ANNUAL REPORT
----------------------
Florida Insured Intermediate Tax-Free Fund
----------------------
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 distribution only to shareholders and to
others who have received a copy of the prospectus of the T. Rowe Price Florida
Insured Intermediate Tax-Free Fund.
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REPTFLI 2/29/96
<PAGE>
================================================================================
Fellow Shareholders
- --------------------------------------------------------------------------------
The fiscal year ended February 29, 1996, was a banner year for bonds and
the funds that invest in them. Prices rose as yields fell through much of the
year, generating good returns for investors in fixed income securities.
MARKET ENVIRONMENT
The economy slowed in 1995, and inflation remained moderate. After
tightening monetary policy in 1994 and early 1995, the Federal Reserve reversed
course when it became clear that the economy was running out of steam. Since
July, the Fed has lowered the key federal funds rate three times, from 6% to
5.25% at the end of the fiscal year.
Against a background of slower growth, moderate inflation, and apparent
progress on reducing the federal budget deficit, bond yields tumbled. The
30-year Treasury yield, nearly 7.5% a year ago, fell briefly below 6% in late
December. At fiscal year-end, the long bond yield had edged back up to 6.5%, as
efforts to come up with deficit reduction legislation flagged. Signs that
stronger economic growth might resume in 1996 also contributed to recent
uneasiness in the bond market.
After moving only slightly lower during the first half of the fiscal year
ended February 29, long-term municipal yields fell further in the second half.
Thirty-year prime general obligation (GO) bonds yielded 5.95% on February 28,
1995, and on August 31 were only 10 basis points lower (100 basis points equal
one percent). During the most recent six months, prices rose further as yields
dropped an additional 45 basis points to 5.4%.
Municipal bonds with short maturities followed a different pattern, as
their yields fell more in the first half of the year than in the second. After
falling 70 basis points to 4.3% on August 31, the yield of five-year prime GO
bonds fell only 10 basis points more by February 29, 1996. The net result was a
lower and steeper yield curve that led to significant price appreciation from
1994's lows.
[edgar description: municipal yield chart showing 30-yr AAA, 5-yr AAA, and
1-yr MIG 1 yields from 2/95 through 2/96]
New issuance of municipal bonds hit a five-year low in 1995 -- 3% below
1994's levels. Light supply for the second year in a row would have been more of
a problem if demand had not been soft due to strong stock market returns and tax
reform discussions. Although new supply declined, the use of bond insurance
grew, and insured bonds constituted 43% of newly issued securities. Bond
insurers were willing to insure new issues as well as secondary market bonds at
a fairly low cost.
Florida's economy remained a pacesetter among the states, powered by
above-average job and population growth. Nonfarm employment grew by 3.5% in 1995
compared with the 2.2% national average, and the creation of 201,000 new jobs
ranked Florida just below Texas and California.
<PAGE>
Florida also strengthened its financial position, adding to its reserves
and budget stabilization fund. Nevertheless, the state faces a challenge in
finding money to pay for the increasing service and infrastructure demands
associated with strong growth. Not surprisingly, bond issuance remained high in
1995, rising 29% over the previous year compared with the slight decrease
nationally. Governor Chiles recently proposed an additional $1.2 billion of
bonds in fiscal 1996 for education, environmental preservation, land
acquisition, and prisons. Florida's net tax-supported debt, currently at $9
billion, has been growing but remains manageable.
================================================================================
PERFORMANCE AND STRATEGY REVIEW
- --------------------------------------------------------------------------------
Your fund provided a strong 9.41% return for the year ended February 29, as
the robust results of the first half were extended in the past six months.
Reflecting favorable markets and our strategy, the fund's performance
outstripped its Lipper peer group average for both the 6- and 12-month periods.
================================================================================
Performance Comparison
- --------------------------------------------------------------------------------
Periods Ended 2/29/96
--------------------
6 Months 12 Months
--------- ---------
Florida Insured Intermediate
Tax-Free Fund 3.86% 9.41%
Lipper Florida Intermediate
Municipal Debt Funds Average 3.43 8.55
================================================================================
The steady supply of new issues offered many opportunities to add bonds
with attractive yields. Accordingly, we sold about one-third of our
lower-yielding, prerefunded bond position and increased allocations to
higher-yielding dedicated tax bonds, air and sea transportation revenue bonds,
and water and sewer revenue bonds.
We entered the second half of the fund's fiscal year on a somewhat cautious
note in response to signs of a strengthening economy and diminishing prospects
of another interest rate cut by the Federal Reserve. This posture was evidenced
by the fund's 5.3 year duration in early September, slightly lower than in
preceding months. (Duration measures a fund's sensitivity to interest rate
changes. For instance, a duration of five years tells you that the fund's price
would fall or rise about 5% in response to a one percentage point increase or
decrease in interest rate levels.)
<PAGE>
By November, however, we became more optimistic for a number of reasons:
the economy appeared to be losing steam; meaningful progress on federal deficit
reduction seemed likely; and overseas demand for Treasuries was strong (pushing
taxable yields down in relation to municipal yields). Consequently, we extended
the fund's duration to 6.2 years, our most aggressive position of the 12-month
period. This helped the fund's performance over the final fiscal quarter.
As our fiscal year drew to a close, we pulled in our horns a bit,
shortening duration to the neutral range of 5.8 years even though the futures
market appeared to be predicting further short-term rate declines. We felt that
prospects for another cut were fading, however, particularly in view of the
impasse in efforts to balance the budget as well as signs of a pickup in
economic growth. The rise in rates since the close of our reporting period
confirmed our preference for caution at this juncture.
OUTLOOK
The municipal market paid substantial attention to the topic of tax reform
last year. Concerns that proposed revisions to the tax code would be detrimental
to municipal bonds kept municipal securities from performing quite as well as
taxable alternatives. As we anticipated, these fears lessened somewhat as tax
reform discussions faded from prominence. Municipals have already recaptured
some of the ground lost to taxable bonds, which we attribute to reduced worries
about tax reform.
The unusually fierce weather this winter, as well as the partial government
shutdowns, tended to delay and distort many recent economic statistics, but it
looks as though the economy is on track for a year of moderate growth. This
should be enough to keep the unemployment rate in its current zone without
significantly exacerbating inflationary pressures. This March the economic
upturn completed its fifth year, making it one of the longest peacetime
expansions on record, but still without signs of an impendin g recession.
Further easing by the Federal Reserve may be slow in coming, since the Fed
is concerned about the risk of fueling inflationary pressures when the economy
has only limited margins of # excess capacity. The prospects for sharp deficit
reduction and the moderate inflation outlook that gave the bond market
confidence last year are not as compelling so far in 1996. Consequently, we
expect the bulk of returns this year to come from coupon income rather than
capital appreciation.
Respectfully submitted,
[signature]
William T. Reynolds
President and Chairman of the
Investment Advisory Committee
March 19, 1996
[Performance Comparison line graph for Small-Cap Value Fund annual report
(February 29, 1996)
<PAGE>
================================================================================
Average Annual Compound Total Return
Periods Ended February 29, 1996
- --------------------------------------------------------------------------------
Since Inception
1 Year (3/31/93)
-------- ---------------------
9.41% 6.58%
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
================================================================================
Portfolio Highlights
================================================================================
Key Statistics
- --------------------------------------------------------------------------------
Periods Ended
Dividend Yield* 2/29/96
- --------------------------- ---------------
6 Months 4.41%
12 Months 4.52
Dividend Per Share
- ---------------------------
6 Months $0.23
12 Months** 0.47
Change in Price Per Share
- ---------------------------
6 Months (From $10.44 to $10.61) $0.17
12 Months (From $10.14 to $10.61) 0.47
Weighted Average Quality*** 1.9
Weighted Average Maturity 8.4 years
Weighted Average Effective Duration 5.8 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.
**Taxability of dividends: 100% of the dividends were exempt from federal
income tax.
***On a T. Rowe Price scale of 1 to 10, with Grade 1 representing highest
quality.
<PAGE>
================================================================================
Sector Diversification
- --------------------------------------------------------------------------------
Percent of Net Assets
2/29/96
---------------------
Prerefunded Bonds 23%
Air and Sea Transportation Revenue 14
General Obligation - Local 12
Water and Sewer Revenue 11
General Obligation - State 9
Dedicated Tax Revenue 7
Lease Revenue 7
Electric Revenue 5
Ground Transportation Revenue 5
Nuclear Revenue 4
Other Assets Less Liabilities 3
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price Florida Insured Intermediate Tax-Free Fund / February 29, 1996
(AMOUNTS IN THOUSANDS)
================================================================================
Amount Value
---------- ----------
FLORIDA -- 93.8%
Broward County, Solid Waste Systems,
(MBIA Insured), 5.40%, 7/1/03 ...................... $ 100 $ 106
Broward County Airport, (AMBAC Insured),
4.90%, 10/1/04 .................................... 1,310 1,348
Charlotte County, Utility, (FGIC Insured),
6.875%, 10/1/21 (Prerefunded 10/1/01) ............. 2,000 2,288
Dade County, Aviation, (MBIA Insured),
6.60%, 10/1/22* .................................... 1,965 2,142
5.40%, 10/1/03* ................................... 1,140 1,203
Capital Appreciation, (MBIA Insured),
Zero Coupon, 2/1/09 ............................... 250 125
Dade County Seaport, GO, (MBIA Insured),
6.25%, 10/1/05 .................................... 1,595 1,800
Duval County School Dist., GO, (AMBAC Insured),
6.125%, 8/1/04 .................................... 2,000 2,211
Florida Board of Ed., Public Ed., GO, 6.625%, 6/1/22
(Prerefunded 6/1/02) .............................. 1,500 1,695
5.625%, 6/1/03 ................................ 1,000 1,075
5.125%, 6/1/04 ................................ 1,000 1,042
4.75%, 6/1/16 ................................. 1,735 1,571
Florida Division of Bond Fin., Dept. of
Environmental Preservation,(AMBAC Insured),
5.50%, 7/1/07 ...................................... 2,000 2,108
Florida Municipal Power Agency, All-Requirements
Power Supply,(AMBAC Insured),
6.25%, 10/1/21 (Prerefunded 10/1/02) ............... 1,700 1,913
Stanton II Project, (AMBAC Insured),
6.50%, 10/1/20 (Prerefunded 10/1/02) ............... 3,230 3,681
Florida Dept. of Corrections, Okeechobee Correctional,
(AMBAC Insured), 5.70%, 3/1/01 ..................... 1,355 1,441
5.80%, 3/1/02 ................................. 1,005 1,080
Florida Turnpike Auth., (AMBAC Insured),
5.50%, 7/1/03 ..................................... 2,000 2,138
5.50%, 7/1/05 ..................................... 1,000 1,068
7.125%, 7/1/18 (Prerefunded 7/1/01) ............... 1,375 1,587
Gainesville Utilities Systems, 6.40%, 10/1/05 ....... 1,500 1,676
Hillsborough County, County Center, GO,
(MBIA Insured), 5.00%, 7/1/01 ..................... 1,250 1,298
Environmentally Sensitive, Lands Acquisition
and Protection,(AMBAC Insured), 6.20%, 7/1/05 ...... 1,485 1,638
Hillsborough County Port Dist., Tampa Port Auth.,
(FSA Insured), 6.50%, 6/1/04* ...................... 2,000 2,251
<PAGE>
Amount Value
---------- ----------
Hillsborough County School Dist., GO,
(MBIA Insured), 7.00%, 8/15/05 .................... $ 1,500 $ 1,776
Hollywood, Water and Sewer, (FGIC Insured),
6.875%, 10/1/21(Prerefunded 10/1/01) .............. 2,100 2,403
Indian Trace Community Dev. Dist., Basin 1 Water
Management,(MBIA Insured), 5.50%, 5/1/06 ........... 1,215 1,291
5.50%, 5/1/07 ..................................... 550 581
Jacksonville Beach Utilities, (MBIA Insured),
6.75%, 10/1/20, (Prerefunded 10/1/01) ............. 500 569
Jacksonville Electric Auth., Electric System,
5.20%, 10/1/02 .................................... 2,000 2,094
St. John River, 5.00%, 10/1/04 .................... 1,355 1,394
Jacksonville HFA, Baptist Medical Center,
(MBIA Insured), VRDN (Currently 3.35%) ............. 100 100
New Children's Hosp. at Baptist Medical Center,
VRDN (Currently 3.40%) ............................. 100 100
Lee County School Board, COP, (FSA Insured),
6.30%, 8/1/01 ..................................... 2,000 2,192
Manatee County, Public Utilities, (MBIA Insured),
6.75%, 10/1/05 .................................... 2,000 2,334
Orange County, Public Service Tax, (FGIC Insured),
5.60%, 10/1/07 .................................... 500 534
Orlando Utilities Commission, Water and Electric,
6.50%, 10/1/20 (Prerefunded 10/1/01) .............. 1,385 1,563
Palm Beach County, GO, 6.875%, 12/1/03 .............. 325 379
Airport System, (MBIA Insured), 7.50%, 10/1/00 .... 2,100 2,373
Pinellas County Water Auth., (AMBAC Insured),
5.50%, 10/1/04 .................................... 2,500 2,678
Reedy Creek Improvement Dist., GO, (MBIA Insured),
6.375%, 6/1/05 .................................... 545
Saint Lucie County, PCR, Florida Power and Light
Co., VRDN(Currently 3.45%) ........................ 1,200 1,200
Sarasota County, Utility Systems, (FGIC Insured),
5.70%, 10/1/01 .................................... 500 535
PUERTO RICO -- 3.2%
Puerto Rico Commonwealth, GO, (MBIA Insured),
5.50%, 7/1/06 ..................................... 2,000 2,131
================================================================================
TOTAL INVESTMENTS IN SECURITIES -- 97.0% OF
NET ASSETS (COST $63,070) ......................................... 65,257
================================================================================
OTHER ASSETS LESS LIABILITIES ....................................... 2,003
---------
<PAGE>
NET ASSETS CONSIST OF:
Value
---------
Accumulated net realized gain/
loss - net of distributions............ 49
Net unrealized gain (loss)
Paid-in-capital applicable to 6,338,949 no
par value shares of beneficial interest
outstanding; unlimited number of shares
authorized................................ 65,024
---------
NET ASSETS $67,260
---------
---------
NET ASSET VALUE PER SHARE $10.61
------
------
* Interest subject to alternative minimum tax
** Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
COP Certificates of Participation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HFA Health Facility Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
Statement of Operations
- --------------------------------------------------------------------------------
T. Rowe Price Florida Insured Intermediate Tax-Free Fund
Year Ended February 29, 1996
(IN THOUSANDS)
================================================================================
INVESTMENT INCOME
Interest income......................................... $ 2,905
---------
Expenses
Investment management................................. 153
Custody and accounting................................ 93
Shareholder servicing................................. 61
Prospectus and shareholder reports.................... 12
Legal and audit....................................... 9
Registration.......................................... 6
Trustees.............................................. 6
Miscellaneous......................................... 4
----------
Total expenses........................................ 344
----------
Net investment income................................... 2,561
----------
REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
Securities............................................ 1,174
Futures............................................... (35)
----------
Net realized gain (loss).............................. 1,139
Change in net unrealized gain or loss on securities..... 1,352
----------
Net realized and unrealized gain (loss)................. 2,491
----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....... $ 5,052
----------
----------
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
Statement of Changes in Net Assets
T. Rowe Price Florida Insured Intermediate Tax-Free Fund
(IN THOUSANDS)
- --------------------------------------------------------------------------------
Year Ended Year Ended
Feb. 29, 1996 Feb. 28, 1995
------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income......................... $ 2,561 $ 1,783
Net realized gain (loss)...................... 1,139 (1,093)
Change in net unrealized gain or loss......... 1,352 946
------------- --------------
Increase (decrease) in net assets from
operations................................. 5,052 1,636
------------- --------------
Distributions to shareholders
Net investment income......................... (2,561) (1,783)
Net realized gain............................. -- (73)
------------- --------------
Decrease in net assets from distributions..... (2,561) (1,856)
------------- --------------
Capital share transactions*
Shares sold................................... 38,353 37,576
Distributions reinvested...................... 1,730 1,327
Shares redeemed............................... (27,236) (24,629)
------------- --------------
Increase (decrease) in net assets from
capital share transactions.................. 12,847 14,274
------------- --------------
Increase (decrease) in net assets............... 15,338 14,054
NET ASSETS
Beginning of period............................. 51,922 37,868
------------- --------------
End of period................................... $67,260 $51,922
============= ==============
* Share information
Shares sold................................... 3,662 3,796
Distributions reinvested...................... 166 133
Shares redeemed............................... (2,610) (2,486)
------------- --------------
Increase (decrease) in shares outstanding..... 1,218 1,443
============= ==============
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
================================================================================
T. Rowe Price Florida Insured Intermediate Tax-Free Fund / February 29, 1996
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 Florida Insured Intermediate Tax-Free
Fund (the fund), a nondiversified, open-end management investment company, is
one of the portfolios established by the Trust.
A) Valuation - Debt securities are generally traded in the over-the-counter
market. Investments in securities originally issued with 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
maturities when issued 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 the
fund, as authorized by the Board of Trustees.
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 the 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.
<PAGE>
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $66,470,000 and $53,598,000, respectively, for the year
ended February 29, 1996.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
income. Capital loss carryforwards utilized in fiscal 1996 amounted to $532,000.
At February 29, 1996, the aggregate cost of investments for federal income
tax and financial reporting purposes was $63,070,000 and net unrealized gain
aggregated $2,187,000, of which $2,271,000 related to appreciated investments
and $84,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management fee,
of which $11,000 was payable at February 29, 1996. The fee is computed daily and
paid monthly, and consists of an Individual Fund Fee equal to 0.05% 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
February 29, 1996, and for the year then ended, the effective annual Group Fee
rate was 0.33% and 0.34%, respectively. The 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
fund's ratio of expenses to average net assets to exceed 0.60%. Thereafter
through February 28, 1999, the 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 0.60%. Pursuant to this agreement,
$70,000 of management fees were not accrued by the fund for the year ended
February 29, 1996. Additionally, $277,000 of unaccrued fees and expenses related
to a previous expense limitation are subject to reimbursement through February
28, 1997.
In addition, the 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 fund incurred expenses pursuant to
these related party agreements totaling approximately $112,000 for the year
ended February 29, 1996, of which $10,000 was payable at period-end. #
<PAGE>
================================================================================
Financial Highlights
T. Rowe Price Florida Insured Intermediate Tax-Free Fund
- --------------------------------------------------------------------------------
For a share outstanding throughout each period
March 31, 1993^
Year Ended, to
February 29, 1996 February 28, 1995 February 28, 1994
NET ASSET VALUE,
BEGINNING OF PERIOD..... $10.14 $10.30 $10.00
------ ------ ------
Investment activities
Net investment income.. 0.47* 0.43* 0.37*
Net realized and
unrealized gain/loss.. 0.47 (0.14) 0.31
------ ------ ------
Total from investment
activities............ 0.94 0.29 0.68
------ ------ ------
Distributions
Net investment income.. (0.47) (0.43) (0.37)
Net realized gain...... -- (0.02) (0.01)
------ ------ ------
Total distributions.... (0.47) (0.45) (0.38)
------ ------ ------
NET ASSET VALUE,
END OF PERIOD........... $10.61 $10.14 $10.30
====== ====== ======
RATIOS/SUPPLEMENTAL DATA
Total return............. 9.41% 3.01% 6.84%
Ratio of expenses to
average net assets...... 0.60%* 0.60%* 0.60%*
Ratio of net investment
income to average
net assets............ 4.47% 4.38% 3.57%
Portfolio turnover rate.. 98.7% 140.5% 70.6%
Net assets, end of
period (in thousands)... $67,260 $51,922 $37,868
** Annualized.
* Excludes expenses in excess of a 0.60% voluntary expense limitation in
effect through February 28, 1997.
^ Commencement of operations.
================================================================================
<PAGE>
Report of Independent Accountants
To the Shareholders and Board of Trustees of
T. Rowe Price Florida Insured Intermediate Tax-Free Fund
We have audited the accompanying statement of net assets of T. Rowe Price
Florida Insured Intermediate Tax-Free Fund (one of the portfolios comprising the
T. Rowe Price State Tax-Free Income Trust) as of February 29, 1996, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years then ended and financial
highlights for the each of the two years in the period then ended and the period
March 31, 1993 (commencement of operations) to February 28, 1994. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
February 29, 1996, by correspondence with the custodia n and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of T.
Rowe Price Florida Insured Intermediate Tax-Free Fund as of February 29, 1996,
the results of its operations, the changes in its net assets, and financial
highlights for each of the respective periods stated in the first paragraph, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
March 19, 1996
