<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price
- --------------------------------------------------------------------------------
Semiannual Report
Virginia Tax-Free Funds
- --------------------------------------------------------------------------------
August 31, 1999
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
* Strong economic growth and rising interest rates hurt returns for
municipal bond investors.
* The Virginia Short-Term Tax-Free Bond Fund's income helped it post a
small six-month gain, but the fund trailed its Lipper peer group.
* The Virginia Tax-Free Bond Fund declined, but a more cautious approach
in the second quarter aided relative returns.
* With rates rising, managing interest rate exposure was critical to the
strategies for both funds.
* While rates could trend higher, Virginia bonds are offering attractive
yields compared with taxable alternatives.
================================================================================
UPDATES AVAILABLE
================================================================================
For updates on each fund following the end of every calendar quarter,
please see our Web site at www.troweprice.com.
================================================================================
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 N which became an actuality N 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.
================================================================================
<PAGE>
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 and to the increasing likelihood of action by
the Federal Reserve. Indeed, 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.
[Virginia Bond Yields chart here. Showing the Virginia Bond Index and the
Virginia 3-Year General Obligation Bond from 8/31/98 to 8/31/99.]
================================================================================
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.
<PAGE>
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 y ields 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 TreasuriesNincluding
corporate, asset-backed and mortgage-backed
bondsNhas 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.
- --------------------------------------------------------------------------------
[Municipal Treasury Yield ratio chart showing 1981-8/99 Tresury ratio and
Treasury Average. Source: Municipal Market Data.]
================================================================================
Interest rates rose across all maturities, with the bellwether 30-year
Treasury bond rising from the 5% area at the beginning of the year to over 6%
for the first time since mid-1998. Short-term yields rose a bit more than
intermediates and long-term bonds over the period. This created a flatter yield
curve N a typical occurrence when the Fed is actively raising short-term rates.
Virginia 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 from maturing bonds and
distributed income. For much of the period under review, Virginia bond returns
compared favorably with their taxable counterparts, despite overall price
declines.
<PAGE>
In August, however, this trend changed. A huge supply of corporate bonds
came to market, pushing up yields on these taxable bonds and attracting
"crossover" institutional buyers N 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.
Virginia's economic growth, already outpacing the nation's, continued to build
momentum. For the fiscal year ended June 30, 1999, job growth came in at 2.5%
and wage and salary growth was 7.4%. The unemployment rate is at a 46-year low,
with employment diversified across public and private sectors. Historically
conservative fiscal management also supports the commonwealth's credit. Virginia
anticipates a revenue surplus of $167 million from the 1999 fiscal year, driven
by a 10.6% increase in revenue collections over last fiscal year despite
decreases in the personal property tax and other taxes. Much of the increase is
attributable to higher net individual income tax collections based on strong
wage and salary growth. Of the $167 million, Governor Gilmore has earmarked $104
million for deposit into the Revenue Stabilization Fund, bringing its balance to
$700 million.
===============================
Virginia's economic growth,
already outpacing the
nation's, continued to
build momentum.
- -------------------------------
In August, Moody's upgraded Virginia's school district credit enhancement
program to Aa1 from Aa2 based on the commonwealth's healthy economic profile and
historical commitment to education. In other news, Gilmore recently announced a
six-year, $2.5 billion statewide transportation plan: he has proposed issuing up
to $600 million of tobacco settlement securitization bonds and $590 million of
other bonds to jump-start various transportation projects in Virginia. There is
a good chance that bond supply in Virginia will increase as a result of these
various initiatives and provide attractive investment alternatives in both the
short- and long-term areas of the market.
================================================================================
VIRGINIA SHORT-TERM TAX-FREE BOND FUND
================================================================================
PERFORMANCE COMPARISON
- ----------------------
Periods Ended 8/31/99 6 Months 12 Months
- --------------------- -------- ---------
Virginia Short-Term
Tax-Free Bond Fund 0.22% 2.45%
Lipper Short Municipal
Debt Funds Average 0.42 2.51
================================================================================
<PAGE>
The rising interest rate environment did not affect your fund as much it
did longer-term funds, but it did hold back returns. We posted a small 0.22%
gain, as a healthy income stream more than compensated for an $0.08 decline in
price per share. Dividends per share did not change from the previous 6- and
12-month periods. This showing moderately lagged the results for the Lipper
benchmark, which in this case measures national municipal funds. The high
quality of the Virginia municipal market sometimes limits our options for
investing in higher-yielding issues, a restraint not always faced by funds
investing nationally.
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 more 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 can't be conducted indiscriminately, however. In recent years, supply
among 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 impelled 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, but we did not cut duration
sharply. As the period wore on, we sought opportunities in three- and four-year
bonds when their yields became especially attractive. On August 31, duration
stood at 2.0 years, down from 2.3 years on February 28. This was closer to a
neutral position compared with our Lipper peer group.
During the six months, the weighted average quality of the portfolio
remained unchanged at AA. We added investments in the hospital and air-and-sea
transportation sectors, which in general offered better yields than the state's
general obligation or prerefunded bonds. Our holdings in the hospital sector
have grown steadily, from 9% on
August 31, 1998, to 14% at the end of the current period. Hospitals have
been under pressure around the country as Medicare reimbursement rates have
fallen and hospitals with excess capacity compete for patients. The difficulties
have chased away many investors, depressing prices (and, correspondingly,
improving yields) nationwide. Virginia's hospitals have not escaped Medicare
cuts, but the challenges posed by competitive pressures are not felt uniformly
in the Virginia economy. Some of the stronger hospital issues should hold up
better than their counterparts in other states, and we think that, considering
their high yields, they are a worthwhile investment.
================================================================================
<PAGE>
VIRGINIA TAX-FREE BOND FUND
================================================================================
PERFORMANCE COMPARISON
- ----------------------
Periods Ended 8/31/99 6 Months 12 Months
- --------------------- -------- ---------
Virginia Tax-Free Bond Fund -2.84% -0.69%
Lipper Virginia Municipal
Debt Funds Average -2.73 -1.00
================================================================================
For the six months, your fund suffered along with all fixed income markets,
posting a total return of -2.84%. A $0.59 price decline during the period
accounted for that showing and helped pull 12-month returns slightly into the
red at -0.69%. Six-month results modestly trailed the fund's Lipper peer group
average, as shown in the Performance Comparison chart. However, dividends per
share remained relatively strong, offsetting a portion of the principal decline.
They, along with our policy of maintaining below-average management fees, helped
the fund outperform its benchmark for the 12 months.
We have held to three fundamental principles in the management of your
fund:
* use strong credit analysis to separate the strong issuers from the
weak;
* maintain intensive market surveillance to take advantage of
inefficiencies in the municipal market; and
* combine our knowledge of market and economic trends to assemble the
best possible portfolio that meets our outlook and the objectives of
our shareholders.
We brought all of these to bear in this difficult period by managing our
duration posture and sector holdings to contain losses and put us in a strong
position for positive future total returns.
We came into the period with a longer-than-average 7.4-year duration
because we owned longer-maturity bonds with attractive yields (see Virginia
Short-Term Tax-Free Bond Fund for an explanation of duration). As rates rose in
the summer, however, prices of these interest rate-sensitive issues weakened.
Given the economic and market conditions, we shifted into bonds with more
defensive characteristics N primarily those with higher coupons and shorter
maturities N and took steps to combat duration extension. The portfolio's
duration can become longer N "extend" N 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 somewhat shorter than six months
ago, duration was a bit longer due to this effect.)
<PAGE>
Municipal interest rates have risen almost 100 basis points (one percentage
point) from the extraordinary global market environment of October 1998. As they
rose, we increased our trading activity in an effort to realize losses where
possible and reinvest the proceeds into higher-yielding securities. We felt this
strategy would allow us to distribute higher levels of income to shareholders
while also building losses that can offset future gains, reducing or eliminating
distributions of taxable capital gains.
The strong national and local economy improves the quality outlook for
tax-supported issues. These include state and local general obligation bonds,
which we have come to emphasize in our security selection. The combined
allocation to this sector increased to 18% of assets at the end of the period
from 15% six months earlier. Correspondingly, we reduced holdings in the health
care area, specifically hospital revenue bonds, from a heavy 21% to a more
moderate 16% during that time frame. We still find value in Virginia's
hospitals, but our holdings there were extensive and, given stricter Medicare
reimbursement rules, we felt some trimming was appropriate.
================================================================================
OUTLOOK
================================================================================
Interest rates could move higher in coming months because of persistent
strength in the domestic economy and 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 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
Virginia's tax-free municipal bonds relative to taxable securities with similar
characteristics.
Respectfully submitted,
/s/
Charles B. Hill
Chairman of the Investment Advisory Committee
Virginia Short-Term Tax-Free Bond Fund
/s/
Hugh D. McGuirk
Chairman of the Investment Advisory Committee
Virginia Tax-Free Bond Fund
September 23, 1999
================================================================================
<PAGE>
T. ROWE PRICE VIRGINIA TAX-FREE FUNDS
- -------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
KEY STATISTICS
- --------------
2/28/99 8/31/99
------- -------
VIRGINIA SHORT-TERM TAX-FREE BOND FUND
--------------------------------------
Price Per Share $ 5.18 $ 5.10
- -----------------------------------------------------------------------------
Dividends Per Share
For 6 months 0.09 0.09
- -----------------------------------------------------------------------------
For 12 months 0.19 0.19
- -----------------------------------------------------------------------------
Dividend Yield *
For 6 months 3.70% 3.57%
- -----------------------------------------------------------------------------
For 12 months 3.70 3.70
- -----------------------------------------------------------------------------
30-Day Standardized Yield 2.88 3.62
- -----------------------------------------------------------------------------
Weighted Average Maturity (years) 2.5 2.3
Weighted Average Effective Duration (years) 2.3 2.0
Weighted Average Quality ** AA AA
- -----------------------------------------------------------------------------
VIRGINIA TAX-FREE BOND FUND
---------------------------
Price Per Share $ 11.45 $ 10.86
- -----------------------------------------------------------------------------
Dividends Per Share
For 6 months 0.27 0.27
- -----------------------------------------------------------------------------
For 12 months 0.55 0.54
- -----------------------------------------------------------------------------
Dividend Yield *
For 6 months 4.88% 4.96%
- -----------------------------------------------------------------------------
For 12 months 4.94 5.11
- -----------------------------------------------------------------------------
30-Day Standardized Yield 4.09 4.74
- -----------------------------------------------------------------------------
Weighted Average Maturity (years) 16.0 14.9
Weighted Average Effective Duration (years) 7.4 7.8
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.
================================================================================
<PAGE>
T. ROWE PRICE VIRGINIA TAX-FREE FUNDS
- -------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
SECTOR DIVERSIFICATION
- ----------------------
Percent of Percent of
Net Assets Net Assets
2/28/99 8/31/99
------- -------
VIRGINIA SHORT-TERM TAX-FREE BOND FUND
--------------------------------------
Prerefunded Bonds 32% 28%
- -----------------------------------------------------------------------------
Hospital Revenue 12 14
- -----------------------------------------------------------------------------
General Obligation-- Local 16 13
- -----------------------------------------------------------------------------
Educational Revenue 5 7
- -----------------------------------------------------------------------------
Solid Waste Revenue 6 7
- -----------------------------------------------------------------------------
Air and Sea Transportation Revenue 2 6
- -----------------------------------------------------------------------------
Water and Sewer Revenue 10 6
- -----------------------------------------------------------------------------
Lease Revenue 4 5
- -----------------------------------------------------------------------------
Industrial and Pollution Control Revenue 4 4
- -----------------------------------------------------------------------------
Ground Transportation Revenue 4 4
- -----------------------------------------------------------------------------
General Obligation-- State 2 2
- -----------------------------------------------------------------------------
Life Care/Nursing Home Revenue 2 2
- -----------------------------------------------------------------------------
Escrowed to Maturity - 2
- -----------------------------------------------------------------------------
All Other 3 -
- -----------------------------------------------------------------------------
Other Assets Less Liabilities -2 -
- -----------------------------------------------------------------------------
Total 100% 100%
<PAGE>
VIRGINIA TAX-FREE BOND FUND
---------------------------
Hospital Revenue 21% 16%
- -----------------------------------------------------------------------------
General Obligation-- Local 9 14
- -----------------------------------------------------------------------------
Prerefunded Bonds 12 12
- -----------------------------------------------------------------------------
Educational Revenue 7 8
- -----------------------------------------------------------------------------
Housing Finance Revenue 8 8
- -----------------------------------------------------------------------------
Industrial and Pollution Control Revenue 5 6
- -----------------------------------------------------------------------------
Solid Waste Revenue 5 6
- -----------------------------------------------------------------------------
Lease Revenue 5 5
- -----------------------------------------------------------------------------
Dedicated Tax Revenue 4 4
- -----------------------------------------------------------------------------
Ground Transportation Revenue 3 4
- -----------------------------------------------------------------------------
General Obligation-- State 6 4
- -----------------------------------------------------------------------------
Air and Sea Transportation Revenue 4 3
- -----------------------------------------------------------------------------
Water and Sewer Revenue 4 3
- -----------------------------------------------------------------------------
Other Revenue - 3
- -----------------------------------------------------------------------------
Escrowed to Maturity 2 2
- -----------------------------------------------------------------------------
Life Care/Nursing Home Revenue 2 2
- -----------------------------------------------------------------------------
All Other 3 -
- -----------------------------------------------------------------------------
Other Assets Less Liabilities - -
- -----------------------------------------------------------------------------
Total 100% 100%
================================================================================
T. ROWE PRICE VIRGINIA TAX-FREE FUNDS
- -------------------------------------
PERFORMANCE COMPARISON
- ----------------------
These charts show the value of a hypothetical $10,000 investment in each
fund over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with 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 the fund returns as well as mutual
fund averages and indexes.
[Virginia Short-Term Tax-Free Bond Fund SEC chart shown here]
[Virginia Tax-Free Bond Fund SEC chart shown here]
<PAGE>
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 3 Years 5 Years Inception Date
- --------------------- ------ ------- ------- --------- ----
Virginia Short-Term
Tax-Free Bond Fund 2.45% 3.91% -- 4.47% 11/30/94
Virginia Tax-Free Bond Fund -0.69 5.49 6.09% 6.82 4/30/91
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
T. ROWE PRICE VIRGINIA SHORT-TERM TAX-FREE BOND FUND
- ---------------------------------------------------- UNAUDITED
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
6 Months Year 11/30/94
Ended Ended Through
8/31/99 2/28/99 2/28/98 2/28/97 2/29/96 2/28/95
------- ------- ------- ------- ------- -------
NET ASSET VALUE
---------------
Beginning of period $ 5.18 $ 5.15 $ 5.13 $ 5.16 $ 5.06 $ 5.00
- -----------------------------------------------------------------------------------------------------
Investment activities
Net investment income 0.09* 0.19* 0.19* 0.20* 0.21* 0.05*
Net realized and
unrealized gain (loss) (0.08) 0.04 0.03 (0.03) 0.11 0.06
- -----------------------------------------------------------------------------------------------------
Total from
investment activities 0.01 0.23 0.22 0.17 0.32 0.11
- -----------------------------------------------------------------------------------------------------
Distributions
Net investment income (0.09) (0.19) (0.19) (0.20) (0.21) (0.05)
Net realized gain - (0.01) (0.01) - (0.01) -
- -----------------------------------------------------------------------------------------------------
Total distributions (0.09) (0.20) (0.20) (0.20) (0.22) (0.05)
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 5.10 $ 5.18 $ 5.15 $ 5.13 $ 5.16 $ 5.06
==Ratios/Supplemental=Data===========================================================================
Total return** 0.22%* 4.51%* 4.48%* 3.33%* 6.43%* 2.28%*+
- -----------------------------------------------------------------------------------------------------
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 3.52%*+ 3.65%* 3.81%* 3.84%* 4.07%* 4.43%*+
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 33.6%+ 22.5% 75.0% 32.5% 36.4% 14.8%+
- -----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 27,148 $ 26,772 $ 20,361 $ 16,314 $ 12,480 $ 4,965
- -----------------------------------------------------------------------------------------------------
</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 2/29/00.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE VIRGINIA TAX-FREE BOND FUND
- ----------------------------------------- UNAUDITED
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FINANCIAL HIGHLIGHTS
- --------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
6 Months Year
Ended Ended
8/31/99 2/28/99 2/28/98 2/28/97 2/29/96 2/28/95
NET ASSET VALUE
---------------
Beginning of period $ 11.45 $ 11.45 $ 11.05 $ 11.09 $ 10.56 $ 11.00
- ----------------------------------------------------------------------------------------------------
Investment activities
Net investment income 0.27 0.55 0.57 0.57* 0.57* 0.57*
Net realized and
unrealized gain (loss) (0.59) 0.12 0.40 (0.04) 0.53 (0.43)
- ----------------------------------------------------------------------------------------------------
Total from
investment activities (0.32) 0.67 0.97 0.53 1.10 0.14
- ----------------------------------------------------------------------------------------------------
Distributions
Net investment income (0.27) (0.55) (0.57) (0.57) (0.57) (0.57)
Net realized gain - (0.12) - - - (0.01)
- ----------------------------------------------------------------------------------------------------
Total distributions (0.27) (0.67) (0.57) (0.57) (0.57) (0.58)
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 10.86 $ 11.45 $ 11.45 $ 11.05 $ 11.09 $ 10.56
<PAGE>
==Ratios/Supplemental=Data==========================================================================
Total return** (2.84%) 6.02% 9.03% 5.00%* 10.69%* 1.51%*
- ----------------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.56%+ 0.57% 0.58% 0.65%* 0.65%* 0.65%*
- ----------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets 4.77%+ 4.83% 5.12% 5.23%* 5.27%* 5.49%*
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 46.1%+ 47.3% 64.3% 66.2% 93.7% 89.1%
- ----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 281,775 $ 278,812 $ 238,282 $ 195,783 $ 178,750 $ 155,278
- ----------------------------------------------------------------------------------------------------
</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 2/28/97.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
T. ROWE PRICE VIRGINIA SHORT-TERM TAX-FREE BOND FUND
- ----------------------------------------------------
Unaudited August 31, 1999
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
VIRGINIA 89.9%
Abington IDA, Johnston Memorial Hosp., 5.00%, 7/1/02 $ 765 $ 774
- -----------------------------------------------------------------------------
Alexandria IDA, Ogden Martin, VRDN (Currently 2.90%) * 250 250
- -----------------------------------------------------------------------------
Arlington County IDA
Alexandria / Arlington Waste to Energy
5.25%, 1/1/03 (FSA Insured) 1,000 1,024
- -----------------------------------------------------------------------------
Augusta County IDA, Augusta Hosp.
6.10%, 9/1/00 (AMBAC Insured) 60 61
- -----------------------------------------------------------------------------
Bedford County IDA, Georgia-Pacific, 4.60%, 8/1/04 570 563
- -----------------------------------------------------------------------------
<PAGE>
Chesapeake Bay Bridge and Tunnel
5.10%, 7/1/01 (FGIC Insured) 945 961
- -----------------------------------------------------------------------------
6.375%, 7/1/22 (MBIA Insured)
(Prerefunded 7/1/01+) 690 730
- -----------------------------------------------------------------------------
Chesterfield County, Water & Sewer, 5.625%, 11/1/01 500 516
- -----------------------------------------------------------------------------
Fairfax County, GO, Public Improvement, 5.50%, 6/1/01 675 691
- -----------------------------------------------------------------------------
Fairfax County IDA
Fairfax Hosp. System, VRDN (Currently 3.25%) 665 665
- -----------------------------------------------------------------------------
Inova Health, VRDN (Currently 3.25%) 200 200
- -----------------------------------------------------------------------------
Fairfax County Sewer, 5.625%, 7/15/01 1,000 1,027
- -----------------------------------------------------------------------------
Henrico County IDA
Bon Secours Health, St. Mary's Hosp.
7.50%, 9/1/07 (Prerefunded 8/1/00+) 650 681
- -----------------------------------------------------------------------------
Hopewell IDA
Westport Convalescent Center
5.45%, 10/1/02 220 219
- -----------------------------------------------------------------------------
5.60%, 10/1/03 235 236
- -----------------------------------------------------------------------------
Leesburg Utility System
6.30%, 7/1/17 (MBIA Insured)
(Prerefunded 7/1/02+) 500 536
- -----------------------------------------------------------------------------
Newport News, GO, 5.00%, 7/1/04 645 661
- -----------------------------------------------------------------------------
Northern Virginia Transportation Dist., Commuter Rail
7.00%, 7/1/05 (FSA Insured)
(Prerefunded 7/1/00+) 970 1,015
- -----------------------------------------------------------------------------
Peninsula Port Auth.
Riverside Health Systems
5.00%, 7/1/01 345 349
- -----------------------------------------------------------------------------
5.00%, 7/1/02 360 364
- -----------------------------------------------------------------------------
5.90%, 7/1/00 120 122
- -----------------------------------------------------------------------------
Petersburg Hosp. Auth.
Southside Regional Medical Center, 5.60%, 7/1/00 $ 700 $ 710
- -----------------------------------------------------------------------------
Portsmouth, GO
5.60%, 8/1/01 500 513
- -----------------------------------------------------------------------------
Public Improvement
5.90%, 11/1/01 125 130
- -----------------------------------------------------------------------------
6.10%, 11/1/03 750 790
- -----------------------------------------------------------------------------
<PAGE>
Richmond, Public Improvement, 6.25%, 1/15/21
(Prerefunded 1/15/01+) 25 26
- -----------------------------------------------------------------------------
Richmond Metropolitan Auth., Expressway
5.75%, 7/15/22 (FGIC Insured)
(Prerefunded 7/15/02+) 320 333
- -----------------------------------------------------------------------------
Roanoke IDA, Roanoke Memorial Hosp.
Carilion Health Systems
VRDN (Currently 2.95%) 150 150
- -----------------------------------------------------------------------------
VRDN (Currently 3.00%) 100 100
- -----------------------------------------------------------------------------
VRDN (Currently 3.20%) 150 150
- -----------------------------------------------------------------------------
6.50%, 7/1/25 (MBIA Insured)
(Prerefunded 7/1/00+) 1,000 1,023
- -----------------------------------------------------------------------------
Southeastern Public Service Auth.
5.00%, 7/1/03 545 543
- -----------------------------------------------------------------------------
Upper Occoquan Sewage Auth.
6.50%, 7/1/17 (MBIA Insured)
(Prerefunded 7/1/01+) 1,430 1,516
- -----------------------------------------------------------------------------
Virginia, GO, 5.00%, 6/1/02 500 511
- -----------------------------------------------------------------------------
Virginia Beach, GO, 6.70%, 3/1/05 (Prerefunded 3/1/01+) 600 633
- -----------------------------------------------------------------------------
Virginia College Building Auth., Hampton Univ.,
5.20%, 4/1/02 435 443
- -----------------------------------------------------------------------------
Virginia Ed. Loan Auth., 5.40%, 9/1/01 (Escrowed
to Maturity) * 400 408
- -----------------------------------------------------------------------------
Virginia Polytechnic Institute and State Univ.,
5.375%, 6/1/01 1,450 1,480
- -----------------------------------------------------------------------------
Virginia Public Building Auth.
5.625%, 8/1/02 675 700
- -----------------------------------------------------------------------------
5.70%, 8/1/03 250 262
- -----------------------------------------------------------------------------
6.10%, 8/1/00 500 511
- -----------------------------------------------------------------------------
6.50%, 8/1/11 (Prerefunded 8/1/01+) 1,000 1,061
- -----------------------------------------------------------------------------
Virginia Public School Auth.
GO
4.90%, 1/1/03 550 559
- -----------------------------------------------------------------------------
6.00%, 8/1/01 200 207
- -----------------------------------------------------------------------------
Total Virginia (Cost $24,468) 24,404
- -----------------------------------------------------------------------------
<PAGE>
DISTRICT OF COLUMBIA 5.8%
Metropolitan Washington D.C. Airports Auth.
6.00%, 10/1/00 (MBIA Insured) * $ 500 $ 511
- -----------------------------------------------------------------------------
6.40%, 10/1/04 (MBIA Insured) * 1,000 1,068
- -----------------------------------------------------------------------------
Total District of Columbia (Cost $1,576) 1,579
- -----------------------------------------------------------------------------
PUERTO RICO 1.9%
Puerto Rico Ind. Medical and Environmental, PCR
4.25%, 9/1/03 500 497
- -----------------------------------------------------------------------------
Total Puerto Rico (Cost $500) 497
- -----------------------------------------------------------------------------
U. S. VIRGIN ISLANDS 1.1%
Virgin Island Water and Power Auth., 5.00%, 7/1/02 300 303
- -----------------------------------------------------------------------------
Total U. S. Virgin Islands (Cost $304) 303
Total Investments in Securities
- ----------------------------------------------------------
98.7% of Net Assets (Cost $26,848) $ 26,783
Other Assets Less Liabilities 365
NET ASSETS $ 27,148
Net Assets Consist of:
Accumulated net investment income - net
of distributions $ 1
Accumulated net realized gain/loss - net
of distributions 58
Net unrealized gain (loss) (65)
Paid-in-capital applicable to 5,319,170 no
par value shares of beneficial
interest outstanding; unlimited
number of shares authorized 27,154
NET ASSETS $ 27,148
NET ASSET VALUE PER SHARE $ 5.10
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. ROWE PRICE VIRGINIA TAX-FREE BOND FUND
- -----------------------------------------
Unaudited August 31, 1999
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
VIRGINIA 90.6%
Alexandria IDA, Ogden Martin, VRDN (Currently 2.90%) * $ 4,200 $ 4,200
- --------------------------------------------------------------------------------
Alexandria Redev. and Housing Auth., Residential Care Fac.
Goodwin House, 6.60%, 10/1/26 750 760
- --------------------------------------------------------------------------------
Arlington County
GO
5.00%, 10/1/12 1,325 1,310
- --------------------------------------------------------------------------------
5.375%, 12/1/12 1,000 1,015
- --------------------------------------------------------------------------------
6.00%, 6/1/10 3,655 3,962
- --------------------------------------------------------------------------------
6.00%, 6/1/11 1,000 1,081
- --------------------------------------------------------------------------------
Arlington County IDA
Alexandria /Arlington Waste
5.375%, 1/1/13 (FSA Insured) * 3,000 2,945
- --------------------------------------------------------------------------------
Arlington Hosp.
7.00%, 9/1/11 (Prerefunded 9/1/01+) 1,205 1,293
- --------------------------------------------------------------------------------
The Nature Conservancy
5.40%, 7/1/17 1,815 1,776
- --------------------------------------------------------------------------------
5.45%, 7/1/27 3,000 2,900
- --------------------------------------------------------------------------------
Augusta County Service Auth., Water and Sewer
5.00%, 11/1/24 (MBIA Insured) 1,000 907
- --------------------------------------------------------------------------------
Bedford County IDA, Nekoosa Packaging/Georgia-Pacific
5.60%, 12/1/25 * 4,000 3,690
- --------------------------------------------------------------------------------
Charles County Ind. Dev., Waste Management, 4.875%, 2/1/09 * 2,250 2,067
- --------------------------------------------------------------------------------
Chesapeake Toll Road, Expressway, 5.625%, 7/15/19 1,250 1,216
- --------------------------------------------------------------------------------
Chesterfield County, Water and Sewer, Zero Coupon, 11/1/10 2,050 1,149
- --------------------------------------------------------------------------------
Covington and Alleghany County IDA, PCR, Westvaco
6.65%, 9/1/18 1,500 1,600
- --------------------------------------------------------------------------------
<PAGE>
Danville IDA
Danville Regional Medical Center
5.20%, 10/1/18 (AMBAC Insured) 3,735 3,551
- --------------------------------------------------------------------------------
6.50%, 10/1/24 (FGIC Insured) (Prerefunded 10/1/04+) 3,000 3,294
- --------------------------------------------------------------------------------
Fairfax County Economic Dev. Auth., National Wildlife Fed
5.25%, 9/1/17 (MBIA Insured)(Prerefunded 12/15/02+) 2,500 2,418
- --------------------------------------------------------------------------------
Fairfax County Housing Auth., FCRHA Office Building
7.50%, 6/15/18 (Prerefunded 12/15/02+) 2,125 2,339
- --------------------------------------------------------------------------------
Fairfax County IDA
Fairfax Hosp. System, VRDN (Currently 3.25%) 800 800
- --------------------------------------------------------------------------------
Inova Health
VRDN (Currently 3.25%) 800 800
- --------------------------------------------------------------------------------
Fairfax County IDA
Inova Health
6.00%, 8/15/26 $ 3,315 $ 3,368
- --------------------------------------------------------------------------------
Fairfax County Water Auth.
5.00%, 4/1/21 2,500 2,310
- --------------------------------------------------------------------------------
5.80%, 1/1/16 (Escrowed to Maturity) 5,935 6,190
- --------------------------------------------------------------------------------
Frederick County IDA, Gov't. Complex Fac.
6.50%, 12/1/14 (MBIA Insured) 1,500 1,624
- --------------------------------------------------------------------------------
Fredericksburg IDA
Hosp. Fac. (MWH MediCorp Obligated Group)
Residual Interest Bond / Inverse Floater
(Currently 9.773%), 8/15/23 (FGIC Insured)
(Prerefunded 8/15/01+) 3,000 3,360
- --------------------------------------------------------------------------------
George Mason Univ., 6.375%, 2/1/13 (MBIA Insured) 1,415 1,520
- --------------------------------------------------------------------------------
Giles County IDA, Hoechst Celanese, 6.625%, 12/1/22 * 1,485 1,552
- --------------------------------------------------------------------------------
Goochland County IDA, Nekoosa Packaging/Georgia Pacific
5.65%, 12/1/25 * 750 693
- --------------------------------------------------------------------------------
Halifax County IDA, Halifax Regional Long-Term Care
5.625%, 7/1/12 1,585 1,503
- --------------------------------------------------------------------------------
Hampton, GO
Public Improvement, 5.125%, 1/15/15 1,500 1,459
- --------------------------------------------------------------------------------
Museum, 7.30%, 1/1/14 (Prerefunded 1/1/00+) 1,100 1,135
- --------------------------------------------------------------------------------
Hampton IDA, Sentara Health, 5.375%, 11/1/15 5,300 5,207
- --------------------------------------------------------------------------------
<PAGE>
Hampton Roads Medical College
6.875%, 11/15/11 1,000 1,058
- --------------------------------------------------------------------------------
6.875%, 11/15/11 (Prerefunded 11/15/01+) 500 529
- --------------------------------------------------------------------------------
6.875%, 11/15/16 (Prerefunded 11/15/01+) 500 537
- --------------------------------------------------------------------------------
Hampton Roads, Regional Jail Auth.
5.625%, 7/1/16 (MBIA Insured) 1,575 1,586
- --------------------------------------------------------------------------------
Hanover County IDA
Memorial Regional Medical Center
6.375%, 8/15/18 (MBIA Insured) 2,185 2,389
- --------------------------------------------------------------------------------
6.50%, 8/15/10 (MBIA Insured) 1,300 1,449
- --------------------------------------------------------------------------------
Henrico County IDA
Bon Secours Health
6.25%, 8/15/20 (MBIA Insured) 1,750 1,885
- --------------------------------------------------------------------------------
St. John's Hosp.
7.50%, 9/1/15 (Prerefunded 7/1/00+) 1,700 1,784
- --------------------------------------------------------------------------------
Henrico County IDA
St. Mary's Hosp.
6.00%, 8/15/16 (MBIA Insured) $ 1,045 $ 1,102
- --------------------------------------------------------------------------------
7.50%, 9/1/07 (Prerefunded 8/1/00+) 325 341
- --------------------------------------------------------------------------------
Motorola, VRDN (Currently 3.35%) * 3,000 3,000
- --------------------------------------------------------------------------------
Regional Jail
6.00%, 8/1/15 2,415 2,500
- --------------------------------------------------------------------------------
7.00%, 8/1/13 1,485 1,656
- --------------------------------------------------------------------------------
Henry County IDA, Memorial Hosp., 6.00%, 1/1/27 4,250 4,262
- --------------------------------------------------------------------------------
Hopewell IDA
Colonial Heights Convalescent Center
5.75%, 10/1/04 150 150
- --------------------------------------------------------------------------------
Forest Hill Convalescent Center
5.60%, 10/1/03 (Prerefunded 10/1/02+) 100 107
- --------------------------------------------------------------------------------
5.90%, 10/1/05 (Prerefunded 10/1/02+) 240 258
- --------------------------------------------------------------------------------
Westport Convalescent Center, 5.75%, 10/1/04 290 290
- --------------------------------------------------------------------------------
Isle of Wight IDA, Union Camp, 6.55%, 4/1/24 * 4,250 4,477
- --------------------------------------------------------------------------------
Loudoun County, GO, 5.25%, 12/1/13 1,360 1,353
- --------------------------------------------------------------------------------
<PAGE>
Lynchburg IDA
Centra Health
Zero Coupon, 8/15/24 (ACA Insured) 5,000 1,095
- --------------------------------------------------------------------------------
5.25%, 1/1/11 1,890 1,867
- --------------------------------------------------------------------------------
5.375%, 1/1/13 1,000 987
- --------------------------------------------------------------------------------
Manassas, GO, 5.25%, 1/1/11 1,550 1,561
- --------------------------------------------------------------------------------
Martinsville IDA
Memorial Hosp. of Martinsville and Henry County
7.00%, 1/1/11 (Prerefunded 1/1/01+) 950 984
- --------------------------------------------------------------------------------
Medical College of Virginia Hosp. Auth.
5.25%, 7/1/14 (MBIA Insured) 3,185 3,143
- --------------------------------------------------------------------------------
5.25%, 7/1/15 (MBIA Insured) 2,600 2,545
- --------------------------------------------------------------------------------
Montgomery County IDA, 5.125%, 1/15/19 (MBIA Insured) 1,750 1,647
- --------------------------------------------------------------------------------
Newport News, GO
5.375%, 1/15/16 1,000 989
- --------------------------------------------------------------------------------
5.50%, 7/1/12 (MBIA Insured) 2,500 2,543
- --------------------------------------------------------------------------------
5.625%, 7/1/14 (MBIA Insured) 4,030 4,097
- --------------------------------------------------------------------------------
5.85%, 12/20/30 1,400 1,410
- --------------------------------------------------------------------------------
Norfolk, GO
5.00%, 7/1/12 (FGIC Insured) 2,245 2,203
- --------------------------------------------------------------------------------
5.25%, 6/1/13 1,000 993
- --------------------------------------------------------------------------------
5.25%, 6/1/14 2,750 2,717
- --------------------------------------------------------------------------------
Norfolk IDA
Children's Hosp. of The King's Daughters
7.00%, 6/1/11 (AMBAC Insured)
(Prerefunded 6/1/01+) $ 1,150 $ 1,226
- --------------------------------------------------------------------------------
Sentara Hosp.
7.00%, 11/1/20 (Prerefunded 11/1/00+) 1,045 1,102
- --------------------------------------------------------------------------------
7.10%, 11/1/10 (Prerefunded 11/1/00+) 850 897
- --------------------------------------------------------------------------------
Norfolk Redev. and Housing Auth., Merrimack Landing
5.50%, 12/1/13 1,000 1,006
- --------------------------------------------------------------------------------
Northern Virginia Transportation Dist.
Commuter Rail
5.375%, 7/1/14 (FSA Insured) 3,200 3,195
- --------------------------------------------------------------------------------
6.00%, 7/1/09 (MBIA Insured) 1,170 1,261
- --------------------------------------------------------------------------------
<PAGE>
Peninsula Port Auth.
Dominion Terminal, 7.375%, 6/1/20 2,000 2,117
- --------------------------------------------------------------------------------
Riverside Health, 6.625%, 7/1/18 (Prerefunded 7/1/02+) 3,020 3,258
- --------------------------------------------------------------------------------
Pocahontas Parkway Assoc., Toll Road, Zero Coupon, 8/15/18 3,000 874
- --------------------------------------------------------------------------------
Portsmouth, GO, 5.00%, 8/1/17 (FGIC Insured) 2,000 1,878
- --------------------------------------------------------------------------------
Prince William County Service Auth.
Water and Sewer Systems
4.75%, 7/1/29 (FGIC Insured) 3,625 3,092
- --------------------------------------------------------------------------------
Richmond, GO
Public Improvement, 5.50%, 1/15/16 1,100 1,099
- --------------------------------------------------------------------------------
Refunding and Improvement
5.00%, 1/15/19 (FSA Insured) 4,055 3,765
- --------------------------------------------------------------------------------
Richmond Metropolitan Auth.
Expressway
5.25%, 7/15/17 (FGIC Insured) 2,700 2,626
- --------------------------------------------------------------------------------
5.25%, 7/15/22 (FGIC Insured) 5,550 5,308
- --------------------------------------------------------------------------------
Roanoke County IDA, Roanoke Memorial Hosp.
Carilion Health Systems
VRDN (Currently 2.95%) 550 550
- --------------------------------------------------------------------------------
VRDN (Currently 3.00%) 800 800
- --------------------------------------------------------------------------------
VRDN (Currently 3.20%) 3,815 3,815
- --------------------------------------------------------------------------------
6.125%, 7/1/17 (MBIA Insured) 3,905 4,161
- --------------------------------------------------------------------------------
Hollins College, 5.20%, 3/15/17 1,150 1,084
- --------------------------------------------------------------------------------
Southeastern Public Service Auth.
5.00%, 7/1/02 (AMBAC Insured) $ 1,475 $ 1,476
- --------------------------------------------------------------------------------
5.00%, 7/1/03 (AMBAC Insured) 1,000 996
- --------------------------------------------------------------------------------
5.00%, 7/1/15 (AMBAC Insured) 3,550 3,378
- --------------------------------------------------------------------------------
Univ. of Virginia
VRDN (Currently 3.25%) 1,000 1,000
- --------------------------------------------------------------------------------
5.20%, 6/1/15 2,300 2,248
- --------------------------------------------------------------------------------
5.25%, 6/1/13 3,880 3,865
- --------------------------------------------------------------------------------
<PAGE>
Virginia, GO
5.25%, 12/1/13 4,000 3,988
- --------------------------------------------------------------------------------
5.375%, 6/1/16 1,700 1,699
- --------------------------------------------------------------------------------
Virginia Beach, GO, 5.25%, 8/1/13 1,000 994
- --------------------------------------------------------------------------------
Virginia Beach Dev. Auth.
Beverly Enterprises, 10.00%, 4/1/10 1,910 2,004
- --------------------------------------------------------------------------------
Sentara Bayside Hosp.
6.60%, 11/1/09 (Prerefunded 11/1/01+) 3,650 3,898
- --------------------------------------------------------------------------------
Virginia Beach General Hosp.
6.00%, 2/15/10 (AMBAC Insured) 1,000 1,075
- --------------------------------------------------------------------------------
Virginia College Building Auth.
21st Century College Program, 5.00%, 8/1/10 850 845
- --------------------------------------------------------------------------------
Randolph Macon College
6.625%, 5/1/13 (Prerefunded 5/1/02+) 1,000 1,077
- --------------------------------------------------------------------------------
Univ. of Richmond, VRDN (Currently 3.25%) 500 500
- --------------------------------------------------------------------------------
Washington and Lee Univ.
5.25%, 1/1/26 2,320 2,199
- --------------------------------------------------------------------------------
5.25%, 1/1/31 (MBIA Insured) 2,000 1,886
- --------------------------------------------------------------------------------
Virginia Commonwealth Univ., State Univ., 5.75%, 5/1/21 1,800 1,802
- --------------------------------------------------------------------------------
Virginia HDA
5.45%, 11/1/12 1,470 1,472
- --------------------------------------------------------------------------------
5.50%, 11/1/13 1,550 1,559
- --------------------------------------------------------------------------------
5.60%, 11/1/18 2,500 2,471
- --------------------------------------------------------------------------------
5.85%, 7/1/12 1,000 1,019
- --------------------------------------------------------------------------------
6.35%, 11/1/01 1,000 1,027
- --------------------------------------------------------------------------------
6.375%, 1/1/26 * 2,000 2,045
- --------------------------------------------------------------------------------
6.45%, 7/1/28 (MBIA Insured) * 2,000 2,022
- --------------------------------------------------------------------------------
6.50%, 5/1/13 * 2,000 2,102
- --------------------------------------------------------------------------------
6.55%, 1/1/17 700 713
- --------------------------------------------------------------------------------
6.60%, 7/1/04 * 1,200 1,221
- --------------------------------------------------------------------------------
7.05%, 5/1/18 840 892
- --------------------------------------------------------------------------------
<PAGE>
Virginia HDA
7.10%, 5/1/13 $ 1,500 $ 1,566
- --------------------------------------------------------------------------------
Virginia Polytechnic Institute and State Univ.
Univ. Services
5.40%, 6/1/11 1,250 1,267
- --------------------------------------------------------------------------------
5.50%, 6/1/16 3,000 2,994
- --------------------------------------------------------------------------------
5.50%, 6/1/20 2,100 2,034
- --------------------------------------------------------------------------------
Virginia Port Auth., Commonwealth Port Fund, 5.55%, 7/1/12 * 1,250 1,267
- --------------------------------------------------------------------------------
Virginia Public Building Auth.
6.25%, 8/1/15 (Prerefunded 8/1/04+) 1,550 1,681
- --------------------------------------------------------------------------------
Virginia Public School Auth., GO
5.00%, 8/1/18 2,035 1,898
- --------------------------------------------------------------------------------
5.375%, 8/1/17 2,245 2,208
- --------------------------------------------------------------------------------
6.50%, 8/1/12 (Prerefunded 8/1/01+) 1,700 1,804
- --------------------------------------------------------------------------------
6.50%, 8/1/16 2,890 3,102
- --------------------------------------------------------------------------------
Virginia Transportation Board
Northern Virginia Transportation Dist.
5.125%, 5/15/19 2,000 1,881
- --------------------------------------------------------------------------------
Route 28 Project, 6.50%, 4/1/18 1,000 1,060
- --------------------------------------------------------------------------------
Washington County IDA
Johnston Memorial Hosp.
6.25%, 7/1/06 (Prerefunded 7/1/05+) 1,660 1,783
- --------------------------------------------------------------------------------
6.75%, 7/1/12 (Prerefunded 7/1/02+) 1,500 1,621
- --------------------------------------------------------------------------------
Total Virginia (Cost $256,078) 255,241
- --------------------------------------------------------------------------------
DISTRICT OF COLUMBIA 3.2%
Metropolitan Washington D.C. Airport Auth.
5.50%, 10/1/23 * 4,750 4,554
- --------------------------------------------------------------------------------
5.75%, 10/1/11 (MBIA Insured) * 1,500 1,546
- --------------------------------------------------------------------------------
6.625%, 10/1/19 (MBIA Insured) * 2,800 2,981
- --------------------------------------------------------------------------------
Total District of Columbia (Cost $8,922) 9,081
- --------------------------------------------------------------------------------
PUERTO RICO 5.1%
Puerto Rico Commonwealth, GO
Capital Appreciation
Zero Coupon, 7/1/18 (MBIA Insured) 2,500 890
- --------------------------------------------------------------------------------
Puerto Rico Electric Power Auth.
5.25%, 7/1/13 (MBIA Insured) 2,300 2,297
- --------------------------------------------------------------------------------
Puerto Rico Highway and Transportation Auth.
5.50%, 7/1/13 (MBIA Insured) $ 1,250 $ 1,284
- --------------------------------------------------------------------------------
5.50%, 7/1/15 (FSA Insured) 2,000 2,034
- --------------------------------------------------------------------------------
5.50%, 7/1/18 2,145 2,103
- --------------------------------------------------------------------------------
6.25%, 7/1/14 1,500 1,632
- --------------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, GO
5.50%, 7/1/21 (FSA Insured) 3,300 3,302
- --------------------------------------------------------------------------------
Puerto Rico Public Building Auth., GO, Gov't. Fac.
5.00%, 7/1/27 (AMBAC Insured) 1,000 916
- --------------------------------------------------------------------------------
Total Puerto Rico (Cost $14,618) 14,458
- --------------------------------------------------------------------------------
Total Investments in Securities
98.9% of Net Assets (Cost $279,618) $ 278,780
Other Assets Less Liabilities 2,995
NET ASSETS $ 281,775
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 12
Accumulated net realized gain/loss -
net of distributions (1,028)
Net unrealized gain (loss) (838)
Paid-in-capital applicable to 25,941,912 no
par value shares of beneficial
interest outstanding; unlimited
number of shares authorized 283,629
NET ASSETS $ 281,775
NET ASSET VALUE PER SHARE $ 10.86
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
ACA American Credit Access
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance Corp.
GO General Obligation
HDA Housing Development 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.
================================================================================
T. ROWE PRICE VIRGINIA TAX-FREE FUNDS
- -------------------------------------
Unaudited
STATEMENT OF OPERATIONS
- -----------------------
Short-Term
Bond Fund Bond Fund
--------- ---------
6 Months 6 Months
Ended Ended
8/31/99 8/31/99
==Investment=Income============================================================
Interest income $ 558 $ 7,691
- -------------------------------------------------------------------------------
Expenses
Custody and accounting 45 59
Shareholder servicing 15 106
Investment management 8 606
Legal and audit 6 7
Trustees 3 3
Prospectus and shareholder reports 1 15
Registration - 4
Miscellaneous 3 2
- -------------------------------------------------------------------------------
Total expenses 81 802
- -------------------------------------------------------------------------------
Net investment income 477 6,889
- -------------------------------------------------------------------------------
==Realized=and=Unrealized=Gain=(Loss)==========================================
Net realized gain (loss)
Securities 52 (999)
Futures - 21
- -------------------------------------------------------------------------------
Net realized gain (loss) 52 (978)
Change in net unrealized gain (loss) on securities (463) (14,056)
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (411) (15,034)
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 66 $ (8,145)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
================================================================================
T. ROWE PRICE VIRGINIA TAX-FREE FUNDS
- ------------------------------------- Unaudited
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
Short-Term
Bond Fund Bond Fund
In thousands
6 Months Year 6 Months Year
Ended Ended Ended Ended
8/31/99 2/28/99 8/31/99 2/28/99
Increase=(Decrease)=in=Net=Assets=============================================
Operations
Net investment income $ 477 $ 887 $ 6,889 $ 12,390
Net realized gain (loss) 52 28 (978) 1,657
Change in net unrealized
gain or loss (463) 210 (14,056) 901
- ------------------------------------------------------------------------------
Increase (decrease) in
net assets from operations 66 1,125 (8,145) 14,948
- ------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (477) (887) (6,889) (12,390)
Net realized gain - (42) - (2,672)
- ------------------------------------------------------------------------------
Decrease in net assets
from distributions (477) (929) (6,889) (15,062)
- ------------------------------------------------------------------------------
Capital share transactions*
Shares sold 7,490 16,469 39,673 66,340
Distributions reinvested 428 799 5,230 11,719
Shares redeemed (7,131) (11,053) (26,906) (37,415)
- ------------------------------------------------------------------------------
Increase (decrease) in
net assets from capital
share transactions 787 6,215 17,997 40,644
- ------------------------------------------------------------------------------
Net=Assets====================================================================
Increase (decrease)
during period 376 6,411 2,963 40,530
Beginning of period 26,772 20,361 278,812 238,282
- ------------------------------------------------------------------------------
==============================================================================
END OF PERIOD $ 27,148 $ 26,772 $ 281,775 $ 278,812
==============================================================================
*Share information
Shares sold 1,457 3,196 3,522 5,793
Distributions reinvested 84 155 469 1,022
Shares redeemed (1,388) (2,143) (2,407) (3,267)
- ------------------------------------------------------------------------------
Increase (decrease)
in shares outstanding 153 1,208 1,584 3,548
The accompanying notes are an integral part of these financial statements.
================================================================================
T. ROWE PRICE VIRGINIA 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 Virginia Short-Term Tax-Free Bond Fund
(the Short-Term Bond Fund) and the Virginia 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 November 30,
1994, and April 30, 1991, 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. Credits earned on daily uninvested cash balances at the
custodian are used to reduce each fund's custody charges.
================================================================================
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 $ 4,364,000 $ 70,367,000
Sales 4,928,000 63,047,000
================================================================================
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.
At August 31, 1999, the costs of investments for the Short-Term Bond and
Bond Funds for federal income tax purposes was substantially the same as for
financial reporting and totaled $26,848,000 and $279,618,000 respectively. Net
unrealized gain (loss) on investments were as follows:
Short-Term
Bond Fund Bond Fund
--------- ---------
Appreciated investments $ 45,000 $ 4,994,000
Depreciated investments (110,000) (5,832,000)
Net unrealized gain (loss) $ (65,000) $ (838,000)
================================================================================
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 $2,000 and $100,000 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 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 29, 2000, 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, 2002, 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, $49,000 of management fees were not
accrued by the Short-Term Bond Fund for the six months ended August 31, 1999,
and $97,000 of management fees and expenses remain unaccrued from a prior
period.
Additionally, $184,000 of unaccrued fees and expenses from a previous
agreement remain subject to reimbursement through February 29, 2000.
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 $45,000 and $119,000, respectively, for the six months ended
August 31, 1999, of which $8,000 and $22,000, respectively, were payable at
period-end.
================================================================================
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*AccessRegistration Mark 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.**
<PAGE>
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.
======================================================================
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 OBTAININFORMATION, CALL:
1-800-638-5660
<PAGE>
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
T. Rowe Price Investment Services, Inc., Distributor. C14-051 8/31/99
