AMENDMENT TO MANAGEMENT AGREEMENT

                                  AMENDMENT TO
                              MANAGEMENT AGREEMENT

      This Amendment dated as of May 1, 2005, is to the Management Agreement
made as of the 26th day of February, 1992, as amended August 1, 1995, (the
"Agreement") by and between Franklin Municipal Securities Trust, a Delaware
statutory trust (the "Trust"), on behalf of FRANKLIN CALIFORNIA HIGH YIELD
MUNICIPAL BOND FUND AND FRANKLIN TENNESSEE MUNICIPAL BOND FUND (the "Funds"),
series of the Trust, and Franklin Advisers, Inc., a California corporation, (the
"Manager").

                                   WITNESSETH:

      WHEREAS,  both the  Manager and the Trust wish to amend  Paragraph  4A of
the Agreement; and

      WHEREAS, the Board of Trustees of the Trust, including a majority of the
Independent Trustees of the Trust present in person, approved the following
amendment at a meeting on April 19, 2005.

      NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereto agree to amend Paragraph 4A of the Agreement to read as follows:

      A. For purposes of calculating such fee, the value of the net assets of
      the Funds shall be determined in the same manner as that Fund uses to
      compute the value of its net assets in connection with the determination
      of the net asset value of its shares, all as set forth more fully in the
      Trust's current prospectus and statement of additional information. The
      rate of the management fee payable by each of the Funds shall be
      calculated daily at the following annual rates:

           0.625% of the value of net assets up to and including $100,000,000;
           and 0.500% of the value of net assets over $100,000,000 and not over
           $250,000,000; and 0.450% of the value of net assets over $250,000,000
           and not over $10 billion; and 0.440% of the value of net assets over
           $10 billion and not over $12.5 billion; and 0.420% of the value of
           net assets over $12.5 billion and not over $15 billion; and 0.400% of
           the value of net assets over $15 billion and not over $17.5 billion
           0.380% of the value of net assets over from $17.5 billion and not
           over $20 billion; and 0.360% of the value of net assets in excess of
           $20 billion.

      IN WITNESS WHEREOF, this Amendment has been executed on behalf of each
party as of the date set forth above.


FRANKLIN MUNICIPAL SECURITIES TRUST


By:
   /s/XXXXXX X. XXXXXXX
     ------------------
      Xxxxxx X. Xxxxxxx
      Vice President and Secretary


FRANKLIN ADVISERS, INC.


By:/s/XXXXXX X. XXXXXXXX
   ---------------------
      Xxxxxx X. Xxxxxxxx
      President