FRANKLIN TEMPLETON INVESTMENTS
One Franklin Parkway
San Mateo, CA 94403
February 15, 2008
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attn: Ms. Christina D'Angelo
RE: Franklin Tax-Free Trust ("Registrant")
(Reorganization of Franklin Florida Insured Tax-Free Income Fund
into Franklin Insured Tax-Free Income Fund)
Registration Statement on Form N-14
File Number: 333-148759
Dear Ms. D'Angelo:
Enclosed for your information and review are marked exhibits. In the
marked exhibits, we have responded to the comments of the Commission's staff
relating to the Registration Statement on Form N-14 of the Registrant filed
on January 18, 2008, Accession No. 0000757010-08-000002.
Our responses to the comments are described below.
1. Comment: Provide the fees and expenses as of the Fund's fiscal year end,
February 28, 2007.
Response: The fees and expenses table has been updated to reflect
figures as of fiscal year end, February 28, 2007. Please refer to
Exhibit A.
2. Comment: The 12b-1 fees for Franklin Florida Insured Tax-Free Income Fund
should be listed as 0.15% since that is the contractual amount.
Response: The 12b-1 fees for Franklin Florida Insured Tax-Free
Income Fund have been revised to show 0.15%. The following footnote
has been added stating that the Fund only pays 0.10%: "The Fund may
pay up to 0.15%, however, Distributors had agreed to limit the
current rate to 0.10% per year. The actual reported total annual
fund operating expenses were 0.74%." Please refer to Exhibit A.
In addition, we have revised the disclosure of the 12b-1 fees under
"What are other key features of the Funds?" to reflect the
contractual amount. Specifically, we have changed the first
sentence of the second paragraph of the "Distribution and Service
(12b-1) Fees" subsection to read: "Florida Fund's Class A Plan may
pay up to 0.15% per year of the average daily net assets of Fund
Class A shares; however, Distributors had agreed to limit the
current rate to 0.10% per year. Insured Fund's Class A plan may pay
up to 0.10% per year of the average daily net assets of Fund Class
A shares."
3. Comment: The second footnote to the Fees and Expenses table should mention
that each Fund will pay 25% of the costs of the transaction.
Response: The second footnote under the Fees and Expenses table has
been revised to the following: "Pro Forma expenses are based on
current and anticipated Insured Fund expenses as if the Transaction
had been effective as of February 28, 2007 and do not include the
estimated costs of the transaction of approximately $62,261, of
which each Fund will pay 25%." Please refer to Exhibit A.
4. Comment: The Example table numbers for Class A are not consistent with the
figures in the Fees and Expenses table. Projected Insured Fund - Class A
(after Transaction) can be referred to as Pro Forma Insured Fund - Class A
(after Transaction).
Response: The Example table has been revised, please refer to
Exhibit B.
5. Comment: The adjusted (transaction) expenses in the Capitalization table
do not match to the transaction expenses we disclose in the footnote to the
Fees and Expenses table.
Response: The Capitalization table has been revised accordingly,
please refer to Exhibit C.
6. Comment: Add a statement in Part B (the Statement of Additional
Information) that pro forma financial statements required by Rule 11-01 of
Regulation S-X [17 CFR 210.11-01] need not be prepared since Florida Fund's
net asset value does not exceed 10% of the Insured Fund's net asset value.
Response: Statement has been added to Part B which reads: "As set
forth in Item 14(2) of Form N-14 [17 CFR 239.23], pro forma
financial statements required by Rule 11-01 of Regulation S-X [17
CFR 210.11-01] are not provided in this Statement of Additional
Information since Florida Fund's net asset value did not exceed 10%
of the Insured Fund's net asset value, both of which were measured
as of a specified date (January 17, 2008) within thirty days prior
to the date of filing of this registration statement."
We have endeavored to fully respond to your comments and believe that the
foregoing responses and related revisions do so. Questions to any further
comments related to this filing may be directed to me at (650) 312-3504.
Very truly yours,
/s/ Bruce Bohan
Enclosure
cc: Kristin H. Ives, Esq.
EXHIBIT A
FEE TABLE FOR CLASS A SHARES OF
FLORIDA FUND AND INSURED FUND
ACTUAL+ PRO FORMA++
--------------------------------------
FLORIDA FUND INSURED INSURED FUND
CLASS A FUND CLASS A
(UNAUDITED) CLASS A AFTER
(UNAUDITED) TRANSACTION
(UNAUDITED)
--------------------------------------
SHAREHOLDER FEES
(fees paid directly from your
investment)
Maximum sales charge (load) 4.25% 4.25% 4.25%
as a percentage of offering
price(1)
Load imposed on purchases(1) 4.25% 4.25% 4.25%
Maximum deferred sales None None None
charge (load)(2)
Redemption fee on shares sold 2.00% 2.00% 2.00%
within 7 calendar days
following their purchase
date(3)
ANNUAL FUND OPERATING
Expenses(4)
Management fees(4) 0.57% 0.46% 0.46%
Distribution and service 0.15% 0.10% 0.10%
(12b-1) fees(4)
Other expenses(4) 0.07% 0.07% 0.07%
TOTAL ANNUAL FUND OPERATING 0.79% 0.63% 0.63%
EXPENSES(4)
--------------------------------------
+ Provided for the fiscal year ended February 28, 2007.
++ Pro Forma expenses are based on current and anticipated Insured Fund
expenses as if the Transaction had been effective as of February 28, 2007
and do not include the estimated costs of the transaction of approximately
$62,261, of which each Fund will pay 25%.
1. The dollar amount of the sales charge is the difference between the
offering price of the shares purchased (which factors in the applicable sales
charge in this table) and the net asset value of those shares. Since the
offering price is calculated to two decimal places using standard rounding
criteria, the number of shares purchased and the dollar amount of the sales
charge as a percentage of the offering price and of your net investment may
be higher or lower depending on whether there was a downward or upward
rounding.
2. There is a 1% contingent deferred sales charge that applies to investments
of $1 million or more and purchases by certain retirement plans without an
initial sales charge.
3. The redemption fee is calculated as a percentage of the amount redeemed
(using standard rounding criteria), and may be charged when you sell or
exchange your shares or if your shares are involuntarily redeemed. The fee
is retained by the applicable Fund and generally withheld from redemption
proceeds. For more details, see "Redemption Fee" section in the Funds'
prospectus.
4. The Fund may pay up to 0.15%, however, Distributors has agreed to limit
the current rate to 0.10% per year. The actual reported total annual fund
operating expenses were 0.74%.
EXHIBIT B
EXAMPLE TABLE
1 Year(1) 3 YEARS 5 YEARS 10 YEARS
------------------------------------
If you sell your shares at the
end of the period:
Florida Fund - Class A $502 $667 $845 $1,361
Insured Fund - Class A $487 $618 $761 $1,178
Pro Forma Insured Fund - Class A $487 $618 $761 $1,178
(after Transaction)
1. Assumes a CDSC will not apply.
EXHIBIT C
FLORIDA INSURED ADJUSTED INSURED
FUND FUND (TRANSACTION FUND--PRO
(UNAUDITED) EXPENSES) FORMA
(UNAUDITED) AFTER
TRANSACTION
(UNAUDITED)
------------------------------------------------
Net assets (all 152,074 2,220,005 (31,131) 2,372,048
classes)(1)
(thousands)
Total shares
outstanding (all
classes)(1) 14,411,119 182,529,294 (1,894,755) 195,045,658
Class A net assets 152,074 1,994,449 (28,171) 2,146,495
(thousands)
Class A shares 14,411,119 164,113,220 (1,894,755) 176,629,584
outstanding
Class A net asset 10.55 12.15 N/A 12.15
value per share
Class B net assets N/A 76,368 (1,002) 76,367
(thousands)
Class B shares N/A 6,253,807 N/A 6,253,807
outstanding
Class B net asset N/A 12.21 N/A 12.21
value per share
Class C net assets N/A 149,188 (1,958) 149,186
(thousands)
Class C shares N/A 12,162,267 N/A 12,162,267
outstanding
Class C net asset N/A 12.27 N/A 12.27
value per share