Semiannual Report
New York
Tax-Free
Funds
August 31, 1997
T. Rowe Price
Report Highlights
New York Tax-Free Funds
o Municipal bonds outperformed Treasuries during most of the
past six months. Inflation remained subdued despite strong
economic growth.
o Economic growth and employment in New York are gradually
improving but continue to lag the national averages.
o Each fund outperformed the average for its peer group for
the six-month period ended August 31.
o Your funds relied to a great extent on credit research and
both maturity and duration management to enhance returns.
o We believe the environment is still favorable for fixed
income investors. New York's economy should grow modestly,
and the state's budget problems seem to be under control.
Fellow Shareholders
The municipal bond market and your funds generated attractive
returns during the six months ended August 31, 1997. Strong
economic growth in the first quarter of 1997 led the Federal
Reserve to raise the federal funds target rate a quarter-point
to 5.50% in March because of concerns that inflation might
accelerate. However, despite robust economic growth, the Fed has
left rates unchanged since March as inflation remained subdued.
MARKET ENVIRONMENT
Interest rates fluctuated as the market wrestled with a
conflicting combination of strong economic growth and declining
inflation. Both money market and longer-term bond yields began
rising before the March rate hike and continued to rise for a
short time afterward in anticipation of further tightening.
However, excellent news on inflation, progress on controlling
the federal budget deficit, and little evidence of wage
pressures diminished fears of further rate increases. Short-term
taxable rates subsequently fell in mid-April to their earlier
levels. Long-term taxable yields also began to fall in the late
spring after climbing to more than 7% in April. The 30-year
Treasury bond yield averaged just over 6.50% in July and August
and 6.80% for the past six months, almost identical to its
average over the two preceding years.
NY Yield chart showing New York Index and New York Money Index
from 8/31/96 through 8/31/97
NY Bond NY Money
8/31/96 6.15 3.2
5.94 3.6
5.91 3.3
11/30/96 5.73 3.35
5.89 2.95
5.91 3.3
2/28/96 5.86 3.1
6.06 3.2
5.93 4.25
5/31/96 5.82 3.65
5.74 3.9
5.45 3.4
8/31/97 5.62 3.1
Long-term municipal interest rates, including those in New York,
followed a similar pattern, rising in March, peaking in April,
then falling in late June and July when preliminary data
signaled a slowdown. Rates reversed in August as favorable
economic data changed the outlook for the third quarter.
Municipal bonds outperformed Treasuries throughout most of the
period except for June, when the highest monthly supply in four
years overwhelmed demand. The yield on long-term AAA GO bonds
began the six-month period at 5.50% and ranged between 5.75% and
5.15% before settling at 5.35% at the end of August. Five-year
AAA GO yields were 4.40% six months ago and finished at 4.35%,
while one-year notes ended higher at 3.85%, up from 3.70% last
February. Overall, both the municipal and Treasury yield curves
flattened as short-term rates rose modestly in anticipation of
further Fed tightening and long-term rates trended lower on
positive inflation news.
In New York, overall economic growth and employment are
gradually improving but continue to lag the national averages.
The state's finances have strengthened as strong tax collections
and spending restraint led to a sizable surplus for the fiscal
year ended March 31, 1997. New York City's situation has
improved as well, with the financial industry prospering. These
trends were rewarded by a recent upgrade of New York State
securities from A- to A by Standard & Poor's, and by a more
favorable view of the city's bonds from Moody's. New issuance in
New York has been strong this year, up 23% from 1996 levels.
NEW YORK TAX-FREE MONEY FUND
Our longer maturity strategy resulted in returns that were ahead
of the fund's peer group averages during both the 6- and
12-month periods ended August 31, 1997.
Performance Comparison
Periods Ended 8/31/97 6 Months 12 Months
_____________________________________________________________
New York Tax-Free
Money Fund 1.56% 3.04%
Lipper New York Tax-Exempt
Money Market Funds Average 1.54 2.98
The tax-exempt short-term market was fairly stable during the
past six months. Despite a hike of 25 basis points in the
federal funds rate, short-term interest rates moved only
modestly higher in a calm, measured fashion. The yield on
one-year securities closed the period 15 basis points higher
than at the end of February and fluctuated within a range of
only 25 basis points.
During the past six months, tax-exempt money fund assets
expanded to a record $154.2 billion, and assets in New York
tax-exempt retail mutual funds reached the $10 billion mark in
August. All in all, the industry has expanded by almost $14
billion since the end of 1996.
Issuance of short-term debt so far in 1997 has run $4.2 billion
behind last year's volume but is expected to regain ground
during the next few months, when the State of California comes
to market with $3 billion and New York City issues an estimated
$1.2 billion in short-term debt. Strong demand coupled with
contracting supply helped keep potentially wide yield swings at
bay so far this year.
Your fund ended the period with a weighted average maturity of
69 days, six days longer than at the end of February and
considerably longer than the average of 49 days for competing
funds. Although we began and ended the last six months with a
long maturity posture, we had actually shortened it during the
spring before lengthening again in June and July to take
advantage of the positive yield curve. We added several
high-quality New York issues to the portfolio as they came to
market and committed an additional 12% of the portfolio to
one-year maturities. We expect to maintain our longer maturity
in coming months unless economic conditions change, causing us
to revise our outlook for short-term rates.
NEW YORK TAX-FREE BOND FUND
Our strategy of managing credit quality and extending the fund's
duration after interest rates had risen enabled us to provide
solid returns that surpassed our peer group averages for the 6-
and 12-month periods ended August 31, 1997.
Periods Ended 8/31/97 6 Months 12 Months
______________________________________________________________
___
New York Tax-Free
Bond Fund 4.07% 8.97%
Lipper New York Municipal
Debt Funds Average 3.98 8.93
The fund began the six-month period with a slightly defensive
duration and ended on a more aggressive note. At the end of
August, duration was 8.1 years compared with 7.4 years at the
end of February, and the fund's weighted average maturity was
20.5 years, up from 18.5 years. (A fund with a duration of 8.1
years would fall or rise in price about 8% in response to a
one-percentage-point rise or fall in interest rates.)
We adopted a more aggressive posture after interest rates rose
following the Fed tightening in March. As rates subsequently
declined due to continuing good news on inflation, fund
performance benefited from the greater appreciation due to our
longer duration. Progress in Washington on addressing the
federal budget deficit, along with the unlikelihood of further
Fed tightening in the near term, reinforced our decision to
lengthen the fund's duration.
As always, we maintained a well-diversified portfolio with a
variety of creditors. . .
We initiated a position in newly issued BBB rated bonds to
capture their higher yield in an otherwise low-yield
environment. In addition, we increased our Puerto Rican and
transportation bond holdings when heavy new issuance in these
areas created an opportunity to add to these sectors at
attractive yields. We believe that lower-quality securities will
continue to perform well on a relative basis and feel confident
about acquiring them aggressively when our research supports
that view.
As always, we maintained a well-diversified portfolio with a
variety of creditors across a number of sectors. However, over
the past year many New York funds benefited from particularly
large holdings of both New York State and City bonds as they
outperformed. We have always held positions in these bonds, but
we typically limited ourselves to about 5% of net assets while
some competing funds are more heavily concentrated in them.
Despite our underweighting in this area, we still managed to
outperform our peer group averages for both the 6- and 12-month
periods. Our emphasis on investing primarily in long-term bonds
has given your fund a yield advantage over many competitors. We
will attempt to maintain this advantage to generate as much of
the fund's return through tax-free income as possible. Our
below-average expense ratio also contributes to fund
performance.
Moving forward, we expect to maintain our average duration and
maturities within a neutral range as long as the economy remains
strong with low inflation. As always, we will continue to
research lower-rated issues carefully before adding them to the
portfolio.
OUTLOOK
The national municipal market is facing a pickup in supply in
coming months, as issuers line up to borrow over both the short
and long term. Interest rates have stayed within the narrow
range established over the past two years, with relatively low
volatility, and remain attractive for issuers. At the same time,
we expect demand for municipals to remain solid, since the
Taxpayer Relief Act of 1997 did not lower personal income tax
rates and did maintain favorable tax treatment for corporations
purchasing municipals.
Given the high level of consumer and business confidence, we
expect the economy to continue to perform well, although not
quite as well as in the first half of the year. The Federal
Reserve has expressed uncertainty about why inflation has
remained so low at this stage of the expansion and is
maintaining a bias toward tightening in an effort to keep
inflation in check. Until signs of accelerating inflation
appear, there is little reason for us to adopt a defensive
posture in the funds. The overall environment for fixed income
investors is still favorable, due to continuing low inflation
and fiscal restraint despite above-trend economic growth.
We expect the New York economy to grow modestly through the rest
of the year. The state's budget problems appear to be under
control following last year's large surplus. New issuance will
most likely continue to increase strongly, with offerings
expected from the New York City Transitional Finance Authority
later this year and, perhaps, from the Long Island Power
Authority during the next 18 months.
Respectfully submitted,
Patrice L. Berchtenbreiter
Chairman of the Investment Advisory Committee
New York Tax-Free Money Fund
William F. Snider
Chairman of the Investment Advisory Committee
New York Tax-Free Bond Fund
September 19, 1997
T. Rowe Price New York Tax-Free Funds
Portfolio Highlights
Key Statistics
2/28/97 8/31/97
New York Tax-Free Money Fund
_______________________________________________________________________
Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.015 0.015
For 12 months 0.029 0.030
Dividend Yield (7-Day Compound) * 2.95% 2.98%
Weighted Average Maturity (days) 63 69
Weighted Average Quality ** First Tier First Tier
New York Tax-Free Bond Fund
_______________________________________________________________________
Price Per Share $10.80 $ 10.95
Dividends Per Share
For 6 months 0.28 0.28
For 12 months 0.57 0.57
Dividend Yield *
For 6 months 5.40% 5.28%
For 12 months 5.49 5.41
Weighted Average Maturity (years) 18.5 20.5
Weighted Average Effective Duration (years) 7.4 8.1
Weighted Average Quality *** A+ A+
* 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.
** All securities purchased in the money fund are rated in the two highest
categories as established by national rating agencies or, if unrated,
are deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
T. Rowe Price New York Tax-Free Funds
Portfolio Highlights
Sector Diversification
Percent of Percent of
Net Assets Net Assets
2/28/97 8/31/97
New York Tax-Free Money Fund
_______________________________________________________________________
General Obligation - Local 11% 18%
Miscellaneous Revenue 19 18
Water and Sewer Revenue 10 10
Dedicated Tax Revenue 7 10
Ground Transportation Revenue 5 8
Industrial and Pollution Control Revenue 4 5
Hospital Revenue 5 5
Air and Sea Transportation Revenue 1 5
Electric Revenue 4 4
Educational Revenue 7 4
Prerefunded Bonds 11 4
Life Care/Nursing Home Revenue 3 4
Nuclear Revenue 5 2
All Other 7 2
Other Assets Less Liabilities 1 1
_______________________________________________________________________
Total100% 100%
New York Tax-Free Bond Fund
_______________________________________________________________________
Dedicated Tax Revenue 14% 10%
Lease Revenue 8 9
Water and Sewer Revenue 10 9
Air and Sea Transportation Revenue 7 9
Housing Finance Revenue 7 8
Ground Transportation Revenue 4 8
Miscellaneous Revenue 7 8
Hospital Revenue 6 7
Educational Revenue 11 6
General Obligation - Local 10 6
Prerefunded Bonds 8 6
General Obligation - State 1 4
Electric Revenue 1 4
Solid Waste Revenue 4 3
Nuclear Revenue 3 2
All Other - 1
Other Assets Less Liabilities -1 -
_______________________________________________________________________
Total100% 100%
T. Rowe Price New York Tax-Free Funds
Performance Comparison
T. Rowe Price New York Tax-Free Money Fund
These charts show the value of a hypothetical $10,000 investment in each fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
NY Tax-Free Money Fund SEC chart
Lipper New York T. Rowe Price
Tax-Exempt Money New York Tax-Free
Market Funds Average Money Fund
8/87 $10,000 $ 10,000
8/88 10,427 10,406
8/89 10,982 10,937
8/90 11,561 11,481
8/91 12,062 11,962
8/92 12,422 12,310
8/93 12,661 12,549
8/94 12,907 12,795
8/95 13,312 13,199
8/96 13,710 13,596
8/97 $14,120 $ 14,009
NY Tax-Free Bond Fund SEC chart
Lipper New York T. Rowe Price
Lehman Municipal Municipal Debt New York Tax-Free
Bond Index Funds Average Bond Fund
8/87 $10,000 $ 10,000 $10,000
8/88 10,688 10,657 10,696
8/89 11,862 11,855 11,782
8/90 12,623 12,403 12,279
8/91 14,111 13,817 13,640
8/92 15,687 15,521 15,346
8/93 17,601 17,527 17,388
8/94 17,626 17,291 17,290
8/95 19,188 18,427 18,619
8/96 20,193 19,256 19,646
8/97 $22,060 $ 21,019 $21,408
Average Annual Compound Total Return
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 8/31/971 Year 3 Years 5 Years 10 Years
_______________________________________________________________________
New York Tax-Free
Money Fund 3.04% 3.07% 2.62% 3.43%
New York Tax-Free
Bond Fund 8.97 7.38 6.88 7.91
Investment return represents past performance and will vary. Shares of the
bond fund may be worth more or less at redemption than at original purchase.
The Money Fund's $1.00 share price is not guaranteed, nor is the fund insured
by the U.S. government.
T. Rowe Price New York Tax-Free Bond Fund
Unaudited
Financial Highlights
For a share outstanding throughout each period
6 Months Year
Ended Ended
8/31/97 2/28/972/29/96 2/28/95 2/28/942/28/93
NET ASSET VALUE
Beginning of
period $1.000 $1.000 $1.000 $1.000 $1.000 $ 1.000
Investment activities
Net invest-
ment income 0.015* 0.029* 0.032* 0.025* 0.018* 0.022*
Distributions
Net invest-
ment income(0.015)(0.029) (0.032) (0.025) (0.018) (0.022)
NET ASSET VALUE
End of period $1.000 $1.000 $1.000 $1.000 $1.000 $ 1.000
Ratios/Supplemental Data
Total return 1.56%* 2.91%* 3.26%* 2.49%* 1.84%* 2.22%*
Ratio of
expenses to
average
net assets 0.55%*!0.55%* 0.55%* 0.55%* 0.55%* 0.55%*
Ratio of net
investment
income to
average
net assets 3.09%*!2.86%* 3.21%* 2.48%* 1.82%* 2.21%*
Net assets,
end of period
(in
thousands) $88,915 $82,729$71,040 $66,154 $57,736$53,904
* Excludes expenses in excess of a 0.55% voluntary expense limitation in
effect through 2/28/99.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Bond Fund
Unaudited
Financial Highlights
For a share outstanding throughout each period
6 Months Year
Ended Ended
8/31/97 2/28/972/29/96 2/28/95 2/28/942/28/93
NET ASSET VALUE
Beginning of
period $10.80 $10.85 $10.37 $10.98 $11.05 $ 10.12
Investment activities
Net invest-
ment income 0.28 0.57* 0.58* 0.58* 0.59* 0.62*
Net realized
and unrealized
gain (loss) 0.15 (0.05) 0.48 (0.53) 0.09 0.93
Total from
investment
activities 0.43 0.52 1.06 0.05 0.68 1.55
Distributions
Net invest-
ment income (0.28) (0.57) (0.58) (0.58) (0.59) (0.62)
Net realized
gain - - - (0.08) (0.16) -
Total
distributions(0.28)(0.57) (0.58) (0.66) (0.75) (0.62)
NET ASSET VALUE
End of period $10.95 $10.80 $10.85 $10.37 $10.98 $ 11.05
Ratios/Supplemental Data
Total return 4.07% 5.02%* 10.44%* 0.74%* 6.31%* 15.79%*
Ratio of
expenses to
average net
assets 0.63%! 0.65%* 0.65%* 0.60%* 0.60%* 0.60%*
Ratio of
net investment
income to
average
net assets 5.22%! 5.35%* 5.42%* 5.71%* 5.31%* 5.91%*
Portfolio
turnover rate 60.8%! 96.9% 116.0% 134.3% 84.9% 41.5%
Net assets,
end of period
(in
thousands) $153,679 $ 144,532$134,933$117,847$130,347$112,026
* Excludes expenses in excess of a 0.60% voluntary expense limitation in
effect through 2/28/95 and a 0.65%
voluntary expense limitation in effect 3/1/95 through 2/28/97.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Money Fund
UnauditedAugust 31, 1997
Statement of Net Assets
Par Value
In thousands
NEW YORK 98.8%
Connetquot, GO, TAN, 4.25%, 6/25/98 $ 1,000 $ 1,003
Dormitory Auth. of the State of
New York, TECP
3.55 - 3.65%, 10/9 - 10/21/97 3,900 3,900
Cornell Univ., VRDN (Currently 3.65%) 2,100 2,100
Masonic Hall Asylum
VRDN (Currently 3.15%)
(AMBAC Insured) 3,200 3,200
Memorial Sloan-Kettering Cancer
Center, TECP
3.65%, 9/9/97 1,000 1,000
Metropolitan Museum of Art
VRDN (Currently 3.15%) 2,178 2,178
Oxford Univ. Press, VRDN (Currently 3.85%)3,385 3,385
Univ. Ed. Fac., 6.40%, 11/1/97
(Escrowed to Maturity) 100 100
Erie County, GO, RAN, 4.50%, 6/25/98 2,000 2,011
Erie County Water Auth.
VRDN (Currently 3.15%)
(AMBAC Insured) 4,150 4,150
Great Neck Water Auth.
VRDN (Currently 3.15%)
(FGIC Insured) 570 570
Huntington Union Free School Dist.,
GO, TAN, 4.25%, 6/29/98 1,000 1,003
Manhasset Union Free School Dist., GO,
TAN, 4.25%, 6/30/98 1,000 1,004
Massapequa Union Free School Dist., GO, TAN
4.25%, 6/30/98 1,000 1,003
Municipal Assistance Corp. of New York City
VRDN (Currently 3.15%) 3,300 3,300
TECP, 4.20%, 7/1/98 610 612
Nassau County, GO, RAN, 4.50%, 3/10/98 2,000 2,007
Nassau County IDA, Cold Spring Harbor
Laboratory
VRDN (Currently 3.70%) 3,100 3,100
New York City, GO
5.50%, 10/1/97
(Escrowed to Maturity) $ 150 $ 150
7.50%, 11/1/97
(Escrowed to Maturity) 70 70
8.00%, 11/15/97
(Escrowed to Maturity) 55 56
8.00%, 12/1/12
(Prerefunded 6/1/98!) 50 52
8.50%, 11/1/09
(Prerefunded 11/1/97!) 50 51
8.50%, 11/1/12
(Prerefunded 11/1/97!) 230 235
8.75%, 11/1/17
(Prerefunded 11/1/97!) 125 128
New York City IDA, American Civil
Liberties Fac.
VRDN (Currently 3.10%) 3,000 3,000
New York City Municipal Water Fin. Auth.
VRDN (Currently 3.45%) 1,000 1,000
VRDN (Currently 3.80%)
(FGIC Insured) 3,200 3,200
New York City Trust for Cultural Resources
American Museum of National History, TECP
3.55%, 10/1/97 (MBIA Insured) 4,000 4,000
New York State, GO, TECP, 3.75%, 10/23/97 1,000 1,000
New York State Power Auth., TECP,
3.60%, 10/16/97 2,120 2,120
New York State Energy Research and
Dev. Auth.
Orange and Rockland Utilities
VRDN (Currently 3.15%)
(FGIC Insured) 3,400 3,400
New York State Environmental Fac., PCR
General Electric, TECP, 3.60%, 10/15/97 1,300 1,300
New York City Municipal Water,
4.80%, 6/15/98 200 201
Solid Waste Disposal, General Electric, TECP
3.65 - 3.75%, 9/10 - 10/10/97 * 3,150 3,150
New York State Housing Fin. Agency, Health Fac.
6.60%, 11/1/97
(Escrowed to Maturity) 500 502
New York State Local Gov't. Assistance
VRDN (Currently 3.20%) $ 4,200 $ 4,200
New York State Medical Care Fac. Fin. Agency
7.70%, 2/15/18 (Prerefunded 2/15/98!) 45 46
Buffalo General Hosp.
7.70%, 2/15/22 (FHA Insured)
(Prerefunded 8/15/98!) 1,000 1,055
Greater New York Health Insurance Plan
8.50%, 11/1/15 (Prerefunded 12/1/97!) 1,000 1,008
New York State Mortgage Agency, Homeowner
4.05%, 10/1/97 * 510 510
New York State Thruway Auth.
VRDN (Currently 3.80%) 3,000 3,000
4.75%, 1/1/98 200 201
5.00%, 1/1/98 (FGIC Insured) 300 301
5.00%, 4/1/98 (AMBAC Insured) 450 453
New York State Urban Dev., Correctional Fac.
8.125%, 1/1/14 (AMBAC Insured)
(Prerefunded 1/1/98!) 30 31
Port Auth. of New York and New Jersey
VRDN (Currently 3.70%) * 1,900 1,900
TECP, 3.75%, 10/17/97 * 815 815
4.25%, 7/1/98 * 1,000 1,003
4.90%, 9/1/97 * 495 495
Rochester, GO, BAN, 4.50%, 10/30/97 2,000 2,002
Roslyn Union Free School Dist., GO,
TAN, 4.25%, 6/29/98 1,000 1,003
South Huntington Union Free School
Dist., GO, TAN
4.10%, 6/30/98 2,000 2,005
Syracuse IDA, Syracuse Univ., VRDN
(Currently 3.65%) 1,200 1,200
Triborough Bridge and Tunnel Auth.
VRDN (Currently 3.15%)
(FGIC Insured) 4,000 4,000
6.70%, 1/1/98 (FSA Insured)
(Escrowed to Maturity) 25 25
7.50%, 1/1/15 (Prerefunded 1/1/98!) 50 51
7.60%, 1/1/02 (Prerefunded 1/1/98!) 30 31
7.875%, 1/1/18 (Prerefunded 1/1/98!) 100 103
Westchester County, GO
3.80%, 12/15/97 $ 175 $ 175
TAN, 3.48%, 12/11/97 2,000 2,000
White Plains, GO
4.50%, 1/15/98 280 281
9.40%, 12/15/97 700 711
Total New York (Cost $87,846) 87,846
PUERTO RICO 0.5%
Puerto Rico Aqueduct and Sewer Auth.
7.875%, 7/1/17
(Prerefunded 07/01/98!) 400 421
Total Puerto Rico (Cost $421) 421
Total Investments in Securities
99.3% of Net Assets (Cost $88,267) $ 88,267
Other Assets Less Liabilities 648
NET ASSETS $ 88,915
_________
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 3
Accumulated net realized gain/loss -
net of distributions (2)
Paid-in-capital applicable to 88,917,002
no par value shares of beneficial interest
outstanding; unlimited number of shares
authorized 88,914
NET ASSETS $ 88,915
_________
NET ASSET VALUE PER SHARE $ 1.00
_________
* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
GO General Obligation
IDA Industrial Development Authority
PCR Pollution Control Revenue
RAN Revenue Anticipation Note
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Bond Fund
UnauditedAugust 31, 1997
Statement of Net Assets
Par Value
In thousands
New York 84.7%
Albany County Airport Auth.,
5.50%, 12/15/19
(FSA Insured) * $ 2,000 $ 1,967
Battery Park City Auth.
5.25%, 11/1/17 2,000 1,930
5.50%, 11/1/29 (AMBAC Insured) 3,150 3,117
Dormitory Auth. of the State of New York
Champlain Valley Physicians
5.00%, 7/1/17 860 806
6.00%, 7/1/09 400 434
City Univ.
5.75%, 7/1/11 (AMBAC Insured) 2,000 2,142
8.20%, 7/1/13 350 368
Cornell Univ., 7.375%, 7/1/20 1,500 1,644
Dept. of Health, 6.50%, 7/1/09 500 543
Judicial Fac. (Suffolk County),
9.50%, 4/15/14 1,000 1,167
Maimonides Medical Center
5.75%, 8/1/35 (MBIA Insured) 1,500 1,528
Mental Health Services Fac., 5.75%, 8/15/222,500 2,500
Nyack Hosp.
5.35%, 7/1/99 750 757
6.00%, 7/1/06 2,000 2,099
Rockefeller Univ., 6.75%, 7/1/11 1,365 1,499
Siena College, 5.75%, 7/1/26
(MBIA Insured) 2,000 2,045
St. Joseph's Hosp., 5.25%, 7/1/18
(MBIA Insured) 1,000 968
State Univ. Ed. Fac.
5.40%, 5/15/23 2,500 2,389
7.50%, 5/15/11 2,130 2,550
Vassar College, 7.25%, 7/1/15 500 550
Erie County Water Auth.
Zero Coupon, 12/1/17
(AMBAC Insured) 665 156
Essex County Industrial Dev. Agency,
PCR, Int'l. Paper
5.70%, 7/1/16 * 500 512
Metropolitan Transportation Auth.
Commuter Fac., 5.625%, 7/1/27
(MBIA Insured) 2,000 2,018
Metropolitan Transportation Auth.
Transportation Fac.
5.875%, 7/1/27 (MBIA Insured) $ 2,300 $ 2,376
Mount Sinai Union Free School Dist., GO
6.20%, 2/15/17 (AMBAC Insured) 1,025 1,139
6.20%, 2/15/18 (AMBAC Insured) 515 573
Municipal Assistance Corp. for the
City of New York
7.625%, 7/1/08 500 524
Nassau County, GO
6.50%, 11/1/13 (FGIC Insured)
(Prerefunded 11/1/04!) 1,500 1,708
Nassau County IDA
Hofstra Univ.
6.75%, 1/1/10 270 302
6.90%, 1/1/14 350 392
6.90%, 1/1/15 375 421
New Rochelle, GO
6.25%, 3/15/17 (MBIA Insured) 375 404
6.25%, 3/15/18 (MBIA Insured) 400 431
6.25%, 3/15/19 (MBIA Insured) 425 457
New York City, GO
5.75%, 10/15/13 1,100 1,119
6.00%, 8/1/12 1,000 1,044
6.25%, 8/1/09 1,750 1,875
7.625%, 2/1/14 (Prerefunded 2/1/02!) 500 570
7.75%, 8/15/15
(Prerefunded 8/15/01!) 1,155 1,310
New York City IDA
Nightingale Bamford School,
5.85%, 1/15/20 1,470 1,499
Terminal One Group Assoc.,
6.00%, 1/1/19 * 2,500 2,581
USTA National Tennis Center
6.375%, 11/15/14 (FSA Insured) 1,000 1,092
New York City Municipal Water Fin. Auth.
Water and Sewer
VRDN (Currently 3.75%)
(FGIC Insured) 100 100
5.00%, 6/15/17 (FGIC Insured) 2,000 1,894
5.875%, 6/15/26 5,000 5,136
New York City Trust for Cultural Resources
Museum of Modern Art
5.50%, 1/1/16 (AMBAC Insured) $ 2,000 $ 2,007
New York State, GO
7.125%, 11/15/16
(Prerefunded 11/15/00!) 500 552
New York State Energy Research and Dev. Auth.
Con Ed., 6.75%, 1/15/27 * 2,350 2,495
New York State Environmental Fac., PCR
New York City Municipal Water
6.50%, 6/15/14 500 541
7.25%, 6/15/10 500 555
7.50%, 6/15/12 500 552
State Water Revolving Fund
5.75%, 6/15/12 1,000 1,059
6.90%, 5/15/15 665 760
New York State Environmental Fac., PCR
State Water Revolving Fund, 6.90%, 11/15/15750 857
New York State Housing Fin. Agency
Service Contract Obligations
7.25%, 9/15/12 1,700 1,891
7.375%, 9/15/21
(Prerefunded 3/15/02!) 150 170
7.80%, 9/15/20 (Prerefunded 3/15/01!) 500 566
State Univ. Construction
8.00%, 5/1/11 (Escrowed to Maturity) 1,000 1,253
New York State Local Gov't. Assistance
5.00%, 4/1/23 3,000 2,760
6.50%, 4/1/20 3,000 3,218
7.00%, 4/1/21 (Prerefunded 4/1/01!) 900 997
Public Benefit, 6.00%, 4/1/14 2,000 2,158
New York State Medical Care Fac. Fin. Agency
Ellis Hosp., 8.00%, 2/15/08
(FHA Guaranteed) 855 897
Mental Health Services
6.375%, 8/15/10 (FGIC Insured) 450 485
New York Hosp.
6.50%, 8/15/29 (AMBAC Insured) 2,000 2,197
New York State Medical Care Fac. Fin.
Agency
St. Vincent/Staten Island Hosp.
6.125%, 2/15/14 (FHA Guaranteed) $ 385 $ 410
New York State Mortgage Agency
Homeowner Mortgage
6.40%, 4/1/27 * 1,000 1,053
7.50%, 4/1/26 * 3,245 3,514
7.75%, 4/1/16 500 529
7.95%, 10/1/15 1,135 1,160
New York State Thruway Auth., 5.375%, 1/1/274,900 4,804
New York State Urban Dev.
Correctional Capital Fac.
7.00%, 1/1/21 (Prerefunded 1/1/02!) 500 559
Senior Lien, 5.375%, 7/1/22 6,400 6,266
Newburgh, GO, 5.875%, 9/15/97 215 215
Niagara Frontier Transportation
Airport Auth.
Greater Buffalo Int'l. Airport
6.125%, 4/1/14 (AMBAC Insured) * 1,385 1,452
Onondaga County IDA, Community
General Hosp.
6.625%, 1/1/18 500 532
Port Auth. of New York and New Jersey
5.50%, 9/1/12 (MBIA Insured) * 1,000 1,016
5.875%, 7/1/11 * 1,000 1,053
6.75%, 10/1/11 * 1,000 1,083
6.125%, 6/1/94 1,000 1,093
6.50%, 10/1/01 * 600 635
6.50%, 7/15/19 (FGIC Insured) * 2,000 2,160
6.50%, 11/1/26 * 1,500 1,603
6.75%, 4/15/26 (MBIA Insured) * 500 535
Suffolk County IDA, Dowling College,
6.70%, 12/1/20 1,000 1,083
Suffolk County Water Auth., BAN,
VRDN (Currently 3.25%) 1,000 1,000
Syracuse IDA, St. Joseph's Hosp.
Health Center
7.50%, 6/1/18 (Prerefunded 6/1/01!) 1,000 1,124
Triborough Bridge and Tunnel Auth.
5.50%, 1/1/12 2,500 2,595
8.125%, 1/1/12 400 414
United Nations Dev.
5.30%, 7/1/11 1,000 990
United Nations Dev.
5.40%, 7/1/14 $ 1,000 $ 981
Westchester County IDA, Wheelabrator
6.00%, 7/1/08 (AMBAC Insured) * 4,330 4,681
Western Nassau County, Water Auth.
5.65%, 5/1/26 (AMBAC Insured) 1,000 1,010
Total New York (Cost $122,226) 130,156
PUERTO RICO 14.9%
Puerto Rico Aqueduct and Sewer Auth.
7.875%, 7/1/17 (Prerefunded 7/1/98!) 1,000 1,054
Puerto Rico Commonwealth, GO
7.30%, 7/1/20 (Prerefunded 7/1/00!) 250 276
7.625%, 7/1/10 (Prerefunded 7/1/00!) 500 556
8.00%, 7/1/07 (Prerefunded 7/1/98!) 1,500 1,581
Puerto Rico Electric Power Auth.
5.25%, 7/1/21 3,000 2,870
5.50%, 7/1/11 2,000 2,033
7.125%, 7/1/14 1,000 1,068
8.00%, 7/1/08 (Prerefunded 7/1/98!) 100 106
Puerto Rico Highway and Transportation Auth.
5.00%, 7/1/36 1,000 924
5.50%, 7/1/26 2,000 1,969
6.375%, 7/1/08 (FSA Insured) 1,000 1,084
Puerto Rico Infrastructure Fin. Auth.,
Special Tax
7.75%, 7/1/08 2,750 2,891
Puerto Rico Public Building Auth., GO
Gov't. Fac.
5.00%, 7/1/27, (AMBAC Insured) 5,000 4,719
5.25%, 7/1/21 1,890 1,811
Total Puerto Rico (Cost $22,240) 22,942
Total Investments in Securities
99.6% of Net Assets (Cost $144,466) $153,098
Other Assets Less Liabilities 581
NET ASSETS $153,679
_________
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 8
Accumulated net realized gain/loss -
net of distributions (69)
Net unrealized gain (loss) 8,632
Paid-in-capital applicable to 14,031,463 no
par value shares of beneficial interest
outstanding; unlimited number of shares
authorized 145,108
NET ASSETS $153,679
_________
NET ASSET VALUE PER SHARE $ 10.95
_________
* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FSA Financial Security Assurance Corp.
GO General Obligation
IDA Industrial Development 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.
T. Rowe Price New York Tax-Free Funds
Unaudited
Statement of Operations
Money Fund Bond Fund
In thousands
6 Months 6 Months
Ended Ended
8/31/97 8/31/97
Investment Income
Interest income $ 1,575 $ 4,361
Expenses
Investment management 130 324
Custody and accounting 46 51
Shareholder servicing 44 69
Prospectus and shareholder reports 6 11
Legal and audit 4 4
Registration 3 8
Trustees 3 3
Miscellaneous 2 3
Total expenses 238 473
Net investment income 1,337 3,888
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 1 663
Futures - (164)
Net realized gain (loss) 1 499
Change in net unrealized gain or loss
on securities - 1,617
Net realized and unrealized gain (loss) 1 2,116
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 1,338 $ 6,004
_____________________
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Funds
Unaudited
Statement of Changes in Net Assets
In thousands Money Fund Bond Fund
6 Months Year 6 Months Year
Ended Ended Ended Ended
8/31/97 2/28/97 8/31/97 2/28/97
Increase (Decrease)
in Net Assets
Operations
Net investment
income $ 1,337 $ 2,212 $ 3,888 $ 7,284
Net realized
gain (loss) 1 (3) 499 86
Change in net
unrealized
gain or loss - - 1,617 (736)
Increase
(decrease) in
net assets from
operations 1,338 2,209 6,004 6,634
Distributions to shareholders
Net investment
income (1,337) (2,212) (3,888) (7,284)
Capital share
transactions*
Shares sold 44,469 74,643 17,577 30,633
Distributions
reinvested 1,288 2,153 2,949 5,537
Shares redeemed (39,572) (65,104) (13,495) (25,921)
Increase
(decrease) in
net assets from
capital share
transactions 6,185 11,692 7,031 10,249
Net Assets
Increase
(decrease)
during period 6,186 11,689 9,147 9,599
Beginning of
period 82,729 71,040 144,532 134,933
End of period $ 88,915 $ 82,729 $153,679 $144,532
_____________________________________________
*Share information
Shares sold 44,469 74,643 1,624 2,867
Distributions
reinvested 1,288 2,153 272 518
Shares redeeemed (39,572) (65,104) (1,247) (2,435)
Increase
(decrease)
in shares
outstanding 6,185 11,692 649 950
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Funds
Unaudited
August 31, 1997
Notes to Financial Statements
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 New York Tax-Free Money Fund (the Money
Fund) and the New York Tax-Free Bond Fund (the Bond Fund), nondiversified,
open-end management investment companies, are two of the portfolios
established by the trust and commenced operations on August 28, 1986.
Valuation Debt securities are generally traded in the over-the-counter
market. Except for securities held by the Money Fund, investments in
securities 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 held by the Money Fund are valued at amortized cost.
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 that fund, as authorized by the Board of Trustees.
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.
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 each 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 for the Bond Fund, other than
short-term securities, aggregated $54,070,000 and $43,724,000, respectively,
for the six months ended August 31, 1997.
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 Money Fund has unused realized capital loss carryforwards for
federal income tax purposes of $3,000, which expires in 2005. The Bond Fund
has unused realized capital loss carryforwards for federal income tax
purposes of $481,000, of which $452,000 expires in 2003, and $29,000 in 2005.
Each fund intends to retain gains realized in future periods that may be
offset by available capital loss carryforwards.
At August 31, 1997, the aggregate costs of investments for the Money and Bond
Funds for federal income tax and financial reporting purposes were
$88,267,000 and $144,466,000, respectively. For the Money Fund, amortized
cost is equivalent to value; and for the Bond Fund, net unrealized gain
aggregated $8,632,000, of which $8,743,000 related to appreciated investments
and $111,000 to depreciated investments.
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 $25,000 and $55,000 were payable at August 31, 1997 by the
Money and Bond Funds, 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 for the Money and Bond Funds, 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 0.30% for assets
in excess of $80 billion. At August 31, 1997, and for the six months then
ended, the effective annual group fee rates were 0.32% and 0.33%,
respectively. 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, 1999, for the Money Fund
which would cause the fund's ratio of expenses to average net assets to
exceed 0.55%. Pursuant to this agreement, $54,000 of management fees were not
accrued by the Money Fund for the six months ended August 31, 1997, and
$258,000 remains unaccrued from prior periods. Subject to shareholder
approval, the Money Fund may reimburse the manager for these expenses,
provided that average net assets have grown or expenses have declined
sufficiently to allow reimbursement without causing the Money Fund's ratio
of expenses to average net assets to exceed 0.55%.
In addition, each fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which each fund receives
certain other services. The manager computes the daily share price and
maintains the financial records of each fund. T. Rowe Price Services, Inc.,
is each fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the funds. The Money and Bond
Funds incurred expenses pursuant to these related party agreements totaling
approximately $67,000 and $89,000, respectively, for the six months ended
August 31, 1997, of which $13,000 and $17,000, respectively, were payable at
period-end.
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(registered trademark):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
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 New York Tax-Free Funds.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
Invest With Confidence (registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor.
CO4-051 8/31/97
