to as the "
Securities" . An investor will be subjected to taxation on the dividend
income received from the Trust and on gains from the sale or liquidation of
Securities (see "Federal Taxation" ). Investors should be aware that
there is no guarantee that the Trust's objectives will be achieved because
they are subject to the continuing ability of the respective Security issuers
to continue to declare and pay dividends and because the market value of the
Securities can be affected by a variety of factors. Common stocks may be
especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Securities will pay dividends on outstanding common shares. Any
distributions of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any
dividends depends upon several factors including the financial condition of
the issuers and general economic conditions.

In selecting Securities for the Trust, the following factors, among others,
were considered by the Sponsor: (a) the quality of the Securities, (b) the
yield and price of the Securities relative to other similar securities and (c)
the likelihood that earnings and dividends will continue or increase. 

Investors should be aware that the Trust is not a "managed" trust and
as a result the adverse financial condition of a company will not result in
its elimination from the Portfolio except under extraordinary circumstances
(see "Trust Administration-Portfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. Investors should
note in particular that the securities were selected by the Sponsor as of the
date the Securities were purchased by the Trust. The Trust may continue to
purchase or hold Securities originally selected through this process even
though the evaluation of the attractiveness of the Securities may have changed
and, if the evaluation were performed again at that time, the Securities would
not be selected for the Trust.

TRUST PORTFOLIO

The Trust consists of a number of different issues of Securities, all of which
were issued by public utility companies listed on a national securities
exchange, the NASDAQ National Market System or are traded in the
over-the-counter market.   

The Trust consists of such of the Securities listed under "Portfolio" 
in Part One of this Prospectus as may continue to be held from time to time in
the Trust together with cash held in the Income and Capital Accounts. Neither
the Sponsor nor the Trustee shall be liable in any way for any failure in any
of the Securities.

Because certain of the Securities from time to time may be sold under certain
circumstances described herein, and because the proceeds from such events will
be distributed to Unitholders and will not be reinvested, no assurance can be
given that the Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor may instruct
the Trustee to sell Securities under certain limited circumstances.
Securities, however, will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation or depreciation.

Unitholders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. As the holder
of the Securities, the Trustee will have the right to vote all of the voting
stocks in the Trust and will vote such stocks in accordance with the
instructions of the Sponsor. Unitholders may, however, be able upon request to
receive an "In Kind Distribution" of these Securities evidenced by the
Units (see "Rights of Unitholders-Redemption of Units" ).

RISK FACTORS

An investment in Units of the Trust should be made with an understanding of
the characteristics of the public utility industry and the risks which such an
investment may entail. General problems of such issuers include the difficulty
in financing large construction programs in an inflationary period, the
limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition,
Federal, state and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely affect
the ability of the issuers of certain of the Securities in the portfolio to
make payments of principal and/or interest on such Securities.

Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and
the appropriate rate of return on an approved asset base, which must be
approved by the state commissions. Certain utilities have had difficulty from
time to time in persuading regulators, who are subject to political pressures,
to grant rate increases necessary to maintain an adequate return on investment
and voters in many states have the ability to impose limits on rate
adjustments (for example, by initiative or referendum). Any unexpected
limitations could negatively affect the profitability of utilities whose
budgets are planned far in advance. In addition, gas pipeline and distribution
companies have had difficulties in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term contracts and
avoiding litigation from their customers, on the one hand, or suppliers, on
the other.

Certain of the issuers of the Securities in the Trust may own or operate
nuclear generating facilities. Governmental authorities may from time to time
review existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating
projects in the electric utility industry have experienced substantial cost
increases, construction delays and licensing difficulties. These have been
caused by various factors, including inflation, high financing costs, required
design changes and rework, allegedly faulty construction, objections by groups
and governmental officials, limits on the ability to finance, reduced
forecasts of energy requirements and economic conditions. This experience
indicates that the risk of significant cost increases, delays and licensing
difficulties remains present through to completion and achievement of
commercial operation of any nuclear project. Also, nuclear generating units in
service have experienced unplanned outages or extensions of scheduled outages
due to equipment problems or new regulatory requirements sometimes followed by
a significant delay in obtaining regulatory approval to return to service. A
major accident at a nuclear plant anywhere, such as the accident at a plant in
Chernobyl, could cause the imposition of limits or prohibitions on the
operation, construction or licensing of nuclear units in the United States.

Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail transportation to
transport fossil fuels, the uncertainty of transmission service costs for both
interstate and intrastate transactions, changes in tax laws which adversely
affect a utility's ability to operate profitably, increased competition in
service costs, recent reductions in estimates of future demand for electricity
and gas in certain areas of the country, restrictions on operations and
increased cost and delays attributable to environmental considerations,
uncertain availability and increased cost of capital, unavailability of fuel
for electric generation at reasonable prices, including the steady rise in
fuel costs and the costs associated with conversion to alternate fuel sources
such as coal, availability and cost of natural gas for resale, technical and
cost factors and other problems associated with construction, licensing,
regulation and operation of nuclear facilities for electric generation,
including among other considerations the problems associated with the use of
radioactive materials and the disposal of radioactive wastes, and the effects
of energy conservation. 

In view of the pending investigations and the other uncertainties discussed
above, there can be no assurance that any company's share of the full cost of
units under construction ultimately will be recovered in rates or of the
extent to which a company could earn an adequate return on its investment in
such units. The likelihood of a significantly adverse event occurring in any
of the areas of concern described above varies, as does the potential severity
of any adverse impact. It should be recognized, however, that one or more of
such adverse events could occur and individually or collectively could have a
material adverse impact on the financial condition or the results of
operations of a company's ability to make dividend payments.

A bill is currently pending in Congress which would deregulate and restructure
the electric utility industry in the U.S. The bill would establish a federal
mandate for all electric utilities to provide retail choice to all classes of
customers by late in the year 2000. After retail choice is established, a
state utility commission would be prohibited from regulating rates for retail
electricity services and would not be allowed to bar any supplier from
offering retail service to any customer. In addition to substantially
increasing competition within the industry, certain authorities have estimated
that restructuring of the industry could result in substantial stranded
investment costs relating to lost long-term investments made in reliance on
future maintenance of current customer bases (which could be negatively
impacted by deregulation). Any such stranded costs would be borne by the
stockholders of the related issuers, including the Trust. Although the Sponsor
makes no prediction as to whether this legislation will be adopted, many
authorities believe that deregulation and restructuring within the electric
utility industry is likely to occur in the coming years. Accordingly, it is
likely that the U.S. electricity market will become highly competitive in
future years. Deregulation of the electric utility industry is in the early
stages and no assurance can be made as to the timing or impact of future
deregulation or restructuring. Accordingly, the restructuring and deregulation
of the electricity industry is marked by great uncertainty and could have a
material adverse impact on certain issuers.

In addition, Congress recently enacted the Telecommunications Act of 1996
which, among other things, is designed to open local telephone services to
competition. While final regulations have only recently been adopted, the
Telecommunications Act is expected to have a significant impact on the
telecommunications industry. In particular, companies within the local
exchange and long distance markets will be subject to substantially increased
competition from other long distance carriers, competitive access providers
and cable companies, among others. Telecommunications companies will need to
be able to adapt to an increasingly innovative and competitive marketplace
with many companies offering combined video, internet and telephonic services.
This increased competition and the changing regulatory environment within the
telecommunications industry could have a material adverse impact on certain
issuers of the Securities.

General. An investment in Units should be made with an understanding of the
risks which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the general
condition of the common stock market may worsen and the value of the Equity
Securities and therefore the value of the Units may decline. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. These perceptions are based on unpredictable factors
including expectations regarding government economic, monetary and fiscal
policies, inflation and interest rates, economic expansion or contraction,
global or regional political, economic or banking crises. Shareholders of
common stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or holders of
debt obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trust have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board of directors
and have a right to participate in amounts available for distribution by the
issuer only after all other claims on the issuer have been paid or provided
for. Certain of the issuers may currently be in arrears with respect to
preferred stock dividend payments. Common stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of income
or provide the same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will create prior
claims for payment of principal, interest and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay dividends
on its common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities in the
portfolio may be expected to fluctuate over the life of the Trust to values
higher or lower than those prevailing on the Initial Date of Deposit or at the
time a Unitholder purchases Units.

Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.

Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trust may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor. The price at which
the Equity Securities may be sold to meet redemptions, and the value of the
Trust, will be adversely affected if trading markets for the Equity Securities
are limited or absent.

An investment in Units of the Trust should be made with an understanding of
the characteristics of the public utility industry and the risks which such an
investment may entail. General problems of such issuers would include the
difficulty in financing large construction programs in an inflationary period,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All such issuers have been experiencing
certain of these problems in varying degrees. In addition, Federal, state and
municipal governmental authorities may from time to time review existing, and
impose additional, regulations governing the licensing, construction and
operation of nuclear power plants, which may adversely affect the ability of
the issuers of certain of the Securities in the portfolio to make dividend
payments and/or interest on such Securities.

Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and
the appropriate rate of return on an approved asset base, which must be
approved by the state commissions. Certain utilities have had difficulty from
time to time in persuading regulators, who are subject to political pressures,
to grant rate increases necessary to maintain an adequate return on investment
and voters in many states have the ability to impose limits on rate
adjustments (for example, by initiative or referendum). Any unexpected
limitations could negatively affect the profitability of utilities whose
budgets are planned far in advance. In addition, gas pipeline and distribution
companies have had difficulties in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term contracts and
avoiding litigation from their customers, on the one hand, or suppliers, on
the other.

Certain of the issuers of the Securities in the Trust may own or operate
nuclear generating facilities. Governmental authorities may from time to time
review existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating
projects in the electric utility industry have experienced substantial costs
increases, construction delays and licensing difficulties. These have been
caused by various factors, including inflation, high financing costs, required
design changes and rework, allegedly faulty construction, objections by groups
and governmental officials, limits on the ability to finance, reduced
forecasts of energy requirements and economic conditions. This experience
indicates that the risk of significant cost increases, delays and licensing
difficulties remains present through to completion and achievement of
commercial operation of any nuclear project. Also, nuclear generating units in
service have experienced unplanned outages or extensions of scheduled outages
due to equipment problems or new regulatory requirements sometimes followed by
a significant delay in obtaining regulatory approval to return to service. A
major accident at a nuclear plant anywhere, such as the accident at a plant in
Chernobyl, could cause the imposition of limits or prohibitions on the
operation, construction or licensing of nuclear units in the United States.

Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail transportation to
transport fossil fuels, the uncertainty of transmission service costs for both
interstate and intrastate transactions, changes in tax laws which adversely
affect a utility's ability to operate profitably, increased competition in
service costs, recent reductions in estimates of future demand for electricity
and gas in certain areas of the country, restrictions on operations and
increased cost and delays attributable to environmental considerations,
uncertain availability and increased cost of capital, unavailability of fuel
for electric generation at reasonable prices, including the steady rise in
fuel costs and the costs associated with conversion to alternate fuel sources
such as coal, availability and cost of natural gas for resale, technical and
cost factors and other problems associated with construction, licensing,
regulation and operation of nuclear facilities for electric generation,
including among other considerations the problems associated with the use of
radioactive materials and the disposal of radioactive wastes, and the effects
of energy conservation. Each of the problems referred to could adversely
affect the ability of the issuers of any utility bonds in the Trust to make
payments due on these bonds.

In view of the pending investigations and the other uncertainties discussed
above, there can be no assurance that any company's share of the full cost of
nuclear units under construction ultimately will be recovered in rates or of
the extent to which a company could earn an adequate return on its investment
in such units. The likelihood of a significantly adverse event occurring in
any of the areas of concern described above varies, as does the potential
severity of any adverse impact. It should be recognized, however, that one or
more of such adverse events could occur and individually or collectively could
have a material adverse impact on the financial condition or the results of
operations of a company's ability to make interest and principal payments on
its outstanding debt.

An investment in Units should be made with an understanding of the risks which
an investment in common stock entails, including the risk that the financial
condition of the issuers of the Securities or the general condition of the
common stock market may worsen and the value of the Securities and therefore
the value of the Units may decline. Common stocks are especially susceptible
to general stock market movements and to volatile increases and decreases of
value as market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors including expectations
regarding government economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or regional
political, economic or banking crises. Shareholders of common stocks have
rights to receive payments from the issuers of those common stocks that are
generally subordinate to those of creditors of or holders of debt obligations
or preferred stocks of such issuers. Shareholders of common stocks of the type
held by the Trust have a right to receive dividends only when and if, and in
the amounts, declared by the issuer's board of directors and have a right to
participate in amounts available for distribution by the issuer only after all
other claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or preferred stock
will create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks are subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the value of the
Securities in the Portfolio may be expected to fluctuate over the life of the
Trust to values higher or lower than those prevailing on the date stated in
the "Summary of Essential Financial Information" in Part One of this
Prospectus.

FEDERAL TAXATION

United States Federal Income Taxes. The following is a general discussion of
certain of the federal income tax consequences of the purchase, ownership and
disposition of the Units. The summary limited to investors who hold the Units
as "capital assets" (generally, property held for investment) within
the meaning of Section 1221 of the Internal Revenue Code of 1986 ("the
Code" ). Unitholders should consult their tax advisers in determining the
federal, state, local and any other tax consequences of the purchase,
ownership and disposition of Units in the Trust. For purposes of the following
discussion and opinion, it is assumed that each Equity Security is equity for
federal income tax purposes.

In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:

1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Trust asset when such income is considered to be
received by the Trust.

2. Each Unitholder will have a taxable event when the Trust disposes of an
Equity Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder (except
to the extent an in kind distribution of stock is available and received by
such Unitholder from the Trust, as described below). The price a Unitholder
pays for his Units, generally including sales charges, is allocated among his
pro rata portion of each Equity Security held by the Trust (in proportion to
the fair market values thereof on the valuation date closest to the date the
Unitholder purchase his Units) in order to determine his initial tax basis for
his pro rata portion of each Equity Security held by the trust. It should be
noted that certain legislative proposals have been made which could affect the
calculation of basis for Unitholders holding securities that are substantially
identical to the Equity Securities. Unitholders should consult their own tax
advisors with regard to calculation of basis.

A Unitholder will be considered to have received all of the dividends paid on
his pro rata portion of each Equity Security when such dividends are received
by the Trust. Unitholders will be taxed in this manner regardless of whether
distributions from the Trust are actually received by the Unitholder or are
automatically reinvested. For federal income tax purposes, a Unitholder's pro
rata portion of dividends as defined by Section 316 of the Code paid with
respect to an Equity Security held by the trust are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits" . A Unitholder's pro rata portion of dividends paid on such Equity
Security which exceed such current and accumulated earnings and profits will
first reduce a Unitholder's tax basis in such Equity Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Equity
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.

3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Equity Securities held by the trust will generally
be considered a capital gain (except in the case of a dealer or a financial
institution) and, in general, will be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Equity
Securities held by the trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution) and, in general,
will be long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
such capital gains and losses for federal income tax purposes.

Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the trust (to the
extent such dividends are taxable as ordinary income, as discussed above and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Equity Securities paying such dividends (other
than corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. The limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.

To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that own Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.

Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as through the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will be deductible
by an individual only to the extend they exceed 2% of such individual's
adjusted gross income. Unitholders may be required to treat some or all of the
expenses of the Trust as miscellaneous itemized deductions subject to this
limitation.

Recognition of Taxable Gain or Loss Upon Disposition of Equity Securities by
the Trust or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when an Equity Security is disposed of by the
Trust or if the Unitholder disposes of a Unit. For taxpayers other than
corporations, net capital gains (which are defined as net long-term capital
gain over net short-term capital loss for a taxable year) are subject to a
maximum marginal stated tax rate of 28%. However, it should be noted that
legislative proposals are introduced from time to time that could affect tax
rates and could affect relative differences at which ordinary income and
capital gains are taxed.

The Revenue Reconciliation Act of 1993 (the "Act" ) raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions" 
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units. 

If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the trust involved including his
pro rata portion of all the Equity Securities represented by the Unit.
Legislative proposals have been made that would treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain as
constructive sales for purposes of recognition of gain (but not loss).
Unitholders should consult their own tax advisors with regard to any such
constructive sale rules.

Special Tax Consequences of In Kind Distributions Upon Redemption or
Termination of the Trust. Under certain circumstances a Unitholder tendering
Units for redemption may be able to request an In Kind Distribution. A
Unitholder may also under certain circumstances be able to request an In Kind
Distribution upon the termination of the Trust. See "Rights of
Unitholders--Redemption of Units." As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unitholder is
considered as owning a pro rata portion of each of the Trust assets for
federal income tax purposes. The receipt of an In Kind Distribution will
result in a Unitholder receiving an undivided interest in whole shares of
stock plus, possibly, cash.

The potential tax consequences that may occur under an In Kind Distribution
will depend on whether or not a Unitholder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unitholder will not
recognize gain or loss if a Unitholder only receives Equity Securities in
exchange for his or her pro rata portion in the Equity Securities held by the
trust. However, if a Unitholder also receives cash in exchange for a
fractional share of an Equity Security held by the trust, such Unitholder will
generally recognize gain or loss based upon the difference between the amount
of cash received by the Unitholder and his tax basis in such fractional share
of an Equity Security held by the Trust.

Because the Trust will own many Equity Securities, a Unitholder who requests
an In Kind Distribution will have to analyze the tax consequences with respect
to each Equity Security owned by the Trust. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum of the gain
(or loss) recognized under the rules described above by such Unitholder with
respect to each Equity Security owned by the Trust. Unitholders who request
and In Kind Distribution are advised to consult their tax advisers in this
regard.

Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. the cost of the Units is allocated among the Equity Securities held in
the Trust in accordance with the proportion of the fair market values of such
Equity Securities on the valuation date closest to the date the Units are
purchased in order to determine such Unitholder's tax basis for his pro rata
portion of each Equity Security.

A Unitholder's tax basis in his Units and his pro rata portion of an Equity
Security held by the trust will be reduced to the extent dividends paid with
respect to such Equity Security are received by the Trust which are not
taxable as ordinary income as described above. 

General. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number nd
appropriate certification are not provided when requested, distributions by
the trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States person. Such persons should consult their tax
advisers.

In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign country. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.

It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.

At the termination of the Trust, the Trustee will furnish to each Unitholder
of such Trust a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds received by
the Trust from the disposition of any Equity Security (resulting from
redemption or the sale of any Equity Security), and the fees and expenses paid
by the Trust. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.

Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.

In the opinion of special counsel to the Trust for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
trust will be treated as the income of the Unitholders under the existing come
tax laws of the State and City of New York.

The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit in the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.

TRUST OPERATING EXPENSES

Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee, which is not to exceed the
amount set forth under "Summary of Essential Financial Information" in
Part One of this Prospectus, for providing portfolio supervisory services for
the Trust. Such fee (which is based on the number of Units outstanding on
January 1 of each year) may exceed the actual costs of providing such
supervisory services for this Trust, but at no time will the total amount
received for portfolio supervisory services rendered to this Series and other
unit investment trusts sponsored by the Sponsor for which it provides such
supervisory services in any calendar year exceed the aggregate cost to the
Supervisor of supplying such services in such year. In addition, the
Evaluator, which is a division of Van Kampen American Capital Investment
Advisory Corp., shall receive as an annual evaluation fee for regularly
evaluating the Trust's portfolio that amount set forth under "Summary of
Essential Financial Information" in Part One of this Prospectus (which is
based on the outstanding number of Units on January 1 of each year). Both of
the foregoing fees may be increased without approval of the Unitholders by
amounts not exceeding proportionate increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index published by
the United States Department of Labor or, if such category is no longer
published, in a comparable category. The Sponsor and dealers will receive
sales commissions and may realize other profits (or losses) in connection with
the sale of Units as described under "Public Offering-Sponsor and Dealer
Compensation" .

Trustee's Fee. For its services the Trustee will receive as an annual fee
from the Trust that amount set forth under "Summary of Essential
Information" in Part One of this Prospectus (which is based on the
outstanding number of units on January 1 of each year for which such
compensation relates). The Trustee's fees are payable monthly on or before
the twenty-fifth day of each month from the Income Account to the extent funds
are available and then from the Capital Account. The Trustee benefits to the
extent there are funds for future distributions, payment of expenses and
redemptions in the Capital and Income Accounts since these accounts are
non-interest bearing and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to the Trust is
expected to result from the use of these funds. Such fees may be increased
without approval of the Unitholders by amounts not exceeding proportionate
increases under the category "All Services Less Rent of Shelter" in
the Consumer Price Index published by the United States Department of Labor
or, if such category is no longer published, in a comparable category. For a
discussion of the services rendered by the Trustee pursuant to its obligations
under the Trust Agreement, see "Rights of Unitholders-Reports Provided" 
and "Trust Administration" .

Miscellaneous Expenses. All costs and expenses incurred in creating and
establishing Series 7 and prior Series of the Trust, including the cost of the
initial preparation, printing and execution of the Trust Agreement and the
certificates, legal and accounting expenses, advertising and selling expenses,
expenses of the Trustee, initial evaluation fees and other out-of-pocket
expenses have been borne by the Sponsor at no cost to such Trust. Expenses
incurred in establishing Series 8 and subsequent Series of the Trust,
including the cost of the initial preparation of documents relating to the
Trust (including the Prospectus, Trust Agreement and certificates), federal
and state registration fees, the initial fees and expenses of the Trustee,
legal and accounting expenses, payment of closing fees and any other
out-of-pocket expenses, will be paid by such Trust and amortized over the life
of such Trust. The following additional charges are or may be incurred by the
Trust: (a) normal expenses (including the cost of mailing reports to
Unitholders) incurred in connection with the operation of the Trust, (b) fees
of the Trustee for extraordinary services, (c) expenses of the Trustee
(including legal and auditing expenses) and of counsel designated by the
Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect the Trust and the rights and interests
of Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part and (g) expenditures incurred in
contacting Unitholders upon termination of the Trust.

The fees and expenses set forth herein are payable out of the Trust. All of
the fees and expenses of the Trust will accrue on a daily basis and will be
charged to the Trust, in arrears, on a monthly basis as of the tenth day of
each month. The fees and expenses of Series 8 and subsequent Series are
payable out of the Capital Account while the fees and expenses of all other
Series are paid out of the Income Account. When such fees and expenses are
paid by or owning to the Trustee, they are secured by a lien on the portfolio
of the Trust. Since the Securities are all common stocks, and the income
stream produced by dividend payments is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or all
expenses of the Trust. If the balances in the Income and Capital Accounts are
insufficient to provide for amounts payable by the Trust, the Trustee has the
power to sell Securities to pay such amounts. These sales may result in
capital gains or losses to Unitholders. See "Federal Taxation" .

PUBLIC OFFERING

General. The secondary market public offering price is based on the aggregate
underlying value of the Securities in the Trust, an applicable sales charge
(which will be reduced by .5 of 1% annually to a minimum sales charge of 1.5%
(3.0% for Series 8)), and cash, if any, in the Income and Capital Accounts
held or owned by the Trust.

Employees of Van Kampen American Capital Distributors, Inc. and its affiliates
may purchase Units of the Trust at the current Public Offering Price less the
dealer's concession described below in "Public Offering-Unit
Distribution" .

Units may be purchased in the secondary market at the Public Offering Price
(for purchases which do not qualify for a sales charge reduction for quantity
purchases) less the concession the Sponsor typically allows to brokers and
dealers for purchases (see "Public Offering--Unit Distribution" ) by
(1) investors who purchase Units through registered investment advisers,
certified financial planners and registered broker-dealers who in each case
either charge periodic fees for financial planning, investment advisory or
asset management service, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap
fee" charge is imposed, (2) bank trust departments investing funds over
which they exercise exclusive discretionary investment authority and that are
held in a fiduciary, agency, custodial or similar capacity, (3) any person who
for at lest 90 days, has been an officer, director, or bona fide employee of
any firm offering Units for sale to investors or their spouses or children and
(4) officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases. 

The Trustee has no cash for distribution to Unitholders until it receives
dividend payments on the Securities in the Trust. The Trustee is authorized to
provide its own funds, at times, in order to advance income distributions. The
Trustee will recover these advancements when such dividend income is received.

Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One of this Prospectus in accordance with fluctuations in the prices of
the underlying Securities in the Trust.

The price of the Units as of the opening of business on the date therein
stated in the "Summary of Essential Financial Information" in Part One
of this Prospectus was established by adding to the determination of the
aggregate underlying value of the Securities an amount initially equal to
4.712% of such value and dividing the sum so obtained by the number of Units
outstanding. Such underlying value shall include the proportionate share of
any cash held in the Capital Account. This computation produced a gross sales
commission initially equal to 4.5% of the Public Offering Price. The Evaluator
will appraise or cause to be appraised daily the value of the underlying
Securities as of 4:00 P.M. Eastern time on days the New York Stock Exchange is
open for business and will adjust the Public Offering Price of the Units
commensurate with such valuation. Such Public Offering Price will be effective
for all orders received at or prior to the close of trading on the New York
Stock Exchange on each such day. Orders received by the Trustee, Sponsor or
any Underwriter for purchases, sales or redemptions after that time, or on a
day when the New York Stock Exchange is closed, will be held until the next
determination of price. Such sales charge will be reduced over time, as set
forth in "Summary of Essential Financial Information" in Part One of
this Prospectus, to a minimum sales charge of either 3.0% or 1.5%.

The value of the Securities is determined on each business day by the
Evaluator based on the closing sale prices on the day the valuation is made
for Securities listed on a national stock exchange or, if no such price
exists, at the bid price on the day the valuation is made. For Securities not
so listed or, if so listed and the principal market to the Securities is other
than such exchange, or if in either case such prices are unavailable, the
valuation will be made based on the current bid price on the over-the-counter
market or by taking into account the same factors referred to under "
Rights of Unitholders-Redemption of Units" .

Unit Distribution. Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in
the manner described.

Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units equal to 60% of the applicable sales
charge.

Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act.

To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 100 Units for Series 8 and
subsequent Series and 250 Units (50 Units for a tax-sheltered retirement
plan). The minimum purchase for Series 2 is five Units (one Unit for a
tax-sheltered retirement plan for Series 3 through Series 7). The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase
of Units and to change the amount of the concession or agency commission to
dealers and others from time to time.

Sponsor and Dealer Compensation. The Sponsor and dealers will receive the
gross sales commission as described under "Public Offering-General" 
above. Cash, if any, made available to the Sponsor prior to the date of
settlement for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the limitations
of the Securities Exchange Act of 1934.

As stated under "Public Market" below, the Sponsor intends to, and
certain dealers maintain a secondary market for Units of the Trust. In so
maintaining a market, the Sponsor and any such dealers will also realize
profits or sustain losses in the amount of any difference between the price at
which Units are purchased and the price at which Units are resold (which price
includes a sales charge). In addition, the Sponsor and any such dealers will
also realize profits or sustain losses resulting from a redemption of such
repurchased Units at a price above or below the purchase price for such Units,
respectively.

Public Market. Although they are not obligated to do so, the Sponsor intends
to maintain a market for the Units offered hereby and offer continuously to
purchase Units. If the supply of Units exceeds demand or if some other
business reason warrants it, the Sponsor may either discontinue all purchases
of Units or discontinue purchases of Units at such prices. In the event that a
market is not maintained for the Units and the Unitholder cannot find another
purchaser, a Unitholder desiring to dispose of his Units may be able to
dispose of such Units only by tendering them to the Trustee for redemption at
the Redemption Price. See "Rights of Unitholders-Redemption of Units" .
A Unitholder who wishes to dispose of his Units should inquire of his broker
as to current market prices in order to determine whether there is in
existence any price in excess of the Redemption Price and, if so, the amount
thereof.

Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-sheltered retirement plan is one Unit with respect to Series 2 and 50
Units with respect to Series 3 through Series 7.

RIGHTS OF UNITHOLDERS

Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust is evidenced by certificates unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be in book entry. Units are transferable
by making a written request to the Trustee and, in the case of Units evidenced
by a certificate, by presentation and surrender of such certificate to the
Trustee properly endorsed or accompanied by a written instrument or
instruments of transfer. A Unitholder must sign such written request, and such
certificate or transfer instrument, exactly as his name appears on the records
of the Trustee and on the face of any certificate representing the Units to be
transferred with the signature guaranteed by a participant in the Securities
Transfer Agents Medallion Program ("STAMP" ) or such other signature
guarantee program in addition to, or in substitution for, STAMP as may be
accepted by the Trustee. In certain instances the Trustee may require
additional documents such as, but not limited to, trust instruments,
certificates of death, appointments as executor or administrator or
certificates of corporate authority. Certificates will be issued in
denominations of one Unit or any multiple thereof.

Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.

Distributions of Income and Capital. Income received by the Trust is credited
by the Trustee to the Income Account. Other receipts are credited to the
Capital Account. Income received by the Trust will be distributed on or
shortly after the twenty-fifth day of each month on a pro rata basis to
Unitholders of record as of the preceding record date (which will be the tenth
day of the month). All distributions will be net of applicable expenses. In
addition, amounts from the Capital Account, if any, will be distributed at
least annually in December to the Unitholders then of record. Proceeds
received from the disposition of any of the Securities after a record date and
prior to the following distribution date will be held in the Capital Account
and not distributed until the next distribution date applicable to such
Capital Account. In the case of certain Series, the Trustee shall not be
required to make a distribution from the Capital Account unless the cash
balance on deposit therein available for distribution shall be sufficient to
distribute at least $1.00 per 50 Units. The Trustee is not required to pay
interest on funds held in the Capital or Income Accounts (but may itself earn
interest thereon and therefore benefits from the use of such funds).

The distribution to the Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the Unitholders' pro rata share
of the estimated annual dividend distributions in the Income Account after
deducting estimated expenses. Because dividends are not received by the Trust
at a constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.

On or before the twenty-fifth day of each month, the Trustee will deduct from
the Income Account or Capital Account amounts necessary to pay the expenses of
the Trust (as determined on the basis set forth under "Trust Operating
Expenses" ). The Trustee also may withdraw from said accounts such amounts,
if any, as it deems necessary to establish a reserve for any governmental
charges payable out of the Trust. Amounts so withdrawn shall not be considered
a part of the Trust's assets until such time as the Trustee shall return all
or any part of such amounts to the appropriate accounts. In addition, the
Trustee may withdraw from the Income and Capital Accounts such amounts as may
be necessary to cover redemptions of Units.

Reinvestment Option. Unitholders of the Trust may elect to have each
distribution of income, capital gains and/or capital on their Units
automatically reinvested in shares of any Van Kampen American Capital mutual
fund (except for B shares which are registered in such Unitholder's state of
residence). Such mutual funds are hereinafter collectively referred to as the
"Reinvestment Funds." 

Each Reinvestment Unitholders of all unit investment trusts sponsored by Van
Kampen American Capital Distributors, Inc., may elect to have each
distribution of interest income, capital gains and/or principal on their Units
automatically reinvested in shares of any Van Kampen American Capital mutual
funds (except for B shares) which are registered in the Unitholder's state of
residence. Such mutual funds are hereinafter collectively referred to as the
"Reinvestment Funds" .

Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trusts. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets
forth the procedures to follow to commence reinvestment. A Unitholder may
obtain a prospectus for the respective Reinvestment Funds from Van Kampen
American Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181. Texas residents who desire to reinvest may request that a
broker-dealer registered in Texas send the prospectus relating to the
respective fund.

After becoming a participant in a reinvestment plan, each distribution of
income, capital gains and/or principal on the participant's Units will, on the
applicable distribution date, automatically be applied, as directed by such
person, as of such distribution date by the Trustee to purchase shares (or
fractions thereof) of the applicable Reinvestment Fund at a net asset value as
computed as of the close of trading on the New York Stock Exchange on such
date. Unitholders with an existing Guaranteed Reinvestment Option (GRO)
Program account (whereby a sales charge is imposed on distribution
reinvestments) may transfer their existing account into a new GRO account
which allows purchases of Reinvestment Fund shares at net asset value as
described above. 

Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund. A participant may
at any time prior to five days preceding the next succeeding distribution
date, by so notifying the Trustee in writing, elect to terminate his or her
reinvestment plan and receive future distributions of his or her Units in
cash. There will be no charge or other penalty for such termination. Each
Reinvestment Fund, its sponsor and investment adviser shall have the right to
terminate at any time the reinvestment plan relating to such fund.

Reports Provided. The Trustee shall furnish Unitholders in connection with
each distribution a statement of the amount of income and the amount of other
receipts (received since the preceding distribution), if any, being
distributed, expressed in each case as a dollar amount representing the pro
rata share of each Unit outstanding. For as long as the Trustee deems it to be
in the best interest of the Unitholders, the accounts of the Trust shall be
audited, not less frequently than annually, by independent certified public
accountants, and the report of such accountants shall be furnished by the
Trustee to Unitholders upon request. Within a reasonable period of time after
the end of each calendar year, the Trustee shall furnish to each person who at
any time during the calendar year was a registered Unitholder a statement (i)
as to the Income Account: income received, deductions for applicable taxes and
for fees and expenses of the Trust, for redemptions of Units, if any, and the
balance remaining after such distributions and deductions, expressed in each
case both as a total dollar amount and as a dollar amount representing the pro
rata share of each Unit outstanding on the last business day of such calendar
year; (ii) as to the Capital Account: the dates of disposition of any
Securities (other than pursuant to In Kind Distributions) and the net proceeds
received therefrom, the results of In Kind Distributions in connection with
redemptions of Units, if any, deductions for payment of applicable taxes and
fees and expenses of the Trust held for distribution to Unitholders of record
as of a date prior to the determination and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Securities held
and the number of Units outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (v) amounts actually distributed
during such calendar year from the Income and Capital Accounts, separately
stated, expressed both as total dollar amounts and as dollar amounts
representing the pro rata share of each Unit outstanding.

In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.

Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 of the certificates representing
the Units to be redeemed, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates) and by payment
of applicable governmental charges, if any. Thus, redemption of Units cannot
be effected until certificates representing such Units have been delivered to
the person seeking redemption or satisfactory indemnity provided. No
redemption fee will be charged. On the third business day following such
tender, the Unitholder will be entitled to receive in cash (unless the
redeeming Unitholder elects an In Kind Distribution as indicated below) an
amount for each Unit equal to the Redemption Price per Unit next computed
after receipt by the Trustee of such tender of Units. The "date of
tender" is deemed to be the date on which Units are received by the
Trustee, except that as regards Units received after 4:00 P.M. Eastern time on
days of trading on the New York Stock Exchange, the date of tender is the next
day on which such Exchange is open for trading and such Units will be deemed
to have been tendered to the Trustee on such day for redemption at the
redemption price computed on that day.

The Trustee is empowered to sell Securities in order to make funds available
for redemption if funds are not otherwise available in the Capital and Income
Accounts to meet redemptions. The Securities to be sold will be selected by
the Trustee from those designated on a current list provided by the portfolio
supervisor for this purpose. Units so redeemed shall be cancelled.

Unitholders tendering 25 Units or more for redemption with respect to Series
2, 1,250 Units or more for redemption with respect to Series 3 through 7 and
1,000 Units or more with respect to Series 8 and subsequent series may request
from the Trustee in lieu of a cash redemption a distribution in kind ("In
Kind Distribution" ) of an amount and value of Securities per Unit equal to
the Redemption Price per Unit as determined as of the evaluation next
following the tender. An In Kind Distribution on redemption of Units will be
made by the Trustee through the distribution of each of the Securities in
book-entry form to the account of the Unitholder's bank or broker-dealer at
Depository Trust Company. The tendering Unitholder will receive his pro rata
number of whole shares of each of the Securities comprising the portfolio and
cash from the Capital Account equal to the fractional shares to which the
tendering Unitholder is entitled. In implementing these redemption procedures,
the Trustee shall make any adjustments necessary to reflect differences
between the Redemption Price of the Securities distributed in kind as of the
date of tender. If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unitholder, the Trustee may sell
Securities according to the criteria discussed above.

To the extent that Securities are redeemed in kind or sold, the size of the
Trust will be, and the diversity of the Trust may be, reduced. Sales may be
required at a time when Securities would not otherwise be sold and may result
in lower prices than might otherwise be realized. The price received upon
redemption may be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the Portfolio at the time of
redemption. Special federal income tax consequences will result if a
Unitholder requests an In Kind Distribution. See "Federal Taxation" .

The Redemption Price per Unit will be determined on the basis of the aggregate
underlying value of the Securities in the Trust. While the Trustee has the
power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which
determines the price per Unit on a daily basis. The Redemption Price per Unit
is the pro rata share of each Unit in the Trust determined on the basis of (i)
the cash on hand in the Trust or monies in the process of being collected and
(ii) the value of the Securities in the Trust, less (a) amounts representing
taxes or other governmental charges payable out of the Trust, (b) any amount
owing to the Trustee for its advances and (c) the accrued expenses of the
Trust. The Evaluator may determine the value of the Securities in the Trust in
the following manner: if the Securities are listed on a national securities
exchange, the evaluation will generally be based on the closing sale price on
the exchange (unless the Evaluator deems the price inappropriate as a basis
for evaluation) or, if there is no closing sale price on the exchange, at the
closing bid price. If the Securities are not so listed or, if so listed and
the principal market for the Securities is other than on the exchange, the
evaluation will generally be made by the Evaluator in good faith based on the
current bid price on the over-the-counter market (unless the Evaluator deems
this price inappropriate as a basis for evaluation) or, if bid price is not
available, (1) on the basis of the current bid price for comparable
securities, (2) by the Evaluator's appraising the value of the Securities in
good faith at the bid side of the market or (3) by any combination thereof.
See "Public Offering-Offering Price" .

The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.

TRUST ADMINISTRATION

Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the second
succeeding business day and by making payment therefor to the Unitholder not
later than the date on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.

The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or redemption price subsequent to its acquisition of such Units.

Portfolio Administration. The portfolio of the Trust is not "managed" 
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. The Trust, however, will not be managed. The Trust Agreement,
however, provides that the Sponsor may (but need not) direct the Trustee to
dispose of an Equity Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
an Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor the retention of such Securities
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in the Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Supervisor). Proceeds from the sale of Securities
(or any securities or other property received by the Trust in exchange for
Equity Securities) are credited to the Capital Account for distribution to
Unitholders or to meet redemptions. Except as stated under "Trust
Portfolio" for failed securities and as provided in this paragraph, the
acquisition by the Trust of any securities other than the Securities is
prohibited.

As indicated under "Rights of Unitholders-Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units of the Trust tendered for redemption and the payment of
expenses.

The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in the Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in the
Trust may be altered. In order to obtain the best price for the Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.

Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders, provided, however, that the Trust Agreement
may not be amended to increase the number of Units. The Trust Agreement may
also be amended in any respect by the Trustee and Sponsor, or any of the
provisions thereof may be waived, with the consent of the holders of 51% of
the Units then outstanding, provided that no such amendment or waiver will
reduce the interest in the Trust of any Unitholder without the consent of such
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders. The Trustee shall
advise the Unitholders of any amendment promptly after execution thereof.

The Trust may be liquidated at any time by consent of Unitholders representing
51% of the Units then outstanding or by the Trustee when the value of the
Trust, as shown by any evaluation, is less than that indicated under "
Summary of Essential Financial Information" in Part One of this
Prospectus. The Trust Agreement will terminate upon the sale or other
disposition of the last Security held thereunder, but in no event will it
continue beyond the Mandatory Termination Date stated under "Summary of
Essential Financial Information" in Part One of this Prospectus.

Written notice of any termination specifying the time or times at which
Unitholders may surrender their certificates for cancellation shall be given
by the Trustee to each Unitholder at his address appearing on the registration
books of the Trust maintained by the Trustee. If the Trust will terminate on
the Mandatory Termination Date, the Trustee will provide written notice
thereof to all Unitholders at least 30 days before such Mandatory Termination
Date and will include with such notice a form to enable eligible Unitholders
to request an In Kind Distribution rather than payment in cash upon the
termination of the Trust. To be effective, this request must be returned to
the Trustee at least five business days prior to the Mandatory Termination
Date. On the Mandatory Termination Date (or on the next business day
thereafter if a holiday) the Trustee will deliver each requesting
Unitholder's pro rata number of whole shares of each of the Securities in the
portfolio to the account of the broker- dealer or bank designated by the
Unitholder at Depository Trust Company. The value of the Unitholder's
fractional shares will be paid in cash. Unitholders not eligible to, or not
electing to, request an In Kind Distribution will receive a cash distribution
from the sale of the remaining Securities within a reasonable time following
the Mandatory Termination Date. Regardless of the distribution involved, the
Trustee will deduct from the funds of the Trust any accrued costs, expenses,
advances or indemnities provided by the Trust Agreement, including estimated
compensation of the Trustee and costs of liquidation and any amounts required
as a reserve to provide for payment of any applicable taxes or other
governmental charges. Any sale of Securities in the Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were
not required at such time. The Trustee will then distribute to each Unitholder
his pro rata share of the balance of the Income and Capital Accounts.

The Sponsor currently intends to, but is not obligated to, offer for sale
units of a subsequent series of the Trust on the Mandatory Termination Date
for the Trust stated under "Summary of Essential Information" in Part
One of this Prospectus. If the Sponsor is in fact offering such units for
sale, Unitholders of the Trust will be given an opportunity to purchase such
units at a public offering price which includes a special reduced sales
charge. There is, however, no assurance that units of any new series of the
Trust will be offered for sale at the time, or if offered, that there will be
sufficient units available for sale to meet the requests of any or all
Unitholders.

With such distribution to the Unitholders will be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distributions thereof to Unitholders in
the same manner.

Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee
of any of the Securities. In the event of the failure of the Sponsor to act
under the Trust Agreement, the Trustee may act thereunder and shall not be
liable for any action taken by it in good faith under the Trust Agreement.

The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the
Trust which the Trustee may be required to pay under any present or future law
of the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.

The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.

Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition" ). 

As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser (MSAM" ), Morgan Stanley & Co.
Incorporated, a registered broker-dealer and investment adviser, and Morgan
Stanley International, are engaged in a wide range of financial services.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and research services;
asset management; trading of futures, options, foreign exchange commodities
and swaps (involving foreign exchange, commodities, indices and interest
rates); real estate advice, financing and investing; and global custody,
securities clearance services and securities lending. As of September 30,
1996, MSAM, together with its affiliated investment advisory companies, had
approximately $103.5 billion of assets under management and fiduciary advice. 

On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.

Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.

Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996, the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)

As of December 31, 1996, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $59 billion of investment
products, of which over $11.88 billion is invested in municipal securities.
The Sponsor and its Van Kampen American Capital affiliates managed $48 billion
of assets, consisting of $29.9 billion for 59 open end mutual funds (of which
46 are distributed by Van Kampen American Capital Distributors, Inc.), $13.1
billion for 38 closed-end funds and $4.99 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen American Capital's open-end funds,
closed-end funds and unit investment trusts are professionally distributed by
leading financial firms nationwide. Based on cumulative assets deposited, the
Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.

If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trusts as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.

Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its Unit Investment Trust
Division offices at 101 Barclay Street, New York, New York 10286 (800)
221-7668. The Bank of New York is subject to supervision and examination by
the Superintendent of the Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by the
Federal Deposit Insurance Corporation to the extent permitted by law.

The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.

In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the certificates issued by
the Trust to, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders-Reports Provided" ). The
Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.

Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of the trust created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor. The Trustee or
successor trustee must mail a copy of the notice of resignation to all
Unitholders then of record, not less than 60 days before the date specified in
such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.

Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus, and undivided
profits of not less than $5,000,000.

OTHER MATTERS

Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. 

Independent Certified Public Accountants. The statement of condition and the
related securities portfolio included in Part One of this Prospectus have been
audited by Grant Thornton LLP, independent certified public accountants, as
set forth in their report in Part One of this Prospectus, and are included
herein in reliance upon the authority of said firm as experts in accounting
and auditing. 

DESCRIPTION OF EARNINGS AND DIVIDEND RANKINGS 

The investment process involves assessment of various factors-such as product
and industry position, corporate resources and financial policy-with results
that make some common stocks more highly esteemed than others. In this
assessment, Standard & Poor's believes that earnings and dividend performance
is the end result of the interplay of these factors and that, over the long
run, the record of this performance has a considerable bearing on relative
quality. The rankings, however, do not pretend to reflect all of the factors,
tangible or intangible, that bear on stock quality.

Relative quality of bonds or other debt, that is, degrees of protection for
principal and interest, called creditworthiness, cannot be applied to common
stocks, and therefore rankings are not to be confused with bond quality
ratings which are arrived at by a necessarily different approach.

Growth and stability of earnings and dividends are deemed key elements in
establishing Standard & Poor's earnings and dividend rankings for common
stocks, which are designed to capsulize the nature of this record in a single
symbol. It should be noted, however, that the process also takes into
consideration certain adjustments and modifications deemed desirable in
establishing such rankings.

The point of departure in arriving at these rankings is a computerized
scoring system based on per-share earnings and dividend records of the most
recent ten years-a period deemed long enough to measure significant time
segments of secular growth, to capture indications of basic change in trends
as they develop, and to encompass the full peak-to-peak range of the business
cycle. Basis scores are computed for earnings and dividends, then adjusted as
indicated by a set of predetermined modifiers for growth, stability within
long-term trends, and cyclicality. Adjusted scores for earnings and dividends
are then combined to yield a final score.

Further, the ranking system makes allowance for the fact that, in general,
corporate size imparts certain recognized advantages from an investment
standpoint. Conversely, minimum size limits (in terms of corporate sales
volume) are set for the various rankings, but the system provides for making
exceptions where the score reflects an outstanding earnings-dividend record.

The final score for each stock is measured against a scoring matrix
determined by analysis of the scores of a large and representative sample of
stocks. The range of scores in the array of this sample has been aligned with
the following ladder of rankings: 

<TABLE>
<CAPTION>
<S>  <C>             <C>  <C>             <C>
A+   Highest         B+   Average         CLowest
A    High            B    Below Average   DIn Reorganization
A-   Above Average   B-   Lower                                
</TABLE>

The positions as determined above may be modified in some instances by special
considerations, such as natural disasters, massive strikes, and non-recurring
accounting adjustments. 

A ranking is not a forecast of future market price performance, but is
basically an appraisal of past performance of earnings and dividends, and
relative current standing. These rankings must not be used as market
recommendations; a high-score stock may at times be so overpriced as to
justify its sale, while a low-score stock may be attractively priced for
purchase. Rankings based upon earnings and dividend records are no substitute
for complete analysis. They cannot take into account potential effects of
management changes, internal company policies not yet fully reflected in the
earnings and dividend record, public relations standing, recent competitive
shifts, and a host of other factors that may be relevant to investment status
and decision.

No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or dealers. This Prospectus does not constitute an offer to
sell, or a solicitation of any offer to buy, securities in any state to any
persons to whom it is not lawful to make such offer in such state.            

<TABLE>
<CAPTION>
Table of Contents                               Page   
<S>                                             <C>    
Introduction....................................1      
The Trust.......................................2      
Objectives and Securities Selection.............2      
Trust Portfolio.................................2      
Risk Factors....................................3      
Federal Taxation................................5      
Trust Operating Expenses........................7      
Public Offering.................................7      
Rights of Unitholders...........................8      
Trust Administration............................10     
Other Matters...................................12     
Description of Earnings and Dividend Rankings...13     
</TABLE>

This Prospectus contains information concerning the Trust and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Trust has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made. 

VAN KAMPEN MERRITT UTILITY INCOME TRUST and
VAN KAMPEN AMERICAN CAPITAL UTILITY INCOME TRUST

PROSPECTUS PART TWO 

Note: This Prospectus May Be Used Only When Accompanied by Part One. Both
Parts of this Prospectus should be retained for future reference. Dated as
of the date of the Prospectus Part I accompanying this Prospectus Part II. 

Sponsor:  VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.

          One Parkview Plaza
          Oakbrook Terrace, Illinois 60181

          2800 Post Oak Boulevard
          Houston, Texas 77056

A Wealth of Knowledge A Knowledge of Wealth

VAN KAMPEN AMERICAN CAPITAL



                   
                                    
                  Contents of Post-Effective Amendment
                        to Registration Statement
     
     This   Post-Effective   Amendment  to  the  Registration   Statement
comprises the following papers and documents:
                                    
                                    
                            The facing sheet
                                    
                                    
                             The prospectus
                                    
                                    
                             The signatures
                                    
                                    
                 The Consent of Independent Accountants


                               Signatures
     
     Pursuant  to  the requirements of the Securities Act  of  1933,  the
Registrant, Van Kampen Merritt Utility Income Trust, Series 3,  certifies
that  it  meets  all  of  the  requirements  for  effectiveness  of  this
Registration  Statement pursuant to Rule 485(b) under the Securities  Act
of  1933  and  has  duly  caused  this Post-Effective  Amendment  to  its
Registration  Statement  to be signed on its behalf  by  the  undersigned
thereunto  duly  authorized,  and its seal to  be  hereunto  affixed  and
attested,  all in the City of Chicago and State of Illinois on  the  24th
day of April, 1997.
                         
                         Van Kampen Merritt Utility Income Trust, 
                            Series 3
                            (Registrant)
                         
                         By Van Kampen American Capital Distributors,
                            Inc.
                            (Depositor)
                         
                         
                         By: Sandra A. Waterworth
                             Vice President

(Seal)
     
     Pursuant  to  the requirements of the Securities Act of  1933,  this
Amendment  to  the  Registration  Statement  has  been  signed  below  on
April 24, 1997 by the following persons who constitute a majority of  the
Board of Directors of Van Kampen American Capital Distributors, Inc.:

 Signature                  Title

Don G. Powell         Chairman and Chief            )
                        Executive Officer           )

William R. Molinari   President and Chief Operating )
                        Officer                     )

Ronald A. Nyberg      Executive Vice President and  )
                        General Counsel             )

William R. Rybak      Senior Vice President and     )
                        Chief Financial Officer     )

Sandra A. Waterworth                                ) (Attorney in Fact)*
____________________

*    An executed copy of each of the related powers of attorney was filed
     with  the Securities and Exchange Commission in connection with  the
     Registration  Statement  on  Form S-6 of Insured  Municipals  Income
     Trust  and  Investors'  Quality Tax-Exempt Trust,  Multi-Series  203
     (File No. 33-65744) and with the Registration Statement on Form  S-6
     of Insured Municipals Income Trust, 170th Insured Multi-Series (File
     No.  33-55891) and the same are hereby incorporated herein  by  this
     reference.
                    
                                      
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