UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-03907 --------- The Empire Builder Tax Free Bond Fund ------------------------------------- (Exact name of registrant as specified in charter) 3435 Stelzer Road, Columbus, OH 43219 ------------------------------------- (Address of principal executive offices) (Zip code) Citi Fund Services, 3435 Stelzer Road, Columbus, OH 43219 --------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (800) 847-5886 -------------- Date of fiscal year end: February 28, 2009 ----------------- Date of reporting period: August 31, 2008 --------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. Item 1. Reports to Stockholders. Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1). [LOGO] EMPIRE BUILDER --------------------- 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 Dear Shareholder, We are pleased to present The Empire Builder Tax-Free Bond Fund Semi-Annual Report for the period ended August 31, 2008. From January 1 through August 31, 2008, the Builder class was up 1.55%, and the Premier class was up 1.66%. The weakening housing and subprime markets continue to negatively impact the stock market and all fixed income markets, including municipals. Since last year, the Federal Reserve Board has cut the Federal Funds Rate seven times - it is currently at 1.50%. The Fund has kept its average life shorter than normal to protect against rising interest rates in the municipal market, as preservation of capital is our number one concern. We will continue to focus on maintaining the high credit quality of the bonds in the Fund. When the right opportunities present themselves, we will continue to extend the duration of the portfolio cautiously to enhance returns while keeping principal in-tact. In our opinion, The Empire Builder Tax-Free Bond Fund is well positioned for the next year. The no-load structure continues to offer value to the shareholder because there is no charge to purchase units. We also recommend our automatic investment program (also known as dollar cost averaging*) that allows you to follow a disciplined investment plan. Please call the customer service desk at 1-800-847-5886 for information on how to participate. We look forward to helping you meet your investment needs. Sincerely, /s/ Seth M. Glickenhaus Seth M. Glickenhaus President - ---------- * Dollar cost averaging does not insure a profit and does not protect against loss in declining markets. An investor should consider his or her financial ability to continue making additional investments through periods of low share price levels. The Fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax (AMT). Past performance is no guarantee of future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and net asset value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information for the most recent month end, please call 1-800-847-5886. For more complete information on The Empire Builder Tax Free Bond Fund, you may request additional prospectuses by calling 1-800-847-5886. You should consider the fund's investment objectives, risk, charges and expenses carefully before you invest. Information about these and other important information is in the fund's prospectus which you should read carefully before investing. Not FDIC insured. May lose value. No bank guarantee. Expense Examples (Unaudited): As a shareholder of The Empire Builder Tax Free Bond Fund, you incur two types of costs: (1) transaction costs, exchange fees and (2) ongoing costs, including management fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in The Empire Builder Tax Free Bond Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2008 through August 31, 2008. Actual Example The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Beginning Ending Expenses Paid Expense Ratio Account Value Account Value During Period* During Period 3/1/08 8/31/08 3/1/08 - 8/31/08 3/1/08 - 8/31/08 ------------- ------------- ---------------- ---------------- The Empire Builder Tax Free Bond Fund Builder Class $1,000.00 $1,034.80 $6.39 1.25% Premier Class 1,000.00 1,035.70 5.48 1.07% Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on The Empire Builder Tax Free Bond Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Beginning Ending Expenses Paid Expense Ratio Account Value Account Value During Period* During Period 3/1/08 8/31/08 3/1/08 - 8/31/08 3/1/08 - 8/31/08 ------------- ------------- ---------------- ---------------- The Empire Builder Tax Free Bond Fund Builder Class $1,000.00 $1,018.85 $6.34 1.25% Premier Class 1,000.00 1,019.76 5.43 1.07% - ---------- * Expenses are equal to the average account value times the Fund's annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the on-half year period). 2 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2008 (Unaudited) Principal Fair Value Credit Ratings** Amount (Note 2) - ---------------- ---------- ----------- Municipal Securities (92.7%) New York City (19.3%) New York City, GO Series G AAA/AA 5.625%, 8/1/2014, Callable 8/01/2012 @ 100, (MBIA/IBC)...................... $2,005,000 $ 2,173,019 Series A AAA/AA 5.250%, 11/1/2015, (MBIA)................................................... 5,000,000 5,324,150 Series B AAA/AA 5.250%, 8/1/2017, Continuous Callable 10/20/2008 @ 100.5, (AMBAC)..................................................................... 130,000 130,830 AA3/AA 5.125%, 8/1/2019, Callable 8/1/2010 @ 101, (FGIC)........................... 2,000,000 2,077,400 New York City, Health & Hospitals Corporation, Health System Revenue, Series A AAA/AAA 5.500%, 2/15/2018, Callable 2/15/2012 @ 100, (FSA).......................... 1,000,000 1,060,730 A1/A+ 5.500%, 2/15/2019, Callable 2/15/2018 @ 100, (General Obligation of Corp.)............................................... 1,000,000 1,073,850 AA1/AAA New York City, Transitional Finance Authority, Series B, 4.750%, 11/15/2015, Continuous Callable 10/20/2008 @ 101.................... 5,000,000 5,054,700 ----------- Total New York City............................................................ 16,894,679 ----------- New York State Agencies (46.5%) New York State Dormitory Authority (46.5%) Augustana Lutheran Home for the Aged, Series A AAA/AA 5.500%, 8/1/2020, Callable 8/1/2010 @ 101, (FHA/MBIA)....................... 835,000 869,101 AAA/AA 5.500%, 8/1/2030, Callable 8/1/2010 @ 101, (FHA/MBIA)....................... 750,000 775,440 Fordham University, Series B AAA/NR 5.000%, 7/1/2033, Callable 7/01/2018 @ 100, (Assured GTY)................... 500,000 504,995 AAA/NR 5.000%, 7/1/2038, Callable 7/01/2018 @ 100, (Assured GTY)................... 250,000 251,140 AAA/AA Mental Health Services Facilities Improvement, Series A, 5.000%, 2/15/2019, Callable 2/15/2015 @ 100, (AMBAC)........................ 2,500,000 2,613,325 Montefiore Medical Center AA2/AAA 5.000%, 8/1/2022, Callable 2/1/2018 @ 100, (FHA)............................ 1,000,000 1,041,080 AA2/AAA 5.000%, 8/1/2024, Callable 2/1/2018 @ 100, (FHA)............................ 1,000,000 1,029,460 Municipal Health Facilities A1/AA- 5.000%, 1/15/2018, Non Callable............................................. 2,000,000 2,151,600 A1/AA- 4.750%, 1/15/2030, Callable 1/15/2018 @ 100................................. 250,000 244,730 AAA/AA New York Medical College, 5.250%, 7/1/2013, Continuous Callable 10/20/2008 @ 101, (MBIA)...................................................................... 1,015,000 1,026,307 AAA/AA New York University, Series 2, 5.500%, 7/1/2018, Callable 7/1/2011 @ 100, (AMBAC).......................... 500,000 527,200 Park Ridge Housing, Inc. AA3/AAA 6.375%, 8/1/2020, Callable 8/1/2010 @ 101, (AMBAC/FNMA)..................... 1,000,000 1,059,660 AA3/AAA 6.500%, 8/1/2025, Callable 8/1/2010 @ 101, (AMBAC/FNMA)..................... 1,470,000 1,559,655 AA1 Residential Institution for Children, 4.500%, 6/1/2026, Callable 6/01/2018 @ 100, (State of New York Mortgage Agency)......................................... 500,000 481,030 The accompanying notes are an integral part of the financial statements. 3 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2008 -- continued (Unaudited) Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) - ---------------- ------------------------------- ---------- ----------- New York State Agencies -- continued Rochester Institute of Technology, Series A AAA/NR 5.250%, 7/1/2016, Callable 7/1/2012 @ 100, (AMBAC).......................... $2,045,000 $ 2,175,001 AAA/NR 5.250%, 7/1/2017, Callable 7/1/2012 @ 100, (AMBAC).......................... 2,155,000 2,284,063 AAA/AA School Districts Financing Program, Series D, 5.250%, 10/1/2023, Callable 10/01/2012 @ 100, (MBIA State Aid Withholding)................................................ 5,755,000 6,047,124 AAA/AA Special Acts School Districts Program, 6.000%, 7/1/2019, Callable 10/06/2008 @ 100, (MBIA)......................... 3,540,000 3,548,213 St. Lawrence - Lewis BOCES AAA/AAA 4.000%, 8/15/2018, Callable 8/15/2017 @ 100, (FSA State Aid Withholding)................................................. 100,000 102,189 AAA/AAA 4.125%, 8/15/2020, Callable 8/15/2017 @ 100, (FSA State Aid Withholding)................................................. 110,000 110,448 AAA/AAA 4.250%, 8/15/2021, Callable 8/15/2017 @ 100, (FSA State Aid Withholding)................................................. 100,000 100,146 AA- State Supported Debt, City University Construction 5th Generation Resolution, Series A, 5.000%, 7/1/2019, Callable 7/01/2018 @ 100........................ 3,000,000 3,164,190 NR/AA- State Supported Debt, Department of Education, Series A, 5.000%, 7/1/2018, Callable 7/1/2016 @ 100......................... 1,000,000 1,069,340 A1/A+ University of Rochester, Series A1, 5.000%, 7/1/2019, Callable 1/1/2017 @ 100........................ 2,305,000 2,451,621 Upstate Community Colleges Series B A1/A 5.250%, 7/1/2015, Callable 7/1/2014 @ 100, (FGIC)........................... 3,140,000 3,437,546 Series A AAA/AAA 6.000%, 7/1/2019, Prerefunded 7/1/2010 @ 101, (FSA)......................... 1,000,000 1,082,260 AAA/AAA 6.000%, 7/1/2020, Prerefunded 7/1/2010 @ 101, (FSA)......................... 845,000 914,510 ----------- Total New York State Dormitory Authority....................................... 40,621,374 ----------- Other New York State Agencies (3.0%) AAA/AAA New York State Environmental Facilities Corp., State Water Pollution Control Revenue, Revolving Fund, Pooled Loan, 5.900%, 1/15/2018, Continuous Callable 10/20/2008 @ 100, (POL CTL-SRF)............................................................... 725,000 726,407 AA2/AA- New York State Power Authority, 5.000%, 11/15/2008, Non Callable............................................ 950,000 956,308 A1/AA- New York State Urban Development Corp., Empire State Development, University Facilities Grants, 6.000%, 1/1/2009, Non Callable.............................................. 905,000 917,018 ----------- Total Other New York State Agencies............................................ 2,599,733 ----------- Other New York State Bonds (23.9%) A3/NR Albany Housing Authority, Limited Obligation, 6.250%, 10/1/2012, Continuous Callable 10/20/2008 @ 100..................... 1,000,000 1,001,920 The accompanying notes are an integral part of the financial statements. 4 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2008 -- continued (Unaudited) Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) - ---------------- ------------------------------- ---------- ----------- Other New York State Bonds -- continued Buffalo, General Obligation Series B AAA/AAA 3.000%, 2/1/2009, Non Callable, (Assured GTY State Aid Withholding)......................................... $ 595,000 $ 596,720 Series A AAA/AAA 4.000%, 2/1/2009, Non Callable, (Assured GTY)............................... 1,455,000 1,465,069 Corning, City School District, GO AAA/NR 5.000%, 6/15/2012, Non Callable, (FSA)...................................... 1,000,000 1,082,470 AAA/NR 5.000%, 6/15/2013, Callable 6/15/2012 @ 100, (FSA).......................... 970,000 1,046,737 AAA/NR 5.000%, 6/15/2014, Callable 6/15/2012 @ 100, (FSA).......................... 600,000 641,676 AAA/AAA Erie County, IDA School Facility, City School District Buffalo Project, Series A, 5.750%, 5/1/2025, Callable 5/1/2017 @ 100, (FSA).................. 5,000,000 5,477,550 Evans, General Obligation AAA/AA 6.800%, 4/15/2012, Non Callable, (AMBAC).................................... 225,000 255,969 AAA/AA 6.800%, 4/15/2013, Non Callable, (AMBAC).................................... 225,000 261,049 A2/NR Fayetteville Manlius, Central School District, GO, 5.000%, 6/15/2016, Callable 6/15/2012 @ 101, (FGIC)......................... 375,000 397,204 Ilion, Central School District, GO, Series B A2/NR 5.500%, 6/15/2015, Callable 6/15/2012 @ 101, (FGIC)......................... 550,000 597,096 A2/NR 5.500%, 6/15/2016, Callable 6/15/2012 @ 101, (FGIC)......................... 500,000 540,220 AAA/AA Mount Sinai, Union Free School District, GO, 6.200%, 2/15/2012, Non Callable, (AMBAC).................................... 1,065,000 1,185,036 North Hempstead, GO, Series B AA2/A 6.375%, 4/1/2009, Non Callable, (FGIC)...................................... 570,000 585,242 AA2/A 6.400%, 4/1/2010, Non Callable, (FGIC)...................................... 560,000 597,374 AAA/AAA Oneida County, IDA Civic Facilities, Mohawk Valley Network, St. Luke's Memorial Hospital, 5.000%, 1/1/2013, Callable 1/1/2010 @ 101, (FSA)............................ 2,000,000 2,023,600 AAA/NR Oyster Bay, GO, 5.000%, 3/15/2011, Non Callable, (FSA)...................................... 430,000 457,507 AAA/NR Southern Cayuga, Central School District, GO, 5.000%, 5/15/2014, Callable 5/15/2012 @ 100, (FSA).......................... 400,000 427,928 Suffolk County, General Obligation, Series D AA3/AA 5.000%, 11/1/2015, Callable 11/1/2008 @ 101, (FGIC)......................... 1,125,000 1,139,209 AA3/AA 5.000%, 11/1/2016, Callable 11/1/2008 @ 101, (FGIC)......................... 1,110,000 1,123,664 ----------- Total Other New York State Bonds.................................................... 20,903,240 ----------- Total Municipal Securities (Cost $79,758,650)....................................... 81,019,026 ----------- Short Term Investment (0.0%)(a) Dreyfus New York Municipal Cash Management Fund..................................... 10,000 10,000 ----------- Total Investments (b)(Cost $79,768,650) -- 92.7%.................................... 81,029,026 Net Other Assets (Liabilities) -- 7.3%.............................................. 6,404,844 ----------- NET ASSETS -- 100.0%................................................................ $87,433,870 =========== - ---------- (a) Variable or Floating Rate Security. (b) See notes to financial statements for tax unrealized appreciation/depreciation of securities. The accompanying notes are an integral part of the financial statements. 5 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2008 -- continued (Unaudited) AMBAC Insured as to principal and interest by the American Municipal Bond Insurance Corp. BOCES Board of Cooperative Educational Services. FGIC Insured as to principal and interest by the Financial Guaranty Insurance Co. FHA Insured as to principal and interest by the Federal Housing Administration. FNMA Insured as to principal and interest by the Federal National Mortgage Association. FSA Insured as to principal and interest by Federal Security Assurance. GO General Obligation GTY Guarantee IBC Insured Bond Certificate IDA Industrial Development Agency MBIA Insured as to principal and interest by the Municipal Bond Insurance Association. POL CTL-SRF Insured as to principal and interest by the Pollution Control State Revenue Fund. ** Credit Ratings given by Moody's Investor Service, Inc. and Standard & Poor's Corp. (Unaudited) Standard & Moody's Poor's - ------- ---------- Aaa AAA Instrument judged to be of the highest quality and carrying the smallest amount of investment risk. Aa AA Instrument judged to be of high quality by all standards. A A Instrument judged to be of adequate quality by all standards. NR NR Not Rated. In the opinion of the Investment Advisor, instrument judged to be of comparable investment quality to rated securities which may be purchased by the fund. For items possessing the strongest investment attributes of their category, Moody's gives that letter rating followed by a number. The Standard & Poor's by ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. Summary of Portfolio Holdings (Unaudited): Percent of The Empire Builder Tax Free Bond Fund Net Assets - ------------------------------------- ---------- New York State Agencies............................................ 46.5% Other New York State Bonds......................................... 23.9% New York City...................................................... 19.3% Other New York State Agencies...................................... 3.0% ---- 92.7% ==== The accompanying notes are an integral part of the financial statements. 6 THE EMPIRE BUILDER TAX FREE BOND FUND Statement of Assets and Liabilities August 31, 2008 (Unaudited) Assets: Investments in securities, at fair value (cost $79,768,650) (Note 2) ................................... $81,029,026 Cash ................................................................................................... 5,600,077 Interest and dividends receivable ...................................................................... 898,987 Receivable for capital shares issued ................................................................... 85 Prepaid expenses and other assets ...................................................................... 50,771 ----------- Total Assets ........................................................................................... 87,578,946 ----------- Liabilities: Dividends payable ...................................................................................... 18,688 Payable for capital shares redeemed .................................................................... 3,028 Advisory fees payable (Note 4) ......................................................................... 29,587 Administration fees payable (Note 4) ................................................................... 19,045 Transfer agency fees payable (Note 4) .................................................................. 14,435 Fund accounting fees payable ........................................................................... 6,452 Custodian fees payable ................................................................................. 1,233 Compliance services fees payable (Note 4) .............................................................. 8,266 Trustees' fees payable ................................................................................. 20,469 Other accrued expenses ................................................................................. 23,873 ----------- Total Liabilities ...................................................................................... 145,076 ----------- Net Assets ................................................................................................ $87,433,870 =========== Net Assets: Capital ................................................................................................ $85,888,693 Accumulated undistributed net investment income ........................................................ 19,065 Accumulated undistributed net realized gains from investments .......................................... 265,736 Net unrealized appreciation of investments ............................................................. 1,260,376 ----------- Net Assets ................................................................................................ $87,433,870 =========== Builder Class: Net Assets ............................................................................................. $41,213,357 Shares of Beneficial Interest Outstanding (unlimited shares authorized) ................................ 2,379,765 ----------- Net Asset Value, Offering and Redemption Price per share ............................................... $ 17.32 =========== Premier Class: Net Assets ............................................................................................. $46,220,513 Shares of Beneficial Interest Outstanding (unlimited shares authorized) ................................ 2,668,318 ----------- Net Asset Value, Offering and Redemption Price per share ............................................... $ 17.32 =========== The accompanying notes are an integral part of the financial statements. 7 THE EMPIRE BUILDER TAX FREE BOND FUND Statement of Operations For the Six Months Ended August 31, 2008 (Unaudited) Investment Income: Interest ................................................................................................ $ 1,752,733 Dividend ................................................................................................ 11,445 ----------- Total Investment Income ................................................................................. 1,764,178 Expenses: Advisory fees (Note 4) .................................................................................. 175,990 Administration fees (Note 4) ............................................................................ 103,173 Audit ................................................................................................... 18,188 Fund accounting fees (Note 4) ........................................................................... 31,407 Legal ................................................................................................... 18,408 Transfer agency fees - Builder Class (Note 4) ........................................................... 54,456 Transfer agency fees - Premier Class (Note 4) ........................................................... 19,448 Custody fees ............................................................................................ 9,448 Trustees' fees (Note 4) ................................................................................. 24,984 Compliance services fee (Note 4) ........................................................................ 34,573 Other fees .............................................................................................. 30,590 ----------- Total Expenses ....................................................................................... 520,665 Less: Custody fee credit ............................................................................. (9,763) ----------- Total Net Expenses ...................................................................................... 510,902 ----------- Net Investment Income ...................................................................................... 1,253,276 ----------- Realized/Unrealized Gains on Investments (Notes 2 and 3) Net realized gains from investment transactions ......................................................... 280,282 Change in unrealized appreciation/depreciation from investment transactions ............................. 1,514,781 ----------- Net realized/unrealized gains from investments .......................................................... 1,795,063 ----------- Change in net assets resulting from operations ............................................................. $ 3,048,339 =========== The accompanying notes are an integral part of the financial statements. 8 THE EMPIRE BUILDER TAX FREE BOND FUND Statements of Changes in Net Assets Six Months Ended Year Ended August 31, 2008 February 29, 2008 ---------------- ----------------- (Unaudited) From Investment Activities: Operations: Net investment income ........................................................... $ 1,253,276 $ 2,884,393 Net realized gains (losses) from investment transactions ........................ 280,282 (43,534) Change in unrealized appreciation/depreciation from investment transactions ...................................................... 1,514,781 (2,926,610) ------------ ------------ Change in net assets resulting from operations .................................. 3,048,339 (85,751) ------------ ------------ Distributions to Shareholders from: Net investment income: Builder Class ................................................................ (570,419) (1,359,940) Premier Class ................................................................ (677,489) (1,597,660) Net realized gains from investment transactions: Builder Class ................................................................ -- (222,248) Premier Class ................................................................ -- (245,249) ------------ ------------ Total distributions .......................................................... (1,247,908) (3,425,097) ------------ ------------ Change in net assets from capital share transactions ............................... (950,115) (4,768,154) ------------ ------------ Change in net assets ......................................................... 850,316 (8,279,002) Net Assets: Beginning of period .......................................................... 86,583,554 94,862,556 ------------ ------------ End of period ................................................................ $ 87,433,870 $ 86,583,554 ============ ============ Accumulated undistributed net investment income .............................. $ 19,065 $ 13,697 ============ ============ Capital Transactions: Builder Class Proceeds from shares issued .................................................. $ 703,908 $ 826,510 Dividends reinvested ......................................................... 520,240 1,446,247 Value of shares redeemed ..................................................... (2,204,835) (4,269,790) ------------ ------------ Total Builder Class ....................................................... (980,687) (1,997,033) ------------ ------------ Premier Class Proceeds from shares issued .................................................. 460,594 735,984 Dividends reinvested ......................................................... 563,041 1,531,526 Value of shares redeemed ..................................................... (993,063) (5,038,631) ------------ ------------ Total Premier Class ....................................................... 30,572 (2,771,121) ------------ ------------ Change in net assets from capital share transactions ............................... $ (950,115) $ (4,768,154) ============ ============ Share Transactions: Builder Class Issued ....................................................................... 40,774 47,542 Reinvested ................................................................... 30,126 83,198 Redeemed ..................................................................... (127,643) (245,071) ------------ ------------ Total Builder Class Shares ................................................ (56,743) (114,331) ------------ ------------ Premier Class Issued ....................................................................... 26,622 42,377 Reinvested ................................................................... 32,606 88,105 Redeemed ..................................................................... (57,490) (288,649) ------------ ------------ Total Premier Class Shares ................................................ 1,738 (158,167) ------------ ------------ The accompanying notes are an integral part of the financial statements. 9 THE EMPIRE BUILDER TAX FREE BOND FUND Financial Highlights For a share of beneficial interest outstanding throughout each period Six Months Ended August 31, 2008 Year Ended Year Ended (Unaudited) February 29, 2008 February 28, 2007 ---------------------- --------------------- ----------------------- Builder Premier Builder Premier Builder Premier Class Class Class Class Class Class ------- ------- ------- ------- ------- ------- Net Asset Value, Beginning of Period .......... $16.97 $16.97 $17.64 $17.65 $17.66 $17.66 ------ ------ ------ ------ ------ ------ Investment Activities: Net investment income ........ 0.24 0.25 0.54 0.57 0.56 0.59 Net realized/unrealized gains/(losses) on investments ............ 0.35 0.35 (0.57) (0.58) 0.04 0.05 ------ ------ ------ ------ ------ ------ Total from Investment Operations ................ 0.59 0.60 (0.03) (0.01) 0.60 0.64 ------ ------ ------ ------ ------ ------ Distributions: Net investment income ........ (0.24) (0.25) (0.55) (0.58) (0.56) (0.59) Net realized capital gains ... -- -- (0.09) (0.09) (0.06) (0.06) ------ ------ ------ ------ ------ ------ Total distributions .......... (0.24) (0.25) (0.64) (0.67) (0.62) (0.65) ------ ------ ------ ------ ------ ------ Net Asset Value, End of Period ................ $17.32 $17.32 $16.97 $16.97 $17.64 $17.65 ====== ====== ====== ====== ====== ====== Total Return (a) ................ 3.48% 3.57% (0.20)% (0.08)% 3.44% 3.70% Ratios/Supplementary Data: Net Assets, End of Period (in thousands) ............ $41,213 $46,221 $41,336 $45,248 $45,010 $49,853 Ratios of Net Investment Income to Average Net Assets (b) ................ 2.75% 2.92% 3.07% 3.25% 3.19% 3.39% Ratios of Net Expenses to Average Net Assets (b) (c) ............ 1.25% 1.07% 1.30% 1.12% 1.28% 1.08% Ratios of Gross Expenses to Average Net Assets* (b) ............... 1.27% 1.10% 1.33% 1.14% 1.30% 1.10% Portfolio Turnover Rate (a) (d) .............. 39.73% 39.73% 69.87% 69.87% 134.56% 134.56% Year Ended Year Ended Year Ended February 28, 2006 February 28, 2005 February 29, 2004 ---------------------- --------------------- ----------------------- Builder Premier Builder Premier Builder Premier Class Class Class Class Class Class ------- ------- ------- ------- ------- ------- Net Asset Value, Beginning of Period .......... $17.77 $17.77 $18.12 $18.13 $18.08 $18.08 ------ ------ ------ ------ ------ ------ Investment Activities: Net investment income ........ 0.46 0.50 0.41 0.45 0.51 0.55 Net realized/unrealized gains/(losses) on investments ............ (0.10) (0.10) (0.22) (0.23) 0.22 0.23 ------ ------ ------ ------ ------ ------ Total from Investment Operations ..... 0.36 0.40 0.19 0.22 0.73 0.78 ------ ------ ------ ------ ------ ------ Distributions: Net investment income ........ (0.46) (0.50) (0.41) (0.45) (0.51) (0.55) Net realized capital gains ... (0.01) (0.01) (0.13) (0.13) (0.18) (0.18) ------ ------ ------ ------ ------ ------ Total distributions .......... (0.47) (0.51) (0.54) (0.58) (0.69) (0.73) ------ ------ ------ ------ ------ ------ Net Asset Value, End of Period ................ $17.66 $17.66 $17.77 $17.77 $18.12 $18.13 ====== ====== ====== ====== ====== ====== Total Return (a) ................ 2.07% 2.26% 1.11% 1.29% 4.16% 4.40% Ratios/Supplementary Data: Net Assets, End of Period (in thousands) ............ $48,323 $53,540 $52,222 $56,313 $55,504 $61,048 Ratios of Net Investment Income to Average Net Assets (b) ................ 2.67% 2.86% 2.32% 2.55% 2.85% 3.03% Ratios of Net Expenses to Average Net Assets (b) (c) ............ 1.20% 1.01% 1.18% 0.95% 1.04% 0.86% Ratios of Gross Expenses to Average Net Assets* (b) ............... 1.21% 1.02% 1.22% 0.99% 1.05% 0.87% Portfolio Turnover Rate (a) (d) .............. 52.14% 52.14% 100.38% 100.38% 202.77% 202.77% - ---------- * The ratio does not include a reduction of expenses for custodian fee credits of cash balances maintained with the custodian or amounts reimbursed by the Administrator. (a) Not annualized for periods less than one year. (b) Annualized for periods less than one year. (c) Ratio as disclosed reflects the impact of custody fee credits from the custodian. Had the custody credits not been included the impact would have been to increase the ratios by 0.02%, 0.03%, 0.02%, 0.01%, 0.01%, and 0.01%, for the six months ended August 31, 2008 and the years 2008, 2007, 2006, 2005 and 2004, respectively. (d) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. The accompanying notes are an integral part of the financial statements. 10 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements August 31, 2008 (Unaudited) 1. Organization: The Empire Builder Tax Free Bond Fund (the "Fund") was established as a Massachusetts business trust by an Agreement and Declaration of Trust dated September 30, 1983. The Fund is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, non-diversified investment company. The Fund has an unlimited number of shares authorized with no par value. The Fund offers two classes of shares; the Builder Class and the Premier Class. Each class of shares outstanding bears the same dividend, liquidation and other rights and conditions, except that the Builder Class shares and the Premier Class shares bear separate transfer agency expenses. Each class of shares has exclusive voting rights with respect to matters affecting only that class. Under the Fund's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund may enter into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund. 2. Significant Accounting Policies: The following is a summary of significant accounting policies adhered to by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Use of Estimates Estimates and assumptions are required to be made regarding amounts of income and expenses, assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ from these amounts. Security Valuation Tax-exempt securities are valued at their fair value as determined by an independent pricing service approved by the Fund's Board of Trustees. The pricing service uses information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining fair value. The methods used by the pricing service and the quality of valuations so established are reviewed by Glickenhaus & Co. (the "Adviser"). Securities for which quotations are not readily available are stated at fair value using procedures approved by the Trustees of the Fund. Short-term debt securities having remaining maturities of sixty (60) days or less are stated at amortized cost, which approximates market value. Investments in investment companies are reported at their respective net asset values as reported by those companies. 11 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) New Accounting Pronouncements As required, effective August 30, 2007, the Fund adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. The adoption of FIN 48 did not impact the Fund's net assets or results of operations. In September 2006, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The changes to current GAAP from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. One key component of the implementation of SFAS 157 included the development of a three-tier fair value hierarchy. The basis of the tiers is dependant upon the various "inputs" used to determine the value of the Funds' investments. These inputs are summarized in the three broad levels listed below: o Level 1 -- quoted prices in active markets for identical assets. o Level 2 -- other significant inputs (including quoted prices of similar securities, interest rates, prepayments speeds, credit risk, etc.) o Level 3 -- significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments.) The inputs or methodology used to for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the Investment Company Act of 1940. Generally, amortized cost approximates the current fair value of a security, but since the valuation is not obtained from a quoted price in an active market, such securities are reflected as Level 2. The following is a summary of the inputs used to value the following Funds' net assets as of August 31, 2008: LEVEL 2 - Other Significant LEVEL 3 - Significant LEVEL 1 - Quoted Prices Observable Inputs Unobservable Inputs ------------------------------ ------------------------------ ------------------------------ Investments Other Financial Investments Other Financial Investments Other Financial Fund Name in Securities Instruments* in Securities Instruments* in Securities Instruments* - --------------------------------- ------------- --------------- ------------- --------------- ------------- --------------- Empire Builder Tax Free Bond Fund $ -- $ -- $81,029,026 $ -- $ -- $ -- -------- -------- ----------- -------- -------- -------- Total $ -- $ -- $81,029,026 $ -- $ -- $ -- ======== ======== =========== ======== ======== ======== - ---------- * Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards, and swap contracts, which are valued at the unrealized appreciation / (depreciation) on the investment. 12 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) In March 2008, the Financial Accounting Standards Board issued the Statement of Financial Accounting Standards No.161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161"). SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about the Funds' derivative and hedging activities, including how such activities are accounted for and their effect on the Funds' financial position, performance and cash flows. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Funds' financial statements and related disclosures. Security Transactions and Investment Income Security transactions are accounted for no later than one business day after trade date. However, for financial reporting purposes, security transactions are accounted for on trade date. Interest income, which includes amortization of premium and accretion of discounts, is accrued as earned. Realized gains and losses from security transactions and unrealized appreciation and depreciation of investments are determined on the basis of identified cost. Taxes The Fund qualifies and intends to continue to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code, and to distribute substantially all of its tax-exempt and taxable income. By distributing during each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, the Fund will not be subject to a federal income or excise tax. Therefore, no federal income tax provision is required. Distributions and Dividends Distributions to shareholders from net investment income are declared daily and paid monthly. The Fund also distributes at least annually substantially all net capital gains, if any, realized from portfolio transactions. The amounts of distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g. reclass of market discounts, gain/loss, paydowns and distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. Determination of Net Asset Value and Allocation of Expenses In calculating net asset value per share of each class, investment income and expenses, other than class-specific expenses, are allocated daily to each class of shares based on shares outstanding. Realized and unrealized gains and losses are allocated based on relative net assets. 13 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) Other The Fund maintains a cash balance with its custodian and receives a reduction of its custody fees and expenses for the amounts of interest earned on such uninvested cash balance. There was no effect on net investment income for the period ended August 31, 2008. The Fund could have invested such cash amounts in an income-producing asset if it had not agreed to a reduction of fees or expenses under the expense offset arrangement with the Fund's custodian. 3. Purchases and Sales of Investment Securities: Purchases and sales of investment securities, excluding short-term investments, during the period ended August 31, 2008, amounted to $30,646,040 and $30,674,936, respectively. During the period, there were no purchases or sales of long-term U.S. Government Securities. 4. Advisory Fees and Other Related Party Transactions: The Fund retains the Adviser to act as investment adviser pursuant to an Investment Advisory Agreement. As compensation for its advisory services, the Adviser receives a fee accrued daily and paid monthly, at the annual rates of 0.40% of the first $100,000,000 of average daily net assets and 0.3333% of any excess over $100,000,000. The Adviser has agreed to a reduction of advisory fees to the extent that the Fund's expenses, including the advisory fees, exceed 1.50% of the Fund's average annual net assets. For the period ended August 31, 2008, there was no reduction of advisory fees pursuant to this agreement. Citi Fund Services Ohio, Inc. ("Citi Ohio" or the "Administrator") and Citi Fund Services, Inc. ("Citi"), subsidiaries of Citi Investor Services, Inc., serve as the Fund's administrator, transfer agent and fund accountant. Citi Ohio and Citi receive compensation for administration and fund accounting services at a rate of 0.15% and 0.03%, respectively, of average daily net assets of the Fund (subject to certain minimum amounts), including reimbursement for certain expenses incurred. Fees received for transfer agency services are class specific and are based on the number of accounts per class. All fees are accrued daily and paid monthly. Under a Compliance Services Agreement between the Fund and Citi Ohio (the "CCO Agreement"), Citi Ohio makes an employee available to serve as the Fund's Chief Compliance Officer (the "CCO"). Under the CCO Agreement, Citi Ohio also provides infrastructure and support in implementing the written policies and procedures comprising the Fund's compliance program, including support services to the CCO. Expenses incurred are reflected on the Statement of Operations as "Compliance services fee". Citi Ohio pays the salary and other compensation earned by any such individuals as employees of Citi Ohio. Certain Officers and Trustees of the Fund are affiliated with the Adviser or the Administrator. Such Officers and Trustees receive no compensation from the Fund for serving in their respective roles. Each of the four non-interested Trustees who serve on both the Board and the Audit Committee are compensated 14 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) $2,100 in retainer per quarter and a $900 fee for each regularly scheduled meeting, plus reimbursement for certain expenses. During the period ended August 31, 2008, actual Trustee compensation was $25,000 in total from the Fund. 5. Concentration of Credit Risk: The Fund invests primarily in debt instruments of municipal issuers in New York State. The issuers' abilities to meet their obligations may be affected by economic developments in New York State or its region. 6. Federal Income Tax Information: As of February 29, 2008, the Fund had no net capital loss carryforwards to offset future net capital gains, if any, to the extent provided by the Treasury regulations. To the extent that these carryforwards could be used to offset future capital gains, it is probable that the gains that are offset will not be distributed to shareholders. Capital losses after October 31 ("post-October losses") within the taxable year are deemed to arise on the first business day of the Fund's next taxable year. After October 31, 2007, for Federal income tax purposes, the Fund will elect to defer post October losses of $27,653. The tax character of current year distributions paid and the tax basis of the current components of the accumulated earnings (deficit) will be determined at the end of the current tax year, February 28, 2009. At August 31, 2008, the cost, gross unrealized appreciation and gross unrealized depreciation on securities for federal income tax purposes, were as follows: Net Unrealized Tax Unrealized Tax Unrealized Appreciation Tax Cost Appreciation (Depreciation) (Depreciation) ---------- -------------- -------------- -------------- Empire Builder Tax-Free Bond Fund...................... 79,613,753 1,586,486 (171,213) 1,415,273 15 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) Investment Advisory Contract Approval (Unaudited) The Fund's Advisory Agreement is subject to annual approval by (i) the vote of the Board or of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, and (ii) the vote of a majority of the Trustees who are not interested persons of the Fund ("Independent Trustees"). The Advisory Agreement is terminable with respect to the Fund by the Adviser, the Fund, or a vote of a majority of the outstanding voting securities of the Fund, without penalty, on 60 days' prior written notice and will terminate automatically in the event of its assignment (as defined for purposes of the 1940 Act). The Trustees meet over the course of the year with investment advisory personnel from the Adviser and regularly review detailed information regarding the investment program and performance of the Fund. The Trustees met in June 2008 to consider the continuation of the Fund's Advisory Agreement. The Board evaluated the information presented and considered various factors relevant to the decision whether or not to continue the Advisory Agreement. The Trustees considered all information they deemed reasonably necessary to evaluate the terms thereof. In connection with this Meeting, the Trustees received materials to assist them with their review. These materials included, among other things, (i) information on the Fund's investment performance and the performance of a group of similar mutual funds (some of which was prepared by a third party); (ii) information on the Fund's advisory fees and other expenses, including information comparing the Fund's expenses to a group of similar funds prepared by a third party and information about any applicable fee waiver and expense reimbursement and fee "breakpoints"; and (iii) information about the profitability of the Advisory Agreement to the Investment Adviser. In considering whether to approve the continuation of the Advisory Agreement, the Board did not identify any single factor as determinative. Matters considered by the Board included, but were not limited to, the factors described below. The Board considered the fees charged by the Adviser to the Fund under the Advisory Agreement. The Adviser furnished information to the Board compiled by a third party showing a comparison of the Adviser's fee rate for the Fund compared to a group of similar mutual funds selected by the third party. The data showed that the Fund's advisory fee rate is below the median and the average of the comparative fund group. The data also indicated that the Fund's total expense ratio was higher than the median and average of the comparative fund group. The Board considered that the Fund, because it was smaller than most of the funds to which it was being compared, could not take advantage of economies of scale (which can reduce fund expenses) to the same extent as those larger funds. The Board took note of earlier discussions among themselves and with the Adviser regarding the size of the Fund and the impact of size on the Fund's expense ratio. The Board also discussed the Fund's decline in net assets over the preceding several years, due primarily to net redemptions by Fund shareholders, and the resulting increase in the Fund's expense ratio and steps the Adviser indicated it was taking with the intent of helping to stabilize the Fund's net assets. They further considered the effect of the interest rate environment and macro-economic trends on sales of Fund shares, and noted differences between the Fund and other intermediate New York municipal bond funds, including that (i) the Fund is generally managed conservatively and is generally less volatile than other, similar funds, (ii) the Fund does not invest in bonds subject to the alternative minimum 16 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) tax, and (iii) the Fund does not charge a sales load or pay distribution or service fees. The Adviser also provided information about the costs to it of providing services to the Fund and information about its profitability with respect to its management of the Fund. In reviewing the fees payable under the Advisory Agreement, the Board also took into account so-called "fallout benefits" to the Adviser, such as the convenience to investors in the Adviser's New York tax exempt unit investment trusts of the availability of the Fund for automatic investment of amounts distributed from the unit investment trusts. The Board also considered the demands and complexity of the investment management of the Fund, and the fact that profitability could be affected by the salaries paid to persons with an ownership interest in the Adviser. After considering these and other relevant factors, the Trustees concluded that the fees and expenses of the Fund, the costs of the services to be provided and the profits to be realized by the Adviser and its affiliates from their relationship with the Fund were not excessive or unreasonable and supported the renewal of the Advisory Agreement. The Board considered to what extent economies of scale would likely be realized as the Fund grows. The Board noted that the advisory fee is currently subject to a breakpoint, and that the advisory fee is subject to further reduction if the Fund's total expenses exceed an expense cap. As noted above, the Board also considered that the Fund's small size did not permit it to take advantage of economies of scale to the same extent as larger funds. After considering these and other relevant factors, the Board concluded that these factors supported the renewal of the Advisory Agreement. The Board reviewed performance information for the Fund for various periods. That review included a comparison of the fund's performance to the performance of a group of other New York municipal bond funds selected by a third party. The Board noted that over the year-to-date and one-year period, the Fund's performance exceeded the median and average performance of the funds in the comparative group. The Trustees also noted the Adviser's view that its conservative investment approach had been responsible, at least in part, for the Fund's outperformance during recent periods of market volatility. After considering these and other relevant factors, the Board concluded that these factors supported the renewal of the Advisory Agreement. The Board considered the nature, extent and quality of the services provided by the Adviser. In this regard, the Board took into account the experience of the Fund's portfolio management team and of the Adviser's senior management, and the time and attention they devote to the Fund. After considering these and other relevant factors, the Board concluded that these factors supported the renewal of the Advisory Agreement. 17 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued August 31, 2008 (Unaudited) Other Information (Unaudited) A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-847-5886; and (ii) on the Securities and Exchange Commission's (the "Commission") website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available (i) without charge, upon request, by calling 1-800-847-5886; and (ii) on the Commission's website at http://www.sec.gov. The Fund files a complete Schedule of Portfolio Holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available without charge on the Commission's website at http://www.sec.gov, or may be reviewed and copied at the Commission's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 18 (This page intentionally left blank) [LOGO] EMPIRE BUILDER TAX FREE BOND FUND Semi-Annual Report August 31, 2008 (Unaudited) Investment Adviser and Distributor Glickenhaus & Co. 546 Fifth Avenue 7th Floor New York, New York 10036 Fund Accountant Citi Fund Services, Inc. 3435 Stelzer Road Columbus, Ohio 43219 Transfer Agent and Administrator Citi Fund Services Ohio, Inc. 3435 Stelzer Road Columbus, Ohio 43219 Custodian State Street Bank & Trust Co. 800 Pennsylvania Avenue 5th Floor Kansas City, Missouri 64105-1307 Legal Counsel Ropes & Gray LLP One International Place Boston, Massachusetts 02110 Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP 100 E. Broad Street Columbus, Ohio 43215 Customer Service 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 This report is submitted for the information of the shareholders of The Empire Builder Tax Free Bond Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus, obtainable from an investment dealer, which includes information regarding the Fund's objectives and policies, record, management, sales commission and other data. 00062943 [LOGO] EMPIRE BUILDER 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 Item 2. Code of Ethics. Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so. Not applicable - only for annual reports. The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 12(a)(1), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item. If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver. Not applicable - only for annual reports. Item 3. Audit Committee Financial Expert. (a)(1) Disclose that the registrant's board of directors has determined that the registrant either: (i) Has at least one audit committee financial expert serving on its audit committee; or (ii) Does not have an audit committee financial expert serving on its audit committee. (2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is "independent." In order to be considered "independent" for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or (ii) Be an "interested person" of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)). (3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert. Not applicable - only for annual reports. Item 4. Principal Accountant Fees and Services. (a) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. (b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (d) Disclose, under the caption All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (e) (1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. (2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. (h) Disclose whether the registrant's audit committee of the board of directors has considered whether the provision of nonaudit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. Not applicable - only for annual reports. Item 5. Audit Committee of Listed Registrants. (a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant's audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state. (b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption from the listing standards for all audit committees. Not applicable. Item 6. Investments. (a) File Schedule I - Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in ss. 210.1212 of the Regulation S-X [17 CFR 210.12-12], unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form. Instruction of paragraph (a) Schedule I - Investments In Securities of unaffiliated issuers filed under this Item must be audited, except that in the case of a report on this Form N-CSR as of the end of a fiscal half-year Schedule I - Investments in securities of unaffiliated issuers need not be audited. (b) If the registrant has divested itself of securities in accordance with Section 13(c) of the Investment Company Act of 1940 following the filing of its last report on Form N-CSR and before filing of the current report, disclosed the following information for each such divested security: (1) Name of the issuer; (2) Exchange ticker symbol; (3) Committee on Uniform Securities Identification Procedures ("CUSIP') number; (4) Total number of shares or, for debt securities, principal amount divested; (5) Date(s) that the securities were divested; and (6) If the registrant holds any securities of the issuer on the date of filing, the exchange ticker symbol; CUSIP number; and the total number of shares or, for debt securities, principal amount held on the date of filing. This Item 6(b) shall terminate one year after the date on which the provisions of Section 4 of the Sudan Accountability and Divestment Act of 2007 terminate pursuant of Section 12 of the Act. Not applicable. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company's investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules there under) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company's investment adviser, or any other third party, that the company uses, or that are used on the company's behalf, to determine how to vote proxies relating to portfolio securities. Not applicable. Item 8. Portfolio Managers of Closed-End Management Investment Companies. If the registrant is a closed-end management investment company that is filing an annual report on this Form N-CSR, provide the information specified in paragraphs (a) and (b) of this Item with respect to portfolio managers. Not applicable. Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. If the registrant is a closed-end management investment company, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant's equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781). Not applicable. Item 10. Submission of Matters to a Vote of Security Holders. Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. Not applicable. Item 11. Controls and Procedures. (a) Disclose the conclusions of the registrant's principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. There were no changes in the registrant's internal control over financial reporting that occurred during the last fiscal half-year of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. Not applicable - Only effective for annual reports. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2). Certifications pursuant to Rule 30a-2(a) are attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by rule 30a-2(b) under the Act as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant incorporates it by reference. Certifications pursuant to Rule 30a-2(b) are furnished herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The Empire Builder Tax Free Bond Fund ------------------------------------- By (Signature and Title)* /s/ Jonathan Rosen ------------------ Jonathan Rosen, Treasurer Date October 30, 2008 ---------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Seth M. Glickenhaus ----------------------- Seth M. Glickenhaus, President Date October 30, 2008 ---------------- By (Signature and Title)* /s/ Jonathan Rosen ------------------ Jonathan Rosen, Treasurer Date October 30, 2008 ---------------- * Print the name and title of each signing officer under his or her signature.