UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: 811-06591 Morgan Stanley Quality Municipal Income Trust (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 (Address of principal executive offices) (Zip code) Ronald E. Robison 1221 Avenue of the Americas, New York, New York 10020 (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: October 31, 2007 Date of reporting period: January 31, 2007 ITEM 1. SCHEDULE OF INVESTMENTS. The Trust's schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows: MORGAN STANLEY QUALITY MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS JANUARY 31, 2007 (UNAUDITED) PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE --------- ------ --------- ------------- TAX-EXEMPT MUNICIPAL BONDS (162.3%) General Obligation (22.2%) $ 5,000 California, Various Purpose dtd 05/01/03 5.25% 02/01/19 $ 5,361,750 4,000 Los Angeles, California, Ser 2004 A (MBIA) 5.00 09/01/24 4,223,120 2,700 Adams & Arapahoe Counties Joint School District # 32, Colorado, Ser 2003A (FSA) 5.125 12/01/21 2,887,407 4,000 Florida Board of Education, Capital Outlay Refg Ser 2002 C (MBIA) 5.00 06/01/20 4,229,480 Hawaii, 5,000 1992 Ser BZ 6.00 10/01/10 5,372,000 8,000 1992 Ser BZ 6.00 10/01/11 8,736,720 10,000 Honolulu City & County, Hawaii, Ser 2003 A (MBIA)** 5.25 03/01/26 10,602,250 4,000 Cook County, Illinois, Ser 1992 C (FGIC) 6.00 11/15/09 4,234,320 6,000 Illinois, First Ser 2002 (MBIA) 5.375 07/01/20 6,420,600 2,000 Schaumburg, Illinois, Ser 2004 B (FGIC) 5.25 12/01/34 2,143,660 1,000 New York City, New York, 2005 Ser G 5.00 12/01/23 1,055,610 10,000 Pennsylvania, First Ser 2003 (MBIA)** 5.00 01/01/19 10,649,300 5,000 South Carolina Public Service Authority, Refg Ser 2002 D 5.00 01/01/20 5,265,000 5,000 Northside Independant School District, Texas, Bldg & Refg Ser 2001 (PSF) 5.00 02/15/26 5,134,950 2,000 King County, Washington, Refg 1998 Ser B (MBIA) 5.25 01/01/34 2,041,140 2,500 Spokane School District #81, Washington, Ser 2005 (MBIA) 0.00# 06/01/23 2,394,975 -------- ------------- 76,200 80,752,282 -------- ------------- Educational Facilities Revenue (6.7%) 3,700 University of Alabama, Ser 2004-A (MBIA) 5.25 07/01/22 3,989,229 3,000 California Infrastructure & Economic Development Bank, The Scripps Research Institute Ser 2005 A 5.00 07/01/29 3,143,640 1,000 San Diego County, California, Burnham Institute for Medical Research Ser 2006 COPs 5.00 09/01/34 1,036,150 University of California, 2,600 Ser 2007 J (FSA)** 4.50 05/15/31 2,593,903 2,400 Ser 2007 J (FSA)** 4.50 05/15/35 2,394,372 Boulder County, Colorado, 1,750 University Corp for Atmospheric Research Ser 2002 (MBIA) 5.375 09/01/18 1,877,873 1,750 University Corp for Atmospheric Research Ser 2002 (MBIA) 5.375 09/01/21 1,877,872 2,000 Colorado Educational & Cultural Facilities Authority, Peak to Peak Charter School Refg & Impr Ser 2004 (XLCA) 5.25 08/15/34 2,129,820 1,000 New Castle County, Delaware, Newark Charter School Inc Ser 2006 5.00 09/01/36 1,015,560 2,000 Illinois Educational Facilities Authority, University of Chicago Ser 1998 A 5.125 07/01/38 2,038,920 2,000 Ohio State University, General Receipts Ser 2002 A 5.125 12/01/31 2,098,940 -------- ------------- 23,200 24,196,279 -------- ------------- Electric Revenue (11.9%) 6,000 Salt River Project Agricultural Improvement & Power District, Arizona, 2002 Ser B 5.00 01/01/31 6,248,940 2,000 Arkansas River Power Authority, Colorado, Power Ser 2006 (XLCA) 5.25 10/01/40 2,143,140 3,300 Jacksonville Electric Authority, Florida, St Johns Power Park Refg Issue 2 Ser 17 5.00 10/01/18 3,436,884 2,000 Western Minnesota Municipal Power Agency, 2003 Ser A (MBIA) 5.00 10/01/30 2,085,120 5,000 Nebraska Public Power District, Ser 2005 C (FGIC) 5.00 01/01/41 5,228,500 South Carolina Public Service Authority, Sautee Cooper 3,700 Refg Ser 2002 D (Ambac) 5.00 01/01/20 3,910,678 7,000 Refg Ser 2003 A (Ambac) 5.00 01/01/22 7,368,200 7,000 Energy Northwest, Washington, Columbia Refg Ser 2001 C (MBIA) 5.75 07/01/18 7,624,820 5,000 Grant County Public Utility District #2, Washington, Electric Refg Ser 2001 H (FSA) 5.375 01/01/18 5,300,500 -------- ------------- 41,000 43,346,782 -------- ------------- Hospital Revenue (15.0%) California Health Facilities Financing Authority, 2,000 Cedars-Sinai Medical Center Ser 2005 5.00 11/15/34 2,065,200 2,000 Kaiser Permanente Ser 2006 A 5.25 04/01/39 2,110,600 5,000 California Statewide Communities Development, John Muir Health Ser 2006 A 5.00 08/15/32 5,229,600 3,000 Highlands County Health Facilities Authority, Florida, Adventist Health/Sunbelt Ser 2006 C 5.25 11/15/36 3,172,710 6,000 Indiana Health & Educational Facility Financing Authority, Clarian Health Ser 2006 A 5.25 02/15/40 6,306,060 3,000 University of Kansas Hospital Authority, KU Health Ser 2002 4.50 09/01/32 2,930,790 Maryland Health & Higher Educational Facilities Authority, 3,000 King Farm Presbyterian Community 2006 Ser B 5.00 01/01/17 3,006,930 5,000 University of Maryland Medical Ser 2001 5.25 07/01/28 5,190,050 1,500 University of Maryland Medical Ser 2002 6.00 07/01/32 1,632,945 2,000 University of Maryland Medical Ser 2006 A 5.00 07/01/41 2,076,780 6,000 Michigan Hospital Finance Authority, Henry Ford Health Refg Ser 2006 A 5.25 11/15/46 6,304,680 2,000 University of Medicine & Dentistry, New Jersey, Ser 2004 COPs (MBIA) 5.25 06/15/23 2,150,900 1,250 Ward County, North Dakota, Trinity Ser 2006 5.125 07/01/29 1,293,363 5,370 Cuyahoga County, Ohio, Cleveland Clinic Health Ser 2003 A 6.00 01/01/32 5,895,884 3,000 Lorain County, Ohio, Catholic Healthcare Partners Ser 2001 A 5.625 10/01/17 3,203,970 2,000 Sullivan County Health Educational & Housing Facilities Board, Tennessee, Wellmont Health Ser 2006 C 5.25 09/01/36 2,087,140 -------- ------------- 52,120 54,657,602 -------- ------------- Industrial Development/Pollution Control Revenue (7.1%) 6,000 California Pollution Control Financing Authority, Keller Canyon Landfill Co/Browning-Ferris Industries Inc Ser 1992 (AMT) 6.875 11/01/27 6,036,120 5,000 Michigan Strategic Fund, Detroit Edison Co Ser 2001 C (AMT) 5.65 09/01/29 5,284,050 8,000 Tennessee Energy Acquisition Corporation, Ser 2006 A** 5.25 09/01/19 8,793,680 3,000 Brazos River Authority, Texas, TXU Electric Co Ser 1999 C (AMT) 7.70 03/01/32 3,486,120 2,000 Sabine River Authority, Texas, TXU Electric Co Refg Ser 2001 B (AMT) (Mandatory Tender 11/01/11) 5.75 05/01/30 2,118,660 -------- ------------- 24,000 25,718,630 -------- ------------- Mortgage Revenue - Multi-Family (1.3%) 2,645 Illinois Housing Development Authority, Ser I 6.625 09/01/12 2,648,518 2,010 New Jersey Housing Mortgage Finance Authority, Home Buyer Ser 2000 CC (AMT) (MBIA) 5.875 10/01/31 2,028,311 -------- ------------- 4,655 4,676,829 -------- ------------- Mortgage Revenue - Single Family (1.4%) 150 Idaho Housing Agency, 1992 Ser E (AMT) 6.75 07/01/12 150,193 1,350 Idaho Housing & Finance Association, 2000 Ser E (AMT) 6.00 01/01/32 1,373,126 245 Missouri Housing Development Commission, Homeownership Ser 2000 B-1 (AMT) 6.25 03/01/31 249,687 3,140 Montana Board of Housing, 2000 Ser B (AMT) 6.00 12/01/29 3,162,074 -------- ------------- 4,885 4,935,080 -------- ------------- Public Facilities Revenue (3.8%) 3,000 Broward County School Board, Florida, Ser 2001 A COPs (FSA) 5.00 07/01/26 3,104,070 4,000 Orange County School Board, Florida, Ser 2001 A COPs (Ambac) 5.25 08/01/14 4,289,760 3,000 Albuquerque, New Mexico, Gross Receipts Refg Ser 1999 C 5.25 07/01/17 3,095,250 3,000 Charleston Educational Excellence Financing Corporation, South Carolina, Charleston County School District Ser 2005 5.25 12/01/29 3,204,030 -------- ------------- 13,000 13,693,110 -------- ------------- Recreational Facilities Revenue (2.6%) 1,590 Denver Convention Center Hotel Authority, Colorado, Refg Ser 2006 (XLCA) 5.00 12/01/30 1,673,252 6,000 District of Columbia Ballpark, Ser 2006 B-1 (FGIC) 5.00 02/01/31 6,313,020 1,400 Marion County Convention & Recreational Facilities Authority, Indiana, Refg Ser 2003 A (AMBAC) 5.00 06/01/21 1,463,616 -------- ------------- 8,990 9,449,888 -------- ------------- Resource Recovery Revenue (0.9%) 3,000 Northeast Maryland Waste Disposal Authority, Montgomery County Ser 2003 (AMT) (Ambac) 5.50 04/01/16 3,207,750 -------- ------------- Retirement & Life Care Facilities Revenue (3.0%) 2,000 Colorado Health Facilities Authority, Adventist Health/ Sunbelt Ser 2006 D 5.25 11/15/35 2,108,660 1,500 Lee County Industrial Development Authority, Florida, Shellpoint Village Ser 2006 5.125 11/15/36 1,524,135 1,500 Missouri Health & Educational Facilities Authority, Lutheran Senior Services Ser 2005 A 5.375 02/01/35 1,568,910 2,500 Vermont Economic Development Authority, Wake Robin Corp Ser 2006 A 5.375 05/01/36 2,550,000 Henrico County Economic Development Authority, Virginia, 1,450 Westminister Canterbury Ser 2006 5.00 10/01/27 1,486,221 1,750 Westminister Canterbury Ser 2006 5.00 10/01/35 1,781,448 -------- ------------- 10,700 11,019,374 -------- ------------- Tobacco Revenue (6.6%) 4,000 Northern Tobacco Securitization Corporation, Alaska, Asset Backed Ser 2006 A 5.00 06/01/46 4,020,440 16,000 Silicon Valley Tobacco Securitization Authority, California, Santa Clara Tobacco Securitization Corp Ser 2007 0.00 06/01/36 3,168,960 5,000 Tobacco Securitization Authority of Northern California, Sacramento County Tobacco Securitization Corporation Ser 2005 A-1 5.00 06/01/37 5,043,950 Tobacco Settlement Financing Corp, New Jersey, 5,000 Ser 2007 1A 4.625 06/01/26 4,816,450 6,000 Ser 2007 1B 0.00 06/01/41 886,260 5,000 Nassau County Tobacco Settlement Corporation, New York, Asset Backed Ser 2006 A-3 5.125 06/01/46 5,103,800 1,000 Tobacco Settlement Financing Corporation, Virginia, Ser 2005 5.625 06/01/37 1,069,580 -------- ------------- 42,000 24,109,440 -------- ------------- Transportation Facilities Revenue (29.6%) 2,000 Arizona Transportation Board, Highway Refg Ser 2002 A 5.25 07/01/19 2,162,560 3,000 Phoenix Civic Improvement Corporation, Arizona, Airport Ser 2002 B (AMT) (FGIC) 5.25 07/01/32 3,124,530 4,000 Port of Oakland, California, Ser 2002 L (AMT) (FGIC) 5.00 11/01/32 4,122,560 2,000 Mid-Bay Bridge Authority, Florida, Refg Ser 1993 A (Ambac) 5.95 10/01/22 2,103,060 3,000 Atlanta, Georgia, Airport Ser 2004 J (FSA) 5.00 01/01/34 3,130,320 Georgia Road & Tollway Authority, 6,000 Ser 2004 5.00 10/01/22 6,347,760 9,000 Ser 2004 5.00 10/01/23 9,510,840 4,000 Chicago, Illinois, O' Hare Int'l Airport Third Lien Ser 2003 B-2 (AMT) (FSA) 5.75 01/01/23 4,373,680 6,335 Indiana Transportation Finance Authority, Highway Ser 2000 5.375 12/01/25 6,643,641 3,000 Wayne County, Michigan, Detroit Metropolitan Wayne County Airport Refg Ser 2002 D (AMT) (FGIC) 5.50 12/01/17 3,213,360 Clark County, Nevada, 4,000 Airport SubLien Ser 2004 A-1 (AMT) (FGIC) 5.50 07/01/20 4,307,160 1,000 Jet Aviation Fuel Tax Ser 2003 C (AMT) (Ambac) 5.375 07/01/19 1,060,840 1,100 Jet Aviation Fuel Tax Ser 2003 C (AMT) (Ambac) 5.375 07/01/20 1,166,220 2,000 Jet Aviation Fuel Tax Ser 2003 C (AMT) (Ambac) 5.375 07/01/22 2,118,100 5,000 New Jersey Transportation Trust Fund Authority, 1999 Ser A 5.75 06/15/20 5,789,300 12,000 New Jersey Turnpike Authority, Ser 2003 A (FGIC) ++ 5.00 01/01/27 12,555,240 10,000 Metropolitan Transportation Authority, New York, Transportation Refg Ser 2002 A (FGIC) 5.00 11/15/25 10,490,500 5,000 Triborough Bridge & Tunnel Authority, New York, Refg 2002 E (MBIA) 5.25 11/15/22 5,338,450 2,000 Harris County, Texas, Toll Road Ser Lien 2005 A (FSA) 5.25 08/15/35 2,077,020 2,000 Alliance Airport Authority, Texas, Federal Express Corp Refg Ser 2006 (AMT) 4.85 04/01/21 2,025,280 Houston, Texas, 6,000 Airport Sub Lien Ser 2000 A (AMT) (FSA) 5.875 07/01/17 6,335,100 5,000 Airport Sub Lien Ser 2000 A (AMT) (FSA) 5.625 07/01/30 5,238,150 4,010 Port of Seattle, Washington, Passenger Facility Ser 1998 A (MBIA)** 5.00 12/01/23 4,100,960 -------- ------------- 101,445 107,334,631 -------- ------------- Water & Sewer Revenue (38.7%) 3,800 Phoenix Civic Improvement Corporation, Arizona, Jr Lien Water Ser 2002 (FGIC) 5.00 07/01/26 3,949,530 3,000 East Bay Municipal Utility District, California, Water Ser 2001 (MBIA) 5.00 06/01/26 3,103,620 3,720 San Diego County Water Authority, California, Ser 2002 A COPs (MBIA) 5.00 05/01/27 3,886,024 3,500 Broward County, Florida, Water & Sewer Utility Ser 2003 (MBIA) 5.00 10/01/24 3,681,930 10,000 Augusta, Georgia, Water & Sewerage Ser 2000 (FSA) 5.25 10/01/30 10,497,800 10,000 Indiana Bond Bank, Revolving Fund Ser 2001 A 5.00 02/01/23 10,502,500 5,000 Louisville & Jefferson County Metropolitan Sewer District, Kentucky, Ser 1999 A (FGIC) 5.75 05/15/33 5,286,750 5,345 Las Vegas Vallley Water District, Nevada, Water Impr Refg Ser 2003 A (FGIC) 5.25 06/01/20 5,702,153 10,000 Passaic Valley Sewerage Commissioners, New Jersey, Ser F (FGIC) 5.00 12/01/20 10,613,700 3,000 Rio Rancho, New Mexico, Water & Wastewater Refg Ser 1999 (Ambac) 5.25 05/15/19 3,087,360 New York City Municipal Water Finance Authority, New York, 3,500 2003 Ser A 5.375 06/15/19 3,755,780 18,000 2002 Ser B 5.00 06/15/26 18,576,180 10,000 2004 Ser A 5.00 06/15/35 10,388,900 4,500 Charlotte, North Carolina, Water & Sewer Ser 2001 5.125 06/01/26 4,731,390 10,000 Austin, Texas, Water & Wastewater Refg Ser 2001 A & B (FSA)** 5.125 05/15/27 10,303,080 15,000 Houston, Texas, Combined Utility First Lien Refg 2004 Ser A (FGIC) 5.25 05/15/23 16,115,550 13,960 San Antonio, Texas, Water & Refg Ser 2001 (FGIC) 5.00 05/15/26 14,357,441 2,000 Fairfax County Water Authority, Virginia, Refg Ser 1992 6.00 04/01/22 2,046,740 -------- ------------- 134,325 140,586,428 -------- ------------- Other Revenue (8.7%) 10,000 California Economic Recovery, Ser 2004 A 5.00 07/01/16 10,520,800 6,000 Golden State Tobacco Securitization Corporation, California, Enhanced Asset Backed Ser 2005 A (Ambac) 5.00 06/01/29 6,205,140 2,000 New Jersey Economic Development Authority, Cigarette Tax Ser 2004 5.75 06/15/29 2,151,100 2,000 New York City Transitional Finance Authority, New York, Refg 2003 Ser A 5.50# 11/01/26 2,139,640 10,000 Tobacco Settlement Financing Corp, New York, State Contingency Ser 2003 B-1C 5.50 06/01/17 10,629,600 -------- ------------- 30,000 31,646,280 -------- ------------- Refunded (2.8%) 5,000 California Infrastructure & Economic Development Bank, Bay Area Toll Bridges Seismic Retrofit First Lien Ser 2003 A 5.00 07/01/28+ 5,593,950 3,000 Pennsylvania Public School Building Authority, Philadelphia School District Ser 2003 (FSA) 5.00 06/01/13+ 3,206,910 1,370 Milwaukee Redevelopment Authority, Wisconsin, Public Schools Ser 2003 A (Ambac) 5.125 08/01/13+ 1,471,640 -------- ------------- 9,370 10,272,500 -------- ------------- 578,890 TOTAL TAX-EXEMPT MUNICIPAL OBLIGATIONS (Cost $564,850,587) 589,602,885 -------- ------------- SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (1.4%) 2,400 Missouri Health & Educational Facilities Authority, Cox Health System Ser 1997 (MBIA) (Demand 02/01/07) 3.68* 06/01/15 2,400,000 2,800 Virginia Commonwealth University, Ser A (Demand 02/01/07) 3.70* 11/01/30 2,800,000 -------- ------------- 5,200 TOTAL SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (Cost $5,200,000) 5,200,000 -------- ------------- 584,090 TOTAL INVESTMENTS (Cost $570,050,587) 594,802,885 -------- ------------- (30,760) FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (-8.4%) -------- Note with interest rates ranging from 3.44% to 3.66% at January 31, 2007 and contractual maturities of collateral ranging from 10/01/19 to 05/15/35 +++ (c) (Cost $(30,760,000)) (30,760,000) ------------- $553,330 TOTAL NET INVESTMENTS (Cost 539,290,587)(a) (b) 155.3% 564,042,885 ======== OTHER ASSETS IN EXCESS OF LIABILITIES 2.0 7,272,799 PREFERRED SHARES OF BENEFICIAL INTEREST (57.3) (208,125,784) ----- ------------- NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 100.0% $ 363,189,900 ===== ============= ---------- Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders. AMT Alternative Minimum Tax. COPs Certificates of Participation. ETM Escrowed to Maturity. PSF Texas Permanent School Fund Guarantee Program. + Prerefunded to call date shown. ++ A portion of this security has been physically segregated in connection with open futures contracts in the amount of $58,500. +++ Floating rate note obligations related to securities held. The interest rate shown reflects the rate in effect at January 31, 2007. * Current coupon of variable rate demand obligation. ** Underlying security related to inverse floaters entered into by the Trust. # Security is a "Step-up" bond where the coupon increases on a predetermined future date. (a) Securities have been designated as collateral in an amount equal to $10,010,842 in connection with open futures contracts and an open interest rate swap contract. (b) The aggregate cost for federal income tax purposes is $539,290,587. The aggregate gross unrealized appreciation is $24,952,471 and the aggregate gross unrealized depreciation is $200,173, resulting in net unrealized appreciation of $24,752,298. (c) Floating Rate Note Obligations Related to Securities Held - The Trust enters into transactions in which it transfers to Dealer Trusts ("Dealer Trusts"), fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts' assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Trust to retain residual interest in the bonds. The Trust enters into shortfall agreements with the Dealer Trusts which commit the Trust to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Trust (inverse floating rate investments) include the right of the Trust (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Trust, thereby collapsing the Dealer Trusts. The Trust accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund's investment assets, and the related floating rate notes reflected as Trust liabilities. The notes issued by the Dealer Trust have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trust for redemption at par at each reset date. At January 31, 2007, Trust investments with a value of $49,437,545 are held by the Dealer Trust and serve as collateral for the $30,760,000 in floating rate note obligations outstanding at that date. Contractual maturities of the floating rate note obligations and interest rates in effect at January 31, 2007 are presented in the "Portfolio of Investments". Bond Insurance: --------------- Ambac Ambac Assurance Corporation. Connie Lee Connie Lee Insurance Company - A wholly owned subsidiary of Ambac Assurance Corporation. FGIC Financial Guaranty Insurance Company. FSA Financial Security Assurance Inc. MBIA Municipal Bond Investors Assurance Corporation. XLCA XL Capital Assurance Inc. FUTURES CONTRACTS OPEN AT JANUARY 31, 2007: NUMBER OF DESCRIPTION, DELIVERY UNDERLYING FACE UNREALIZED CONTRACTS LONG/SHORT MONTH AND YEAR AMOUNT AT VALUE APPRECIATION ---------------------------------------------------------------------------------- 90 Short U.S. Treasury Notes 5 Yr March 2007 $(9,607,500) $204,792 ======== INTEREST RATE SWAP AGREEMENT OPEN AT JANUARY 31, 2007: NOTIONAL AMOUNT PAYMENTS PAYMENTS TERMINATION UNREALIZED COUNTERPARTY (000) MADE BY TRUST RECEIVED BY TRUST DATE APPPRECIATION ------------------------------------------------------------------------------------------------------------- J P Morgan Chase Co. $15,000 Fixed Rate 3.568% Floating Rate BMA (Bond Market Association) 03/08/17 $256,802 ======== GEOGRAPHIC SUMMARY OF INVESTMENTS Based on Market Value as a Percent of Total Investments Alabama 0.7% Alaska 0.7 Arizona 2.7 California 12.8 Colorado 2.6 Delaware 0.2 District of Columbia 1.1 Florida 4.5 Georgia 5.2 Hawaii 3.5 Idaho 0.3 Illinois 3.9 Indiana 4.4 Kansas 0.5 Kentucky 0.9 Maryland 2.7 Michigan 2.6 Minnesota 0.4 Missouri 0.7 Montana 0.6 Nebraska 0.9 Nevada 2.5 New Jersey 7.3 New Mexico 1.1 New York 12.0 North Carolina 0.8 North Dakota 0.2 Ohio 2.0 Pennsylvania 1.6 South Carolina 3.5 Tennessee 0.9 Texas 10.5 Vermont 0.5 Virginia 1.6 Washington 3.3 Wisconsin 0.3 ----- Total~ 100.0% ===== ---------- ~ Does not include open short futures contracts with an underlying face amount of $9,607,500 with unrealized appreciation of $204,792 and an open interest rate swap agreement with unrealized appreciation of $256,802. ITEM 2. CONTROLS AND PROCEDURES. (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to provide reasonable assurance that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's ("SEC") rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. The Trust's principal executive officer and principal financial officer have also concluded that the Trust's disclosure controls and procedures designed to ensure that information required to be disclosed by the Trust in this Form N-Q is accumulated and communicated to the Trust's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure were effective. Management of the Trust has determined that as of and prior to November 30, 2006, the Trust's fiscal quarter end period, the Trust had a deficiency in its internal control over financial reporting related to the review, analysis and determination of whether certain transfers of municipal securities qualified for sale accounting under the provisions of Statement of Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." Since November 30, 2006, and prior to the issuance of the Trust's quarterly schedule of portfolio holdings, management has revised its disclosure controls and procedures and its internal control over financial reporting in order to improve the controls' effectiveness to ensure that transactions in transfer of municipal securities are accounted for properly. Management notes that other investment companies investing in similar investments over similar time periods had been accounting for such investments in a similar manner as the Trust. Accordingly, other investment companies are also concluding that there was a material weakness in their internal control over financial reporting of such investments. There was no impact to the net asset value of the Trust's shares or the Trust's total return for any period as a result of the changes in financial reporting of such investments. (b) There were no changes in the Trust's internal control over financial reporting that occurred during the fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting. However, as discussed above, subsequent to November 30, 2006, the Trust's internal control over financial reporting was revised. ITEM 3. EXHIBITS. (a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Morgan Stanley Quality Municipal Income Trust /s/ Ronald E. Robison ------------------------------------- Ronald E. Robison Principal Executive Officer March 22, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Ronald E. Robison ------------------------------------- Ronald E. Robison Principal Executive Officer March 22, 2007 /s/ Francis Smith ------------------------------------- Francis Smith Principal Financial Officer March 22, 2007 3 EXHIBIT 3 A1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley Quality Municipal Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Omitted; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 22, 2007 /s/ Ronald E. Robison ---------------------------------------- Ronald E. Robison Principal Executive Officer 4 EXHIBIT 3 A2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Francis Smith, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley Quality Municipal Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Omitted; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 22, 2007 /s/ Francis Smith ---------------------------------------- Francis Smith Principal Financial Officer 5