• Franklin Federal Limited-Term Tax-Free Income Fund • Franklin California Limited-Term Tax-Free Income Fund • Franklin New York Limited-Term Tax-Free Income Fund

With over 25 years of experience in tax-free investing, Franklin has grown to be the largest,¹ as well as one of the most respected, municipal bond fund managers in the U.S. We're known for our conservative investment approach focused on maximizing tax-free income without using leverage or investing in exotic derivatives.

Following that same time-tested strategy, the Franklin limited-term tax-free income funds seek to provide high, current, tax-free income while preserving shareholders' capital.²

Additionally, the funds are managed to maintain an average portfolio maturity of 5 years or less, to meet the needs of investors who want to invest in shorter-term municipal bond funds.

Fund highlights

• Limited maturities (5 years or less) may help to reduce interest rate sensitivity compared to funds with longer average maturities
• Taxable-equivalent yields may be higher than short-term, taxable fixed income alternatives
• Professional management by Franklin, the leader in tax-free investing with over $50 billion in municipal assets under management¹

Because municipal bonds are sensitive to interest rate movements, the funds' yields and share prices will fluctuate with market conditions. Bond prices and the funds' share prices generally move in the opposite direction of interest rates. Additionally, funds with investments concentrated in a single state are subject to greater risks than geographically diversified funds. These and other risks are discussed in the funds' prospectuses.

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Footnote
1.	Source: Strategic Insight, as of 2/29/04. Based on long-term, tax-free fund assets.
2.	For investors subject to the alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable. For investors in Franklin Federal Limited-Term Tax-Free Income Fund, dividends are generally subject to state and local taxes, if any.
Important Legal Information
For more information about Franklin Federal Limited-Term Tax-Free Income Fund, Franklin California Limited-Term Tax-Free Income Fund or Franklin New York Limited-Term Tax-Free Income Fund, contact your financial advisor or download a free prospectus, which contains important information about the fund's investment goal, sales charges, expenses and risk considerations. Please read the prospectus carefully before investing or sending money.