Centennial California Tax Exempt Trust

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Prospectus dated August 22, 2003


                                         Centennial California Tax Exempt Trust
                                         is a money market mutual fund. It
                                         seeks the maximum current income
                                         exempt from federal and California
                                         personal income taxes for individual
                                         investors as is consistent with
                                         preservation of capital. The Trust
                                         invests in short-term, high-quality
                                         "money market" securities.

                                         This Prospectus contains important
                                         information about the Trust's
                                         objective, its investment policies,
                                         strategies and risks.  It also
                                         contains important information about
As with all mutual funds, the            how to buy and sell shares of the
Securities and Exchange Commission has   Trust and other account features.
not approved or disapproved the Trust's  Please read this Prospectus carefully
securities nor has it determined that    before you invest and keep it for
this Prospectus is accurate or           future reference about your account.
complete.  It is a criminal offense to
represent otherwise.
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2

CONTENTS

                  A B O U T  T H E  T R U S T

                  The Trust's Investment Objective and Strategies

                  Main Risks of Investing in the Trust

                  The Trust's Past Performance

                  Fees and Expenses of the Trust

                  About the Trust's Investments

                  How the Trust is Managed

                  A B O U T  Y O U R  A C C O U N T

                  How to Buy Shares
                  Automatic Purchase and Redemption Programs
                  Direct Shareholders

                  How to Sell Shares
                  Automatic Purchase and Redemption Programs
                  Direct Shareholders

                  How to Exchange Shares

                  Shareholder Account Rules and Policies


                  Dividends, Capital Gains and Taxes


                  Financial Highlights













A B O U T  T H E  T R U S T

The Trust's Investment Objective and Strategies

WHAT IS THE TRUST'S INVESTMENT OBJECTIVE?  The Trust seeks the maximum current
interest income exempt from federal and California personal income taxes for
individual investors as is consistent with the preservation of capital.


WHAT DOES THE TRUST MAINLY INVEST IN?  The Trust is a money market fund.  It
invests in a variety of high-quality money market instruments to seek income.
Money market securities are short-term, U.S. dollar denominated debt instruments
issued by the U.S. and state governments, domestic and foreign corporations and
financial institutions and other entities.  They include, for example, municipal
securities, bank obligations, repurchase agreements, commercial paper, other
corporate debt obligations and government debt obligations. To be considered
"high-quality," generally they must be rated in one of the two highest
credit-quality categories for short-term securities by nationally recognized rating
services.  If unrated, a security must be determined by the Trust's investment
manager to be of comparable quality to rated securities.


The Trust normally attempts to invest 100% of its assets in municipal securities
and as a fundamental policy, the Trust will invest under normal circumstances at
least 80% of its net assets (plus borrowings for investment purposes) in
investments the income from which is exempt from federal and California personal
income taxes for individuals in the opinion of bond counsel to the respective
issuer.  Such investments may include obligations of the State of California and
its political subdivisions, agencies and instrumentalities or obligations of
commonwealths or territories of the United States, or their agencies,
instrumentalities or authorities the interest from which is not subject to
California personal income tax in the opinion of bond counsel to the respective
issuer.  Securities that generate income that is subject to alternative minimum
taxes will not count towards that 80% threshold.


WHO IS THE TRUST DESIGNED FOR? The Trust is designed for investors who are seeking
income exempt from federal and California personal income taxes at current money
market rates while preserving the value of their investment, because the Trust
tries to keep its share price stable at $1.00. Income on money market instruments
tends to be lower than income on longer-term debt securities, so the Trust's yield
will likely be lower than the yield on longer-term fixed income funds.  The Trust
does not invest for the purpose of seeking capital appreciation or gains and is not
a complete investment program.


Main Risks of Investing in the Trust

      All investments carry risks to some degree.  Funds that invest in debt
obligations for income may be subject to credit risks and interest rate risks.
There are risks that any of the Trust's holdings could have its credit rating
downgraded, or the issuer could default, or that interest rates could rise sharply,
causing the value of the Trust's securities (and its share price) to fall.  As a
result, there is a risk that the Trust's shares could fall below $1.00 per share.
If there is a high redemption demand for the Trust's shares that was not
anticipated, portfolio securities might have to be sold prior to their maturity at
a loss.  Also, there is the risk that the value of your investment could be eroded
over time by the effects of inflation, and that poor security selection could cause
the Trust to underperform other funds with similar objectives.

Risks of Focusing on Investments in California Municipal Securities.  The Trust
      generally invests a significant portion of its assets in California municipal
      securities. Because the Trust invests primarily in the securities of
      California issuers, its performance will be significantly affected by local,
      state and regional factors.  These may include state or local legislation or
      policy changes, erosion of the tax base of the state or one or more
      particular localities, the effects of possible terrorist acts or natural
      disasters, or other economic or credit problems affecting the state generally
      or any individual locality (which may directly or indirectly affect the state
      as a whole).  Having a higher percentage of its assets invested in the
      securities of fewer issuers, particularly obligations of government issuers
      of a single state, could result in greater credit risk exposure to a smaller
      number of issuers due to economic, regulatory or political problems in
      California.  The Trust is a "non-diversified" fund, however, it is currently
      subject to certain diversification requirements under rules for money market
      funds under federal law.

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An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.  Although the Trust seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Trust.
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The Trust's Past Performance

The bar chart and table below show how the Trust's returns may vary over time, by
showing changes in the Trust's performance from year to year for the last 10
calendar years and average annual total returns for the 1-, 5- and 10- year
periods.  Variability of returns is one measure of the risks of investing in a
money market fund.  The Trust's past investment performance does not predict how
the Trust will perform in the future.

Annual Total Returns (as of 12/31 each year)

[See appendix to prospectus for annual total return data for bar chart.]


For the period from 1/1/03 through 6/30/03 the cumulative total return (not
annualized) was 0.19%.
During the period shown in the bar chart, the highest return (not annualized) for a
calendar quarter was 0.86% (2nd 'Q '95) and the lowest return (not annualized) for
a calendar quarter was 0.13% (1st Q ' 02).



Average Annual Total Returns

for the periods ended December 31, 2002      1 Year     5 Years  10 Years

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                                             -----------         ---------------

Centennial California Tax Exempt Trust       0.61%      2.07%    2.33%
(inception 6/12/90)

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The returns in the table measure the performance of a hypothetical account and
assume that all dividends have been reinvested in additional shares.


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The total returns are not the Trust's current yield. The Trust's yield more closely
reflects the Trust's current earnings.  To obtain the Trust's current seven day
yield, please call the Transfer Agent toll-free at 1.800.525.9310.
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Fees and Expenses of the Trust


The Trust pays a variety of expenses directly for management of its assets,
administration and other services.  Those expenses are subtracted from the Trust's
assets to calculate the Trust's net asset value per share. All shareholders
therefore pay those expenses indirectly.  The following tables are meant to help
you understand the fees and expenses you may pay if you buy and hold shares of the
Trust. The numbers below are based upon the Trust's expenses during the fiscal year
ended June 30, 2003.


SHAREHOLDER FEES.   The Trust does not charge any initial sales charge to buy
shares or to reinvest dividends.  There are no exchange fees or redemption fees and
no contingent deferred sales charges (unless you buy Trust shares by exchanging
Class A shares of other eligible funds that were purchased subject to a contingent
deferred sales charge, as described in "How to Sell Shares").

Annual Trust Operating Expenses (deducted from Trust assets):
(% of average daily net assets)

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 Management Fees1                             0.50%

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 Distribution and/or Service (12b-1) Fees     0.20%
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 Other Expenses2                              0.06%

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 Total Annual Operating Expenses              0.76%

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1.    The Management fee is shown without giving effect to a voluntary expense
      assumption by the Manager.  That expense assumption had no impact on the
      Trust's "Management fees" or the "Total Annual Operating Expenses" during its
      last fiscal year. The voluntary expense assumption may be amended or
      withdrawn at any time.
   2. "Other expenses" include transfer agent fees, custodial expenses, and
   accounting and legal expenses the      Trust pays.  The Transfer Agent has
   voluntarily undertaken to the Trust to limit the transfer agent fees to    0.35%
   per annum.  That undertaking may be amended or withdrawn at any time.  That fee
   waiver had no  impact on the Trust's "Other Expenses" or "Total Annual Operating
   Expenses" during its last fiscal year.


EXAMPLE. The following example is intended to help you compare the cost of
investing in the Trust with the cost of investing in other mutual funds.  The
example assumes that you invest $10,000 in shares of the Trust for the time periods
indicated and reinvest your dividends and distributions.  The example also assumes
that your investment has a 5% return each year and that the Trust's operating
expenses remain the same.  Your actual costs may be higher or lower, because
expenses will vary over time. Based on these assumptions your expenses would be as
follows, whether or not you redeem your investment at the end of each period:

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  1 year                        3 years     5 years     10 years

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  $78                           $243        $422        $942

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About the Trust's Investments

THE TRUST'S PRINCIPAL INVESTMENT POLICIES.  The Trust invests in money market
instruments meeting quality, maturity and diversification standards established by
its Board of Trustees as well as rules that apply to money market funds under the
Investment Company Act.  The Statement of Additional Information contains more
detailed information about the Trust's investment policies and risks.


      The Trust's investment manager, Centennial Asset Management Corporation
(referred to in this Prospectus as the Manager), tries to reduce risks by
diversifying investments and by carefully researching securities before they are
purchased.  The rate of the Trust's income will vary from day to day, generally
reflecting changes in overall short-term interest rates. There is no assurance that
the Trust will achieve its investment objective.


What Does the Trust Invest In? Money market instruments are high-quality,
      short-term debt instruments.  They may have fixed, variable or floating
      interest rates.  All of the Trust's money market instruments must meet the
      special diversification, quality and maturity requirements set under the
      Investment Company Act and the special procedures set by the Board described
      briefly below.  The following is a brief description of the types of money
      market instruments the Trust can invest in.

   o  Municipal Securities.  The Trust buys municipal bonds and notes, tax-exempt
      commercial paper, certificates of participation in municipal leases and other
      debt obligations.  These are debt obligations issued by or on behalf of the
      State of California, other states and the District of Columbia, their
      political subdivisions (such as cities, towns and counties), or any
      commonwealth or territory of the United States, or by their agencies,
      instrumentalities and authorities, if the interest paid on the security is
      not subject to federal individual income tax in the opinion of bond counsel
      to the issuer.  All of these types of debt obligations are referred to as
      "municipal securities" in this Prospectus.

o     Other Money Market Instruments.  Up to 20% of the Trust's assets can be
      invested in investments, the income from which may be taxable.  The Trust's
      taxable investments include repurchase agreements, municipal securities
      issued to benefit a private user and certain temporary investments.  These
      investments are described below under "Other Investment Strategies" or in the
      Statement of Additional Information.  Normally, the Trust will not invest
      more than 20% of its total assets in taxable investments.

      Additionally, the Trust can buy other money market instruments that the
Manager approves under procedures adopted by its Board of Trustees from time to
time.  They must be U.S. dollar-denominated short-term investments that the Manager
determines to have minimal credit risks.

What Standards Apply to the Trust's Investments?  Money market instruments are
      subject to credit risk, the risk that the issuer might not make timely
      payments of interest on the security or repay principal when it is due.  The
      Trust can buy only those instruments that meet standards set by the
      Investment Company Act for money market funds and procedures adopted by the
      Board of Trustees.  The Trust's Board of Trustees has adopted procedures to
      evaluate securities for the Trust's portfolio and the Manager has the
      responsibility to implement those procedures when selecting investments for
      the Trust.

      In general, the Trust buys only high-quality investments that the Manager
believes present minimal credit risk at the time of purchase.  "High-quality"
investments are:
o     rated in one of the two highest short-term rating categories of two national
      rating organizations, or
o     rated by one rating organization in one of its two highest rating categories
      (if only one rating organization has rated the investment), or
o     unrated investments that the Manager determines are comparable in quality to
      the two highest rating categories.

      The procedures also limit the amount of the Trust's assets that can be
invested in the securities of any one issuer (other than the U.S. government, its
agencies and instrumentalities), to spread the Trust's investment risks.  No
security's maturity will exceed the maximum time permitted under Rule 2a-7
(currently 397 days). Finally, the Trust must maintain a dollar-weighted average
portfolio maturity of not more than 90 days, to reduce interest rate risks.

Can the Trust's Investment Objective and Policies Change?  The Trust's Board of
      Trustees can change non-fundamental policies without shareholder approval,
      although significant changes will be described in amendments to this
      Prospectus. Fundamental policies cannot be changed without the approval of a
      majority of the Trust's outstanding voting shares.  The Trust's investment
      objective is a fundamental policy.  Some of the investment restrictions that
      are fundamental policies are listed in the Statement of Additional
      Information.  An investment policy is not fundamental unless this Prospectus
      or the Statement of Additional Information says that it is.

Other Investment Strategies.  To seek its objective, the Trust can use the
investment techniques and strategies described below.  The Trust might not always
use all of them. These techniques have risks.  The Statement of Additional
Information contains more information about some of these practices, including
limitations on their use that are designed to reduce the overall risks.

Floating Rate/Variable Rate Notes.  The Trust can purchase investments with
      floating or variable interest rates.  Variable rates are adjustable at stated
      periodic intervals.  Floating rates are adjusted automatically according to a
      specified market rate or benchmark for such investments, such as the prime
      rate of a bank.  If the maturity of an investment is greater than the maximum
      time permitted under Rule 2a-7 (currently 397 days), it can be purchased if
      it has a demand feature.  That feature must permit the Trust to recover the
      principal amount of the investment on not more than 30 days' notice at any
      time, or at specified times not exceeding the maximum time permitted under
      Rule 2a-7.

"When-Issued" and "Delayed-Delivery" Transactions.  The Trust can purchase
      municipal securities on a "when-issued" basis and can purchase or sell such
      securities on a "delayed-delivery" basis. These terms refer to securities
      that have been created and for which a market exists, but which are not
      available for immediate delivery.  The Trust does not intend to make such
      purchases for speculative purposes.  During the period between the purchase
      and settlement, no payment is made for the security and no interest accrues
      to the buyer from the investment. There is a risk of loss to the Trust if the
      value of the security declines prior to the settlement date.

Municipal Lease Obligations.  Municipal leases are used by state and local
      governments to obtain funds to acquire land, equipment or facilities.  The
      Trust can invest in certificates of participation that represent a
      proportionate interest in payments made under municipal lease obligations.
      Most municipal leases, while secured by the leased property, are not general
      obligations of the issuing municipality.  They often contain
      "non-appropriation" clauses under which the municipal government has no
      obligation to make lease or installment payments in future years unless money
      is appropriated on a yearly basis.  If the government stops making payments
      or transfers its payment obligations to a private entity, the obligation
      could lose value or become taxable.

            Some of these obligations might not have an active trading market and
      would be subject to the Trust's limits on "illiquid" securities described
      below.  From time to time the Trust can invest more than 5% of its net assets
      in municipal lease obligations that the Manager has determined to be liquid
      under guidelines set by the Trust's Board of Trustees.

Illiquid and Restricted Securities.  Investments may be illiquid because they do
      not have an active trading market, making it difficult to value them or
      dispose of them promptly at an acceptable price.  A restricted security is
      one that has a contractual limit on resale or which cannot be sold publicly
      until it is registered under federal securities laws. The Trust will not
      invest more than 10% of its net assets in illiquid or restricted securities.
      That limit does not apply to certain restricted securities that are eligible
      for resale to qualified institutional purchasers or purchases of commercial
      paper that may be sold without registration under the federal securities
      laws. The Manager monitors holdings of illiquid securities on an ongoing
      basis to determine whether to sell any holdings to maintain adequate
      liquidity.  Difficulty in selling a security may result in a loss to the
      Trust or additional costs.

Demand Features and Guarantees.  The Trust can invest a significant percentage of
      its assets in municipal securities that have demand features, guarantees or
      similar credit and liquidity enhancements.  A demand feature permits the
      holder of the security to sell the security within a specified period of time
      at a stated price and entitles the holder of the security to receive an
      amount equal to the approximate amortized cost of the security plus accrued
      interest.  A guarantee permits the holder of the security to receive, upon
      presentment to the guarantor, the principal amount of the underlying security
      plus accrued interest when due or upon default. A guarantee is the
      unconditional obligation of an entity other than the issuer of the security.
      Demand features and guarantees can effectively:
o     shorten the maturity of a variable or floating rate security,
o     enhance the security's credit quality, and
o     enhance the ability to sell the security.

      The aggregate price for a security subject to a demand feature or a guarantee
may be higher than the price that would otherwise be paid for the security without
the guarantee or the demand feature.  When the Trust purchases securities subject
to guarantees or demand features, there is an increase in the cost of the
underlying security and a corresponding reduction in its yield. Because the Trust
invests in securities backed by banks and other financial institutions, changes in
the credit quality of these institutions could cause losses to the Trust.
Therefore, an investment in the Trust may be riskier than an investment in other
types of money market funds.

Repurchase Agreements.  The Trust can enter into repurchase agreements.  In a
      repurchase transaction, the Trust buys a security and simultaneously sells it
      to the vendor for delivery at a future date.  Repurchase agreements must be
      fully collateralized.  However, if the vendor fails to pay the resale price
      on the delivery date, the Trust may incur costs in disposing of the
      collateral and may experience losses if there is any delay in its ability to
      do so. The Trust will not enter into repurchase transactions that will cause
      more than 10% of the Trust's net assets to be subject to repurchase
      agreements having a maturity beyond seven days.  There is no limit on the
      amount of the Trust's net assets that can be subject to repurchase agreements
      of seven days or less.  Income earned on repurchase transactions is not tax
      exempt and accordingly, under normal market conditions, the Trust will limit
      its investments in repurchase transactions to 20% of its total assets.

Temporary Defensive and Interim Investments. In times of unstable adverse market or
      economic conditions, the Trust can invest up to 100% of its assets in
      temporary defensive or interim investments that are inconsistent with the
      Trust's principal investment objective.  These temporary investments can
      include:

o     obligations issued or guaranteed by the U.S. government or its agencies or
         instrumentalities,
o     bankers' acceptances; taxable commercial paper rated in the highest category
         by a rating organization,
o     short-term taxable debt obligations rated in one of the two highest rating
         categories of a rating organization,
o     certificates of deposit of domestic banks, and
o     repurchase agreements.

      To the extent the Trust assumes a temporary defensive position, a significant
portion of the Trust's distributions may be subject to federal and California
income taxes.

How the Trust is Managed

THE MANAGER.  The investment advisor for the Trust is the Manager, Centennial Asset
Management Corporation, a wholly owned subsidiary of OppenheimerFunds, Inc.  The
Manager chooses the Trust's investments and handles its day-to-day business.  The
Manager carries out its duties, subject to the policies established by the Trust's
Board of Trustees, under an investment advisory agreement that states the Manager's
responsibilities.  The agreement sets the fees the Trust pays to the Manager and
describes the expenses that the Trust is responsible to pay to conduct its
business.


      The Manager has been an investment advisor since 1978. The Manager and its
parent company and controlled affiliates managed more than $130 billion in assets
as of June 30, 2003, including other Oppenheimer funds with more than seven million
shareholder accounts.  The Manager is located at 6803 South Tucson Way, Centennial,
Colorado 80112.


Portfolio Manager.  Michael Carbuto is the portfolio manager of the Trust.  He is
      the person principally responsible for the day-to-day management of the
      Trust's portfolio.  Mr. Carbuto has had this responsibility since June 1990.
      Mr. Carbuto is a Vice President of OppenheimerFunds, Inc., a Vice President
      of the Trust, and an officer and portfolio manager of other funds for which
      the Manager or an affiliate serves as investment advisor.


Advisory Fees. Under the investment advisory agreement, the Trust pays the Manager
      an advisory fee at an annual rate that declines on additional assets as the
      Trust grows: 0.500% of the first $250 million of net assets; 0.475% of the
      next $250 million of net assets; 0.450% of the next $250 million of net
      assets; 0.425% of the next $250 million of net assets; and 0.400% of the net
      assets in excess of $1 billion.  The Manager has voluntarily undertaken to
      assume certain expenses of the Trust in any fiscal year that exceed 0.80% of
      the Trust's average annual net assets.  The Trust's management fee for the
      fiscal year ended June 30, 2003 was 0.50% of the Trust's average annual net
      assets before and after the expense assumption noted above.  Additionally,
      effective July 7, 2003, the Manager has voluntarily undertaken to waive
      receipt of its management fees to the extent necessary so that the Trust may
      seek to maintain a positive yield.  The Manager reserves the right to amend
      or terminate either voluntary expense assumption at any time.


      For further information about the investment advisory agreement, including a
description of expense assumption arrangements with the Manager, see the Statement
of Additional Information.

A B O U T  Y O U R  A C C O U N T

How to Buy Shares

AT WHAT PRICE ARE SHARES SOLD?  Shares of the Trust are sold at their offering
price, which is the net asset value per share without any sales charge.  The net
asset value per share will normally remain fixed at $1.00 per share.  However,
there is no guarantee that the Trust will maintain a stable net asset value of
$1.00 per share.

      The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the Distributor
(Centennial Asset Management Corporation) or the Sub-Distributor (OppenheimerFunds
Distributor, Inc.) receives the purchase order at its offices in Colorado, or after
any agent appointed by the Sub-Distributor receives the order and sends it to the
Sub-Distributor as described below.


How is the Trust's Net Asset Value Determined?  The net asset value of shares of
      the Trust is normally determined twice each day, at 12:00 Noon and at 4:00
      P.M., on each day The New York Stock Exchange ("the Exchange") is open for
      trading (referred to in this Prospectus as a "regular business day"). All
      references to time in this Prospectus mean "Eastern time."


      The net asset value per share is determined by dividing the value of the
Trust's net assets by the number of shares that are outstanding. Under a policy
adopted by the Trust's Board of Trustees, the Trust uses the amortized cost method
to value its securities to determine net asset value.

      The shares of the Trust offered by this Prospectus are considered to be Class
A shares for the purposes of exchanging them or reinvesting distributions among
other eligible funds that offer more than one class of shares.

      If, after the close of the principal market on which a security held by the
Trust is traded, and before the time the Trust's securities are priced that day, an
event occurs that the Manager deems likely to cause a material change in the value
of such security, the Trust's Board of Trustees has authorized the Manager, subject
to the Board's review, to ascertain a fair value for such security.  A security's
valuation may differ depending on the method used for determining value.

HOW MUCH MUST YOU INVEST?  You can open an account with a minimum initial
investment described below, depending on how you buy and pay for your shares.  You
can make additional purchases at any time with as little as $25.  The minimum
investment requirements do not apply to reinvesting distributions from the Trust or
other eligible funds (a list of them appears in the Statement of Additional
Information, or you can ask your broker/dealer or call the Transfer Agent) or
reinvesting distributions from unit investment trusts that have made arrangements
with the Distributor.

HOW ARE SHARES PURCHASED? You can buy shares in one of several ways:

Buying Shares Through a Broker/Dealer's Automatic Purchase and Redemption Program.
      You can buy shares of a Trust through a broker/dealer that has a sales
      agreement with the Trust's Distributor or Sub-Distributor that allows shares
      to be purchased through the broker/dealer's Automatic Purchase and Redemption
      Program. Shares of the Trust are sold mainly to customers of participating
      broker/dealers that offer the Trust's shares under these special purchase
      programs.  If you participate in an Automatic Purchase and Redemption Program
      established by your broker/dealer, your broker/dealer buys shares of the
      Trust for your account with the broker/dealer.  Program participants should
      also read the description of the program provided by their broker/dealer.

Buying Shares Through Your Broker/Dealer.  If you do not participate in an
      Automatic Purchase and Redemption Program, you can buy shares of the Trust
      through any broker/dealer that has a sales agreement with the Distributor or
      Sub-Distributor.  Your broker/dealer will place your order with the
      Distributor on your behalf.

Buying Shares Directly Through the Sub-Distributor.  You can also purchase shares
      directly through the Trust's Sub-Distributor.  Shareholders who make
      purchases directly and hold shares in their own names are referred to as
      "direct shareholders" in this Prospectus.

      The Sub-Distributor may appoint certain servicing agents to accept purchase
(and redemption) orders, including broker/dealers that have established Automatic
Purchase and Redemption Programs.  The Distributor or Sub-Distributor, in their
sole discretion, may reject any purchase order for shares of a Trust.

AUTOMATIC PURCHASE AND REDEMPTION PROGRAM.  If you buy shares of a Trust through
your broker/dealer's Automatic Purchase and Redemption Program, your broker/dealer
will buy your shares for your Program Account and will hold your shares in your
broker/dealer's name.  These purchases will be made under the procedures described
in "Guaranteed Payment Procedures" below.  Your Automatic Purchase and Redemption
Program Account may have minimum investment requirements established by your
broker/dealer.  You should direct all questions about your Automatic Purchase and
Redemption Program to your broker/dealer, because the Trust's Transfer Agent does
not have access to information about your account under that Program.

Guaranteed Payment Procedures.  Some broker/dealers may have arrangements with the
      Distributor to enable them to place purchase orders for shares of the Trust
      and to guarantee that the Trust's custodian bank will receive Federal Funds
      to pay for the shares prior to specified times. Broker/dealers whose clients
      participate in Automatic Purchase and Redemption Programs may use these
      guaranteed payment procedures to pay for purchases of shares of the Trust.

o     If the Distributor receives a purchase order before 12:00 Noon on a regular
       business day with the broker/dealer's guarantee that the Trust's custodian
       bank will receive payment for those shares in Federal Funds by 2:00 P.M. on
       that same day, the order will be effected at the net asset value determined
       at 12:00 Noon that day. Distributions will begin to accrue on the shares on
       that day if the Federal Funds are received by the required time.

o     If the Distributor receives a purchase order after 12:00 Noon on a regular
       business day with the broker/dealer's guarantee that the Trust's custodian
       bank will receive payment for those shares in Federal Funds by 2:00 P.M. on
       that same day, the order will be effected at the net asset value determined
       at 4:00 P.M. that day.  Distributions will begin to accrue on the shares on
       that day if the Federal Funds are received by the required time.

o     If the Distributor receives a purchase order between 12:00 Noon and 4:00 P.M.
       on a regular business day with the broker/dealer's guarantee that the
       Trust's custodian bank will receive payment for those shares in Federal
       Funds by 4:00 P.M. the next regular business day, the order will be effected
       at the net asset value determined at 4:00 P.M. on the day the order is
       received and distributions will begin to accrue on the shares purchased on
       the next regular business day if the Federal Funds are received by the
       required time.

HOW CAN DIRECT SHAREHOLDERS BUY SHARES?  Direct shareholders can buy shares of the
Trust by completing a Centennial Funds new account application and sending it to
the Sub-Distributor, OppenheimerFunds Distributor, Inc., P.O. Box 5143, Denver,
Colorado 80217.  Payment must be made by check or by Federal Funds wire as
described below.  If you don't list a broker/dealer on the application, the
Sub-Distributor, will act as your agent in buying the shares.  However, we
recommend that you discuss your investment with a financial advisor before you make
a purchase to be sure that the Trust is appropriate for you.

      The Trust intends to be as fully invested as possible to maximize its yield.
Therefore, newly purchased shares normally will begin to accrue distributions after
the Sub-Distributor or its agent accepts your purchase order, starting on the
business day after the Trust receives Federal Funds from the purchase payment.

Payment by Check.  Direct shareholders may pay for purchases of shares of the Trust
      by check. Send your check, payable to "OppenheimerFunds Distributor, Inc.,"
      along with your application and other documents to the address listed above.
      For initial purchases, your check should be payable in U.S. dollars and drawn
      on a U.S. bank so that distributions will begin to accrue on the next regular
      business day after the Sub-Distributor accepts your purchase order.  If your
      check is not drawn on a U.S. bank and is not payable in U.S. dollars, the
      shares will not be purchased until the Sub-Distributor is able to convert the
      purchase payment to Federal Funds.  In that case distributions will begin to
      accrue on the purchased shares on the next regular business day after the
      purchase is made.  The minimum initial investment for direct shareholders by
      check is $500.

Payment by Federal Funds Wire.  Direct shareholders may pay for purchases of shares
      of the Trust by Federal Funds wire.  You must also forward your application
      and other documents to the address listed above. Before sending a wire, call
      the Sub-Distributor's Wire Department at 1.800.525.9310 (toll-free from
      within the U.S.) or 303.768.3200 (from outside the U.S.) to notify the
      Sub-Distributor of the wire, and to receive further instructions.

      Distributions will begin to accrue on the purchased shares on the purchase
date that is a regular business day if the Federal Funds from your wire and the
application are received by the Sub-Distributor and accepted by 12:00 Noon.  If the
Sub-Distributor receives the Federal Funds from your wire and accepts the purchase
order between 12:00 Noon and 4:00 P.M. on the purchase date, distributions will
begin to accrue on the shares on the next regular business day.  The minimum
investment by Federal Funds Wire is $2,500.

Buying Shares Through Automatic Investment Plans.  Direct shareholders can purchase
      shares of the Trust automatically each month by authorizing the Trust's
      Transfer Agent to debit your account at a U.S. domestic bank or other
      financial institution.  Details are in the Automatic Investment Plan
      Application and the Statement of Additional Information.  The minimum monthly
      purchase is $25.

Service (12b-1) Plan.  The Trust has adopted a service plan.  It reimburses the
      Distributor for a portion of its costs incurred for services provided to
      accounts that hold shares of the Trust.  Reimbursement is made quarterly, or
      monthly depending on asset size, at an annual rate of up to 0.20% of the
      average annual net assets of the Trust.  The Distributor currently uses all
      of those fees (together with significant amounts from the Manager's own
      resources) to pay dealers, brokers, banks and other financial institutions
      quarterly for providing personal services and maintenance of accounts of
      their customers that hold shares of the Trust.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day.  Your
shares will be sold at the next net asset value calculated after your order is
received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent.

HOW CAN PROGRAM PARTICIPANTS SELL SHARES?  If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker/dealer, you must redeem
shares held in your Program Account by contacting your broker/dealer firm, or you
can redeem shares by writing checks as described below.  You should not contact the
Trust or its Transfer Agent directly to redeem shares held in your Program
Account.  You may also arrange (but only through your broker/dealer) to have the
proceeds of redeemed Trust shares sent by Federal Funds wire, as described below in
"Sending Redemption Proceeds by Wire."


HOW CAN DIRECT SHAREHOLDERS REDEEM SHARES?  Direct shareholders can redeem their
shares by writing a letter to the Transfer Agent, by wire, by using the Trust's
checkwriting privilege, or by telephone. You can also set up Automatic Withdrawal
Plans to redeem shares on a regular basis.  If you have questions about any of
these procedures, and especially if you are redeeming shares in a special
situation, such as due to the death of the owner, please call the Transfer Agent
first, at 1.800.525.9310 for assistance.


Certain Requests Require a Signature Guarantee.  To protect you and the Trust from
      fraud, the following redemption requests for accounts of direct shareholders
      must be in writing and must include a signature guarantee (although there may
      be other situations that also require a signature guarantee):
   o  You wish to redeem $100,000 or more and receive a check
   o  The redemption check is not payable to all shareholders listed on the account
      statement
   o  The redemption check is not sent to the address of record on your account
      statement
   o  Shares are being transferred to an account with a different owner or name
   o  Shares are being redeemed by someone (such as an Executor) other than the
      owners listed in the account registration.

Where Can Direct Shareholders Have Their Signatures Guaranteed?  The Transfer Agent
      will accept a guarantee of your signature by a number of financial
      institutions, including:
o     a U.S. bank, trust company, credit union or savings association,
o     a foreign bank that has a U.S. correspondent bank,
o     a U.S. registered dealer or broker in securities, municipal securities or
   government securities, or
o     a U.S. national securities exchange, a registered securities association or a
   clearing agency.
      If you are signing on behalf of a corporation, partnership or other business
or as a fiduciary, you must also include your title in the signature.

How Can Direct Shareholders Sell Shares by Mail?  Write a letter to the Transfer
      Agent that includes:
      o  Your name
      o  The Trust's name
      o  Your account number (from your account statement)
      o  The dollar amount or number of shares to be redeemed
      o  Any special payment instructions
      o  Any share certificates for the shares you are selling
      o  The signatures of all registered owners exactly as the account is
      registered, and
      o  Any special documents requested by the Transfer Agent to assure proper
         authorization of the person asking to sell the shares (such as Letters
         Testamentary of an Executor).

- ---------------------------------------------------------------------------------
- ---------------------------------------- ---------------------------------------
Use the following address for            Send courier or express mail
- ---------------------------------------- requests to:
requests by mail:                        Shareholder Services, Inc.
Shareholder Services, Inc.               10200 E. Girard Avenue, Building D
P.O. Box 5143                            Denver, Colorado 80231
Denver, Colorado 80217-5143
                                         ----------------------------------------

How Can Direct Shareholders Sell Shares by Telephone?  Direct shareholders and
      their broker/dealer representative of record may also sell shares by
      telephone.  To receive the redemption price calculated on a particular
      regular business day, the Transfer Agent, or its designated agent, must
      receive the request by 4:00 P.M. on that day. You may not redeem shares held
      under a share certificate by telephone.  To redeem shares through a service
      representative, call 1.800.525.9310.  Proceeds of telephone redemptions will
      be paid by check payable to the shareholder(s) of record and will be sent to
      the address of record for the account. Up to $100,000 may be redeemed by
      telephone in any seven day period.  Telephone redemptions are not available
      within 30 days of changing the address on an account.

Sending Redemption Proceeds By Wire.  While the Transfer Agent normally sends
      direct shareholders their money by check, you can arrange to have the
      proceeds of the shares you sell sent by Federal Funds wire to a bank account
      you designate.  It must be a commercial bank that is a member of the Federal
      Reserve wire system.  The minimum redemption you can have sent by wire is
      $2,500. There is a $10 fee for each request.  To find out how to set up this
      feature on an account or to arrange a wire, direct shareholders should call
      the Transfer Agent at 1.800.525.9310.  If you hold your shares through your
      broker/dealer's Automatic Purchase and Redemption Program, you must contact
      your broker/dealer to arrange a Federal Funds wire.

Can Direct Shareholders Submit Requests by Fax?  Direct shareholders may send
      requests for certain types of account transactions to the Transfer Agent by
      fax (telecopier).  Please call 1.800.525.9310 for information about which
      transactions may be handled this way. Transaction requests submitted by fax
      are subject to the same rules and restrictions as written and telephone
      requests described in this Prospectus.

HOW DO I WRITE CHECKS AGAINST MY ACCOUNT?  Automatic Purchase and Redemption
Program participants may write checks against the account held under their Program,
but must arrange for checkwriting privileges through their broker/dealers.  Direct
shareholders may write checks against their account by requesting that privilege on
the account application or by contacting the Transfer Agent for signature cards.
They must be signed (with a signature guarantee) by all owners of the account and
returned to the Transfer Agent so that checks can be sent to you to use.
Shareholders with joint accounts can elect in writing to have checks paid over the
signature of one owner. If checkwriting is established after November 1, 2000, only
one signature is required for shareholders with joint accounts, unless you elect
otherwise.

   o  Checks can be written to the order of whomever you wish, but may not be
      cashed at the bank the checks are payable through or the Trust's custodian
      bank.
   o  Checkwriting privileges are not available for accounts holding shares that
      are subject to a contingent deferred sales charge.
   o  Checks must be written for at least $250.
   o  Checks cannot be paid if they are written for more than your account value.
   o  You may not write a check that would require the Trust to redeem shares that
      were purchased by check or Automatic Investment Plan payments within the
      prior 10 days.
   o  Don't use your checks if you changed your account number, until you receive
      new checks.

WILL I PAY A SALES CHARGE WHEN I SELL MY SHARES?  The Trust does not charge a fee
to redeem shares of the Trust that were bought directly or by reinvesting
distributions from that Trust or another Centennial Trust or eligible fund.
Generally, there is no fee to redeem shares of the Trust bought by exchange of
shares of another Centennial Trust or eligible fund.  However,

o     if you acquired shares of  a Trust by exchanging Class A shares of another
      eligible fund that you bought subject to the Class A contingent deferred
      sales charge, and
o     those shares are still subject to the Class A contingent deferred sales
      charge when you exchange them into the Trust, then
o     you will pay the contingent deferred sales charge if you redeem those shares
      from the Trust within 18 months of the purchase date of the shares of the
      fund you exchanged.

How to Exchange Shares

Shares of the Trust can be exchanged for shares of certain other Centennial Trusts
or other eligible funds, depending on whether you own your shares through your
broker/dealer's Automatic Purchase and Redemption Program or as a direct
shareholder.

HOW CAN PROGRAM PARTICIPANTS EXCHANGE SHARES?  If you participate in an Automatic
Purchase and Redemption Program sponsored by your broker/dealer, you may exchange
shares held in your Program Account for shares of Centennial Money Market Trust,
Centennial Government Trust, Centennial Tax Exempt Trust, Centennial California Tax
Exempt Trust and Centennial New York Tax Exempt Trust (referred to in this
Prospectus as the "Centennial Trusts"), if available for sale in your state of
residence by contacting your broker or dealer and obtaining a Prospectus of the
selected Centennial Trust.

HOW CAN DIRECT SHAREHOLDERS EXCHANGE SHARES?  Direct shareholders can exchange
shares of the Trust for Class A shares of certain eligible funds listed in the
Statement of Additional Information.  To exchange shares, you must meet several
conditions:

   o  Shares of the fund selected for exchange must be available for sale in your
      state of residence.
   o  The prospectuses of the Trust and the fund whose shares you want to buy must
      offer the exchange privilege.
   o  You must hold the shares you buy when you establish your account for at least
      seven days before you can exchange them. After the account is open seven
      days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase requirements for the fund whose shares you
      purchase by exchange.
   o  Before exchanging into a fund, you must obtain and read its prospectus.

      Shares of a particular class of an eligible fund may be exchanged only for
shares of the same class in other eligible funds.  For example, you can exchange
shares of the Trust only for Class A shares of another fund, and you can exchange
only Class A shares of another eligible fund for shares of the Trust.

      You may pay a sales charge when you exchange shares of the Trust.  Because
shares of the Trust are sold without sales charge, in some cases you may pay a
sales charge when you exchange shares of the Trust for shares of other eligible
funds that are sold subject to a sales charge. You will not pay a sales charge when
you exchange shares of the Trust purchased by reinvesting distributions from the
Trust or other eligible funds (except Oppenheimer Cash Reserves), or when you
exchange shares of the Trust purchased by exchange of shares of an eligible fund on
which you paid a sales charge.

      For tax purposes, exchanges of shares involve a sale of the shares of the
fund you own and a purchase of the shares of the other fund, which may result in a
capital gain or loss.  Since shares of the Trust normally maintain a $1.00 net
asset value, in most cases you should not realize a capital gain or loss when you
sell or exchange your shares.

      Direct shareholders can find a list of eligible funds currently available for
exchanges in the Statement of Additional Information or you can obtain one by
calling a service representative at 1.800.525.9310.  The list of eligible funds can
change from time to time.

How Do Direct Shareholders Submit Exchange Requests?  Direct shareholders may
      request exchanges in writing or by telephone:

   o  Written Exchange Requests.  Complete an Exchange Authorization Form, signed
      by all owners of the account.  Send it to the Transfer Agent at the address
      on the back cover.

   o  Telephone Exchange Requests.  Telephone exchange requests may be made by
      calling a service representative at 1.800.525.9310.  Telephone exchanges may
      be made only between accounts that are registered with the same name(s) and
      address.  Shares held under certificates may not be exchanged by telephone.

ARE THERE LIMITATIONS ON EXCHANGES?  There are certain exchange policies you should
be aware of:


   o  Shares are redeemed from one fund and purchased from the other fund in the
      exchange transaction on the same regular business day on which the Transfer
      Agent receives an exchange request that conforms to the policies described
      above.  Requests for exchanges to any of the Centennial Trusts must be
      received by the Transfer Agent by 4:00 P.M. on a regular business day to be
      effected that day.  The Transfer Agent must receive requests to exchange
      shares of the Trust to funds other than the Centennial Trusts on a regular
      business day by the close of the Exchange that day.  The close is normally
      4:00 P.M. but may be earlier on some days.

   o  The interests of the Trust's long-term shareholders and its ability to manage
      its investments may be adversely affected when its shares are repeatedly
      bought and sold in response to short-term market fluctuations--also known as
      "market timing."  When large dollar amounts are involved, the Trust may have
      difficulty implementing long-term investment strategies, because it cannot
      predict how much cash it will have to invest. Market timing also may force
      the Trust to sell portfolio securities at disadvantageous times to raise the
      cash needed to buy a market timer's shares. These factors may hurt the
      Trust's performance and its shareholders. When the Manager believes frequent
      trading would have a disruptive effect on the Trust's ability to manage its
      investments, the Manager and the Trust may reject purchase orders and
      exchanges into the Trust by any person, group or account that the Manager
      believes to be a market timer. All accounts under common ownership or control
      within the Centennial or Oppenheimer funds complex may be counted together
      for purposes of determining market timing with respect to any exchange
      involving the Trust.


   o  Because excessive trading can hurt fund performance and harm shareholders,
      the Trust reserves the right to refuse any exchange request that may, in the
      opinion of the Trust, be disadvantageous, or to refuse multiple exchange
      requests submitted by a shareholder or dealer.


   o  The Trust may amend, suspend or terminate the exchange privilege at any time.
      The Trust is currently not obligated to provide notice before rejecting an
      exchange offer.


   o  If the Transfer Agent cannot exchange all the shares you request because of a
      restriction cited above, only the shares eligible for exchange will be
      exchanged.

Shareholder Account Rules and Policies

More information about the Trust's policies and procedures for buying, selling and
exchanging shares is contained in the Statement of Additional Information.

The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time it believes it is in the
      Trust's best interest to do so.

Telephone transaction privileges for purchases, redemptions or exchanges may be
      modified, suspended or terminated by the Trust at any time.  If an account
      has more than one owner, the Trust and the Transfer Agent may rely on the
      instructions of any one owner.  Telephone privileges apply to each owner of
      the account and the broker/dealer representative of record for the account
      unless the Transfer Agent receives cancellation instructions from an owner of
      the account.  The Trust will provide you notice whenever it is required to do
      so by applicable law.

The Transfer Agent will record any telephone calls to verify data concerning
      transactions.  It has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax identification
      numbers and other account data and by confirming such transactions in
      writing.  The Transfer Agent and the Trust will not be liable for losses or
      expenses arising out of telephone instructions where reasonably believed to
      be genuine.

Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form.  From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements for
      redemptions stated in this Prospectus.

Payment for redeemed shares ordinarily is made in cash.  It is forwarded by check
      or by Federal Funds wire (as elected by the shareholder) within seven days
      after the Transfer Agent receives redemption instructions in proper form.
      However, under unusual circumstances determined by the Securities and
      Exchange Commission, payment may be delayed or suspended.  For accounts
      registered in the name of a broker/dealer, payment will normally be forwarded
      within three business days after redemption.


The Transfer Agent may delay processing any type of redemption payment as described
      under "How to Sell Shares" for recently purchased shares, but only until the
      purchase payment has cleared. That delay may be as much as 10 days from the
      date the shares were purchased.  That delay may be avoided if you purchase
      shares by Federal Funds wire or certified check, or arrange with your bank to
      provide telephone or written assurance to the Transfer Agent that your
      purchase payment has cleared.


Involuntary redemptions of small accounts may be made by the Trust if the account
      value has fallen below $250 for reasons other than the fact that the market
      value of shares has dropped. In some cases involuntary redemptions may be
      made to repay the Distributor or Sub-Distributor for losses from the
      cancellation of share purchase orders.


Customer Identification Program.  Federal regulations may require the Trust to
      obtain your name, your date of birth (for a natural person), your residential
      street address or principal place of business and your Social Security
      number, employer identification number or other government issued
      identification when you open an account. Additional information may be
      required in certain circumstances or to open corporate accounts.  The Trust
      or the Transfer Agent may use this information to attempt to verify your
      identity.  The Trust may not be able to establish an account if the necessary
      information is not received.  The Trust may also place limits on account
      transactions while it is in the process of attempting to verify your
      identity.  Additionally, if the Trust is unable to verify your identity after
      your account is established, the Trust may be required to redeem your shares
      and close your account.


"Backup Withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges) if you
      fail to furnish the Trust your correct, certified Social Security or Employer
      Identification Number when you sign your application, or if you under-report
      your income to the Internal Revenue Service.

To avoid sending duplicate copies of materials to households, the Trust will mail
      only one copy of each prospectus, annual and semi-annual report and annual
      notice of the Trust's privacy policy to shareholders having the same last
      name and address on the Trust's records. The consolidation of these mailings,
      called householding, benefits the Trust through reduced mailing expense.

      If you want to receive  multiple copies of these  materials,  you may call the
      Transfer  Agent at  1.800.525.9310.  You may also notify the Transfer Agent in
      writing.  Individual copies of prospectuses,  reports and privacy notices will
      be sent to you  commencing  within 30 days after the Transfer  Agent  receives
      your request to stop householding.


Dividends, Capital Gains and Taxes


DIVIDENDS.  The Trust intends to declare dividends from net investment income each
regular business day and to pay those dividends to shareholders monthly on a date
selected by the Board of Trustees.  To maintain a net asset value of $1.00 per
share, the Trust might withhold dividends or make distributions from capital or
capital gains.  Daily dividends will not be declared or paid on newly purchased
shares until Federal Funds are available to the Trust from the purchase payment for
such shares.

CAPITAL GAINS.  The Trust normally holds its securities to maturity and therefore
will not usually pay capital gains. Although the Trust does not seek capital gains,
the Trust could realize capital gains on the sale of its portfolio securities.  If
it does, it may make distributions out of any net short-term or long-term capital
gains in December of each year.  The Trust may make supplemental distributions of
dividends and capital gains following the end of its fiscal year.


What Choices Do I Have for Receiving Distributions?  For Automatic Purchase and
      Redemption Programs, dividends and distributions are automatically reinvested
      in additional shares of the selected Trust.  For direct shareholders, when
      you open your account, specify on your application how you want to receive
      your dividends and distributions.  You have four options:


o     Reinvest All Distributions in the Trust.  You can elect to reinvest all
      dividends and capital gains distributions in additional shares of the Trust.

o     Reinvest Dividends or Capital Gains.  You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital gains
      distributions) in the Trust while receiving other types of distributions by
      check or having them sent to your bank account.

o     Receive All Distributions in Cash.  You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your bank.
o     Reinvest Your Distributions in Another Account.  You can reinvest all
      distributions in the same class of shares of another eligible fund account
      you have established.

Under the terms of the Automatic Purchase and Redemption Program, your
broker/dealer can redeem shares to satisfy debit balances arising in your Program
Account. If that occurs, you will be entitled to dividends on those shares as
described in your Program Agreements.

TAXES. Exempt interest dividends paid from net investment income earned by the
Trust on municipal securities will be excludable from gross income for federal
income tax purposes.  A portion of a dividend that is derived from interest paid on
certain "private activity bonds" may be an item of tax preference if you are
subject to the alternative minimum tax. If the Trust earns interest on taxable
investments, any dividends derived from those earnings will be taxable as ordinary
income to shareholders.

      Dividends paid by the Trust from interest on California municipal securities
will be exempt from California individual income taxes, if at the close of each
quarter at least 50% of the value of the Trust's assets are invested in debt
obligations that pay interest exempt from California individual income taxes.
Dividends paid from income from municipal securities of issuers outside California
will normally be subject to California individual income taxes.

      Dividends and capital gains distributions may be subject to state or local
taxes. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders.  It does not matter how long you have held your
shares.  Dividends paid from short-term capital gains are taxable as ordinary
income. Whether you reinvest your distributions in additional shares or take them
in cash, the tax treatment is the same.  Every year the Trust will send you and the
IRS a statement showing the amount of any taxable distribution you received in the
previous year as well as the amount of your tax-exempt income.

Remember, There May be Taxes on Transactions.  Because the Trust seeks to maintain
      a stable $1.00 per share net asset value, it is unlikely that you will have a
      capital gain or loss when you sell or exchange your shares.  A capital gain
      or loss is the difference between the price you paid for the shares and the
      price you received when you sold them.  Any capital gain is subject to
      capital gains tax.

Returns of Capital Can Occur.  In certain cases, distributions made by the Trust
      may be considered a non-taxable return of capital to shareholders.  If that
      occurs, it will be identified in notices to shareholders.

      This information is only a summary of certain federal income tax information
about your investment. You should consult with your tax advisor about the effect of
an investment in the Trust on your particular tax situation.






Financial Highlights


The Financial Highlights Table is presented to help you understand the Trust's
financial performance for the past five fiscal years.  Certain information reflects
financial results for a single Trust share.  The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment in
the Trust (assuming reinvestment of all dividends and distributions).  This
information has been audited by Deloitte & Touche LLP, the Trust's independent
auditors, whose report, along with the Trust's financial statements, is included in
the Statement of Additional Information, which is available on request

FINANCIAL HIGHLIGHTS

 Year Ended June 30                                 2003            2002           2001        2000        1999
- -----------------------------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period           $   1.00        $   1.00       $   1.00    $   1.00    $   1.00
- -----------------------------------------------------------------------------------------------------------------
 Income from investment operations--net
 investment income and net realized gain             .01             .01            .03         .03         .02
- -----------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income               (.01)           (.01)          (.03)       (.03)       (.02)
 Distributions from net realized gain                 --              -- 1           --          --          --
                                                -----------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                    (.01)           (.01)          (.03)       (.03)       (.02)
- -----------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                 $   1.00        $   1.00       $   1.00    $   1.00    $   1.00
                                                =================================================================

- -----------------------------------------------------------------------------------------------------------------
 Total Return 2                                     0.52%           0.89%          2.74%       2.63%       2.41%

- -----------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)       $152,856        $154,653       $157,316    $162,261    $155,839
- -----------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)              $156,348        $164,278       $166,654     $160,351   $168,272
- -----------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                              0.52%           0.89%          2.72%        2.57%      2.38%
 Expenses, gross                                    0.76%           0.77%          0.84%        0.83%      0.80%
 Expenses, net                                      0.76% 4,5       0.77% 4,5      0.81% 6      0.81%      0.78% 4,6

1. Less than $0.005 per share. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions 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. Total returns reflect changes in net investment income only. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Trust distributions or the redemption of Trust shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary reimbursement of expenses less than 0.01%. 6. Net of voluntary reimbursement of expenses.

INFORMATION AND SERVICES

For More Information on Centennial California Tax Exempt Trust

The following additional information about the Trust is available without charge
upon request:

STATEMENT OF ADDITIONAL INFORMATION.  This document includes additional information
about the Trust's investment policies, risks, and operations.  It is incorporated
by reference into this Prospectus (which means it is legally part of this
Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS.  Additional information about the Trust's
investments and performance is available in the Trust's Annual and Semi-Annual
Reports to shareholders.  The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Trust's
performance during its last fiscal year.

How to Get More Information

You can request the Statement of Additional Information, the Annual and Semi-Annual
Reports, the notice explaining the Trust's privacy policy and other information
about the Trust or your account:

- ---------------------------------------------------------------------------------
By Telephone:                            Call Shareholder Services, Inc.
                                         toll-free:
                                         1.800.525.9310
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
By Mail:                                 Write to:

                                         Shareholder Services, Inc.
                                         P.O. Box 5143
                                         Denver, Colorado 80217-5143

- ---------------------------------------------------------------------------------

Information about the Trust including the Statement of Additional Information can
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1.202.942.8090.  Reports and other information about the Trust
are available on the EDGAR database on the SEC's Internet website at www.sec.gov.
                                                                     -----------
Copies may be obtained after payment of a duplicating fee by electronic request at
the SEC's e-mail address: publicinfo@sec.gov or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102.

No one has been authorized to provide any information about the Trust or to make
any representations about the Trust other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Trust, nor a
solicitation of an offer to buy shares of the Trust, to any person in any state or
other jurisdiction where it is unlawful to make such an offer.

                                             The Trust's shares are distributed by:
The Trust's SEC File No.: 811-5871           Centennial Asset Management Corporation

PR0180.001.0803
Printed on recycled paper







APPENDIX TO THE PROSPECTUS OF
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

      Graphic material included in Prospectus of Centennial California Tax Exempt
Trust (the "Trust") under the heading:  "Annual Total Returns (as of 12/31 each
year)."


      Bar chart will be included in the Prospectus of the Trust depicting the
annual total returns of a hypothetical investment in shares of the Trust for the
past 10 full calendar years.  Set forth below are the relevant data points that
will appear on the bar chart.


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Calendar Year Ended:             Annual Total Returns
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12/31/93                         1.81%
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12/31/94                         2.16%
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12/31/95                         3.31%
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12/31/96                         2.79%
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12/31/97                         2.91%
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12/31/98                         2.57%
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12/31/99                         2.47%
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12/31/00                         2.94%
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12/31/01                         1.76%
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12/31/02                         0.61%

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 Centennial California Tax Exempt Trust
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6803 South Tucson Way, Centennial, Colorado 80112

1.800.525.9310


Statement of Additional Information dated August 22, 2003

      This Statement of Additional Information is not a prospectus.  This
document contains additional information about the Trust and supplements
information in the Prospectus dated August 22, 2003.  It should be read
together with the Prospectus, which may be obtained by writing to the Trust's
Transfer Agent, Shareholder Services, Inc., at P.O. Box 5143, Denver,
Colorado 80217, or by calling the Transfer Agent at the toll-free number
shown above.


Contents

Page
About the Trust

Additional Information about the Trust's Investment Policies and Risks.......2
     The Trust's Investment Policies.........................................2
     Other Investment Strategies.............................................9
     Investment Restrictions................................................19
How the Trust is Managed....................................................21
     Organization and History...............................................21
     Board of Trustees and Oversight Committees.............................22
     Trustees and Officers of the Trust.....................................23
     The Manager............................................................35
Service Plan................................................................39
Performance of the Trust....................................................40


About Your Account

How To Buy Shares...........................................................43
How To Sell Shares..........................................................44
How To Exchange Shares......................................................45
Dividends and Taxes.........................................................47
Additional Information About the Trust......................................52


Financial Information About the Trust

Independent Auditors' Report................................................53
Financial Statements........................................................54


Appendix A: Description of Securities Ratings..............................A-1
Appendix B: Municipal Bond Industry Classifications........................B-1







                                    58
                                      2
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 ABOUT THE TRUST
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Additional Information About the Trust's Investment Policies and Risks

The investment objective and the principal investment policies of the Trust
are described in the Prospectus.  This Statement of Additional Information
contains supplemental information about those policies and the types of
securities that the Trust's investment manager, Centennial Asset Management
Corporation (referred to as the "Manager"), will select for the Trust.
Additional explanations are also provided about the strategies the Trust may
use to try to achieve its objective.

The Trust's Investment Policies. The composition of the Trust's portfolio and
the techniques and strategies that the Trust's Manager uses in selecting
portfolio securities will vary over time.  The Trust is not required to use
all of the investment techniques and strategies described below at all times
in seeking its goal.  It may use some of the special investment techniques
and strategies at some times or not at all.

      The Trust will not make investments with the objective of seeking
capital growth.  However, the value of the securities held by the Trust may
be affected by changes in general interest rates.  Because the current value
of debt securities varies inversely with changes in prevailing interest
rates, if interest rates increase after a security is purchased, that
security would normally decline in value.  Conversely, if interest rates
decrease after a security is purchased, its value would rise.  However, those
fluctuations in value will not generally result in realized gains or losses
to the Trust since the Trust does not usually intend to dispose of securities
prior to their maturity.  A debt security held to maturity is redeemable by
its issuer at full principal value plus accrued interest.

      The Trust may sell securities prior to their maturity, to attempt to
take advantage of short-term market variations, or because of a revised
credit evaluation of the issuer or other considerations. The Trust may also
do so to generate cash to satisfy redemptions of Trust shares.  In such
cases, the Trust may realize a capital gain or loss on the security.

      There are variations in the credit quality of municipal securities,
both within a particular rating classification and between classifications.
These variations depend on numerous factors. The yields of municipal
securities depend on a number of factors, including general conditions in the
municipal securities market, the size of a particular offering, the maturity
of the obligation and rating (if any) of the issue. These factors are
discussed in greater detail below.

Municipal Securities.  The types of municipal securities in which the Trust
may invest are described in the Prospectus under "About the Trust's
Investments." Municipal securities are generally classified as general
obligation bonds, revenue bonds and notes. A discussion of the general
characteristics of these principal types of municipal securities follows
below.







      |X|   Municipal Bonds.  We have classified municipal securities having
a maturity (when the security is issued) of more than one year as "municipal
bonds." The principal classifications of long-term municipal bonds are
"general obligation" and "revenue" (including "industrial development")
bonds. They may have fixed, variable or floating rates of interest, as
described below.

      Some bonds may be "callable," allowing the issuer to redeem them before
their maturity date. To protect bondholders, callable bonds may be issued
with provisions that prevent them from being called for a period of time.
Typically, that is 5 to 10 years from the issuance date.  When interest rates
decline, if the call protection on a bond has expired, it is more likely that
the issuer may call the bond.  If that occurs, the Trust might have to
reinvest the proceeds of the called bond in bonds that pay a lower rate of
return.

      General Obligation Bonds.  The basic security behind general obligation
bonds is the issuer's pledge of its full faith and credit and taxing power,
if any, for the repayment of principal and the payment of interest. Issuers
of general obligation bonds include states, counties, cities, towns, and
regional districts.  The proceeds of these obligations are used to fund a
wide range of public projects, including construction or improvement of
schools, highways and roads, and water and sewer systems. The rate of taxes
that can be levied for the payment of debt service on these bonds may be
limited or unlimited. Additionally, there may be limits as to the rate or
amount of special assessments that can be levied to meet these obligations.

      Revenue Bonds.  The principal security for a revenue bond is generally
the net revenues derived from a particular facility, group of facilities, or,
in some cases, the proceeds of a special excise tax or other specific revenue
source.  Revenue bonds are issued to finance a wide variety of capital
projects. Examples include electric, gas, water and sewer systems; highways,
bridges, and tunnels; port and airport facilities; colleges and universities;
and hospitals.

      Although the principal security for these types of bonds may vary from
bond to bond, many provide additional security in the form of a debt service
reserve fund that may be used to make principal and interest payments on the
issuer's obligations.  Housing finance authorities have a wide range of
security, including partially or fully insured mortgages, rent subsidized
and/or collateralized mortgages, and/or the net revenues from housing or
other public projects.  Some authorities provide further security in the form
of a state's ability (without obligation) to make up deficiencies in the debt
service reserve fund.

      Industrial Development Bonds.  Industrial development bonds are
considered municipal bonds if the interest paid is exempt from federal income
tax. They are issued by or on behalf of public authorities to raise money to
finance various privately operated facilities for business and manufacturing,
housing, sports, and pollution control.  These bonds may also be used to
finance public facilities such as airports, mass transit systems, ports, and
parking.  The payment of the principal and interest on such bonds is
dependent solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property financed by
the bond as security for those payments.







      Private Activity Municipal Securities.  The Tax Reform Act of 1986 (the
"Tax Reform Act") reorganized, as well as amended, the rules governing tax
exemption for interest on certain types of municipal securities.  The Tax
Reform Act generally did not change the tax treatment of bonds issued in
order to finance governmental operations.  Thus, interest on general
obligation bonds issued by or on behalf of state or local governments, the
proceeds of which are used to finance the operations of such governments,
continues to be tax-exempt.  However, the Tax Reform Act limited the use of
tax-exempt bonds for non-governmental (private) purposes.  More stringent
restrictions were placed on the use of proceeds of such bonds.  Interest on
certain private activity bonds is taxable under the revised rules.  There is
an exception for "qualified" tax-exempt private activity bonds, for example,
exempt facility bonds including certain industrial development bonds,
qualified mortgage bonds, qualified Section 501(c)(3) bonds, and qualified
student loan bonds.  Normally, the Trust will not invest more than 20% of its
total assets in private activity municipal securities or other taxable
investments.

      In addition, limitations as to the amount of private activity bonds
which each state may issue were revised downward by the Tax Reform Act, which
will reduce the supply of such bonds.  The value of the Trust's portfolio
could be affected if there is a reduction in the availability of such bonds.

      Interest on certain private activity bonds issued after August 7, 1986,
which continues to be tax-exempt, will be treated as a tax preference item
subject to the alternative minimum tax (discussed below) to which certain
taxpayers are subject. The Trust may hold municipal securities the interest
on which (and thus a proportionate share of the exempt-interest dividends
paid by the Trust) will be subject to the federal alternative minimum tax on
individuals and corporations.

      The federal alternative minimum tax is designed to ensure that all
persons who receive income pay some tax, even if their regular tax is zero.
This is accomplished in part by including in taxable income certain tax
preference items that are used to calculate alternative minimum taxable
income.  The Tax Reform Act made tax-exempt interest from certain private
activity bonds a tax preference item for purposes of the alternative minimum
tax on individuals and corporations.  Any exempt-interest dividend paid by a
regulated investment company will be treated as interest on a specific
private activity bond to the extent of the proportionate relationship the
interest the investment company receives on such bonds bears to all its
exempt interest dividends.

      In addition, corporate taxpayers subject to the alternative minimum tax
may, under some circumstances, have to include exempt-interest dividends in
calculating their alternative minimum taxable income. That could occur in
situations where the "adjusted current earnings" of the corporation exceeds
its alternative minimum taxable income.

      To determine whether a municipal security is treated as a taxable
private activity bond, it is subject to a test for: (a) a trade or business
use and security interest, or (b) a private loan restriction. Under the trade
or business use and security interest test, an obligation is a private
activity bond if: (i) more than 10% of the bond proceeds are used for private
business purposes and (ii) 10% or more of the payment of principal or
interest on the issue is directly or indirectly derived from such private use
or is secured by the privately used property or the payments related to the
use of the property. For certain types of uses, a 5% threshold is substituted
for this 10% threshold.

      The term "private business use" means any direct or indirect use in a
trade or business carried on by an individual or entity other than a state or
municipal governmental unit.  Under the private loan restriction, the amount
of bond proceeds that may be used to make private loans is limited to the
lesser of 5% or $5.0 million of the proceeds.  Thus, certain issues of
municipal securities could lose their tax-exempt status retroactively if the
issuer fails to meet certain requirements as to the expenditure of the
proceeds of that issue or the use of the bond-financed facility. The Trust
makes no independent investigation of the users of such bonds or their use of
proceeds of the bonds.  If the Trust should hold a bond that loses its
tax-exempt status retroactively, there might be an adjustment to the
tax-exempt income previously distributed to shareholders.

      Additionally, a private activity bond that would otherwise be a
qualified tax-exempt private activity bond will not, under Internal Revenue
Code Section 147(a), be a qualified bond for any period during which it is
held by a person who is a "substantial user" of the facilities or by a
"related person" of such a substantial user.  This "substantial user"
provision applies primarily to exempt facility bonds, including industrial
development bonds. The Trust may invest in industrial development bonds and
other private activity bonds. Therefore, the Trust may not be an appropriate
investment for entities which are "substantial users" (or persons related to
"substantial users") of such exempt facilities. Those entities and persons
should consult their tax advisers before purchasing shares of the Trust.

      A "substantial user" of such facilities is defined generally as a
"non-exempt person who regularly uses part of a facility" financed from the
proceeds of exempt facility bonds.  Generally, an individual will not be a
"related person" under the Internal Revenue Code unless such individual or
the individual's immediate family (spouse, brothers, sisters and immediate
descendants) own directly or indirectly in the aggregate more than 50% in
value of the equity of a corporation or partnership which is a "substantial
user" of a facility financed from the proceeds of exempt facility bonds.

      |X|   Municipal Notes.  Municipal securities having a maturity (when
the security is issued) of one year or less are generally known as municipal
notes. Municipal notes generally are used to provide for short-term working
capital needs. Some of the types of municipal notes the Trust can invest in
are described below.

      Tax Anticipation Notes.  These are issued to finance working capital
needs of municipalities.  Generally, they are issued in anticipation of
various seasonal tax revenue, such as income, sales, use or other business
taxes, and are payable from these specific future taxes.


o     Revenue Anticipation Notes.  These are notes issued in expectation of
receipt of other types of revenue, such as federal revenues available under
federal revenue-sharing programs.









o     Bond Anticipation Notes.  Bond anticipation notes are issued to provide
interim financing until long-term financing can be arranged.  The long-term
bonds that are issued typically also provide the money for the repayment of
the notes.

o     Construction Loan Notes.  These are sold to provide project
construction financing until permanent financing can be secured.  After
successful completion and acceptance of the project, it may receive permanent
financing through public agencies, such as the Federal Housing Administration.


      |X|   Tax Exempt Commercial Paper.  This type of short-term obligation
(usually having a maturity of 270 days or less) is issued by a municipality
to meet current working capital needs.

      |X|   Municipal Lease Obligations.  The Trust's investments in
municipal lease obligations may be through certificates of participation that
are offered to investors by public entities. Municipal leases may take the
form of a lease or an installment purchase contract issued by a state or
local government authority to obtain funds to acquire a wide variety of
equipment and facilities.

      Some municipal lease securities may be deemed to be "illiquid"
securities. Their purchase by the Trust would be limited as described below
in "Illiquid Securities." From time to time the Trust may invest more than 5%
of its net assets in municipal lease obligations that the Manager has
determined to be liquid under guidelines set by the Board of Trustees. Those
guidelines require the Manager to evaluate:
            the frequency of trades and price quotations for such securities;
            the number of dealers or other potential buyers willing to
                purchase or sell such securities;
            the availability of market-makers; and
            the nature of the trades for such securities.

      Municipal leases have special risk considerations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation is
ordinarily backed by the municipality's covenant to budget for, appropriate
and make the payments due under the lease obligation.  However, certain lease
obligations contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease or installment purchase payments
in future years unless money is appropriated for that purpose on a yearly
basis.  While the obligation might be secured by the lease, it might be
difficult to dispose of that property in case of a default.

      Projects financed with certificates of participation generally are not
subject to state constitutional debt limitations or other statutory
requirements that may apply to other municipal securities.  Payments by the
public entity on the obligation underlying the certificates are derived from
available revenue sources.  That revenue might be diverted to the funding of
other municipal service projects.  Payments of interest and/or principal with
respect to the certificates are not guaranteed and do not constitute an
obligation of a state or any of its political subdivisions.

      In addition to the risk of "non-appropriation," municipal lease
securities do not have as highly liquid a market as conventional municipal
bonds. Municipal leases, like other municipal debt obligations, are subject
to the risk of non-payment of interest or repayment of principal by the
issuer. The ability of issuers of municipal leases to make timely lease
payments may be adversely affected in general economic downturns and as
relative governmental cost burdens are reallocated among federal, state and
local governmental units.  A default in payment of income would result in a
reduction of income to the Trust. It could also result in a reduction in the
value of the municipal lease and that, as well as a default in repayment of
principal, could result in a decrease in the net asset value of the Trust.
While the Trust holds such securities, the Manager will also evaluate the
likelihood of a continuing market for these securities and their credit
quality.

Ratings of Securities - Portfolio Quality, Maturity and Diversification.
Under Rule 2a-7 of the Investment Company Act of 1940 ("Investment Company
Act"), the Trust uses the amortized cost method to value its portfolio
securities to determine the Trust's net asset value per share.  Rule 2a-7
imposes requirements for the maturity, quality and diversification of the
securities which the Trust buys.  The Trust may purchase only those
securities that the Manager, under procedures approved by the Board of
Trustees, has determined have minimal credit risk and, as such, are "eligible
securities."

      Quality.  Eligible securities are securities that have received a
rating in one of the two highest short-term rating categories by a rating
organization.  Rating organizations are designated by the SEC.  Eligible
securities may be "first tier" or "second tier" securities.  First tier
securities are those that have received a rating in the highest category for
short term debt obligations by at least two rating organizations.  If only
one rating organization has rated the security, it must be rated in the
highest category for that rating organization.  U.S. government securities
and securities issued by a registered money market mutual fund are also first
tier securities.

      The Trust may also buy second tier "conduit securities."  These
eligible securities are securities rated by rating organizations but are not
first tier securities.  Conduit securities are municipal securities such as
industrial development or revenue bonds issued to finance non-government
projects.  The payment of the principal and interest on a conduit security is
not the obligation of the municipal issuer, but is the obligation of another
person who is ultimately responsible for the payment of principal and
interest, such as the user of the facility.  The Trust may not invest more
than 5% of its total assets in second tier conduit securities.

      The Trust may also buy unrated securities that the Manager determines
are comparable in quality to a first or second tier security by applying
certain criteria established by the Board to determine its creditworthiness.
These criteria require a high quality short term or long-term rating
(depending on the security) from a rating organization.  Unrated securities
the Trust may buy include asset backed securities and securities subject to
"demand features" or "guarantees."

      The Trust may purchase a security subject to a guarantee if the
guarantee is an eligible security or a first tier security. The trust may
also purchase a security subject to a "conditional" demand feature if the
demand feature is an eligible security and the Manager has decided that the
conditional demand feature meets the requirements imposed by Rule 2a-7.

      If a security's rating is downgraded, the Manager or the Board of
Trustees may have to reassess the security's credit risk.  If a security is
downgraded, the Manager or the Board of Trustees will promptly reassess
whether the security continues to present minimal credit risk, reassess the
status of the security as an "eligible security," and take such actions as is
appropriate. If the Trust disposes of the security within five days of the
Manager learning of the downgrade, the Manager will provide the Board of
Trustees with subsequent notice of such downgrade.  If a security is in
default, or ceases to be an eligible security, or is determined no longer to
present minimal credit risks, the Board of Trustees must determine whether it
would be in the best interests of the Trust to dispose of the security.

|X|   Diversification.  With respect to 75% of its total assets, the Trust
cannot invest more than 5% of its total assets in securities issued by one
issuer.  It cannot invest more than 5% of its total assets in securities of
one issuer unless the security is a first tier security.  The Trust also
cannot invest more than 1% of its total assets or $1.0 million, whichever is
greater, in second tier securities of one issuer.  For diversification
purposes, the Trust is considered to have purchased the security underlying a
repurchase agreement if the repurchase agreement is fully collateralized.
For a refunded security, the Trust is considered to have the U.S. government
securities underlying the refunded security.  For conduit securities, the
Trust considers the issuer to be the person ultimately responsible for
payment of the obligation.  If the Trust buys an asset backed security, the
issuer of the security is deemed to be the "special purpose" entity which
issued the security.  A special purpose entity is an entity which is
organized solely for the purpose of issuing asset backed securities.  If the
asset backed securities issued by the special purpose entity include the
obligations of another person or another special purpose entity and those
obligations amount to 10% or more of the asset backed securities the Trust
buys, that other person or entity is considered to be the issuer of a pro
rata percentage of the asset backed security.

      The Trust may buy a security subject to a demand feature or guarantee.
In this case, with respect to 75% of its total assets, the Trust may not
invest more than 10% of its total assets in securities issued by or subject
to demand features or guarantees issued by the same issuer.  If the demand
feature or guarantee is a second tier security, the Trust may not invest more
than 5% of its total assets in securities subject to demand features or
guarantees from the same issuer.  And, the Trust may not invest more than 10%
of its total assets in securities issued by or subject to demand features or
guarantees from the same issuer.  However, if the demand feature or guarantee
is issued by a person who is a non-controlled person, the Trust does not have
to limit its investments to no more than 10% of its total assets in
securities issued by or subject to demand features or guarantees from the
same issuer.

      Maturity.  The Trust must maintain a dollar-weighted average portfolio
maturity of not more than 90 days, and the maturity of any single security
must not be in excess the maximum permitted maturity under Rule 2a-7 (or any
other applicable rule) which is currently 397 days from the date of
purchase.  The Trust also may buy adjustable and floating rate securities,
enter into repurchase agreements and lend portfolio securities.  Rule 2a-7
defines how the maturities of these securities are determined.
      Demand Features and Guarantees.  Demand features and guarantees and
some of their uses are described in the Prospectus.  The Trust also uses
demand features and guarantees to satisfy the maturity, quality and
diversifications requirements described above.  The Trust considers the
person which issues the demand feature as the person to whom the Trust will
look for payment.  An unconditional demand feature is considered a guarantee
and the Trust looks to the person making the guarantee for payment of the
obligation of the underlying security.

      When the Trust buys municipal securities, it may obtain a demand
feature from the seller to repurchase the securities that entitles the Trust
to achieve same day settlement from the repurchaser and to receive an
exercise price equal to the amortized cost of the underlying security plus
accrued interest, if any, at the time of exercise.  Another type of demand
feature purchased in conjunction with a Municipal Security enables the Trust
to sell the underlying security within a specified period of time at a fixed
exercise price.  The Trust may pay for demand features either separately in
cash or by paying a higher price for the securities acquired subject to the
demand features.  The Trust will enter into these transactions only with
banks and dealers which, in the Manager's opinion, present minimal credit
risks.  The Trust's purchases of demand features are subject to the
provisions of Rule 2a-7 under the Investment Company Act because the Trust
uses the amortized cost method to value its portfolio securities.

      The Trust's ability to exercise a demand feature or guarantee will
depend on the ability of the bank or dealer to pay for the securities if the
demand feature or guarantee is exercised.  If the bank or dealer should
default on its obligation, the Trust might not be able to recover all or a
portion of any loss sustained from having to sell the security elsewhere.
Demand features and guarantees are not transferable by the Trust, and
therefore terminate if the Trust sells the underlying security to a third
party.  The Trust intends to enter into these arrangements to facilitate
portfolio liquidity, although such arrangements may enable the Trust to sell
a security at a pre-arranged price which may be higher than the prevailing
market price at the time the demand feature or guarantee is exercised. Any
considerations paid by the Trust for the demand feature (which increases the
cost of the security and reduces the yield otherwise available for the
security) will be reflected on the Trust's books as unrealized depreciation
while the demand feature or guarantee is held, and a realized gain or loss
when demand feature is exercised or expires.

Other Investment Strategies

Floating Rate/Variable Rate Obligations.  The Trust may invest in instruments
with floating or variable interest rates.  The interest rate on a floating
rate obligation is based on a stated prevailing market rate, such as a bank's
prime rate, the 90-day U.S. Treasury Bill rate, the rate of return on
commercial paper or bank certificates of deposit, or some other standard.
The rate on the investment is adjusted automatically each time the market
rate is adjusted.  The interest rate on a variable rate obligation is also
based on a stated prevailing market rate but is adjusted automatically at a
specified interval.  Some variable rate or floating rate obligations in which
the Trust may invest have a demand feature entitling the holder to demand
payment of an amount approximately equal to the amortized cost of the
instrument or the principal amount of the instrument plus accrued interest at
any time, or at specified intervals not exceeding the maximum time permitted
under Rule 2a-7 (which is currently 397 days).  These notes may or may not be
backed by bank letters of credit.

      Variable rate demand notes may include master demand notes, which are
obligations that permit the Trust to invest fluctuating amounts in a note.
The amount may change daily without penalty, pursuant to direct arrangements
between the Trust, as the note purchaser, and the issuer of the note.  The
interest rates on these notes fluctuate from time to time.  The issuer of
this type of obligation normally has a corresponding right in its discretion,
after a given period, to prepay the outstanding principal amount of the
obligation plus accrued interest.  The issuer must give a specified number of
days' notice to the holders of those obligations.  Generally, the changes in
the interest rate on those securities reduce the fluctuation in their market
value.  As interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than that for fixed-rate obligations
having the same maturity.

      Because these types of obligations are direct lending arrangements
between the note purchaser and issuer of the note, these instruments
generally will not be traded.  Generally, there is no established secondary
market for these types of obligations, although they are redeemable from the
issuer at face value.  Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Trust's right
to redeem them is dependent on the ability of the note issuer to pay
principal and interest on demand.  These types of obligations usually are not
rated by credit rating agencies.  The Trust may invest in obligations that
are not rated only if the Manager determines at the time of investment that
they are Eligible Securities.  The Manager, on behalf of the Trust, will
monitor the creditworthiness of the issuers of the floating and variable rate
obligations in the Trust's portfolio on an ongoing basis.  There is no limit
on the amount of the Trust's assets that may be invested in floating rate and
variable rate obligations that meet the requirements of Rule 2a-7.

When-Issued and Delayed Delivery Transactions.  As stated in the Prospectus,
the Trust may invest in municipal securities on a "when-issued" or "delayed
delivery" basis. Payment for and delivery of the securities shall not exceed
120 days from the date the offer is accepted.  The purchase price and yield
are fixed at the time the buyer enters into the commitment.  During the
period between the time of commitment and settlement, no payment is made by
the Trust to the issuer and no interest accrues to the Trust from this
investment.  However, the Trust intends to be as fully invested as possible
and will not invest in when-issued securities if its income or net asset
value will be materially adversely affected.  At the time the Trust makes the
commitment to purchase a municipal security on a when-issued basis, it will
record the transaction on its books and reflect the value of the security in
determining its net asset value.  It will also segregate cash or other liquid
high quality municipal securities equal in value to the commitment for the
when-issued securities. While when-issued securities may be sold prior to
settlement date, the Trust intends to acquire the securities upon settlement
unless a prior sale appears desirable for investment reasons.  There is a
risk that the yield available in the market when delivery occurs may be
higher than the yield on the security acquired.

Repurchase Agreements.  In a repurchase transaction, the Trust acquires a
security from, and simultaneously resells it to, an approved vendor (a U.S.
commercial bank or the U.S. branch of a foreign bank having total domestic
assets of at least $1 billion or a broker-dealer with a net capital of at
least $50 million and which has been designated a primary dealer in
government securities). They must meet credit requirements set by the Manager
from time to time.  The resale price exceeds the purchase price by an amount
that reflects an agreed-upon interest rate effective for the period during
which the repurchase agreement is in effect.  The majority of these
transactions run from day to day, and delivery pursuant to the resale
typically will occur within one to five days of the purchase.  Repurchase
agreements are considered "loans" under the Investment Company Act
collateralized by the underlying security.  The Trust's repurchase agreements
require that at all times while the repurchase agreement is in effect, the
value of the collateral must equal or exceed the repurchase price to fully
collateralize the repayment obligation.  Additionally, the Manager will
monitor the vendor's creditworthiness to confirm that the vendor is
financially sound and will continuously monitor the collateral's value.

      Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Trust, along with other affiliated entities managed by the
Manager, may transfer uninvested cash balances into one or more joint
repurchase accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities that are
pledged as collateral for repurchase agreements are held by a custodian bank
until the agreements mature. Each joint repurchase arrangement requires that
the market value of the collateral be sufficient to cover payments of
interest and principal; however, in the event of default by the other party
to the agreement, retention or sale of the collateral may be subject to legal
proceedings.

Bank Loan Participation Agreements.  The Fund may invest in bank loan
participation agreements, subject to the investment limitation set forth in
the Prospectus as to investments in illiquid securities.  Participation
agreements provide an undivided interest in a loan made by the bank issuing
the participation interest in the proportion that the buyer's investment
bears to the total principal amount of the loan.  Under this type of
arrangement, the issuing bank may have no obligation to the buyer other than
to pay principal and interest on the loan if and when received by the bank.
Thus, the Trust must look to the creditworthiness of the borrower, which is
obligated to make payments of principal and interest on the loan.  If the
borrower fails to pay scheduled principal or interest payments, the Trust may
experience a reduction in income.

Loans of Portfolio Securities.  To attempt to increase its income, the Trust
may lend its portfolio securities to qualified borrowers (other than in
repurchase transactions).  There are risks in connection with securities
lending. The Trust might experience a delay in receiving additional
collateral to secure a loan, or a delay in recovery of the loaned securities.
The Trust presently does not intend to lend securities; but if it does, these
loans cannot exceed 25% of the value of the Trust's total assets.  Income
from securities loans does not constitute exempt-interest income for the
purpose of paying tax-exempt dividends.

      The Trust must receive collateral for a loan.  Under current applicable
regulatory requirements (which are subject to change), on each business day
the loan collateral must be at least equal to the value of the loaned
securities.  It must consist of cash, bank letters of credit, securities of
the U.S. government or its agencies or instrumentalities, or other cash
equivalents in which the Trust is permitted to invest.  To be acceptable as
collateral, letters of credit must obligate a bank to pay amounts demanded by
the Trust if the demand meets the terms of the letter.  The terms of the
letter of credit and the issuing bank both must be satisfactory to the
Trust.

      When it lends securities, the Trust receives amounts equal to the
dividends or interest on the loaned securities.  It also receives one or more
of (a) negotiated loan fees, (b) interest on securities used as collateral,
and (c) interest on short-term debt securities purchased with the loan
collateral. Either type of interest may be shared with the borrower.  The
Trust may pay reasonable finder's, administrative or other fees in connection
with these loans.  The terms of the Trust's loans must meet applicable tests
under the Internal Revenue Code and must permit the Trust to reacquire loaned
securities on five days' notice or in time to vote on any important matter.


Special Risks of Investing Primarily in California Municipal Securities.
Because the Trust focuses its investments primarily on California municipal
securities, the value of its portfolio investments will be highly sensitive
to events affecting the fiscal stability of the State of California and its
municipalities, authorities and other instrumentalities that issue
securities.  The following information is a brief summary of factors
affecting the economy of the State of California and does not purport to be a
complete description of such factors.  Other factors will affect issuers.
The summary is based primarily upon one or more publicly available offering
statements relating to debt offerings of California issuers, the latest of
which is dated June 5, 2003.  The Trust has not independently verified the
information.  The creditworthiness of obligations issued by local California
issuers may be unrelated to the creditworthiness of obligations issued by the
State of California, and there is no responsibility on the part of the State
of California to make payments on such local obligations.


      There have been a number of political developments, voter initiatives,
state constitutional amendments and legislation in California in recent years
that may affect the ability of the State government and municipal governments
to pay interest and repay principal on the securities they have issued.  In
addition, in recent years, the State of California has derived a significant
portion of its revenues from personal income and sales taxes.  Because the
amount collected from these taxes is particularly sensitive to economic
conditions, the State's revenues have been volatile.

      It is not possible to predict the future impact of the legislation and
economic considerations described below on the long-term ability of the State
of California or California municipal issuers to pay interest or repay
principal on their obligations.  In part that is because of possible
inconsistencies in the terms of the various laws and Propositions and the
applicability of other statutes to these issues.  The budgets of California
counties and local governments may be significantly affected by state budget
decisions beyond their control.  The information below about these conditions
is only a brief summary, based upon information the Trust has drawn from
sources that it believes are reliable.

      Changes to the State Constitution.  Changes to the state constitution
in recent years have raised general concerns about the ability of the State
and municipal governments in California to obtain sufficient revenues to pay
their bond obligations.  In 1978, California voters approved Proposition 13,
an amendment to the state constitution.  The Proposition added a new section
to the constitution that limits ad valorem taxes on real property and
restricts the ability of local taxing entities to increase real property
taxes.  However, legislation enacted after Proposition 13 provided help to
California municipal issuers to raise revenue to pay their bond obligations.
During the severe recession California experienced from 1991 to 1993, the
State legislature eliminated significant components of its aid to local
governments.  The State has since increased aid to local governments and
reduced certain mandates for local services.  Whether legislation will be
enacted in the future to either increase or reduce the redistribution of
State revenues to local governments, or to make them less dependent on State
budget decisions, cannot be predicted.  Even if legislation increasing such
redistribution is passed, it cannot be predicted whether in every instance it
will provide sufficient revenue for local municipal issuers to pay their bond
obligations.

      Another amendment to the state constitution may also have an adverse
impact on state and municipal bond obligations.  That amendment restricts the
state government from spending amounts in excess of appropriation limits
imposed on each state and local government entity.  If revenues exceed the
appropriation limit, those revenues must be returned, in the form of a
revision in the tax rates or fee schedules.

      Voter Initiatives.  California voters have approved a number of
initiatives that affect the ability of the state and municipalities to
finance their bond obligations.  In 1988, California voters approved
Proposition 98, which requires a minimum level of funding for public schools
and community colleges.  In 1986, voters approved Proposition 62, which had a
number of effects. One requires that any special tax imposed by a local
government must be approved by a two-thirds vote of the electorate.  In 1995,
the California Supreme Court upheld the constitutionality of that
Proposition.  That created uncertainty as to the legality of certain local
taxes enacted by non-charter cities without voter approval. It is not
possible to predict the eventual impact of that decision.

      In 1996, California voters approved Proposition 218.  That initiative
applied the provisions of Proposition 62 to all government entities,
including cities having charters.  It requires that all taxes for general
purposes be approved by a simple majority of the popular vote, and that taxes
for special purposes must be approved by a two-thirds majority vote.
Proposition 218 also limits the authority of local governments to impose
property-related assessments, fees and charges.  It requires that such
assessments be limited to the special benefit conferred and prohibits their
use for general governmental services.  The Proposition enables voters to use
their initiative powers to reduce or repeal previously-authorized taxes,
assessments, fees and charges.

      Effect of other State Laws on Bond Obligations.  Some of the tax-exempt
securities that the Trust can invest in may be obligations payable solely
from the revenues of a specific institution or secured by specific
properties.  These are subject to provisions of California law that could
adversely affect the holders of such obligations.  For example, the revenues
of California health care institutions may be adversely affected by State
laws, and California law limits the remedies of a creditor secured by a
mortgage or deed of trust on real property.  Debt obligations payable solely
from revenues of health care institutions may also be insured by the State
but no guarantee exists that adequate reserve funds will be appropriated by
the State legislature for such purpose.


|X|   General Economic Conditions in the State.  The California economy and
general financial condition affect the ability of the State and local
government to raise and redistribute revenues to assist issuers of municipal
securities to make timely payments on their obligations.  California is the
most populous state in the nation with a total population estimated at nearly
35 million.  California has a diverse economy, with major employment in the
agriculture, manufacturing, high technology, services, trade, entertainment
and construction sectors.

      A significant downturn in U.S. stock market prices could adversely
affect California's economy by reducing household spending and business
investment, particularly in the important high technology sector.  Moreover,
a large and increasing share of the State's General Fund revenue in the form
of income and capital gains taxes is directly related to, and would be
adversely affected by, a significant downturn in the performance of the stock
markets.

      Since early 2001, the State has faced severe financial challenges,
which may continue for several years.  The State experienced an economic
recession in 2001 and a sluggish recovery in 2002 (with greatest impacts in
the high technology, internet, and telecommunications sectors, especially in
Northern California); weakened exports; and most particularly, large stock
market declines (with attendant declines in stock option values and capital
gains realizations). These adverse fiscal and economic factors have resulted
in a serious erosion of General Fund tax revenues. The three largest General
Fund tax sources (personal income, sales and use, and corporate taxes)
totaled $72.8 billion in fiscal year 2000-01, were an estimated $59.7 billion
in 2001-02, and, as of August 2, 2003, are projected to be $61.2 billion in
2002-03 and $64.1 billion in 2003-04. The bulk of the revenue declines from
2000-01 through 2001-02 were from personal income taxes, principally from
reduced capital gains and stock option revenue of approximately $9 billion.


      It is impossible to predict the time, magnitude or location of a major
earthquake or its effect on the California economy.  In January 1994, a major
earthquake struck the Los Angeles area, causing significant damage in a four
county area.  The possibility exists that another such earthquake could
create a major dislocation of the California economy and significantly affect
State and local governmental budgets.

      Following a severe recession beginning in 1990, the State's financial
condition improved markedly during the fiscal years starting in 1995-96, due
to a combination of better than expected revenues, a slowdown in growth of
social welfare programs, and continued spending restraint based on actions
taken in earlier years.  The State's cash position also improved, and the
State's General Fund took in substantially greater tax revenue that was
initially planned when the budgets were enacted for the fiscal years ended in
1996, 1997, 1998, 1999 and 2000 ($2.2 billion, $1.6 billion, $2.4 billion,
1.7 billion and $8.2 billion, respectively).


      2000 Budget Act.  The 2000 Budget Act for fiscal year 2000-01 assumed
General Fund revenues and transfers of $73.9 billion, a 3.8 percent increase
over 1999-00 estimates. This budget appropriated $78.8 billion from the
General Fund, a 17.3 percent increase over 1999-00, and reflected the use of
$5.5 billion from the Special Fund for Economic Uncertainties (the "SFEU")
available from surpluses in the prior year.  About $7.0 billion of the
increased spending in 2000-01 was for one-time expenditures and investments.
Final 2000-01 expenditures were $78.0 billion, about $2.0 billion below the
2001 Budget Act estimates.  The June 30, 2001 SFEU balance, the budget
reserve, was approximately $1.3 billion. This figure recognized the
disbursement prior to June 30, 2001 of about $6.2 billion from the General
Fund to make loans for the Department of Water Resources ("DWR") power supply
program (see "Repayment of Energy Loans" below).









      2001 Budget Act.  The 2001 Budget Act's spending plan for fiscal year
2001-02 included General Fund expenditures of $78.8 billion, a reduction of
$1.3 billion from the prior year. This was to be accomplished without serious
program cuts because such a large part of the 2000 Budget Act comprised
one-time expenditures. The spending plan utilized more than half of the
budget surplus as of June 30, 2001, but still left a projected balance in the
SFEU at June 30, 2002, of $2.6 billion. The 2001 Budget Act assumed that,
during the course of the fiscal year, the $6.2 billion advanced by the
General Fund to the DWR for power purchases would be repaid with interest.
The final estimate of 2001-02 revenues and expenditures showed an
unprecedented drop in revenues compared to the prior year.  The final
estimate for the three largest tax sources was $59.7 billion, a drop of over
$13 billion from 2000-01, the vast bulk of which was attributable to reduced
personal income taxes from stock option and capital gains activity.  This
revenue shortfall and the delay of issuance of the DWR power revenue bonds
past June 30, 2002, resulted in a substantial budgetary deficit and cash flow
difficulties.  The Department of Finance estimates that, on a budgetary
basis, the General Fund had a $2.1 billion deficit at June 30, 2002.

      2002 Budget Act.  The 2002 Budget Act initially forecast $79.2 billion
in General Fund revenues and transfers and $76.7 billion in expenditures in
fiscal year 2002-03.  The 2002 Budget Act addressed a $23.6 billion gap
between expenditures and resources through a combination of program
reductions, loans, fund shifts, accelerations and transfers, and modest tax
changes.  These revenue estimates proved to be substantially overstated, as
expected economic recovery did not occur, among other factors.  Based on
revised estimates in the 2003-04 May Revision, revenues and transfers in
2002-03 were projected to be $70.8 billion, with expenditures of $78.1
billion.

      In December 2002, the Governor released proposals for immediate action
to reduce the budget gap by about $10.2 billion, of which $3.4 billion would
be effected in 2002-03 and the balance in 2003-04.  The Legislature passed
budget adjustment legislation in March and April of 2003, totaling about $6.9
billion in spending reductions, deferrals and funding transfers ($3.3 billion
for 2002-03 and $3.6 billion for 2003-04). The largest part of the reductions
(including a $1.1 billion deferral into the 2003-04 fiscal year) are for K-12
education funding. The totals reflect the enactment of legislation in May
2003 permitting the sale of about $1.9 billion of pension obligation bonds to
fund the State's 2003-04 payments to the Public Employees' Retirement System.

      2003 Budget Act.  The 2003-04 Governor's Budget for fiscal year 2003-04
projected a significant downward revision in State revenues as a result of
the longer than expected economic recovery.  The 2003-04 Governor's Budget
projected revenues from the three largest tax sources to be about $61.7
billion in 2002-03, more than $6 billion lower than projected in the 2002
Budget Act.  The decline was mainly due to weak personal income tax revenues,
which dropped by nearly 26 percent in 2001-02 and are expected to decline by
another 0.5 percent in 2002-03.  As a result, the Administration projected a
$34.6 billion budget shortfall for 2002-03 and 2003-04.
      The Governor released the May Revision to the 2003-04 Governor's Budget
in May 2003. This May Revision projected that while some corrective action
was taken in March and April 2003, the pre-corrective action budget gap has
increased to about $38.2 billion, primarily due to the cancellation of the
sale of a tobacco securitization bond, lost opportunities for savings with
the passage of time, and increased caseload in certain health and
correctional programs.

      The Governor signed the State's budget for fiscal year 2003-04 (the
"2003 Budget Act") in August 2003.  The 2003 Budget Act forecasts $73.4
billion in General Fund revenues and transfers and $71.1 billion in
expenditures.  The 2003 Budget Act addresses its potential $39.4 billion gap
between expenditures and resources through a combination of program
reductions ($17.6 billion), deficit financing ($10.7 billion), new revenues
($4.7 billion), funding shifts ($4.4 billion) and loans and other borrowing
($2.3 billion).  Despite these cuts, the Legislative Analysts Office is
predicting that, assuming all of the savings in the current budget plan are
achieved, 2004-05 will conclude with a cumulative year-end budget shortfall
of approximately $8 billion absent further corrective actions.  Consequently,
further cuts may be required in the budget for fiscal year 2004-05.

      Future Budgets. It cannot be predicted what actions will be taken in
the future by the State Legislature and the Governor to deal with changing
State revenues and expenditures. The State budget will be affected by
national and State economic conditions and other factors.

State Indebtedness
- ------------------

      General Obligation Bonds. As of May 1, 2003, the State had
approximately $26.5 billion of its general obligation bonds outstanding.
General obligation bond authorizations in an aggregate amount of
approximately $29.6 billion remained unissued as of that date.

      Ratings. As of August 14, 2003, the State's general obligation bonds
were rated A3 by Moody's, BBB by Standard & Poor's, and A by Fitch Ratings.
In August 2003, Moody's lowered its rating to A3 from A2 and stated that its
ratings remain on a watchlist for possible further downgrade. In July 2003,
Standard and Poor's lowered its rating to BBB from A, citing the lack of
progress in adopting a fiscal 2004 budget and the gubernatorial recall
election as reasons for the downgrade. However, Standard and Poor's stated
that further credit deterioration in the short term is unlikely absent a
severe cash flow crisis.  Fitch's similarly lowered its rating to A from AA
citing financial pressure since 2001, reflecting in part recessionary
conditions and an unprecedented drop in personal income tax receipts which it
expects to continue in 2003-04.  It is not presently possible to determine
whether, or the extent to which, Moody's, S&P or Fitch Ratings will change
such ratings in the future. It should be noted that the creditworthiness of
obligations issued by local California issuers may be unrelated to the
creditworthiness of obligations issued by the State, and there is no
obligation on the part of the State to make payment on such local obligations
in the event of default.

      Cash Flow Borrowings.  As part of its cash management program, the
State has regularly issued short-term obligations to meet cash flow needs.
The State did not issue any revenue anticipation notes for the 2000-01 fiscal
year.  The State issued $5.7 billion of 2001-02 Revenue Anticipation Notes in
October 2001 that matured in June 2002.  To provide additional cash resources
necessary to pay the State's obligations at the end of June 2002 and into the
first few months of the 2002-03 fiscal year, in June 2002, the State issued
$7.5 billion of 2001-02 Revenue Anticipation Warrants with maturity dates in
October 2002, November 2002 and January 2003, all of which were repaid in
October and November 2002.  The State issued a total of $12.5 billion of
2002-03 Revenue Anticipation Notes in October and November 2002 that matured
in June 2003, to partially fund its cash flow needs in the 2002-03 fiscal
year, including repayment of the 2001-02 Revenue Anticipation Warrants.

      With insufficient cash resources to pay the debt service due, the State
Controller issued $11 billion of Revenue Anticipation Warrants in June 2003
to provide enough additional cash to pay the debt service due on the 2002
Revenue Anticipation Notes and to pay other State obligations coming due in
June 2003 and in the first months of the 2003-04 fiscal year.

      The original cash flow estimates for the 2002-03 fiscal year included a
number of assumptions which have been achieved, including the receipt of $6.6
billion from the sale of DWR power revenue bonds in November 2002 and $2.5
billion from the sale of tobacco litigation settlement payments in January
2003. (See "Repayment of Energy Loans" and "Tobacco Litigation" below.) The
following major factors, however, have resulted in the reduction of the cash
flow estimates as the year has progressed: (1) enactment by the Legislature
of mid-year budget reductions in lower amounts than requested by the
Governor, (2) cancellation of the second part of the planned sale of bonds
secured by tobacco litigation settlement payments, which would have produced
$2 billion of receipts for the General Fund in April 2003, and (3) higher
than expected expenditures for health and social services and correctional
programs due to higher caseloads/population. These negative factors were
partially offset by recognition of about $1.1 billion of additional internal
borrowable resources.

      Repayment of Energy Loans.  The Department of Water Resources ("DWR")
borrowed money from the General Fund for DWR's power supply program between
January and June 2001.  DWR has issued approximately $11.25 billion in
revenue bonds in several series and in the fall of 2002 used the net proceeds
of the revenue bonds to repay outstanding loans from banks and commercial
lenders in the amount of approximately $3.5 billion and a loan from the
General Fund in the amount of $6.1 billion plus accrued interest of
approximately $500 million.  Issuance of the DWR revenue bonds had been
delayed since mid-2001 by a number of factors, including administrative and
legal challenges.

      The loans from the General Fund and the banks and commercial lenders
financed DWR's power supply program costs during 2001 that exceeded DWR's
revenues from the sale of electricity.  The general purpose of the power
supply program was to provide to customers of the three major investor-owned
electric utilities in the State (the  "IOUs") the portion of their power not
provided by the IOUs.  The power supply program has become self-supporting
and no additional loans from the General Fund are authorized.  As of January
1, 2003, the DWR's authority to enter into new power purchase contracts
terminated, and the IOUs resumed responsibility for obtaining electricity for
their customers

      The primary source of money to pay debt service on the DWR revenue
bonds will be revenues derived from customers of the IOUs resulting from
charges set by the California Public Utilities Commission. The DWR revenue
bonds are not a debt or liability of the State and do not directly,
indirectly or contingently obligate the State to levy or to pledge any form
of taxation whatever therefore or to make any appropriation for their
payment.

Tobacco Litigation
- ------------------

      In 1998, the State (together with 45 other states and certain U.S.
jurisdictions) signed a settlement agreement with the four major cigarette
manufacturers. The State agreed to drop its lawsuit and not to sue in the
future for monetary damages. Tobacco manufacturers agreed to billions of
dollars in payments and restrictions on marketing activities. Under the
settlement, the companies agreed to pay California governments approximately
$25 billion (subject to adjustments) over a period of 25 years.  Additional
payments continue in perpetuity, with current projections of $1.2 billion in
2025, steadily increasing each year to $1.6 billion in 2045. Under a separate
Memorandum of Understanding, half of the money will be paid to the State and
half to local governments (all counties and the cities of San Diego, Los
Angeles, San Francisco and San Jose).
During fiscal year 2001-02, the General Fund received $478 million in
settlement payments.  Of that amount, $76 million was deposited in the
General Fund and $402 million was deposited into a special fund to pay
certain health care costs.  The 2003 May Revision forecasts payments to the
State totaling $474 million in 2002-03 and $174 million in 2003-04, which
will be deposited in a special fund to pay certain healthcare costs.

      The State planned an issuance of revenue bonds to generate $4.5 billion
for the General Fund during the 2002-03 fiscal year secured by the tobacco
settlement revenues received by the State beginning in the 2003-04 fiscal
year.  An initial sale producing $2.5 billion in revenue was completed in
January 2003.  The second part of the sale, originally scheduled in April
2003, was cancelled because of uncertainties in the market for the bonds.


|X|   Financial Problems of Local Governments.  It is not possible to predict
the future impact of the voter initiatives. State constitutional amendments,
legislation or economic considerations described above, or of such
initiatives, amendments or legislation that may be enacted in the future, on
the long-term ability of California municipal issuers to pay interest or
repay principal on their obligations.  There is no assurance that any
California issuer will make full or timely payments of principal or interest
or remain solvent.  For example, in December 1994, Orange County, California,
together with its pooled investment funds, which included investment funds
from other local governments, filed for bankruptcy.  The County has since
emerged from bankruptcy.  Los Angeles County, the nation's largest county, in
the recent past has also experienced financial difficulty and its financial
condition will continue to be affected by the large number of County
residents who are dependent on government services and by a structural
deficit in its health department.  Moreover, California's improved economy
has caused Los Angeles County, and other local governments, to come under
increased pressure from public employee unions for improved compensation and
retirement benefits.


      A program to offset a portion of the vehicle license fees (VLF) paid by
vehicle owners to local governments was established in 1998.  The amount of
this offset has increased from 25 percent in 1999 to the current level of
67.5 percent.  This offset was expected to provide tax relief of $3.85
billion in 2002-03 and $3.916 billion in 2003-04.  Since 1999, the General
Fund has backfilled the offset so that the tax relief did not result in a
revenue loss to local governments.  However, as the amount paid by taxpayers
has been reduced the amount backfilled by the General Fund has increased.
State law requires the reduction of the VLF offsets and restoration of the
VLF "during any period in which insufficient moneys are available to be
transferred from the General Fund to fully fund the offsets."  In June 2003,
the State restored the VLF.  This action reduces General Fund expenditures by
$4.18 billion in fiscal year 2003-04 and results in a reduction of
approximately $825 million to local governments because of the time needed
for the Department of Motor Vehicles to phase out the offset from vehicle
registration bills.  The State has committed to repay this $825 million to
local governments in 3 years.


Investment Restrictions

      |X|   What Are "Fundamental Policies?"  Fundamental policies are those
policies that the Trust has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Trust's outstanding voting
securities.  Under the Investment Company Act, a "majority" vote is defined
as the vote of the holders of the lesser of:
o     67% or more of the shares present or represented by proxy at a
         shareholder meeting, if the holders of more than 50% of the
         outstanding shares are present or represented by proxy, or
o     more than 50% of the outstanding shares.

      The Trust's investment objective is a fundamental policy. Other
policies described in the Prospectus or this Statement of Additional
Information are "fundamental" only if they are identified as such.  The
Trust's Board of Trustees can change non-fundamental policies without
shareholder approval.  However, significant changes to investment policies
will be described in supplements or updates to the Prospectus or this
Statement of Additional Information, as appropriate. The Trust's most
significant investment policies are described in the Prospectus.

|X|   Does the Trust Have Additional Fundamental Policies?  The following
investment restrictions are fundamental policies of the Trust.

o     The Trust cannot make loans, except that the Trust, may purchase debt
         securities described in "Investment Objective and Policies," and
         other securities substantially similar thereto, and repurchase
         agreements; and the Trust may lend its portfolio securities as
         described in its investment policy stated above;

o     The Trust cannot borrow money in excess of 10% of the value of its
         total assets or make any investment when borrowings exceed 5% of the
         value of its total assets; it may borrow only as a temporary measure
         for extraordinary or emergency purposes; no assets of the Trust may
         be pledged, mortgaged or assigned to secure a debt;

o     The Trust cannot invest in commodities or commodity contracts, or
         invest in interests in oil, gas, or other mineral exploration or
         development programs;

o     The Trust cannot invest in real estate; however, the Trust may purchase
         Municipal Bonds or Notes secured by interests in real estate;

o     The Trust cannot make short sales of securities or purchase securities
         on margin, except for short-term credits necessary for the clearance
         of purchases and sales of portfolio securities;

o     The Trust cannot invest in or hold securities of any issuer if those
         officers and Trustees of the Trust or the Manager individually
         owning more than 0.5% of the securities of such issuer together own
         more than 5% of the securities of such issuer;

o     The Trust cannot underwrite securities of other companies;

o     The Trust cannot invest in securities of other investment companies
         except as they may be acquired as part of a merger, consolidation or
         acquisition of assets; or

o     The Trust cannot issue "senior securities," but this does not prohibit
         certain investment activities for which assets of the Trust are
         designated as segregated, or margin, collateral or escrow
         arrangements are established, to cover the related obligations.

o     As a fundamental policy, The Trust cannot invest in any debt instrument
         having a maturity in excess of the time period provided for in Rule
         2a-7 of the Investment Company Act, or any other applicable rule, or
         in the case of a debt instrument subject to a repurchase agreement
         or called for redemption, unless purchased subject to a demand
         feature which may not exceed the time period provided for in Rule
         2a-7, or any other applicable rule.

o     The Trust cannot invest 25% or more of its total assets in any one
         industry; however, for the purposes of this restriction, municipal
         securities and U.S. government obligations are not considered to be
         part of any single industry.

      For purposes of the investment restrictions listed above, the
identification of the "issuer" of a municipal security depends on the terms
and conditions of the security.  When the assets and revenues of an agency,
authority, instrumentality or other political subdivision are separate from
those of the government creating the subdivision and the security is backed
only by the assets and revenues of the subdivision, such subdivision would be
deemed to be the sole issuer.  Similarly, in the case of an industrial
development bond, if that bond is backed only by the assets and revenues of
the nongovernmental user, then such nongovernmental user would be deemed to
be the sole issuer.  However, if in either case the creating government or
some other entity guarantees the security, such guarantee would be considered
a separate security and would be treated as an issue of such government or
other agency. Conduit securities are deemed to be issued by the person
ultimately responsible for payments of interest and principal on the security.

      In applying the restrictions as to the Trust's investments, the Manager
will consider a nongovernmental user of facilities financed by industrial
development bonds as being in a particular industry, despite the fact that
there is no industry concentration limitation as to municipal securities the
Trust may own.  Although this application of the restriction is not
technically a fundamental policy of the Trust, it will not be changed without
shareholder approval. Should any such change be made, the Prospectus and/or
Statement of Additional Information will be supplemented to reflect the
change.

      Unless the Prospectus or this Statement of Additional Information
states that a percentage restriction applies on an ongoing basis, it applies
only at the time the Trust makes an investment. The Trust need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Trust.

      For purposes of the Trust's policy not to concentrate its investments
in securities of issuers, the Trust has adopted the industry classifications
set forth in Appendix B to this Statement of Additional Information.  This is
not a fundamental policy.

How the Trust is Managed

Organization and History.  The Trust is an open-end, diversified management
investment company organized as a Massachusetts business trust in 1989, with
an unlimited number of authorized shares of beneficial interest.

|X|   Classes  of  Shares.  The Trust  has a single  class of shares of stock.
While  that class has no  designation,  it is deemed to be the  equivalent  of
Class A for purposes of the shareholder  account  policies that apply to Class
A shares of the Oppenheimer funds.

      Shares of the Trust are freely transferable.  Each share has one vote
at shareholder meetings, with fractional shares voting proportionally on
matters submitted to a vote of shareholders.  There are no preemptive or
conversion rights and shares participate equally in the assets of the Trust
upon liquidation.

|X|   Meetings of Shareholders.  As a Massachusetts business trust, the Trust
is not required to hold, and does not plan to hold, regular annual meetings
of shareholders. The Trust will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.

      Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee.  The
Trustees will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of 10% of its
outstanding shares.  If the Trustees receive a request from at least 10
shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the
Trust's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense. The
shareholders making the request must have been shareholders for at least six
months and must hold shares of the Trust valued at $25,000 or more or
constituting at least 1% of the Trust's outstanding shares, whichever is
less. The Trustees may also take other action as permitted by the Investment
Company Act.

|X|   Shareholder and Trustee Liability.  The Declaration of Trust contains
an express disclaimer of shareholder or Trustee liability for the Trust's
obligations. It also provides for indemnification and reimbursement of
expenses out of the Trust's property for any shareholder held personally
liable for its obligations.  The Declaration of Trust also states that upon
request, the Trust shall assume the defense of any claim made against a
shareholder for any act or obligation of the Trust and shall satisfy any
judgment on that claim.  Massachusetts law permits a shareholder of a
business trust (such as the Trust) to be held personally liable as a
"partner" under certain circumstances. However, the risk that a Trust
shareholder will incur financial loss from being held liable as a "partner"
of the Trust is limited to the relatively remote circumstances in which the
Trust would be unable to meet its obligations.

      The Trust's contractual arrangements state that any person doing
business with the Trust (and each shareholder of the Trust) agrees under its
Declaration of Trust to look solely to the assets of the Trust for
satisfaction of any claim or demand that may arise out of any dealings with
the Trust. Additionally, the Trustees shall have no personal liability to any
such person, to the extent permitted by law.


Board of Trustees and Oversight Committees. The Trust is governed by a Board
of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Trust's activities, review its
performance, and review the actions of the Manager.  Although the Trust will
not normally hold annual meetings of its shareholders, it may hold
shareholder meetings from time to time on important matters, and shareholders
have the right to call a meeting to remove a Trustee or to take other action
described in the Declaration of Trust.

      The Board of Trustees has an Audit Committee and a Review Committee.
The members of the Audit Committee are Edward L. Cameron (Chairman), William
L. Armstrong, George C. Bowen and Robert J. Malone. The Audit Committee held
seven meetings during the fiscal year ended June 30, 2003. The Audit
Committee furnishes the Board with recommendations regarding the selection of
the Trust's independent auditors. Other main functions of the Audit Committee
include, but are not limited to: (i) reviewing the scope and results of
financial statement audits and the audit fees charged; (ii) reviewing reports
from the Trust's independent auditors regarding the Trust's internal
accounting procedures and controls;  (iii) review reports from the Manager's
Internal Audit Department; (iv) maintaining a separate line of communication
between the Trust's independent auditors and its Independent Trustees; and
(v) exercise all other functions outlined in the Audit Committee Charter,
including but not limited to reviewing the independence of the Trust's
independent auditors and the pre-approval of the performance by the Trust's
independent auditors of any non-audit service, including tax service, for the
Trust that is not prohibited by the Sarbanes-Oxley Act.

      The Audit Committee's functions include selecting and nominating, to
the full Board, nominees for election as Trustees, and selecting and
nominating Independent Trustees for election.  The Audit Committee may, but
need not, consider the advice and recommendation of the Manager and its
affiliates in selecting nominees. The full Board elects new trustees except
for those instances when a shareholder vote is required.

      To date, the Committee has been able to identify from its own resources
an ample number of qualified candidates.  Nonetheless, shareholders may
submit names of individuals, accompanied by complete and properly supported
resumes, for the Audit Committee's consideration by mailing such information
to the Committee in care of the Trust.  The Committee may consider such
persons at such time as it meets to consider possible nominees.  The
Committee, however, reserves sole discretion to determine the candidates to
present to the Board and/or shareholders when it meets for the purpose
considering potential nominees.

      The members of the Review Committee are Jon S. Fossel (Chairman),
Robert G. Avis, Richard Grabish, Sam Freedman, Beverly Hamilton and F.
William Marshall, Jr.  The Review Committee held six meetings during the
fiscal year ended June 30, 2003. Among other functions, the Review Committee
reviews reports and makes recommendations to the Board concerning the fees
paid to the Trust's transfer agent and the services provided to the Trust by
the transfer agent.  The Review Committee also reviews the Trust's investment
performance and policies and procedures adopted by the Trust to comply with
Investment Company Act and other applicable law.


Trustees and Officers of the Trust. Except for Mr. Grabish, each of the
Trustees is an "Independent Trustee," as defined in the Investment Company
Act. Mr. Grabish is an "Interested Trustee" because he is affiliated with the
Manager by virtue of his positions with A.G. Edwards & Sons, Inc. and its
affiliates (as described in his biography below), which is a partial owner of
the Manager's parent company.

      The Trust's Trustees and officers and their positions held with the
Trust and length of service in such position(s) and their principal
occupations and business affiliations during the past five years are listed
in the chart below. The information for the Trustees also includes the dollar
range of shares of the Trust as well as the aggregate dollar range of shares
of the Oppenheimer/Centennial funds beneficially owned by the Trustees. All
of the Trustees are also trustees or directors of the following
Oppenheimer/Centennial funds1 (referred to as "Board II Funds"):

Oppenheimer Cash Reserves                 Oppenheimer Select Managers
Oppenheimer Champion Income Fund          Oppenheimer Senior Floating Rate Fund
Oppenheimer Capital Income Fund           Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund               Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund       Oppenheimer Variable Account Funds
Oppenheimer Integrity Funds               Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund  Centennial America Fund, L. P.
                                          Centennial   California   Tax  Exempt
Oppenheimer Main Street Funds, Inc.       Trust

Oppenheimer Main Street Opportunity Fund  Centennial Government Trust
Oppenheimer Main Street Small Cap Fund    Centennial Money Market Trust
Oppenheimer Municipal Fund                Centennial New York Tax Exempt Trust
Oppenheimer Principal Protected Trust     Centennial Tax Exempt Trust
Oppenheimer Real Asset Fund


      Present or former  officers,  directors,  trustees  and  employees  (and
their immediate  family members) of the Trust, the Manager and its affiliates,
and retirement plans  established by them for their employees are permitted to
purchase  Class A shares of the Trust and the other  Oppenheimer  funds at net
asset  value  without  sales  charge.  The sales  charges on Class A shares is
waived for that group because of the  economies of sales  efforts  realized by
the Distributor.


      Messrs. Murphy, Masterson, Molleur, Vottiero, Weiss, Wixted and Zack,
and Mses. Bechtolt, Feld, Ives and Wolf who are officers of the Trust,
respectively hold the same offices with one or more of the other Board II
Funds as with the Trust. As of August 13, 2003, the Trustees and officers of
the Trust, as a group, owned of record or beneficially less than 1% of the
shares of the Trust.  The foregoing statement does not reflect ownership of
shares held of record by an employee benefit plan for employees of the
Manager, other than the shares beneficially owned under that plan by the
officers of the Trust listed above. In addition, each Independent Trustee,
and his family members, do not own securities of either the Manager,
Distributor or Sub-Distributor of the Board II Funds or any person directly
or indirectly controlling, controlled by or under common control with the
Manager, Distributor or Sub-Distributor.

|X|   Affiliated Transactions and Material Business Relationships. In 2001,
Mr. Swain surrendered for cancellation 60,000 options of Oppenheimer
Acquisition Company ("OAC") (OppenheimerFunds, Inc.'s parent holding
company), to MassMutual for a cash payment of $2,700,600.


      Mr. Swain has reported that he sold a residential property to Mr.
Freedman on October 23, 2001 for $1.2 million.  An independent appraisal of
the property supported the sale price.

      The address of each Trustee in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until
his or her resignation, retirement, death or removal.

- -------------------------------------------------------------------------------------
                                Independent Trustees
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name,              Principal  Occupation(s)  During  Past  5   Dollar     Aggregate
                                                                           Dollar
                                                                          Range of
                                                                           Shares
                                                                         Beneficially
                                                                          Owned in
                                                              Range of   any of the

Position(s) Held   Years / Other  Trusteeships/Directorships   Shares    Oppenheimer/Centennial
with the Trust,    Held by  Trustee / Number  of  Portfolios Beneficially   Funds
Length of Service, in Fund  Complex  Currently  Overseen  by  Owned in    Overseen
Age                Trustee                                    the Trust  by Trustee

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                                                             As of December 31, 2002

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

James C. Swain,    Formerly, Chief Executive Officer (until      $0         Over
Chairman and       August 27, 2002) of the Board II Funds,
Trustee, since     President and a director (until 1997) of
1990               Centennial Asset Management Corporation
Age: 69            (the "Manager") and Vice Chairman (until

                   January 2, 2002) of OppenheimerFunds,
                   Inc. (of which the Manager is a
                   wholly-owned investment advisory                       $100,000

                   subsidiary). Oversees 43 portfolios in
                   the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
William L.         Chairman of the following private             $0       $50,001-

Armstrong,         mortgage banking companies: Cherry Creek
Vice-Chairman and  Mortgage Company (since 1991),
Trustee since 2001 Centennial State Mortgage Company (since
Age: 66            1994), The El Paso Mortgage Company
                   (since 1993), Transland Financial
                   Services, Inc. (since 1997); Chairman of
                   the following private companies: Great
                   Frontier Insurance (insurance agency)
                   (since 1995), Ambassador Media
                   Corporation and Broadway Ventures (since
                   1984); a director of the following
                   public companies: Helmerich & Payne,
                   Inc. (oil and gas drilling/production
                   company) (since 1992) and UNUMProvident
                   (insurance company) (since 1991). Mr.
                   Armstrong is also a Director/Trustee of
                   Campus Crusade for Christ and the
                   Bradley Foundation. Formerly a director
                   of the following: Storage Technology
                   Corporation (a publicly-held computer
                   equipment company) (1991-February 2003),
                   Frontier Real Estate, Inc. (residential                $100,000
                   real estate brokerage) (1994-1999), and
                   Frontier Title (title insurance agency)
                   (1995-June 1999); a U.S. Senator
                   (January 1979-January 1991). Oversees 43
                   portfolios in the OppenheimerFunds
                   complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Robert G. Avis,    Formerly, Director and President of A.G.
Trustee since 1990 Edwards Capital, Inc. (General Partner
Age: 72            of private equity funds) (until February

                   2001); Chairman, President and Chief
                   Executive Officer of A.G. Edwards
                   Capital, Inc. (until March 2000); Vice
                   Chairman and Director of A.G. Edwards,
                   Inc. and Vice Chairman of A.G. Edwards &
                   Sons, Inc. (its brokerage company             $0         Over
                   subsidiary) (until March 1999); Chairman               $100,000
                   of A.G. Edwards Trust Company and A.G.E.
                   Asset Management (investment advisor)
                   (until March 1999); and a Director
                   (until March 2000) of A.G. Edwards &
                   Sons and A.G. Edwards Trust Company.

                   Oversees 43 portfolios in the
                   OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

George C. Bowen,   Formerly (until April 1999) Mr. Bowen
Trustee since      held the following positions: Senior
1998               Vice President (since February 1992),
Age: 66            Treasurer (since July 1991) Assistant
                   Secretary and a director (since December
                   1991) of the Manager; Senior Vice
                   President (from September 1987) and
                   Treasurer (from March 1985) of
                   OppenheimerFunds, Inc; Vice President
                   (from June 1983) and Treasurer (since
                   March 1985) of OppenheimerFunds
                   Distributor, Inc. (a subsidiary of
                   OppenheimerFunds, Inc., of which the
                   Manager is an investment advisory
                   subsidiary); Vice President (since
                   October 1989) and Treasurer (since April
                   1986) of HarbourView Asset Management
                   Corporation (an investment advisory
                   subsidiary of OppenheimerFunds, Inc.);
                   President, Treasurer and a director
                   (June 1989-January 1990) of Centennial
                   Capital Corporation (a prior investment
                   advisory subsidiary of OppenheimerFunds,
                   Inc.); Vice President and Treasurer
                   (since August 1978) and Secretary (since
                   April 1981) of Shareholder Services,

                   Inc., and Vice President, Treasurer and       $0         Over
                   Secretary (since November 1989) of                     $100,000
                   Shareholder Financial Services, Inc.
                   (both are transfer agent subsidiaries of
                   OppenheimerFunds, Inc.); Assistant
                   Treasurer (since March 1998) of
                   Oppenheimer Acquisition Corp.

                   (OppenheimerFunds, Inc.'s parent holding
                   company); Treasurer (since November
                   1989) of Oppenheimer Partnership
                   Holdings, Inc. (a holding company
                   subsidiary of OppenheimerFunds, Inc.);
                   Vice President and Treasurer (since July
                   1996) of Oppenheimer Real Asset
                   Management, Inc. (an investment advisory
                   subsidiary of OppenheimerFunds, Inc.);
                   Chief Executive Officer and director
                   (since March 1996) of MultiSource
                   Services, Inc. (a broker-dealer
                   subsidiary of OppenheimerFunds, Inc.);
                   Treasurer (since October 1997) of
                   OppenheimerFunds International Ltd. and
                   Oppenheimer Millennium Funds plc
                   (offshore fund management subsidiaries
                   of OppenheimerFunds, Inc.). Oversees 43
                   portfolios in the OppenheimerFunds
                   complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Edward L.          A member of The Life Guard of Mount           $0       $50,001-
Cameron, Trustee   Vernon, George Washington's home (since
since 2001         June 2000). Formerly (March 2001 - May
Age: 64            2002) Director of Genetic ID, Inc. and

                   its subsidiaries (a privately held
                   biotech company); a partner with
                   PricewaterhouseCoopers LLP (from
                   1974-1999) (an accounting firm) and
                   Chairman (from 1994-1998), Price
                   Waterhouse LLP Global Investment
                   Management Industry Services Group.                    $100,000

                   Oversees 43 portfolios in the
                   OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Jon S. Fossel,     Chairman and Director (since 1998) of         $0         Over
Trustee since 1990 Rocky Mountain Elk Foundation (a
Age: 61            not-for-profit foundation); and a

                   director (since October 1999) of P.R.
                   Pharmaceuticals (a privately held
                   company) and UNUMProvident (an insurance
                   company) (since June 1, 2002). Formerly
                   Chairman and a director (until October
                   1996) and President and Chief Executive
                   Officer (until October 1995) of
                   OppenheimerFunds, Inc.; President, Chief
                   Executive Officer and a director of
                   Oppenheimer Acquisition Corp.,
                   Shareholder Services Inc. and                          $100,000
                   Shareholder Financial Services, Inc.

                   (until October 1995). Oversees 43

                   portfolios in the OppenheimerFunds
                   complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Sam Freedman,      Director of Colorado Uplift (a                $0         Over
Trustee since 1996 non-profit charity) (since September
Age: 62            1984). A trustee or director of other

                   Oppenheimer funds. Formerly (until
                   October 1994) Mr. Freedman held several
                   positions in subsidiary or affiliated
                   companies of OppenheimerFunds, Inc.

                   Oversees 43 portfolios in the                          $100,000
                   OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Beverly L.         Trustee (since 1996) of MassMutual            $0      $10,001-$50,000
Hamilton, Trustee  Institutional Funds and of MML Series
since 2002         Investment Fund (open-end investment
Age: 56            companies); Director of MML Services

                   (since April 1987) and America Funds
                   Emerging Markets Growth Fund (since

                   October 1991) (both are investment
                   companies), The California Endowment (a
                   philanthropy organization) (since April
                   2002), and Community Hospital of
                   Monterey Peninsula, (since February
                   2002); a trustee (since February 2000)
                   of Monterey International Studies (an
                   educational organization), and an
                   advisor to Unilever (Holland)'s pension
                   fund and to Credit Suisse First Boston's
                   Sprout venture capital unit. Mrs.
                   Hamilton also is a member of the
                   investment committees of the Rockefeller
                   Foundation, the University of Michigan
                   and Hartford Hospital. Formerly,
                   President (February 1991-April 2000)
                   ARCO Investment Management Company.
                   Oversees 44 portfolios in the
                   OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Robert J. Malone,  Director (since 2001) of Jones                $0         Over
Trustee since 2002 Knowledge, Inc. (a privately held
Age: 58            company), U.S. Exploration, Inc., (since
                   1997), Colorado UpLIFT (a non-profit
                   organization) (since 1986) and a trustee
                   of the Gallagher Family Foundation
                   (non-profit organization) (since 2000).
                   Formerly, Chairman of U.S. Bank (a
                   subsidiary of U.S. Bancorp and formerly
                   Colorado National Bank,) (July
                   1996-April 1, 1999) and a director of                  $100,000
                   Commercial Assets, Inc. (a REIT)
                   (1993-2000). Oversees 44 portfolios in
                   the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

F. William         Trustee (since 1996) of MassMutual
Marshall, Jr.,     Institutional Funds and of MML Series
Trustee since 2001 Investment Fund (open-end investment
Age: 61            companies); Chairman of the Board (since
                   2003), Trustee and Chairman of the
                   investment committee (since May 1987)
                   for the Worcester Polytech Institute;
                   President and Treasurer (since January
                   1999) of the SIS Fund (a private not for
                   profit charitable fund); Trustee (since
                   1995) of the Springfield Library and
                   Museum Association; Trustee (since 1996)
                   of the Community Music School of
                   Springfield. Formerly, member of the                     Over
                   investment committee of the Community         $0       $100,000
                   Foundation of Western Massachusetts
                   (1998 - 2003); Chairman (January
                   1999-July 1999) of SIS & Family Bank,
                   F.S.B. (formerly SIS Bank); President,
                   Chief Executive Officer and Director
                   (May 1993-December 1998) of SIS
                   Bankcorp, Inc. and SIS Bank (formerly
                   Springfield Institution for Savings) and
                   Executive Vice President (January
                   1999-July 1999) of Peoples Heritage
                   Financial Group, Inc. Oversees 43
                   portfolios in the OppenheimerFunds
                   complex.

- -------------------------------------------------------------------------------------









      The address of Mr. Grabish in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Mr. Grabish serves for an indefinite term, until
his resignation, retirement, death or removal.


                              Interested Trustee

- ---------------------------------------------------------------------------------
Name,           Principal Occupation(s) During Past 5      Dollar     Aggregate
                                                                       Dollar
                                                                      Range of
                                                                     lyShares
                                                                     Beneficially

Position(s)                                                           Owned in
Held with the                                              Range of  any of the
Trust,                                                     Shares    Oppenheimer/Centennial
Length of       Years / Other Trusteeships/Directorships   Beneficial   Funds
Service,        Held by Trustee / Number of Portfolios in  Owned in   Overseen
Age             Fund Complex Currently Overseen by Trustee the Trust by Trustee

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
                                                            As of December 31,

                                                                   2002

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard F.      Senior Vice President, Assistant Director     $0        Over
Grabish,        of Sales and Marketing (since March                   $100,000
Trustee since   1997), and Manager of Private Client
2001            Services (since June 1985) for A.G.
Age: 54         Edwards & Sons, Inc. (broker/dealer and
                investment firm). Chairman and Chief
                Executive Officer (since March 2001) of
                A.G. Edwards Trust Company; Director
                (since March 1988) of A.G. Edwards &
                Sons, Inc. Formerly (until March 1987)
                President and Vice Chairman of A.G.
                Edwards Trust Company. Oversees 6
                portfolios in the OppenheimerFunds
                complex.
- ---------------------------------------------------------------------------------









     The address of the officers in the chart below is as follows: Messrs.
Molleur, Murphy, and Zack and Ms. Feld, 498 Seventh Avenue, New York, NY
10018, Messrs. Carbuto, Masterson, Vottiero, and Wixted and Mses. Bechtolt
and Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each officer serves
for an annual term or until his or her earlier resignation, death or removal.


- -------------------------------------------------------------------------------------
                               Officers of the Trust
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Name,                          Principal Occupation(s) During Past 5 Years
Position(s) Held with the
Trust,
Length of Service,
Age

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

John V. Murphy,                Director (since November 2001) of the Manager;
President                      Chairman, Chief Executive Officer and director
since October 2001             (since June 2001) and President (since September
Age: 54                        2000) of OppenheimerFunds, Inc.; President and a
                               trustee or director of other Oppenheimer funds;
                               President and a director (since July 2001) of
                               Oppenheimer Acquisition Corp. and of Oppenheimer
                               Partnership Holdings, Inc.; a director (since
                               November 2001) of OppenheimerFunds Distributor,
                               Inc.; Chairman and a director (since July 2001) of
                               Shareholder Services, Inc. and of Shareholder
                               Financial Services, Inc.; President and a director
                               (since July 2001) of OppenheimerFunds Legacy Program
                               (a charitable trust program established by
                               OppenheimerFunds, Inc.); a director of the following
                               investment advisory subsidiaries of
                               OppenheimerFunds, Inc.: OFI Institutional Asset
                               Management, Inc. (since November 2001), HarbourView
                               Asset Management Corporation and OFI Private
                               Investments, Inc. (since July 2002); President
                               (since November 1, 2001) and a director (since July
                               2001) of Oppenheimer Real Asset Management, Inc.; a
                               director (since November 2001) of Trinity Investment
                               Management Corp. and Tremont Advisers, Inc.
                               (investment advisory affiliates of OppenheimerFunds,
                               Inc.); Executive Vice President (since February
                               1997) of Massachusetts Mutual Life Insurance Company
                               (OppenheimerFunds, Inc.'s parent company); a
                               director (since June 1995) of DLB Acquisition
                               Corporation (a holding company that owns shares of
                               David L. Babson & Company, Inc.); formerly Chief
                               Operating Officer (September 2000-June 2001) of
                               OppenheimerFunds, Inc.; President and trustee
                               (November 1999-November 2001) of MML Series
                               Investment Fund and MassMutual Institutional Funds
                               (open-end investment companies); a director
                               (September 1999-August 2000) of C.M. Life Insurance
                               Company; President, Chief Executive Officer and
                               director (September 1999-August 2000) of  MML Bay
                               State Life Insurance Company; a director (June
                               1989-June 1998) of Emerald Isle Bancorp and Hibernia
                               Savings Bank (wholly-owned subsidiary of Emerald
                               Isle Bancorp). An officer of 89 portfolios in the
                               OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Michael A. Carbuto,            Vice President (since May 1988) of OppenheimerFunds,
Vice President and Portfolio   Inc.; an officer of 3 portfolios in the
Manager                        OppenheimerFunds complex; formerly Vice President of
since June 1990                the Distributor (May 1988 - September 1999).

Age:  48

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Brian W. Wixted,               Senior Vice President and Treasurer (since March
Treasurer since April 1999     1999) of OppenheimerFunds, Inc.; Treasurer (since
Age: 43                        March 1999) of HarbourView Asset Management

                               Corporation, Shareholder Services, Inc., Oppenheimer
                               Real Asset Management Corporation, Shareholder
                               Financial Services, Inc., Oppenheimer Partnership
                               Holdings, Inc., OFI Private Investments, Inc. (since
                               March 2000), OppenheimerFunds International Ltd. and
                               Oppenheimer Millennium Funds plc (since May 2000),
                               offshore fund management subsidiaries of
                               OppenheimerFunds, Inc., and OFI Institutional Asset
                               Management, Inc. (since November 2000), an
                               investment advisory subsidiary of OppenheimerFunds,
                               Inc.; Treasurer and Chief Financial Officer (since
                               May 2000) of Oppenheimer Trust Company, a trust
                               company subsidiary of OppenheimerFunds, Inc.;
                               Assistant Treasurer (since March 1999) of
                               Oppenheimer Acquisition Corp. and OppenheimerFunds
                               Legacy Program (since April 2000); formerly
                               Principal and Chief Operating Officer (March
                               1995-March 1999), Bankers Trust Company-Mutual Fund
                               Services Division. An officer of 89 portfolios in
                               the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Robert G. Zack,                General Counsel (since November 2001) of the
Vice President & Secretary     Manager; Senior Vice President (since May 1985) and
since November 1, 2001         General Counsel (since February 2002) of
Age: 55                        OppenheimerFunds, Inc.; General Counsel and a
                               director (since November 2001) of OppenheimerFunds
                               Distributor, Inc.; Senior Vice President and General
                               Counsel (since November 2001) of HarbourView Asset
                               Management Corporation; Vice President and a
                               director (since November 2000) of Oppenheimer
                               Partnership Holdings, Inc.; Senior Vice President,
                               General Counsel and a director (since November 2001)
                               of Shareholder Services, Inc., Shareholder Financial
                               Services, Inc., OFI Private Investments, Inc.,
                               Oppenheimer Trust Company and OFI Institutional
                               Asset Management, Inc.; a director (since November
                               2001) of Oppenheimer Real Asset Management, Inc.;
                               Assistant Secretary and a director (since November
                               2001) of OppenheimerFunds International Ltd.; Vice
                               President (since November 2001) of OppenheimerFunds
                               Legacy Program; Secretary (since November 2001) of
                               Oppenheimer Acquisition Corp.; formerly Acting
                               General Counsel (November 2001-February 2002) and
                               Associate General Counsel (May 1981-October 2001) of
                               OppenheimerFunds, Inc.; Assistant Secretary of
                               Shareholder Services, Inc. (May 1985-November 2001),
                               Shareholder Financial Services, Inc. (November
                               1989-November 2001); OppenheimerFunds International
                               Ltd. and Oppenheimer Millennium Funds plc (October
                               1997-November 2001). An officer of 89 portfolios in
                               the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Philip Vottiero,               Vice President/Fund  Accounting of  OppenheimerFunds,
Assistant Treasurer            Inc.    (since    March    2002);    formerly    Vice
since August 27, 2002          President/Corporate  Accounting of  OppenheimerFunds,
Age: 40                        Inc.  (July  1999-March  2002)  prior to which he was
                               Chief  Financial   Officer  at  Sovlink   Corporation
                               (April  1996-June  1999). An officer of 90 portfolios
                               in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Connie Bechtolt,               Assistant Vice President of OppenheimerFunds, Inc.
Assistant Treasurer            (since September 1998); formerly Manager/Fund
since October 22, 2002         Accounting (September 1994-September 1998) of
Age: 40                        OppenheimerFunds, Inc. An officer of 89 portfolios

                               in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Philip T. Masterson,           Vice President and Assistant Counsel of
Assistant Secretary            OppenheimerFunds, Inc. (since July 1998); formerly,
since August 27, 2002          an associate with Davis, Graham, & Stubbs LLP
Age: 39                        (January 1997-June 1998). An officer of 89

                               portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Denis R. Molleur,              Vice President and Senior Counsel of the
Assistant Secretary            OppenheimerFunds, Inc.; (since July 1999); formerly
since November 1, 2001         a Vice President and Associate Counsel of
Age: 45                        OppenheimerFunds, Inc. (September 1995-July 1999).

                               An officer of 82 portfolios in the OppenheimerFunds
                               complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Katherine P. Feld,             Director, Vice President and Assistant Secretary
Assistant Secretary            (since June 1999) of the Manager; Vice President and
since November 1, 2001         Senior Counsel (since July 1999) of
Age: 45                        OppenheimerFunds, Inc.; Vice President (since June
                               1990) of OppenheimerFunds Distributor, Inc.; Vice
                               President (since 1997) of Oppenheimer Real Asset
                               Management, Inc.; formerly Vice President and
                               Associate Counsel of OppenheimerFunds, Inc. (June
                               1990-July 1999). An officer of 89 portfolios in the
                               OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Kathleen T. Ives,              Vice President and Assistant Counsel (since June
Assistant Secretary            1998) of OppenheimerFunds, Inc.; Vice President
since November 1, 2001         (since 1999) of OppenheimerFunds Distributor, Inc.;
Age: 37                        Vice President and Assistant Secretary (since 1999)

                               of Shareholder Services, Inc.; Assistant Secretary
                               (since December 2001) of OppenheimerFunds Legacy
                               Program and Shareholder Financial Services, Inc.;
                               and formerly Assistant Vice President and Assistant
                               Counsel of OppenheimerFunds, Inc. (August 1997-June
                               1998). An officer of 89 portfolios in the
                               OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

                                        Aggregate        Total Compensation
|X|   Remuneration of Trustees.
The officers of the Trust are
affiliated with the Manager and
receive no salary or fee from
the Trust. The Trustees of the
Trust received the compensation
shown below from the Trust with
respect to the Trust's fiscal
year ended June 30, 2003.   The
compensation from all of the
Board II Funds (including the
Trust) represents compensation
received for serving as a
managing general partner,
director or trustee and member
of a committee (if applicable)
of the boards of those funds
during the calendar year 2002
(there were 41 funds at the end
of 2002).
                                                         From Trust and Fund
  Trustee    Name    and    Other     Compensation         Complex Paid to
  Position(s) (as applicable)          from Trust1        Trustee/Director*
                                                                          -

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

 James C. Swain                           $799                $177,996
  Chairman   of  the   Board   of
Trustees

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

William L. Armstrong
  Vice Chairman of the Board of
  Trustees and                            $432                 $92,076
  Audit Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Robert G. Avis                            $432                 $92,199
  Review Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

George Bowen                              $432                 $91,124
 Audit Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Edward L. Cameron                         $485                 $99,743
  Audit Committee Chairman

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Jon. S. Fossel                            $485                 $94,590
  Review Committee Chairman

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Sam Freedman                              $432                 $92,199
  Review Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Richard F. Grabish2                      $1,125                $9,0133
   Review Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Beverly Hamilton4                         $4325               $113,6596
   Review Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Robert J. Malone4                         $4327                $58,326
   Audit Committee Member

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

F. William Marshall, Jr.                  $432                $138,1248
  Review Committee Member

- ------------------------------------------------------------------------------

Effective  July 1, 2002,  C. Howard.  Kast and Robert M.  Kirchner  retired as
Trustees  from the Board II Funds.  For the calendar  year ended  December 31,
2002,  Mr. Kast  received  $41,451 and Mr.  Kirchner  received  $38,001  total
compensation  from all of the  Oppenheimer  funds  for  which  they  served as
Trustee.
1.    Aggregate   Compensation   from  Trust   includes   fees  and   deferred
   compensation, if any, for a Trustee.
2.    Mr. Grabish serves only as a Trustee for the six Centennial Trusts.
3.    Compensation  for  Mr.  Grabish  for  service  as a  Trustee  as well as
   service  on the  Review  Committee  is paid only by  Centennial  Government
   Trust,  Centennial  California  Tax Exempt Trust,  Centennial  Money Market
   Trust,  Centennial  New York Tax Exempt Trust,  Centennial Tax Exempt Trust
   and Centennial  America Fund,  L.P.  (total of six funds).  Mr. Grabish was
   appointed to the Review  Committee  beginning  February  24,  2003.  Had he
   served on the  Review  Committee  for the 2002  calendar  year,  his "Total
   Compensation From Trust and Fund Complex" would have been higher.
4.    Mrs.  Hamilton and Mr.  Malone were  elected as  Trustees,  Directors or
   Managing  General  Partners  of the Board II Funds  with the  exception  of
   Oppenheimer  Senior  Floating  Rate Fund for which  they  currently  do not
   serve as Trustees  effective June 1, 2002.  Compensation for Mrs.  Hamilton
   and Mr.  Malone was paid by all the Board II Funds,  with the  exception of
   Oppenheimer  Senior  Floating  Rate  (total of 40  Oppenheimer  funds as of
   12/31/02).
5.    Includes $432 deferred under Deferred Compensation Plan described below.
6.    Includes  $55,333  compensation  (of  which  100% was  deferred  under a
   deferred  compensation plan) paid to Mrs. Hamilton for serving as a trustee
   by two open-end investment  companies  (MassMutual  Institutional Funds and
   MML  Series  Investment  Fund)  the  investment  adviser  for  which is the
   indirect parent company of OppenheimerFunds,  Inc.  OppenheimerFunds,  Inc.
   also  serves as the  Sub-Advisor  to the  MassMutual  International  Equity
   Fund, a series of MassMutual Institutional Funds.
7.    Includes $432 deferred under Deferred Compensation Plan described below.
8.    Includes  $47,000  compensation  paid to Mr.  Marshall  for serving as a
   trustee by two  open-end  investment  companies  (MassMutual  Institutional
   Funds and MML Series  Investment Fund) the investment  adviser for which is
   the indirect  parent company of  OppenheimerFunds,  Inc.  OppenheimerFunds,
   Inc. also serves as the Sub-Advisor to the MassMutual  International Equity
   Fund, a series of MassMutual Institutional Funds.
   *For  purposes  of  this  section  only,   "Fund   Complex"   includes  the
   Oppenheimer   funds,   MassMutual   Institutional   Funds  and  MML  Series
   Investment  Fund in accordance  with the  instructions  for Form N-1A.  The
   Manager does not  consider  MassMutual  Institutional  Funds and MML Series
   Investment Fund to be part of the  OppenheimerFunds  "Fund Complex" as that
   term may be otherwise interpreted.

|X|   Deferred Compensation Plan for Trustees.  The Trustees have adopted a
Deferred Compensation Plan for disinterested Trustees that enables them to
elect to defer receipt of all or a portion of the annual fees they are
entitled to receive from the Trust.  Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee.  The amount paid to the Trustee under this plan will be determined
based upon the performance of the selected funds.

      Deferral of fees of the Trustees under this plan will not materially
affect the Trust's assets, liabilities or net income per share.  This plan
will not obligate the Trust to retain the services of any Trustee or to pay
any particular level of compensation to any Trustee.  Pursuant to an Order
issued by the Securities and Exchange Commission, the Trust may invest in the
funds selected by any Trustee under this plan without shareholder approval
for the limited purpose of determining the value of the Trustees' deferred
fee accounts.

      |X|               Major Shareholders.  As of August 13, 2003 the only
person who owned of record or was known by the Trust to own beneficially 5%
or more of the Trust's outstanding retail shares was A.G. Edwards & Sons,
Inc. ("Edwards"), 1 North Jefferson Avenue, St. Louis, Missouri 63103, which
owned 152,136,774.870 shares of the Trust which was 99.45% of the outstanding
shares of the Trust on that date, for accounts of its customers none of whom
individually owned more than 5% of the outstanding shares.


The Manager.  The Manager, Centennial Asset Management Corporation, is
wholly-owned by OppenheimerFunds, Inc., which is a wholly-owned subsidiary of
Oppenheimer Acquisition Corp., a holding company controlled by Massachusetts
Mutual Life Insurance Company.

      The portfolio manager of the Trust is principally responsible for the
day-to-day management of the Trust's investment portfolio.  Other members of
the Manager's fixed-income portfolio department, particularly security
analysts, traders and other portfolio managers, have broad experience with
fixed-income securities.  They provide the Trust's portfolio manager with
research and support in managing the Trust's investments.


|X|   Code of Ethics.  The Manager and the Distributor have a Code of
Ethics.  It is designed to detect and prevent improper personal trading by
certain employees, including portfolio managers, that would compete with or
take advantage of the Trust's portfolio transactions.  Covered persons
include persons with knowledge of the investments and investment intentions
of the Trust and other funds advised by the Manager.  The Code of Ethics does
permit personnel subject to the Code to invest in securities, including
securities that may be purchased or held by the Trust, subject to a number of
restrictions and controls.  Compliance with the Code of Ethics is carefully
monitored and enforced by the Manager.  The Trust does not have a Code of
Ethics since it is a money market fund.


      |X|               The Investment Advisory Agreement.  The Manager
provides investment advisory and management services to the Trust under an
investment advisory agreement between the Manager and the Trust.  The Manager
selects securities for the Trust's portfolio and handles its day-to-day
business.  The agreement requires the Manager, at its expense, to provide the
Trust with adequate office space, facilities and equipment.  It also requires
the Manager to provide and supervise the activities of all administrative and
clerical personnel required to provide effective administration for the
Trust.  Those responsibilities include the compilation and maintenance of
records with respect to its operations, the preparation and filing of
specified reports, and composition of proxy materials and registration
statements for continuous public sale of shares of the Trust.

      Expenses not expressly assumed by the Manager under the investment
advisory agreement are paid by the Trust.  The investment advisory agreement
lists examples of expenses paid by the Trust.  The major categories relate to
interest, taxes, fees to unaffiliated Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain printing
and registration costs and non-recurring expenses, including litigation
costs.  The management fees paid by the Trust to the Manager are calculated
at the rates described in the Prospectus.

- ---------------------------------------------------------------------------------
  Fiscal Year    Management Fee Paid to Centennial Asset Management Corporation
  ending 6/30
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
      2001                                  $832,185
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
      2002                                  $821,435
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

      2003                                  $781,783

- ---------------------------------------------------------------------------------


      The Manager has undertaken that the total expenses of the Trust, in any
fiscal year of the Trust, exclusive of taxes, interest, brokerage commissions
(if any) and non-recurring expenses, including litigation, shall not exceed
0.80% of the average annual net assets of the Trust.  Additionally, effective
July 7, 2003, the Manager has voluntarily undertaken to waive receipt of its
management fees to the extent necessary so that the Trust may seek to
maintain a positive yield.  The payment of the management fee at the end of
any month will be reduced so that there will not be any accrued but unpaid
liability under those expense limitations.  Any assumption of the Trust's
expenses under either arrangement lowers the Trust's overall expense ratio
and increases its yield and total return during the time such expenses are
assumed.  The Manager reserves the right to vary the amount of expenses
assumed or eliminate the assumption of expenses altogether. For the fiscal
years ended June 30 2001, 2002 and 2003, the management fees payable by the
Trust would have been $776,093, $814,544 and $777,878 with the Manager's
voluntary expense assumption.  Those amounts reflect the effect of the
expense assumptions of $39,225, $6,891 and $3,905 for the fiscal years ended
June 30, 2001, 2002 and 2003, respectively.  The expense assumption of
$39,225 for the fiscal year ended June 30, 2001 included $16,035 that the
Manager reimbursed the Trust for the fiscal year ended June 30, 2000.


    The investment  advisory  agreement  states that in the absence of willful
misfeasance,  bad faith,  gross negligence in the performance of its duties or
reckless  disregard  of  its  obligations  and  duties  under  the  investment
advisory  agreement,  the Manager is not liable for any loss  resulting from a
good faith  error or  omission  on its part with  respect to any of its duties
under the agreement.

         |X|      Annual Approval of Investment Advisory Agreement. Each
year, the Board of Trustees, including a majority of the Independent
Trustees, is required to approve the renewal of the investment advisory
agreement. The Investment Company Act requires that the Board request and
evaluate and the Manager provide such information as may be reasonably
necessary to evaluate the terms of the investment advisory agreement.  The
Board employs an independent consultant to prepare a report that provides
such information as the Board requests for this purpose.

      The Board also receives information about the 12b-1 distribution fees
the Trust pays.  These distribution fees are reviewed and approved at a
different time of the year.

      The Board reviewed the foregoing information in arriving at its
decision to renew the investment advisory agreement.  Among other factors,
the Board considered:
o     The nature, cost, and quality of the services provided to the Trust and
         its shareholders;
o     The profitability of the Trust to the Manager;
o     The investment performance of the Trust in comparison to regular market
         indices
o     Economies of scale that may be available to the Trust from the Manager;
o     Fees paid by other mutual funds for similar services;
o     The value and quality of any other benefits or services received by the
         Trust from its relationship with the Manager, and
o     The direct and indirect benefits the Manager received from its
         relationship with the Trust.  These included services provided by
         the Distributor and the Transfer Agent, and brokerage and soft
         dollar arrangements permissible under Section 28(e) of the
         Securities Exchange Act.

      The Board considered that the Manager must be able to pay and retain
high quality personnel at competitive rates to provide services to the
Trust.  The Board also considered that maintaining the financial viability of
the Manager is important so that the Manager will be able to continue to
provide quality services to the Trust and its shareholders in adverse times.
The Board also considered the investment performance of other mutual funds
advised by the Manager. The Board is aware that there are alternatives to the
use of the Manager.


      These matters were also considered by the Independent Trustees, meeting
separately from the full Board with experienced Counsel to the Independent
Trustees who assisted them in their deliberations.  The Independent Trustees'
Counsel is independent of the Manager within the meaning and intent of the
SEC Rules regarding the independence of counsel.


      After careful deliberation, the Board concluded that it was in the best
interest of shareholders to continue the investment advisory agreement for
another year. In arriving at a decision, the Board did not single out any one
factor or group of factors as being more important than other factors, but
considered all factors together.  The Board judged the terms and conditions
of the investment advisory agreement, including the investment advisory fee,
in light of all of the surrounding circumstances.


      |X|               The Distributor.  Under its General Distributor's
agreement with the Trust, Centennial Asset Management Corporation acts as the
Trust's principal underwriter and Distributor in the continuous public
offering of the Trust's shares.  The Distributor is not obligated to sell a
specific number of shares.  The Distributor bears the expenses normally
attributable to sales, including advertising and the cost of printing and
mailing prospectuses, other than those furnished to existing shareholders.
For other distribution expenses paid by the Trust, see the section entitled
"Service Plan" below. The Trust's Sub-Distributor is OppenheimerFunds
Distributor, Inc.

Portfolio Transactions.  Portfolio decisions are based upon recommendations
and judgment of the Manager subject to the overall authority of the Board of
Trustees.  Most purchases made by the Trust are principal transactions at net
prices, so the Trust incurs little or no brokerage costs. The Trust deals
directly with the selling or purchasing principal or market maker without
incurring charges for the services of a broker on its behalf unless the
Manager determines that a better price or execution may be obtained by using
the services of a broker.  Purchases of portfolio securities from
underwriters include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers include a spread between the bid and
asked prices.

      The Trust seeks to obtain prompt execution of orders at the most
favorable net price.  If broker/dealers are used for portfolio transactions,
transactions may be directed to broker/dealers for their execution and
research services.  The research services provided by a particular broker may
be useful only to one or more of the advisory accounts of the Manager and its
affiliates.  Investment research received for the commissions of those other
accounts may be useful both to the Trust and one or more of such other
accounts.  Investment research services may be supplied to the Manager by a
third party at the instance of a broker through which trades are placed.  It
may include information and analyses on particular companies and industries
as well as market or economic trends and portfolio strategy, receipt of
market quotations for portfolio evaluations, information systems, computer
hardware and similar products and services.  If a research service also
assists the Manager in a non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or component that
provides assistance to the Manager in the investment decision-making process
may be paid in commission dollars.

      The research services provided by brokers broaden the scope and
supplement the research activities of the Manager.  That research provides
additional views and comparisons for consideration, and helps the Manager
obtain market information for the valuation of securities held in the Trust's
portfolio or being considered for purchase.

      Subject to applicable rules covering the Manager's activities in this
area, sales of shares of the Trust and/or the other investment companies
managed by the Manager or distributed by the Distributor may also be
considered as a factor in the direction of transactions to dealers.  That
must be done in conformity with the price, execution and other considerations
and practices discussed above.  Those other investment companies may also
give similar consideration relating to the sale of the Trust's shares.  No
portfolio transactions will be handled by any securities dealer affiliated
with the Manager.

      The Trust may experience high portfolio turnover that may increase the
Trust's transaction costs.  However, since brokerage commissions, if any, are
small, high turnover does not have an appreciable adverse effect upon the
income of the Trust.







Service Plan

The Trust has adopted a Service Plan for the shares.  The plan has been
approved by a vote of the Board of Trustees, including a majority of the
Independent Trustees2, cast in person at a meeting called for the purpose of
voting on that plan.

      Under the plan, the Manager and the Distributor may make payments to
affiliates and, in their sole discretion, from time to time, may use their
own resources (at no direct cost to the Trust) to make payments to brokers,
dealers or other financial institutions for distribution and administrative
services they perform.  The Manager may use its profits from the advisory fee
it receives from the Trust.  In their sole discretion, the Distributor and
the Manager may increase or decrease the amount of payments they make from
their own resources to plan recipients.

      Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Trust's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose
of voting on continuing the plan.  A plan may be terminated at any time by
the vote of a majority of the Independent Trustees or by the vote of the
holders of a "majority" (as defined in the Investment Company Act) of the
outstanding shares of the Trust.

      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan.  An amendment to increase materially the
amount of payments to be made under a plan must be approved by shareholders.
The approval must be by a "majority" (as defined in the Investment Company
Act) of the shares.

      While the plan is in effect, the Treasurer of the Trust shall provide
separate written reports on the plan to the Board of Trustees at least
quarterly for its review.  The Reports shall detail the amount of all
payments made under the plan and the purpose for which the payments were
made. Those reports are subject to the review and approval of the Independent
Trustees.

      The plan states that while it is in effect, the selection and
nomination of those Trustees of the Trust who are not "interested persons" of
the Trust is committed to the discretion of the Independent Trustees.  This
does not prevent the involvement of others in the selection and nomination
process as long as the final decision as to selection or nomination is
approved by a majority of the Independent Trustees.

      Under the plan, no payment will be made to any recipient in any quarter
in which the aggregate net asset value of all Trust shares held by the
recipient for itself and its customers does not exceed a minimum amount, if
any, that may be set from time to time by a majority of the Independent
Trustees.  The Board of Trustees has set no minimum amount of assets to
qualify for payments under the plan.







      |X|   Service Plan Fees.  Under the service plan, the Distributor
currently uses the fees it receives from the Trust to pay brokers, dealers
and other financial institutions (they are referred to as "recipients") for
personal services and account maintenance services they provide for their
customers who hold shares.  The services include, among others, answering
customer inquiries about the Trust, assisting in establishing and maintaining
accounts in the Trust, making the Trust's investment plans available and
providing other services at the request of the Trust or the Distributor. The
service plan permits reimbursements to the Distributor at a rate of up to
0.20% of average annual net assets of the shares.  The Distributor makes
payments to plan recipients quarterly or monthly depending on asset size at
an annual rate not to exceed 0.20% of the average annual net assets
consisting of shares held in the accounts of the recipients or their
customers.


      For the fiscal year ended June 30, 2003 payments under the plan totaled
$312,648, all of which was paid by the Distributor to recipients.  That
included $11 paid to an affiliate of the Sub-Distributor's parent company.
For the fiscal year ended June 30, 2003, the Manager paid, in the aggregate,
$467,746 in fees out of its own resources for distribution assistance. Any
unreimbursed expenses the Distributor incurs with respect to the shares in
any fiscal quarter cannot be recovered in subsequent quarters.  The
Distributor may not use payments received under the plan to pay any of its
interest expenses, carrying charges, or other financial costs, or allocation
of overhead.


Performance of the Trust

Explanation of Performance Terminology.  The Trust uses a variety of terms to
illustrate its performance. These terms include "yield," "compounded
effective yield, " "tax-equivalent yield" and "average annual total return."
An explanation of how yields and total returns are calculated is set forth
below.  The charts below show the Trust's performance as of the Trust's most
recent fiscal year end.  You can obtain current performance information by
calling the Trust's Transfer Agent at 1.800.525.9310.

      The Trust's illustrations of its performance data in advertisements
must comply with rules of the Securities and Exchange Commission.  Those
rules describe the types of performance data that may be used and how it is
to be calculated.  If the Trust shows total returns in addition to its
yields, the returns must be for the 1-, 5- and 10-year periods ending as of
the most recent calendar quarter prior to the publication of the
advertisement (or its submission for publication).

      Use of standardized performance calculations enables an investor to
compare the Trust's performance to the performance of other funds for the
same periods. However, a number of factors should be considered before using
the Trust's performance information as a basis for comparisons with other
investments:

o     Yields and total returns measure the performance of a hypothetical
      account in the Trust over various periods and do not show the
      performance of each shareholder's account. Your account's performance
      will vary from the model performance data if your dividends are
      received in cash, or you buy or sell shares during the period, or you
      bought your shares at a different time than the shares used in the
      model.
o     An investment in the Trust is not insured by the FDIC or any other
      government agency.
o     The Trust's yield is not fixed or guaranteed and will fluctuate.
o     Yields and total returns for any given past period represent historical
      performance information and are not, and should not be considered, a
      prediction of future yields or returns.

        Yields.  The Trust's current yield is calculated for a seven-day
period of time as follows. First, a base period return is calculated for the
seven-day period by determining the net change in the value of a hypothetical
pre-existing account having one share at the beginning of the seven-day
period.  The change includes dividends declared on the original share and
dividends declared on any shares purchased with dividends on that share, but
such dividends are adjusted to exclude any realized or unrealized capital
gains or losses affecting the dividends declared.  Next, the base period
return is multiplied by 365/7 to obtain the current yield to the nearest
hundredth of one percent.

      The compounded effective yield for a seven-day period is calculated by
      (1) adding 1 to the base period return (obtained as described above),
      (2) raising the sum to a power equal to 365 divided by 7, and
      (3) subtracting 1 from the result.

      The yield as calculated above may vary for accounts less than
approximately $100 in value due to the effect of rounding off each daily
dividend to the nearest full cent.  The calculation of yield under either
procedure described above does not take into consideration any realized or
unrealized gains or losses on the Trust's portfolio securities which may
affect dividends.  Therefore, the return on dividends declared during a
period may not be the same on an annualized basis as the yield for that
period.

      The Trust's "tax equivalent yield" adjusts the Trust's current yield,
as calculated above, by a stated federal tax rate.  The tax equivalent yield
is computed by dividing the tax-exempt portion of the Trust's current yield
by one minus a stated income tax rate and adding the result to the portion
(if any) of the Trust's current yield that is not tax-exempt.  The tax
equivalent yield may be compounded as described above to provide a compounded
effective tax equivalent yield.

      The tax-equivalent yield may be used to compare the tax effects of
income derived from the Trust with income from taxable investments at the tax
rates stated. Your tax bracket is determined by your federal and state
taxable income (the net amount subject to federal and state income tax after
deductions and exemptions).  The tax-equivalent yield table assumes that the
investor is taxed at the highest bracket, regardless of whether a switch to
non-taxable investments would cause a lower bracket to apply.  For taxpayers
with income above certain levels, otherwise allowable itemized deductions are
limited.

      Total Return Information.  There are different types of "total returns"
to measure the Trust's performance. Total return is the change in value of a
hypothetical investment in the Trust over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period.  The cumulative
total return measures the change in value over the entire period (for
example, ten years).  An average annual total return shows the average rate
of return for each year in a period that would produce the cumulative total
return over the entire period.  However, average annual total returns do not
show actual year-by-year performance.  The Trust uses standardized
calculations for its total returns as prescribed by the SEC.  The methodology
is discussed below.

      Average Annual Total Return.  The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years.  It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula
below) held for a number of years ("n") to achieve an Ending Redeemable Value
("ERV" in the formula) of that investment, according to the following formula:

- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------

ERV    l/n - 1 = Average Annual Total
- ---
               Return
  P


      Cumulative Total Return.  The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years.  Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis.  Cumulative total return is determined as follows:

 ERV - P   = Total Return
- -----------
    P

- ---------------------------------------------------------------------------------

                                              Tax-Equivalent Yield
                   Compounded        (41.05% Combined State and Federal Tax                               Average Annual Total Returns
     Yield       Effective Yield                    Brackets)                                                     (at 6/30/03)
 (7 days ended    (7 days ended
    6/30/03)        6/30/03)

- ---------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

                            Yield       Compounded
                           (7 days      Effective
                            ended         Yield      1-Year  5 Years 10 Years
                          6/30/03)       (7 days
                                          ended
                                         6/30/03)

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

  0.37%       0.37%         0.22%         0.22%      0.52%    1.83%    2.26%

- -------------------------------------------------------------------------------




      |X|               Other Performance Comparisons.  Yield information may
be useful to investors in reviewing the Trust's performance.  The Trust may
make comparisons between its yield and that of other investments, by citing
various indices such as The Bank Rate Monitor National Index (provided by
Bank Rate Monitor(TM)) which measures the average rate paid on bank money market
accounts, NOW accounts and certificates of deposits by the 100 largest banks
and thrifts in the top ten metro areas.  When comparing the Trust's yield
with that of other investments, investors should understand that certain
other investment alternatives such as certificates of deposit, U.S.
government securities, money market instruments or bank accounts may provide
fixed yields and may be insured or guaranteed.


      From time to time, the Trust may include in its advertisements and
sales literature performance information about the Trust cited in other
newspapers and periodicals, such as The New York Times, which may include
performance quotations from other sources.

From time to time the Trust may include in its advertisements and sales literature
the total return performance of a hypothetical investment account that
includes shares of the Trust and other Oppenheimer funds. The combined
account may be part of an illustration of an asset allocation model or
similar presentation. The account performance may combine total return
performance of the Trust and the total return performance of other
Oppenheimer funds included in the account. Additionally, from time to time,
the Trust's advertisements and sales literature may include, for illustrative
or comparative purposes, statistical data or other information about general
or specific market and economic conditions. That may include, for example,
o     information about the performance of certain securities or commodities
            markets or segments of those markets,
o     information about the performance of the economies of particular
            countries or regions,
o     the earnings of companies included in segments of particular
            industries, sectors, securities markets, countries or
            regions,
o     the availability of different types of securities or offerings of
            securities,
o     information relating to the gross national or gross domestic product of
            the United States or other countries or regions,
o     comparisons of various market sectors or indices to demonstrate
            performance, risk, or other characteristics of the Trust.

A B O U T  Y O U R  A C C O U N T

How to Buy Shares


Determination of Net Asset Value Per Share. The net asset value per share of
the Trust is determined twice each day that the New York Stock Exchange
("Exchange") is open, at 12:00 Noon and at 4:00 P.M, on each day that the
Exchange is open, by dividing the value of the Trust's net assets by the
total number of shares outstanding. All references to time in this Statement
of Additional Information mean "Eastern time."  The Exchange's most recent
annual announcement (which is subject to change) states that it will close on
New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day.  It may also close on other days.


      The Trust's Board of Trustees has adopted the amortized cost method to
value the Trust's portfolio securities.  Under the amortized cost method, a
security is valued initially at its cost and its valuation assumes a constant
amortization of any premium or accretion of any discount, regardless of the
impact of fluctuating interest rates on the market value of the security.
This method does not take into consideration any unrealized capital gains or
losses on securities.  While this method provides certainty in valuing
securities, in certain periods the value of a security determined by
amortized cost may be higher or lower than the price the Trust would receive
if it sold the security.

      The Trust's Board of Trustees has established procedures reasonably
designed to stabilize the Trust's net asset value at $1.00 per share.  Those
procedures include a review of the valuations of the Trust's portfolio
holdings by the Board of Trustees, at intervals it deems appropriate, to
determine whether the Trust's net asset value calculated by using available
market quotations deviates from $1.00 per share based on amortized cost.

      The Board of Trustees will examine the extent of any deviation between
the Trust's net asset value based upon available market quotations and
amortized cost. If the Trust's net asset value were to deviate from $1.00 by
more than 0.5%, Rule 2a-7 requires the Board of Trustees to consider what
action, if any, should be taken. If they find that the extent of the
deviation may cause a material dilution or other unfair effects on
shareholders, the Board of Trustees will take whatever steps it considers
appropriate to eliminate or reduce the dilution, including, among others,
withholding or reducing dividends, paying dividends from capital or capital
gains, selling portfolio instruments prior to maturity to realize capital
gains or losses or to shorten the average maturity of the portfolio, or
calculating net asset value per share by using available market quotations.

      During periods of declining interest rates, the daily yield on shares
of the Trust may tend to be lower (and net investment income and dividends
higher) than those of a fund holding the identical investments as the Trust
but which used a method of portfolio valuation based on market prices or
estimates of market prices. During periods of rising interest rates, the
daily yield of the Trust would tend to be higher and its aggregate value
lower than that of an identical portfolio using market price valuation.

How to Sell Shares

The information below supplements the terms and conditions for redeeming
shares set forth in the Prospectus.

Checkwriting.  When a check is presented to the Bank for clearance, the Bank
will ask the Trust to redeem a sufficient number of full and fractional
shares in the shareholder's account to cover the amount of the check.  This
enables the shareholder to continue receiving dividends on those shares until
the check is presented to the Trust.  Checks may not be presented for payment
at the offices of the Bank or the Trust's Custodian.  This limitation does
not affect the use of checks for the payment of bills or to obtain cash at
other banks.  The Trust reserves the right to amend, suspend or discontinue
offering checkwriting privileges at any time. The Trust will provide you
notice whenever it is required to do so by applicable law.


      In choosing to take advantage of the checkwriting privilege, by signing
the account application or by completing a checkwriting card, each individual
who signs:

(1)   for individual accounts, represents that they are the registered
         owner(s) of the shares of the Trust in that account;
(2)   for accounts for corporations, partnerships, trusts and other entities,
         represents that they are an officer, general partner, trustee or
         other fiduciary or agent, as applicable, duly authorized to act on
         behalf of the registered owner(s);
(3)   authorizes the Trust, its Transfer Agent and any bank through which the
         Trust's drafts (checks) are payable to pay all checks drawn on the
         Trust account of such person(s) and to redeem a sufficient amount of
         shares from that account to cover payment of each check;

      (4)               specifically acknowledges that if they choose to
         permit checks to be honored if there is a single signature on checks
         drawn against joint accounts, or accounts for corporations,
         partnerships, trusts or other entities, the signature of any one
         signatory on a check will be sufficient to authorize payment of that
         check and redemption from the account, even if that account is
         registered in the names of more than one person or more than one
         authorized signature appears on the checkwriting card or the
         application, as applicable;
(5)   understands that the checkwriting privilege may be terminated or
         amended at any time by the Trust and/or the Trust's bank; and

(6)   acknowledges and agrees that neither the Trust nor its bank shall incur
         any liability for that amendment or termination of checkwriting
         privileges or for redeeming shares to pay checks reasonably believed
         by them to be genuine, or for returning or not paying checks that
         have not been accepted for any reason.

Sending Redemption Proceeds by Federal Funds Wire.  The Federal Funds wire of
redemptions proceeds may be delayed if the Trust's custodian bank is not open
for business on a day when the Trust would normally authorize the wire to be
made, which is usually the Trust's next regular business day following the
redemption.  In those circumstances, the wire will not be transmitted until
the next bank business day on which the Trust is open for business.  No
distributions will be paid on the proceeds of redeemed shares awaiting
transfer by Federal Funds wire

How to Exchange Shares
As stated in the Prospectus, direct shareholders can exchange shares of the
Trust for Class A shares of any of the following eligible funds:


Oppenheimer AMT-Free New York Municipals  Oppenheimer Multiple Strategies Fund
Oppenheimer Bond Fund                     Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer Pennsylvania Municipal Fund
                                          Oppenheimer   Principal  Protected  Main
Oppenheimer Capital Preservation Fund     Street Fund

Oppenheimer Capital Income Fund           Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Champion Income Fund          Inc.
                                          Oppenheimer  Quest  Global  Value  Fund,
Oppenheimer Convertible Securities Fund   Inc.
Oppenheimer Developing Markets Fund       Oppenheimer Quest Opportunity Value Fund
Oppenheimer Disciplined Allocation Fund   Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund                Oppenheimer Real Asset Fund
                                          Oppenheimer      Rochester      National
Oppenheimer Emerging Growth Fund          Municipals

Oppenheimer Emerging Technologies Fund    Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund               Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund                   Oppenheimer Strategic Income Fund
Oppenheimer Global Fund                   Oppenheimer Total Return Bond Fund
Oppenheimer Global Opportunities Fund     Oppenheimer Total Return Fund, Inc.
Oppenheimer Gold & Special Minerals Fund  Oppenheimer Trinity Core Fund
                                          Oppenheimer  Trinity  Large  Cap  Growth

Oppenheimer Growth Fund                   Fund

Oppenheimer High Yield Fund               Oppenheimer Trinity Value Fund
Oppenheimer International Bond Fund       Oppenheimer U.S. Government Trust
Oppenheimer International Growth Fund     Oppenheimer Value Fund
Oppenheimer  International  Small Company
Fund                                      Limited-Term New York Municipal Fund
Oppenheimer Limited-Term Government Fund  Rochester Fund Municipals
Oppenheimer Limited Term Municipal Fund   OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Main Street Fund              OSM1 - Jennison Growth Fund
                                          OSM1 -  Mercury  Advisors  S&P 500 Index

Oppenheimer Main Street Opportunity Fund  Fund

                                          OSM1 -  Mercury  Advisors  Focus  Growth

Oppenheimer Main Street Small Cap Fund    Fund

Oppenheimer MidCap Fund                   OSM1 - QM Active Balanced Fund
                                          OSM1 - Salomon Brothers All Cap Fund
And the following money market funds:


Oppenheimer Cash Reserves                 Centennial Government Trust
Oppenheimer Money Market Fund, Inc.       Centennial Money Market Trust
Centennial America Fund, L. P.            Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust    Centennial Tax Exempt Trust




1 - "OSM" stands for Oppenheimer Select Managers

      Shares of the Trust purchased without a sales charge may be exchanged
for shares of an eligible fund offered with a sales charge upon payment of
the sales charge.  Shares of the Trust acquired by reinvestment of dividends
or distributions from the Trust or any of the other eligible funds (other
than Oppenheimer Cash Reserves) or from any unit investment trust for which
reinvestment arrangements have been made with the Distributor may be
exchanged at net asset value for shares of any of the eligible funds.

      Limits on Multiple Exchange Orders.  The Trust reserves the right to
reject telephone or written exchange requests submitted in bulk by anyone on
behalf of more than one account. The Trust may accept requests for exchanges
of up to 50 accounts per day from representatives of authorized dealers that
qualify for this privilege.

      Telephone Exchange Requests.  When exchanging shares by telephone, a
direct shareholder must have an existing account in the fund to which the
exchange is to be made.  Otherwise, the investor must obtain a prospectus of
that fund before the exchange request may be submitted. If all telephone
lines are busy (which might occur, for example, during periods of substantial
market fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.


      Processing Exchange Requests.  Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date").  Normally, shares of the fund to be
acquired are purchased on the Redemption Date, but such purchases may be
delayed by either fund up to five business days if it determines that it
would be disadvantaged by an immediate transfer of the redemption proceeds.
The Trust reserves the right, in its discretion, to refuse any exchange
request that may disadvantage it.  For example, if the receipt of multiple
exchange requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Trust, the Trust may refuse the request.


      In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered by a
share certificate that is not tendered with the request.  In those cases,
only the shares available for exchange without restriction will be
exchanged.

      The different eligible funds available for exchange have different
investment objectives, policies and risks.  A shareholder should assure that
the fund selected is appropriate for his or her investment and should be
aware of the tax consequences of an exchange.  For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of one
fund and a purchase of shares of another.  The Trust, the Distributor, the
Sub-Distributor, and the Transfer Agent are unable to provide investment, tax
or legal advice to a shareholder in connection with an exchange request or
any other investment transaction.

      The Trust may amend, suspend or terminate the exchange privilege at any
time.  Although, the Trust may impose these changes at any time, it will
provide you with notice of those changes whenever it is required to do so by
applicable law.  It may be required to provide 60 days notice prior to
materially amending or terminating the exchange privilege.  That 60-day
notice is not required in extraordinary circumstances.

Dividends and Taxes

Tax Status of the Trust's Dividends, Distributions and Redemptions of Shares.
The federal tax treatment of the Trust's distributions is briefly highlighted
in the Prospectus. The following is only a summary of certain additional tax
considerations generally affecting the Trust and its shareholders.

      The tax discussion in the Prospectus and this Statement of Additional
Information is based on tax law in effect on the date of the Prospectus and
this Statement of Additional Information. Those laws and regulations may be
changed by legislative, judicial, or administrative action, possible with
retroactive effect. State and local tax treatment of exempt-interest
dividends and potential capital gain distributions from regulated investment
companies may differ from the treatment under the Internal Revenue Code
described below. Potential purchasers of shares of the Trust are urged to
consult their tax advisers with specific reference to their own tax
circumstances as well as the consequences of federal, state and local tax
rules affecting an investment in the Trust.







|X|   Qualification as a Regulated  Investment Company.  The Trust has elected
to be  taxed as a  regulated  investment  company  under  Subchapter  M of the
Internal  Revenue  Code  of  1986,  as  amended.  As  a  regulated  investment
company,  the Trust is not subject to federal income tax on the portion of its
net  investment  income  (that  is,  taxable  interest,  dividends,  and other
taxable  ordinary  income,  net of expenses) and capital gain net income (that
is, the excess of net  long-term  capital  gains over net  short-term  capital
losses) that it distributes to shareholders.

      If the Trust qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for federal income tax on
amounts it pays as dividends and other distributions. That qualification
enables the Trust to "pass through" its income and realized capital gains to
shareholders without having to pay tax on them. The Trust qualified as a
regulated investment company in its last fiscal year and intends to qualify
in future years, but reserves the right not to qualify. The Internal Revenue
Code contains a number of complex tests to determine whether the Trust
qualifies. The Trust might not meet those tests in a particular year. If it
does not qualify, the Trust will be treated for tax purposes as an ordinary
corporation and will receive no tax deduction for payments of dividends and
other distributions made to shareholders. In such an instance, all of the
Trust's dividends would be taxable to shareholders.

      To qualify as a regulated investment company, the Trust must distribute
at least 90% of its investment company taxable income (in brief, net
investment income and the excess of net short-term capital gain over net
long-term capital loss) and at least 90% of its net tax-exempt income for the
taxable year. The Trust must also satisfy certain other requirements of the
Internal Revenue Code, some of which are described below.  Distributions by
the Trust made during the taxable year or, under specified circumstances,
within twelve months after the close of the taxable year, will be considered
distributions of income and gains for the taxable year and will therefore
count toward satisfaction of the above-mentioned requirement.

      To qualify as a regulated investment company, the Trust must derive at
least 90% of its gross income from dividends, interest, certain payments with
respect to securities loans, gains from the sale or other disposition of
stock or securities or foreign currencies (to the extent such currency gains
are directly related to the regulated investment company's principal business
of investing in stock or securities) and certain other income.

      In addition to satisfying the requirements described above, the Trust
must satisfy an asset diversification test in order to qualify as a regulated
investment company.  Under that test, at the close of each quarter of the
Trust's taxable year, at least 50% of the value of the Trust's assets must
consist of cash and cash items (including receivables), U.S. government
securities, securities of other regulated investment companies, and
securities of other issuers. As to each of those issuers, the Trust must not
have invested more than 5% of the value of the Trust's total assets in
securities of each such issuer and the Trust must not hold more than 10% of
the outstanding voting securities of each such issuer. No more than 25% of
the value of its total assets may be invested in the securities of any one
issuer (other than U.S. government securities and securities of other
regulated investment companies), or in two or more issuers which the Trust
controls and which are engaged in the same or similar trades or businesses.
For purposes of this test, obligations issued or guaranteed by certain
agencies or instrumentalities of the U.S. government are treated as U.S.
government securities.

|X|   Excise Tax on Regulated Investment Companies. Under the Internal
Revenue Code, by December 31 each year, the Trust must distribute 98% of its
taxable investment income earned from January 1 through December 31 of that
year and 98% of its capital gains realized in the period from November 1 of
the prior year through October 31 of the current year. If it does not, the
Trust must pay an excise tax on the amounts not distributed. It is presently
anticipated that the Trust will meet those requirements. To meet this
requirement, in certain circumstances the Trust might be required to
liquidate portfolio investments to make sufficient distributions to avoid
excise tax liability. However, the Board of Trustees and the Manager might
determine in a particular year that it would be in the best interests of
shareholders for the Trust not to make such distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would
reduce the amount of income or capital gains available for distribution to
shareholders.

|X|   Taxation of Fund Distributions. The Trust intends to qualify under the
Internal Revenue Code during each fiscal year to pay "exempt-interest
dividends" to its shareholders. To satisfy this qualification, at the end of
each quarter of its taxable year, at least 50% of the value of the Trust's
total assets consists of obligations as defined in Section 103(a) of the
Internal Revenue Code, as amended. Exempt-interest dividends that are derived
from net investment income earned by the Trust on municipal securities will
be excludable from gross income of shareholders for federal income tax
purposes. To the extent the Trust fails to qualify to pay exempt-interest
dividends in any given form, such dividends would be included in the gross
income of shareholders for federal income tax purposes.

      Net investment income includes the allocation of amounts of income from
the municipal securities in the Trust's portfolio that are free from federal
income taxes. This allocation will be made by the use of one designated
percentage applied uniformly to all income dividends paid during the Trust's
tax year. That designation will normally be made following the end of each
fiscal year as to income dividends paid in the prior year. The percentage of
income designated as tax-exempt may substantially differ from the percentage
of the Trust's income that was tax-exempt for a given period.

      A portion of the exempt-interest dividends paid by the Trust may be an
item of tax preference for shareholders subject to the federal alternative
minimum tax. The amount of any dividends attributable to tax preference items
for purposes of the alternative minimum tax will be identified when tax
information is distributed by the Trust.

      A shareholder receiving a dividend from income earned by the Trust from
one or more of the following sources must treat the dividend as ordinary
income in the computation of the shareholder's gross income, regardless of
whether the dividend is reinvested:
(1)   certain taxable temporary investments (such as certificates of deposit,
          repurchase agreements, commercial paper and obligations of the U.S.
          government, its agencies and instrumentalities);
(2)   income from securities loans;
(3)   income or gains from options or futures,
(4)   any net short-term capital gain; and
(5)   any market discount amortization on tax-exempt bonds.

      The Trust's dividends will not be eligible for the dividends-received
deduction for corporations. Shareholders receiving Social Security benefits
should be aware that exempt-interest dividends are a factor in determining
whether (and the extent to which) such benefits are subject to federal income
tax. Losses realized by shareholders on the redemption of Fund shares within
six months of purchase will be disallowed for federal income tax purposes to
the extent of exempt-interest dividends received on such shares.

      In any year in which  the  Trust  qualifies  as a  regulated  investment
company under the Internal  Revenue  Code,  the Trust will also be exempt from
California  corporate  income and franchise  taxes.  It will also be qualified
under  California  law to pay exempt  interest  dividends  that will be exempt
from  California  personal  income tax. That  exemption  applies to the extent
that the Trust's  distributions  are  attributable  to interest on  California
municipal   securities  and  qualifying   obligations  of  the  United  States
government,  if at  least  50% of the  Trust's  assets  are  invested  in such
obligations at the close of each quarter in its tax year.  Distributions  from
the Trust attributable to income from sources other than California  municipal
securities  and U.S.  government  obligations  will  generally  be  subject to
California income tax as ordinary income.

      Distributions by the Trust from investment income and long- and
short-term capital gains will generally not be excludable from taxable income
in determining California corporate franchise tax or income tax for corporate
shareholders of the Trust.  Additionally, certain distributions paid to
corporate shareholders of the Trust may be includable in income subject to
the California alternative minimum tax.

      The Trust may either retain or distribute to shareholders its net
capital gain for each taxable year.  The Trust currently intends to
distribute any such amounts.  If the net capital gain is distributed and
designated as a capital gain distribution, it will be taxable to shareholders
as a long-term capital gain and will be properly identified in reports sent
to shareholders in January of each year. Such treatment will apply no matter
how long the shareholder has held his or her shares or whether that gain was
recognized by the Trust before the shareholder acquired his or her shares.

      If the Trust elects to retain its net capital gain, the Trust will be
subject to tax on it at the 35% corporate tax rate.  If the Trust elects to
retain its net capital gain, it is expected that the Trust also will elect to
have shareholders of record on the last day of its taxable year treated as if
each received a distribution of their pro rata share of such gain. As a
result, each shareholder will be required to report his or her pro rata share
of such gain on their tax return as long-term capital gain, will receive a
refundable tax credit for his/her pro rata share of tax paid by the Trust on
the gain, and will increase the tax basis for his/her shares by an amount
equal to the deemed distribution less the tax credit.

      Distributions by the Trust will be treated in the manner described
above regardless of whether the distributions are paid in cash or reinvested
in additional shares of the Trust (or of another fund).  Shareholders
receiving a distribution in the form of additional shares will be treated as
receiving a distribution in an amount equal to the fair market value of the
shares received, determined as of the reinvestment date.


      The Trust will be required in certain cases to withhold 28% of ordinary
income dividends (not including "exempt-interest dividends"), capital gains
distributions (including short-term and long-term) and the proceeds of the
                                                 -
redemption of shares, paid to any shareholder (1) who has failed to provide a
correct taxpayer identification number or to properly certify that number
- -------
when required, (2) who is subject to backup withholding for failure to report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Trust that the shareholder is not subject to backup
withholding or is an "exempt recipient" (such as a corporation). All income
and any tax withheld by the Trust is remitted by the Trust to the U.S.
Treasury and is identified in reports mailed to shareholders in January of
each year.


|X|   Tax Effects of Redemptions of Shares. If a shareholder redeems all or a
portion of his/her shares, the shareholder will recognize a gain or loss on
       -
the redeemed shares in an amount equal to the difference between the proceeds
of the redeemed shares and the shareholder's adjusted tax basis in the
shares.  All or a portion of any loss recognized in that manner may be
disallowed if the shareholder purchases other shares of the Trust within 30
days before or after the redemption.

      In general, any gain or loss arising from the redemption of shares of
the Trust will be considered capital gain or loss, if the shares were held as
a capital asset. It will be long-term capital gain or loss if the shares were
held for more than one year.  However, any capital loss arising from the
redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends
received on those shares. Special holding period rules under the Internal
Revenue Code apply in this case to determine the holding period of shares and
there are limits on the deductibility of capital losses in any year.

|X|   Foreign  Shareholders.  Under U.S.  tax law,  taxation of a  shareholder
who is a foreign person  (including,  but not limited to, a nonresident  alien
individual,  a foreign trust, a foreign estate,  a foreign  corporation,  or a
foreign partnership)  primarily depends on whether the foreign person's income
from the Trust is  effectively  connected  with the conduct of a U.S. trade or
business.   Typically,   ordinary   income   dividends   paid  (not  including
exempt-interest  dividends  paid by the  Trust)  from a  mutual  fund  are not
considered "effectively connected" income.

      Ordinary income dividends that are paid by the Trust (and are deemed
not "effectively connected income") to foreign persons will be subject to a
U.S. tax withheld by the Trust at a rate of 30%, provided the Trust obtains a
properly completed and signed Certificate of Foreign Status. The tax rate may
be reduced if the foreign person's country of residence has a tax treaty with
the U.S. allowing for a reduced tax rate on ordinary income dividends paid by
the Trust. All income and any tax withheld by the Trust is remitted by the
Trust to the U.S. Treasury and is identified in reports mailed to
shareholders in March of each year.

      If the ordinary income dividends from the Trust are effectively
                                                      ---
connected with the conduct of a U.S. trade or business, then the foreign
person may claim an exemption from the U.S. tax described above provided the
Trust obtains a properly completed and signed Certificate of Foreign Status.


      If the foreign person fails to provide a certification of his/her
foreign status, the Trust will be required to withhold U.S. tax at a rate of
28% on ordinary income dividends (not including "exempt-interest dividends"),
capital gains distributions (including short-term and long-term) and the
proceeds of the redemption of shares, paid to any foreign person. All income
and any tax withheld (in this situation) by the Trust is remitted by the
Trust to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.


      The tax consequences to foreign persons entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to
them of an investment in the Trust, including the applicability of the U.S.
withholding taxes described above.

Dividend Reinvestment in Another Trust.  Direct shareholders of the Trust may
elect to reinvest all dividends and/or capital gains distributions in Class A
shares of any eligible fund listed above. To elect this option, the
shareholder must notify the Transfer Agent in writing and must have an
existing account in the fund selected for reinvestment.  Otherwise, the
shareholder first must obtain a prospectus for that fund and an application
from the Distributor to establish an account.  The investment will be made at
the close of business on the payable date of the dividend or distribution.

Additional Information About the Trust

The Distributor.  The Trust's shares are sold through dealers, brokers and
other financial institutions that have a sales agreement with the
Sub-Distributor.  The Distributor and the Sub-Distributor also distribute
shares of the other funds managed by the Manager or an affiliate.


The Transfer Agent.  Shareholder Services, Inc., the Trust's Transfer Agent,
is responsible for maintaining the Trust's shareholder registry and
shareholder accounting records, and for paying dividends and distributions to
shareholders of the Trust.  It also handles shareholder servicing and
administrative functions.  It serves as the Transfer Agent for an annual per
account fee.

The Custodian.  Citibank, N.A. is the custodian of the Trust's assets.  The
custodian's responsibilities include safeguarding and controlling the Trust's
portfolio securities and handling the delivery of such securities to and from
the Trust.  It is the practice of the Trust to deal with the custodian in a
manner uninfluenced by any banking relationship the custodian may have with
the Manager and its affiliates.  The Trust's cash balances with the custodian
in excess of $100,000 are not protected by federal deposit insurance.  Those
uninsured balances at times may be substantial.


Independent Auditors.  Deloitte & Touche LLP are the independent auditors of
the Trust.  They audit the Trust's financial statements and perform other
related audit services.  They also act as auditors for the Manager and OFI
and for certain other funds advised by the Manager and its affiliates.

INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- To the Board of Trustees and Shareholders of Centennial California Tax Exempt Trust:

  We have audited the accompanying statement of assets and liabilities of Centennial California Tax Exempt Trust, including the statement of investments, as of June 30, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

  We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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. An audit 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 June 30, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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.

  In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Centennial California Tax Exempt Trust as of June 30, 2003, 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP Denver, Colorado July 22, 2003 STATEMENT OF INVESTMENTS June 30, 2003

                                                                                    Principal          Value
                                                                                       Amount     See Note 1
- --------------------------------------------------------------------------------------------------------------

 Short-Term Tax-Exempt Obligations--103.3%
- --------------------------------------------------------------------------------------------------------------
  California--103.3%
  CA Department of Water & Power Supply RB, Series B-1, 1% 1                      $ 3,500,000   $  3,500,000
- --------------------------------------------------------------------------------------------------------------
  CA Department of Water & Power Supply RRB, Central Valley Project,
  MERLOT Series 2003 B32, FGIC Insured, 1.03% 1                                     2,000,000      2,000,000
- --------------------------------------------------------------------------------------------------------------
  CA EDLFA Revenue Nts., Stanford University, 0.80%, 9/8/03                         4,000,000      4,000,000
- --------------------------------------------------------------------------------------------------------------
  CA HFFAU RB, MSTFC Series 1998 26, FSA Insured, 0.98% 1                           6,000,000      6,000,000
- --------------------------------------------------------------------------------------------------------------
  CA Infrastructure & ED Bank RRB, J. Paul Getty Trust, Series A, 1%, 5/15/04 2     6,000,000      6,000,000
- --------------------------------------------------------------------------------------------------------------
  CA Infrastructure & ED Bank RRB, J. Paul Getty Trust, Series D, 1%, 5/13/04 2     4,000,000      4,000,000
- --------------------------------------------------------------------------------------------------------------
  CA Infrastructure & ED Bank RRB, Salvation Army Western Territory,
  Series 2001, 1.08%, 1/28/04                                                       7,500,000      7,500,000
- --------------------------------------------------------------------------------------------------------------
  CA M-S-R PPA RRB, San Juan Project, Sub. Lien, Series E,
  MBIA Insured, 0.90% 1                                                               900,000        900,000
- --------------------------------------------------------------------------------------------------------------
  CA PCFAU SWD RB, Burrtec Waste Industries, Series A, 1.10% 1                      2,500,000      2,500,000
- --------------------------------------------------------------------------------------------------------------
  CA PCFAU SWD RR RB, Greenteam of San Jose Project-A, 1.05% 1                      4,235,000      4,235,000
- --------------------------------------------------------------------------------------------------------------
  CA PCFAU SWD RR RB, Shell Martinez Refining-A, 0.95% 1                            4,200,000      4,200,000
- --------------------------------------------------------------------------------------------------------------
  CA SCDAU MH RB, Greentree Sr. Apts. Project-P, 1% 1                               7,350,000      7,350,000
- --------------------------------------------------------------------------------------------------------------
  CA SCDAU RB, IDV-Fibrebond, Inc., 1.35% 1                                           655,000        655,000
- --------------------------------------------------------------------------------------------------------------
  CA SCDAU RB, IDV-Propak California Corp.-B, 1.35% 1                                 340,000        340,000
- --------------------------------------------------------------------------------------------------------------
  Lodi, CA EU REF COP, Series A, MBIA Insured, 0.85% 1                              5,000,000      5,000,000
- --------------------------------------------------------------------------------------------------------------
  Los Angeles Cnty., CA MH Mtg. RB, Valencia Housing Project,
  Series C, 1% 1                                                                    2,500,000      2,500,000
- --------------------------------------------------------------------------------------------------------------
  Los Angeles, CA Convention & Exhibit Center Authority Lease RRB,
  Subseries B-2, AMBAC Insured, 0.97%, 6/16/04 2                                    5,000,000      5,000,000
- --------------------------------------------------------------------------------------------------------------
  Los Angeles, CA USD GOB, AAMC Series 1999-7, MBIA Insured, 0.98% 1,3              6,000,000      6,000,000
- --------------------------------------------------------------------------------------------------------------
  Los Angeles, CA Wastewater System GOB, AAMC Series 1998-25,
  FGIC Insured, 0.98% 1                                                             2,000,000      2,000,000
- --------------------------------------------------------------------------------------------------------------
  Mount San Antonio, CA Community College District GOUN, Series A,
  FGIC Insured, 3.25%, 5/1/04                                                       1,000,000      1,019,385
- --------------------------------------------------------------------------------------------------------------
  Northern CA Power Agency RRB, Hydroelectric Project 1-A,
  MBIA Insured, 0.95% 1                                                             3,500,000      3,500,000
- --------------------------------------------------------------------------------------------------------------
  Oceanside, CA MH RRB, Lakeridge Apts. Project, 0.95% 1                            3,300,000      3,300,000
- --------------------------------------------------------------------------------------------------------------
  Orange Cnty., CA Apt. Development RB, Niquel Summit 2, Series B, 1% 1             3,461,000      3,461,000
- --------------------------------------------------------------------------------------------------------------
  Orange Cnty., CA LTA RB, 1.05%, 8/14/03                                          11,000,000     11,000,000
- --------------------------------------------------------------------------------------------------------------
  Orange Cnty., CA LTA RB, 1.05%, 8/14/03                                             200,000        200,000
- --------------------------------------------------------------------------------------------------------------
  Orange Cnty., CA Special FAU Teeter Plan RB, Series B,
  AMBAC Insured, 0.95% 1                                                            1,250,000      1,250,000
- --------------------------------------------------------------------------------------------------------------
  Orange Cnty., CA Special FAU Teeter Plan RB, Series D,
  AMBAC Insured, 0.95% 1                                                            2,400,000      2,400,000
- --------------------------------------------------------------------------------------------------------------
  Rancho Mirage, CA Joint Powers FA REF COP, Eisenhower Medical
  Center, Series B, MBIA Insured, 0.97% 1                                           1,700,000      1,700,000
- --------------------------------------------------------------------------------------------------------------
  Sacramento Cnty., CA HAU MH RB, Shadowood Apts
  Project-Issue A, 1.08% 1                                                          6,000,000      6,000,000
- --------------------------------------------------------------------------------------------------------------
  San Bernardino Cnty., CA MH HAU RRB, Montclair Heritage-A, 1.04% 1                4,620,000      4,620,000
- --------------------------------------------------------------------------------------------------------------
  San Bernardino Cnty., CA MH RRB, Somerset Apts.-A, 0.90% 1                        2,495,000      2,495,000

4 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

                                                                                    Principal          Value
                                                                                       Amount     See Note 1
- --------------------------------------------------------------------------------------------------------------

  California Continued
  San Diego, CA TAN, MERLOT Series 2003 B20, 1.75%, 6/30/04 4                     $ 7,000,000   $  7,064,330
- --------------------------------------------------------------------------------------------------------------
  San Diego, CA Unified Port/Airport District RB, Lindberg Field,
  1.05%, 11/3/03                                                                    9,400,000      9,400,000
- --------------------------------------------------------------------------------------------------------------
  San Diego, CA Water Utility Fund Net System GOB, AAMC Series
  1998-10, FGIC Insured, 1.05% 1,3                                                  7,000,000      7,000,000
- --------------------------------------------------------------------------------------------------------------
  San Francisco, CA City & Cnty. PUC Clean Water RRB, MERLOT Series B20,
  MBIA Insured, 1.03% 1                                                             7,500,000      7,500,000
- --------------------------------------------------------------------------------------------------------------
  Southeast CA RR FA Lease RRB, Series A, 0.92% 1                                   2,000,000      2,000,000
- --------------------------------------------------------------------------------------------------------------
  Stockton, CA CFD No. 99-02 SPTX Bonds, Arch Road East, 1% 1                       2,835,000      2,835,000
- --------------------------------------------------------------------------------------------------------------
  University of CA Regents RB, 0.90%, 8/13/03                                       7,500,000      7,500,000

- --------------------------------------------------------------------------------------------------------------
  Total Investments, at Value (Cost $157,924,715)                                       103.3%   157,924,715
- --------------------------------------------------------------------------------------------------------------
  Liabilities in Excess of Other Assets                                                  (3.3)    (5,068,834)
                                                                                  ----------------------------
  Net Assets                                                                            100.0%  $152,855,881
                                                                                  ============================

Footnotes to Statement of Investments

To simplify the listings of securities, abbreviations are used per the table below:

AAMC ABN AMRO Munitops Certificates CFD Community Development District COP Certificates of Participation ED Economic Development EDLFA Educational Facilities Authority EU Electric Utilities FA Facilities Authority FAU Finance Authority GOB General Obligation Bonds GOUN General Obligation Unlimited Nts. HAU Housing Authority HFFAU Health Facilities Finance Authority IDV Industrial Development LTA Local Transportation Authority/Agency MERLOT Municipal Exempt Receipts Liquidity Option Tender MH Multifamily Housing MSTFC Morgan Stanley & Co., Inc. Trust Floater Certificates PCFAU Pollution Control Finance Authority PPA Public Power Agency PUC Public Utilities Commission RB Revenue Bonds REF Refunding RR Resource Recovery RRB Revenue Refunding Bonds SCDAU Statewide Communities Development Authority SPTX Special Tax SWD Solid Waste Disposal TAN Tax Anticipation Nts. USD Unified School District 1. Floating or variable rate obligation maturing in more than one year. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on June 30, 2003. This instrument has a demand feature which allows, on up to 30 days' notice, the recovery of principal at any time, or at specified intervals not exceeding one year. 2. Put obligation redeemable at full principal value on the date reported. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $13,000,000 or 8.50% of the Trust's net assets as of June 30, 2003. 4. When-issued security to be delivered and settled after June 30, 2003. See Note 1 of Notes to Financial Statements. See accompanying Notes to Financial Statements. 5 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST STATEMENT OF ASSETS AND LIABILITIES June 30, 2003

- ---------------------------------------------------------------------------------------------------

 Assets

 Investments, at value (cost $157,924,715)--see accompanying statement               $157,924,715
- ---------------------------------------------------------------------------------------------------
 Cash                                                                                     563,054
- ---------------------------------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold                                                     2,971,417
 Interest                                                                                 271,196
 Other                                                                                      8,794
                                                                                     --------------
 Total assets                                                                         161,739,176

- ---------------------------------------------------------------------------------------------------
 Liabilities

 Payables and other liabilities:
 Investments purchased on a when-issued basis                                           7,064,330
 Shares of beneficial interest redeemed                                                 1,701,552
 Service plan fees                                                                         76,949
 Shareholder reports                                                                       11,602
 Dividends                                                                                 10,931
 Transfer and shareholder servicing agent fees                                              4,025
 Trustees' compensation                                                                       642
 Other                                                                                     13,264
                                                                                     --------------
 Total liabilities                                                                      8,883,295

- ---------------------------------------------------------------------------------------------------
 Net Assets                                                                          $152,855,881
                                                                                     ==============


- ---------------------------------------------------------------------------------------------------
 Composition of Net Assets

 Paid-in capital                                                                     $152,855,881
                                                                                     --------------
 Net Assets--applicable to 152,837,158 shares of beneficial interest outstanding     $152,855,881
                                                                                     ==============

- ---------------------------------------------------------------------------------------------------
 Net Asset Value, Redemption Price Per Share and Offering Price Per Share                   $1.00

See accompanying Notes to Financial Statements. 6 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST STATEMENT OF OPERATIONS For the Year Ended June 30, 2003 - ------------------------------------------------------------------------- Investment Income Interest $1,991,365 - ------------------------------------------------------------------------- Expenses Management fees 781,783 - ------------------------------------------------------------------------- Service plan fees 312,648 - ------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 49,046 - ------------------------------------------------------------------------- Shareholder reports 13,987 - ------------------------------------------------------------------------- Custodian fees and expenses 6,148 - ------------------------------------------------------------------------- Trustees' compensation 5,918 - ------------------------------------------------------------------------- Other 26,521 ------------ Total expenses 1,196,051 Less reduction to custodian expenses (6,502) Less voluntary reimbursement of expenses (3,905) ------------ Net expenses 1,185,644 - ------------------------------------------------------------------------- Net Investment Income 805,721 - ------------------------------------------------------------------------- Net Realized Gain on Investments 2,327 - ------------------------------------------------------------------------- Net Increase in Net Assets Resulting from Operations $ 808,048 ============ See accompanying Notes to Financial Statements. 7 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST STATEMENTS OF CHANGES IN NET ASSETS

 Year Ended June 30,                                                                  2003            2002
- ------------------------------------------------------------------------------------------------------------

 Operations

  Net investment income                                                       $    805,721    $  1,464,326
- ------------------------------------------------------------------------------------------------------------
  Net realized gain                                                                  2,327          20,304
                                                                              ------------------------------
  Net increase in net assets resulting from operations                             808,048       1,484,630

- ------------------------------------------------------------------------------------------------------------
  Dividends and/or Distributions to Shareholders

  Dividends from net investment income                                            (805,721)     (1,447,930)
- ------------------------------------------------------------------------------------------------------------
  Distributions from net realized gain                                                --           (16,396)

- ------------------------------------------------------------------------------------------------------------
  Beneficial Interest Transactions

  Net decrease in net assets resulting from beneficial interest transactions    (1,799,511)     (2,683,600)

- ------------------------------------------------------------------------------------------------------------
  Net Assets

  Total decrease                                                                (1,797,184)     (2,663,296)
- ------------------------------------------------------------------------------------------------------------
  Beginning of period                                                          154,653,065     157,316,361
                                                                              ------------------------------
  End of period                                                               $152,855,881    $154,653,065
                                                                              ==============================

See accompanying Notes to Financial Statements. 8 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST FINANCIAL HIGHLIGHTS

 Year Ended June 30                                 2003            2002           2001        2000        1999
- -----------------------------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period           $   1.00        $   1.00       $   1.00    $   1.00    $   1.00
- -----------------------------------------------------------------------------------------------------------------
 Income from investment operations--net
 investment income and net realized gain             .01             .01            .03         .03         .02
- -----------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income               (.01)           (.01)          (.03)       (.03)       (.02)
 Distributions from net realized gain                 --              -- 1           --          --          --
                                                -----------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                    (.01)           (.01)          (.03)       (.03)       (.02)
- -----------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                 $   1.00        $   1.00       $   1.00    $   1.00    $   1.00
                                                =================================================================

- -----------------------------------------------------------------------------------------------------------------
 Total Return 2                                     0.52%           0.89%          2.74%       2.63%       2.41%

- -----------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)       $152,856        $154,653       $157,316    $162,261    $155,839
- -----------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)              $156,348        $164,278       $166,654     $160,351   $168,272
- -----------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                              0.52%           0.89%          2.72%        2.57%      2.38%
 Expenses, gross                                    0.76%           0.77%          0.84%        0.83%      0.80%
 Expenses, net                                      0.76% 4,5       0.77% 4,5      0.81% 6      0.81%      0.78% 4,6

1. Less than $0.005 per share. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions 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. Total returns reflect changes in net investment income only. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Trust distributions or the redemption of Trust shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary reimbursement of expenses less than 0.01%. 6. Net of voluntary reimbursement of expenses. See accompanying Notes to Financial Statements. 9 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. Significant Accounting Policies

  Centennial California Tax Exempt Trust (the Trust) is registered under the Investment Company Act of 1940, as amended, as a non-diversified, open-end management investment company. The Trust’s investment objective is to seek the maximum current interest income exempt from federal and California personal income taxes for individual investors as is consistent with the preservation of capital. The Trust’s investment advisor is Centennial Asset Management Corporation (the Manager), a subsidiary of OppenheimerFunds, Inc. (OFI).

  The following is a summary of significant accounting policies consistently followed by the Trust.

- -------------------------------------------------------------------------------- Securities Valuation. Portfolio securities are valued on the basis of amortized cost, which approximates market value. - --------------------------------------------------------------------------------

  Securities on a When-Issued Basis. Delivery and payment for securities that have been purchased by the Trust on a when-issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Trust may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Trust maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued basis may increase the volatility of the Trust’s net asset value to the extent the Trust makes such purchases while remaining substantially fully invested. As of June 30, 2003, the Trust had entered into when-issued purchase commitments of $7,064,330.

- --------------------------------------------------------------------------------

  Security Credit Risk. There arecertain risks arising from geographic concentration in any State. Certain revenue or tax related events in a state may impair the ability of certain issuers of municipal securities to pay principal and interest on their obligations.

- --------------------------------------------------------------------------------

  Federal Taxes. The Trust intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income to shareholders, therefore, no federal income or excise tax provision is required.

  The tax components of capital shown in the table below represent distribution requirements the Trust must satisfy under the income tax regulations, losses the Trust may be able to offset against income and gains realized in future years for federal income tax purposes.

Undistributed Net Undistributed Accumulated Investment Income Long-Term Gains Loss Carryforward --------------------------------------------------------- $27,351 $-- $-- 10 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

  Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Trust.

To (From) From Net Ordinary Capital Gain Tax Return Investment Income (Loss) (Loss) 1 of Capital Loss ------------------------------------------------------ $-- $2,327 $-- $-- 1. $2,327 was distributed in connection with Trust share redemptions.

  The tax character of distributions paid during the years ended June 30, 2003 and June 30, 2002 were as follows:

Year Ended Year Ended June 30, 2003 June 30, 2002 ------------------------------------------------------- Distributions paid from: Exempt-interest distributions $805,721 $ 1,447,930 Long-term capital gain -- 16,396 ------------------------ Total $805,721 $1,464,326 ======================== - --------------------------------------------------------------------------------

  Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually.

- -------------------------------------------------------------------------------- Expense Offset Arrangement. The reduction of custodian fees represents earnings on cash balances maintained by the Trust. - -------------------------------------------------------------------------------- Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- Other. 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. 11 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 2. Shares of Beneficial Interest

  The Trust has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:

                                 Year Ended June 30, 2003          Year Ended June 30, 2002
                                  Shares           Amount           Shares           Amount
- ---------------------------------------------------------------------------------------------

 Sold                        450,261,068    $ 450,261,068      444,501,691    $ 444,501,691
 Dividends and/or
 distributions reinvested        803,029          803,029        1,492,748        1,492,748
 Redeemed                   (452,863,608)    (452,863,608)    (448,678,039)    (448,678,039)
                            -----------------------------------------------------------------
 Net decrease                 (1,799,511)   $  (1,799,511)      (2,683,600)   $  (2,683,600)
                            =================================================================

- -------------------------------------------------------------------------------- 3. Fees and Other Transactions with Affiliates

  Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust which provides for a fee at an annual rate of 0.50% of the first $250 million of the net assets; 0.475% of the next $250 million of net assets; 0.45% of the next $250 million of net assets; 0.425% of the next $250 million of net assets; and 0.40% of net assets in excess of $1 billion. The Manager has voluntarily undertaken to assume any expenses of the Trust in any fiscal year they exceed 0.80% of the Trust’s average annual net assets. The Manager reserves the right to amend or terminate that expense assumption at any time.

- -------------------------------------------------------------------------------- Transfer Agent Fees. Shareholder Services, Inc. (SSI) acts as the transfer and shareholder servicing agent for the Trust and for other registered investment companies. The Trust pays SSI a $14.75 per account fee.

  SSI has voluntarily agreed to limit transfer and shareholder servicing agent fees up to an annual rate of 0.35% of average net assets of the Trust. This undertaking may be amended or withdrawn at any time.

- --------------------------------------------------------------------------------

  Service Plan (12b-1) Fees. The Trust has adopted a service plan. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold shares of the Trust. Reimbursement is made quarterly at an annual rate up to 0.20% of the average annual net assets of the Trust. During the year ended June 30, 2003, the Trust paid $11 to a broker/dealer affiliated with the Manager as reimbursement for distribution-related expenses.

12 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

                                    A-4
                                  Appendix A

                      Description of Securities Ratings

Below is a description of the two highest rating categories for Short Term
Debt and Long Term Debt by the "Nationally-Recognized Statistical Rating
Organizations" which the Manager evaluates in purchasing securities on behalf
of the Trust.  The ratings descriptions are based on information supplied by
the ratings organizations to subscribers.

SHORT TERM DEBT RATINGS.

Moody's Investors Service, Inc.  ("Moody's")

The following rating designations for commercial paper (defined by Moody's as
promissory obligations not having original maturity in excess of nine
months), are judged by Moody's to be investment grade, and indicate the
relative repayment capacity of rated issuers:

Prime-1: Superior capacity for repayment.  Capacity will normally be
evidenced by the following characteristics: (a) leading market positions in
well-established industries; (b) high rates of return on funds employed; (c)
conservative capitalization structure with moderate reliance on debt and
ample asset protection; (d) broad margins in earning coverage of fixed
financial charges and high internal cash generation; and (e) well-established
access to a range of financial markets and assured sources of alternate
liquidity.

Prime-2: Strong capacity for repayment.  This will normally be evidenced by
many of the characteristics cited above but to a lesser degree.  Earnings
trends and coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected
by external conditions.  Ample alternate liquidity is maintained.

      Moody's ratings for state and municipal short-term obligations are
designated "Moody's Investment Grade" ("MIG"). Short-term notes which have
demand features may also be designated as "VMIG."  These rating categories
are as follows:

MIG 1/VMIG 1: Denotes superior credit quality. Excellent protection is
afforded by established cash flows, highly reliable liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2: Denotes strong credit quality. Margins of protection are ample
although not as large as in the preceding group.

Standard & Poor's Ratings Services, a division of The McGraw-Hill  Companies,
- ------------------------------------------------------------------------------
Inc. ("Standard and Poor's")
- ----------------------------

The following ratings by Standard and Poor's for commercial paper (defined by
Standard and Poor's as debt having an original maturity of no more than 365
days) assess the likelihood of payment:
A-1: Obligation is rated in the highest category. The obligor's capacity to
meet its financial commitment on the obligation is strong. Within this
category, a plus (+) sign designation indicates the obligor's capacity to
meet its financial obligation is extremely strong.

A-2: Obligation is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

Standard and Poor's ratings for Municipal Notes due in 3 years or less:
- ------------------------------------------------------------------------

SP-1: Strong capacity to pay principal and interest. An issue determined to
possess a very strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

Standard and Poor's assigns "dual ratings" to all municipal debt issues that
have a demand or double feature as part of their provisions.  The first
rating addresses the likelihood of repayment of principal and interest as
due, and the second rating addresses only the demand feature.  With
short-term demand debt, Standard and Poor's note rating symbols are used with
the commercial paper symbols (for example, "SP-1+/A-1+").


Fitch, Inc. ("Fitch")
- ---------------------

Fitch assigns the following short-term ratings to debt obligations that are
payable on demand or have original maturities of generally up to three years,
including commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes:

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.


Dominion Bond Rating Service Limited ("DBRS")

- ------------------------------------------------------------------------------


R-1: Short term debt rated "R-1 (high)" is of the highest credit quality,  and
indicates  an entity which  possesses  unquestioned  ability to repay  current
liabilities  as they  fall  due.  Entities  rated  in this  category  normally
maintain   strong   liquidity   positions,   conservative   debt   levels  and
profitability  which is both stable and above average.  Companies achieving an
"R-1  (high)"  rating are  normally  leaders in  structurally  sound  industry
segments with proven track records,  sustainable  positive  future results and
no  substantial   qualifying  negative  factors.  Given  the  extremely  tough
definition  which DBRS has established  for an "R-1 (high)",  few entities are
strong enough to achieve this rating.  Short term debt rated "R-1 (middle)" is
of  superior  credit  quality  and, in most  cases,  ratings in this  category
differ from "R-1 (high)"  credits to only a small degree.  Given the extremely
tough  definition  which  DBRS has for the "R-1  (high)"  category  (which few
companies  are  able to  achieve),  entities  rated  "R-1  (middle)"  are also
considered strong credits which typically  exemplify above average strength in
key areas of  consideration  for debt  protection.  Short term debt rated "R-1
(low)" is of  satisfactory  credit quality.  The overall  strength and outlook
for key liquidity,  debt and profitability ratios is not normally as favorable
as  with  higher  rating  categories,   but  these  considerations  are  still
respectable.  Any  qualifying  negative  factors  which  exist are  considered
manageable,  and the  entity  is  normally  of  sufficient  size to have  some
influence in its industry.

R-2:  Short term debt rated  "R-2" is of  adequate  credit  quality and within
the three subset grades  (high,  middle,  low),  debt  protection  ranges from
having reasonable  ability for timely repayment to a level which is considered
only just  adequate.  The  liquidity  and debt ratios of entities in the "R-2"
classification are not as strong as those in the "R-1" category,  and the past
and future  trend may suggest  some risk of  maintaining  the  strength of key
ratios  in  these  areas.   Alternative   sources  of  liquidity  support  are
considered  satisfactory;  however,  even the strongest liquidity support will
not improve the commercial paper rating of the issuer.  The size of the entity
may restrict  its  flexibility,  and its relative  position in the industry is
not typically as strong as the "R-1 credit".  Profitability  trends,  past and
future,  may be less  favorable,  earnings not as stable,  and there are often
negative  qualifying  factors  present  which  could also make the entity more
vulnerable to adverse changes in financial and economic conditions.


LONG TERM DEBT RATINGS.

These ratings are relevant for securities purchased by the Trust with a
remaining maturity of 397 days or less, or for rating issuers of short-term
obligations.

Moody's
- -------

Bonds (including municipal bonds) are rated as follows:

Aaa: Judged to be the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edged."  Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure.  While the various protective elements are likely to
change, the changes that can be expected are most unlikely to impair the
fundamentally strong position of such issues.

Aa: Judged to be of high quality by all standards. Together with the "Aaa"
group, they comprise what are generally known as high-grade bonds.  They are
rated lower than the best bonds because margins of protection may not be as
large as with "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than that of "Aaa" securities.

      Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating
classification. The modifier "1" indicates that the obligation ranks in the
higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates a ranking in the lower end
of that generic rating category.


Standard and Poor's
- -------------------

Bonds (including municipal bonds maturing beyond 3 years) are rated as
follows:

AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA: Bonds rated "AA" differ from the highest rated obligations only in small
degree. A strong capacity to meet its financial commitment on the obligation
is very strong.


Fitch
- -----

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.

AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

      Because bonds rated in the "AAA" and "AA" categories are not
significantly vulnerable to foreseeable future developments, short-term debt
of these issuers is generally rated "F-1+."








                                    B-1

                                  Appendix B

                   Municipal Bond Industry Classifications

Adult Living Facilities
Airlines
Bond Anticipation Notes
Education
Electric Utilities
Gas Utilities
General Obligation
Higher Education
Highways/Railways
Hospital/Healthcare
Hotels, Restaurants & Leisure
Manufacturing, Durable Goods
Manufacturing, Non Durable Goods
Marine/Aviation Facilities
Multi-Family Housing
Municipal Leases
Non Profit Organization
Paper, Containers & Packaging
Parking Fee Revenue
Pollution Control
Resource Recovery
Revenue Anticipation Notes
Sales Tax Revenue
Sewer Utilities
Single Family Housing
Special Assessment
Special Tax
Sports Facility Revenue
Student Loans
Tax Anticipation Notes
Tax & Revenue Anticipation Notes
Telephone Utilities
Tobacco
Water Utilities














                                     3

- ------------------------------------------------------------------------------
Centennial California Tax Exempt Trust
- ------------------------------------------------------------------------------

Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way

Centennial, Colorado 80112


Sub-Distributor

OppenheimerFunds Distributor, Inc.
P.O. Box 5254
Denver, Colorado 80217-5254


Transfer Agent

Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217-5143

1.800.525.9310

Custodian of Portfolio Securities

Citibank, N.A.
111 Wall Street
New York, New York 10005


Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202


Counsel to the Trust

Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202

Counsel to the Independent Trustees

Mayer, Brown, Rowe & Maw, LLP
1675 Broadway
New York, New York 10019


PX0180.001.0803





- --------

1 Mr. Grabish is a Trustee of Centennial Government Trust, Centennial
California Tax Exempt Trust, Centennial Money Market Trust, Centennial New
York Tax Exempt Trust and Centennial Tax Exempt Trust and is a Managing
General Partner of Centennial America Fund, L.P. Mrs. Hamilton and Mr. Malone
are not Trustees of Oppenheimer Senior Floating Rate Fund.
2. In  accordance  with Rule 12b-1 of the  Investment  Company  Act,  the term
"Independent  Trustees" in this Statement of Additional  Information refers to
those  Trustees who are not  "interested  persons" of the Trust and who do not
have any direct or indirect  financial  interest in the  operation of the plan
or any agreement under the plan.