Registration No. 33-30471
                                                             File No. 811-5871

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                  FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933                                                                [X]

Pre-Effective Amendment No. _____                                        [   ]


Post-Effective Amendment No. 22                                            [X]


                                    and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                                [X]


Amendment No. 25                                                           [X]


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                    CENTENNIAL CALIFORNIA TAX EXEMPT TRUST
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              (Exact Name of Registrant as Specified in Charter)

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              6803 South Tucson Way, Centennial, Colorado 80112
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             (Address of Principal Executive Offices) (Zip Code)

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                                1.303.768.3200
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             (Registrant's Telephone Number, including Area Code)

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                             Robert G. Zack, Esq.
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                            OppenheimerFunds, Inc.
        225 Liberty Street, 11th Floor, New York, New York 10281-1008
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                   (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):


[   ] Immediately upon filing pursuant to paragraph (b)
[X]   On August 23, 2006 pursuant to paragraph (b)
[   ] 60 days after filing pursuant to paragraph (a)(1)
[   ] On _______________ pursuant to paragraph (a)(1)
[   ] 75 days after filing pursuant to paragraph (a)(2)
[   ] On _______________ pursuant to paragraph (a)(2) of Rule 485


If appropriate, check the following box:

[   ] This  post-effective  amendment  designates a new  effective  date for a
previously filed post-effective amendment.

Centennial California Tax Exempt Trust

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Prospectus dated August 23, 2006


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

                                         This Prospectus contains important
                                         information about the Trust's
                                         objective, its investment policies,
                                         strategies and risks.  It also
                                         contains important information about
As with all mutual funds, the            how to buy and sell shares of the
Securities and Exchange Commission has   Trust and other account features.
not approved or disapproved the Trust's  Please read this Prospectus carefully
securities nor has it determined that    before you invest and keep it for
this Prospectus is accurate or           future reference about your account.
complete.  It is a criminal offense to
represent otherwise.
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29

CONTENTS

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

                  The Trust's Investment Objective and Strategies

                  Main Risks of Investing in the Trust

                  The Trust's Past Performance

                  Fees and Expenses of the Trust

                  About the Trust's Investments

                  How the Trust is Managed

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

                  How to Buy Shares
                  Automatic Purchase and Redemption Programs
                  Direct Shareholders

                  How to Sell Shares
                  Automatic Purchase and Redemption Programs
                  Direct Shareholders

                  How to Exchange Shares

                  Shareholder Account Rules and Policies

                  Dividends, Capital Gains and Taxes

                  Financial Highlights











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

The Trust's Investment Objective and Strategies

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

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


The Trust normally attempts to invest 100% of its assets in municipal securities
and as a fundamental policy, the Trust will invest under normal circumstances at
least 80% of its net assets (plus borrowings for investment purposes) in
investments the income from which is exempt from federal and California personal
income taxes for individuals in the opinion of bond counsel to the respective
issuer.  Such investments may include obligations of the State of California and
its political subdivisions, agencies and instrumentalities or obligations of
commonwealths or territories of the United States, or their agencies,
instrumentalities or authorities the interest from which is not subject to federal
and California personal income tax in the opinion of bond counsel to the respective
issuer.  Securities that generate income that is subject to alternative minimum
taxes will not count towards that 80% threshold. The balance of the Trust's assets
can be invested in investments the income from which may be taxable. The Trust will
not invest more than 20% of its net assets in municipal securities the income on
which may be a tax preference item that would increase an individual investor's
alternative minimum tax.


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

Main Risks of Investing in the Trust


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


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


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

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

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

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


For the period from 1/1/06 through 6/30/06 the cumulative total return (not
annualized) was 1.28%.
During the period shown in the bar chart, the highest return (not annualized) for a
calendar quarter was 0.79% (4th  'Q 00) and the lowest return (not annualized) for
a calendar quarter was 0.03% (3rd `Q 03).



Average Annual Total Returns

for the periods ended December 31, 2005      1 Year     5 Years  10 Years

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Centennial California Tax Exempt Trust       1.75%      0.98%    1.85%
(inception 6/12/90)

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


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


The Trust pays a variety of expenses directly for management of its assets,
administration and other services.  Those expenses are subtracted from the Trust's
assets to calculate the Trust's net asset value per share. All shareholders
therefore pay those expenses indirectly.  The following tables are meant to help
you understand the fees and expenses you may pay if you buy and hold shares of the
Trust. The numbers below are based upon the Trust's expenses during the fiscal year
ended June 30, 2006.


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

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

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 Management Fees(1)                           0.50%

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

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 Total Annual Operating Expenses              0.76%

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1. The Management fee is shown without giving effect to a voluntary expense
assumption by the Manager.  That expense assumption had no impact on the Trust's
"Management fees" or the "Total Annual Operating Expenses" during its last fiscal
year. The voluntary expense assumption may be amended or withdrawn at any time.

Expenses may vary in future years. "Other expenses" include transfer agent fees,
custodial expenses, and accounting and legal expenses the Trust pays.  The Transfer
Agent has voluntarily undertaken to the Trust to limit the transfer agent fees to
0.35% of average daily net assets per fiscal year.  That undertaking may be amended
or withdrawn at any time.  For the Trust's fiscal year ended June 30, 2006, the
transfer agent fees did not exceed the expense limitations.


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

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  1 year             3 years           5 years            10 years
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  $78                $244              $424               $946

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About the Trust's Investments


THE TRUST'S PRINCIPAL INVESTMENT POLICIES AND RISKS.  The Trust invests in money
market instruments meeting quality, maturity and diversification standards
established by its Board of Trustees as well as rules that apply to money market
funds under the Investment Company Act of 1940 (the "Investment Company Act").  The
Statement of Additional Information ("SAI") contains more detailed information
about the Trust's investment policies and risks.


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

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

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


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


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

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

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

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


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

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


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


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

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

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

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

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

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

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

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

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

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


PORTFOLIO HOLDINGS.  The Trust's portfolio holdings are included in semi-annual and
annual reports that are distributed to shareholders of the Trust within 60 days
after the close of the period for which such report is being made. The Trust
discloses of its portfolio holdings in its Statements of Investments on Form N-Q,
which are filed with the Securities and Exchange Commission (the "SEC") no later
than 60 days after the close of its first and third fiscal quarters. These required
filings are publicly available at the SEC. Therefore, portfolio holdings of the
Trust are made publicly available no later than 60 days after the close of each of
the Trust's fiscal quarters.

      A description of the Trust's policies and procedures with respect to the
disclosure of the Trust's portfolio securities is available in the Trust's SAI.


How the Trust is Managed

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


      The Manager has been an investment advisor since 1978. The Manager and its
parent company and controlled affiliates managed more than $215 billion in assets
as of June 30, 2006, including other Oppenheimer and Centennial funds with more
than 6 million shareholder accounts.  The Manager is located at 6803 South Tucson
Way, Centennial, Colorado 80112.

Advisory Fees. Under the investment advisory agreement, the Trust pays the Manager
      an advisory fee at an annual rate that declines on additional assets as the
      Trust grows: 0.500% of the first $250 million of net assets; 0.475% of the
      next $250 million of net assets; 0.450% of the next $250 million of net
      assets; 0.425% of the next $250 million of net assets; and 0.400% of the net
      assets in excess of $1 billion.  The Manager has voluntarily undertaken to
      assume certain expenses of the Trust in any fiscal year that exceed 0.80% of
      the Trust's average annual net assets. Additionally, effective July 7, 2003,
      the Manager has voluntarily undertaken to waive receipt of its management
      fees to the extent necessary so that the Trust may seek to maintain a
      positive yield.  The Manager reserves the right to amend or terminate either
      voluntary expense assumption at any time. The Trust's management fees for the
      fiscal year ended June 30, 2006 was 0.50% of the Trust's average annual net
      assets both before and after the expense assumption noted above.

      A discussion of the matters considered by the Trust's Independent Trustees,
in approving the Trust's investment advisory agreement, is included in the Trust's
annual report to shareholders for the period ended June 30, 2006.

Portfolio Manager.  The Trust's portfolio is managed by Cameron T. Ullyatt who is
      primarily responsible for the day-to-day management of the Trust's
      investments.

      Mr. Ullyatt, CFA, has been a portfolio manager of the Trust since July 2006.
      He has been a Vice President of the Manager and OppenheimerFunds, Inc. since
      July 2006. Mr. Ullyatt is an officer of 2 other portfolios in the
      OppenheimerFunds complex. Mr. Ulyatt previously worked as an Assistant Vice
      President since December 2000 and analyst for the Manager and
      OppenheimerFunds, Inc. since January 1999.

      The SAI provides additional information about the portfolio manager's
      compensation, other accounts he manages and his ownership of Trust shares.


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

How to Buy Shares

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


      The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the Distributor
(Centennial Asset Management Corporation) or the Sub-Distributor (OppenheimerFunds
Distributor, Inc.) receives the purchase order at its offices in Colorado, or after
any agent appointed by the Sub-Distributor receives the order and sends it to the
Sub-Distributor as described below. Your financial adviser can provide you with
more information regarding the time you must submit your purchase order and whether
the adviser is an authorized agent for the receipt of purchase orders.

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


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

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

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


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


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

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


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

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


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

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

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

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

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

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

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

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


Payment by Check.  Direct shareholders may pay for purchases of shares of the Trust
      by check. Send your check, payable to "OppenheimerFunds Distributor, Inc.,"
      along with your application and other documents to the address listed above.
      Your check must be payable in U.S. dollars and drawn on a U.S. bank.
      Distributions will begin to accrue on the next regular business day after the
      Sub-Distributor accepts your purchase order.  The minimum initial investment
      for direct shareholders by check is $500.


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

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


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

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

OTHER PAYMENTS TO FINANCIAL INTERMEDIARIES AND SERVICE PROVIDERS. The Manager, the
Distributor and the Sub-Distributor, in their discretion, also may pay dealers or
other financial intermediaries and service providers for distribution and/or
shareholder servicing activities. These payments are made out of the Manager's, the
Distributor's and/or the Sub-Distributor's own resources, including from the
profits derived from the advisory fees the Manager, the Distributor and the
Sub-Distributor receives from the Trust. These cash payments, which may be
substantial, are paid to many firms having business relationships with the Manager,
the Distributor and the Sub-Distributor. These payments are in addition to any
distribution fees, servicing fees, or transfer agency fees paid directly or
indirectly by the Trust to these financial intermediaries. These payments by the
Manager, the Distributor or the Sub-Distributor from their own resources are not
reflected in the tables in the section called "Fees and Expenses of the Trust" in
this Prospectus because they are not paid by the Trust.

     "Financial intermediaries" are firms that offer and sell Trust shares to their
clients, or provide shareholder services to the Trust, or both, and receive
compensation for doing so. Your securities dealer or financial adviser, for
example, is a financial intermediary, and there are other types of financial
intermediaries that receive payments relating to the sale or servicing of the
Trust's shares. In addition to dealers, the financial intermediaries that may
receive payments include sponsors of fund "supermarkets," sponsors of fee-based
advisory or wrap fee programs, sponsors of college and retirement savings programs,
banks and trust companies offering products that hold Trust shares, and insurance
companies that offer variable annuity or variable life insurance products.

     In general, these payments to financial intermediaries can be categorized as
"distribution-related" or "servicing" payments. Payments for distribution-related
expenses, such as marketing or promotional expenses, are often referred to as
"revenue sharing." Revenue sharing payments may be made on the basis of the sales
of shares attributable to that dealer, the average net assets of the Trust and
other Oppenheimer funds attributable to the accounts of that dealer and its
clients, negotiated lump sum payments for distribution services provided, or sales
support fees. In some circumstances, revenue sharing payments may create an
incentive for a dealer or financial intermediary or its representatives to
recommend or offer shares of the Trust or other Oppenheimer funds to its customers.
These payments also may give an intermediary an incentive to cooperate with the
Distributor's marketing efforts. A revenue sharing payment may, for example,
qualify the Trust for preferred status with the intermediary receiving the payment
or provide representatives of the Distributor with access to representatives of the
intermediary's sales force, in some cases on a preferential basis over funds of
competitors. Additionally, as firm support, the Manager, the Distributor or the
Sub-Distributor may reimburse expenses related to educational seminars and "due
diligence" or training meetings (to the extent permitted by applicable laws or the
rules of the NASD) designed to increase sales representatives' awareness about
Oppenheimer funds, including travel and lodging expenditures. However, the Manager
does not consider a financial intermediary's sale of shares of the Trust or other
Oppenheimer funds when selecting brokers or dealers to effect portfolio
transactions for the funds.

     Various factors are used to determine whether to make revenue sharing
payments. Possible considerations include, without limitation, the types of
services provided by the intermediary, sales of Trust shares, the redemption rates
on accounts of clients of the intermediary or overall asset levels of Oppenheimer
funds held for or by clients of the intermediary, the willingness of the
intermediary to allow the Distributor to provide educational and training support
for the intermediary's sales personnel relating to the Oppenheimer funds, the
availability of the Oppenheimer funds on the intermediary's sales system, as well
as the overall quality of the services provided by the intermediary and the
Manager, Distributor or the Sub-Distributor's relationship with the intermediary.
The Manager, Distributor and the Sub-Distributor have adopted guidelines for
assessing and implementing each prospective revenue sharing arrangement. To the
extent that financial intermediaries receiving distribution-related payments from
the Manager, Distributor or the Sub-Distributor sell more shares of the Oppenheimer
funds or retain more shares of the funds in their client accounts, the Manager,
Distributor and the Sub-Distributor benefit from the incremental management and
other fees they receive with respect to those assets.

     Payments may also be made by the Manager, the Distributor, the Sub-Distributor
or the Transfer Agent to financial intermediaries to compensate or reimburse them
for administrative or other client services provided such as sub-transfer agency
services for shareholders or retirement plan participants, omnibus accounting or
sub-accounting, participation in networking arrangements, account set-up,
recordkeeping and other shareholder services. Payments may also be made for
administrative services related to the distribution of Trust shares through the
intermediary. Firms that may receive servicing fees include retirement plan
administrators, qualified tuition program sponsors, banks and trust companies, and
others. These fees may be used by the service provider to offset or reduce fees
that would otherwise be paid directly to them by certain account holders, such as
retirement plans.

      The SAI contains more information about revenue sharing and service payments
made by the Manager, Distributor or the Sub-Distributor. Your dealer may charge you
fees or commissions in addition to those disclosed in this Prospectus. You should
ask your dealer or financial intermediary for details about any such payments it
receives from the Manager, Distributor or the Sub-Distributor and their affiliates,
or any other fees or expenses it charges.


How to Sell Shares

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

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

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

Certain Requests Require a Signature Guarantee.  To protect you and the Trust from
      fraud, the following redemption requests for accounts of direct shareholders
      must be in writing and must include a signature guarantee (although there may
      be other situations that also require a signature guarantee):

   o  You wish to redeem more than $100,000 and receive a check.
   o  The redemption check is not payable to all shareholders listed on the account

      statement.
   o  The redemption check is not sent to the address of record on your account
      statement.
   o  Shares are being transferred to an account with a different owner or name.
   o  Shares are being redeemed by someone (such as an Executor) other than the
      owners listed in the account registration.

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


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

         authorization of the person asking to sell the shares.

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


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


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

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

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

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

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

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

How to Exchange Shares

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


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

HOW CAN DIRECT SHAREHOLDERS EXCHANGE SHARES?  Direct shareholders can exchange
shares of the Trust for Class A shares of certain eligible funds listed in the SAI.
Shares of a particular class of an eligible fund may be exchanged only for shares
of the same class in other eligible funds.  For example, you can exchange shares of
the Trust only for Class A shares of another fund, and you can exchange only Class
A shares of another eligible fund for shares of the Trust. To exchange shares, you
must meet several conditions:

   o  Shares of the fund selected for exchange must be available for sale in your
      state of residence.

   o  The prospectuses of the selected fund must offer the exchange privilege.
   o  When you establish an account, you must hold the shares you buy for at least

      seven days before you can exchange them. After your account is open for seven
      days, you can exchange shares on any regular business day, subject to the
      limitations described below.
   o  You must meet the minimum purchase requirements for the selected fund.
   o  Generally, exchanges may be made only between identically registered
      accounts, unless all account owners send written exchange instructions with a
      signature guarantee.
   o  Before exchanging into a fund, you must obtain its prospectus and should read
      it carefully.

For tax purposes, an exchange of shares of the Trust is considered a sale of those
shares and a purchase of the shares of the fund to which you are exchanging. An
exchange may result in a capital gain or loss. Since shares of a Trust normally
maintain a $1.00 net asset value, in most cases you should not realize a capital
gain or loss when you sell or exchange your shares.


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


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

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

   o  Written Exchange Requests.  Send a request letter, signed by all owners of
      the account to the Transfer Agent at the address on the back cover.
      Exchanges of shares for which share certificates have been issued cannot be
      processed unless the Transfer Agent receives the certificates with the
      request letter.

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


Please refer to "How to Exchange Shares" in the SAI for more details.


ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?

Risks from Excessive Purchase, Redemption and Short-Term Exchange Activity. The
exchange privilege affords investors the ability to switch their investments among
eligible funds if their investment needs change. However, there are limits on that
privilege. Frequent purchases, redemptions and exchanges of Trust shares may
interfere with the Manager's ability to manage the Trust's investments efficiently,
increase the fund's transaction and administrative costs and/or affect the Trust's
performance, depending on various factors, such as the size of the Trust, the
nature of its investments, the amount of Trust assets the portfolio manager
maintains in cash or cash equivalents, the aggregate dollar amount and the number
and frequency of trades. If large dollar amounts are involved in exchange and/or
redemption transactions, the Trust might be required to sell portfolio securities
at unfavorable times to meet redemption or exchange requests, and the Trust's
brokerage or administrative expenses might be increased.

Therefore, the Manager and the Trust's Board of Trustees have adopted the following
policies and procedures to detect and prevent frequent and/or excessive exchanges,
and/or purchase and redemption activity, while balancing the needs of investors who
seek liquidity from their investment and the ability to exchange shares as
investment needs change. There is no guarantee that the policies and procedures
described below will be sufficient to identify and deter excessive short-term
trading.


o     Timing of Exchanges.  Exchanged shares are normally redeemed from one fund
      and the proceeds are reinvested in the fund selected for exchange on the same
      regular business day on which the Transfer Agent or its agent (such as a
      financial intermediary holding the investor's shares in an "omnibus" or
      "street name" account) receives an exchange request that conforms to these
      policies. The request must be received by the close of the NYSE that day,
      which is normally 4:00 p.m. Eastern time, but may be earlier on some days, in
      order to receive that day's net asset value on the exchanged shares. Exchange
      requests received after the close of the NYSE will receive the next net asset
      value calculated after the request is received. However, the Transfer Agent
      may delay transmitting the proceeds from an exchange for up to five business
      days if it determines, in its discretion, that an earlier transmittal of the
      redemption proceeds to the receiving fund would be detrimental to either the
      fund from which the exchange is being made or the fund into which the
      exchange is being made. The proceeds will be invested in the fund into which
      the exchange is being made at the next net asset value calculated after the
      proceeds are received. In the event that such delay in the reinvestment of
      proceeds occurs, the Transfer Agent will notify you or your financial
      representative.

o     Limits on Disruptive Activity. The Transfer Agent may, in its discretion,
      limit or terminate trading activity by any person, group or account that it
      believes would be disruptive, even if the activity has not exceeded the
      policy outlined in this Prospectus. The Transfer Agent may review and
      consider the history of frequent trading activity in all accounts in the
      Oppenheimer or Centennial funds known to be under common ownership or control
      as part of the Transfer Agent's procedures to detect and deter excessive
      trading activity.

o     Exchanges of Client Accounts by Financial Advisers.  The Trust and the
      Transfer Agent permit dealers and financial intermediaries to submit exchange
      requests on behalf of their customers (unless the customer has revoked that
      authority). The Distributor and/or the Transfer Agent have agreements with a
      number of financial intermediaries that permit them to submit exchange orders
      in bulk on behalf of their clients. Those intermediaries are required to
      follow the exchange policies stated in this Prospectus and to comply with
      additional, more stringent restrictions. Those additional restrictions
      include limitations on the funds available for exchanges, the requirement to
      give advance notice of exchanges to the Transfer Agent, and limits on the
      amount of client assets that may be invested in a particular fund. A fund or
      the Transfer Agent may limit or refuse bulk exchange requests submitted by
      such financial intermediaries if, in the Transfer Agent's judgment, exercised
      in its discretion, the exchanges would be disruptive to any of the funds
      involved in the transaction.

o     Redemptions of Shares.  These exchange policy limits do not apply to
      redemptions of shares. Shareholders are permitted to redeem their shares on
      any regular business day, subject to the terms of this Prospectus. Further
      details are provided under "How to Sell Shares."


o     Right to Refuse Exchange and Purchase Orders.  The Distributor and/or the
      Transfer Agent may refuse any purchase or exchange order in their discretion
      and are not obligated to provide notice before rejecting an order. The Trust
      may amend, suspend or terminate the exchange privilege at any time. You will
      receive 60 days' notice of any material change in the exchange privilege
      unless applicable law allows otherwise.


o     Right to Terminate or Suspend Account Privileges.  The Transfer Agent may
      send a written warning to direct shareholders that the Transfer Agent
      believes may be engaging in excessive purchases, redemptions and/or exchange
      activity and reserves the right to suspend or terminate the ability to
      purchase shares and/or exchange privileges for any account that the Transfer
      Agent determines, in carrying out these policies and in the exercise of its
      discretion, has engaged in disruptive or excessive trading activity, with or
      without such warning.


o     Omnibus Accounts.  If you hold your shares of the Trust through a financial
      intermediary such as a broker/dealer, a bank, an insurance company separate
      account, an investment adviser, an administrator or trustee of a retirement
      plan or 529 plan that holds your shares in an account under its name (these
      are sometimes referred to as "omnibus" or "street name" accounts), that
      financial intermediary may impose its own restrictions or limitations to
      discourage short-term or excessive trading. You should consult your financial
      intermediary to find out what trading restrictions, including limitations on
      exchanges, they may apply.


While the Trust, the Distributor, the Manager and the Transfer Agent encourage
financial intermediaries to apply the Trust's policies to their customers who
invest indirectly in the Trust, the Transfer Agent may not be able to detect
excessive short term trading activity facilitated by, or in accounts maintained
in, the "omnibus" or "street name" accounts of a financial intermediary.
Therefore the Transfer Agent might not be able to apply this policy to accounts
such as (a) accounts held in omnibus form in the name of a broker/dealer or
other financial institution, or (b) omnibus accounts held in the name of a
retirement plan or 529 plan trustee or administrator, or (c) accounts held in
the name of an insurance company for its separate account(s), or (d) other
accounts having multiple underlying owners but registered in a manner such that
the underlying beneficial owners are not identified to the Transfer Agent.


However, the Transfer Agent will attempt to monitor overall purchase and
redemption activity in those accounts to seek to identify patterns that may
suggest excessive trading by the underlying owners.  If evidence of possible
excessive trading activity is observed by the Transfer Agent, the financial
intermediary that is the registered owner will be asked to review account
activity, and to confirm to the Transfer Agent and the Trust that appropriate
action has been taken to curtail any excessive trading activity. However, the
Transfer Agent's ability to monitor and deter excessive short-term trading in
omnibus or street name accounts ultimately depends on the capability and
cooperation of the financial intermediaries controlling those accounts.



Additional Policies and Procedures. The Trust's Board has adopted the following
additional policies and procedures to detect and prevent frequent and/or excessive
exchanges and purchase and redemption activity:


o     30-Day Limit.  A direct shareholder may exchange all or some of the shares of
      the Trust held in his or her account to another eligible Oppenheimer fund
      once in a 30 calendar-day period. When shares are exchanged into another fund
      account, that account will be "blocked" from further exchanges into another
      fund for a period of 30 calendar days from the date of the exchange. The
      block will apply to the full account balance and not just to the amount
      exchanged into the account. For example, if a shareholder exchanged $1,000
      from one fund into another fund in which the shareholder already owned shares
      worth $10,000, then, following the exchange, the full account balance
      ($11,000 in this example) would be blocked from further exchanges into
      another fund for a period of 30 calendar days. A "direct shareholder" is one
      whose account is registered on the Trust's books showing the name, address
      and tax ID number of the beneficial owner.


o     Exchanges Into Money Market Funds.  A direct shareholder will be permitted to
      exchange shares of a stock or bond fund for shares of any money market fund
      that offers an exchange privilege at any time, even if the shareholder has
      exchanged shares into the stock or bond fund during the prior 30 days.
      However, all of the shares held in that money market fund would then be
      blocked from further exchanges into another fund for 30 calendar days.


o     Dividend Reinvestments.  Reinvestment of dividends or distributions from one
      fund to purchase shares of another fund will not be considered exchanges for
      purposes of imposing the 30-day limit.

o     Asset Allocation.  Third-party asset allocation and rebalancing programs will
      be subject to the 30-day limit described above. Asset allocation firms that
      want to exchange shares held in accounts on behalf of their customers must
      identify themselves to the Transfer Agent and execute an acknowledgement and
      agreement to abide by these policies with respect to their customers'
      accounts. "On-demand" exchanges outside the parameters of portfolio
      rebalancing programs will be subject to the 30-day limit. However, investment
      programs by other Oppenheimer "funds-of-funds" that entail rebalancing of
      investments in underlying Oppenheimer funds will not be subject to these
      limits.

o     Automatic Exchange Plans.  Accounts that receive exchange proceeds through
      automatic or systematic exchange plans that are established through the
      Transfer Agent will not be subject to the 30-day block as a result of those
      automatic or systematic exchanges (but may be blocked from exchanges, under
      the 30-day limit, if they receive proceeds from other exchanges).

Shareholder Account Rules and Policies


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


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


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

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


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


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


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

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


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

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


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

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

Dividends, Capital Gains and Taxes

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

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

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

o     Reinvest All Distributions in the Trust.  You can elect to reinvest all
      dividends and capital gains distributions in additional shares of the Trust.
o     Reinvest Dividends or Capital Gains.  You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital gains
      distributions) in the Trust while receiving other types of distributions by
      check or having them sent to your bank account.
o     Receive All Distributions in Cash.  You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your bank.

o     Reinvest Your Distributions in Another Account.  You can reinvest all
      distributions in the same class of shares of another eligible fund account
      you have established, provided that the selected fund is available for
      exchange.


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

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

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

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


      The Trust intends each year to qualify as a "regulated investment company"
under the Internal Revenue Code, but reserves the right not to qualify.  It
qualified during its last fiscal year.  The Trust, as a regulated investment
company, will not be subject to Federal income taxes on any of its income, provided
that it satisfies certain income, diversification and distribution requirements.


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

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

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






Financial Highlights


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

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

YEAR ENDED JUNE 30,                                   2006          2005          2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------
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                .02 1         .01 1          -- 2           .01             .01
---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                  (.02)         (.01)           -- 2          (.01)           (.01)
Distributions from net realized gain                    --            --            --              --              -- 2
                                                  -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                       (.02)         (.01)           -- 2          (.01)           (.01)
---------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                    $   1.00      $   1.00      $   1.00        $   1.00        $   1.00
                                                  =========================================================================

---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3                                        2.27%         1.13%         0.21%           0.52%           0.89%
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $182,065      $165,862      $139,892        $152,856        $154,653
---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $184,956      $148,312      $149,559        $156,348        $164,278
---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                 2.25%         1.11%         0.21%           0.52%           0.89%
Total expenses                                        0.76% 6       0.77% 5       0.78% 5,6       0.76% 5,6       0.77% 5,6

1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Less than $0.005 per share.

3. 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 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.

4. Annualized for periods of less than one full year.

5. Reduction to custodian expenses less than 0.01%.

6. Voluntary reimbursement of expenses less than 0.01%.

INFORMATION AND SERVICES

For More Information on Centennial California Tax Exempt Trust

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

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

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

How to Get More Information

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

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

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
By Mail:                        Write to:
                                Shareholder Services, Inc.
                                P.O. Box 5143
                                Denver, Colorado 80217-5143
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
On the Internet:                You can request these documents by e-mail or
                                through the OppenheimerFunds website. You may
                                also read or download certain documents on the
                                OppenheimerFunds website at:
                                www.oppenheimerfunds.com
---------------------------------------------------------------------------------

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

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

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

PR0180.001.0806
Printed on recycled paper







APPENDIX TO THE PROSPECTUS OF
CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

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

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

--------------------------------------------------------------------
Calendar Year Ended:             Annual Total Returns
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/96                         2.79%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/97                         2.91%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/98                         2.57%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/99                         2.47%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/00                         2.94%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/01                         1.76%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/02                         0.61%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/03                         0.29%
--------------------------------------------------------------------
--------------------------------------------------------------------
12/31/04                         0.48%
--------------------------------------------------------------------
--------------------------------------------------------------------

12/31/05                         1.75%

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

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

6803 South Tucson Way, Centennial, Colorado 80112
1.800.525.9310


Statement of Additional Information dated August 23, 2006.

      This Statement of Additional Information ("SAI") is not a prospectus.
This document contains additional information about the Trust and supplements
information in the Prospectus dated August 23, 2006.  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........
     The Trust's Investment Policies..........................................
     Other Investment Strategies..............................................
     Other Investment Restrictions............................................
     Disclosure of Portfolio Holdings.........................................
How the Trust is Managed......................................................
     Organization and History.................................................
     Board of Trustees and Oversight Committees...............................
     Trustees and Officers of the Trust.......................................
     The Manager..............................................................

Service Plan..................................................................
Payments to Trust Intermediaries..............................................
Performance of the Trust......................................................


About Your Account
How To Buy Shares.............................................................
How To Sell Shares............................................................
How To Exchange Shares........................................................
Dividends and Taxes...........................................................
Additional Information About the Trust........................................

Financial Information About the Trust

Report of Independent Registered Public Accounting Firm.......................
Financial Statements..........................................................


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







                                    47
                                      2
 -----------------------------------------------------------------------------
 ABOUT THE TRUST
 -----------------------------------------------------------------------------

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 SAI 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, school
districts 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.


|X|   Tender Option Bond Programs. The Trust may also invest a significant
portion of its assets in tender option bond programs. Tender option bond
programs are a type of municipal bond derivative security that provide for
tax-free income at a variable rate. In such programs, high quality
longer-term municipal bonds are held inside a trust and varying economic
interests in the bonds are created and sold to investors. One class of
investors earns interest at a rate based on current short-term tax-exempt
interest rates and may tender its holdings at par to the program sponsor at
agreed upon intervals. This share class is an eligible security for municipal
money market fund investments. A second class of investors has a residual
income interest (earning any net income produced by the underlying bonds that
exceeds the variable income paid to the other class of investors) and bears
the risk that the underlying bonds decline in value due to changes in market
interest rates. The Funds do not invest in this second class of shares. Under
the terms of such programs, both investor classes bear the risk of loss that
would result from a default on the underlying bonds as well as from other
potential, yet remote, credit or structural events.

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.


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. A second tier security is any eligible security that is not
a first tier security.


      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 security
or the demand feature or guarantee is a second tier security, the Trust may
not invest more than 5% 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 of the maximum permitted maturity under Rule 2a-7 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 which 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.

      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

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 "SEC"), 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.


Illiquid and Restricted Securities.  Under the policies and procedures
established by the Trust's Board of Trustees, the Manager determines the
liquidity of certain of the Trust's investments. Investments may be illiquid
because of the absence of an active trading market, making it difficult to
value them or dispose of them promptly at an acceptable price.  A restricted
security is one that has a contractual restriction on its resale or which
cannot be sold publicly until it is registered under the Securities Act of
1933.

      Illiquid securities the Trust can buy include issues that may be
redeemed only by the issuer upon more than seven days notice or at maturity,
repurchase agreements maturing in more than seven days, fixed time deposits
subject to withdrawal penalties which mature in more than seven days, and
other securities that cannot be sold freely due to legal or contractual
restrictions on resale. Contractual restrictions on the resale of illiquid
securities might prevent or delay their sale by the Trust at a time when such
sale would be desirable.

      There are restricted securities that are not illiquid that the Trust
can buy.  They include certain master demand notes redeemable on demand, and
short-term corporate debt instruments that are related to current
transactions of the issuer and therefore are exempt from registration as
commercial paper.  Illiquid securities include repurchase agreements maturing
in more than seven days, or certain participation interests other than those
with puts exercisable within seven days.


Bank Loan Participation Agreements.  The Trust 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 Considerations Relating to California Municipal Obligations

  Because the Trust invests primarily in California tax-exempt securities,
the value of its portfolio investments will be highly sensitive to events
affecting the fiscal stability of the State of California (sometimes referred
to in this section as the "State") and its municipalities, authorities and
other instrumentalities that issue such securities.  The following
information is based on information available as of the date of this
Statement of Additional Information primarily from official statements and
prospectuses relating to securities offerings of the State, the latest of
which is dated June 14, 2006.

  General Economic Conditions

  The economy of the State is the largest among the 50 states and one of the
largest in the world.  The diversified economy of the State has major
components in high technology, trade, entertainment, agriculture, tourism,
construction and services. Certain of the State's significant industries,
such as high technology, are sensitive to economic disruptions in their
export 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 and 2003 (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 resulted in a
serious erosion of General Fund tax revenues.  In recent years, the State has
derived a significant portion of its revenue 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.

  California's geographic location subjects it to earthquake risks.  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.

  State Budgets

  2005 Budget Act. The State's 2005 Budget Act (adopted in July 2005 for the
fiscal year ending June 30, 2006) forecasted $84.5 billion in General Fund
revenues and transfers, $90.0 billion in expenditures, and after application
of the prior year's $7.5 billion General Fund balance, a positive General
Fund balance of $1.9 billion.  The State's Legislative Analyst's Office (the
"LAO"), in its Analysis of the 2006-07 Budget Bill Report issued on February
23, 2006 (the "LAO February 2006 Report"), estimates General Fund revenues
and transfers of $89.0 billion, expenditures of $90.5 billion and a positive
General Reserve balance of $7.6 billion for the 2005-2006 fiscal year.  The
May Revision to the Governor's Budget for 2006-07, released in May 2006 (the
"2006 May Revision"), projects General Fund revenues and transfers of $92.4
billion, expenditures of $92.6 billion and a positive General Reserve balance
of $8.8 billion for the 2005-2006 fiscal year.  The 2006 Budget Act, as of
June 30, 2006, projects that the 2005-06 fiscal year will end with revenues
and transfers of $102.2 billion, expenditures of $92.7 billion and a reserve
of $9.0 billion.

  2006 Budget Act.  The Governor's Budget for the 2006-07 fiscal year,
released in January 2006, projects General Fund revenues and transfers for
the fiscal year ended June 30, 2007 of $91.5 billion, expenditures at $97.9
billion, and a year-end General Fund reserve of $674 million.  Coinciding
with the release of the budget, the Governor announced a "Strategic Growth
Plan" for the State in which he proposed that the State spend nearly $223
billion over 10 years on State infrastructure programs such as
transportation, education, flood control, public safety and courts.  The
Strategic Growth Plan would be financed in part through the issuance of $68
billion in general obligation bonds.  The LAO February 2006 Report projects
revenues and transfers of $93.0 billion, expenditures of $98.0 billion and a
positive General Reserve balance of $2.6 billion for the 2006-2007 fiscal
year (approximately $1.9 billion more than that assumed in the budget
estimate).

  However, the LAO warned that several budgetary risks could add several
billions of dollars to the operating shortfalls during the next several
fiscal years.  They include an economic slowdown due to higher energy costs,
a real estate decline, unfavorable outcomes in major lawsuits, and added
State costs resulting from federal budget reduction efforts.  The LAO
recommended that the Legislature reduce the amount of ongoing spending
increases proposed in the budget.  In the report, the LAO warned of operating
budget shortfalls in upcoming years of up to $5 billion annually.

  The 2006 May Revision projected that the State would receive about $7.5
billion in additional revenues (for 2005-06 and 2006-07) from revenues
projected in January, although expenditures would also increase.  The May
Revision projected General Fund revenues and transfers for the fiscal year
ended June 30, 2007 of $93.9 billion, expenditures at $101.0 billion, and a
year-end General Fund reserve of $2.2 billion.  The spending plan includes
$3.2 billion for the repayment or prepayment of prior obligations, including
$1.5 billion to prepay Economic Recovery Bonds, and other one-time costs of
$1.6 billion.

  The Governor signed the 2006 Budget Act on June 30, 2006 which was
substantially in line with the Governor's proposals in the 2006 May
Revision.  The 2006 Budget Act forecasts $93.9 billion in General Fund
revenues and transfers and $101.3 billion in expenditures. The 2006 Budget
Act projects that by utilizing the prior year's $9.5 billion General Fund
balance, the General Fund will end the fiscal year with a positive balance of
about $2.1 billion.  The 2006 Budget Act assumes that the State will not
issue Economic Recovery Bonds or raise taxes.

  Constraints on the Budget Process.  Approved in March 2004 with the State's
Economic Recovery Bonds, Proposition 58 requires the State to enact a
balanced budget and establish a special reserve in the General Fund and
restricts future borrowing to cover budget deficits. As a result of the
provisions requiring the enactment of a balanced budget and restricting
borrowing, the State would, in some cases, have to take more immediate
actions to correct budgetary shortfalls. Beginning with the budget for fiscal
year 2004-05, Proposition 58 requires the Legislature to pass a balanced
budget and provides for mid-year adjustments in the event that the budget
falls out of balance. The balanced budget determination is made by
subtracting expenditures from all available resources, including prior-year
balances.


  If the Governor determines that the State is facing substantial revenue
shortfalls or spending deficiencies, the Governor is authorized to declare a
fiscal emergency. He or she would then be required to propose legislation to
address the emergency, and call the Legislature into special session to
consider that legislation.  If the Legislature fails to pass and send to the
Governor legislation to address the budget fiscal emergency within 45 days,
the Legislature would be prohibited from acting on any other bills or
adjourning in joint recess until such legislation is passed.
  Proposition 58 also requires that a special reserve (the Budget
Stabilization Account) be established in the State's General Fund. Beginning
with fiscal year 2006-07, a specified portion of estimated annual General
Fund revenues would be transferred by the Controller into the Budget
Stabilization Account no later than September 30 of each fiscal year. These
transfers would continue until the balance in the Budget Stabilization
Account reaches $8 billion or 5 percent of the estimated General Fund
revenues for that fiscal year, whichever is greater. The annual transfer
requirement would be in effect whenever the balance falls below the $8
billion or 5 percent target. The annual transfers could be suspended or
reduced for a fiscal year by an executive order issued by the Governor no
later than June 1 of the preceding fiscal year.

  Proposition 58 will also prohibit certain future borrowing to cover budget
deficits. This restriction applies to general obligation bonds, revenue
bonds, and certain other forms of long-term borrowing. The restriction does
not apply to certain other types of borrowing, such as short-term borrowing
to cover cash shortfalls in the General Fund (including revenue anticipation
notes or revenue anticipation warrants currently used by the State), or
inter-fund borrowings.


  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 and Revenue Bonds. As of May 1, 2006, the State
had approximately $56.3 billion aggregate principal of its long-term general
obligation bonds and revenue bonds outstanding.  Inclusive of estimated
interest of approximately $34.1 billion, the State's debt service
requirements for general obligation bonds and revenue bonds totaled nearly
$90.4 billion.  General obligation bond authorizations in an aggregate amount
of approximately $31.7 billion remained unissued as of that date.

  Ratings.  As of July 11, 2006, the State's general obligation bonds were
rated A1 by Moody's, A+ by Standard & Poor's, and A+ by Fitch Ratings.  It is
not presently possible to determine whether, or the extent to which, Moody's,
Standard & Poor's or Fitch Ratings will change such ratings in the future.

  Future Initiatives.  In response to the Governor's "Strategic Growth Plan",
the Legislature in May 2006 approved a $116 million Strategic Growth Plan
package, which included four bond measures totaling about $37.3 billion which
will appear on the November 2006 election ballot.


  Local Government

  The primary units of local government in California are the counties,
ranging in population from 1,200 (Alpine) to approximately 10 million (Los
Angeles). Counties are responsible for the provision of many basic services,
including indigent healthcare, welfare, courts, jails and public safety in
unincorporated areas. There are also 478 incorporated cities and thousands of
other special districts formed for education, utility and other services. The
fiscal condition of local governments has been constrained since the
enactment of "Proposition 13" in 1978 and later constitutional amendments,
which reduced and limited the future growth of property taxes and limited the
ability of local governments to impose "special taxes" (those devoted to a
specific purpose) without two-thirds voter approval. Proposition 218, another
initiative constitutional amendment enacted in 1996, further limited the
ability of local governments to impose or raise various taxes, fees, charges
and assessments without voter approval. Counties, in particular, have had
fewer options to raise revenues than many other local government entities,
and have been required to maintain many services.


  Some local governments in California have experienced notable financial
difficulties, including Los Angeles County, Orange County and San Diego
County, and there is no assurance that any California issuer will make full
or timely payments of principal or interest or remain solvent.  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.

  According to the State, the 2004 Budget Act, related legislation and the
enactment of Senate Constitutional Amendment No. 4 (described below) will
dramatically change the State-local fiscal relationship. These constitutional
and statutory changes implement an agreement negotiated between the Governor
and local governments officials (the "State-local agreement") in connection
with the 2004 Budget Act. One change relates to the reduction of the Vehicle
License Fee ("VLF") rate from 2 percent to 0.65 percent of the market value
of the vehicle. In order to protect local governments, the reduction in VLF
revenue to cities and counties from this rate change will be replaced by an
increase in the amount of property tax they receive. Under the State-local
agreement and implementing legislation, for fiscal years 2004-05 and 2005-06
only, the replacement property taxes that cities and counties receive will be
reduced by $700 million. In future years, local governments will receive the
full value of the VLF revenue. Also for these two fiscal years, redevelopment
agencies will be required to shift $250 million to schools, and special
districts to shift $350 million, in property tax revenues they would
otherwise receive.

  As part of the State-local agreement, Senate Constitutional Amendment No. 4
was enacted by the Legislature and subsequently approved by the voters at the
November 2004 election.  Senate Constitutional Amendment No. 4 amends the
State Constitution to, among other things, reduce the Legislature's authority
over local government revenue sources by placing restrictions on the State's
access to local governments' property, sales, and VLF revenues as of November
3, 2004. Beginning with fiscal year 2008-09, the State will be able to borrow
up to 8 percent of local property tax revenues, but only if the Governor
proclaims such action is necessary due to a severe State fiscal hardship,
two-thirds of both houses of the Legislature approves the borrowing and the
amount borrowed is required to be paid back within three years. The State
also will not be able to borrow from local property tax revenues for more
than two fiscal years within a period of 10 fiscal years. In addition, the
State cannot reduce the local sales tax rate or restrict the authority of the
local governments to impose or change the distribution of the statewide local
sales tax.


  Senate Constitutional Amendment No. 4 also prohibits the State from
mandating activities on cities, counties or special districts without
providing for the funding needed to comply with the mandates. Beginning in
fiscal year 2005-06, if the State does not provide funding for an activity
that has been determined to be mandated, the requirement on cities, counties
or special districts to abide by the mandate would be suspended. In addition,
Senate Constitutional Amendment No. 4 expands the definition of what
constitutes a mandate to encompass State action that transfers to cities,
counties and special districts financial responsibility for a required
program for which the State previously had partial or complete
responsibility. The State mandate provisions of Senate Constitutional
Amendment No. 4 do not apply to schools or community colleges or to mandates
relating to employee rights.

  Constitutional, Legislative and Other Factors

  The State is subject to an annual appropriations limit imposed by Article
XIII B of the State Constitution (the "Appropriations Limit"). The
Appropriations Limit does not restrict appropriations to pay debt service on
voter-authorized bonds.

  Article XIII B prohibits the State from spending "appropriations subject to
limitation" in excess of the Appropriations Limit.  "Appropriations subject
to limitation" are authorizations to spend "proceeds of taxes," which consist
of tax revenues and certain other funds, including proceeds from regulatory
licenses, user charges or other fees to the extent that such proceeds exceed
"the cost reasonably borne by that entity in providing the regulation,
product or service," but "proceeds of taxes" exclude most State subventions
to local governments, tax refunds and some benefit payments such as
unemployment insurance. No limit is imposed on appropriations of funds which
are not "proceeds of taxes," such as reasonable user charges or fees and
certain other non-tax funds.  Various types of appropriations are excluded
from the Appropriations Limit.

  The State's Appropriations Limit in each year is based on the Limit for the
prior year, adjusted annually for changes in State per capita personal income
and changes in population, and adjusted, when applicable, for any transfer of
financial responsibility for providing services to or from another unit of
government or any transfer of the financial source for the provisions of
services from tax proceeds to non-tax proceeds.

  The Legislature has enacted legislation to implement Article XIII B which
defines certain terms used in Article XIII B and sets forth the methods for
determining the Appropriations Limit. California Government code Section 7912
requires an estimate of the Appropriations Limit to be included in the
Governor's Budget, and thereafter to be subject to the budget process and
established in the Budget Act.

  On November 8, 1988, voters of the State approved Proposition 98, a
combined initiative constitutional amendment and statute called the
"Classroom Instructional Improvement and Accountability Act." Proposition 98
changed State funding of public education below the university level and the
operation of the State appropriations funding, primarily by guaranteeing K-14
schools a minimum share of General Fund revenues. Proposition 98 permits the
Legislature by two-thirds vote of both houses, with the Governor's
concurrence, to suspend the K-14 schools' minimum funding formula for a
one-year period.  Proposition 98 also contains provisions transferring
certain State tax revenues in excess of the Article XIII B limit to K-14
schools.

  Because of the complexities of Article XIII B, the ambiguities and possible
inconsistencies in its terms, the applicability of its exceptions and
exemptions and the impossibility of predicting future appropriations, it is
not possible to predict the impact of this or related legislation on the
bonds in the Trust's portfolio.


  Articles XIII A, XIII B, XIII C and XIII D were each adopted as measures
that qualified for the ballot pursuant to the State's initiative process.
Other Constitutional amendments affecting State and local taxes and
appropriations have been proposed from time to time.  If any such initiatives
were adopted, the State could be pressured to provide additional financial
assistance to local Governments or appropriate revenues as mandated by such
initiatives. Propositions such as Proposition 98 and others that may be
adopted in the future may place increasing pressure on the State's budget
over future years, potentially reducing resources available for other State
programs, especially to the extent the Article XIII B spending limit would
restrain the State's ability to fund such other programs by raising taxes.


  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.

  Pending Litigation

  The State is a party to numerous legal proceedings, many of which normally
occur in governmental operations.  In addition, the State is involved in
certain other legal proceedings that, if decided against the State might
require the State to make significant future expenditures or impair future
revenue sources.  Because of the prospective nature of these proceedings, it
is not presently possible to predict the outcome of such litigation or
estimate the potential impact on the ability of the State to pay debt service
costs on its obligations.


  On August 8, 2005, a lawsuit titled California Teachers Association et al.
v. Arnold Schwarzenegger et al. was filed.  Plaintiffs - California Teachers
Association, California Superintendent of Public Instruction Jack O'Connell,
and various other individuals - allege that the California Constitution's
minimum school funding guarantee was not followed for the 2004-2005 fiscal
year and the 2005-06 fiscal year in the aggregate amount of approximately
$3.1 billion.  Plaintiffs seek a writ of mandate requiring the State to
recalculate the minimum-funding guarantee in compliance with the California
Constitution.  On May 10, 2006, counsel for all parties executed a settlement
agreement, and the action has been stayed pending implementation
legislation.  The settlement calls for payment of the outstanding balance of
the minimum funding obligation to school districts and community college
districts (approximately $3 billion in the aggregate) through the 2013-14
fiscal year.

      On November 15, 2005, a California Superior Court judge entered a
decision in a case which sought judicial validation for the issuance by the
State of pension obligation bonds.  The judge ruled the bonds were not
valid.  The State appealed, but the State will not be able to issue pension
obligation bonds until the matter is finally resolved.  For the 2005-2006
fiscal year, the State made payments of about $525 million for a portion of
the fiscal year contribution to the California Public Employees' Retirement
System which had been planned to be funded from the bonds.  The 2006 Budget
Act does not call for the issuance of any pension obligation bonds.


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 SAI 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 SAI, 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
SAI will be supplemented to reflect the change.

      Unless the Prospectus or this SAI 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 SAI.  This is not a fundamental policy.


Disclosure of Portfolio Holdings.  The Trust has adopted policies and
procedures concerning the dissemination of information about its portfolio
holdings by employees, officers and/or trustees of the Manager, Distributor,
Sub-Distributor and Transfer Agent.  These policies are designed to assure
that non-public information about portfolio securities is distributed only
for a legitimate business purpose, and is done in a manner that (a) conforms
to applicable laws and regulations and (b) is designed to prevent that
information from being used in a way that could negatively affect the Trust's
investment program or enable third parties to use that information in a
manner that is harmful to the Trust.


o     Public Disclosure. The Trust's portfolio holdings are made publicly
         available no later than 60 days after the close of each of the
         Trust's fiscal quarters in semi-annual and annual reports to
         shareholders, or in its Statements of Investments on Form N-Q, which
         are publicly available at the SEC.


      Until publicly disclosed, the Trust's portfolio holdings are
proprietary, confidential business information. While recognizing the
importance of providing the Trust's shareholders with information about their
Trust's investments and providing portfolio information to a variety of third
parties to assist with the management, distribution and administrative
process, the need for transparency must be balanced against the risk that
third parties who gain access to the Trust's portfolio holdings information
could attempt to use that information to trade ahead of or against the Trust,
which could negatively affect the prices the Trust is able to obtain in
portfolio transactions or the availability of the securities that portfolio
managers are trading on the Trust's behalf.

      The Manager and its subsidiaries and affiliates, employees, officers,
and trustees, shall neither solicit nor accept any compensation or other
consideration (including any agreement to maintain assets in the Trust or in
other investment companies or accounts managed by the Manager or any
affiliated person of the Manager) in connection with the disclosure the
Trust's non-public portfolio holdings. The receipt of investment advisory
fees or other fees and compensation paid to the Manager and its subsidiaries
pursuant to agreements approved by the Trust's Board shall not be deemed to
be "compensation" or "consideration" for these purposes.  It is a violation
of the Code of Ethics for any covered person to release holdings in
contravention of portfolio holdings disclosure policies and procedures
adopted by the Trust.

      A list of the top 10 or more portfolio securities holdings (based on
invested assets), listed by security or by issuer, as of the end of each
month may be disclosed to third parties (subject to the procedures below) no
sooner than 15 days after month-end.

      Except under special limited circumstances discussed below, month-end
lists of the Trust's complete portfolio holdings may be disclosed no sooner
than 30-days after the relevant month-end, subject to the procedures below.
If the Trust's complete portfolio holdings have not been disclosed publicly,
they may be disclosed pursuant to special requests for legitimate business
reasons, provided that:

o     The third-party recipient must first submit a request for release of
      Trust portfolio holdings, explaining the business reason for the
      request;
o     Senior officers (a Senior Vice President or above) in the Manager's
      Portfolio and Legal departments must approve the completed request for
      release of Trust portfolio holdings; and
o     The third-party recipient must sign the Manager's portfolio holdings
      non-disclosure agreement before receiving the data, agreeing to keep
      information that is not publicly available regarding the Trust's
      holdings confidential and agreeing not to trade directly or indirectly
      based on the information.

      The Trust's complete portfolio holdings positions may be released to
the following categories of entities or individuals on an ongoing basis,
provided that such entity or individual either (1) has signed an agreement to
keep such information confidential and not trade on the basis of such
information or (2) is subject to fiduciary obligations, as a member of the
Trust's Board, or as an employee, officer and/or trustee of the Manager,
Distributor, Sub-Distributor or Transfer Agent, or their respective legal
counsel, not to disclose such information except in conformity with these
policies and procedures and not to trade for his/her personal account on the
basis of such information:

o     Employees of the Trust's Manager, Distributor and Transfer Agent who
      need to have access to such information (as determined by senior
      officers of such entity),
o     The Trust's independent registered public accounting firm,
o     Members of the Trust's Board and the Board's legal counsel,
o     The Trust's custodian bank,
o     A proxy voting service designated by the Trust and its Board,
o     Rating/ranking organizations (such as Lipper and Morningstar),
o     Portfolio pricing services retained by the Manager to provide portfolio
      security prices, and
o     Dealers, to obtain bids (price quotations, if securities are not priced
      by the Trust's regular pricing services).


      Portfolio holdings information of the Trust may be provided, under
limited circumstances, to brokers and/or dealers with whom the Trust trades
and/or entities that provide investment coverage and/or analytical
information regarding the Trust's portfolio, provided that there is a
legitimate investment reason for providing the information to the broker,
dealer or other entity.  Month-end portfolio holdings information may, under
this procedure, be provided to vendors providing research information and/or
analytics to the fund, with at least a 15-day delay after the month end, but
in certain cases may be provided to a broker or analytical vendor with a 1- 2
day lag to facilitate the provision of requested investment information to
the Manager to facilitate a particular trade or the portfolio manager's
investment process for the Trust.  Any third party receiving such information
must first sign the Manager's portfolio holdings non-disclosure agreement as
a pre-condition to receiving this information.


      Portfolio holdings information (which may include information on
individual securities positions or multiple securities) may be provided to
the entities listed below (1) by portfolio traders employed by the Manager in
connection with portfolio trading, and (2) by the members of the Manager's
Security Valuation Group and Accounting Departments in connection with
portfolio pricing or other portfolio evaluation purposes:

o     Brokers and dealers in connection with portfolio transactions
      (purchases and sales)

o     Brokers and dealers to obtain bids or bid and asked prices (if
      securities held by the Trust are not priced by the Trust's regular
      pricing services)
o     Dealers to obtain price quotations where the Trust is not identified as
      the owner


      Portfolio holdings information (which may include information on the
Trust's entire portfolio or individual securities therein) may be provided by
senior officers of the Manager or attorneys on the legal staff of the
Manager, Distributor, Sub-Distributor or Transfer Agent, in the following
circumstances:

o     Response to legal process in litigation matters, such as responses to
      subpoenas or in class action matters where the Fund may be part of the
      plaintiff class (and seeks recovery for losses on a security) or a
      defendant,
o     Response to regulatory requests for information (the SEC, NASD, state
      securities regulators, and/or foreign securities authorities, including
      without limitation requests for information in inspections or for
      position reporting purposes),
o     To potential sub-advisors of portfolios (pursuant to confidentiality
      agreements),
o     To consultants for retirement plans for plan sponsors/discussions at
      due diligence meetings (pursuant to confidentiality agreements),
o     Investment bankers in connection with merger discussions (pursuant to
      confidentiality agreements)

      Portfolio managers and analysts may, subject to the Manager's policies
on communications with the press and other media, discuss portfolio
information in interviews with members of the media, or in due diligence or
similar meetings with clients or prospective purchasers of Fund shares or
their financial intermediary representatives.

      The Trust's shareholders may, under unusual circumstances (such as a
lack of liquidity in the Trust's portfolio to meet redemptions), receive
redemption proceeds of their Trust shares paid as pro rata shares of
securities held in the Trust's portfolio.  In such circumstances, disclosure
of the Trust's portfolio holdings may be made to such shareholders.

      The Chief Compliance Officer of the Trust and the Manager, Distributor,
Sub-Distributor and Transfer Agent (the "CCO") shall oversee the compliance
by the Manager, Distributor, Sub-Distributor Transfer Agent, and their
personnel with these policies and procedures. At least annually, the CCO
shall report to the Trust's Board on such compliance oversight and on the
categories of entities and individuals to which disclosure of portfolio
holdings of the Trust has been made during the preceding year pursuant to
these policies. The CCO shall report to the Trust's Board any material
violation of these policies and procedures during the previous calendar
quarter and shall make recommendations to the Board as to any amendments that
the CCO believes are necessary and desirable to carry out or improve these
policies and procedures.

      The Manager and/or the Trust have entered into ongoing arrangements to
make available information about the Trust's portfolio holdings.  One or more
of the Oppenheimer funds may currently disclose portfolio holdings
information based on ongoing arrangements to the following parties:

          ---------------------------------------------------------
          A.G. Edwards & Sons           Keijser Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          ABG Securities                Kempen & Co. USA Inc.
          ---------------------------------------------------------
          ---------------------------------------------------------
          ABN AMRO                      Kepler Equities/Julius
                                        Baer Sec
          ---------------------------------------------------------
          ---------------------------------------------------------
          Advest                        KeyBanc Capital Markets
          ---------------------------------------------------------
          ---------------------------------------------------------
          AG Edwards                    Leerink Swan
          ---------------------------------------------------------
          ---------------------------------------------------------
          American Technology Research  Legg Mason
          ---------------------------------------------------------
          ---------------------------------------------------------
          Auerbach Grayson              Lehman
          ---------------------------------------------------------
          ---------------------------------------------------------
          Banc of America Securities    Lehman Brothers
          ---------------------------------------------------------
          ---------------------------------------------------------
          Barclays                      Lipper
          ---------------------------------------------------------
          ---------------------------------------------------------
          Baseline                      Loop Capital Markets
          ---------------------------------------------------------
          ---------------------------------------------------------
          Bear Stearns                  MainFirst Bank AG
          ---------------------------------------------------------
          ---------------------------------------------------------
          Belle Haven                   Makinson Cowell US Ltd
          ---------------------------------------------------------
          ---------------------------------------------------------
          Bloomberg                     Maxcor Financial
          ---------------------------------------------------------
          ---------------------------------------------------------
          BNP Paribas                   Merrill
          ---------------------------------------------------------
          ---------------------------------------------------------
          BS Financial Services         Merrill Lynch
          ---------------------------------------------------------
          ---------------------------------------------------------
          Buckingham Research Group     Midwest Research
          ---------------------------------------------------------
          ---------------------------------------------------------
          Caris & Co.                   Mizuho Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          CIBC World Markets            Morgan Stanley
          ---------------------------------------------------------
          ---------------------------------------------------------
          Citigroup                     Morningstar
          ---------------------------------------------------------
          ---------------------------------------------------------
          Citigroup Global Markets      Natexis Bleichroeder
          ---------------------------------------------------------
          ---------------------------------------------------------
          Collins Stewart               Ned Davis Research Group
          ---------------------------------------------------------
          ---------------------------------------------------------
          Craig-Hallum Capital Group LLCNomura Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          Credit Agricole Cheuvreux     Pacific Crest
          N.A. Inc.
          ---------------------------------------------------------
          ---------------------------------------------------------
          Credit Suisse First Boston    Pacific Crest Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          Daiwa Securities              Pacific Growth Equities
          ---------------------------------------------------------
          ---------------------------------------------------------
          Davy                          Petrie Parkman
          ---------------------------------------------------------
          ---------------------------------------------------------
          Deutsche Bank                 Pictet
          ---------------------------------------------------------
          ---------------------------------------------------------
          Deutsche Bank Securities      Piper Jaffray Inc.
          ---------------------------------------------------------
          ---------------------------------------------------------
          Dresdner Kleinwort WassersteinPlexus
          ---------------------------------------------------------
          ---------------------------------------------------------
          Emmet & Co                    Prager Sealy & Co.
          ---------------------------------------------------------
          ---------------------------------------------------------
          Empirical Research            Prudential Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          Enskilda Securities           Ramirez & Co.
          ---------------------------------------------------------
          ---------------------------------------------------------
          Essex Capital Markets         Raymond James
          ---------------------------------------------------------
          ---------------------------------------------------------
          Exane BNP Paribas             RBC Capital Markets
          ---------------------------------------------------------
          ---------------------------------------------------------
          Factset                       RBC Dain Rauscher
          ---------------------------------------------------------
          ---------------------------------------------------------
          Fidelity Capital Markets      Research Direct
          ---------------------------------------------------------
          ---------------------------------------------------------
          Fimat USA Inc.                Robert W. Baird
          ---------------------------------------------------------
          ---------------------------------------------------------
          First Albany                  Roosevelt & Cross
          ---------------------------------------------------------
          ---------------------------------------------------------
          First Albany Corporation      Russell Mellon
          ---------------------------------------------------------
          ---------------------------------------------------------
          Fixed Income Securities       Ryan Beck & Co.
          ---------------------------------------------------------
          ---------------------------------------------------------
          Fortis Securities             Sanford C. Bernstein
          ---------------------------------------------------------
          ---------------------------------------------------------
          Fox-Pitt, Kelton              Scotia Capital Markets
          ---------------------------------------------------------
          ---------------------------------------------------------
          Friedman, Billing, Ramsey     SG Cowen & Co.
          ---------------------------------------------------------
          ---------------------------------------------------------
          Fulcrum Global Partners       SG Cowen Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          Garp Research                 Soleil Securities Group
          ---------------------------------------------------------
          ---------------------------------------------------------
          George K Baum & Co.           Standard & Poors
          ---------------------------------------------------------
          ---------------------------------------------------------
          Goldman                       Stone & Youngberg
          ---------------------------------------------------------
          ---------------------------------------------------------
          Goldman Sachs                 SWS Group
          ---------------------------------------------------------
          ---------------------------------------------------------
          HSBC                          Taylor Rafferty
          ---------------------------------------------------------
          ---------------------------------------------------------
          HSBC Securities Inc           Think Equity Partners
          ---------------------------------------------------------
          ---------------------------------------------------------
          ING Barings                   Thomas Weisel Partners
          ---------------------------------------------------------
          ---------------------------------------------------------
          ISI Group                     UBS
          ---------------------------------------------------------
          ---------------------------------------------------------
          Janney Montgomery             Wachovia
          ---------------------------------------------------------
          ---------------------------------------------------------
          Jefferies                     Wachovia Corp
          ---------------------------------------------------------
          ---------------------------------------------------------
          Jeffries & Co.                Wachovia Securities
          ---------------------------------------------------------
          ---------------------------------------------------------
          JP Morgan                     Wescott Financial
          ---------------------------------------------------------
          ---------------------------------------------------------
          JP Morgan Securities          William Blair
          ---------------------------------------------------------
          ---------------------------------------------------------
          JPP Eurosecurities            Yieldbook
          ---------------------------------------------------------
          ---------------------------------------------------------
          Keefe, Bruyette & Woods
          ---------------------------------------------------------


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.


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, but may hold shareholder meetings from time to time on
important matters or when required to do so by the Investment Company Act or
other applicable law. Shareholders have the right, upon a vote or declaration
in writing of two-thirds of the outstanding shares of the Trust, to remove a
Trustee or to take other action described in the Trust's Declaration of
Trust.


      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.


Shareholder and Trustee Liability.  The Trust's 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 and that 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.


      The Board of Trustees has an Audit Committee, a Review Committee and a
Governance Committee. The Audit Committee and Governance Committee are
comprised solely of Trustees who are not "interested persons" under the
Investment Company Act (the "Independent Trustees"). The members of the Audit
Committee are Edward L. Cameron (Chairman), George C. Bowen, Robert J. Malone
and F. William Marshall, Jr. The Audit Committee held 8 meetings during the
Trust's fiscal year ended June 30, 2006. The Audit Committee furnishes the
Board with recommendations regarding the selection of the Trust's independent
registered public accounting firm (also referred to as the "independent
Auditors"). Other main functions of the Audit Committee, outlined in the
Audit Committee Charter, 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) reviewing reports
from the Manager's Internal Audit Department; (iv) reviewing certain reports
from and meet periodically with the Trust's Chief Compliance Officer; (v)
maintaining a separate line of communication between the Trust's independent
Auditors and the Independent Trustees; (vi) reviewing the independence of the
Trust's independent Auditors; and (vii) pre-approving the provision of any
audit or non-audit services by the Trust's independent Auditors, including
tax services, that are not prohibited by the Sarbanes-Oxley Act, to the
Trust, the Manager and certain affiliates of the Manager.

      The members of the Review Committee are Jon S. Fossel (Chairman),
Robert G. Avis, Sam Freedman, Richard F. Grabish and Beverly L. Hamilton. The
Review Committee held 6 meetings during the Trust's fiscal year ended June
30, 2006. Among other duties, as set forth in the Review Committee's Charter,
the Review Committee reports and makes recommendations to the Board
concerning the fees paid to the Trust's Transfer Agent and the Manager and
the services provided to the Trust by the Transfer Agent and the Manager. The
Review Committee also reviews the Trust's investment performance as well as
the policies and procedures adopted by the Trust to comply with the
Investment Company Act and other applicable law.


      The Governance Committee is comprised solely of Independent Trustees.
The members of the Governance Committee are Robert J. Malone (Chairman),
William L. Armstrong, Beverly L. Hamilton and F. William Marshall, Jr. The
Governance Committee held 5 meetings during the Trust's fiscal year ended
June 30, 2006. The Governance Committee has adopted a charter setting forth
its duties and responsibilities. Among other duties, the Governance Committee
reviews and oversees the Trust's governance guidelines, the adequacy of the
Trust's Codes of Ethics and the nomination of Trustees, including Independent
Trustees. The Governance Committee has adopted a process for shareholder
submission of nominees for board positions. Shareholders may submit names of
individuals, accompanied by complete and properly supported resumes, for the
Governance Committee's consideration by mailing such information to the
Governance Committee in care of the Trust. The Governance Committee may
consider such persons at such time as it meets to consider possible nominees.
The Governance Committee, however, reserves sole discretion to determine
which candidates for Trustees and Independent Trustees it will recommend to
the Board and/or shareholders and it may identify candidates other than those
submitted by Shareholders. The Governance Committee may, but need not,
consider the advice and recommendation of the Manager and/or its affiliates
in selecting nominees. The full Board elects new Trustees except for those
instances when a shareholder vote is required.

      Shareholders who desire to communicate with the Board should address
correspondence to the Board or an individual Board member and may submit
their correspondence electronically at www.oppenheimerfunds.com under the
caption "contact us" or by mail to the Trust at the address below.

Trustees and Officers of the Trust. Except for Messrs. Murphy and Grabish,
each of the Trustees is an Independent Trustee. All of the Trustees are also
trustees or directors of the following Oppenheimer/Centennial funds (referred
to as "Board II Funds") except for Mr. Grabish, who serves as Trustee for
only the following funds: Centennial California Tax Exempt Trust, Centennial
Government Trust, Centennial Money Market Trust, Centennial New York Tax
Exempt Trust and Centennial Tax Exempt Trust:


Oppenheimer Cash Reserves                  Oppenheimer   Principal   Protected
                                           Trust II
                                           Oppenheimer   Principal   Protected
Oppenheimer Capital Income Fund            Trust III
Oppenheimer Champion Income Fund           Oppenheimer Real Asset Fund
                                           Oppenheimer  Senior  Floating  Rate
Oppenheimer Equity Fund, Inc.              Fund

Oppenheimer High Yield Fund                Oppenheimer Strategic Income Fund
Oppenheimer Integrity Funds                Oppenheimer Variable Account Funds
Oppenheimer International Bond Fund        Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund

                                           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  charge on Class A shares is
waived for that group  because of the reduced  sales  efforts  realized by the
Distributor.


      Messrs. Ullyatt, Gillespie, Murphy, Petersen, Szilagyi, Vandehey,
Wixted and Zack, and Mss. Bloomberg and Ives, who are officers of the Trust,
hold the same offices with one or more of the other Board II Funds. As of
August 14, 2006 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 Board II Funds. In addition,
none of the Independent Trustees (nor any of their immediate family members)
owns securities of either the Manager, the Distributor or the Sub-Distributor
or of any entity directly or indirectly controlling, controlled by or under
common control with the Manager, the Distributor or the Sub-Distributor of
the Board II Funds.

      Biographical Information. The Trustees and officers, their positions
with the Trust, length of service in such position(s), and principal
occupations and business affiliations during at least the past five years are
listed in the charts below. The charts also include information about each
Trustee's beneficial share ownership in the Trust and in all of the
registered investment companies that the Trustee oversees in the Oppenheimer
family of funds ("Supervised Funds"). The address of each Trustee in the
chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each
Trustee serves for an indefinite term, or until his or her resignation,
retirement, death or removal.


-------------------------------------------------------------------------------------
                                Independent Trustees
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name,                 Principal Occupation(s) During Past 5   Dollar      Aggregate
                                                                           Dollar
                                                                          Range of
                                                                         y Shares
                                                              Range of   Beneficially

Position(s) Held      Years; Other                            Shares      Owned in
with the Trust,       Trusteeships/Directorships Held;        Beneficiall    All
Length of Service,    Number of Portfolios in Fund Complex    Owned in   Supervised
Age                   Currently Overseen                      the Trust     Funds

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

                                                                       2005

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

William L. Armstrong, President, Colorado Christian           None       Over
Chairman of the       University (since 2006); Chairman of               $100,000
Board since 2003 and  the following private mortgage banking
Trustee since 2000    companies: Cherry Creek Mortgage
Age: 69               Company (since 1991), Centennial State
                      Mortgage Company (since 1994), and The
                      El Paso Mortgage Company (since 1993);
                      Chairman of the following private
                      companies: Ambassador Media
                      Corporation (since 1984) and Broadway
                      Ventures (since 1984); Director of the
                      following: Helmerich & Payne, Inc.
                      (oil and gas drilling/production
                      company) (since 1992), Campus Crusade
                      for Christ (since 1991) and The Lynde
                      and Harry Bradley Foundation, Inc.
                      (non-profit organization) (since
                      2002); former Chairman of the
                      following: Transland Financial
                      Services, Inc. (private mortgage
                      banking company) (1997-2003), Great
                      Frontier Insurance (insurance agency)
                      (1995-2000), Frontier Real Estate,
                      Inc. (residential real estate
                      brokerage) (1994-2000), and Frontier
                      Title (title insurance agency)
                      (1995-2000); former Director of the
                      following: UNUMProvident (insurance
                      company) (1991-2004) and International
                      Family Entertainment (television
                      channel) (1992-1997); U.S. Senator
                      (January 1979-January 1991). Oversees
                      38 portfolios in the OppenheimerFunds
                      complex.

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

Robert G. Avis,       Director and President of A.G. Edwards  None       Over
Trustee since 1990    Capital, Inc. (General Partner of                  $100,000
Age: 75               private equity funds) (until February

                      2001); Chairman, President and Chief
                      Executive Officer of A.G. Edwards
                      Capital, Inc. (until March 2000);
                      Director of A.G. Edwards & Sons, Inc.
                      (brokerage company) (until 2000) and
                      A.G. Edwards Trust Company (investment
                      adviser) (until 2000); Vice Chairman
                      and Director of A.G. Edwards, Inc.
                      (until March 1999); Vice Chairman of
                      A.G. Edwards & Sons, Inc. (until March
                      1999); Chairman of A.G. Edwards Trust
                      Company (until March 1999) and A.G.E.
                      Asset Management (investment adviser)
                      (until March 1999). Oversees 38
                      portfolios in the OppenheimerFunds
                      complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
George C. Bowen,      Assistant Secretary and Director of     None       Over
Trustee since 1998    the Manager (December 1991-April                   $100,000
Age: 69               1999); President, Treasurer and
                      Director of Centennial Capital
                      Corporation (June 1989-April 1999);
                      Chief Executive Officer and Director
                      of MultiSource Services, Inc. (March

                      1996-April 1999); Mr. Bowen held
                      several positions with
                      OppenheimerFunds, Inc. and with
                      subsidiary or affiliated companies of
                      OppenheimerFunds, Inc. (September
                      1987-April 1999).  Oversees 38
                      portfolios in the OppenheimerFunds
                      complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Edward L. Cameron,    Member of The Life Guard of Mount       None       Over
Trustee since 2000    Vernon (George Washington historical               $100,000
Age: 67               site) (since June 2000); Director of
                      Genetic ID, Inc. (biotech company)

                      (March 2001-May 2002); Partner at
                      PricewaterhouseCoopers LLP (accounting
                      firm) (July 1974-June 1999); Chairman
                      of Price Waterhouse LLP Global
                      Investment Management Industry
                      Services Group (accounting firm) (July
                      1994-June 1998). Oversees 38
                      portfolios in the OppenheimerFunds
                      complex.

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

Jon S. Fossel,        Director of UNUMProvident (insurance    None       Over
Trustee since 1990    company) (since June 2002); Director               $100,000
Age: 64               of Northwestern Energy Corp. (public
                      utility corporation) (since November
                      2004); Director of P.R.
                      Pharmaceuticals (October 1999-October
                      2003); Director of Rocky Mountain Elk
                      Foundation (non-profit organization)
                      (February 1998-February 2003 and since
                      February 2005); Chairman and Director
                      (until October 1996) and President and
                      Chief Executive Officer (until October
                      1995) of OppenheimerFunds, Inc.;
                      President, Chief Executive Officer and
                      Director of the following: Oppenheimer
                      Acquisition Corp. ("OAC") (parent
                      holding company of OppenheimerFunds,
                      Inc.), Shareholders Services, Inc. and
                      Shareholder Financial Services, Inc.
                      (until October 1995). Oversees 38
                      portfolios in the OppenheimerFunds
                      complex.

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

Sam Freedman,         Director of Colorado Uplift             None       Over
Trustee since 1996    (charitable organization) (since                   $100,000
Age: 65               September 1984). Mr. Freedman held

                      several positions with
                      OppenheimerFunds, Inc. and with
                      subsidiary or affiliated companies of
                      OppenheimerFunds, Inc. (until October
                      1994). Oversees 38 portfolios in the
                      OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Beverly L. Hamilton,  Trustee of Monterey Institute for       None       Over
Trustee since 2002    International Studies (educational                 $100,000
Age: 59               organization) (since February 2000);
                      Board Member of Middlebury College
                      (educational organization) (since
                      December 2005); Director of The

                      California Endowment (philanthropic
                      organization) (since April 2002);

                      Director (February 2002-2005) and
                      Chairman of Trustees (since 2006) of
                      Community Hospital of Monterey
                      Peninsula; Director (October
                      1991-2005) and Vice Chairman (since
                      2006) American Funds' Emerging Markets
                      Growth Fund, Inc. (mutual fund);
                      President of ARCO Investment
                      Management Company (February
                      1991-April 2000); Member of the
                      investment committees of the
                      Rockefeller Foundation (since 2001)
                      and The University of Michigan (since
                      2000); Advisor at Credit Suisse First
                      Boston's Sprout venture capital unit
                      (venture capital fund) (1994-January
                      2005); Trustee of MassMutual
                      Institutional Funds (investment
                      company) (1996-June 2004); Trustee of
                      MML Series Investment Fund (investment
                      company) (April 1989-June 2004);
                      Member of the investment committee of
                      Hartford Hospital (2000-2003); and
                      Advisor to Unilever (Holland) pension
                      fund (2000-2003); Oversees 38
                      portfolios in the OppenheimerFunds
                      complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert J. Malone,     Director of Jones International         None       Over
Trustee since 2002    University (educational organization)              $100,000
Age: 61               (since August 2005); Chairman, Chief
                      Executive Officer and Director of
                      Steele Street State Bank (commercial
                      banking) (since August 2003); Director
                      of Colorado UpLIFT (charitable
                      organization) (since 1986); Trustee of
                      the Gallagher Family Foundation
                      (non-profit organization) (since
                      2000); Former Chairman of U.S.
                      Bank-Colorado (subsidiary of U.S.
                      Bancorp and formerly Colorado National
                      Bank) (July 1996-April 1999); Director
                      of Commercial Assets, Inc. (real
                      estate investment trust) (1993-2000);
                      Director of Jones Knowledge, Inc.
                      (2001-July 2004); and Director of U.S.
                      Exploration, Inc. (oil and gas
                      exploration) (1997-February 2004).
                      Oversees 38 portfolios in the
                      OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

F. William Marshall,  Trustee of MassMutual Select Funds      None       Over
Jr.,                  (formerly MassMutual Institutional                 $100,000
Trustee since 2000    Funds) (investment company) (since
Age: 64               1996) and MML Series Investment Fund
                      (investment company) (since 1996), the
                      Springfield Library); Trustee (since
                      1987) and Chairman (1994-2005) of the
                      Investment Committee of the Worcester
                      Polytech Institute (private
                      university); President and Treasurer
                      of the SIS Funds (private charitable
                      fund) (since January 1999); Chairman
                      of SIS & Family Bank, F.S.B. (formerly
                      SIS Bank) (commercial bank) (January
                      1999-July 1999); and Executive Vice
                      President of Peoples Heritage
                      Financial Group, Inc. (commercial
                      bank) (January 1999-July 1999).
                      Oversees 40 portfolios in the
                      OppenheimerFunds complex.*

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

*  Includes two open-end investment companies: MassMutual Select Funds and
   MML Series Investment Fund. In accordance with the instructions for SEC
   Form N-1A, for purposes of this section only, MassMutual Select Funds and
   MML Series Investment Fund are included in the "Fund Complex." The Manager
   does not consider MassMutual Select Funds and MML Series Investment Fund
   to be part of the OppenheimerFunds' "Fund Complex" as that term may be
   otherwise interpreted.

      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. Mr. Grabish is an "Interested
Trustee" because of his affiliation with A.G. Edwards & Sons, Inc., a
broker/dealer that sells shares of the Trust.


                              Interested Trustee

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

Position(s) Held                                             Shares     yBeneficially
with the Trust,     Years; Other Trusteeships/Directorships  Beneficiall Owned in All
Length of Service,  Held; Number of Portfolios in Fund       Owned in     Supervised
Age                 Complex Currently Overseen;              the Trust       Funds

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

                                                              As of December 31, 2005

----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Richard F. Grabish, Senior Vice President and Assistant      None       Over $100,000
Trustee since 2001  Director of Sales and Marketing (since
Age: 57             March 1997), Director (since March

                    1987) and Manager of Private Client
                    Services (since June 1985-June 2005) of
                    A.G. Edwards & Sons, Inc.
                    (broker/dealer and investment firm);
                    Chairman and Chief Executive Officer of
                    A.G. Edwards Trust Company, FSB (since
                    March 2001); President and Vice
                    Chairman of A.G. Edwards Trust Company,
                    FSB (investment adviser) (April
                    1987-March 2001); President of A.G.
                    Edwards Trust Company, FSB (investment
                    adviser) (since June 2005). Oversees 5
                    portfolios in the OppenheimerFunds
                    complex.

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


      Mr. Murphy is an "Interested Trustee" because he is affiliated with the
Manager and OppenheimerFunds, Inc. by virtue of his positions as an officer
and director of the Manager and OppenheimerFunds, Inc., and as a shareholder
of its parent company. The address of Mr. Murphy is Two World Financial
Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008. Mr.
Murphy serves as a Trustee for an indefinite term, or until his resignation,
retirement, death or removal and as an officer for an indefinite term, or
until his resignation, retirement, death or removal. 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 director or trustee.


----------------------------------------------------------------------------------------
                            Interested Trustee and Officer
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Name,              Principal Occupation(s) During Past 5      Dollar     Aggregate
                                                                         Dollar Range
                                                                         Of Shares
                                                              Range of   Beneficially

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

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

                                                               As of December 31, 2005

----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
John V. Murphy,    Chairman, Chief Executive Officer and      None       Over $100,000

President          Director (since June 2001) and President
Since 2001 and     (since September 2000) of
Trustee since 2003 OppenheimerFunds, Inc.; President and
Age: 57            director or trustee of other Oppenheimer
                   funds; President and Director of OAC and
                   of Oppenheimer Partnership Holdings, Inc.
                   (holding company subsidiary of
                   OppenheimerFunds, Inc.) (since July
                   2001); Director of OppenheimerFunds
                   Distributor, Inc. (subsidiary of
                   OppenheimerFunds, Inc.) (since November
                   2001); Chairman and Director of
                   Shareholder Services, Inc. and of
                   Shareholder Financial Services, Inc.
                   (transfer agent subsidiaries of
                   OppenheimerFunds, Inc.) (since July
                   2001); President and Director of
                   OppenheimerFunds Legacy Program
                   (charitable trust program established by
                   OppenheimerFunds, Inc.) (since July
                   2001); Director of the following
                   investment advisory subsidiaries of
                   OppenheimerFunds, Inc.: the Manager, OFI
                   Institutional Asset Management, Inc.,
                   Trinity Investment Management Corporation
                   and Tremont Capital Management, Inc.
                   (since November 2001), HarbourView Asset
                   Management Corporation and OFI Private
                   Investments, Inc. (since July 2001);
                   President (since November 2001) and
                   Director (since July 2001) of Oppenheimer
                   Real Asset Management, Inc.; Executive
                   Vice President of Massachusetts Mutual
                   Life Insurance Company (OAC's parent
                   company) (since February 1997); Director
                   of DLB Acquisition Corporation (holding
                   company parent of Babson Capital
                   Management LLC) (since June 1995); Member
                   of the Investment Company Institute's
                   Board of Governors (since October 3,
                   2003); Chief Operating Officer of
                   OppenheimerFunds, Inc. (September
                   2000-June 2001); President and Trustee of
                   MML Series Investment Fund and MassMutual
                   Select Funds (open-end investment
                   companies) (November 1999-November 2001);
                   Director of C.M. Life Insurance Company
                   (September 1999-August 2000); President,
                   Chief Executive Officer and Director of
                   MML Bay State Life Insurance Company
                   (September 1999-August 2000); Director of
                   Emerald Isle Bancorp and Hibernia Savings
                   Bank (wholly-owned subsidiary of Emerald
                   Isle Bancorp) (June 1989-June 1998).
                   Oversees 91portfolios in the
                   OppenheimerFunds complex.

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









     The address of the officers in the chart below is as follows: Messrs.
Gillespie and Zack and Ms. Bloomberg, Two World Financial Center, 225 Liberty
Street, New York, New York 10281-1008, Messrs. Ullyatt, Petersen, Szilagyi,
Vandehey and Wixted and Ms. Ives, 6803 S. Tucson Way, Centennial, Colorado
80112-3924. Each officer serves for an annual term or until his or her
resignation, retirement, 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
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Cameron T. Ullyatt,            Vice President (since August 2006) of the Fund and
Vice President and Portfolio   Vice President (since July 2006) of the Manager and
Manager since 2006             OppenheimerFunds, Inc.; a Chartered Financial Analyst;
Age:  31                       an officer of 3 portfolios in the OppenheimerFunds
                               complex. Formerly an Assistant Vice President (since
                               December 2000) and an analyst for the Manager and
                               OppenheimerFunds, Inc. (since January 1999).

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

Mark S. Vandehey,              Senior Vice President and Chief Compliance Officer of
Vice President and Chief       the Manager and OppenheimerFunds, Inc. (since March
Compliance Officer since 2004  2004); Vice President of the Manager, OppenheimerFunds
Age:  55                       Distributor, Inc., and Shareholder Services, Inc.
                               (since June 1983); Vice President and Director of
                               Internal Audit of OppenheimerFunds, Inc.
                               (1997-February 2004). An officer of 91 portfolios in
                               the Oppenheimer funds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Brian W. Wixted,               Senior Vice President and Treasurer of

Treasurer and Principal        OppenheimerFunds, Inc. (since March 1999); Treasurer
Financial & Accounting         of the following: Shareholder Services, Inc.,
Officer since April 1999       HarbourView Asset Management Corporation, Shareholder
Age: 46                        Financial Services, Inc., Oppenheimer Real Asset
                               Management Corporation, and Oppenheimer Partnership
                               Holdings, Inc. (since March 1999), OFI Private
                               Investments, Inc. (since March 2000), OppenheimerFunds
                               International Ltd. and OppenheimerFunds plc (since May
                               2000), OFI Institutional Asset Management, Inc. (since
                               November 2000), and OppenheimerFunds Legacy Program
                               (since June 2003); Treasurer and Chief Financial
                               Officer of OFI Trust Company (trust company subsidiary
                               of OppenheimerFunds, Inc.) (since May 2000); Assistant
                               Treasurer of OAC (since March 1999); and Assistant
                               Treasurer of the Manager and Distributor (March
                               1999-October 2003) and OppenheimerFunds Legacy Program
                               (April 2000-June 2003); Principal and Chief Operating
                               Officer of Bankers Trust Company-Mutual Fund Services
                               Division (March 1995-March 1999). An officer of 91
                               portfolios in the OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Brian Petersen,                Assistant Vice President of OppenheimerFunds, Inc.
Assistant Treasurer since 2004 (since August 2002); Manager/Financial Product
Age: 35                        Accounting of OppenheimerFunds, Inc. (November

                               1998-July 2002). An officer of 91 portfolios in the
                               OppenheimerFunds complex.

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

Brian C. Szilagyi,             Assistant Vice President of OppenheimerFunds, Inc.
Assistant Treasurer since 2005 (since July 2004); Director of Financial Reporting and
Age: 36                        Compliance of First Data Corporation (April 2003-July
                               2004); Manager of Compliance of Berger Financial Group
                               LLC (May 2001-March 2003); Director of Mutual Fund
                               Operations at American Data Services, Inc. (September
                               2000-May 2001). An officer of 91 portfolios in the
                               OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Robert G. Zack,                Executive Vice President (since January 2004) and
Vice President & Secretary     General Counsel (since March 2002) of
since 2001                     OppenheimerFunds, Inc.; General Counsel of the Manager
Age: 57                        and Distributor (since December 2001); General Counsel

                               and Director of OppenheimerFunds Distributor, Inc.
                               (since December 2001); Senior Vice President, General
                               Counsel and Director of the Transfer Agent,
                               Shareholder Financial Services, Inc., OFI Private
                               Investments, Inc. and OFI Trust Company (since
                               November 2001); Senior Vice President and General
                               Counsel of HarbourView Asset Management Corporation
                               (since December 2001); Secretary and General Counsel
                               of OAC (since November 2001); Assistant Secretary
                               (since September 1997) and Director (since November
                               2001) of OppenheimerFunds International Ltd. and
                               OppenheimerFunds plc; Vice President and Director of
                               Oppenheimer Partnership Holdings, Inc. (since December
                               2002); Director of Oppenheimer Real Asset Management,
                               Inc. (since November 2001); Vice President of
                               OppenheimerFunds Legacy Program (since June 2003);
                               Senior Vice President and General Counsel of OFI
                               Institutional Asset Management, Inc. (since November
                               2001); Director of OppenheimerFunds (Asia) Limited
                               (since December 2003); Senior Vice President (May
                               1985-December 2003), Acting General Counsel (November
                               2001-February 2002) and Associate General Counsel (May
                               1981-October 2001) of OppenheimerFunds, Inc.;
                               Assistant Secretary of the following: the Transfer
                               Agent (May 1985-November 2001), Shareholder Financial
                               Services, Inc. (November 1989-November 2001), and
                               OppenheimerFunds International Ltd. (September
                               1997-November 2001). An officer of 91 portfolios in
                               the OppenheimerFunds complex.

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

Lisa I. Bloomberg,             Vice President and Associate Counsel of
Assistant Secretary since 2004 OppenheimerFunds, Inc. (since May 2004); First Vice
Age:  38                       President (April 2001-April 2004), Associate General
                               Counsel (December 2000-April 2004), Corporate Vice
                               President (May 1999-April 2001) and Assistant General
                               Counsel (May 1999-December 2000) of UBS Financial
                               Services Inc. (formerly, PaineWebber Incorporated). An
                               officer of 91 portfolios in the OppenheimerFunds
                               complex.

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

Kathleen T. Ives,              Vice President (since June 1998) and Senior Counsel
Assistant Secretary since 2001 and Assistant Secretary (since October 2003) of
Age: 40                        OppenheimerFunds, Inc.; Vice President (since 1999)
                               and Assistant Secretary (since October 2003) of the
                               Distributor; Assistant Secretary of the Manager (since
                               October 2003); Vice President and Assistant Secretary
                               of Shareholder Services, Inc. (since 1999); Assistant
                               Secretary of OppenheimerFunds Legacy Program and
                               Shareholder Financial Services, Inc. (since December
                               2001); Assistant Counsel of the Manager (August
                               1994-October 2003). An officer of 91 portfolios in the
                               OppenheimerFunds complex.

---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Phillip S. Gillespie,          Senior Vice President and Deputy General Counsel of

Assistant Secretary since 2004 OppenheimerFunds, Inc. (since September 2004); First
Age:  42                       Vice President (2000-September 2004), Director
                               (2000-September 2004) and Vice President (1998-2000)
                               of Merrill Lynch Investment Management. An officer of
                               91 portfolios in the OppenheimerFunds complex

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


o     Remuneration of the Officers and Trustees. The officers and Mr. Murphy,
   who are affiliated with the Manager, receive no salary or fee from the
   Trust. The Independent Trustees and Mr. Grabish received the compensation
   shown below from the Trust for serving as a Trustee and member of a
   committee (if applicable), with respect to the Trust's fiscal year ended
   June 30, 2006. The total compensation, including accrued retirement
   benefits, from the Trust and fund complex represents compensation received
   for serving as a Trustee and member of a committee (if applicable) of the
   Boards of the Trust and other funds in the OppenheimerFunds complex during
   the calendar year ended December 31, 2005.


------------------------------------------------------------------------------
  Trustee    Name    and    Other       Aggregate        Total Compensation
                                      Compensation       From Trust and Fund

                                     from Trust((1))      Complex(2) Year
  Position(s) (as applicable)       Fiscal Year Ended    ended December 31,
                                      June 30, 2006             2005

------------------------------------------------------------------------------
------------------------------------------------------------------------------
 William L. Armstrong                                         $178,000
Chairman of the Board of
Trustees and Governance

Committee Member                          $869

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

Robert G. Avis                            $579                $118,500

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

George Bowen                              $579                $118,500

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

Edward L. Cameron                         $681                $136,000

Audit Committee Chairman
------------------------------------------------------------------------------
------------------------------------------------------------------------------

Jon S. Fossel                             $613                $124,100

Review Committee Chairman
------------------------------------------------------------------------------
------------------------------------------------------------------------------

Sam Freedman                              $579                $118,500

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

Richard F. Grabish((3))                   $579                 $11,273

Review Committee Member
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Beverly Hamilton

Review Committee Member and              $533(4)              $107,175
Governance Committee Member

------------------------------------------------------------------------------
------------------------------------------------------------------------------
Robert J. Malone

Governance Committee Chairman            $665(5)              $134,868
and Audit Committee Member

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

F. William Marshall, Jr.                  $579               $169,500(6)

Audit Committee Member and
Governance Committee Member
------------------------------------------------------------------------------

1.    "Aggregate  Compensation  From the  Trust"  includes  fees and  deferred
   compensation, if any.

2.    In accordance with SEC  regulations,  for purposes of this section only,
   "Fund   Complex"   includes   the   Oppenheimer   funds,   the   MassMutual
   Institutional  Funds,  the  MassMutual  Select  Funds  and the  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 following:  MassMutual Premier  International Equity
   Fund,  MassMutual  Premier Main Street Fund,  MassMutual  Premier Strategic
   Income Fund,  MassMutual Premier Capital  Appreciation Fund, and MassMutual
   Premier Global Fund.  OppenheimerFunds,  Inc. does not consider  MassMutual
   Institutional  Funds,  MassMutual  Select  Funds and MML Series  Investment
   Fund to be part of the  OppenheimerFunds'  "Fund  Complex" as that term may
   be otherwise interpreted.

3.    Mr. Grabish serves as Trustee for only the following  funds:  Centennial
   California Tax Exempt Trust,  Centennial Government Trust, Centennial Money
   Market  Trust,  Centennial  New York Tax Exempt  Trust and  Centennial  Tax
   Exempt Trust.

4.    Includes $533 deferred by Ms. Hamilton under the "Deferred  Compensation
   Plan" described below.
1.    Includes $299  deferred by Mr.  Malone under the "Deferred  Compensation
   Plan" described below.
6.    Includes  $51,000  compensation  paid to Mr.  Marshall  for serving as a
   Trustee for MassMutual Select Funds and MML Series Investment Fund.


|X|   Deferred Compensation Plan for Trustees.  The Board of Trustees has
adopted a Deferred Compensation Plan for Independent 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
Trustees. The amount paid to the Trustees under the plan will be determined
based upon the amount of compensation deferred and the performance of the
selected funds.

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


      |X|               Major Shareholders.  As of August 14, 2006 the only
person who owned of record or was known by the Trust to own beneficially 5%
or more of the Trust's outstanding shares was A.G. Edwards & Sons, Inc.
("Edwards") for the Sole Benefit of its Customers, Attn. Money Fund Dept., 1
North Jefferson Avenue, St. Louis, Missouri 63103-2205, which owned
187,308,436.300  shares of the Trust which was 99.49% 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. A.G. Edwards, Inc.
is a minority owner of Oppenheimer Acquisition Corporation, the parent
company of the Manager, Distributor, and Transfer Agent.


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 have access to
information that could permit them to 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.


      The Trust pays expenses not expressly assumed by the Manager under the
investment advisory agreement.  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. The management fees paid by the
Trust to the Manager during its last three fiscal years were:


---------------------------------------------------------------------------------
  Fiscal Year    Management Fee Paid to Centennial Asset Management Corporation
  ending 6/30
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
      2004                                  $748,982
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
      2005                                  $740,169
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

      2006                                  $924,555

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


      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, 2004, 2005 and 2006, the management fees payable by the
Trust would have been $747,307, $740,169 and $924,069 with the Manager's
voluntary expense assumption.  Those amounts reflect the effect of the
expense assumptions of $1,675, $0 and $486 for the fiscal years ended June
30, 2004, 2005 and 2006 respectively.


    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.


Portfolio Manager.  The Trust's portfolio is managed by Cameron T. Ullyatt
(referred to as "Portfolio Manager"). He is the person who is responsible for
the day-to-day management of the Trust's investments.


         Other Accounts Managed.  In addition to managing the Trust's
investment portfolio, Mr. Ullyatt also manages other investment portfolios
and other accounts on behalf of the Manager or its affiliates.  The following
table provides information regarding the other portfolios and accounts
managed by Mr. Ullyatt as of June 30, 2006. No account has a
performance-based advisory fee:


                                  Registered     Other Pooled
                                  Investment      Investment      Other
                                  Companies        Vehicles    Accounts(1)

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

                                     None            None          None

      Accounts Managed
      ----------------------------------------------------------------------
      ----------------------------------------------------------------------

                                     None            None          None

      Total Assets Managed
      -------------------------
      *In millions.

      (1) Does not include personal accounts of portfolio managers and their
      families, which are subject to the Code of Ethics.



     As indicated above, the Portfolio Manager also manages other funds and
accounts.  Potentially, at times, those responsibilities could conflict with
the interests of the Trust.  That may occur whether the investment strategies
of the other fund or account are the same as, or different from, the Trust's
investment objectives and strategies.  For example, the Portfolio Manager may
need to allocate investment opportunities between the Trust and another fund
or account having similar objectives or strategies, or he may need to execute
transactions for another fund or account that could have a negative impact on
the value of securities held by the Trust.  Not all funds and accounts
advised by the Manager have the same management fee.  If the management fee
structure of another fund or account is more advantageous to the Manager than
the fee structure of the Trust, the Manager could have an incentive to favor
the other fund or account.  However, the Manager's compliance procedures and
Code of Ethics recognize the Manager's fiduciary obligations to treat all of
its clients, including the Trust, fairly and equitably, and are designed to
preclude the Portfolio Manager from favoring one client over another. It is
possible, of course, that those compliance procedures and the Code of Ethics
may not always be adequate to do so.  At different times, the Trust's
Portfolio Manager may manage other funds or accounts with investment
objectives and strategies that are similar to those of the Trust, or may
manage funds or accounts with investment objectives and strategies that are
different from those of the Trust.


      Compensation of the Portfolio Manager.  The Trust's Portfolio Manager
is employed and compensated by the Manager, not the Trust. Under the
Manager's compensation program for its portfolio managers and portfolio
analysts, their compensation is based primarily on the investment performance
results of the funds and accounts they manage, rather than on the financial
success of the Manager. This is intended to align the portfolio managers and
analysts' interests with the success of the funds and accounts and their
shareholders. The Manager's compensation structure is designed to attract and
retain highly qualified investment management professionals and to reward
individual and team contributions toward creating shareholder value. As of
June 30, 2006 the Portfolio Manager's compensation consisted of three
elements: a base salary, an annual discretionary bonus and eligibility to
participate in long-term awards of options and appreciation rights in regard
to the common stock of the Manager's holding company parent. Senior portfolio
managers may also be eligible to participate in the Manager's deferred
compensation plan.


To help the Manager attract and retain talent, the base pay component of each
portfolio manager is reviewed regularly to ensure that it reflects the
performance of the individual, is commensurate with the requirements of the
particular portfolio, reflects any specific competence or specialty of the
individual manager, and is competitive with other comparable positions. The
annual discretionary bonus is determined by senior management of the Manager
and is based on a number of factors, including a fund's pre-tax performance
for periods of up to five years, measured against an appropriate Lipper
benchmark selected by management. The Lipper benchmark with respect to the
Trust is Lipper - California Money Market Funds. Other factors considered
include management quality (such as style consistency, risk management,
sector coverage, team leadership and coaching) and organizational
development. The Portfolio Manager's compensation is not based on the total
value of the Trust's portfolio assets, although the Trust's investment
performance may increase those assets. The compensation structure is also
intended to be internally equitable and serve to reduce potential conflicts
of interest between the Trust and other funds and accounts managed by the
Portfolio Manager. The compensation structure of the other funds and accounts
managed by the Portfolio Manager is the same as the compensation structure of
the Trust, described above.


             Ownership of the Trust's Shares.  As of June 30, 2006 the
      Portfolio Manager did not beneficially own any shares of the Trust.


      |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 Trustees(1), 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.  In their sole discretion, they may also from time to time make
substantial payments from their own resources, which include the profits the
Manager derives from the advisory fees it receives from the Trust, to
compensate brokers, dealers, financial institutions and other intermediaries
for providing distribution assistance and/or administrative services or that
otherwise promote sales of the Trust's shares.  These payments, some of which
may be referred to as "revenue sharing," may relate to the Trust's inclusion
on a financial intermediary's preferred list of funds offered to its clients.

    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.  The 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 the plan.  An amendment to increase materially the
amount of payments to be made under the 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 period
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 periodically 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, 2006 payments under the plan totaled
$369,661. The Distributor retained $0 and the remaining balance was paid out
by the Distributor to recipients, which included $248 paid to an affiliate of
the Distributor's parent company. 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.

    For the fiscal year ended June 30, 2006, the Manager paid, in the
aggregate, $360,115 in fees out of its own resources for distribution
assistance to A.G. Edwards & Sons, Inc. Those distribution assistance
payments were paid based on annual rates applied to the average net asset
value during the calendar quarter of qualified assets of the Centennial
funds.

Payments to Trust Intermediaries

      Financial intermediaries may receive various forms of compensation or
reimbursement from the Trust in the form of 12b-1 plan payments as described
in the preceding section of this SAI. Additionally, the Manager, the
Distributor and/or the Sub-Distributor (including their affiliates) may make
payments to financial intermediaries in connection with their offering and
selling shares of the Trust and other Oppenheimer or Centennial funds,
providing marketing or promotional support, transaction processing and/or
administrative services. Among the financial intermediaries that may receive
these payments are brokers and dealers who sell and/or hold shares of the
Trust, banks (including bank trust departments), registered investment
advisers, insurance companies, retirement plan and qualified tuition program
administrators, third party administrators, and other institutions that have
selling, servicing or similar arrangements with the Manager, Distributor or
Sub-Distributor. The payments to intermediaries vary by the types of product
sold, the features of the Trust and the role played by the intermediary.

      Possible types of payments to financial intermediaries include, without
limitation, those discussed below.

o     Payments made by the Trust, or by an investor buying or selling shares
         of the Trust may include:

o     ongoing asset-based payments attributable to the share class selected,
         including fees payable under the Trust's service plan adopted under
         Rule 12b-1 under the Investment Company Act, which are paid from the
         Trust's assets (see " Service Plan" above);
o     shareholder servicing payments for providing omnibus accounting,
         recordkeeping, networking, sub-transfer agency or other
         administrative or shareholder services, including retirement plan
         and 529 plan administrative services fees, which are paid from the
         assets of a Trust as reimbursement to the Manager, Distributor or
         Sub-Distributor for expenses they incur on behalf of the Trust.
o     Payments made by the Manager, Distributor or Sub-Distributor out of
         their respective resources and assets, which may include profits the
         Manager derives from investment advisory fees paid by the Trust.
         These payments are made at the discretion of the Manager, the
         Distributor and/or the Sub-Distributor. These payments, often
         referred to as "revenue sharing" payments, may be in addition to the
         payments by the Trust listed above.
o     These types of payments may reflect compensation for marketing support,
         support provided in offering the Trust or other Oppenheimer or
         Centennial funds through certain trading platforms and programs,
         transaction processing or other services;
o     The Manager, Distributor and Sub-Distributor each may also pay other
         compensation to the extent the payment is not prohibited by law or
         by any self-regulatory agency, such as the NASD. Payments are made
         based on the guidelines established by the Manager, Distributor and
         Sub-Distributor, subject to applicable law.

      These payments may provide an incentive to financial intermediaries to
actively market or promote the sale of shares of the Trust or other
Oppenheimer or Centennial funds, or to support the marketing or promotional
efforts of the Distributor or Sub-Distributor offering shares of the Trust or
other Oppenheimer or Centennial funds. In addition, some types of payments
may provide a financial intermediary with an incentive to recommend the
Trust. Financial intermediaries may earn profits on these payments, since the
amount of the payment may exceed the cost of providing the service. Certain
of these payments are subject to limitations under applicable law. Financial
intermediaries may categorize and disclose these arrangements to their
clients and to members of the public in a manner different from the
disclosures in the Trust's prospectus and this SAI. You should ask your
financial intermediary for information about any payments it receives from
the Trust, the Manager, the Distributor or the Sub-Distributor and any
services it provides, as well as the fees and commissions it charges.

      Although brokers or dealers that sell Trust shares may also act as a
broker or dealer in connection with the execution of the purchase or sale of
portfolio securities by the Trust or other Oppenheimer or Centennial funds, a
financial intermediary's sales of shares of the Trust or such other
Oppenheimer or Centennial funds is not a consideration for the Manager when
choosing brokers or dealers to effect portfolio transactions for the Trust or
such funds.

      Revenue sharing payments can pay for distribution-related or asset
retention items including, without limitation,

o     transactional support, one-time charges for setting up access for the
          Trust or other Oppenheimer or Centennial funds on particular
          trading systems, and paying the intermediary's networking fees;
o     program support, such as expenses related to including the Oppenheimer
          and Centennial funds in retirement plans, college savings plans,
          fee-based advisory or wrap fee programs, fund "supermarkets", bank
          or trust company products or insurance companies' variable annuity
          or variable life insurance products;
o     placement on the dealer's list of offered funds and providing
          representatives of the Distributor with access to a financial
          intermediary's sales meetings, sales representatives and management
          representatives.

      Additionally, the Manager, Distributor or Sub-Distributor may make
payments for firm support, such as business planning assistance, advertising,
and educating a financial intermediary's sales personnel about the
Oppenheimer and Centennial funds and shareholder financial planning needs.

      For the year ended December 31, 2005, the following financial
intermediaries that are broker-dealers offering shares of the Oppenheimer and
Centennial funds, and/or their respective affiliates, received revenue
sharing or similar distribution-related payments from the Manager,
Distributor or Distributor for marketing or program support:


  ===============================================================================

  ADVANTAGE CAPITAL CORP./FINANCIAL       ADVEST, INC.
  SERVICES CORP.

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

  Aegon USA                               Aetna Retirement Services, Inc.

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

  A.G. Edwards & Sons, Inc.               AIG Life

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

  Allianz Life Insurance Company          Allmerica Financial Life Insurance
                                          and Annuity Co.

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

  Allstate Financial Advisors             American Enterprise Life Insurance

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

  American General Securities, Inc.       American General Annuity

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

  Ameriprise Financial Services, Inc.     American Portfolio Financial
                                          Services, Inc.

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

  Ameritas Life Insurance Corporation     Annuity Investors Life

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

  Associated Securities                   AXA Advisors

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

  Banc One Securities Corp.               BNY Investment Center, Inc.

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

  Cadaret Grant & Co. Inc.                Charles Schwab - Great West Life

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

  Chase Investment Services Corp.         CitiCorp Investment Services, Inc.

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

  Citigroup Global Markets, Inc. (SSB)    CitiStreet

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

  Citizens Bank of Rhode Island           CJM Planning Corp.

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

  Columbus Life Insurance Company         Commonwealth Financial Network

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

  CUNA Brokerage Services, Inc.           CUSO Financial Services, L.P.

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

  Federal Kemper Life Assurance Company   Financial Network (ING)

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

  First Global Capital                    GE Financial Assurance - GE Life &
                                          Annuity

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

  Glenbrook Life and Annuity Co.          Hartford

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

  HD Vest                                 HSBC Brokerage (USA) Inc.

  -------------------------------------------------------------------------------
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  ING Financial Advisers                  ING Financial Partners

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

  Jefferson Pilot Life Insurance Company  Jefferson Pilot Securities Corp.

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

  John Hancock Life Insurance Co.         Kemper Investors Life Insurance Co.

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

  Legend Equities Corp.                   Legg Mason

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

  Lincoln Benefit Life                    Lincoln Financial

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

  Lincoln Investment Planning, Inc.       Lincoln National Life

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

  Linsco Private Ledger                   MassMutual Financial Group and
                                          affiliates

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

  McDonald Investments, Inc.              Merrill Lynch & Co. and affiliates

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

  MetLife and affiliates                  Minnesota Life Insurance Company

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

  Mony Life Insurance Co.                 Morgan Stanley Dean Witter, Inc.

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

  Multi-Financial (ING)                   Mutual Service Corporation

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

  National Planning Holdings, Inc.        Nationwide and affiliates

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

  NFP                                     New York Life Securities, Inc.

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

  Park Avenue Securities LLC              PFS Investments, Inc.

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

  Prime Capital Services, Inc.            Primevest Financial Services, Inc.
                                          (ING)

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

  Protective Life Insurance Co.           Prudential Investment Management
                                          Services LLC

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

  Raymond James & Associates              Raymond James Financial Services

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

  RBC Dain Rauscher Inc.                  Royal Alliance

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

  Securities America Inc.                 Security Benefit Life Insurance Co.

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

  Sentra Securities                       Signator Investments

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

  Sun Life Assurance Company of Canada    SunAmerica Securities, Inc.

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

  SunTrust Securities                     Thrivent

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

  Travelers Life & Annuity Co., Inc.      UBS Financial Services Inc.

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

  Union Central Life Insurance Company    United Planners

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

  Valic Financial Advisors, Inc.          Wachovia Securities LLC

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

  Walnut Street Securities (Met Life      Waterstone Financial Group
  Network)

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

  Wells Fargo Investments, LLC

  ===============================================================================


      For the year ended December 31, 2005, the following firms, which in
some cases are broker-dealers, received payments from the Manager,
Distributor or Sub-Distributor for administrative or other services provided
(other than revenue sharing arrangements), as described above:


  ===============================================================================

  ABN AMRO FINANCIAL SERVICES INC.        ACS HR SOLUTIONS LLC

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

  Administrative Management Group         ADP Broker/Dealer Inc.

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

  Aetna Financial Services                Alliance Benefit Group

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

  American Stock Transfer & Trust Co      Ameriprise Financial Services, Inc.

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

  Baden Retirement Plan Services LLC      Banc One Securities Corp.

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

  BCG Securities                          Benefit Administration Company LLC

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

  Benefit Administration Inc.             Benefit Plans Administrative Services

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

  Benetech Inc.                           Bisys Retirement Services

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

  Boston Financial Data Services Inc.     Ceridian Retirement Plan Services

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

  Charles Schwab & Co Inc.                Charles Schwab Trust Company

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

  Circle Trust Company                    Citigroup Global Markets Inc.

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

  CitiStreet                              City National Bank

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

  Columbia Funds Distributor Inc.         CPI Qualified Plan Consultants Inc.

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

  Daily Access.Com Inc.                   Digital Retirement Solutions

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

  DST Systems Inc.                        Dyatech LLC

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

  Edgewood/Federated Investments          ERISA Administrative Services Inc.

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

  Expert Plan Inc.                        FASCorp

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

  FBD Consulting Inc.                     Fidelity Institutional Operations Co.

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

  Fidelity Investments                    First National Bank of Omaha

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

  First Trust Corp.                       First Trust-Datalynx

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

  Franklin Templeton                      Geller Group LTD

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

  GoldK Inc.                              Great West Life & Annuity Ins Co.

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

  Hartford Life Insurance Co              Hewitt Associates LLC

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

  ICMA-RC Services LLC                    Independent Plan Coordinators Inc.

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

  ING                                     Ingham Group

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

  Interactive Retirement Systems          Invesco Retirement Plans

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

  Invesmart                               InWest Pension Management

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

  John Hancock Life Insurance Co.         JPMorgan Chase & Co

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

  JPMorgan Chase Bank                     July Business Services

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

  Kaufman & Goble                         Leggette & Company Inc.

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

  Lincoln National Life                   MassMutual Financial Group and
                                          affiliates

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

  Matrix Settlement & Clearance Services  Mellon HR Solutions

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

  Mercer HR Services                      Merrill Lynch & Co., Inc.

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

  Metavante 401(k) Services               Metlife Securities Inc.

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

  MFS Investment Management               Mid Atlantic Capital Corp.

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

  Milliman Inc.                           Morgan Stanley Dean Witter Inc.

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

  National City Bank                      National Financial Services Corp.

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

  Nationwide Investment Service Corp.     New York Life Investment Management

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

  Northeast Retirement Services           Northwest Plan Services Inc.

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

  Pension Administration and Consulting   PFPC Inc.

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

  Plan Administrators Inc.                PlanMember Services Corporation

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

  Princeton Retirement Group Inc.         Principal Life Insurance Co

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

  Programs for Benefit Plans Inc.         Prudential Retirement Insurance &
                                          Annuity Co.

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

  Prudential Retirement Services          PSMI Group

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  Putnam Investments                      Quads Trust Company

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  RSM McGladrey Retirement Resources      SAFECO

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

  Standard Insurance Co                   Stanley Hunt DuPree Rhine

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  Stanton Group Inc.                      State Street Bank & Trust

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  Strong Capital Management Inc.          Symetra Investment Services Inc.

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  T Rowe Price Associates                 Taylor Perky & Parker LLC

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  Texas Pension Consultants               The 401(K) Company

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  The Chicago Trust Company               The Retirement Plan Company LLC

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  The Vanguard Group                      TruSource

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  Unified Fund Services Inc.              Union Bank & Trust Co. (Nebraska)

  -------------------------------------------------------------------------------
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  USI Consulting Group (CT)               Valic Retirement Services Co

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  Wachovia Bank NA                        Web401k.com

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

  Wells Fargo Bank NA                     Wilmington Trust Company

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  WySTAR Global Retirement Solutions

  ===============================================================================


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 SEC.  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 6/30/06)

ended        (7 days

 6/30/06)     ended
            6/30/06)

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                            Yield       Compounded
                           (7 days      Effective
                            ended         Yield      1-Year  5 Years 10 Years

                          6/30/06)       (7 days

                                          ended

                                         6/30/06)

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

  3.16%       3.21%         5.36%         5.44%      2.27%    1.00%    1.84%

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



      |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
NYSE") is open, at 12:00 Noon and at 4:00 P.M, on each day that the NYSE 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 SAI mean "Eastern time."
The NYSE's most recent annual announcement regarding holidays and days when
the market may close early is available on the NYSE's website at
www.nyse.com.


      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 receives information on 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 Absolute Return Fund           Oppenheimer Limited Term Municipal Fund
Oppenheimer AMT-Free Municipals            Oppenheimer Main Street Fund
Oppenheimer AMT-Free New York Municipals   Oppenheimer Main Street Opportunity Fund
Oppenheimer Balanced Fund                  Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund      Oppenheimer MidCap Fund
Oppenheimer Capital Appreciation Fund      Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Income Fund            Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Champion Income Fund           Oppenheimer Quest Balanced Fund
                                           Oppenheimer  Quest  Capital  Value  Fund,
Oppenheimer Convertible Securities Fund    Inc.
Oppenheimer Core Bond Fund                 Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund        Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund                 Oppenheimer Main Street Fund
Oppenheimer Dividend Growth Fund           Oppenheimer Real Asset Fund
Oppenheimer Emerging Growth Fund           Oppenheimer Real Estate Fund
                                           Oppenheimer  Rochester  Arizona Municipal
Oppenheimer Emerging Technologies Fund     Fund
                                           Oppenheimer  Rochester Maryland Municipal
Oppenheimer Enterprise Fund                Fund
                                           Oppenheimer    Rochester    Massachusetts
Oppenheimer Discovery Fund                 Municipal Fund
                                           Oppenheimer  Rochester Michigan Municipal
Oppenheimer Equity Fund, Inc.              Fund
                                           Oppenheimer       Rochester      National
Oppenheimer Global Fund                    Municipals
                                           Oppenheimer   Rochester   North  Carolina
Oppenheimer Global Opportunities Fund      Municipal Fund
Oppenheimer Gold & Special Minerals Fund   Oppenheimer Rochester Ohio Municipal Fund
                                           Oppenheimer  Rochester Virginia Municipal
Oppenheimer Growth Fund                    Fund
Oppenheimer High Yield Fund                Oppenheimer Select Value Fund
Oppenheimer International Bond Fund        Oppenheimer Senior Floating Rate Fund
Oppenheimer International Diversified Fund Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer International Growth Fund      Oppenheimer Strategic Income Fund
Oppenheimer  International  Small  Company
Fund                                       Oppenheimer U.S. Government Trust
Oppenheimer International Value Fund       Oppenheimer Value Fund
Oppenheimer    Limited   Term   California
Municipal Fund                             Limited Term New York Municipal Fund
Oppenheimer Limited Term Government Fund   Rochester Fund Municipals
                                           Oppenheimer Portfolio Series
                                              Active Allocation Fund
                                              Aggressive Investor Fund
                                              Conservative Investor Fund
                                              Moderate Investor Fund

And the following money market funds:

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

|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
SAI 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 SAI is based on tax law
in effect on the date of the Prospectus and this SAI. Those laws and
regulations may be changed by legislative, judicial, or administrative
action, sometimes 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 Trust 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.

      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, the Trust will provide to shareholders of record
on the last day of its taxable year information regarding their pro rata
share of the gain and tax paid. 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). 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 with a
copy sent to the IRS.

|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. 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.


|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. 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 with a copy sent to the IRS.

      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. 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 with a copy sent to the IRS.

      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 Registered Public Accounting Firm. Deloitte & Touche LLP serves
as the Independent Registered Public Accounting Firm for the Trust. Deloitte
& Touche LLP audits the Trust's financial statements and performs other
related audit services. Deloitte & Touche LLP also acts as the independent
registered public accounting firm for certain other funds advised by the
Manager and its affiliates. Audit and non-audit services provided by Deloitte
& Touche LLP to the Trust must be pre-approved by the Audit Committee.

                   CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
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, 2006, 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 periods presented. 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 the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Trust is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit includes consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2006, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. 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, 2006, 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 periods presented, in conformity with accounting
principles generally accepted in the United States of America.


DELOITTE & TOUCHE LLP

Denver, Colorado
August 8, 2006


                   6 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

STATEMENT OF INVESTMENTS  June 30, 2006
--------------------------------------------------------------------------------

                                                                                  PRINCIPAL               VALUE
                                                                                     AMOUNT          SEE NOTE 1
----------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX-EXEMPT OBLIGATIONS--102.0%
----------------------------------------------------------------------------------------------------------------
CALIFORNIA--89.8%
Alameda/Contra Costa, CA Schools FAU COP, Capital Improvements
Financing Project, Series A, 4% 1                                               $   790,000       $     790,000
----------------------------------------------------------------------------------------------------------------
Auburn, CA USD COP, Refinance & Capital Improvement Project-2002, 4% 1            5,635,000           5,635,000
----------------------------------------------------------------------------------------------------------------
CA Dept. of Water Resources Power Supply RB, Series B-1, 3.93% 1                  3,000,000           3,000,000
----------------------------------------------------------------------------------------------------------------
CA Dept. of Water Resources Power Supply RB, Series C-1, 3.93% 1                  3,150,000           3,150,000
----------------------------------------------------------------------------------------------------------------
CA Dept. of Water Resources Power Supply RB, Series C-2, 3.93% 1                  4,000,000           4,000,000
----------------------------------------------------------------------------------------------------------------
CA Dept. of Water Resources Power Supply RB, Series C-7, 3.97% 1                  4,300,000           4,300,000
----------------------------------------------------------------------------------------------------------------
CA Dept. of Water Resources Power Supply RRB, Central Valley Project,
MERLOTS Series 2003 B32, 4% 1,2                                                   1,985,000           1,985,000
----------------------------------------------------------------------------------------------------------------
CA Economic Recovery RB, Series 2004 C-16, 3.95% 1                                4,400,000           4,400,000
----------------------------------------------------------------------------------------------------------------
CA Economic Recovery RB, Series C-10, 3.92% 1                                     7,500,000           7,500,000
----------------------------------------------------------------------------------------------------------------
CA EDFAU IDV RB, Applied Aerospace Structure Corp., Series 1998, 4.02% 1          1,200,000           1,200,000
----------------------------------------------------------------------------------------------------------------
CA Golden State Tobacco Securitization Corp. RB, Reset Option Certificates
II-R Trust, Series 364, 4.03% 1,2                                                 2,475,000           2,475,000
----------------------------------------------------------------------------------------------------------------
CA GOUN, P-Floats, Series MT-162, 3.15% 1                                         2,000,000           2,000,000
----------------------------------------------------------------------------------------------------------------
CA HFFAU RB, Adventist Health System, Series A, 3.95% 1                           1,000,000           1,000,000
----------------------------------------------------------------------------------------------------------------
CA I&E Development Bank RB, Salvation Army Western Territory, Series 2001,
3.40%, 11/13/06                                                                   9,000,000           9,000,000
----------------------------------------------------------------------------------------------------------------
CA I&E Development Bank RB, Starter & Alternator Project, Series 199, 4.02% 1     3,900,000           3,900,000
----------------------------------------------------------------------------------------------------------------
CA P-Floats, Series PZP-002, 4.07% 1                                              4,000,000           4,000,000
----------------------------------------------------------------------------------------------------------------
CA P-Floats, Series PZP-005, 4.07% 1,2                                            2,000,000           2,000,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU RRB, Pacific Gas & Electric Co., 3.96% 1                                   700,000             700,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU RRB, Pacific Gas & Electric Co., Series F, 3.96% 1                         800,000             800,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RB, CR&R, Inc. Project, Series A, 4.03% 1                            3,920,000           3,920,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RB, Greenwaste Recovery Project, Series A, 4.05% 1                   3,075,000           3,075,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RB, Marin San Services Project, Series A, 4.05% 1                    1,500,000           1,500,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RB, Penas Disposal Inc. Project, Series A, 4.05% 1                   1,345,000           1,345,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RB, Sunset Waste Paper, Inc. Project, 4.05% 1                        3,170,000           3,170,000
----------------------------------------------------------------------------------------------------------------
CA PCFAU SWD RB, Vanderham/J&D Wilson Dairy Project, Series 2004, 4.06% 1         2,500,000           2,500,000
----------------------------------------------------------------------------------------------------------------
CA REF GOUN, Series 2005A, Subseries A-3, 3.93% 1                                 3,500,000           3,500,000
----------------------------------------------------------------------------------------------------------------
CA SCDAU MH RB, Oakwood Apts. Project, Series 2006 L, 3.80%, 8/23/06              6,500,000           6,500,000
----------------------------------------------------------------------------------------------------------------
CA SCDAU MH RB, P-Floats, Series PT-3099, 4.07% 1,2                               4,975,000           4,975,000
----------------------------------------------------------------------------------------------------------------
CA SCDAU RRB, Gemological Institute of America, 3.93% 1                           2,100,000           2,100,000
----------------------------------------------------------------------------------------------------------------
CA Statewide FAU TS RB, P-Floats, Series PA-1287, 4.03% 1,2                       3,150,000           3,150,000
----------------------------------------------------------------------------------------------------------------
Clovis, CA USD GOB, P-Floats, Series PZ-42, 4.04% 1                               1,330,000           1,330,000
----------------------------------------------------------------------------------------------------------------
El Rancho, CA USD GOUN, P-Floats, Series 807, 4% 1,2                              6,205,000           6,205,000
----------------------------------------------------------------------------------------------------------------
Fontana, CA PFAU TXAL RB, PTTR, Series 707, 4% 1,2                                1,990,000           1,990,000


                   7 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

                                                                                  PRINCIPAL               VALUE
                                                                                     AMOUNT          SEE NOTE 1
----------------------------------------------------------------------------------------------------------------
CALIFORNIA Continued
Lancaster, CA RA MH RB, Floating Rate Trust Receipts, Series F12J,
Sunset Project, 4% 1,2                                                          $ 9,475,000       $   9,475,000
----------------------------------------------------------------------------------------------------------------
Los Angeles, CA Municipal Improvement Corp. RB, Series A-1, 3.65%, 11/3/06        5,000,000           5,000,000
----------------------------------------------------------------------------------------------------------------
Los Angeles, CA USD GOB, AAMC Series 1999-7, 3.98% 1,2                            6,000,000           6,000,000
----------------------------------------------------------------------------------------------------------------
Mt. Diablo, CA USD GOB, AAMC Series 2004-36, 4% 1,2                               4,590,000           4,590,000
----------------------------------------------------------------------------------------------------------------
Oakland, CA USD GOUN, Municipal Securities Trust Certificates, Series 9035,
Cl. A, 3.99% 1,2                                                                  4,000,000           4,000,000
----------------------------------------------------------------------------------------------------------------
Orange Cnty., CA Apt. Development RB, Hidden Hills Project, Series C, 3.93% 1     5,700,000           5,700,000
----------------------------------------------------------------------------------------------------------------
San Diego, CA Sewer RB, SGMSTR Series SG 14, 4% 1,2                               3,955,000           3,955,000
----------------------------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. PUC Clean Water RRB, MERLOTS
Series 2003 B20, 4% 1,2                                                           6,975,000           6,975,000
----------------------------------------------------------------------------------------------------------------
San Joaquin Delta Community College District GOUN, CA Municipal Securities
Trust Certificates, Cl. A, Series 3020, 4.08% 1,2                                 2,800,000           2,800,000
----------------------------------------------------------------------------------------------------------------
Santa Clara Cnty., CA FAU Lease RB, Housing Authority Office Project,
Series 2004A, 3.95% 1                                                             3,485,000           3,485,000
----------------------------------------------------------------------------------------------------------------
Santa Rosa, CA Wastewater RB, P-Floats, Series PZ-43, 4.03% 1                     2,085,000           2,085,000
----------------------------------------------------------------------------------------------------------------
South Bay, CA Regional Public Communications Authority RB, Hawthorne
Project, Series B, 3.98% 1                                                        2,405,000           2,405,000
                                                                                                  --------------
                                                                                                    163,565,000

----------------------------------------------------------------------------------------------------------------
U.S. POSSESSIONS--12.2%
PR Commonwealth Credit Enhanced Custodial Receipts, 3.25%, 7/24/06 2              8,000,000           8,000,000
----------------------------------------------------------------------------------------------------------------
PR Commonwealth GOUN, Floating Rate Trust Receipts, Series 2005-F2, 4.03% 1,2     5,250,000           5,250,000
----------------------------------------------------------------------------------------------------------------
PR Commonwealth Infrastructure FAU RB, Tender Option Trust Certificates,
Series 2005 Z-6, 4.04% 1,2                                                        2,905,000           2,905,000
----------------------------------------------------------------------------------------------------------------
PR Commonwealth Public Finance Corp. RRB, Reset Option Certificates II-R
Trust, Series 415CE, 4.02% 1                                                      2,700,000           2,700,000
----------------------------------------------------------------------------------------------------------------
PR Commonwealth RB, Floating Rate Trust Receipts, Lehman Brothers, Inc. as
Trustor, Series F5, 3.98% 1,2                                                     3,300,000           3,300,000
                                                                                                  --------------
                                                                                                     22,155,000

----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $185,720,000)                                       102.0%        185,720,000
----------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS                                                  (2.0)         (3,655,283)
                                                                                --------------------------------
NET ASSETS                                                                            100.0%      $ 182,064,717
                                                                                ================================


                   8 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

FOOTNOTES TO STATEMENT OF INVESTMENTS

TO SIMPLIFY THE LISTINGS OF SECURITIES, ABBREVIATIONS ARE USED PER THE TABLE
BELOW:

AAMC         ABN AMRO Munitops Certificates
COP          Certificates of Participation
EDFAU        Economic Development Finance Authority
FAU          Finance Authority
GOB          General Obligation Bonds
GOUN         General Obligation Unlimited Nts.
HFFAU        Health Facilities Finance Authority
I&E          Infrastructure and Economic
IDV          Industrial Development
MERLOTS      Municipal Exempt Receipts Liquidity Option Tender
MH           Multifamily Housing
P-Floats     Puttable Floating Option Tax Exempt Receipts
PCFAU        Pollution Control Finance Authority
PFAU         Public Finance Authority
PTTR         Puttable Tax Exempt Receipts
PUC          Public Utilities Commission
RA           Redevelopment Agency/Authority
RB           Revenue Bonds
REF          Refunding
RRB          Revenue Refunding Bonds
SCDAU        Statewide Communities Development Authority
SGMSTR       Societe Generale, NY Branch Municipal Security Trust Receipts
SWD          Solid Waste Disposal
TS           Tobacco Settlement
TXAL         Tax Allocation
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,
2006. 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. 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 $80,030,000 or 43.96% of the Trust's net
assets as of June 30, 2006.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   9 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

STATEMENT OF ASSETS AND LIABILITIES  June 30, 2006
--------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------
ASSETS
-----------------------------------------------------------------------------------------------------
Investments, at value (cost $185,720,000)--see accompanying statement of investments   $ 185,720,000
-----------------------------------------------------------------------------------------------------
Cash                                                                                         141,063
-----------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest                                                                                   1,311,487
Investments sold                                                                             400,000
Other                                                                                         15,744
                                                                                       --------------
Total assets                                                                             187,588,294

-----------------------------------------------------------------------------------------------------
LIABILITIES
-----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                                      5,196,059
Dividends                                                                                    188,894
Distribution and service plan fees                                                            95,514
Shareholder communications                                                                     9,296
Trustees' compensation                                                                         4,530
Transfer and shareholder servicing agent fees                                                  3,567
Shares of beneficial interest redeemed                                                         1,589
Other                                                                                         24,128
                                                                                       --------------
Total liabilities                                                                          5,523,577

-----------------------------------------------------------------------------------------------------
NET ASSETS                                                                             $ 182,064,717
                                                                                       ==============

-----------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
-----------------------------------------------------------------------------------------------------
Paid-in capital                                                                        $ 182,030,732
-----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments                                                  33,985
                                                                                       --------------
NET ASSETS--applicable to 182,012,009 shares of beneficial interest outstanding        $ 182,064,717
                                                                                       ==============

-----------------------------------------------------------------------------------------------------
NET ASSET VALUE, REDEMPTION PRICE PER SHARE AND OFFERING PRICE PER SHARE               $        1.00

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   10 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

STATEMENT OF OPERATIONS  For the Year Ended June 30, 2006
--------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------
INVESTMENT INCOME
-----------------------------------------------------------------------------------------------------
Interest                                                                               $   5,569,656

-----------------------------------------------------------------------------------------------------
EXPENSES
-----------------------------------------------------------------------------------------------------
Management fees                                                                              924,555
-----------------------------------------------------------------------------------------------------
Service plan fees                                                                            369,661
-----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees                                                 41,925
-----------------------------------------------------------------------------------------------------
Shareholder communications                                                                    24,279
-----------------------------------------------------------------------------------------------------
Trustees' compensation                                                                         5,275
-----------------------------------------------------------------------------------------------------
Administration service fees                                                                    1,500
-----------------------------------------------------------------------------------------------------
Custodian fees and expenses                                                                    1,294
-----------------------------------------------------------------------------------------------------
Other                                                                                         41,894
                                                                                       --------------
Total expenses                                                                             1,410,383
Less waivers and reimbursements of expenses                                                     (486)
                                                                                       --------------
Net expenses                                                                               1,409,897

-----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                                      4,159,759

-----------------------------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS                                                              42,239

-----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                   $   4,201,998
                                                                                       ==============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   11 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------

YEAR ENDED JUNE 30,                                                                   2006             2005
------------------------------------------------------------------------------------------------------------
OPERATIONS
------------------------------------------------------------------------------------------------------------
Net investment income                                                        $   4,159,759    $   1,651,449
------------------------------------------------------------------------------------------------------------
Net realized gain                                                                   42,239            4,790
                                                                             -------------------------------
Net increase in net assets resulting from operations                             4,201,998        1,656,239

------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------------------------------------------------------------------
Dividends from net investment income                                            (4,159,759)      (1,651,449)

------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions      16,160,365       25,965,482

------------------------------------------------------------------------------------------------------------
NET ASSETS
------------------------------------------------------------------------------------------------------------
Total increase                                                                  16,202,604       25,970,272
------------------------------------------------------------------------------------------------------------
Beginning of period                                                            165,862,113      139,891,841
                                                                             -------------------------------

End of period                                                                $ 182,064,717    $ 165,862,113
                                                                             ===============================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   12 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

YEAR ENDED JUNE 30,                                   2006          2005          2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------
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                .02 1         .01 1          -- 2           .01             .01
---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                  (.02)         (.01)           -- 2          (.01)           (.01)
Distributions from net realized gain                    --            --            --              --              -- 2
                                                  -------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                       (.02)         (.01)           -- 2          (.01)           (.01)
---------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                    $   1.00      $   1.00      $   1.00        $   1.00        $   1.00
                                                  =========================================================================

---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3                                        2.27%         1.13%         0.21%           0.52%           0.89%
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $182,065      $165,862      $139,892        $152,856        $154,653
---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $184,956      $148,312      $149,559        $156,348        $164,278
---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                 2.25%         1.11%         0.21%           0.52%           0.89%
Total expenses                                        0.76% 6       0.77% 5       0.78% 5,6       0.76% 5,6       0.77% 5,6

1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Less than $0.005 per share.

3. 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 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.

4. Annualized for periods of less than one full year.

5. Reduction to custodian expenses less than 0.01%.

6. Voluntary reimbursement of expenses less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   13 | 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 wholly owned subsidiary of OppenheimerFunds, Inc.
(OFI).

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

--------------------------------------------------------------------------------
SECURITIES VALUATION. The net asset value of shares of the Trust is normally
determined twice each day, at 12:00 Noon Eastern time and at 4:00 P.M. Eastern
time on each day the New York Stock Exchange (the "Exchange") is open for
trading. Portfolio securities are valued on the basis of amortized cost, which
approximates market value.

--------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Trust on a when-issued basis or
forward commitment can take place up to ten days 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
internally designated 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 or forward commitment may increase the volatility of the Trust's net asset
value to the extent the Trust executes such transactions while remaining
substantially fully invested. The Trust may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of June 30, 2006, the Trust had sold $200,000 of
securities issued on a when-issued basis or forward commitment.

--------------------------------------------------------------------------------
SECURITY CREDIT RISK. There are certain 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.


                   14 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

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          UNDISTRIBUTED
          NET INVESTMENT             LONG-TERM           ACCUMULATED LOSS
          INCOME                         GAINS           CARRYFORWARD 1,2
          ---------------------------------------------------------------
          $220,881                     $22,948                        $--

1. During the fiscal year ended June 30, 2006, the Trust utilized $8,254 of
capital loss carryforward to offset capital gains realized in that fiscal year.

2. During the fiscal year ended June 30, 2005, the Trust utilized $4,790 of
capital loss carryforward to offset capital gains realized in that fiscal year.

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.

The tax character of distributions paid during the years ended June 30, 2006 and
June 30, 2005 was as follows:

                                      YEAR ENDED       YEAR ENDED
                                   JUNE 30, 2006    JUNE 30, 2005
-----------------------------------------------------------------
Distributions paid from:
Exempt-interest dividends             $4,159,759       $1,651,449

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Trust. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Trust or in other Oppenheimer funds
selected by the Trustee. The Trust purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Trust asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Trust, and will not materially affect the
Trust's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.

--------------------------------------------------------------------------------
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 but may be paid at other times to maintain the net asset value per
share at $1.00.


                   15 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Trust on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Trust pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Trust, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Trust
during the period. At June 30, 2006, the Trust had $268 of such earnings on cash
balances available to offset future custodian fees or interest expenses incurred
during the next fiscal year.

--------------------------------------------------------------------------------
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.

--------------------------------------------------------------------------------
INDEMNIFICATIONS. The Trust's organizational documents provide current and
former trustees and officers with a limited indemnification against liabilities
arising in connection with the performance of their duties to the Trust. In the
normal course of business, the Trust may also enter into contracts that provide
general indemnifications. The Trust's maximum exposure under these arrangements
is unknown as this would be dependent on future claims that may be made against
the Trust. The risk of material loss from such claims is considered remote.

--------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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.

--------------------------------------------------------------------------------
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, 2006          YEAR ENDED JUNE 30, 2005
                                  SHARES           AMOUNT           SHARES           AMOUNT
--------------------------------------------------------------------------------------------
Sold                         567,108,511    $ 567,108,511      435,633,846    $ 435,633,846
Dividends and/or
distributions reinvested       4,048,435        4,048,435        1,571,006        1,571,006
Redeemed                    (554,996,581)    (554,996,581)    (411,239,370)    (411,239,370)
                            ----------------------------------------------------------------
Net increase                  16,160,365    $  16,160,365       25,965,482    $  25,965,482
                            ================================================================


                   16 | CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

--------------------------------------------------------------------------------
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
average annual rate as shown in the following table:

        FEE SCHEDULE
        ------------------------------------------------
        Up to $250 million of net assets          0.500%
        Next $250 million of net assets           0.475
        Next $250 million of net assets           0.450
        Next $250 million of net assets           0.425
        Over $1 billion of net assets             0.400

--------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Trust pays the Manager a fee of $1,500 per year
for preparing and filing the Trust's tax returns.

--------------------------------------------------------------------------------
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 per account fee. For the year ended June 30,
2006, the Trust paid $41,933 to SSI for services to the Trust.

--------------------------------------------------------------------------------
SERVICE PLAN (12b-1) FEES. The Trust has adopted a service plan. It reimburses
Centennial Asset Management Corporation, the Distributor, for a portion of its
costs incurred for services provided to accounts that hold shares of the Trust.
Reimbursement is made periodically, depending on asset size, at an annual rate
of up to 0.20% of the average annual net assets of the Trust. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions periodically for providing personal services and
maintenance of accounts of their customers that hold shares of the Trust. Fees
incurred by the Trust under the Plan are detailed in the Statement of
Operations.

--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily undertaken
to assume certain expenses of the Trust in any fiscal year that exceed 0.80% of
the Trust's average annual net assets. 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. During the
year ended June 30, 2006, the Manager waived $486 of its management fees. The
Manager reserves the right to amend or terminate either voluntary expense
assumption at any time.

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

                                  Appendix A

                      Description of Securities Ratings

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

SHORT TERM DEBT RATINGS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Fitch, Inc. ("Fitch")

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

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

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

Dominion Bond Rating Service Limited ("DBRS")
------------------------------------------------------------------------------

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

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

LONG TERM DEBT RATINGS.

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

Moody's

Bonds (including municipal bonds) are rated as follows:

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

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

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



Standard and Poor's

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

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

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


Fitch

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

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

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








                                    B-1

                                  Appendix B

                   MUNICIPAL BOND INDUSTRY CLASSIFICATIONS

Adult Living Facilities
Airlines
Automobiles
Chemicals
Corporate Backed
Education
Electric Utilities
Food Products
Gas Utilities
General Obligation
Higher Education
Highways/Railways
Hospital/Healthcare
Hotels, Restaurants & Leisure
Manufacturing, Durable Goods
Manufacturing, Non Durable Goods
Marine/Aviation Facilities
Metals & Mining
Multi-Family Housing
Municipal Leases
Non Profit Organization
Oil & Gas
Paper, Containers & Packaging
Parking Fee Revenue
Pollution Control
Real Estate
Resource Recovery
Sales Tax Revenue
Sewer Utilities
Single Family Housing
Special Assessment
Special Tax
Sports Facility Revenue
Student Loans
Telephone Utilities
Tobacco
U.S. Government - Full Faith & Credit
U.S. Government Agencies-GSEs
Water Utilities









                                     3

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

Investment Advisor and Distributor
Centennial Asset Management Corporation
6803 South Tucson Way
Centennial, Colorado 80112

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

Transfer Agent
Shareholder Services, Inc.
P.O. Box 5143
Denver, Colorado 80217-5143
1.800.525.9310

Custodian of Portfolio Securities
Citibank, N.A.
111 Wall Street
New York, New York 10005

Independent Registered Public Accounting Firm
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
Bell, Boyd & Lloyd, LLC
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207



PX0180.001. 0806.







(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.

                    CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

                                  FORM N-1A

                                    PART C

                              OTHER INFORMATION


Item 23.  Exhibits

(a)   (i)  Declaration  of Trust dated August 7, 1989:  Previously  filed with
Registrant's  Initial  Registration  Statement  (8/11/89),  and  refiled  with
Registrant's  Post-Effective Amendment No. 6 (10/27/94),  pursuant to Item 102
of Regulation S-T, and incorporated herein by reference.

      (ii)  Amendment  to the  Declaration  of Trust dated  February 23, 2001:
Previously   filed  with   Registrant's   Post  Effective   Amendment  No.  16
(10/25/01), and incorporated herein by reference.

      (iii)  Amendment  No. 2 to the  Declaration  of Trust  dated  August 27,
2002:  Previously  filed with  Registrant's  Post  Effective  Amendment No. 17
(10/18/02), and incorporated herein by reference.

(b)   By-Laws,  as amended and restated  through October 24, 2000:  Previously
filed with  Registrant's  Post  Effective  Amendment  No. 16  (10/25/01),  and
incorporated herein by reference.

(c)   Specimen Share  Certificate:  Previously  filed with  Registrant's  Post
Effective Amendment No. 16 (10/25/01), and incorporated herein by reference.

(d)   Investment  Advisory Agreement dated October 22, 1990:  Previously filed
with  Registrant's  Post-Effective  Amendment No. 2  (10/29/90),  refiled with
Registrant's  Post-Effective Amendment No. 6 (10/27/94),  pursuant to Item 102
of Regulation S-T and incorporated herein by reference.

(e)   (i)   General   Distributor's   Agreement  Centennial  Asset  Management
      Corporation  dated October 13, 1992:  Previously filed with Registrant's
      Post Effective  Amendment No. 5 (10/28/93),  and incorporated  herein by
      reference.

      (ii)  Sub-Distributor's  Agreement  between  Centennial Asset Management
      Corporation and OppenheimerFunds  Distributor,  Inc. dated May 28, 1993:
      Previously  filed  with  Registrant's  Post-Effective  Amendment  No.  5
      (10/28/93), and incorporated herein by reference.

      (iii) Form  of  Dealer   Agreement  of   Centennial   Asset   Management
      Corporation  (formerly  Centennial  Capital   Corporation):   Previously
      filed  with  Post-Effective  Amendment  No. 6 of  Centennial  Government
      Trust  (Reg.  No.  2-75912),   (10/26/84),   refiled  with  Registrant's
      Post-Effective  Amendment  No.  6  (10/27/94),  pursuant  to Item 102 of
      Regulation S-T, and incorporated herein by reference.

(f)   Form of Deferred Compensation Agreement for Disinterested
Trustees/Directors:  Filed with Post-Effective Amendment No. 40 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/27/98, and incorporated herein by reference.

(g)   (i) Global Custodial  Services Agreement dated July 15, 2003, as amended
      on June 9, 2005 between Registrant and Citibank,  N.A.: Previously filed
      with the Initial  Registration  Statement of  Oppenheimer  International
      Diversified  Fund  (Reg.  No.  333-125805),  6/14/05,  and  incorporated
      herein by reference.

(h)   Not applicable.

(i)   Opinion and  Consent of Counsel  dated  February  20,  1990:  Previously
filed with Registrant's Pre-Effective Amendment No. 2 (2/22/90),  refiled with
Registrant's  Post-Effective Amendment No. 6 (10/27/94),  pursuant to Item 102
of Regulation S-T and incorporated herein by reference.

(j)   Independent   Registered  Public   Accounting   Firm's  Consent:   Filed
herewith.

(k)   Not applicable.

(l)   Investment  letter  from  Centennial  Asset  Management  Corporation  to
Registrant   dated  May  8,   1990:   Previously   filed   with   Registrant's
Pre-Effective  Amendment  No.  3  (5/17/90),  and  refiled  with  Registrant's
Post-Effective  Amendment No. 6, (10/27/94) pursuant to Item 102 of Regulation
S-T and incorporated herein by reference.

(m)   Service Plan and  Agreement  between  Registrant  and  Centennial  Asset
Management  Corporation  under Rule 12b-1 dated  August 24,  1993:  Previously
filed  with  Registrant's  Post-Effective  Amendment  No. 5,  (10/28/93),  and
incorporated herein by reference.

(n)   Not applicable.


(o)      Powers of Attorney dated December 13, 2004 for all
Trustees/Directors and Officers: Previously filed with Post-Effective
Amendment No. 44 to the Registration Statement of Oppenheimer Variable
Account Funds (Reg. No. 2-93177), 2/25/05, and incorporated herein by
reference.


      (ii) Power of Attorney for Richard F. Grabish: Previously filed with
the Registrant's Post-Effective Amendment No. 20 (08/15/05), and incorporated
herein by reference.



(p)   Amended  and  Restated  Code of Ethics of the  Oppenheimer  Funds  dated
March  31,  2006  under  Rule  17j-1 of the  Investment  Company  Act of 1940:
Previously  filed with  Post-Effective  Amendment  No. 13 to the  Registration
Statement  of  Oppenheimer  MidCap Fund (Reg.  No.  333-31533),  4/07/06,  and
incorporated herein by reference.


Item 24.  Persons Controlled by or Under Common Control with the Fund

None.

Item 25.  Indemnification

Reference is made to the provisions of Article Seven of Registrant's Amended
and Restated Declaration of Trust filed as Exhibit 23(a) to this Registration
Statement, and incorporated herein by reference.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.

Item 26.  Business and Other Connections of Investment Adviser

(a)   Centennial Asset Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts A and
B hereof and listed in Item 25(b) below.

(b)   There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Centennial Asset Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or trustee.

---------------------------------------------------------------------------------
Name and Current Position
with Centennial Asset
Management Corporation       Other Business and Connections  During the Past Two
                             Years
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert Agan,                 Senior Vice President of OppenheimerFunds, Inc.,
Vice President               Shareholder Financial Services, Inc. and
                             Shareholders Services, Inc.; Vice President of
                             OppenheimerFunds Distributor, Inc. and OFI Private
                             Investments, Inc.

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

Janette Aprilante,           Vice President and Secretary of OppenheimerFunds,
Secretary                    Inc. Secretary (since December 2001) of:
                             OppenheimerFunds Distributor, Inc., HarbourView
                             Asset Management Corporation (since June 2003),
                             Oppenheimer Real Asset Management, Inc.,
                             Shareholder Financial Services, Inc., Shareholder
                             Services, Inc., Trinity Investment Management
                             Corporation (since January 2005), OppenheimerFunds
                             Legacy Program, OFI Private Investments, Inc.
                             (since June 2003) and OFI Institutional Asset
                             Management, Inc. (since June 2003). Assistant
                             Secretary of OFI Trust Company (since December
                             2001).

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

Robert J. Bishop,            Vice President of OppenheimerFunds, Inc.;
Treasurer                    Treasurer of OppenheimerFunds Distributor, Inc.
                             (since October 2003).

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

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

Susan Cornwell,              Senior Vice President of OppenheimerFunds, Inc.,
Vice President               Shareholder Financial Services, Inc. and
                             Shareholder Services, Inc.; Vice President of
                             OppenheimerFunds Distributor, Inc. and
                             OppenheimerFunds Legacy Program.

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

Kathleen T. Ives,            Vice President and Assistant Secretary of
Assistant Secretary          OppenheimerFunds Distributor, Inc. and Shareholder

                             Services, Inc.; Vice President, Senior Counsel and
                             Assistant Secretary of OppenheimerFunds, Inc.
                             Assistant Secretary of OppenheimerFunds Legacy
                             Program and Shareholder Financial Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Richard Knott,               Senior Vice President of OppenheimerFunds
Senior Vice President        Distributor, Inc.

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

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

John V. Murphy,              Chairman, Chief Executive Officer, Director and
Director                     President of OppenheimerFunds, Inc.; President and
                             Management Director of Oppenheimer Acquisition
                             Corp.; President and Director of Oppenheimer Real
                             Asset Management, Inc.; Chairman Director of
                             Shareholder Services, Inc. and Shareholder
                             Financial Services, Inc.; Director of
                             OppenheimerFunds Distributor, Inc.; OFI
                             Institutional Asset Management, Inc., Trinity
                             Investment Management Corporation, Tremont Capital
                             Management, Inc., HarbourView Asset Management
                             Corporation, OFI Private Investments, Inc.;
                             Executive Vice President of Massachusetts Mutual
                             Life Insurance Company; Director of DLB
                             Acquisition Corporation; a member of the
                             Investment Company Institute's Board of Governors.

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

James H. Ruff,               President and Director of OppenheimerFunds
President & Director         Distributor, Inc; Executive Vice President of
                             OppenheimerFunds, Inc and OFI Private Investments,
                             Inc.

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

Cameron T. Ullyatt,          Vice President of OppenheimerFunds, Inc.
Vice President

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

Mark S. Vandehey,            Senior Vice President and Chief Compliance Officer
Vice President & Chief       of OppenheimerFunds, Inc.; Vice President and
Compliance Officer           Chief Compliance Officer of OppenheimerFunds
                             Distributor, Inc. and Shareholder Services, Inc.;
                             Chief Compliance Officer of HarbourView Asset
                             Management Corporation, Real Asset Management,
                             Inc., Shareholder Financial Services, Inc.,
                             Trinity Investment Management Corporation,
                             OppenheimerFunds Legacy Program, OFI Private
                             Investments Inc. and OFI Trust Company and OFI
                             Institutional Asset Management, Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barry D. Weiss,              Vice President of OppenheimerFunds, Inc. and of
Vice President               HarbourView Asset Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carol E. Wolf,               Senior Vice President of OppenheimerFunds, Inc.
Vice President               and of HarbourView Asset Management Corporation;
                             serves on the Board of the Colorado Ballet.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert G. Zack               Executive Vice President and General Counsel of
General Counsel,             OppenheimerFunds, Inc.; General Counsel and
                             Director of OppenheimerFunds Distributor, Inc.;
                             Senior Vice President and General Counsel of
                             HarbourView Asset Management Corporation and OFI
                             Institutional Asset Management, Inc.; Senior Vice
                             President, General Counsel and Director of
                             Shareholder Financial Services, Inc., Shareholder
                             Services, Inc., OFI Private Investments, Inc. and
                             OFI Trust Company; Director and Assistant
                             Secretary of OppenheimerFunds International Ltd
                             and OppenheimerFunds plc; Secretary and General
                             Counsel of Oppenheimer Acquisition Corp.; Director
                             of Oppenheimer Real Asset Management, Inc. and
                             OppenheimerFunds (Asia) Limited); Vice President
                             of OppenheimerFunds Legacy Program.

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



The Oppenheimer Funds include the following:

Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (a series of Rochester Portfolio Series)
OFI Tremont Core Strategies Hedge Fund
OFI Tremont Market Neutral Hedge Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Convertible Securities Fund (a series of Bond Fund Series)
Oppenheimer Core Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Dividend Growth Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Fund, Inc.
Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer International Bond Fund
Oppenheimer International Diversified Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International
Value Trust)
Oppenheimer Limited Term California Municipal Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal
Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Portfolio Series (4 series)
     Active Allocation Fund
     Aggressive Investor Fund
     Conservative Investor Fund
     Moderate Investor Fund
Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer
Principal
     Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer
Principal

     Protected Trust II)

Oppenheimer Principal Protected Main Street Fund III (a series of Oppenheimer
Principal

     Protected Trust III)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)

     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small- & Mid- Cap Value Fund

Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (1 series):

     Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):

     Oppenheimer Balanced Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Core Bond Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer MidCap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Government Securities Portfolio
     Growth Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio

   Rochester Fund Municipals

The address of the  Oppenheimer  funds  listed  above,  Shareholder  Financial
Services,  Inc.,  Shareholder  Services,  Inc.,   OppenheimerFunds   Services,
Centennial   Asset   Management   Corporation,   Centennial   Capital   Corp.,
Oppenheimer Real Asset Management,  Inc. and  OppenheimerFunds  Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds,  Inc.,  OppenheimerFunds  Distributor,  Inc.,
HarbourView Asset Management  Corporation,  Oppenheimer  Partnership Holdings,
Inc.,  Oppenheimer  Acquisition  Corp.,  OFI Private  Investments,  Inc.,  OFI
Institutional  Asset  Management,  Inc. and  Oppenheimer  Trust Company is Two
World Financial  Center,  225 Liberty  Street-11th  Floor,  New York, New York
10281-1008.

The address of Tremont  Advisers,  Inc. is 555 Theodore  Fremd  Avenue,  Suite
206-C, Rye, New York 10580.

The  address  of  OppenheimerFunds  International  Ltd.  is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment  Management  Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.


The address of  OppenheimerFunds  (Asia) Limited is Central Tower,  28 Queen's
Road, Suite 1601, Central, Hong Kong.



Item 27.  Principal Underwriter

(a)   Centennial Asset Management Corporation is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Centennial Asset
Management Corporation is the investment adviser, as described in Part A and
B of this Registration Statement and listed in Item 26(b) above.

(b)   The directors and officers of the Registrant's principal underwriter
are:

---------------------------------------------------------------------------------
Name & Principal                                          Position(s) and
Business Address     Position(s) & Office(s) with         Office(s)
                     Underwriter                          with Registrant
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Robert Agan(1)       Vice President                       None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante(1) Secretary                            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop(2)  Treasurer                            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Cornwell(2)    Vice President                       None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Kathleen T. Ives(2)  Assistant Secretary                  Assistant Secretary

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

Richard Knott(1)     Senior Vice President                None

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy(1)    Director                             President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James H. Ruff(1)     President & Director                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Cameron T. Ullyat(2) Vice President                       Vice President &
                                                          Portfolio Manager

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark S. Vandehey(2)  Vice President and Chief Compliance  Vice President and
                     Officer                              Chief Compliance
                                                          Officer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barry D. Weiss(2)    Vice President                       None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carol E. Wolf(2)     Vice President                       None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack(1)    General Counsel                      Vice President &
                                                          Secretary
---------------------------------------------------------------------------------

(1) Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY
10281-1008
(2)6803 South Tucson Way, Centennial, CO 80112-3924

(c)   Not applicable.

Item 27. Location of Accounts and Records

The  accounts,  books  and  other  documents  required  to  be  maintained  by
Registrant  pursuant to Section  31(a) of the  Investment  Company Act of 1940
and rules  promulgated  thereunder are in the possession of  OppenheimerFunds,
Inc. at its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

Item 28. Management Services

Not applicable

Item 29. Undertakings

Not applicable.






                                  SIGNATURES


Pursuant  to  the  requirements  of the  Securities  Act of  1933  and/or  the
Investment  Company Act of 1940,  the  Registrant  certifies that it meets all
the requirements for effectiveness of this Registration  Statement pursuant to
Rule  485(b)  under  the  Securities  Act of 1933  and has  duly  caused  this
Registration  Statement  to be  signed  on  its  behalf  by  the  undersigned,
thereunto  duly  authorized,  in the City of New York and State of New York on
the 18th day of August, 2006.



                                        CENTENNIAL CALIFORNIA TAX EXEMPT TRUST


                                                      By:  /s/ John V. Murphy*
                                 ---------------------------------------------
                                                  John V. Murphy, President, &
                                                   Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                    Title                         Date


/s/ William L. Armstrong *    Chairman &                    August 18, 2006
----------------------------------                          Trustee
William L. Armstrong


/s/ John V. Murphy*           President & Principal

----------------------------------                          Executive Officer
August 18, 2006
John V. Murphy


/s/ Brian W. Wixted*          Treasurer & Principal         August 18, 2006
----------------------------------                          Financial and
Brian W. Wixted               Accounting Officer


/s/ Robert G. Avis*           Trustee                       August 18, 2006

----------------------------------
Robert G. Avis


/s/ George Bowen*             Trustee                       August 18, 2006

----------------------------------
George Bowen


s/ Edward L. Cameron *        Trustee                       August 18, 2006

----------------------------------
Edward L. Cameron



/s/ Jon S. Fossel*            Trustee                       August 18, 2006

----------------------------------
Jon S. Fossel


/s/ Sam Freedman*             Trustee                       August 18, 2006

----------------------------------
Sam Freedman


/s/Richard F. Grabish*        Trustee                       August 18, 2006

----------------------------------
Richard F. Grabish


/s/ Beverly L. Hamilton*      Trustee                       August 18, 2006

----------------------------------
Beverly L. Hamilton


/s/ Robert J. Malone*         Trustee                       August 18, 2006

----------------------------------
Robert J. Malone


/s/ F. William Marshall, Jr.  Trustee                       August 18, 2006

----------------------------------
F. William Marshall, Jr.


*By: /s/ Mitchell J. Lindauer
-----------------------------------------
Mitchell J. Lindauer, Attorney-in-Fact






                    CENTENNIAL CALIFORNIA TAX EXEMPT TRUST

                     Registration Statement No. 33-30471


                                EXHIBIT INDEX


Exhibit No.             Description


23(j)                   Independent Registered Public Accounting Firm's
consent