* TF3 *P4
SUPPLEMENT DATED JANUARY 12, 1999
TO THE PROSPECTUS OF
FRANKLIN TAX-FREE TRUST
(TFT3 - Franklin Arizona Tax-Free Income Fund, Franklin Colorado Tax-Free Income
Fund, Franklin Connecticut Tax-Free Income Fund, Franklin Federal
Intermediate-Term Tax-Free Income Fund, Franklin High Yield Tax-Free Income
Fund, Franklin Indiana Tax-Free Income Fund, Franklin Michigan Tax-Free Income
Fund, Franklin New Jersey Tax-Free Income Fund, Franklin Oregon Tax-Free Income
Fund, Franklin Pennsylvania Tax-Free Income Fund
and Franklin Puerto Rico Tax-Free Income Fund)
dated July 1, 1998 as amended January 1, 1999
On January 12, 1999, Franklin Tax-Free Trust's Board of Trustees approved
proposals to merge the Franklin Michigan Tax-Free Income Fund into Franklin
Michigan Insured Tax-Free Income Fund and the Franklin Indiana Tax-Free Income
Fund into Franklin Federal Tax-Free Income Fund, subject to shareholder
approval. Franklin Federal Tax-Free Income Fund's Board of Directors also
approved the Franklin Indiana Tax-Free Income Fund merger. The investment goal
of the Franklin Michigan Tax-Free Income Fund, Franklin Michigan Insured
Tax-Free Income Fund, and Franklin Indiana Tax-Free Income Fund is to provide
investors with as high a level of income exempt from federal income taxes and
from the personal income taxes, if any, for resident shareholders of the fund's
state as is consistent with prudent investing, while seeking preservation of
shareholders' capital. The investment goal of the Franklin Federal Tax-Free
Income Fund is to provide investors with as high a level of interest income
exempt from federal income taxes as is consistent with prudent investing, while
seeking preservation of shareholders' capital. The Boards believe these proposed
mergers will benefit shareholders.
It is anticipated that in the spring of 1999 shareholders of the Franklin
Michigan Tax-Free Income Fund and Franklin Indiana Tax-Free Income Fund will
receive a proxy and proxy statement requesting their votes on the applicable
merger.
Franklin Michigan Tax-Free Income Fund and Franklin Indiana Tax-Free Income Fund
will be closed to new investors after the close of business on January 12, 1999.
If you are a shareholder of record as of the close of business on January 12,
1999, you may continue to add to your account, subject to your applicable
minimum additional investment amount, or buy additional shares through
reinvestment of dividend or capital gain distributions.
Although you may redeem your shares, please keep in mind that if you sell all
the shares in your account, your account will be closed and you will not be
allowed to buy additional shares of the Franklin Michigan Tax-Free Income Fund
and Franklin Indiana Tax-Free Income Fund or to reopen your account in those
funds.
Please keep this supplement for future reference.
