TAX-FREE TRUST OF ARIZONA
Supplement to the Prospectus dated October 30, 1998
for Class A Shares and Class C Shares
as previously supplemented May 12, 1999
The following supplements the information in the Prospectus
regarding purchase and redemption of shares:
The Trust generally permits "transfer on death" registration
of shares ("TOD"), so that on the death of the shareholder the
shares are transferred to a designated beneficiary or
beneficiaries. Ask the Transfer Agent or your broker-dealer for
the Transfer on Death Registration Request Form. With it you will
receive a copy of the TOD Rules of the Aquilasm Group of Funds,
which specify how the registration becomes effective and
operates. By opening a TOD Account, you agree to be bound by the
TOD rules.
The material under the caption "Certain Investment Companies"
is replaced as follows:
Class A Shares of the Trust may be purchased at net asset
value without sales charge (except as set forth below under
"Special Dealer Arrangements") to the extent that the aggregate
net asset value of such Class A Shares does not exceed the
proceeds from a redemption (a "Qualifying Redemption" ) made
within 120 days prior to such purchase, of shares of another
investment company on which a sales charge, including a
contingent deferred sales charge, has been paid. Additional
information is available from the Distributor.
To qualify, the following special procedures must be
followed:
1. A completed Application (included in the Prospectus) and
payment for the Class A Shares to be purchased must be sent
to the Distributor, Aquila Distributors, Inc., 380 Madison
Avenue, Suite 2300, New York, NY 10017 and should not be
sent to the Trust's Shareholder Servicing Agent. (This
instruction replaces the mailing address contained on the
Application.)
2. The Application must be accompanied by evidence
satisfactory to the Distributor that the prospective
shareholder has made a Qualifying Redemption in an amount at
least equal to the net asset value of the Class A Shares to
be purchased. Satisfactory evidence includes a confirmation
of the date and the amount of the redemption from the
investment company, its transfer agent or the investor's
broker or dealer, or a copy of the investor's account
statement with the investment company reflecting the
redemption transaction.
3. You must complete and return to the Distributor a
Transfer Request Form, which is available from the
Distributor.
The Trust reserves the right to alter or terminate this
privilege at any time without notice. The Prospectus will be
supplemented to reflect such alteration or termination.
The material under the caption "Special Dealer Arrangements"
is replaced as follows:
During certain periods determined by the Distributor, the
Distributor (not the Trust) will pay, to any dealer effecting a
purchase of Class A shares of the Trust using the proceeds of a
qualifying redemption of an investment company (that is not a
member of the Aquilasm Group of Funds), up to 1% of the proceeds.
The shareholder, however, shall not be subject to any sales
charge. These arrangements will be in effect through
December 31, 1999 unless extended or earlier terminated by a
supplement of the Prospectus.
Dealer payments shall be made in up to 4 payments of 0.25 of
1% of the proceeds over a four year period. The first payment
will be made subsequent to receipt of the proper documentation
detailed above. Future payments, over the remaining years, will
be made at the end of the quarter of the anniversary month that
the purchase of Class A Shares took place, provided that any part
of the investment remains in the Trust during the entire time
period. No payments will be made with respect to any shares
redeemed during the four-year period.
The date of this supplement is August 3, 1999.
