| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933         | [ X ]                      |
|-----------------------------------------------------------------|----------------------------|
|                                                            |                       |
| Pre-Effective Amendment No.                                     | [    ] |
|                                                            |                       |
| Post-Effective Amendment No.  39                      | [ X ]                      |
|                                                            |                       |
| REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | [ X ]                      |
|                                                            |                       |
| Amendment No. 40                                                | [ X ]                      |

| [    ] | immediately upon filing pursuant to paragraph (b)                                                      |
|----------------------------|--------------------------------------------------------------------------------------------------------|
| [ X ]            | on July 26, 2013 pursuant to paragraph (b)                                                             |
| [    ] | 60 days after filing pursuant to paragraph (a)(1)                                                      |
| [    ] | on (date) pursuant to paragraph (a)(1)                                                                 |
| [    ] | 75 days after filing pursuant to paragraph (a)(2)                                                      |
| [    ] | on (date) pursuant to paragraph (a)(2) of Rule 485.                                                    |
| [    ] | This post-effective amendment designates a new effective date for a previous post-effective amendment. |

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|   | Tickers: | Class A – CHTFX | Class C – CHKCX |
|--------|----------|-----------------------|-----------------------|
|   |     | Class I – CHKIX | Class Y – CHKYX |

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| Fund Summary                                                 |   | 1      |
|--------------------------------------------------------------|--------|--------|
|                                                         |   |   |
| Investment Objective                                         | 1      |
|                                                         |   |   |
| Fees and Expenses of the Fund                                | 1      |
|                                                         |   |   |
| Shareholder Fees                                             | 1      |
|                                                         |   |   |
| Principal Investment Strategies                              | 2      |
|                                                         |   |   |
| Principal Risks                                              | 2      |
|                                                         |   |   |
| Fund Performance                                             | 4      |
|                                                         |   |   |
| Management                                                   | 5      |
|                                                         |   |   |
| Purchase and Sale of Fund Shares                             | 5      |
|                                                         |   |   |
| Tax Information                                              | 5      |
|                                                         |   |   |
| Payment to Broker-Dealers and Other Financial Intermediaries | 5      |
|                                                         |   |   |
| Investment of the Fund’s Assets                        | 5      |
|                                                         |   |   |
| Fund Management                                              | 13     |
|                                                         |   |   |
| Net Asset Value per Share                                    | 14     |
|                                                         |   |   |
| Purchases                                                    |   | 14     |
|                                                         |   |   |
| Redeeming An Investment                                      | 17     |
|                                                         |   |   |
| Alternative Purchase Plans                                   | 20     |
|                                                         |   |   |
| Dividends and Distributions                                  | 28     |
|                                                         |   |   |
| Tax Information                                              | 29     |
|                                                         |   |   |
| Financial Highlights                                         | 31     |

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|                                                                                                       | Class AShares  | Class CShares | Class IShares | Class YShares |
|------------------------------------------------------------------------------------------------------------|---------------------|---------------|---------------|---------------|
| Shareholder Fees (fees paid directly from your investment)                                            |                |          |          |          |
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)                       | 4.00%               | None          | None          | None          |
|                                                                                                       |                |          |          |          |
| Maximum Deferred Sales Charge (Load) (as a percentage of the lesser of redemption value or purchase price) | None(1)             | 1.00%         | None          | None          |
|                                                                                                       |                |          |          |          |
| Annual Fund Operating Expenses (Expenses that you pay each year as a percentage of your investment)        |                |          |          |          |
|                                                                                                       |                |          |          |          |
| Management Fee                                                                                             | 0.40%               | 0.40%         | 0.40%         | 0.40%         |
|                                                                                                       |                |          |          |          |
| Distribution (12b-1) Fee                                                                                   | 0.15%               | 0.75%         | 0.15%         | None          |
|                                                                                                       |                |          |          |          |
| Other Expenses                                                                                             | 0.22%               | 0.47%         | 0.39%         | 0.22%         |
|                                                                                                       |                |          |          |          |
| Total Annual Fund Operating Expenses                                                                       | 0.77%               | 1.62%         | 0.94%         | 0.62%         |
|                                                                                                       |                |          |          |          |

| (1) | Purchases of $1 million or more have no sales charge but a contingent deferred sales charge of up to 1% for redemptions within two years of purchase. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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|           | 1 Year | 3 Years | 5 Years | 10 Years |
|----------------|--------|---------|---------|----------|
| Class A Shares | $475   | $636    | $811    | $1,316   |
| Class C Shares | $265   | $511    | $881    | $1,485   |
| Class I Shares | $96    | $300    | $520    | $1,155   |
| Class Y Shares | $63    | $199    | $346    | $774     |

| Class C Shares | $165 | $511 | $881 | $1,485 |
|----------------|------|------|------|--------|

| * | be rated within the four highest credit ratings assigned by nationally recognized statistical rating organizations or, |
|---|------------------------------------------------------------------------------------------------------------------------|

| * | if unrated, be determined to be of comparable quality by the Fund’s Manager, Aquila Investment Management LLC. |
|---|----------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                        | Average Annual Total Returns forthe Periods Ended December 31, 2012  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|
|                                                                                                                                                                                                                        | 1 Year                                                                    | 5 Years | 10 Years |
| Class Returns Before Taxes:                                                                                                                                                                                                 |                                                                      |   |   |
| Class A                                                                                                                                                                                                                     | 1.32%                                                                     | 4.42% | 3.99% |
| Class C                                                                                                                                                                                                                     | 3.71%                                                                     | 4.38% | 3.52% |
| Class I                                                                                                                                                                                                                     | 5.47%                                                                     | 5.12% | 4.26% |
| Class Y                                                                                                                                                                                                                     | 5.78%                                                                | 5.43%  | 4.56%  |
| Class Y Returns After Taxes:                                                                                                                                                                                                |                                                                      |   |   |
| On Distributions                                                                                                                                                                                                            | 5.78%                                                                     | 5.42% | 4.54% |
| On Distributions and Redemption                                                                                                                                                                                             | 5.00%                                                                | 5.22%  | 4.47%  |
| Barclays Capital Quality Intermediate Municipal Bond Index (This index of municipal bonds of issuers throughout the U.S. is unmanaged and does not reflect deductions for fund operating expenses, taxes or sales charges.) | 3.84%                                                                     | 5.47% | 4.53% |

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|   | * | Initially, $1,000, except that there is no minimum amount for purchase of shares through certain financial intermediaries as discussed below. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | * | Subsequently, any amount (for investments in shares of the same class). |
|--------|---|-------------------------------------------------------------------------|

|   | * | $50 or more if an Automatic Investment Program is established. |
|--------|---|----------------------------------------------------------------|

|   | * | Subsequently, any amount you specify of $50 or more. |
|--------|---|------------------------------------------------------|

|   | * | You are not permitted to maintain both an Automatic  Investment Program and an Automatic Withdrawal Plan simultaneously. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | through an investment broker or dealer, or a bank or other financial intermediary, that has a sales agreement with the Distributor, Aquila Distributors, Inc., in which case that institution will take action on your behalf, and you will not personally perform the steps indicated below; or |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | directly through the Distributor, by mailing payment to the Fund’s Agent, BNY Mellon. |
|--------------------|---------------------------------------------------------------------------------------------|

| Opening a Class A or Class C Share Account                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------|
| * Make out a check for the investment amount payable to Churchill Tax-Free Fund of Kentucky.                                                 |
|                                                                                                                                         |
| * Complete a New Account Application, which is available with the Prospectus or upon request, indicating the features you wish to authorize. |
|                                                                                                                                         |
| * Send your check and completed New Account Application to your dealer or to the Fund’s Agent, BNY Mellon.                             |

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| Adding to a Class A or Class C Share Account                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| By Wire                                                                                                                                                                                                                                                          | By Check  |
| * Telephone the Agent (toll-free) at 800-437-1000 (individual shareholders) or 877-953-6932 (broker/dealers) to advise us that you would like to purchase shares of the Fund by wire transfer.We will provide appropriate instructions at that time.   | * Make out a check for the investment amount payable to Churchill Tax-Free Fund of Kentucky. * Fill out the pre-printed stub attached to the Fund’s confirmations or supply the name(s) of account owner(s), the account number, and the name of the Fund. * Send your check and account information to your dealer or to the Fund’s Agent, BNY Mellon.  |
| Unless you indicate otherwise, your investment will be made in Class A Shares.                                                                                                                                                                                   |

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|   | *-Class C Shares held for less than 12 months (from the date of purchase); and |
|--------|--------------------------------------------------------------------------------|

|   | *-CDSC Class A Shares (as described below). |
|--------|---------------------------------------------|

| By mail, send instructions to:                                                      | By telephone, call:    | By FAX, send instructions to: |
|------------------------------------------------------------------------------------------|------------------------|-------------------------------|
| BNY MellonAttn:  Aquila Group of Funds4400 Computer DriveWestborough, MA 01581 | 800-437-1000 toll-free | 508-599-1838                  |

| ·   | account name(s) and number |
|--------------------|----------------------------|

| ·   | name of the caller |
|--------------------|--------------------|

| ·   | the social security number registered to the account |
|--------------------|------------------------------------------------------|

| ·   | personal identification. |
|--------------------|--------------------------|

----

| ·   | account name(s) |
|--------------------|-----------------|

| ·   | account number |
|--------------------|----------------|

| ·   | amount to be redeemed |
|--------------------|-----------------------|

| ·   | any payment directions. |
|--------------------|-------------------------|

| ·   | account name(s); |
|--------------------|------------------|

| ·   | account number; |
|--------------------|-----------------|

| ·   | dollar amount or number of shares to be redeemed or a statement that all shares held in the account are to be redeemed; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | payment instructions (we normally mail redemption proceeds to your address as registered with the Fund); and |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | signature(s) of the registered shareholder(s). |
|--------------------|------------------------------------------------|

| ·   | member of a national securities exchange; |
|--------------------|-------------------------------------------|

| ·   | U.S. bank or trust company; |
|--------------------|-----------------------------|

| ·   | state-chartered savings bank; |
|--------------------|-------------------------------|

| ·   | Federally chartered savings and loan association; |
|--------------------|---------------------------------------------------|

| ·   | foreign bank having a U.S. correspondent bank; or |
|--------------------|---------------------------------------------------|

| ·   | participant in the Securities Transfer Association Medallion Program (“STAMP”), the Stock Exchanges Medallion Program (“SEMP”) or the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Redemption               | Method of Payment                                                                                                                                                                                   | Charges                                                   |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
| Under $1,000.            | Check.                                                                                                                                                                                              | None.                                                     |
| $1,000 or more.          | Check, or wired or transferred through the Automated Clearing House to your Financial Institution account, if you so requested on your New Account Application or Ready Access Features Form.  | None.                                                          |
| Through a broker/dealer. | Check or wire, to your broker/dealer.                                                                                                                                                               | None.  However, your broker/dealer may charge a fee. |

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|                                                  | Class A Shares“Front-Payment Class”                                                                                                                                                 | Class C Shares“Level-Payment Class”                                                                                                                                                                                       |
|-------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                  |                                                                                                                                                                                            |                                                                                                                                                                                                                                  |
| Initial Sales Charge                                  | Class A Shares are offered at net asset value plus amaximum sales charge of 4%, paid at the time of purchase.  Thus, your investment is reduced by the applicable sales charge.  | None.  Class C Shares are offered at net asset value with no sales charge payable at the time of purchase.                                                                                                                  |
| Contingent Deferred Sales Charge (“CDSC”) | None (except for certain purchases of $1 million or more).                                                                                                                                      | A CDSC of 1% is imposed upon the redemption of Class C Shares held for less than 12 months. No CDSC applies to Class C Shares acquired through the reinvestment of dividends or distributions.                                   |
| Distribution and Service Fees                         | A distribution fee of 0.15 of 1% is imposed on the average annual net assets represented by the Class A Shares.                                                                                 | There is a level charge for distribution and service fees for six years after the date of purchase at the aggregate annual rate of 1% of the average net assets represented by the Class C Shares.                               |
| Other Information                                     | The initial sales charge is waived or reduced in some cases.  Larger purchases qualify for lower sales charges.                                                                       | Class C Shares, together with a pro-rata portion of all Class C Shares acquired through reinvestment of dividends and other distributions paid in additional Class C Shares, automatically convert to Class A Shares after six years. |

|                                   | Class Y Shares“Institutional Class”                               | Class I Shares“Financial Intermediary Class”                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------------|-------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Initial Sales Charge                   | None. Financial intermediaries may charge a fee for purchase of shares.  | None. Financial intermediaries may charge a fee for purchase of shares.                                                                                                                                                                                                                                                                                                                                               |
| Contingent Deferred Sales Charge  | None.                                                                         | None.                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Distribution and Service Fees          | None.                                                                         | A distribution fee of up to 0.25 of 1% of average annual net assets allocable to Class I Shares is permitted under the Distribution Plan.  A distribution fee of up to 0.15 of 1% of such net assets is currently authorized by the Trustees of the Fund.  In addition, a service fee of up to 0.25 of 1% of such assets is imposed on the average annual net assets allocable to Class I Shares. |

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| Class A Shares Offering Price                               | Class C, I and Y Shares Offering Price  |
|-------------------------------------------------------------|----------------------------------------------|
| Net asset value per share plus the applicable sales charge. | Net asset value per share.                   |

|   | * an individual; |
|--------|------------------|

|   | * an individual, together with his or her spouse, and/or any children under 21 years of age purchasing shares for their accounts; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | * a trustee or other fiduciary purchasing shares for a single trust estate or fiduciary account; or |
|--------|-----------------------------------------------------------------------------------------------------|

|   | * a government, municipality or tax-exempt entity that meets the requirements for qualification under Section 501 of the Internal Revenue Code of 1986, as amended (the “Code”). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| IAmount of Purchase Plus Value of All OtherShares Held By a Single Purchaser                             | IISales Charge as Percentage of Public Offering Price | IIISales Charge as Approximate Percentage of Amount Invested |
|----------------------------------------------------------------------------------------------------------|-------------------------------------------------------|--------------------------------------------------------------|
|                                                                                                     |                                                  |                                                         |
| Less than $25,000                                                                                        | 4.00%                                                 | 4.17%                                                        |
| $25,000 but less than $50,000                                                                            | 3.75%                                                 | 3.90%                                                        |
| $50,000 but less than $100,000                                                                           | 3.50%                                                 | 3.63%                                                        |
| $100,000 but less than $250,000                                                                          | 3.25%                                                 | 3.36%                                                        |
| $250,000 but less than $500,000                                                                          | 3.00%                                                 | 3.09%                                                        |
| $500,000 but less than $1,000,000                                                                        | 2.50%                                                 | 2.56%                                                        |
|                                                                                                     |                                                  |                                                         |
| For purchases of $1 million or more see “Sales Charges for Purchases of $1 Million or More.” |

|   |
|--------|

| If you invest $10,000 (Column I), your sales charge would be 4.00% or $400 (Column II).                                                                                      | ($10,000 x .04 = $400)               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|
| The value of your account would be equivalent to the amount of your investment less the sales charge. (The initial value of your account would be $10,000 - $400 = $9,600.)  | ($10,000 - $400 = $9,600)            |
| The sales charge as a percentage of the reduced value of your account would be 4.17% (Column III).                                                                           | ($400 / $9,600 = 0.0416666 or 4.17%) |

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|                                                                                          | CDSC Rate on Shares Redeemed                                    |
|-----------------------------------------------------------------------------------------------|----------------------------------------------------------------------|
| Value of All Aquila Fund Shares at Time Shares Being Redeemed were Originally Purchased  | During First Two Years After Purchase                           |
| $1 million and up to $2.5 million                                                        | 1%                                                                   |
| Over $2.5 million and up to $5 million                                                   | 0.50% on shares redeemed in year 10.25% on shares redeemed in year 2 |
| Over $5 million                                                                          | None                                                                 |

|   | * - Redemption following the death of the shareholder or beneficial owner. |
|--------|----------------------------------------------------------------------------|

|   | * - Redemption by the Fund when an account falls below the minimum required account size. |
|--------|-------------------------------------------------------------------------------------------|

|   | * - Redemption by an investor who purchased $1 million or more without an initial sales charge if the securities dealer of record waived or deferred its commission in connection with the purchase, with notice to the investor and the Fund at the time of purchase. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (iii) protect the Fund against any claim that some of the expenses which it pays or may pay might be considered to be sales-related and therefore come within the purview of the Rule. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 1. the day prior to the day when redemption proceeds are mailed, wired or transferred by the Automated Clearing House or the Agent or paid by the Agent to a financial intermediary; or |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. the third business day after the day the net asset value of the redeemed shares was determined. |
|--------|----------------------------------------------------------------------------------------------------|

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|           | Exempt-Interest  Dividends  | Capital Gains Distributions | Ordinary Income Dividends |
|----------------|--------------------------------------------|-----------------------------|---------------------------|
| Class A Shares | 100.00%                                    | 0.00%                       | 0.00%                     |
| Class C Shares | 100.00%                                    | 0.00%                       | 0.00%                     |
| Class I Shares | 100.00%                                    | 0.00%                       | 0.00%                     |
| Class Y Shares | 100.00%                                    | 0.00%                       | 0.00%                     |

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|                                                                                            |   |                 |    |                    | Class A |   |
|-------------------------------------------------------------------------------------------------|--------|----------------------|---------|-------------------------|---------|--------|
|                                                                                            |   | Three Months         |    | Year Ended December 31, |    |
|                                                                                            |   | 3/31/13 Ended† |    | 2012                    |    |   | 2011 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Net asset value, beginning of period                                                            |   | $                    | 11.07   |                    |    | $      | 10.84 |   |   | $ | 10.26 |   |   | $ | 10.51 |   |   | $ | 9.42 |   |   | $ | 10.38 |   |
| Income (loss) from investment operations:                                                       |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income(1)                                                                        |   |                 | 0.08    |                    |    |   | 0.36 |   |   |   | 0.39 |   |   |   | 0.40 |   |   |   | 0.41 |   |   |   | 0.40 |   |
| Net gain (loss) on securities (both                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| realized and unrealized)                                                                        |   |                 | (0.10   | )                       |    |   | 0.23 |   |   |   | 0.58 |   |   |   | (0.25 | ) |   |   | 1.09 |   |   |   | (0.92 | ) |
| Total from investment operations                                                                |   |                 | (0.02   | )                       |    |   | 0.59 |   |   |   | 0.97 |   |   |   | 0.15 |   |   |   | 1.50 |   |   |   | (0.52 | ) |
| Less distributions:                                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends from net investment income                                                            |   |                 | (0.08   | )                       |    |   | (0.36 | ) |   |   | (0.39 | ) |   |   | (0.40 | ) |   |   | (0.41 | ) |   |   | (0.39 | ) |
| Distributions from capital gains                                                                |   |                 | – |                    |    |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (0.05 | ) |
| Total distributions                                                                             |   |                 | (0.08   | )                       |    |   | (0.36 | ) |   |   | (0.39 | ) |   |   | (0.40 | ) |   |   | (0.41 | ) |   |   | (0.44 | ) |
| Net asset value, end of period                                                                  |   | $                    | 10.97   |                    |    | $      | 11.07 |   |   | $ | 10.84 |   |   | $ | 10.26 |   |   | $ | 10.51 |   |   | $ | 9.42 |   |
| Total return(not reflecting sales charge)                                                       |   |                 | (0.14   | )%(2)                   |    |   | 5.53 | % |   |   | 9.64 | % |   |   | 1.38 | % |   |   | 16.05 | % |   |   | (5.05 | )% |
| Ratios/supplemental data                                                                        |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net assets, end of period (in millions)                                                         |   | $                    | 215     |                    |    | $      | 219 |   |   | $ | 199 |   |   | $ | 186 |   |   | $ | 195 |   |   | $ | 170 |   |
| Ratio of expenses to average net assets                                                         |   |                 | 0.77    | %(3)                    |    |   | 0.76 | % |   |   | 0.77 | % |   |   | 0.75 | % |   |   | 0.76 | % |   |   | 0.79 | % |
| Ratio of net investment income to                                                               |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average net assets                                                                              |   |                 | 3.11    | %(3)                    |    |   | 3.30 | % |   |   | 3.73 | % |   |   | 3.80 | % |   |   | 3.96 | % |   |   | 3.97 | % |
| Portfolio turnover rate                                                                         |   |                 | 2       | %(2)                    |    |   | 12 | % |   |   | 12 | % |   |   | 8 | % |   |   | 8 | % |   |   | 14 | % |
|                                                                                            |   |                 |    |                    |    |
| The expense ratios after giving effect to the expense offset for uninvested cash balances were: |   |
|                                                                                            |   |                 |    |                    |    |
| Ratio of expenses to average net assets                                                         |   |                 | 0.77    | %(3)                    |    |   | 0.76 | % |   |   | 0.77 | % |   |   | 0.75 | % |   |   | 0.76 | % |   |   | 0.78 | % |

| (1) | Per share amounts have been calculated using the daily average shares method. |
|-----|-------------------------------------------------------------------------------|
| (2) | Not annualized.                                                               |
| (3) | Annualized.                                                                   |

| † | Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31.The information presented is for the period January 1, 2013 to March 31, 2013. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                            |   |                 |    |                    | Class C |   |
|-------------------------------------------------------------------------------------------------|--------|----------------------|---------|-------------------------|---------|--------|
|                                                                                            |   | Three Months         |    | Year Ended December 31, |    |
|                                                                                            |   | 3/31/13 Ended† |    | 2012                    |    |   | 2011 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Net asset value, beginning of period                                                            |   | $                    | 11.07   |                    |    | $      | 10.83 |   |   | $ | 10.25 |   |   | $ | 10.51 |   |   | $ | 9.42 |   |   | $ | 10.38 |   |
| Income (loss) from investment operations:                                                       |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income(1)                                                                        |   |                 | 0.06    |                    |    |   | 0.27 |   |   |   | 0.30 |   |   |   | 0.31 |   |   |   | 0.32 |   |   |   | 0.31 |   |
| Net gain (loss) on securities (both                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| realized and unrealized)                                                                        |   |                 | (0.11   | )                       |    |   | 0.24 |   |   |   | 0.58 |   |   |   | (0.26 | ) |   |   | 1.09 |   |   |   | (0.91 | ) |
| Total from investment operations                                                                |   |                 | (0.05   | )                       |    |   | 0.51 |   |   |   | 0.88 |   |   |   | 0.05 |   |   |   | 1.41 |   |   |   | (0.60 | ) |
| Less distributions:                                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends from net investment income                                                            |   |                 | (0.06   | )                       |    |   | (0.27 | ) |   |   | (0.30 | ) |   |   | (0.31 | ) |   |   | (0.32 | ) |   |   | (0.31 | ) |
| Distributions from capital gains                                                                |   |                 | – |                    |    |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (0.05 | ) |
| Total distributions                                                                             |   |                 | (0.06   | )                       |    |   | (0.27 | ) |   |   | (0.30 | ) |   |   | (0.31 | ) |   |   | (0.32 | ) |   |   | (0.36 | ) |
| Net asset value, end of period                                                                  |   | $                    | 10.96   |                    |    | $      | 11.07 |   |   | $ | 10.83 |   |   | $ | 10.25 |   |   | $ | 10.51 |   |   | $ | 9.42 |   |
| Total return(not reflecting CDSC)                                                               |   |                 | (0.44   | )%(2)                   |    |   | 4.73 | % |   |   | 8.72 | % |   |   | 0.42 | % |   |   | 15.06 | % |   |   | (5.85 | )% |
| Ratios/supplemental data                                                                        |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net assets, end of period (in millions)                                                         |   | $                    | 12      |                    |    | $      | 13 |   |   | $ | 9 |   |   | $ | 9 |   |   | $ | 4 |   |   | $ | 3 |   |
| Ratio of expenses to average net assets                                                         |   |                 | 1.62    | %(3)                    |    |   | 1.61 | % |   |   | 1.62 | % |   |   | 1.59 | % |   |   | 1.60 | % |   |   | 1.64 | % |
| Ratio of net investment income to                                                               |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average net assets                                                                              |   |                 | 2.26    | %(3)                    |    |   | 2.43 | % |   |   | 2.87 | % |   |   | 2.90 | % |   |   | 3.06 | % |   |   | 3.10 | % |
| Portfolio turnover rate                                                                         |   |                 | 2       | %(2)                    |    |   | 12 | % |   |   | 12 | % |   |   | 8 | % |   |   | 8 | % |   |   | 14 | % |
|                                                                                            |   |                 |    |                    |    |
| The expense ratios after giving effect to the expense offset for uninvested cash balances were: |   |
|                                                                                            |   |                 |    |                    |    |
| Ratio of expenses to average net assets                                                         |   |                 | 1.62    | %(3)                    |    |   | 1.61 | % |   |   | 1.62 | % |   |   | 1.59 | % |   |   | 1.60 | % |   |   | 1.63 | % |

| (1) | Per share amounts have been calculated using the daily average shares method. |
|-----|-------------------------------------------------------------------------------|
| (2) | Not annualized.                                                               |
| (3) | Annualized.                                                                   |

| † | Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31.The information presented is for the period January 1, 2013 to March 31, 2013. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                            |   |                 |    |                    | Class I |   |
|-------------------------------------------------------------------------------------------------|--------|----------------------|---------|-------------------------|---------|--------|
|                                                                                            |   | Three Months         |    | Year Ended December 31, |    |
|                                                                                            |   | 3/31/13 Ended† |    | 2012                    |    |   | 2011 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Net asset value, beginning of period                                                            |   | $                    | 11.07   |                    |    | $      | 10.83 |   |   | $ | 10.25 |   |   | $ | 10.51 |   |   | $ | 9.42 |   |   | $ | 10.38 |   |
| Income (loss) from investment operations:                                                       |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income(1)                                                                        |   |                 | 0.08    |                    |    |   | 0.34 |   |   |   | 0.37 |   |   |   | 0.39 |   |   |   | 0.39 |   |   |   | 0.38 |   |
| Net gain (loss) on securities (both                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| realized and unrealized)                                                                        |   |                 | (0.10   | )                       |    |   | 0.24 |   |   |   | 0.58 |   |   |   | (0.27 | ) |   |   | 1.09 |   |   |   | (0.91 | ) |
| Total from investment operations                                                                |   |                 | (0.02   | )                       |    |   | 0.58 |   |   |   | 0.95 |   |   |   | 0.12 |   |   |   | 1.48 |   |   |   | (0.53 | ) |
| Less distributions:                                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends from net investment income                                                            |   |                 | (0.08   | )                       |    |   | (0.34 | ) |   |   | (0.37 | ) |   |   | (0.38 | ) |   |   | (0.39 | ) |   |   | (0.38 | ) |
| Distributions from capital gains                                                                |   |                 | – |                    |    |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (0.05 | ) |
| Total distributions                                                                             |   |                 | (0.08   | )                       |    |   | (0.34 | ) |   |   | (0.37 | ) |   |   | (0.38 | ) |   |   | (0.39 | ) |   |   | (0.43 | ) |
| Net asset value, end of period                                                                  |   | $                    | 10.97   |                    |    | $      | 11.07 |   |   | $ | 10.83 |   |   | $ | 10.25 |   |   | $ | 10.51 |   |   | $ | 9.42 |   |
| Total return                                                                                    |   |                 | (0.18   | )%(2)                   |    |   | 5.47 | % |   |   | 9.48 | % |   |   | 1.13 | % |   |   | 15.89 | % |   |   | (5.16 | )% |
| Ratios/supplemental data                                                                        |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net assets, end of period (in millions)                                                         |   | $                    | 7       |                    |    | $      | 7 |   |   | $ | 7 |   |   | $ | 7 |   |   | $ | 8 |   |   | $ | 8 |   |
| Ratio of expenses to average net assets                                                         |   |                 | 0.94    | %(3)                    |    |   | 0.91 | % |   |   | 0.92 | % |   |   | 0.90 | % |   |   | 0.90 | % |   |   | 0.93 | % |
| Ratio of net investment income to                                                               |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average net assets                                                                              |   |                 | 2.94    | %(3)                    |    |   | 3.15 | % |   |   | 3.58 | % |   |   | 3.64 | % |   |   | 3.82 | % |   |   | 3.83 | % |
| Portfolio turnover rate                                                                         |   |                 | 2       | %(2)                    |    |   | 12 | % |   |   | 12 | % |   |   | 8 | % |   |   | 8 | % |   |   | 14 | % |
|                                                                                            |   |                 |    |                    |    |
| The expense ratios after giving effect to the expense offset for uninvested cash balances were: |
|                                                                                            |   |                 |    |                    |    |
| Ratio of expenses to average net assets                                                         |   |                 | 0.94    | %(3)                    |    |   | 0.91 | % |   |   | 0.92 | % |   |   | 0.90 | % |   |   | 0.90 | % |   |   | 0.92 | % |

| (1) | Per share amounts have been calculated using the daily average shares method. |
|-----|-------------------------------------------------------------------------------|
| (2) | Not annualized.                                                               |
| (3) | Annualized.                                                                   |

| † | Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31.The information presented is for the period January 1, 2013 to March 31, 2013. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                            |   |                 |    |                    | Class Y |   |
|-------------------------------------------------------------------------------------------------|--------|----------------------|---------|-------------------------|---------|--------|
|                                                                                            |   | Three Months         |    | Year Ended December 31, |    |
|                                                                                            |   | 3/31/13 Ended† |    | 2012                    |    |   | 2011 |   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Net asset value, beginning of period                                                            |   | $                    | 11.08   |                    |    | $      | 10.84 |   |   | $ | 10.26 |   |   | $ | 10.52 |   |   | $ | 9.43 |   |   | $ | 10.39 |   |
| Income (loss) from investment operations:                                                       |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net investment income(1)                                                                        |   |                 | 0.09    |                    |    |   | 0.38 |   |   |   | 0.41 |   |   |   | 0.42 |   |   |   | 0.42 |   |   |   | 0.41 |   |
| Net gain (loss) on securities (both                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| realized and unrealized)                                                                        |   |                 | (0.10   | )                       |    |   | 0.24 |   |   |   | 0.58 |   |   |   | (0.26 | ) |   |   | 1.09 |   |   |   | (0.91 | ) |
| Total from investment operations                                                                |   |                 | (0.01   | )                       |    |   | 0.62 |   |   |   | 0.99 |   |   |   | 0.16 |   |   |   | 1.51 |   |   |   | (0.50 | ) |
| Less distributions:                                                                             |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends from net investment income                                                            |   |                 | (0.09   | )                       |    |   | (0.38 | ) |   |   | (0.41 | ) |   |   | (0.42 | ) |   |   | (0.42 | ) |   |   | (0.41 | ) |
| Distributions from capital gains                                                                |   |                 | – |                    |    |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | (0.05 | ) |
| Total distributions                                                                             |   |                 | (0.09   | )                       |    |   | (0.38 | ) |   |   | (0.41 | ) |   |   | (0.42 | ) |   |   | (0.42 | ) |   |   | (0.46 | ) |
| Net asset value, end of period                                                                  |   | $                    | 10.98   |                    |    | $      | 11.08 |   |   | $ | 10.84 |   |   | $ | 10.26 |   |   | $ | 10.52 |   |   | $ | 9.43 |   |
| Total return                                                                                    |   |                 | (0.10   | )%(2)                   |    |   | 5.78 | % |   |   | 9.81 | % |   |   | 1.44 | % |   |   | 16.21 | % |   |   | (4.88 | )% |
| Ratios/supplemental data                                                                        |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net assets, end of period (in millions)                                                         |   | $                    | 35      |                    |    | $      | 34 |   |   | $ | 33 |   |   | $ | 40 |   |   | $ | 46 |   |   | $ | 37 |   |
| Ratio of expenses to average net assets                                                         |   |                 | 0.62    | %(3)                    |    |   | 0.61 | % |   |   | 0.62 | % |   |   | 0.60 | % |   |   | 0.61 | % |   |   | 0.64 | % |
| Ratio of net investment income to                                                               |   |                 |    |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average net assets                                                                              |   |                 | 3.26    | %(3)                    |    |   | 3.45 | % |   |   | 3.89 | % |   |   | 3.95 | % |   |   | 4.10 | % |   |   | 4.12 | % |
| Portfolio turnover rate                                                                         |   |                 | 2       | %(2)                    |    |   | 12 | % |   |   | 12 | % |   |   | 8 | % |   |   | 8 | % |   |   | 14 | % |
|                                                                                            |   |                 |    |                    |    |
| The expense ratios after giving effect to the expense offset for uninvested cash balances were: |
|                                                                                            |   |                 |    |                    |    |
| Ratio of expenses to average net assets                                                         |   |                 | 0.62    | %(3)                    |    |   | 0.61 | % |   |   | 0.62 | % |   |   | 0.60 | % |   |   | 0.61 | % |   |   | 0.63 | % |

| (1) | Per share amounts have been calculated using the daily average shares method. |
|-----|-------------------------------------------------------------------------------|
| (2) | Not annualized.                                                               |
| (3) | Annualized.                                                                   |

| † | Effective December 1, 2012, the Fund changed its fiscal year end from December 31 to March 31.The information presented is for the period January 1, 2013 to March 31, 2013. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   |           | Ticker Symbol | CUSIP #   |
|--------|----------------|---------------|-----------|
|   |           |          |      |
|   | Class A Shares | CHTFX         | 171562101 |
|   | Class C Shares | CHKCX         | 171562309 |
|   | Class I Shares | CHKIX         | 171562507 |
|   | Class Y Shares | CHKYX         | 171562408 |
|   |           |          |      |

----

|   | Tickers: | Class A – CHTFX | Class C – CHKCX |
|--------|----------|-----------------------|-----------------------|
|   |     | Class I – CHKIX | Class Y – CHKYX |

| Statement of Additional Information | July 26, 2013  |
|-------------------------------------|---------------------|

| Fund History                                | 2  |
|---------------------------------------------|----|
| Investment Strategies and Risks             | 2  |
| Fund Policies                               | 15 |
| Management of the Fund                      | 17 |
| Ownership of Securities                     | 28 |
| Investment Advisory and Other Services      | 30 |
| Brokerage Allocation and Other Practices    | 43 |
| Capital Stock                               | 43 |
| Purchase, Redemption, and Pricing of Shares | 45 |
| Additional Tax Information                  | 55 |
| Underwriters                                | 60 |
| Appendix A                                  | 62 |

----

| Highest rating (1)        | 16.3%                        |
|---------------------------|------------------------------|
| Second highest rating (2) | 67.5%                        |
| Third highest rating (3)  | 15.1%                        |
| Fourth highest rating (4) | 0.4%                         |
| Not rated                 |     0.7% |
|                      | 100.0%                       |

| * | Also includes pre-refunded Kentucky Obligations, which are bonds for which U.S. Government Obligations have been placed in escrow to retire such Obligations at their earliest call date. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | Municipal Bonds |
|--------|-----------------|

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|    Name, Address(1)and Yearof Birth InterestedTrustee(4)   |   Positions Held with Fund and Length ofService(2)     |     Principal Occupation(s)During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Number of Portfolios in Fund Complex(3)Overseen by Trustee     |     Other Directorships Held by Trustee During Past 5 Years                                                                                              |
|------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Diana P. HerrmannNew York, NY(1958)                                                 | Trustee since 1995 and President since 1999                                     | Vice Chair and Chief Executive Officer of Aquila Management Corporation, Founder and Sponsor of the Aquila Group of Funds(5) and parent of Aquila Investment Management LLC, Manager, since 2004, President since 1997, Chief Operating Officer, 1997-2008, a Director since 1984, Secretary since 1986 and previously its Executive Vice President, Senior Vice President or Vice President, 1986-1997; Chief Executive Officer and Vice Chair since 2004, President and Manager  since 2003, and Chief Operating Officer (2003-2008), of the Manager; Chair, Vice Chair, President, Executive Vice President and/or Senior Vice President of funds in the Aquila Group of Funds since 1986; Director of the Distributor since 1997; Governor, Investment Company Institute (the U.S. mutual fund industry trade organization dedicated to protecting shareholder interests and educating the public about investing) for various periods since 2004, and head of its Small Funds Committee, 2004-2009; active in charitable and volunteer organizations. | 11                                                                                 | ICI Mutual Insurance Company, a Risk Retention Group (2006-2009 and 2010-2013); Vice Chair and Trustee of Pacific Capital Funds of Cash Assets Trust (three Aquila money-market funds) 2004-2012 |

----

|    Name, Address(1)and Yearof Birth  |   Positions Held with Fund and Length ofService(2)          |     Principal Occupation(s)During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                | Number of Portfolios in Fund Complex(3)Overseen by Trustee |     Other Directorships Held by Trustee During Past 5 Years |
|----------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------------|
| Non-interestedTrustees                              |                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                       |                                                                            |
| Thomas A.ChristopherDanville, KY(1947)              | Chair of the Board of Trustees since 2005 and Trusteesince 1992  | Senior partner of Robinson, Hughes & Christopher, C.P.A.s, P.S.C., since 1977; Chairman of the Board, A Good Place for Fun, Inc., a sports facility, since 1987, President, 1987-2012; Director, Sunrise Children’s Services Inc., since 2010; Director, Global Outreach International, since 2011; currently or formerly active with various professional and community organizations.                            | 5                                                          | None                                                                            |
| David A. DuffyNorth Kingstown, RI(1939)             | Trustee since 2009                                               | Retired Founder and Chairman of Duffy & Shanley, Inc., a marketing communications firm, 1973-2003; past Chairman of the Rhode Island Convention Center Authority, 2003-2011; past National Chairman, National Conference for Community & Justice (NCCJ); past Vice Chair, Providence College Board of Trustees; officer or director of numerous civic and non-profit organizations including Rhode Island Hospital.  | 2                                                          | Delta Dental of Rhode Island                                                    |
| Anne J. MillsScottsdale, AZ(1938)                   | Trustee since 1987                                               | President, Loring Consulting Company since 2001; Vice President for Business Management and CFO, Ottawa University, 1992-2001, 2006-2009; IBM Corporation, 1965-1991; currently active with various charitable, educational and religious organizations.                                                                                                                                                                     | 5                                                          | None                                                                            |

----

|    Name, Address(1)and Yearof Birth  |   Positions Held with Fund and Length ofService(2) |     Principal Occupation(s)During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Number of Portfolios in Fund Complex(3)Overseen by Trustee |     Other Directorships Held by Trustee During Past 5 Years |
|----------------------------------------------------------|--------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------------|
| John J. PartridgeProvidence, RI(1940)               | Trustee since 2009                                           | Founding Partner, Partridge Snow & Hahn LLP, a law firm, Providence, Rhode Island, since 1988, Senior Counsel, since January 1, 2007; Assistant Secretary – Advisor to the Board, Aquila Narragansett Tax-Free Income Fund, 2005-2008, Trustee 2002-2005; director or trustee of various educational, civic and charitable organizations, including Ocean State Charities Trust, Memorial Hospital of Rhode Island, and The Pawtucket Foundation.                                                                                                                                                                                                                                                                                                                                     | 5                                                          | None                                                                            |
| James R. RamseyLouisville, KY(1948)                 | Trustee since 1987                                           | President, University of Louisville since November 2002; Professor of Economics, University of Louisville, 1999-present; Kentucky Governor’s Senior Policy Advisor and State Budget Director, 1999-2002; Vice Chancellor for Finance and Administration, the University of North Carolina at Chapel Hill, 1998 to 1999; previously Vice President for Finance and Administration at Western Kentucky University, State Budget Director for the Commonwealth of Kentucky, Chief State Economist and Executive Director for the Office of Financial Management and Economic Analysis for the Commonwealth of Kentucky, Adjunct Professor at the University of Kentucky, Associate Professor at Loyola University-New Orleans and Assistant Professor at Middle Tennessee State University.  | 2                                                          | Community Bank and Trust, Pikeville, KY and Texas Roadhouse Inc.                |

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|    Name, Address(1)and Yearof Birth  |   Positions Held with Fund and Length ofService(2)  |     Principal Occupation(s)During Past 5 Years                                                                                                                                                                     | Number of Portfolios in Fund Complex(3)Overseen by Trustee  |    Other Directorships Held by Trustee During Past 5 Years  |
|----------------------------------------------------------|--------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|---------------------------------------------------------------------------------|
| Laureen L. WhiteNorth Kingstown, RI(1959)           | Trustee since 2009                                                 | President, Greater Providence Chamber of Commerce, since 2005, Executive Vice President 2004-2005 and Senior Vice President, 1989-2002; Executive Counselor to the Governor of Rhode Island for Policy and Communications, 2003-2004.  | 2                                                                | None                                                                            |

| Diana P. Herrmann: | Over 30 years of experience in the financial services industry, 25 of which have been in mutual fund management, most recently as the Vice Chair, Chief Executive Officer, President, Director and Secretary of Aquila Management Corporation (“Aquila”), Founder and Sponsor of the Aquila Group of Funds and parent of the adviser, manager or administrator of each fund of the Aquila Group of Funds, and previously as the Chief Operating Officer, Executive Vice President, Senior Vice President or Vice President of Aquila. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

| Thomas A. Christopher: | Knowledgeable about operation and governance of mutual funds as an investment company board member for 20 years; knowledgeable about financial matters as a partner of an accounting firm as detailed above.                                                                                                   |
|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |                                                                                                                                                                                                                                                                                                           |
| David A. Duffy:        | Knowledgeable about operation and governance of mutual funds as an investment company board member for 17 years; knowledgeable about  government affairs as an executive and as a board member of various corporate and civic organizations as detailed above.                                       |
|                   |                                                                                                                                                                                                                                                                                                           |
| Anne J. Mills:         | Extensive financial and management experience as an executive of various organizations as detailed above; knowledgeable about operation and governance of mutual funds as an investment company board member for 26 years.                                                                                     |
|                   |                                                                                                                                                                                                                                                                                                           |
| John J. Partridge:     | Knowledgeable about finance and corporate governance as a lawyer and as a board member of various organizations as detailed above and about operation and governance of mutual funds as an investment company board member or adviser to the board for 10 years                                                |
|                   |                                                                                                                                                                                                                                                                                                           |
| James R. Ramsey:       | Experienced educator and knowledgeable about economic and governmental affairs as a prior State Budget Director and Chief State Economist and current university president as detailed above; knowledgeable about operation and governance of mutual funds as an investment company board member for 25 years. |
|                   |                                                                                                                                                                                                                                                                                                           |
| Laureen L. White:      | Knowledgeable about government affairs as a chamber of commerce executive as detailed above; knowledgeable about operation and governance of mutual funds as an investment company board member for 7 years.                                                                                                   |

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|     Name, Address(1)and Year of Birth  |  Positions Held with Fund and Length ofService(2)  |      Principal Occupation(s) During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----------------------------------------------------------------|--------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| TrusteeEmeritus (6)                                        |                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Theodore T. MasonHastings-on-Hudson, NY(1935)                   | Trustee Emeritus since 2011; Trustee 1987-2011               | Executive Director, East Wind Power Partners Ltd. since 1994 and Louisiana Power Partners, 1999-2003; Assistant Treasurer, Fort Schuyler Maritime Alumni Association, Inc., successor to Alumni Association of SUNY Maritime College, since 2010 (previously Treasurer, President, First Vice President, and Second Vice President) and director of the same organization since 1997; Director, STCM Management Company, Inc., 1973-2004; twice national officer of Association of the United States Navy (formerly Naval Reserve Association), Commanding Officer of four naval reserve units and Captain, USNR (Ret); Vice President and director, The Navy League of the United States New York Council since 2012 and director since 2002; trustee, The Maritime Industry Museum at Fort Schuyler, 2000-2004; and Fort Schuyler Maritime Foundation, Inc., successor to the Maritime College at Fort Schuyler Foundation, Inc., 2000-2012; Trustee, Hawaiian Tax-Free Trust since 1984 and Chair since 2004; Trustee Aquila Three Peaks High Income Fund since 2006; Trustee Emeritus, Churchill Tax-Free Fund of Kentucky and Aquila Narragansett Tax-Free Income Fund since 2011; Trustee, 1987-2011 and 2009-2011, respectively; Trustee of Pacific Capital Funds of Cash Assets Trust (three Aquila money-market funds, consisting of Pacific Capital Cash Assets Trust (1984-2012), Pacific Capital Tax-Free Cash Assets Trust (1988-2012), and Pacific Capital U.S. Government Securities Cash Assets Trust (1988-2012)) and Chair of the Board of each, 2004-2012.  |
|     Name, Address(1)and Year of Birth  |  Positions Held with Fund and Length ofService(2)  |      Principal Occupation(s) During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Officers                                                   |                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Charles E.Childs, IIINew York, NY(1957)                    | Executive Vice President since 2003 and Secretary since 2011 | Executive Vice President of all funds in the Aquila Group of Funds and the Manager and the Manager’s parent since 2003; Chief Operating Officer of the Manager and the Manager’s parent since 2008; Secretary of all funds in the Aquila Group of Funds since 2011; formerly Senior Vice President, corporate development, Vice President, Assistant Vice President and Associate of the Manager’s parent since 1987; Executive Vice President, Senior Vice President, Vice President or Assistant Vice President of the Aquila money-market funds, 1988-2012; Director of the Distributor since 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

|     Name, Address(1)and Year of Birth  |  Positions Held with Fund and Length ofService(2)                           |      Principal Occupation(s) During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----------------------------------------------------------------|---------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Marie E. AroDenver, CO(1955)                                    | Senior Vice President since 2010                                                 | Co-President of the Distributor since 2010, Vice President, 1993-1997; Senior Vice President, Aquila Three Peaks Opportunity Growth Fund since 2004; Senior Vice President, Tax-Free Trust of Arizona since 2010 and Vice President, 2004-2010; Senior Vice President, Aquila Three Peaks High Income Fund since 2006; Senior Vice President, Churchill Tax-Free Fund of Kentucky, Hawaiian Tax-Free Trust, Aquila Narragansett Tax-Free Income Fund, Tax-Free Fund For Utah, Tax-Free Fund of Colorado and Tax-Free Trust of Oregon since 2010; Vice President, INVESCO Funds Group, 1998-2003.  |
| Paul G. O’BrienCharlotte, NC(1959)                        | Senior Vice President since 2010                                                 | Co-President, Aquila Distributors, Inc. since 2010, Managing Director, 2009-2010; Senior Vice President of Aquila Three Peaks High Income Fund, Aquila Three Peaks Opportunity Growth Fund, and each of the Aquila Municipal Bond Funds since 2010; held various positions to Senior Vice President and Chief Administrative Officer of Evergreen Investments Services, Inc., 1997-2008; Mergers and Acquisitions Coordinator for Wachovia Corporation, 1994-1997.                                                                                                                                |
| Todd W. CurtisPhoenix, AZ(1949)                            | Vice President since 2004; Portfolio Manager or Co-Portfolio Manager since 2009  | Senior Vice President since 2004 and Portfolio Manager since 1986, Tax-Free Trust of Arizona; Vice President since 2004 and Portfolio Manager or Co-Portfolio Manager since 2009, Churchill Tax-Free Fund of Kentucky, backup portfolio manager, 2004-2009; Vice President and Portfolio Manager or Co-Portfolio Manager, Tax-Free Fund For Utah, since 2009; Vice President and Portfolio Manager, Banc One Investment Advisors, Inc. and its predecessors, 1981-2004.                                                                                                                           |
| Royden P. DurhamLouisville, KY(1951)                       | Vice President and Co-Portfolio Manager since 2011                               | Vice President and Co-Portfolio Manager, Churchill Tax-Free Fund of Kentucky, since 2011; President, advEnergy solutions LLC, 2007-2011; Vice President and Trust Advisor, JP Morgan Chase, 2005-2006; Vice President and Trust Officer, Regions Morgan Keegan Trust, 2003-2005; Vice President Fixed Income and Equity Portfolios, The Sachs Company / Louisville Trust Company, 1986-2003.                                                                                                                                                                                                      |
| Robert Matthew WatersUnion, KY(1970)                       | Vice President since 2012                                                        | Vice President, Churchill Tax-Free Fund of Kentucky since 2012; Internal Sales Manager, Fifth Third Asset Management, Cincinnati, OH, 2010-2012, Regional Sales Director, 2012; Sales Associate, Russell Investments, Tampa, FL, 2008-2010; Financial Advisor, Bank of America Investment Services, Tampa FL, 2008; Product Specialist Manager - Asset Management Services, Raymond James Financial, St. Petersburg, FL, 2007-2008, Internal Wholesaler - Asset Management Services, 2004-2007, Account Executive - Raymond James Bank, 2002-2004; Certified Investment Management Analyst.       |

----

|     Name, Address(1)and Year of Birth  |  Positions Held with Fund and Length ofService(2)       |      Principal Occupation(s) During Past 5 Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----------------------------------------------------------------|-------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| James T. ThompsonBountiful, Utah(1955)                     | Assistant Vice President since 2009                          | Vice President and Co-Portfolio Manager, Tax-Free Fund For Utah, since 2009; Assistant Vice President and Backup Portfolio Manager, Tax-Free Trust of Arizona and Churchill Tax-Free Fund of Kentucky, since 2009; Senior Vice President, First Security Bank/Wells Fargo Brokerage Services LLC, Salt Lake City, Utah 1991-2009.                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Randall S. FillmoreNew York, NY(1960)                      | Chief Compliance Officer since 2012                               | Chief Compliance Officer of each fund in the Aquila Group of Funds, the Manager and the Distributor since 2012; Managing Director, Fillmore & Associates, 2009-2012; Fund and Adviser Chief Compliance Officer (2002-2009), Senior Vice President - Broker Dealer Compliance (2004-2009), Schwab Funds Anti Money Laundering Officer and Identity Theft Prevention Officer (2004-2009), Vice President - Internal Audit (2000-2002), Charles Schwab Corporation; National Director, Information Systems Risk Management - Consulting Services (1999-2000), National Director, Investment Management Audit and Business Advisory Services (1992-1999), Senior Manager, Manager, Senior and Staff Roles (1983-1992), PricewaterhouseCoopers LLP.  |
| Joseph P. DiMaggioNew York, NY(1956)                       | Chief Financial Officer since 2003 and Treasurer since 2000  | Chief Financial Officer of each fund in the Aquila Group of Funds since 2003 and Treasurer since 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Yolonda S. ReynoldsNew York, NY(1960)                      | Assistant Treasurer since 2010                                    | Assistant Treasurer of each fund in the Aquila Group of Funds since 2010; Director of Fund Accounting for the Aquila Group of Funds since 2007; Investment Accountant, TIAA-CREF, 2007; Senior Fund Accountant, JP Morgan Chase, 2003-2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Lori A. VindigniNew York, NY(1966)                         | Assistant Treasurer since 2000                               | Assistant Treasurer of each fund in the Aquila Group of Funds since 2000; Assistant Vice President of the Manager or its predecessor and current parent since 1998; Fund Accountant for the Aquila Group of Funds, 1995-1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

----

| Name of Trustee         | Dollar Range of Ownership in Churchill Tax-Free Fund of Kentucky(1) | Aggregate Dollar Range of Ownership in Funds in the Aquila Group of Funds (1) |
|-------------------------|---------------------------------------------------------------------|-------------------------------------------------------------------------------|
|                    |                                                                |                                                                          |
| Interested Trustee      |                                                                |                                                                          |
|                    |                                                                |                                                                          |
| Diana P. Herrmann       | C                                                                   | E                                                                             |
|                    |                                                                |                                                                          |
| Non-interested Trustees |                                                                |                                                                          |
|                    |                                                                |                                                                          |
| Thomas A. Christopher   | E                                                                   | E                                                                             |
|                    |                                                                |                                                                          |
| David A. Duffy          | C                                                                   | C                                                                             |
|                    |                                                                |                                                                          |
| Anne J. Mills           | C                                                                   | D                                                                             |
|                    |                                                                |                                                                          |
| John J. Partridge       | C                                                                   | E                                                                             |
|                    |                                                                |                                                                          |
| James R. Ramsey         | E                                                                   | E                                                                             |
|                    |                                                                |                                                                          |
| Laureen L. White        | B                                                                   | B                                                                             |
|                    |                                                                |                                                                          |
|                    |                                                                |                                                                          |

----

| Name                        | Compensation as Trustee from the Fund for the 12 months ended March 31, 2013 | Compensation as Trustee from All Funds in the Aquila Group of Funds for the 12 months ended March 31, 2013 | Number of Boards on which the Trustee Served for the 12 months ended March 31, 2013(2) |
|-----------------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
|  Thomas A. Christopher |  $23,417                                                                |  $84,750                                                                                              |  5                                                                                |
| David A. Duffy              | $14,000                                                                      | $35,750                                                                                                    | 2                                                                                      |
| Anne J. Mills               | $15,278                                                                      | $87,000                                                                                                    | 5                                                                                      |
| John J. Partridge           | $13,639                                                                      | $52,500                                                                                                    | 5                                                                                      |
| James R. Ramsey             | $14,500                                                                      | $29,000                                                                                                    | 2                                                                                      |
| Laureen L. White            | $13,806                                                                      | $30,500                                                                                                    | 2                                                                                      |

| Institutional 5% shareholders                                                                            | Share Class    | Number of Shares | Percent of Class |
|---------------------------------------------------------------------------------------------------------------|----------------|------------------|------------------|
| Charles Schwab & Co. Inc.Special Custody AccountFBO Customers101 Montgomery StreetSan Francisco, CA  | Class AClass C | 3,900,185301,134 | 20.06%25.99%     |
| NFS LLC FEBOStock Yards Bank200 S.5th St.Louisville, KY                                                  | Class A        | 2,673,778        | 13.75%           |
| First Clearing LLCFBO Customers2801 Market StreetSt. Louis, MO                                           | Class AClass C | 1,602,106101,902 | 8.24%8.79%       |

----

| Institutional 5% shareholders                                                          | Share Class | Number of Shares | Percent of Class |
|---------------------------------------------------------------------------------------------|-------------|------------------|------------------|
| Pershing LLCP.O. Box 2052Jersey City, NJ                                               | Class I     | 622,920          | 90.39%           |
| Vallee & Co FBO SGC/O M&I Trust Co. NA11270 W. Park Pl. Ste. 400Milwaukee, WI  | Class Y     | 1,309,754        | 42.99%           |
| Fifth Third Bank TTEEFBO: BANKDANP.O. Box 3385Cincinnati, OH                           | Class Y     | 460,706          | 15.12%           |
| Danky & Co.P.O. Box 28Danville, KY                                                 | Class Y     | 412,936          | 13.56%           |
| NFS LLC FEBOKentucky  BankP.O. Box 157Paris, KY                              | Class Y     | 166,412          | 5.46%            |

| Additional 5% shareholders |   |   |
|----------------------------|--------|--------|

----

| 2012   | $1,048,307                 |
|--------|----------------------------|
|   |                       |
| 2011   | $   948,618 |
|   |                       |
| 2010   | $1,022,782                 |

| $268,373 |   |
|----------|--------|

----

----

----

|                                 | Sales Charges | Retained by Distributor |
|--------------------------------------|---------------|-------------------------|
|                                 |          |                    |
| Fiscal Year Ended December 31:  |          |                    |
| 2012                                 | $572,126      | $47,874                 |
|                                 |          |                    |
| 2011                                 | $346,420      | $30,463                 |
|                                 |          |                    |
| 2010                                 | $277,793      | $26,548                 |
| Fiscal Period Ended March 31, 2013:  |          |                    |
|                                 | $122,209      | $11,956                 |

----

| Amount of Purchase Plus Value of All Other Shares Held by a Single Purchaser | Sales Charge as Percentage of Public Offering Price | Commissions as Percentage of Offering Price |
|------------------------------------------------------------------------------|----------------------------------------------------------|---------------------------------------------|
|                                                                         |                                                     |                                        |
| Less than $25,000                                                            | 4.00%                                                    | 3.50%                                       |
| $25,000 but less than $50,000                                                | 3.75%                                                    | 3.50%                                       |
| $50,000 but less than $100,000                                               | 3.50%                                                    | 3.25%                                       |
| $100,000 but less than $250,000                                              | 3.25%                                                    | 3.00%                                       |
| $250,000 but less than $500,000                                              | 3.00%                                                    | 2.75%                                       |
| $500,000 but less than $1,000,000                                            | 2.50%                                                    | 2.25%                                       |

----

----

----

----

----

----

|                                       | To All QualifiedRecipients | To Distributor | To Other Qualified Recipients |
|--------------------------------------------|----------------------------|----------------|-------------------------------|
|  Fiscal Year Ended December 31, 2012: |                       |           |
|                                       |                       |           |                          |
| Part I                                     | $314,707                   | $10,586        | $304,121                      |
| Part II                                    | $81,539                    | $21,174        | $60,365                       |
| Part III                                   | $14,502                    | $0             | $14,502                       |

| Fiscal Period Ended March 31, 2013:  |    |   |
|-------------------------------------------|---------|--------|
| Part I                                    | $80,299 | $2,521 | $77,778 |
|                                      |    |   |   |
| Part II                                   | $22,911 | $6,531 | $16,380 |
|                                      |    |   |   |
| Part III                             | $3,686  | $0     | $3,686 |

----

----

----

|   | * Front-Payment Class Shares (“Class A Shares”) are offered to investors at net asset value plus a sales charge, paid at the time of purchase, at the maximum rate of 4.0% of the public offering price, with lower rates for larger purchases including previous purchases of shares of any class of any of the funds in the Aquila Group of Funds. There is no sales charge on purchases of $1 million or more, but redemptions of shares so purchased are generally subject to a contingent deferred sales charge (“CDSC”). Class A Shares are subject to a fee under the Fund’s Distribution Plan at the rate of 0.15 of 1% of the average annual net assets represented by the Class A Shares. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | * Level-Payment Class Shares (“Class C Shares”) are offered to investors at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years after the date of purchase at the aggregate annual rate of 1% of the average annual net assets of the Class C Shares. Six years after the date of purchase, Class C Shares are automatically converted to Class A Shares. If you redeem Class C Shares before you have held them for 12 months from the date of purchase you will pay a |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | CDSC; this charge is 1%, calculated on the net asset value of the Class C Shares at the time of purchase or at redemption, whichever is less. There is no CDSC after Class C Shares have been held beyond the applicable period. For purposes of applying the CDSC and determining the time of conversion, the 12-month and six-year holding periods are considered modified by up to one month depending upon when during a month your purchase of such shares is made. Class C Shares are subject to a fee under the Fund’s Distribution Plan at the rate of 0.75 of 1% of the average annual net assets represented by the Class C Shares and a service fee of 0.25 of 1% of such assets. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | * Institutional Class Shares (“Class Y Shares”) are offered and sold only through institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are offered at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge and no distribution fee. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | * Financial Intermediary Class Shares (“Class I Shares”) are offered and sold only through financial intermediaries with which Aquila Distributors, Inc. has entered into sales agreements, and are not offered directly to retail customers. Class I Shares are offered at net asset value with no sales charge and no redemption fee or contingent deferred sales charge, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers.  Class I Shares may carry a distribution fee of up to 0.25 of 1% of average annual net assets allocable to Class I Shares.  A distribution fee of up to 0.15 of 1% of such net assets is currently authorized by the Board of Trustees of the Fund.  In addition, Class I Shares may pay a service fee of up to 0.25 of 1% of such assets. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (i)   | Class A Shares issued in a single purchase of $1 million or more by a single purchaser; and |
|-----------------|---------------------------------------------------------------------------------------------|

| (ii)   | Class A Shares issued when the value of the purchase, together with the value (based on purchase cost or current net asset value, whichever is higher) of shares of the Fund or any other fund in the Aquila Group of Funds that are owned by the purchaser, is $1 million or more. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Value of All Aquila Fund Shares at Time Shares Being Redeemed were Originally Purchased  | CDSC Rate on Shares Redeemed                                                    |
|-----------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|
| $1 million and up to $2.5 million                                                        | 1% on shares redeemed in years 1 & 2                                             |
| Over $2.5 million and up to $5 million                                                        | 0.50 of 1% on shares redeemed in year 10.25 of 1% on shares redeemed in year 2  |
| Over $5 million                                                                               | None                                                                                 |

| ·   | Redemption following the death of the shareholder or beneficial owner. |
|--------------------|------------------------------------------------------------------------|

| ·   | Redemption by the Fund when an account falls below the minimum required account size. |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | Redemption by an investor who purchased $1 million or more without an initial sales charge if the securities dealer of record waived or deferred its commission in connection with the purchase, with notice to the investor and the Fund at the time of purchase. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Amount of Purchase                    | Amount Distributed to Broker/Dealer as a Percentage of Purchase Price |
|---------------------------------------|-----------------------------------------------------------------------|
|                                  |                                                                  |
| $1 million but less than $2.5 million | 1%                                                                    |
|                                  |                                                                  |
| $2.5 million but less than $5 million | 0.50 of 1%                                                            |
|                                  |                                                                  |
| $5 million or more                    | 0.25 of 1%                                                            |

|   | * | current and former Trustees and officers of any funds in the Aquila Group of Funds; |
|--------|---|-------------------------------------------------------------------------------------|

|   | * | the directors, managers, officers and certain employees, former employees and representatives of the Manager, the Distributor, and the sub-adviser of any fund in the Aquila Group of Funds and the parents and/or affiliates of such companies; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | * | selected broker dealers, their officers and employees and other investment professionals; |
|--------|---|-------------------------------------------------------------------------------------------|

|   | * | certain persons connected with firms providing legal, advertising or public relations assistance to the Funds; |
|--------|---|----------------------------------------------------------------------------------------------------------------|

|   | * | plans for the benefit of trust or similar clients of banking institutions over which these institutions have full investment authority, if the Distributor has an agreement relating to such purchases. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (i) | satisfies uniform criteria which enable the Distributor to realize economies of scale in its costs of distributing shares; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------|

|   |  (ii) | gives its endorsement or authorization (if it is a group or association) to an investment program to facilitate solicitation of its membership by a broker or dealer; and |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | complies with the conditions of purchase that make up an agreement between the Fund and the group, representative or broker or dealer. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------|

| * | certain wrap accounts, asset allocation programs or other fee-based arrangements for the benefit of clients of investment professionals or other financial intermediaries; and |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| * | certain retirement plans that are part of a retirement plan or platform offered by banks, broker-dealers, financial advisors or insurance companies, or serviced by recordkeepers. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | assistance in training and educating the financial advisor’s personnel; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | participation in the financial advisor’s conferences and meetings; |
|--------------------|--------------------------------------------------------------------------|

| ·   | advertising of the Fund’s shares; |
|--------------------|-----------------------------------------|

| ·   | payment of travel expenses, including lodging, for attendance at sales seminars by qualifying registered representatives; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | other incentives or financial assistance to financial advisors in connection with promotional, training or educational seminars or conferences; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | shareholder education events; |
|--------------------|-------------------------------|

| ·   | exhibit space or sponsorships at regional or national events of financial intermediaries; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | participation in special financial advisor programs; |
|--------------------|------------------------------------------------------|

| ·   | continued availability of the Fund’s shares through the financial advisor’s automated trading platform; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | access to the financial advisor’s sales representatives and national sales management personnel by the Distributor or Fund representatives; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | inclusion of the Fund and/or the Aquila Group of Funds on preferred or recommended sales lists; and |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | other comparable expenses at the discretion of the Distributor. |
|--------------------|-----------------------------------------------------------------|

----

----

----

----

----

----

|   | 1. | Interactive Data Pricing and Reference Data, Inc. (pricing services) on a daily basis with no lag; |
|--------|----|----------------------------------------------------------------------------------------------------|

|   | 2. | Tait, Weller & Baker LLP, its independent registered public accounting firm, as soon as practicable following the Fund's fiscal year-end and on an as-needed basis; and |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Fitch, its financial printer, as soon as practicable following each fiscal quarter-end. |
|--------|----|-----------------------------------------------------------------------------------------|

----

----

----

----

----

----

| Name of Principal Underwriter | Net Underwriting Discounts and Commissions | Compensation on Redemptions and Repurchases | Brokerage Commissions | OtherCompensation |
|-------------------------------|--------------------------------------------|---------------------------------------------|-----------------------|-------------------|

| Aquila Distributors, Inc. | $47,874 | None | None | None(*) |
|---------------------------|---------|------|------|---------|

| Aquila Distributors, Inc. | $11,956 | None | None | None(*) |
|---------------------------|---------|------|------|---------|

----

----

----

----

----

----

----

----

----

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| (a)     |                                                                                                                             | Supplemental Declaration of Trust Amending and Restating the Declaration of Trust (ii)                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                             |                                                                                                                                |
| (b)     |                                                                                                                             | By-laws (xiii)                                                                                                                      |
|    |                                                                                                                             |                                                                                                                                |
| (c)     |                                                                                                                             | See Supplemental Declaration of Trust Amending and Restating the Declaration of Trust and By-laws filed under Items 28(a) and 28(b) |
|    |                                                                                                                             |                                                                                                                                |
| (d)     |                                                                                                                             | Advisory and Administration Agreement (xvi)                                                                                         |
|    |                                                                                                                             |                                                                                                                                |
| (e)     | (i)                                                                                                                              | Distribution Agreement (iii)                                                                                                        |
|    |                                                                                                                             |                                                                                                                                |
|    | (ii)                                                                                                                             | Anti-Money Laundering Amendment to Distribution Agreement (ix)                                                                      |
|    |                                                                                                                             |                                                                                                                                |
|    | (iii)                                                                                                                            | Sales Agreement for brokerage firms (iii)                                                                                           |
|    |                                                                                                                             |                                                                                                                                |
|    | (iv)                                                                                                                             | Sales Agreement for financial institutions (iii)                                                                                    |
|    |                                                                                                                             |                                                                                                                                |
|    | (v)                                                                                                                              | Services Agreement (ii)                                                                                                             |
|    |                                                                                                                             |                                                                                                                                |
|    | (vi)                                                                                                                             | Shareholder Services Agreement (viii)                                                                                               |
|    |                                                                                                                             |                                                                                                                                |
| (f)     |                                                                                                                             | Not applicable                                                                                                                      |
|    |                                                                                                                             |                                                                                                                                |
| (g)     |                                                                                                                             | Custody Agreement (ii)                                                                                                              |
|    |                                                                                                                             |                                                                                                                                |
| (h)     | (i)                                                                                                                              | Transfer Agency Agreement (iv)                                                                                                      |
|    |                                                                                                                             |                                                                                                                                |
|    | (ii)                                                                                                                             | Anti-Money Laundering Amendment to Transfer Agency Agreement (ix)                                                                   |
|    |                                                                                                                             |                                                                                                                                |
|    | (iii)                                                                                                                            | Customer Identification Services Amendment to Transfer Agency Agreement (x)                                                         |
|    |                                                                                                                             |                                                                                                                                |
| (i)     |                                                                                                                             | Opinion of Fund Counsel (xiv)                                                                                                       |
|    |                                                                                                                             |                                                                                                                                |
| (j)     |                                                                                                                             | Consent of Independent Registered Public Accounting Firm (xix)                                                                      |
|    |                                                                                                                             |                                                                                                                                |
| (k)     |                                                                                                                             | Not applicable                                                                                                                      |
|    |                                                                                                                             |                                                                                                                                |
| (l)     |                                                                                                                             | Not applicable                                                                                                                      |
|    |                                                                                                                             |                                                                                                                                |
| (m)     | (i)                                                                                                                              | Distribution Plan (iv)                                                                                                              |
|    |                                                                                                                             |                                                                                                                                |
|    | (ii)                                                                                                                             | Shareholder Services Plan (iv)                                                                                                      |
|    |                                                                                                                             |                                                                                                                                |
| (n)     |                                                                                                                             | Plan pursuant to Rule 18f-3 (xvii)                                                                                                  |
|    |                                                                                                                             |                                                                                                                                |
| (o)     |                                                                                                                             | Reserved                                                                                                                            |
|    |                                                                                                                             |                                                                                                                                |
| (p)     | (i)                                                                                                                              | Code of Ethics of the Fund (xvii)                                                                                                   |
|    |                                                                                                                             |                                                                                                                                |
|    | (ii)                                                                                                                             | Code of Ethics of the Manager (xvii)                                                                                                |
|    |                                                                                                                             |                                                                                                                                |
| N/A     |                                                                                                                             | Powers of Attorney (xviii)                                                                                                          |
|    |                                                                                                                             |                                                                                                                                |
| (i)     |                                                                                                                             | Filed as an exhibit to Registrant's Post-Effective Amendment No. 13 dated January 29, 1996 and incorporated herein by reference.    |
|    |                                                                                                                             |                                                                                                                                |
| (ii)    | Filed as an exhibit to Registrant's Post-Effective Amendment No. 15 dated April 15, 1996 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (iii)   | Filed as an exhibit to Registrant's Post-Effective Amendment No. 16 dated April 24, 1997 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (iv)    | Filed as an exhibit to Registrant's Post-Effective Amendment No. 17 dated April 28, 1998 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (v)     | Filed as an exhibit to Registrant's Post-Effective Amendment No. 19 dated April 27, 1999 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (vi)    | Filed as an exhibit to Registrant's Post-Effective Amendment No. 20 dated April 27, 2000 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (vii)   | Filed as an exhibit to Registrant's Post- Effective Amendment No. 21 dated April 30, 2001 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (viii)  | Filed as an exhibit to Registrant's Post- Effective Amendment No. 22 dated April 22, 2002 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (ix)    | Filed as an exhibit to Registrant's Post- Effective Amendment No. 24 dated April 29, 2003 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (x)     | Filed as an exhibit to Registrant's Post- Effective Amendment No. 25 dated April 22, 2004 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (xi)    | Filed as an exhibit to Registrant's Post- Effective Amendment No. 26 dated April 29, 2005 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (xii)   | Filed as an exhibit to Registrant's Post- Effective Amendment No. 27 dated April 27, 2006, and incorporated herein by reference. |
|    |                                                                                                                             |
| (xiii)  | Filed as an exhibit to Registrant's Post- Effective Amendment No. 28 dated April 25, 2007 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (xiv)   | Filed as an exhibit to Registrant's Post- Effective Amendment No. 30 dated April 29, 2008 and incorporated herein by reference.  |
|    |                                                                                                                             |
| (xv)    | Filed as an exhibit to Registrant's Post-Effective Amendment No. 31 dated April 30, 2009 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (xvi)   | Filed as an exhibit to Registrant's Post-Effective Amendment No. 32 dated April 29, 2010 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (xvii)  | Filed as an exhibit to Registrant's Post-Effective Amendment No. 33 dated April 21, 2011 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (xviii) | Filed as an exhibit to Registrant's Post-Effective Amendment No. 35 dated April 24, 2012 and incorporated herein by reference.   |
|    |                                                                                                                             |
| (xix)   | Filed herewith.                                                                                                                  |

| (a)   | Not applicable. |
|-----------------|-----------------|

| (b)   | Not applicable. |
|-----------------|-----------------|

----

|   | CHURCHILL TAX-FREE TRUST |
|--------|--------------------------|
|   | (Registrant)             |
|   |                     |
|   |                     |

|   | By:           /s/ Diana P. Herrmann |
|--------|--------------------------------------------------------------------------------------------|
|   | Diana P. Herrmann, President                                                               |

| SIGNATURE                   |   | TITLE                                 |   |
|-----------------------------|--------|---------------------------------------|--------|
|                        |   |                                  |   |
|                        |   |                                  |   |
| /s/ Diana P. Herrmann       |   |                                  |   |
| Diana P. Herrmann           |   | Trustee and President                 |   |
|                        |   |                                  |   |
| /s/ Thomas A. Christopher * |   |                                  |   |
| Thomas A. Christopher       |   | Chair of the Board of Trustees        |   |
|                        |   |                                  |   |
| /s/ David A. Duffy *        |   |                                  |   |
| David A. Duffy              |   | Trustee                               |   |
|                        |   |                                  |   |
| /s/ Anne J. Mills *         |   |                                  |   |
| Anne J. Mills               |   | Trustee                               |   |
|                        |   |                                  |   |
| /s/ John J. Partridge *     |   |                                  |   |
| John J. Partridge           |   | Trustee                               |   |
|                        |   |                                  |   |
| /s/ James R. Ramsey *       |   |                                  |   |
| James R. Ramsey             |   | Trustee                               |   |
|                        |   |                                  |   |
| /s/ Laureen L. White *      |   |                                  |   |
| Laureen L. White            |   | Trustee                               |   |
|                        |   |                                  |   |
| /s/ Joseph P. DiMaggio      |   |                                  |
| Joseph P. DiMaggio          |   | Chief Financial Officer and Treasurer |
|                        |   |                                  |   |

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