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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,  revised November 20,
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
     Other 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







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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.

o     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.

o     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.

o     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.







o     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.

o     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:
o     the frequency of trades and price quotations for such securities;
o     the number of dealers or other potential buyers willing to purchase or
                sell such securities;
o     the availability of market-makers; and
o     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."

|X|   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.

|X|   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.

|X|   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.

|X|   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.

|X|   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.


Other 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
Audit Committee is comprised solely of Independent Trustees. 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 of considering potential
nominees.

      The members of the Review Committee are Jon S. Fossel (Chairman), Robert
G. Avis, Richard F. 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 Messrs. Murphy and Grabish, each
of the Trustees  are "Independent Trustees," as under the Investment Company
Act. Mr. Murphy is an "Interested Trustee," because he is affiliated with
OppenheimerFunds, Inc. by virtue of his positions as an officer and director of
OppenheimerFunds, Inc., and as a shareholder of its parent company. Mr. Murphy
was elected as a Trustee of the Trust with the understanding that in the event
he ceases to be the chief executive officer of OppenheimerFunds, Inc., he will
resign as a trustee of the Trust and the other Board II Funds (defined below)
for which he is a trustee or director. 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
funds (except for Mrs. Hamilton and Messrs. Grabish and Malone, who are not
Trustees of Oppenheimer Senior Floating Rate Fund) (referred to as "Board II
Funds"):

Oppenheimer Cash Reserves                  Oppenheimer   Principal   Protected
                                           Trust II
Oppenheimer Champion Income Fund           Oppenheimer Real Asset Fund
                                           Oppenheimer  Senior  Floating  Rate

Oppenheimer Capital Income Fund            Fund

Oppenheimer Equity Fund, Inc.              Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund                Oppenheimer Variable Account Funds
Oppenheimer International Bond Fund        Panorama Series Fund, Inc.
Oppenheimer Integrity Funds
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
                                           Centennial   New  York  Tax  Exempt
Oppenheimer Municipal Fund                 Trust
Oppenheimer Principal Protected Trust      Centennial Tax Exempt Trust



      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, Molleur, Vottiero,
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     None        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: 70            (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 38 portfolios in
                   the OppenheimerFunds complex.

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

William L.         Chairman of the following private            None      $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 38
                   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            None        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 38 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: 67            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      None        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 38
                   portfolios in the OppenheimerFunds
                   complex.

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

Edward L.          A member of The Life Guard of Mount          None      $50,001-
Cameron, Trustee   Vernon, George Washington's home (since
since 2001         June 2000). Formerly (March 2001 - May
Age: 65            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 38 portfolios in the
                   OppenheimerFunds complex.

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

Jon S. Fossel,     Chairman and Director (since 1998) of        None        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 38
                   portfolios in the OppenheimerFunds
                   complex.

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

Sam Freedman,      Director of Colorado Uplift (a               None        Over
Trustee since 1996 non-profit charity) (since September
Age: 63            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 38 portfolios in the                          $100,000
                   OppenheimerFunds complex.

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

Beverly L.         Trustee (since 1996) of MassMutual           None     $10,001-$50,000
Hamilton, Trustee  Institutional Funds and of MML Series
since 2002         Investment Fund (open-end investment
Age: 57            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 39 portfolios in the
                   OppenheimerFunds complex.

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

Robert J. Malone,  Director (since 2001) of Jones               None        Over
Trustee since 2002 Knowledge, Inc. (a privately held
Age: 59            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 37 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        None      $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 40
                   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    None       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: 55         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 37
                portfolios in the OppenheimerFunds
                complex.

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









      The address of Mr. Murphy in the chart below is Two World Financial
Center, New York, NY 10281-1008. Mr. Murphy serves for an indefinite term, until
his resignation, death or removal.


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

                           Interested Trustee and Officer

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

Name,              Principal Occupation(s) During Past 5      Dollar     Aggregate
                                                                         Dollar
                                                                         Range Of
                                                                         Shares
                   Years;                                     Range of   Beneficially
Position(s) Held   Other Trusteeships/Directorships Held by   Shares     Owned in
with Trust,        Trustee;                                   BeneficiallAny of the
Length of Service, Number of Portfolios in Fund Complex       Owned in   Oppenheimer
Age                Currently Overseen by Trustee              the Trust  Funds

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

                                                                As of December 31,
                                                                       2002

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

John V. Murphy,    Director (since November 2001) of the      None       Over
President          Manager; Chairman, Chief Executive                    $100,000
Since 2001and      Officer and director (since June 2001)
Trustee since 2003 and President (since September 2000) of
Age: 54            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).
                   Oversees 72 portfolios in the
                   OppenheimerFunds complex.

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








     The address of the officers in the chart below is as follows: Messrs.
Molleur and Zack and Ms. Feld, Two World Financial Center, New York, NY
10281-1008, Messrs. Vottiero and Wixted and Mses. Bechtolt, Ives and Wolf, 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
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Carol E. Wolf, Vice President  Senior Vice President (since June 2000) of
and Portfolio Manager since    OppenheimerFunds, Inc.; an officer of 9 portfolios
2003                           in the OppenheimerFunds complex; formerly Vice
Age:  51                       President of OppenheimerFunds, Inc. (June 1990 -
                               June 2000).

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

Brian W. Wixted,               Vice President (since May 1988) of OppenheimerFunds,
Treasurer since June 1990      Inc.; Treasurer (since March 1999) of HarbourView
Age: 44                        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
                               82 portfolios in the OppenheimerFunds complex.

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

Brian W. Wixted,               Senior Vice President and Treasurer (since March
Treasurer since April 1999     1999) of OppenheimerFunds, Inc.; Treasurer (since
Age: 55                        March 1999) of HarbourView Asset Management
                               Corporation, Shareholder Services, Inc., Oppenheimer
                               Real Asset Management Corporation, Shareholder
                               Financial Services, 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 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
                               82 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 82 portfolios
                               in the OppenheimerFunds complex.

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

Connie Bechtolt,               Vice President of OppenheimerFunds, Inc. (since
Assistant Treasurer            March 2002); formerly Vice President/Corporate
since August 27, 2002          Accounting of OppenheimerFunds, Inc. An officer of
Age: 40                        82 portfolios in the OppenheimerFunds complex.

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

Connie Bechtolt,               Vice President of OppenheimerFunds, Inc. (since July
Assistant Secretary            1999); formerly a Vice President and Associate
since November 1, 2001         Counsel of OppenheimerFunds, Inc. (September
Age: 46                        1995-July 1999). An officer of 73 portfolios in the

                               OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Katherine P. Feld,             Vice President and Assistant Secretary (since July
Assistant Secretary            1999) of OppenheimerFunds, Inc.; Vice President
since August 27, 2002          (since June 1990) of OppenheimerFunds Distributor,
Age: 45                        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 82 portfolios
                               in the OppenheimerFunds complex.

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

Kathleen T. Ives,              Vice President (since June 1998) and Senior Counsel
Assistant Secretary            (since October 2003) of the Manager; Vice President
since November 1, 2001         (since 1999) of OppenheimerFunds Distributor, Inc.;
Age: 38                        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.;
                               formerly an Assistant Counsel (August 1994-October
                               2003) and Assistant Vice President of the Manager
                               (August 1997-June 1998). An officer of 82 portfolios
                               in the OppenheimerFunds complex.

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

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

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|X|   Remuneration of Trustees. The officers of the Trust and Mr. Murphy (who
is an officer and Trustee 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).


- ------------------------------------------------------------------------------
  Trustee    Name    and    Other       Aggregate        Total Compensation
                                                         From Trust and Fund
  Position(s) (as applicable)         Compensation         Complex Paid to
                                       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. Grabish                       $1,125                $9,0132

   Review Committee Member
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Beverly Hamilton3                         $4324               $113,6595

   Review Committee Member
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Robert J. Malone3                         $4326                $58,326

   Audit Committee Member
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

F. William Marshall, Jr.                  $432                $138,1247

  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.

1.    Effective  October  27,  2003,  Mr.  Grabish  was elected as Trustee on all
   Board II Funds  (with  the  exception  of  Oppenheimer  Senior  Floating  Rate
   Fund).  Prior to that date,  "Total  Compensation From Trust and Fund Complex"
   paid to Mr.  Grabish  for  service  as a  Trustee,  as well as  service on the
   Review  Committee was 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 for which he previously  served as Trustee on
   the Board II  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.

3.    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).
4.    Includes $432 deferred under Deferred Compensation Plan described below.
5.    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.
6.    Includes $432 deferred under Deferred Compensation Plan described below.
7.    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 a global, diversified insurance and financial
services organization.


      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, including the Independent
Trustees, 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 Trustees1, 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.

|X|     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.

|X|   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.

o     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


o     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     Average Annual Total
  Yield     Effective     Federal Tax Brackets)              Returns
(7 days       Yield                                        (at 6/30/03)
ended        (7 days
 6/30/03)     ended
            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 ("the
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 Municipals           Oppenheimer Limited Term Municipal Fund
Oppenheimer AMT-Free New York Municipals  Oppenheimer Main Street Fund
Oppenheimer Bond Fund                     Oppenheimer Main Street Opportunity Fund
Oppenheimer California Municipal Fund     Oppenheimer Main Street Small Cap Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer Multiple Strategies Fund
Oppenheimer Capital Preservation Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Income Fund           Oppenheimer Pennsylvania Municipal Fund
                                          Oppenheimer   Principal  Protected  Main
Oppenheimer Champion Income Fund          Street Fund
                                          Oppenheimer   Principal  Protected  Main
Oppenheimer Convertible Securities Fund   Street Fund II
Oppenheimer Developing Markets Fund       Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Disciplined Allocation Fund   Inc.
                                          Oppenheimer  Quest  International  Value
Oppenheimer Discovery Fund                Fund, Inc.
Oppenheimer Emerging Growth Fund          Oppenheimer Quest Opportunity Value Fund
Oppenheimer Emerging Technologies Fund    Oppenheimer Quest Value Fund, Inc.
Oppenheimer Enterprise Fund               Oppenheimer Real Asset Fund
Oppenheimer Equity Fund, Inc.             Oppenheimer Real Estate Fund
                                          Oppenheimer      Rochester      National
Oppenheimer Global Fund                   Municipals
Oppenheimer Global Opportunities Fund     Oppenheimer Senior Floating Rate Fund
Oppenheimer Gold & Special Minerals Fund  Oppenheimer Small Cap Value Fund
Oppenheimer Growth Fund                   Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund               Oppenheimer Total Return Bond 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 MidCap 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

      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.

|X|   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.

|X|   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.

|X|   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.
                                      53
                                        2

 Audit and non-audit services provided to the Trust must be pre-approved by the
Audit Committee. Non-audit services provided by Deloitte & Touche LLP to the
Manager, OppenheimerFunds, Inc. and certain related companies must also be
pre-approved by the Audit Committee.

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

                                   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
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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

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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.rev.1103





- --------
1. 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.