Will Davis vs. Kentucky Case Destroy State Specific Money Funds? Managers of tax free money market funds are discussing the upcoming review of Davis, a Kentucky case that said it's unconstitutional for a state to tax out of state municipal income, by the U.S. Supreme Court on Nov. 6, 2007. Should the Court uphold Davis, state-specific municipal funds could become dinosaurs. But we believe this appears unlikely based upon recent court decisions and based upon the size and political importance of states and municipalities. JPMorgan's Nick Rabiecki tells us, "A small number of funds are thinking about it [Davis].... Some funds are taking it as more of a threat than others. No one knows what's going to happen here.... The lobbyists can't influence it. Some are creating contingency plans." Look for more in the October Money Fund Intelligence.

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