<PAGE>
Semiannual Report
MARYLAND
TAX-FREE
FUNDS
T. ROWE PRICE
---------------
AUGUST 31, 1999
---------------
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
-------------------------
Maryland Tax-Free Funds
. Strong economic growth and rising interest rates hurt returns for municipal
bond investors.
. The Maryland Short-Term Tax-Free Bond Fund's income helped it post a small
six-month gain, though it modestly trailed its Lipper peer group.
. The Maryland Tax-Free Bond Fund's returns were negative, but the fund
performed better than its Lipper average.
. Demand in the Maryland market is outpacing supply, helping to overcome
price weakness in the broad market.
. While rates could trend higher, Maryland bonds are currently offering
attractive yields to taxable investors.
UPDATES AVAILABLE
For updates on each fund following the end of every calendar quarter, please see
our Web site at WWW.TROWEPRICE.COM.
<PAGE>
FELLOW SHAREHOLDERS
Above-average economic growth during the six months ended August 31 was good for
U.S. consumers but not so good for bond investors. Interest rates rose
throughout the period as investors worried about a buildup in inflationary
pressures and the possibility -- which became an actuality -- of monetary
tightening by the Federal Reserve. Resulting declines in bond prices weighed
upon all municipal bond funds for the period, leading to mixed results for your
funds.
- -----------------------
Maryland Bond Yields
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Maryland Maryland 3-Year
Bond Index General Obligation Bond
8/31/98 5 3.7
4.82 3.5
4.97 3.5
30-Nov 4.97 3.6
4.95 3.55
4.86 3.45
28-Feb 5 3.58
5.02 3.65
5.04 3.6
31-May 5.15 3.78
5.37 4.1
5.39 4.08
8/31/99 5.62 4.18
MARKET ENVIRONMENT
The U.S. economy continued its robust growth, driven by exuberant
consumer spending. Although broad inflation measures did not rise
appreciably, tight labor markets, low unemployment, and a rebound
in energy prices raised fears that inflationary pressures were
building. The fixed income markets reacted nervously to these
developments as well as to the increasing likelihood of action by
the Federal Reserve. As summer approached, Fed Chairman Alan
Greenspan served clear warning that the central bank would act to
preempt a rise in inflation. Actions soon followed words as the
Fed raised key short-term interest rates on June 30 and again on
August 24, pushing the federal funds target rate up a total of 50
basis points (one-half of a percentage point) to 5.25%. With
these moves the Fed effectively rescinded two of its three rate
reductions of the previous fall, when it had moved swiftly to
ease a global financial crisis. Indeed, the beginnings of
recovery in many of the Asian and Latin American nations most
affected by that crisis helped push the U.S. dollar lower and
interest rates higher.
1
<PAGE>
- ---------------------------------------------
Market Changes Spell Higher Tax-free Yields
- --------------------------------------------------------------------------------
Structural changes are taking place in the fixed income markets resulting in
higher tax-free yields for investors.
The chart below tracks the yield on 30-year, AAA general obligation municipal
bonds as a percentage of long-term Treasury bond yields since 1981.
Historically, the yield on these municipal bonds has averaged about 85% of the
Treasury yield. This discount reflected both the tax benefit of municipals and
uncertainty about future tax laws. Investors in the 31% federal tax bracket, for
example, keep only 69% of their income from taxable bonds. Therefore, they would
logically be attracted to high-quality municipal bonds offering 85% or more of
the prevailing Treasury yield.
The sharp spike in municipal yields in 1986 reflects the tax reform debate,
which posed a threat to municipal bonds' federal tax exemption. Accordingly,
municipal bond yields reached parity with Treasury yields. However, when the Tax
Reform Act of 1986 left the tax benefit intact, municipal bond prices rose
sharply until yields had fallen to more normal levels.
Recently, different forces have been at work that go beyond the impact of 1998's
global financial crisis. At that time, shaky world markets prompted foreign
investors (who have no need for U.S. tax-exempt bonds) to buy Treasuries, and
Treasury yields plunged to near parity with municipals.
Since then, Treasury yields have returned to pre-crisis levels, but municipal
yields are again unusually high at about 94% of Treasury yields. According to
Mary Miller, director of the T. Rowe Price municipal bond department, the
current relationship is "illogical from a tax standpoint" but unlikely to change
soon.
For one thing, the supply of Treasury debt is shrinking due to the federal
budget surplus, while outstanding municipal supply continues to grow. In
addition, the supply of taxable bonds outside of Treasuries--including
corporate, asset-backed and mortgage-backed bonds--has also risen, and this has
created more competition in the market. As a result, even as tax-exempt yields
have risen in relation to Treasury yields over the past two years, they have
fallen in relation to the yields on other high-quality taxable bonds.
Over time, income makes up the vast majority of a bond investor's total return.
Therefore, these developments have given investors the opportunity to earn
higher-than-expected tax-free income with little or no sacrifice of credit
quality.
[LINE GRAPH APPEARS HERE]
Treasury Ratio Treasury Average
79 84.5
78.4 84.5
'81 83.2 84.5
'82 82.1 84.5
'83 78.4 84.5
'84 77.6 84.5
'85 84.5 84.5
'86 93.1 84.5
'87 83.6 84.5
'88 81.7 84.5
'89 85.4 84.5
'90 80.7 84.5
'91 83.2 84.5
'92 82.4 84.5
'93 87 84.5
'94 81.9 84.5
'95 87.9 84.5
'96 80.9 84.5
'97 81 84.5
'98 93.8 84.5
8/99 92.3 84.5
2
<PAGE>
MARYLAND'S FISCAL HEALTH CONTINUED TO BE EXEMPLARY.
Interest rates rose across all maturities, with the bellwether
30-year Treasury bond rising from around 5% at the beginning of
the year to over 6% for the first time since mid-1998. Short-term
yields rose a bit more than intermediate- and long-term bonds
over the period. This created a flatter yield curve -- a typical
occurrence when the Fed is actively raising short-term rates.
Maryland short- and long-term municipal bond yields also rose
steadily throughout the period, as shown in the chart on page 1.
Municipals were helped by strong seasonal demand in July from the
proceeds of maturing bonds and distributed income. For much of
the period under review, Maryland bond returns compared favorably
with their taxable counterparts, despite overall price declines.
In August, however, this trend changed. A heavy supply of
corporate bonds came to market, pushing up yields on these
taxable bonds and attracting "crossover" institutional buyers --
those who buy either corporate or municipal bonds depending on
their after-tax yields. The drop in demand for municipals from
these institutional investors, some of whom also sold municipals
from their portfolios, came at a time when dealers were reluctant
to add to their bond inventories. The combination created a weak
market tone. After outperforming taxable bonds through July,
municipals lost ground in August, and their performance fell in
line with the taxable side for the entire six-month period.
Maryland's fiscal health continued to be exemplary. Statewide
economic expansion and strong employment growth nudged tax and
interest revenues 4.5% above expectations, despite a significant
income tax cut. As a result, the state recorded a $320 million
surplus for its 1999 fiscal year. According to law, $310 million
of the surplus will be allocated to the revenue stabilization
account -- a "rainy day" fund that already exceeds $1.5 billion.
The Department of Budget and Management projects that the state's
budget will remain in balance through the 2001 fiscal year.
Maryland plans to put its assets to work by expanding its fiscal
year 2000 budget 4.7%, and one of its primary initiatives is to
significantly increase education funding. The state has
authorized $445 million in new general obligation bonds for the
coming year, of which $250 million will go to local school
construction -- the largest amount for this purpose since fiscal
year 1973.
3
<PAGE>
MARYLAND SHORT-TERM TAX-FREE BOND FUND
The rising interest rate environment did not affect your fund as
much as it did longer-term funds, but it did hold back returns.
We posted a small 0.06% gain, as a healthy income stream
compensated for a $0.09 decline in price per share. Dividends per
share changed only modestly from the previous 6- and 12-month
periods. This showing moderately lagged the results for the
fund's Lipper benchmark, which in this case measures national
municipal funds. The high quality of the Maryland municipal
market sometimes limits our options for investing in
higher-yielding issues, a restraint not always faced by funds
investing nationally.
-----------------------
Performance comparison
-----------------------------------------------------
Periods
Ended 8/31/99 6 Months 12 Months
-----------------------------------------------------
Maryland Short-Term
Tax-Free Bond Fund 0.06% 2.34%
-----------------------------------------------------
Lipper Short Municipal
Debt Funds Average 0.42 2.51
-----------------------------------------------------
As is often the case, managing duration was our chief
responsibility during the period. (Duration is a measure of price
sensitivity to changes in interest rates. A fund having a
duration of two years will have a 2% appreciation or decline in
price in response to a one-percentage-point fall or rise,
respectively, in interest rates.) Our longer-term strategy has
been to maintain the portfolio's duration and weighted average
maturity close to the maximum allowed by the prospectus, because
three-year bonds generally offer better yields and appreciation
potential than one-year bonds. We repeatedly sell bonds as they
roll into the one-year maturity range (typically to money market
investors, who may offer a premium for them) and buy three-year
bonds. This process cannot be conducted indiscriminately,
however. In recent years, supply of three-year bonds has been
tight and prices haven't always been attractive. We've taken
extra steps, such as staggering portfolio maturity dates, to
minimize the challenges we face when reinvesting assets.
Rising rate environments also impel us to alter our interest rate
strategy, because keeping the portfolio at its maximum duration
increases our susceptibility to price losses. Early in the
period, we sought to forestall declines by trimming interest rate
exposure. As the period wore on, however, the yields on bonds
with three- or four-year maturities reached levels not seen since
September 1997. We stepped in aggressively to take advantage,
and, as a result, duration fell only slightly to 2.2 years from
2.3 years last February. In Maryland the
4
<PAGE>
demand for issues with good yields often outstrips supply, and we
felt that in the long term this strategy would pay off.
The longer issues we purchased were often local general
obligation bonds, and exposure to this sector doubled to 16% of
assets from the previous period. Money for the purchases came
mostly from other high-quality sectors, such as state general
obligations or prerefunded bonds, so that the weighted average
quality of the portfolio remained unchanged at AA.
MARYLAND TAX-FREE BOND FUND
In a difficult interest rate environment, your fund posted a
total return of -2.77% for the six months. A decline in net asset
value from $10.73 to $10.16 during the period was responsible for
the loss and also for the essentially flat 12-month results.
However, the fund performed better than its Lipper benchmark for
both periods. A high level of income helped relative results, as
did the fund's modest expense ratio, which is well below its
category's average.
- -----------------------
Performance comparison
- --------------------------------------------------------
Periods Ended 8/31/99 6 Months 12 Months
- --------------------------------------------------------
Maryland Tax-Free
Bond Fund - 2.77% - 0.49%
- --------------------------------------------------------
Lipper Maryland Municipal
Debt Funds Average - 2.83 - 0.96
- --------------------------------------------------------
We modified our strategic goals somewhat as 1998's bond-friendly
environment gave way to this year's more negative climate. At the
beginning of 1999, we were chiefly concerned that falling rates
might cause the fund's duration to shorten as long-term bonds
began trading to their call dates -- that is, the market reacted
as if issuers would retire their debt before its stated maturity.
(See the Maryland Short-Term Tax-Free Bond Fund section for an
explanation of duration.) In the early part of the period,
therefore, we used the proceeds of maturing bond positions to buy
long-term bonds with the highest available market yields to
increase the fund's income and price appreciation potential. We
stuck to this plan through May.
As rates rose in the late spring and summer, however, long-term
issues fell in value. We shifted into bonds with more defensive
characteristics -- primarily those with higher coupons and
shorter maturities -- and took steps to combat duration
extension. The portfolio's duration can
5
<PAGE>
THE FUND'S AVERAGE CREDIT QUALITY REMAINED HIGH, ENDING THE PERIOD AT AA-...
become longer -- "extend" -- when holdings that had been trading
to early call dates begin trading to their later maturity dates.
(Although our weighted average maturity as of August 31 was
slightly shorter than six months ago, duration was significantly
longer due to this effect.) We also sought to improve the fund's
dividend yield by selling bonds at losses and replacing them with
new, higher-yielding positions. Realizing losses also helps us
reduce or avoid taxable distributions of capital gains. These
steps helped our performance relative to our peers, but only by a
modest amount.
While it is never pleasant to weather a period of rising interest
rates, the Maryland market performed better than the national
average for municipal bonds. This was, in part, due to a 39%
decline in new issues versus the first eight months of 1998.
Strong demand from Maryland residents for bonds as interest rates
rose also helped cushion the negative price effects of the rate
environment.
The fund's average credit quality remained high, ending the
period at AA- by our analysts' measures and even higher using the
rating agencies (as reported in the Key Statistics table that
follows this letter). Shifts in sector exposure were modest
during the period, although hospital bonds dropped from 17% to
12% of assets while state and local general obligation debt grew
from 13% to 18%. We reduced hospital holdings because they
continued to show poor financial performance, and increased our
positions in state and local general obligation debt, which has
been benefiting from the strong state economy. As discussed in
the market environment section, the Maryland economy is firing on
all cylinders, keeping state and local tax coffers full.
OUTLOOK
Interest rates could move higher in coming months because of
persistent strength in the domestic economy and economic recovery
overseas. The Fed is keeping a close eye on inflationary
pressures, particularly in the labor markets, and could tighten
another 25 basis points if it intends to move the federal funds
rate back to its level of a year ago. However, the Fed is also
interested in maintaining a liquid and orderly market as we
approach the end of the year and the
6
<PAGE>
transition to 2000, which could serve to moderate future rate
increases. At the same time, the increase in rates so far this
year could be enough to slow certain sectors of the economy.
These crosscurrents do not argue for an aggressive posture
regarding interest rates. At present, we are focusing on the
higher yields available in the marketplace and on the current
appeal of tax-free municipal bonds relative to taxable
securities, as discussed on page 2.
We continue to be impressed by the strength of the Maryland
economy and the steady demand from investors for Maryland
tax-free bonds.
Respectfully submitted,
/s/ Charles B. Hill
Charles B. Hill
Chairman of the Investment Advisory Committee
Maryland Short-Term Tax-Free Bond Fund
/s/ Mary J. Miller
Mary J. Miller
Chairman of the Investment Advisory Committee
Maryland Tax-Free Bond Fund
September 20, 1999
7
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
KEY STATISTICS
2/28/99 8/31/99
Maryland Short-Term Tax-Free Bond Fund
- --------------------------------------------------------------------------------
Price Per Share $5.17 $5.08
- --------------------------------------------------------------------------------
Dividends Per Share
- --------------------------------------------------------------------------------
For 6 months 0.10 0.09
--------------------------------------------------------------------------
For 12 months 0.19 0.19
--------------------------------------------------------------------------
Dividend Yield *
- --------------------------------------------------------------------------------
For 6 months 3.80% 3.67%
--------------------------------------------------------------------------
For 12 months 3.85 3.80
--------------------------------------------------------------------------
30-Day Standardized Yield 2.93 3.68
- --------------------------------------------------------------------------------
Weighted Average Maturity (years) 2.6 2.5
- --------------------------------------------------------------------------------
Weighted Average Effective Duration (years) 2.3 2.2
- --------------------------------------------------------------------------------
Weighted Average Quality ** AA AA
- --------------------------------------------------------------------------------
Maryland Tax-Free Bond Fund
- --------------------------------------------------------------------------------
Price Per Share $ 10.73 $ 10.16
- --------------------------------------------------------------------------------
Dividends Per Share
- --------------------------------------------------------------------------------
For 6 months 0.27 0.27
--------------------------------------------------------------------------
For 12 months 0.54 0.54
--------------------------------------------------------------------------
Dividend Yield *
- --------------------------------------------------------------------------------
For 6 months 5.15% 5.27%
--------------------------------------------------------------------------
For 12 months 5.21 5.42
--------------------------------------------------------------------------
30-Day Standardized Yield 4.03 4.75
- --------------------------------------------------------------------------------
Weighted Average Maturity (years) 15.8 15.7
- --------------------------------------------------------------------------------
Weighted Average Effective Duration (years) 6.9 7.5
- --------------------------------------------------------------------------------
Weighted Average Quality ** AA AA
- --------------------------------------------------------------------------------
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the fund's net asset value at the end of the period.
** Based on T. Rowe Price research.
8
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
2/28/99 8/31/99
Maryland Short-Term Tax-Free Bond Fund
- --------------------------------------------------------------------------------
Prerefunded Bonds 32% 28%
- --------------------------------------------------------------------------------
General Obligation -- Local 8 16
- --------------------------------------------------------------------------------
Hospital Revenue 11 10
- --------------------------------------------------------------------------------
Educational Revenue 10 10
- --------------------------------------------------------------------------------
Solid Waste Revenue 10 8
- --------------------------------------------------------------------------------
General Obligation -- State 10 7
- --------------------------------------------------------------------------------
Life Care/Nursing Home Revenue 6 5
- --------------------------------------------------------------------------------
Ground Transportation Revenue 4 4
- --------------------------------------------------------------------------------
Lease Revenue 3 3
- --------------------------------------------------------------------------------
Water and Sewer Revenue - 2
- --------------------------------------------------------------------------------
Dedicated Tax Revenue - 2
- --------------------------------------------------------------------------------
Miscellaneous Revenue - 2
- --------------------------------------------------------------------------------
All Other 7 4
- --------------------------------------------------------------------------------
Other Assets Less Liabilities - 1 - 1
- --------------------------------------------------------------------------------
Total 100% 100%
Maryland Tax-Free Bond Fund
- --------------------------------------------------------------------------------
Prerefunded Bonds 16% 15%
- --------------------------------------------------------------------------------
Housing Finance Revenue 14 14
- --------------------------------------------------------------------------------
Hospital Revenue 17 12
- --------------------------------------------------------------------------------
General Obligation - Local 9 10
- --------------------------------------------------------------------------------
General Obligation - State 4 8
- --------------------------------------------------------------------------------
Educational Revenue 6 5
- --------------------------------------------------------------------------------
Miscellaneous Revenue 3 5
- --------------------------------------------------------------------------------
Ground Transportation Revenue 5 5
- --------------------------------------------------------------------------------
Water and Sewer Revenue 3 4
- --------------------------------------------------------------------------------
Escrowed to Maturity 5 4
- --------------------------------------------------------------------------------
Solid Waste Revenue 4 4
- --------------------------------------------------------------------------------
Lease Revenue 4 4
- --------------------------------------------------------------------------------
Dedicated Tax Revenue 3 3
- --------------------------------------------------------------------------------
Electric Revenue 3 3
- --------------------------------------------------------------------------------
Life Care/Nursing Home Revenue 2 2
- --------------------------------------------------------------------------------
All Other 3 2
- --------------------------------------------------------------------------------
Other Assets Less Liabilities - 1 -
- --------------------------------------------------------------------------------
Total 100% 100%
9
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
These charts show the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with benchmarks, which may include
a broad-based market index and a peer group average or index. Market indexes
do not include expenses, which are deducted from fund returns as well as
mutual fund averages and indexes.
MARYLAND SHORT-TERM TAX-FREE BOND FUND
----------------------------------------------------------------------------
Lehman 3-Year State Lipper Short Municipal Maryland Short-Term
GO Bond Index Debt Funds Average Tax-Free Bond Fund
1/29/93 10,000 10,000 10,000
8/93 10,358 10,307 10,381
8/94 10,625 10,532 10,613
8/95 11,348 11,032 11,204
8/96 11,790 11,446 11,596
8/97 12,429 11,988 12,083
8/98 13,147 12,576 12,681
8/99 13,526 12,897 12,978
MARYLAND TAX-FREE BOND FUND
----------------------------------------------------------------------------
Lehman Municipal Lipper Maryland Municipal Maryland Tax-Free
Bond Index Debt Funds Average Bond Fund
8/89 10,000 10,000 10,000
8/90 10,642 10,415 10,455
8/91 11,897 11,567 11,601
8/92 13,225 12,757 12,843
8/93 14,838 14,255 14,534
8/94 14,859 14,183 14,462
8/95 16,176 15,293 15,608
8/96 17,024 16,042 16,422
8/97 18,598 17,385 17,806
8/98 20,207 18,783 19,307
8/99 20,307 18,717 19,214
- ------------------------------------
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.
Since Inception
Periods Ended 8/31/99 1 Year 5 Years 10 Years Inception Date
- --------------------------------------------------------------------------------
Maryland Short-Term
Tax-Free Bond Fund 2.34% 4.11% - 4.04% 1/29/93
- --------------------------------------------------------------------------------
Maryland Tax-Free Bond Fund - 0.49 5.85 6.75% - 3/31/87
- --------------------------------------------------------------------------------
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
6 Months Year
Ended Ended
8/31/99 2/28/99 2/28/98 2/28/97 2/29/96 2/28/95
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 5.17 $ 5.14 $ 5.11 $ 5.15 $ 5.04 $ 5.09
--------------------------------------------------------------------------------------------------
Investment activities
Net investment income 0.09* 0.19* 0.20* 0.20* 0.21* 0.18*
--------------------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) (0.09) 0.03 0.03 (0.04) 0.11 (0.05)
--------------------------------------------------------------------------------------------------
Total from
investment activities -- 0.22 0.23 0.16 0.32 0.13
--------------------------------------------------------------------------------------------------
Distributions
Net investment income (0.09) (0.19) (0.20) (0.20) (0.21) (0.18)
--------------------------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 5.08 $ 5.17 $ 5.14 $ 5.11 $ 5.15 $ 5.04
--------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C> <C>
Total returnu 0.06%* 4.46%* 4.56%* 3.26%* 6.49%* 2.64%*
--------------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.60%*+ 0.62%* 0.65%* 0.65%* 0.65%* 0.65%*
--------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 3.61%*+ 3.80%* 3.89%* 3.98%* 4.14%* 3.59%*
--------------------------------------------------------------------------------------------------
Portfolio turnover rate 22.4%+ 46.4% 60.4% 21.4% 39.3% 105.3%
--------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 128,867 $ 122,552 $ 109,424 $ 102,252 $ 85,784 $ 74,808
--------------------------------------------------------------------------------------------------
</TABLE>
. Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.65% voluntary expense limitation in effect
through 6/30/98, and a 0.60% voluntary expense limitation in effect from
7/1/98 through 2/28/01.
+ Annualized
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- ----------------------------------------------------------------------------------------------------------------------------------
6 Months Year
Ended Ended
8/31/99 2/28/99 2/28/98 2/28/97 2/29/96 2/28/95
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 10.73 $ 10.67 $ 10.35 $ 10.40 $ 9.99 $ 10.45
--------------------------------------------------------------------------------------------------
Investment activities
Net investment income 0.27 0.54 0.55 0.56 0.57 0.56
Net realized and
unrealized gain (loss) (0.56) 0.06 0.32 (0.05) 0.41 (0.42)
--------------------------------------------------------------------------------------------------
Total from
investment activities (0.29) 0.60 0.87 0.51 0.98 0.12
--------------------------------------------------------------------------------------------------
Distributions
Net investment income (0.27) (0.54) (0.55) (0.56) (0.57) (0.56)
Net realized gain (0.01) -- -- -- -- (0.02)
--------------------------------------------------------------------------------------------------
Total distributions (0.28) (0.54) (0.55) (0.56) (0.57) (0.58)
--------------------------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 10.16 $ 10.73 $ 10.67 $ 10.35 $ 10.40 $ 9.99
--------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C> <C>
Total return (2.77)% 5.80% 8.68% 5.12% 10.00% 1.43%
--------------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.51%+ 0.51% 0.51% 0.54% 0.54% 0.57%
--------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 5.06%+ 5.10% 5.31% 5.47% 5.53% 5.73%
--------------------------------------------------------------------------------------------------
Portfolio turnover rate 28.7%+ 15.4% 19.2% 26.2% 23.9% 28.9%
--------------------------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 1,049 $ 1,063 $ 926 $ 820 $ 799 $ 725
--------------------------------------------------------------------------------------------------
</TABLE>
. Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Unaudited August 31, 1999
<TABLE>
<CAPTION>
- -----------------------
Statement of Net Assets Par Value
- ---------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
MARYLAND 94.4%
Anne Arundel County, GO
Consolidated Solid Waste
5.75%, 2/1/04 * $ 350 $ 367
--------------------------------------------------------------------------
6.00%, 2/1/01 * 350 359
--------------------------------------------------------------------------
6.00%, 2/1/02 * 350 364
--------------------------------------------------------------------------
6.00%, 2/1/03 * 325 341
--------------------------------------------------------------------------
Water and Sewer
4.75%, 9/1/01 1,030 1,043
--------------------------------------------------------------------------
5.00%, 3/15/02 * 1,280 1,302
--------------------------------------------------------------------------
5.00%, 3/15/03 * 1,345 1,371
---------------------------------------------------------------------------------
Baltimore City, GO, Consolidated Public Improvement
7.50%, 10/15/00 (FGIC Insured) 500 520
---------------------------------------------------------------------------------
Baltimore City, Water Projects
6.50%, 7/1/20 (MBIA Insured)
(Prerefunded 7/1/00+) 345 353
---------------------------------------------------------------------------------
Baltimore County
Consolidated Public Improvement
GO, 5.50%, 6/1/04 1,000 1,048
--------------------------------------------------------------------------
6.00%, 7/1/05 (Prerefunded 7/1/02+) 500 532
--------------------------------------------------------------------------
Stella Maris, GO, 7.50%, 3/1/21 (Prerefunded 3/1/01+) 1,000 1,066
---------------------------------------------------------------------------------
Baltimore County Economic Dev.
Maryvale Preparatory School Fac.
6.50%, 5/1/08 1,000 976
---------------------------------------------------------------------------------
Charles County, County Commissioners
Fox Chase Apartments, 7.25%, 10/1/01 185 185
-----------------------------------------------------------------------------
New Forest Apartments, 7.25%, 11/1/01 460 461
---------------------------------------------------------------------------------
Frederick County, GO, Public Facilities, 5.00%, 7/1/02 3,275 3,339
---------------------------------------------------------------------------------
Howard County, GO
Consolidated Public Improvement
4.875%, 8/15/02 2,000 2,038
--------------------------------------------------------------------------
5.875%, 5/15/12 (Prerefunded 5/15/03+) 1,520 1,598
---------------------------------------------------------------------------------
Howard County Metropolitan Dist.
7.125%, 5/15/11 (Prerefunded 5/15/00+) 500 517
--------------------------------------------------------------------------
7.15%, 5/15/20 (Prerefunded 5/15/00+) 500 517
---------------------------------------------------------------------------------
Laurel, 6.60%, 7/1/03 (MBIA Insured) (Prerefunded 7/1/01+) 375 398
---------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
- ---------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Maryland, State and Local Fac.
7.00%, 10/15/02 (Prefunded 10/15/00+) $ 1,000 $ 1,040
---------------------------------------------------------------------------------
Maryland, GO
6.50%, 3/15/05 (Prerefunded 3/15/01+) 2,000 2,099
---------------------------------------------------------------------------------
State and Local Fac.
4.85%, 10/15/02 500 510
--------------------------------------------------------------------------
5.00%, 7/15/01 5,000 5,087
--------------------------------------------------------------------------
5.00%, 10/15/02 930 952
---------------------------------------------------------------------------------
Maryland DOT, 5.00%, 9/1/01 3,000 3,051
---------------------------------------------------------------------------------
Maryland Economic Dev.
Associated Jewish Charities
5.25%, 7/15/02 305 305
--------------------------------------------------------------------------
5.25%, 7/15/03 320 319
--------------------------------------------------------------------------
5.50%, 7/15/04 340 340
--------------------------------------------------------------------------
5.50%, 7/15/05 360 358
--------------------------------------------------------------------------
5.50%, 7/15/06 380 376
--------------------------------------------------------------------------
5.50%, 7/15/07 400 393
---------------------------------------------------------------------------------
Maryland Energy Fin. Admin.
Solid Waste Disposal, 5.10%, 12/1/99 * 450 451
-----------------------------------------------------------------------------
Wheelabrator Water Technologies
5.75%, 12/1/04 * 2,570 2,659
---------------------------------------------------------------------------------
Maryland HHEFA
Bradford Oaks Nursing and Rehabilitation Center
5.125%, 1/1/00 200 200
--------------------------------------------------------------------------
5.375%, 1/1/01 200 201
--------------------------------------------------------------------------
Broadmead
4.60%, 7/1/01 375 376
--------------------------------------------------------------------------
4.90%, 7/1/04 250 251
--------------------------------------------------------------------------
Charity Obligation Group, 4.60%, 11/1/03 4,460 4,463
-----------------------------------------------------------------------------
Doctor's Community Hosp.
8.75%, 7/1/22 (Prerefunded 7/1/00+) 5,815 6,166
--------------------------------------------------------------------------
Easton Memorial Hosp.
5.00%, 7/1/00 (MBIA Insured) 335 339
--------------------------------------------------------------------------
5.00%, 7/1/01 (MBIA Insured) 360 365
--------------------------------------------------------------------------
5.00%, 7/1/02 (MBIA Insured) 370 377
--------------------------------------------------------------------------
5.00%, 7/1/03 (MBIA Insured) 390 399
--------------------------------------------------------------------------
5.00%, 7/1/04 (MBIA Insured) 410 419
--------------------------------------------------------------------------
5.00%, 7/1/05 (MBIA Insured) 430 438
--------------------------------------------------------------------------
</TABLE>
14
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
- ---------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Maryland HHEFA
Francis Scott Key Medical Center
6.75%, 7/1/23 (FGIC Insured)
(Prerefunded 7/1/00+) $ 35 $ 36
--------------------------------------------------------------------------
Good Samaritan Hosp.
4.90%, 7/1/00 (Escrowed to Maturity) 1,020 1,030
--------------------------------------------------------------------------
Greater Baltimore Medical Center
6.75%, 7/1/19 (Prerefunded 7/1/01+) 2,025 2,156
--------------------------------------------------------------------------
Johns Hopkins Hosp., VRDN (Currently 3.15%) 1,000 1,000
-----------------------------------------------------------------------------
Johns Hopkins Univ.
5.50%, 7/1/01 2,500 2,562
--------------------------------------------------------------------------
5.50%, 7/1/02 4,000 4,135
--------------------------------------------------------------------------
Kennedy Krieger Institute
6.00%, 7/1/01 125 128
--------------------------------------------------------------------------
6.00%, 7/1/02 220 226
--------------------------------------------------------------------------
6.00%, 7/1/03 380 392
--------------------------------------------------------------------------
6.00%, 7/1/04 405 419
--------------------------------------------------------------------------
6.00%, 7/1/05 430 445
--------------------------------------------------------------------------
Pooled Loan Program, VRDN (Currently 3.30%) 400 400
-----------------------------------------------------------------------------
Stella Maris, 4.75%, 3/1/01 4,625 4,644
-----------------------------------------------------------------------------
Union Hosp. of Cecil County
6.70%, 7/1/22 (Prerefunded 7/1/02+) 1,725 1,865
--------------------------------------------------------------------------
Univ. of Maryland Medical System
VRDN (Currently 3.20%) 700 700
--------------------------------------------------------------------------
7.00%, 7/1/17 (FGIC Insured)
(Prerefunded 7/1/01+) 2,250 2,406
---------------------------------------------------------------------------------
Maryland Ind. Dev. Fin. Auth.
American Center for Physics Headquarters Fac.
5.80%, 1/1/01 400 405
--------------------------------------------------------------------------
Way Station, 4.90%, 1/2/03 2,215 2,197
---------------------------------------------------------------------------------
Maryland Transportation Auth.
Transportation Fac.
5.20%, 7/1/00 4,000 4,050
--------------------------------------------------------------------------
6.10%, 7/1/00 1,100 1,122
---------------------------------------------------------------------------------
Maryland Water Quality Fin. Admin.
Revolving Loan Fund
6.70%, 9/1/13 (Prerefunded 9/1/01+) 1,165 1,244
--------------------------------------------------------------------------
7.25%, 9/1/11 (Prerefunded 9/1/00+) 575 606
---------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- ---------------------------------------------------------------------------------------
Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In thousands
Montgomery County, GO
6.30%, 4/1/02 $ 1,250 $ 1,314
--------------------------------------------------------------------------
9.75%, 6/1/01 1,700 1,858
--------------------------------------------------------------------------
Consolidated Public Improvement
5.00%, 5/1/01 1,480 1,503
--------------------------------------------------------------------------
5.50%, 7/1/03 1,250 1,304
---------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Auth.
Montgomery County Resources
5.70%, 7/1/03 * 4,260 4,385
--------------------------------------------------------------------------
7.10%, 1/1/03 (MBIA Insured) 1,000 1,082
--------------------------------------------------------------------------
Solid Waste
5.30%, 7/1/00 * 1,765 1,785
--------------------------------------------------------------------------
5.90%, 7/1/05 * 2,250 2,339
--------------------------------------------------------------------------
Southwest Resource Recovery Fac.
5.80%, 7/1/04 * 60 62
--------------------------------------------------------------------------
7.05%, 1/1/02 (MBIA Insured) 500 530
---------------------------------------------------------------------------------
Prince George's County
Collington Episcopal, 5.40%, 4/1/02 450 452
-----------------------------------------------------------------------------
Dimensions Health
7.25%, 7/1/17 (Prerefunded 7/1/02+) 5,500 6,030
-----------------------------------------------------------------------------
Equipment Acquistion Program, COP
5.00%, 10/15/00 (MBIA Insured) 4,050 4,102
---------------------------------------------------------------------------------
Prince George's County Housing Auth., Largo Oxford
4.50%, 12/1/07 (Prerefunded 12/1/01+) 2,000 2,012
---------------------------------------------------------------------------------
Univ. of Maryland
Equipment Loan, VRDN (Currently 3.20%) 800 800
-----------------------------------------------------------------------------
Auxilary Fac. And Tuition
5.00%, 4/1/02 3,145 3,203
--------------------------------------------------------------------------
5.50%, 4/1/10 (Prerefunded 4/1/03+) 1,000 1,053
--------------------------------------------------------------------------
6.40%, 4/1/06 (Prerefunded 10/1/02+) 500 540
---------------------------------------------------------------------------------
Washington Suburban Sanitary Dist., GO
6.40%, 11/1/04 (Prerefunded 11/1/01+) 250 266
--------------------------------------------------------------------------
6.50%, 11/1/13 (Prerefunded 11/1/01+) 1,000 1,067
--------------------------------------------------------------------------
7.00%, 6/1/01 1,480 1,551
--------------------------------------------------------------------------
8.00%, 1/1/02 1,460 1,579
---------------------------------------------------------------------------------
Total Maryland (Cost $121,982) 121,614
-------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- ---------------------------------------------------------------------------------------
Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In thousands
PUERTO RICO 5.3%
Puerto Rico Ind. Medical and Environmental PCR
4.25%, 9/1/03 $ 1,500 $ 1,490
---------------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, GO
5.50%, 7/1/00 (FSA Insured) 2,790 2,832
---------------------------------------------------------------------------------
Puerto Rico Telephone Auth.
5.45%, 1/16/15 (MBIA Insured)
(Prerefunded 1/1/03+) 2,400 2,493
---------------------------------------------------------------------------------
Total Puerto Rico (Cost $6,817) 6,815
---------------
U. S. VIRGIN ISLANDS 0.9%
Virgin Island Water and Power Auth., 5.00%, 7/1/02 1,200 1,213
---------------------------------------------------------------------------------
Total U. S. Virgin Islands (Cost $1,214) 1,213
---------------
Total Investments in Securities
100.6% of Net Assets (Cost $130,013) $ 129,642
Other Assets Less Liabilities (775)
---------------
NET ASSETS $ 128,867
---------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 2
Accumulated net realized gain/loss - net of distributions (120)
Net unrealized gain (loss) (371)
Paid-in-capital applicable to 25,355,254 no par value shares of
beneficial interest outstanding; unlimited number of shares authorized 129,356
--------------
NET ASSETS $ 128,867
---------------
NET ASSET VALUE PER SHARE $ 5.08
---------------
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
COP Certificates of Participation
DOT Department of Transportation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HHEFA Health & Higher Educational Facility Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accomapnying notes are an integral part of these financial statments.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- --------------------------------------------------------------------------------------
Unaudited August 31, 1999
- ----------------------
STATEMENT OF NET ASSET Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In Thousands
MARYLAND 94.3%
Allegany Co., PCR, Westvaco, 6.20%, 1/1/08 $ 1,350 $ 1,445
---------------------------------------------------------------------------------
Anne Arundel County, GO
4.50%, 8/1/24 3,250 2,723
--------------------------------------------------------------------------
5.00%, 5/15/11 3,000 2,971
--------------------------------------------------------------------------
5.00%, 5/15/12 3,180 3,127
--------------------------------------------------------------------------
5.00%, 5/15/13 1,680 1,636
--------------------------------------------------------------------------
5.125%, 2/1/22 1,340 1,255
--------------------------------------------------------------------------
5.125%, 2/1/23 1,090 1,019
--------------------------------------------------------------------------
Consolidated General Improvement
6.30%, 8/1/16 (Prerefunded 8/1/05+) 775 848
--------------------------------------------------------------------------
6.30%, 8/1/19 (Prerefunded 8/1/05+) 725 793
--------------------------------------------------------------------------
6.30%, 8/1/20 (Prerefunded 8/1/05+) 705 771
--------------------------------------------------------------------------
6.30%, 8/1/21 (Prerefunded 8/1/05+) 790 865
--------------------------------------------------------------------------
Consolidated Water and Sewer
4.50%, 8/1/24 3,410 2,857
--------------------------------------------------------------------------
6.30%, 8/1/22 (Prerefunded 8/1/05+) 450 493
--------------------------------------------------------------------------
6.30%, 8/1/24 (Prerefunded 8/1/05+) 720 788
--------------------------------------------------------------------------
7.20%, 4/15/13 (Prerefunded 4/15/00+) 625 650
--------------------------------------------------------------------------
7.20%, 4/15/14 (Prerefunded 4/15/00+) 625 651
---------------------------------------------------------------------------------
Anne Arundel County
Special Tax Dist., Farmington Village
6.25%, 6/1/25 4,222 3,948
---------------------------------------------------------------------------------
Baltimore City, GO
Zero Coupon, 10/15/08 (FGIC Insured)
(Prerefunded 10/15/05+) 2,015 1,252
--------------------------------------------------------------------------
Zero Coupon, 10/15/09 (FGIC Insured)
(Prerefunded 10/15/05+) 2,430 1,420
--------------------------------------------------------------------------
Zero Coupon, 10/15/11 (FGIC Insured)
(Prerefunded 10/15/05+) 3,975 2,051
--------------------------------------------------------------------------.
Consolidated Public Improvement
Zero Coupon, 10/15/06 (FGIC Insured) 3,100 2,178
--------------------------------------------------------------------------
Zero Coupon, 10/15/08 (FGIC Insured) 1,785 1,110
--------------------------------------------------------------------------
Zero Coupon, 10/15/09 (FGIC Insured) 2,170 1,269
--------------------------------------------------------------------------
Zero Coupon, 10/15/11 (FGIC Insured) 5,765 3,001
--------------------------------------------------------------------------
5.50%, 10/15/09 (FGIC Insured) 1,860 1,939
--------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- ---------------------------------------------------------------------------------------
Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In thousands
Baltimore City, GO
Consolidated Public Improvement
5.50%, 10/15/10 (FGIC Insured) $ 2,615 $ 2,712
--------------------------------------------------------------------------
5.50%, 10/15/16 (FGIC Insured) 1,775 1,796
--------------------------------------------------------------------------
7.00%, 10/15/07 (MBIA Insured) 500 572
--------------------------------------------------------------------------
7.00%, 10/15/08 (MBIA Insured) 5,190 5,975
--------------------------------------------------------------------------
7.50%, 10/15/09 (FGIC Insured) 2,635 3,148
---------------------------------------------------------------------------------
Baltimore City
--------------------------------------------------------------------------
Board of Ed. Admin. Headquarters, COP
5.00%, 4/1/13 (MBIA Insured) 3,460 3,305
--------------------------------------------------------------------------
5.25%, 4/1/09 (MBIA Insured) 2,790 2,812
--------------------------------------------------------------------------
5.25%, 4/1/10 (MBIA Insured) 2,940 2,941
--------------------------------------------------------------------------
7.25%, 4/1/16 (MBIA Insured) 3,200 3,319
--------------------------------------------------------------------------
Convention Center
5.50%, 9/1/14 (MBIA Insured) 4,000 4,046
--------------------------------------------------------------------------
6.00%, 9/1/17 (FGIC Insured)
(Prerefunded 9/1/04+) 5,180 5,534
--------------------------------------------------------------------------
Parking Fac.
5.25%, 7/1/21 (FGIC Insured) 2,000 1,924
--------------------------------------------------------------------------
5.90%, 7/1/11 (FGIC Insured) 590 629
--------------------------------------------------------------------------
5.90%, 7/1/12 (FGIC Insured) 1,195 1,273
--------------------------------------------------------------------------
5.90%, 7/1/13 (FGIC Insured) 1,000 1,062
--------------------------------------------------------------------------
6.00%, 7/1/14 (FGIC Insured) 5,155 5,522
--------------------------------------------------------------------------
6.00%, 7/1/15 (FGIC Insured) 5,460 5,841
--------------------------------------------------------------------------
6.00%, 7/1/16 (FGIC Insured) 5,785 6,172
--------------------------------------------------------------------------
6.00%, 7/1/17 (FGIC Insured) 6,135 6,524
--------------------------------------------------------------------------
6.00%, 7/1/18 (FGIC Insured) 6,505 6,922
--------------------------------------------------------------------------
Port Fac., E.I. DuPont - Conoco
6.50%, 10/1/11 10,400 11,129
--------------------------------------------------------------------------
Tindeco Wharf Apartments
6.60%, 12/20/24 (GNMA Guaranteed) 1,000 1,051
--------------------------------------------------------------------------
Wastewater
5.60%, 7/1/13 (MBIA Insured) 19,300 19,899
--------------------------------------------------------------------------
5.65%, 7/1/20 (MBIA Insured) 2,000 2,037
--------------------------------------------------------------------------
Water
5.80%, 7/1/15 (FGIC Insured) 3,350 3,448
--------------------------------------------------------------------------
6.00%, 7/1/15 (FGIC Insured) 6,250 6,687
--------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- ---------------------------------------------------------------------------------------
Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In thousands
Baltimore City, COP
7.20%, 4/1/10 (MBIA Insured) $ 1,950 $ 2,024
--------------------------------------------------------------------------
7.20%, 4/1/10 (MBIA Insured)
(Prerefunded 4/1/00+) 1,300 1,350
--------------------------------------------------------------------------
7.25%, 4/1/16 (MBIA Insured) 5,845 6,064
--------------------------------------------------------------------------
7.25%, 4/1/16 (MBIA Insured)
(Prerefunded 4/1/00+) 1,655 1,717
--------------------------------------------------------------------------
Baltimore County
Golf Systems, VRDN (Currently 3.25%) 3,300 3,300
-----------------------------------------------------------------------------
North Brooke Apartments
6.35%, 1/20/21 (GNMA Guaranteed) 3,000 3,125
--------------------------------------------------------------------------
Pickersgill Retirement Community
7.70%, 1/1/21 (Prerefunded 1/1/02+) 3,550 3,877
--------------------------------------------------------------------------
Stella Maris, 7.50%, 3/1/21 (Prerefunded 3/1/01+) 2,760 2,943
---------------------------------------------------------------------------------
Baltimore County, GO
COP, 7.10%, 10/1/12 (Prerefunded 10/1/99+) 3,195 3,268
-----------------------------------------------------------------------------
Pension Funding
5.125%, 8/1/14 4,300 4,240
--------------------------------------------------------------------------
5.125%, 8/1/15 4,195 4,112
---------------------------------------------------------------------------------
Baltimore County Economic Dev.
Maryvale Preparatory School Fac., 6.50%, 5/1/11 600 582
---------------------------------------------------------------------------------
Calvert County Economic Dev.
Asbury Solomons Islands Fac.
5.00%, 1/1/27 (MBIA Insured) 2,500 2,268
---------------------------------------------------------------------------------
Calvert County, PCR, Baltimore Gas and Electric
5.55%, 7/15/14 5,550 5,561
---------------------------------------------------------------------------------
Carroll County
Copper Ridge, 7.75%, 1/1/18 3,000 3,157
-----------------------------------------------------------------------------
Fairhaven, 7.75%, 1/1/11 1,000 1,040
---------------------------------------------------------------------------------
Carroll County, GO
Consolidated Public Improvement
County Commissioners, 5.625%, 10/1/20 1,900 1,885
-----------------------------------------------------------------------------
6.00%, 11/1/06 (Prerefunded 11/1/99+) 800 819
---------------------------------------------------------------------------------
Carroll County, Public Improvement Bonds
7.30%, 10/1/20 (Prerefunded 10/1/00+) 2,000 2,113
---------------------------------------------------------------------------------
Charles County
Holly Station, 6.45%, 5/1/26 1,780 1,867
-----------------------------------------------------------------------------
New Forest Apartments
6.10%, 11/1/28 5,000 5,159
---------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- ---------------------------------------------------------------------------------------
Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In thousands
Damascus Gardens Dev., Multi Family
7.375%, 8/15/17
(Escrowed to Maturity) $ 3,735 $ 4,335
---------------------------------------------------------------------------------
Frederick City, GO, General Improvement
6.125%, 12/1/09 (FGIC Insured) 1,840 1,955
---------------------------------------------------------------------------------
Frederick County, GO
BAN, VRDN (Currently 3.25%) 1,125 1,125
-----------------------------------------------------------------------------
Public Facilities, 5.75%, 7/1/19 7,280 7,436
---------------------------------------------------------------------------------
Frederick County
Buckinghams Choice
5.90%, 1/1/17 1,855 1,753
--------------------------------------------------------------------------
6.00%, 1/1/24 750 708
---------------------------------------------------------------------------------
Gaithersburg Hosp. Fac.
Asbury Methodist Home
5.50%, 1/1/20 3,250 3,063
--------------------------------------------------------------------------
7.85%, 1/1/20 (Prerefunded 1/1/00+) 6,500 6,714
--------------------------------------------------------------------------
Shady Grove Adventist Hosp.
6.50%, 9/1/12 (FSA Insured) 5,000 5,609
---------------------------------------------------------------------------------
Howard County, GO
Metropolitan Dist.
7.15%, 5/15/14 (Prerefunded 5/15/00+) 1,005 1,039
--------------------------------------------------------------------------
7.15%, 5/15/15 (Prerefunded 5/15/00+) 1,080 1,117
--------------------------------------------------------------------------
7.15%, 5/15/16 (Prerefunded 5/15/00+) 1,160 1,199
--------------------------------------------------------------------------
7.15%, 5/15/17 (Prerefunded 5/15/00+) 1,245 1,287
---------------------------------------------------------------------------------
Howard County
COP, GO, 8.15%, 2/15/20 470 609
-----------------------------------------------------------------------------
Golf Course Fac., 6.00%, 2/15/21 3,110 3,168
---------------------------------------------------------------------------------
Laurel, GO
6.90%, 7/1/07 (MBIA Insured)
(Prerefunded 7/1/01+) 1,000 1,068
--------------------------------------------------------------------------
7.00%, 7/1/09 (MBIA Insured)
(Prerefunded 7/1/01+) 550 588
---------------------------------------------------------------------------------
Maryland, GO
5.835%, 8/1/12 10,000 9,756
--------------------------------------------------------------------------
6.885%, 7/15/13 7,500 7,510
--------------------------------------------------------------------------
7.00%, 10/15/03 (Prerefunded 10/15/00+) 2,000 2,089
--------------------------------------------------------------------------
7.10%, 10/15/04 (Prerefunded 10/15/00+) 3,000 3,152
--------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- ---------------------------------------------------------------------------------------
Par Value
- ---------------------------------------------------------------------------------------
<S> <C> <C>
In thousands
Maryland, GO
State and Local Fac.
5.00%, 7/15/10 $ 9,000 $ 8,999
--------------------------------------------------------------------------
5.25%, 6/15/09 1,650 1,281
--------------------------------------------------------------------------
5.25%, 7/15/13 11,770 11,779
--------------------------------------------------------------------------
5.25%, 7/15/14 12,045 12,007
--------------------------------------------------------------------------
5.70%, 3/15/10 5,000 5,244
--------------------------------------------------------------------------
Maryland CDA
Residential
5.15%, 3/1/18 * 5,000 4,591
--------------------------------------------------------------------------
5.90%, 9/1/19 * 2,000 2,003
--------------------------------------------------------------------------
5.95%, 9/1/29 * 16,000 16,024
--------------------------------------------------------------------------
Single Family
5.60%, 4/1/18 3,920 3,862
--------------------------------------------------------------------------
5.85%, 7/1/27 * 7,000 6,952
--------------------------------------------------------------------------
5.875%, 7/1/16 3,950 3,977
--------------------------------------------------------------------------
5.875%, 4/1/17 * 215 216
--------------------------------------------------------------------------
5.875%, 9/1/25 * 3,500 3,511
--------------------------------------------------------------------------
6.00%, 4/1/17 2,500 2,558
--------------------------------------------------------------------------
6.45%, 4/1/14 1,000 1,037
--------------------------------------------------------------------------
6.75%, 4/1/10 * 5,000 5,207
--------------------------------------------------------------------------
6.75%, 4/1/26 * 3,990 4,120
--------------------------------------------------------------------------
6.80%, 4/1/22 * 3,340 3,480
--------------------------------------------------------------------------
6.80%, 4/1/24 * 2,690 2,802
--------------------------------------------------------------------------
6.85%, 4/1/11 4,895 5,068
--------------------------------------------------------------------------
7.00%, 4/1/14 2,720 2,837
--------------------------------------------------------------------------
7.05%, 4/1/17 4,750 4,955
--------------------------------------------------------------------------
7.25%, 4/1/11 2,000 2,069
--------------------------------------------------------------------------
7.25%, 4/1/19 * 9,000 9,314
--------------------------------------------------------------------------
7.25%, 4/1/27 9,250 9,570
--------------------------------------------------------------------------
7.375%, 4/1/10 495 508
--------------------------------------------------------------------------
7.60%, 4/1/17 1,800 1,846
---------------------------------------------------------------------------------
Maryland DOT, 6.80%, 11/1/05 (Prerefunded 11/1/99+) 5,500 5,638
---------------------------------------------------------------------------------
Maryland Economic Dev.
Associated Catholic Charities
VRDN (Currently 3.34%) 5,055 5,055
--------------------------------------------------------------------------
Associated Jewish Charities, 5.67%, 7/15/29 16,645 15,219
-----------------------------------------------------------------------------
Chesapeake Bay Foundation
VRDN (Currently 3.25%) 1,000 1,000
---------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Maryland Energy Fin. Admin.
Wheelabrator Technologies
6.30%, 12/1/10 * $ 6,145 $ 6,492
-------------------------------------------------------------------------
6.45%, 12/1/16 * 2,600 2,716
------------------------------------------------------------------------------
Maryland HHEFA
Bradford Oaks Nursing and Rehabilitation Center
6.375%, 1/1/19 1,500 1,487
-------------------------------------------------------------------------
6.375%, 1/1/27 2,000 1,979
-------------------------------------------------------------------------
Calvert Memorial Hosp., 5.00%, 7/1/28 1,800 1,606
----------------------------------------------------------------------------
Charlestown Community, VRDN (Currently 3.25%) 860 860
----------------------------------------------------------------------------
Deaton Hosp., VRDN (Currently 3.25%) 8,000 8,000
----------------------------------------------------------------------------
Doctor's Community Hosp.
5.50%, 7/1/24 3,030 2,696
-------------------------------------------------------------------------
8.75%, 7/1/22 (Prerefunded 7/1/00+) 6,800 7,211
-------------------------------------------------------------------------
Francis Scott Key Medical Center
5.00%, 7/1/18 (FGIC Insured) 4,880 4,493
-------------------------------------------------------------------------
5.00%, 7/1/23 (FGIC Insured) 3,000 2,735
-------------------------------------------------------------------------
7.00%, 7/1/10 (FGIC Insured)
(Prerefunded 7/1/00+) 2,000 2,093
-------------------------------------------------------------------------
Frederick Memorial Hosp.
5.00%, 7/1/23 (FGIC Insured) 5,500 5,014
-------------------------------------------------------------------------
5.00%, 7/1/28 (FGIC Insured) 3,750 3,390
-------------------------------------------------------------------------
Good Samaritan Hosp.
5.60%, 7/1/06 (Escrowed to Maturity) 1,545 1,624
-------------------------------------------------------------------------
5.70%, 7/1/07 (Escrowed to Maturity) 1,875 1,983
-------------------------------------------------------------------------
5.75%, 7/1/13 (Escrowed to Maturity) 2,480 2,594
-------------------------------------------------------------------------
5.75%, 7/1/13 (AMBAC Insured)
(Escrowed to Maturity) 1,520 1,590
-------------------------------------------------------------------------
Helix Health
5.00%, 7/1/27 (AMBAC Insured)
(Escrowed to Maturity) 8,970 8,273
-------------------------------------------------------------------------
5.125%, 7/1/10 (AMBAC Insured)
(Escrowed to Maturity) 2,585 2,594
-------------------------------------------------------------------------
5.25%, 8/15/38 (AMBAC Insured) 18,450 16,934
-------------------------------------------------------------------------
Holy Cross Hosp.
7.125%, 7/1/10 (AMBAC Insured)
(Prerefunded 7/1/00+) 1,400 1,466
-------------------------------------------------------------------------
23
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Maryland HHEFA
Holy Cross Hosp.
7.50%, 7/1/01 (AMBAC Insured)
(Prerefunded 7/1/00+) $ 1,655 $ 1,739
-------------------------------------------------------------------------
Howard County General Hosp.
5.50%, 7/1/21 (Escrowed to Maturity) 5,600 5,580
-------------------------------------------------------------------------
Johns Hopkins Hosp.
Zero Coupon, 7/1/19 9,460 3,061
-------------------------------------------------------------------------
4.50%, 5/15/35 2,000 1,628
-------------------------------------------------------------------------
5.50%, 5/15/38 10,590 10,070
-------------------------------------------------------------------------
7.00%, 7/1/23 (Prerefunded 7/1/00+) 1,305 1,366
-------------------------------------------------------------------------
Johns Hopkins Medical Institute Parking Fac.
5.375%, 7/1/20 (AMBAC Insured) 5,550 5,404
-------------------------------------------------------------------------
Johns Hopkins Univ.
5.125%, 7/1/20 14,850 14,023
-------------------------------------------------------------------------
5.25%, 7/1/15 5,000 4,931
-------------------------------------------------------------------------
5.25%, 7/1/16 7,540 7,391
-------------------------------------------------------------------------
5.25%, 7/1/17 3,100 3,019
-------------------------------------------------------------------------
Kennedy Krieger Institute
6.75%, 7/1/22 (Prerefunded 7/1/01+) 2,850 2,978
-------------------------------------------------------------------------
7.40%, 7/1/11 (Prerefunded 7/1/01+) 370 398
-------------------------------------------------------------------------
Loyola College
VRDN (Currently 3.25%) (MBIA Insured) 2,250 2,250
-------------------------------------------------------------------------
5.00%, 10/1/39 9,000 7,878
-------------------------------------------------------------------------
5.375%, 10/1/26 (MBIA Insured) 6,820 6,616
-------------------------------------------------------------------------
Maryland General Hosp.
6.20%, 7/1/24 (MBIA Insured) 4,000 4,137
-------------------------------------------------------------------------
Mercy Medical Center
5.75%, 7/1/26 (FSA Insured) 3,810 3,849
-------------------------------------------------------------------------
6.50%, 7/1/13 (FSA Insured) 2,155 2,391
-------------------------------------------------------------------------
North Arundel Hosp., VRDN (Currently 3.30%) 1,600 1,600
----------------------------------------------------------------------------
Peninsula Regional Medical Center
5.00%, 7/1/23 (MBIA Insured) 10,000 9,117
-------------------------------------------------------------------------
Pooled Loan Program, VRDN (Currently 3.30%) 5,000 5,000
----------------------------------------------------------------------------
Sinai Hosp.
7.30%, 7/1/05 (AMBAC Insured)
(Prerefunded 7/1/00+) 2,000 2,098
-------------------------------------------------------------------------
Union Hosp. of Cecil County
6.625%, 7/1/12 (Prerefunded 7/1/02+) 1,545 1,667
-------------------------------------------------------------------------
24
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Maryland HHEFA
Union Memorial Hosp.
6.60%, 7/1/06 (MBIA Insured)
(Prerefunded 7/1/01+) $ 500 $ 531
-------------------------------------------------------------------------
6.75%, 7/1/11 (MBIA Insured)
(Prerefunded 7/1/01+) 3,000 3,192
-------------------------------------------------------------------------
6.75%, 7/1/21 (MBIA Insured)
(Prerefunded 7/1/01+) 7,895 8,401
-------------------------------------------------------------------------
Univ. of Maryland Medical System
VRDN (Currently 3.25%) 4,400 4,400
-------------------------------------------------------------------------
5.00%, 7/1/20 (FGIC Insured) 5,875 5,417
-------------------------------------------------------------------------
7.00%, 7/1/11 (MBIA Insured)
(Prerefunded 7/1/01+) 4,550 4,865
-------------------------------------------------------------------------
7.00%, 7/1/17 (FGIC Insured)
(Prerefunded 7/1/01+) 7,770 8,308
-------------------------------------------------------------------------
7.00%, 7/1/22 (FGIC Insured) 2,020 2,370
-------------------------------------------------------------------------
Upper Chesapeake Hosp.
5.125%, 1/1/38 (FSA Insured) 5,310 4,761
- --------------------------------------------------------------------------------
Maryland Ind. Dev. Fin. Auth.
American Center for Physics Headquarters Fac.
6.25%, 1/1/07 5,770 5,942
-------------------------------------------------------------------------
6.375%, 1/1/12 5,900 6,117
-------------------------------------------------------------------------
6.625%, 1/1/17 4,250 4,444
-------------------------------------------------------------------------
Associated Catholic Charities, 9.00%, 1/1/10 725 752
----------------------------------------------------------------------------
Bon Secours Health, 5.929%, 8/26/22 (FSA Insured) 15,000 15,715
----------------------------------------------------------------------------
Holy Cross Health, 5.60%, 12/1/09 2,780 2,890
- --------------------------------------------------------------------------------
Maryland Local Gov't. Income Trust
Capitalization Program, COP
6.80%, 8/1/01 1,615 1,684
-------------------------------------------------------------------------
7.125%, 8/1/09 3,000 3,142
- --------------------------------------------------------------------------------
Maryland Stadium Auth.
Baltimore Convention Center Expansion
5.875%, 12/15/11 (AMBAC Insured) 2,025 2,123
-------------------------------------------------------------------------
Sports Fac.
5.60%, 3/1/14 1,000 1,014
-------------------------------------------------------------------------
5.75%, 3/1/22 6,705 6,803
-------------------------------------------------------------------------
5.80%, 3/1/26 3,875 3,934
- --------------------------------------------------------------------------------
Maryland Transportation Auth.
Zero Coupon, 7/1/07 (FGIC Insured) 8,500 5,800
-------------------------------------------------------------------------
Zero Coupon, 7/1/08 (FGIC Insured) 2,000 1,287
-------------------------------------------------------------------------
Zero Coupon, 7/1/09 (FGIC Insured) 10,410 6,320
-------------------------------------------------------------------------
6.80%, 7/1/16 (Escrowed to Maturity) 12,780 14,534
-------------------------------------------------------------------------
25
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Maryland Transportation Auth.
Baltimore-Washington Int'l. Airport
6.25%, 7/1/14 (FGIC Insured) * $ 3,105 $ 3,247
-------------------------------------------------------------------------
6.40%, 7/1/19 (FGIC Insured) * 1,305 1,313
- --------------------------------------------------------------------------------
Maryland Water Quality Fin. Admin.
Revolving Loan Fund
Zero Coupon, 9/1/02 1,185 1,037
-------------------------------------------------------------------------
Zero Coupon, 9/1/07 1,125 758
-------------------------------------------------------------------------
6.00%, 9/1/15 1,600 1,666
-------------------------------------------------------------------------
6.70%, 9/1/13 (Prerefunded 9/1/01+) 1,280 1,367
-------------------------------------------------------------------------
7.10%, 9/1/13 (Prerefunded 9/1/01+) 985 1,059
-------------------------------------------------------------------------
7.25%, 9/1/11 (Prerefunded 9/1/00+) 1,700 1,791
-------------------------------------------------------------------------
7.25%, 9/1/12 (Prerefunded 9/1/00+) 2,000 2,107
- --------------------------------------------------------------------------------
Maryland-National Capital Park and Planning Commission, GO
Prince George's County
5.375%, 1/15/16 1,300 1,293
-------------------------------------------------------------------------
5.375%, 1/15/17 1,200 1,190
-------------------------------------------------------------------------
6.90%, 7/1/05 (Prerefunded 7/1/00+) 1,400 1,464
-------------------------------------------------------------------------
6.90%, 7/1/06 (Prerefunded 7/1/00+) 1,350 1,411
-------------------------------------------------------------------------
6.90%, 7/1/07 (Prerefunded 7/1/00+) 1,400 1,464
-------------------------------------------------------------------------
6.90%, 7/1/08 (Prerefunded 7/1/00+) 1,400 1,463
-------------------------------------------------------------------------
6.90%, 7/1/09 (Prerefunded 7/1/00+) 1,400 1,463
- --------------------------------------------------------------------------------
Maryland-National Capital Park and Planning Commission
Little Bennett Golf Fac.
8.25%, 10/1/11 (Prerefunded 10/1/02+) 2,070 2,335
- --------------------------------------------------------------------------------
Montgomery County, GO
Consolidated Public Improvement
4.75%, 5/1/13 1,085 1,027
-------------------------------------------------------------------------
5.375% 5/1/09 2,850 2,953
-------------------------------------------------------------------------
5.375% 5/1/10 5,700 5,862
-------------------------------------------------------------------------
5.375% 5/1/16 5,750 5,752
-------------------------------------------------------------------------
5.375% 5/1/17 5,750 5,733
-------------------------------------------------------------------------
6.125% 10/1/14 (Prerefunded 10/1/04+) 3,150 3,437
-------------------------------------------------------------------------
6.80% 11/1/09 (Prerefunded 11/1/99+) 1,145 1,174
-------------------------------------------------------------------------
7.10% 10/1/09 (Prerefunded 10/1/00+) 1,000 1,054
- --------------------------------------------------------------------------------
Montgomery County
Consolidated Public Improvement
6.125% 10/1/13 (Prerefunded 10/1/04+) 2,500 2,727
-------------------------------------------------------------------------
7.10% 10/1/10 (Prerefunded 10/1/00+) 1,840 1,940
-------------------------------------------------------------------------
26
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Montgomery County
Consolidated Public Improvement
Golf Course, 6.125%, 10/1/22 $ 2,260 $ 2,256
- --------------------------------------------------------------------------------
Montgomery County Housing Opportunities Commission
Multi-Family
6.25%, 7/1/25 5,500 5,706
-------------------------------------------------------------------------
7.50%, 7/1/24 3,000 3,151
-------------------------------------------------------------------------
Single Family
Zero Coupon, 7/1/27 7,165 1,432
-------------------------------------------------------------------------
Zero Coupon, 7/1/28 13,500 2,677
-------------------------------------------------------------------------
5.75%, 7/1/13 1,770 1,813
-------------------------------------------------------------------------
5.80%, 7/1/17 885 893
-------------------------------------------------------------------------
5.90%, 7/1/17 1,860 1,897
-------------------------------------------------------------------------
6.00%, 7/1/17 4,110 4,206
-------------------------------------------------------------------------
6.50%, 7/1/11 2,615 2,709
-------------------------------------------------------------------------
6.65%, 7/1/16 2,235 2,328
-------------------------------------------------------------------------
6.80%, 7/1/17 2,515 2,590
-------------------------------------------------------------------------
6.90%, 7/1/19 2,000 2,043
-------------------------------------------------------------------------
7.50%, 7/1/17 710 732
-------------------------------------------------------------------------
7.625%, 7/1/17 435 438
- --------------------------------------------------------------------------------
Montgomery County, PCR, Potomac Electric, 5.375%, 2/15/24 4,560 4,360
- --------------------------------------------------------------------------------
Morgan State Univ., Academic Fees and Auxiliary Fac.
6.05%, 7/1/15 (MBIA Insured) 1,090 1,168
- --------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Auth.
Montgomery County Resources
6.00%, 7/1/08 * 10,000 10,416
-------------------------------------------------------------------------
6.20%, 7/1/10 * 7,750 8,111
-------------------------------------------------------------------------
6.30%, 7/1/16 (MBIA Insured) * 13,985 14,714
-------------------------------------------------------------------------
Southwest Resource Recovery Fac., 6.30%, 7/1/16 * 5,000 5,174
- --------------------------------------------------------------------------------
Prince George's County
Dimensions Health
5.375%, 7/1/14 2,685 2,391
-------------------------------------------------------------------------
7.00%, 7/1/01 1,305 1,341
-------------------------------------------------------------------------
7.00%, 7/1/22 (Prerefunded 7/1/02+) 2,660 2,899
-------------------------------------------------------------------------
7.20%, 7/1/06 420 457
-------------------------------------------------------------------------
7.20%, 7/1/06 (Prerefunded 7/1/02+) 1,985 2,159
-------------------------------------------------------------------------
PCR, Potomac Electric
5.75%, 3/15/10 6,750 7,110
-------------------------------------------------------------------------
6.375%, 1/15/23 7,175 7,467
-------------------------------------------------------------------------
27
<PAGE>
T. ROWE PRICE MARYLAND SHORT-TERM TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Prince George's County
Solid Waste Management
6.90%, 6/30/05 (Prerefunded 6/30/00+) $ 1,500 $ 1,568
-------------------------------------------------------------------------
6.90%, 6/30/06 (Prerefunded 6/30/00+) 1,000 1,046
-------------------------------------------------------------------------
7.00%, 6/30/07 (Prerefunded 6/30/00+) 1,120 1,172
-------------------------------------------------------------------------
7.00%, 6/30/09 (Prerefunded 6/30/00+) 1,255 1,313
- --------------------------------------------------------------------------------
Prince George's County Housing Auth.
New Keystone, 6.80%, 7/1/25 (MBIA Insured) 2,600 2,723
----------------------------------------------------------------------------
Riverview Terrace Apartments
6.70%, 6/20/20 (GNMA Guaranteed) 1,500 1,592
-------------------------------------------------------------------------
Single Family, 5.75%, 8/1/30 * 1,980 1,919
----------------------------------------------------------------------------
Stevenson Apartments
6.35%, 7/20/20 (GNMA Guaranteed) 2,200 2,270
-------------------------------------------------------------------------
Prince George's County IDA
Gabriel DuVall Law Building, 8.00%, 9/1/07 1,185 1,185
----------------------------------------------------------------------------
Upper Marlboro Justice Center
5.25%, 6/30/19 (MBIA Insured) 1,500 1,443
- --------------------------------------------------------------------------------
Univ. of Maryland
Auxiliary Fac. and Tuition
5.60%, 4/1/11 3,155 3,250
-------------------------------------------------------------------------
5.75%, 4/1/17 4,500 4,579
-------------------------------------------------------------------------
6.375%, 4/1/09 (Prerefunded 10/1/02+) 2,100 2,266
-------------------------------------------------------------------------
6.50%, 4/1/12 (Prerefunded 10/1/02+) 440 476
-------------------------------------------------------------------------
7.00%, 10/1/05 (Prerefunded 10/1/99+) 2,000 2,045
-------------------------------------------------------------------------
7.20%, 10/1/09 (Prerefunded 10/1/99+) 1,400 1,432
- --------------------------------------------------------------------------------
Washington County Sanitary Dist., GO
6.875%, 2/1/10 (Prerefunded 2/1/00+) 3,500 3,615
-------------------------------------------------------------------------
7.00%, 2/1/15 (Prerefunded 2/1/00+) 2,000 2,067
- --------------------------------------------------------------------------------
Washington Suburban Sanitary Dist., GO
6.20%, 6/1/11 2,400 2,541
-------------------------------------------------------------------------
6.20%, 6/1/12 1,500 1,584
-------------------------------------------------------------------------
6.40%, 1/1/15 2,270 2,386
-------------------------------------------------------------------------
6.625%, 6/1/18 (Prerefunded 6/1/04+) 3,665 3,994
-------------------------------------------------------------------------
6.90%, 6/1/08 (Prerefunded 6/1/00+) 1,500 1,565
-------------------------------------------------------------------------
6.90%, 6/1/09 (Prerefunded 6/1/00+) 2,300 2,399
-------------------------------------------------------------------------
5.00%, 6/1/10 2,085 2,080
-------------------------------------------------------------------------
5.00%, 6/1/11 2,060 2,038
-------------------------------------------------------------------------
28
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Washington Suburban Sanitary Dist., GO
Water Supply
5.00%, 6/1/10 $ 2,580 $ 2,573
.........................................................................
5.00%, 6/1/11 2,545 2,518
................................................................................
Worcester County Sanitary Dist.
GO, 6.50%, 8/15/12 735 790
.........................................................................
6.50%, 8/15/12 (Prerefunded 8/15/02+) 1,265 1,359
................................................................................
Total Maryland (Cost $967,352) 989,100
------------
PUERTO RICO 6.0%
Puerto Rico Commonwealth, GO
Consolidated Public Improvement
6.25%, 7/1/11 (MBIA Insured) 2,000 2,208
.........................................................................
6.25%, 7/1/12 (MBIA Insured) 1,750 1,929
................................................................................
Puerto Rico Electric Power Auth.
5.25%, 7/1/14 (MBIA Insured) 10,000 9,948
.........................................................................
7.00%, 7/1/11 (Prerefunded 7/1/01+) 1,200 1,286
................................................................................
Puerto Rico Highway and Transportation Auth.
4.75%, 7/1/38 10,000 8,439
.........................................................................
5.50%, 7/1/15 (FSA Insured) 5,000 5,084
.........................................................................
5.50%, 7/1/36 3,500 3,382
................................................................................
Puerto Rico Infrastructure Fin. Auth., GO
5.125%, 7/1/09 (AMBAC Insured) 10,000 10,189
................................................................................
Puerto Rico Municipal Fin. Agency, GO
................................................................................
5.50%, 7/1/17 (FSA Insured) 3,300 3,312
.........................................................................
5.50%, 7/1/21 (FSA Insured) 2,375 2,377
.........................................................................
6.00%, 7/1/12 (FSA Insured) 5,000 5,395
.........................................................................
6.00%, 7/1/14 (FSA Insured) 3,060 3,219
................................................................................
Puerto Rico Public Building Auth., GO, Gov't. Fac.
5.00%, 7/1/27 (AMBAC Insured) 7,000 6,411
................................................................................
Total Puerto Rico (Cost $62,613) 63,179
------------
29
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Par Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
100.3% of Net Assets (Cost $1,029,965) $ 1,052,279
Other Assets Less Liabilities (3,384)
------------
NET ASSETS $ 1,048,895
-------------
Net Assets Consist of:
Accumulated net investment income - net of
distributions $ 18
Accumulated net realized gain/loss - net of
distributions (5,104)
Net unrealized gain (loss) 22,314
Paid-in-capital applicable to 103,220,184 no par
value shares of beneficial interest outstanding;
unlimited number of shares authorized 1,031,667
-------------
NET ASSETS $ 1,048,895
-------------
NET ASSET VALUE PER SHARE $ 10.16
-------------
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
CDA Community Development Administration
COP Certificates of Participation
DOT Department of Transportation
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FSA Financial Security Assurance Corp.
GNMA Government National Mortgage Association
GO General Obligation
HHEFA Health & Higher Educational Facility Authority
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.
30
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
Unaudited
- ------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands Short-Term
Bond Fund Bond Fund
6 Months 6 Months
Ended Ended
8/31/99 8/31/99
Investment Income
Interest income $ 2,667 $ 29,923
-------------------------
Expenses
Investment management 260 2,259
Custody and accounting 52 89
Shareholder servicing 50 325
Legal and audit 7 7
Prospectus and shareholder reports 4 28
Trustees 3 5
Registration 2 6
Miscellaneous 2 3
-------------------------
Total expenses 380 2,722
Expenses paid indirectly (1) (8)
-------------------------
Net expenses 379 2,714
-------------------------
Net investment income 2,288 27,209
-------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 96 (4,167)
Futures - 246
-------------------------
Net realized gain (loss) 96 (3,921)
Change in net unrealized gain or loss on securities (2,190) (52,840)
-------------------------
Net realized and unrealized gain (loss) (2,094) (56,761)
-------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 194 $ (29,552)
-------------------------
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------
In thousands Short-Term
Bond Fund Bond Fund
6 Months Year 6 Months Year
Ended Ended Ended Ended
8/31/99 2/28/99 8/31/99 2/28/99
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 2,288 $ 4,277 $ 27,209 $ 50,299
Net realized gain (loss) 96 435 (3,921) 489
Change in net unrealized
gain or loss (2,190) 271 (52,840) 4,337
--------------------------------------------------
Increase (decrease) in
net assets from operations 194 4,983 (29,552) 55,125
--------------------------------------------------
Distributions to shareholders
Net investment income (2,288) (4,277) (27,209) (50,299)
Net realized gain -- -- (1,002) --
--------------------------------------------------
Decrease in net assets
from distributions (2,288) (4,277) (28,211) (50,299)
--------------------------------------------------
Capital share transactions*
Shares sold 30,973 50,730 127,901 225,022
Distributions reinvested 1,938 3,552 20,710 36,608
Shares redeemed (24,502) (41,860) (105,114) (129,711)
--------------------------------------------------
Increase (decrease) in
net assets from capital
share transactions 8,409 12,422 43,497 131,919
--------------------------------------------------
Net Assets
Increase (decrease)
during period 6,315 13,128 (14,266) 136,745
Beginning of period 122,552 109,424 1,063,161 926,416
--------------------------------------------------
End of period $ 128,867 $ 122,552 $ 1,048,895 $ 1,063,161
--------------------------------------------------
* Share information
Shares sold 6,040 9,854 12,155 21,026
Distributions reinvested 378 690 1,982 3,419
Shares redeemed (4,775) (8,141) (10,037) (12,133)
--------------------------------------------------
Increase (decrease)
in shares outstanding 1,643 2,403 4,100 12,312
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
Unaudited August 31, 1999
- -------------------------------
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 Maryland Short-Term Tax-Free Bond
Fund (the Short-Term Bond Fund) and the Maryland 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
January 29, 1993, and March 31, 1987, respectively.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company
industry; these principles may require the use of estimates by fund
management.
Valuation Debt securities are generally traded in the over-the-counter
market. 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.
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. Expenses paid indirectly
reflect credits earned on daily uninvested cash balances at the custodian,
which are used to reduce each fund's custody charges.
33
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, for the six months ended August 31, 1999, were as follows:
--------------------------------------------------------------------------
Short-Term
Bond Fund Bond Fund
Purchases $ 26,009,000 $ 193,198,000
Sales 13,640,000 149,734,000
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute
all of its income. As of February 28, 1999, the Short-Term Bond Fund had
capital loss carryforwards for federal income tax purposes of $121,000,
all of which expires in 2004. The Short-Term Bond Fund intends to retain
gains realized in future periods that may be offset by available capital
loss carryforwards.
At August 31, 1999, the costs of investments for the Short-Term Bond and
Bond Funds were substantially the same for federal income tax purposes as
for financial reporting and totaled $130,013,000 and $1,029,965,000,
respectively. Net unrealized gain (loss) on investments was as follows:
--------------------------------------------------------------------------
Short-Term
Bond Fund Bond Fund
Appreciated investments $ 242,000 $ 35,822,000
Depreciated investments 613,000 (13,508,000)
-----------------------------
Net unrealized gain (loss) $ (371,000) $ 22,314,000
=============================
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment
management fee, of which $47,000 and $373,000 were payable at August 31,
1999 by the Short-Term Bond 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 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
34
<PAGE>
T. ROWE PRICE MARYLAND TAX-FREE FUNDS
- --------------------------------------------------------------------------------
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, 1999, and for the six months then ended, the
effective annual group fee rate was 0.32%. 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, 2001, which would cause
the Short-Term Bond Fund's ratio of total expenses to average net assets
to exceed 0.60%. Thereafter, through February 28, 2003, the Short-Term
Bond Fund is required to reimburse the manager for these expenses,
provided that average net assets have grown or expenses have declined
sufficiently to allow reimbursement without causing the Short-Term Bond
Fund's ratio of total expenses to average net assets to exceed 0.60%.
Pursuant to this agreement, $5,000 of management fees were not accrued by
the Short-Term Bond Fund for the six months ended August 31, 1999.
Additionally, $7,000 of unaccrued management fees related to a previous
expense limitation for the Short-Term Bond Fund are subject to
reimbursement through February 28, 2001.
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
Short-Term Bond and Bond Funds incurred expenses pursuant to these related
party agreements totaling approximately $74,000 and $293,000,
respectively, for the six months ended August 31, 1999, of which $14,000
and $56,000, respectively, were payable at period-end.
35
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m.
to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe
Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and
other securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and
results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price
Investment Services, Inc., Member NASD/SIPC.
** Based on a January 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
36
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
- ----------------------------------
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
- ----------------------------------
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free**
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond***
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
- ----------------------------------
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- ----------------------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
- --------------------------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors.
** Formerly named Florida Insured Intermediate Tax-Free.
*** Formerly named Tax-Free Insured Intermediate Bond.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by
investing in the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
37
<PAGE>
For fund and account information or to conduct transactions, 24 hours, 7 days a
week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account or obtain information, call:
1-800-638-5660
Internet address:
www.troweprice.com
Plan Account Lines for retirement plan participants:
The appropriate 800 number appears on your retirement account statement.
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 appropriate to the fund or funds
covered in this report.
Walk-In Investor Centers:
For directions, call 1-800-225-5132 or visit our Web site
Baltimore Area
Downtown
101 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. C12-051 8/31/99
