File Nos. 33-12381 & 811-5047
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
TAX-FREE FUND OF COLORADO
(Exact Name of Registrant as Specified in Charter)
380 Madison Avenue, Suite 2300
New York, New York 10017
(Address of Principal Executive Offices)
(212) 697-6666
(Registrant's Telephone Number)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
<page>
Important Notice
Please Read Immediately
Aquilasm
Group of Funds
Tax-Free Fund of Colorado
380 Madison Avenue, Suite 2300, New York, NY 10017
Notice of Annual Meeting of
Shareholders to Be Held
on June 21, 2006
To Shareholders of the Fund:
The purpose of this Notice is to advise you that an Annual Meeting of the
Shareholders of Tax-Free Fund of Colorado (the "Fund"), will be held:
Place: (a) Hyatt Regency Denver Tech Center
7800 E. Tufts Avenue
Denver, Colorado;
Time: (b) on Wednesday, June 21, 2006
at 10:00 a.m. Mountain Daylight Time;
Purposes: (c) for the following purposes:
(i) to elect seven Trustees; each Trustee elected
will hold office until the next annual meeting of
the Fund's shareholders or until his or her
successor is duly elected (Proposal No. 1);
(ii) to ratify (that is, to approve) or reject the
selection of Tait, Weller & Baker LLP as
the Fund's independent registered public
accounting firm for the fiscal year
ending December 31, 2006 (Proposal No.
2); and
(iii) to act upon any other matters which may
properly come before the Meeting at the scheduled
time and place or any adjourned meeting or meetings.
Who Can
Vote What
Shares: (d) To vote at the Meeting, you must have been a
shareholder on the Fund's records at the close of
business on March 27, 2006 (the "record date").
Also, the number of shares of each of the Fund's
outstanding classes of shares that you held at that
time and the respective net asset values of each
class of shares at that time determine the number of
votes you may cast at the Meeting (or any adjourned
meeting or meetings).
By order of the Board of Trustees,
EDWARD M. W. HINES
Secretary
May 10, 2006
Please Note:
If you do not expect to attend the Meeting, please vote by any of three ways: by
the Internet, by telephone or by completing the enclosed proxy card and
returning it in the accompanying stamped envelope. To avoid unnecessary expense
to the Fund, we request your cooperation in voting no matter how large or small
your holding may be.
Tax-Free Fund of Colorado
380 Madison Avenue, Suite 2300, New York, New York 10017
Proxy Statement
Introduction
The purpose of the Notice preceding this Proxy Statement is to advise you
of the time, place and purposes of an Annual Meeting of the Shareholders of
Tax-Free Fund of Colorado (the "Fund"). The purpose of this
Proxy Statement is to give you information on which you may base your decisions
as to the choices, if any, you make in voting.
The Fund's Manager (the "Manager") is Aquila Investment Management LLC,
380 Madison Avenue, Suite 2300, New York, NY 10017, a subsidiary of the Fund's
founder, Aquila Management Corporation. The Fund's principal underwriter (the
"Distributor") is Aquila Distributors, Inc., 380 Madison Avenue, Suite 2300, New
York, NY 10017. The Fund's Investment Sub-Adviser (the "Sub-Adviser") is
Kirkpatrick Pettis Capital Management, a Division of Davidson Fixed Income
Management, 1600 Broadway, Denver, Colorado 80202.
A copy of the Fund's most recent annual report will be sent to you without
charge upon written request to the Distributor, at the above address, or by
calling 800-437-1020 toll-free or 212-697-6666.
This Notice and Proxy Statement are first being mailed on or about May 10,
2006.
You should read this Proxy Statement prior to voting. If your shares are
registered in the name of your broker or someone other than yourself, you may
authorize that person to vote your shares. If your shares are registered in your
name, then you may vote in one of three ways:
(1) Proxy Card
The enclosed proxy card authorizes the persons named (or their substitutes)
to vote your shares; the Fund calls these persons the "proxy holders." As to the
election of Trustees you may authorize the proxy holders to vote your shares for
the entire slate indicated below by marking the appropriate box on the proxy
card or by merely signing and returning your proxy card with no instructions. Or
you may withhold the authority of the proxy holders to vote on the election of
Trustees by marking the appropriate box. Also, you may withhold that authority
as to any particular nominee by following the instructions on the proxy card.
As to the other matter listed on the proxy card, you may direct the proxy
holders to vote your shares on this proposal by marking the appropriate box
"For" or "Against" or instruct them not to vote your shares on the proposal by
marking the "Abstain" box. If you return your signed proxy card and do not mark
a box on the proposal, the proxy holders will vote your shares for that
proposal.
(2) Internet Voting
To vote your shares by the Internet, please contact the Fund at the
Internet address shown on your proxy card. You will be prompted to enter the
control number on your proxy card. Follow the instructions on the screen, using
your proxy card as a guide. If you vote by the Internet, you need not return the
proxy card by mail.
(3) Telephone Voting
To vote your shares by telephone, call the toll-free number on your proxy
card. You will be prompted to enter the control number on your proxy card.
Follow the recorded instructions using your proxy card as a guide. If you vote
by phone, you need not return the proxy card by mail.
General Information
You may end the power of the proxy holders to vote your shares by: (i) so
notifying the Fund in writing; (ii) signing a new and different proxy card (if
the Fund receives it before the old one is used); (iii) voting your shares at
the meeting in person or by your duly appointed agent; or (iv) calling the toll
free number provided or contacting the Fund's Internet address, both of which
are detailed on your proxy card, entering your control number and revoking your
previous vote.
Proxies for shares held by brokers in "street name" and not voted or
marked as abstentions will be counted for purposes of determining a quorum. They
will be counted as present in determining voting results, and will therefore
have the same effect as negative votes.
The Fund is sending you this Notice and Proxy Statement in connection with
the solicitation by its Trustees of proxies to be used at the Annual Meeting to
be held at the time and place and for the purposes indicated in the Notice or
any adjourned meeting or meetings. Whenever it is stated in this Proxy Statement
that a matter is to be acted on at the Meeting, this means the Meeting held at
the scheduled time or any adjourned meeting or meetings.
The Fund pays the costs of the solicitation. Proxies are being solicited by
the use of the mails; they may also be solicited by telephone, facsimile and
personal interviews. Brokerage firms, banks and others may be requested to
forward this Notice and Proxy Statement to beneficial owners of the Fund's
shares so that these owners may authorize the voting of their shares. The Fund
will pay these firms their out-of-pocket expenses for doing so.
On the record date, the Fund had three classes of shares outstanding. All
shareholders of the Fund are entitled to vote at the meeting. Each shareholder
on the record date is entitled to one vote for each dollar (and a proportionate
fractional vote for each fraction of a dollar) of net asset value (determined as
of the record date) represented by full and fractional shares of any class held
on the record date. On the record date, the net asset value per share of each of
the Fund's outstanding classes of shares was as follows: Class A Shares, $10.36;
Class C Shares, $10.34; and Class Y Shares, $10.38. The meeting is expected to
act only upon matters that affect the Fund as a whole: the election of Trustees
and the selection of an independent registered public accounting firm. On
matters that affect the Fund as a whole, all shareholders of the Fund, including
the shareholders of all classes of shares of the Fund, are entitled to vote at
the meeting.
On the record date, the total number of shares outstanding for each class
of shares was as follows: Class A Shares, 20,831,832; Class C Shares, 1,209,145;
and Class Y Shares, 1,362,336.
On the record date, the following holders held 5% or more of a class of the
Fund's outstanding shares. On the basis of information received from the
institutional holders, the Fund's management believes that all of the shares
indicated are held by them for the benefit of clients.
Name and address of
the holder of Record Number of shares Percent of class
Institutional 5% shareholders
Merrill Lynch Pierce Fenner
& Smith Inc. 214,762 Class C Shares 17.76%
FBO its Customers 137,556 Class Y Shares 10.10%
4800 Deer Lake Drive East
Jacksonville, FL 32246
Northern Trust as Agent 560,662 Class Y Shares 41.15%
FBO Armstrong Ventures LLC
P.O. Box 92956 Chicago IL 60675
Alpine Trust & Asset
Management 267,482 Class Y Shares 19.63%
225 N. Fifth Street
Grand Junction, CO 81501
Haws & Co. 105,174 Class Y Shares 7.72%
c/o Guaranty Bank & Trust
6501 E. Belleview Avenue
Suite 400
Englewood CO 80111
Additional 5% Shareholders
The Fund's management is not aware of any other person beneficially owning more
than 5% of any class of its outstanding shares as of such date.
Election of Trustees
(Proposal No. 1)
At the Meeting, seven Trustees are to be elected. Each Trustee elected will
serve until the next annual meeting or until his or her successor is duly
elected. The nominees selected by the Trustees are named in the table below. See
"Introduction" above for information as to how you can vote your shares in the
election of Trustees.
The following material includes information about each nominee and each
officer of the Fund. All shares of the Fund listed as owned by the Trustees are
Class A Shares unless indicated otherwise. All of the nominees, except for Lyle
W. Hillyard, are presently Trustees and were elected by the shareholders in
March 2005. All nominees have consented to serve if elected.
Nominees(1)
Number of
Positions Held Portfolios in Other Directorships
with Fund Complex Held by Trustee
Fund Overseen by (The position held is a
Name, Address(2) and and Length of Principal Occupation(s) Trustee directorship unless
Date of Birth Service(3) During Past 5 Years indicated otherwise.)
- ------------- ------- ------------------- ---------------------
Interested Trustees(4)
Diana P. Herrmann Trustee since Vice Chair and Chief Executive 11 None
New York, NY 2000 and Officer of Aquila Management
(02/25/58) President Corporation, Founder of the
since 1999 Aquilasm Group of Funds(5) and
parent of Aquila Investment
Management LLC, Manager, since
2004, President and Chief
Operating Officer since 1997, a
Director since 1984, Secretary
since 1986 and previously its
Executive Vice President, Senior
Vice President or Vice
President, 1986-1997; Chief
Executive Officer and Vice Chair
since 2004 and President, Chief
Operating Officer and Manager of
the Manager since 2003; Vice
Chair, President, Executive Vice
President or Senior Vice
President of funds in the
Aquilasm Group of Funds since
1986; Director of the
Distributor since 1997; trustee,
Reserve Money-Market Funds,
1999-2000 and Reserve Private
Equity Series, 1998-2000;
Governor, Investment Company
Institute and head of its Small
Funds Committee since 2004;
active in charitable and
volunteer organizations.
Non-Interested
Trustees
Anne J. Mills Chair of Board President, Loring Consulting 4 None
Castle Rock, CO of Trustees Company since 2001; Vice
(12/23/38) since 2005 and President for Business Affairs,
Trustee since Ottawa University, 1992-2001;
1987 IBM Corporation, 1965-1991;
Budget Review Officer, the
American Baptist Churches/USA,
1994-1997; director, the
American Baptist Foundation;
Trustee, Ottawa University; and
Trustee Emerita, Brown
University.
Tucker Hart Adams Trustee since President, The Adams Group, 2 Director, Colorado Health
Colorado Springs, 1989 Inc., an economic consulting Facilities Authority and
CO firm, since 1989; formerly Chief Mortgage Analysis Computer
(01/11/38) Economist, United Banks of Corp.
Colorado; currently or formerly
active with numerous
professional and community
organizations.
Thomas A. Trustee since Vice President of Robinson, 2 None
Christopher 2004 Hughes & Christopher, C.P.A.s,
Danville, KY P.S.C., since 1977; President, A
(12/19/47) Good Place for Fun, Inc., a
sports facility, since 1987;
currently or formerly active
with various professional and
community organizations.
Gary C. Cornia Trustee since Director, Romney Institute of 4 None
Orem, UT 2000 Public Management, Marriott
(06/24/48) School of Management, Brigham
Young University, 2004 -
present; Professor, Marriott
School of Management, 1980 -
present; Past President, the
National Tax Association;
Fellow, Lincoln Institute of
Land Policy, 2002-2003;
Associate Dean, Marriott School
of Management, Brigham Young
University, 1991-2000; Utah
Governor's Tax Review Committee
since 1993.
Lyle W. Hillyard None President of the law firm of 1 None
Logan, UT Hillyard, Anderson & Olsen,
(09/25/40) Logan, Utah, since 1967; member
of Utah Senate, 1985 to present, in
the following positions: President,
2000, Senate Majority Leader,
1999-2000, Assistant Majority Whip,
1995-1998; served as Chairman of the
following Senate Committees: Tax and
Revenue, Senate Judiciary Standing,
Joint Executive Appropriations, and
Senate Rules; also Appropriations
Subcommittees for Higher Education
and for Public Education.
John C. Lucking Trustee President, Econ-Linc, an 3 Director, Sanu Resources
Phoenix, AZ since 2000 economic consulting firm, since
(05/20/43) 1995; formerly Consulting
Economist, Bank One Arizona and Chief
Economist, Valley National Bank;
member, Arizona's Joint Legislative
Budget Committee Economic Advisory
Panel and the Western Blue Chip
Economic Forecast Panel; Board,
Northern Arizona University
Foundation since 1997; member,
various historical, civic and
economic associations.
Other Individuals
Chairman Emeritus(6)
Lacy B. Herrmann Founder and Founder and Chairman of the N/A N/A
New York, NY Chairman Board, Aquila Management
(05/12/29) Emeritus since Corporation, the sponsoring
2005, Chairman organization and parent of the
of the Board Manager or Administrator and/or
of Trustees, Adviser or Sub-Adviser to each
1987-2005 fund of the Aquilasm Group of
Funds; Chairman of the Manager or
Administrator and/or Adviser or
Sub-Adviser to each since 2004;
Founder and Chairman Emeritus of
Hawaiian Tax-Free Trust, Pacific
Capital Cash Assets Trust,
Pacific Capital Tax-Free Cash
Assets Trust, Pacific Capital
U.S. Government Securities Cash
Assets Trust, Tax-Free Fund of
Colorado, Churchill Tax-Free Fund
of Kentucky, Narragansett Insured
Tax-Free Income Fund, Tax-Free
Trust of Arizona, Tax-Free Trust
of Oregon, Tax-Free Fund For Utah
and Aquila Rocky Mountain Equity
Fund; previously Chairman and a
Trustee of each fund in the
Aquilasm Group of Funds since its
establishment until 2004 or 2005;
Director of the Distributor
since 1981 and formerly Vice
President or Secretary,
1981-1998; Trustee Emeritus,
Brown University and the Hopkins
School; active in university,
school and charitable
organizations.
Officers
Charles E. Executive Vice Executive Vice President of all N/A N/A
Childs, III President funds in the Aquilasm Group of
New York, NY since 2003 Funds and the Manager and the
(04/01/57) Manager's parent since 2003;
formerly Senior Vice President,
corporate development, Vice
President, Assistant Vice
President and Associate of the
Manager's parent since 1987;
Senior Vice President, Vice
President or Assistant Vice
President of the Aquila
Money-Market Funds, 1988-2003.
Stephen J. Caridi Senior Vice Vice President of the N/A N/A
New York, NY (05/06/61) President Distributor since 1995; Vice
since 2004 President, Hawaiian Tax-Free
Trust since 1998; Senior Vice
President, Narragansett Insured
Tax-Free Income Fund since 1998,
Vice President 1996-1997; Senior
Vice President, Tax-Free Fund of
Colorado since 2004; Assistant
Vice President, Tax-Free Fund
For Utah since 1993.
Jerry G. McGrew Senior Vice President of the Distributor N/A N/A
New York, NY (06/18/44) President since 1998, Registered Principal
since 1997 since 1993, Senior Vice
President, 1997-1998 and Vice
President, 1993-1997; Senior
Vice President, Aquila Rocky
Mountain Equity Fund and five
Aquila Bond Funds since 1995;
Vice President, Churchill Cash
Reserves Trust, 1995-2001.
Emily T. Rae Vice President Vice President of Aquila Rocky N/A N/A
Aurora, CO since 2002 Mountain Equity Fund and
(03/02/74) Tax-Free Fund of Colorado since
2002; investment analyst, Colorado
State Bank and Trust, 2001-02;
financial analyst, J.P. Morgan,
2000-01, senior registered associate,
Kirkpatrick Pettis, 1998-2000.
Robert W. Anderson Chief Chief Compliance Officer of the N/A N/A
New York, NY (08/23/40) Compliance Fund, the Manager and the
Officer since Distributor since 2004,
2004 and Compliance Officer of the
Assistant Manager or its predecessor and
Secretary current parent since 1998 and
since 2000 Assistant Secretary of the
Aquilasm Group of Funds since
2000.
Joseph P. DiMaggio Chief Chief Financial Officer of the N/A N/A
New York, NY Financial Aquilasm Group of Funds since
(11/06/56) Officer since 2003 and Treasurer since 2000.
2003 and
Treasurer
since 2000
Edward M. W. Hines Secretary Partner, Hollyer Brady Barrett & N/A N/A
New York, NY since 1987 Hines LLP, legal counsel to the
(12/16/39) Fund, since 1989; Secretary of
the Aquilasm Group of Funds.
John M. Herndon Assistant Assistant Secretary of the N/A N/A
New York, NY (12/17/39) Secretary Aquilasm Group of Funds since
since 1995 1995 and Vice President of the
three Aquila Money-Market Funds since
1990; Vice President of the Manager
or its predecessor and current parent
since 1990.
Lori A. Vindigni Assistant Assistant Treasurer of the N/A N/A
New York, NY Treasurer since Aquilasm Group of Funds since
(11/02/66) 2000 2000; Assistant Vice President
of the Manager or its predecessor and
current parent since 1998; Fund
Accountant for the Aquilasm Group of
Funds, 1995-1998.
(1)The Fund's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free).
(2) The mailing address of each Trustee and officer is c/oTax-Free Fund of
Colorado, 380 Madison Avenue, New York, NY 10017.
(3) Each Trustee holds office until the next annual meeting of shareholders or
until his or her successor is elected and qualifies. The term of office of each
officer is one year.
(4) Ms. Herrmann is an interested person of the Fund as an officer of the Fund,
as a director, officer and shareholder of the Manager's corporate parent, as an
officer and Manager of the Manager, and as a shareholder and director of the
Distributor.
(5) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of
Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Bond Funds";
Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these
11 funds are called the "Aquilasm Group of Funds."
(6) The Chairman Emeritus may attend Board meetings but has no voting power.
Securities Holdings of the Nominees
(as of 12/31/05)
Name of Aggregate Dollar
Trustee Dollar Range of Range of Ownership
Ownership in Tax-Free Fund of in the Aquilasm
Colorado (1) Group of Funds (1)
-------- --------------
Interested Trustees
Diana P. Herrmann B E(2)
Non-interested Trustees
Anne J. Mills D D
Tucker H. Adams B B
Thomas A. Christopher C D
Gary C. Cornia C E
Lyle W. Hillyard B(3) C
John C. Lucking C E
(1) A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. over $100,000
(2) As of January 9, 2006
(3) As of April 26, 2006
None of the non-interested Trustees or their immediate family members
holds of record or beneficially any securities of the Manager or the
Distributor.
The Fund does not currently pay fees to any of the Fund's officers or
to Trustees affiliated with the Manager or the Sub-Adviser. For its fiscal year
ended December 31, 2005, the Fund paid a total of $136,144 in compensation and
reimbursement of expenses to the Trustees. No other compensation or remuneration
of any type, direct or contingent, was paid by the Fund to its Trustees.
The Fund is one of the 11 funds in the Aquilasm Group of Funds, which
consist of tax-free municipal bond funds, money-market funds and an equity fund.
The following table lists the compensation of all nominees for Trustee who
received compensation from the Fund or from other funds in the Aquilasm Group of
Funds during the Fund's fiscal year. None of such Trustees has any pension or
retirement benefits from the Fund or any of the other funds in the Aquilasm
Group of Funds.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee now
Name Fund Group of Funds serves
Anne J.
Mills $24,850 $82,750 4
Tucker H.
Adams $14,900 $38,175 2
Thomas A.
Christopher $17,900 $42,763 2
Gary C.
Cornia $15,625 $75,025 4
Lyle W.
Hillyard $ 0 $14,100 1
John C.
Lucking $15,400 $49,275 3
Class A Shares may be purchased without a sales charge by the Fund's
Trustees and officers.
The Fund's Manager is a wholly-owned subsidiary of Aquila Management
Corporation ("AMC"), founder of each fund in the Aquilasm Group of Funds. As of
March 31, 2006, these funds had aggregate assets of approximately $4.4 billion,
of which approximately $2.4 billion consisted of assets of the tax-free
municipal bond funds. AMC's address is the same as that of the Manager. AMC is
controlled by Mr. Lacy B. Herrmann, through share ownership directly, through
two trusts and by his wife. During the fiscal year ended December 31, 2005, the
Fund paid $1,262,228 in management fees.
During the fiscal year ended December 31, 2005, $111,347 was paid under
Part I of the Fund's Distribution Plan to Qualified Recipients with respect to
the Class A Shares, of which $3,626 was retained by the Distributor. With
respect to Class C Shares, during the same period, $106,790 was paid under Part
II of the Plan and $35,597 was paid under the Fund's Shareholder Services Plan.
Of these total payments of $142,387, the Distributor retained $29,550. All of
such payments were for compensation.
The Distributor currently handles the distribution of the shares of the
funds in the Aquilasm Group of Funds, including the Fund. Under the Distribution
Agreement, the Distributor is responsible for the payment of certain printing
and distribution costs relating to prospectuses and reports as well as the costs
of supplemental sales literature, advertising and other promotional activities.
The shares of the Distributor are owned 24% by Diana P. Herrmann, 72% by Mr.
Herrmann and other members of his immediate family and the balance by employees
of Aquila Investment Management LLC.
Other Information on Trustees
The Trustees have appointed a standing Audit Committee consisting of all of
the Trustees who are "independent" and are not "interested persons" of the Fund,
as that term is defined in the Investment Company Act of 1940. The members of
the Audit Committee are Anne J. Mills, Tucker Hart Adams, Thomas A. Christopher,
Gary C. Cornia, John C. Lucking and J. William Weeks. The Committee (i) selects
the Fund's independent registered public accounting firm (subject to shareholder
ratification); (ii) reviews the methods, scope and result of audits and the fees
charged; and (iii) reviews the adequacy of the Fund's internal accounting
procedures and controls. Selection of the independent registered public
accounting firm is also ratified by the Board of Trustees. The Audit Committee
held four meetings during the Fund's last fiscal year. The Board of Trustees has
adopted a written charter for the Audit Committee.
During the Fund's last fiscal year, the Board of Trustees held four
meetings. Each current Trustee was present for at least 75% of the total number
of Board meetings and Audit Committee meetings (if such Trustee was a member of
that committee).
The Fund's policy is that all Trustees who can do so attend the Annual
Meeting.
The Fund has a Nominating Committee, consisting of all of the
Independent Trustees. The Nominating Committee held no meetings during the last
fiscal year. The committee will consider nominees recommended by the
shareholders who may send recommendations to the committee in care of the
Manager at 380 Madison Avenue, New York, NY 10017. The charter of the Nominating
Committee is available on the Fund's website at www.aquilafunds.com.
Since the beginning of the Fund's most recently completed fiscal year,
no Trustee purchased or sold any shares of any class of the Manager, Sub-Adviser
or the parents or subsidiaries of either.
Vote Required
To be elected, each nominee must receive the affirmative votes of a
majority of the shares present.
Ratification or Rejection
of Selection of
Independent Registered Public Accounting Firm
(Proposal No. 2)
Tait, Weller & Baker LLP ("TWB") has been selected as the Fund's
independent registered public accounting firm for the fiscal year ending
December 31, 2006 by the Fund's Audit Committee. The selection has been ratified
by the Board of Trustees, including a majority of the Independent Trustees.
TWB has concentrated its accounting practice primarily in the mutual
fund industry for more than 40 years and is one of the industry's largest
providers. TWB was selected by the Audit Committee to perform the audit for the
fiscal year ended December 31, 2005.
KPMG LLP ("KPMG") had served as the Fund's independent registered
public accounting firm for all of the Fund's fiscal years from its inception
through its fiscal year ended December 31, 2004. KPMG resigned in mid-2005.
KPMG's reports on the Fund's financial statements, including those for the
Fund's two fiscal years ended December 31, 2003 and 2004, contained no adverse
opinion or disclaimer of opinion. No reports were qualified or modified as to
uncertainty, audit scope, or accounting principles. Since the Fund's inception
and including the last two fiscal years and the subsequent period through the
date of its resignation, there were no disagreements with KPMG on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, and there were no reportable events of the kinds required to
be disclosed under regulations applicable to proxy statements.
The following table represents fees for professional audit services
rendered by TWB for the audit of the Fund's annual financial statements for the
fiscal year ended December 31, 2005 and those of KPMG for the audit of the
Fund's annual financial statements for the fiscal year ended December 31, 2004,
and fees billed for other services rendered by TWB and KPMG.
2004 2005
Audit Fees: $22,110 $16,000
Audit related fees 0 0
------ ------
Audit and audit related fees 22,110 16,000
Tax fees (1) 8,945 3,000
All other fees 0 0
------ ------
Total fees $31,055 19,000
------ ------
(1) Tax fees consisted of fees for tax consultation and tax compliance services.
Neither TWB nor KPMG performed any services during the fiscal year for the
Fund's investment adviser (the Manager) or any entity controlling, controlled by
or under common control with the Manager that provides services to the Fund.
All audit and non-audit services performed by either TWB or KPMG on
behalf of the Fund or non-audit services performed on behalf of affiliated
entities within the investment company complex where such engagement relates
directly to the operations and financial reporting of the Fund are pre-approved
by the Audit Committee. Services to be considered between meetings of the
Committee are pre-approved by a selected member of the Committee in accordance
with applicable regulations and subject to additional procedures established by
the Committee.
The Audit Committee reviewed all services performed and fees charged by TWB
and accepted its representation that it was independent with respect to its
audit of the Fund's financial statements for the year ended December 31, 2005.
The Audit Committee has reviewed all services to be performed and fees to be
charged by TWB and in recommending appointment of TWB for the fiscal year ending
December 31, 2006 has accepted its representation that it is independent.
It is expected that representatives of TWB will not be present at the
meeting but representatives of the firm will be available should any matter
arise requiring their advice.
Vote Required
Approval requires the affirmative votes of a majority of the shares
present.
Shareholder Proposals
Under the proxy rules of the Securities and Exchange Commission,
shareholder proposals meeting tests contained in those rules may, under certain
conditions, be included in the Fund's proxy statement and proxy card for a
particular annual meeting. One of these conditions relates to the timely receipt
by the Fund of any such proposal. Under these rules, proposals submitted for
inclusion in the proxy material for the Fund's next annual meeting after the
meeting to which this Proxy Statement relates must be received by the Fund not
less than 120 days before the anniversary of the date of this Proxy Statement.
Accordingly, a shareholder proposal intended to be presented at the Fund's 2007
annual meeting must be received by the Fund by January 10, 2007 in order to be
included in the Fund's proxy material relating to that meeting. The date for
such submission could change, depending on the scheduled date for the next
annual meeting; if so, shareholders will be notified.
The fact that the Fund receives a shareholder proposal in a timely
manner does not insure its inclusion in the Fund's proxy material, since there
are other requirements in the proxy rules relating to such inclusion.
A shareholder wishing to provide notice of a proposal in the manner
prescribed by Rule 14a-4 (c)(1) under the Securities Exchange Act of 1934 must
submit written notice of the proposal to the Fund by March 26, 2007.
Other Business
The Fund does not know of any other matter which will come up for action at
the Meeting. If any other matter or matters properly come up for action at the
Meeting, including any adjournment of the Meeting, the proxy holders will vote
the shares which your proxy card, Internet or telephone vote entitles them to
vote, in accordance with their judgment on such matter or matters, except as
noted. That is, by signing and returning your proxy card or by voting by
telephone or the Internet, you give the proxy holders discretionary authority as
to any such matter or matters.
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Tax-Free Fund of Colorado
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on June 21, 2006
PROXY STATEMENT
<page>
TAX-FREE FUND OF COLORADO
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET VOTING
www.proxyvote.com/aquila
To vote your shares by the Internet, contact the Fund at
www.proxyvote.com/aquila. Follow the simple instructions at the website, using
this proxy card as a guide. If you vote by the Internet, you need not return the
proxy card by mail.
TELEPHONE VOTING
1-877-587-0761
To vote your shares by telephone, call toll free 877-587-0761. Follow the simple
recorded instructions using this proxy card as a guide. If you vote by phone,
you need not return the proxy card by mail.
VOTE BY MAIL
You can vote your shares by completing and returning this proxy card. Please
mark this proxy, date and sign it below and return it promptly in the
accompanying envelope which requires no postage if mailed in the United States.
TO VOTE: MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Tax-Free Fund of Colorado
1. Election of Trustees Nominees:
1) Tucker Hart Adams; 2) Thomas A. Christopher; 3) Gary C. Cornia; 4)Diana
P. Herrmann*; 5) Lyle W. Hillyard; 6) John C. Lucking; 7) Anne J. Mills;
* interested Trustee
For All Withhold All For All Except
[ ] [ ] [ ]
INSTRUCTION: To withhold authority to vote for one or more (but not all)
nominees, mark "FOR ALL EXCEPT" and write the nominee number(s) and/ or name(s)
on the line below.
- --------------------
[sentences below bolded in printed form]
Management recommends a vote FOR all nominees listed above and FOR the proposal
listed below. The shares represented hereby will be voted as indicated at right
or FOR if no choice is indicated.
2. Action on selection of Tait, Weller & Baker LLP as independent registered
public accounting firm. (Proposal No. 2 in Proxy Statement)
For Against Abstain
[ ] [ ] [ ]
As to any other matter said proxies shall vote in accordance with their best
judgment.
For address changes and/or comments, please check this box and write them on
the back where indicated. _
[_]
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS PROXY CARD. When signing
as a custodian, attorney, executor, administrator, trustee, guardian, etc.,
please sign your full title as such. Joint owners should each sign.
- ----------------------------------------- ----
Signature(s) (PLEASE SIGN WITHIN THE BOX) Date
Yes No
I plan to attend the annual meeting in Denver. [ ] [ ]
I plan to attend the outreach meeting in __ __
Grand Junction. [__] [__]
<page>
Aquilasm Group of Funds
Tax-Free Fund of Colorado
Proxy for Shareholder Meeting June 21, 2006
Proxy Solicited on Behalf of the Board of Trustees
The shareholder(s) of Tax-Free Fund of Colorado (the "Fund") whose
signature(s)appear(s) on the reverse does/do hereby appoint LACY B. HERRMANN,
DIANA P. HERRMANN and EDWARD M. W. HINES, or any of them, as attorneys and
proxies of the undersigned, with full power of substitution, to attend the
Annual Meeting of Shareholders of the Fund to be held on Wednesday, June 21,
2006 at the Hyatt Regency Denver Tech Center, 7800 E. Tufts Avenue, Denver, CO,
at 10:00 a.m. Mountain Daylight Time, and at all adjournments thereof, and
thereat to vote the shares held in the name of the undersigned on the record
date for said meeting on the matters listed on the reverse side. Such shares are
entitled to one vote for every dollar of net asset value represented by the
share balance printed on the reverse.
Please read the proxy statement prior to voting.
Annual Meeting Attendance - You are encouraged to attend the Annual Meeting of
Shareholders. If you can attend, please so indicate on the proxy card or e-mail
us at info@aquilafunds.com
Address Changes/Comments:--------------------------------
- ---------------------------------------------------------
(If you noted any Address Changes/Comments above, please mark corresponding box
on the reverse side.)
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED ON THE REVERSE SIDE.