Semiannual Report
New York Tax-Free Funds
August 31, 2000
T. Rowe Price
REPORT HIGHLIGHTS
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New York Tax-Free Funds
o Favorable supply-and-demand conditions helped municipal bonds post strong
returns for the six months ended August 31.
o The bond fund provided excellent results that exceeded its peer group
averages, while the money fund also generated good relative returns.
o The credit ratings of both New York State and City securities were upgraded
during the period.
o Municipal bonds were undervalued at the start of the year but made up much
lost ground versus taxable counterparts. We remain optimistic about
financial conditions within the state.
UPDATES AVAILABLE
For updates on T. Rowe Price funds following the end of each calendar quarter,
please see our Web site at www.troweprice.com.
Fellow Shareholders
Municipal bonds turned in a strong performance for the six months ended August
31, largely due to favorable supply-and-demand factors in the market. Investors
were encouraged by aggressive action taken by the Federal Reserve in its effort
to curb above-average economic growth and stem inflation. As a result, the bond
fund provided excellent returns for the 6- and 12-month periods, while the money
fund generated good results relative to its peers.
MARKET ENVIRONMENT
New York Yield Indexes
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New York New York
Bond Index Money Index
8/31/99 5.85 3.15
6.04 3.70
6.17 3.35
11/99 6.10 3.60
6.27 5.35
6.30 2.75
2/00 6.11 3.65
5.84 3.70
6.01 5.25
5/00 6.01 3.90
5.89 4.55
5.76 4.05
Fixed-income markets in 2000 have been largely influenced by the Federal
Reserve's tightening program, heightened volatility in the equity market,
and the government's buyback of U.S. Treasury bonds. Fed activity, which
includes federal funds rate increases totaling 75 basis points during the
past six months, finally seems to be exerting some weight on the resilient
U.S. economy. (One hundred basis points equal one percent.) The Fed's
expressed determination to slow economic growth and engineer a soft landing
has injected a note of sobriety into equity markets.
Municipal bond prices rose and yields declined during the period, aided by
outsized demand for tax-exempt securities. The supply of new issues, down
20% through August versus the same period last year, has been capped by
higher borrowing costs than last year and lower borrowing needs of state
and local governments. Demand, particularly from buyers of individual
bonds, has been quite strong as attractive taxable-equivalent yields have
enticed both fixed-income investors and others seeking to rebalance their
portfolios with bonds. Money market yields moved somewhat higher due to the
Federal Reserve's activity.
New York continues to show solid and sustained economic growth, which has
improved the state's financial condition. Unlike the 1980s and 1990s with
their annual deficits, the state ended fiscal 1999-2000 with a substantial
surplus of $2.2 billion in the general fund. Since our last report, the
state enacted a debt reform measure seeking to cap debt at affordable
levels. In light of these trends, Moody's Investors Service upgraded state
securities in July and New York City securities a month later.
NEW YORK TAX-FREE MONEY FUND
Performance Comparison
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Periods Ended 8/31/00 6 Months 12 Months
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New York Tax-Free
Money Fund 1.75% 3.26%
Lipper New York Tax-Exempt
Money Market Funds Average 1.75 3.22
The fund's return for the past six months was 1.75%, the same as the peer
group average. For the 12 months ended August 31, the fund performed
slightly better at 3.26% versus 3.22% for the Lipper average for similar
funds.
During the past six months, the Federal Reserve raised short-term interest
rates two more times for a total of 75 basis points. Rates have been hiked
six times in all since June 1999 in a series of tightening moves that have
lifted the key fed funds rate 175 basis points to 6.50%. Since February 29,
short-term tax-exempt rates reacted less to the Fed's actions than would be
expected, rising 20 basis points to 4.25% for six-month securities and only
10 basis points to 4.30% for one-year rates. Evidence of higher short-term
rates was more readily seen in the tax-exempt variable rate sector, where
yields over the past six months averaged 4.18%, about 70 basis points more
than their average over the previous six-month period.
The larger move in the variable rate market, comprising one- and seven-day
maturities, relative to 6- and 12-month maturities resulted in a flatter
short-term yield curve. On August 31, a one-day investment in the
tax-exempt market yielded the same as a one-year investment. The average
variable rate security over the past six months yielded 4.18% compared with
an average of 4.39% for a one-year security. Indeed, to the investor there
was not much of a sacrifice in yield associated with highly liquid cash
investments.
Short-term New York notes offered yields from five to 10 basis points lower
than national securities during the period, making them quite attractive on
a taxable equivalent basis. (One hundred basis points equal one percent.)
Asset growth in New York tax-exempt funds of almost 20% in the past year
outpaced that of the overall market. The state has enjoyed continued
economic growth and has ended its fiscal year with a substantial surplus.
The fund closed the period with a weighted average maturity (WAM) of 51
days, only three days longer than at the end of February. We began the
six-month period 12 days longer than the peer group average, but by August
31 our competitors had lengthened their portfolios to only a day shorter
than the fund's WAM.
NEW YORK TAX-FREE BOND FUND
Performance Comparison
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Periods Ended 8/31/00 6 Months 12 Months
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New York Tax-Free
Bond Fund 7.22% 6.55%
Lipper New York Municipal
Debt Funds Average 6.63 5.29
Your fund's returns for the 6- and 12-month periods were 7.22% and 6.55%,
respectively, well ahead of the Lipper peer group average. Six-month
dividends per share were up a penny to $0.27 cents from last February, but
the bulk of the returns came primarily from price appreciation as the
fund's net asset value rose from $10.20 to $10.66 per share over the past
six months.
The fund's relatively strong performance can be attributed to its slightly
longer duration than the peer group average. (Duration is a measure of
interest rate volatility. For example, a fund with a duration of eight
years can be expected to rise or fall about 8% in price in response to a
one-percentage-point fall or rise in interest rates.) We moved the duration
slightly longer during the early summer as it became evident that municipal
supply would remain low at least until the fall. Performance was further
enhanced by the fund's emphasis on a barbell structure, which means
holdings were concentrated in both short- and long-term bonds. Securities
with maturities of 20 years and longer appreciated most in value.
Additionally, our low cash reserves and strategy of remaining fully
invested proved beneficial as well.
Weighted average quality remained unchanged at AA-. Our largest holding,
NYC Water Authority bonds representing about 8% of assets, was upgraded to
Aa3/AA from A1/A by both Moody's and Standard & Poor's. Higher-quality
bonds continued to outperform as their yield differences with lower-quality
securities widened in many instances. We bought Nassau County general
obligation bonds rated BBB-, since there are encouraging signs of a
possible turnaround in the county's financial outlook. Nassau's political
leaders have agreed to let a state oversight committee monitor the county's
progress in improving its finances so that they reflect the county's
standing as one of the nation's wealthiest.
Regarding sector diversification, we increased our exposure in three major
sectors: educational revenue, nuclear revenue, and life care/nursing home
revenue bonds. We added certain attractive credits within these sectors to
diversify and lighten our exposure to dedicated tax revenue securities. In
our last report, we mentioned that we reduced our exposure to hospital
holdings because of concerns within the industry. We still believe that the
negative effects of health care reform could have a lag effect in New York
relative to the national health care market, and we kept a lower exposure
to that sector.
OUTLOOK
While higher oil prices have not yet caused significant deterioration in
the inflation outlook, they are acting like a tax on consumer activity.
Slower consumer demand growth and the resultant need of manufacturers to
reduce the pace of inventory accumulation will continue to restrain
production and hiring. Energy price pressures may persist, but other costs
should continue to ease as production growth moderates. As a result, it
appears increasingly likely that the Fed's tightening cycle may have ended
for the foreseeable future.
We began the year believing that the municipal market was substantially
undervalued after a particularly weak period in late 1999. Municipal bonds
have recovered much ground in 2000, and we expect the current mix of low
supply and strong demand to continue. The economic backdrop favors stable
to improving municipal bond prices barring a change in the outlook for
inflation.
We remain optimistic about New York State's economic outlook but will
continue to monitor debt levels. Both New York State and New York City
still face projected budget deficits. In addition, due to the state's high
dependence on the financial services industry, the risk of stock or bond
market weakness would affect New York's coffers more than other states.
Respectfully submitted,
Patrice L. Berchtenbreiter
Chairman of the Investment Advisory Committee
New York Tax-Free Money Fund
Konstantine B. Mallas
Chairman of the Investment Advisory Committee
New York Tax-Free Bond Fund
September 22, 2000
T. Rowe Price New York Tax-Free Funds
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Portfolio Highlights
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KEY STATISTICS
2/29/00 8/31/00
New York Tax-Free Money Fund
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Price Per Share $ 1.00 $ 1.00
Dividends Per Share
For 6 months 0.015 0.017
For 12 months 0.028 0.032
Dividend Yield (7-Day Compound) * 3.31% 3.65%
Weighted Average Maturity (days) 48 51
Weighted Average Quality** First Tier First Tier
New York Tax-Free Bond Fund
Price Per Share $ 10.20 $ 10.66
Dividends Per Share
For 6 months 0.26 0.27
For 12 months 0.52 0.53
Dividend Yield *
For 6 months 5.21% 5.04%
For 12 months 5.24 5.08
30-Day Standardized Yield 5.25 4.89
Weighted Average Maturity (years) 17.8 17.7
Weighted Average Effective Duration (years) 9.2 8.1
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.
** All securities purchased in the money fund are rated in the two highest
categories as established by the national rating agencies or, if unrated,
are deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
T. Rowe Price New York Tax-Free Funds
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Portfolio Highlights
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SECTOR DIVERSIFICATION
Percent of Percent of
Net Assets Net Assets
2/29/00 8/31/00
New York Tax-Free Money Fund
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Housing Finance Revenue 14% 15%
Water and Sewer Revenue 12 12
Prerefunded Bonds 18 10
General Obligation - Local 9 9
Nuclear Revenue 7 9
Educational Revenue 2 7
Ground Transportation Revenue 4 7
Dedicated Tax Revenue 13 6
Miscellaneous Revenue 9 6
General Obligation - State 3 6
Electric Revenue 3 4
Industrial and Pollution Control Revenue 2 3
Hospital Revenue 4 2
All Other 1 1
Other Assets Less Liabilities -1 3
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Total 100% 100%
New York Tax-Free Bond Fund
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Dedicated Tax Revenue 19% 15%
Lease Revenue 15 14
Educational Revenue 7 10
Housing Finance Revenue 8 9
General Obligation - Local 8 8
Water and Sewer Revenue 9 8
Air and Sea Transportation Revenue 7 7
Hospital Revenue 6 5
Prerefunded Bonds 5 5
Nuclear Revenue 1 4
Ground Transportation Revenue 4 4
Miscellaneous Revenue 3 3
Life Care/Nursing Home Revenue 1 2
Industrial and Pollution Control Revenue 2 2
All Other 4 3
Other Assets Less Liabilities 1 1
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Total 100% 100%
T. Rowe Price New York Tax-Free Funds
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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 fund
returns as well as mutual fund averages and indexes.
NEW YORK TAX-FREE MONEY FUND
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Lipper New York New York
Tax-Exempt Money Tax-Free
Market Funds Average Money Fund
8/90 10.000 10.000
8/91 10.436 10.420
8/92 10.744 10.723
8/93 10.948 10.931
8/94 11.156 11.145
8/95 11.502 11.497
8/96 11.843 11.843
8/97 12.195 12.203
8/98 12.557 12.573
8/99 12.875 12.902
8/00 13.283 13.322
NEW YORK TAX-FREE BOND FUND
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Lehman Municipal Lipper New York New York
Bond Index Municipal Debt Tax-Free
Funds Average Funds Average Bond Fund
8/90 10.000 10.000 10.000
8/91 11.179 11.157 11.108
8/92 12.427 12.539 12.497
8/93 13.944 14.176 14.160
8/94 13.963 13.981 14.081
8/95 15.201 14.886 15.163
8/96 15.997 15.563 15.999
8/97 17.476 16.985 17.434
8/98 18.988 18.447 19.055
8/99 19.083 18.164 18.747
8/00 20.375 19.176 19.976
Average Annual Compound Total Return
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This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 8/31/00 1 Year 3 Years 5 Years 10 Years
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New York Tax-Free Money Fund 3.26% 2.97% 2.99% 2.91%
New York Tax-Free Bond Fund 6.55 4.64 5.67 7.16
Investment return represents past performance and will vary. Shares of the
bond fund may be worth more or less at redemption than at original
purchase, as their principal value will fluctuate. Investments in the Money
Fund are not insured or guaranteed by the FDIC or any other government
agency. Although it seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.
T. Rowe Price New York Tax-Free Money Fund
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Unaudited
Financial Highlights For a share outstanding throughout each period
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6 Months Year
Ended Ended
8/31/00 2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
NET ASSET VALUE
Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment activities
Net investment
income (loss) 0.017* 0.028* 0.028* 0.031* 0.029* 0.032*
Distributions
Net investment
income (0.017) (0.028) (0.028) (0.031) (0.029) (0.032)
NET ASSET VALUE
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
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Ratios/Supplemental Data
Total return(diamond) 1.75%* 2.79%* 2.81%* 3.11%* 2.91%* 3.26%*
Ratio of total
Expenses to average
net assets 0.55%!* 0.55%* 0.55%* 0.55%* 0.55%* 0.55%*
Ratio of net investment
income (loss) to average
net assets 3.45%!* 2.76%* 2.77%* 3.07%* 2.86%* 3.21%*
Net assets,
end of period
(in thousands) $114,616 $114,524 $106,119 $ 95,333 $ 82,729 $71,040
(diamond) 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 0.55% voluntary expense limitation in
effect through 2/28/01.
! Annualized
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Bond Fund
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Unaudited
Financial Highlights For a share outstanding throughout each period
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6 Months Year
Ended Ended
8/31/00 2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
NET ASSET VALUE
Beginning of period $ 10.20 $ 11.23 $ 11.26 $ 10.80 $ 10.85 $ 10.37
Investment activities
Net investment
income (loss) 0.27 0.52 0.53 0.57 0.57* 0.58*
Net realized and
unrealized gain (loss) 0.46 (1.02) 0.13 0.46 (0.05) 0.48
Total from
investment
activities 0.73 (0.50) 0.66 1.03 0.52 1.06
Distributions
Net investment
income (0.27) (0.52) (0.53) (0.57) (0.57) (0.58)
Net realized gain -- (0.01) (0.16) -- -- --
Total distributions (0.27) (0.53) (0.69) (0.57) (0.57) (0.58)
NET ASSET VALUE
End of period $ 10.66 $ 10.20 $ 11.23 $ 11.26 $ 10.80 $ 10.85
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Ratios/Supplemental Data
Total return(diamond) 7.22% (4.47)% 6.08% 9.75% 5.02%* 10.44%*
Ratio of total
expenses to
average net assets 0.56%! 0.58% 0.59% 0.61% 0.65%* 0.65%*
Ratio of net
Investment income
(loss) to average
net assets 5.11%! 4.94% 4.77% 5.16% 5.35%* 5.42%*
Portfolio
turnover rate 35.8%! 77.5% 55.4% 55.0% 96.9% 116.0%
Net assets,
end of period
(in thousands) $191,925 $180,243 $216,010 $177,393 $144,532 $134,933
(diamond) 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 New York Tax-Free Money Fund
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Unaudited August 31, 2000
Statement of Net Assets Par Value
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In thousands
NEW YORK 97.4%
Brentwood Union Free School Dist., GO, TAN
5.00%, 6/29/01 $ 1,000 $ 1,005
Dormitory Auth. of the State of New York
Mount Sinai School, TECP, 4.10%, 9/7/00 3,600 3,600
Cornell Univ., VRDN (Currently 4.10%) 4,500 4,500
Memorial Sloan Kettering Cancer Center
VRDN (Currently 4.00%) 1,900 1,900
Metropolitan Museum of Art
VRDN (Currently 4.00%) 1,775 1,775
Oxford Univ. Press, VRDN (Currently 4.20%) 1,810 1,810
Erie County Water Auth.
VRDN (Currently 4.10%)
(AMBAC Insured) 2,650 2,650
Great Neck Water Auth.
VRDN (Currently 4.25%)
(FGIC Insured) 1,285 1,285
Half Hollow Central School Dist., GO,
TAN, 4.80%, 6/29/01 1,000 1,004
Long Island Power Auth., Electric System
VRDN (Currently 4.15%) 3,000 3,000
VRDN (Currently 4.30%) 4.30%, 9/1/00 2,000 2,000
Metropolitan Transportation Auth.
TECP, 4.05%, 11/15/00 1,500 1,500
Dedicated Tax, 4.375%, 4/1/01
(MBIA Insured) 1,000 1,001
Municipal Assistance, VRDN
(Currently 4.24%) 2,300 2,300
Nassau County, GO, RAN,
6.00%, 3/20/01 2,000 2,016
New York City, GO
VRDN (Currently 4.35%) 5,300 5,300
New York City Housing Dev.
Brittany Dev., VRDN (Currently 4.10%)
(FNMA Guaranteed) * 3,500 3,500
Carnegie Park, VRDN (Currently 4.10%)
(FNMA Guaranteed) 1,600 1,600
Tribeca Tower, VRDN (Currently 4.10%)
(FNMA Guaranteed) * 3,600 3,600
New York City IDA, American Civil Liberties Fac.
VRDN (Currently 4.00%) 862 862
New York City Municipal Water Fin. Auth.
Water & Sewer System
VRDN (Currently 4.30%) (FGIC Insured) $ 5,000 $ 5,000
New York City Trust Cultural Resources
American Museum of National History
4.50%, 7/1/01 (AMBAC Insured) 2,300 2,300
New York Local Gov't. Assistance
7.00%, 4/1/04 (Prerefunded 4/1/01!) 50 51
7.00%, 4/1/21 (Prerefunded 4/1/01!) 50 52
7.25%, 4/1/18
(MBIA Insured) (Prerefunded 4/1/01!) 160 165
New York Medical Care Fac.
Mental Health Services Fac.
7.75%, 8/15/11 (Prerefunded 2/15/01!) 1,795 1,857
New York State, GO
3.90%, 10/5/00 2,000 2,000
4.35%, 8/1/01 2,000 2,000
4.40%, 2/8/01 2,600 2,600
New York State Energy Research and Dev. Auth.
VRDN (Currently 4.10%) * 4,000 4,000
Orange and Rockland Utilities
VRDN (Currently 4.10%) (FGIC Insured) 4,600 4,600
New York State Environmental Fac.
State Water Revolving Fund
4.00%, 10/15/00 1,895 1,895
New York State Housing Fin. Agency
VRDN (Currently 4.20%) * 5,300 5,300
8.00%, 11/1/08 (Prerefunded 11/1/00!) 1,080 1,109
Normandie Court II Multi-Family
VRDN (Currently 4.10%) * 2,000 2,000
Service Contract
7.80%, 9/15/10 (Prerefunded 9/15/00!) 35 35
West End Avenue Housing
VRDN (Currently 4.30%) * 1,200 1,200
New York State Local Gov't. Assistance,
VRDN (Currently 4.05%) 3,000 3,000
New York State Power Auth.
4.00%, 9/1/00 $ 1,400 $ 1,400
5.75%, 1/1/01 120 120
6.00%, 1/1/20 (AMBAC Insured)
(Prerefunded 1/1/01!) 5,000 5,026
6.50%, 1/1/20 (Escrowed to Maturity) 310 312
6.75%, 1/1/18 (Prerefunded 1/1/01!) 365 375
6.75%, 1/1/18 (MBIA Insured)
(Prerefunded 1/1/01!) 110 113
New York State Thruway Auth.,
TECP, 4.10%, 9/7/00 5,000 5,000
New York Urban Dev., State Fac.
7.50%, 4/1/20 (Prerefunded 4/1/01!) 365 379
Port Washington Union Free School Dist., GO, TAN
5.00%, 6/28/01 1,000 1,005
St. Lawrence County IDA, ALCOA,
VRDN (Currently 4.29%) * 1,700 1,700
Suffolk County Water Auth., BAN,
VRDN (Currently 4.20%) 3,000 3,000
Suffolk County IDA, Cold Spring Harbor Laboratory
VRDN (Currently 4.20%) 1,500 1,500
Triborough Bridge & Tunnel Auth.
VRDN (Currently 4.00%) (AMBAC Insured) 3,000 3,000
VRDN (Currently 4.24%) (FGIC Insured) 550 550
6.875%, 1/1/05 (Prerefunded 1/1/01!) 750 771
7.00%, 1/1/21 (Prerefunded 1/1/01!) 1,350 1,382
Westchester County, GO
4.50%, 11/15/00 150 150
4.60%, 11/15/00 500 501
Total New York (Cost $111,656) 111,656
Total Investments in Securities
97.4% of Net Assets (Cost $111,656) $ 111,656
Other Assets Less Liabilities 2,960
NET ASSETS $ 114,616
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Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 3
Accumulated net realized gain/loss -
net of distributions (2)
Paid-in-capital applicable to 114,617,860
no par value shares of beneficial interest
outstanding; unlimited number of shares
authorized 114,615
NET ASSETS $ 114,616
----------
NET ASSET VALUE PER SHARE $ 1.00
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* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
BAN Bond Anticipation Note
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
GO General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
RAN Revenue Anticipation Note
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Bond Fund
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Unaudited August 31, 2000
Statement of Net Assets Par Value
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In thousands
NEW YORK 97.5%
Albany County Airport Auth.
5.50%, 12/15/19 (FSA Insured) * $ 500 $ 492
Allegany County IDA, GO
Hougton College Civic Fac.
5.00%, 1/15/11 520 501
5.25%, 1/15/18 400 369
Dormitory Auth. of the State of New York
City Univ., 5.75%, 7/1/11
(AMBAC Insured) 2,000 2,159
Columbia Univ.
5.00%, 7/1/18 1,000 962
5.00%, 7/1/22 2,500 2,354
Dept. of Health, 5.50%, 7/1/25
(MBIA Insured) 1,500 1,470
Maimonides Medical Center
5.75%, 8/1/35 (MBIA Insured) 1,500 1,513
Memorial Sloan Kettering Cancer Center,
VRDN (Currently 4.15%) 1,800 1,800
Mount Sinai Health, 6.50%, 7/1/25 1,000 1,055
New York Medical College
5.25%, 7/1/12 (MBIA Insured) 2,110 2,160
Nyack Hosp., 6.00%, 7/1/06 2,000 1,996
Rockefeller Univ.
5.00%, 7/1/28 2,000 1,854
6.75%, 7/1/11 (Prerefunded 7/1/01!) 1,365 1,419
St. Johns Univ., 4.75%, 7/1/28
(MBIA Insured) 2,500 2,178
Univ. Educational Fac.
5.25%, 5/15/15 (AMBAC Insured) 2,000 2,016
7.50%, 5/15/11 2,300 2,692
Univ. of Rochester
Zero Coupon, 7/1/15 (MBIA Insured) 1,970 1,172
Westchester County Court Fac.
5.25%, 8/1/14 2,500 2,522
5.25%, 8/1/15 2,000 2,004
5.25%, 8/1/16 4,250 4,232
Dutchess County IDA, Bard College Civic Fac.,
5.75%, 8/1/30 1,750 1,743
Essex County IDA, PCR, 5.70%, 7/1/16 * 1,850 1,856
Huntington Housing Auth.,
Gurwin Jewish Senior Residences
6.00%, 5/1/39 750 606
Long Island Power Auth.
Zero Coupon, 6/1/17 (FSA Insured) $ 2,000 $ 802
5.25%, 12/1/26 1,000 932
5.25%, 12/1/26 (AMBAC Insured) 5,000 4,754
Electric Systems, VRDN (Currently 4.10%) 1,900 1,900
Metropolitan Transportation Auth.
5.25%, 4/1/14 (FGIC Insured) 4,540 4,581
Commuter Fac., 5.00%, 7/1/11 (AMBAC Insured) 2,000 2,018
Transit Fac., 4.75%, 7/1/16 (FSA Insured) 1,750 1,628
Transportation Fac.
5.875%, 7/1/27 (MBIA Insured) 2,300 2,354
Mount Sinai Union Free School Dist., GO
6.20%, 2/15/17 (AMBAC Insured) 1,025 1,134
6.20%, 2/15/18 (AMBAC Insured) 515 570
Nassau County, GO
6.50%, 11/1/13
(Prerefunded 11/1/04!) (FGIC Insured) 1,500 1,660
7.00%, 3/1/04 1,500 1,595
Sewer Dist., 6.50%, 3/1/03 620 643
Nassau County IDA
Hofstra Univ.
5.00%, 7/1/23 (MBIA Insured) 2,000 1,854
6.90%, 1/1/14 (Prerefunded 1/1/05!) 350 389
6.90%, 1/1/15 (Prerefunded 1/1/05!) 375 417
New Rochelle, GO
6.25%, 3/15/17 (MBIA Insured) 375 395
6.25%, 3/15/18 (MBIA Insured) 400 421
6.25%, 3/15/19 (MBIA Insured) 425 446
New York City, GO
5.75%, 10/15/13 1,100 1,148
5.875%, 3/15/12 2,345 2,463
6.00%, 8/1/12 1,000 1,060
6.25%, 8/1/09 1,750 1,894
7.625%, 2/1/14 (Prerefunded 2/1/02!) 500 530
7.75%, 8/15/15 35 37
7.75%, 8/15/15 (Prerefunded 8/15/01!) 55 57
New York City Health & Hosp., Health Systems Bonds
5.25%, 2/15/17 1,160 1,096
New York City IDA
American Airlines, 5.40%, 7/1/20 * $ 1,500 $ 1,319
Brooklyn Navy Yard Cogeneration,
5.65%, 10/1/28 * 2,500 2,281
Horace Mann School, 4.90%, 7/1/13
(MBIA Insured) 1,320 1,281
Terminal One Group Assoc., 6.00%, 1/1/19 * 2,500 2,546
USTA National Tennis Center
6.375%, 11/15/14 (FSA Insured) 1,000 1,076
New York City Municipal Water Fin. Auth.
Water and Sewer
5.00%, 6/15/17 (FGIC Insured) 2,000 1,921
5.375%, 6/15/26 (FSA Insured) 6,000 5,808
5.875%, 6/15/26 4,000 4,059
6.00%, 6/15/33 1,800 1,869
New York City Transitional Fin. Auth.
VRDN (Currently 4.15%) 600 600
Future Tax
5.00%, 5/1/26 1,350 1,237
5.75%, 8/15/19 5,000 5,152
6.00%, 8/15/15 (FGIC Insured) 1,000 1,070
New York State, GO
7.125%, 11/15/16
(Prerefunded 11/15/00!) 500 513
New York State Environmental Fac., PCR
New York City Municipal Water, 7.50%, 6/15/12 500 511
State Water Revolving Fund, 5.75%, 6/15/12 1,000 1,075
New York State Housing Fin. Agency
Service Contract Obligations
7.375%, 9/15/21 (Prerefunded 3/15/02!) 150 160
State Univ. Construction
8.00%, 5/1/11 (Escrowed to Maturity) 1,000 1,231
New York State Local Gov't. Assistance
VRDN (Currently 4.00%) 1,000 1,000
5.00%, 4/1/23 3,000 2,746
6.00%, 4/1/14 2,100 2,283
New York State Medical Care Fac. Fin. Agency
6.125%, 2/15/14 (Prerefunded 2/15/04!) 110 114
New York State Medical Care Fac. Fin. Agency
Mental Health Services
6.375%, 8/15/10 (FGIC Insured) $ 5 $ 5
6.375%, 8/15/10 (FGIC Insured)
(Prerefunded 2/15/02!) 445 467
New York Hosp.
6.50% 8/15/29 (AMBAC Insured)
(Prerefunded 2/15/05!) 2,000 2,201
New York State Mortgage Agency
Homeowner Mortgage
5.70%, 10/1/17 * 2,120 2,136
5.85%, 10/1/18 * 1,185 1,202
5.95%, 4/1/30 * 1,500 1,504
6.35%, 10/1/30 * 2,500 2,612
6.40%, 4/1/27 * 955 990
7.50%, 4/1/26 * 2,695 2,900
New York State Urban Dev.
Correctional Capital Fac.
6.00%, 1/1/15 (AMBAC Insured) 4,000 4,268
7.00%, 1/1/21 (Prerefunded 1/1/02!) 500 527
Sr. Lien, 5.375%, 7/1/22 7,000 6,845
New York State Thruway Auth.
5.00%, 4/1/17 (FGIC Insured) 5,000 4,809
5.50%, 4/1/18 (FGIC Insured) 2,000 2,016
Niagara County, GO
Environmental Infrastructure
5.25%, 8/15/14 (MBIA Insured) 435 437
5.25%, 8/15/15 (MBIA Insured) 335 334
Niagara Frontier Transportation Airport Auth.
Greater Buffalo Int'l. Airport
6.125%, 4/1/14 (AMBAC Insured) * 1,385 1,446
Nyack Union Free School Dist., GO
5.25%, 12/15/13 (FGIC Insured) 1,290 1,321
5.25%, 12/15/15 (FGIC Insured) 550 555
Oneida County IDA
St. Elizabeth Medical Center
5.50%, 12/1/10 500 452
5.625%, 12/1/09 1,000 927
5.75%, 12/1/19 1,600 1,324
Port Auth. of New York and New Jersey
5.50%, 9/1/12 (MBIA Insured) * $ 900 $ 926
5.875%, 7/1/11 * 1,000 1,049
5.875%, 9/15/15 (FGIC Insured) * 2,000 2,082
6.125%, 6/1/94 1,000 1,081
6.50%, 10/1/01 * 400 405
6.50%, 7/15/19 (FGIC Insured) * 2,000 2,111
6.50%, 11/1/26 * 1,500 1,533
6.75%, 10/1/11 * 1,000 1,031
6.75%, 4/15/26 (MBIA Insured) * 500 511
Suffolk County, 5.25%, GO, 10/15/14
(FGIC Insured) 1,240 1,253
Suffolk County IDA, Jeffersons Ferry,
7.20%, 11/1/19 2,000 2,001
Suffolk County Judicial Fac., John P. Cohalan Complex
5.75%, 4/15/14 (AMBAC Insured) 4,510 4,770
Syracuse IDA, St. Joseph's Hosp. Health Center
7.50%, 6/1/18 (Prerefunded 6/1/01!) 1,000 1,042
Tompkins County IDA, Cornell Univ.,
5.75%, 7/1/30 2,000 2,039
Triborough Bridge and Tunnel Auth.,
5.00%, 1/1/20 2,060 1,957
United Nations Dev.
5.30%, 7/1/11 910 910
5.40%, 7/1/14 865 863
Westchester County IDA
Hebrew Hosp., 7.375%, 7/1/30 1,250 1,258
Wheelabrator
5.50%, 7/1/09 * 370 342
6.00%, 7/1/08 (AMBAC Insured) * 2,000 2,144
Yonkers IDA, Civic Fac., St. Joseph Hosp.,
6.20%, 3/1/20 1,000 872
Total New York (Cost $180,134) 187,213
PUERTO RICO 1.2%
Puerto Rico Commonwealth
Highway and Transportation Auth.
5.00%, 7/1/36 1,000 914
6.375%, 7/1/08 (FSA Insured) 1,000 1,047
Puerto Rico Commonwealth Infrastructure Fin. Auth.
Special Tax, 7.75%, 7/1/08 340 341
Total Puerto Rico (Cost $2,191) 2,302
Total Investments in Securities
98.7% of Net Assets (Cost $182,325) $ 189,515
Futures Contracts
In thousands
Contract Unrealized
Expiration Value Gain (Loss)
---------- --------- -----------
Short, 20 Bond Buyer
40 Muni Index contracts
$15,000 par of 6.5%
Nassau County, GO
bonds pledged as
initial margin 9/00 $ (1,998) $ (31)
Net payments (receipts)
of variation
margin to date 21
Variation margin receivable
(payable) on open futures contracts (10)
Other Assets Less Liabilities 2,420
NET ASSETS $ 191,925
----------
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 10
Accumulated net realized gain/loss -
net of distributions (6,827)
Net unrealized gain (loss) 7,159
Paid-in-capital applicable to 17,998,564 no
par value shares of beneficial interest outstanding;
unlimited number of shares authorized 191,583
NET ASSETS $ 191,925
----------
NET ASSET VALUE PER SHARE $ 10.66
----------
* Interest subject to alternative minimum tax
! Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
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.
T. Rowe Price New York Tax-Free Funds
--------------------------------------------------------------------------------
Unaudited
Statement of Operations
--------------------------------------------------------------------------------
In thousands
Money Fund Bond Fund
6 Months 6 Months
Ended Ended
8/31/00 8/31/00
Investment Income (Loss)
Interest income $ 2,341 $ 5,308
Expenses
Investment management 214 389
Custody and accounting 44 49
Shareholder servicing 39 64
Legal and audit 7 7
Prospectus and shareholder reports 5 12
Registration 3 2
Trustees 3 3
Miscellaneous 6 2
Total expenses 321 528
Expenses paid indirectly (1) (1)
Net expenses 320 527
Net investment income (loss) 2,021 4,781
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities -- (490)
Futures -- 2
Net realized gain (loss) -- (488)
Change in net unrealized gain or loss
Securities -- 8,814
Futures -- (31)
Change in net unrealized gain or loss -- 8,783
Net realized and unrealized gain (loss) -- 8,295
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,021 $ 13,076
-----------------------
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Funds
--------------------------------------------------------------------------------
Unaudited
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
In thousands
Money Fund Bond Fund
6 Months Year 6 Months Year
Ended Ended Ended Ended
8/31/00 2/29/00 8/31/00 2/29/00
Increase (Decrease) in Net Assets
Operations
Net investment
income (loss) $ 2,021 $ 2,981 $ 4,781 $ 10,140
Net realized gain (loss) -- -- (488) (6,145)
Change in net unrealized
gain or loss -- -- 8,783 (14,035)
Increase (decrease) in
net assets from operations 2,021 2,981 13,076 (10,040)
Distributions to shareholders
Net investment income (2,021) (2,981) (4,781) (10,140)
Net realized gain -- -- -- (198)
Decrease in net assets
from distributions (2,021) (2,981) (4,781) (10,338)
Capital share transactions *
Shares sold 39,164 84,976 14,368 49,752
Distributions
reinvested 1,956 2,890 3,635 8,112
Shares redeemed (41,028) (79,461) (14,616) (73,253)
Increase (decrease) in
net assets from capital
share transactions 92 8,405 3,387 (15,389)
Net Assets
Increase (decrease)
during period 92 8,405 11,682 (35,767)
Beginning of period 114,524 106,119 180,243 216,010
End of period $114,616 $114,524 $191,925 $180,243
-----------------------------------------------
*Share information
Shares sold 39,164 84,976 1,385 4,624
Distributions reinvested 1,956 2,890 349767
Shares redeemed (41,028) (79,461) (1,405) (6,964)
Increase (decrease)
in shares outstanding 92 8,405 329 (1,573)
The accompanying notes are an integral part of these financial statements.
T. Rowe Price New York Tax-Free Funds
--------------------------------------------------------------------------------
Unaudited August 31, 2000
Notes to Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price State Tax-Free Income Trust (the trust) is registered under
the Investment Company Act of 1940. The New York Tax-Free Money Fund (the
Money Fund) and the New York Tax-Free Bond Fund (the Bond Fund),
nondiversified, open-end management investment companies, are two of the
portfolios established by the trust and commenced operations on August 28,
1986. The Money Fund seeks preservation of capital, liquidity and,
consistent with these objectives, the highest level of income exempt from
federal, New York state, and New York city income taxes by investing
primarily in high-quality New York municipal securities. The Bond Fund
seeks to provide, consistent with prudent portfolio management, the highest
level of income exempt from federal, New York state, and New York city
income taxes by investing primarily in investment-grade New York municipal
bonds.
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. Except for securities held by the Money Fund, investments in
securities are stated at fair value as furnished by dealers who make
markets in such securities or by an independent pricing service, which
considers yield or price of bonds of comparable quality, coupon, maturity,
and type, as well as prices quoted by dealers who make markets in such
securities. Securities held by the Money Fund are valued at amortized cost,
which approximates fair value. For the Bond Fund, financial futures
contracts are valued at closing settlement prices.
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 and are
used to reduce each fund's custody charges. Payments (variation margin)
made or received by the Fund to settle the daily fluctuations in the value
of futures contracts are recorded as unrealized gains or losses until the
contracts are closed. Unrealized gains and losses on futures contracts are
included in change in net unrealized gain or loss in the accompanying
financial statements.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities for the Bond Fund, other than
short-term securities, aggregated $32,961,000 and $31,561,000,
respectively, for the six months ending August 31, 2000.
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 29, 2000, the Money and Bond Funds had
capital loss carryforwards for federal income tax purposes of $2,000, all
of which expires in 2005, and $3,767,000, all of which expires in 2008,
respectively. The Money and Bond Funds intend to retain gains realized in
future periods that may be offset by available capital loss carryforwards.
At August 31, 2000, the costs of investments for the Money and Bond Funds
for federal income tax purposes was substantially the same as for financial
reporting and totaled $111,656,000 and $182,325,000, respectively. For the
Money Fund, amortized cost is equivalent to value. For the Bond Fund, net
unrealized gain aggregated $7,190,000, of which $8,423,000 related to
appreciated investments and $1,233,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee, of which $35,000 and $67,000 were payable at August 31, 2000 by the
Money and Bond Funds, respectively. The fee is computed daily and paid
monthly, and consists of an individual fund fee equal to 0.10% of average
daily net assets and a group fee. The group fee is based on the combined
assets of certain mutual funds sponsored by the manager or T. Rowe Price
International, Inc. (the group). The group fee rate ranges from 0.48% for
the first $1 billion of assets to 0.295% for assets in excess of $120
billion. At August 31, 2000, 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 Money Fund's ratio of total expenses to average net assets to exceed
0.55%. Pursuant to this agreement, $29,000 of management fees were not
accrued by the Money Fund for the six months ended August 31, 2000, and
$70,000 remains unaccrued from a prior period. Additionally, $177,000 of
unaccrued fees and expenses related to a previous expense limitation are
subject to reimbursement through February 28, 2001. Subject to shareholder
approval, the Money Fund may reimburse the manager for these expenses,
provided that average net assets have grown or expenses have declined
sufficiently to allow reimbursement without causing the Money Fund's ratio
of total expenses to average net assets to exceed 0.55%.
In addition, each fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which each fund
receives certain other services. The manager computes the daily share price
and maintains the financial records of each fund. T. Rowe Price Services,
Inc. is each fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the funds. The Money and Bond
Funds incurred expenses pursuant to these related party agreements totaling
approximately $64,000 and $81,000, respectively, for the six months ended
August 31, 2000, of which $13,000 and $18,000, respectively, were payable
at period-end.
T. Rowe Price New York Tax-Free Funds
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
For the hearing impaired, call:
1-800-367-0763
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 - new address
105 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 Invest with Confidence (registered trademark)
T. Rowe Price Investment Services, Inc., Distributor. C04-051 8/31/00
