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SIGNATURE FRED R. KELLY, JR.
TITLE PORTFOLIO MANAGER
EXHIBIT 99
ATTACHMENT 77G
For the period ending: 09/30/98
File number: 811-05009
DEFAULTS & ARREARS ON SENIOR SECURITIES
<TABLE>
<S> <C>
1) Briargate Public Building Authority, Landowner Assessment Lien Series 1985A
and 1986A
In default: Interest
Nature of Default: (partial default) District did not make timely interest payment.
Date of Default: December 15, 1990
Default per $1,000 face: $ 451,170
2) Town of Castle Rock, Local Improvement District 1988-2
In default: Interest
Nature of Default: (partial default) District did not make timely interest
payment.
Date of Default: December 1, 1993 (50% interest payment)
June 1, 1994 no interest payment
Default per $1,000 face: $ 530,000
3) El Paso County, Colorado Pheasant Run LID 86-2 Local Improvement District
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: March, 1994
Default per $1,000 face: $ 100,000
4) Mesa County Single Family Mortgage Revenue Series 1982
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: December 1, 1995
Default per $1,000 face: $ 220,000
5) Northgate Public Building Authority Landowner Assessment Lien Series 1987A
In default: Interest
Nature of Default: District did not make timely interest payment.
Date of Default: July 1, 1991
Default per $1,000 face: $ 20,000
</TABLE>
EXHIBIT 99
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
COLORADO BOND SHARES - A TAX-EXEMPT FUND:
In planning and performing our audit of the financial statements of Colorado
Bond Shares - A Tax-Exempt Fund for the year ended September 30, 1998, we
considered its internal control structure, including procedures for 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 the internal controls.
The management of Colorado Bond Shares - A Tax-Exempt Fund is responsible for
establishing and maintaining an internal controls. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control policies and
procedures. Two of the objectives of internal controls are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in internal controls, errors
may occur and may not be detected. Also, projection of any
evaluation of the structure 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 the internal controls would not necessarily
disclose all matters in the internal controls 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 the specific internal control elements 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 the internal controls, including procedures for safeguarding
securities, that we considered to be material weaknesses as defined above as of
September 30, 1998.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission and should not be used for any other purpose.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Denver, Colorado
November 3, 1998
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<NAME> COLORADO BONDSHARES A TAX-EXEMPT FUND
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<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 71,076,820
<INVESTMENTS-AT-VALUE> 72,178,844
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