N-CSR

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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number     811-05009

COLORADO BONDSHARES — A TAX-EXEMPT FUND

(Exact name of registrant as specified in charter)

1200 17TH STREET, SUITE 850, DENVER, COLORADO     80202-5808

(Address of principal executive offices) (Zip code)

FRED R. KELLY, JR.     1200 17TH STREET, SUITE 850, DENVER, COLORADO     80202-5808

(Name and address of agent for service)

Registrant’s telephone number, including area code:     303-572-6990

Date of fiscal year end:     09/30/2007

Date of reporting period:     09/30/2007

TABLE OF CONTENTS

Item 1.	Reports to Stockholders.
Item 2.	Code of Ethics.
Item 3.	Audit Committee Financial Expert.
Item 4.	Principal Accountant Fees and Services.
Item 5.	Audit Committee of Listed Registrants.
Item 6.	Schedule of Investments.
Item 7.	Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Item 8.	Portfolio Managers of Closed-End Management Investment Companies.
Item 9.	Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchases.
Item 10.	Submission of Matters to a Vote of Security Holders.
Item 11.	Controls and Procedures.
Item 12.	Exhibits.
Section 302 Certification
Section 906 Certification

Item 1. Reports to Stockholders

November 26, 2007

Dear Shareholders,

      It is time again to present to you the operating results for the fiscal year ended September 30, 2007. We continued our proud tradition of good performance during this time period which is outlined in detail in the following pages. The share price remarkably reached its highest level in 20 years and I believe we are entering a time when our income may well improve because of market changes noted below that have occurred.

      Towards the end of the fiscal year in the months of July, August and September, the credit markets experienced some volatility brought on by concerns about sub-prime loans made by lenders. While the municipal markets were less affected than others, there was still some apprehension on the part of tax exempt bond investors that was evident. Only now are reports coming out about the financial impact of market movements on various financial institutions.

      I am happy to report that the effect on Colorado BondShares has been relatively minor to date and if history is any guide, which it sometimes is not, we tend to do very well during down markets. At this writing, the volatility which abated for awhile has returned and probably will continue for some time. We are well positioned to ride out these challenging markets because our liquidity is great and the quality of our holdings has probably never been higher. It would not be particularly surprising if we get buffeted a little by the winds of change, but fundamentally our assets are fairly valued, our cash flow is secure and we are not leveraged. This is the first time in a couple of years that the markets have offered good value for the new dollars invested, which we see as more of an opportunity than an impediment.

      Thank you for your business this past year.

Sincerely,

Fred R. Kelly

Portfolio Manager

Officers and Trustees

George N. Donnelly, Chairman of the Board

of Trustees

Bruce G. Ely, Trustee

James R. Madden, Trustee

Andrew B. Shaffer, President, Secretary, Treasurer and Trustee

Fred R. Kelly, Jr., Portfolio Manager

Investment Adviser

Freedom Funds Management Company

Transfer, Shareholder Servicing, and Dividend Disbursing Agent

Freedom Funds Management Company

Distributor

SMITH HAYES Financial Services Corporation

Custodian of Portfolio Securities

Wells Fargo Investments and Trust,
Wells Fargo Bank, N.A.

Independent Registered Public Accounting Firm

Anton Collins Mitchell LLP

Legal Counsel

Kutak Rock LLP

This report is submitted for the general information of the shareholders of Colorado BondShares — A Tax-Exempt Fund. This report must be preceded or accompanied by a Prospectus of the Fund. The prospectus contains information concerning the investment policies and expenses of the portfolio in addition to other pertinent information. Shares of Colorado BondShares — A Tax-Exempt Fund are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.

FEDERAL INCOME TAX INFORMATION

(unaudited)

In early 2008, shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2007. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service.

FUND EXPENSES (Unaudited)

      The following examples are intended to help you understand the ongoing costs (in dollars) of investing in the Fund and compare these costs with those of other mutual funds. The examples (actual and hypothetical 5% return) are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

      As a shareholder of Colorado BondShares — A Tax-Exempt Fund you can incur two types of costs:

•  Sales charges (front loads) on fund purchases and

•  Ongoing fund costs, including management fees, administrative services, and other fund expenses. All mutual funds have operating expenses. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund.

Actual Fund Expenses

      The first line of the table below provides information about actual account values and actual expenses. The “Ending Account Value” shown is derived from the Fund’s actual return, which includes the effect of Fund expenses. You can estimate the expenses that you paid over the period by using the information below together with the amount you invested. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given in the first line under the heading “Expenses Paid During Period.”

Hypothetical Example for Comparison Purposes

      The second line of the table below provides information that is intended to help you compare the ongoing costs of investing in the Fund with those of other mutual funds. The hypothetical “Ending Account Value” is based on the actual expense ratio of the Fund and an assumed 5% rate of return per year before expenses. The results do not apply to your investment because the return used is not the Fund’s actual return. This information is useful for making comparisons with the 5% hypothetical examples that appear in shareholder reports of other funds.

Six Months Ended September 30, 2007

	Beginning Account		Ending Account		Expenses Paid
Colorado BondShares — A Tax-Exempt Fund	Value 04/01/07		Value 09/30/07		During Period(1)
Based on Actual Fund Return	$	1,000.00	$	1,028.22	$	2.85
Based on Hypothetical 5% Annual Return Before Expenses	$	1,000.00	$	1,022.20	$	2.84

(1) The expenses shown in this table are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 to reflect the one-half year period.

      Please note that expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transaction costs, such as sales charges. If transaction costs were included, your total costs would have been higher. You can find more information about the Fund’s expenses in the Financial Statements section of this report. For additional information on operating costs please see the Fund’s prospectus.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

        Market conditions for tax-exempt bonds during the first three quarters of the fiscal year ended September 30, 2007 were somewhat reflective of the two prior years in that little changed. But, in the fourth quarter, bond investors became extremely risk averse, which precipitated a sort of capital crunch. In an effort to restore liquidity, the Federal Reserve Bank lowered the target federal funds rate for the first time in four years by 0.50%, from 5.25% to 4.75%. In this environment, bond prices have been quite volatile.

      For the fiscal year ended September 30, 2007 the Fund experienced a total return of 6.59% at net asset value; the return was comprised of a dividend of 5.78% of average net assets and principal appreciation of 0.81%. This year’s performance was once again good enough to rank the Fund as one of the top funds in the United States in our performance category of single state intermediate municipal bond funds. According to Morningstar Inc., the Fund ranked as a top-performer in six out of the last ten years (1996, 1999, 2001, 2004, 2005 and 2007). The Fund also led all other Colorado municipal bond funds in the three-year, five-year and ten-year total performance category at net asset value with returns of 6.13%, 6.10% and 6.21%, respectively. The average annual total returns at the maximum offering price (including sales charges and reinvestment of all dividends and distributions) are 1.52%, 4.43%, 5.07%, and 5.70% for the one, three, five and ten-year periods ended September 30, 2007, respectively.

      A key factor which allowed the Fund to outperform competitors was management’s determination to maintain an average duration (time period during which securities are likely to be held by the portfolio) of 5.4 years for the portfolio, which was among the shortest in our peer group. The Fund carried a disproportionately high weighting of short-term bonds in the portfolio, designed to lessen the exposure to market risk in a time when it seemed likely for interest rates to rise. It should be stated that past performance is not necessarily indicative of future performance, but it is one of many important factors to consider when evaluating a potential investment.

      While the strategy of buying short maturities helped to protect principal, it did not maximize the current income stream. Even so, distributions increased to $0.54 per share in fiscal year 2007 due in large part to a single extraordinary event that will not likely be repeated in future years, compared to $0.49 per share in fiscal years 2005 and 2006. It is management’s philosophy that foregoing risky opportunities that may increase income is preferable to potentially incurring losses of principal. Until the risks posed by rising interest rates have abated, management will continue to exercise this methodology. Much of this year’s success may be attributed to longer term holdings being principally invested in non-rated tax-exempt bonds, with coupon rates that exceed average coupons currently available in the market. Non-rated securities are generally subject to greater credit risk than rated issues; but management believes that proper analysis can effectively mitigate these risks.

2

PERFORMANCE SUMMARY (Unaudited)

COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN

COLORADO BONDSHARES⁽¹⁾

THE LIPPER GENERAL MUNICIPAL DEBT FUND INDEX⁽⁴⁾

AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX⁽⁵⁾

(1)  Total return is the percentage change in the value of a hypothetical investment that has occurred in the indicated period of time, taking into account the imposition of the sales charge and other fees and assuming the reinvestment of all dividends and distributions. Past performance is not indicative of future performance. The graph does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of shares of the Fund.

  * Fiscal year ended September 30, 2007 includes an interest payment of approximately $3.8 million representing four years of unpaid interest relating to the Fund’s holding of United Airlines/Denver International Airport bonds that is a non-recurring event outside of the control of the Fund.

(2)  Average annual total return reflects the hypothetical annually-compounded return that would have produced the same cumulative total return if the Fund’s performance had been constant over the entire period. Average annual total returns for the one-year, five-year and ten-year periods ended September 30, 2007 are 1.52%, 5.07% and 5.70%, respectively. Average annual total return includes the imposition of the sales charge and assumes the reinvestment of all dividends and

3

distributions. Past performance is not indicative of future performance. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of shares of the Fund.

(3)  Includes reinvestment of dividends and adjustment for the maximum sales charge of 4.75%.

(4)

The Lipper General Municipal Debt Fund Index is a non-weighted index of the 30 largest funds within the investment objective of the General Municipal Debt. Reflects no deductions for fees, expenses or taxes. Includes reinvestment of dividends but does not reflect any adjustment for sales charge.

(5)

The Lehman Brothers Municipal Bond Index is considered representative of the broad market for investment grade, tax-exempt bonds with a maturity date of one year. You cannot invest directly in this index. This index is not professionally managed and does not pay any commissions, expenses or taxes. If this index did pay commissions, expenses or taxes, its returns would be lower. The Fund selected the Lehman Index to compare the returns of the Fund to an appropriate broad-based securities market index. You should note, however, that there are some fundamental differences between the portfolio of securities invested in by the Fund and the securities represented by the Lehman Index. Unlike the Fund which invests primarily in not-rated securities on issues of any size, the Lehman Index only includes securities with a rating of at least “Baa” by Moody’s Investor Services, Inc. from an issue size of no less than $50,000,000. Some of these differences between the portfolio of the Fund and the securities represented by the Lehman Index may cause the performance of the Fund to differ from the performance of the Lehman Index.

4

CREDIT QUALITY

Colorado BondShares — A Tax-Exempt Fund

Based on a Percentage of Total Net Assets as of September 30, 2007

SECTOR BREAKDOWN

Colorado BondShares — A Tax-Exempt Fund

Based on a Percentage of Total Net Assets as of September 30, 2007

*Cash & cash equivalents include cash, receivables less liabilities plus securities with a maturity date or redemption feature of one year or less, including variable rate securities as identified in the accompanying Schedule of Investments.

5

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Colorado BondShares — A Tax-Exempt Fund

      We have audited the accompanying statement of assets and liabilities of Colorado BondShares — A Tax-Exempt Fund (the “Fund”), including the schedule of investments, as of September 30, 2007, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the year ended September 30, 2003 were audited by other auditors whose report dated October 10, 2003 expressed an unqualified opinion thereon.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2007, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      As discussed more fully in Note 1 to the financial statements, securities amounting to $69,728,311 (12% of net assets) have been valued at fair value as determined by the Board of Trustees. We have reviewed the procedures applied by the trustees in valuing such securities and have inspected underlying documentation; while we believe the procedures to be reasonable and the documentation appropriate, determination of fair values involves subjective judgment which is not susceptible to substantiation by auditing procedures.

      In our opinion, subject to the effect on the financial statements of the valuation of securities determined by the Board of Trustees as described in the preceding paragraph, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Colorado BondShares — A Tax-Exempt Fund as of September 30, 2007 and 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 then ended, and the financial highlights for each of the four years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

ANTON COLLINS MITCHELL LLP

Denver, Colorado

November 27, 2007

6

Colorado BondShares

Tax-Exempt Fund

Schedule of Investments

September 30, 2007

Face Amount			Market Value
Colorado Municipal Bonds — 72.4%
	1,600,000	Aberdeen Metropolitan District No. 1 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2007, 7.50% to yield 8.00% due 12/1/2035	$	1,510,688
	1,000,000	Adonea Metropolitan District No. 2 LTD Tax (Convertible to Unlimited Tax) G.O. Series 2005A, 6.125% to yield 6.25% due 12/1/2025		985,360
	2,175,000	Antelope Heights Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2003, 8.00% due 12/1/2023		2,674,445
	2,000,000	Arista Metropolitan District Special Revenue Bond Series 2005, 6.75% due 12/1/2035		2,036,140
	306,040	Aurora Centretech Metropolitan District G.O. Refunding and Improvement Series 1994, 6.00% due 12/1/2023(b)		464,400
	2,960,000	BNC Metropolitan District No. 1 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2004, 8.00% due 6/1/2028		2,960,000
	1,000,000	Beacon Pointe Metropolitan District LTD Tax (Convertible to Unlimited Tax) G.O. Series 2005A, 6.125% to yield 6.25% due 12/1/2025		974,780
	700,000	Beebe Draw Farms Metropolitan District G.O. Series 1998, 7.00% due 10//1/2018		707,973
	5,095,000	Belle Creek Metropolitan District No. 1 G.O. LTD Tax Series 2000, 8.00% due 12/1/2020		5,223,649
	2,250,000	Black Hawk (City of) Device Tax Revenue Series 1998, 5.625% due 12/1/2021		2,323,148
	4,520,000	Boulder County Development Revenue (Boulder College of Massage Therapy Project) Series 2006A, 6.35% due 10/15/2031		4,342,500
	1,845,000	Bradburn Metropolitan District No. 3 G.O. LTD Tax Series 2003, 7.50% due 12/1/2033		1,845,000
	6,245,000	Bromley Park Metropolitan District No. 3 G.O. Exchange (LTD Tax to Unlimited Tax) Series 2001A and B, 8.00% due 12/1/2019-22(b)		6,948,040
	6,000,000	Bromley Park Metropolitan District No. 2 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2002B, 8.00% due 12/1/2022(b)		7,256,280
	3,991,000	Bromley Park Metropolitan District No. 2 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2003, 8.00% due 12/01/2028(b)		4,823,602
	4,750,000	Broomfield Village Metropolitan District No. 2 Special Revenue Refunding Series 2005B, 4.09% due 7/1/2032(h)		4,750,000
	9,230,000	Broomfield Village Metropolitan District No. 2 Special Revenue Refunding Series 2003B, 4.59% due 7/1/2032(h)		9,230,000
	500,000	Castle Oaks Metropolitan District G.O. LTD Tax Series 2005, 6.00% due 12/1/2025		485,955
	25,000	Castle Rock (Town of) G.O. Series 1988-2, 10.375% due 12/1/2008		27,120

7

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Municipal Bonds — (Continued)
	565,000	Castle Rock (Town of) LID No. 1988-2 Special Assessment Series 1988, 9.25%-10.375% due 12/1/2008(a)(i)	$	39,550
	1,930,000	Central Platte Valley Metropolitan District Special Obligation Revenue Series 1998, 7.00% due 12/1/2017(b)		1,980,547
	6,465,662	Colorado Centre Metropolitan District LTD Tax and Special Revenue Series 1992B, 0.00% due 1/1/2032(a)(g)(i)		161,642
	2,009,520	Colorado Centre Metropolitan District LTD Tax and Special Revenue Series 1992A, principal only, 0.00% due 1/1/2027(a)(e)(i)		20,095
	2,008,335	Colorado Centre Metropolitan District LTD Tax and Special Revenue Series 1992A, interest only, 9.00% due 1/1/2027(f)(i)		1,104,584
	1,700,000	Colorado Educational and Cultural Facilities Authority Charter School Revenue (Brighton Charter School Project) Series 2006, 6.00% due 11/1/2036		1,710,540
	3,200,000	Colorado Educational and Cultural Facilities Authority Charter School Revenue (Liberty Common School Project) Series 1998, 6.95% due 8/15/2019(b)		3,284,960
	840,000	Colorado Educational and Cultural Facilities Authority Charter School Revenue (Crown Pointe Academy) Series 2000, 7.25% due 7/15/2025		875,994
	1,125,000	Colorado Educational and Cultural Facilities Authority Private School Revenue (Escuela Tlatelolco Project) Series 2000A, 8.50% due 6/1/2022		1,096,346
	310,000	Colorado Educational and Cultural Facilities Authority Charter School Revenue (Elbert County Charter School Project) Series 2000A, 8.00% due 6/1/2010(b)		330,215
	5,410,000	Colorado Educational and Cultural Facilities Authority Student Housing Revenue (Inn at Auraria LLC Project) Series 2005A, 5.875% due 7/1/2023		5,341,077
	2,020,000	Colorado Educational and Cultural Facilities Authority Charter School Revenue (Belle Creek Charter School Project) Series 2002A, 7.625% to yield 7.75% due 3/15/2032		2,358,027
	785,000	Colorado Educational and Cultural Facilities Authority Charter School Revenue Refunding and Improvement (Elbert County Charter School Project Series 2004, 7.375% to yield 7.45% due 3/1/2035		836,206
	450,000	Colorado Health Facilities Authority Revenue Extendable Rate Adjustable Securities (Christian Living Communities Project) Series 2006B, 4.65% due 1/1/2037(h)		443,691
	3,655,000	Colorado Housing and Finance Authority Economic Development Revenue (Micro Business Development Corporation Project) Series 2005, 6.75% due 12/1/2010		3,606,644
	5,585,000	Colorado Housing and Finance Authority Multi-family/ Project Class I Adjustable Rate 2000 Series A-1, 3.85% due 10/1/2030(h)		5,585,000

8

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Municipal Bonds — (Continued)
	110,000	Colorado Housing and Finance Authority Variable Rate Class I Series A-2, 3.85% due 4/1/2020(h)	$	110,000
	19,710,000	Colorado Housing and Finance Authority Adjustable Rate Multi-family Housing Insured Mortgage Revenue 2002 Series AA, 3.85% due 10/1/2030(h)		19,710,000
	1,000,000	Colorado Housing and Finance Authority Single Family Mortgage Class I Adjustable Rate 2002 Series B-3, 3.85% due 11/1/2021(h)		1,000,000
	2,200,000	Colorado Housing and Finance Authority Single Family Class I Adjustable Rate Series 2001 AA-3, 3.85% due 5/1/2036(h)		2,200,000
	1,800,000	Colorado Housing and Finance Authority Single Family Mortgage Class I Adjustable Rate 2003 Series A-2, 3.85% due 11/1/2021(h)		1,800,000
	4,125,000	Colorado Housing and Finance Authority Multi-family Project Class I Adjustable Rate 2005 Series B-3, 3.85% due 10/1/2036(h)		4,125,000
	4,000,000	Colorado Housing and Finance Authority Multi-family Project Class III Adjustable Rate 2006 Series A3, 3.85% due 10/1/2036(h)		4,000,000
	27,020,000	Colorado Housing and Finance Authority Single Family Mortgage Class I Adjustable Rate 2006 Series A-2, 3.85% due 11/1/2034(h)		27,020,000
	21,970,000	Colorado Housing and Finance Authority Single Family Mortgage Class I Adjustable Rate 2006 Series C-2, 3.85% due 11/1/2034(h)		21,970,000
	5,000,000	Commerce City Northern Infrastructure General Improvement District G.O. Variable Rate Series 2006, 3.89% due 12/1/2028(h)		5,000,000
	2,455,000	Conservatory Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2003, 7.50% due 12/1/2027(b)		2,991,025
	3,725,000	Conservatory Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2005, 6.75% due 12/1/2034(b)		4,394,867
	1,200,000	Cornerstone Metropolitan District No. 1 Variable Rate Revenue Series 2006, 3.87% due 12/1/2036(h)		1,200,000
	1,025,000	Cotton Ranch Metropolitan District G.O. Series 1998A, 7.25% due 12/15/2017(b)		1,031,027
	3,145,000	Crested Butte Industrial Development Refunding and Improvement Revenue (Crested Butte Academy Project) Series 2006B, 7.50% due 8/15/2026(a)		2,719,796
	1,865,000	Denver (City and County of) Subordinate Multifamily Housing Revenue (Capitol Heights Apartments) Series 1999C, 8.00% due 5/1/2032		1,117,508
	2,155,000	Denver (City and County of) Single Family Home Mortgage Revenue (Metro Mayors Caucus Single Family Mortgage Bond Program) Series 2001A, 6.30% to yield 5.80% due 11/1/2032		2,198,962
	775,000	Denver West Metropolitan District G.O. Series 1997B, 5.70% due 12/1/2017		775,938

9

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Municipal Bonds — (Continued)
	400,000	Eagle Riverview Affordable Housing Corporation Multifamily Housing Project Revenue Series 1999B, 7.00% due 7/1/2029	$	405,324
	7,500,000	East Cherry Creek Valley Water and Sanitation District Water Activity Enterprise, Inc. Variable Rate Water Revenue Series 2004, 3.00% due 11/15/2023(c)		6,918,750
	5,000,000	Ebert Metropolitan District Securitization Trust Series 2004-S1, Class A2 Certificates 3.99% due 12/1/2034(h)		5,000,000
	1,725,000	Ebert Metropolitan District Securitization Trust Series 2005-S1, Class A2 Certificates 3.99% due 12/1/2009(h)		1,725,000
	90,000	El Paso County Powers Boulevard/ Drennan Road LID 1985-2 Special Assessment Refunding Series 1988, 8.875%-9.00% due 9/1/2000(a)		9,000
	620,000	Fort Lupton Golf Course Revenue Anticipation Warrants Senior Series 1996A, 8.50% due 12/15/2015(a)		71,306
	1,900,000	Fronterra Village Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2001, 8.00% due 12/1/2021(b)		2,215,191
	4,550,000	Fronterra Village Metropolitan District No. 2 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2003, 8.00% due 12/1/2023(b)		5,369,682
	500,000	Galleria Metropolitan District G.O. LTD Tax Series 1999, 7.25% to yield 7.375% due 12/1/2019(b)		539,490
	890,000	Gateway Village GID Subordinate LTD Tax G.O. Series 1999, 7.00% due 6/1/2019(b)		917,973
	905,000	Gateway Village GID G.O. Refunding and Improvement Series 1998, 6.00% due 12/1/2018(b)		923,987
	755,000	Gateway Village GID G.O. Refunding and Improvement Series 1998, 6.00% due 12/1/2018		756,027
	2,000,000	Granby Ranch Metropolitan District LTD Tax G.O. Series 2006, 6.75% due 12/1/2036		2,034,880
	5,750,000	Grand Elk Ranch GID LTD Tax G.O. Series 2003, 8.00% due 12/1/2023(b)		6,990,332
	675,000	Greatrock North Water and Sanitation District LTD Tax G.O. Series 1998, 8.00% due 12/1/2017		708,865
	1,000,000	High Plains Metropolitan District LTD Tax (Convertible to Unlimited Tax) G.O. Series 2005A, 6.125% to yield 6.25% due 12/1/2025		925,160
	50,000	Idledale Fire Protection District G.O. Series 1993, 5.80% due 12/15/2007		50,107
	130,000	Las Animas (City of) G.O. Water Series 1989, 8.60% due 12/1/2009		132,760
	405,000	Littleton (The) Riverfront Authority Tax Increment Revenue Refunding Series 1999A-1, 8.00% due 12/1/2008		406,810

10

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Municipal Bonds — (Continued)
	2,000,000	Madre Metropolitan District No. 2 G. O. (LTD Tax Convertible to Unlimited Tax) Series 2007A, 5.375% due 12/1/2026	$	1,805,840
	6,245,000	Maher Ranch Metropolitan District No. 4 G.O. LTD Tax Series 2003, 7.80% due 12/1/2027(b)		7,736,618
	1,945,000	Maher Ranch Metropolitan District No. 4 G.O. LTD Tax Series 2006, 7.00% due 12/1/2036(b)		2,329,702
	11,580,000	Meadows Metropolitan District No. 1 G.O. LTD Tax Series 1989 A (reissued on 12/29/1993) 7.999% due 6/1/2029		11,580,000
	11,565,000	Meadows Metropolitan District No. 2 G.O. LTD Tax Series 1989 B (reissued on 12/29/1993) 7.999% due 6/1/2029		11,565,000
	11,515,000	Meadows Metropolitan District No. 7 G.O. LTD Tax Series 1989 C (reissued on 12/29/1993) 7.999% due 6/1/2029		11,515,000
	15,925,000	Moffat County Weekly Adjustable/ Fixed Rate Pollution Control Revenue Refunding (Colorado-Ute Electric Association, Inc. Project) Tri-State Generation and Transmission Series 1984 3.85% due 7/1/2010(h)		15,925,000
	260,000	Mount Carbon Metropolitan District LTD Tax and Revenue Refunding Series 2004A, 7.00% due 6/1/2043		97,526
	2,000,000	Mount Carbon Metropolitan District LTD Tax and Revenue Refunding Series 2004B, 7.00% due 6/1/2043		750,200
	565,000	Mount Carbon Metropolitan District LTD Tax and Revenue Refunding Series 2004C, 8.00% due 6/1/2043(e)		40
	1,000,000	Mountain Shadows Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2007, 5.50% due 12/1/2027		846,700
	1,500,000	Neu Towne Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2004, 7.20% due 12/1/2023		1,500,000
	1,210,000	North Pines Metropolitan District G.O. LTD Tax Series 2000, 9.00% due 12/1/2020		1,223,685
	2,765,000	North Range Village Metropolitan District G.O. LTD Tax Series 2000, 8.00% due 12/1/2020(b)		3,086,210
	1,365,000	North Range Village Metropolitan District G.O. LTD Tax Series 2001, 10.00% due 12/1/2021(b)(c)		1,601,118
	1,000,000	Northwest Metropolitan District No. 3 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2005, 6.125% due 12/1/2025		985,360
	1,430,000	Parker Jordan Metropolitan District G.O. Series 1998A, 6.25% due 12/1/2017(b)		1,466,665
	4,445,000	Parker Jordan Metropolitan District G.O. Series 2000, 7.25% to yield 7.375% due 12/1/2019(b)		4,789,888

11

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Municipal Bonds — (Continued)
	2,340,000	Potomac Farms Metropolitan District G.O. Refunding and Improvement (LTD Tax Convertible to Unlimited Tax) Series 2007A, 7.25% due 12/1/2037	$	2,333,963
	13,350,000	Reata South Metropolitan District LTD Tax G.O. Series 2007A, 7.25% due 6/1/2037		13,521,280
	5,790,000	Rendezvous Residential Metropolitan District G.O. LTD Tax Series 2002, 8.00% due 12/1/2021(b)		6,911,697
	3,100,000	Revenue Bond Certificate Series Trust 2004-13 Senior Certificates of Beneficial Ownership (Centennial East Apartments Project) 4.06% due 12/1/2033(h)		3,100,000
	970,000	Riverdale Peaks II Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2005, 6.40% due 12/1/2025		978,478
	1,135,000	Riverdale Peaks II Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2005, 6.50% due 12/1/2035		1,144,874
	1,285,000	Routt County LID No. 2002-1 Special Assessment Series 2004A, 6.50% to yield 6.59% due 8/1/2024		1,315,506
	144,747	Roxborough Village Metropolitan District Series 1993A, 9.00% due 12/31/2016(i)		166,567
	334,438	Roxborough Village Metropolitan District Series 1993B, principal only, 0.00% due 12/31/2021(e)(i)		178,761
	367,244	Roxborough Village Metropolitan District Series 1993B, interest only, 10.41% due 12/31/2042(f)(i)		56,923
	1,870,000	Sand Creek Metropolitan District G.O. LTD Tax Series 1997, 7.125% due 12/1/2016(b)		1,916,918
	805,000	Sand Creek Metropolitan District G.O. LTD Tax Series 1998, 6.625% due 12/1/2017(b)		838,158
	2,000,000	Serenity Ridge Metropolitan District No. 2 Series 2004, 7.375% due 12/1/2024		2,000,000
	1,000,000	Silver Peaks Metropolitan District No. 2 General Obligation (LTD Tax Convertible to Unlimited Tax) Series 2006, 5.75% due 12/1/2036		918,190
	3,750,000	Solitude Metropolitan District Senior G.O. LTD Tax Series 2006, 7.00% due 12/1/2026		3,777,187
	2,000,000	Southlands Metropolitan District No. 1 (LTD Tax Convertible to Unlimited Tax) Series 2004, 7.125% to yield 7.18% due 12/1/2034(b)		2,419,640
	510,000	Southlands Metropolitan District No. 1 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2004, 6.75% to yield 6.80% due 12/1/2016(b)		584,098
	1,000,000	Southlands Metropolitan District No. 1 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2004, 7.00% to yield 7.05% due 12/1/2024(b)		1,202,720
	1,780,000	Sterling Hills Metropolitan District G.O. LTD Tax Refunding and Improvement Series 1998, 7.75% due 6/1/2018		1,874,393

12

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Municipal Bonds — (Continued)
	3,135,000	Sterling Hills West Metropolitan District G.O. Exchange (LTD Tax Convertible to Unlimited Tax) Series 2001A, 8.00% due 12/1/2019(b)	$	3,428,436
	3,315,000	Sterling Hills West Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Series 2001B, 8.00% due 12/1/2021(b)		3,868,903
	3,012,007	Sterling Hills West Metropolitan District G.O. LTD Tax Series 2004, 7.50% due 12/1/2021(b)		3,280,196
	4,020,000	Tabernash Meadows Water and Sanitation District G.O. Series 2000, 8.40% due 6/1/2020		3,015,000
	1,485,000	Todd Creek Farms Metropolitan District No. 2 LTD Tax G.O. Series 1997, 8.00% due 6/1/2017(b)		1,495,603
	875,000	Todd Creek Farms Metropolitan District No. 2 LTD Tax G.O. Series 1999, 7.50% due 12/1/2018(b)		880,521
	5,500,000	Triview Metropolitan District G.O. Variable Rate Refunding and Improvement Series 2006A, 3.70% due 11/1/2023(h)		5,498,625
	10,920,000	United Water & Sanitation District Revenue Refunding and Improvement Series 2004A, 6.00% due 12/1/2013		10,902,200
	10,800,000	United Water & Sanitation District Revenue Series 2004B, 6.00% to yield 6.05% due 12/1/2012		10,805,076
	20,400,000	United Water & Sanitation District (Lupton Lakes Water Storage Project and Water Activity Enterprise) Revenue Bonds, Series 2006 6.00% due 3/1/2021		19,958,136
	500,000	Wheatlands Metropolitan District No. 2 G.O. (LTD Tax Convertible to Unlimited Tax) Series 2005, 6.00% due 12/1/2025		485,425
	2,060,000	Wildgrass Metropolitan District G.O. (LTD Tax Convertible to Unlimited Tax) Refunding Series 2007, 6.20% to yield 5.25% due 12/1/2034		2,020,015
	500,000	Wyndham Hill Metropolitan District No. 2 G.O. LTD Tax Series 2005, 6.25% due 12/1/2025		499,405
		Total Colorado Municipal Bonds (cost $408,584,784)	$	417,990,411
Colorado Capital Appreciation and Zero Coupon — 9.4%
	27,777,698	Bromley Park Metropolitan District No. 3 Subordinate LTD Tax G.O. Capital Appreciation Series 2006, 8.00% due 12/15/2031(b)(d)	$	4,902,486
	11,175,000	Bromley Park Metropolitan District No. 2 G.O. LTD Tax Convertible Zero Coupon Series 2007B, 7.00% due 12/15/2037(d)		7,689,741
	520,000	Colorado Health Facilities Authority Zero Coupon Retirement Housing Revenue (Liberty Heights Project) 1990 Subordinate Series B, 6.97% due 7/15/2020(b)(d)		293,488

13

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount			Market Value
Colorado Capital Appreciation and Zero Coupon — (Continued)
	7,470,000	Conifer Metropolitan District Jefferson County Supplemental Interest Coupons, Series 2006, 8.00% due 12/1/2010-2031(d)	$	2,734,917
	18,400,492	Cottonwood Water and Sanitation District G.O. Second Lien (LTD Tax Through 2001) Refunding Series 1998A, Capital Appreciation 8.00% due 12/1/2027(d)		3,964,754
	500,000	El Paso County School District No. 20 G.O. Refunding Series 1993A, Zero Coupon 6.10% due 6/15/2008(d)		487,255
	8,005,000	McKay Landing Metropolitan District No. 2 Subordinate G.O. LTD Tax Refunding Series 2004B, Capital Appreciation 7.50% due 12/1/2031(b)(d)		1,507,262
	17,500,000	PV Water and Sanitation Metropolitan District Capital Appreciation Revenue Series 2006, 6.00% due 12/15/2017(d)		9,635,675
	440,000	Potomac Farms Metropolitan District Convertible Capital Appreciation G.O. Refunding and Improvement (LTD Tax Convertible to Unlimited Tax) Series 2007B, due 12/1/2023		345,206
	906,622	Roxborough Village Metropolitan District Series 1993C, 9.84% due 12/31/2032(d)(i)		18,132
	8,070,000	Silver Peaks Metropolitan District No. 1 Revenue Series 2003, 8.00% due 12/1/2007-2012(d)		6,628,738
	11,520,000	United Water & Sanitation District Ravenna Project Water Activity Enterprise Capital Appreciation Revenue Series 2006, 6.50% due 12/15/2011(d)		8,755,200
	7,130,000	United Water & Sanitation District Ravenna Project Water Activity Enterprise Capital Appreciation Subordinate Series 2007, 6.125% due 12/1/2037(d)		5,514,556
	2,286,030	United Water & Sanitation District Ravenna Project Water Activity Enterprise Capital Appreciation Subordinate Series 2006B, 7.00% due 12/15/2011(d)	$	1,733,657
		Total Colorado Capital Appreciation and Zero Coupon Bonds (cost $58,374,275)	$	54,211,067
Colorado Certificates of Participation — 0.1%
	600,000	Eagle-Vail Metropolitan District Building Authority (Golf Course Project) Series 1999, 6.00% due 12/1/2019	$	600,000
		Total Colorado Certificates of Participation Bonds (cost $527,330)	$	600,000

14

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

Face Amount					Market Value
Other Municipal Bonds — 8.0%
	3,740,000	Class B Revenue Bond Certificate Series Trust 2004-1 Variable Rate Senior Certificates of Beneficial Ownership, 4.06% due 7/1/2037(h)			$	3,740,000
	4,908,949	Freddie Mac Multifamily Variable Rate Certificates Series M001 Class B, 13.22% due 4/1/2037(g)				4,908,949
	21,836,245	Freddie Mac Multifamily Variable Rate Certificates Series M010 Class A, 4.09% due 11/15/2036(h)				21,836,245
	700,000	The Industrial Development Authority of the City of Kansas City, Missouri Multi-family Housing Revenue (Alexandria Apartments) Series 2005A 6.75% due 1/1/2028				730,933
	1,000,000	The Industrial Development Authority of the City of St. Louis, Missouri Senior Housing Revenue (Grant School Apartments) Series 2005A, 6.75% due 5/1/2027				987,100
	7,575,000	Revenue Bond Certificate Series Trust 2005-4 Senior Certificates of Beneficial Ownership (Hermitage Apartments Project) 4.06% due 5/1/2031(h)				7,575,000
	5,000,000	Uinta County School District Number 6 General Obligation Refunding Series 2006, 7.00% to yield 4.40% due 12/1/2020				6,220,500
		Total Other Municipal Bonds (cost $46,048,693)			$	45,998,727
Colorado Taxable Notes — 0%
	227,347	Note receivable from Tabernash Meadows, LLC, a Colorado limited liability company, 24.00% due 2/09/2002(a)			$	227,347
		Total Colorado Taxable Notes (cost $227,347)			$	227,347
		Total investments, at value	89.9	%	$	519,027,552
		Other assets net of liabilities	10.1	%		58,626,080
		Net assets	100.0	%	$	577,653,632

15

Colorado BondShares

A Tax-Exempt Fund

Schedule of Investments — (Continued)

(a)	Defaulted or non-income producing based upon the financial condition of the issuer (see footnote 1 to notes to financial statements).
(b)	Originally issued as general obligation bonds but are now pre-refunded and are secured by an escrow fund consisting entirely of direct U.S. Government obligations.
(c)	Represents current interest rate for a step rate bond.
(d)	Interest rate shown for zero coupon bonds represents the effective yield at the date of acquisition.
(e)	Principal-only certificate represents the right to receive the principal payments on the underlying debt security upon maturity. The price of this security is typically more volatile than that of coupon-bearing bonds of the same maturity.
(f)	Interest-only certificate represents the right to receive semi-annual interest payments on the underlying debt security. The principal amount of the underlying security represents the notional amount on which current interest is calculated. The interest rate shown represents the effective yield at the date of acquisition.
(g)	Interest rate disclosed for cash flow bond represents the effective yield at September 30, 2007. Income on this security is derived from the cash flow of the issuer.
(h)	Represents current interest rate for a variable rate bond.
(i)	Terms of security have been restructured since the original issuance. The total face amount of all such restructured securities approximates $12,801,568 and a market value of $1,746,254 or less than 1% of net assets, respectively, as of September 30, 2007.

The following abbreviations are used in the descriptions of securities included in the Schedule of Investments:

G.O. — General Obligation

GID — General Improvement District

LID — Local Improvement District

LTD — Limited

See accompanying notes to financial statements.

16

Colorado BondShares

A Tax-Exempt Fund

Statement of Assets and Liabilities

September 30, 2007

ASSETS
Investments, at value (amortized cost $513,762,429)		$	519,027,552
	— see accompanying statement
Cash			7,338,579
Interest receivable			52,349,183
Receivable for shares of beneficial interest sold			2,279,144
Receivable for investments sold			503
TOTAL ASSETS			580,994,961
LIABILITIES
Payables and other liabilities:
	Dividends payable		2,284,822
	Payable for shares redeemed		687,183
	Management fee payable		234,950
	Accrued expenses payable		134,374
TOTAL LIABILITIES			3,341,329
NET ASSETS		$	577,653,632
COMPOSITION OF NET ASSETS
Paid-in capital		$	570,951,479
Accumulated realized gain and losses			1,437,030
Net unrealized appreciation of investments (note 3)			5,265,123
NET ASSETS		$	577,653,632
NET ASSET PRICE AND REDEMPTION PRICE PER SHARE (based on 60,734,028 shares of beneficial interest outstanding at September 30, 2007, unlimited number of no par value shares authorized)		$	9.51
MAXIMUM OFFERING PRICE PER SHARE (net asset value plus maximum sales charge of 4.75% of offering price)		$	9.99

See accompanying notes to financial statements.

17

Colorado BondShares

A Tax-Exempt Fund

Statement of Operations

For The Fiscal Year Ended September 30, 2007

INVESTMENT INCOME
	Interest		$	32,399,035
EXPENSES
	Management fees (note 4)			2,554,664
	Custodian fees (note 5)			93,482
	Legal and auditing fees			125,204
	Portfolio pricing fees (note 5)			16,104
	Registration fees			21,604
	Shareholders’ reports			95,530
	Transfer agency expenses (note 4)			154,982
	Trustees’ fees			6,156
	Other			30,154
		Total expenses		3,097,880
Less expenses paid indirectly (note 5)				(238,681	)
		Net expenses		2,859,199
NET INVESTMENT INCOME				29,539,836
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
	Net realized gain on investments			1,431,255
	Change in net unrealized appreciation/depreciation on investments			1,624,145
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS				3,055,400
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS			$	32,595,236

See accompanying notes to financial statements.

18

Colorado BondShares

A Tax-Exempt Fund

Statements of Changes in Net Assets

For The Fiscal Years Ended September 30,

			2007			2006
FROM OPERATIONS:
	Net investment income		$	29,539,836		$	19,842,871
	Net realized gain on investments			1,431,255			3,257
	Change in unrealized appreciation/depreciation on investments			1,624,145			2,765,643
		Net increase in net assets resulting from operations		32,595,236			22,611,771
FROM DISTRIBUTIONS TO SHAREHOLDERS:
	Dividends to shareholders from net investment income			(28,952,094	)		(19,842,871	)
	Distributions in excess of net investment income (note 1)			—			(587,743	)
	Realized capital gain and ordinary income			—			(354,059	)
		Total distributions to shareholders		(28,952,094	)		(20,784,673	)
FROM BENEFICIAL INTEREST TRANSACTIONS:
	Proceeds from sale of shares			159,489,309			98,061,711
	Proceeds from dividends reinvested			17,207,808			13,000,474
	Redemption of shares			(43,249,603	)		(40,755,502	)
		Increase in net assets derived from beneficial interest transactions		133,447,514			70,306,683
		Net increase in net assets		137,090,656			72,133,781
NET ASSETS:
	Beginning of period			440,562,976			368,429,195
	End of period		$	577,653,632		$	440,562,976

See accompanying notes to financial statements.

19

Colorado BondShares

A Tax-Exempt Fund

Financial Highlights

		For Fiscal Years Ended September 30,
		2007			2006			2005			2004			2003
For a share outstanding throughout the period
Net Asset Value, beginning of period		$	9.45		$	9.41		$	9.35		$	9.27		$	9.33
Net investment income(3)			0.55			0.47			0.48			0.47			0.60
Net realized and unrealized gain (loss) on investments			0.05			0.06			0.07			0.08			(0.06	)
Increase from investment operations			0.60			0.53			0.55			0.55			0.54
Dividends to shareholders from net investment income			(0.54	)		(0.47	)		(0.48	)		(0.47	)		(0.60	)
Distributions in excess of net investment income			—			(0.01	)		—			—			—
Realized capital gains and ordinary income			—			(0.01	)		(0.01	)		—			—
Total Distributions			(0.54	)		(0.49	)		(0.49	)		(0.47	)		(0.60	)
Net increase (decrease) in net asset value			0.06			0.04			0.06			0.08			(0.06	)
Net Asset Value, end of period		$	9.51		$	9.45		$	9.41		$	9.35		$	9.27
Total Return, at Net Asset Value(1)			6.59	%*		5.72	%		6.14	%		6.19	%		5.96	%
Ratios/ Supplemental Data:
	Ratios to average net assets:
	Net investment income		5.78	%		4.97	%		5.10	%		5.08	%		6.46	%
	Total expenses		0.61	%		0.61	%		0.58	%		0.63	%		0.65	%
	Net expenses		0.56	%		0.57	%		0.55	%		0.60	%		0.61	%
Net assets, end of period (000s)		$	577,654		$	440,563		$	368,429		$	312,651		$	267,207
	Portfolio turnover rate(2)		13.75	%		5.27	%		4.40	%		2.57	%		4.65	%

(1)  Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns.

  *  The total return for fiscal year ended September 30, 2007 includes an interest payment of approximately $3.8 million representing four years of unpaid interest relating to the Fund’s holding of United Airlines/ Denver International Airport bonds that is a non-recurring event outside of the control of the Fund.

(2)

The portfolio turnover rate is computed by dividing the lesser of purchases or sales of portfolio securities for a period by the monthly average of the market value of portfolio securities owned during the period. Sales of securities include the proceeds of securities which have been called, or for which payment has been made through redemption or maturity. Securities with a maturity date of one year or less at the time of acquisition are excluded from the calculation. Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) for the period September 30, 2007 were $91,392,389 and $42,534,039, respectively.

(3)

Net investment income per share was calculated using an average shares method.

See accompanying notes to financial statements.

20

Colorado BondShares

A Tax-Exempt Fund

Notes to Financial Statements

(1) Summary of Significant Accounting Policies

      Colorado BondShares — A Tax-Exempt Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management company. The Fund’s investment objectives are to maximize income exempt from federal income taxes and from personal income taxes of the State of Colorado to the extent consistent with the preservation of capital and to seek opportunities for capital appreciation. The Fund’s investment adviser is Freedom Funds Management Company (“Freedom Funds”). The following is a summary of significant accounting policies consistently followed by the Fund.

     (a) Investment Valuation

      The values of most investment securities are determined at their market price using prices provided by a national independent pricing service approved by the Fund’s Board of Trustees. In cases where a market price is not available from the pricing service, or where the Fund determines that the “market price” so determined is not reflective of the true “fair value” or realizable value of these securities, the securities are valued at “fair value” as determined in good faith by the Fund’s Board of Trustees. As of September 30, 2007, securities valued at fair market totaled $69,728,311 or 12% of net assets. In either event, the Fund values the municipal bonds and other securities taking into consideration yield, stability, risk, quality, coupon, maturity, type of issue, trading characteristics and any other relevant trading or market factors. The Fund records amortization of premiums and accretion of original discounts on zero coupon bonds using the effective yield method, in accordance with federal income tax purposes. Short-term debt securities are stated at amortized cost, which approximates fair value.

     (b) Income Taxes

      The Fund intends to comply with the requirements of subchapter M of the Internal Revenue Code, as amended, applicable to regulated investment companies and to distribute all its net investment income to shareholders. The Fund distributes investment income monthly and due to the tax-exempt nature of its investments the income is generally non-taxable to the shareholders. The Fund distributes net realized capital gains, if any, to its shareholders at least annually. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to the differing treatment of tax allocations. Undistributed realized capital gains and ordinary income totaled $1,437,030, as of September 30, 2007.

21

Colorado BondShares

A Tax-Exempt Fund

Notes to Financial Statements — (Continued)

     (c) Other/ Security Credit Risk

      Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Dividends to shareholders are declared each business day and paid monthly. Distributions to shareholders are recorded on the ex-dividend date. Realized gains and losses from investment transactions are calculated using the identified-cost basis, which is the same basis the Fund uses for federal income tax purposes. Interest income is recorded on the accrual basis. The Fund concentrates its investments in Colorado and, therefore, may have more credit risks related to the economic conditions of Colorado than a portfolio with a broader geographical diversification. The Fund invests in non-rated securities, which may be subject to a greater degree of credit risk and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rate fixed income securities.

      The Fund discontinues the accrual of interest income on municipal bonds when the securities become delinquent as to payment of principal or interest, or when the Fund’s investment adviser determines that an uncertainty exists as to the realization of all or a portion of the principal balance. The face amount of bonds for which the accrual of interest income has been discontinued approximates $13,122,529 and such bonds have a market value of $3,248,736, or less than 1% of net assets, as of September 30, 2007. These securities have been identified on the accompanying Statement of Investments.

     (d) Uses of Estimates

      The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

     (e) Classification of Distributions to Shareholders

      The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund.

22

Colorado BondShares

A Tax-Exempt Fund

Notes to Financial Statements — (Continued)

      The Fund distributed $587,743 in excess of net investment income to the shareholders during the fiscal year ended September 30, 2006. To correct this over distribution, the November 2006 dividend to shareholders was reduced by $587,743. In March 2007, the Adviser reimbursed shareholders $3,424 for the amount of the over distribution that was not recoverable due to closed accounts. These adjustments are included in dividends to shareholders from net investment income presented on the statement of changes in net assets.

     (f) Securities Purchased on a When-Issued Basis

      The Fund may purchase securities on a when-issued basis with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and may increase or decrease in value prior to the delivery date. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchases commitments.

     (g) New Accounting Pronouncements

      In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluations of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management does not anticipate a material impact to the financial statements of the Fund.

      In September 2006, FASB issued Statement of Financial Accounting Standards No. 157, “Fair Market Value Measurements” (“SFAS 157”). This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands disclosure about fair value measurements. SFAS 157 applies to fair value measurements already required or permitted by existing standards. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management believes the adoption of SFAS 157 will have no material impact on its financial statements.

23

Colorado BondShares

A Tax-Exempt Fund

Notes to Financial Statements — (Continued)

(2) Shares of Beneficial Interest

      The Fund has an unlimited number of no par value shares of beneficial interest authorized. Transactions in shares of beneficial interest for the years ended September 30, were as follows:

	2007						2006
	Shares			Amount			Shares			Amount
Shares sold		16,859,280		$	159,489,309			10,423,444		$	98,061,711
Dividends reinvested		1,818,953			17,207,808			1,382,357			13,000,474
		18,678,233			176,697,117			11,805,801			111,062,185
Shares redeemed		(4,570,409	)		(43,249,603	)		(4,333,243	)		(40,755,502	)
Net increase in shares outstanding		14,107,824		$	133,447,514			7,472,558		$	70,306,683

(3) Unrealized Gains and Losses

      At September 30, 2007, the net unrealized appreciation on investments of $5,265,123, based on cost for federal income tax purposes, was comprised of gross appreciation of $16,382,837 and gross depreciation of $11,117,714.

(4) Management Fees and Other Transactions with Affiliates

      Management fees paid to Freedom Funds were in accordance with the investment advisory agreement with the Fund which provides for an annual fee equivalent to 0.5% of the net assets of the Fund. Freedom Funds pays all expenses associated with advertising, marketing, and distributing the Fund’s shares and serves as the transfer agent, dividend disbursing agent, and registrar for the Fund. Freedom Funds provided certain transfer agency and shareholder services as part of the management fee arrangement for the period ended September 30, 2007. Transfer agency expenses represent direct expenses charged to the Fund by third parties.

24

Colorado BondShares

A Tax-Exempt Fund

Notes to Financial Statements — (Continued)

(5) Earnings Credits on Cash Balances

      Expenses paid indirectly by the Fund represent earnings credits on cash balances maintained with the Fund’s custodian bank, Wells Fargo Investments and Trust. The earnings credits resulted in offsetting custodian fees of $93,482, shareholder report fees of $66,149 for services provided by Bowne and Broadridge, auditing fees for services provided by Anton Collins Mitchell LLP $44,100, legal fees of $18,846 for services provided by Kutak Rock LLP, and portfolio pricing fees of $16,104 for services provided by Standard and Poor’s, a division of The McGraw-Hill Companies.

(6) Contingencies

      The Fund is involved in certain disputes and legal actions arising in the ordinary course of its business. While it is not feasible to predict or determine the outcome of these proceedings, in management’s opinion, based on a review with legal counsel, none of these disputes and legal actions is expected to have a material impact on its financial position or results of operations. However, litigation is subject to inherent uncertainties, and an adverse result in these matters may arise from time to time that may harm the Fund’s business.

25

Trustees Approve Advisory Agreement (Unaudited)

      The Board of Trustees (the “Trustees”) of Colorado BondShares — A Tax-Exempt Fund unanimously approved the continuance of the Fund’s Investment Advisory and Service Agreement with Freedom Funds Management Company (“Freedom Funds”) at a meeting held on September 28, 2007. In approving the Advisory Agreement, the Trustees, including the disinterested trustees, considered the reasonableness of the advisory fee in light of the extent and quality of the advisory services provided and any additional benefits received by Freedom Funds or its affiliates in connection with providing services to the Fund, compared the fees charged by Freedom Funds to those paid by similar funds, and analyzed the expenses incurred by Freedom Funds with respect to the Fund.

      The Trustees also considered the Fund’s performance relative to a selected peer group, the expense ratio of the Fund in comparison to other funds of comparable size, and other factors. The Trustees determined that the Fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the Fund and its shareholders.

      Matters considered by the Trustees in connection with its consideration of the Advisory Agreement included, among other things, the following:

1. Investment Adviser Services

      Freedom Funds manages the assets of the Fund, including making purchases and sales of portfolio securities consistent with the Fund’s investment objectives and policies. In addition, Freedom Funds administers the Fund’s daily business affairs such as providing accurate accounting records, computing accrued income and expenses of the Fund, computing the daily net asset value of the Fund, assuring proper dividend disbursements, proper financial information to investors, and notices of all shareholders’ meetings, and providing sufficient office space, storage, telephone services, and personnel to accomplish these responsibilities. In considering the nature, extent and quality of the services provided by Freedom Funds, the Trustees believe that the services provided by the Freedom Funds have provided the Fund with superior results. At the same time, Freedom Fund’s fee structure is equal to or lower than all but two of the comparable funds. The Trustees noted the Fund’s focus is inherently more labor intensive. Under the circumstances, the Trustees found the fee structure to be justified.

2. Investment Performance

      The Trustees reviewed the performance of the Fund compared to other, similar funds, and reported that the current (as of September 27, 2007) net asset value was $9.51 per share and the current distribution yield (based on net asset value) was 4.58% (also as of September 27, 2007). Since the overall structure of the portfolio was satisfactory and the performance of the Fund, measured in terms of distribution yield, was ahead of the other members of its peer group of Colorado funds (higher than the distribution yield of eleven comparable Colorado municipal bond funds), no changes to either the type of assets or manner of operations were recommended.

26

3. Expense Ratios

      The Trustees reviewed the performance (measured by distribution yield), fees and expense ratios of eleven Colorado municipal bond funds (such eleven being the only such funds known to the Trustees at the time). While the Fund was at the top of the list in terms of current yield, it had one of the lowest expense ratios (the only other Colorado municipal bond fund with a lower ratio was still being subsidized by their management company). The Trustees considered the fact that the Fund’s unique focus on unrated bonds, while geared toward producing superior investment results, often required additional expenses. While expenses can vary with unrated bonds (principally as a result of litigation with respect to defaulted issues), the Trustees noted the Fund’s good performance for the current year.

4. Management Fees and Expenses

      The Trustees reviewed the investment advisory fee rates payable by the Fund to Freedom Funds. As part of its review, the Trustees considered the estimated advisory fees and the Fund’s estimated total expense ratio for the one-year period ended September 30, 2007 as compared to a group of eleven comparable Colorado municipal bond funds identified by Freedom Funds.

      After reviewing the foregoing information, and in light of the nature, extent and quality of the services provided by Freedom Funds, the Trustees concluded that the advisory fees charged by Freedom Funds for the advisory and related services to the Fund and the Fund’s total expense ratio are reasonable.

      The management fee is one half of one percent of total net assets managed. Such fee is payable to Freedom Funds on a monthly basis. This fee is comparable to the group of eleven competing Colorado municipal bond funds identified by Freedom Funds and is consistent with national funds many times the Fund’s size.

5. Profitability

      The Trustees reviewed the level of profits realized by Freedom Funds and relevant affiliates thereof in providing investment and administrative services to the Fund. The Trustees considered the level of profits realized without regard to revenue sharing or other payments by Freedom Funds and its affiliates to third parties in respect to distribution of the Fund’s securities. The Trustees also considered other direct or indirect benefits received by Freedom Funds and its affiliates in connection with its relationship with the Fund and found that there were none.

      The Trustees concluded that, in light of the foregoing factors and the nature, extent and quality of the services provided by Freedom Funds, the profits realized by Freedom Funds are reasonable.

6. Economies of Scale

      In reviewing advisory fees and profitability, the Trustees also considered the extent to which Freedom Funds and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Trustees acknowl-

27

edged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds, particularly in an environment where costs are rising due to changing regulations. The Trustees reviewed data summarizing the increases and decreases in the assets of the Fund over various time periods, and evaluated the extent to which the total expense ratio of the Fund and Freedom Fund’s profitability may have been effected by such increases or decreases. Between January and September of 2007, total net assets of the Fund under management by Freedom Funds rose about 23.7% (from around $438.9 million to approx. $575.4 million). To the extent that the Fund has been able to obtain information, it appears that redemptions of Fund shares have occurred as a result of factors other than the performance of the Fund, such as tax payments and estate settlements. As a result, the redemptions of Fund’s shares do not appear to follow any pattern and redemptions do not seem to be occurring as a result of any dissatisfaction with the Fund’s performance. The number of shares of the Fund that have been redeemed has been less than the number of new shares issued by the Fund, and as a result the Fund continues to grow at what the Trustees determined was a healthy level.

      Based upon the foregoing, the Trustees concluded that the benefits from the economies of scale are currently being shared equitably by Freedom Funds and the Fund. The Trustees also concluded that the structure of the advisory fee can be expected to cause Freedom Funds, its affiliates and the Fund to continue to share such benefits equitably.

      After requesting and reviewing these and other factors that they deemed relevant, the Trustees concluded that the continuation of the Advisory Agreement was in the best interest of the Fund and its shareholders.

      Freedom Funds also serves as the transfer agent, shareholder servicing agent and dividend disbursing agent for the Fund, pursuant to a Transfer Agency and Service Agreement (the “Service Agreement”). Freedom Fund’s duties under the Service Agreement include processing purchase and redemption transactions, establishing and maintaining shareholder accounts and records, disbursing dividends declared by the Fund and all other customary services of a transfer agent, shareholder servicing agent and dividend disbursing agent. As compensation for these services, the Fund may pay Freedom Funds at a rate intended to represent Freedom Fund’s cost of providing such services. This fee would be in addition to the investment advisory fee payable to Freedom Funds under the Advisory Agreement.

Other Information (Unaudited)

Proxy Voting Record

The Fund does not invest in equity securities. Accordingly, there were no matters relating to a portfolio security considered during the 12 months ended June 30, 2007 with respect to which the Fund was entitled to vote. Applicable regulations require us to inform you that the foregoing proxy voting information is available on the SEC website at http://www.sec.gov or you may call us at 1-800-572-0069.

28

Quarterly Schedule of Investments

The Fund files a complete schedule of investments with the Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at http://www.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 1-800-732-0330 or you may call us at 1-800-572-0069.

29

Officers and Trustees of the Fund

      The following table lists the trustees and officers of the Fund, together with their address, age, positions held with the Fund, the term of each office held and the length of time served in each office, principal business occupations during the past five years and other directorships, if any, held by each trustee and officer. Each trustee and officer has served in that capacity for the Fund continuously since originally elected or appointed. The Board of Trustees supervises the business activities of the Fund. Each trustee serves as a trustee until termination of the Fund unless the Trustee dies, resigns, retires, or is removed.

      Andrew B. Shaffer is an “interested person” of the Fund as defined in the 1940 Act by virtue of his position as both an officer and a trustee of the Fund as described in the table below. None of the trustees nor the officers of the Fund has any position with Freedom Funds, the principal underwriter of the Fund, the distribution agent of the Fund, the service agent of the Fund or the custodian of the Fund, or any affiliates thereof. There is no family relationship between any officers and trustees of the Fund.

Non-Interested Trustees

	Position held with the
	Fund and Length of	Principal Occupation	Other Directorships
Name, Address and Age	Time Served	During the Past Five Years:	Held By Director
George N. Donnelly 1200 17th Street, Suite 850 Denver CO 80202 Age: 60	Chairman of the Board of Trustees Trustee since inception of the Fund in 1987	Mr. Donnelly is currently a Senior Regional Vice President for Phoenix Life Insurance Company.		None
Bruce G. Ely Trustee since July 2002 1200 17th Street, Suite 850 Denver CO 80202 Age: 56	Trustee since July 2002	Mr. Ely is currently the Regional Marketing Director for MBIA Municipal Investors Service Corporation in Colorado.		None
James R. Madden Trustee 1200 17th Street, Suite 850 Denver CO 80202 Age: 63	Trustee since September 2004	Mr. Madden has owned Madden Enterprises, a real estate company that owns and leases commercial buildings and real estate, for the past thirty years.		None
Interested Trustees
Andrew B. Shaffer1 1200 17th Street, Suite 850 Denver CO 80202 Age: 59	Trustee, Secretary and Treasurer since June 1995 and President since January 2003	Mr. Shaffer is the manager of Shaffer Capital Management/LLC.		None

¹Andrew B. Shaffer is an “interested person” of the Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) by virtue of his position as both an officer and a trustee of the Fund as described in the table above.

     Additional information about the Fund’s trustees is included in the Statement of Additional Information, which is available, free of charge, upon request, by calling us at 1-800-572-0069.

30

Compensation

      The Board met two times during the fiscal year ended September 30, 2007. The following tables show the compensation paid by the Fund to each of the trustees during that year:

Non-Interested Trustees

			Pension or Retirement
			Benefits Accrued		Total compensation
	Aggregate Compensation		As Part of Fund		from Fund Paid to
Name of Person, Position(s) with the Fund	from Fund		Expenses		SUCH PERSON
George N. Donnelly, Trustee	$	400		N/A	$	400
Bruce G. Ely, Trustee		400		N/A		400
James R. Madden, Trustee		0		N/A		0
Interested Trustees
Andrew B. Shaffer (Trustee, President, Secretary and Treasurer)		400		N/A		400

      No officer or trustee of the Fund received remuneration from the Fund in excess of $60,000 for services to the Fund during the fiscal year ended September 30, 2007. The officers and trustees of the Fund, as a group, received $1,200 in compensation from the Fund for services to the Fund during the 2007 fiscal year.

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ITEM 2. CODE OF ETHICS.

(a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics (as defined in Item 2 of Form N-CSR), that applies to its President (Principal Executive Officer) and Treasurer (Principal Financial Officer).

(c) There have been no amendments to the code of ethics during the period covered by this report.

(d) The registrant has not granted, during the period covered by this report, any waivers, including an implicit waiver, from the code of ethics.

(f)(3) A copy of the registrant’s code of ethics is available upon request and without charge by calling or writing the registrant at 1200 Seventeenth Street, Suite 850, Denver, Colorado 80202, telephone (303) 572-6990 or (800) 572-0069 (outside Denver).

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

(a) The registrant’s board of trustees has determined that the registrant does not have an “audit committee financial expert” as such term is defined by the Securities and Exchange Commission pursuant to item 3 of Form N-CSR. The board of trustees, which serves as the audit committee, is composed of individuals who, in the aggregate, possess experience evaluating audits, understand generally accepted accounting principles, have experience evaluating financial statements and understand internal control over financial reporting and the audit committee function; however, no single individual appears to meet all of the independence and the financial training/experience qualifications outlined in the instructions to Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table shows the amount of fees that Anton Collins Mitchell LLP, the registrant’s independent registered public accounting firm, billed to the registrant during the registrant’s last two fiscal years. For the reporting periods, the audit committee approved in advance all audit services and non-audit services that Anton Collins Mitchell LLP provided to the registrant.

     The aggregate fees billed by the registrant’s independent registered public accountant firm, for professional services in the registrant’s fiscal years ended September 30, 2007 and 2006 are as follows:

	2007		2006
(a) Audit Fees	$	41,100	$	53,887
(b) Audit-Related Fees	$	0	$	0
(c) Tax Fees	$	0	$	0
(d) Other Fees	$	0	$	0

The above “Audit Fees” were billed for amounts related to the audit of the registrant’s financial statements and services normally provided by the accountant in connection with statutory and regulatory filings.

(e)(1) The board of trustees serves as the audit committee and pre-approves all audit and non-audit services to be provided by the registrant’s independent registered public accounting firm.

(e)(2) Not applicable.

(f) Not applicable.

(g) No non-audit fees were billed by the registrant’s independent registered public accounting firm for services rendered to the registrant and the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for the fiscal years ended September 30, 2007 and 2006.

(h) The registrant’s independent registered public accounting firm did not provide any non-audit services to the registrant in the registrant’s fiscal years ended September 30, 2007 and 2006.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Please see Schedule of Investments contained in the Annual Report included under Item 1 of this Form N-CSR.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant has adopted and maintained disclosure controls and procedures (as such term is defined in Rules 30a-3(c) under the Investment Company Act of 1940, as amended (the “Act”)) that are designed to ensure that information required to be disclosed in the registrant’s reports under the Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer to allow for timely decisions regarding required disclosure.

As required by Rule 30a-3(b) of the Act, the registrant carried out an evaluation under the supervision and with the participation of its management, including its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures within the 90-day period prior to the filing date of this report. Based on the foregoing, the registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures were effective, as of that date.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during 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.

ITEM 12. EXHIBITS.

(a)(2)(i)	President’s (Principal Executive Officer) Section 302 Certification
(a)(2)(ii)	Treasurer’s (Principal Financial Officer) Section 302 Certification
(b)	Combined President & Treasurer (Principal Executive Officer and Principal Financial Officer) Section 906 Certification

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Colorado BondShares — A Tax-Exempt Fund

By (Signature and Title)	/s/ Andrew B. Shaffer
	Andrew B. Shaffer
	President, Secretary and Treasurer

Date: December 10, 2007

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.

/s/ Andrew B. Shaffer

Andrew B. Shaffer,

President, Secretary and Treasurer

(Principal Executive Officer and

Principal Financial Officer)

Date: December 10, 2007

EX-99.CERT

99.302 CERT.

     I, Andrew B. Shaffer, certify that:

     1. I have reviewed this report on Form N-CSR of Colorado BondShares — A Tax-Exempt 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 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 and I have disclosed to the registrant’s auditors and 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.

Date: 12/10/07

/s/ ANDREW B. SHAFFER

Andrew B. Shaffer 
President
(Principal Executive Officer)

99.302 CERT.

     I, Andrew B. Shaffer, certify that:

     1. I have reviewed this report on Form N-CSR of Colorado BondShares — A Tax-Exempt 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 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 and I have disclosed to the registrant’s auditors and 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.

Date: 12/10/07

/s/ ANDREW B. SHAFFER

Andrew B. Shaffer 
Treasurer
(Principal Financial Officer)

EX-99.906CERT

99.906 CERT

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies in his capacity as Treasurer and President, respectively, of COLORADO BONDSHARES- A TAX-EXEMPT FUND (the “Fund”), that:

(a)	The Form N-CSR of the Fund for the period ended September 30, 2007 (the “Report”) fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Act of 1934, as amended; and
(b)	the information contained in the Report fairly presents, in all material respects, the financial condition and the results of operations of the Fund.

SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO COLORADO BONDSHARES-A TAX-EXEMPT FUND AND WILL BE RETAINED BY THE TRUST AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

Colorado BondShares — A Tax-Exempt Fund

Date: December 10, 2007

/s/ Andrew B. Shaffer

Andrew B. Shaffer

President & Treasurer