SHAREHOLDER LETTER
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Your Fund's Goal: Franklin California Tax-Free Income Fund seeks to provide
high, current income exempt from regular federal and California state personal
income taxes through a portfolio consisting primarily of California municipal
bonds.(1)
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Dear Shareholder:
This annual report for Franklin California Tax-Free Income Fund covers the
period ended March 31, 2000. The year under review was marked by economic
strength, as U.S. gross domestic product (GDP) rose an estimated, annualized
5.4%, consumer confidence remained strong and unemployment hit a 30-year low. In
fact, the domestic economy grew for a record 108th month in a row, and domestic
stock markets surged to all-time highs. In the face of such economic expansion,
inflation as measured by the Consumer Price Index was 3.7% for the reporting
period.
Bond markets started the period in what looked to be a potentially positive year
due to interest-rate expectations. However, the Federal Reserve Board (the Fed)
proceeded to raise the federal funds target rate 0.25% on five separate
occasions due to inflation fears. This made 1999 and early 2000 one of the worst
periods that bond markets have ever experienced. In February, the government
announced it would sponsor 30-year Treasury buybacks and reduce future issuance
of long-term Treasuries. This, coupled with several signs that U.S. economic
growth might be slowing, increased demand just as supply was dwindling. These
circumstances caused Treasury bond prices to rise sharply for the first time
since the first half of 1999, when interest rates were falling. In this
environment, the Treasury bond yield curve experienced an unusual situation and
became inverted; that is, rates on long-term bonds declined below those of
short-term bonds. None of the other domestic fixed-income markets, including
municipal bonds, experienced such an inversion.
1. For investors subject to the federal alternative minimum tax, a small portion
of this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
All portfolio holdings mentioned in the report are listed by their complete
legal titles in the fund's Statement of Investments (SOI), which provides a
complete listing of the fund's portfolio holdings, including dollar value and
number of shares or principal amount. The SOI begins on page 17.
CONTENTS
Shareholder Letter ........................................................ 1
Performance Summary ....................................................... 10
Financial Highlights & Statement of Investments ........................... 14
Financial Statements ...................................................... 51
Notes to Financial Statements ............................................. 54
Independent Auditors' Report .............................................. 57
Tax Designation ........................................................... 58
[PYRAMID GRAPH]
The yield on the 30-year Treasury rose from 5.63% at the beginning of the fund's
fiscal year, to 5.83% on March 31, 2000, after reaching a high of 6.75% on
January 20, 2000. The yield on the Bond Buyer Municipal Bond Index (Bond Buyer
40), an indicator of the municipal bond market, rose from 5.23% to 5.97% for the
same period, while its price declined 9.75%.(2) As interest rates and yields
increased, the dollar value of bonds decreased, meaning bond funds in general
declined in value.
Municipal bond supply in 1999 and first quarter 2000 added pressure to the
already volatile municipal bond market. Although less than in 1998, the $225
billion issuance in 1999 was the fourth-highest on record. Looking forward, we
anticipate decreased new issuance for the remainder of 2000. The near-record
volume did have some benefit, as it helped municipal bonds remain cheap relative
to Treasuries. During the year under review, municipal bonds, as measured by the
Bond Buyer 40, yielded as much as 102% of a comparable Treasury bond's yield.
Historically, this ratio is about 90%.(3) Because municipal bonds are
tax-exempt, they generally yield less than Treasuries, which are subject to
federal income tax. When municipals are yielding nearly the same as Treasuries,
investors are able to take advantage of the tax exemption at little extra cost.
2. The unmanaged Bond Buyer Municipal Bond Index is composed of the yield to
maturity of 40 bonds. The index attempts to track the new-issue market as
closely as possible, so it changes bonds twice a month, adding all new bonds
that meet certain requirements and deleting an equivalent number according to
their secondary market trading activity. As a result, the average par call date,
average maturity date and average coupon rate change over time. The average
maturity generally has been about 28-30 years.
Looking forward, we anticipate that the Fed will monitor inflationary tendencies
closely, probably raising the federal funds target rate again. If, as a result,
the economy slows toward the end of 2000, the bond markets could begin to
experience less volatility.
The last few times municipal bonds lost ground, they enjoyed sharp rebounds in
the following year. For example, in 1994, when the Fed raised interest rates six
times, the average general municipal bond fund lost 6.5% in total return. In the
following year, rates declined, and the average municipal bond fund gained
nearly 17%. Although there is no guarantee that bond markets and municipal bond
funds will repeat past behavior, markets do go through cycles. Predicting these
cycles is very difficult, even for professional economists -- which is why we
recommend investing for the long term. It is important to remember that over
time, the tax-free income received from municipal bond funds will ultimately
drive the fund's total return performance.
CALIFORNIA ECONOMIC UPDATE
In California, the year under review marked the state's sixth consecutive year
of economic expansion and fifth straight year in which economic growth and job
creation exceeded the national average. Although the state's 30-year low 4.6%
unemployment rate still topped the 4.1% national average in February, this rate
dropped faster than the national average during the reporting period.(4)
California's economic expansion also translated into a record year for its
housing market, with an estimated 8% increase in the median home price for
1999.(5) The state's diversified and growing economy, as well as its improved
fiscal management, contributed to Moody's and Fitch's decision to upgrade
California's debt to Aa3 and AA, respectively, during the last five months of
the reporting period.(6) This marked the first time in eight years that Standard
& Poor's(R), Moody's Investors Service and Fitch IBCA Inc., three independent
credit rating agencies, have all viewed California's credit as double-A.(7)
3. Source: The Bond Buyer, 3/00.
As California's population reached 34 million in 1999, the world's
eighth-largest economy prospered, remained broad-based, and grew faster than the
nation's as a whole. The largest employment gains during the reporting period
occurred in construction, which was up 9%, and services, up 4.1% due
particularly to the explosion of Internet-related firms; tourism and
entertainment-related jobs also grew significantly.(4) These new jobs reflected
a decade-long shift in the state's key industries, with computers, software and
entertainment overtaking traditional manufacturing sectors such as cars,
airplanes and steel in importance. The diversified and growing economy has
demonstrated resilience in light of weakness in Asia, which is one of
California's key export markets. Losses on state exports to the Pacific Rim over
the past two years have been offset by NAFTA-induced export growth, which has
increased substantially to Mexico, now 12.7% of total state exports, and Canada,
at 12.1%.(7)
4. Source: Bureau of Labor Statistics, 3/15/00.
5. Source: California Association of REALTORS, PR Newswire, 10/20/99.
6. Sources: Moody's Investors Service, 10/15/99, and Fitch IBCA, State of
California, 2/16/00. This does not indicate Moody's or Fitch's rating of the
fund.
7. Source: Standard & Poor's Ratings Direct, 2/17/00. This does not indicate
Standard & Poor's rating of the fund.
Encouraging employment figures factor into the state's projections for 5.4%
personal income growth in 2000, which is conservative compared to most outside
forecasters' projections and follows a 6.6% increase in 1999. Per-capita income
has stabilized at about 104% of the national average after a long period of
relative decline.(7)
California's total net tax-supported debt was just over $21.6 billion in 1999,
approximately $729 per capita, or 2.4% of personal income, higher than the
national medians of $540 and 2.2%, respectively. California entered fiscal year
2000 with $9.6 billion in available resources, due to general and special fund
surpluses, the largest amount the state has had in over two decades.(8) These
sizable balances, which should help cushion the negative impacts of any future
recessions, and projections for further California economic growth, albeit at a
slower rate than that of the last two years, underlie the state's favorable
credit outlook.
PORTFOLIO NOTES
Generally rising interest rates during the year under review presented
challenges for the municipal bond market, as bond prices fall when interest
rates rise. The Fed raised short-term interest rates five times during the
period -- 25 basis points, or 0.25%, each time. For the 12 months ended March
31, 2000, the price on the 30-year Treasury bond fell 5.96%, the Lehman Brothers
Municipal Bond Index was off 6.1%, and the Bond Buyer 40 was down 9.75%. By
comparison, Franklin California Tax-Free Income Fund's Class A share price
declined 7.0%, as measured by net asset value.(9) The Lehman Brothers Municipal
Bond Index comprises short- and long-term bonds, while the Bond Buyer 40
generally tracks bonds in the 25- to 40-year range, has an average maturity of
30 years, and more closely reflects recent municipal bond market performance.
8. Source: Moody's Investors Service, 1/15/00.
QUALITY BREAKDOWN
Based on Total Long-Term Investments*
3/31/00
[PIE CHART]
AAA - 57.5%
AA - 13.4%
A - 9.7%
BBB - 18.6%
Below Investment Grade - 0.8%
*Quality breakdown includes internal ratings for bonds not rated by an
independent agency.
PORTFOLIO BREAKDOWN
3/31/00
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
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Utilities 17.0%
Hospital & Health Care 12.2%
Transportation 16.9%
Prerefunded 16.0%
Tax-Supported Debt 12.7%
Subject to Government Appropriation 11.6%
General Obligation 5.4%
Housing 4.9%
Other Revenue 1.6%
Higher Education 1.5%
Corporate-Backed 0.2%
California's $27 billion bond supply for 1999 was somewhat light, a 21.6%
decrease from 1998 issuance. California municipalities that had rushed to
finance new projects while interest rates were low tabled plans for new issues
as rates rose throughout 1999, diminishing supply. Supply in 2000 is expected to
be at least 40% less than it was in 1999.(10) The lack of supply and a favorable
reaction to the Fed's moves to tighten credit and control inflation rallied the
long-term municipal bond market in the last two months of the reporting period,
allowing it to move off its January lows. Accordingly, the fund's Class A
shares' net asset value rose from $6.60 on February 1, to $6.88 on March 31,
2000, an increase of 4.2%.
During the period, we sought to take advantage of the rising interest-rate
environment to improve the portfolio structure, enabling the fund to capture
greater yields, improve call protection and book tax losses. These losses can
then be carried forward to help offset any current or future taxable capital
gains, possibly lowering shareholders' future tax liabilities. We sold some
lower-coupon issues at a premium, such as prerefunded bonds with coupons in the
5.5% to 6.5% range, to meet cash needs.
9. Sources: Lehman Brothers; The Bond Buyer. Treasuries, if held to maturity,
offer a fixed rate of return and fixed principal value; their interest payments
and principal are guaranteed. The fund's investment return and share price
fluctuate with market conditions. The index is unmanaged and includes reinvested
interest. One cannot invest directly in an index.
10. Source: The Bond Buyer, 1/3/00.
Despite the reduction in the state's bond supply, we were able to find value in
a number of issues that came to market. We purchased securities at more
attractive yields, which helped the fund to slightly increase the dividend per
share on several occasions during the reporting period. In addition, our active
portfolio management has built a portfolio that is diversified by credit quality
as well as coupons and maturities, which can provide a greater measure of
stability to the fund's share value. The fund continues to emphasize
high-quality securities, and AAA-rated bonds represented 57.5% of the fund's
total long-term investments at the end of the reporting period. The portfolio's
average maturity increased from 21.2 to 23.2 years during the year under review.
Your fund offers a notable tax advantage over a comparable taxable investment.
The Performance Summary on page 10 shows that at the end of this reporting
period, the fund's Class A shares' distribution rate was 5.17%, based on an
annualization of the current 3.1 cent ($0.031) per share dividend and the
maximum offering price of $7.19 on March 31, 2000. This tax-free rate is
generally higher than the after-tax return on a comparable taxable investment.
An investor in the maximum combined federal and California state personal income
tax bracket of 45.22% would need to earn 9.44% from a taxable investment to
match the fund's tax-free distribution rate. The Performance Summary also shows
the distribution rates and taxable equivalent distribution rates for Class B and
C shares.
Looking forward, we will attempt to continue taking advantage of the recently
higher interest-rate environment, seeking to provide shareholders with high,
current tax-free income. As always, we encourage investors to maintain a
long-term investment perspective. Please keep in mind that interest rates and
thus, bond prices, rise and fall depending on the economy. Such fluctuations are
a normal part of investing, and one should expect this when investing in any
security, including municipal bonds. Municipal bond funds can help lower such
volatility, as they offer a level of diversification that is difficult for
individual investors to achieve on their own.
DIVIDEND DISTRIBUTIONS*
4/1/99 - 3/31/00
<TABLE>
<CAPTION>
DIVIDEND PER SHARE
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MONTH CLASS A CLASS B CLASS C
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<S> <C> <C> <C>
April 2.95 cents 2.67 cents 2.58 cents
May 2.95 cents 2.67 cents 2.58 cents
June 3.00 cents 2.64 cents 2.64 cents
July 3.00 cents 2.64 cents 2.64 cents
August 3.00 cents 2.64 cents 2.64 cents
September 3.05 cents 2.73 cents 2.72 cents
October 3.05 cents 2.73 cents 2.72 cents
November 3.05 cents 2.73 cents 2.72 cents
December 3.10 cents 2.79 cents 2.79 cents
January 3.10 cents 2.79 cents 2.79 cents
February 3.10 cents 2.79 cents 2.79 cents
March 3.10 cents 2.78 cents 2.81 cents
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TOTAL 36.45 CENTS 32.60 CENTS 32.42 CENTS
</TABLE>
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions include all accrued income earned by the fund during the reporting
period.
We encourage you to discuss your financial goals with an investment
representative. As always, we appreciate your support, welcome your questions
and comments and look forward to serving your investment needs in the years
ahead.
Sincerely,
/s/ Charles B. Johnson
Charles B. Johnson
Chairman
Franklin California Tax-Free Income Fund
/s/ Sheila Amoroso
Sheila Amoroso
/s/ Rafael R. Costas Jr.
Rafael R. Costas Jr.
Senior Vice Presidents/Co-Directors
Franklin Municipal Bond Department
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This discussion reflects our views, opinions, and portfolio holdings as of March
31, 2000, the end of the reporting period. The information provided is not a
complete analysis of every aspect of any industry, security or the fund. Our
strategies and the fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
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CLASS A: Subject to the current, maximum 4.25% initial sales charge. Prior to
July 1, 1994, fund shares were offered at a lower initial sales charge; thus
actual total returns may differ. Effective May 1, 1994, the fund eliminated the
sales charge on reinvested dividends and implemented a Rule 12b-1 plan, which
affects subsequent performance.
CLASS B: Subject to no initial sales charge, but subject to a contingent
deferred sales charge (CDSC) declining from 4% to 0% over six years. These
shares have higher annual fees and expenses than class A shares.
CLASS C: Subject to 1% initial sales charge and a 1% CDSC for shares redeemed
within 18 months of investment. These shares have higher annual fees and
expenses than Class A shares.
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ONE-YEAR PERFORMANCE SUMMARY
AS OF 3/31/00
One-year total return does not include sales charges. Distributions will vary
based on earnings of the fund's portfolio and any profits realized from the sale
of the portfolio's securities. Past distributions are not indicative of future
trends. All total returns include reinvested distributions at net asset value.
CLASS A
One-Year Total Return -1.97%
Net Asset Value (NAV) $6.88 (3/31/00) $7.40 (3/31/99)
Change in NAV -$0.52
Distributions (4/1/99-3/31/00) Dividend Income $0.3645
Long-Term Capital Gain $0.0052
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Total $0.3697
CLASS B
One-Year Total Return -2.51%
Net Asset Value (NAV) $6.87 (3/31/00) $7.39 (3/31/99)
Change in NAV -$0.52
Distributions (4/1/99-3/31/00) Dividend Income $0.3260
Long-Term Capital Gain $0.0052
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Total $0.3312
CLASS C
One-Year Total Return -2.54%
Net Asset Value (NAV) $6.87 (3/31/00) $7.39 (3/31/99)
Change in NAV -$0.52
Distributions (4/1/99-3/31/00) Dividend Income $0.3242
Long-Term Capital Gain $0.0052
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Total $0.3294
Franklin California Tax-Free Income Fund paid distributions derived from
long-term capital gains totaling 0.52 cents ($0.0052) per share in June 1999.
The fund hereby designates such distributions as capital gain dividends per
Internal Revenue Code Section 852 (b)(3).
Past performance does not guarantee future results.
ADDITIONAL PERFORMANCE
AS OF 3/31/00
INCEPTION
CLASS A 1-YEAR 5-YEAR 10-YEAR (2/1/77)
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Cumulative Total Return(1) -1.97% +30.37% +88.55% +285.83%
Average Annual Total Return(2) -6.15% +4.52% +6.08% +5.81%
INCEPTION
CLASS B 1-YEAR (1/1/99)
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Cumulative Total Return(1) -2.51% -1.65%
Average Annual Total Return(2) -6.23% -4.32%
INCEPTION
CLASS C 1-YEAR 3-YEAR (5/1/95)
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Cumulative Total Return(1) -2.54% +12.79% +26.34%
Average Annual Total Return(2) -4.37% +3.75% +4.66%
SHARE CLASS A B C
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Distribution Rate(3) +5.17% +4.86% +4.86%
Taxable Equivalent Distribution Rate(4) +9.44% +8.87% +8.87%
30-Day Standardized Yield(5) +5.03% +4.69% +4.65%
Taxable Equivalent Yield(4) +9.18% +8.56% +8.49%
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, applicable,
maximum sales charge(s) for that class.
3. Distribution rate is based on an annualization of the respective class's
current monthly dividend and the maximum offering price per share on March 31,
2000.
4. Taxable equivalent distribution rate and yield assume the published rates as
of March 15, 2000, for the maximum combined federal and California state
personal income tax bracket of 45.22%, based on the federal income tax rate of
39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended March 31, 2000.
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Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
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Past performance does not guarantee future results.
AVERAGE ANNUAL TOTAL RETURN
3/31/00
CLASS A
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1-Year -6.15%
5-Year +4.52%
10-Year +6.08%
Since Inception (2/1/77) +5.81%
AVERAGE ANNUAL TOTAL RETURN
3/31/00
CLASS B
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1-Year -6.23%
Since Inception (1/1/99) -4.32%
TOTAL RETURN INDEX COMPARISON
FOR HYPOTHETICAL $10,000 INVESTMENT
Total return represents the change in value of an investment over the periods
shown. It includes the current, applicable, maximum sales charge(s), fund
expenses, account fees and reinvested distributions. The unmanaged index, which
includes approximately 38,000 municipal securities from across the country,
differs from the fund in composition, does not pay management fees or expenses
and includes reinvested interest. One cannot invest directly in an index.
CLASS A (4/1/90 - 3/31/00)
The following line graph compares the performance of the Franklin California
Tax-Free Income Fund's Class A shares to that of the Lehman Brothers Municipal
Bond Index, and to the Consumer Price Index based on a $10,000 investment from
4/1/90 to 3/31/00.
<TABLE>
<CAPTION>
Date Franklin California Tax-Free Lehman Brothers Municipal Bond CPI
Income Fund-Class A Index
<S> <C> <C> <C> <C> <C>
04/01/1990 9,569 10,000 10,000
04/30/1990 9,559 -0.72% 9,928 0.16% 10,016
05/31/1990 9,788 2.18% 10,144 0.23% 10,039
06/30/1990 9,847 0.88% 10,234 0.54% 10,093
07/31/1990 9,993 1.47% 10,384 0.38% 10,132
08/31/1990 9,810 -1.45% 10,234 0.92% 10,225
09/30/1990 9,813 0.06% 10,240 0.84% 10,311
10/31/1990 9,888 1.82% 10,426 0.60% 10,373
11/30/1990 10,080 2.01% 10,636 0.22% 10,395
12/31/1990 10,112 0.43% 10,681 0.00% 10,395
01/31/1991 10,248 1.34% 10,824 0.60% 10,458
02/28/1991 10,295 0.87% 10,919 0.15% 10,473
03/31/1991 10,343 0.03% 10,922 0.15% 10,489
04/30/1991 10,466 1.34% 11,068 0.15% 10,505
05/31/1991 10,560 0.89% 11,167 0.30% 10,536
06/30/1991 10,561 -0.10% 11,156 0.29% 10,567
07/31/1991 10,716 1.22% 11,292 0.15% 10,583
08/31/1991 10,794 1.32% 11,441 0.29% 10,613
09/30/1991 10,950 1.30% 11,590 0.44% 10,660
10/31/1991 11,014 0.90% 11,694 0.15% 10,676
11/30/1991 11,063 0.28% 11,727 0.29% 10,707
12/31/1991 11,222 2.15% 11,979 0.07% 10,715
01/31/1992 11,239 0.23% 12,006 0.15% 10,731
02/29/1992 11,241 0.03% 12,010 0.36% 10,769
03/31/1992 11,338 0.03% 12,013 0.51% 10,824
04/30/1992 11,404 0.89% 12,120 0.14% 10,839
05/31/1992 11,584 1.18% 12,263 0.14% 10,855
06/30/1992 11,716 1.68% 12,469 0.36% 10,894
07/31/1992 12,046 3.00% 12,843 0.21% 10,917
08/31/1992 11,882 -0.97% 12,719 0.28% 10,947
09/30/1992 11,914 0.65% 12,802 0.28% 10,978
10/31/1992 11,728 -0.98% 12,676 0.35% 11,016
11/30/1992 12,078 1.79% 12,903 0.14% 11,032
12/31/1992 12,262 1.02% 13,035 -0.07% 11,024
01/31/1993 12,396 1.16% 13,186 0.49% 11,078
02/28/1993 12,701 3.62% 13,663 0.35% 11,117
03/31/1993 12,613 -1.06% 13,518 0.35% 11,156
04/30/1993 12,698 1.01% 13,655 0.28% 11,187
05/31/1993 12,748 0.56% 13,731 0.14% 11,202
06/30/1993 12,959 1.67% 13,961 0.14% 11,218
07/31/1993 12,940 0.13% 13,979 0.00% 11,218
08/31/1993 13,237 2.08% 14,270 0.28% 11,250
09/30/1993 13,359 1.14% 14,432 0.21% 11,273
10/31/1993 13,389 0.19% 14,460 0.41% 11,319
11/30/1993 13,295 -0.88% 14,332 0.07% 11,327
12/31/1993 13,426 2.11% 14,635 0.00% 11,327
01/31/1994 13,565 1.14% 14,802 0.27% 11,358
02/28/1994 13,360 -2.59% 14,418 0.34% 11,397
03/31/1994 13,008 -4.07% 13,831 0.34% 11,435
04/30/1994 13,058 0.85% 13,949 0.14% 11,451
05/31/1994 13,163 0.87% 14,070 0.07% 11,459
06/30/1994 13,120 -0.61% 13,985 0.34% 11,498
07/31/1994 13,301 1.83% 14,240 0.27% 11,529
08/31/1994 13,370 0.35% 14,290 0.40% 11,575
09/30/1994 13,270 -1.47% 14,080 0.27% 11,607
10/31/1994 13,113 -1.78% 13,830 0.07% 11,615
11/30/1994 12,937 -1.81% 13,579 0.13% 11,630
12/31/1994 13,046 2.20% 13,878 0.00% 11,630
01/31/1995 13,367 2.86% 14,275 0.40% 11,676
02/28/1995 13,710 2.91% 14,690 0.40% 11,723
03/31/1995 13,840 1.15% 14,859 0.33% 11,762
04/30/1995 13,873 0.12% 14,877 0.33% 11,801
05/31/1995 14,202 3.19% 15,352 0.20% 11,824
06/30/1995 14,117 -0.87% 15,218 0.20% 11,848
07/31/1995 14,210 0.95% 15,363 0.00% 11,848
08/31/1995 14,344 1.27% 15,558 0.26% 11,879
09/30/1995 14,438 0.63% 15,656 0.20% 11,902
10/31/1995 14,634 1.45% 15,883 0.33% 11,942
11/30/1995 14,851 1.66% 16,147 -0.07% 11,933
12/31/1995 15,008 0.96% 16,302 -0.07% 11,925
01/31/1996 15,084 0.76% 16,425 0.59% 11,995
02/29/1996 15,016 -0.68% 16,314 0.32% 12,034
03/31/1996 14,864 -1.28% 16,105 0.52% 12,096
04/30/1996 14,837 -0.28% 16,060 0.39% 12,144
05/31/1996 14,873 -0.04% 16,053 0.19% 12,167
06/30/1996 15,031 1.09% 16,228 0.06% 12,174
07/31/1996 15,129 0.90% 16,374 0.19% 12,197
08/31/1996 15,163 -0.02% 16,371 0.19% 12,220
09/30/1996 15,370 1.40% 16,600 0.32% 12,259
10/31/1996 15,512 1.13% 16,788 0.32% 12,299
11/30/1996 15,742 1.83% 17,095 0.19% 12,322
12/31/1996 15,712 -0.42% 17,023 0.00% 12,322
01/31/1997 15,725 0.19% 17,056 0.32% 12,361
02/28/1997 15,871 0.92% 17,213 0.31% 12,400
03/31/1997 15,707 -1.33% 16,984 0.25% 12,431
04/30/1997 15,831 0.84% 17,126 0.12% 12,446
05/31/1997 16,046 1.51% 17,385 -0.06% 12,438
06/30/1997 16,172 1.07% 17,571 0.12% 12,453
07/31/1997 16,545 2.77% 18,058 0.12% 12,468
08/31/1997 16,466 -0.94% 17,888 0.19% 12,492
09/30/1997 16,660 1.19% 18,101 0.25% 12,523
10/31/1997 16,763 0.64% 18,217 0.25% 12,554
11/30/1997 16,889 0.59% 18,324 -0.06% 12,547
12/31/1997 17,095 1.46% 18,592 -0.12% 12,532
01/31/1998 17,246 1.03% 18,783 0.19% 12,555
02/28/1998 17,281 0.03% 18,789 0.19% 12,579
03/31/1998 17,293 0.09% 18,806 0.19% 12,603
04/30/1998 17,253 -0.45% 18,721 0.18% 12,626
05/31/1998 17,498 1.58% 19,017 0.18% 12,649
06/30/1998 17,571 0.39% 19,091 0.12% 12,664
07/31/1998 17,602 0.25% 19,139 0.12% 12,679
08/31/1998 17,850 1.55% 19,435 0.12% 12,694
09/30/1998 18,099 1.25% 19,678 0.12% 12,709
10/31/1998 18,106 0.00% 19,678 0.24% 12,740
11/30/1998 18,211 0.35% 19,747 0.00% 12,740
12/31/1998 18,204 0.25% 19,797 -0.06% 12,732
01/31/1999 18,379 1.19% 20,032 0.24% 12,763
02/28/1999 18,357 -0.44% 19,944 0.12% 12,778
03/31/1999 18,406 0.14% 19,972 0.30% 12,816
04/30/1999 18,430 0.25% 20,022 0.73% 12,910
05/31/1999 18,303 -0.58% 19,906 0.00% 12,910
06/30/1999 18,039 -1.44% 19,619 0.00% 12,910
07/31/1999 18,064 0.36% 19,690 0.30% 12,949
08/31/1999 17,810 -0.80% 19,532 0.24% 12,980
09/30/1999 17,786 0.04% 19,540 0.48% 13,042
10/31/1999 17,480 -1.08% 19,329 0.18% 13,066
11/30/1999 17,636 1.06% 19,534 0.06% 13,073
12/31/1999 17,406 -0.75% 19,387 0.00% 13,073
01/31/2000 17,227 -0.44% 19,302 0.24% 13,105
02/29/2000 17,543 1.16% 19,526 0.59% 13,182
03/31/2000 18,044 2.18% 19,952 0.82% 13,290
Total Return 80.44% 99.52% 32.90%
</TABLE>
* Source: Standard & Poor's Micropal.
CLASS B (1/1/99 - 3/31/00)
The following line graph compares the performance of the Franklin California
Tax-Free Income Fund's Class B shares to that of the Lehman Brothers Municipal
Bond Index, and to the Consumer Price Index based on a $10,000 investment from
1/1/99 to 3/31/00.
<TABLE>
<CAPTION>
Date Franklin California Tax-Free Lehman Brothers Municipal CPI
Income Fund-Class B Bond Index
<S> <C> <C> <C> <C> <C>
01/01/1999 10,000 10,000 10,000
01/31/1999 10,083 1.19% 10,119 0.24% 10,024
02/28/1999 10,079 -0.44% 10,074 0.12% 10,036
03/31/1999 10,088 0.14% 10,089 0.30% 10,066
04/30/1999 10,098 0.25% 10,114 0.73% 10,140
05/31/1999 10,038 -0.58% 10,055 0.00% 10,140
06/30/1999 9,875 -1.44% 9,910 0.00% 10,140
07/31/1999 9,884 0.36% 9,946 0.30% 10,170
08/31/1999 9,739 -0.80% 9,866 0.24% 10,194
09/30/1999 9,736 0.04% 9,870 0.48% 10,243
10/31/1999 9,550 -1.08% 9,764 0.18% 10,262
11/30/1999 9,644 1.06% 9,867 0.06% 10,268
12/31/1999 9,514 -0.75% 9,793 0.00% 10,268
01/31/2000 9,412 -0.44% 9,750 0.24% 10,293
02/29/2000 9,566 1.16% 9,863 0.59% 10,353
03/31/2000 9,464 2.18% 10,078 0.82% 10,438
Total Return -5.36% 0.78% 4.38%
</TABLE>
* Source: Standard & Poor's Micropal.
Past performance does not guarantee future results.
CLASS C (5/1/95 - 3/31/00)
The following line graph compares the performance of the Franklin California
Tax-Free Income Fund's Class C shares to that of the Lehman Brothers Municipal
Bond Index, and to the Consumer Price Index based on a $10,000 investment from
5/1/95 to 3/31/00.
<TABLE>
<CAPTION>
Date Franklin California Tax-Free Lehman Brothers Municipal CPI
Income Fund-Class C Bond Index
<S> <C> <C> <C> <C> <C>
05/01/1995 9,902 10,000 10,000
05/31/1995 10,140 3.19% 10,319 0.20% 10,020
06/30/1995 10,060 -0.87% 10,229 0.20% 10,040
07/31/1995 10,121 0.95% 10,326 0.00% 10,040
08/31/1995 10,211 1.27% 10,458 0.26% 10,066
09/30/1995 10,286 0.63% 10,523 0.20% 10,086
10/31/1995 10,406 1.45% 10,676 0.33% 10,120
11/30/1995 10,569 1.66% 10,853 -0.07% 10,112
12/31/1995 10,675 0.96% 10,957 -0.07% 10,105
01/31/1996 10,723 0.76% 11,041 0.59% 10,165
02/29/1996 10,668 -0.68% 10,966 0.32% 10,198
03/31/1996 10,562 -1.28% 10,825 0.52% 10,251
04/30/1996 10,537 -0.28% 10,795 0.39% 10,291
05/31/1996 10,542 -0.04% 10,791 0.19% 10,310
06/30/1996 10,649 1.09% 10,908 0.06% 10,316
07/31/1996 10,728 0.90% 11,006 0.19% 10,336
08/31/1996 10,747 -0.02% 11,004 0.19% 10,356
09/30/1996 10,873 1.40% 11,158 0.32% 10,389
10/31/1996 10,984 1.13% 11,284 0.32% 10,422
11/30/1996 11,127 1.83% 11,491 0.19% 10,442
12/31/1996 11,100 -0.42% 11,443 0.00% 10,442
01/31/1997 11,104 0.19% 11,464 0.32% 10,475
02/28/1997 11,202 0.92% 11,570 0.31% 10,508
03/31/1997 11,096 -1.33% 11,416 0.25% 10,534
04/30/1997 11,179 0.84% 11,512 0.12% 10,547
05/31/1997 11,309 1.51% 11,686 -0.06% 10,540
06/30/1997 11,393 1.07% 11,811 0.12% 10,553
07/31/1997 11,667 2.77% 12,138 0.12% 10,565
08/31/1997 11,590 -0.94% 12,024 0.19% 10,586
09/30/1997 11,722 1.19% 12,167 0.25% 10,612
10/31/1997 11,788 0.64% 12,245 0.25% 10,639
11/30/1997 11,872 0.59% 12,317 -0.06% 10,632
12/31/1997 12,027 1.46% 12,497 -0.12% 10,619
01/31/1998 12,128 1.03% 12,626 0.19% 10,640
02/28/1998 12,130 0.03% 12,629 0.19% 10,660
03/31/1998 12,149 0.09% 12,641 0.19% 10,680
04/30/1998 12,098 -0.45% 12,584 0.18% 10,699
05/31/1998 12,264 1.58% 12,783 0.18% 10,719
06/30/1998 12,309 0.39% 12,832 0.12% 10,731
07/31/1998 12,342 0.25% 12,865 0.12% 10,744
08/31/1998 12,510 1.55% 13,064 0.12% 10,757
09/30/1998 12,679 1.25% 13,227 0.12% 10,770
10/31/1998 12,679 0.00% 13,227 0.24% 10,796
11/30/1998 12,729 0.35% 13,274 0.00% 10,796
12/31/1998 12,719 0.25% 13,307 -0.06% 10,789
01/31/1999 12,835 1.19% 13,465 0.24% 10,815
02/28/1999 12,831 -0.44% 13,406 0.12% 10,828
03/31/1999 12,841 0.14% 13,425 0.30% 10,861
04/30/1999 12,852 0.25% 13,458 0.73% 10,940
05/31/1999 12,774 -0.58% 13,380 0.00% 10,940
06/30/1999 12,566 -1.44% 13,187 0.00% 10,940
07/31/1999 12,577 0.36% 13,235 0.30% 10,973
08/31/1999 12,394 -0.80% 13,129 0.24% 10,999
09/30/1999 12,389 0.04% 13,134 0.48% 11,052
10/31/1999 12,152 -1.08% 12,992 0.18% 11,072
11/30/1999 12,273 1.06% 13,130 0.06% 11,079
12/31/1999 12,107 -0.75% 13,032 0.00% 11,079
01/31/2000 11,977 -0.44% 12,974 0.24% 11,105
02/29/2000 12,173 1.16% 13,125 0.59% 11,171
03/31/2000 12,511 2.18% 13,411 0.82% 11,262
Total Return 25.11% 34.11% 12.62%
</TABLE>
* Source: Standard & Poor's Micropal.
AVERAGE ANNUAL TOTAL RETURN
3/31/00
CLASS C
--------------------------------------------------------------------------------
1-Year -4.37%
3-Year +3.75%
Since Inception (5/1/95) +4.66%
*Source: Standard & Poor's Micropal.
Past performance does not guarantee future results.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------
YEAR ENDED MARCH 31,
--------------------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE(a)
(for a share outstanding throughout the year)
Net asset value, beginning of year ............. $ 7.40 $ 7.35 $ 7.09 $ 7.18 $ 7.11
--------------------------------------------------------------------------
Income from investment operations:
Net investment income .38 .39 .42 .43 .44
Net realized and unrealized gains (losses) .... (.53) .07 .27 (.04) .07
--------------------------------------------------------------------------
Total from investment operations ............... (.15) .46 .69 .39 .51
--------------------------------------------------------------------------
Less distributions from:
Net investment income ......................... (.36) (.39) (.42) (.43) (.44)
Net realized gains ............................ (.01) (.02) (.01) (.05) --
--------------------------------------------------------------------------
Total distributions ............................ (.37) (.41) (.43) (.48) (.44)
--------------------------------------------------------------------------
Net asset value, end of year ................... $ 6.88 $ 7.40 $ 7.35 $ 7.09 $ 7.18
==========================================================================
Total Return(b) ................................ (1.97%) 6.43% 10.10% 5.67% 7.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ................ $12,859,577 $15,473,713 $14,767,307 $13,633,542 $ 13,312,666
Ratio to average net assets:
Expenses ...................................... .57% .57% .56% .56% .55%
Net investment income ......................... 5.40% 5.21% 5.71% 6.07% 6.14%
Portfolio turnover rate ........................ 12.10% 18.66% 17.29% 11.96% 19.24%
</TABLE>
(a) Based on average shares outstanding effective March 31, 2000.
(b) Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Highlights (continued)
CLASS B
-------------------------
YEAR ENDED MARCH 31,
-------------------------
2000 1999(c)
-------------------------
PER SHARE OPERATING PERFORMANCE(a)
(for a share outstanding throughout the year)
Net asset value, beginning of year .................. $ 7.39 $ 7.41
-------------------------
Income from investment operations:
Net investment income .............................. .34 .10
Net realized and unrealized losses ................. (.52) (.03)
-------------------------
Total from investment operations .................... (.18) .07
-------------------------
Less distributions from:
Net investment income .............................. (.33) (.09)
Net realized gains ................................. (.01) --
-------------------------
Total distributions ................................. (.34) (.09)
-------------------------
Net asset value, end of year ........................ $ 6.87 $ 7.39
Total Return(b) ..................................... (2.51%) 0.88%
=========================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ..................... $110,933 $ 43,674
Ratio to average net assets:
Expenses ........................................... 1.14% 1.14%(d)
Net investment income .............................. 4.87% 4.59%(d)
Portfolio turnover rate ............................. 12.10% 18.66%
(a) Based on average shares outstanding effective March 31, 2000.
(b) Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(c) For the period January 1, 1999 (effective date) to March 31, 1999.
(d) Annualized
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------------------
2000 1999 1998 1997 1996(c)
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE(a)
(for a share outstanding throughout the year)
Net asset value, beginning of year .......... $ 7.39 $ 7.35 $ 7.09 $ 7.18 $ 7.09
------------------------------------------------------------------
Income from investment operations:
Net investment income ...................... .34 .35 .38 .39 .38
Net realized and unrealized gains (losses) . (.53) .06 .27 (.04) .08
------------------------------------------------------------------
Total from investment operations ............ (.19) .41 .65 .35 .46
------------------------------------------------------------------
Less distributions from:
Net investment income ...................... (.32) (.35) (.38) (.39) (.37)
Net realized gain .......................... (.01) (.02) (.01) (.05) --
------------------------------------------------------------------
Total distributions ......................... (.33) (.37) (.39) (.44) (.37)
------------------------------------------------------------------
Net asset value, end of year ................ $ 6.87 $ 7.39 $ 7.35 $ 7.09 $ 7.18
==================================================================
Total Return(b) ............................. (2.54%) 5.70% 9.49% 5.06% 6.62%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............. $367,874 $464,535 $295,976 $138,509 $47,685
Ratio to average net assets:
Expenses ................................... 1.14% 1.14% 1.14% 1.14% 1.14%(d)
Net investment income ...................... 4.82% 4.61% 5.13% 5.47% 5.55%(d)
Portfolio turnover rate ..................... 12.10% 18.66% 17.29% 11.96% 19.24%
</TABLE>
(a) Based on average shares outstanding effective March 31, 2000.
(b) Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(c) For the period January 1, 1995 (effective date) to March 31, 1996.
(d) Annualized
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 98.1%
BONDS 87.3%
ABAG Finance Authority for Nonprofit Corps. COP,
6.75%, 8/01/20 ................................................................... $ 3,955,000 $ 4,210,968
6.125%, 3/01/21 .................................................................. 4,245,000 4,344,715
Butte Valley-Tulelake Rural Health, 6.65%, 10/01/22 .............................. 5,300,000 5,440,026
Episcopal Home Foundation, Refunding, 5.125%, 7/01/13 ............................ 6,000,000 5,438,160
Episcopal Home Foundation, Refunding, 5.125%, 7/01/18 ............................ 16,975,000 14,597,651
Home for Jewish Parents, Insured, 5.625%, 5/15/22 ................................ 5,000,000 4,885,300
Lytton Gardens Inc., Insured, 6.00%, 2/15/30 ..................................... 5,000,000 4,978,900
MFHR, Palo Alto Gardens Apartments, Series A, 5.45%, 4/01/39 ..................... 5,500,000 4,880,700
Milestones Human Services Inc., Insured, 5.65%, 7/01/22 .......................... 2,000,000 1,960,140
Miramonte Mental Health Services, Insured, 6.60%, 7/01/22 ........................ 1,250,000 1,288,850
Odd Fellows Home, 6.00%, 8/15/24 ................................................. 5,525,000 5,468,700
Peninsula Family YMCA, Series A, Pre-Refunded, 6.80%, 10/01/11 ................... 2,325,000 2,452,643
Rehabilitation Mental Health Services Inc. Project, Insured, 6.50%, 6/01/12 ...... 2,000,000 2,094,280
Rehabilitation Mental Health Services Inc. Project, Insured, 6.55%, 6/01/22 ...... 2,370,000 2,438,090
Rhoda Haas Goldman Plaza, Insured, 5.125%, 5/15/23 ............................... 5,000,000 4,528,950
United Way of Santa Clara County Project, 7.20%, 7/01/11 ......................... 2,445,000 2,541,944
ABAG Finance Corp. COP, ABAG XXV, 6.80%, 8/01/12 ..................................... 4,500,000 4,602,915
ABAG Revenue,
Mello-Roos, Refunding and Improvement, Series A, FSA Insured, 5.125%, 9/01/21 .... 4,760,000 4,462,881
Mello-Roos, Refunding and Improvement, Series A, FSA Insured, 5.20%, 9/01/27 ..... 4,140,000 3,849,041
Tax Allocation, RDA Pool, Series A, FSA Insured, 6.00%, 12/15/24 ................. 6,000,000 6,088,440
Tax Allocation, RDA Pool, Series A4, FSA Insured, 5.875%, 12/15/25 ............... 5,000,000 5,047,650
Tax Allocation, RDA Pool, Series A6, FSA Insured, 5.375%, 12/15/25 ............... 3,670,000 3,509,805
ABAG Water and Wastewater Revenue, Pooled Financing Program, Series A, FSA
Insured, 5.30%, 10/01/21 ........................................................... 5,450,000 5,227,368
Adelanto Improvement Agency Tax Allocation,
Adelanto Improvement Project, Series 1990, Pre-Refunded, 8.00%, 8/01/20 .......... 12,630,000 12,971,389
Adelanto Improvement Project, Series 1990, Pre-Refunded, 8.25%, 8/01/20 .......... 1,855,000 1,975,074
Refunding, Series 1985, ETM, 8.125%, 6/01/15 ..................................... 7,155,000 7,201,436
Agua Mansa Industrial Growth Association Special Tax, CFD No. 8, 8.25%, 9/01/17 ...... 15,930,000 16,279,982
Alameda County COP,
Alameda County Medical Center Project, MBIA Insured, 5.00%, 6/01/23 .............. 19,195,000 17,156,491
Alameda County Medical Center Project, MBIA Insured, 5.30%, 6/01/26 .............. 7,000,000 6,476,820
Alameda County Medical Center Project, MBIA Insured, 5.00%, 6/01/28 .............. 8,925,000 7,867,388
Capital Projects, Series 1992, Pre-Refunded, 6.75%, 6/01/16 ...................... 10,500,000 11,192,580
Alameda-Contra Costa Transit COP, Refunding, 7.60%, 8/01/18 .......................... 23,675,000 24,167,203
Alhambra RDA, Tax Allocation, Industrial Redevelopment Project, Refunding,
6.375%, 5/01/23 .................................................................. 2,560,000 2,572,109
Alvord USD,
Series A, FGIC Insured, 5.375%, 8/01/27 .......................................... 6,100,000 5,818,424
Series B, FGIC Insured, 5.50%, 8/01/27 ........................................... 5,000,000 4,815,050
Anaheim PFA, Lease Revenue, Public Improvements Project, Series A, FSA
Insured, 5.00%,
9/01/27 .......................................................................... 8,900,000 8,029,402
3/01/37 .......................................................................... 146,010,000 127,906,220
Antioch Area Public Facilities Financing Agency Special Tax, CFD No. 1989-1,
MBIA Insured, 5.50%, 8/01/22 ....................................................... 4,870,000 4,741,432
Antioch Development Agency Tax Allocation, Project 1, Refunding, FGIC Insured,
6.40%, 9/01/17 ..................................................................... 4,895,000 5,131,771
Antioch PFA, Reassessment Revenue, sub. lien,
Refunding, 5.60%, 9/02/09 ........................................................ 1,290,000 1,243,586
Refunding, Series B, 5.50%, 9/02/08 .............................................. 1,225,000 1,184,563
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Antioch PFA, Reassessment Revenue, sub. lien, (cont.)
Series B, 5.10%, 9/02/04 ......................................................... $ 1,985,000 $ 1,951,275
Series B, 5.30%, 9/02/06 ......................................................... 2,195,000 2,144,713
Apple Valley Insured Health Facilities Revenue COP, 7.30%, 6/01/20 ................... 3,500,000 3,581,095
Arcadia Hospital Revenue, Methodist Hospital of Southern California,
6.50%, 11/15/12 .................................................................. 2,295,000 2,362,748
6.625%, 11/15/22 ................................................................. 3,750,000 3,838,350
Azusa PFAR,
Local Agency, Series A, Pre-Refunded, 7.75%, 8/01/20 ............................. 10,225,000 10,556,597
Water Systems Acquisition Project, Refunding, Series A, FGIC Insured,
5.50%, 7/01/20 ................................................................. 5,200,000 5,087,732
Bakersfield Hospital Revenue, Adventist Health Systems West, Refunding,
MBIA Insured, 5.50%, 3/01/19 ....................................................... 6,085,000 5,931,171
Bakersfield PFAR, Series A, 6.10%, 9/15/10 ........................................... 11,070,000 11,446,601
Baldwin Park PFAR, Tax Allocation,
Refunding, Series A, 7.10%, 9/01/24 .............................................. 2,000,000 2,082,040
Series A, 7.75%, 8/01/19 ......................................................... 5,265,000 5,369,879
Series B, 7.75%, 8/01/21 ......................................................... 5,795,000 5,906,090
Belmont RDA, Tax Allocation, Los Costanos Community Development, Series A,
6.70%, 8/01/14 ................................................................... 1,235,000 1,357,327
6.25%, 8/01/17 ................................................................... 2,080,000 2,172,955
6.80%, 8/01/23 ................................................................... 2,310,000 2,547,791
Belmont - Redwood Shores School District, Series A, 5.50%, 9/01/22 ................... 6,500,000 6,320,275
Berkeley Hospital Revenue, Alta Bates Hospital,
Series B, Pre-Refunded, 7.65%, 12/01/15 .......................................... 5,730,000 5,866,832
Series C, Pre-Refunded, 7.60%, 12/01/15 .......................................... 2,850,000 2,941,086
Brea and Olinda USD, COP, High School Refinancing Program, Refunding,
Series A, FSA Insured, 6.25%, 8/01/18 ............................................ 12,645,000 13,058,112
Series B, 7.00%, 8/01/18 ......................................................... 9,120,000 9,550,646
Brea PFA, Water Revenue, Series B, FGIC Insured, Pre-Refunded, 6.25%, 7/01/21 ........ 11,070,000 11,354,167
Brea PFAR, Tax Allocation, Redevelopment Project, Series A, MBIA Insured,
7.00%, 8/01/15 ................................................................... 1,720,000 1,805,742
6.75%, 8/01/22 ................................................................... 4,395,000 4,573,569
7.00%, 8/01/23 ................................................................... 6,150,000 6,438,743
Brea RDA, Tax Allocation, Redevelopment Project, Refunding, MBIA Insured,
6.125%, 8/01/13 .................................................................. 12,845,000 13,523,473
5.75%, 8/01/23 ................................................................... 5,400,000 5,419,116
Brentwood 1915 Act, Infrastructure Financing, Reassessment, Series A, FSA
Insured, 5.80%, 9/02/17 ............................................................ 5,300,000 5,417,978
Brentwood RDA, Tax Allocation, Brentwood Redevelopment Project, Series A, 7.70%,
11/01/08 ........................................................................... 2,000,000 2,042,700
Brisbane PFAR, 8.00%, 9/02/15 ........................................................ 5,700,000 5,857,605
Buena Park CRDA, Tax Allocation, Central Business District Project, Refunding,
Series A, 7.10%, 9/01/14 ........................................................... 7,000,000 7,381,290
Burbank Parking Authority, Special Tax, CFD No. 1, 8.375%, 10/01/06 .................. 1,245,000 1,283,259
Burbank RDA, Tax Allocation,
City Center Redevelopment Project, Refunding, Series A, FSA Insured, 5.50%,
12/01/23 ........................................................................ 5,000,000 4,851,650
Refunding, Series A, 6.00%, 12/01/23 .............................................. 6,500,000 6,378,645
Burton Elementary School District COP, Loan Acquisition, Capital Appreciation,
Series A, FSA Insured, 6.60%, 9/01/27 ............................................. 820,000 861,804
Calexico CRDA Revenue, Tax Allocation, Merged Central Business and Residential,
Refunding, FSA Insured, 5.80%, 8/01/24 ............................................ 5,840,000 5,868,616
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California Counties Lease Financing Authority COP, CSAC Financing Corp.,
Amador County Project, ETM, 7.70%, 10/01/09 ............................................... $ 2,565,000 $ 2,927,871
California Educational Facilities Authority Revenue,
Chapman College, 7.30%, 1/01/02 ......................................................... 365,000 378,556
Chapman College, Pre-Refunded, 7.30%, 1/01/02 ........................................... 385,000 401,836
Chapman College, Pre-Refunded, 7.50%, 1/01/18 ........................................... 3,000,000 3,136,620
Chapman University, Refunding, Connie Lee Insured, 5.125%, 10/01/26 ..................... 10,000,000 9,092,100
St. Mary's College of California Project, Pre-Refunded, 7.50%, 10/01/20 ................. 2,100,000 2,179,338
Stanford University, Refunding, Series O, 5.125%, 1/01/31 ............................... 21,250,000 19,456,713
Student Loan Program, Series A, MBIA Insured, 6.00%, 3/01/16 ............................ 6,000,000 6,069,660
California Health Facilities Financing Authority Revenue,
Adventist Health Systems West, Series B, MBIA Insured, 6.25%, 3/01/21 ................... 2,930,000 2,977,876
AIDS Health Care Foundation, Refunding, Series C, California
Mortgage Insured, 6.25%, 9/01/17 ........................................................ 1,750,000 1,786,243
Association for Retarded Citizens of San Diego, CHFCLP Insured,
Pre-Refunded, 7.00%, 5/01/21 ............................................................ 3,650,000 3,781,510
California Autism Foundation Inc., Series A, CHFCLP Insured, 6.25%, 11/01/20 ............ 3,560,000 3,535,365
Catholic Healthcare West, Refunding, Series A, MBIA Insured, 5.75%, 7/01/15 ............. 12,500,000 12,768,125
Catholic Healthcare West, Refunding, Series A, MBIA Insured, 6.00%, 7/01/17 ............. 7,300,000 7,499,582
Catholic Healthcare West, Refunding, Series A, MBIA Insured, 6.00%, 7/01/25 ............. 1,000,000 1,012,850
Catholic Healthcare West, Series A, 5.00%, 7/01/18 ...................................... 40,000,000 31,514,400
Catholic Healthcare West, Series A, 5.00%, 7/01/28 ...................................... 140,630,000 103,447,428
Catholic Healthcare West, Series A, MBIA Insured, 5.00%, 7/01/17 ........................ 5,000,000 4,670,600
Catholic Healthcare West, Series A, MBIA Insured, 5.125%, 7/01/24 ....................... 11,500,000 10,509,275
Cedarknoll Inc., Series B, California Mortgage Insured, Pre-Refunded, 7.50%, 8/01/20 .... 1,575,000 1,624,833
Cedars-Sinai Medical Center, Series A, MBIA Insured, 5.125%, 8/01/17 ..................... 8,355,000 7,935,663
Cedars-Sinai Medical Center, Series A, MBIA Insured, 5.125%, 8/01/27 ..................... 15,600,000 14,144,052
Cedars-Sinai Medical Center, Series B, MBIA Insured, 5.25%, 8/01/27 ...................... 52,500,000 48,493,725
Clinicas Del Camino, Series A, CHFCLP Insured, 6.55%, 5/01/25 ............................ 4,500,000 4,701,240
Community Provider, Pooled Loan Program, Series A, Pre-Refunded, 7.35%, 6/01/20 .......... 730,000 748,506
County Program, Series B, 7.20%, 1/01/12 ................................................. 2,385,000 2,397,164
El Proyecto, Series A, CHFCLP Insured, 5.50%, 12/01/22 ................................... 3,350,000 3,219,819
Enloe Health System, Series A, FSA Insured, 5.00%, 11/15/18 .............................. 5,000,000 4,578,950
Enloe Health System, Series A, FSA Insured, 5.00%, 11/15/28 .............................. 25,390,000 22,370,367
Families First, Series A, California Mortgage Insured, 6.00%, 12/01/25 ................... 11,365,000 11,426,144
Feedback Foundation Inc., Series A, CHFCLP Insured, 6.50%, 12/01/22 ...................... 4,240,000 4,366,140
Hospital of the Good Samaritan, Refunding, 6.90%, 9/01/07 ................................ 13,920,000 14,299,738
Hospital of the Good Samaritan, Refunding, 7.00%, 9/01/21 ................................ 71,050,000 70,887,296
Kaiser Permanente, Series A, 5.40%, 5/01/28 .............................................. 46,000,000 39,944,100
Kaiser Permanente, Series A, FSA Insured, 5.00%, 6/01/20 ................................. 32,295,000 29,257,655
Kaiser Permanente, Series A, FSA Insured, 5.00%, 6/01/24 ................................. 136,775,000 121,750,266
Kaiser Permanente, Series A, Pre-Refunded, 6.50%, 12/01/20 ............................... 11,000,000 11,402,930
Kaiser Permanente, Series B, 5.25%, 10/01/16 ............................................. 7,515,000 6,827,227
Kaiser Permanente, Series B, 5.00%, 10/01/18 ............................................. 16,425,000 14,045,675
Kaiser Permanente, Series B, 5.00%, 10/01/20 ............................................. 36,520,000 30,616,542
Kaiser Permanente, Series B, 5.40%, 5/01/28 .............................................. 80,000,000 69,468,000
Lodi Memorial Hospital Association, Series A, CHFCLP Insured, 7.70%, 9/01/10 ............. 4,000,000 4,125,240
Marshall Hospital, Insured, Series A, 5.30%, 11/01/28 .................................... 5,500,000 5,110,930
Mills-Peninsula Health, Refunding, Series A, Connie Lee Insured, 5.75%, 1/15/15 .......... 11,500,000 11,692,280
Mills-Peninsula Health, Series B, Connie Lee Insured, 5.75%, 1/15/15 ..................... 5,665,000 5,759,719
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
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<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California Health Facilities Financing Authority Revenue, (cont.)
Northern California Presbyterian, 5.40%, 7/01/28 ......................................... $ 6,340,000 $ 5,366,113
On Lok Senior Health Services, Series A, CHFCLP Insured, 6.40%, 12/01/12 ................. 2,000,000 2,103,740
On Lok Senior Health Services, Series A, CHFCLP Insured, 6.50%, 12/01/22 ................. 7,525,000 7,748,869
Pomona Valley Hospital, Refunding, Series A, MBIA Insured, 5.75%, 7/01/15 ................ 4,200,000 4,274,130
Pomona Valley Hospital, Refunding, Series A, MBIA Insured, 5.625%, 7/01/19 ............... 8,500,000 8,435,060
San Diego Hospital Association, Refunding, Series A, MBIA Insured, 6.20%, 8/01/20 ........ 8,250,000 8,430,593
San Diego Hospital Association, Series A, Pre-Refunded, 6.95%, 10/01/21 .................. 21,145,000 22,351,111
Scripps Memorial Hospital, Series A, MBIA Insured, 6.375%, 10/01/22 ...................... 9,725,000 9,997,203
Small Facilities Loan, Health Facilities, Refunding, Series B, Insured, 7.50%, 4/01/22 ... 5,000,000 5,470,700
Small Facilities Loan, Health Facilities, Series A, CHFCLP Insured, 6.75%, 3/01/20 ....... 5,500,000 5,687,605
South Coast Medical Center, CHFCLP Insured, Pre-Refunded, 7.25%, 7/01/15 ................. 3,000,000 3,083,310
Southern California, Series A, CHFCLP Insured, 5.50%, 12/01/22 ........................... 3,070,000 2,950,700
St. Francis Medical Center, Refunding, Series H, AMBAC Insured, 6.35%, 10/01/23 .......... 7,000,000 7,308,840
St. Paul's Episcopal Home, CHFCLP Insured, 6.50%, 9/01/14 ................................ 2,595,000 2,671,319
Sutter Health, Refunding, Series A, MBIA Insured, 5.875%, 8/15/16 ........................ 5,750,000 5,888,633
Sutter Health, Series A, FSA Insured, 5.25%, 8/15/27 ..................................... 5,300,000 4,895,345
Sutter Health, Series A, FSA Insured, 5.00%, 8/15/37 ..................................... 61,000,000 52,722,910
Sutter Health, Series A, MBIA Insured, 5.00%, 8/15/38 .................................... 25,860,000 22,330,369
The Help Group, CHFCLP Insured, 5.40%, 8/01/22 ........................................... 7,420,000 7,041,506
UCSF-Stanford Health Care, Refunding, Series A, FSA Insured, 5.00%, 11/15/31 ............. 2,150,000 1,878,627
UCSF-Stanford Health Care, Refunding, Series B, 5.00%, 11/15/31 .......................... 26,920,000 23,522,158
UCSF-Stanford Health Care, Refunding, Series B, AMBAC Insured, 5.00%, 11/15/28 ........... 30,000,000 26,432,100
Valleycare Hospital Corp., Refunding, 5.50%, 5/01/20 ..................................... 11,640,000 11,255,182
Walden House, State Guaranteed, 6.85%, 3/01/22 ........................................... 3,225,000 3,345,228
California HFA, SFM Purchase,
Class I, Series A-1, 6.05%, 8/01/26 ...................................................... 13,935,000 13,961,895
Refunding, Series A-2, FHA Insured, 6.45%, 8/01/25 ....................................... 9,105,000 9,332,534
California HFAR,
Home Mortgage, Series A, 6.55%, 8/01/26 .................................................. 6,975,000 7,195,829
Home Mortgage, Series C, 7.60%, 8/01/30 .................................................. 23,585,000 23,993,256
Home Mortgage, Series D, 7.75%, 8/01/10 .................................................. 1,235,000 1,263,059
Home Mortgage, Series D, MBIA Insured, 6.15%, 8/01/28 .................................... 5,250,000 5,297,618
Home Mortgage, Series E, 6.70%, 8/01/25 .................................................. 5,730,000 5,928,545
Home Mortgage, Series E, 6.375%, 8/01/27 ................................................. 14,090,000 14,412,238
Home Mortgage, Series E, AMBAC Insured, 6.10%, 8/01/29 ................................... 22,275,000 22,398,404
Home Mortgage, Series E, MBIA Insured, 6.15%, 8/01/25 .................................... 16,550,000 16,691,172
Home Mortgage, Series F, 6.75%, 8/01/11 .................................................. 865,000 895,855
Home Mortgage, Series F-1, 6.875%, 8/01/15 ............................................... 3,350,000 3,506,043
Home Mortgage, Series F-1, 7.00%, 8/01/26 ................................................ 8,455,000 8,740,272
Home Mortgage, Series G, 7.05%, 8/01/27 .................................................. 2,775,000 2,847,011
Home Mortgage, Series H, 6.25%, 8/01/27 .................................................. 19,345,000 19,605,577
Home Mortgage, Series I, MBIA Insured, 5.75%, 2/01/29 .................................... 8,100,000 7,844,688
Home Mortgage, Series J, MBIA Insured, 5.40%, 8/01/28 .................................... 6,345,000 5,770,333
Home Mortgage, Series J, MBIA Insured, 5.55%, 8/01/28 .................................... 10,000,000 9,363,900
Home Mortgage, Series M, MBIA Insured, 5.60%, 8/01/29 .................................... 21,150,000 19,959,255
Home Mortgage, Series N, 6.375%, 2/01/27 ................................................. 6,905,000 7,062,917
Home Mortgage, Series N, FSA Insured, 5.15%, 8/01/18 ..................................... 6,000,000 5,507,040
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
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<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California HFAR, (cont.)
Home Mortgage, Series R, MBIA Insured, 6.15%, 8/01/27 .................................... $ 9,000,000 $9,081,630
Home Mortgage, SF, Series A, 10.25%, 2/01/14 ............................................. 465,000 467,599
Home Mortgage, SF, Series B, 10.625%, 2/01/14 ............................................ 170,000 170,189
Housing Revenue, Series E, MBIA Insured, 6.625%, 8/01/14 ................................. 4,365,000 4,575,087
Housing Revenue, Series E, MBIA Insured, 6.75%, 8/01/26 .................................. 11,855,000 12,358,956
Housing Revenue, Series F, MBIA Insured, 6.90%, 8/01/26 .................................. 11,345,000 11,863,353
MFHR II, Series A, AMBAC Insured, 6.25%, 2/01/37 ......................................... 5,000,000 5,098,450
MFHR III, Series B, MBIA Insured, 5.50%, 8/01/39 ......................................... 15,000,000 13,703,400
Multi-Unit Rental Housing, Series A, 6.875%, 2/01/22 ..................................... 2,465,000 2,469,117
Series B, MBIA Insured, 8.625%, 8/01/15 .................................................. 1,975,000 1,983,651
Series B-1, Class 1, 5.65%, 8/01/28 ...................................................... 13,190,000 12,529,181
SFM, Series C-2, Class 1, FHA Insured, 5.65%, 2/01/25 .................................... 13,615,000 12,985,715
California Mobilehome Park Financing Authority Revenue, Series A, FSA Insured,
4.65%, 10/01/00 .......................................................................... 45,000 45,216
4.80%, 10/01/01 .......................................................................... 45,000 45,347
4.95%, 10/01/02 .......................................................................... 50,000 50,524
5.05%, 10/01/03 .......................................................................... 50,000 50,750
5.15%, 10/01/04 .......................................................................... 55,000 55,791
5.25%, 10/01/05 .......................................................................... 55,000 55,996
6.25%, 10/01/25 .......................................................................... 2,280,000 2,303,028
California PCFA,
PCR, PG&E Co., Series A, 6.625%, 6/01/09 ................................................. 1,750,000 1,826,668
PCR, Southern California Edison Co., Refunding, 6.90%, 12/01/17 .......................... 2,510,000 2,632,137
PCR, Southern California Edison Co., Series B, 6.40%, 12/01/24 ........................... 29,000,000 29,817,220
PCR, Southern California Edison Co., Series B, MBIA Insured, 6.40%, 12/01/24 ............. 12,120,000 12,496,447
Solid Waste Disposal Revenue, Keller Canyon Landfill Co. Project, 6.875%, 11/01/27 ....... 17,205,000 16,738,056
California Public Capital Improvement Financing Authority Revenue, Pooled Projects,
Joint Powers Agency, Series E, 8.375%, 3/01/03 ........................................... 13,225,000 13,323,923
Series A, 8.40%, 3/01/08 ................................................................. 48,250,000 48,856,985
Series A, 8.50%, 3/01/18 ................................................................. 121,300,000 122,834,445
California Resources Efficiency Financing Authority COP, Capital Improvement
Program, Refunding, AMBAC Insured,
5.625%, 4/01/22 .......................................................................... 10,365,000 10,319,601
5.75%, 4/01/27 ........................................................................... 7,885,000 7,906,841
California Rural Home Mortgage Finance Authority SFMR, GNMA Secured, FNMA Insured,
7.00%, 9/01/29 ........................................................................... 4,715,000 5,076,169
California Special Districts Association Finance Corp. COP, Series F, 8.10%, 9/01/10 ........... 150,000 152,213
California Special Districts Lease Financing Program COP,
Series C, 7.90%, 4/01/14 ................................................................. 135,000 136,449
Series E, 7.70%, 12/01/09 ................................................................ 205,000 207,712
Series E, 7.75%, 12/01/19 305,000 308,761
California State Department of Veteran Affairs Home Purchase Revenue,
Refunding, Series A, 5.40%, 12/01/28 ..................................................... 9,580,000 9,059,614
Refunding, Series B, 5.50%, 12/01/18 ..................................................... 2,500,000 2,409,475
Series A, Chase Revenue, Series A, 5.20%, 12/01/27 ....................................... 31,000,000 27,937,820
Series B, 5.20%, 12/01/28 ................................................................ 63,875,000 58,120,501
California State Department of Water Resources Central Valley Project Water
System Revenue, Refunding, Series Q, MBIA Insured, 5.375%, 12/01/27 ...................... 53,000,000 50,541,860
Series J-1, 6.00%, 12/01/20 .............................................................. 9,580,000 9,644,378
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
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<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California State Department of Water Resources Central Valley Project Water
System Revenue, (cont.)
Series J-2, 6.00%, 12/01/20 .............................................................. $ 22,865,000 $ 23,018,653
Series J-3, 6.00%, 12/01/20 .............................................................. 18,945,000 19,072,310
Series L, 5.75%, 12/01/19 ................................................................ 18,000,000 18,104,040
Series L, 5.50%, 12/01/23 ................................................................ 52,395,000 50,840,440
Series L, 5.875%, 12/01/25 ............................................................... 40,070,000 40,322,842
Series O, 5.00%, 12/01/22 ................................................................ 5,500,000 5,039,375
Series O, 4.75%, 12/01/25 ................................................................ 16,000,000 13,904,640
Series S, 5.00%, 12/01/29 ................................................................ 24,595,000 22,078,686
California State GO,
6.00%, 8/01/19 ........................................................................... 905,000 924,448
5.25%, 10/01/20 .......................................................................... 11,170,000 10,670,701
6.00%, 5/01/24 ........................................................................... 2,565,000 2,599,961
5.125%, 10/01/27 ......................................................................... 39,835,000 36,621,909
AMBAC Insured, 5.90%, 3/01/25 ............................................................ 210,000 212,356
AMBAC Insured, 5.125%, 10/01/27 .......................................................... 31,420,000 28,885,663
FGIC Insured, 5.625%, 10/01/26 ........................................................... 41,500,000 41,021,090
FSA Insured, 5.50%, 3/01/20 .............................................................. 5,500,000 5,382,520
FSA Insured, 5.50%, 9/01/29 .............................................................. 30,000,000 28,817,100
MBIA Insured, 6.00%, 8/01/24 ............................................................. 990,000 1,003,919
Refunding, 5.625%, 9/01/24 ............................................................... 10,650,000 10,558,623
Series BR, 5.25%, 12/01/26 ............................................................... 5,000,000 4,480,900
Series BR, 5.30%, 12/01/29 ............................................................... 13,000,000 11,670,100
Various Purposes, FSA Insured, 5.50%, 4/01/19 ............................................ 5,000,000 4,930,450
Veterans Bonds, Series BD, BE, and BF, 6.40%, 2/01/22 .................................... 29,000,000 29,053,650
Veterans Bonds, Series BD, BE, and BF, 6.55%, 2/01/25 .................................... 10,570,000 10,603,296
Veterans Bonds, Series BD, BE, and BF, AMBAC Insured, 6.20%, 2/01/16 ..................... 11,500,000 11,545,425
Veterans Bonds, Series BD, BE, and BF, AMBAC Insured, 6.375%, 2/01/27 .................... 45,000,000 45,094,050
Veterans Bonds, Series BH, 5.50%, 12/01/18 ............................................... 44,250,000 42,891,968
Veterans Bonds, Series BH, 5.60%, 12/01/32 ............................................... 44,235,000 41,589,747
Veterans Bonds, Series BH, FSA Insured, 5.50%, 12/01/24 .................................. 22,265,000 20,783,710
Veterans Bonds, Series BM, 5.45%, 12/01/25 ............................................... 36,635,000 34,977,999
Veterans Bonds, Series BN, 5.375%, 12/01/21 .............................................. 24,870,000 23,810,289
Veterans Bonds, Series BN, 5.45%, 12/01/28 ............................................... 21,575,000 20,495,387
California State HFAR, Home Mortgage, Series L, MBIA Insured, 6.40%, 8/01/27 ................... 14,955,000 15,321,098
California State Local Government Finance Authority Revenue, Marin Valley, Series A,
FSA Insured, 5.85%, 10/01/27 ................................................................... 6,735,000 6,803,293
California State Public Works Board Lease Revenue,
California Science Center, Series A, 5.25%, 10/01/22 ..................................... 8,645,000 8,072,269
California State University, Various Projects, Series A, 6.30%, 10/01/04 ................. 5,250,000 5,557,755
California State University, Various Projects, Series A, Pre-Refunded, 6.50%, 10/01/06 ... 10,695,000 11,397,768
Department of Corrections, California State Prison at Coalinga, Series B, MBIA Insured,
5.375%, 12/01/19 ......................................................................... 15,250,000 14,860,668
Department of Corrections, Corcoran II Facility, Series A, AMBAC Insured, 5.25%, 1/01/21 . 17,405,000 16,702,882
Department of Justice Building, Series A, FSA Insured, 5.625%, 5/01/20 ................... 5,000,000 5,001,200
Southern California Veterans Home, Series A, Pre-Refunded, 6.50%, 10/01/14 ............... 3,750,000 4,101,938
Trustees California State University, Refunding, Series A, 5.00%, 10/01/19 ............... 8,500,000 7,698,875
University of California, Various Projects, Refunding, Series A, 5.50%, 6/01/21 .......... 14,000,000 13,673,940
University of California, Various Projects, Refunding, Series A, 5.00%, 6/01/23 .......... 23,175,000 21,185,195
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California State Public Works Board Lease Revenue, (cont.)
University of California, Various Projects, Series A, Pre-Refunded, 6.375%, 10/01/14 ..... $ 11,480,000 $ 12,499,768
University of California, Various Projects, Series A, Pre-Refunded, 6.375%, 11/01/14 ..... 23,130,000 25,260,504
University of California, Various Projects, Series B, 5.50%, 6/01/19 ..................... 13,000,000 12,817,350
University of California, Various Projects, Series B, Pre-Refunded, 6.625%, 12/01/14 ..... 7,415,000 8,183,565
Various California Community Colleges, Refunding, Series A, 5.90%, 4/01/17 ............... 8,320,000 8,494,304
California Statewide CDA Revenue, COP,
Catholic Healthcare West, MBIA Insured, 5.50%, 7/01/23 ................................... 11,240,000 10,770,056
CHFCLP Insured, ETM, 5.90%, 8/01/21 ...................................................... 4,000,000 4,042,440
CHFCLP Insured, Families First Inc., 7.25%, 12/01/22 ..................................... 5,120,000 5,527,552
CHFCLP Insured Health Facilities, AIDS Project, Series A, 6.25%, 8/01/22 ................. 2,590,000 2,637,682
CHFCLP Insured Health Facilities, Children's Campus, 6.375%, 9/01/12 ..................... 2,765,000 2,879,886
CHFCLP Insured Health Facilities, Children's Campus, 6.50%, 9/01/22 ...................... 3,000,000 3,085,080
CHFCLP Insured Health Facilities, Eskaton Properties, 6.75%, 5/01/21 ..................... 9,600,000 10,227,072
CHFCLP Insured Health Facilities, Unihealth, Series A, AMBAC Insured, Pre-Refunded,
5.75%, 10/01/25 .......................................................................... 36,000,000 37,898,640
CHFCLP Insured Hospital, Triad Health Care, Pre-Refunded, 6.50%, 8/01/22 ................. 80,230,000 85,446,555
CHFCLP Insured Hospital, Triad Health Care, Refunding, ETM, 6.25%, 8/01/06 ............... 2,000,000 2,109,440
CHFCLP Insured Retirement Housing Foundation, Refunding, 6.625%, 4/15/12 ................. 7,000,000 7,434,070
CHFCLP Insured Retirement Housing Foundation, Refunding, 6.75%, 4/15/22 .................. 16,000,000 17,030,560
Gemological Institute, Connie Lee Insured, 6.00%, 5/01/15 ................................ 5,365,000 5,546,874
Gemological Institute, Connie Lee Insured, 6.00%, 5/01/20 ................................ 3,775,000 3,850,953
Health Facilities, Barton Memorial Hospital, Refunding, Series B, 6.40%, 12/01/05 ........ 250,000 260,148
Salk Institute, Connie Lee Insured, 6.20%, 7/01/24 ....................................... 7,065,000 7,251,233
Sisters Charity Leavenworth, 5.00%, 12/01/23 ............................................. 11,375,000 9,789,098
Southern California Development Corp., 6.10%, 12/01/15 ................................... 2,255,000 2,317,148
St. Joseph Health System Group, Pre-Refunded, 6.50%, 7/01/15 ............................. 8,395,000 9,167,844
St. Joseph Health System Group, Pre-Refunded, 6.625%, 7/01/21 ............................ 12,500,000 13,710,500
Sutter Health Obligated Group, MBIA Insured, 5.50%, 8/15/22 .............................. 25,520,000 24,503,794
Sutter Health Obligated Group, Refunding, AMBAC Insured, 6.00%, 8/15/09 .................. 6,465,000 6,755,796
Sutter Health Obligated Group, Refunding, AMBAC Insured, 6.125%, 8/15/22 ................. 9,330,000 9,476,854
Sutter Health Obligated Group, Refunding, MBIA Insured, 5.50%, 8/15/23 ................... 14,000,000 13,413,400
California Statewide CDA,
COP, California Lutheran Homes, ETM, 5.75%, 11/15/15 ..................................... 5,000,000 5,050,350
COP, Children's Hospital, Los Angeles, 5.25%, 8/15/29 .................................... 37,685,000 32,780,674
COP, FSA Insured, 5.50%, 8/15/31 ......................................................... 9,000,000 8,463,240
COP, Kaiser Permanente, 5.30%, 12/01/15 .................................................. 32,200,000 29,759,562
COP, MBIA Insured, 5.00%, 4/01/18 ........................................................ 7,000,000 6,482,770
COP, MBIA Insured, 5.125%, 4/01/23 ....................................................... 6,000,000 5,546,520
COP, St. Joseph Health System, Refunding, 5.125%, 7/01/17 ................................ 5,000,000 4,655,450
COP, St. Joseph Health System, Refunding, 5.25%, 7/01/21 ................................. 16,250,000 14,789,450
COP, The Internext Group, 5.375%, 4/01/17 ................................................ 5,000,000 4,248,350
COP, The Internext Group, 5.375%, 4/01/30 ................................................ 27,680,000 21,588,186
Lease Revenue, Oakland Convention Center Project, Refunding, AMBAC Insured,
5.50%, 10/01/14 .......................................................................... 10,000,000 10,073,800
Lease Revenue, Special Facilities, United Airlines, Los Angeles, 5.625%, 10/01/34 ........ 65,920,000 56,644,397
Lease Revenue, Special Facilities, United Airlines, Series A, 5.70%, 10/01/33 ............ 26,125,000 22,715,165
MFHR, Borregas Court Project, Series J, GNMA Secured, 6.30%, 3/20/39 ..................... 7,453,000 7,638,654
MFHR, Series E, FNMA Insured, 6.40%, 6/01/28 ............................................. 8,000,000 8,163,840
Water Revenue, Refunding, Series A, 6.10%, 7/01/21 ....................................... 4,615,000 4,633,460
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California Statewide Communities Development Corp. COP, Pacific Homes, Series A,
Pre-Refunded, 6.00%, 4/01/17 ................................................................... $ 6,270,000 $ 6,649,084
California Valley HFAR, Home Mortgage, MBIA Insured, 5.65%, 2/01/27 ............................ 20,000,000 19,019,400
Camarillo COP, Capital Improvement Corp., ETM, 7.625%, 4/01/08 ................................. 4,150,000 4,259,726
Campbell Housing Facility Revenue, San Tomas Gardens Project, Series A, 6.625%, 10/20/34 ....... 5,615,000 5,736,340
Camrosa Water District COP, Water System Improvement Projects, MBIA Insured, 6.00%, 1/15/20 .... 5,120,000 5,227,878
Capistrano Bay Park and Recreation District COP, Special Lease Finance, Series Q, 6.35%,
8/01/12 ........................................................................................ 2,800,000 2,839,032
Carson RDA, Project Area No. 1, Refunding, Series 1992, 6.375%,
10/01/12 ................................................................................. 3,965,000 4,115,670
10/01/16 ................................................................................. 1,565,000 1,600,103
Castaic Lake Water Agency COP, Water System Improvement Project, Refunding,
Series A, MBIA Insured,
6.125%, 8/01/15 .......................................................................... 11,540,000 12,076,264
6.00%, 8/01/18 ........................................................................... 5,345,000 5,474,135
Cathedral City PFAR, Tax Allocation, Redevelopment Projects, Refunding, Series A,
MBIA Insured, 5.70%, 8/01/24 ................................................................... 11,210,000 11,215,605
Central San Joaquin Water Conservation District COP, Series 1990, Pre-Refunded,
7.65%, 12/01/18 ................................................................................ 4,630,000 4,878,863
Cerritos PFAR, Los Coyotes Redevelopment Project Loan, Series A, AMBAC Insured,
5.75%, 11/01/22 ................................................................................ 3,500,000 3,514,700
Chaffey Community College District COP, Pre-Refunded, 7.40%, 11/01/14 .......................... 5,000,000 5,659,000
Chico PFAR, Southeast Chico Redevelopment Project, Series A, FGIC Insured, 6.625%, 4/01/21 ..... 1,955,000 2,007,531
Chico RDAR, COP, Insured Health Facilities, Sierra Sunrise Lodge,
6.80%, 2/01/11 ........................................................................... 4,110,000 4,255,206
6.75%, 2/01/21 ........................................................................... 2,800,000 2,878,064
Chino RDA, Tax Allocation, Central City Redevelopment Project, 7.00%, 9/01/22 .................. 9,980,000 10,452,054
Chino USD, COP, Land Acquisition,
Series A, FSA Insured, 6.60%, 9/01/14 .................................................... 1,265,000 1,304,101
Series A, FSA Insured, 6.70%, 9/01/29 .................................................... 7,105,000 7,271,115
Series D, BIG Insured, 7.45%, 9/01/24 .................................................... 7,605,000 7,768,888
Series E, BIG Insured, 7.50%, 9/01/24 .................................................... 495,000 505,687
Clayton 1915 Act, Limited Obligation, Contra Costa County, Oakhurst Country Club,
8.10%, 9/02/01 ........................................................................... 55,000 56,257
8.20%, 9/02/02 ........................................................................... 80,000 82,943
8.25%, 9/02/03 ........................................................................... 75,000 77,662
8.30%, 9/02/04 ........................................................................... 105,000 108,682
8.30%, 9/02/05 ........................................................................... 125,000 129,280
8.35%, 9/02/06 ........................................................................... 115,000 120,414
8.35%, 9/02/07 ........................................................................... 140,000 144,717
8.375%, 9/02/08 .......................................................................... 145,000 149,798
8.375%, 9/02/09 .......................................................................... 160,000 165,267
8.40%, 9/02/10 ........................................................................... 20,000 20,659
8.40%, 9/02/11 ........................................................................... 160,000 165,270
8.40%, 9/02/12 ........................................................................... 195,000 201,382
8.40%, 9/02/13 ........................................................................... 220,000 227,201
Clayton Special Tax, CFD No. 90-1, Pre-Refunded, 8.60%, 9/02/22 ................................ 6,215,000 6,468,634
Clovis COP, Pre-Refunded, 7.20%, 8/01/11 ....................................................... 2,670,000 2,819,814
Coachella RDA, Tax Allocation, Project Area No. 4, Pre-Refunded, 8.45%, 9/01/20 ................ 1,750,000 1,816,605
Coachella Valley COP, ID No. 71, Storm Water District, Flood Control Project,
Pre-Refunded, 6.75%, 10/01/12 .................................................................. 3,000,000 3,214,620
Coachella Valley USD, COP, 8.25%, 9/01/12 ...................................................... 6,270,000 6,481,236
Colma 1915 Act, Local ID No. 1, Refunding, 4.90%, 9/02/00 ...................................... 440,000 440,937
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Colton RDA, MFR, Seniors Housing Project, Series A, 7.75%, 7/01/22 ............................. $ 4,100,000 $ 4,120,869
Colusa County COP, ABAG Finance Corp., Series B, 7.00%, 2/01/18 ................................ 1,555,000 1,594,233
Commerce Joint Powers Financing Authority Lease Revenue, Community Center, Series A,
6.25%, 10/01/22 ................................................................................ 4,000,000 3,999,960
Commerce Refuse to Energy Authority Revenue, Refunding, Series 1994, 8.75%, 7/01/10 ............ 31,825,000 35,321,613
Compton COP, Civic Center and Capital Improvement, Refunding, Series A, 5.50%, 9/01/15 ......... 5,000,000 4,765,100
Compton CRDA, Tax Allocation, Series 1, FSA Insured, 6.75%, 8/01/13 ............................ 7,005,000 7,418,085
Compton Sewer Revenue, Pre-Refunded, 6.75%, 7/01/23 ............................................ 4,535,000 4,910,317
Concord RDA, Tax Allocation, Central Concord Redevelopment Project, Refunding,
Sub Series A, 6.00%, 7/01/19 ................................................................... 8,395,000 8,161,031
Contra Costa County COP,
Merrithew Memorial Hospital Project, Refunding, MBIA Insured, 5.50%, 11/01/22 ............ 11,000,000 10,560,330
Series 1994, Pre-Refunded, 6.50%, 8/01/24 ................................................ 4,500,000 4,910,805
Contra Costa County MFHR, Byron Park Project, Refunding, Series C, GNMA Secured,
6.40%, 1/20/31 ........................................................................... 5,930,000 6,098,116
Contra Costa Transportation Authority Revenue, Sales Tax, Series A,
ETM, 6.875%, 3/01/07 ..................................................................... 13,900,000 14,978,362
FGIC Insured, ETM, 6.50%, 3/01/09 ........................................................ 1,000,000 1,039,800
Corcoran Hospital District Revenue, Series A, 6.55%, 7/01/12 ................................... 1,245,000 1,284,691
Corona 1915 Act,
AD No. 79-2 and 80-1, Refunding, 8.10%, 9/02/00 .......................................... 1,480,000 1,498,737
AD No. 79-2 and 80-1, Refunding, 8.10%, 9/02/01 .......................................... 1,575,000 1,619,966
AD No. 79-2 and 80-1, Refunding, 8.10%, 9/02/02 .......................................... 1,540,000 1,597,072
AD No. 79-2 and 80-1, Refunding, 8.10%, 9/02/03 .......................................... 1,650,000 1,710,456
AD No. 79-2 and 80-1, Refunding, 8.10%, 9/02/04 .......................................... 1,885,000 1,952,898
AD No. 79-2, Northeast Area, Series B, 7.80%, 9/02/00 .................................... 810,000 819,291
AD No. 79-2, Northeast Area, Series B, 7.80%, 9/02/01 .................................... 875,000 896,490
AD No. 79-2, Northeast Area, Series B, 7.85%, 9/02/02 .................................... 925,000 958,365
AD No. 79-2, Northeast Area, Series B, 7.85%, 9/02/03 .................................... 985,000 1,020,115
AD No. 79-2, Northeast Area, Series B, 7.85%, 9/02/04 .................................... 1,055,000 1,091,957
Corona COP,
Corona Community Hospital Project, Pre-Refunded, 9.425%, 9/01/20 ......................... 15,000,000 18,977,100
Vista Hospital System, Refunding, Series C, 7.315%, 7/01/20 .............................. 22,325,000 20,985,500
Corona RDA, Tax Allocation, Redevelopment Project Area A, Refunding, Series A, FGIC Insured,
6.25%, 9/01/16 ........................................................................... 3,000,000 3,151,260
Corona-Norco USD, Lease Revenue, Land Acquisition, Series A, FSA Insured, 6.00%, 4/15/29 ....... 18,435,000 18,694,749
CSAC Finance Corp. COP, Sutter County, Health Facilities Program, 7.80%, 1/01/21 ............... 2,100,000 2,109,975
Culver City USD, GO, MBIA Insured, 5.75%, 8/01/36 .............................................. 5,000,000 5,002,800
Cupertino COP,
Memorial Park Expansion Project, Bank Qualified, Pre-Refunded, 7.25%, 7/01/10 ............ 4,110,000 4,224,628
Refunding, Series A, 5.75%, 1/01/16 ...................................................... 5,000,000 5,044,800
Refunding, Series B, 6.25%, 7/01/10 ...................................................... 3,535,000 3,701,993
Cypress COP, Civic Center, Refunding and Improvement Project, 6.80%, 8/01/17 ................... 3,440,000 3,587,370
Desert Hot Springs RDA, Tax Allocation, Redevelopment Project No. 2,
Series A, 6.625%, 9/01/20 ................................................................. 1,230,000 1,242,940
Duarte COP,
City Civic Center, Refunding, 7.00%, 6/15/22 ............................................. 5,370,000 5,553,869
Refunding, Series A, 5.25%, 4/01/24 ...................................................... 5,000,000 4,172,650
Series A, 5.25%, 4/01/19 ................................................................. 5,000,000 4,312,450
Series A, 5.25%, 4/01/31 ................................................................. 12,500,000 10,150,875
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
East Bay MUD,
Wastewater System Revenue, sub., MBIA Insured, 5.00%, 6/01/38 ............................ $ 23,115,000 $ 20,113,748
Water System Revenue, sub., MBIA Insured, 5.00%, 6/01/38 ................................. 64,095,000 55,772,905
Water System Revenue, sub., Refunding, 6.00%, 6/01/20 .................................... 15,100,000 15,286,485
East Side UHSD, Santa Clara County, Series D, FGIC Insured, 5.80%, 9/01/21 ..................... 7,100,000 7,155,167
Eastern Municipal Water District, Water and Sewer Revenue COP, Refunding, Series A,
FGIC Insured, 6.30%, 7/01/20 ............................................................. 7,975,000 8,122,219
El Cajon RDA, Tax Allocation, Redevelopment Project, Refunding, AMBAC Insured, 5.35%, 10/01/22 . 11,285,000 10,842,967
El Camino Hospital District Revenue, Refunding, Series A, ETM, 7.25%, 8/15/09 .................. 8,945,000 10,001,136
El Dorado County Board Authority Lease Revenue, Capital Facilities Project, Pre-Refunded,
7.40%, 11/01/09 ......................................................................... 5,500,000 5,719,395
El Dorado County Special Tax, Community Facilities District No 1992-1, 6.25%, 9/01/29 .......... 19,925,000 18,705,192
El Monte COP, Department of Public Social Services Facility, AMBAC Insured, 4.75%, 6/01/30 ..... 10,790,000 9,178,298
Emeryville PFAR,
Housing Increment Loan, 6.20%, 9/01/25 ................................................... 3,115,000 3,140,948
Shellmound Park Redevelopment and Housing Project, Series B, MBIA Insured,
5.00%, 9/01/28 ...................................................................... 20,000,000 18,014,600
Empire USD, COP, Garst School Supplies Financing Project, 6.75%, 12/01/17 ...................... 1,165,000 1,212,136
Empire USD, Special Tax, CFD No. 1987-1, Refunding, Series A, MBIA Insured, 6.50%, 10/01/17 .... 2,700,000 2,842,722
Escondido COP,
Escondido Mobile Home Park, Pre-Refunded, 7.25%, 3/01/07 ................................. 1,000,000 1,048,600
Escondido Mobile Home Park, Pre-Refunded, 7.40%, 3/01/21 ................................. 4,910,000 5,155,107
Wastewater Project, Refunding, AMBAC Insured, 5.70%, 9/01/26 ............................. 13,465,000 13,445,880
Wastewater Project, Refunding, AMBAC Insured, 5.80%, 9/01/26 ............................. 400,000 402,352
Fairfield PFAR, Fairfield Redevelopment Projects, Series A, 7.80%, 8/01/19 ..................... 2,145,000 2,182,194
Fairoaks Fire Protection District COP, 8.00%, 12/01/15 ......................................... 1,960,000 2,026,032
Fillmore COP, Water System Improvement Project, AMBAC Insured, 7.70%, 5/01/19 .................. 2,590,000 2,936,283
Folsom PFAR, Local Agency,
7.25%, 10/01/10 .......................................................................... 3,000,000 3,108,240
8.00%, 10/01/18 .......................................................................... 7,590,000 7,689,050
Fontana PFAR, Tax Allocation, North Fontana Redevelopment,
Series B, 6.30%, 1/15/24 ................................................................. 1,905,000 1,895,475
Sub. lien, Series A, Pre-Refunded, 7.65%, 12/01/09 ....................................... 2,000,000 2,144,080
Sub. lien, Series A, Pre-Refunded, 7.75%, 12/01/20 ....................................... 11,005,000 11,815,188
Fontana RDA, Tax Allocation, Jurupa Hills Redevelopment Project,
Refunding, Series A, 5.50%, 10/01/27 ..................................................... 12,500,000 10,789,250
Series A, Pre-Refunded, 7.10%, 10/01/23 .................................................. 10,000,000 10,784,700
Foothill/Eastern Corridor Agency Toll Road Revenue,
Refunding, MBIA Insured, 5.75%, 1/15/40 .................................................. 395,510,000 369,291,642
Senior lien, Series A, 5.00%, 1/01/35 .................................................... 15,955,000 13,842,558
Senior lien, Series A, Pre-Refunded, 6.50%, 1/01/32 ...................................... 108,175,000 119,629,651
Senior lien, Series A, Pre-Refunded, 6.00%, 1/01/34 ...................................... 125,995,000 135,728,114
Fort Bragg RDA, Tax Allocation, Fort Bragg Redevelopment Project, Series A, 6.875%, 5/01/18 .... 2,015,000 2,068,015
Fortuna and Susanville Cities COP, Series B, 7.375%, 9/01/17 ................................... 2,000,000 2,054,440
Fresno County COP, American Avenue Landfill Project,
ETM, 7.90%, 11/01/00 ..................................................................... 320,000 327,398
ETM, 8.00%, 11/01/01 ..................................................................... 345,000 364,082
Pre-Refunded, 8.25%, 11/01/13 ............................................................ 7,185,000 7,805,137
Fresno County Office of Education COP, Capital Outlay Financing Program,
Series C, 7.50%, 12/01/10 ................................................................ 2,470,000 2,518,807
Fresno Health Facilities Revenue, Holy Cross Health Systems Corp., MBIA Insured,
5.625%, 12/01/15 ......................................................................... 5,000,000 5,041,700
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Fresno RDAR, Tax Allocation, Mariposa Redevelopment Project, Series A, 6.625%, 2/01/23 ......... $ 1,505,000 $1,518,891
Fresno USD, COP, Project Phase VI, Series A, Pre-Refunded, 7.20%, 5/01/11 ...................... 7,065,000 7,425,880
Galt COP, Wastewater Improvement, 7.80%, 9/01/10 ............................................... 3,340,000 3,459,205
Glendale USD, COP, Series A, AMBAC Insured, 6.00%, 3/01/19 ..................................... 7,250,000 7,397,320
Grand Terrace PFA, Series A, Pre-Refunded, 7.85%, 6/01/21 ...................................... 2,945,000 3,120,198
Guam Power Authority Revenue, Refunding, Series A, 5.25%, 10/01/34 ............................. 10,000,000 8,701,500
Hawaiian Gardens RDA, Tax Allocation, Project No. 1,
Refunding, 6.35%, 12/01/33 ............................................................... 13,000,000 12,927,070
Refunding, ETM, 8.00%, 12/01/10 .......................................................... 6,545,000 7,515,296
Helix Water District COP, Installment Purchase, Series A, FSA Insured, 5.25%, 4/01/24 .......... 8,925,000 8,414,401
Hemet USD, COP, Series 1991, Pre-Refunded, 8.00%, 12/01/13 ..................................... 4,000,000 4,306,920
Hemet Valley Hospital District Revenue COP, Hemacinto Community Corp. Project,
Series A, 7.75%, 5/01/19 ................................................................. 2,515,000 2,525,488
Hesperia PFAR, Highway and Street Improvement, Series A, 6.10%, 10/01/10 ....................... 1,600,000 1,676,256
Hesperia Water District COP, Water Facilities Improvement Projects, FGIC Insured,
Pre-Refunded, 7.15%, 6/01/26 ............................................................. 5,000,000 5,309,050
Hollister RDA, Tax Allocation, Community Development Project, Series B, FSA Insured,
6.625%, 10/01/07 ......................................................................... 1,905,000 2,003,412
6.75%, 10/01/13 .......................................................................... 1,495,000 1,572,232
Huntington Beach COP, Emerald Cove Senior Citizens Housing Project, Refunding, 7.00%, 9/01/21 .. 3,655,000 3,732,778
Huntington Beach PFAR, Huntington Beach Redevelopment Projects, Refunding, 7.00%, 8/01/24 ...... 2,630,000 2,696,408
Huntington Park PFA, Local Agency Revenue, Refunding, Series A, MBIA Insured, 6.45%, 9/01/22 ... 10,000,000 10,500,900
Imperial COP,
Wastewater System Refining Program, Refunding, Series B, 5.85%, 10/15/16 ................. 1,820,000 1,846,499
Wastewater System Refining Program, Refunding, Series B, 5.875%, 10/15/20 ................ 3,175,000 3,215,354
Water System Refining Program, Refunding, Series A, 5.85%, 10/15/16 ...................... 2,625,000 2,663,220
Water System Refining Program, Refunding, Series A, 5.875%, 10/15/20 ..................... 4,535,000 4,592,640
Indio PFAR, Tax Allocation, Series 1992, Pre-Refunded, 7.30%, 8/15/22 .......................... 12,120,000 12,507,719
Industry COP, Refunding, 6.625%, 6/01/06 ....................................................... 11,380,000 12,386,220
Industry Urban Development Agency Tax Allocation, Transportation District No. 3
Project, Refunding, 6.90%, 11/01/07 ...................................................... 5,860,000 6,141,690
Inglewood PFAR, La Cinega Redevelopment Project, Series A, AMBAC Insured, 6.00%, 5/01/16 ....... 7,410,000 7,581,097
Inglewood USD, COP, 7.375%, 10/01/05 ........................................................... 2,990,000 3,054,046
Inland Empire Solid Waste Financing Authority Revenue, Landfill Improvement Financing
Project, Series B, FSA Insured
6.25%, 8/01/11 ........................................................................... 5,000,000 5,408,050
Pre-Refunded, 6.00%, 8/01/16 ............................................................. 5,000,000 5,408,950
Intercommunity Hospital Financing Authority COP, Northbay Healthcare System, Refunding,
ACA Insured, 5.25%, 11/01/19 ............................................................. 5,000,000 4,524,900
Irwindale CRDA, Tax Allocation,
Individual Development Project, Pre-Refunded, 6.60%, 8/01/18 ............................. 1,630,000 1,798,135
Individual Development Project, Pre-Refunded, 6.625%, 8/01/26 ............................ 9,100,000 10,120,474
Senior lien, Refunding, FSA Insured, 5.75%, 8/01/26 ...................................... 10,220,000 10,274,370
Irwindale PFA, Special Tax, CFD No. 1, Pre-Refunded, 8.50%, 11/01/20 ........................... 9,985,000 10,487,845
John C. Fremont Hospital District Health Facilities Revenue, 6.75%, 6/01/23 .................... 1,760,000 1,844,410
Keppel USD, Special Tax, CFD No. 91-1, Series A, 7.40%, 9/01/16 ................................ 2,000,000 2,104,680
Kern County Board of Education COP,
Refunding, Series A, MBIA Insured, 5.20%, 5/01/28 ........................................ 13,685,000 12,627,560
Series A, MBIA Insured, 5.25%, 6/01/29 ................................................... 5,775,000 5,391,656
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Kern County Housing Authority RRMR, Series A, 9.875%, 9/01/08 .................................. $ 2,730,000 $ 2,739,091
Kern County Housing Authority SFMR, Series A, GNMA Secured,
7.45%, 12/01/02 .......................................................................... 110,000 111,749
7.55%, 12/01/07 .......................................................................... 245,000 254,168
7.65%, 12/01/12 .......................................................................... 355,000 365,987
7.70%, 12/01/23 .......................................................................... 1,620,000 1,653,566
7.50%, 10/01/24 .......................................................................... 805,000 819,530
La Mirada RDA,
Special Tax, Civic Theater Project, CFD No. 89-1, Pre-Refunded, 7.90%, 10/01/01 .......... 295,000 306,564
Special Tax, Civic Theater Project, CFD No. 89-1, Pre-Refunded, 8.00%, 10/01/02 .......... 315,000 327,420
Special Tax, Civic Theater Project, CFD No. 89-1, Pre-Refunded, 8.00%, 10/01/03 .......... 340,000 353,406
Special Tax, Civic Theater Project, CFD No. 89-1, Pre-Refunded, 8.25%, 10/01/20 .......... 12,725,000 13,242,017
Tax Allocation, Housing, Refunding, Series A, FSA Insured, 5.875%, 8/15/25 ............... 7,100,000 7,173,272
La Mirada SFMR, MBS, Series A, 7.65%, 4/01/24 .................................................. 1,550,000 1,595,648
La Palma Community Development Commission Tax Allocation, La Palma Community Development
Project No. 1,
7.10%, 6/01/21 ........................................................................... 4,945,000 5,078,218
6.10%, 6/01/22 ........................................................................... 2,355,000 2,296,172
La Quinta RDA, Tax Allocation,
Redevelopment Project Area No. 1, Refunding, AMBAC Insured, 5.20%, 9/01/28 ............... 8,600,000 7,986,562
Redevelopment Project Area No. 1, Refunding, AMBAC Insured, 5.25%, 9/01/33 ............... 4,300,000 3,970,190
Redevelopment Project Areas No. 1 and 2, MBIA Insured, 6.00%, 9/01/25 .................... 7,500,000 7,611,300
Lake Arrowhead Community Services District COP, FGIC Insured, 6.50%, 6/01/15 ................... 6,430,000 6,766,932
Lake Elsinore PFA, Tax Allocation Revenue, Lake Elsinore Redevelopment Projects, Series A,
FSA Insured, 5.80%, 9/01/25 .................................................................. 6,750,000 6,780,578
Lake Elsinore PFA, Tax Allocation Revenue, Series A, 5.50%, 9/01/30 ............................ 13,050,000 11,209,167
Lake Elsinore USD,
COP, Pre-Refunded, 6.90%, 2/01/20 ........................................................ 5,150,000 5,557,417
Special Tax, CFD No. 8, Pre-Refunded, 8.25%, 9/01/16 ..................................... 4,200,000 4,495,596
Lakewood RDA, Tax Allocation, Redevelopment Project No.1, Refunding, Series A, FSA Insured,
6.50%, 9/01/17 ................................................................................. 6,705,000 7,052,118
Lancaster COP, School District Project, FSA Insured, Pre-Refunded,
6.95%, 3/01/12 ........................................................................... 2,640,000 2,885,678
7.00%, 3/01/22 ........................................................................... 3,555,000 3,889,063
Lancaster RDA,
RMR, Los Angeles County, Series A, ETM, 10.125%, 9/01/16 ................................. 5,000 5,089
Tax Allocation, Amargosa Redevelopment Project, Refunding, MBIA Insured, 6.85%, 2/01/19 .. 6,055,000 6,262,808
Tax Allocation, Combined Redevelopment Project Areas, Housing Program, MBIA Insured,
5.80%, 8/01/23 ........................................................................... 9,125,000 9,178,016
Tax Allocation, Combined Redevelopment Project Areas, Sheriff's Program, MBIA Insured,
5.70%, 8/01/23 ........................................................................... 13,140,000 13,156,688
Lemon Grove CDA, Tax Allocation, 1998 Refunding, 5.75%, 8/01/28 ................................ 8,115,000 7,277,857
Lemoore Financing Authority Lease Revenue, Water and Wastewater System Improvement Project,
AMBAC Insured, 6.20%, 12/01/20 .................................................................. 4,400,000 4,564,384
Lemoore RDA, Tax Allocation, Refunding, 6.85%, 8/01/25 ......................................... 6,105,000 6,248,590
Liberty UHSD, Series A, FSA Insured, 6.20%, 8/01/19 ............................................ 2,745,000 2,847,663
Little Lake City School District COP, Refunding, Series A,
6.15%, 6/01/06 ........................................................................... 280,000 285,393
6.20%, 6/01/07 ........................................................................... 300,000 305,346
6.25%, 6/01/08 ........................................................................... 315,000 320,160
6.25%, 6/01/09 ........................................................................... 335,000 338,792
6.25%, 6/01/10 ........................................................................... 355,000 358,948
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Local Medical Facilities Financing Authority COP, Insured California Health
Clinic Project, 7.55%, 3/01/20 ................................................................. $ 8,960,000 $ 9,224,410
Local Medical Facilities Financing Authority II COP, Insured California Health
Clinic Project, 7.55%, 11/01/20 ................................................................ 3,980,000 4,113,250
Local Medical Facilities Financing Authority III COP, Insured California Health
Clinic Project, 6.90%, 7/01/22 ................................................................. 3,470,000 3,615,671
Loma Linda Hospital Revenue, Loma Linda University Medical Center, Refunding, ..................
Series A, AMBAC Insured, 6.55%, 12/01/18 ................................................. 11,525,000 12,124,070
Series B, MBIA Insured, 5.00%, 12/01/22 .................................................. 8,000,000 7,235,440
Long Beach California Board Finance Authority Lease Revenue, Temple and Willow
Facility, Refunding, Series B,
MBIA Insured, 5.00%, 10/01/27 ................................................................... 14,935,000 13,472,864
Long Beach COP, Fleet Services Project, Series A, Pre-Refunded, 6.60%, 5/01/14 ................. 7,715,000 7,884,576
Long Beach Harbor Revenue, MBIA Insured,
5.375%, 5/15/20 .......................................................................... 12,000,000 11,316,840
5.25%, 5/15/25 ........................................................................... 10,500,000 9,623,985
Long Beach HMR, Series A, 9.60%, 11/01/14 ...................................................... 1,335,000 1,349,431
Long Beach USD, COP, Los Angeles County Schools, Series A, 6.30%, 12/01/12 ..................... 3,735,000 3,957,942
Los Angeles Community College District COP, Series A, Refunding, FSA Insured, 6.00%, 8/15/20 ... 4,330,000 4,407,377
Los Angeles COP,
Ararat Mission Hills Project, Series A, Pre-Refunded, 7.25%, 6/01/21 ..................... 3,185,000 3,311,190
Bay Harbor Hospital Inc., 7.30%, 4/01/20 ................................................. 5,335,000 5,441,700
Department of Public Social Services, Series A, AMBAC Insured, 5.50%, 8/01/24 ............ 4,000,000 3,869,520
Department of Public Social Services, Series A, AMBAC Insured, 5.50%, 8/01/31 ............ 5,000,000 4,784,050
Los Angeles County Capital Assets Leasing Corp. Leasehold Revenue, Refunding, AMBAC Insured,
6.00%, 12/01/16 ................................................................................. 6,000,000 6,155,880
Los Angeles County COP,
CHFCLP Insured Health Clinic Program, Behavioral Health Service, Refunding,
Series F, 5.875%, 1/01/21 ................................................................ 7,520,000 7,567,677
CHFCLP Insured Health Clinic Program, Series A, 7.30%, 1/01/21 ........................... 15,545,000 16,042,906
CHFCLP Insured Health Clinic Program, Series B, 7.05%, 8/01/21 ........................... 7,175,000 7,407,757
CHFCLP Insured Health Clinic Program, Series C, 6.90%, 1/01/22 ........................... 1,200,000 1,233,504
Disney Parking Project, Pre-Refunded, 6.50%, 3/01/23 ..................................... 12,060,000 12,904,321
Marina del Rey, Series A, 6.50%, 7/01/08 ................................................. 21,615,000 22,687,536
Retirement Housing Foundation, Refunding, 6.625%, 4/15/12 ................................ 3,400,000 3,610,834
Retirement Housing Foundation, Refunding, 6.75%, 4/15/22 ................................. 7,665,000 8,158,703
Series 1992, 6.625%, 7/01/22 ............................................................. 1,000,000 1,032,010
Los Angeles County MTA, Sales Tax Revenue,
Proposition A, First Tier, Refunding, Senior Series A, AMBAC Insured, 5.00%, 7/01/26 ..... 13,000,000 11,651,380
Proposition A, First Tier, Refunding, Senior Series A, MBIA Insured, 5.25%, 7/01/27 ...... 7,840,000 7,343,963
Proposition A, Refunding, Series A, FGIC Insured, 5.00%, 7/01/21 ......................... 118,800,000 109,583,496
Proposition A, Refunding, Series A, MBIA Insured, 5.625%, 7/01/18 ........................ 10,060,000 10,097,423
Proposition A, Second Tier, MBIA Insured, Pre-Refunded, 6.00%, 7/01/26 ................... 12,200,000 13,201,132
Proposition C, Second Senior Series A, AMBAC Insured, 5.00%, 7/01/25 ..................... 58,000,000 52,596,140
Los Angeles County Public Works Financing Authority Revenue,
Multiple Capital Facilities Project, Series B, AMBAC Insured, 5.125%, 12/01/29 ........... 26,905,000 24,629,644
Regional Park and Open Space District, Series A, Pre-Refunded, 6.00%, 10/01/15 ........... 10,000,000 10,758,800
Los Angeles County Sanitation Districts Financing Authority Revenue, Capital Projects, Series A,
5.00%, 10/01/23 .......................................................................... 25,750,000 23,125,303
Los Angeles County Sanitation Districts Financing Authority Revenue, Capital Projects, Series A,
MBIA Insured,
5.25%, 10/01/19 .......................................................................... 30,000,000 28,798,200
5.00%, 10/01/23 .......................................................................... 14,300,000 13,064,623
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Los Angeles County SFMR, Issue A, GNMA Secured,
7.875%, 8/01/16 .......................................................................... $ 1,685,000 $ 1,736,578
8.00%, 3/01/17 ........................................................................... 2,265,000 2,294,128
Los Angeles County Transportation Commission Lease Revenue, FSA Insured, 7.375%, 12/15/06 ...... 11,495,000 11,968,594
Los Angeles County Transportation Commission Sales Tax Revenue,
Proposition C, Second Senior, Series A, MBIA Insured, Pre-Refunded, 6.625%, 7/01/09 ...... 29,590,000 31,546,195
Refunding, Series B, 6.50%, 7/01/13 ...................................................... 4,300,000 4,477,676
Refunding, Series B, FGIC Insured, 5.75%, 7/01/18 ........................................ 28,095,000 28,161,866
Refunding, Series B, MBIA Insured, 5.75%, 7/01/18 ........................................ 13,480,000 13,512,082
Series B, FGIC Insured, 6.50%, 7/01/13 ................................................... 5,000,000 5,217,100
Los Angeles CRDA,
Financing Authority Revenue, Pooled Financing, Beacon Normandie, Series B, 6.625%,
9/01/14 .................................................................................. 7,500,000 7,951,275
MFHR, Angelus Plaza Project, Refunding, Series A, 6.40%, 7/01/23 ......................... 6,230,000 6,356,967
Tax Allocation, Bunker Hill, Refunding, Series H, FSA Insured, 5.625%, 12/01/18 .......... 20,000,000 20,080,000
Tax Allocation, Bunker Hill, Refunding, Series H, FSA Insured, 5.625%, 12/01/23 .......... 50,090,000 49,793,968
Tax Allocation, Bunker Hill, Refunding, Series H, FSA Insured, 5.60%, 12/01/28 ........... 36,900,000 36,327,681
Tax Allocation, Series G, ETM, 6.75%, 7/01/10 ............................................ 8,060,000 8,111,906
Los Angeles Department of Airports Revenue, Ontario International Airport, Series A,
FGIC Insured, 6.00%, 5/15/26 ............................................................ 10,000,000 10,085,500
Los Angeles Department of Water and Power Electric Plant Revenue,
FGIC Insured, 6.125%, 1/15/33 ............................................................ 5,000,000 5,083,100
Refunding, 5.875%, 9/01/30 ............................................................... 27,880,000 28,076,833
Refunding, FGIC Insured, 5.875%, 9/01/30 ................................................. 15,000,000 15,071,250
Refunding, MBIA Insured, 6.00%, 2/01/28 .................................................. 11,060,000 11,264,278
Refunding, MBIA Insured, 5.875%, 9/01/30 ....................................................... 19,400,000 19,492,150
Refunding, Second Issue, 5.40%, 11/15/31 ................................................. 14,500,000 13,663,060
Refunding, Series 1992, 6.375%, 2/01/20 .................................................. 8,245,000 8,514,117
Refunding, Series 1992, 6.00%, 2/01/28 ................................................... 8,290,000 8,443,116
Refunding, Series 1993, MBIA Insured, 5.375%, 9/01/23 .................................... 62,955,000 60,560,821
Second Issue, 6.00%, 8/15/32 ............................................................. 37,600,000 37,911,704
Series 1993, 6.125%, 1/15/33 ............................................................. 101,095,000 102,901,568
Los Angeles Department of Water and Power Waterworks Revenue, Refunding,
Series 1992, 6.40%, 5/15/28 .............................................................. 21,590,000 22,175,737
Series 1993, 5.80%, 4/15/24 .............................................................. 10,520,000 10,569,760
Los Angeles Harbor Department Revenue, Series B,
6.125%, 8/01/18 .......................................................................... 24,810,000 25,614,836
6.20%, 8/01/22 ........................................................................... 59,835,000 61,978,888
5.375%, 11/01/23 ......................................................................... 7,460,000 7,045,895
MBIA Insured, 6.20%, 8/01/25 ............................................................. 35,690,000 36,988,045
Los Angeles HMR, Series 1985, 9.00%, 6/15/18 ................................................... 200,000 200,102
Los Angeles MFHR, Refunding, Senior Series G, FSA Insured, 5.75%, 1/01/24 ...................... 7,330,000 7,208,102
Los Angeles Municipal Improvement Corp. Lease Revenue, Central Library Project,
Refunding, Series A, 6.30%, 6/01/18 ............................................................ 3,000,000 3,071,040
Los Angeles USD, COP, Dr. Francisco Bravo Medical Facility, Refunding,
6.50%, 6/01/04 ........................................................................... 3,040,000 3,210,210
6.60%, 6/01/05 ........................................................................... 1,145,000 1,209,967
6.60%, 6/01/06 ........................................................................... 3,610,000 3,814,073
6.625%, 6/01/08 .......................................................................... 8,505,000 8,964,950
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Los Angeles Wastewater System Revenue,
Refunding, Series A, FGIC Insured, 6.00%, 12/01/12 ....................................... $ 15,000,000 $ 15,583,800
Refunding, Series A, FGIC Insured, 6.00%, 12/01/18 ....................................... 25,665,000 26,048,692
Refunding, Series A, MBIA Insured, 5.70%, 6/01/20 ........................................ 65,445,000 65,670,785
Refunding, Series A, MBIA Insured, 5.80%, 6/01/21 ........................................ 35,505,000 35,768,802
Refunding, Series C, MBIA Insured, 5.60%, 6/01/20 ........................................ 31,540,000 31,461,781
Refunding, Series D, FGIC Insured, 6.00%, 11/01/14 ....................................... 8,000,000 8,333,280
Series A, FGIC Insured, 5.00%, 6/01/28 ................................................... 8,245,000 7,429,240
Series A, MBIA Insured, 5.875%, 6/01/24 .................................................. 45,400,000 45,827,214
Series B, AMBAC Insured, 6.00%, 6/01/22 .................................................. 10,650,000 10,765,766
Series B, MBIA Insured, 5.70%, 6/01/23 ................................................... 75,720,000 75,813,893
Lynwood PFA, Tax Allocation, Project Area A, Refunding, Series A, FSA Insured,
5.90%, 9/01/28 ........................................................................... 6,470,000 6,659,895
Lynwood RDA, Tax Allocation, Project Area, Series A, 6.50%, 7/01/13 ............................ 6,430,000 6,759,859
Madera County COP, Valley Children's Hospital, MBIA Insured,
5.00%, 3/15/23 ........................................................................... 14,500,000 12,974,890
5.75%, 3/15/28 ........................................................................... 27,500,000 27,272,300
Madera USD, COP, 6.50%, 12/01/07 ............................................................... 1,250,000 1,324,975
Madera-Chowchilla Power Authority Hydroelectric Revenue, Refunding, 8.00%,
1/01/14 .................................................................................. 2,235,000 2,379,917
Marysville COP, Capital Improvement Financing Project, 7.125%, 2/01/13 ......................... 1,110,000 1,163,824
Marysville Hospital Revenue, Fremont Rideout Health, Refunding, Series A, AMBAC
Insured, 5.00%, 1/01/22 .................................................................. 5,000,000 4,490,150
Menlo Park CDA, MFHR, Gateway Project, Series A, FHA Insured, 8.25%, 12/01/28 .................. 3,470,000 3,490,994
Merced Irrigation District COP, Water Facilities Project, 6.40%, 11/01/10 ...................... 3,580,000 3,793,511
Metropolitan Water District Revenue, Southern California Waterworks,
5.50%, 7/01/19 ........................................................................... 81,315,000 79,981,434
5.00%, 7/01/20 ........................................................................... 7,765,000 7,186,740
Series A, 5.00%, 7/01/26 ................................................................. 40,890,000 36,962,516
Series A, 5.00%, 7/01/37 ................................................................. 26,080,000 23,015,861
Series C, 5.00%, 7/01/37 ................................................................. 26,780,000 23,633,618
Mid-Peninsula Regional Open Space District COP, Special District Association
Finance Corp., 5.75%, 9/01/20 ............................................................ 5,200,000 5,047,848
Mill Valley Revenue COP, Pre-Refunded, 7.10%, 12/01/20 ......................................... 2,750,000 2,861,320
Milpitas RDA, Tax Allocation, Redevelopment Project Area No. 1, MBIA Insured,
5.40%, 1/15/17 ........................................................................... 12,155,000 12,048,158
5.50%, 1/15/24 ........................................................................... 15,790,000 15,280,299
Modesto Irrigation District COP, Refunding and Capital Improvements, Series B, 5.30%, 7/01/22 .. 4,860,000 4,432,271
Modesto PFA, Lease Revenue, Capital Improvements and Refinancing Project, AMBAC Insured,
5.125%, 9/01/33 ................................................................................. 12,535,000 11,342,671
Mojave Water Agency COP, Supplemental Water Entitlement, MBIA Insured, 5.55%, 9/01/22 .......... 10,005,000 9,865,630
Montclair RDA, Tax Allocation,
Redevelopment Project No. IV, 6.90%, 10/01/22 ............................................ 1,645,000 1,704,829
Redevelopment Project No. V, 6.90%, 10/01/22 ............................................ 4,245,000 4,399,391
Monterey County COP, Natividad Medical Center Improvement Project, Series C, MBIA Insured,
Pre-Refunded,
6.50%, 8/01/15 ........................................................................... 3,500,000 3,872,470
6.60%, 8/01/23 ........................................................................... 13,250,000 14,721,943
6.25%, 8/01/28 ........................................................................... 13,385,000 14,652,827
Monterey Park RDA, Tax Allocation, Atlantic-Garvey Redevelopment Project No. 1, Refunding, 6.85%,
9/01/14 .................................................................................. 13,680,000 14,267,009
Moreno Valley Special Tax, Towngate Community Facilities 8, Refunding, Series A, FSA Insured,
5.875%, 12/01/15 ......................................................................... 5,830,000 5,966,247
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Moreno Valley USD, COP,
Land Acquisition, Series F, FSA Insured, Pre-Refunded, 6.75%, 9/01/27 .................... $ 7,680,000 $ 8,225,664
Refunding, FSA Insured, 5.60%, 3/01/17 ................................................... 5,000,000 5,033,800
Refunding, FSA Insured, 5.70%, 3/01/27 ................................................... 15,000,000 14,978,550
Mount Diablo USD, Special Tax, CFD No. 1, AMBAC Insured, 6.30%, 8/01/22 ........................ 5,000,000 5,139,950
Mountain View COP, Capital Improvement Financing Authority Revenue,
City Hall, MBIA Insured, 6.25%, 8/01/12 .................................................. 3,110,000 3,231,383
City Hall/Community Theatre, MBIA Insured, 6.50%, 8/01/16 ................................ 2,000,000 2,078,880
Mountain View School District COP, Santa Clara County Financing Project,
Pre-Refunded,
6.75%, 4/01/07 ........................................................................... 1,010,000 1,051,168
6.90%, 4/01/12 ........................................................................... 1,430,000 1,490,618
Mountain View Shoreline Regional Park, Community Tax Allocation, Series A, MBIA
Insured, 5.75%, 8/01/18 .................................................................. 9,605,000 9,680,687
Mountain View-Los Altos UHSD, COP, Financing Project, Pre-Refunded, 7.40%, 8/01/16 ............. 2,175,000 2,304,021
M-S-R Public Power Agency San Juan Project Revenue,
Refunding, Series F, AMBAC Insured, 6.00%, 7/01/20 ....................................... 10,750,000 10,912,648
Series E, MBIA Insured, 6.00%, 7/01/22 ................................................... 8,490,000 8,519,121
Murrieta COP, Road Improvement Project, 6.00%, 4/01/27 ......................................... 8,600,000 8,045,730
Napa Housing Facility Revenue, Napa Park Apartments, Series A, GNMA Secured, 6.35%, 6/20/35 .... 6,125,000 6,248,296
Napa Mortgage Revenue, Refunding, Creekside II Apartments Project, Series A, MBIA Insured,
6.625%, 7/01/25 .......................................................................... 2,000,000 2,057,960
Needles PFAR, Tax Allocation, Redevelopment Project, Series A, 7.50%, 8/15/22 .................. 1,580,000 1,617,051
Nevada County COP, Jail and Government Center Project, Refunding, FSA Insured, 5.875%, 10/01/19 6,275,000 6,330,910
Nevada Power Authority Revenue, Bowman Hydroelectric Project, Refunding, 7.50%, 5/01/13 ........ 7,025,000 7,265,817
North City West School Facilities Financing Authority Special Tax, CFD No. 1, Series C,
AMBAC Insured, 5.30%,
9/01/22 .................................................................................. 10,000,000 9,545,500
9/01/27 .................................................................................. 9,900,000 9,340,551
Northern California Public Power Agency Revenue, Hydroelectric Project No. 1, Refunding,
Series A, MBIA Insured,
5.50%, 7/01/24 ........................................................................... 10,000,000 9,636,300
5.20%, 7/01/32 ........................................................................... 43,675,000 40,046,044
Oakland COP, Oakland Museum, Refunding, Series A, AMBAC Insured, 6.00%, 4/01/12 ................ 8,000,000 8,268,160
Oakland HFR,
Issue D-1, 6.875%, 7/01/00 ............................................................... 200,000 200,530
Issue D-1, 6.95%, 1/01/01 ................................................................ 205,000 206,228
Issue D-1, 6.95%, 7/01/01 ................................................................ 80,000 80,714
Issue D-1, 7.10%, 1/01/10 ................................................................ 2,740,000 2,806,171
Issue D-2, 6.95%, 7/01/01 ................................................................ 210,000 211,873
Issue D-2, 7.10%, 1/01/10 ................................................................ 1,095,000 1,121,444
Issue D-2, 7.15%, 1/01/24 ................................................................ 5,735,000 5,852,395
Oakland Joint Powers Financing Authority Lease Revenue, Oakland Administration Buildings,
AMBAC Insured, 5.75%,
8/01/21 .................................................................................. 7,105,000 7,160,419
8/01/26 .................................................................................. 24,895,000 24,957,984
Oakland Revenue,
1800 Harrison Foundation, Refunding, Series A, AMBAC Insured, 6.00%, 1/01/29 ............. 13,825,000 14,057,951
1800 Harrison Foundation, Series B, AMBAC Insured, 6.00%, 1/01/29 ........................ 13,470,000 13,696,970
Oakland YMCA Project, Refunding, Pre-Refunded, 7.40%, 6/01/10 ............................ 5,405,000 5,542,017
Oceanside Building Authority Revenue, Refunding, 7.75%, 11/01/04 ............................... 3,595,000 3,952,882
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Oceanside COP,
Oceanside Civic Center Project, Refunding, MBIA Insured, 5.75%, 8/01/15 .................. $ 5,000,000 $5,119,450
Refunding, Series A, 6.375%, 4/01/12 ..................................................... 4,435,000 4,647,303
Refunding, Series A, 6.625%, 4/01/23 ..................................................... 9,000,000 9,032,130
Wastewater Systems Plan, Refunding, AMBAC Insured, 5.80%, 5/01/21 ........................ 4,500,000 4,533,120
Water System Project, Refunding, AMBAC Insured, 5.80%, 8/01/21 ........................... 4,750,000 4,786,243
Olivenhain Municipal Water District 1915 Act, AD No. 96-1, MBIA Insured, 5.45%, 9/02/27 ........ 11,105,000 10,632,704
Ontario Montclair School District COP,
Capital Projects, FSA Insured, 5.625%, 9/01/17 ........................................... 7,500,000 7,578,675
Series A, Pre-Refunded, 7.50%, 10/01/12 .................................................. 1,670,000 1,731,640
Orange County Airport Revenue, Refunding, MBIA Insured, 5.625%, 7/01/12 ........................ 5,000,000 5,176,150
Orange County CFD, No. 87-4 Special Tax, Foothill Ranch, Pre-Refunded, 8.00%, 8/15/10 .......... 5,000,000 5,172,350
Orange County COP,
Civic Center Expansion Project, AMBAC Insured, Pre-Refunded, 6.00%, 8/01/21 .............. 4,500,000 4,628,385
Juvenile Justice Center Facilities, Refunding, AMBAC Insured, 6.375%, 6/01/11 ............ 5,000,000 5,284,200
Orange County Development Agency Tax Allocation, Santa Ana Heights Area Project, Refunding,
6.125%, 9/01/23 ............................................................................... 6,500,000 6,400,290
Orange County Financing Authority Tax Allocation Revenue, Refunding, Series A,
MBIA Insured, 6.50%,
9/01/21 .................................................................................. 5,225,000 5,417,855
9/01/22 .................................................................................. 8,000,000 8,292,000
Orange County Recovery COP, Series A, MBIA Insured, 5.80%, 7/01/16 ............................. 10,380,000 10,645,313
Orange County Recovery, Refunding, Series A, MBIA Insured, 5.75%, 6/01/15 ...................... 79,010,000 80,861,994
Orange County Sanitation District COP, 7.00%, 9/01/00 .......................................... 1,975,000 1,987,265
Orange County Transportation District COP, Business Acquisition Project,
Pre-Refunded, 6.75%, 12/01/05 ........................................................... 2,865,000 2,947,541
Orange County Water District COP, Refunding, Series A,
5.50%, 8/15/14 ........................................................................... 9,430,000 9,547,026
5.00%, 8/15/18 ........................................................................... 5,000,000 4,680,050
Orange RDA, Tax Allocation Revenue, Northwest Redevelopment Project, Refunding,
Series B, 5.70%, 10/01/23 ................................................................ 8,530,000 8,127,384
Oroville PFAR, Series A, AMBAC Insured, 6.30%, 9/15/20 ......................................... 12,150,000 12,589,952
Oroville Wyandotte Irrigation District Revenue, Hydroelectric Sly Creek Power,
Refunding, 6.20%, 1/01/09 ................................................................ 8,280,000 8,605,404
Oxnard Harbor District Revenue, ACA Insured, 5.60%, 8/01/19 .................................... 10,820,000 10,399,535
Palm Desert 1915 Act, Limited Obligation, AD No. 92-1, Pre-Refunded, 7.60%, 9/02/12 ............ 1,290,000 1,344,477
Palm Desert Financing Authority Lease Revenue, Blythe County Administrative Project,
6.625%, 8/01/26 .......................................................................... 5,020,000 5,049,618
Palm Desert Financing Authority Tax Allocation Revenue,
Project Area No.1, Refunding, MBIA Insured, 5.625%, 4/01/23 .............................. 13,000,000 12,925,250
Project Area No.1, Series A, MBIA Insured, 6.625%, 4/01/23 ............................... 1,200,000 1,254,276
Project Area No.1, Series A, MBIA Insured, 5.95%, 4/01/24 ................................ 15,075,000 15,254,996
Project Area No.1, Series A, MBIA Insured, Pre-Refunded, 6.625%, 4/01/23 ................. 4,140,000 4,393,575
Palm Springs COP, Multiple Capital Facilities Project, Refunding, AMBAC Insured,
5.75%, 4/01/27 ........................................................................... 11,570,000 11,602,049
Palm Springs Financing Authority Regional Airport Revenue, Tax Allocation,
Series B, 6.875%, 8/01/21 ................................................................ 2,230,000 2,294,871
Palmdale Civic Authority Revenue, Merged Redevelopment Project Areas, Refunding, Series A,
MBIA Insured, 6.15%, 9/01/24 ............................................................. 4,730,000 4,857,899
Palmdale CRDA, Tax Allocation,
Merged Redevelopment Project, Refunding, MBIA Insured, 5.00%, 9/01/28 .................... 17,500,000 15,641,150
Merged Redevelopment Project, Refunding, MBIA Insured, 5.00%, 9/01/34 .................... 6,980,000 6,144,215
Series A, MBIA Insured, 5.75%, 9/01/27 ......................................................... 10,435,000 10,464,427
Palmdale School District COP, 7.40%, 8/01/20 ................................................... 495,000 503,207
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Palomar Community College District COP, Building Acquisition Project,
Connie Lee Insured, Pre-Refunded,
6.75%, 10/01/19 ................................................................................ $ 4,210,000 $ 4,656,471
Paramount RDA, Tax Allocation, Custodial Receipts, MBIA Insured, 6.25%, 8/01/23 ................ 22,070,000 22,885,045
Pasadena COP, Art Center College of Design, Connie Lee Insured, 6.50%, 12/01/19 ................ 8,250,000 8,708,535
Pasadena Water Revenue, 6.00%, 7/01/13 ......................................................... 4,000,000 4,165,200
Perris PFAR,
Special Tax, Series A, ETM, 7.45%, 9/01/01 ............................................... 205,000 206,275
Special Tax, Series A, ETM, 7.50%, 9/01/02 ............................................... 235,000 236,356
Special Tax, Series A, ETM, 7.55%, 9/01/03 ............................................... 270,000 271,504
Special Tax, Series A, ETM, 7.60%, 9/01/04 ............................................... 305,000 306,574
Special Tax, Series A, ETM, 7.60%, 9/01/05 ............................................... 325,000 326,404
Special Tax, Series A, ETM, 7.80%, 9/01/19 ............................................... 3,555,000 3,568,331
Tax Allocation, Refunding, Series B, MBIA Insured, 6.35%, 8/15/17 ........................ 5,280,000 5,514,802
Tax Allocation, Refunding, Series C, 7.10%, 11/15/17 ..................................... 3,330,000 3,477,386
Perris RDA, Tax Allocation,
Central and North Perris Redevelopment Project, Series A, Pre-Refunded, 7.875%, 10/01/10 . 2,935,000 3,182,509
Central and North Perris Redevelopment Project, Series B, Pre-Refunded, 7.875%, 10/01/14 . 4,535,000 4,873,538
Series 1991, 7.15%, 8/01/11 .............................................................. 865,000 901,001
Series 1991, 7.20%, 8/01/21 .............................................................. 2,040,000 2,097,079
Perris Special Tax,
CFD No. 8, Series A, ETM, 8.05%, 9/01/00 ................................................. 65,000 66,091
CFD No. 8, Series A, ETM, 8.10%, 9/01/01 ................................................. 85,000 89,331
CFD No. 8, Series A, ETM, 8.15%, 9/01/02 ................................................. 100,000 108,227
CFD No. 8, Series A, Pre-Refunded, 8.30%, 9/01/18 ........................................ 6,040,000 6,916,464
CFD No. 91-1, 8.75%, 9/01/21 ............................................................. 5,395,000 5,535,917
Petaluma Community Development Commission MFR, Park Lane Apartments, Series A, 6.875%, 11/20/34 4,800,000 5,000,208
Pioneers Memorial Healthcare District, Refunding, AMBAC Insured, 5.125%, 10/01/24 .............. 7,500,000 6,800,475
Pittsburg PFA, Water Revenue, MBIA Insured, 5.50%, 6/01/27 ..................................... 2,980,000 2,870,068
Placentia COP, RDA, Refunding, Series A, 6.90%, 1/01/14 ........................................ 1,770,000 1,875,864
Placer Hills Union Elementary School District COP, Convertible Capital Appreciation, 7.125%,
3/01/19 ................................................................................. 510,000 542,604
Pleasanton COP, Capital Improvements, 6.70%, 10/01/11 .......................................... 2,180,000 2,291,049
Pomona PFAR, Refunding, Series P, 5.75%, 10/01/15 .............................................. 6,490,000 6,270,703
Pomona RDA, Tax Allocation, Southwest Pomona Redevelopment Project, ETM, 11.45%, 1/01/07 ....... 11,405,000 14,119,960
Port Hueneme RDA, Tax Allocation, R-76 Project, Refunding, 6.50%, 5/01/23 ...................... 3,045,000 3,070,913
Port of Oakland Revenue, Series E, MBIA Insured,
6.25%, 11/01/05 .......................................................................... 1,525,000 1,615,128
6.30%, 11/01/06 .......................................................................... 1,050,000 1,113,053
6.40%, 11/01/07 .......................................................................... 500,000 530,975
6.40%, 11/01/22 .......................................................................... 11,495,000 11,860,886
Port of Oakland Revenue, Series J, MBIA Insured, 5.50%, 11/01/26 ............................... 7,000,000 6,744,360
Port of Oakland Special Facilities Revenue, Mitsui O.S.K. Lines Ltd., Series A,
6.70%, 1/01/07 ........................................................................... 6,100,000 6,319,173
6.75%, 1/01/12 ........................................................................... 4,890,000 5,082,226
6.80%, 1/01/19 ........................................................................... 8,075,000 8,407,609
Porterville COP,
Infrastructure Financing Project, AMBAC Insured, 5.00%, 7/01/28 .......................... 10,430,000 9,396,700
Public Building Project, Refunding, AMBAC Insured, 6.30%, 10/01/18 ....................... 1,950,000 2,024,958
Porterville UHSD, COP, Capital Appreciation, Land Acquisition, Series A, 6.60%, 9/01/27 ........ 1,310,000 1,376,784
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Poway COP, Royal Mobile Home Park Project,
Capital Improvement, FSA Insured, Pre-Refunded, 7.00%, 7/01/20 ........................... $ 5,500,000 $ 5,730,670
Refunding, FSA Insured, 5.875%, 8/01/15 .................................................. 6,250,000 6,465,188
Refunding, FSA Insured, 6.00%, 8/01/20 ................................................... 5,400,000 5,521,284
Refunding, FSA Insured, 6.00%, 8/01/28 ................................................... 15,000,000 15,255,900
Poway RDA, Tax Allocation, Sub-Paguay Redevelopment Project, Refunding, FGIC Insured,
5.50%, 12/15/23 ................................................................................ 23,000,000 22,316,670
5.75%, 12/15/26 .......................................................................... 11,710,000 11,731,429
Puerto Rico Commonwealth GO, Public Improvement, 4.75%, 7/01/23 ................................ 7,695,000 6,605,080
Puerto Rico Commonwealth Highway and Transportation Authority Revenue,
Series A, 5.00%, 7/01/38 ................................................................. 89,975,000 77,607,037
Series Y, 5.00%, 7/01/36 ................................................................. 63,000,000 54,211,500
Puerto Rico Electric Power Authority Power Revenue, Refunding, Series EE, 4.75%, 7/01/24 ....... 19,200,000 16,421,760
Puerto Rico Electric Power Authority Revenue, Series DD, 5.00%, 7/01/28 ........................ 23,250,000 20,352,818
Rancho Cucamonga, Palmdale, Potterville and Colton HFA, SFMR, Series 1986, GNMA
Secured, 7.55%, 8/01/18 .................................................................. 3,950,000 4,113,491
Rancho Cucamonga RDA, Tax Allocation, Rancho Redevelopment Project, Set-Aside
Housing, MBIA Insured, 5.25%, 9/01/21 ................................................... 8,330,000 7,938,573
Rancho Murieta Community Services District 1915 Act, ID No. 1,
8.25%, 9/02/01 ........................................................................... 745,000 768,266
8.25%, 9/02/02 ........................................................................... 715,000 742,220
8.30%, 9/02/03 ........................................................................... 745,000 773,355
8.40%, 9/02/04 ........................................................................... 750,000 778,530
8.40%, 9/02/05 ........................................................................... 735,000 762,496
8.40%, 9/02/06 ........................................................................... 750,000 777,908
Redlands USD, COP, Series A, FSA Insured,
6.15%, 9/01/11 ........................................................................... 645,000 651,934
6.25%, 9/01/27 ........................................................................... 4,310,000 4,356,764
Redwood City MFHR, Redwood Plaza Project, Refunding, Series A, GNMA Secured, 8.25%, 9/01/26 .... 3,795,000 3,809,383
Redwood City PFA, Local Agency Revenue, Series B, Pre-Refunded, 7.25%, 7/15/11 ................. 3,750,000 3,960,675
Rialto COP, FSA Insured, 5.75%, 2/01/22 ........................................................ 2,715,000 2,731,534
Rialto RDA, Tax Allocation, Agua Mansa Redevelopment Project, Pre-Refunded, 6.75%, 3/01/24 ..... 3,500,000 3,822,000
Richmond Joint Powers Financing Authority Revenue, Series B, Pre-Refunded, 7.00%, 5/15/07 ...... 2,000,000 2,046,980
Richmond Revenue, West Contra Costa YMCA Project, Pre-Refunded, 7.75%, 6/01/17 ................. 3,715,000 3,811,144
Riverside County Asset Leasing Corp. Leasehold Revenue, Hospital Project,
Series A, 6.375%, 6/01/09 ................................................................ 23,000,000 23,807,300
Series A, 6.50%, 6/01/12 ................................................................. 20,125,000 21,177,940
Series B, MBIA Insured, 5.00%, 6/01/19 ................................................... 18,865,000 17,172,621
Riverside County Board of Education COP, Capital Appreciation Financing Projects,
Series A, 6.65%, 11/01/17 ............................................................... 7,945,000 8,247,069
Riverside County CFD, Special Tax, No. 86-1, 8.75%, 9/01/16 .................................... 13,780,000 13,834,569
Riverside County COP,
Capital Projects, Series A, Pre-Refunded, 6.875%, 11/01/09 ............................... 4,975,000 5,262,953
Family Law Court Project, MBIA Insured, 5.75%, 11/01/27 .................................. 5,295,000 5,310,197
Historic Courthouse, MBIA Insured, 5.875%, 11/01/27 ...................................... 6,000,000 6,071,940
Riverside County Flood Control and Water Conservation District Elsinore Valley AD,
Zone 3, 7.875%,
9/01/03 .................................................................................. 165,000 181,734
9/01/04 .................................................................................. 180,000 202,644
9/01/05 .................................................................................. 190,000 218,099
9/01/06 .................................................................................. 205,000 239,395
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Riverside County Flood Control and Water Conservation District Elsinore Valley
AD, Zone 3, 7.875%, (cont.)
9/01/07 .................................................................................. $ 225,000 $266,600
9/01/08 .................................................................................. 240,000 286,138
9/01/09 .................................................................................. 260,000 314,005
9/01/10 .................................................................................. 280,000 341,356
9/01/11 .................................................................................. 305,000 373,326
9/01/12 .................................................................................. 325,000 402,711
9/01/13 .................................................................................. 350,000 436,839
9/01/14 .................................................................................. 380,000 474,175
9/01/15 .................................................................................. 410,000 513,213
9/01/16 .................................................................................. 440,000 551,949
9/01/17 .................................................................................. 475,000 595,365
Riverside County Housing Authority Revenue, Breezewood Apartment Project,
Refunding, Series C, 6.40%, 6/01/28 ............................................................ 5,025,000 4,498,079
Riverside County PFA, COP,
5.75%, 5/15/19 ........................................................................... 3,500,000 3,025,995
5.80%, 5/15/29 ........................................................................... 14,230,000 11,829,684
Riverside County PFA, Tax Allocation Revenue, Redevelopment Projects, Series A,
5.625%, 10/01/33 ......................................................................... 9,225,000 8,177,040
Riverside County SFMR,
Series A, GNMA Secured, 7.20%, 10/01/24 .................................................. 925,000 933,510
Series B, GNMA Secured, 7.60%, 11/01/19 .................................................. 475,000 489,682
Riverside MFHR,
Birchwood Park Apartments, Series A, FNMA Insured, 6.50%, 1/01/18 ........................ 2,200,000 2,231,196
Palm Shadows Apartments, Series A, FNMA Insured, 6.50%, 1/01/18 .......................... 4,010,000 4,066,862
Riverside RDA, Tax Allocation, Merged Redevelopment Project, Series A,
MBIA Insured, 5.625%, 8/01/23 .................................................................. 6,000,000 5,964,780
Riverside USD, COP, Series B, FSA Insured, 7.375%, 9/01/26 ..................................... 5,490,000 5,827,196
Rocklin USD, CFD Special Tax No.1, Pre-Refunded, 7.70%, 9/01/12 ................................ 6,085,000 6,298,462
Rohnert Park HFAR, Rancho Feliz Mobile Home Park, FSA Insured, 5.375%, 12/01/26 ................ 8,380,000 7,781,333
Roseville 1915 Act,
North Roseville Rocklin District No. 88-3, Refunding, 8.00%, 9/02/00 ..................... 115,000 116,317
North Roseville Rocklin District No. 88-3, Refunding, 8.00%, 9/02/01 ..................... 125,000 128,165
North Roseville Rocklin District No. 88-3, Refunding, 8.10%, 9/02/02 ..................... 130,000 134,748
North Roseville Rocklin District No. 88-3, Refunding, 8.15%, 9/02/03 ..................... 145,000 150,294
North Roseville Rocklin District No. 88-3, Refunding, 8.20%, 9/02/04 ..................... 155,000 160,625
North Roseville Rocklin District No. 88-3, Refunding, 8.20%, 9/02/05 ..................... 170,000 176,100
North Roseville Rocklin District No. 88-3, Refunding, 8.20%, 9/02/06 ..................... 180,000 186,458
North Roseville Rocklin District No. 88-3, Refunding, 8.25%, 9/02/07 ..................... 200,000 207,190
North Roseville Rocklin District No. 88-3, Refunding, 8.25%, 9/02/08 ..................... 215,000 222,693
North Roseville Rocklin District No. 88-3, Refunding, 8.25%, 9/02/09 ..................... 185,000 191,605
Rocky Ridge Harding District No. 88-4, Refunding, 8.00%, 9/02/00 ......................... 245,000 247,805
Rocky Ridge Harding District No. 88-4, Refunding, 8.00%, 9/02/01 ......................... 260,000 266,583
Rocky Ridge Harding District No. 88-4, Refunding, 8.10%, 9/02/02 ......................... 275,000 285,043
Rocky Ridge Harding District No. 88-4, Refunding, 8.15%, 9/02/03 ......................... 305,000 316,136
Rocky Ridge Harding District No. 88-4, Refunding, 8.20%, 9/02/04 ......................... 325,000 336,794
Rocky Ridge Harding District No. 88-4, Refunding, 8.20%, 9/02/05 ......................... 350,000 362,558
Roseville Special Tax,
CFD No. 2, Pre-Refunded, 8.00%, 9/01/06 .................................................. 355,000 367,801
CFD No. 2, Pre-Refunded, 8.25%, 9/01/21 .................................................. 7,165,000 7,430,535
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Roseville Special Tax, (cont.)
North Central CFD No. 1, Pre-Refunded, 8.00%, 11/01/02 ................................... $ 1,725,000 $1,852,667
North Central CFD No. 1, Pre-Refunded, 8.10%, 11/01/03 ................................... 1,860,000 2,000,449
North Central CFD No. 1, Pre-Refunded, 8.40%, 11/01/10 ................................... 10,000,000 10,800,200
North Central CFD No. 1, Pre-Refunded, 8.60%, 11/01/17 ................................... 12,000,000 12,996,360
Sacramento 1915 Act, North Natomas AD No. 88-3,
8.20%, 9/02/10 ........................................................................... 780,000 767,107
8.20%, 9/02/11 ........................................................................... 1,730,000 1,699,742
8.25%, 9/02/12 ........................................................................... 2,240,000 2,255,277
8.25%, 9/02/13 ........................................................................... 2,425,000 2,442,290
8.25%, 9/02/14 ........................................................................... 2,620,000 2,639,440
Sacramento Area Council of Governments COP, Sacog Administrative Building
Project, Pre-Refunded,
7.125%, 7/01/16 ................................................................................ 1,500,000 1,541,400
Sacramento City Financing Authority Revenue, Series 1991,
6.60%, 11/01/05 .......................................................................... 1,300,000 1,361,321
6.70%, 11/01/11 .......................................................................... 920,000 965,062
Sacramento County Airport System Revenue, Series A, MBIA Insured, 5.90%, 7/01/24 ............... 6,875,000 6,905,388
Sacramento County COP, Public Facilities Project, Coroner/Crime Laboratory,
AMBAC Insured, 6.40%,
10/01/19 ................................................................................. 11,000,000 11,834,680
10/01/24 ................................................................................. 29,500,000 31,738,460
Sacramento County Special Tax, CFD No. 1, Improvement Area 1, Series 1990, Pre-Refunded
8.20%, 12/01/10 .......................................................................... 2,250,000 2,356,155
8.25%, 12/01/20 .......................................................................... 7,610,000 7,971,475
Sacramento MUD, Electric Revenue,
Refunding, Series D, MBIA Insured, 5.25%, 11/15/20 ....................................... 10,000,000 9,551,100
Refunding, Series Z, FGIC Insured, 6.25%, 7/01/04 ........................................ 5,740,000 5,994,167
Refunding, Series Z, FGIC Insured, 6.35%, 7/01/05 ........................................ 3,000,000 3,136,050
Series I, MBIA Insured, 6.00%, 1/01/24 ................................................... 4,500,000 4,558,230
Series J, AMBAC Insured, 5.60%, 8/15/24 .................................................. 10,215,000 10,093,850
Sub. lien, Refunding, 8.00%, 11/15/10 .................................................... 16,110,000 16,149,147
Sacramento RDA, Tax Allocation,
Merged Downtown Redevelopment Project, Series A, MBIA Insured,
Pre-Refunded, 6.50%, 11/01/13 ............................................................ 2,140,000 2,215,200
Series A, MBIA Insured, 6.50%, 11/01/13 .................................................. 360,000 371,462
Sacramento Regional Transit District COP, Series A, 6.375%,
3/01/04 .................................................................................. 1,000,000 1,052,200
3/01/05 .................................................................................. 1,100,000 1,156,177
Sacramento-Yolo Port District Revenue, Port Facilities, Refunding,
Series A, 7.25%, 7/01/13 ....................................................................... 11,645,000 12,166,580
Salida Area Public Facilities Financing Agency CFD, Special Tax, No. 1988-1,
Refunding, FSA Insured,
5.25%, 9/01/28 ................................................................................. 6,800,000 6,335,424
San Bernardino 1915 Act, AD No. 961, Refunding,
7.60%, 9/02/02 ........................................................................... 855,000 868,184
7.65%, 9/02/03 ........................................................................... 920,000 939,440
7.70%, 9/02/04 ........................................................................... 990,000 1,014,305
7.75%, 9/02/05 ........................................................................... 1,065,000 1,091,231
San Bernardino County COP,
Medical Center Financing Project, Refunding, 5.00%, 8/01/26 .............................. 15,045,000 12,297,482
Medical Center Financing Project, Refunding, MBIA Insured, 5.00%, 8/01/28 ................ 55,065,000 48,899,923
Medical Center Financing, Series A, MBIA Insured, 5.50%, 8/01/22 ......................... 40,830,000 39,204,966
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
San Bernardino County COP, (cont.)
Medical Center Financing, Series A, MBIA Insured, Pre-Refunded, 5.50%, 8/01/22 ........... $ 23,945,000 $ 25,373,080
West Valley Detention Center Project, MBIA Insured, 6.25%, 11/01/04 ...................... 3,705,000 3,937,933
West Valley Detention Center Project, MBIA Insured, 6.35%, 11/01/05 ...................... 3,935,000 4,190,893
West Valley Detention Center Project, MBIA Insured, 6.40%, 11/01/06 ...................... 4,185,000 4,461,126
West Valley Detention Center Project, MBIA Insured, 6.50%, 11/01/12 ...................... 20,000,000 21,342,400
West Valley Detention Center Project, MBIA Insured, 6.20%, 11/01/25 ...................... 9,275,000 9,576,994
San Bernardino County Mortgage Revenue, Don Miguel Apartments Project,
Refunding, MBIA Insured,
6.00%, 9/01/03 ................................................................................. 180,000 183,253
San Bernardino County SFMR,
GNMA Secured, 7.50%, 12/01/07 ............................................................ 380,000 398,156
GNMA Secured, 7.65%, 6/01/23 ............................................................. 1,810,000 1,898,762
Series A, GNMA Secured, FNMA Insured, 6.20%, 5/01/21 ..................................... 600,000 593,706
Series B, 5.40%, 5/01/25 ................................................................. 7,945,000 7,301,296
San Bernardino Joint Powers Financing Authority Lease Revenue, City Hall Project,
Refunding, MBIA Insured,
5.70%, 1/01/23 ................................................................................. 6,315,000 6,327,314
San Bernardino Joint Powers Financing Authority Revenue COP, Police Station Financing Project,
6.60%, 4/01/20 ................................................................................. 4,715,000 5,241,571
San Bernardino Joint Powers Financing Authority Revenue, Tax Allocation,
Central City Merged Project, Refunding, Series A, ETM, 6.75%, 11/01/00 ................... 450,000 457,376
Central City Merged Project, Refunding, Series A, ETM, 6.90%, 11/01/01 ................... 480,000 498,979
Central City Merged Project, Series A, Pre-Refunded, 7.00%, 11/01/02 ..................... 510,000 540,478
Central City Merged Project, Series A, Pre-Refunded, 7.00%, 11/01/03 ..................... 550,000 582,868
Central City Merged Project, Series A, Pre-Refunded, 7.00%, 11/01/04 ..................... 585,000 619,960
Central City Merged Project, Series A, Pre-Refunded, 7.05%, 11/01/05 ..................... 625,000 662,819
Central City Merged Project, Series A, Pre-Refunded, 7.05%, 11/01/06 ..................... 670,000 710,542
Central City Merged Project, Series A, Pre-Refunded, 7.05%, 11/01/07 ..................... 720,000 763,567
Central City Merged Project, Series A, Pre-Refunded, 7.10%, 11/01/20 ..................... 15,585,000 16,539,737
Central City Merged Project, Series B, Pre-Refunded, 7.50%, 11/01/20 ..................... 3,000,000 3,199,470
Refunding, Series A, FSA Insured, 5.75%, 10/01/25 ........................................ 19,915,000 19,974,745
San Bernardino Municipal Water Department COP, FGIC Insured, 6.25%, 2/01/12 .................... 905,000 935,318
San Carlos Mortgage Revenue, Elms Project, FHA Insured, 6.875%, 8/01/37 ........................ 8,465,000 8,803,939
San Diego County COP,
Central Jail, Refunding, AMBAC Insured, 5.00%, 10/01/25 .................................. 5,825,000 5,280,363
MBIA Insured, 5.00%, 8/15/28 ............................................................. 26,000,000 23,252,840
San Diego County Regional Transportation Commission Sales Tax Revenue,
Series A, ETM, 6.00%, 4/01/08 .................................................................. 1,250,000 1,298,225
San Diego IDR, San Diego Gas and Electric Co. Project, Series A, 6.40%, 9/01/18 ................ 19,800,000 20,503,098
San Diego Public Facilities Financing Authority Sewer Revenue,
FGIC Insured, 5.00%, 5/15/25 ............................................................. 22,400,000 20,318,592
Series A, FGIC Insured, 5.25%, 5/15/27 ................................................... 21,750,000 20,377,140
Series B, FGIC Insured, 5.25%, 5/15/22 ................................................... 5,200,000 4,932,616
Series B, FGIC Insured, 5.25%, 5/15/27 ................................................... 6,175,000 5,785,234
San Diego RDA, Tax Allocation, Horton Project, Refunding, Series A,
FSA Insured, 6.00%, 11/01/15 ................................................................... 5,000,000 5,220,900
San Diego Special Tax, CFD No. 1, Series A, Pre-Refunded, 8.50%, 9/01/16 ....................... 28,845,000 30,993,087
San Elijo Joint Powers Authority Revenue, Water Pollution Control Facilities,
Refunding, FGIC Insured,
5.00%, 3/01/20 ................................................................................. 5,000,000 4,631,150
San Francisco BART District Sales Tax Revenue, FGIC Insured,
5.50%, 7/01/34 ........................................................................... 11,790,000 11,281,969
Pre-Refunded, 6.60%, 7/01/12 ............................................................. 1,440,000 1,509,062
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
San Francisco City and County Airport Commission International Airport Revenue,
Issue 6, AMBAC Insured, 6.50%, 5/01/18 ................................................... $ 2,500,000 2,636,625
Issue 6, AMBAC Insured, 6.60%, 5/01/24 ................................................... 13,250,000 13,965,103
Issue 9A, FGIC Insured, 5.90%, 5/01/25 ................................................... 46,415,000 46,553,317
Issue 12-A, Second Series, 5.90%, 5/01/26 ................................................ 45,000,000 45,100,800
Issue 15A, Second Series, FSA Insured, 5.00%, 5/01/28 .................................... 41,650,000 36,486,650
Issue 16A, Second Series, FSA Insured, 5.125%, 5/01/23 ................................... 24,635,000 22,335,076
Issue 16A, Second Series, FSA Insured, 5.00%, 5/01/29 .................................... 37,805,000 33,289,949
Issue 18A, Second Series, FGIC Insured, 5.00%, 5/01/29 ................................... 8,800,000 7,694,280
Issue 22, Second Series, AMBAC Insured, 4.75%, 5/01/23 ................................... 13,230,000 11,260,582
Issue 22, Second Series, AMBAC Insured, 4.75%, 5/01/29 ................................... 44,130,000 36,775,294
San Francisco City and County COP, San Francisco Courthouse Project,
FSA Insured, 5.875%, 4/01/21 ................................................................... 2,810,000 2,849,312
San Francisco City and County Public Utilities Commission Water Revenue,
Refunding, Series A, 6.50%, 11/01/09 ..................................................... 4,000,000 4,249,360
Series A, 5.00%, 11/01/21 ................................................................ 5,000,000 4,522,400
San Francisco City and County RDA,
Hotel Tax Revenue, FSA Insured, 6.75%, 7/01/25 ........................................... 315,000 340,272
Hotel Tax Revenue, FSA Insured, Pre-Refunded, 6.75%, 7/01/25 ............................. 9,100,000 10,024,651
Lease Revenue, George R. Moscone Center, Refunding, Series 1992, 5.50%, 7/01/18 .......... 22,170,000 21,644,571
Mortgage Revenue, Refunding, Series A, MBIA Insured, 6.65%, 7/01/24 ...................... 5,645,000 5,645,113
San Francisco City and County Revenue, Irwin Memorial Blood Center,
Series A, 6.80%, 12/01/21 ...................................................................... 3,000,000 3,116,430
San Gabriel Valley Schools Financing Authority Revenue,
Oxnard Union High School, Pre-Refunded, 6.60%, 3/01/24 ................................... 4,145,000 4,446,342
Pomona USD Financing, 5.80%, 2/01/26 ..................................................... 5,150,000 4,975,827
Series A, 7.70%, 11/01/19 ................................................................ 1,765,000 1,802,789
San Gorgonio Memorial Health Care District Health Facility Revenue,
Pre-Refunded, 6.375%, 6/01/08 .................................................................. 1,815,000 1,941,124
San Joaquin Area Flood Control Agency 1915 Act, Flood Protection and
Restoration Assessment, FSA Insured,
6.00%, 9/02/14 ................................................................................. 8,220,000 8,489,205
San Joaquin County COP, General Hospital Project, Pre-Refunded,
6.25%, 9/01/13 ........................................................................... 32,880,000 35,241,442
6.625%, 9/01/20 .......................................................................... 36,500,000 39,549,210
San Joaquin County Special Tax, CFD No. 8,
7.625%, 9/01/10 .......................................................................... 1,420,000 1,428,009
7.75%, 9/01/20 ........................................................................... 2,990,000 3,008,448
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue,
Refunding, Series A, 5.50%, 1/15/28 ...................................................... 247,300,000 220,589,127
Refunding, Series A, MBIA Insured, 5.375%, 1/15/29 ....................................... 91,470,000 87,032,790
Refunding, Series A, MBIA Insured, 5.25%, 1/15/30 ........................................ 21,200,000 19,723,844
Senior lien, 5.00%, 1/01/33 .............................................................. 82,040,000 68,008,699
Senior lien, Pre-Refunded, 7.00%, 1/01/30 ................................................ 85,535,000 92,609,600
Senior lien, Pre-Refunded, 6.75%, 1/01/32 ................................................ 64,320,000 69,229,546
San Jose Airport Revenue, Refunding, MBIA Insured, 5.75%, 3/01/16 .............................. 13,600,000 13,721,992
San Jose Financing Authority Revenue, Convention Center Project,
Refunding, Series C, 6.40%, 9/01/17 ...................................................... 16,100,000 16,695,056
Series C, 6.40%, 9/01/22 ................................................................. 55,550,000 57,166,505
San Jose RDA,
MFHR, Miraido Village, Series A, GNMA Secured, 5.75%, 7/20/38 ............................ 7,155,000 6,815,281
Tax Allocation, Housing, Set-Aside Merged Area, Series E, MBIA Insured, 5.85%, 8/01/27 ... 7,325,000 7,324,268
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (cont.)
San Jose RDA, (cont.)
Tax Allocation, Merged Area Redevelopment Project, 5.25%, 8/01/29 ...................... $ 7,000,000 $ 6,278,860
Tax Allocation, Merged Area Redevelopment Project, AMBAC Insured, 5.00%, 8/01/31 ....... 4,000,000 3,540,720
Tax Allocation, Merged Area Redevelopment Project, MBIA Insured, 5.00%, 8/01/21 ........ 35,235,000 32,496,183
Tax Allocation, Merged Area Redevelopment Project, MBIA Insured, 5.625%, 8/01/28 ....... 24,135,000 23,846,587
Tax Allocation, Merged Area Redevelopment Project, Refunding, MBIA Insured,
5.00%, 8/01/20 ....................................................................... 35,665,000 33,003,321
San Leandro RDA, RMR, Pre-Refunded, 11.25%, 4/01/13 ....................................... 65,000 79,177
San Luis Obispo County COP, Jail Expansion Project,
6.75%, 10/01/16 ........................................................................ 1,830,000 1,862,574
6.80%, 10/01/21 ........................................................................ 1,475,000 1,499,603
San Marcos PFAR, Series A, 6.25%, 9/02/22 ................................................. 25,000,000 25,680,000
San Marcos Public Facilities Authority Revenue,
Capital Improvement, 8.25%, 1/01/19 .................................................... 16,700,000 17,145,222
Civic Center, Mission Blvd. Project, Refunding and Improvement, Series A,
6.15%, 8/01/13 ....................................................................... 11,670,000 11,794,169
Civic Center, Mission Blvd. Project, Refunding and Improvement, Series A,
6.20%, 8/01/22 ....................................................................... 7,895,000 7,772,312
Rancheros Mobilehome Park Project, 7.00%, 10/01/24 ..................................... 355,000 365,015
Refunding, 5.80%, 9/01/18 .............................................................. 4,750,000 4,461,390
Tax Allocation, Refunding, Series A, FSA Insured, 5.50%, 8/01/23 ....................... 18,000,000 17,469,360
San Marcos USD, School Facilities ID No. 1, AMBAC Insured, 5.80%, 11/01/14 ................ 5,000,000 5,212,200
San Mateo County Joint Powers Authority Lease Revenue, Capital Projects, Series A, FSA
Insured, 5.125%, 7/15/28 ............................................................... 4,005,000 3,677,832
San Mateo County Joint Powers Financing Authority Lease Revenue, San Mateo
County Health Care Center, Series A, FSA Insured, Pre-Refunded, 5.75%, 7/15/22 ......... 21,945,000 23,345,091
San Mateo Flood Control District COP, Colma Creek Flood Control Zone, MBIA
Insured, 5.125%, 8/01/32 ............................................................... 10,145,000 9,190,457
San Mateo RDA, Tax Allocation, Merged Area, Series A, 5.70%, 8/01/27 ...................... 6,330,000 5,938,869
San Pablo RDA, Tax Allocation, Merged Project Area, FGIC Insured, 6.25%, 12/01/19 ......... 3,500,000 3,656,240
San Rafael RDA, Tax Allocation, Central San Rafael Redevelopment, Refunding,
FGIC Insured, 6.45%, 12/01/17 .......................................................... 6,740,000 7,092,704
San Rafael Sanitation District COP, Waste Water Facilities Financing, 6.80%,
8/01/11 ................................................................................ 2,200,000 2,287,912
San Ramon COP, Capital Improvement Projects, Series 1993, 6.00%, 3/01/18 .................. 1,730,000 1,737,889
San Ramon PFA, Tax Allocation Revenue,
MBIA Insured, 5.30%, 2/01/28 ........................................................... 19,610,000 18,494,191
Pre-Refunded, 6.90%, 2/01/24 ........................................................... 6,140,000 6,795,875
Refunding, 6.90%, 2/01/24 .............................................................. 6,910,000 7,228,758
San Ramon Valley COP, Fire Protection District, Financing Corp., Refunding,
6.00%, 7/01/19 ......................................................................... 6,275,000 6,333,169
San Ramon Valley USD, COP,
Pre-Refunded, 7.70%, 2/01/10 ........................................................... 6,000,000 6,432,000
Refunding, 7.55%, 2/01/04 .............................................................. 5,385,000 5,436,319
Refunding, Series 1992, 7.00%, 2/01/22 ................................................. 19,830,000 20,749,121
Series A, 6.35%, 10/01/01 .............................................................. 7,855,000 7,973,768
Santa Ana COP, Parking Facilities Project, Refunding, Series A, AMBAC Insured,
6.125%, 6/01/16 ........................................................................ 2,070,000 2,145,038
Santa Ana Financing Authority Water Revenue, MBIA Insured, 6.125%, 9/01/24 ................ 5,000,000 5,123,000
Santa Ana HMR, Series A, FGIC Insured, 9.50%, 6/01/12 ..................................... 35,000 35,242
Santa Barbara COP,
California Health Facilities, Loan Program, 7.65%, 5/01/15 ............................. 1,675,000 1,711,448
Harbor Project, Refunding, 6.75%, 10/01/27 ............................................. 8,090,000 8,432,773
Santa Barbara Housing Authority Revenue, Refunding and Acquisition, 6.25%, 11/15/20 ....... 5,845,000 5,352,033
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (cont.)
Santa Barbara SFMR, GNMA Secured,
7.625%, 10/01/10 .................................................................. $ 170,000 $ 176,013
7.65%, 10/01/23 ................................................................... 480,000 495,989
Santa Clara County COP, Terraces of Los Gatos Project, Pre-Refunded, 6.90%, 3/01/18 ..... 4,000,000 4,182,080
Santa Clara County Financing Authority Lease Revenue, Valley Medical Center Facilities,
Replacement Project, Series A, AMBAC Insured, Pre-Refunded, 6.75%, 11/15/20 ....... 13,000,000 14,405,300
Santa Clara Housing Authority MFHR,
Arastradero Park Apartments Project, Series A, GNMA Secured, 6.65%, 5/20/35 ....... 6,465,000 6,758,446
Elana Gardens Apartments Project, Series A, GNMA Secured, 6.40%, 6/20/35 .......... 5,625,000 5,740,931
Sierra Vista I Apartments Project, Series A, GNMA Secured, 6.65%, 6/20/35 ......... 3,860,000 4,036,749
Santa Clara Valley Water District COP, Refunding and Improvement, Series A,
FGIC Insured, 6.00%, 2/01/24 ...................................................... 17,000,000 17,222,870
Santa Clarita COP, Refunding, MBIA Insured, 5.00%, 10/01/21 ............................. 5,105,000 4,706,963
Santa Cruz City School District COP, Education Center Financing Project,
Pre-Refunded, 7.00%, 5/01/24 ...................................................... 3,150,000 3,483,774
Santa Cruz County Housing Authority MFHR, Series B, FNMA Insured, 7.75%, 7/01/23 ........ 9,230,000 9,439,983
Santa Maria Bonita School District COP, MBIA Insured,
7.00%, 3/01/16 .................................................................... 480,000 499,464
Pre-Refunded, 7.00%, 3/01/16 ...................................................... 2,270,000 2,376,372
Santa Maria COP, Revenue, Marian Medical Center, Pre-Refunded, 6.75%, 9/01/22 ........... 3,600,000 3,851,496
Santa Monica RDA Tax Allocation, Earthquake Recovery Redevelopment Project,
AMBAC Insured, 6.00%, 7/01/29 ..................................................... 13,110,000 13,390,161
Seal Beach RDA, sub. lien, Tax Allocation Revenue, Riverfront, Refunding,
Series A, 6.70%, 9/01/13 .......................................................... 2,880,000 2,891,578
Shafter Joint Powers Financing Authority Lease Revenue, Community Correctional
Facility Project, Series A,
5.95%, 1/01/11 .................................................................... 1,880,000 1,948,451
6.05%, 1/01/17 .................................................................... 5,135,000 5,285,301
Shasta Joint Powers Financing Authority Lease Revenue, Courthouse County
Improvement Project, Series A, Pre-Refunded, 6.70%, 6/01/23 ....................... 2,500,000 2,662,350
Sierra View Local Hospital District Revenue, Insured Health Facilities,
Pre-Refunded, 6.40%, 3/01/22 ...................................................... 15,000,000 15,803,850
Simi Valley SFRMR, Series A, GNMA Secured, FNMA Insured, 7.70%, 3/01/25 ................. 245,000 253,565
Snowline Joint USD, COP, Pre-Refunded, 7.25%, 4/01/18 ................................... 1,000,000 1,071,050
Soledad RDA, Tax Allocation, Soledad Redevelopment Project, Pre-Refunded,
7.40%, 11/01/12 ................................................................... 3,740,000 4,072,000
Sonoma County Office of Education COP, Series 1990, Pre-Refunded, 7.375%, 7/01/20 ....... 1,745,000 1,794,174
South Gate PFAR, Tax Allocation,
Redevelopment Project No. 1, Refunding, 6.10%, 9/01/03 ............................ 10,000,000 9,969,000
South Gate Redevelopment Project No. 1, AMBAC Insured, 5.875%, 9/01/24 ............ 8,505,000 8,576,782
South Napa Waste Management Authority Revenue, Solid Waste Transfer Facilities
Project, 6.50%, 2/15/14 ........................................................... 4,500,000 4,692,735
South Orange County PFA, Special Tax Revenue,
Foothill Area, Series C, FGIC Insured, 5.75%, 8/15/18 ............................. 5,000,000 5,055,250
Senior lien, Refunding, Series A, MBIA Insured, 6.00%, 9/01/18 .................... 18,850,000 19,249,055
South San Francisco 1915 Act, Gateway AD No. ST-82-2, 8.00%,
9/02/00 ........................................................................... 1,455,000 1,472,853
9/02/01 ........................................................................... 1,570,000 1,606,989
9/02/02 ........................................................................... 1,675,000 1,734,915
Southern California HFA, SFMR,
GNMA Secured, 7.625%, 10/01/22 .................................................... 2,520,000 2,571,282
GNMA Secured, 7.75%, 3/01/24 ...................................................... 3,335,000 3,418,142
Series A, GNMA Secured, 6.75%, 9/01/22 ............................................ 580,000 592,882
Series B, GNMA Secured, 6.90%, 10/01/24 ........................................... 960,000 986,218
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (cont.)
Southern California Public Power Authority Power Project Revenue,
6.75%, 7/01/13 ..................................................................... $ 10,000,000 $ 11,345,500
Hydroelectric-Hoover Uprating, Refunding, 6.00%, 10/01/17 .......................... 7,795,000 7,852,137
Multi-Purpose Projects, 6.00%, 7/01/18 ............................................. 29,645,000 29,656,858
Palo Verde Project, Refunding, Series A, AMBAC Insured, ETM, 5.00%, 7/01/15 ........ 8,000,000 7,598,080
San Juan Project Unit 3, Series A, MBIA Insured, 5.00%, 1/01/20 .................... 5,790,000 5,364,667
Southern California Public Power Authority Transmission Project Revenue,
Southern Transmission, Refunding,
6.125%, 7/01/18 .................................................................... 51,035,000 52,337,413
5.50%, 7/01/20 ..................................................................... 19,785,000 19,357,842
5.75%, 7/01/21 ..................................................................... 22,530,000 22,628,456
MBIA Insured, 5.75%, 7/01/21 ....................................................... 16,335,000 16,406,384
Southern Kern USD, COP, Pre-Refunded, 7.10%, 9/01/17 ..................................... 2,250,000 2,424,960
Standard Elementary School District COP, Pre-Refunded, 7.375%, 6/01/11 ................... 1,390,000 1,438,845
Stockton Central Parking District, Refunding, Series 1991, 7.90%, 8/01/11 ................ 5,700,000 5,717,157
Stockton COP, Essential Services Building Parking Facility,
5.875%, 8/01/23 .................................................................... 2,295,000 2,236,523
6.00%, 8/01/31 ..................................................................... 6,585,000 6,501,897
Stockton East Water District COP, 1990 Project,
Series A, AMBAC Insured, 6.40%, 4/01/22 ............................................ 14,095,000 14,581,137
Series A, AMBAC Insured, Pre-Refunded, 6.40%, 4/01/22 .............................. 5,905,000 6,241,644
Series B, 7.45%, 4/01/05 ........................................................... 28,575,000 59,248,262
Stockton Health Facilities Revenue, St. Joseph Medical Center, Series A, MBIA
Insured, 5.50%, 6/01/23 ............................................................ 5,000,000 4,791,350
Stockton PFA, Special Tax, CFD No. 90-4, Pre-Refunded, 8.50%, 9/01/16 .................... 8,000,000 8,383,200
Stockton Port District Port Facilities Revenue, Refunding and Improvement,
Series A, FSA Insured, 5.95%, 7/01/17 .............................................. 5,095,000 5,266,294
Stockton Revenue COP, Wastewater System Project, Series A, MBIA Insured, 5.20%, 9/01/29 .. 19,160,000 17,633,714
Stockton Special Tax, CFD No. 90-2,
Brookside, Series 305, Pre-Refunded, 8.50%, 8/01/09 ................................ 1,430,000 1,479,049
Brookside, Series 305, Pre-Refunded, 8.65%, 8/01/15 ................................ 2,710,000 2,804,254
Series 2, ETM, 7.30%, 8/01/00 ...................................................... 725,000 732,917
Series 2, Pre-Refunded, 7.35%, 8/01/01 ............................................. 780,000 804,047
Series 2, Pre-Refunded, 7.40%, 8/01/02 ............................................. 835,000 860,877
Series 2, Pre-Refunded, 7.45%, 8/01/03 ............................................. 895,000 922,879
Series 2, Pre-Refunded, 7.50%, 8/01/04 ............................................. 965,000 995,214
Series 2, Pre-Refunded, 7.70%, 8/01/09 ............................................. 3,000,000 3,095,820
Series 6, 7.75%, 8/01/15 ........................................................... 3,000,000 3,051,480
Suisun City COP, Civic Center Project, Refunding, 6.45%, 11/01/15 ........................ 2,105,000 2,156,699
Suisun City RDA, Tax Allocation, Suisun City Redevelopment Project, Refunding,
MBIA Insured,
6.00%, 10/01/18 .................................................................... 3,285,000 3,366,402
5.90%, 10/01/23 .................................................................... 3,390,000 3,424,476
Sunnyvale Financing Authority Utilities Revenue, Wastewater Reuse and Sludge,
Series A, 6.30%, 10/01/12 .......................................................... 4,735,000 4,856,737
Tahoe Forest Hospital District Revenue, Series A, 5.90%, 7/01/29 ......................... 7,990,000 6,728,699
Tehachapi COP, Series 1990, 8.20%, 11/01/20 .............................................. 2,500,000 2,557,600
Tehachapi USD, COP, Tompkins Elementary School Project, Pre-Refunded, 7.80%, 2/01/21 ..... 2,250,000 2,363,355
Temecula Valley USD,
Series D, FGIC Insured, 6.00%, 9/01/14 ............................................. 1,250,000 1,292,325
Series D, FGIC Insured, 6.125%, 9/01/19 ............................................ 3,110,000 3,186,164
Series E, FSA Insured, 6.35%, 9/01/19 .............................................. 5,460,000 5,742,227
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (cont.)
Thousand Oaks RDA,
MFR, The Shadows Apartments, Refunding, Series A, FNMA Insured, 5.75%,
11/01/27 .......................................................................... $ 7,530,000 $ 7,277,293
Tax Allocation, Thousand Oaks Boulevard Redevelopment, Refunding, MBIA
Insured, 5.375%, 12/01/25 ........................................................... 24,485,000 23,416,964
Thousand Oaks SFHMR,
Capital Appreciation, Series A, GNMA Secured, 8.00%, 9/01/23 ........................ 126,000 266,097
Refunding, Series A, GNMA Secured, 7.45%, 9/01/10 ................................... 135,000 138,922
Refunding, Series A, GNMA Secured, 7.55%, 9/01/15 ................................... 185,000 189,218
Refunding, Series A, GNMA Secured, 7.625%, 3/01/23 .................................. 530,000 534,245
Torrance Hospital Revenue,
Little Co. of Mary Hospital, Pre-Refunded, 6.875%, 7/01/15 .......................... 3,595,000 3,818,573
Torrance Memorial Hospital Medical Center, Refunding, 6.75%, 1/01/12 ................ 2,000,000 2,011,240
Trabuco Canyon PFA, Special Tax Revenue, Refunding,
Series A, FSA Insured, 6.00%, 10/01/10 .............................................. 13,775,000 15,006,072
Series A, FSA Insured, 6.10%, 10/01/15 .............................................. 13,220,000 14,415,749
Series C, FSA Insured, 6.00%, 7/01/12 ............................................... 3,040,000 3,315,515
Series C, FSA Insured, 6.10%, 7/01/19 ............................................... 5,215,000 5,595,956
Tracy Area Public Facilities Financing Agency Special Tax, CFD No. 8, Series C,
Pre-Refunded, 7.80%, 10/01/16 ....................................................... 5,000,000 5,194,850
Tracy COP, I-205 Corridor Improvement and Refinancing Project, AMBAC Insured,
5.125%, 10/01/27 .................................................................... 6,695,000 6,154,981
Travis USD, COP, Foxboro Elementary School Construction Project, Pre-Refunded,
6.70%, 9/01/06 ...................................................................... 490,000 523,095
7.00%, 9/01/12 ...................................................................... 3,670,000 3,942,718
Tri-City Hospital District Revenue, Refunding, Series A, MBIA Insured, 5.625%,
2/15/17 ............................................................................. 5,000,000 5,013,750
Tri-Dam Power Authority Revenue, Hydroelectric Sand Bar Project, Refunding,
7.50%, 1/01/17 ...................................................................... 45,830,000 46,309,840
Trinity County PUD, COP, Electric District Facilities, Refunding, Series 1993,
6.60%, 4/01/11 ...................................................................... 2,565,000 2,668,498
6.75%, 4/01/23 ...................................................................... 4,000,000 4,052,160
Tulare County COP, Financing Project, Series B, Pre-Refunded, 6.875%, 11/15/12 ............ 1,100,000 1,184,612
Tulare Local Health Care District Health Facilities Revenue, 5.20%, 12/01/21 .............. 4,455,000 4,096,417
Union City CRDA, Tax Allocation Revenue, Community Redevelopment Project, AMBAC
Insured,
5.75%, 10/01/33 ..................................................................... 5,250,000 5,254,043
University of California COP, UCLA Center Chiller/Cogeneration Project, Refunding,
5.50%, 11/01/17 ..................................................................... 13,940,000 13,952,546
5.60%, 11/01/20 ..................................................................... 14,880,000 14,843,246
University of California Revenues,
Multi-Purpose Projects, Refunding, Series C, AMBAC Insured, 5.00%, 9/01/23 .......... 17,545,000 16,031,042
Multi-Purpose Projects, Series F, FGIC Insured, 5.00%, 9/01/22 ...................... 40,575,000 36,900,528
Multi-Purpose Projects, Series F, FGIC Insured, 5.00%, 9/01/27 ...................... 82,440,000 74,375,719
Research Facilities, Series B, Pre-Refunded, 6.55%, 9/01/24 ......................... 20,000,000 21,657,000
U.C. Davis Medical Center, AMBAC Insured, 5.75%, 7/01/20 ............................ 44,385,000 44,467,112
Upland COP,
Refunding, Mortgage Insured, 5.50%, 1/01/07 ......................................... 4,935,000 4,909,881
San Antonio Community Hospital, Refunding, 5.70%, 1/01/11 ........................... 11,210,000 11,217,847
Vacaville COP, Pre-Refunded, 9.40%, 10/01/15 .............................................. 11,865,000 12,394,179
Vacaville PFAR, Local Agency, 8.65%, 9/02/18 .............................................. 5,815,000 6,012,768
Val Verde USD, COP, Vista Verde Project, Pre-Refunded, 6.95%, 6/01/21 ..................... 2,785,000 2,924,361
Vallejo RDA, Tax Allocation, Waterfront Redevelopment Project, 7.90%, 5/01/19 ............. 2,470,000 2,472,989
Vallejo Revenue, Golf Course Project, Series A, 7.90%, 6/01/17 ............................ 6,000,000 6,188,760
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (cont.)
Vallejo USD, Special Tax Revenue, CFD No. 2,
7.75%, 9/01/15 ................................................................... $ 2,300,000 $ 2,320,033
8.125%, 9/01/16 .................................................................. 5,100,000 5,235,303
Victor Valley UHSD, COP, Pre-Refunded, 7.875%, 11/01/12 ................................ 5,100,000 5,317,056
Victorville RDA, Tax Allocation, Bear Valley Road Redevelopment Project,
Pre-Refunded, 7.50%, 11/01/06 .................................................... 1,200,000 1,280,736
Refunding, Series A, FSA Insured, 6.125%, 9/01/19 ................................ 2,405,000 2,469,791
Refunding, Series A, FSA Insured, 6.125%, 9/01/24 ................................ 3,245,000 3,324,827
Virgin Islands PFAR, senior lien,
Fund Loan Notes, Refunding, Series A, 5.50%, 10/01/22 ............................ 7,000,000 6,212,430
Refunding, Series A, 5.50%, 10/01/14 ............................................. 3,865,000 3,642,144
Vista Community Development Commission Tax Allocation Revenue, Vista
Redevelopment Project Area,
MBIA Insured, 5.50%, 9/01/23 ..................................................... 11,810,000 11,461,605
Series B, MBIA Insured, 5.20%, 9/01/28 ........................................... 5,485,000 5,093,755
Vista Joint Powers Financing Authority Revenue, Series A, 7.625%, 2/01/20 .............. 3,675,000 3,769,999
Walnut Improvement Agency RMR, Series A, 10.25%, 5/01/17 ............................... 80,000 82,674
Walnut PFAR, Tax Allocation, Improvement Project, Refunding, MBIA Insured,
6.50%, 9/01/22 ................................................................... 8,285,000 8,679,200
Washington Township Hospital District Revenue,
AMBAC Insured, 5.25%, 7/01/23 .................................................... 5,000,000 4,669,050
HealthCare District Revenue, 5.25%, 7/01/29 ...................................... 6,500,000 5,447,845
Watsonville Insured Hospital Revenue, Watsonville Community Hospital, Series A,
Pre-Refunded,
6.30%, 7/01/15 ................................................................... 3,990,000 4,363,185
6.35%, 7/01/24 ................................................................... 5,435,000 5,955,836
Watsonville RDA, GO, Tax Allocation, Watsonville Redevelopment Project, 6.30%,
8/01/06 .......................................................................... 1,745,000 1,750,811
West Basin Municipal Water District Revenue COP, 1992 Project, Refunding,
Series A, AMBAC Insured, 5.50%, 8/01/22 .......................................... 4,000,000 3,889,480
West Hollywood COP, Refunding, MBIA Insured, 5.00%, 2/01/25 ............................ 6,250,000 5,628,125
Westminster RDAR, Tax Allocation, Commercial Redevelopment Project No. 1,
Series A, Pre-Refunded, 7.30%, 8/01/21 ........................................... 6,455,000 6,833,973
Whittier CFD, Special Tax Revenue, Whitter Station Center, Series 1,
Pre-Refunded, 7.75%, 9/01/19 ..................................................... 5,095,000 5,274,752
William S. Hart Joint School Financing Authority Special Tax Revenue, Community
Facilities, Refunding,
FSA Insured, 6.50%, 9/01/14 ............................................................ 4,000,000 4,346,120
--------------
TOTAL BONDS (COST $11,650,670,878) ..................................................... 11,641,337,199
--------------
ZERO COUPON/STEP-UP BONDS 10.8%
Anaheim PFA, Lease Revenue,
Capital Appreciation, Public Improvements Project, Series C, FSA Insured,
9/1/26 ......................................................................... 4,430,000 929,946
Capital Appreciation, Public Improvements Project, Series C, FSA Insured,
9/1/27 ......................................................................... 17,860,000 3,533,958
Capital Appreciation, Public Improvements Project, Series C, FSA Insured,
9/1/28 ......................................................................... 8,425,000 1,571,347
Public Improvements Project, Series C, FSA Insured, 9/1/33 ....................... 37,070,000 5,127,893
Auburn USD, COP, Land Acquisition Program, Series A, FSA Insured, zero cpn. to
9/01/00, 7.00% thereafter, 9/01/28 ............................................... 2,770,000 2,791,301
Baldwin Park RDA, Tax Allocation, San Gabriel, Refunding, Series A, ETM,
2/01/01 .......................................................................... 560,000 541,100
2/01/02 .......................................................................... 565,000 519,139
2/01/03 .......................................................................... 570,000 498,585
2/01/04 .......................................................................... 575,000 478,406
2/01/05 .......................................................................... 585,000 462,987
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
ZERO COUPON/STEP-UP BONDS (cont.)
Beaumont USD, COP, Series A, FSA Insured,1/01/29 ...................................... $ 6,835,000 $ 5,529,447
Burton Elementary School District COP, Loan Acquisition, Capital Appreciation,
Series B, FSA Insured, zero cpn. to
9/01/00, 6.60% thereafter, 9/01/27 .................................................. 300,000 296,964
California Educational Facilities Authority Revenue,
Loyola Marymount University, MBIA Insured, 10/01/32 ............................. 8,435,000 1,079,343
Loyola Marymount University, MBIA Insured, 10/01/33 ............................. 8,435,000 1,011,947
Loyola Marymount University, MBIA Insured, 10/01/34 ............................. 8,435,000 948,769
Loyola Marymount University, MBIA Insured, 10/01/35 ............................. 8,435,000 889,555
Loyola Marymount University, MBIA Insured, 10/01/36 ............................. 8,435,000 834,053
Loyola Marymount University, MBIA Insured, 10/01/37 ............................. 8,435,000 782,009
Loyola Marymount University, MBIA Insured, 10/01/38 ............................. 8,435,000 733,170
Loyola Marymount University, MBIA Insured, 10/01/39 ............................. 8,435,000 687,453
Santa Clara University, AMBAC Insured, 9/1/26 ................................... 5,800,000 1,217,536
California Health Facilities Financing Authority Revenue, Kaiser Permanente,
Series A, ETM,10/01/11 .......................................................... 13,970,000 7,186,587
California HFAR,
Capital Appreciation, Series G, MBIA Insured, 2/01/30 ........................... 69,800,000 10,331,098
Convertible Home Mortgage, FSA Insured, zero cpn. to 2/10/10, 6.70%
thereafter, 2/01/31 ........................................................... 18,995,000 10,538,616
FNMA Home Mortgage, Series B, FSA Insured, 2/01/30 .............................. 41,270,000 5,616,847
Home Mortgage, Capital Appreciation, Series A, 8/01/16 .......................... 615,000 107,072
Home Mortgage, Series B, MBIA Insured, 2/01/30 .................................. 125,210,000 18,265,635
Home Mortgage, Series C, 8/01/21 ................................................ 6,360,000 1,249,549
(a) Home Mortgage, Series F, FSA Insured, 8/01/31 ................................... 91,140,000 12,105,215
California HFR, Home Mortgage, Series N, AMBAC Insured,8/01/31 ........................ 80,350,000 43,597,910
California Public School District Financing Authority Lease Revenue, Los Banos
School,
Series A, FSA Insured, zero cpn. to 10/01/00, 6.20% thereafter, 10/01/23 ........ 455,000 449,190
Series B, FSA Insured, Pre-Refunded, zero cpn. to 10/01/00, 6.20%
thereafter,10/1/2023 .......................................................... 4,535,000 4,621,256
California State GO,
Principal Eagles II, Series 3, 3/01/09 .......................................... 7,500,000 4,789,425
Principal Eagles II, Series 4, 6/01/06 .......................................... 10,000,000 7,454,400
Principal Eagles II, Series 6, 3/01/09 .......................................... 5,000,000 3,192,950
Principal M-Raes, Series 8, 4/01/09 ............................................. 9,000,000 5,723,280
California Statewide CDA Revenue, COP, Insured Hospital, Triad Health Care,
Refunding, ETM,
8/01/09 ......................................................................... 6,450,000 4,011,449
8/01/10 ......................................................................... 6,745,000 3,942,722
8/01/11 ......................................................................... 3,115,000 1,715,244
Campbell USD, Series B, FGIC Insured,
8/01/20 ......................................................................... 5,000,000 1,530,800
8/01/21 ......................................................................... 6,280,000 1,810,147
Chino USD, COP, Land Acquisition, Series B, FSA Insured, zero cpn. to 9/01/02,
6.60% thereafter, 9/01/14 ....................................................... 1,580,000 1,406,769
6.70% thereafter, 9/01/29 ....................................................... 4,780,000 4,153,151
Contra Costa County COP, Merrithew Memorial Hospital Project, ETM,11/01/15 ............ 6,810,000 2,899,085
Contra Costa Home Mortgage Finance Authority HMR, Mandatory Sinking Fund,
3/01/07, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 10,770,000 2,392,771
3/01/08, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 9,635,000 2,268,079
3/01/09, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 8,615,000 2,132,213
3/01/10, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 7,700,000 2,013,550
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
ZERO COUPON/STEP-UP BONDS (cont.)
Contra Costa Home Mortgage Finance Authority HMR, Mandatory Sinking Fund, (cont.)
9/01/07, MBIA Insured, Pre-Refunded, 9/01/17 .................................... $ 5,890,000 $ 1,351,107
9/01/08, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 8,095,000 1,966,761
9/01/09, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 7,135,000 1,821,351
9/01/10, MBIA Insured, Pre-Refunded, 9/01/17 .................................... 6,275,000 1,691,803
Contra Costa School Financing Authority Revenue, Capital Appreciation, Antioch
USD Community, Series B, 9/01/07 ................................................ 1,515,000 971,554
Desert Sands USD, COP, Capital Projects, FSA Insured, zero cpn. to 3/01/01,
6.45% thereafter, 3/01/20 ....................................................... 6,820,000 6,442,718
El Paso de Robles GO, Capital Appreciation, Series A, FGIC Insured,
8/01/16 ......................................................................... 2,050,000 804,953
8/01/22 ......................................................................... 11,485,000 3,003,328
8/01/27 ......................................................................... 11,495,000 2,196,580
Elk Grove USD, Special Tax, Capital Appreciation, CFD 1, MBIA Insured,
12/01/19 ........................................................................ 2,775,000 863,247
12/01/20 ........................................................................ 2,765,000 802,431
12/01/21 ........................................................................ 4,195,000 1,144,270
12/01/22 ........................................................................ 4,195,000 1,070,522
12/01/23 ........................................................................ 4,195,000 1,005,583
12/01/24 ........................................................................ 4,200,000 943,278
12/01/25 ........................................................................ 6,355,000 1,340,079
12/01/26 ........................................................................ 6,355,000 1,257,909
12/01/27 ........................................................................ 6,355,000 1,183,746
12/01/28 ........................................................................ 6,355,000 1,113,968
Fontana USD, GO, Convertible Capital Appreciation, Series D, FGIC Insured,
zero cpn. to 5/1/00, 5.80% thereafter, 5/01/17 ....................................... 5,000,000 5,027,950
Foothill/Eastern Corridor Agency Toll Road Revenue,
Capital Appreciation, Refunding, 1/15/25 ........................................ 57,000,000 11,710,650
Capital Appreciation, Refunding, 1/15/30 ........................................ 128,460,000 18,902,889
Capital Appreciation, Refunding, 1/15/31 ........................................ 14,635,000 2,019,337
Capital Appreciation, Refunding, 1/15/36 ........................................ 217,160,000 21,720,343
Capital Appreciation, Refunding, 1/15/38 ........................................ 205,560,000 18,076,946
Capital Appreciation, Refunding, MBIA Insured, 1/15/21 .......................... 51,180,000 13,713,169
Capital Appreciation, Refunding, MBIA Insured, 1/15/37 .......................... 170,615,000 16,000,275
Capital Appreciation, Refunding, zero cpn. to 7/15/09, 5.80% thereafter,
1/15/20, ....................................................................... 49,500,000 27,007,695
Capital Appreciation, Refunding, zero cpn. to 7/15/09, 5.875% thereafter,
1/15/27, ....................................................................... 80,835,000 43,008,262
Capital Appreciation, Refunding, zero cpn. to 7/15/09, 5.875% thereafter,
1/15/28, ....................................................................... 80,500,000 42,676,270
Capital Appreciation, Refunding, zero cpn. to 7/15/09, 5.875% thereafter,
1/15/29, ....................................................................... 112,230,000 58,927,484
Capital Appreciation, senior lien, Series A, ETM, 1/01/22 ....................... 30,835,000 8,748,198
Capital Appreciation, senior lien, Series A, ETM, 1/01/23 ....................... 5,765,000 1,540,062
Capital Appreciation, senior lien, Series A, ETM, 1/01/24 ....................... 72,045,000 18,118,597
Capital Appreciation, senior lien, Series A, ETM, 1/01/28 ....................... 2,000,000 396,460
Capital Appreciation, senior lien, Series A, ETM, zero cpn. to 1/01/05,
7.05% thereafter, 1/01/09 ...................................................... 10,000,000 8,453,700
Capital Appreciation, senior lien, Series A, Pre-Refunded, zero cpn. to
1/01/05, 7.15% thereafter, 1/01/14 ............................................. 5,500,000 4,800,015
Convertible Capital Appreciation, Refunding, 1/15/23 ............................ 10,000,000 5,445,600
Convertible Capital Appreciation, Refunding, 1/15/26 ............................ 30,000,000 16,143,900
Convertible Capital Appreciation, Refunding, 1/15/32 ............................ 100,000,000 12,938,000
Convertible Capital Appreciation, Refunding, 1/15/33 ............................ 132,460,000 16,327,020
Convertible Capital Appreciation, Refunding, 1/15/34 ............................ 100,000,000 11,375,000
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
ZERO COUPON/STEP-UP BONDS (cont.)
Foothill/Eastern Corridor Agency Toll Road Revenue, (cont.)
Convertible Capital Appreciation, Refunding, 1/15/35 ............................... $ 33,445,000 $ 3,567,244
Senior lien, Series A, ETM, 1/01/25 ................................................ 20,660,000 4,890,635
Senior lien, Series A, ETM, 1/01/26 ................................................ 23,475,000 5,229,526
Senior lien, Series A, ETM, 1/01/27 ................................................ 15,000,000 3,152,100
Senior lien, Series A, ETM, 1/01/29 ................................................ 35,310,000 6,602,970
Senior lien, Series A, Pre-Refunded, 1/01/12 ....................................... 8,000,000 6,968,080
Lodi Electric Systems Revenue COP, Capital Appreciation Bond, Series B, MBIA
Insured, 1/15/19 ................................................................... 6,360,000 2,084,363
Los Angeles Convention and Exhibition Center Authority COP, Series 1985, ETM,
12/01/05 ........................................................................... 26,750,000 20,332,140
Los Angeles HMR, Series A, GNMA Secured, 8/25/16 ......................................... 865,000 221,215
Los Banos USD, COP, Series B, MBIA Insured, 8/01/16 ...................................... 5,000,000 4,696,250
New Haven USD, GO, Capital Appreciation, Series C, FGIC Insured, 8/01/23 ................. 14,700,000 3,611,790
Palmdale CRDA, Tax Allocation, Merged Project, sub. lien, AMBAC Insured, zero
cpn. to 12/01/04, 5.50% thereafter, 12/01/29 ....................................... 3,255,000 2,532,260
Paramount USD, COP, Land Acquisition, Series B, FSA Insured, zero cpn. to
9/01/01,
6.85% thereafter, 9/01/14 .......................................................... 1,695,000 1,566,875
7.00% thereafter, 9/01/29 .......................................................... 7,675,000 7,103,520
Pasadena Special Tax CFD, No. 1 Civic Center West, Pre-Refunded, 12/01/17 ................ 4,090,000 1,347,778
Perris SFMR, Series A, GNMA Secured, ETM, 6/01/23 ........................................ 19,095,000 4,623,281
Placer Union High School District COP, Capital Appreciation, Series A, 3/01/19 ........... 2,095,000 2,228,933
Rancho Water District Financing Authority Revenue, AMBAC Insured,
8/15/16 ............................................................................ 8,605,000 3,452,756
8/15/17 ............................................................................ 13,605,000 5,067,726
8/15/18 ............................................................................ 13,605,000 4,736,445
Riverside County Asset Leasing Corp. Leasehold Revenue, Riverside County
Hospital Project, MBIA Insured,
6/01/23 ............................................................................ 14,160,000 3,553,877
6/01/24 ............................................................................ 13,005,000 3,060,467
Riverside County Board of Education COP, Capital Appreciation Financing
Projects, Series A, 11/01/05 ....................................................... 1,250,000 949,800
Riverside County SFMR, Capital Appreciation Mortgage,
Series A, GNMA Secured, ETM, 9/01/14 ............................................... 20,220,000 8,823,604
Series A, GNMA Secured, ETM, 11/01/20 .............................................. 25,055,000 7,177,506
Series B, GNMA Secured, ETM, 6/01/23 ............................................... 26,160,000 6,333,859
Rocklin USD, GO, Capital Appreciation, Series A, FGIC Insured,
9/01/08 ............................................................................ 3,660,000 2,418,565
9/01/09 ............................................................................ 4,100,000 2,560,163
9/01/10 ............................................................................ 4,595,000 2,712,566
9/01/11 ............................................................................ 5,145,000 2,858,511
9/01/12 ............................................................................ 5,760,000 3,010,176
9/01/16 ............................................................................ 33,960,000 13,484,497
Roseville City School District GO, Capital Appreciation, Series A,
8/01/11 ............................................................................ 3,115,000 1,709,574
8/01/17 ............................................................................ 30,770,000 10,880,887
Roseville Joint UHSD, Capital Appreciation, Series A,
8/01/10 ............................................................................ 1,820,000 1,062,789
8/01/11 ............................................................................ 1,965,000 1,078,431
8/01/17 ............................................................................ 18,155,000 6,417,974
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
ZERO COUPON/STEP-UP BONDS (cont.)
San Francisco City and County RDA, Lease Revenue, George R. Moscone Center,
Capital Appreciation,
7/01/05 ....................................................................... $ 12,820,000 $ 9,917,808
7/01/06 ....................................................................... 11,320,000 8,308,201
7/01/07 ....................................................................... 4,570,000 3,171,671
7/01/08 ....................................................................... 7,785,000 5,095,983
Pre-Refunded, 7/01/16 ......................................................... 16,300,000 4,973,619
Pre-Refunded, 7/01/17 ......................................................... 16,300,000 4,576,551
Pre-Refunded, 7/01/18 ......................................................... 16,300,000 4,210,942
Zero cpn. to 7/01/02, 8.50% thereafter, 7/01/14 ............................... 46,000,000 43,230,800
San Gabriel USD, COP, Facilities Development Program, Series B, FSA Insured,
zero cpn. to 9/01/02, 6.75% thereafter, 9/01/29 .................................. 2,250,000 1,944,338
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, senior lien,
ETM, 1/01/25 .................................................................. 5,700,000 1,349,304
ETM, 1/01/28 .................................................................. 33,545,000 6,649,625
ETM, 1/01/29 .................................................................. 37,050,000 6,928,350
Pre-Refunded, zero cpn. to 1/01/02, 7.50% thereafter, 1/01/09 ................. 21,585,000 22,317,163
Pre-Refunded, zero cpn. to 1/01/02, 7.55% thereafter, 1/01/10 ................. 10,745,000 11,237,658
Pre-Refunded, zero cpn. to 1/01/02, 7.60% thereafter, 1/01/11 ................. 25,935,000 27,292,697
Pre-Refunded, zero cpn. to 1/01/02, 7.65% thereafter, 1/01/12 ................. 25,215,000 26,594,261
Pre-Refunded, zero cpn. to 1/01/02, 7.65% thereafter, 1/01/13 ................. 27,350,000 28,713,398
Pre-Refunded, zero cpn. to 1/01/02, 7.705% thereafter, 1/01/14 ................ 7,470,000 7,896,164
Pre-Refunded, zero cpn. to 1/01/02, 7.705% thereafter, 1/01/15 ................ 60,155,000 63,419,612
Refunding, Series A, 1/15/16 .................................................. 19,500,000 12,132,705
Refunding, Series A, 1/15/17 .................................................. 17,000,000 10,499,200
Refunding, Series A, 1/15/18 .................................................. 60,000,000 36,909,000
Refunding, Series A, 1/15/19 .................................................. 57,000,000 34,823,580
Refunding, Series A, 1/15/20 .................................................. 80,000,000 48,327,200
Refunding, Series A, 1/15/22 .................................................. 90,000,000 53,833,500
Refunding, Series A, 1/15/23 .................................................. 80,000,000 47,704,000
Refunding, Series A, 1/15/24 .................................................. 80,000,000 47,564,800
Santa Maria Water and Wastewater Revenue, COP, Series A, AMBAC Insured, 8/01/27 ..... 20,000,000 14,264,200
Simi Valley SFRMR, Series A, 9/01/25 ................................................ 350,000 47,924
Southern California Public Power Authority Power Project Revenue, Refunding,
Series A, AMBAC Insured,
7/01/11 ....................................................................... 12,000,000 6,724,560
7/01/12 ....................................................................... 16,890,000 8,904,070
7/01/13 ....................................................................... 16,000,000 7,912,640
Stockton East Water District COP, Refunding, Series A, AMBAC Insured, 4/01/16 ....... 103,885,000 38,712,700
--------------
TOTAL ZERO COUPON/STEP-UP BONDS (COST $1,433,548,511) ............................... 1,438,320,285
--------------
TOTAL LONG TERM INVESTMENTS (COST $13,084,219,389) .................................. 13,079,657,484
--------------
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(b) SHORT-TERM INVESTMENTS. 8%
California PCFA, PCR, PG&E Co., Refunding, Series F, Daily VRDN and Put,
3.45%, 11/01/26 ...................................................................... $ 17,725,000 $ 17,725,000
California State Economic Development Financing Authority Revenue, Independent
System B, Weekly VRDN and Put, 3.30%, 4/01/08 ........................................ 16,300,000 16,300,000
Irvine 1915 Act,
AD No. 87-8, Daily VRDN and Put, 3.40%, 9/02/24 ................................ 42,370,000 42,370,000
AD No. 97-16, Daily VRDN and Put, 3.40%, 9/02/23 ............................... 6,300,000 6,300,000
AD No. 97-17, Daily VRDN and Put, 3.40%, 9/02/23 ............................... 565,000 565,000
Orange County Sanitation District COP, Nos 1-3, 5-7, 11, 13 and 14, Daily VRDN
and Put, 3.40%, 8/01/15 ........................................................ 24,750,000 24,750,000
Puerto Rico Commonwealth Government Development Bank, Refunding, MBIA Insured,
Weekly VRDN and Put, 3.25%, 12/01/15 ........................................... 1,400,000 1,400,000
Puerto Rico Commonwealth Highway and Transportation Authority Revenue,
Series A, AMBAC Insured, Weekly VRDN and Put, 3.25%, 7/01/28 ................... 1,300,000 1,300,000
---------------
TOTAL SHORT-TERM INVESTMENTS (COST $110,710,000) ..................................... 110,710,000
---------------
TOTAL INVESTMENTS (COST $13,194,929,389) 98.9% ....................................... 13,190,367,484
OTHER ASSETS, LESS LIABILITIES 1.1% .................................................. 148,016,869
---------------
NET ASSETS 100.0% .................................................................... $13,338,384,353
===============
</TABLE>
See glossary of terms on page 50.
(a) Sufficient collateral has been segregated for securities traded on a
when-issued or delayed delivery basis.
(b) Variable rate demand notes (VRDNs) are tax-exempt obligations which contain
a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the principal balance
plus accrued interest at specified dates.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, MARCH 31, 2000 (CONT.)
GLOSSARY OF TERMS
--------------------------------------------------------------------------------
1915 ACT - Improvement Bond Act of 1915
ABAG - The Association of Bay Area Governments
ACA - American Capital Access
AD - Assessment District
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co. (Acquired by MBIA in 1989
and no longer does business under this name)
CDA - Community Development Authority/Agency
CFD - Community Facilities District
CHFCLP - California Health Facilities Construction Loan Program
COP - Certificate of Participation
CRDA - Community Redevelopment Authority/Agency
CSAC - County Supervisors Association of California
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FNMA - Federal National Mortgage Association
FSA - Financial Security Assistance
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Authority/Agency
HFAR - Housing Finance Authority/Agency Revenue
HFR - Home Financial Revenue
HMR - Home Mortgage Revenue
ID - Improvement District
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MBS - Mortgage-Backed Securities
MFHR - Multi-Family Housing Revenue
MFR - Multi-Family Revenue
MTA - Metropolitan Transit Authority
MUD - Municipal Utility District
PCFA - Pollution Control Financing Authority
PCR - Pollution Control Revenue
PFA - Public Financing Authority
PFAR - Public Financing Authority Revenue
PUD - Public Utility District
RDA - Redevelopment Authority/Agency
RDAR - Redevelopment Agency Revenue
RMR - Residential Mortgage Revenue
RRMR - Residential Rental Mortgage Revenue
SF - Single Family
SFHMR - Single Family Home Mortgage Revenue
SFM - Single Family Mortgage
SFMR - Single Family Mortgage Revenue
SFRMR - Single Family Residential Mortgage Revenue
UHSD - Unified High School District
USD - Unified School District
VRDN - Variable Rate Demand Notes
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $13,194,929,389) $13,190,367,484
Cash ..................................................... 366,625
Receivables:
Capital shares sold ..................................... 7,632,772
Interest ................................................ 182,237,464
---------------
Total assets ....................................... 13,380,604,345
---------------
Liabilities:
Payables:
Investment securities purchased ......................... 11,835,440
Capital shares redeemed ................................. 18,099,904
Affiliates .............................................. 7,680,962
Shareholders ............................................ 4,138,102
Other liabilities ........................................ 465,584
---------------
Total liabilities .................................. 42,219,992
---------------
Net assets, at value ............................. $13,338,384,353
===============
Net assets consist of:
Undistributed net investment income ...................... $ 23,855,019
Net unrealized depreciation .............................. (4,561,905)
Accumulated net realized loss ............................ (11,928,509)
Capital shares ........................................... 13,331,019,748
---------------
Net assets, at value .............................. $13,338,384,353
===============
CLASS A:
Net asset value per share
($12,859,576,892 / 1,869,039,354 shares outstanding)* .. $ 6.88
===============
Maximum offering price per share ($6.88 / 95.75%) ........ $ 7.19
===============
CLASS B:
Net asset value and maximum offering price per share
($110,933,227 / 16,138,603 shares outstanding)* ........ $ 6.87
===============
CLASS C:
Net asset value per share
($367,874,234 / 53,519,858 shares outstanding)* ........ $ 6.87
===============
Maximum offering price per share ($6.87 / 99.00%) ........ $ 6.94
===============
</TABLE>
*Redemption price is equal to net asset value less any applicable contingent
deferred sales charge.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
<TABLE>
<S> <C> <C>
Investment income:
Interest .......................................... $ 857,631,609
---------------
Expenses:
Management fees (Note 3) .......................... $63,791,060
Distribution fees: (Note 3)
Class A .......................................... 10,776,346
Class B .......................................... 576,403
Class C .......................................... 2,739,562
Transfer agent fees (Note 3) ...................... 4,492,804
Custodian fees .................................... 176,255
Reports to shareholders ........................... 750,051
Registration and filing fees ...................... 511,994
Professional fees (Note 3) ........................ 266,042
Directors' fees and expenses ...................... 123,973
Other ............................................. 429,877
-----------
Total expenses ..................................... 84,634,367
---------------
Net investment income ............................. 772,997,242
---------------
Realized and unrealized losses:
Net realized loss from investments ................ (11,711,553)
Net unrealized depreciation on investments ........ (1,113,091,530)
---------------
Net realized and unrealized loss ................... (1,124,803,083)
---------------
Net decrease in net assets resulting from operations $ (351,805,841)
===============
</TABLE>
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
-------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income .............................................. $ 772,997,242 $ 813,754,289
Net realized gain (loss) from investments .......................... (11,711,553) 46,041,024
Net unrealized appreciation (depreciation) on investments .......... (1,113,091,530) 112,383,811
-------------------------------------
Net increase (decrease) in net assets resulting from operations... (351,805,841) 972,179,124
Distributions to shareholders from:
Net investment income:
Class A ........................................................... (726,801,344) (797,790,042)
Class B ........................................................... (4,065,129) (158,483)
Class C ........................................................... (19,682,434) (17,577,963)
Net realized gains:
Class A ........................................................... (10,661,233) (49,417,902)
Class B ........................................................... (48,352) --
Class C ........................................................... (331,896) (1,251,012)
-------------------------------------
Total distributions to shareholders ................................. (761,590,388) (866,195,402)
Capital share transactions: (Note 2)
Class A ........................................................... (1,540,197,674) 602,614,722
Class B ........................................................... 72,790,394 43,693,388
Class C ........................................................... (62,734,110) 166,346,589
-------------------------------------
Total capital share transactions .................................... (1,530,141,390) 812,654,699
Net increase (decrease) in net assets ............................ (2,643,537,619) 918,638,421
Net assets:
Beginning of year ................................................... 15,981,921,972 15,063,283,551
-------------------------------------
End of year ......................................................... $ 13,338,384,353 $ 15,981,921,972
=====================================
Undistributed net investment income included in net assets:
End of year ...................................................... $ 23,855,019 $ 1,496,555
=====================================
</TABLE>
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Franklin California Tax-Free Income Fund (the Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end investment company.
The Fund seeks to provide tax-free income. The following summarizes the Fund's
significant accounting policies.
a. SECURITY VALUATION
Tax-free bonds generally trade in the over-the-counter market and are valued
within the range of the latest quoted bid and asked prices. In the absence of a
sale or reported bid and asked prices, information with respect to bond and note
transactions, quotations from bond dealers, market transactions in comparable
securities, and various relationships between securities are used to determine
the value of the security. The Fund may utilize a pricing service, bank or
broker/dealer experienced in such matters to perform any of the pricing
functions under procedures approved by the Board of Directors. Securities for
which market quotations are not readily available are valued at fair value as
determined by management in accordance with procedures established by the Board
of Directors.
b. INCOME TAXES
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.
c. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Bond discount and
premium are amortized on an income tax basis. Distributions to shareholders are
recorded on the ex-dividend date.
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.
d. ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. CAPITAL STOCK
The Fund offers three classes of shares: Class A, Class B, and Class C. Each
class of shares differs by its initial sales load, distribution fees, voting
rights on matters affecting a single class and its exchange privilege.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Notes to Financial Statements (continued)
2. CAPITAL STOCK (CONT.)
At March 31, 2000, there were five billion shares authorized ($.01 par value)
for each class. Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------
2000 1999(a)
------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold ......................................... 240,488,307 $ 1,679,469,285 474,619,393 $ 3,502,952,552
Shares issued in reinvestment of distributions ...... 45,791,780 319,191,413 48,948,394 360,693,105
Shares redeemed ..................................... (508,181,729) (3,538,858,372) (441,485,023) (3,261,030,935)
------------------------------------------------------------------------
Net increase (decrease) ............................. (221,901,642) $(1,540,197,674) 82,082,764 $ 602,614,722
========================================================================
CLASS B SHARES:
Shares sold ......................................... 12,625,622 $ 89,069,351 5,987,954 $ 44,294,143
Shares issued in reinvestment of distributions ...... 386,322 2,666,240 14,890 109,834
Shares redeemed ..................................... (2,780,059) (18,945,197) (96,126) (710,589)
------------------------------------------------------------------------
Net increase ........................................ 10,231,885 $ 72,790,394 5,906,718 $ 43,693,388
========================================================================
CLASS C SHARES:
Shares sold ......................................... 11,263,635 $ 79,161,354 28,413,185 $ 209,666,423
Shares issued in reinvestment of distributions ...... 1,912,072 13,328,420 1,696,053 12,497,405
Shares redeemed ..................................... (22,492,323) (155,223,884) (7,568,825) (55,817,239)
------------------------------------------------------------------------
Net increase (decrease) ............................. (9,316,616) $ (62,734,110) 22,540,413 $ 166,346,589
========================================================================
</TABLE>
(a) For the period January 1, 1999 (effective date) to March 31, 1999 for
Class B Shares.
3. TRANSACTIONS WITH AFFILIATES
Certain officers and directors of the Fund are also officers and/or directors of
Franklin/Templeton Distributors, Inc. (Distributors), Franklin Advisers, Inc.
(Advisers), Franklin/Templeton Investor Services, Inc. (Investor Services), and
Franklin Templeton Services, Inc. (FT Services), the Fund's principal
underwriter, investment manager, transfer agent, and administrative manager,
respectively.
The Fund pays an investment management fee to Advisers based on the net assets
of the Fund as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE MONTH-END NET ASSETS
------------------------------------------------------------------------
<S> <C>
.625% First $100 million
.500% Over $100 million, up to and including $250 million
.450% Over $250 million, up to and including $10 billion
.440% Over $10 billion, up to and including $12.5 billion
.420% Over $12.5 billion, up to and including $15 billion
.400% Over $15 billion, up to and including $17.5 billion
</TABLE>
Fees are further reduced on net assets over $17.5 billion.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Notes to Financial Statements (continued)
3. TRANSACTIONS WITH AFFILIATES (CONT.)
Under an agreement with Advisers, FT Services provides administrative services
to the Fund. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Fund.
The Fund reimburses Distributors up to .10%, .65%, and .65% per year of the
average daily net assets of Class A, Class B and Class C, respectively, for
costs incurred in marketing the Fund's shares.
Distributors paid net commissions on sales of the Fund shares, and received
contingent deferred sales charges for the year of $4,113,146 and $1,110,191,
respectively.
The Fund paid transfer agent fees of $4,492,804, of which $3,712,762 was paid to
Investor Services.
Included in professional fees are legal fees of $113,151 that were paid to two
law firms in which a partner in each law firm is an officer of the Fund.
4. INCOME TAXES
At March 31, 2000, the net unrealized depreciation based on the cost of
investments for income tax purposes of $13,195,000,867 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 432,570,429
Unrealized depreciation (437,203,812)
-------------
Net unrealized depreciation $ (4,633,383)
=============
</TABLE>
At March 31, 2000, the Fund had tax basis capital losses of $7,003,120 which may
be carried over to offset future capital gains. Such losses expire in 2008.
At March 31, 2000, the Fund has deferred capital losses occurring subsequent to
October 31, 1999 of $4,853,911. For tax purposes, such losses will be reflected
in the year ending March 31, 2001.
Net realized capital losses differ for financial statement and tax purposes
primarily due to differing treatment of wash sales.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended March 31, 2000 aggregated $1,717,202,269 and $3,567,161,416,
respectively.
6. CREDIT RISK
The Fund has investments in excess of 10% of its total net assets in the state
of California. Such concentration may subject the Fund more significantly to
economic changes occurring within that state.
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Independent Auditors' Report
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Franklin California Tax-Free Income
Fund (the "Fund") at March 31, 2000, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
San Francisco, California
May 3, 2000
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Tax Designation
Under Section 852(b)(5)(A) of the Internal Revenue Code, the Fund hereby
designates 100% of the distributions paid from net investment income as
exempt-interest dividends for the fiscal year ended March 31, 2000.
