______________________
SEMIANNUAL REPORT
______________________
Maryland Tax-Free Funds
______________________
FOR YIELD, PRICE, LAST TRANSACTION,
AND CURRENT BALANCE, 24 HOURS,
7 DAYS A WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
______________________
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
______________________
T. ROWE PRICE
100 East Pratt Street
Baltimore, Maryland 21202
______________________
This report is authorized for distri-bution only to shareholders and to
others who have received a copy of the prospectus of the T. Rowe Price
Maryland Tax-Free Bond Funds.
MDC
<PAGE>
- -------------------------------------------------------------------------------
Fellow Shareholders
- -------------------------------------------------------------------------------
While stocks have captured most of the headlines so far this year, bonds
also delivered strong returns for investors. Bond prices rose and yields fell
sharply, although long-term tax-exempt issues trailed their taxable equivalents.
Despite the Federal Reserve's ease in July, municipal and taxable bonds gave
back some of their gains after revised economic data indicated the economy was
not slowing to the extent originally believed.
- -------------------------------------------------------------------------------
MARKET ENVIRONMENT
- -------------------------------------------------------------------------------
Municipals turned in their strongest performance this year in January and
February, when the yield on 30-year AAA general obligation bonds fell to 5.95%
from 6.65%. However, during the six months covered in this report, that yield
declined by only another 10 basis points to 5.85%, compared with an 80-b
asis-point drop in the 30-year Treasury bond yield.
The tax-exempt market's lagging performance relative to Treasuries can be
attributed largely to investor concerns about tax reform proposals in Washington
(see sidebar on page 2). One effect of this key issue was the divergence between
intermediate- and long-term tax-exempt bonds. During the six months ended August
31, bonds maturing in 5 to 10 years
[Edgar description: An 2-line chart showing interest rate levels on the
Maryland Bond Index and the 3-Year Maryland General Obligation bond from
8/31/94 through 8/31/95.]
provided higher total returns than long-term bonds. The municipal yield
curve steepened significantly (short-term yields fell and long-term yields were
steady) because investors demonstrated their reluctance to assume the additional
risk of buying bonds with long maturities until tax uncertainties are cleared
up.
The supply of new tax-exempt issues has been light so far this year,
especially in Maryland, where new issuance was down 42%, compared with a 22%
drop nationwide. The shortage reflects belt tightening by local governments, a
dearth of borrowing by hospitals, and a drop in refinancing activity following
the runup in interest rates in 1994. Secondary market supply, particularly in
shorter maturities, was also constricted by large redemptions of older,
high-coupon bonds that reached their call dates in June and July. These powerful
technical conditions caused Maryland tax-exempts to trade at lower yields and
higher prices than national averages, particularly during the quarter.
<PAGE>
The state's economy continued to recover modestly from the early-1990s
recession, although its growth trailed the national rate due to ongoing cutbacks
in federal government jobs, as well as weakness in the banking and defense
industries. While the service sector is generating the most new jobs in the
state, not many of them are high-wage positions. As a result, Maryland's
historically high income levels have been moving closer to the national average.
It is too soon to say whether these are short-term developments or long-term
trends that will affect overall credit quality.
- -------------------------------------------------------------------------------
MARYLAND SHORT-TERM TAX-FREE BOND FUND
- -------------------------------------------------------------------------------
For most of the past six months, as the economy slowed and interest rates
dropped, we gradually extended the fund's maturity and duration to highs of 2.9
and 2.5 years, respectively, on June 30. Our portfolio extension benefited the
fund, especially in May, when increasing talk of a flat tax drove investors away
from longer maturities, sparking a strong rally in shorter-term tax-exemp t
issues. The longer posture also helped the fund as interest rates dropped in
anticipation of the cut in the federal funds target in July, the Fed's first
reduction in nearly three years.
Since then, however, economic signals have been somewhat mixed, creating
uncertainty over the Fed's next move. While short-term municipal yields fell in
the wake of the Fed cut, they have since retraced some of their decline.
Consequently, we moved to a more neutral stance, trimming the fund's weighted
average maturity to 2.7 years and its effective duration to 2.4 years as of
August 31. Your fund performed marginally below its peer group average in the
six-month period, but slightly better for the quarter.
===============================================================================
Performance Comparison
- -------------------------------------------------------------------------------
Periods Ended 8/31/95
_____________________
3 Months 6 Months
__________________
Maryland Short-Term
Tax-Free Bond Fund 1.45% 3.74%
-------------------
Lipper States Short Municipal
Debt Fund Average 1.39 3.88
-------------------
===============================================================================
<PAGE>
========================================
Municipal Bonds Hindered by Tax
Reform Proposals
========================================
In recent months, proposals for tax
reform in Washington have trimmed
returns on municipal bonds. Most of
these proposals are still in rudimentary
form, but they center on the possibility
of a flat tax with a low income tax
rate, and the elimination of taxes on
the income from taxable securities. As a
result, investors demanded higher yields
on long-term tax-exempt issues relative
to Treasuries to compensate for the risk
that new legislation might reduce the
tax advantages of municipals. Tax-exempt
securities with short maturities have
performed better, because they are less
vulnerable to any changes in the tax
laws.
Tax reform discussions could
continue to affect the municipal market
adversely, but we believe the likelihood
of a genuine flat tax is slim. In our
experience, the market often overreacts
to proposed changes in the tax code,
creating periods of market weakness that
we view as buying opportunities.
Accordingly, we have taken advantage of
the demand for short-term tax-exempt
bonds and have purchased long-term bonds
when their yields approached those of
long-term Treasuries.
========================================
- -------------------------------------------------------------------------------
MARYLAND TAX-FREE BOND FUND
- -------------------------------------------------------------------------------
Your fund benefited from the steepening of the municipal yield curve and
its above-average weighting in prerefunded bonds and other intermediate-term
issues. As of August 31, about 17% of net assets were invested in bonds that had
been refinanced in advance of their maturity by issuers taking advantage of low
interest rates. Proceeds from the sale of these bonds are escrowed in U.S.
Treasuries until their earliest call dates, in effect turning them into
high-quality intermediate-term bonds. As mentioned, intermediate-term tax-exem
pts outperformed their long-term counterparts during the past six months,
largely due to concern over potential tax reform.
<PAGE>
Over the last six months, we increased our holdings of long-term bonds and
extended duration as much as permitted by the limited supply. The goal was to
move the portfolio from 1994's defensive posture to a more market neutral
position. We moved the fund's duration from just over 7 years at the end of
February to 7.5 years in June, when municipals reached attractive yield levels
versus Treasuries. In August, we lowered duration closer to 7 years as the
economy began to show signs of strength again. We expect supply to pick up
modestly for the rest of the year, providing more opportunities to further
extend the portfolio, particularly if yields move higher.
The fund's performance compared favorably with its peer group average for
both the last quarter and six months.
===============================================================================
Performance Comparison
- -------------------------------------------------------------------------------
Periods Ended 8/31/95
_____________________
3 Months 6 Months
__________________
Maryland Tax-Free
Bond Fund 0.92% 5.02%
---------------------
Lipper Maryland Municipal
Debt Fund Average 0.72 4.69
---------------------
===============================================================================
- -------------------------------------------------------------------------------
OUTLOOK
- -------------------------------------------------------------------------------
For the past three months, the 30-year Treasury bond yield has hovered in a
range between 6.5% and 7%. While recent economic growth has slowed significantly
from last year's rapid pace, it may not have slowed to the extent the Federal
Reserve believed when it loosened monetary policy in July. Second quarter GDP,
initially reported to have increased by a paltry 0.5% annualized rate, was
subsequently revised to 1.1%. Growth in the third and fourth quarters should be
closer to the long-term trend of 2.5%. Until the economy shows clearer signs of
veering from moderate to either slower or more rapid growth, long bond yields
are likely to remain close to current levels. Despite the emerging picture of a
rebound in growth, the combination of benign inflation and the growing sense of
fiscal responsibility in Washington may reassure the bond market.
The municipal market is also likely to trade in its range of the past six
months, with long-term rates fluctuating between 5.5% and 6.0%. Unless tax
reform proposals disappear altogether, we do not expect municipal bonds to
outperform Treasuries, and investors may continue to prefer tax-exempt bonds
with short maturities. Overall, we anticipate that economic developments will
have a greater impact than tax reform proposals on the municipal market.
Respectfully submitted,
[signature]
Mary J. Miller
Chairman of the Investment
Advisory Committee
September 20, 1995
<PAGE>
===============================================================================
Portfolio Highlights
Maryland Short-Term Tax-Free Bond Fund
================================================================================
Key Statistics
Periods Ended
Dividend Yield 8/31/95
__________________________ _______________
3 Months* 4.18%
6 Months* 4.21
SEC 30-Day Yield 3.78
Dividend Per Share
___________________________
3 Months $0.05
6 Months 0.11
Change in Price Per Share
___________________________
3 Months (From $5.10 to $5.12) $0.02
6 Months (From $5.04 to $5.12) 0.08
Weighted Average Quality** 1.6
Weighted Average Maturity 2.7 years
Weighted Average Effective Duration 2.4 years
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the average daily net asset values per share for the same period.
** On a T. Rowe Price scale of 1 to 10, with Grade 1 representing highest
quality.
===============================================================================
Maryland Tax-Free Bond Fund
================================================================================
Key Statistics
Periods Ended
Dividend Yield 8/31/95
___________________________ _______________
3 Months* 5.60%
6 Months* 5.66
SEC 30-Day Yield 5.28
Dividend Per Share
___________________________
<PAGE>
3 Months $0.14
6 Months 0.29
Change in Price Per Share
___________________________
3 Months (From $10.25 to $10.20) $-0.05
6 Months (From $9.99 to $10.20) 0.21
Weighted Average Quality** 2.4
Weighted Average Maturity 16.9 years
Weighted Average Effective Duration 7.1 years
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the average daily net asset values per share for the same period.
** On a T. Rowe Price scale of 1 to 10, with Grade 1 representing highest
quality.
===============================================================================
Average Annual Compound Total Return
Periods ended August 31, 1995
Since
Inception
1 Year (1/29/93)
-------- -----------
5.57% 4.49%
Note: For the above periods ended 6/30/95, the fund's returns were 5.47%
and 4.36%, respectively.
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
===============================================================================
Average Annual Compound Total Return
Periods ended August 31, 1995
Since
Inception
1 Year 5 Years (3/31/87)
_______ _______ ________
7.92% 8.34% 6.68%
Note: For the above periods ended 6/30/95, the fund's returns were 8.30%,
7.87%, and 6.59%, respectively.
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
===============================================================================
<PAGE>
Maryland Short-Term Tax-Free Bond Fund
Sector Diversification
Percent of Net Assets
8/31/95
----------------------
Prerefunded Bonds 49%
General Obligation - Local 19
Dedicated Tax Revenue 8
Solid Waste Revenue 6
Educational Revenue 4
Hospital Revenue 3
Lease Revenue 2
Industrial and Pollution Control Revenue 2
General Obligation - State 2
Miscellaneous Revenue 1
Nuclear Revenue 1
Ground Transportation Revenue 1
Water and Sewer Revenue 1
Other Assets Less Liabilities 1
===============================================================================
Maryland Tax-Free Bond Fund
Sector Diversification
Percent of Net Assets
8/31/95
----------------------
Hospital Revenue 19%
Prerefunded Bonds 17
Housing Finance Revenue 15
General Obligation - Local 11
Educational Revenue 4
Miscellaneous Revenue 4
Water and Sewer Revenue 4
Lease Revenue 3
Solid Waste Revenue 3
Electric Revenue 3
Industrial and Pollution Control Revenue 3
Dedicated Tax Revenue 2
Life Care/Nursing Home Revenue 2
Air and Sea Transportation Revenue 2
General Obligation - State 2
Nuclear Revenue 2
Ground Transportation Revenue 1
Pooled Loan Revenue 1
Escrowed to Maturity 1
Other Assets Less Liabilities 1
================================================================================
<PAGE>
Statement of Net Assets
T.Rowe Price Maryland Short-Term Tax-Free Bond Fund/August 31, 1995 (Unaudited)
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C> <C>
Amount Value
------ -----
MARYLAND -- 94.0%
Allegany County, PCR, Westvaco Corp., 5.20%, 1/1/98 ................................................... $ 700 $ 712
Anne Arundel County, Baltimore Gas and Electric, TECP, 3.85%, 9/1/95 * ................................ 1,000 1,000
Anne Arundel County, GO, Consolidated General Improvement,
6.00%, 8/1/96 ................................................................................... 3,370 3,430
Consolidated Water and Sewer, 6.00%, 3/1/10 (Pre-refunded 3/1/97**) ................................. 800 839
Baltimore City, GO, (MBIA Insured), 8.90%, 10/15/99 ................................................... 650 762
Consolidated Public Improvement, GO, (FGIC Insured), 7.50%, 10/15/00 ................................ 500 570
Parking System Fac., (FGIC Insured), 3.45%, 7/1/96 .................................................. 1,710 1,703
Wastewater, (MBIA Insured), 6.50%, 7/1/20 (Pre-refunded 7/1/00**) ................................... 600 653
Baltimore City IDA, Capital Acquisition Program, VRDN
(Currently 3.70%) ................................................................................... 1,000 1,000
Baltimore County, Consolidated Public Improvement, 6.90%, 4/1/06
(Pre-refunded 4/1/00**) ........................................................................... 1,000 1,116
Metropolitan Dist., 6.80%, 4/1/01 (Pre-refunded 4/1/00**) ........................................... 1,000 1,112
Charles County, GO, 6.20%, 6/1/01 ..................................................................... 300 325
6.375%, 12/1/03 ................................................................................. 1,580 1,735
Maryland, GO, 5.20%, 10/15/98 ......................................................................... 1,000 1,035
6.50%, 3/1/99 ................................................................................... 500 538
6.70%, 5/15/01 (Pre-refunded 5/15/98**) ......................................................... 500 537
Maryland DOT, 6.40%, 7/15/97 .......................................................................... 1,000 1,043
6.40%, 7/15/98 .................................................................................. 1,925 2,042
6.375%, 11/1/98 ................................................................................. 1,875 1,999
6.50%, 7/15/01 .................................................................................. 1,100 1,183
6.50%, 7/15/02 (Pre-refunded 7/15/98**) ......................................................... 1,000 1,078
6.80%, 11/15/02 (Pre-refunded 11/15/98**) ....................................................... 2,000 2,187
Maryland Economic Dev. Corp., Roland Park Country School,
5.10%, 11/1/95 .................................................................................. 745 743
5.20%, 11/1/96 .................................................................................. 735 735
5.35%, 11/1/97 .................................................................................. 730 731
5.50%, 11/1/98 .................................................................................. 725 727
Maryland Environmental Service, Cecil County Landfill, 5.50%, 3/1/97 .................................. 385 390
5.50%, 9/1/97.................................................................................... 395 401
Midshore Landfill, (AMBAC Insured), 5.20%, 9/1/96 ................................................... 760 771
Maryland HHEFA, Anne Arundel Medical Center, (AMBAC Insured),
3.85%, 7/1/97 ................................................................................... 940 936
Doctor's Community Hosp., 4.25%, 7/1/96 ............................................................. 135 134
8.75%, 7/1/22 (Pre-refunded 7/1/00**) ........................................................... 3,965 4,759
Francis Scott Key Medical Center, (FGIC Insured), 6.75%, 7/1/23
(Pre-refunded 7/1/00**)
Greater Baltimore Medical Center, 6.75%, 7/1/11 ..................................................... 500 564
Johns Hopkins Hosp., 7.00%, 7/1/23 (Pre-refunded 7/1/00**) .......................................... 400 450
Kennedy Kreiger Institute, VRDN (Currently 3.65%) ................................................... 500 500
Memorial Hosp. of Cumberland, 9.25%, 7/1/17 (Pre-refunded 7/1/97**) ................................. 3,000 3,335
Mercy Medical Center, 7.90%, 7/1/09 (Pre-refunded 7/1/99**) ......................................... 150 171
North Arundel Hosp., (BIGI Insured), 7.875%, 7/1/21 ................................................. 1,250 1,397
<PAGE>
Amount Value
------ ------
Maryland HHEFA, Pooled Loan Program, VRDN (Currently 3.60%) ................................................... $ 100 $ 100
Univ. of Maryland Medical System, 9.50%, 1/1/14
(Pre-refunded 7/22/96**) .................................................................................. 7,385 7,886
Maryland Water Quality Fin. Administration, Revolving Loan Fund,
5.60%, 9/1/99 ............................................................................................... 500 523
Montgomery County, Consolidated Public Improvement, 6.80%, 11/1/02
(Pre-refunded 11/1/99**) 2,000 2,224
GO, 5.25%, 10/1/97 ........................................................................................ 885 909
Western County Swim Fac., 7.375%, 10/1/09 (Pre-refunded 10/1/97**) .......................................... 1,500 1,630
Montgomery County Parking, Bethesda Parking Lot, (FGIC Insured),
6.00%, 6/1/03 ............................................................................................... 500 538
Northeast Maryland Waste Disposal Auth., Southwest Resource Recovery
Fac., (MBIA Insured), 6.65%, 1/1/97 ........................................................................ 500 516
6.85%, 1/1/99............................................................................................. 3,425 3,675
Prince George's County, Consolidated Public Improvement, GO,
7.00%, 2/1/98 ...............................................................................................
Dimensions Health Corp., 6.35%, 7/1/96 ...................................................................... 625 630
Prince George's County IDA, Upper Marlboro Justice Center,
(MBIA Insured), 3.90%, 6/30/96................................................................................ 250 250
Prince George's County, PCR, Int'l. Paper, 4.00%, 7/15/96 ..................................................... 1,100 1,100
Saint Mary's County, GO, (MBIA Insured), 7.00%, 3/1/97 ........................................................ 560 584
7.00%, 3/1/98 ........................................................................................... 585 623
Univ. of Maryland, Auxilary Fac. and Tuition, 7.00%, 10/1/05
(Pre-refunded 10/1/99**) .................................................................................... 500 559
Washington Suburban Sanitary Dist., GO, 6.90%, 1/1/97 ......................................................... 500 519
5.90%, 11/1/98 .......................................................................................... 2,000 2,109
8.00%, 1/1/00 ........................................................................................... 3,295 3,761
7.25%, 1/1/02 (Pre-refunded 1/1/97**) ................................................................... 1,000 1,062
7.25%, 1/1/04 (Pre-refunded 1/1/97**) ................................................................... 1,360 1,444
Wicomico County, Consolidated Public Improvement, GO, (FGIC Insured),
7.00%, 2/1/98............................................................................................. 750 799
PUERTO RICO -- 4.4%
Puerto Rico Electric Power Auth., 7.125%, 7/1/14 (Pre-refunded 7/1/99**) ...................................... 2,070 2,309
Puerto Rico Housing Bank and Fin. Agency, Loan Insurance Claims,
3.75%, 12/1/95............................................................................................ 1,000 996
Puerto Rico Ind., Med., Higher Ed. and Environmental Pollution Control Fac .....................................
Fin. Auth., Catholic Univ. of Puerto Rico, 4.10%, 12/1/96 ................................................... 210 210
4.40%, 12/1/97 .......................................................................................... 215 214
<PAGE>
Value
-----
TOTAL INVESTMENTS IN SECURITIES -- 98.4% OF NET ASSETS
(COST $81,895)...................................................... $83,451
OTHER ASSETS LESS LIABILITIES........................................ 1,314
__________
NET ASSETS CONSIST OF:
Value
------
Accumulated net realized gain/loss -
net of distributions......................... (1,049)
Net unrealized gain (loss).................... 1,556
Paid-in-capital applicable to 16,560,936
no par value shares of
beneficial interest outstanding;
unlimited number of shares authorized....... 84,258
NET ASSETS.................................................. $84,765
NET ASSET VALUE PER SHARE................................... $5.12
* - Interest subject to alternative minimum tax
** - Used in determining portfolio maturity
AMBAC - AMBAC Indemnity Corp.
BIGI - Bond Investors Guaranty Insurance
DOT - Department of Transportation
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
HHEFA - Health & Higher Educational Facility Authority
IDA - Industrial Development Authority
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
TECP - Tax-Exempt Commercial Paper
VRDN - Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
===============================================================================
Statement of Net Assets
T. Rowe Price Maryland Tax-Free Bond Fund / August 31, 1995 (Unaudited)
(AMOUNTS IN THOUSANDS)
Amount Value
______ ______
MARYLAND -- 94.5%
Allegany Co., PCR, Westvaco Corp., 6.20%, 1/1/08 ........................................................ $1,350 $1,415
Anne Arundel County, Consolidated General Improvement, GO,
6.90%, 1/15/08 (Pre-refunded 1/15/99**) ........................................................... 1,150 1,262
6.30%, 8/1/16 ..................................................................................... 775 812
6.30%, 8/1/19 ..................................................................................... 725 758
6.30%, 8/1/20 ..................................................................................... 705 736
6.30%, 8/1/21 ..................................................................................... 790 824
Consolidated Water and Sewer, GO, 7.20%, 4/15/13
(Pre-refunded 4/15/00**) ............................................................................ 625 704
7.20%, 4/15/14 (Pre-refunded 4/15/00**) ........................................................... 625 704
6.00%, 7/15/15 .................................................................................... 690 698
6.00%, 7/15/16 .................................................................................... 690 696
6.30%, 8/1/22 ..................................................................................... 450 470
6.30%, 8/1/24 ..................................................................................... 720 751
Anne Arundel County, PCR, Baltimore Gas and Electric, 6.00%, 4/1/24 ..................................... 6,585 6,576
<PAGE>
Amount Value
______ ______
Baltimore City, Board of Ed. Administration Headquarters, COP,
(MBIA Insured), 7.25%, 4/1/16 ..................................................................... $3,200 $3,531
Consolidated Public Improvement, GO, (FGIC Insured),
Zero Coupon, 10/15/06 ............................................................................. 3,100 1,706
Zero Coupon, 10/15/08 ............................................................................. 3,800 1,815
Zero Coupon, 10/15/09 .............................................................................. 4,600 2,046
7.50%, 10/15/09 .................................................................................... 2,635 3,200
(MBIA Insured), 9.00%, 10/15/98 .....................................................................
7.00%, 10/15/07 ..................................................................................... 500 585
7.00%, 10/15/08 ................................................................................... 5,190 6,065
Convention Center, (FGIC Insured), 6.00%, 9/1/17 ...................................................... 5,535 5,558
Port Fac. (E.I. DuPont - CONOCO), 6.50%, 12/1/10 ...................................................... 1,700 1,841
6.50%, 10/1/11 .................................................................................... 11,400 12,334
Rivoli Office Building Fac., COP, (MBIA Insured), 7.20%, 4/1/10 ....................................... 1,950 2,148
7.20%, 4/1/10 (Pre-refunded 4/1/00**) ............................................................. 1,300 1,467
7.25%, 4/1/16 ..................................................................................... 5,845 6,450
7.25%, 4/1/16 (Pre-refunded 4/1/00**) ............................................................. 1,655 1,871
Tindeco Wharf Apartments, (GNMA Guaranteed), 6.60%, 12/20/24 .......................................... 1,000 1,027
Wastewater, (MBIA Insured), 5.60%, 7/1/13 ............................................................. 9,300 9,064
Water, (FGIC Insured), 6.00%, 7/1/15 .................................................................. 6,250 6,448
Baltimore City IDA, Capital Acquisition Program, VRDN (Currently 3.70%) ................................. 4,800 4,800
Baltimore County, 7.10%, 10/1/12 (Pre-refunded 10/1/99**) ............................................... 3,195 3,582
TECP, BAN, 3.60%, 9/6/95 ............................................................................ 6,000 6,000
North Brooke Apartment, (GNMA Guaranteed), 6.35%, 1/20/21 ............................................. 2,000 2,011
Pickersgill Retirement Community, 7.70%, 1/1/21 ....................................................... 3,550 3,746
Spring Hill Apartments, (GNMA Guaranteed), VRDN (Currently 3.60%) ..................................... 700 700
Stella Maris, 7.50%, 3/1/21 ........................................................................... 2,760 2,888
Baltimore County, Consolidated Public Improvement, Pension Funding, GO,
6.70%, 7/1/11 ...................................................................................... 5,000 5,402
Baltimore County, PCR, Bethlehem Steel, 7.55%, 6/1/17 .................................................... 3,300 3,430
Bel Air, Parking Revenue, COP, (CGIC Insured), 7.80%, 6/1/10
(Pre-refunded 12/1/98**) ............................................................................ 1,500 1,693
Calvert County, PCR, Baltimore Gas and Electric, 5.55%, 7/15/14 ......................................... 7,750 7,460
Carroll County, Consolidated Public Improvement, GO, 6.00%, 11/1/06
(Pre-refunded 11/1/99**) ............................................................................ 800 866
7.30%, 10/1/20 .................................................................................... 2,000 2,216
Copper Ridge, 7.75%, 1/1/18 ........................................................................... 3,000 3,162
Fairhaven, 7.75%, 1/1/11 .............................................................................. 1,000 1,070
Damascus Gardens Dev. Corp., Multi Family, (FHA Guaranteed),
7.375%, 11/1/21 ....................................................................................... 3,973 3,994
Frederick, General Improvement, GO, (FGIC Insured), 6.125%, 12/1/09 ..................................... 1,840 1,939
Frederick County, GO, 7.20%, 4/1/05 (Pre-refunded 4/1/99**) ............................................. 1,000 1,113
Gaithersburg, Asbury Methodist Home, 7.85%, 1/1/20
(Pre-refunded 1/1/00**) ............................................................................... 6,500 7,428
Gaithersburg Hosp. Fac., Shady Grove Adventist Hosp., (FSA Insured),
6.50%, 9/1/12 ..................................................................................... 5,000 5,403
5.50%, 9/1/15 ..................................................................................... 2,345 2,241
<PAGE>
Amount Value
______ ______
Howard County, TECP, BAN, 3.55%, 9/5/95 .................................................................. $400 $400
Consolidated Public Improvement, GO, 7.30%, 2/15/02
(Pre-refunded 1/1/99**) .............................................................................. 650 710
6.90%, 5/15/06 (Pre-refunded 5/15/00**) ............................................................ 1,700 1,874
7.30%, 2/15/08 (Pre-refunded 1/1/99**) ............................................................. 1,000 1,092
7.00%, 5/15/08 (Pre-refunded 5/15/00**) ............................................................ 1,000 1,106
7.40%, 2/15/09 (Pre-refunded 1/1/99**) ............................................................. 250 276
7.00%, 5/15/10 (Pre-refunded 5/15/00**) ........................................................... 2,000 2,212
5.875%, 5/15/11 ................................................................................... 2,000 2,040
5.875%, 5/15/12 ................................................................................... 3,020 3,080
Metropolitan Dist., GO, 7.15%, 5/15/14 (Pre-refunded 5/15/00**) ....................................... 1,005 1,126
7.15%, 5/15/15 (Pre-refunded 5/15/00**) ........................................................... 1,080 1,210
7.15%, 5/15/16 (Pre-refunded 5/15/00**) ........................................................... 1,160 1,300
7.15%, 5/15/17 (Pre-refunded 5/15/00**) ........................................................... 1,245 1,395
5.90%, 2/15/25 .................................................................................... 1,100 1,097
Special Fac., 6.00%, 2/15/21 .......................................................................... 4,360 4,385
Kent County, Washington College, 7.60%, 7/1/09 .......................................................... 1,000 1,091
Laurel, GO, (MBIA Insured), 6.90%, 7/1/07 ............................................................... 1,000 1,119
7.00%, 7/1/09 ..................................................................................... 550 612
Maryland, GO, 7.00%, 10/15/03 (Pre-refunded 10/15/00**) ................................................. 2,000 2,245
7.10%, 10/15/04 (Pre-refunded 10/15/00**) ......................................................... 3,000 3,393
St. Mary's County Building Commission, COP, 7.625%, 12/1/03
(Pre-refunded 6/1/98**) ............................................................................. 1,500 1,661
State and Local Fac. Loan, GO, 5.70%, 3/15/10 ......................................................... 7,500 7,707
Maryland CDA, Infrastructure, 8.375%, 6/1/08 ............................................................ 775 869
8.50%, 6/1/18 ..................................................................................... 1,350 1,509
Single Family, 7.625%, 9/1/95 * ....................................................................... 5 5
7.50%, 4/1/00 ...................................................................................... 500 527
7.875%, 4/1/07 ..................................................................................... 300 316
6.75%, 4/1/10 * .................................................................................... 5,000 5,194
Maryland CDA, Single Family, 7.375%, 4/1/10 ............................................................. 495 527
6.85%, 4/1/11 ..................................................................................... 4,980 5,222
7.25%, 4/1/11 * ................................................................................... 2,000 2,131
6.45%, 4/1/14 ..................................................................................... 1,000 1,026
7.00%, 4/1/14 ..................................................................................... 2,760 2,938
5.875%, 4/1/17 * .................................................................................. 1,995 2,011
7.05%, 4/1/17 ..................................................................................... 4,750 5,044
7.40%, 4/1/17 ..................................................................................... 5,395 5,756
7.60%, 4/1/17 ..................................................................................... 2,200 2,344
8.125%, 4/1/17 .................................................................................... 1,655 1,756
8.00%, 4/1/18 ..................................................................................... 1,200 1,278
8.20%, 4/1/18 ..................................................................................... 1,150 1,219
7.25%, 4/1/19 ...................................................................................... 9,000 9,509
6.80%, 4/1/22 *..................................................................................... 4,225 4,338
6.80%, 4/1/24 *..................................................................................... 2,750 2,828
6.75%, 4/1/26 *..................................................................................... 4,000 4,103
7.25%, 4/1/27....................................................................................... 9,630 10,139
7.625%, 4/1/29 *.................................................................................... 1,970 2,087
<PAGE>
Amount Value
_____ ______
Maryland DOT, 5.50%, 10/1/95 ..................................................................................... $2,000 $2,002
6.80%, 11/1/05 (Pre-refunded 11/1/99**) .................................................................... 5,500 6,116
Maryland Environmental Service, Cecil County Landfill, 5.00%, 9/1/95 ............................................. 355 355
5.25%, 3/1/96 .............................................................................................. 365 365
5.25%, 9/1/96 .............................................................................................. 375 378
Maryland HHEFA, Broadmead, 7.625%, 7/1/10 ........................................................................ 1,390 1,468
Church Hosp., 8.00%, 7/1/09 .................................................................................... 1,200 1,332
Doctor's Community Hosp., 8.75%, 7/1/22 (Pre-refunded 7/1/00**) ................................................ 6,800 8,162
5.50%, 7/1/24 .............................................................................................. 3,070 2,477
Edenwald, 6.00%, 1/1/10 ........................................................................................ 2,000 1,968
Francis Scott Key Medical Center, (FGIC Insured), 7.00%, 7/1/10
(Pre-refunded 7/1/00**) ...................................................................................... 2,000 2,250
5.00%, 7/1/18 .............................................................................................. 4,230 3,736
5.00%, 7/1/23 .............................................................................................. 2,850 2,477
Franklin Square Hosp., (MBIA Insured), 7.50%, 7/1/19 ........................................................... 4,750 5,250
Frederick Memorial Hosp., (FGIC Insured), 5.00%, 7/1/23 ........................................................ 5,500 4,780
Good Samaritan Hosp., 7.40%, 7/1/09 (Pre-refunded 7/1/99**) .................................................... 1,000 1,126
5.75%, 7/1/13 .............................................................................................. 4,000 3,861
5.75%, 7/1/19 .............................................................................................. 3,370 3,178
7.50%, 7/1/21 (Pre-refunded 7/1/99**) ...................................................................... 4,000 4,517
Greater Baltimore Medical Center, (FGIC Insured), 5.00%, 7/1/13 ................................................ 4,000 3,598
(FGIC Insured), 5.00%, 7/1/19 ................................................................................ 12,060 10,623
Holy Cross Hosp., (AMBAC Insured), 7.50%, 7/1/01 ............................................................... 1,655 1,874
7.125%, 7/1/10 ............................................................................................. 1,400 1,542
Howard County General Hosp., 5.50%, 7/1/21 ..................................................................... 5,000 4,174
Johns Hopkins Hosp., Zero Coupon, 7/1/19 ....................................................................... 9,785 2,283
7.00%, 7/1/23 (Pre-refunded 7/1/00**) ...................................................................... 1,305 1,468
Johns Hopkins Univ., 7.375%, 7/1/08 ............................................................................. 1,500 1,644
7.50%, 7/1/20 ............................................................................................... 11,015 12,062
Maryland HHEFA, Kaiser Permanente, 9.125%, 7/1/15 ................................................................ 1,550 1,588
Kennedy Kreiger Institute, VRDN (Currently 3.65%) .............................................................. 2,700 2,700
7.40%, 7/1/11 .............................................................................................. 370 387
6.75%, 7/1/22 .............................................................................................. 2,85 2,836
Mercy Medical Center, VRDN (Currently 3.65%) ................................................................... 1,000 1,000
7.90%, 7/1/09 (Pre-refunded 7/1/99**) ...................................................................... 2,000 2,287
8.00%, 7/1/20 (Pre-refunded 7/1/99**) ...................................................................... 6,500 7,454
(AMBAC Insured), 5.50%, 7/1/22 ............................................................................... 2,900 2,719
Peninsula Regional Medical Center, 5.00%, 7/1/23 ............................................................... 11,035 9,563
Pooled Loan Program, VRDN (Currently 3.60%) .................................................................... 6,300 6,300
Sinai Hosp., (AMBAC Insured), 7.30%, 7/1/05 (Pre-refunded 7/1/00**) ............................................ 2,000 2,276
5.25%, 7/1/19 .............................................................................................. 9,320 8,505
5.25%, 7/1/23 .............................................................................................. 3,020 2,726
Suburban Hosp., 7.60%, 7/1/18 (Pre-refunded 7/1/98**) .......................................................... 300 333
Union Hosp. of Cecil County, 6.625%, 7/1/12 .................................................................... 1,545 1,545
6.70%, 7/1/22 .............................................................................................. 1,500 1,454
Union Memorial Hosp., (MBIA Insured), 6.60%, 7/1/06 ............................................................ 500 542
6.75%, 7/1/11 .............................................................................................. 3,000 3,235
6.75%, 7/1/21 .............................................................................................. 7,865 8,319
Univ. of Maryland Medical System, (FGIC Insured), 5.375%, 7/1/13 ............................................... 5,000 4,728
5.00%, 7/1/20 .............................................................................................. 10,950 9,583
7.00%, 7/1/22 .............................................................................................. 2,000 2,309
(MBIA Insured), 7.00%, 7/1/11 (Pre-refunded 7/1/01**) ........................................................ 4,550 5,183
7.00%, 7/1/17 (Pre-refunded 7/1/01**) ....................................................................... 7,770 8,850
<PAGE>
Amount Value
_____ ______
Maryland Ind. Dev. Fin. Auth., American Center for Physics Headquarters Fac.,
6.25%, 1/1/07 ............................................................................................... $5,770 $5,875
6.375%, 1/1/12 .............................................................................................. 4,150 4,206
6.625%, 1/1/17 .............................................................................................. 4,250 4,280
Associated Catholic Charities, 9.00%, 1/1/10 .................................................................... 980 1,089
Bon Secours Health System, (FSA Insured),
Residual Interest Bond / Inverse Floater, 8/26/22 (Currently 5.929%) .......................................... 10,000 9,973
Maryland Local Gov't. Income Trust Capitalization Program, GO, COP,
6.80%, 8/1/01 .............................................................................................. 1,615 1,788
7.125%, 8/1/09 ............................................................................................. 3,000 3,286
Maryland Stadium Auth., Convention Center Expansion, (AMBAC Insured),
5.875%, 12/15/10 ........................................................................................... 2,500 2,553
5.875%, 12/15/13 ........................................................................................... 4,225 4,247
Maryland Transportation Auth., 6.80%, 7/1/16 (Escrowed to Maturity) .............................................. 4,040 4,535
(FGIC Insured), Zero Coupon, 7/1/07 .......................................................................... 8,500 4,588
Zero Coupon, 7/1/08 ........................................................................................ 2,000 1,009
Zero Coupon, 7/1/09 ........................................................................................ 10,410 4,895
Baltimore-Washington Int'l. Airport, (FGIC Insured), 6.25%, 7/1/14 * ........................................... 3,105 3,166
6.40%, 7/1/19 * ............................................................................................ 12,395 12,965
Maryland Water Quality Fin. Administration, Revolving Loan Fund,
Zero Coupon, 9/1/02 ........................................................................................ 1,185 848
Zero Coupon, 9/1/07 ........................................................................................ 1,125 598
7.25%, 9/1/11 .............................................................................................. 1,700 1,896
Maryland Water Quality Fin. Administration, Revolving Loan Fund,
7.25%, 9/1/12 .............................................................................................. 2,000 2,246
6.70%, 9/1/13 .............................................................................................. 1,280 1,394
7.10%, 9/1/13 .............................................................................................. 985 1,110
6.00%, 9/1/15 .............................................................................................. 1,600 1,609
Maryland-National Capital Park and Planning Commission, Little Bennett
Golf Fac., 8.25%, 10/1/11 ................................................................................... 2,400 2,621
Prince George's County, GO, 6.90%, 7/1/05 ....................................................................... 1,400 1,549
6.90%, 7/1/06 ............................................................................................... 2,190 2,417
6.90%, 7/1/07 .............................................................................................. 1,400 1,541
6.90%, 7/1/08 .............................................................................................. 1,400 1,541
6.90%, 7/1/09 .............................................................................................. 1,400 1,538
Montgomery County, Consolidated Public Improvement, GO,
7.00%, 4/1/07 (Pre-refunded 4/1/00**) ...................................................................... 2,000 2,240
7.25%, 10/1/08 (Pre-refunded 10/1/98**) .................................................................... 500 554
7.10%, 10/1/09 (Pre-refunded 10/1/00**) .................................................................... 1,000 1,134
6.80%, 11/1/09 (Pre-refunded 11/1/99**) .................................................................... 1,145 1,273
7.10%, 10/1/10 (Pre-refunded 10/1/00**) .................................................................... 1,840 2,087
6.125%, 10/1/13 ............................................................................................ 2,500 2,603
6.125%, 10/1/14 ............................................................................................ 3,150 3,261
Montgomery County Housing Opportunities Commission, Single Family,
6.50%, 7/1/11 .............................................................................................. 4,000 4,154
6.65%, 7/1/16 .............................................................................................. 2,370 2,451
6.80%, 7/1/17 .............................................................................................. 2,910 3,017
7.50%, 7/1/17 .............................................................................................. 1,815 1,928
7.625%, 7/1/17 ............................................................................................. 4,185 4,408
6.90%, 7/1/19 .............................................................................................. 2,000 2,107
7.50%, 7/1/24 .............................................................................................. 3,000 3,114
6.25%, 7/1/25 .............................................................................................. 5,500 5,499
<PAGE>
Amount Value
_____ ______
Montgomery County, PCR, Potomac Electric Power, 5.375%, 2/15/24 ................................................... $5,845 $5,342
Morgan State Univ., Academic Fees and Auxiliary Fac., (MBIA Insured),
7.20%, 7/1/13 (Pre-refunded 7/1/00**) ....................................................................... 1,000 1,134
6.05%, 7/1/15 ............................................................................................... 1,020 1,060
Northeast Maryland Waste Disposal Auth., Southwest Resource Recovery
Fac., 6.00%, 7/1/06 * ......................................................................................... 2,200 2,249
6.00%, 7/1/08 * ............................................................................................. 10,000 10,151
6.30%, 7/1/16 * ............................................................................................. 10,050 10,063
Prince George's County, Collington Episcopal Life Care Community, Inc.,
5.625%, 4/1/09 ............................................................................................. 2,750 2,589
Consolidated Public Improvement, (MBIA Insured), 5.25%, 1/1/14 ................................................. 2,000 1,875
GO, 7.20%, 2/1/05 (Pre-refunded 2/1/99**) .................................................................... 1,000 1,100
Dimensions Health Corp., 7.00%, 7/1/01 ......................................................................... 2,450 2,651
7.20%, 7/1/06 .............................................................................................. 420 459
7.20%, 7/1/06 (Pre-refunded 7/1/02**) ...................................................................... 1,985 2,307
5.375%, 7/1/14 ............................................................................................. 10,435 9,315
7.00%, 7/1/22 (Pre-refunded 7/1/02**) ...................................................................... 2,660 3,061
5.30%, 7/1/24 .............................................................................................. 2,035 1,723
Equipment Refinancing and Acquisition Program, COP, 6.70%, 7/15/96 .............................................. 1,160 1,173
Prince George's County, Solid Waste Management System, 6.90%, 6/30/05
(Pre-refunded 6/30/00**) ..................................................................................... 1,500 1,682
6.90%, 6/30/06 (Pre-refunded 6/30/00**) .................................................................... 1,000 1,121
7.00%, 6/30/07 (Pre-refunded 6/30/00**) .................................................................... 1,120 1,260
7.00%, 6/30/09 (Pre-refunded 6/30/00**) .................................................................... 1,255 1,412
Prince George's County Housing Auth., New Keystone, (MBIA Insured),
6.80%, 7/1/25 .............................................................................................. 2,600 2,698
Stevenson Apartments, 6.35%, 7/20/20 ........................................................................... 2,200 2,229
Riverview Terrace Apartments (GNMA Guaranteed), 6.70%, 6/20/20 ................................................. 1,500 1,564
Prince George's County IDA, Gabriel DuVall Law Building, 8.00%, 9/1/07 ........................................... 1,185 1,288
Hyattsville Dist. Court Fac., 6.00%, 7/1/09 .................................................................... 1,935 2,007
Upper Marlboro Justice Center, (MBIA Insured), 5.25%, 6/30/19 .................................................. 1,500 1,376
Prince George's County, PCR, Potomac Electric, 5.75%, 3/15/10 .................................................... 1,000 1,016
6.375%, 1/15/23 ............................................................................................ 5,000 5,279
Univ. of Maryland, VRDN (Currently 3.55%) ........................................................................ 2,400 2,400
7.00%, 10/1/98 ............................................................................................. 2,000 2,161
6.375%, 4/1/09 ............................................................................................. 2,100 2,270
7.20%, 10/1/09 (Pre-refunded 10/1/99**) .................................................................... 1,400 1,575
5.50%, 4/1/11 .............................................................................................. 5,025 5,009
6.50%, 4/1/12 .............................................................................................. 440 469
5.60%, 4/1/16 .............................................................................................. 2,000 1,934
Auxilary Fac. and Tuition, 7.00%, 10/1/05 (Pre-refunded 10/1/99**) ............................................. 2,000 2,235
Washington County Public Fac., GO, 6.70%, 12/1/04
(Pre-refunded 12/1/98**) ....................................................................................... 1,040 1,140
6.70%, 12/1/05 (Pre-refunded 12/1/98**) .................................................................... 1,115 1,222
Washington County Sanitary Dist., GO, 6.875%, 2/1/10 (Pre-refunded 2/1/00**) ..................................... 3,500 3,887
7.00%, 2/1/15 (Pre-refunded 2/1/00**) ...................................................................... 2,000 2,230
Washington Suburban Sanitary Dist., GO, 7.40%, 7/1/07
(Pre-refunded 7/1/98**) ........................................................................................ 700 773
6.90%, 6/1/08 (Pre-refunded 6/1/00**) ...................................................................... 1,500 1,679
6.90%, 6/1/09 (Pre-refunded 6/1/00**) ...................................................................... 2,300 2,575
6.20%, 6/1/11 .............................................................................................. 2,400 2,512
6.40%, 1/1/12 .............................................................................................. 2,205 2,327
6.20%, 6/1/12 .............................................................................................. 1,500 1,565
5.50%, 6/1/13 .............................................................................................. 1,000 978
5.00%, 6/1/14 .............................................................................................. 1,875 1,701
6.40%, 1/1/15 .............................................................................................. 2,270 2,391
6.625%, 6/1/18 ............................................................................................. 3,665 3,943
Worcester County Sanitary Dist., 6.50%, 8/15/12 .................................................................. 2,000 2,120
<PAGE>
Amount Value
_____ ______
PUERTO RICO - 4.3%
Puerto Rico Commonwealth, GO, (MBIA Insured), 6.25%, 7/1/11........................................................ $2,000 $2,170
6.25%, 7/1/12................................................................................................ 1,750 1,891
5.375%, 7/1/22............................................................................................... 4,475 4,183
Puerto Rico Commonwealth Highway and Transportation Auth.,
(FSA Insured), 5.50%, 7/1/15................................................................................... 5,000 4,824
Puerto Rico Electric Power Auth., 7.00%, 7/1/07.................................................................... 4,000 4,351
7.00%, 7/1/11................................................................................................ 1,200 1,304
7.00%, 7/1/21................................................................................................ 1,895 2,075
Puerto Rico Infrastructure Fin. Auth., 7.50%, 7/1/09............................................................... 5,150 5,656
Puerto Rico Municipal Fin. Agency, (FSA Insured), 6.00%, 7/1/14.................................................... 3,030 3,073
Univ. of Puerto Rico, (MBIA Insured), 5.25%, 6/1/25................................................................ 3,600 3,292
</TABLE>
================================================================================
Value
-----
TOTAL INVESTMENTS IN SECURITIES -- 98.8% OF NET ASSETS
(COST $712,197)...................................................... $753,144
OTHER ASSETS LESS LIABILITIES......................................... 9,298
-----
NET ASSETS CONSIST OF: Value
--------
Accumulated net realized gain/loss
- - net of distributions........................... (8,464)
Net unrealized gain (loss)....................... 40,947
Paid-in-capital applicable to 74,743,314
no par value shares of
beneficial interest outstanding;
unlimited number of shares authorized.......... 729,959
--------
NET ASSETS.................................................... $762,442
=========
NET ASSET VALUE PER SHARE..................................... $10.20
* - Interest subject to alternative minimum tax
** - Used in determining portfolio maturity
AMBAC - AMBAC Indemnity Corp.
BAN - Bond Anticipation Note
CDA - Community Development Administration
CGIC - Capital Guaranty Insurance Corp.
COP - Certificates of Participation
DOT - Department of Transportation
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Authority
FSA - Financial Security Assurance Corp.
GNMA - Government National Mortgage
GO - General Obligation
HHEFA - Health & Higher Educational Facility Authority
IDA - Industrial Development Authority
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
TECP - Tax-Exempt Commercial Paper
VRDN - Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
===============================================================================
<PAGE>
Statement of Operations
T. Rowe Price Maryland Tax-Free Funds / Six Months Ended August 31, 1995
(Unaudited)
(IN THOUSANDS)
Short-Term
Bond Fund Bond Fund
--------- ---------
Interest income ..................................... $1,944 $22,984
--------- ---------
Expenses
Investment management.............................. 163 1,648
Custodian and accounting........................... 48 76
Shareholder servicing.............................. 38 244
Legal & audit...................................... 7 6
Trustees'.......................................... 3 7
Prospectus and shareholder reports................. 1 6
Miscellaneous...................................... 1 8
--------- ---------
Total expenses..................................... 261 1,995
--------- ---------
Net investment income................................ 1,683 20,989
--------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities......................................... 108 1,122
Futures............................................ -- 128
--------- ---------
Net realized gain (loss)........................... 108 1,250
Change in net unrealized gain or loss on securities.. 1,118 14,188
--------- ---------
Net realized and unrealized gain (loss).............. 1,226 15,438
--------- ---------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS.... $2,909 $36,427
========= =========
The accompanying notes are an integral part of these financial statements.
===============================================================================
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Statement of Changes in Net Assets
T. Rowe Price Maryland Tax-Free Funds (Unaudited)
(IN THOUSANDS)
Short-Term Bond Fund Bond Fund
----------------------------- -----------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Aug. 31, 1995 Feb. 28, 1995 Aug. 31, 1995 Feb. 28, 1995
------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income................................ $1,683 $2,812 $20,989 $41,894
Net realized gain (loss)............................. 108 (1,147) 1,250 (8,699)
Change in net unrealized gain or loss................ 1,118 359 14,188 (28,245)
-------- -------- -------- --------
Increase (decrease) in net assets from operations.... 2,909 2,024 36,427 4,950
-------- -------- -------- --------
Distributions to shareholders
Net investment income................................ (1,683) (2,812) (20,989) (41,894)
Net realized gain on investments..................... -- -- -- (1,541)
-------- -------- -------- --------
Decrease in net assets from distributions............. (1,683) (2,812) (20,989) (43,435)
-------- -------- -------- --------
Capital share transactions*
Shares sold.......................................... 22,984 57,415 67,200 146,960
Distributions reinvested............................. 1,406 2,272 15,589 32,662
Shares redeemed...................................... (15,659) (60,140) (60,608) (237,716)
-------- -------- -------- --------
Increase (decrease) in net assets from capital
share transactions................................... 8,731 (453) 22,181 (58,094)
-------- -------- -------- --------
Increase (decrease) in net assets...................... 9,957 (1,241) 37,619 (96,579)
NET ASSETS
Beginning of period.................................... 74,808 76,049 724,823 821,402
-------- -------- -------- --------
End of period.......................................... $84,765 $74,808 $762,442 $724,823
======== ======== ======== ========
<PAGE>
*Share information
Shares sold.......................................... 4,521 11,421 6,643 14,907
Distributions reinvested............................. 276 452 1,540 3,322
Shares redeemed...................................... (3,079) (11,985) (5,996) (24,287)
-------- -------- -------- --------
Increase (decrease) in shares outstanding............ 1,718 (112) 2,187 (6,058)
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
Notes to Financial Statements
T. Rowe Price Maryland Tax-Free Funds / August 31, 1995 (Unaudited)
- -------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
T. Rowe Price State Tax-Free Income Trust (the Trust) is registered under
the Investment Company Act of 1940. The Maryland Short-Term Tax-Free Bond Fund
(the Short-Term Bond Fund) and the Maryland Tax-Free Bond Fund (the Bond Fund),
non-diversified, open-end management investment companies, are two of the
portfolios established by the Trust.
A) Valuation - Debt securities are generally traded in the over-the-counter
market. Investments in securities with remaining maturities of one year or more
are stated at fair value as furnished by dealers who make markets in such
securities or by an independent pricing service, which considers yield or price
of bonds of comparable quality, coupon, maturity, and type, as well as prices
quoted by dealers who make markets in such securities. Securities with remaining
maturities of less than one year are stated at fair value, which is determined
by using a matrix system that establishes a value for each security based on
money market yields.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of each
fund, as authorized by the Board of Trustees.
<PAGE>
B) Premiums and Discounts - Premiums and original issue discounts on
municipal securities are amortized for both financial reporting and tax
purposes. Market discounts are recognized upon disposition of the security as
gain or loss for financial reporting purposes and as ordinary income for tax
purposes.
C) Other - Income and expenses are recorded on the accrual basis.
Investment transactions are accounted for on the trade date. Realized gains and
losses are reported on an identified cost basis. Distributions to shareholders
are recorded by the fund on the ex-dividend date. income and capital gain
distributions are determined in accordance with federal income tax regulations
and may differ from those determined in accordance with generally accepted
accounting principles.
- -------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
- -------------------------------------------------------------------------------
Purchases and sales of portfolio securities, other than short-term
securities, for the six months ended August 31, 1995, were as follows:
Short-Term
Bond Fund Bond Fund
------------- -------------
Purchases $28,305,000 $94,602,000
Sales 11,339,000 74,976,000
- -------------------------------------------------------------------------------
NOTE 3 - FEDERAL INCOME TAXES
- -------------------------------------------------------------------------------
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute all of
its income. The Short-Term Bond Fund has unused realized capital loss
carryforwards for federal income tax purposes of $421,000 which expire in 2003.
The Bond Fund has unused realized capital loss carryforwards for federal income
tax purposes of $6,712,000 which expire in 2003. Each fund intends to retain
gains realized in future periods that may be offset by available capital loss
carryforwards.
At August 31, 1995, the aggregate cost of investments for the Short-Term
Bond and Bond Funds for federal income tax and financial reporting purposes was
$81,895,000 and $712,197,000, respectively. Net unrealized gain (loss) on
investments was as follows:
<PAGE>
Short-Term
Bond Fund Bond Fund
------------- -------------
Appreciated
Investments $1,570,000 $42,684,000
Depreciated
Investments (14,000) (1,737,000)
------------- -------------
Gain (Loss) $1,556,000 $40,947,000
============= =============
- -------------------------------------------------------------------------------
NOTE 4 - RELATED PARTY TRANSACTIONS
- -------------------------------------------------------------------------------
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management fee,
of which $29,000 and $279,000 was payable at August 31, 1995, by the Short-Term
Bond Fund and Bond Fund, respectively. The fee is computed daily and paid
monthly, and consists of an Individual Fund Fee equal to 0.10% of average daily
net assets and a Group Fee. The Group Fee is based on the combined assets of
certain mutual funds sponsored by the Manager or Rowe-Price Fleming
International, Inc. (the Group). The Group Fee rate ranges from 0.48% for the
first $1 billion of assets to 0.31% for assets in excess of $34 billion. At
August 31, 1995, and for the six months then ended, the effective annual Group
Fee rate was 0.34%. Each fund pays a pro rata share of the Group Fee based on
the ratio of its net assets to those of the Group.
Under the terms of the investment management agreement, the Manager is
required to bear any expenses through February 28, 1997, which would cause the
Short-Term Bond Fund's ratio of expenses to average net assets to exceed 0.65%.
Thereafter through February 28, 1999, the Short-Term Bond Fund is required to
reimburse the Manager for these expenses, provided that average net assets have
grown or expenses have declined sufficiently to allow reimbursement without
causing the fund's ratio of expenses to average net assets to exceed 0.65%.
Pursuant to this agreement, $14,000 of management fees were not accrued by the
Short-Term Bond Fund for the six months ended August 31, 1995. Additionally,
$263,000 of unaccrued management fees and expenses related to a previous expense
limitation are subject to reimbursement through February 28, 1997.
In addition, each fund has entered into agreements with the Manager and a
wholly owned subsidiary of the Manager, pursuant to which the fund receives
certain other services. The Manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc. is the fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. The Short-Term Bond and Bond Funds incurred
expenses pursuant to these related party agreements totaling approximately
$65,000 and $242,000, respectively, for the six months ended August 31, 1995, of
which $13,000 and $49,000, respectively, were payable at period-end.
<PAGE>
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
T. Rowe Price Maryland Short-Term Tax-Free Bond Fund (Unaudited)
For a share outstanding throughout each period
Jan. 29, 1993
Six Months Year Ended February 28, (Commencement
Ended ----------------------- of Operations)
August 31, 1995 1995 1994 to Feb. 28, 1993
-----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD................. $5.04 $5.09 $5.07 $5.00
------ ------ ------ ------
Net investment income ............................. 0.11* 0.18* 0.15* 0.01*
Net realized and unrealized gain (loss)............ 0.08 (0.05) 0.02 0.07
------ ------ ------ ------
Total from Investment Activities..................... 0.19 0.13 0.17 0.08
Distributions
Net investment income.............................. (0.11) (0.18) (0.15) (0.01)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD....................... $5.12 $5.04 $5.09 $5.07
====== ====== ====== ======
RATIOS / SUPPLEMENTAL DATA
Total Return......................................... 3.74% 2.64% 3.49% 1.67%
Ratio of Expenses to Average Net Assets.............. 0.65%*** 0.65%* 0.65% 0.65%***
Ratio of Net Investmen
Income to Average Net Assets....................... 4.19%** 3.59% 3.09% 2.96%***
Portfolio Turnover Rate.............................. 29.6%** 105.3% 20.5% 96.9%**
Net Assets, End of Period (in thousands)............. $84,765 $74,808 $76,049 $8,323
<FN>
** Annualized
* Excludes expenses in excess of a 0.65% voluntary expense limitation in
effect through February 28, 1997
</FN>
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
T. Rowe Price Maryland Tax-Free Bond Fund (Unaudited)
For a share outstanding throughout each period
Six Months Year Ended
Ended ---------------------------------------------------------
August 31, 1995 Feb. 28, Feb. 28, Feb. 28, Feb. 29, Feb. 28,
1995 1994 1993 1992 1991
-----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD.......................................... $9.99 $10.45 $10.50 $9.82 $9.61 $9.45
------ ------ ------ ------ ------ ------
Investment Activities
Net investment income.............................. 0.29 0.56 0.56 0.57 0.59 0.60
Net realized and unrealized
gain (loss)...................................... 0.21 (0.44) 0.05 0.73 0.26 0.16
------ ------ ------ ------ ------ ------
Total from Investment Activities..................... 0.50 0.12 0.61 1.30 0.85 0.76
------ ------ ------ ------ ------ ------
Distributions
Net investment income.............................. (0.29) (0.56) (0.56) (0.57) (0.59) (0.60)
Net realized gain.................................. -- (0.02) (0.10) (0.05) (0.05) --
------ ------ ------ ------ ------ ------
Total Distributions.................................. (0.29) (0.58) (0.66) (0.62) (0.64) (0.60)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD....................... $10.20 $9.99 $10.45 $10.50 $9.82 $9.61
====== ====== ====== ====== ====== ======
RATIOS / SUPPLEMENTAL DATA
Total Return......................................... 5.02% 1.43% 5.93% 13.75% 9.13% 8.37%
Ratio of Expenses to Average
Net Assets......................................... 0.53%** 0.57% 0.57% 0.61% 0.64% 0.68%
Ratio of Net Investment Income
to Average Net Assets.............................. 5.61%** 5.73% 5.31% 5.72% 6.04% 6.38%
Portfolio Turnover Rate.............................. 21.0%** 28.9% 24.3% 23.3% 21.9% 52.2%
Net Assets, End of Period
(in thousands)..................................... $762,442 $72 $821,402 $724,469 $475,188 $300,974
<FN>
** Annualized
</FN>
</TABLE>
