N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-02790

Franklin California Tax-Free Income Fund

(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: 3/31

Date of reporting period: 3/31/19

Item 1. Reports to Stockholders.

	Annual Report and Shareholder Letter
	March 31, 2019

Franklin California Tax-Free Income Fund

Sign up for electronic delivery at franklintempleton.com/edelivery

Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800) 632-2301 or by contacting your financial intermediary.

You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800) 632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.

Franklin Templeton

Successful investing begins with ambition. And achievement only comes when you reach for it. That’s why we continually strive to deliver better outcomes for investors. No matter what your goals are, our deep, global investment expertise allows us to offer solutions that can help.

During our more than 70 years of experience, we’ve managed through all kinds of markets—up, down and those in between. We’re always preparing for what may come next. It’s because of this, combined with our strength as one of the world’s largest asset managers that we’ve earned the trust of millions of investors around the world.

Dear Shareholder:

During the 12 months ended March 31, 2019, the U.S. economy continued to grow amid positive economic data and corporate earnings, but financial markets experienced their usual volatility due to trade concerns and geopolitical issues. The U.S. Federal Reserve (Fed) increased its federal funds rate by 0.25% at its June, September and December 2018 meetings, bringing the rate from 1.75% at the start of the period to 2.50% by period-end. At its March 2019 meeting, the Fed decided not to raise rates and indicated that further rate increases may be on hold for the calendar year.

During the 12-month period, the municipal bond market posted moderate returns. The municipal bond market outperformed the corporate bond and U.S. Treasury bond markets, with generally higher returns for longer-term and lower-rated municipal bonds. Factors contributing to this positive investment environment for municipals included relatively low inflation, increased employment and the strength of the U.S. economy.

Franklin California Tax-Free Income Fund’s annual report includes more detail about municipal bond market conditions and a discussion from the portfolio managers. In addition, on our website, franklintempleton.com, you can find updated commentary by our municipal bond experts. Municipal bonds provide tax-free income and diversification from equities. Despite periods of volatility, municipal bonds historically have had a solid long-term record of performance, driven mostly by their compounding income component. Please remember all securities markets fluctuate, as do mutual fund share prices.

As always, we recommend investors consult their financial advisors to help them make the best decisions for the long term.

In a constantly changing market environment, we remain committed to our disciplined strategy as we manage the Fund, keeping in mind the trust you have placed in us. We appreciate your confidence and encourage you to contact us or your financial advisor when you have questions about your Franklin Templeton tax-free investment.

Sincerely,

Rupert H. Johnson, Jr.

Chairman

Franklin Tax-Free Trust

Sheila Amoroso

Senior Vice President and Director

Franklin Municipal Bond Department

This letter reflects our analysis and opinions as of March 31, 2019, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, state, industry, security or fund. Statements of fact are from sources considered reliable.

Not FDIC Insured | May Lose Value | No  Bank Guarantee 

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Contents

Annual Report
Franklin California Tax-Free Income Fund	3
Performance Summary	7
Your Fund’s Expenses	11
Financial Highlights and Statement of Investments	12
Financial Statements	37
Notes to Financial Statements	40
Report of Independent Registered Public Accounting Firm	48
Tax Information	49
Board Members and Officers	50
Shareholder Information	54

Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.

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Annual Report

Franklin California Tax-Free Income Fund

This annual report for Franklin California Tax-Free Income Fund covers the fiscal year ended March 31, 2019.

Your Fund’s Goal and Main Investments

The Fund seeks to provide as high a level of income exempt from federal and California personal income taxes (for California residents) as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.¹

Performance Overview

The Fund’s Class A share price, as measured by net asset value, increased from $7.27 on September 10, 2018, to $7.44 on March 31, 2019. The Fund’s Class A shares paid dividends totaling 12.43 cents per share for the reporting period.² The Performance Summary beginning on page 7 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 3.18% based on an annualization of March’s 2.05 cent per share dividend and the maximum offering price of $7.73 on March 31, 2019. An investor in the 2019 maximum combined effective federal and California personal income tax bracket of 53.10% (including 3.8% Medicare tax) would need to earn a distribution rate of 6.78% from a taxable investment to match the Fund’s Class A tax-free distribution rate. For other performance data, please see the Performance Summary. During the period under review, the Fund experienced a reduction of its monthly dividend. Dividend distributions were affected by low interest rates during the period. This and other factors resulted in reduced income for the portfolio and caused dividends to be lower at the end of the period.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

Credit Quality Composition*

3/31/19

Ratings	% of Total Investments
AAA	10.27%
AA	45.85%
A	32.76%
BBB	2.62%
Below Investment Grade	0.94%
Refunded	6.54%
Not Rated	1.02%

*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.

Municipal Bond Market Overview

The financial markets experienced volatility during the 12-month reporting period due to trade concerns and geopolitical stress. Equity markets sold off sharply during the fourth quarter of 2018, spurring a flight to perceived quality that benefited high-quality fixed income assets such as municipal bonds and U.S. Treasuries. Stocks quickly reversed course and rallied sharply to start 2019, and municipal bonds performed well in the first quarter of 2019. Overall, the municipal bond market outperformed the corporate bond and U.S. Treasury markets but underperformed the equity markets during the period.

Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, posted a +5.38% total return for the period, while U.S. Treasuries, as measured by the Bloomberg Barclays U.S. Treasury Index, posted a

1.For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.

2. The distribution amount is the sum of all net investment income distributions for the period shown. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 17.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Portfolio Composition

3/31/19

	% of Total Investments*
Transportation		27.67%
General Obligation		18.41%
Refunded**		11.95%
Hospital & Health Care		10.76%
Utilities		10.64%
Subject to Government Appropriations		7.76%
Higher Education		7.45%
Tax-Supported		3.21%
Other Revenue		1.47%
Housing		0.68%

*Does not include cash and cash equivalents.

**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.

+4.22% total return, and investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, posted a +4.94% total return.³ U.S. stocks, as represented by the Standard & Poor’s^® 500 Index, outperformed the fixed income markets with a +9.50% total return.³

Municipal bonds with intermediate and long maturities generally outperformed bonds with shorter maturities during the 12-month period. The best-performing maturity group in the Bloomberg Barclays Municipal Bond Index was the 12–17 year group, which returned +6.50% for the period.³ High-yield municipal bonds generally outperformed investment-grade municipal bonds, with the Bloomberg Barclays High Yield Municipal Bond Index posting a +8.14% total return, compared with a +5.38% total return for the Bloomberg Barclays Municipal Bond Index.³

Municipal issuance during the reporting period totaled approximately $349 billion, a 17% decline from total issuance for the preceding 12-month period.⁴ Issuance remains diminished as the Tax Cuts and Jobs Act of 2017 eliminated advanced refundings beginning in January 2018. Calendar-year 2018 issuance was approximately $339 billion, which represented a 24% decline from 2017.⁴ The Investment Company Institute reported negative municipal bond fund flows during the fourth quarter of 2018, but flows turned sharply positive in the first quarter of 2019. Overall, total net

municipal bond fund inflows for the 12-month period were approximately $20 billion.⁵ In our view, investor demand remains healthy.

The U.S. Federal Reserve (Fed) raised its target range for the federal funds rate by 0.25% at its June, September and December 2018 meetings. The target range stood at 2.25%–2.50% at period-end. The Fed also increased the discount rate by 0.25% at all three meetings, to finish the period at 3.00%. The Fed paused at both the January and March 2019 meetings, leaving the discount rate and the target range for the federal funds rate unchanged. Furthermore, the Fed indicated the labor market remains strong, but economic activity has slowed since the fourth quarter of 2018. With market-based inflation measures remaining low in recent months, the market has interpreted the Fed’s recent decisions to mean the Fed will remain on the sidelines and foster economic growth while attempting to achieve its inflation objective.

At period-end, we maintained our positive view of the municipal bond market. We believe municipal bonds continue to be an attractive asset class among fixed income securities, and we intend to follow our disciplined approach of investing to maximize income, while seeking value in the municipal bond market.

State Update

California’s large and diverse economy continued to expand during the 12 months under review, supported by outstanding higher education institutions, a wide range of businesses in innovative sectors and California’s position as the dominant venture capitalist state. Unemployment was 4.3% at period-end, unchanged from March 2018, and was higher than the 3.8% national rate.⁶

California’s fiscal year 2018 budget, which ended June 30, extended the state’s recent track record of balanced fiscal operations. Highlights of the budget were increased spending for general fund expenditures, education, Medi-Cal funding and pension contributions. The state continued to make deposits to its budget stabilization account, resulting in large budget reserves. The state’s budget for fiscal year 2019, which started in July, mirrored the 2018 budget, with continued deposits to reserve funds and increased spending for general fund expenditures, education and Medi-Cal. State pension

3. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.

4. Source: The Bond Buyer, Thomson Reuters.

5. Source: Investment Company Institute.

6. Source: Bureau of Labor Statistics.

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FRANKLIN CALIFORNIA TAX - FREE INCOME FUND

contributions also continued to rise, representing a persistent source of fiscal pressure. The governor’s proposed 2020 fiscal year budget would increase funding to match a modest estimated increase in revenue. The extra funding is planned for increasing reserves, reversal of prior budgetary accounting deferrals, pre-payment of unfunded other post-employment employee benefits, and extra payments toward unfunded pension liabilities for state employees and teachers. The governor also plans to use some extra funding to start new pre-K schooling programs for low income families and expand low and moderate income housing.

California’s net tax-supported debt was $2,188 per capita and 3.9% of personal income, compared with the $987 and 2.3% national medians, respectively.⁷ During the period under review, independent credit rating agency Moody’s Investors Service assigned an Aa3 rating with a stable outlook to California’s general obligations bonds.⁸ The rating reflected Moody’s view on the state’s massive and diverse economy that has performed strongly relative to the rest of the nation, as well as the state’s robust revenue growth, accumulation of healthy liquidity and continued fiscal discipline. The positive outlook reflected Moody’s view of California’s strongly performing economy and finances. In contrast, Moody’s cited some challenges to the state, including a highly volatile revenue structure, vulnerability to federal policy and funding changes, especially for health care, and the legislative supermajority requirement to raise new revenue.

Investment Strategy

We use a consistent, disciplined strategy in an effort to maximize tax-exempt income for our shareholders, while balancing risk and return within the Fund’s range of allowable investments. We generally employ a buy-and-hold approach and invest in securities we believe should provide the most relative value in the market. We do not use leverage or derivatives, nor do we use hedging techniques that could add volatility and contribute to underperformance in adverse markets.

Manager’s Discussion

Based on the combination of our value-oriented philosophy of investing primarily for income and a positive-sloping municipal yield curve, we favored the use of longer-term bonds. Consistent with our strategy, we sought to purchase bonds that

Dividend Distributions*

4/1/18–3/31/19

	Dividend per Share (cents)
Month	Class A**		Class A1		Class C		Class R6		Advisor Class
April		—		2.16		1.82		2.21		2.21
May		—		2.16		1.82		2.21		2.21
June		—		2.16		1.82		2.21		2.21
July		—		2.16		1.82		2.21		2.21
August		—		2.16		1.82		2.21		2.21
September		—		2.16		1.82		2.22		2.21
October		2.06		2.16		1.82		2.22		2.21
November		2.06		2.16		1.82		2.22		2.21
December		2.10		2.19		1.86		2.26		2.24
January		2.10		2.19		1.86		2.26		2.24
February		2.06		2.15		1.82		2.22		2.20
March		2.05		2.15		1.81		2.22		2.20
Total		12.43		25.96		21.91		26.67		26.56

*The distribution amount is the sum of all net investment income distributions for the period shown. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.

**Effective 9/10/18, the Fund began offering Class A shares. See the prospectus for details.

ranged from 15 to 30 years in maturity with good call features. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.

Thank you for your continued participation in Franklin California Tax-Free Income Fund. We look forward to serving your future investment needs.

7. Source: Moody’s Investors Service, “States - US: Medians - State debt continues slow growth trend,” 4/24/18.

8. This does not indicate Moody’s rating of the Fund.

See www.franklintempletondatasources.com for additional data provider information.

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FRANKLIN CALIFORNIA TAX - FREE INCOME FUND

The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Performance Summary as of March 31, 2019

The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.

Performance as of 3/31/19

Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%. Class A: 3.75% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com.

Share Class	Cumulative Total Return	1	Average Annual Total Return	2
A3,4
1-Year	+5.39%		+1.44%
5-Year	+24.17%		+3.63%
10-Year	+75.48%		+5.38%
Advisor
1-Year	+5.44%		+5.44%
5-Year	+24.77%		+4.53%
10-Year	+77.36%		+5.90%

Share Class	Distribution Rate	5	Taxable Equivalent Distribution Rate	6	30-Day Standardized Yield	7	Taxable Equivalent 30-Day Standardized Yield	6
A	3.18%		6.78%		2.03%		4.33%
Advisor	3.56%		7.59%		2.37%		5.05%

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

See page 10 for Performance Summary footnotes.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

PERFORMANCE SUMMARY

Total Return Index Comparison for a Hypothetical $10,000 Investment

Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.

Class A (4/1/09–3/31/19)

Advisor Class (4/1/09–3/31/19)

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

PERFORMANCE SUMMARY

Net Asset Value

Share Class (Symbol)	3/31/19		9/10/18		3/31/18		Change
A (FTFQX)		$7.44		$7.27		N/A		+$0.17
A1 (FKTFX)		$7.43		N/A		$7.31		+$0.12
C (FRCTX)		$7.41		N/A		$7.30		+$0.11
R6 (FKTQX)		$7.42		N/A		$7.30		+$0.12
Advisor (FCAVX)		$7.42		N/A		$7.30		+$0.12

Distributions (4/1/18–3/31/19)

Share Class	Net Investment Income
A (9/10/18–3/31/19)		$0.1243
A1		$0.2596
C		$0.2191
R6		$0.2667
Advisor		$0.2656

Total Annual Operating Expenses¹⁰

Share Class
A	0.74%
Advisor	0.49%

See page 10 for Performance Summary footnotes.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

PERFORMANCE SUMMARY

Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.

All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

1. Cumulative total return represents the change in value of an investment over the periods indicated.

2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.

4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns would have differed. Total returns with sales charges have been restated to reflect the current maximum initial sales charge of 3.75%.

5. Distribution rate is based on an annualization of the respective class’s March dividend and the maximum offering price (NAV for Advisor Class) per share on 3/31/19.

6. Taxable equivalent distribution rate and yield assume the published rates as of 12/18/18 for the maximum combined effective federal and California personal income tax rate of 53.10%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax. This combined rate does not consider the impact of California’s surcharge on taxable income in excess of $1 million.

7. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.

8. Source: Morningstar. The Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody’s, S&P and Fitch.

9. Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.

10. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.

See www.franklintempletondatasources.com for additional data provider information.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Your Fund’s Expenses

As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.

Actual Fund Expenses

The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the 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. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.

		Actual     (actual return after expenses)		Hypothetical     (5% annual return before  expenses)
Share   Class	Beginning Account Value 10/1/18	Ending Account Value 3/31/19	Expenses Paid During Period 10/1/18–3/31/191,2	Ending Account Value 3/31/19	Expenses Paid During Period 10/1/18–3/31/191,2	Net Annualized Expense Ratio2
A	$1,000	$1,045.40	$3.93	$1,021.09	$3.88	0.77%
A1	$1,000	$1,046.30	$3.11	$1,021.89	$3.07	0.61%
C	$1,000	$1,042.10	$5.96	$1,019.10	$5.89	1.17%
R6	$1,000	$1,047.00	$2.40	$1,022.59	$2.37	0.47%
Advisor	$1,000	$1,046.80	$2.65	$1,022.34	$2.62	0.52%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Financial Highlights

	Year Ended March 31, 2019a
Class A
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year	$ 7.27
Income from investment operationsb:
Net investment incomec	0.14
Net realized and unrealized gains (losses)	0.15
Total from investment operations	0.29
Less distributions from net investment income	(0.12)
Net asset value, end of year	$ 7.44
Total returnd	4.11%
Ratios to average net assetse
Expensesf	0.76%
Net investment income	3.38%
Supplemental data
Net assets, end of year (000’s)	$524,756
Portfolio turnover rate	14.12%

^aFor the period September 10, 2018 (effective date) to March 31, 2019.

^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^cBased on average daily shares outstanding.

^dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

  12         Annual Report     |  The accompanying notes are an integral part of these financial statements.   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS

	Year Ended March 31,
	2019		2018		2017		2016		2015
Class A1
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$ 7.31		$ 7.38		$ 7.59		$ 7.60		$ 7.21
Income from investment operationsa:
Net investment incomeb		0.26		0.26		0.27		0.29		0.31
Net realized and unrealized gains (losses)		0.12		(0.06)		(0.22)		(0.01)		0.39
Total from investment operations		0.38		0.20		0.05		0.28		0.70
Less distributions from net investment income		(0.26)		(0.27)		(0.26)		(0.29)		(0.31)
Net asset value, end of year		$ 7.43		$ 7.31		$ 7.38		$ 7.59		$ 7.60
Total returnc		5.34%		2.66%		0.68%		3.82%		9.83%
Ratios to average net assets
Expenses		0.60%d		0.59%		0.59%		0.57%		0.58%
Net investment income		3.54%		3.53%		3.54%		3.87%		4.11%
Supplemental data
Net assets, end of year (000’s)		$11,824,206		$12,154,752		$12,425,129		$11,836,310		$11,757,208
Portfolio turnover rate		14.12%		13.05%		19.37%		8.77%		9.71%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.

^dBenefit of expense reduction rounds to less than 0.01%.

  franklintempleton.com   The accompanying notes are an integral part of these financial statements.   |  Annual Report         13

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS

	Year Ended March 31,
	2019			2018			2017			2016			2015
Class C
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$ 7.30			$ 7.36			$ 7.58			$ 7.58			$ 7.19
Income from investment operationsa:
Net investment incomeb		0.22			0.22			0.23			0.25			0.26
Net realized and unrealized gains (losses)		0.11			(0.06	)		(0.23	)		(—	)c		0.39
Total from investment operations		0.33			0.16			—			0.25			0.65
Less distributions from net investment income		(0.22	)		(0.22	)		(0.22	)		(0.25	)		(0.26	)
Net asset value, end of year		$ 7.41			$ 7.30			$ 7.36			$ 7.58			$ 7.58
Total returnd		4.63%			2.23%			(0.02)%			3.39%			9.26%
Ratios to average net assets
Expenses		1.16%e			1.15%			1.14%			1.13%			1.14%
Net investment income		2.98%			2.97%			2.99%			3.31%			3.55%
Supplemental data
Net assets, end of year (000’s)	$	1,124,954		$	1,527,772		$	1,659,070		$	1,442,032		$	1,316,471
Portfolio turnover rate		14.12%			13.05%			19.37%			8.77%			9.71%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.

^eBenefit of expense reduction rounds to less than 0.01%.

  14         Annual Report     |  The accompanying notes are an integral part of these financial statements.   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS

	Year Ended March 31,
	2019	2018a
Class R6
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year	$ 7.30	$7.46
Income from investment operationsb:
Net investment incomec	0.27	0.18
Net realized and unrealized gains (losses)	0.12	(0.18)
Total from investment operations	0.39	—
Less distributions from net investment income	(0.27)	(0.16)
Net asset value, end of year	$ 7.42	$ 7.30
Total returnd	5.45%	(0.05)%
Ratios to average net assetse
Expenses before waiver and payments by affiliates	0.47%	0.49%
Expenses net of waiver and payments by affiliates	0.46%f	0.48%
Net investment income	3.68%	3.64%
Supplemental data
Net assets, end of year (000’s)	$103,760	$85,534
Portfolio turnover rate	14.12%	13.05%

^aFor the period August 1, 2017 (effective date) to March 31, 2018.

^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^cBased on average daily shares outstanding.

^dTotal return is not annualized for periods less than one year.

^eRatios are annualized for periods less than one year.

^fBenefit of expense reduction rounds to less than 0.01%.

  franklintempleton.com     The accompanying notes are an integral part of these financial statements.     |  Annual Report         15

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

FINANCIAL HIGHLIGHTS

	Year Ended March 31,
	2019		2018		2017		2016		2015
Advisor Class
Per share operating performance (for a share outstanding throughout the year)
Net asset value, beginning of year		$ 7.30		$ 7.36		$ 7.58		$ 7.59		$ 7.20
Income from investment operationsa:
Net investment incomeb		0.26		0.27		0.28		0.30		0.31
Net realized and unrealized gains (losses)		0.13		(0.06)		(0.23)		(0.01)		0.39
Total from investment operations		0.39		0.21		0.05		0.29		0.70
Less distributions from net investment income		(0.27)		(0.27)		(0.27)		(0.30)		(0.31)
Net asset value, end of year		$ 7.42		$ 7.30		$ 7.36		$ 7.58		$ 7.59
Total return		5.44%		2.89%		0.65%		3.92%		9.95%
Ratios to average net assets
Expenses		0.51%c		0.50%		0.49%		0.48%		0.49%
Net investment income		3.63%		3.62%		3.64%		3.96%		4.20%
Supplemental data
Net assets, end of year (000’s)		$1,641,388		$1,572,721		$1,463,633		$1,108,743		$908,763
Portfolio turnover rate		14.12%		13.05%		19.37%		8.77%		9.71%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cBenefit of expense reduction rounds to less than 0.01%.

  16         Annual Report | The accompanying notes are an integral part of these financial statements.     franklintempleton.com

FRANKLIN CALIFORNIA TAX - FREE INCOME FUND

Statement of Investments, March 31, 2019

	Principal Amount		Value
Municipal Bonds 96.7%
California 95.8%
ABAG Finance Authority for Nonprofit Corporations COP, Santa Clara County and Butte Valley-Tulelake Rural Health Projects Inc., California Mortgage Insured, 6.65%, 10/01/22	$	270,000	$	271,072
ABAG Finance Authority for Nonprofit Corporations MFHR, Palo Alto Gardens Apartments, Series A, 5.45%, 4/01/39		5,500,000		5,504,455
ABAG Finance Authority for Nonprofit Corporations Revenue,
Casa de las Campanas Inc., California Mortgage Insured, 6.00%, 9/01/37		11,000,000		11,671,440
Channing House, California Mortgage Insured, Pre-Refunded, 6.00%, 5/15/30		8,495,000		8,929,349
Channing House, California Mortgage Insured, Pre-Refunded, 6.125%, 5/15/40		17,635,000		18,561,014
Eskaton Properties Inc. Obligated Group, Refunding, 5.00%, 11/15/35		10,000,000		10,771,600
San Diego Hospital Assn. Sharp Healthcare, Series B, Pre-Refunded, 6.25%, 8/01/39		17,500,000		17,777,200
St. Rose Hospital, Series A, California Mortgage Insured, Pre-Refunded, 5.625%, 5/15/29		9,050,000		9,095,159
St. Rose Hospital, Series A, California Mortgage Insured, Pre-Refunded, 6.00%, 5/15/29		8,620,000		8,666,807
Alameda Corridor Transportation Authority Revenue,
Capital Appreciation, sub. lien, Refunding, Series A, AMBAC Insured, zero cpn., 10/01/29		20,000,000		14,225,200
Capital Appreciation, sub. lien, Refunding, Series A, AMBAC Insured, zero cpn., 10/01/30		41,665,000		28,325,950
Alameda USD Alameda County GO, Election of 2014, Series A, 5.00%, 8/01/39		18,000,000		20,548,260
Alhambra City Elementary School District GO, Los Angeles County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/27		3,035,000		2,473,677
Alisal USD,
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 8/01/32		3,355,000		2,271,268
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 8/01/33		3,610,000		2,357,763
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 2/01/34		3,345,000		2,126,115
Alvord USD,
GO, Riverside County, Capital Appreciation, Election of 2007, Series B, AGMC Insured, zero cpn., 8/01/36		15,000,000		8,097,000
GO, Riverside County, Capital Appreciation, Election of 2007, Series B, AGMC Insured, zero cpn. to 8/01/26, 7.35% thereafter, 8/01/46		42,500,000		44,373,825
GO, Riverside County, Election of 2012, Refunding, Series A, AGMC Insured, 5.00%, 8/01/42		34,690,000		38,702,592
Anaheim City School District GO, Orange County, Election of 2010, AGMC Insured, Pre-Refunded, 6.25%, 8/01/40		7,500,000		8,347,500
Anaheim PFA Lease Revenue,
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/24		26,855,000		23,832,470
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/26		29,430,000		24,436,318
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/27		22,860,000		18,264,226
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/28		14,425,000		11,057,484
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/29		24,810,000		18,280,504
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/32		13,665,000		8,818,708
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/33		37,070,000		22,967,831
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/34		24,970,000		14,816,699
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 3/01/37		15,080,000		7,977,169

  franklintempleton.com   Annual Report         17

FRANKLIN CALIFORNIA TAX - FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Anaheim UHSD, GO, Orange County, Election of 2002, Capital Appreciation, Series A, AGMC Insured, zero cpn., 8/01/26	$	8,570,000	$	7,237,708
Antelope Valley Community College District GO, Los Angeles and Kern Counties, Refunding, 5.00%, 8/01/39		11,750,000		13,428,370
Antioch USD, GO, Contra Costa County, School Facilities ID No. 1, Election of 2008, Series B, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/36		3,130,000		3,171,128
Atascadero USD, GO, San Luis Obispo County, Election of 2010, Series A, AGMC Insured, 5.00%, 8/01/40		6,235,000		6,692,836
Atwater PFA Wastewater Revenue, AGMC Insured, Pre-Refunded, 6.125%, 5/01/45		4,620,000		4,730,095
Auburn PFA Wastewater Revenue, Assured Guaranty, Pre-Refunded, 5.50%, 6/01/39		1,880,000		1,892,803
Baldwin Park USD,
GO, Los Angeles County, Capital Appreciation, Election of 2006, Refunding, BAM Insured, zero cpn., 8/01/48		25,000,000		3,897,500
GO, Los Angeles County, Capital Appreciation, Election of 2006, Refunding, BAM Insured, zero cpn., 8/01/53		60,000,000		6,337,800
GO, Los Angeles County, Election of 2006, BAM Insured, 5.00%, 8/01/43		5,000,000		5,578,950
Bay Area Toll Authority Toll Bridge Revenue,
San Francisco Bay Area, Series F-1, 5.00%, 4/01/56		60,000,000		68,400,000
San Francisco Bay Area, Series S-4, AGMC Insured, Pre-Refunded, 5.125%, 4/01/48		20,000,000		22,936,800
San Francisco Bay Area, Subordinate, Refunding, Series S-7, 4.00%, 4/01/42		84,260,000		89,061,135
San Francisco Bay Area, Subordinate, Refunding, Series S-7, 4.00%, 4/01/47		72,000,000		75,735,360
San Francisco Bay Area, Subordinate, Series S-2, Pre-Refunded, 5.00%, 10/01/50		75,000,000		79,124,250
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.00%, 4/01/43		36,040,000		41,157,320
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.125%, 4/01/48		27,355,000		31,371,808
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.25%, 4/01/53		33,000,000		38,005,440
Beaumont Public Improvement Authority Wastewater Revenue, Series A, AGMC Insured, 5.00%, 9/01/49		10,000,000		11,608,400
Beaumont USD,
GO, Riverside County, Capital Appreciation, Election of 2008, Series C, AGMC Insured, zero cpn., 8/01/40		11,000,000		4,980,470
GO, Riverside County, Election of 2008, Series C, AGMC Insured, Pre-Refunded, 5.75%, 8/01/36		6,200,000		6,837,236
Berkeley USD, GO, Alameda County, Election of 2010, Series B, AGMC Insured, 5.375%, 8/01/35		5,090,000		5,359,872
California Community College Financing Authority Lease Revenue,
College of the Sequoias and Kern Community College District, Series A, AGMC Insured, 5.00%, 6/01/30		2,330,000		2,409,267
College of the Sequoias and Kern Community College District, Series A, AGMC Insured, 5.125%, 6/01/35		1,250,000		1,292,663
Grossmont-Cuyamaca Palomar and Shasta-Tehama-Trinity Joint Community College District, Series A, NATL Insured, 5.125%, 4/01/31		880,000		895,083
California County Tobacco Securitization Agency Tobacco Settlement Revenue,
Asset-Backed, Alameda County Tobacco Asset Securitization Corp., 5.875%, 6/01/35		7,500,000		7,571,550
Asset-Backed, Kern County Tobacco Funding Corp., Refunding, 5.00%, 6/01/34		10,295,000		10,847,224
Asset-Backed, Kern County Tobacco Funding Corp., Refunding, 5.00%, 6/01/40		17,650,000		18,599,923
Asset-Backed, Stanislaus County Tobacco Funding Corp., Series A, 5.875%, 6/01/43		8,690,000		8,805,838
California Health Facilities Financing Authority Revenue,
Adventist Health System/West, Series A, Pre-Refunded, 5.75%, 9/01/39		18,000,000		18,316,440
California-Nevada Methodist Homes, Refunding, California Mortgage Insured, 5.00%, 7/01/35		1,000,000		1,156,150
Catholic Healthcare West, Series A, 5.25%, 3/01/41		50,000,000		52,754,500
Catholic Healthcare West, Series A, Pre-Refunded, 6.00%, 7/01/34		10,000,000		10,112,300
Cedars-Sinai Medical Center, Pre-Refunded, 5.00%, 8/15/39		4,200,000		4,255,104
Children’s Hospital Los Angeles, Refunding, Series A, 5.00%, 8/15/42		7,750,000		8,787,415
Children’s Hospital Los Angeles, Refunding, Series A, 5.00%, 8/15/47		10,370,000		11,695,493

  18         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX - FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
California Health Facilities Financing Authority Revenue, (continued)
Children’s Hospital Los Angeles, Series A, AGMC Insured, Pre-Refunded, 5.25%, 7/01/38	$	17,000,000	$	17,810,390
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/24		10,500,000		10,811,535
Children’s Hospital of Orange County, Series A, 6.25%, 11/01/29		13,870,000		14,254,892
Children’s Hospital of Orange County, Series A, 5.25%, 11/01/41		10,000,000		10,849,000
Community Program for Persons with Developmental Disabilities, Series A, California Mortgage Insured, 6.25%, 2/01/26		5,000,000		5,409,200
El Camino Hospital, 4.125%, 2/01/47		11,000,000		11,570,570
El Camino Hospital, 5.00%, 2/01/47		12,500,000		14,293,250
Feedback Foundation Inc. Olive Crest Treatment Centers and South California Alcohol and Drug Programs Inc., Series A, California Mortgage Insured, 6.50%, 12/01/22		510,000		512,040
Kaiser Permanente, Refunding, Series A, Subseries A-2, 4.00%, 11/01/38		25,000,000		27,126,250
Kaiser Permanente, Refunding, Series A, Subseries A-2, 4.00%, 11/01/44		385,000,000		408,735,250
Kaiser Permanente, Series A, Subseries A-2, 5.00%, 11/01/47		30,000,000		41,629,200
Lucile Salter Packard Children’s Hospital at Stanford, Series A, 5.00%, 8/15/51		39,455,000		42,554,190
Lucile Salter Packard Children’s Hospital at Stanford, Series A, 5.00%, 11/15/56		22,000,000		24,803,680
Lucile Salter Packard Children’s Hospital at Stanford, Series B, 5.00%, 8/15/55		12,960,000		14,458,694
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/34		1,000,000		1,160,170
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/39		1,450,000		1,657,553
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/44		1,160,000		1,313,897
Pomona Valley Hospital Medical Center, Refunding, Series A, NATL Insured, 5.625%, 7/01/19		1,885,000		1,891,352
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/38		9,000,000		10,271,880
Rady Children’s Hospital, 5.25%, 8/15/41		11,000,000		11,704,550
Sutter Health, Refunding, Series A, 5.00%, 8/15/43		20,000,000		22,627,800
Sutter Health, Refunding, Series A, 4.00%, 11/15/48		36,810,000		38,781,175
Sutter Health, Refunding, Series B, 5.00%, 11/15/46		89,970,000		103,315,250
Sutter Health, Series A, 4.00%, 11/15/42		11,680,000		12,376,595
Sutter Health, Series A, 5.00%, 11/15/48		34,500,000		39,843,360
Sutter Health, Series A, 5.00%, 8/15/52		89,990,000		98,622,741
California Infrastructure and Economic Development Bank Revenue,
Academy of Motion Picture Arts and Sciences Obligated Group, Refunding, Series A, 5.00%, 11/01/41		8,000,000		8,898,160
Bay Area Toll Bridges Seismic Retrofit, first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/33		13,460,000		17,130,946
Bay Area Toll Bridges Seismic Retrofit, first lien, Series A, FGIC Insured, Pre-Refunded, 5.00%, 7/01/29		50,985,000		65,220,012
Clean Water State Revolving Fund, Green Bonds, 5.00%, 10/01/48		10,000,000		11,835,500
Infrastructure SRF, Refunding, Series A, 5.00%, 10/01/40		4,015,000		4,642,223
Infrastructure SRF, Refunding, Series A, 5.00%, 10/01/43		1,900,000		2,188,971
California Municipal Finance Authority Mobile Home Park Revenue, Caritas Projects, Senior, Refunding, Series A, 4.00%, 8/15/52		27,350,000		27,816,591
California Municipal Finance Authority Senior Living Revenue,
Pilgrim Place in Claremont, Series A, California Mortgage Insured, Pre-Refunded, 5.875%, 5/15/29		2,895,000		2,910,315
Pilgrim Place in Claremont, Series A, California Mortgage Insured, Pre-Refunded, 6.125%, 5/15/39		5,830,000		5,862,531
California School Facilities Financing Authority Revenue, Azusa USD, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/32		10,000,000		10,120,700

  franklintempleton.com   Annual Report         19

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
California State Community College Financing Authority College Housing Revenue, NCCD - Orange Coast Properties LLC - Orange Coast College Project, 5.25%, 5/01/53	$	8,150,000	$	9,124,577
California State Educational Facilities Authority Revenue,
Chapman University, 5.00%, 4/01/45		10,000,000		11,213,200
Loma Linda University, Refunding, Series A, 5.00%, 4/01/47		11,000,000		12,555,730
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/26		7,620,000		6,400,724
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/27		7,365,000		5,963,220
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/28		4,120,000		3,217,226
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/30		5,685,000		4,085,355
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/31		7,615,000		5,232,114
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/32		7,615,000		5,003,740
Santa Clara University, Capital Appreciation, Refunding, AMBAC Insured, zero cpn., 9/01/26		5,150,000		3,993,310
Santa Clara University, Refunding, 5.00%, 4/01/45		15,495,000		17,484,248
Stanford University, Refunding, Series U-1, 5.25%, 4/01/40		24,960,000		34,633,498
Stanford University, Refunding, Series U-3, 5.00%, 6/01/43		56,950,000		77,838,690
Stanford University, Series U-4, 5.00%, 6/01/43		24,205,000		33,083,152
Stanford University, Series U-6, 5.00%, 5/01/45		90,580,000		125,413,445
a Stanford University, Series V-1, 5.00%, 5/01/49		20,000,000		27,896,600
University of San Francisco, Refunding, Series A, 5.00%, 10/01/48		10,000,000		11,651,600
University of San Francisco, Refunding, Series A, 5.00%, 10/01/53		10,000,000		11,538,300
California State GO,
NATL Insured, 6.00%, 10/01/21		65,000		66,621
Various Purpose, 5.125%, 4/01/24		5,000		5,014
Various Purpose, 6.00%, 5/01/24		2,565,000		2,575,260
Various Purpose, 5.20%, 4/01/26		20,000		20,056
Various Purpose, 6.00%, 4/01/38		36,920,000		36,948,428
Various Purpose, 6.00%, 11/01/39		100,000,000		102,625,000
Various Purpose, 5.25%, 11/01/40		69,685,000		73,132,317
Various Purpose, 5.00%, 4/01/49		5,000,000		5,969,500
Various Purpose, AGMC Insured, 5.50%, 4/01/19		140,000		140,000
Various Purpose, AGMC Insured, 5.50%, 3/01/20		95,000		96,608
Various Purpose, AMBAC Insured, 5.90%, 3/01/25		210,000		213,891
Various Purpose, FGIC Insured, 6.00%, 8/01/19		310,000		314,709
Various Purpose, FGIC Insured, 5.375%, 6/01/26		1,335,000		1,343,624
Various Purpose, NATL Insured, 6.00%, 8/01/24		990,000		1,006,206
Various Purpose, NATL RE, FGIC Insured, 5.625%, 10/01/26		5,005,000		5,109,404
Various Purpose, Pre-Refunded, 6.00%, 4/01/38		20,210,000		20,210,000
Various Purpose, Refunding, 5.625%, 9/01/24		255,000		259,447
Various Purpose, Refunding, 6.00%, 3/01/33		25,000,000		26,047,250
Various Purpose, Refunding, 5.00%, 10/01/39		15,000,000		17,363,700
Various Purpose, Refunding, 5.50%, 3/01/40		25,000,000		25,771,000
Various Purpose, Refunding, 5.00%, 10/01/41		15,250,000		16,376,365
Various Purpose, Refunding, 5.00%, 4/01/42		85,000,000		91,796,600
Various Purpose, Refunding, 5.00%, 4/01/43		44,745,000		49,277,221
Various Purpose, Refunding, 5.00%, 10/01/44		25,000,000		28,133,750
Various Purpose, Refunding, 5.00%, 8/01/45		22,500,000		25,683,525

  20         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
California State GO, (continued)
Various Purpose, Refunding, 5.00%, 8/01/46	$	20,000,000	$	23,100,400
Various Purpose, Refunding, 5.00%, 10/01/47		81,000,000		92,944,260
Various Purpose, Refunding, 5.00%, 11/01/47		10,000,000		11,712,100
California State Municipal Finance Authority Revenue,
Channing House Project, Series B, California Mortgage Insured, 5.00%, 5/15/47		10,000,000		11,576,000
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/42		5,500,000		6,155,160
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/46		15,000,000		16,600,950
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/47		20,750,000		23,112,180
Eisenhower Medical Center, Refunding, Series A, 5.00%, 7/01/42		5,100,000		5,720,007
Eisenhower Medical Center, Refunding, Series A, 5.00%, 7/01/47		4,000,000		4,450,160
Eisenhower Medical Center, Series A, Pre-Refunded, 5.75%, 7/01/40		7,000,000		7,372,330
Inland Regional Center Project, Refunding, 5.00%, 6/15/45		23,300,000		26,097,864
LINXS APM Project, senior lien, Series A, 5.00%, 12/31/43		78,650,000		89,532,014
NCROC-Paradise Valley Estates Project, Series A, California Mortgage Insured, 5.00%, 1/01/43		10,000,000		11,595,700
NCROC-Paradise Valley Estates Project, Series A, California Mortgage Insured, 5.00%, 1/01/49		18,990,000		21,937,438
NorthBay Healthcare Group, Series A, 5.25%, 11/01/41		5,500,000		6,037,185
NorthBay Healthcare Group, Series A, 5.00%, 11/01/47		8,650,000		9,294,598
South Central Los Angeles Regional Center Project, 5.75%, 12/01/43		33,895,000		38,214,918
University of La Verne, Refunding, Series A, 4.00%, 6/01/47		8,000,000		8,497,600
California State Municipal Finance Authority Student Housing Revenue, CHF-Davis I LLC - West Village Student Housing Project, 5.00%, 5/15/48		10,000,000		11,325,600
California State PCFA Revenue, San Jose Water Co. Project, 4.75%, 11/01/46		15,000,000		16,509,450
California State PCFA Water Furnishing Revenue, San Diego County Water Authority Desalination Project Pipeline, Refunding, 5.00%, 11/21/45		9,155,000		10,533,377
California State Public School District Financing Authority Lease Revenue, Southern Kern USD, Series B, AGMC Insured, ETM, 5.90%, 9/01/26		1,475,000		1,721,915
California State Public Works Board Lease Revenue,
Various Capital Projects, Refunding, Series G, 5.00%, 11/01/31		16,520,000		18,265,999
Various Capital Projects, Series A, 5.00%, 4/01/31		48,070,000		52,334,290
Various Capital Projects, Series A, 5.00%, 4/01/32		17,885,000		19,447,791
Various Capital Projects, Series A, 5.00%, 4/01/37		29,000,000		31,377,130
Various Capital Projects, Series A, Subseries A-1, Pre-Refunded, 5.50%, 3/01/25		8,700,000		9,032,427
Various Capital Projects, Series A, Subseries A-1, Pre-Refunded, 6.00%, 3/01/35		10,000,000		10,427,300
Various Capital Projects, Series G, Subseries G-1, Pre-Refunded, 5.75%, 10/01/30		100,000,000		102,188,000
Various Capital Projects, Series I, 5.00%, 11/01/38		40,000,000		44,367,200
Various Capital Projects, Series I, Pre-Refunded, 6.375%, 11/01/34		50,000,000		51,456,500
Various Judicial Council Projects, Series D, 5.00%, 12/01/31		15,000,000		16,227,900
California State University Revenue,
Systemwide, Refunding, Series A, 5.00%, 11/01/39		23,000,000		26,026,340
Systemwide, Refunding, Series A, 5.00%, 11/01/39		19,920,000		24,079,296
Systemwide, Refunding, Series A, 5.00%, 11/01/42		29,105,000		34,209,144
Systemwide, Refunding, Series A, 5.00%, 11/01/42		29,645,000		31,947,231
Systemwide, Refunding, Series A, 5.00%, 11/01/43		16,870,000		20,246,362
Systemwide, Refunding, Series A, 5.00%, 11/01/43		11,000,000		12,591,700
Systemwide, Refunding, Series A, 5.00%, 11/01/44		32,345,000		36,382,303
Systemwide, Refunding, Series A, 5.00%, 11/01/47		63,000,000		73,274,040
Systemwide, Refunding, Series A, 5.00%, 11/01/50		17,385,000		20,518,472

  franklintempleton.com   Annual Report         21

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
California Statewide CDA,
COP, Citrus Valley Health Partners Inc., NATL Insured, 5.125%, 4/01/23	$	6,000,000	$	6,019,200
COP, Insured Health Facilities, UniHealth America, Series A, AMBAC Insured, Pre-Refunded, 5.75%, 10/01/25		6,745,000		7,268,345
MFHR, 740 S. Olive Street Apartments, Series L, GNMA Secured, 5.10%, 7/20/50		10,000,000		10,246,400
California Statewide CDA Revenue,
Adventist Health System/West, Refunding, Series A, 5.00%, 3/01/35		9,250,000		10,629,915
Adventist Health System/West, Refunding, Series A, 5.00%, 3/01/48		67,585,000		78,022,827
Cottage Health System Obligated Group, Refunding, 5.25%, 11/01/30		18,500,000		19,517,685
Cottage Health System Obligated Group, Refunding, 5.00%, 11/01/40		56,000,000		58,255,680
Henry Mayo Newhall Memorial Hospital, Refunding, Series A, AGMC Insured, 5.25%, 10/01/43		3,000,000		3,352,260
Huntington Memorial Hospital Project, 5.00%, 7/01/48		7,980,000		9,214,107
Insured Health Facility, CLARE Foundation Inc. and Principals Inc., Refunding, Series A, California Mortgage Insured, 5.00%, 8/01/21		460,000		461,283
Insured Health Facility, North County Serenity House Inc., Refunding, California Mortgage Insured, 5.50%, 1/01/28		2,700,000		2,708,478
Kaiser Permanente, Series A, 5.00%, 4/01/42		88,945,000		95,478,010
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.25%, 8/01/24		11,835,000		12,020,454
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.625%, 8/01/29		20,015,000		20,356,056
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.75%, 2/01/38		37,455,000		38,108,590
Poway RHF Housing Inc., Series A, California Mortgage Insured, 5.25%, 11/15/35		2,000,000		2,279,760
The Redwoods, a Community of Seniors Project, Refunding, California Mortgage Insured, 5.125%, 11/15/35		2,000,000		2,261,260
The Redwoods, a Community of Seniors Project, Refunding, California Mortgage Insured, 5.375%, 11/15/44		7,250,000		8,274,860
California Statewide CDA Student Housing Revenue,
University of California, Irvine East Campus Apartments, Phase I, CHF-Irvine LLC, Refunding, 5.125%, 5/15/31		8,000,000		8,499,680
University of California, Irvine East Campus Apartments, Phase I, CHF-Irvine LLC, Refunding, 5.375%, 5/15/38		8,500,000		9,067,205
California Statewide CDA Water and Wastewater Revenue, Pooled Financing Program, Monterey Merced Los Angeles san Bernardino County, Series A, AGMC Insured, 5.25%, 10/01/24		275,000		275,809
Campbell USD,
GO, Capital Appreciation, Series B, NATL Insured, zero cpn., 8/01/20		5,000,000		4,900,050
GO, Capital Appreciation, Series B, NATL Insured, zero cpn., 8/01/21		6,280,000		6,054,046
Carlsbad USD,
COP, San Diego County, Project, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/34		14,000,000		14,254,520
COP, San Diego County, Project, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/41		3,880,000		3,950,538
GO, San Diego County, Capital Appreciation, Election of 2006, Series B, zero cpn. to 5/01/19, 6.00% thereafter, 5/01/34		14,000,000		16,904,020
GO, San Diego County, Capital Appreciation, Election of 2006, Series C, zero cpn. to 8/01/26, 6.625% thereafter, 8/01/35		33,000,000		33,442,200
Castaic USD, COP, Refunding, AGMC Insured, 5.125%, 9/01/33		1,000,000		1,042,210
Castro Valley USD, COP, Solar Projects, AGMC Insured, 5.00%, 9/01/32		2,620,000		2,793,287
Centinela Valley UHSD,
GO, Los Angeles County, Election of 2010, Series B, AGMC Insured, 5.00%, 8/01/50		3,850,000		4,260,911
GO, Los Angeles County, Refunding, Series A, NATL Insured, 5.50%, 8/01/33		15,630,000		19,355,879
Central USD,
GO, Fresno County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/29 .		3,000,000		3,040,650
GO, Fresno County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.625%, 8/01/33		3,500,000		3,548,860

  22         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Cerritos PFAR Tax Allocation, Redevelopment Project, Refunding, Series A, AMBAC Insured, 5.00%, 11/01/22	$	1,675,000	$	1,752,167
Chaffey Joint UHSD, GO, San Bernardino County, Election of 2012, Series B, 5.00%, 8/01/44		27,500,000		31,255,675
Charter Oak USD, GO, Los Angeles County, Election of 2012, Refunding, Series A, AGMC Insured, 5.00%, 8/01/40		5,000,000		5,706,900
Chico USD, GO, Election of 2012, Series A, 5.00%, 8/01/43		8,000,000		8,975,600
Chula Vista IDR, San Diego Gas and Electric Co., Refunding, Series A, 5.875%, 2/15/34		17,500,000		17,631,075
Coachella Valley USD,
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/36		8,000,000		4,494,240
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/37		8,000,000		4,293,120
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/40		7,500,000		3,514,425
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/43		10,000,000		3,931,600
Coalinga-Huron Joint USD, GO, Fresno Monterey and San Benito Counties, Election of 2016, Series B, BAM Insured, 5.00%, 8/01/48		13,210,000		15,241,830
College of the Sequoias Tulare Area ID No. 3 GO, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/33		5,000,000		5,067,750
College of the Sequoias Visalia Area ID No. 2 GO,
Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/33		5,750,000		5,827,912
Election of 2008, Series B, AGMC Insured, 5.00%, 8/01/39		3,000,000		3,115,380
Colton Joint USD,
GO, San Bernardino and Riverside Counties, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/42		16,365,000		6,940,887
GO, San Bernardino and Riverside Counties, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/34		10,665,000		10,805,138
Compton CRDA Tax Allocation,
Redevelopment Project, second lien, Series B, 5.70%, 8/01/30		10,000,000		10,377,100
Redevelopment Project, second lien, Series B, 6.00%, 8/01/35		11,160,000		11,625,707
Redevelopment Project, second lien, Series B, 6.00%, 8/01/42		10,000,000		10,408,000
Compton Sewer Revenue, Los Angeles County, 6.00%, 9/01/39		11,775,000		11,920,303
Corona-Norco USD,
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 9/01/23		2,320,000		2,139,736
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 9/01/24		2,620,000		2,362,795
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 3/01/25		1,400,000		1,245,608
GO, Riverside County, Capital Appreciation, Series C, NATL Insured, zero cpn., 9/01/25		4,655,000		4,076,570
GO, Riverside County, Capital Appreciation, Series C, NATL Insured, zero cpn., 9/01/26		6,080,000		5,175,722
GO, Riverside County, Election of 2006, Series C, AGMC Insured, Pre-Refunded, 5.50%, 8/01/39		7,500,000		7,602,900
GO, Riverside County, Election of 2014, Series A, 5.00%, 8/01/44		20,000,000		22,822,200
Covina PFA Wastewater Revenue, Assured Guaranty, 5.375%, 10/01/29		6,550,000		6,669,668
Covina PFA Water Revenue, AGMC Insured, 5.50%, 10/01/40		3,500,000		3,694,425
Daly City Housing Development Finance Agency Mobile Home Park Revenue, Franciscan Mobile Home Park Acquisition Project, senior bond, Refunding, Series A, 5.00%, 12/15/47		17,870,000		17,902,702
Delano UHSD, GO, Refunding, Series A, NATL Insured, 5.15%, 2/01/32		8,520,000		10,114,177
Delano USD, COP, Refinancing Project, NATL Insured, 5.125%, 1/01/22		1,015,000		1,060,299
East Bay MUD Water System Revenue,
Alameda and Contra Costa Counties, Refunding, Series A, 5.00%, 6/01/35		10,000,000		11,381,600
Alameda and Contra Costa Counties, Refunding, Series A, 5.00%, 6/01/36		7,355,000		8,505,396
Alameda and Contra Costa Counties, Series C, 5.00%, 6/01/44		14,000,000		15,679,720
Alameda and Contra Costa Counties, Series C, 4.00%, 6/01/45		9,070,000		9,602,137

  franklintempleton.com   Annual Report         23

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Eastern California Municipal Water District Financing Authority Water and Wastewater Revenue, Series B, 5.00%, 7/01/46	$	30,705,000	$	35,143,408
El Monte UHSD, GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre- Refunded, 5.50%, 6/01/34		11,355,000		11,431,419
Elk Grove Finance Authority Special Tax Revenue, BAM Insured, 5.00%, 9/01/38		1,500,000		1,717,320
Escondido UHSD,
COP, Public School Facilities Project, Series A, AGMC Insured, 5.00%, 6/01/33		3,500,000		3,616,550
COP, Public School Facilities Project, Series A, AGMC Insured, 5.00%, 6/01/37		2,500,000		2,581,750
Fairfax Elementary School District GO,
Capital Appreciation, Election of 2010, Refunding, AGMC Insured, zero cpn., 11/01/48		10,380,000		3,232,436
Election of 2010, AGMC Insured, 5.75%, 11/01/40		2,250,000		2,467,598
Folsom Cordova USD, GO, School Facilities ID No. 5, Election of 2014, Sacramento County, Series C, 4.00%, 10/01/43		17,500,000		18,634,000
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue,
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/37		41,250,000		22,489,500
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/38		77,650,000		40,513,887
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/39		56,100,000		28,060,659
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.50% thereafter, 1/15/31		35,000,000		35,520,800
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.625% thereafter, 1/15/32		37,260,000		37,945,584
Capital Appreciation, Refunding, Series A, zero cpn., 1/15/42		130,000,000		52,348,400
Capital Appreciation, Refunding, Series A, zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42		98,000,000		94,847,340
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/22		30,835,000		29,610,850
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/23		5,765,000		5,432,821
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/24		72,045,000		66,388,027
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/25		20,660,000		18,648,749
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/26		23,475,000		20,746,031
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/27		15,000,000		12,955,800
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/28		2,000,000		1,680,460
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/29		35,310,000		28,776,944
Refunding, Series A, 5.75%, 1/15/46		260,000,000		298,893,400
Refunding, Series A, 6.00%, 1/15/49		305,000,000		356,706,650
Refunding, Series A, 6.00%, 1/15/53		190,000,000		221,754,700
Refunding, Series A, AGMC Insured, 5.00%, 1/15/42		10,000,000		11,029,500
Fort Bragg USD, GO, Election of 2008, AGMC Insured, 5.125%, 8/01/41		4,380,000		4,668,248
Fowler USD,
GO, Fresno County, Capital Appreciation, Election of 2004, Series C, AGMC Insured, zero cpn., 8/01/41		3,095,000		1,401,107
GO, Fresno County, Capital Appreciation, Election of 2004, Series C, AGMC Insured, zero cpn., 8/01/42		3,005,000		1,305,552
GO, Fresno County, Election of 2004, Series C, AGMC Insured, 5.25%, 8/01/39		3,555,000		3,711,953
Franklin-McKinley School District GO, Santa Clara County, Election of 2010, Series C, BAM Insured, 5.00%, 8/01/44		5,000,000		5,538,050
Fresno USD,
GO, Capital Appreciation, Election of 2001, Series G, zero cpn., 8/01/41		47,000,000		11,275,770
GO, Capital Appreciation, Election of 2010, Refunding, Series B, zero cpn., 8/01/41		35,000,000		8,507,800
GO, Refunding, Series C, NATL Insured, 5.90%, 2/01/20		2,065,000		2,138,968
GO, Refunding, Series C, NATL Insured, 5.90%, 8/01/22		3,000,000		3,307,140
Fullerton School District Financing Authority Special Tax Revenue, senior lien, Refunding, Series A, AGMC Insured, 5.00%, 9/01/31		2,500,000		2,792,725
Fullerton School District GO, Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/23		3,030,000		2,789,660

  24         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Glendale Community College District GO, Capital Appreciation, NATL Insured, zero cpn., 8/01/28	$	15,000,000	$	10,803,150
Glendora PFAR Tax Allocation, Project No. 1, Refunding, Series A, NATL Insured, 5.00%, 9/01/24		5,000,000		5,014,250
Golden State Tobacco Securitization Corp. Enhanced Tobacco Settlement Revenue,
Asset-Backed, Series A, 5.00%, 6/01/35		25,000,000		28,445,500
Asset-Backed, Series A, 5.00%, 6/01/40		212,525,000		239,058,746
Asset-Backed, Series A, 5.00%, 6/01/45		308,395,000		345,223,531
Golden State Tobacco Securitization Corp. Tobacco Settlement Revenue, Asset-Backed, Refunding, Series A-1, 5.00%, 6/01/35		28,340,000		32,146,062
Grand Terrace CRDA Tax Allocation Revenue, Community Redevelopment Project Area, Series A, 6.00%, 9/01/33		10,000,000		10,282,100
Grossmont UHSD,
GO, San Diego County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/24		5,110,000		4,629,047
GO, San Diego County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/33		1,440,000		1,457,150
GO, San Diego County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.25%, 8/01/33		7,510,000		7,605,602
Hacienda La Puente USD, GO, Los Angeles County, Election of 2016, Series A, 4.00%, 8/01/47		655,000		690,933
Hartnell Community College District GO, Monterey and San Benito Counties, Capital Appreciation, Election of 2002, zero cpn. to 8/01/22, 6.125% thereafter, 8/01/33		20,000,000		23,334,800
Hawthorne School District GO,
Capital Appreciation, Election of 2004, Series C, Assured Guaranty, zero cpn., 8/01/48		37,665,000		11,872,008
Los Angeles County, Election of 2008, Series A, Assured Guaranty, 5.00%, 8/01/34		1,000,000		1,010,160
Hayward USD, GO, Alameda County, Capital Appreciation, Election of 2008, Series A, AGMC Insured, Pre-Refunded, zero cpn., 8/01/38		9,875,000		2,681,754
Healdsburg RDA Tax Allocation Revenue, Sotoyome Community Development Project, Pre-Refunded, 5.375%, 8/01/34		7,750,000		8,156,642
Huntington Beach City School District GO, Capital Appreciation, Election of 2002, Series A, NATL Insured, zero cpn., 8/01/28		10,005,000		7,866,631
Huntington Beach UHSD, COP, Adult Education Project, AGMC Insured, 5.25%, 9/01/39		2,000,000		2,091,980
Inland Empire Tobacco Securitization Authority Revenue, Tobacco Settlement Asset-Backed, Inland Empire Tobacco Securitization Corp., Capital Appreciation, Series B, 5.75%, 6/01/26		35,000,000		36,344,000
Irvine USD Special Tax,
CFD No. 01-1, South Irvine Communities, Refunding, BAM Insured, 5.00%, 9/01/38		7,000,000		7,875,350
CFD No. 09-1, Series D, 5.00%, 3/01/57		10,000,000		11,023,500
Jefferson UHSD San Mateo County GO,
Refunding, Series A, NATL Insured, 6.45%, 8/01/25		3,045,000		3,609,299
Refunding, Series A, NATL Insured, 6.45%, 8/01/29		3,075,000		3,966,535
Jurupa PFA Special Tax Revenue,
Refunding, Series A, AGMC Insured, 5.25%, 9/01/42		3,250,000		3,675,360
Series A, AGMC Insured, 5.125%, 9/01/37		4,000,000		4,497,040
Jurupa PFAR, superior lien, Refunding, Series A, AGMC Insured, 5.00%, 9/01/30		4,000,000		4,171,120
Jurupa USD, GO, Riverside County, Election of 2014, Series A, 5.00%, 8/01/39		10,165,000		11,680,906
La Habra COP, Park La Habra and Viewpark Refinancing Project, Refunding, Series A, AGMC Insured, 5.25%, 9/01/40		7,900,000		8,274,776
La Mirada RDA Tax Allocation, Merged Project Area, Refunding, Series A, AGMC Insured, 5.00%, 8/15/28		1,855,000		1,935,822
La Palma Community Development Commission Tax Allocation, La Palma Community Development Project No. 1, Refunding, 6.10%, 6/01/22		340,000		341,187
Lake Elsinore PFA Tax Allocation Revenue, Series A, Assured Guaranty, 5.25%, 9/01/33		10,065,000		10,223,322
Lake Elsinore USD, COP, School Facilities Project Funding Program, AGMC Insured, 5.00%, 6/01/42		10,000,000		10,314,900
Lake Tahoe USD, GO, Election of 2008, AGMC Insured, 5.375%, 8/01/29		10,000,000		10,124,700

  franklintempleton.com   Annual Report         25

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Lakeside USD San Diego County GO, Capital Appreciation, Election of 2008, Series B, zero cpn., 8/01/45	$	11,540,000	$	4,256,644
Lammersville Joint USD, GO, Election of 2016, Series A, 4.00%, 8/01/46		41,340,000		43,297,036
Lancaster School District GO,
Capital Appreciation, Election of 1999, NATL Insured, zero cpn., 8/01/25		5,495,000		4,755,703
Capital Appreciation, Election of 1999, NATL Insured, zero cpn., 7/01/26		5,965,000		4,998,968
Lawndale RDA Tax Allocation,
Economic Revitalization Project, Assured Guaranty, 5.50%, 8/01/39		10,280,000		10,406,855
Economic Revitalization Project, Assured Guaranty, 5.50%, 8/01/44		6,085,000		6,159,480
Lemon Grove School District GO,
Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/50		20,990,000		6,210,941
Election of 2008, Series A, Assured Guaranty, 5.125%, 8/01/33		2,100,000		2,124,738
Live Oak School District COP,
Assured Guaranty, Pre-Refunded, 5.50%, 8/01/29		1,245,000		1,261,870
Assured Guaranty, Pre-Refunded, 5.875%, 8/01/34		2,270,000		2,303,551
Assured Guaranty, Pre-Refunded, 5.875%, 8/01/39		2,750,000		2,790,645
Lodi USD, GO, San Joaquin County, Election of 2016, 4.00%, 8/01/41		15,000,000		15,881,250
Long Beach Bond Finance Authority Natural Gas Purchase Revenue,
Series A, 5.50%, 11/15/28		8,000,000		10,023,440
Series A, 5.00%, 11/15/29		17,465,000		21,270,100
Series A, 5.50%, 11/15/30		5,000,000		6,350,450
Series A, 5.00%, 11/15/35		69,800,000		86,720,218
Series A, 5.50%, 11/15/37		35,000,000		45,897,600
Los Angeles Community College District GO, Refunding, 5.00%, 8/01/38		10,000,000		11,741,800
Los Angeles County MTA Sales Tax Revenue,
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/35		17,655,000		20,904,579
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/37		10,970,000		12,901,598
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/38		28,160,000		33,016,192
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/39		10,000,000		11,697,100
Los Angeles County Sanitation Districts Financing Authority Revenue, Capital Projects, District No. 20, Green Bonds, Refunding, Series A, 4.00%, 10/01/42		16,430,000		17,334,307
Los Angeles Department of Airports Revenue,
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/34		18,500,000		18,579,735
Los Angeles International Airport, Senior, Refunding, Series A, 5.25%, 5/15/39		14,000,000		14,064,540
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/40		19,445,000		20,174,965
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/35		80,000,000		83,157,600
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/40		30,000,000		31,126,200
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/41		14,500,000		16,363,975
Los Angeles International Airport, Subordinate, Refunding, Series A, 5.00%, 5/15/49		10,000,000		11,744,600
Los Angeles International Airport, Subordinate, Refunding, Series E, 5.00%, 5/15/43		15,005,000		18,069,471
Los Angeles International Airport, Subordinate, Refunding, Series E, 5.00%, 5/15/48		33,145,000		39,678,874
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/44		60,000,000		69,942,600
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/47		33,000,000		37,826,910
Los Angeles International Airport, Subordinate, Series B, 5.00%, 5/15/41		12,500,000		14,224,125
Los Angeles International Airport, Subordinate, Series B, 5.00%, 5/15/46		53,000,000		60,020,380
Los Angeles Department of Water and Power Revenue,
Power System, Refunding, Series A, 5.00%, 7/01/35		15,105,000		17,321,961
Power System, Refunding, Series A, 5.00%, 7/01/36		17,795,000		20,335,592
Power System, Refunding, Series A, 5.00%, 7/01/46		15,000,000		17,077,950
Power System, Series A, 5.00%, 7/01/42		7,710,000		8,963,338
Power System, Series A, 5.00%, 7/01/47		11,000,000		12,714,680
Power System, Series B, 5.00%, 7/01/35		11,995,000		14,031,151

  26         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Los Angeles Department of Water and Power Revenue, (continued)
Power System, Series B, 5.00%, 7/01/43	$	62,000,000	$	69,094,660
Power System, Series D, 5.00%, 7/01/44		51,940,000		58,425,748
Power System, Series E, 5.00%, 7/01/44		34,000,000		38,245,580
Water System, Refunding, Series A, 5.00%, 7/01/43		81,095,000		88,671,706
Water System, Refunding, Series A, 5.00%, 7/01/46		62,660,000		71,506,339
Water System, Refunding, Series B, 5.00%, 7/01/48		10,000,000		11,838,300
Water System, Series A, 5.00%, 7/01/43		13,805,000		16,307,985
Water System, Series A, 5.00%, 7/01/44		72,060,000		83,744,529
Water System, Series A, 5.00%, 7/01/44		50,000,000		56,348,500
Water System, Series A, 5.00%, 7/01/48		22,375,000		26,291,072
Los Angeles Harbor Department Revenue, Exempt Facility, Refunding, Series B, 5.00%, 8/01/44		10,300,000		11,715,117
Los Angeles Mortgage Revenue, FHA Insured Mortgage Loans, Section 8 Assisted Projects, Refunding, Series 1, NATL Insured, 6.50%, 7/01/22		255,000		255,836
Los Angeles USD,
GO, Election of 2004, Series I, 5.00%, 7/01/29		10,000,000		10,085,200
GO, Election of 2004, Series I, 5.00%, 1/01/34		36,760,000		37,058,491
GO, Election of 2005, Series F, 5.00%, 7/01/29		2,250,000		2,269,170
Los Angeles Wastewater System Revenue,
Green Bonds, Refunding, Series C, 5.00%, 6/01/45		24,690,000		27,951,549
Green Bonds, Series A, 5.00%, 6/01/44		9,000,000		10,201,950
Series A, Pre-Refunded, 5.00%, 6/01/39		25,000,000		25,150,000
Los Gatos-Saratoga Joint UHSD,
GO, Santa Clara and Santa Cruz Counties, Election of 2014, Series A, 4.00%, 8/01/39		10,635,000		11,207,269
GO, Santa Clara and Santa Cruz Counties, Election of 2014, Series A, 4.00%, 8/01/44		16,090,000		16,884,846
Madera County COP,
Valley Children’s Hospital Project, NATL Insured, 5.00%, 3/15/23		6,960,000		6,983,316
Valley Children’s Hospital Project, NATL Insured, 5.75%, 3/15/28		27,500,000		27,592,125
McFarland PFAR, Water and Wastewater Financing Projects, Series A, AGMC Insured, 5.00%, 10/01/40		5,115,000		5,340,265
Mendocino-Lake Community College District GO, Election of 2006, Series B, AGMC Insured, 5.125%, 8/01/41		7,500,000		8,002,425
The Metropolitan Water District of Southern California Water Revenue, Authorization, Series A, 5.00%, 7/01/40		10,000,000		11,510,100
Midpeninsula Regional Open Space District GO, Green Bond, 4.00%, 9/01/48		11,220,000		12,068,793
Milpitas RDA Tax Allocation, Redevelopment Project Area No. 1, NATL Insured, ETM, 5.50%, 1/15/24		8,860,000		9,767,175
Modesto High School District Stanislaus County GO,
Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/21		9,660,000		9,299,489
Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/23		10,815,000		9,974,242
Capital Appreciation, Series A, NATL Insured, zero cpn., 5/01/27		12,770,000		10,643,540
Monterey Peninsula USD,
GO, Election of 2010, Series A, AGMC Insured, Pre-Refunded, 5.75%, 8/01/41		17,500,000		19,298,650
GO, Election of 2010, Series C, 5.00%, 8/01/41		11,190,000		12,979,057
Moorpark USD,
COP, Assured Guaranty, Pre-Refunded, 5.625%, 11/01/28		2,180,000		2,233,432
GO, Capital Appreciation, Election of 2008, Series A, Assured Guaranty, zero cpn., 8/01/32		5,870,000		3,850,603
Moreno Valley USD,
GO, Riverside County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/27		6,315,000		5,367,939
GO, Riverside County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/28		6,625,000		5,471,919
GO, Riverside County, Election of 2014, Series A, AGMC Insured, 5.00%, 8/01/44		29,220,000		33,324,826
Mount San Antonio Community College District GO, Los Angeles County, Capital Appreciation, Election of 2008, Series A, zero cpn. to 8/01/28, 6.25% thereafter, 8/01/43		55,000,000		50,054,400

  franklintempleton.com   Annual Report         27

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39	$	25,000,000	$	36,301,750
M-S-R Public Power Agency San Juan Project Revenue, Series E, NATL Insured, ETM, 6.00%, 7/01/22		6,330,000		6,871,088
Murrieta Valley USD, COP, School Facility Bridge Funding Program, Pre-Refunded, 5.75%, 5/01/41		12,000,000		12,540,840
Needles PFAR Tax Allocation, Redevelopment Project, Series A, 7.50%, 8/15/22		540,000		540,697
Newport Mesa USD, GO, Capital Appreciation, Election of 2005, zero cpn. to 7/31/21, 6.30% thereafter, 8/01/42		20,000,000		23,764,000
Northern California Public Power Agency Revenue, AMBAC Insured, Pre-Refunded, 7.50%, 7/01/23		2,425,000		2,649,992
Oak Grove School District GO, Capital Appreciation, Election of 2008, Series B-1, Pre-Refunded, zero cpn., 6/01/41		36,240,000		8,194,589
Oak View USD, GO, San Joaquin County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/49		1,895,000		1,986,377
Oakland USD Alameda County GO, Election of 2006, Series A, Pre-Refunded, 6.125%, 8/01/29		7,225,000		7,338,938
Oceanside USD,
GO, San Diego County, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/38		10,590,000		5,663,003
GO, San Diego County, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/39		7,860,000		4,006,242
GO, San Diego County, Refunding, 5.00%, 8/01/48		12,000,000		13,725,480
Ontario-Montclair School District GO, San Bernardino County, Election of 2016, Series A, 5.00%, 8/01/46		11,765,000		13,611,517
Orange County Sanitation District Revenue, Wastewater, Refunding, Series A, 5.00%, 2/01/36		8,350,000		9,583,378
Orange County Water District Revenue COP,
Series B, NATL Insured, ETM, 5.00%, 8/15/28		13,740,000		16,842,492
Series B, NATL Insured, ETM, 5.00%, 8/15/34		3,305,000		4,265,896
Series B, NATL Insured, Pre-Refunded, 5.00%, 8/15/34		4,140,000		5,487,570
Orange Special Tax, CFD No. 06-1, Del Rio Public Improvements, Refunding, AGMC Insured, 5.00%, 10/01/40		7,500,000		8,469,300
Oxnard School District GO, Ventura County, Election of 2012, Series C, BAM Insured, 4.00%, 8/01/44		10,755,000		11,243,062
Palomar Community College District GO,
Capital Appreciation, Election of 2006, Series B, zero cpn. to 8/01/25, 6.20% thereafter, 8/01/39		69,410,000		73,766,172
Election of 2006, Series C, 5.00%, 8/01/44		35,120,000		40,296,688
Palomar Health Revenue, Refunding, AGMC Insured, 5.00%, 11/01/47		35,000,000		40,701,850
Palomar Pomerado Health COP, Pre-Refunded, 6.75%, 11/01/39		30,000,000		30,910,200
Palomar Pomerado Health GO,
Capital Appreciation, Election of 2004, Series A, Assured Guaranty, zero cpn. to 8/01/19, 7.00% thereafter, 8/01/38		36,000,000		47,376,000
Capital Appreciation, Election of 2004, Series A, zero cpn. to 8/01/20, 6.75% thereafter, 8/01/40		60,000,000		74,637,000
Paramount USD,
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/43		32,000,000		7,523,520
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/48		28,000,000		4,415,880
GO, Los Angeles County, Election of 2006, AGMC Insured, 5.00%, 8/01/46		11,270,000		12,020,357
GO, Los Angeles County, Election of 2006, BAM Insured, 5.00%, 8/01/48		2,450,000		2,724,621
Pasadena Electric Revenue, Refunding, Series A, 4.00%, 6/01/46		22,625,000		23,959,875
Patterson Joint USD,
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/22		1,900,000		1,782,238
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/23		1,985,000		1,816,612
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/24		2,075,000		1,852,124

  28         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Patterson Joint USD, (continued)
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/25	$	2,170,000	$	1,878,048
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/26		2,265,000		1,893,585
Perris School District COP, School Facility Bridge Funding Program, AGMC Insured, 5.50%, 9/01/34		4,000,000		4,162,160
Perris SFMR, Capital Appreciation, Series A, GNMA Secured, ETM, zero cpn., 6/01/23		19,095,000		17,525,773
Perris UHSD, GO, Riverside County, Election of 2012, Series A, AGMC Insured, 5.00%, 9/01/42		5,000,000		5,615,450
Pittsburg USD, GO, Contra Costa County, Refunding, 4.00%, 8/01/44		11,000,000		11,541,310
Pittsburg USD Financing Authority Revenue, Board Program, AGMC Insured, Pre-Refunded, 5.50%, 9/01/46		9,980,000		10,945,266
Placentia-Yorba Linda USD,
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/43		27,955,000		11,754,798
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/46		89,200,000		32,160,168
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/49		85,000,000		27,108,200
Pleasanton USD, COP, AGMC Insured, Pre-Refunded, 5.00%, 8/01/29		4,000,000		4,192,880
Pomona USD,
GO, Election of 2008, Series C, AGMC Insured, 5.25%, 8/01/40		16,000,000		17,246,720
GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 8/01/33		5,675,000		5,747,243
Poway RDA Successor Agency Tax Allocation,
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 12/15/31		10,180,000		13,107,666
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 12/15/32		11,215,000		14,543,276
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 6/15/33		5,835,000		7,619,693
Poway USD, GO, Capital Appreciation, School Facilities ID No. 2007-1, Election of 2008, Refunding, Series B, zero cpn., 8/01/46		45,000,000		16,061,850
The Regents of the University of California Revenue,
General, Refunding, Series AZ, 5.00%, 5/15/48		62,325,000		73,597,723
Limited Project, Refunding, Series O, 5.00%, 5/15/48		20,000,000		23,529,200
Limited Project, Refunding, Series O, 5.00%, 5/15/58		10,000,000		11,507,300
Rialto USD,
GO, Capital Appreciation, Election of 1999, Series A, NATL Insured, zero cpn., 6/01/19		1,655,000		1,650,813
GO, Capital Appreciation, Election of 2010, Series A, AGMC Insured, zero cpn. to 8/01/26, 7.35% thereafter, 8/01/41		27,000,000		28,555,740
Richmond Joint Powers Financing Authority Lease Revenue, Civic Center Project, Refunding, Assured Guaranty, 5.875%, 8/01/37		24,000,000		24,319,920
Rio Hondo Community College District GO, Capital Appreciation, Election of 2004, Series C, zero cpn., 8/01/35		10,000,000		6,016,500
Ripon USD,
GO, Capital Appreciation, Election of 2012, Refunding, Series A, BAM Insured, 5.00%, 8/01/42		2,315,000		2,635,720
GO, Capital Appreciation, Election of 2012, Refunding, Series A, BAM Insured, 5.00%, 8/01/42		705,000		778,863
Riverside County Asset Leasing Corp. Leasehold Revenue,
Riverside County Hospital Project, Capital Appreciation, Series A, NATL Insured, zero cpn., 6/01/23		14,160,000		12,937,142
Riverside County Hospital Project, Capital Appreciation, Series A, NATL Insured, zero cpn., 6/01/24		13,005,000		11,554,162
Riverside County SFMR,
Capital Appreciation, Mortgage, Series A, GNMA Secured, ETM, zero cpn., 11/01/20		25,055,000		24,260,255
Capital Appreciation, Mortgage, Series B, GNMA Secured, ETM, zero cpn., 6/01/23		26,160,000		24,010,171
Riverside County Transportation Commission Sales Tax Revenue, Limited Tax, Series A, Pre- Refunded, 5.25%, 6/01/39		11,000,000		12,726,340
Riverside County Transportation Commission Toll Revenue, senior lien, Series A, 5.75%, 6/01/48		10,000,000		10,969,900

  franklintempleton.com   Annual Report         29

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Riverside Electric Revenue,
Issue D, AGMC Insured, 5.00%, 10/01/33	$	10,000,000	$	10,000,000
Issue D, AGMC Insured, 5.00%, 10/01/38		4,695,000		4,695,000
Refunding, Series A, 5.00%, 10/01/43		11,535,000		12,919,546
Riverside Sewer Revenue, Refunding, Series A, 5.00%, 8/01/40		25,000,000		28,550,250
RNR School Financing Authority Special Tax, CFD No. 92-1, Subordinate, Refunding, Series A, BAM Insured, 5.00%, 9/01/36		11,145,000		12,829,455
Road 17 Levee Area PFA Assessment Revenue, Road 17 Levee Improvement Project, Pre-Refunded, 7.00%, 9/01/39		8,865,000		9,066,324
Rocklin USD,
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/25		8,160,000		7,187,083
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/26		8,695,000		7,423,530
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/27		9,080,000		7,485,915
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/28		16,615,000		13,205,270
Rohnert Park Community Development Commission Tax Allocation Revenue, Redevelopment Project, Series R, NATL Insured, ETM, 5.00%, 8/01/37		1,380,000		1,382,525
Roseville Electric System Revenue COP, AGMC Insured, 5.00%, 2/01/34		5,000		5,014
Roseville Natural Gas Financing Authority Gas Revenue, 5.00%, 2/15/26		5,000,000		5,852,950
Sacramento City USD, GO, Election of 2012, Measure Q, Series E, 4.00%, 5/01/47		20,000,000		20,572,000
Sacramento County Airport System Revenue,
Senior, 5.00%, 7/01/40		9,000,000		9,354,150
Senior, Refunding, Series A, 5.00%, 7/01/41		10,000,000		11,533,700
Subordinate, Refunding, Series B, 5.00%, 7/01/41		9,000,000		10,348,290
Sacramento County Sanitation Districts Financing Authority Revenue, Sacramento Regional County Sanitation District, Refunding, Series A, 5.00%, 12/01/44		25,000,000		27,811,250
Sacramento Transient Occupancy Tax Revenue,
Convention Center Complex, Senior, Series A, 5.00%, 6/01/43		6,035,000		7,100,298
Convention Center Complex, Senior, Series A, 5.00%, 6/01/48		12,000,000		14,020,200
Sacramento Water Revenue, 5.00%, 9/01/38		21,630,000		24,399,289
Salida Area Public Facilities Financing Agency No. 88 Special Tax, Refunding, AGMC Insured, 5.00%, 9/01/30		5,435,000		5,858,604
San Bernardino Community College District GO, Capital Appreciation, Election of 2008, Series B, zero cpn., 8/01/48		66,390,000		22,230,691
San Bernardino County COP, Medical Center Financing Project, Refunding, 5.00%, 8/01/26		13,045,000		13,079,439
San Bernardino County SFMR, Capital Appreciation, Series A, GNMA Secured, ETM, zero cpn., 5/01/22		11,235,000		9,539,414
San Buenaventura Public Facilities Financing Authority Wastewater Revenue,
Series C, 5.00%, 1/01/39		8,500,000		9,570,830
Series C, 5.00%, 1/01/44		10,840,000		12,182,859
San Buenaventura Public Facilities Financing Authority Water Revenue, Series C, 5.00%, 1/01/44		8,555,000		9,610,687
San Diego Community College District GO, Capital Appreciation, Election of 2002, zero cpn. to 8/01/19, 6.00% thereafter, 8/01/33		26,880,000		32,919,130
San Diego County COP, The Salk Institute for Biological Studies, Pre-Refunded, 5.125%, 7/01/40		15,000,000		15,682,350
San Diego County Regional Airport Authority Revenue,
Consolidated Rental Car Facilities, Series A, 5.00%, 7/01/44		5,645,000		6,317,545
Subordinate, Refunding, Series A, 5.00%, 7/01/27		11,565,000		12,068,540
San Diego County Regional Transportation Commission Sales Tax Revenue,
Refunding, Series A, 5.00%, 4/01/48		25,000,000		28,880,750
Series A, 5.00%, 4/01/44		54,915,000		61,641,538
Series A, 5.00%, 4/01/48		20,000,000		22,372,600

  30         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FFREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
San Diego USD,
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/21	$	12,160,000	$	11,714,701
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/22		8,440,000		7,981,202
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/23		11,120,000		10,294,562
GO, Capital Appreciation, Election of 2008, Series A, Pre-Refunded, zero cpn. to 7/01/19, 6.00% thereafter, 7/01/33		104,505,000		125,314,036
GO, Capital Appreciation, Election of 2008, Series C, zero cpn. to 6/30/30, 6.625% thereafter, 7/01/48		29,840,000		25,648,077
GO, Dedicated Unlimited Ad Valorem Property Tax, Capital Appreciation, Election of 2008, Series E, zero cpn. to 7/01/32, 5.375% thereafter, 7/01/47		74,270,000		54,138,374
GO, Dedicated Unlimited Ad Valorem Property Tax, Capital Appreciation, Refunding, Series R-2, zero cpn. to 6/30/30, 6.625% thereafter, 7/01/40		79,500,000		70,050,630
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series F, 5.00%, 7/01/40		56,510,000		64,690,388
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series F, 5.00%, 7/01/45		34,370,000		39,133,682
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series G, 5.00%, 7/01/40		13,000,000		14,881,880
San Francisco City and County Airport Commission International Airport Revenue,
Refunding, Second Series, Series A, 5.00%, 5/01/42		20,910,000		24,053,609
Refunding, Second Series, Series A, 5.00%, 5/01/47		49,090,000		56,166,814
Refunding, Second Series, Series A, 5.00%, 5/01/49		25,000,000		29,301,750
Refunding, Second Series, Series B, 5.00%, 5/01/47		70,725,000		82,077,777
Refunding, Second Series, Series D, 5.00%, 5/01/48		117,910,000		136,595,198
Refunding, Second Series, Series D, 5.25%, 5/01/48		120,000,000		142,014,000
Refunding, Second Series, Series E, 5.00%, 5/01/48		44,650,000		52,540,994
Second Series, Series B, 5.00%, 5/01/44		31,000,000		34,771,150
Second Series, Series B, 5.00%, 5/01/46		12,500,000		14,122,625
San Francisco City and County Public Utilities Commission Water Revenue,
Sub-Series A, 5.00%, 11/01/36		23,490,000		25,750,678
Sub-Series A, 5.00%, 11/01/41		5,800,000		6,301,990
Sub-Series A, 5.00%, 11/01/43		71,735,000		78,259,298
San Francisco City and County RDA Successor Agency Tax Allocation, Transbay Infrastructure Projects, third lien, Series B, AGMC Insured, 5.00%, 8/01/46		10,000,000		11,577,500
San Gabriel USD,
GO, Los Angeles County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 8/01/26		3,530,000		3,020,374
GO, Los Angeles County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 2/01/27		1,850,000		1,552,520
San Jacinto USD,
COP, Refunding, AGMC Insured, 5.125%, 9/01/30		4,375,000		4,563,519
COP, Refunding, AGMC Insured, 5.375%, 9/01/40		12,000,000		12,551,760
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue,
Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 1/15/26		13,155,000		10,786,574
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.65% thereafter, 1/15/37		104,745,000		111,075,788
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.70% thereafter, 1/15/38		140,340,000		149,174,403
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/40		158,655,000		171,141,148
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/41		141,024,000		152,342,586
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/42		141,024,000		152,786,812
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/25		5,700,000		5,189,280
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/28		33,545,000		28,307,955
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/29		37,050,000		30,340,986
senior lien, Refunding, Series A, 5.00%, 1/15/44		125,000,000		137,525,000
senior lien, Refunding, Series A, 5.00%, 1/15/50		430,000,000		470,991,900

  franklintempleton.com   Annual Report         31

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
San Jose Airport Revenue,
Refunding, Series A, 5.00%, 3/01/41	$	10,000,000	$	11,482,600
Refunding, Series A, 5.00%, 3/01/47		20,000,000		22,803,800
Refunding, Series B, 5.00%, 3/01/47		10,000,000		11,569,700
San Jose Financing Authority Lease Revenue, Civic Center Project, Refunding, Series A, AMBAC Insured, 5.00%, 6/01/39		20,885,000		20,931,574
San Jose GO,
Libraries, Parks and Public Safety Projects, 5.00%, 9/01/28		11,600,000		11,631,320
Libraries, Parks and Public Safety Projects, NATL Insured, 5.00%, 9/01/34		15,820,000		15,883,755
Libraries and Parks Projects, NATL Insured, 5.00%, 9/01/36		35,150,000		35,287,436
San Jose Special Hotel Tax Revenue,
Convention Center Expansion and Renovation Project, 6.50%, 5/01/36		10,000,000		10,969,800
Convention Center Expansion and Renovation Project, 6.50%, 5/01/42		10,000,000		10,972,000
San Jose USD,
COP, Capital Appreciation, AGMC Insured, ETM, zero cpn., 1/01/27		7,105,000		6,113,284
COP, Capital Appreciation, AGMC Insured, ETM, zero cpn., 1/01/29		7,105,000		5,762,581
San Juan USD,
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/26		15,825,000		12,722,825
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/27		18,605,000		15,503,919
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/28		19,470,000		15,733,318
San Luis Obispo County Financing Authority Revenue, Nacimiento Water Project, Refunding, Series A, BAM Insured, 5.00%, 9/01/37		10,000,000		11,493,300
San Marcos PFAR, Series A, ETM, 6.25%, 9/02/22		15,000,000		17,451,450
San Marcos School Financing Authority Lease Revenue, AGMC Insured, Pre-Refunded, 5.00%, 8/15/40		15,635,000		16,410,809
San Marino USD, GO, Los Angeles County, Capital Appreciation, Election of 2000, Series A, NATL Insured, zero cpn., 7/01/25		6,080,000		5,388,582
San Mateo UHSD,
COP, Phase I Projects, Capital Appreciation, Series B, AMBAC Insured, Pre-Refunded, zero cpn. to 12/15/19, 5.00% thereafter, 12/15/43		11,535,000		13,139,749
GO, Capital Appreciation, Election of 2000, Series B, NATL Insured, zero cpn., 9/01/22		5,000,000		4,733,300
Sanger Financing Authority Wastewater Revenue,
Fresno County, Subordinate, AGMC Insured, 5.00%, 6/15/35		2,360,000		2,611,836
Fresno County, Subordinate, AGMC Insured, 5.00%, 6/15/43		3,225,000		3,543,017
Sanger Financing Authority Water Revenue, Fresno County, AGMC Insured, 5.00%, 6/15/43		2,930,000		3,218,927
Sanger USD, GO, Fresno County, Election of 2016, Series A, BAM Insured, 4.00%, 8/01/41		10,000,000		10,761,900
Santa Ana CRDA Tax Allocation,
Merged Project Area, Series A, Pre-Refunded, 6.25%, 9/01/24		7,005,000		7,651,281
Merged Project Area, Series A, Pre-Refunded, 6.75%, 9/01/28		13,500,000		14,869,845
Santa Ana USD, COP, Financing Project, Capital Appreciation, AGMC Insured, zero cpn., 4/01/24		14,245,000		11,862,666
Santa Barbara Housing Authority Revenue, Refunding and Acquisition, 6.25%, 11/15/20		1,035,000		1,058,950
Santa Cruz County RDA Tax Allocation,
Live Oak/Soquel Community Improvement Project Area, Series A, Pre-Refunded, 7.00%, 9/01/36		5,000,000		5,113,550
Refunding, Series A, BAM Insured, 5.00%, 9/01/35		20,000,000		23,320,200
Santa Maria Joint UHSD, GO, Santa Barbara and San Luis Obispo Counties, Election of 2004, 4.00%, 8/01/37		14,230,000		14,972,664
Santa Paula Utility Authority Wastewater Enterprise Revenue,
Series A, 5.00%, 2/01/45		16,495,000		18,721,990
Series A, 5.00%, 2/01/50		21,050,000		23,750,294
Saugus/Hart School Facilities Financing Authority Lease Revenue,
Series A, AGMC Insured, 5.00%, 9/01/35		2,000,000		2,081,220
Series A, AGMC Insured, 5.00%, 9/01/40		1,500,000		1,559,460

  32         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
School Facilities Financing Authority Revenue, Capital Appreciation, Grant Joint UHSD, Series A, AGMC Insured, zero cpn., 8/01/42	$	49,000,000	$	20,176,240
Semitropic ID of Semitropic Water Storage District Revenue, second lien, Refunding, Series A, AGMC Insured, 5.00%, 12/01/45		10,000,000		11,368,700
Snowline Joint USD, COP, Refinancing Project, Assured Guaranty, Pre-Refunded, 5.00%, 9/01/34		13,390,000		13,589,779
Sonoma CDA Tax Allocation, Redevelopment Project, 7.125%, 12/01/36		10,775,000		12,285,870
Southern California Public Power Authority Gas Project Revenue, Project No. 1, Series A, 5.00%, 11/01/33		17,500,000		21,199,500
Southern California Water Replenishment District Revenue COP, Pre-Refunded, 5.00%, 8/01/41		22,870,000		24,827,901
Southern Mono Health Care District GO,
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/28		2,340,000		1,802,455
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/29		2,440,000		1,805,551
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/30		2,550,000		1,803,590
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/31		2,660,000		1,792,521
Southwestern Community College District GO, Election of 2008, Series D, 5.00%, 8/01/44		10,000,000		11,323,700
Stanislaus USD,
GO, Election of 2008, Series A, Assured Guaranty, 5.625%, 8/01/33		4,140,000		4,192,371
GO, Election of 2008, Series B, AGMC Insured, Pre-Refunded, 5.125%, 8/01/41		3,400,000		3,680,364
Sulphur Springs USD,
COP, AGMC Insured, ETM, 6.50%, 12/01/37		2,550,000		2,806,071
COP, Refunding, AGMC Insured, 6.50%, 12/01/37		11,390,000		14,171,666
Temple City USD, GO, Election of 2012, Series A, 5.00%, 8/01/43		10,000,000		11,157,900
Trabuco Canyon PFA Special Tax Revenue, Refunding, Series C, AGMC Insured, 6.10%, 7/01/19		890,000		899,630
Truckee PFA Tax Allocation Revenue,
Truckee Redevelopment Project Loan, Series A, AGMC Insured, 5.00%, 9/01/30		1,255,000		1,309,593
Truckee Redevelopment Project Loan, Series A, AGMC Insured, 5.375%, 9/01/37		5,000,000		5,242,750
Tulare County Board of Education COP,
Capital Improvement Projects, BAM Insured, 5.375%, 5/01/33		3,185,000		3,574,526
Capital Improvement Projects, BAM Insured, 5.50%, 5/01/38		8,305,000		9,332,578
Capital Improvement Projects, BAM Insured, 5.50%, 5/01/43		10,855,000		12,199,609
Tustin CRDA Tax Allocation,
Orange County, Housing, AGMC Insured, Pre-Refunded, 5.00%, 9/01/30		2,125,000		2,233,843
Orange County, Housing, AGMC Insured, Pre-Refunded, 5.25%, 9/01/39		3,250,000		3,427,808
Twin Cities Police Authority CFD Special Tax, No. 2008-1, Public Safety, Police and Emergency Response Facilities and Services, Pre-Refunded, 6.00%, 8/01/44		10,710,000		11,084,100
Union Elementary School District GO,
Santa Clara County, Capital Appreciation, Election of 1999, Series A, NATL Insured, zero cpn., 9/01/24		2,000,000		1,810,440
Santa Clara County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/25		5,500,000		4,853,420
Santa Clara County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/26		5,850,000		5,009,238
University of California Regents Medical Center Pooled Revenue,
Refunding, Series J, 5.00%, 5/15/48		75,000,000		82,482,000
Refunding, Series L, 5.00%, 5/15/47		49,575,000		56,296,378
University of California Revenue,
Limited Project, Refunding, Series I, 5.00%, 5/15/40		22,990,000		26,078,247
Limited Project, Refunding, Series I, 5.00%, 5/15/50		25,420,000		28,561,404
Limited Project, Refunding, Series K, 4.00%, 5/15/46		19,850,000		20,937,581
Limited Project, Refunding, Series O, 5.00%, 5/15/39		14,400,000		17,170,416
Limited Project, Refunding, Series O, 5.00%, 5/15/43		30,120,000		35,600,936
Limited Project, Series M, 5.00%, 5/15/37		15,410,000		18,217,240

  franklintempleton.com   Annual Report         33

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
University of California Revenue, (continued)
Refunding, Series AR, 5.00%, 5/15/41	$	13,760,000	$	15,849,318
Upland COP,
San Antonio Community Hospital, Pre-Refunded, 6.50%, 1/01/41		34,130,000		37,123,201
San Antonio Regional Hospital, Refunding, 5.00%, 1/01/47		14,400,000		16,067,376
Upland USD, GO, Capital Appreciation, Election of 2008, Series C, zero cpn., 8/01/45		62,900,000		22,964,790
Val Verde USD,
GO, Riverside County, Convertible Capital Appreciation, Election of 2008, Refunding, Series B, AGMC Insured, zero cpn. to 7/31/22, 6.125% thereafter, 8/01/34		1,000,000		1,138,210
GO, Riverside County, Election of 2012, Refunding, Series B, BAM Insured, 5.00%, 8/01/44		15,000,000		17,182,650
Vallejo PFAR, Local Agency, Hiddenbrooke ID, Refunding, Series A, 5.80%, 9/01/31		3,730,000		3,746,151
Vallejo RDA Tax Allocation, Waterfront Redevelopment Project, 7.90%, 5/01/19		295,000		295,103
Victor Valley Joint UHSD, GO, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/34		28,350,000		28,687,649
Vista RDA Successor Agency Tax Allocation, Vista Redevelopment Project, Refunding, Series B-1, AGMC Insured, 5.00%, 9/01/37		3,020,000		3,447,904
Vista USD,
GO, San Diego County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 8/01/26		7,150,000		6,038,461
GO, San Diego County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 2/01/27		4,795,000		4,033,362
Washington Township Health Care District GO, Series B, 5.00%, 8/01/45		15,000,000		17,197,950
Washington Township Health Care District Revenue, Series A, 5.50%, 7/01/38		11,000,000		11,446,380
West Contra Costa USD, GO, Contra Costa County, Refunding, Assured Guaranty, 5.25%, 8/01/29		2,500,000		2,532,250
West Hills Community College District School Facilities ID No. 3 GO, Election of 2008, Series B, AGMC Insured, Pre-Refunded, 6.50%, 8/01/41		4,000,000		4,473,920
West Sacramento Area Flood Control Agency Assessment Revenue,
5.25%, 9/01/41		9,030,000		9,737,410
AGMC Insured, 5.00%, 9/01/40		3,000,000		3,427,020
AGMC Insured, 5.00%, 9/01/45		7,500,000		8,535,525
West Sacramento Financing Authority Special Tax Revenue, Series A, XLCA Insured, 5.00%, 9/01/34		4,940,000		6,032,135
Western Placer USD, COP, Refinancing Project, AGMC Insured, 5.20%, 11/01/41		1,000,000		1,079,370
Western Riverside Water and Wastewater Financing Authority Revenue,
Eastern Municipal Water District ID, Assured Guaranty, 5.50%, 9/01/34		1,750,000		1,778,298
Eastern Municipal Water District ID, Assured Guaranty, 5.625%, 9/01/39		2,500,000		2,541,400
Westminster School District GO, Election of 2008, Series A-1, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/34		18,980,000		19,206,052
Wiseburn School District GO,
Los Angeles County, Election of 2010, Series A, AGMC Insured, Pre-Refunded, 5.75%, 8/01/40		9,215,000		9,750,207
Los Angeles County, Election of 2010, Series B, AGMC Insured, Pre-Refunded, 5.625%, 5/01/41		10,000,000		10,987,100
				14,579,562,657
U.S. Territories 0.9%
Puerto Rico 0.9%
Children’s Trust Fund Tobacco Settlement Revenue,
Asset-Backed, Refunding, 5.50%, 5/15/39		6,210,000		6,274,832
Asset-Backed, Refunding, 5.625%, 5/15/43		16,000,000		16,170,240
b Puerto Rico Commonwealth Infrastructure Financing Authority Special Tax Revenue, 5.00%, 7/01/46		9,475,000		1,775,047
b Puerto Rico Electric Power Authority Power Revenue,
Refunding, Series A, 5.00%, 7/01/29		20,000,000		14,125,000
Refunding, Series A, 5.00%, 7/01/42		24,000,000		16,950,000
Series A, 7.00%, 7/01/33		50,000,000		36,625,000
Series WW, 5.00%, 7/01/28		12,030,000		8,496,187

  34         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Municipal Bonds (continued)
U.S. Territories (continued)
Puerto Rico (continued)
b Puerto Rico Electric Power Authority Power Revenue, (continued)
Series WW, 5.25%, 7/01/33	$	32,250,000	$	22,897,500
Series XX, 5.25%, 7/01/40		14,000,000		9,940,000
Puerto Rico Industrial Tourist Educational Medical and Environmental Control Facilities Financing Authority Revenue, Cogeneration Facility, AES Puerto Rico Project, 6.625%, 6/01/26		5,800,000		5,756,500
				139,010,306
Total Municipal Bonds before Short Term Investments (Cost $13,047,786,106)				14,718,572,963
Short Term Investments 2.4%
Municipal Bonds 2.4%
California 2.4%
c California State GO,
Kindergarten, Refunding, Series A1, LOC Citibank, Daily VRDN and Put, 1.23%, 5/01/34		17,830,000		17,830,000
Series A-3, LOC Bank of Montreal, Daily VRDN and Put, 1.25%, 5/01/33		5,000,000		5,000,000
c California Statewide CDA Revenue, Rady Children’s Hospital-San Diego, Series B, LOC Wells Fargo Bank, Daily VRDN and Put, 1.30%, 8/15/47		28,435,000		28,435,000
c Irvine 1915 Act Special Assessment,
Limited Obligation Improvement, AD No. 94-13, LOC State Street Bank & Trust Co., Daily VRDN and Put, 1.35%, 9/02/22		4,400,000		4,400,000
Limited Obligation Improvement, AD No. 97-16, LOC State Street Bank & Trust Co., Daily VRDN and Put, 1.35%, 9/02/22		16,718,000		16,718,000
c Irvine Ranch Water District GO, ID, Consolidated, Series B, LOC Bank of America, Daily VRDN and Put, 1.28%, 10/01/41		26,790,000		26,790,000
c Los Angeles Department of Water and Power Revenue,
Power System, Refunding, Series A, Subseries A-4, SPA Bank of America, Daily VRDN and Put, 1.31%, 7/01/35		30,700,000		30,700,000
Power System, Refunding, Series B, Subseries B-6, SPA TD Bank National Association, Daily VRDN and Put, 1.26%, 7/01/34		36,700,000		36,700,000
Water System, Refunding, Series B, Subseries B-2, SPA Royal Bank of Canada, Daily VRDN and Put, 1.27%, 7/01/35		67,300,000		67,300,000
c The Metropolitan Water District of Southern California Water Revenue, Refunding, Series B-3, SPA Citibank, Daily VRDN and Put, 1.26%, 7/01/35		33,300,000		33,300,000
c Santa Clara Valley Transportation Authority Sales Tax Revenue, 2000 Measure A, Refunding, Series D, SPA TD Bank National Association, Daily VRDN and Put, 1.25%, 4/01/36		21,300,000		21,300,000

  franklintempleton.com   Annual Report         35

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

STATEMENT OF INVESTMENTS

	Principal Amount		Value
Short Term Investments (continued)
Municipal Bonds (continued)
California (continued)
c University of California Revenue, General, Refunding, Series AL, Daily VRDN and Put, 1.26%, 5/15/48	$	79,225,000	$	79,225,000
Total Short Term Investments (Cost $367,698,000)				367,698,000
Total Investments (Cost $13,415,484,106) 99.1%				15,086,270,963
Other Assets, less Liabilities 0.9%				132,793,950
Net Assets 100.0%			$	15,219,064,913

See Abbreviations on page 47.

^aSecurity purchased on a when-issued basis. See Note 1(b).

^bSee Note 7 regarding defaulted securities.

^cVariable rate demand notes (VRDNs) are 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. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.

  36         Annual Report   |  The accompanying notes are an integral part of these financial statements.   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Financial Statements

Statement of Assets and Liabilities

March 31, 2019

Assets:
Investments in securities:
Cost - Unaffiliated issuers	$13,415,484,106
Value - Unaffiliated issuers	$15,086,270,963
Cash	454,713
Receivables:
Capital shares sold	21,797,986
Interest	162,371,223
Other assets	14,668
Total assets	15,270,909,553
Liabilities:
Payables:
Investment securities purchased	27,301,000
Capital shares redeemed	14,162,946
Management fees	5,592,413
Distribution fees	3,163,174
Transfer agent fees	1,123,653
Accrued expenses and other liabilities	501,454
Total liabilities	51,844,640
Net assets, at value	$15,219,064,913
Net assets consist of:
Paid-in capital	$14,304,997,119
Total distributable earnings (loss)	914,067,794
Net assets, at value	$15,219,064,913
Class A:
Net assets, at value	$     524,756,358
Shares outstanding	70,528,998
Net asset value per sharea	$7.44
Maximum offering price per share (net asset value per share ÷ 96.25%)	$7.73
Class A1:
Net assets, at value	$11,824,205,819
Shares outstanding	1,591,337,351
Net asset value per sharea	$7.43
Maximum offering price per share (net asset value per share ÷ 96.25%)	$7.72
Class C:
Net assets, at value	$   1,124,954,346
Shares outstanding	151,717,155
Net asset value and maximum offering price per sharea	$7.41
Class R6:
Net assets, at value	$      103,760,142
Shares outstanding	13,980,527
Net asset value and maximum offering price per share	$7.42
Advisor Class:
Net assets, at value	$   1,641,388,248
Shares outstanding	221,281,293
Net asset value and maximum offering price per share	$7.42

^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

  franklintempleton.com   The accompanying notes are an integral part of these financial statements.  |   Annual Report         37

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

FINANCIAL STATEMENTS

Statement of Operations

for the year ended March 31, 2019

Investment income:
Interest:
Unaffiliated issuers	$	620,005,207
Expenses:
Management fees (Note 3a)		66,118,702
Distribution fees: (Note 3c)
Class A		411,427
Class A1		11,210,320
Class C		8,508,880
Transfer agent fees: (Note 3e)
Class A		92,183
Class A1		6,658,255
Class C		737,538
Class R6		22,639
Advisor Class		883,048
Custodian fees (Note 4)		125,979
Reports to shareholders		214,840
Registration and filing fees		125,231
Professional fees		950,144
Trustees’ fees and expenses		163,011
Other		394,678
Total expenses		96,616,875
Expense reductions (Note 4)		(100,864	)
Expenses waived/paid by affiliates (Note 3f)		(7,299	)
Net expenses		96,508,712
Net investment income		523,496,495
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(9,956,510	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		255,817,387
Net realized and unrealized gain (loss)		245,860,877
Net increase (decrease) in net assets resulting from operations	$	769,357,372

  38         Annual Report   |  The accompanying notes are an integral part of these financial statements.   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

FINANCIAL STATEMENTS

Statements of Changes in Net Assets

	Year Ended			Year Ended
	March 31, 2019			March 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	523,496,495		$	546,734,003
Net realized gain (loss)		(9,956,510	)		(354,828,173	)
Net change in unrealized appreciation (depreciation)		255,817,387			222,438,228
Net increase (decrease) in net assets resulting from operations		769,357,372			414,344,058
Distributions to shareholders: (Note 1d)
Class A		(5,197,949	)		—
Class A1		(423,274,689	)		(446,567,107	)
Class M		(45	)		(30	)
Class C		(39,924,236	)		(48,932,320	)
Class R6		(3,365,595	)		(658,554	)
Advisor Class		(57,394,738	)		(57,924,101	)
Total distributions to shareholders		(529,157,252	)		(554,082,112	)
Capital share transactions: (Note 2)
Class A		508,085,673			—
Class A1		(517,071,838	)		(160,991,115	)
Class M		(4,921	)		5,000
Class C		(413,152,174	)		(117,971,740	)
Class R6		16,588,428			86,850,620
Advisor Class		43,635,071			124,798,723
Total capital share transactions		(361,919,761	)		(67,308,512	)
Net increase (decrease) in net assets		(121,719,641	)		(207,046,566	)
Net assets:
Beginning of year		15,340,784,554			15,547,831,120
End of year (Note 1d)	$	15,219,064,913		$	15,340,784,554

  franklintempleton.com   The accompanying notes are an integral part of these financial statements.  |   Annual Report         39

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Notes to Financial Statements

1.  Organization and Significant Accounting Policies

Franklin California Tax-Free Income Fund (Fund) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Fund offers five classes of shares: Class A, Class A1, Class C, Class R6 and Advisor Class. Beginning on October 19, 2018, Class C shares automatically convert to Class A shares after they have been held for 10 years. Each class of shares may differ by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees due to differing arrangements for distribution and transfer agent fees.

Class M was closed to investors effective at the close of market June 8, 2018.

Effective September 10, 2018, Class A shares were renamed A1, and the Fund began offering a new class of shares, Class A. Class A1 shares are only offered to existing Class A1 shareholders.

The following summarizes the Fund’s significant accounting policies.

a.  Financial Instrument Valuation

The Fund’s investments in 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. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument 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 Fund’s 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, credit spreads, estimated default rates, anticipated market interest rate volatility, 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.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs 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. An income-based valuation approach may also be used 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.

b.  Securities Purchased on a When-Issued Basis

The Fund purchases securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.

c.  Income Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.

  40         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2019, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

d.  Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date. Effective May 1, 2019, dividends from net investment income are declared daily and paid monthly. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.*

Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.

e.  Insurance

The scheduled payments of interest and principal for each insured municipal security in the Fund are insured by either a new issue insurance policy or a secondary insurance policy.

Some municipal securities in the Fund are secured by collateral guaranteed by an agency of the U.S. government. Depending on the type of coverage, premiums for insurance are either added to the cost basis of the security or paid by a third party.

Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.

f.  Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

g.  Guarantees and Indemnifications

Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.

*Effective during the current reporting period, it is no longer required to present certain line items in the Statements of Changes in Net Assets. The below prior period amounts affected by this change are shown as they were in the prior year Statements of Changes in Net Assets.

  franklintempleton.com   Annual Report         41

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies  (continued)

For the year ended March 31, 2018, distributions to shareholders were as follows:

Distributions from net investment income:
Class A1	$	(446,567,107	)
Class M		(30	)
Class C		(48,932,320	)
Class R6		(658,554	)
Advisor Class		(57,924,101	)

For the year ended March 31, 2018, undistributed net investment income included in net assets was $37,087,757.

2. Shares of Beneficial Interest

At March 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:

	Year Ended					Year Ended
	March 31, 2019a,b					March 31, 2018c,d
	Shares			Amount		Shares			Amount
Class A Shares:
Shares solde		80,236,719		$	578,154,810
Shares issued in reinvestment of distributions		664,343			4,800,713
Shares redeemed		(10,372,064	)		(74,869,850)
Net increase (decrease)		70,528,998		$	508,085,673
Class A1 Shares:
Shares sold		109,715,082		$	794,245,080		131,096,653		$	974,057,514
Shares issued in reinvestment of distributions		47,923,777			347,231,945		49,117,202			364,365,036
Shares redeemed		(228,957,225	)		(1,658,548,863)		(202,019,054	)		(1,499,413,665)
Net increase (decrease)		(71,318,366	)	$	(517,071,838)		(21,805,199	)	$	(160,991,115)
Class M Shares:
Shares sold		—		$	—		675		$	5,000
Shares redeemed		(675	)		(4,921)		—			—
Net increase (decrease)		(675	)	$	(4,921)		675		$	5,000
Class C Shares:
Shares sold		16,635,907		$	120,669,805		23,485,863		$	174,614,502
Shares issued in reinvestment of distributions		4,932,892			35,693,447		5,818,615			43,101,731
Shares redeemede		(79,249,613	)		(569,515,426)		(45,273,541	)		(335,687,973)
Net increase (decrease)		(57,680,814	)	$	(413,152,174)		(15,969,063	)	$	(117,971,740)
Class R6 Shares:
Shares sold		6,701,788		$	48,649,483		12,489,223		$	92,531,756
Shares issued in reinvestment of distributions		465,258			3,365,201		89,820			658,449
Shares redeemed		(4,903,985	)		(35,426,256)		(861,577	)		(6,339,585)
Net increase (decrease)		2,263,061		$	16,588,428		11,717,466		$	86,850,620

  42         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

	Year Ended						Year Ended
	March 31, 2019a,b						March 31, 2018c,d
	Shares			Amount			Shares			Amount
Advisor Class Shares:
Shares sold		67,516,609		$	489,214,941			69,267,581		$	514,241,679
Shares issued in reinvestment of distributions		6,576,625			47,561,014			6,419,698			47,539,621
Shares redeemed		(68,328,005	)		(493,140,884	)		(58,952,698	)		(436,982,577	)
Net increase (decrease)		5,765,229		$	43,635,071			16,734,581		$	124,798,723

^aFor the period September 10, 2018 (effective date) to March 31, 2019, for Class A.

^bClass M was closed to investors on June 8, 2018.

^cFor the period January 25, 2018 (effective date) to March 31, 2018, for Class M.

^dFor the period August 1, 2017 (effective date) to March 31, 2018, for Class R6.

^eMay include a portion of Class C shares that were automatically converted to Class A.

3.   Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a.   Management Fees

The Fund pays an investment management fee to Advisers based on the month-end net assets of the Fund as follows:

Annualized Fee Rate	Net Assets
0.625%	Up to and including $100 million
0.500%	Over $100 million, up to and including $250 million
0.450%	Over $250 million, up to and including $7.5 billion
0.440%	Over $7.5 billion, up to and including $10 billion
0.430%	Over $10 billion, up to and including $12.5 billion
0.420%	Over $12.5 billion, up to and including $15 billion
0.400%	Over $15 billion, up to and including $17.5 billion
0.380%	Over $17.5 billion, up to and including $20 billion
0.360%	In excess of $20 billion

For the year ended March 31, 2019, the gross effective investment management fee rate was 0.442% of the Fund’s average daily net assets.

b.   Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

  franklintempleton.com   Annual Report         43

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

3. Transactions with Affiliates (continued)

c.   Distribution Fees

The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A and A1 reimbursement distribution plans, the Fund reimburses Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rates for each share class. Under the Class A and A1 reimbursement distribution plans, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Fund’s Class C compensation distribution plan, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:

Class A	0.25	%
Class A1	0.10	%
Class C	0.65	%

d.   Sales Charges/Underwriting Agreements

Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the year:

Sales charges retained net of commissions paid to unaffiliated brokers/dealers	$	493,464
CDSC retained	$	203,058

Effective March 1, 2019, certain front-end sales charges on Class A and A1 shares were lowered. Further details are disclosed in the Fund’s Prospectus.

e.   Transfer Agent Fees

Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. The fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. In addition, each class reimburses Investor Services for out of pocket expenses incurred and, except for Class R6, reimburses shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.

For the year ended March 31, 2019, the Fund paid transfer agent fees of $8,393,663, of which $3,937,600 was retained by Investor Services.

f.   Waiver and Expense Reimbursements

Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.01% based on the average net assets of the class until September 30, 2019.

g.   Interfund Transactions

The Fund engaged in purchases and sales of investments with funds or other accounts that have common investment managers (or affiliated investment managers), directors, trustees or officers. During the year ended March 31, 2019, these purchase and sale transactions aggregated $172,913,000 and $263,495,000, respectively.

  44         Annual Report   franklintempleton.com

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

4.   Expense Offset Arrangement

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the year ended March 31, 2019, the custodian fees were reduced as noted in the Statement of Operations.

5.   Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.

At March 31, 2019, capital loss carryforwards were as follows:

Capital loss carryforwards not subject to expiration:
Short term	$	303,544,806
Long term		463,022,321
Total capital loss carryforwards	$	766,567,127

During the year ended March 31, 2019, the Fund utilized $4,612,396 of capital loss carryforwards.

The tax character of distributions paid during the years ended March 31, 2019 and 2018, was as follows:

	2019		2018
Distributions paid from tax exempt income	$	529,157,252	$	554,082,112

At March 31, 2019, the cost of investments, net unrealized appreciation (depreciation) and undistributed tax exempt income for income tax purposes were as follows:

Cost of investments	$	13,446,910,785
Unrealized appreciation	$	1,721,091,904
Unrealized depreciation		(81,731,726)
Net unrealized appreciation (depreciation)	$	1,639,360,178
Distributable earnings:
Undistributed tax exempt income	$	41,274,749

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of bond discounts and wash sales.

6.   Investment Transactions

Purchases and sales of investments (excluding short term securities) for the year ended March 31, 2019, aggregated $2,066,594,953 and $2,612,584,199, respectively.

7.   Defaulted Securities

The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At March 31, 2019, the aggregate value of these securities was $110,808,734, representing 0.7% of the Fund’s net assets. The Fund discontinues accruing income on securities for which income has been deemed uncollectible and provides an estimate for losses on interest receivable. The securities have been identified in the accompanying Statement of Investments.

  franklintempleton.com   Annual Report         45

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

8.   Concentration of Risk

The Fund invests a large percentage of its total assets in obligations of issuers within California and U.S. territories. Such concentration may subject the Fund to risks associated with industrial or regional matters, and economic, political or legal developments occurring within California and U.S. territories. Investing in Puerto Rico securities may expose the Fund to heightened risks due to recent adverse economic and market changes, credit downgrades and ongoing restructuring discussions. In addition, investments in these securities are sensitive to interest rate changes and credit risk of the issuer and may subject the Fund to increased market volatility. The market for these investments may be limited, which may make them difficult to buy or sell.

9.   Credit Facility

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 7, 2020. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the year ended March 31, 2019, the Fund did not use the Global Credit Facility.

10.   Fair Value Measurements

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments

• Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

At March 31, 2019, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.

11.   Subsequent Events

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

NOTES TO FINANCIAL STATEMENTS

Abbreviations

Selected Portfolio

1915 Act	Improvement Bond Act of 1915
ABAG	The Association of Bay Area Governments
AD	Assessment District
AGMC	Assured Guaranty Municipal Corp.
AMBAC	American Municipal Bond Assurance Corp.
BAM	Build America Mutual Assurance Co.
BART	Bay Area Rapid Transit
CDA	Community Development Authority/Agency
CFD	Community Facilities District
COP	Certificate of Participation
CRDA	Community Redevelopment Authority/Agency
ETM	Escrow to Maturity
FGIC	Financial Guaranty Insurance Co.
FHA	Federal Housing Authority/Agency
GNMA	Government National Mortgage Association
GO	General Obligation
ID	Improvement District
IDR	Industrial Development Revenue
LOC	Letter of Credit
MFHR	Multi-Family Housing Revenue
MTA	Metropolitan Transit Authority
MUD	Municipal Utility District
NATL	National Public Financial Guarantee Corp.
NATL RE	National Public Financial Guarantee Corp. Reinsured
PCFA	Pollution Control Financing Authority
PFA	Public Financing Authority

PFAR	Public Financing Authority Revenue
RDA	Redevelopment Agency/Authority
SFMR	Single Family Mortgage Revenue
SPA	Standby Purchase Agreement
SRF	State Revolving Fund
UHSD	Unified/Union High School District
USD	Unified/Union School District
XLCA	XL Capital Assurance

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of Franklin California Tax-Free Income Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Franklin California Tax-Free Income Fund (the “Fund”) as of March 31, 2019, the related statement of operations for the year ended March 31, 2019, the statement of changes in net assets for each of the two years in the period ended March 31, 2019, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2019 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2019 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

May 17, 2019

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

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Tax Information (unaudited)

Under Section 852(b)(5)(A) of the Internal Revenue Code, the Fund hereby reports 100% of the distributions paid from net investment income as exempt-interest dividends for the fiscal year ended March 31, 2019. A portion of the Fund’s exempt-interest dividends may be subject to the federal alternative minimum tax. By mid-February 2020, shareholders will be notified of amounts for use in preparing their 2019 income tax returns.

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Board Members and Officers

The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Fund, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.

Independent Board Members

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Harris J. Ashton (1932) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 1977	136	Bar-S Foods (meat packing company) (1981-2010).
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998).
Terrence J. Checki (1945) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2017	112	Hess Corporation (exploration of oil and gas) (2014-present).
Principal Occupation During at Least the Past 5 Years:
Member of the Council on Foreign Relations (1996-present); Member of the National Committee on U.S.-China Relations (1999-present); member of the Board of Trustees of the Economic Club of New York (2013-present); member of the Board of Trustees of the Foreign Policy Association (2005-present) and member of various other boards of trustees and advisory boards; and formerly, Executive Vice President of the Federal Reserve Bank of New York and Head of its Emerging Markets and Internal Affairs Group and Member of Management Committee (1995-2014); and Visiting Fellow at the Council on Foreign Relations (2014).
Mary C. Choksi (1950) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2014	136	Avis Budget Group Inc. (car rental) (2007-present), Omnicom Group Inc. (advertising and marketing communications services) (2011-present) and White Mountains Insurance Group, Ltd. (holding company) (2017-present).
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Founder and Senior Advisor, Strategic Investment Group (investment management group) (2015-2017); Founding Partner and Senior Managing Director, Strategic Investment Group (1987–2015); Founding Partner and Managing Director, Emerging Markets Management LLC (investment management firm) (1987-2011); and Loan Officer/Senior Loan Officer/Senior Pension Investment Officer, World Bank Group (international financial institution) (1977-1987).
Edith E. Holiday (1952) One Franklin Parkway San Mateo, CA 94403-1906	Lead Independent Trustee	Trustee since 1998 and Lead Independent Trustee since March 2019	136	Hess Corporation (exploration of oil and gas) (1993-present), Canadian National Railway (railroad) (2001-present), White Mountains Insurance Group, Ltd. (holding company) (2004-present), Santander Consumer USA Holdings, Inc. (consumer finance) (2016-present), RTI International Metals, Inc. (manufacture and distribution of titanium) (1999-2015) and H.J. Heinz Company (processed foods and allied products) (1994-2013).
Principal Occupation During at Least the Past 5 Years:
Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant Secretary for Public Affairs and Public Liaison-United States Treasury Department (1988-1989).
J. Michael Luttig (1954) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2009	136	Boeing Capital Corporation (aircraft financing) (2006-2013).
Principal Occupation During at Least the Past 5 Years:
Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company) (2006-present); and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006).

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Independent Board Members (continued)

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Larry D. Thompson (1945) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2007	136	The Southern Company (energy company) (2014-present; previously 2010-2012), Graham Holdings Company (education and media organization) (2011-present) and Cbeyond, Inc. (business communications provider) (2010-2012).
Principal Occupation During at Least the Past 5 Years:
Director of various companies; Counsel, Finch McCranie, LLP (law firm) (2015-present); Independent Compliance Monitor and Auditor, Volkswagen AG (manufacturer of automobiles and commercial vehicles) (2017-present); John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; previously 2011-2012); and formerly, Executive Vice President - Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (2012-2014); Senior Vice President - Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003).

Interested Board Members and Officers

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
**Gregory E. Johnson (1961) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2013	150	None
Principal Occupation During at Least the Past 5 Years:
Chairman of the Board, Member - Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 42 of the investment companies in Franklin Templeton; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. (1994-2015).
**Rupert H. Johnson, Jr. (1940) One Franklin Parkway San Mateo, CA 94403-1906	Chairman of the Board, Trustee and Vice President	Chairman of the Board since 2013, Trustee since 1983 and Vice President since 1982	136	None
Principal Occupation During at Least the Past 5 Years:
Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 40 of the investment companies in Franklin Templeton.
Sheila Amoroso (1959) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 1999	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton.
Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2012	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in Franklin Templeton.

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Interested Board Members and Officers (continued)

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Sonal Desai, Ph.D. (1963) One Franklin Parkway San Mateo, CA 94403-1906	President and Chief Executive Officer – Investment Management	Since December 2018	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Director and Executive Vice President, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC; and officer of 18 of the investment companies in Franklin Templeton.
Gaston Gardey (1967) One Franklin Parkway San Mateo, CA 94403-1906	Treasurer, Chief Financial Officer and Chief Accounting Officer	Since 2009	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Treasurer, U.S. Fund Administration & Reporting and officer of 28 of the investment companies in Franklin Templeton.
Aliya S. Gordon (1973) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2009	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel and officer of 44 of the investment companies in Franklin Templeton.
Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906	Vice President and Co-Secretry	Vice President since 2009 and Co-Secretary since January 2019	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton; Vice President, Franklin Templeton Distributors, Inc. and FASA, LLC; and officer of 44 of the investment companies in Franklin Templeton.
Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906	Chief Executive Officer – Finance and Administration	Since 2017	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Templeton Services, LLC; officer of 44 of the investment companies in Franklin Templeton; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).
Robert Lim (1948) One Franklin Parkway San Mateo, CA 94403-1906	Vice President – AML Compliance	Since 2016	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Vice President, Franklin Templeton Companies, LLC; Chief Compliance Officer, Franklin Templeton Distributors, Inc. and Franklin Templeton Investor Services, LLC; and officer of 44 of the investment companies in Franklin Templeton.
Kimberly H. Novotny (1972) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Vice President	Since 2013	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel, Franklin Templeton; Vice President and Corporate Secretary, Fiduciary Trust International of the South; Vice President, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 44 of the investment companies in Franklin Templeton.

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Interested Board Members and Officers (continued)

Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Robert C. Rosselot (1960) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Chief Compliance Officer	Since 2013	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance, Franklin Templeton; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the investment companies in Franklin Templeton; and formerly, Senior Associate General Counsel, Franklin Templeton (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013).
Navid J. Tofigh (1972) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2015	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel and officer of 44 of the investment companies in Franklin Templeton.
Craig S. Tyle (1960) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2005	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in Franklin Templeton.
Thomas Walsh (1961) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 1999	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton.
Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Vice President and Co-Secreatary	Vice President since 2011 and Co-Secretary since January 2019	Not Applicable	Not Applicable
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton.

*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.

**Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director and major shareholder of Resources.

Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.

Note 2: Effective March 12, 2019, John B. Wilson ceased to be a trustee of the Trust.

Note 3: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.

The Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an Audit Committee Financial Expert within the meaning of such Act and Rules. To the extent that the Fund’s Audit Committee does not include at least one Audit Committee Financial Expert, the SEC Rules require an explanation as to why it does not. The Fund’s Audit Committee currently does not have an Audit Committee Financial Expert following the departure from the Board of Trustees of the Fund’s previous Audit Committee Financial Expert. The Audit Committee believes that, as a result of the collective experience of the remaining Audit Committee members with respect to mutual funds, investments, financial statements and accounting principles, there is adequate oversight over the Fund’s financial operations and financial statements. It is anticipated that the Fund’s Board of Trustees will designate a new Audit Committee Financial Expert in the near future.

The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.

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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

Shareholder Information

Board Approval of Investment Management Agreements

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

(Fund)

At an in-person meeting held on February 26, 2019 (Meeting), the Board of Trustees (Board) of the Fund, including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (Manager) and the Fund (Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of the Management Agreement.

In considering the continuation of the Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of the Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of the Fund; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with the Fund; (iv) the extent to which economies of scale are realized as the Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.

In approving the continuance of the Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for the Fund; reports on expenses, shareholder services, marketing support payments made to financial intermediaries and third party servicing arrangements; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board also reviewed and considered an annual report on payments made by Franklin Templeton Investments (FTI) or the Fund to financial intermediaries, as well as a memorandum relating to third-party servicing arrangements in response to a guidance update in 2016 from the US Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans and developing strategies to address areas of heightened concern in the mutual fund industry, such as cybersecurity and liquidity risk management. The Board also recognized management’s commitment to facilitating Board oversight of liquidity through the designation of a liquidity/risk administrator and the development of reports that highlight the amount of illiquid investments for the Fund.

The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the mutual fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Fund by the FTI organization.

Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Fund and its shareholders.

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Fund Performance

The Board reviewed and considered the performance results of the Fund over various time periods ended December 31, 2018. The Board considered the performance returns for the Fund in comparison to the performance returns of mutual funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. A summary of the Fund’s performance results is below.

The Performance Universe for the Fund included the Fund and all retail and institutional California municipal debt funds. The Board noted that the Fund’s annualized income return for the one-, three-, five- and 10-year periods was above the median of its Performance Universe. The Board also noted that the Fund’s annualized total return for the one-year period was below the median of its Performance Universe, but for the three-, five- and 10-year periods was above the median of its Performance Universe. Given the Fund’s income-oriented investment objective, the Board concluded that the Fund’s performance was satisfactory.

Comparative Fees and Expenses

The Board reviewed and considered information regarding the Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board also noted the quarterly and annual reports it receives on all marketing support payments made by FTI to financial intermediaries. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other mutual funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally

increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges, and the actual total expense ratio, for comparative consistency, was shown for Class A1 shares for the Fund and for Class A shares or Class M shares for each other fund in the Expense Group with multiple classes of shares. The Board received a description of the methodology used by Broadridge to select the mutual funds included in an Expense Group.

The Expense Group for the Fund included the Fund and seven other California municipal debt funds. The Board noted that the Management Rate for the Fund was slightly above the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable.

Profitability

The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board considered the Fund profitability analysis provided by the Manager that addresses the overall profitability of FTI’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2018, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Fund’s profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain Franklin Templeton funds, has been engaged by the Manager to periodically review and assess the allocation methodologies to be used solely by the Fund’s Board with respect to the profitability analysis.

The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also noted management’s expenditures in improving shareholder services provided to the Fund, as well as the need to implement systems

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SHAREHOLDER INFORMATION

and meet additional regulatory and compliance requirements resulting from recent SEC and other regulatory requirements.

The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund.

Economies of Scale

The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints, which operate generally to share any economies of scale with the Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the Franklin Templeton family of funds as a whole. The Board concluded that, to the extent economies of scale may be realized by the Manager and its affiliates, the Fund’s management fee structure provided a sharing of benefits with the Fund and its shareholders as the Fund grows.

Conclusion

Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of the Management Agreement for an additional one-year period.

Proxy Voting Policies and Procedures

The Fund’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Fund uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Fund’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request

to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Fund’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Fund files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

Householding of Reports and Prospectuses

You will receive the Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.

  56         Annual Report   franklintempleton.com

Annual Report and Shareholder Letter Franklin California Tax-Free Income Fund   Investment Manager Franklin Advisers, Inc.   Distributor Franklin Templeton Distributors, Inc. (800) DIAL BEN^® / 342-5236 franklintempleton.com   Shareholder Services (800) 632-2301

Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.

To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.

© 2019 Franklin Templeton Investments. All rights reserved. 1112 A 05/19

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Mary C. Choksi and she is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $91,292 for the fiscal year ended March 31, 2019 and $95,645 for the fiscal year ended March 31, 2018.

(b) Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.

(c) Tax Fees

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s

investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $15,000 for the fiscal year ended March 31, 2019 and $0 for the fiscal year ended March 31, 2018. The services for which these fees were paid included professional fees in connection with an Indonesia withholding tax refund claim and tax consulting services related to the operating agreement and term sheet for the launch of a new fund.

(d) All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended March 31, 2019 and $5,569 for the fiscal year ended March 31, 2018. The services for which these fees were paid include review of materials provided to the fund Board in connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $16,500 for the fiscal year ended March 31, 2019 and $14,000 for the fiscal year ended March 31, 2018. The services for which these fees were paid included the issuance of an Auditor’s Certificate for South Korean regulatory shareholders disclosures, assets under management certification, and benchmarking services in connection with the ICI TA Survey.

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

(i) pre-approval of all audit and audit related services;

(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;

(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit

committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $31,500 for the fiscal year ended March 31, 2019 and $19,569 for the fiscal year ended March 31, 2018.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were 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 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.

Item 5. Audit Committee of Listed Registrants. N/A

Item 6. Schedule of Investments. N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies. N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A

Item 13. Exhibits.

(a) (1) Code of Ethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

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.

FRANKLIN CALIFORNIA TAX-FREE INCOME FUND

By	/s/ MATTHEW T. HINKLE
	Matthew T. Hinkle
	Chief Executive Officer - Finance and Administration

Date May 24, 2019

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	/s/ MATTHEW T. HINKLE
	Matthew T. Hinkle
	Chief Executive Officer - Finance and Administration

Date May 24, 2019

By	/s/ GASTON GARDEY
	Gaston Gardey
	Chief Financial Officer and Chief Accounting Officer

Date May 24, 2019

EX-99.CODE

Code of Ethics for Principal Executives & Senior Financial Officers

Procedures Revised December 10, 2018  

FRANKLIN TEMPLETON FUNDS

CODE OF ETHICS FOR PRINCIPAL EXECUTIVES AND

SENIOR FINANCIAL OFFICERS

I. Covered Officers and Purpose of the Code

This code of ethics (the “Code”) applies to the Principal Executive Officers, Principal Financial Officer and Principal Accounting Officer (the “Covered Officers,” each of whom is set forth in Exhibit A) of each investment company advised by a Franklin Resources subsidiary and that is registered with the United States Securities & Exchange Commission (“SEC”) (collectively, “FT Funds”) for the purpose of promoting:

• Honest and ethical conduct, including the ethical resolution of actual or apparent conflicts of interest between personal and professional relationships;

• Full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by or on behalf of the FT Funds;

• Compliance with applicable laws and governmental rules and regulations;

• The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• Accountability for adherence to the Code.

Each Covered Officer will be expected to adhere to a high standard of business ethics and must be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

* Rule 38a-1 under the Investment Company Act of 1940 (“1940 Act”) and Rule 206(4)-7 under the Investment Advisers Act of 1940 (“Advisers Act”) (together the “Compliance Rule”) require registered investment companies and registered investment advisers to, among other things, adopt and implement written policies and procedures reasonably designed to prevent violations of the federal securities laws (“Compliance Rule Policies and Procedures”).

CONFIDENTIAL INFORMATION. This document is the proprietary product of Franklin Templeton Investments. It may NOT be distributed outside the company unless it is made subject to a non-disclosure agreement and/or such release receives authorization by an FTI Chief Compliance Officer. Any unauthorized use, reproduction or transfer of this document is strictly prohibited. Franklin Templeton Investments © 2014. All Rights Reserved.

FTI Compliance Procedures Standards of Business Conduct

II. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder.

Franklin Resources, Inc. has separately adopted the Code of Ethics and Business Conduct (“Business Conduct”), which is applicable to all officers, directors and employees of Franklin Resources, Inc., including Covered Officers. It summarizes the values, principles and business practices that guide the employee’s business conduct and also provides a set of basic principles to guide officers, directors and employees regarding the minimum ethical requirements expected of them. It supplements the values, principles and business conduct identified in the Code and other existing employee policies.

Additionally, the Franklin Templeton Funds have separately adopted the FTI Personal Investments and Insider Trading Policy governing personal securities trading and other related matters. The Code for Insider Trading provides for separate requirements that apply to the Covered Officers and others, and therefore is not part of this Code.

Insofar as other policies or procedures of Franklin Resources, Inc., the Funds, the Funds’ adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superceded by this Code to the extent that they overlap or conflict with the provisions of this Code. Please review these other documents or consult with the Legal Department if have questions regarding the applicability of these policies to you.

III. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

Overview. A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his or her service to, the FT Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of apposition with the FT Funds.

Certain conflicts of interest arise out of the relationships between Covered Officers and the FT Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment Company Act”) and the Investment Advisers Act of 1940 (“Investment Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the FT Funds because of their status as “affiliated persons” of the FT Funds. The FT Funds’ and the investment advisers’ compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the FT Funds, the investment advisers and the fund administrator of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the FT Funds, for the adviser, the administrator, or

2

FTI Compliance Procedures Standards of Business Conduct

for all three), be involved in establishing policies and implementing decisions that will have different effects on the adviser, administrator and the FT Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the FT Funds, the adviser, and the administrator and is consistent with the performance by the Covered Officers of their duties as officers of the FT Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the FT Funds’ Boards of Directors (“Boards”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the FT Funds.

Each Covered Officer must:

• Not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the FT Funds whereby the Covered Officer would benefit personally to the detriment of the FT Funds;

• Not cause the FT Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the FT Funds;

• Not retaliate against any other Covered Officer or any employee of the FT Funds or their affiliated persons for reports of potential violations that are made in good faith;

• Report at least annually the following affiliations or other relationships:¹

• all directorships for public companies and all companies that are required to file reports with the SEC;

• any direct or indirect business relationship with any independent directors of the FT Funds;

• any direct or indirect business relationship with any independent public accounting firm (which are not related to the routine issues related to the firm’s service as the Covered Persons accountant); and

• any direct or indirect interest in any transaction with any FT Fund that will benefit the officer (not including benefits derived from the advisory, sub-advisory, distribution or service agreements with affiliates of Franklin Resources).

These reports will be reviewed by the Legal Department for compliance with the Code.

There are some conflict of interest situations that should always be approved in writing by Franklin Resources General Counsel or Deputy General Counsel, if material. Examples of these include²:

• Service as a director on the board of any public or private Company.

¹  Reporting of these affiliations or other relationships shall be made by completing the annual Directors and Officers Questionnaire and returning the questionnaire to Franklin Resources Inc, General Counsel or Deputy General Counsel.

²  Any activity or relationship that would present a conflict for a Covered Officer may also present a conflict for the Covered Officer if a member of the Covered Officer’s immediate family engages in such an activity or has such a relationship. The Cover Person should also obtain written approval by FT’s General Counsel in such situations.

3

FTI Compliance Procedures Standards of Business Conduct

• The receipt of any gifts in excess of $100 from any person, from any corporation or association.

• The receipt of any entertainment from any Company with which the FT Funds has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety. Notwithstanding the foregoing, the Covered Officers must obtain prior approval from the Franklin Resources General Counsel for any entertainment with a value in excess of $1000.

• Any ownership interest in, or any consulting or employment relationship with, any of the FT Fund’s service providers, other than an investment adviser, principal underwriter, administrator or any affiliated person thereof.

• A direct or indirect financial interest in commissions, transaction charges or spreads paid by the FT Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

• Franklin Resources General Counsel or Deputy General Counsel will provide a report to the FT Funds Audit Committee of any approvals granted at the next regularly scheduled meeting.

IV. Disclosure and Compliance

• Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the FT Funds;

• Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the FT Funds to others, whether within or outside the FT Funds, including to the FT Funds’ directors and auditors, and to governmental regulators and self-regulatory organizations;

• Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the FT Funds, the FT Fund’s adviser and the administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the FT Funds file with, or submit to, the SEC and in other public communications made by the FT Funds; and

• It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

V. Reporting and Accountability

Each Covered Officer must:

• Upon becoming a covered officer affirm in writing to the Board that he or she has received, read, and understands the Code (see Exhibit B);

• Annually thereafter affirm to the Board that he has complied with the requirements of the Code; and

• Notify Franklin Resources’ General Counsel or Deputy General Counsel promptly if he or she knows of any violation of this Code. Failure to do so is itself is a violation of this Code.

4

FTI Compliance Procedures Standards of Business Conduct

Franklin Resources’ General Counsel and Deputy General Counsel are responsible for applying this Code to specific situations in which questions are presented under it and have the authority to interpret this Code in any particular situation.³ However, the Independent Directors of the respective FT Funds will consider any approvals or waivers⁴ sought by any Chief Executive Officers of the Funds.

The FT Funds will follow these procedures in investigating and enforcing this Code:

• Franklin Resources General Counsel or Deputy General Counsel will take all appropriate action to investigate any potential violations reported to the Legal Department;

• If, after such investigation, the General Counsel or Deputy General Counsel believes that no violation has occurred, The General Counsel is not required to take any further action;

• Any matter that the General Counsel or Deputy General Counsel believes is a violation will be reported to the Independent Directors of the appropriate FT Fund;

• If the Independent Directors concur that a violation has occurred, it will inform and make a recommendation to the Board of the appropriate FT Fund or Funds, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer;

• The Independent Directors will be responsible for granting waivers, as appropriate; and

• Any changes to or waivers of this Code will, to the extent required, are disclosed as provided by SEC rules.⁵

VI. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the FT Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the FT Funds, the FT Funds’ advisers, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The FTI Personal Investments and Insider Trading Policy, adopted by the FT Funds, FT investment advisers and FT Fund’s principal underwriter pursuant to Rule 17j-1 under the Investment Company Act, the Code of Ethics and Business Conduct and more detailed policies and procedures set forth in FT’s Employee Handbook are separate requirements applying to the Covered Officers and others, and are not part of this Code.

³  Franklin Resources General Counsel and Deputy General Counsel are authorized to consult, as appropriate, with members of the Audit Committee, counsel to the FT Funds and counsel to the Independent Directors, and are encouraged to do so.

⁴  Item 2 of Form N-CSR defines “waiver” as “the approval by the registrant of a material departure from a provision of the code of ethics” and “implicit waiver,” which must also be disclosed, as “the registrant’s failure to take action within a reasonable period of time regarding a material departure from a provision of the code of ethics that has been made known to an executive officer” of the registrant. See Part X.

⁵ See Part X.

5

FTI Compliance Procedures Standards of Business Conduct

VII. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the FT Funds’ Board including a majority of independent directors.

VIII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the FT Funds’ Board and their counsel.

IX. Internal Use

The Code is intended solely for the internal use by the FT Funds and does not constitute an admission, by or on behalf of any FT Funds, as to any fact, circumstance, or legal conclusion.

X. Disclosure on Form N-CSR

Item 2 of Form N-CSR requires a registered management investment company to disclose annually whether, as of the end of the period covered by the report, it 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 officers are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, it must explain why it has not done so.

The registrant must also: (1) file with the SEC a copy of the code as an exhibit to its annual report; (2) post the text of the code on its Internet website and disclose, in its most recent report on Form N-CSR, its Internet address and the fact that it has posted the code on its Internet website; or (3) undertake in its most recent report on Form N-CSR to provide to any person without charge, upon request, a copy of the code and explain the manner in which such request may be made. Disclosure is also required of amendments to, or waivers (including implicit waivers) from, a provision of the code in the registrant’s annual report on Form N-CSR or on its website. If the registrant intends to satisfy the requirement to disclose amendments and waivers by posting such information on its website, it will be required to disclose its Internet address and this intention.

The Legal Department shall be responsible for ensuring that:

• a copy of the Code is filed with the SEC as an exhibit to each Fund’s annual report; and

• any amendments to, or waivers (including implicit waivers) from, a provision of the Code is disclosed in the registrant’s annual report on Form N-CSR.

In the event that the foregoing disclosure is omitted or is determined to be incorrect, the Legal Department shall promptly file such information with the SEC as an amendment to Form N-CSR.

In such an event, the Fund Chief Compliance Officer shall review the Code and propose such changes to the Code as are necessary or appropriate to prevent reoccurrences.

6

FTI Compliance Procedures Standards of Business Conduct

EXHIBIT A

Persons Covered by the Franklin Templeton Funds

Code of Ethics

December 2018

FRANKLIN GROUP OF FUNDS

Edward Perks	President and Chief Executive Officer – Investment Management
Rupert H. Johnson, Jr.	Chairman of the Board and Vice President – Investment Management
Don Taylor	President and Chief Executive Officer – Investment Management
Sonal Desai)	President and Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Gaston R. Gardey	Chief Financial Officer and Chief Accounting Officer and Treasurer

FRANKLIN MUTUAL SERIES FUNDS

Peter Langerman	Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Robert G. Kubilis	Chief Financial Officer and Chief Accounting Officer

FRANKLIN ALTERNATIVE STRATEGIES FUNDS

Mat S. Gulley	Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Robert G. Kubilis	Chief Financial Officer and Chief Accounting Officer

TEMPLETON GROUP OF FUNDS

Manraj S. Sekhon	President and Chief Executive Officer – Investment Management
Michael Hasenstab, Ph.D.	President and Chief Executive Officer – Investment Management
Norman Boersma	President and Chief Executive Officer – Investment Management
Matthew Hinkle	Chief Executive Officer – Finance and Administration
Robert G. Kubilis	Chief Financial Officer, Chief Accounting Officer and Treasurer

7

FTI Compliance Procedures Standards of Business Conduct

Exhibit B

ACKNOWLEDGMENT FORM

Franklin Templeton Funds Code of Ethics

For Principal Executives and Senior Financial Officers

Instructions:

1. Complete all sections of this form.

2. Print the completed form, sign, and date.

3. Submit completed form to FT’s General Counsel c/o Code of Ethics Administration within 10 days of becoming a Covered Officer and by February 15th of each subsequent year.

Inter-office mail:	Code of Ethics Administration, Global Compliance SM-920/2
Fax:	(650) 312-5646
E-mail:	Code of Ethics Inquiries & Requests (internal address);
	lpreclear@franklintempleton.com (external address)

Covered Officer’s Name:

Title:

Department:

Location:

Certification for Year Ending:

To: Franklin Resources General Counsel, Legal Department

I acknowledge receiving, reading and understanding the Franklin Templeton Fund’s Code of Ethics for Principal Executive Officers and Senior Financial Officers (the “Code”). I will comply fully with all provisions of the Code to the extent they apply to me during the period of my employment. I further understand and acknowledge that any violation of the Code may subject me to disciplinary action, including termination of employment.

Signature Date signed

8

EX-99.CERT

Exhibit 13 (a) (2)

I, Matthew T. Hinkle, certify that:

1. I have reviewed this report on Form N-CSR of Franklin California Tax-Free Income Fund;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting 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; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

5/24/2019

S\MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

Exhibit 13 (a) (2)

I, Gaston Gardey, certify that:

1. I have reviewed this report on Form N-CSR of Franklin California Tax-Free Income Fund;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting 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; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

5/24/2019

S\GASTON GARDEY

Gaston Gardey

Chief Financial Officer and Chief Accounting Officer

EX-99.906CE

Exhibit 13 (b)

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew T. Hinkle, Chief Executive Officer of the Franklin California Tax-Free Income Fund (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The periodic report on Form N-CSR of the Registrant for the period ended 3/31/2019 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: 5/24/2019

S\MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

Exhibit 13 (b)

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Gaston Gardey, Chief Financial Officer of the Franklin California Tax-Free Income Fund (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The periodic report on Form N-CSR of the Registrant for the period ended 3/31/2019 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: 5/24/2019

S\GASTON GARDEY

Gaston Gardey

Chief Financial Officer and Chief Accounting Officer