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<PAGE> PAGE 2
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SIGNATURE KIMBERLEY MONASTERIO
TITLE ASSISTANT TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FRANKLIN FEDERAL TAX-FREE INCOME FUND APRIL 30, 1998 ANNUAL REPORT AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 011
<NAME> FRANKLIN FEDERAL TAX-FREE INCOME FUND - CLASS I
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 6,487,935,647
<INVESTMENTS-AT-VALUE> 6,980,566,003
<RECEIVABLES> 221,885,511
<ASSETS-OTHER> 54,436,058
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,256,887,572
<PAYABLE-FOR-SECURITIES> 81,326,565
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17,405,417
<TOTAL-LIABILITIES> 98,731,982
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,685,833,853
<SHARES-COMMON-STOCK> 573,422,438
<SHARES-COMMON-PRIOR> 580,178,206
<ACCUMULATED-NII-CURRENT> 5,570,212
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (25,878,831)
<ACCUM-APPREC-OR-DEPREC> 492,630,356
<NET-ASSETS> 7,158,155,590
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 447,218,775
<OTHER-INCOME> 0
<EXPENSES-NET> (42,363,444)
<NET-INVESTMENT-INCOME> 404,855,331
<REALIZED-GAINS-CURRENT> 42,732,886
<APPREC-INCREASE-CURRENT> 156,385,279
<NET-CHANGE-FROM-OPS> 603,973,496
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (396,082,048)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 114,214,913
<NUMBER-OF-SHARES-REDEEMED> (134,063,708)
<SHARES-REINVESTED> 13,093,027
<NET-CHANGE-IN-ASSETS> 180,724,202
<ACCUMULATED-NII-PRIOR> 1,843,059
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (68,611,717)
<GROSS-ADVISORY-FEES> (32,368,130)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (42,363,444)
<AVERAGE-NET-ASSETS> 7,116,622,814
<PER-SHARE-NAV-BEGIN> 11.90
<PER-SHARE-NII> 0.69
<PER-SHARE-GAIN-APPREC> 0.35
<PER-SHARE-DIVIDEND> (0.69)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.25
<EXPENSE-RATIO> 0.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FRANKLIN FEDERAL TAX-FREE INCOME FUND APRIL 30, 1998 ANNUAL REPORT AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 012
<NAME> FRANKLIN FEDERAL TAX-FREE INCOME FUND - CLASS II
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 6,487,935,647
<INVESTMENTS-AT-VALUE> 6,980,566,003
<RECEIVABLES> 221,885,511
<ASSETS-OTHER> 54,436,058
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,256,887,572
<PAYABLE-FOR-SECURITIES> 81,326,565
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17,405,417
<TOTAL-LIABILITIES> 98,731,982
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,685,833,853
<SHARES-COMMON-STOCK> 11,042,906
<SHARES-COMMON-PRIOR> 6,045,053
<ACCUMULATED-NII-CURRENT> 5,570,212
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (25,878,831)
<ACCUM-APPREC-OR-DEPREC> 492,630,356
<NET-ASSETS> 7,158,155,590
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 447,218,775
<OTHER-INCOME> 0
<EXPENSES-NET> (42,363,444)
<NET-INVESTMENT-INCOME> 404,855,331
<REALIZED-GAINS-CURRENT> 42,732,886
<APPREC-INCREASE-CURRENT> 156,385,279
<NET-CHANGE-FROM-OPS> 603,973,496
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,046,130)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,941,310
<NUMBER-OF-SHARES-REDEEMED> (1,202,566)
<SHARES-REINVESTED> 259,109
<NET-CHANGE-IN-ASSETS> 180,724,202
<ACCUMULATED-NII-PRIOR> 1,843,059
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (68,611,717)
<GROSS-ADVISORY-FEES> (32,368,130)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (42,363,444)
<AVERAGE-NET-ASSETS> 7,116,622,814
<PER-SHARE-NAV-BEGIN> 11.90
<PER-SHARE-NII> 0.63
<PER-SHARE-GAIN-APPREC> 0.33
<PER-SHARE-DIVIDEND> (0.62)
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> .000
<PER-SHARE-NAV-END> 12.24
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .000
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Franklin Federal Tax-Free Income Fund
In planning and performing our audit of the financial
statements of Franklin Federal Tax-Free Income Fund for the
year ended April 30, 1998, we considered its internal
control, including controls over safeguarding securities, in
order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of Franklin Federal Tax-Free Income Fund is
responsible for establishing and maintaining internal
control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected
benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external
purposes that are fairly presented in conformity with
generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized
acquisition, use, or disposition.
Because of inherent limitations in internal control, errors
or irregularities may occur and not be detected. Also,
projection of any evaluation of internal control to future
periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be
material weaknesses under standards established by the
American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or
operation of any specific internal control component does
not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation
to the financial statements being audited may occur and not
be detected within a timely period by employees in the
normal course of performing their assigned functions.
However, we noted no matters involving internal control,
including controls over safeguarding securities that we
consider to be material weaknesses as defined above as of
April 30, 1998.
This report is intended solely for the information and use
of management and Securities and Exchange Commission.
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 3, 1998
