0000773478-11-000023.txt : 201111290000773478-11-000023.hdr.sgml : 2011112920111129091732ACCESSION NUMBER:0000773478-11-000023CONFORMED SUBMISSION TYPE:N-QPUBLIC DOCUMENT COUNT:21CONFORMED PERIOD OF REPORT:20110930FILED AS OF DATE:20111129DATE AS OF CHANGE:20111129EFFECTIVENESS DATE:20111129

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:FRANKLIN CALIFORNIA TAX FREE TRUSTCENTRAL INDEX KEY:0000773478IRS NUMBER:000000000STATE OF INCORPORATION:DEFISCAL YEAR END:0630

FILING VALUES:FORM TYPE:N-QSEC ACT:1940 ActSEC FILE NUMBER:811-04356FILM NUMBER:111229713

BUSINESS ADDRESS:STREET 1:ONE FRANKLIN PARKWAYCITY:SAN MATEOSTATE:CAZIP:94403-1906BUSINESS PHONE:650-312-2000

MAIL ADDRESS:STREET 1:ONE FRANKLIN PARKWAYCITY:SAN MATEOSTATE:CAZIP:94403-1906

0000773478S000006718FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME

C000018278CLASS AFRCIX

C000018279CLASS BFRCBX

C000018280CLASS CFRCAX

C000073518ADVISOR

0000773478S000006719FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE

C000018281CLASS AFKCIX

C000018282CLASS CFCCIX

C000073519ADVISORFRCZX

0000773478S000006721FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUND

C000018284FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUNDFCLXX

N-Q1fctftnq.htmFCTFT QTRLY INVESTMENTS PE 9/30/11

fctftnq.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF

REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-04356

Franklin California Tax-Free Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906

(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant's telephone number, including area code: 650 312-2000

Date of fiscal year end: 6/30

Date of reporting period: 9/30/11

Item 1. Schedule of Investments.

Franklin California Tax-Free Trust

Statement of Investments, September 30, 2011 (unaudited) (continued)

'Variable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. The coupon rate shown represents the rate at period end.

Franklin California Tax-Free Trust

Statement of Investments, September 30, 2011 (unaudited) (continued)

ABBREVIATIONS
Selected Portfolio

Quarterly Statement ofInvestments

I See Notes to Statements ofInvestments.

Quarterly Statement ofInvestments

I See Notes to Statements ofInvestments.

Franklin California Tax-Free Trust

Notes to Statements of Investments (unaudited)

1. ORGANIZATION

Franklin California Tax-Free Trust (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of three funds (Funds).

2. FINANCIAL INSTRUMENT VALUATION

The Funds' investments in securities and other financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Under procedures approved by the Trust's Board of Trustees, the Funds may utilize independent pricing services, quotations from securities and financial instnunent dealers, and other market sources to determine fair value.

Debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Funds' pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market -based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

Securities in the Franklin California Tax-Exempt Money Fund are valued at amortized cost, which approximates market value. Amortized cost is an income-based approach which involves valuing an instnunent at its cost and thereafter assuming a constant amortization to maturity of any discount or prenuum.

The Funds have procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available or which may not be reliably priced. Under these procedures, the Funds primarily employ a market -based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. The Funds may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

3. INCOME TAXES

At September 30,2011, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

At September 30,2011, the cost of investments for book and income tax purposes was the same for the Franklin California Tax-Exempt Money Fund.

4. FAIR VALUE MEASUREMENTS

The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds' own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds' investments and are summarized in the following fair value hierarchy:

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speed, credit risk, etc.)

Level 3 - significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. Money market securities may be valued using amortized cost, in accordance with the 1940 Act. Generally, amortized cost reflects the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as a Level 2.

For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

At September 30,2011, all of the Funds' investments in securities carried at fair value were valued using Level 2 inputs.

5. NEW ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in the ASU will improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) and include new guidance for certain fair value measurement principles and disclosure requirements. The ASU is effective for interim and annual periods beginning after

December 15, 2011. The Funds are currently reviewing the requirements and believe the adoption of this ASU will not have a material impact on the financial statements.

6. SUBSEQUENT EVENTS

The Funds have evaluated subsequent events through the issuance of the Statements of Investments and determined that no events have occurred that require disclosure.

For additional information on the Funds' significant accounting policies, please refer to the Funds' most recent semiannual or annual shareholder report.

Item 2. Controls andProcedures.

(a) Evaluation ofDisclosure Controls and Procedures. The Registrant maintains disclosurecontrols and procedures that are designed to ensure that information requiredto be disclosed in the Registrants filings under the Securities Exchange Actof 1934 and the Investment Company Act of 1940 is recorded, processed,summarized and reported within the periods specified in the rules and forms ofthe Securities and