<PAGE>
FUND PROFILE
July 1, 1999
T. Rowe Price New Jersey Tax-FreeBond Fund
A long-term bond fund for investors seeking income exempt from federal and New
Jersey income taxes.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by
calling 1-800-xxx-xxxx, or by visiting our Web site at www.troweprice.com.
1. What is the fund's objective?
The fund seeks to provide, consistent with prudent portfolio management, the
highest level of income exempt from federal and New Jersey income taxes by
investing primarily in investment-grade New Jersey municipal bonds.
2. What is the fund's principal investment strategy?
We will invest at least 65% of assets in New Jersey municipal bonds. The
fund's weighted average maturity is expected to exceed 15 years.
The fund will generally purchase investment-grade securities, which means
their ratings are within the four highest credit categories (AAA, AA, A, BBB)
as determined by a national rating organization or, if unrated, by T. Rowe
Price. The fund may occasionally purchase below-investment-grade securities
(including
(LOGO)
<PAGE>
those with the lowest or no rating), but no such purchase will be made if it
would cause the fund's noninvestment-grade bonds to exceed 5% of its net
assets.
Investment decisions reflect the manager's outlook for interest rates and the
economy as well as the prices and yields of various securities. For example,
if we expect rates to fall, we may buy longer-term securities to provide
higher yield and appreciation potential. And if our economic outlook is
positive, we may take advantage of the fund's 5% "basket" for
noninvestment-grade bonds. The fund may sell holdings for a variety of
reasons, such as to adjust average maturity or quality or to shift assets
into higher-yielding securities.
The fund sometimes invests in obligations of the Commonwealth of Puerto Rico
and its public corporations (as well as the U.S. territories of Guam and the
Virgin Islands) that are exempt from federal and New Jersey income taxes. The
fund will generally purchase these securities when they offer a comparably
attractive combination of risk and return.
Due to seasonal variations or shortages in the supply of suitable short-term
New Jersey securities, the fund may invest in municipals whose interest is
exempt from federal but not New Jersey income taxes. Every effort will be
made to minimize such investments, but they could compose up to 10% of the
fund's annual income.
. Income from New Jersey municipal securities is exempt from federal and New
Jersey income taxes.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of any of these documents, call 1-800-xxx-xxxx.
3. What are the main risks of investing in the fund?
Any of the following could cause a decline in your fund's price or income.
. Interest rate risk This risk refers to the decline in bond prices that
accompanies a rise in the overall level of interest rates. (Bond prices and
interest rates move in opposite directions.) Generally, the longer the
maturity of a fund or security, the greater its interest rate risk. This risk
is minimal for the money fund.
. Credit risk This is the chance that any of a fund's holdings will have its
credit rating downgraded or will default (fail to make scheduled interest or
principal payments), potentially reducing the fund's income level and share
price.
As of June 1, 1999, the state of New Jersey was rated Aaa by Moody's and AAA
by Standard & Poor's.
The fund may invest a significant portion of assets in securities that are
not general obligations of the state. These may be issued by local
governments or public
<PAGE>
authorities and are rated according to their particular creditworthiness,
which may vary significantly from the state's general obligations.
While generally considered to be of medium quality, securities in the BBB
category may be more susceptible to adverse economic or investing conditions,
and some BBB securities have speculative characteristics. The fund may retain
a security whose credit quality is downgraded after purchase.
. Significant political and economic developments within a state may have
direct and indirect repercussions on virtually all municipal bonds issued in
the state.
. Geographical risk A fund investing within a single state is, by definition,
less diversified geographically than one investing across many states and
therefore has greater exposure to adverse economic and political changes
within that state.
. Political risk This is the chance that a significant restructuring of
federal income tax rates, or even serious discussion on the topic in
Congress, could cause municipal bond prices to fall. The demand for municipal
securities is strongly influenced by the value of tax-exempt income to
investors. Broadly lower income tax rates could reduce the advantage of
owning municipals.
. Other risks The fund may invest in certain sectors with special risks, such
as health care, which could be affected by federal or state legislation,
electric utilities subject to governmental regulation, and private activity
bonds without governmental backing.
The fund's investments in the Commonwealth of Puerto Rico and its public
corporations (as well as the U.S. territories of Guam and the Virgin Islands)
require careful assessment of certain risk factors, including reliance on
substantial federal assistance and favorable tax programs that have recently
become subject to phaseout by Congress.
. Derivatives risk To the extent the fund uses these instruments, it may be
exposed to additional volatility and potential losses.
. Year 2000 risk Organizations, governmental entities, and markets in which
the fund invests will be affected by the Year 2000 problem. While at this
time the fund cannot predict the degree of impact, it is possible that fund
returns could be adversely affected as a result.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The share price and income level of the fund will fluctuate with changing
market conditions and interest rate levels. When you sell your shares, you
may lose money. An investment in the fund is not a deposit of a bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
<PAGE>
4. How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. The fund can be used to generate income or to
diversify a stock portfolio. The higher your tax bracket, the more likely
tax-exempt securities are appropriate. If you can accept the possibility of
share price decline in an effort to achieve income exempt from federal and
New Jersey income taxes, the fund could be an appropriate part of your
overall investment strategy. If you are investing for principal stability and
liquidity, you should consider a money market fund.
The fund is inappropriate for tax-deferred accounts, such as IRAs.
. The fund should not represent your complete investment program or be used
for short-term trading purposes.
5. How has the fund performed in the past?
The bar chart and the average annual total return table indicate risk by
illustrating how much returns can differ from one year to the next. The
fund's past performance is no guarantee of its future returns.
<TABLE>
INSERT BAR
CHART HERE
<CAPTION>
Calendar Year Total Returns
-------------------------------
<S> <C>
1992 9.61%
1993 13.98
1994 -6.09
1995 16.97
1996 3.23
1997 9.11
1998 6.27
-------------------------------
</TABLE>
The fund can also experience short-term performance swings. The best calendar
quarter return during the years depicted in the chart was 6.28% in the first
quarter of 1995, and the worst was -6.09% in the first quarter of 1994.
<TABLE>
Average Annual Total Returns
<CAPTION>
Periods ended December 31, 1998
Since inception
1 year 5 years (04/30/91)
<S> <C> <C> <C> <S>
New Jersey Tax-Free Bond Fund 6.27% 5.63% 7.81%
------------------------------------
Lipper New Jersey Municipal Debt
Funds Average 5.61 5.24 7.31
Lipper New Jersey Municipal Debt
Funds Index 5.75 5.32 7.31
Lehman Municipal Bond Index 6.48 6.23 7.87
-----------------------------------------------------------------------------
</TABLE>
<PAGE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions.
6. What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees.
<TABLE>
Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
---------------------------------------------------------------------------------
<S> <C> <S>
0.42
Management fee %
/a/
-----------------------------------------------
Other expenses 0.23
%
-----------------------------------------------
Total annual fund 0.65
operating expenses %
/a/
-----------------------------------------------
Fee waiver/reimbursement --
%
-----------------------------------------------
Net expenses 0.65
%
---------------------------------------------------------------------------------
</TABLE>
/a//
/To limit the fund's expenses, T. Rowe Price contractually obligated itself
to waive its fees and bear any expenses from March 1, 1999, through February
28, 1999, which would cause the fund's ratio of expenses to average net
assets to exceed 0.65%. Effective March 1, 1999, T. Rowe Price agreed to
extend this expense limitation for a period of two years through February 28,
2001. Fees waived or expenses paid or assumed under these agreements are
subject to reimbursement to T. Rowe Price by the fund whenever the fund's
expense ratio is below 0.65%; however, no reimbursement will be made after
February 28, 2001 (for the first agreement), or February 28, 2003 (for the
second agreement), or if it would result in the expense ratio exceeding
0.65%. Any amounts reimbursed have the effect of increasing fees otherwise
paid by the fund.
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, the expense limitation currently in place is not renewed, you
invest $10,000, you earn a 5% annual return, and you hold the investment for
the following periods:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
$66 $ $ $
208 362 810
----------------------------------------------------
</TABLE>
<PAGE>
7. Who manages the fund?
The fund is managed by T. Rowe Price Associates, Inc. (T. Rowe Price).
Founded in 1937, T. Rowe Price and its affiliates manage investments for
individual and institutional accounts. The company offers a comprehensive
array of stock, bond, and money market funds directly to the investing
public.
William F. Snider manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since 1994. He joined T. Rowe Price in 1991 and
has been managing investments since 1993.
8. How can I purchase shares?
Fill out and return a New Account Form in the postpaid envelope, along with
your check. The minimum initial purchase is $2,500 or $50 if investing
through Automatic Asset Builder. The minimum subsequent investment is $100.
You can also open an account by bank wire, by exchanging from another T. Rowe
Price fund, or by transferring assets from another financial institution.
9. How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer free exchange among our entire
family of domestic and international funds. Restrictions may apply in special
circumstances, and some redemption requests need a signature guarantee. A $5
fee is charged for wire redemptions under $5,000.
10. When will I receive income and capital gain distributions?
The fund distributes income daily and capital gains, if any, at year-end.
Although most income will not be subject to federal income tax, short-term
gains are taxable at ordinary income rates and long-term gains are taxable at
the current capital gains rate. Income from certain "private activity" bonds
may be taxable for those investors subject to the alternative minimum tax
(AMT). Distributions are reinvested automatically in additional shares unless
you choose another option, such as receiving a check.
11. What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
<PAGE>
. asset manager accounts.
<PAGE>
To Open a Mutual Fund, Asset Manager, or Brokerage Account
Investor Services
1-800-xxx-xxxx
For Information on Existing Accounts
Shareholder Services
1-800-225-5132
For Yields and Prices and Account Transactions
Tele*Access/(R)/
1-800-638-2587 24 hours, 7 days
For Fund Information and Account Transactions on the Internet
www.troweprice.com
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
Headquarters
100 East Pratt Street Baltimore, MD 21202
<PAGE>
NEW ACCOUNT FORM (LOGO)
You may purchase shares of a T. Rowe Price fund after
reviewing the information in the profile or after requesting
and reviewing the fund's prospectus (and other information).
Please note: an IRA will not be established using this form.
If you want to open an IRA, call 1-800-638-5660 to request
an IRA New Account Form.
Mail this form to: T. Rowe Price
P.O. Box 17300, Baltimore, MD 21298-9353
For help with this form, call toll free 1-800-638-5660.
Please do not remove the mailing label from this form.
1 PROVIDE YOUR TAX IDENTIFICATION NUMBER
Owner's or Minor's Social Security or Tax ID Number
(Use Minor's Social Security Number for Custodial Account)
_ _ _ _ _ _ _ _ _
Joint Owner's or Custodian's Social Security or Tax ID Number
_ _ _ _ _ _ _ _ _
2 DESIGNATE TYPE OF ACCOUNT AND OWNER NAME(S)
Please print in CAPITAL LETTERS. Choose one:
__ Individual or Joint Account.*
*Joint tenancy with right of survivorship unless you instruct otherwise.
Owner's Name (First, Middle Initial, Last)
________________________________
Title: Mr. Ms. Mrs. Dr.
Joint Owner's Name (First, Middle Initial, Last)
________________________________
Title: Mr. Ms. Mrs. Dr.
__ Custodial Account.
Uniform Gift or Transfer to Minors Act (UGMA or UTMA)
Custodian's Name (First, Middle Initial, Last)
________________________________
Minor's Name (First, Middle Initial, Last)
________________________________
State of Residence (Minor's or Custodian's)
________________________________
__ Trust, Corporation, Business, or Other Entity Account.*
*Please attach the first and last pages of the trust agreement or a copy
of
the corporate resolution.
Name of Trust, Corporation, or Other Entity
_________________________________________________________
Trustee Names or Type of Entity
________________________________________________________
<PAGE>
Name of Trust Beneficiary (Optional) Date of Trust Agreement
________________ __-__-__
month day year
__ Check this box if your organization is incorporated or tax-exempt under
Section 501(a) of the Internal Revenue Code, a qualified retirement plan
under Section 401(a), or a custodial account under Section 403(b)(7),
and
you DO NOT want us to file information returns on your behalf.
3 PROVIDE YOUR ADDRESS
Street Address or P.O. Box
__________________________________________________
__________________________________________________
City State
____________________ __
ZIP Code
_ _ _ _ _ - _ _ _ _
4 PROVIDE OTHER ACCOUNT DATA
Daytime Phone Ext.
_ _ _ _ _ _ - _ _ _ _ _ _ _ _
Evening Phone Ext.
_ _ _ _ _ _ - _ _ _ _ _ _ _ _
Date of Birth (Owner/Minor)
Date of Birth (Joint Owner/Custodian)
_ _ - _ _ - _ _ _ _ - _ _ - _ _
month day year month day year
__ U.S. Citizen __ Resident Alien
__ Nonresident Alien. My permanent foreign address for tax purposes is:
_____________________________________
_____________________________________
Owner's Occupation / Employer Name (Optional)
_____________________________________
Employer Address (Optional)
__________________________________________________________________________
5 SELECT YOUR FUND(S)
Please print the fund name(s) exactly as listed inside the Investment Kit you
received with this form. Fill in the amount of your investment for each fund.
The minimum initial investment is $2,500 per fund ($1,000 for UGMAs/UTMAs)
but is waived if you use Automatic Asset Builder (see Sections 6 and 7E).
Fund Name Amount
__________________________________ $________
Fund Name Amount
__________________________________ $________
Fund Name Amount
__________________________________ $________
<PAGE>
Fund Name Amount
__________________________________ $________
Total Investment$________
6 CHOOSE YOUR INVESTMENT METHOD
A. __ By check.
Make payable to T. Rowe Price Funds. (Otherwise it may be returned.)
B. __ By Automatic Asset Builder.
See Section 7E for instructions.
C. __ By wire.
Please call 1-800-225-5132 for the following information and wiring
instructions:
Account Number
_ _ _ _ _ _ _ _ _ _ - _
Date of Wire
_ _ - _ _ - _ _
month day year
(over, please)
7 SELECT YOUR ACCOUNT SERVICE OPTIONS
A. TO RECEIVE YOUR DISTRIBUTIONS
Your dividends and capital gains will be reinvested unless you indicate
------
otherwise.
__ Pay dividends and capital gains to me by check.
__ Transfer dividends and capital gains to my bank account.
(Please complete Section 7C if you elect this option.)
__ Pay dividends to me by check and reinvest capital gains.
B. TO EXCHANGE AND REDEEM FUND SHARES
You can use the telephone or your personal computer to check your account
balance, redeem shares, or make exchanges among any identically registered
accounts unless you check the boxes below.
------
__ I do NOT want telephone/computer exchange.
__ I do NOT want telephone/computer redemption.
C. TO MAKE TRANSFERS BETWEEN YOUR BANK AND T. ROWE PRICE
This service makes purchasing or redeeming fund shares even more convenient.
Simply call a T. Rowe Price representative or Tele*Access (R) and your
transaction
will be processed by electronically moving money between your bank
account and your mutual fund accounts.
Transfers occur only when you initiate them ($100 minimum) and are made
through the Automated Clearing House (ACH) network or by wire.* This service
becomes available approximately 20 days after your application is
processed. Since you initiate transfers by phone or computer, be sure that
you did not decline the phone/computer redemption service above.
<PAGE>
__ Check this box to set up this service. YOU MUST ALSO ATTACH A BLANK,
VOIDED CHECK (other than your investment check) from your bank
account to this form.
Any co-owner of your bank account who is not a co-owner of
---
your mutual fund account must sign below.
X___________________________________________
Bank Account Co-owner's Signature
*There is a $5 fee for wire redemptions under $5,000 but no fee for ACH
transactions.
ATTACH VOIDED CHECK HERE
D. TO SET UP CHECKWRITING
You can write checks for $500 or more on all T. Rowe Price money market and
bond fund accounts (except the High Yield and Emerging Markets Bond funds).
Those authorized to write checks should read the checking agreement and sign
below.
By signing this form, I agree to all of State Street Bank's checking account
rules, and to any conditions and limitations on redeeming checks from the
T. Rowe Price Funds. I also agree that:
(1) This form applies to any other identically registered T. Rowe Price
fund checking account I establish later;
(2) If I am subject to IRS backup withholding, I may write checks only on
money fund accounts;
(3) State Street Bank and the Fund reserve the right to change, revoke, or
close any checking account;
(4) The signatures are authentic, and, for organizations, I have submitted
an original or certified resolution authorizing the individuals with legal
capacity to sign and act on behalf of the organization.
(Do not detach this section from the rest of the form.)
_____________________________________________________
Fund Name Fund Name
_____________________________________________________
Print Name of Owner, Custodian, or Trustee
X___________________________________________________
Signature Date
_____________________________________________________
Print Name of Joint Owner, Co-trustee, Corporate Officer, etc.
X___________________________________________________
Signature Date
How many signatures do you require on checks?
__ Only one owner __ All owners
G00-008 6/30/98
<PAGE>
E. TO SET UP AUTOMATIC ASSET BUILDER
This service allows you to automatically invest in your fund account through
your
bank account and/or payroll deduction each month (minimum $50 per fund).
___ Check this box to invest from your bank account.
Be sure to complete Section 7C and fill in the information below.
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
__________________________________ ____
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
_____________________ ___
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
_____________________ ___
Fund Name
__________________________________________________________________________
Amount Day of Month You Would Like to Invest
_____________________ ___
____ Check this box to invest through payroll deduction.
T. Rowe Price will mail you instructions for this service.
8 SIGN YOUR NEW ACCOUNT FORM
By signing this form, I certify that:
- - I agree to be bound by the terms of the prospectus for each fund in which
I am investing. If I am purchasing shares after reviewing a fund profile, I
understand that I will receive the prospectus after I purchase shares in the
fund. I have the authority and legal capacity to purchase mutual fund shares,
am of legal age in my state, and believe each investment is suitable for me.
- - I authorize T. Rowe Price, the Funds, their affiliates and agents to act on
any
instructions believed to be genuine for any service authorized on this form,
including telephone/computer services. The Funds use reasonable procedures
(including shareholder identity verification) to confirm that instructions
given by telephone/computer are genuine, and the Funds are not liable for
acting on these instructions. (If these procedures are not followed, it is the
opinion of certain regulatory agencies that the Funds may be liable for any
loss that may result from acting on instructions given.) I understand that
anyone who can properly identify my account(s) can make phone/computer
transactions on my behalf.
- - The Funds can redeem shares from my account(s) to reimburse a fund for
any loss due to nonpayment or other indebtedness.
<PAGE>
- - By selecting the electronic transfer service in Section 7C, I hereby authorize
T. Rowe Price to initiate credit and debit entries to my (our) account at the
Financial Institution indicated and for the Financial Institution to credit or
debit the same to such account through the Automated Clearing House
(ACH) system, subject to the rules of the Financial Institution, ACH, and the
Fund. T. Rowe Price may correct any transaction error with a debit or credit
to my Financial Institution account and/or Fund account. THIS AUTHORIZATION,
including any credit or debit entries initiated thereunder, is in full
force and effect until I notify T. Rowe Price of its revocation by telephone
or in writing and T. Rowe Price has had sufficient time to act on it.
- - Under penalties of perjury, the tax identification number(s) shown on
this form is correct. If I fail to give the correct number or fail to sign this
form, T. Rowe Price may reject, restrict, or redeem my investment. I may
also be subject to IRS backup withholding (currently 31%) on all
distributions and redemptions, and I may be subject to a $50 IRS penalty.
- - Under penalties of perjury, I am NOT subject to IRS backup withholding
because 1) I have not been notified, or 2) notification has been revoked
(cross out "NOT" if you are currently subject to withholding), or 3) I have
indicated in Section 4 that I am a nonresident alien and certify that for
dividends I am not a U.S. citizen or resident (or I am filing for a foreign
corporation, partnership, estate, or trust).
- - For clarification on any of these certification issues, please contact us for
assistance.
- - The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding.
PLEASE SIGN HERE
X__________________________________________________
Signature of Owner, Custodian, or Trustee Date
X__________________________________________________
Signature of Joint Owner, Co-trustee, Corporate Officer, etc. Date
Thank you for your investment. You will receive a confirmation shortly.
8
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