Our Ref No. 98-344-CC .

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Our Ref No. 98-344-CC .

July

Nuveen Flagship Multistte

RESPONSE OF TH OFFICE OF CHIF COUNSEL

DIVSION OF INSTMNT MAAGEME

Trust i, et a/.

File No. 811-07747

would not

recommend enforcement action to the Commssion if series of Nuveen Flagship

Multistate Trust I, Nuveen Flagship Multistate Trust IT, and Nuveen Flagship Multistte

Your letter of

March 14, 1997 requests assurance that the staf

Trust IV (the "Nuveen Flagship Funds") that are acquirg the assets and assumig the

liabilities of certain series offunds afated with The John Nuveen Company (the

"Nuveen Funds") and Flagship Resources, Inc. (the "Flagship Funds") use the redemption

credits of

the Nuveen and Flagship Funds under Rule 24f-2 under the Investment

Company Act of 1940 (the "Investment Company Act") for purposes of calculating

registration fees owed under the Securities Act of 1933 (the "Securities Act").

You state that, on January 31, 1997, the Nuveen Funds and the Flagship Funds

were reorganzed into series of the Nuveen Flagship Funds, which are open-end

investment companes registered under the Investment Company Act. You represent that,

prior to the reorganations, each of the Nuveen Flagship Funds had nomial assets and

liabilties, and no operating history. You state that the priar purpose of

the,

reorganiations was to combine those Nuveen and Flagship Funds that had substantialy

similar investment objectives and policies. You represent that, in each reorganation,

either the Nuveen Fund or the Flagship Fund was deemed the survvig fund for purposes

of accounting and the calculation of performance, in accordance with the stafs position in

North American Security Trust (pub. avaiL. Aug. 5, 1994) ("NAST').l

You assert that Rule 24f-2 should be interpreted to permt the Nuveen Flagship

the acquired series of

both the Nuveen Funds

and the Flagship Funds. Alternatively, you maita that each series of the Nuveen

Flagship Funds should be permtted to assume the redemption credits of that Nuveen or

Funds to assume the redemption credits of

Flagship Fund determed to be the survvig fund of the reorganation, in accordance

with the stafs position in NAST

the Investment Company Act provides that, upon the effectve

date of a fund's registration statement, the fund automaticaly wi be deemed to have

Section 24(f) of

1 In NAST, the sta stated that, in determng whether a new fund resulting from a

reorganation may use the historical performance of one of several predecessor funds,

the attributes of the new fund and the predecessor funds should be compared to determe

which predecessor fund most closely resembles the new fund. We have not been asked,

and take no position regarding,. which Nuveen or Flagship Fund should be considered the

survvig fund in each reorganation for purposes of accounting and the calculation of

performance.

2

registered an indefite amount of securities. The section further provides that a fund wi

have 90 days after the end of its fiscal year to pay a registration fee based on net sales, i. e.,

the aggregate price of shares sold during the year, reduced by the aggregate price of

shares redeemed or repurchased. If the fund pays its registration fee more than 90 days

after the end of the fund's fiscal year, it wi be required to pay interest on unpaid

2

amounts.

Under Rule 24f-2, if a fund ceases operations, the date that the fund ceases

operations is deemed to be the end of its fiscal year.3 In the case of a liquidation, merger,

or sale of al or substantialy al of the assets of a fund, the fund is deemed to have ceased

operations on the date that the transaction is consummated. When a fund or a series of a

fund merges with another fund or series of a fund, however, Rule 24f-2 provides that the

acquired fund is considered not to have ceased operations, and the acquirg fund wi

assume the redemption credits of the acquired fund, if: (i) the acquirg fund is a "shell

fund" that had no assets or liabilties, other than nomial assets or liabilties, and no

operating history imediately prior to the merger; (ü) the acquirg fund acquired

substantially

all of

the assets and assumed substantialy all of

the liabilties of

the acquired

fund; and (ii) the merger is not designed to result in the acquired fund mergig with, or

substantially al of its assets being acquired by, a fund or series of a fund other than a shell

fund.

The staff has stated that, absent novel or unusual issues, it wi no longer respond

to letters requesting no-action relieffor an acquirg fund to use the Rule 24f-2

redemption credits of an acquired fund. 4 Your letter presents a novel issue with respect to

the use of redemption credits, however, because in each reorganition, two diferent

2 Section 24(f) was amended by the National Securities Markets Improvement Act of

1996. Prior to the amendment, the registration of an indefite amount of securities was

not automatic. Instead, Rule 24f-2 required a fund to make an election in order to register

an indefite amount of securities. Rule 24f-2 required that a fund fie a notice every year

setting forth the number and amount of securities sold in the past fiscal year. If the notice

was fied withi 60 days of

the fund's fiscal year-end, the fund could compute its

registration fees based on net sales. If the notice was not fied withi the 60-day period,

the fee was based on gross sales, i. e., the aggegate price of the shares sold by the fund

durig the year.

Rule 24f-2 recently was revised to reflect changes made to Section 24(f) by the

National Securities Markets Improvement Act of 1996. See Investment Company Act

Release No. 22815 (Sept. 10, 1997) (adopting amendments to Rule 24f-2).

3 See Rule 24f-2(b).

4 See CIGNA Aggressive Growth Fund, Inc. (pub. avail. Feb. 15, 1985); Lowr Market

Timig Fund, Inc. (pub. avai. Feb. 8, 1985).

3

series were reorganed into a newly created shell series. We believe, therefore, that your

letter warrants a staf response.

In 1995, the staff stated that it would not recommend enforcement action to the

Commssion if newly created shell series of a registered fund used the Rule 24f-2 credits

of an acquired series of another registered fund. S The stafs position was based on

representations that each acquirg series would be continuing the acquired series'

business, and each shareholder of an acquired series, imediately afer the reorganation,

would own the same pro rata interest in the same portolio of securities as he or she

owned imediately before the reorganition.6 By contrast, the staf has taken the

position that when a fund is reorganied into an existing fund that is not a shell (an

"operating fund"), and the acquired fund's shareholders receive interests in a new fund

with a portfolio diferent from that of the acquired fund, the acquirg fund generaly may

not use the acquired fund's Rule 24f-2 redemption credits.7 Rule 24f-2, as amended last

year, largely codifes this staf position by clarg that an acquirg fund in a merger may

the merger was designed to

result in the acquired fund mergig with a fund that was not. a shell fund before the

merger. 8

not use the acquired fund's Rule 24f-2 redemption credits if

You assert that, because the reorganations involved a transfer of assets and

liabilties from the Nuveen and Flagship Funds to shell series with nomial assets and

liabilties and no operating history, the Nuveen Flagship funds should be able to assume

the redemption credits of the acquired series of both the Nuveen Funds and the Flagship

Funds. You contend that permtting this transfer of redemption credits would be

consistent with Rule 24f-2, even though the priar purose of

the reorgantions was to

combine two operating funds ÍÍto a single fund. Alternatively, you maitain that each

S Victory Funds (pub. avai. Apr. 24, 1995) ("Victory Fun&').

6 Rule 24f-2 was amended in 1995, in part to codif the stafs position in Victory Fund.

See Investment Company Act Release No. 21332 (Sept. 1, 1995) (adopting amendments

to Rule 24f-2).

7 See, e.g., Scudder Managed Reserves, Inc. (pub. avai. May 15, 1981). But see

Kemper Total Return Fund (pub. avail. Feb. 6, 1995) ("Kemper") (staf stated that it

would not recommend enforcement action to the Commssion if acquirg funds that were

not shells used acquired funds' redemption credits where the purpose of the

reorganiations was to consolidate clone funds with diferent distribution options into a

single fund with multiple distribution options, and the reorgang funds had the same

investment objectives and policies, the same portfolio managers, and substantialy the

same portfolio securities).

8 Rule 24f-2(b)(3). The 1997 amendments to Rule 24f-2 were not designed to supersede

the staffs position in

views.

Kemper, supra note 7, which continues to represent the stafs

4

series of the Nuveen Flagship Funds should be permtted to assume the redemption credits

of that Nuveen or Flagship Fund determed to be the survvig fund of the

reorganation, in accordance with the staffs position in NAST

As a result of the reorganiations, a shareholder of a Nuveen Flagship Fund would

not own the same pro rata interest in the same portolio of securities as he or she owned

before the reorganiation. Rather, the shareholder would own an interest in a larger pool

of securities that included securities contributed by both a Nuveen Fund and a Flagship

Fund. Thus, although the funds used shell series to accomplish the reorgantions, the

ultimate purpose of the reorganzations was to combine the assets and liabilties of

operating series of the Nuveen and Flagship Funds. In this situation, we believe that it

would not be consistent with Rule 24f-2 for the Nuveen Flagship Funds to use the

both the Nuveen Funds and the Flagship Funds. We therefore are

redemption credits of

unable to assure you that we would not recommend enforcement action to the

Commssion under Section 24(f) of

the Investment Company Act and Rule 24f-2

thereunder if

the Nuveen Flagship Funds use the Rule 24f-2 redemption credits of

both the

Nuveen Funds and the Flagship Funds, as described in your letter. We would not,

however, recommend enforcement action to the Commssion under Section 24(f) and Rule

24f-2 if each Nuveen Flagship Fund relies on Rule 24f-2(b) to use the redemption credits

of the Nuveen or Flagship Fund determed, in accrdance with the stas position in

NAST, supra, to be the "survvof' of each reorganation.

Our position is based on the facts and representations in your letter, and diferent

facts or circumstances may require a diferent conclusion.

~~ úJaçr~

Sarah A. Wagman U

Special Counsel

VEDDER

PRICE

VEDDER, PRICE, KAUFMAN & KAMMHOLZ

222 NORTH LASALLE STREET

CHICAGO, ILLINOIS 60601-1003

'l.....

312-609-7500

FACSIMILE: 312-609-5005

DAVID A. STURMS

A PARTNERSHIP INCLUOING VEOOER, PRICE, KAUFMAN & KAMMHOLZ, PC.

312~609-7589

WITH OFFICES IN CHICAGO AND NEW YORK CITY

40 Act/Rule 24f-2

March 14, 1997

VIA EXPRESS COURIER

Mr. Jack W. Murphy

Associate Director

Offce of Chief Counsel

Division of Investment Management

Securities and Exchange Commission

450 Fift Street, N. W.

Washington, D. C. 20549

RE: Nuveen Flagship Multistate Trust I (File No. 811-07747)

Nuveen Flagship Multistate Trust II (File No. 811-07755)

Nuveen Flagship Multistate Trust IV (File No. 811-07751)

Dear Mr. Murphy:

The above-referenced Nuveen Flagship Funds are open-end management investment companies

registered as such under the Investment Company Act

of 1940,

as amended (the" 1940 Act").

The Nuveen Flagship Funds (also referred to as the "successor funds") were orgânized for the

purpose of combining certin series of various investment companes affiliated with The John

Nuveen Company (the "Nuveen Funds") and Flagship Resources, Inc. (the "Flagship Funds")

in connection with the acquisition of Flagship Resources, Inc. by The John Nuveen Company.

On behalf of the Nuveen Flagship Funds, we respectfully request that the staff of the Division

of Investment Mangement assure that it wiii not recommend enforcement action to the

Securities and Exchange Commission (the "Commission") if

the

Nuveen Flagship Funds use the

Rule 24f-2redemption credits of the respective Nuveen and Flagship Funds.(also referred to as

the "predecessor funds") as described below in computing their registration fees.

I. THE REORGANIZATIONS

On January 31, 1997, the Nuveen Funds and the Flagship Funds were reorganized into certin

series of the Nuveen Flagship Funds pursuant to which: (a) the predecessor fund transferred all

VPKK-002/1l2828. V4 03/14/97

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VEDDER

PRICE

Mr. Jack W. Murphy

March 14, 1997

Page 2

its assets to the successor fund in exchange for shares of the successor fund and the successor

fund assumed all the liabilties of the predecessor fund; and (b) the successor fund distributed

its shares to the shareholders of the predecessor fund. The primary purpose of each

reorganization was to combine, into one mutual fund, funds with substantially similar investment

objectives and policies. Prior to the reorganizations, each of the Nuveen Flagship Funds had

.nominal assets and liabilties (i.e., seed money) and had no operating history. For a description

of the various reorganizations, please see Appendix A.

I. CALCULATION OF RULE 24F-2 FEES

"Fairness Notion" -- Rules Allow Funds to Net Redemptions

Section 6(b) of the Securities Act of 1933, as amended (the "1933 Act") specifies the fees that

must be

paid in connection with registering securities with the Commission under the 1933 Act.

Section 24 of the 1940 Act modifies those provisions for certin investment companies.l Rule

24f-2 under the 1940 Act permits mutual funds to register an indefinite number of securities and

if a Rule 24f-2 Notice is fied within 60 days after the fund's fiscal year end, to deduct the value

of the shares redeemed from the value of the shares sold in calculating the amount of fees due.

Such reductions in registration fees are often referred to as "redemption credits."

The abilty to net redemptions under Rule 24f-2 is based upon the notIDn of fairness. Because

mutual funds continuously offer their shares to the public and stand ready to redeem them upon

request, it

is common for a mutual fund to issue and redeem shares in any given year in an

amount greatly in excess of

any net new sales. A registration fee calculation method that does

not allow netting "may result in inordinately high registration costs for open-end management

companies and their shareholders and may unfairly burden the registration process. "2

i On October 11, 1996 Section 24 was amended to provide additional

flexibilty in registering investment

company securities. The effective date of those amendments are the earlier of (a) October 11, 1997 or (b) the

effective date of final rules or regulations issued under Section 24. .

i SEC releae number IC-9677 (March 15, 1977) proposing Rule 24e-2. See also SEC release number IC-9989

(November 3, 1977) adopting Rule 24f-2 based upon the same "fairness" concerns that prompted Rule 24e-2.

VPKK-002/112828. V4 03/14/97

...

VEDDERPRlCE

Mr. Jack W. Murphy

March 14, 1997

Page 3

Merger and Other Business Combinations

Rule 24f-2(b)(3) provides that a predecessor fund may transfer redemption credits to a successor

fund in the case of either (i) a succession under Rule 414 under the 1933 Act or (ii) a transfer

of assets to a newly-created series of a series company. 3 This provision of the Rule was added

by amendment in 1995.4 As originally proposed, paragraph (b)(3) was only intended to clarify

the purpose of changing the fund's state of incorporation or form of

organization would not result in the company ceasing operations for purposes of Rule 24f-2.

Under the amendment as originally proposed, transactions qualifying for the netting provision

that reorganizations for

would have been limited to reorganizations that satisfied the requirements of Rule 414 under the

1933 Act. CommentersS recommended that the Commission expand the application of

Specifically, 24f-2(b)(3) provides that: "in the case of a merger of a registrant ("Predecessor Fund") with

another registrant ("Successor Fund"), or a sale of all or substantially all of a Predecessor Fund's assets and

liabilties to a Successor Fund, the Predecessor Fund shall not be deemed to have ceased operations and the

Successor Fund shall assume the obligations, fees, and redemption credits of the Predecessor Fund incurred pursuant

to this section. , . if: (i) The registration statement of the Predecessor

Fund is deemed the registration statement

of the Successor Fund in a transaction described. . . (under Rule 414 under the 1933 Act); or (ii) The Successor

Fund is a series of a series company (as defined in §270.18f-2), and immediately prior to the transaction the

Successor Fund had no assets or liabilties, other than nominal assets or liabilties, and no operating history. "

Under Rule 414, a registration statement of an issuer that has been succeeded by an issuer having a

different state of incorporation is deemed to be a registration statement of the successor issuer if: (1) immediately

prior to the succession the successor issuer had no more than nominal assets or liabilties; (2) the succession was

.effected by a statutory merger or similar succession under which the successor acquired all the assets and all the

liabilties of the predecessor; (3) the succession was approved by the security holders of the predecessor at a meeting

. for which proxies had been'

solicited pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (the "1934

Act"); and (4) the successor has fied an amendment to the registration statement of the predecssor issuer which.

(a) expressly adopts such registration statèmentas its own for all purposes. of the 1933 and 1934 Acts and (b) sets

fort any additional information necessar to reflect any material changes made in connection with the succession.

or necessar to keep the registration statement from being misleading in any material respect. Although Rule 414

was contemplated for use only in connection with a reorganization that merely changes the State of incorporation

of the registrant, the staf has granted "no-action" requests involving other "organizational" changes; some of which

did not involve a change in domicile at all (e.g., American Business Shares. Inc. (available July 31, 1975); Advance

Investors Corporation (available September 29, 1976); and Scudder Common Stock Fund. Inc. (available October

10, 1984).

4 See SEC Release No. IC-20874 (Februar 1; 1995) proposing the amendments and SEC Release No. IC­

21332 (September 1, 1995) adopting the amendments.

S See letter dated March 23, 1995 from Craig S. Tyle, Vice President and Senior Counsel, Investment

Company Institute to Jonathan G. Katz, Secretar, Securities- and Exchange Commission.

VPKK-002/112828. V4 03/14/97

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VEDDER

PRICE

Mr. Jack W. Murphy

March 14, 1997

Page 4

paragraph (b)(3) to (i): at a minimum, permit the transfer of redemption credits when

the assets

and liabilties of an existing fund are merged or otherwise transferred into the portfolio of a

newly-created series of another fund (which, in essence, is the functional equivalent of a Rule

414 transaction and was the subject of a favorable staff no-action response6); and (ii) ideally,

permit the transfer of redemption credits in any mutual fund merger or business combination.

In response to such comments, the Commission decided to revise paragraph (b)(3) to provide

that a fund may transfer redemption credits to a successor fund in the case of a transfer of assets

to a newly-created series of a series company, but did not address the broader suggestion that

redemption credits be allowed to tranfer in any mutual fund merger or business combination.

The staff has informed us that the amendments

to Rule 24f-2 adding paragraph (b)(3)(ii);

therefore, should be read to simply codify The Victory Funds and not be extended to

reorganizations that while technically fallng within (b)(3)(ii) are not Rule 414-type transactions.

II.. LEGAL CONSIDERATIONS

The form and substance of the Nuveen Flagship Fund reorganizations

Each reorganization was structured as a combination of the predecessor funds into a new series

of a successor fund. However, in each case, a particular predecessor fund was deemed the

"surviving" fund for accounting, performance and other purposes (referred to as the "accounting

survivor"). In determining the identity of the accounting survivor, the factors articulated in

Nort American Security trust (available August 5, 1994) were used.7 In substance,

therefore,

each reorganiation was the reorganiation of one predecessor fund into the other predecessor

fund. Since Rule 414 arguably was not available, pursuant to Rule 145 under the 1933 Act, the

shares of the Nuveen Flagship Funds issued. to the shareholders of the predecessor funds in

connection with the reorganiations were registered on Form N-14.

6 The Victory Funds (pub. avaiL. April 24, 1995). In The Victory Funds, the staff stated that when a shell

series assumes the assets and liabilties of an acquired fund, the transaction is similar to a reorganzation under Rule

414 because the successor fud is continuing the acquired fund's business and each shareholder of

the acquired fund,

following the transaction, owns the same pro rata interest in the same portfolio of securities as the shareholder

owned before the transaction.

7 The Nuveen Flagship Funds are not seeking no-action with respect to their analysis under North American

Security Trust.

VPKK-002/112828. V4 03/14/97

c .

".

VEDDER

PRICE

Mr. Jack W. Murphy

March 14, 1997

Page 5

Form should govern

Rule 24f-2(b)(3)(ii) specifically provides that a predecessor fund may transfer redemption credits

to a series of a successor fund, where such series immediately prior to the reorganization "had

no assets or liabilties, other than nominal assets or liabilties, and no operating history." The

Nuveen/Flagship reorganizations were just that--to wit, each was a reorganization of two

predecessor funds into a newly-created series with nominal assets and liabilities and no operating

history. The Rule itself does not limit its application to Rule 414-type transactions or require

subjective analysis. Nevertheless, the staff has suggested to us that Section 48(a) of the

1940 Act may prohibit the predecessor funds from transferring the redemption credits pursuant

to Rule 24f-2(b)(3)(ii) since such result may be viewed as doing indirectly that which could not

have been done directly. In other words, since the substance of the reorganizations was to

organize one predecessor fund into the other predecessor fund, the staff has suggested that the

form (i.e., the use of a new-shell series) should be disregarded and that Rule 24f-2(b)(3)(ii)

should be unavailable.

Anomalously, however, this runs counter to the staff's historically rigid adherence to form over

substance in its Rule 24f-2 analysis. When the staff has previously had the opportnity to

similar mutual fund combinations,

generally a form over substance analysis has been followed; most often to the detriment of the

mutual funds and their shareholders.8 In the Nuveen/Flagship reorganiations, a structure was

address the transferabilty of Rule 24f-2 redemption credits in

used that did follow the specified form for allowing the transfer of redemption credits. For the

staff, now, to disregard that form would be unfair and unwarranted.

8 For example, in Scudder Managed Reserves. Inc. (available May 15, 1981) the staff denied a no-action

request of an existing Scudder mutual fund that sought to succeed to the redemption credits of an acquired Scudder

mutual fud. In denying the relief, the staff reasoned that the existing Scudder fund could not succeed to the

acquired Scudder fund's registration statement since the existing

Scudder fud was a functioning entity and, thus,

did not satisfy the requirement of Rule 414 thatan acquiring fund can succeed to an acquired fud's registration

argued unsuccessfully that a substance over form analysis

should be followed (i.e., the Scudder reorganization could have been accomplished within the framework of Rule

414). Rather, the staff followed a form over substance analysis. More recently, in Kemper Total Return Fund

statement only if it is a corporate shell. Scudder's counsel

(available Februar 6, 1995) the staff permtted acquiring funds that were not shells to use the acquired fuIids'

redemption credits because the reorganizing funds had the same investment objectives and policies, the same

portfolio manager, and substantially the same portfolio securities. The staff, however, called Kemper a "narow

modification" of its prior analysis and explicitly reaserted the

staff s position ariculated in Scudder,

VPKK-002/112828. V4 03/14/97

VEDDER

PRICE

Mr. Jack W. Murphy

March 14, 1997

Page 6

The Substance Alternative

Notwithstanding the 3,rguments above, if the staff neverteless denies this no-action request on

a substance over form analysis, then the staff should treat each Nuveen/Flagship reorganization

as a reorganization of one of the predecessor funds into the other predecessor fund and allow

the accounting survivor to retain its redemption credits in the new series of the successor fund.

To determine otherwise would have the draconian effect of ignoring both form and substance.

In other words, it would be irratiónal for the staff to take. a structure providing for the

combination of "A" and "B" into "C" and treat it substantively as a

combination of "A" into

"B," yet stil disallow the transfer of redemption credits from "A" to "B."

III. CONCLUSION

In light of the foregoing, we respectfully request the staff to confrm to us that in connèction

with the reorganizations described above (i) each Nuveen Flagship Fund (i.e. ,the successor

fund) would be able to use the redemption credits of each Nuveen and Flagship Fund (i.e., the

predecessor funds) for purposes of calculating the registration fees owed under Rule 24f-2 or,

each Nuveen Flagship Fund would be able to use the redemption credits of the

accounting survivor for purposes of calculating the registration fees owed under Rule 24f-2.

alternatively, (ii)

Pursuant to the Commission's procedures applicable to requests for no-action letters,9 enclosed

are seven additional copies of this no-action request.

If you have any questions with respect to this letter or need any additional inormation, please

call David A. Sturms at 312/609-7589 or Cathy G. O'Kelly at 312/609-7657.

M

David A. Sturms

DAS:cj

Enclosures

9 SEe release number 33-6269 (December 5, 1980),

VPKK-002/112828. V4 03/14/97

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APPENDIX A

On January 31, 1997" various Nuveen and Flagship Funds were reorganized into the Nuveen

Flagship Funds as follows:

1. Nuveen ArizonaTax-Free Value Fund, a series of the Nuveen Multistate Tax-Free Trust,

and Flagship Arizona Double Tax Exempt Fund, a series of the Flagship Tax Exempt

Funds Trust, were reorganized into Nuveen Flagship Arizona Municipal Bond Fund, a

series of the Nuveen Flagship Multistate Trust i.

2. Nuveen Florina Tax-Free Value Fund, a series of the Nuveen Multistate Tax-Free Trust,

and Flagship Florida Double Tax Exempt Fund,. a seríes of the Flagship Tax Exempt

Funds Trust, were reorganized into Nuveen Flagship Florida Municipal Bond Fund, a

series of the Nuveen Flagship Multistate Trust i.

3. Nuveen Pennsylvania Tax-Free Value Fund, a series of the Nuveen Multistate Tax-Free

Exempt

Fund, a series of the Flagship Tax

Exempt Funds Trust, were reorganized into Nuveen Flagship Pennsylvania Municipal

Trust, and Flagship Pennsylvania Triple Tax .

Bond Fund, a series of the Nuveen Flagship Multistate Trust i.

the Nuveen Multistate Tax-Free Trust,

and Flagship Virginia Double Tax Exempt Fund, a series of the Flagship Tax Exempt

Funds Trust, were reorganized into Nuveen Flagship Virginia Municipal Bond Fund, a

series of the Nuveen Flagship Multistate Trust i.

4. Nuveen Virginia Tax-Free Value Fund, a series of

5. Nuveen New Jersey Tax-Free Value Fund, a series of the Nuveen Multistate Tax-Free

Trust, and Flagship New Jersey Double Tax

Exempt Fund, a series of the Flagship Tax

Exempt Funds Trust, were reorganized into Nuveen Flagship New Jersey Municipal

Bond Fund, a series of the Nuveen Flagship Multistate Trust II.

6. Nuveen New York Tax-Free Value Fund, a series of the Nuveen Tax-Free Bond Fund,

Inc., and Flagship New York Tax Exempt Fund, a series of the Flagship Tax Exempt

Funds Trust, were reorganized into Nuveen Flagship New York Municipal Bond Fund,

a series of the Nuveen Flagship Multistate Trust II.

7. Nuveen Michigan Tax-Free Value Fund, a series of the Nuveen Multistate Tax-Free

Trust, and Flagship Michigan Triple Tax Exempt Fund, a series of the Flagship Tax

Exempt Funds Trust, were reorganized into Nuveen Flagship Michigan MunicipaI Bond

Fund, a series of the Nuveen Flagship Multistate Trust IV.

8. Nuveen Ohio Tax-Free Value Fund, a series of the Nuveen Tax-Free Bond Fund, Inc.,

and Flagship Ohio Double Tax Exempt Fund, a s~ries of

the Flagship Tax Exempt Funds

Trust, were reorganized into Nuveen Flagship Ohio Municipal Bond Fund, a series Of

the Nuveen Flagship Multistate Trust IV.