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
Aquila
Group of Fundssm
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, 2007
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 Thursday, June 21, 2007
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, 2007 (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 26, 2007 (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 17, 2007
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 17,
2007.
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, $10.30;
Class C Shares, $10.28; and Class Y Shares, $10.33. 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, 18,881,916; Class C Shares, 1,086,440;
and Class Y Shares, 559,330.
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. 198,587 Class C Shares 18.28%
FBO its Customers 62,998 Class Y Shares 11.26%
4800 Deer Lake Drive East
Jacksonville, FL 32246
Alpine Trust & Asset
Management 236,319 Class Y Shares 42.25%
225 N. Fifth Street
Grand Junction, CO 81501
NFS LLC FEBO
AMG National Bank/Haws & Co. 83,787 Class Y Shares 14.98%
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 are presently
Trustees and were elected by the shareholders in June 2006. All nominees have
consented to serve if elected.
Nominees(1)
Number of
Positions Held Portfolios Other Directorships
with in Fund Held by Trustee
Fund and Complex (The position held is
Name, Address(2) Length of Principal Occupation(s) Overseen a directorship unless
and Date of Birth Service(3) During Past 5 Years by Trustee indicated otherwise.)
Interested
Trustee(4)
Diana P. Herrmann Trustee since Vice Chair and Chief Executive 12 ICI Mutual Insurance
New York, NY 2000 and Officer of Aquila Management Company
(02/25/58) President Corporation, Founder of the
since 1999 Aquila Group of Fundssm(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; Chair,
Vice Chair, President, Executive
Vice President or Senior Vice
President of funds in the Aquila
Group of Fundssm 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 the President, Loring Consulting 4 None
Castle Rock, CO Board of Company since 2001; Vice
(12/23/38) Trustees since President for Business
2005 and Management and CFO, Ottawa
Trustee since University, since 2006, Vice
1987 President for Business Affairs,
1992-2001; IBM Corporation,
1965-1991; currently active with
various charitable educational
and religious organizations.
Gary C. Cornia Vice Chair of Director, Romney Institute of 4 None
Orem, UT the Board of Public Management, Marriott
(06/24/48) Trustees since School of Management, Brigham
2006 and Young University, 2004 -
Trustee since present; Professor, Marriott
2000 School of Management, 1980 -
present; Past President, the
National Tax Association;
Fellow, Lincoln Institute of
Land Policy, 2002 - present;
Associate Dean, Marriott School
of Management, Brigham Young
University, 1991-2000; Utah
Governor's Tax Review Committee
since 1993.
Tucker Hart Adams Trustee since President, The Adams Group, 3 Director, Colorado Health
Colorado Springs, 1989 Inc., an economic consulting Facilities Authority
CO firm, since 1989; formerly Chief
(01/11/38) Economist, United Banks of
Colorado; currently or formerly
active with numerous
professional and community
organizations.
Thomas A. Trustee since Vice President of Robinson, 3 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.
Lyle W. Hillyard Trustee since President of the law firm of 2 None
Logan, UT 2006 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; currently serves as
Co-Chair, Joint Executive
Appropriations.
John C. Lucking Trustee since President, Econ-Linc, an 3 Director, Sanu Resources
Phoenix, AZ 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
Trustees 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 of Manager or Administrator and/or
Trustees, Adviser or Sub-Adviser to each
1987-2004 fund of the Aquila Group of
Fundssm; Chairman of the Manager
or Administrator and/or Adviser
or Sub-Adviser to each since
2004; Founder and Chairman
Emeritus of each fund in the
Aquila Group of Fundssm;
previously Chairman and a
Trustee of each fund in the
Aquila Group of Fundssm 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.
J. William Weeks Trustee Retired; limited partner in real N/A N/A
Palm Beach, FL Emeritus since estate partnerships Alex, Brown
(06/22/27) 2006 & Sons No. 1 and 2; formerly
Senior Vice President or Vice
President of the Aquila
Municipal Bond Funds; and Vice
President of the Distributor.
Officers
Charles E. Executive Vice Executive Vice President of all N/A N/A
Childs, III President funds in the Aquila Group of
New York, NY since 2003 Fundssm 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 since Distributor since 1995; Vice
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; Vice
President, Aquila Rocky Mountain
Equity Fund since 2006.
Jerry G. McGrew Senior Vice President of the Distributor N/A N/A
New York, NY (06/18/44) President since 1998, Registered
since 1997 Principal since 1993, Senior
Vice President, 1997-1998 and
Vice President, 1993-1997;
Senior Vice President, Aquila
Three Peaks High Income Fund,
Aquila Rocky Mountain Equity
Fund and five Aquila
Municipal Bond Funds; 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 and each of the other funds
Officer since in the Aquila Group of Fundssm,
2004 and the Manager and the Distributor
Assistant since 2004, Compliance Officer
Secretary of the Manager or its
since 2000 predecessor and current parent
1998-2004; Assistant Secretary
of the Aquila Group of Fundssm
since 2000.
Joseph P. DiMaggio Chief Chief Financial Officer of the N/A N/A
New York, NY Financial Aquila Group of Fundssm since
(11/06/56) Officer since 2003 and Treasurer since 2000.
2003 and
Treasurer
since 2000
Edward M. W. Hines Secretary Partner and then shareholder of N/A N/A
New York, NY since 1987 legal counsel to the Fund,
(12/16/39) Hollyer Brady Barrett & Hines
LLP since 1989 and thereafter
its successor, Butzel Long,
since 2007; Secretary of the
Aquila Group of Fundssm.
John M. Herndon Assistant Assistant Secretary of the N/A N/A
New York, NY (12/17/39) Secretary Aquila Group of Fundssm 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 Aquila Group of Fundssm since
(11/02/66) 2000 2000; Assistant Vice President
of the Manager or its
predecessor and current parent
since 1998; Fund Accountant for
the Aquila Group of Fundssm,
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. Ms. Herrmann is the daughter of Lacy B. Herrmann, the Founder and
Chairman Emeritus of the Fund.
(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 Municipal Bond
Funds"; Aquila Rocky Mountain Equity Fund is an equity fund; Aquila Three Peaks
High Income Fund is a high income corporate bond fund; considered together,
these 12 funds are called the "Aquila Group of Fundssm."
(6) A Trustee Emeritus may attend Board meetings but has no voting power.
Securities Holdings of the Nominees
(as of 12/31/06)
Name of Aggregate Dollar
Trustee Dollar Range of Range of Ownership
Ownership in Tax-Free Fund of in the Aquila
Colorado (1) Group of Fundssm (1)
Interested Trustees
Diana P. Herrmann C E
Non-interested Trustees
Tucker H. Adams B C
Thomas A. Christopher C E
Gary C. Cornia C E
Lyle W. Hillyard B C
John C. Lucking C C
Anne J. Mills D D
(1) A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. over $100,000
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, 2006, the Fund paid a total of $130,111 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 twelve funds in the Aquila Group of Fundssm, which
consist of three money-market funds, seven tax-free municipal bond funds, a high
income corporate bond fund 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 Aquila Group of Fundssm during the Fund's fiscal
year. None of such nominees has any pension or retirement benefits from the Fund
or any of the other funds in the Aquila Group of Fundssm.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquila Trustee now
Name Fund Group of Fundssm serves
Tucker H.
Adams $13,250 $46,000 3
Thomas A.
Christopher $15,667 $49,750 3
Gary C.
Cornia $13,417 $74,500 4
Lyle W.
Hillyard $ 6,750 $20,000 2
John C.
Lucking $13,250 $45,000 3
Anne J.
Mills $21,542 $81,750 4
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 Aquila Group of Fundssm. As of
April 30, 2007, these funds had aggregate assets of approximately $4.9 billion,
of which approximately $2.3 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, 2006, the
Fund paid $1,156,263 in management fees.
During the fiscal year ended December 31, 2006, $103,635 was paid under
Part I of the Fund's Distribution Plan to Qualified Recipients with respect to
the Class A Shares, of which $3,496 was retained by the Distributor. With
respect to Class C Shares, during the same period, $91,514 was paid under Part
II of the Plan and $30,504 was paid under the Fund's Shareholder Services Plan.
Of these total payments of $122,018, the Distributor retained $28,385. All of
such payments were for compensation.
The Distributor currently handles the distribution of the shares of the
funds in the Aquila Group of Fundssm, 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, Lyle W. Hillyard and John C. Lucking. 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
amended the charter for the Audit Committee, a copy of which is attached as an
appendix to this Proxy Statement.
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 meetings of committees of which such Trustee was a member.
The Fund's policy is that all Trustees who can do so attend the Annual
Meeting. At the last Annual Meeting all of the Trustees were present.
The Fund has a Nominating Committee, consisting of all of the Independent
Trustees. The Nominating Committee held two 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. Recommendations of nominees from shareholders are
not treated differently than proposals from other sources. The charter of the
Nominating Committee is available on the Fund's website at www.aquilafunds.com.
Shareholder communications intended for the Board of Trustees (or one or
more specified Trustees) may be sent to them in care of the Manager at the above
address.
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"), which is currently serving as the Fund's
independent registered public accounting firm, has been selected by the Fund's
Audit Committee and ratified by the Board of Trustees, including a majority of
the non-"interested" Trustees, as the Fund's independent registered public
accounting firm for the fiscal year ending December 31, 2007. Such selection is
submitted to the shareholders for ratification or rejection.
The following table represents fees for professional audit services
rendered by TWB for the audit of the Fund's annual financial statements, and
fees billed for other services rendered by TWB, for the fiscal years ended
December 31, 2005 and 2006.
2005 2006
Audit Fees $16,000 $16,000
Audit related fees 0 0
Audit and audit related fees $16,000 $16,000
Tax fees (1) 3,000 3,000
All other fees 0 0
Total $19,000 $19,000
(1) Tax fees consisted of fees for tax consultation and tax compliance services.
TWB did not perform any services during the last 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 TWB 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 has reviewed all services performed and fees charged by
TWB and has accepted TWB's representation that it is independent in recommending
re-appointment of it for the fiscal year ending December 31, 2007.
TWB has no direct or indirect financial interest in the Fund, the Manager
or the Sub-Adviser. It is expected that representatives of TWB will not be
present at the meeting but will be available should any matter arise requiring
their presence.
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 2008
annual meeting must be received by the Fund by January 17, 2008 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 April 1, 2008.
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.
APPENDIX
TAX-FREE FUND OF COLORADO
AUDIT COMMITTEE CHARTER
September 6, 2003
Amended March 12, 2006
1. The Audit Committee shall be composed entirely of independent Trustees.
2. The purposes of the Audit Committee are:
(a) to oversee the Fund's accounting and financial reporting policies.
(b) to oversee the quality and objectivity of the Fund's financial
statements and the independent audit thereof; and
(c) to act as a liaison between the Fund's independent auditors and the
full Board of Trustees.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, and the auditor's responsibility to plan and carry out a proper audit
and such other functions as deemed appropriate by the Audit Committee.
3. To carry out its purposes, the Audit Committee shall have the following
duties and powers:
(a) to select, retain or terminate the auditors and, in connection
therewith, to evaluate the independence of the auditors, including
whether the auditors provide any consulting services to the manager,
and to receive the auditors' specific representations as to their
independence;
(b) to meet with the Fund's independent auditors, including private
meetings, as necessary (i) to review and approve the audit plan,
detailing the arrangements for and scope of the annual audit, any
special audits and any other services deemed appropriate; (ii) to
discuss any matters of concern relating to the Fund's financial
statements, including any adjustments to such statements recommended
by the auditors, or other results of said audit(s); (iii) to consider
the auditors' comments with respect to the Fund's financial policies,
procedures and internal accounting controls and management's responses
thereto; and (iv) to review the form of opinion the auditors propose
to render to the Board and shareholders;
(c) to consider the effect upon the Fund of any changes in accounting
principles or practices proposed by management or the auditors;
(d) to review and approve the fees charged by the auditors for audit and
non-audit services;
(e) to investigate improprieties or suspected improprieties in Fund
financial operations;
(f) to establish a complaint mechanism about accounting, internal
accounting controls or auditing matters, including a procedure to
receive confidential, anonymous submissions regarding questionable
accounting and audit matters;
(g) to establish procedures if it believes appropriate for delegation of
pre-approvals of services by auditors to a member or members of the
Committee; and
(h) to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other matters
as the Committee may deem necessary or appropriate.
4. The Committee shall meet on a periodic basis and is empowered to hold special
meetings as circumstances require.
5. The Committee shall periodically meet with the Chief Financial Officer and/or
the Treasurer of the Fund and with internal auditors, if any, for the management
company.
6. The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including the authority to retain special counsel and
other experts or consultants at the expense of the Fund.
7. The Committee shall review this Charter regularly and recommend any changes
to the full Board of Trustees.
IMPORTANT NOTICE
PLEASE READ IMMEDIATELY
Tax-Free Fund of Colorado
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on June 21, 2007
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 1-877-587-0761. 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 __ __
Westminster. [__] [__]
<page>
Aquila Group of Fundssm
Tax-Free Fund of Colorado
Proxy for Shareholder Meeting June 21, 2007
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 DIANA P. HERRMANN,
CHARLES E. CHILDS, III 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 Thursday, June 21, 2007
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.