MULTIPLE CLASS PLAN
                                  ON BEHALF OF
                 FRANKLIN MICHIGAN INSURED TAX-FREE INCOME FUND


      This Multiple Class Plan (the "Plan") has been adopted unanimously by the
Board members of FRANKLIN TAX-FREE TRUST (the "Investment Company") for its
series, Franklin Michigan Insured Tax-Free Income Fund (the "Fund"). The Board
has determined that the Plan, including the expense allocation methods among the
classes, is in the best interests of each class of the Fund, the Fund and the
Investment Company as a whole. The Plan sets forth the provisions relating to
the establishment of multiple classes of shares of the Fund, and supersedes any
Plan previously adopted for the Fund.

      1. The Fund shall offer three classes of shares, to be known as Class A
Shares, Class B Shares and Class C Shares.

      2. Class A Shares shall carry a front-end sales charge ranging from 0% -
4.25%. Class B Shares and Class C Shares shall not be subject to any front-end
sales charges.

      3. Class A Shares shall not be subject to a contingent deferred sales
charge ("CDSC"), except in the following limited circumstances. On investments
of $1 million or more, a contingent deferred sales charge of 1.00% of the lesser
of the then-current net asset value or the original net asset value at the time
of purchase applies to redemptions of those investments within the contingency
period of 18 months from the calendar month following their purchase. The CDSC
is waived in certain circumstances, as described in the Fund's prospectus and
statement of additional information ("SAI").

      Class B Shares shall be subject to a CDSC with the following CDSC
schedule: (a) Class B Shares redeemed within 2 years of their purchase shall be
assessed a CDSC of 4% on the lesser of the then-current net asset value or the
original net asset value at the time of purchase; (b) Class B Shares redeemed
within the third and fourth years of their purchase shall be assessed a CDSC of
3% on the lesser of the then-current net asset value or the original net asset
value at the time of purchase; (c) Class B Shares redeemed within 5 years of
their purchase shall be assessed a CDSC of 2% on the lesser of the then-current
net asset value or the original net asset value at the time of purchase; and (d)
Class B Shares redeemed within 6 years of their purchase shall be assessed a
CDSC of 1% on the lesser of the then-current net asset value or the original net
asset value at the time of purchase. The CDSC is waived in certain circumstances
described in the Fund's prospectus and SAI.

      Class C Shares redeemed within 12 months of their purchase shall be
assessed a CDSC of 1.00% on the lesser of the then-current net asset value or
the original net asset value at the time of purchase. The CDSC is waived in
certain circumstances as described in the Fund's prospectus and SAI.

      4. The distribution plan adopted by the Investment Company pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended, (the "Rule
12b-1 Plan") associated with the Class A Shares may be used to compensate
Franklin/Templeton Distributors, Inc. (the "Distributor") or others for expenses
incurred in the promotion and distribution of the Class A Shares. Such expenses
include, but are not limited to, the printing of prospectuses and reports used
for sales purposes, expenses of preparing and distributing sales literature
and related expenses, advertisements, and other distribution-related expenses,
including a prorated portion of the Distributor's overhead expenses attributable
to the distribution of the Class A Shares, as well as any distribution or
shareholder servicing fees paid to securities firms or others who provide
personal assistance to shareholders in servicing their accounts and have
executed a servicing agreement with the Investment Company for the Class A
Shares, the Distributor or its affiliates.

      The Rule 12b-1 Plan associated with the Class B Shares has two components.
The first component is an asset-based sales charge to be retained by the
Distributor to compensate Distributor for amounts advanced to securities dealers
or their firms or others with respect to the sale of Class B Shares. In
addition, such payments may be retained by the Distributor to be used in the
promotion and distribution of Class B Shares in a manner similar to that
described above for Class A Shares. The second component is a shareholder
servicing fee to be paid to securities firms or others who provide personal
assistance to shareholders in servicing their accounts and have executed a
servicing agreement with the Investment Company for the Class B Shares, the
Distributor or its affiliates.

      The Rule 12b-1 Plan associated with the Class C Shares has two components.
The first component is a shareholder servicing fee, to be paid to securities
firms or others who provide personal assistance to shareholders in servicing
their accounts and have executed a servicing agreement with the Investment
Company for the Class C Shares, the Distributor or its affiliates. The second
component is an asset-based sales charge to be retained by the Distributor
during the first year after the sale of shares and, in subsequent years, to be
paid to dealers or retained by the Distributor to be used in the promotion and
distribution of Class C Shares, in a manner similar to that described above for
Class A Shares.

      The Rule 12b-1 Plans for the Class A, Class B and Class C Shares shall
operate in accordance with Rule 2830(d) of the Conduct Rules of the National
Association of Securities Dealers, Inc.

      5. The only difference in expenses as between Class A, Class B and Class C
Shares shall relate to differences in Rule 12b-1 plan expenses, as described in
the applicable Rule 12b-1 Plans; however, to the extent that the Rule 12b-1 Plan
expenses of one Class are the same as the Rule 12b-1 Plan expenses of another
Class, such classes shall be subject to the same expenses.

      6. There shall be no conversion features associated with the Class A and
Class C Shares. Each Class B Share, however, shall be converted automatically,
and without any action or choice on the part of the holder of the Class B
Shares, into Class A Shares on the conversion date specified, and in accordance
with the terms and conditions approved by the Franklin Tax-Free Trust's Board of
Trustees and as described, in the Fund's prospectus and SAI relating to the
Class B Shares, as such prospectus and SAI may be amended from time to time;
provided, however, that the Class B Shares shall be converted automatically into
Class A Shares to the extent and on the terms permitted by the Investment
Company Act of 1940, as amended (the "Act"), and the rules and regulations
adopted thereunder.

      7. Shares of Class A, Class B and Class C may be exchanged for shares of
another investment company within the Franklin Templeton Investments according
to the terms and conditions stated in each fund's prospectus and SAI, as it may
be amended from time to time, to the extent permitted by the Act and the rules
and regulations adopted thereunder.

      8. Each class will vote separately with respect to any Rule 12b-1 Plan
related to, or which now or in the future may affect, that class.

      9. On an ongoing basis, the Board members, pursuant to their fiduciary
responsibilities under the Act of 1940 and otherwise, will monitor the Fund for
the existence of any material conflicts between the interests of the various
classes of shares. The Board members, including a majority of the Board members
who are not "interested persons" (as defined in the Act) of the Fund, its
investment manager or the Distributor and who have no direct, or indirect
financial interest in the operation of the Rule 12b-1 Plans (the "independent
Board members"), shall take such action as is reasonably necessary to eliminate
any such conflict that may develop. Franklin Advisers, Inc. and
Franklin/Templeton Distributors, Inc. shall be responsible for alerting the
Board to any material conflicts that arise.

      10. All material amendments to this Plan must be approved by a majority of
the Board members, including a majority of the independent Board members.

      11. I, Murray L. Simpson, Secretary of the Franklin Tax-Free Trust do
hereby certify that this Multiple Class Plan was adopted on behalf of the
Franklin Michigan Insured Tax-Free Income Fund, by a majority of the Board
members of the Fund, including a majority of the independent Board members, on
November 18, 2003.



                                          /S/ Murray L. Simpson
                                          ---------------------
                                          Murray L. Simpson
                                          Secretary