T. Rowe Price
--------------------------------------------------------------------------------
Semiannual Report
Maryland Tax-Free Funds
--------------------------------------------------------------------------------
August 31, 2000
--------------------------------------------------------------------------------
REPORT HIGHLIGHTS
-----------------
MARYLAND TAX-FREE FUNDS
-----------------------
* Interest rates fell during the six months ended August 31, and strong
demand for limited supply improved municipal bond prices.
* The Maryland Short-Term Tax- Free Bond Fund took advantage of market
opportunities to post a superior return to its Lipper peer group
average.
* Falling interest rates helped the Maryland Tax-Free Bond Fund to
significantly outperform its Lipper average.
* The economic environment favors a stable to improving market bar-ring
unforeseen inflation.
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 falling interest rates and favorable supply/demand
factors in the market. Investors were also encouraged by the Federal Reserve's
aggressive efforts to curb above-average economic growth and stem inflation. As
a result, both the Maryland Tax-Free Bond Fund and the Maryland Short-Term
Tax-Free Bond Fund posted strong total returns and outpaced their Lipper peer
group averages.
MARKET ENVIRONMENT
------------------
MARYLAND BOND YIELDS
--------------------
Maryland Maryland 3-Year
Bond Index General Obligation Bond
---------- -----------------------
8/31/1999 5.62 4.18
5.76 4.23
6.01 4.3
11/30/1999 5.85 4.25
6.06 4.48
6.27 4.68
2/29/2000 6.15 4.7
5.9 4.7
5.98 4.85
5/31/2000 6.07 4.88
5.89 4.67
5.72 4.48
8/31/2000 5.6 4.34
<PAGE>
Fixed-income markets in 2000 have been largely influenced by the Federal
Reserve's interest rate tightening program. Fed activity, which included federal
funds rate increases of 75 basis points during the past six months, finally
seemed to moderate economic growth and cool inflation concerns. (One hundred
basis points equal one percent.) The Fed's expressed determination to slow
economic growth and engineer a soft landing has injected volatility and a note
of sobriety into equity markets, which has also heightened interest in
more-stable fixed income investments.
Long-term Treasury bonds have returned about 15% so far this year due to a
scarcity premium: since the government announced a Treasury buyback program to
reduce outstanding debt, investors have feared a dwindling supply of long-term
Treasuries. The Treasury yield curve has been inverted since January, as Fed
rate hikes have put upward pressure on short-term yields while long-term yields
have come down.
Municipal bond yields have also fallen. The Maryland bond index yield
dropped 47 basis points in the last three months of the period, and short-term
bond yields fell even more sharply. The trend was aided by a supply/demand
imbalance. The supply of new issues in Maryland is down 16% through August
versus the same period last year. Nationwide, supply has fallen by 20% as
borrowing costs have climbed and the borrowing needs of state and local
governments have declined. But demand, particularly from buyers of individual
bonds, has been quite strong as municipal yields have been very attractive
compared with taxable alternatives.
Maryland's economy continues to experience steady growth. Job creation has
caused unemployment to drop to its lowest level in over a decade and below the
national average. The economy has benefited from a strong scientific and
technological research sector, which includes federal agencies such as the
National Institutes of Health and the research universities Johns Hopkins and
University of Maryland. These institutions have facilitated the fast-paced
growth of small high-tech firms that are making a significant contribution to
the economy. Maryland's prospects for continued growth may be enhanced if the
federal government uses its surplus to increase federal employment and funding
for research.
The solid economy has translated into stronger-than-projected revenue
growth. In particular, income tax and sales and use tax revenues have exceeded
expectations. These are two of the largest sources of tax revenue the state has.
At the close of the fiscal year ended June 30, 2000, Maryland had a substantial
surplus; consecutive years of stronger-than-projected revenue growth have
allowed the state to build reserves even while implementing a 10% income tax
cut. Through its excellent financial management, the state of Maryland continues
to provide clear justification for its AAA rating.
<PAGE>
MARYLAND SHORT-TERM TAX-FREE BOND FUND
--------------------------------------
PERFORMANCE COMPARISON
----------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------- -------- ---------
Maryland Short-Term
Tax-Free Bond Fund 2.94% 4.07%
Lipper Short Municipal
Debt Funds Average 2.70 3.84
Interest rates fell consid-erably on short-term Maryland bonds during the
six months ended August 31, and your fund was able to capitalize. Its 2.94%
six-month return handily surpassed the Lipper peer group average, which measures
short-term national municipal funds. Twelve-month results of 4.07% were also
superior to the Lipper average. The fund's net asset value rose slightly from
$5.04 to $5.09, but performance came largely from income, which remained
unchanged from six months ago at $0.10 per share. At 3.83%, the fund's 12-month
dividend yield at the end of the period was roughly equivalent to a 5.98%
taxable yield for an investor in the 36% tax bracket.
An important component of our strategy over the past six months was to keep
duration around 2.2 years -- at the conservative end of the fund's typical
range. (Duration is a measure of price sensitivity to changes in interest rates.
A fund having a duration of two years should have a 2% appreciation or decline
in price in response to a one-percentage-point fall or rise, respectively, in
interest rates.) As the federal funds rate moved higher early in 2000, so did
the return on cash equivalents. Higher rates on cash generally mean higher
yields -- and price losses -- on short-term bonds. Our shorter duration posture
was meant to protect us against this possibility.
Another approach that has generally benefited fund performance has been to
move the portfolio's duration within a range to take advantage of market
opportunities. When the market has been weak (meaning that prices are low and
yields are relatively high), we have extended duration modestly by purchasing
longer, higher-yielding bonds. We would then hold on to these positions,
allowing duration to shorten naturally as our holdings drew closer to their
maturity dates. For example, we employed this strategy in June when evidence of
a slowdown began to emerge, and enjoyed some added return as the market rallied
in July and August.
<PAGE>
It has become more important for us to take advantage of such market
opportunities because, at this point, there are very few good values to be found
in Maryland's short-term municipal market. With issuance in Maryland down 16%
through August, we must reinvest the proceeds of matured holdings in an
increasingly costly secondary market. As a resu lt, the difference in yield
between one-year and four-year Maryland bonds has collapsed to almost zero,
because of the high demand for minimal supply. In fact, there are indications
that the yield curve is inverted in the secondary market, meaning you can earn
more on a one-year bond than on a four-year bond. This is an unusual condition
that more typically occurs when investors believe the Federal Reserve is about
to raise the overnight federal funds rate.
The fund's sector breakdown changed little during the period. Holdings in
prerefunded and lease revenue bonds declined the most, offset by increases in
state general obligations and industrial development revenue bonds. The
portfolio's average credit quality was unchanged at AA.
MARYLAND TAX-FREE BOND FUND
---------------------------
PERFORMANCE COMPARISON
----------------------
Periods Ended 8/31/00 6 Months 12 Months
--------------------- -------- ---------
Maryland Tax-Free Bond Fund 6.35% 6.13%
Lipper Maryland Municipal
Debt Funds Average 5.93 4.90
Falling interest rates helped Maryland's tax-exempt market regain strength
in the most recent half year along with the national munic-ipal market. Your
fund took advantage, posting a 6.35% six-month return that exceeded its Lipper
peer group average. This return reflected a favorable combination of strong
income -- dividends per share remained at $0.27 per share -- and a sharply
rising net asset value. We were especially pleased to outperform our Lipper
benchmark after having also reported superior performance in the more
challenging previous six-month period. The 12-month dividend yield finished the
period at 5.36%; an approximate taxable equivalent yield for investors in the
36% tax bracket would be 8.38%.
Duration management was an important part of the fund's recent success.
(For an explanation of duration, see the Maryland Short-Term Tax-Free Bond Fund
discussion.) After taking a conservative approach last year, we took on more
interest rate exposure at the outset of 2000 by shifting the portfolio's average
duration and maturity targets modestly longer. After a period of sustained
weakness, we felt municipals offered considerable value as yields neared their
highest levels in several years. We invested the portfolio's cash -- both new
cash flow and the proceeds of maturing bonds -- in the longer end of the market.
We wanted to lock in higher rates while also improving potential for principal
appreciation if rates fell. As rates subsequently declined, this strategy
enabled the share price to rise a notch ahead of our competitors and allowed the
fund to maintain its dividend per share distributions.
<PAGE>
As the market continued to improve over the summer, we shifted the fund's
target duration more in line with the market. At the period's end, duration
stood at 7.5 years, somewhat shorter than six months ago. If rates continue to
fall, we would expect with our current posture to keep up with but not exceed
peer group averages.
We have long sought a balance between higher-coupon, premium-priced bonds,
which bolster income, and lower-coupon, discount bonds with better potential for
price appreciation when rates fall. More recently, we have directed most new
cash flow into higher-coupon bonds, seeking to rebuild emphasis on income over
price appreciation. This approach should moderate swings of share price
movement, particularly in a rising rate environment.
As in the national market, new issue supply of Maryland municipal bonds has
been light in 2000, limiting opportunities to dramatically reposition the
portfolio. The fund's average credit quality remained high at AA, and allocation
among sectors did not change significantly. As prerefunded bond holdings
matured, we somewhat rebuilt our allocation to the hospital sector and expanded
our holdings of educational revenue bonds. Specifically, we added to holdings of
the University of Maryland and Johns Hopkins University and began a new position
in the University of Maryland Medical System.
OUTLOOK
-------
Currently, the market's opinion of the Fed's next move is a 180-degree
shift from three months ago. At that time, many economists were calling for an
increase in the fed funds rate to 7% by Labor Day, with more tightening in the
fall. However, higher oil prices have not yet spoiled an otherwise positive
inflation outlook, and the slowdown in consumption and other factors have
moderated these dire predictions. At this point, some analysts are suggesting a
possible reduction in rates. In our view, the interest rate picture for the next
several months is balanced: further rate hikes are unlikely, but rates may not
fall much from here. In addition, the economic backdrop, as well as the current
mix of low supply and strong demand, favor stable to improving municipal bond
prices barring a change in the outlook for inflation.
Respectfully submitted,
/s/
Charles B. Hill
Chairman of the Investment Advisory Committee
Maryland Short-Term Tax-Free Bond Fund
/s/
Hugh D. McGuirk
Chairman of the Investment Advisory Committee
Maryland Tax-Free Bond Fund
September 21, 2000
================================================================================
<PAGE>
T. Rowe Price Maryland Tax-Free Funds
-------------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
KEY STATISTICS
--------------
2/29/00 8/31/00
------- -------
MARYLAND SHORT-TERM TAX-FREE BOND FUND
--------------------------------------
Price Per Share $5.04 $5.09
Dividends Per Share
For 6 months 0.10 0.10
For 12 months 0.19 0.19
Dividend Yield *
For 6 months 3.82% 3.81%
For 12 months 3.80 3.83
30-Day Standardized Yield 4.17 3.99
Weighted Average Maturity (years) 2.5 2.4
Weighted Average Effective Duration (years) 2.2 2.2
Weighted Average Quality ** AA AA
Maryland Tax-Free Bond Fund
Price Per Share $9.87 $10.22
Dividends Per Share
For 6 months 0.27 0.27
For 12 months 0.53 0.54
Dividend Yield *
For 6 months 5.49% 5.30%
For 12 months 5.53 5.36
30-Day Standardized Yield 5.18 4.95
Weighted Average Maturity (years) 16.2 17.2
Weighted Average Effective Duration (years) 8.0 7.5
Weighted Average Quality ** AA AA
* Dividends earned and reinvested for the periods indicated are
annualized and divided by the fund's net asset value per share at the
end of the period.
** Based on T. Rowe Price research.
================================================================================
<PAGE>
T. Rowe Price Maryland Tax-Free Funds
-------------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
SECTOR DIVERSIFICATION
----------------------
Percent of Percent of
Net Assets Net Assets
2/29/00 8/31/00
------- -------
MARYLAND SHORT-TERM TAX-FREE BOND FUND
--------------------------------------
General Obligation - Local 22% 22%
Prerefunded Bonds 24 21
Solid Waste Revenue 11 12
Educational Revenue 9 10
General Obligation - State 4 8
Hospital Revenue 5 5
Life Care/Nursing Home Revenue 5 5
Dedicated Tax Revenue 4 3
Industrial and Pollution Control Revenue 1 3
Lease Revenue 7 3
Water and Sewer Revenue 2 2
Miscellaneous Revenue 2 2
Ground Transportation Revenue 2 2
All Other 1 1
Other Assets Less Liabilities 1 1
Total 100% 100%
MARYLAND TAX-FREE BOND FUND
---------------------------
Housing Finance Revenue 16% 16%
Hospital Revenue 12 15
Educational Revenue 7 10
Prerefunded Bonds 15 10
General Obligation - Local 10 9
General Obligation - State 7 7
Water and Sewer Revenue 5 5
Ground Transportation Revenue 5 5
Escrowed to Maturity 4 4
Miscellaneous Revenue 4 4
Solid Waste Revenue 4 4
Dedicated Tax Revenue 2 3
Lease Revenue 3 3
Electric Revenue 2 2
All Other 3 3
Other Assets Less Liabilities 1 -
Total 100% 100%
================================================================================
<PAGE>
T. Rowe Price Maryland 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 fund returns as well as mutual
fund averages and indexes.
MARYLAND SHORT-TERM TAX-FREE BOND FUND
--------------------------------------
Lehman Brothers 3-Year Lipper Short Municipal Maryland Short-Term
State GO Bond Index Debt Funds Average Tax-Free Bond Fund
------------------- ------------------ ------------------
1/29/93 10000 10000 10000
8/93 10358 10307 10381
8/94 10625 10532 10613
8/95 11348 11032 11204
8/96 11790 11446 11596
8/97 12429 11988 12083
8/98 13147 12576 12681
8/99 13526 12897 12978
8/00 14156 13401 13507
MARYLAND TAX-FREE BOND FUND
---------------------------
Lehman Brothers Lipper Maryland Municipal Maryland
Municipal Bond Index Debt Funds Average Tax-Free Bond Fund
--------------------- ------------------ ------------------
8/90 10000 10000 10000
8/91 11179 11125 11097
8/92 12427 12266 12285
8/93 13944 13703 13902
8/94 13963 13635 13833
8/95 15201 14723 14929
8/96 15997 15458 15708
8/97 17476 16773 17031
8/98 18988 18137 18468
8/99 19083 18055 18378
8/00 20375 18966 19504
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 8/31/00 1 Year 5 Years 10 Years Inception Date
--------------------- ------ ------- -------- --------- ----
Maryland Short-Term
Tax-Free Bond Fund 4.07% 3.81% - 4.04% 1/29/93
Maryland Tax-Free Bond Fund 6.13 5.49 6.91% - -
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
T. Rowe Price Maryland Short-Term Tax-Free Bond Fund
---------------------------------------------------- Unaudited
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
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 $ 5.04 $ 5.17 $ 5.14 $ 5.11 $ 5.15 $ 5.04
------------------------------------------------------------------------------
Investment activities
Net investment
income (loss) 0.10* 0.19* 0.19* 0.20* 0.20* 0.21*
Net realized and
unrealized gain (loss) 0.05 (0.13) 0.03 0.03 (0.04) 0.11
------------------------------------------------------------------------------
Total from
investment activities 0.15 0.06 0.22 0.23 0.16 0.32
------------------------------------------------------------------------------
Distributions
Net investment income (0.10) (0.19) (0.19) (0.20) (0.20) (0.21)
------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 5.09 $ 5.04 $ 5.17 $ 5.14 $ 5.11 $ 5.15
Ratios/Supplemental Data
Total return** 2.94%* 1.16%* 4.46%* 4.56%* 3.26%* 6.49%*
------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.60%*+ 0.60%* 0.62%* 0.65%* 0.65%* 0.65%*
------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 3.80%*+ 3.70%* 3.80%* 3.89%* 3.98%* 4.14%*
------------------------------------------------------------------------------
Portfolio turnover rate 23.6%+ 41.4% 46.4% 60.4% 21.4% 39.3%
------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 115,495 $124,135 $122,552 $109,424 $102,252 $ 85,784
--------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.65% voluntary expense limitation in
effect through 6/30/98, and a 0.60% voluntary expense limitation in effect
from 7/1/98 through 2/28/01.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Maryland Tax-Free Bond Fund
----------------------------------------- Unaudited
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
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 $ 9.87 $ 10.73 $ 10.67 $ 10.35 $ 10.40 $ 9.99
-------------------------------------------------------------------------------
Investment activities
Net investment
income (loss) 0.27 0.53 0.54 0.55 0.56 0.57
Net realized and
unrealized gain (loss) 0.35 (0.85) 0.06 0.32 (0.05) 0.41
-------------------------------------------------------------------------------
Total from
investment activities 0.62 (0.32) 0.60 0.87 0.51 0.98
-------------------------------------------------------------------------------
Distributions
Net investment income (0.27) (0.53) (0.54) (0.55) (0.56) (0.57)
Net realized gain - (0.01) - - - -
-------------------------------------------------------------------------------
Total distributions (0.27) (0.54) (0.54) (0.55) (0.56) (0.57)
-------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 10.22 $ 9.87 $ 10.73 $ 10.67 $ 10.35 $ 10.40
Ratios/Supplemental Data
Total return** 6.35%+ (2.98)% 5.80% 8.68% 5.12% 10.00%
-------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.50%+ 0.51% 0.51% 0.51% 0.54% 0.54%
-------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 5.32%+ 5.23% 5.10% 5.31% 5.47% 5.53%
-------------------------------------------------------------------------------
Portfolio turnover rate 30.3%+ 29.2% 15.4% 19.2% 26.2% 23.9%
-------------------------------------------------------------------------------
Net assets,end of period
(in millions) $ 1,034 $ 979 $ 1,063 $ 926 $ 820 $ 799
--------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Maryland Short-Term Tax-Free Bond Fund
----------------------------------------------------
Unaudited August 31, 2000
STATEMENT OF NET ASSETS
----------------------- Par Value
In thousands
MARYLAND 91.1%
Anne Arundel County, GO
Consolidated Solid Waste
5.75%, 2/1/04 * $ 350 $ 364
-------------------------------------------------------------------------------
6.00%, 2/1/01 * 350 352
-------------------------------------------------------------------------------
6.00%, 2/1/02 * 350 358
-------------------------------------------------------------------------------
6.00%, 2/1/03 * 325 336
-------------------------------------------------------------------------------
Water and Sewer
4.75%, 9/1/01 1,030 1,035
-------------------------------------------------------------------------------
5.00%, 3/15/02 * 1,280 1,291
-------------------------------------------------------------------------------
5.00%, 3/15/03 * 1,345 1,364
-------------------------------------------------------------------------------
Baltimore City, COP, 5.25%, 4/1/04 (MBIA Insured) 2,160 2,217
-------------------------------------------------------------------------------
Baltimore County
Consolidated Public Improvement
6.00%, 7/1/05 (Prerefunded 7/1/02+) 500 524
-------------------------------------------------------------------------------
Baltimore County, GO
Consolidated Public Improvement
5.50%, 6/1/04 1,000 1,039
-------------------------------------------------------------------------------
Refunding Pension, 5.50%, 8/1/04 1,000 1,041
-------------------------------------------------------------------------------
Baltimore County Economic Dev.
Maryvale Preparatory School Fac., 6.50%, 5/1/08 1,000 967
-------------------------------------------------------------------------------
Baltimore County Metropolitan Dist.
6.10%, 7/1/06 (Prerefunded 7/1/02+) 1,500 1,574
-------------------------------------------------------------------------------
Charles County Commissioners
Fox Chase Apartments, 7.25%, 10/1/01 130 130
-------------------------------------------------------------------------------
New Forest Apartments, 7.25%, 11/1/01 265 264
-------------------------------------------------------------------------------
<PAGE>
Frederick County, Public Fac., GO, 5.00%, 7/1/02 2,275 2,302
-------------------------------------------------------------------------------
Howard County, GO, 6.00%, 8/15/03 750 784
-------------------------------------------------------------------------------
Maryland, GO, State and Local Fac.
4.85%, 10/15/02 500 506
-------------------------------------------------------------------------------
5.00%, 10/15/02 930 943
-------------------------------------------------------------------------------
5.00%, 7/15/04 5,000 5,113
-------------------------------------------------------------------------------
5.20%, 3/15/04 2,500 2,568
-------------------------------------------------------------------------------
Maryland Economic Dev.
Associated Jewish Charities
5.25%, 7/15/02 305 304
-------------------------------------------------------------------------------
5.25%, 7/15/03 320 318
-------------------------------------------------------------------------------
5.50%, 7/15/04 340 340
-------------------------------------------------------------------------------
Maryland Economic Dev.
Associated Jewish Charities
5.50%, 7/15/05 $ 360 $ 359
-------------------------------------------------------------------------------
5.50%, 7/15/06 380 377
-------------------------------------------------------------------------------
5.50%, 7/15/07 400 396
-------------------------------------------------------------------------------
Maryland Energy Fin. Admin
Wheelabrator Water Technologies
5.75%, 12/1/04 * 2,570 2,639
-------------------------------------------------------------------------------
Maryland HHEFA
Bradford Oaks Nursing and Rehabilitation Center
5.375%, 1/1/01 200 200
-------------------------------------------------------------------------------
Broadmead
4.60%, 7/1/01 375 374
-------------------------------------------------------------------------------
4.90%, 7/1/04 250 246
-------------------------------------------------------------------------------
Charity Obligation Group, 4.60%, 11/1/26
(Prerefunded 11/1/03+) 1,035 1,042
-------------------------------------------------------------------------------
<PAGE>
Easton Memorial Hosp.
5.00%, 7/1/01 (MBIA Insured) 360 362
-------------------------------------------------------------------------------
5.00%, 7/1/02 (MBIA Insured) 370 374
-------------------------------------------------------------------------------
5.00%, 7/1/03 (MBIA Insured) 390 396
-------------------------------------------------------------------------------
5.00%, 7/1/04 (MBIA Insured) 410 418
-------------------------------------------------------------------------------
5.00%, 7/1/05 (MBIA Insured) 430 440
-------------------------------------------------------------------------------
Greater Baltimore Medical Center
6.75%, 7/1/19 (Prerefunded 7/1/01+) 2,025 2,105
-------------------------------------------------------------------------------
Johns Hopkins Univ.
5.50%, 7/1/01 2,500 2,525
-------------------------------------------------------------------------------
5.50%, 7/1/02 4,000 4,082
-------------------------------------------------------------------------------
Kennedy Krieger Institute
6.00%, 7/1/01 125 126
-------------------------------------------------------------------------------
6.00%, 7/1/02 220 223
-------------------------------------------------------------------------------
6.00%, 7/1/03 380 387
-------------------------------------------------------------------------------
6.00%, 7/1/04 405 412
-------------------------------------------------------------------------------
6.00%, 7/1/05 430 438
-------------------------------------------------------------------------------
Stella Maris, 4.75%, 7/1/21 4,625 4,613
-------------------------------------------------------------------------------
Union Hosp. of Cecil County
6.70%, 7/1/22 (Prerefunded 7/1/02+) 1,000 1,059
-------------------------------------------------------------------------------
Univ. of Maryland Medical Center
6.00%, 7/1/03 200 204
-------------------------------------------------------------------------------
6.00%, 7/1/05 200 203
-------------------------------------------------------------------------------
Maryland HHEFA
Univ. of Maryland Medical System
6.50%, 7/1/21 (FGIC Insured)
(Prerefunded 7/1/01+) $ 2,250 $ 2,290
-------------------------------------------------------------------------------
Washington County Hosp.
6.375%, 7/1/22 (Prerefunded 7/1/02+) 1,265 1,334
-------------------------------------------------------------------------------
<PAGE>
Maryland Ind. Dev. Fin. Auth.
American Center for Physics Headquarters Fac.
5.80%, 1/1/01 400 401
-------------------------------------------------------------------------------
Way Station, 4.90%, 1/2/03 2,110 2,059
-------------------------------------------------------------------------------
Maryland Stadium Auth.
VRDN, (Currently 4.30%) * 700 700
-------------------------------------------------------------------------------
Maryland Transportation Auth. Fac., 5.40%, 7/1/02 2,000 2,035
-------------------------------------------------------------------------------
Montgomery County, GO
6.30%, 4/1/02 1,250 1,287
-------------------------------------------------------------------------------
6.30%, 4/1/04 950 1,010
-------------------------------------------------------------------------------
9.75%, 6/1/01 1,700 1,767
-------------------------------------------------------------------------------
Consolidated Public Improvement
5.25%, 1/1/04 2,000 2,055
-------------------------------------------------------------------------------
5.50%, 7/1/03 1,800 1,856
-------------------------------------------------------------------------------
5.60%, 7/1/04 4,000 4,173
-------------------------------------------------------------------------------
5.70%, 7/1/05 965 1,019
-------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Auth.
Montgomery County Resources
5.60%, 7/1/02 * 2,000 2,037
-------------------------------------------------------------------------------
5.70%, 7/1/03 * 4,260 4,384
-------------------------------------------------------------------------------
5.80%, 7/1/04 (MBIA Insured) * 2,875 3,000
-------------------------------------------------------------------------------
7.10%, 1/1/03 (MBIA Insured) 1,000 1,057
-------------------------------------------------------------------------------
Solid Waste, 5.90%, 7/1/05 * 2,250 2,364
-------------------------------------------------------------------------------
Southwest Resources
5.80%, 7/1/04 * 60 62
-------------------------------------------------------------------------------
7.05%, 1/1/02 (MBIA Insured) 1,500 1,550
-------------------------------------------------------------------------------
Prince George's County
Collington Episcopal, 5.40%, 4/1/02 450 452
-------------------------------------------------------------------------------
Dimensions Health
7.00%, 7/1/22 (Prerefunded 7/1/02+) 1,500 1,598
-------------------------------------------------------------------------------
7.25%, 7/1/17 (Prerefunded 7/1/02+) 5,500 5,882
-------------------------------------------------------------------------------
<PAGE>
Prince George's County Housing Auth., Largo Oxford
4.50%, 12/1/07 (Prerefunded 12/1/01+) $ 2,000 $ 2,003
-------------------------------------------------------------------------------
Prince George's County IDA,PCR
Int'l. Paper,5.10%,7/15/01 1,500 1,494
-------------------------------------------------------------------------------
Univ. of Maryland
5.50%, 4/1/10 (Prerefunded 4/1/03+) 1,000 1,046
-------------------------------------------------------------------------------
6.40%, 4/1/06 (Prerefunded 10/1/02+) 500 530
-------------------------------------------------------------------------------
Auxiliary Fac. and Tuition, 5.00%, 4/1/02 3,145 3,177
-------------------------------------------------------------------------------
Washington Suburban Sanitary Dist., GO
6.50%, 11/1/13 (Prerefunded 11/1/01+) 1,000 1,044
-------------------------------------------------------------------------------
8.00%, 1/1/02 1,460 1,527
-------------------------------------------------------------------------------
Total Maryland (Cost $105,252) 105,227
-------------------------------------------------------------------------------
PUERTO RICO 6.8%
Puerto Rico Ind. Medical and Environmental, PCR
4.25%, 9/1/13 1,500 1,476
-------------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, 5.50%, 8/1/02 3,825 3,910
-------------------------------------------------------------------------------
Puerto Rico Telephone Auth., 5.45%, 1/16/15 (MBIA Insured)
(Prerefunded 1/1/03+) 2,400 2,475
-------------------------------------------------------------------------------
Total Puerto Rico (Cost $7,869) 7,861
-------------------------------------------------------------------------------
<PAGE>
TEXAS==0.2%====================================================================
Gulf Coast Waste Disposal Auth., PCR, Amoco Oil
VRDN (Currently 4.45%) * 200 200
-------------------------------------------------------------------------------
Total Texas (Cost $200) 200
-------------------------------------------------------------------------------
U.S. VIRGIN ISLANDS 1.0%
Virgin Island Water and Power Auth., 5.00%, 7/1/02 1,200 1,204
Total U. S. Virgin Islands (Cost $1,210) 1,204
99.1% of Net Assets (Cost $114,531) $ 114,492
Other Assets Less Liabilities 1,003
NET ASSETS $ 115,495
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 2
Accumulated net realized gain/loss - net of distributions (325)
Net unrealized gain (loss) (39)
Paid-in-capital applicable to 22,674,636 of no
par value shares of beneficial
interest outstanding; unlimited number of
shares authorized 115,857
NET ASSETS $ 115,495
NET ASSET VALUE PER SHARE $ 5.09
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
COP Certificates of Participation
FGIC Financial Guaranty Insurance Company
GO General Obligation
HHEFA Health & Higher Educational Facility Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Maryland Tax-Free Bond Fund
-----------------------------------------
Unaudited August 31, 2000
STATEMENT OF NET ASSETS
----------------------- Par Value
In thousands
MARYLAND 95.6%
Anne Arundel County
National Business Park, 7.375%, 7/1/28 $ 3,500 $ 3,564
-------------------------------------------------------------------------------
Special Tax Dist.,Farmington Village, 6.25%, 6/1/25 4,222 3,893
-------------------------------------------------------------------------------
Anne Arundel County, GO
Consolidated General Improvement
4.50%, 8/1/24 3,250 2,782
-------------------------------------------------------------------------------
6.30%, 8/1/16 (Prerefunded 8/1/05+) 775 845
-------------------------------------------------------------------------------
6.30%, 8/1/19 (Prerefunded 8/1/05+) 725 790
-------------------------------------------------------------------------------
6.30%, 8/1/20 (Prerefunded 8/1/05+) 705 768
-------------------------------------------------------------------------------
6.30%, 8/1/21 (Prerefunded 8/1/05+) 790 861
-------------------------------------------------------------------------------
Consolidated Water and Sewer
4.50%, 8/1/24 3,410 2,919
-------------------------------------------------------------------------------
6.30%, 8/1/22 (Prerefunded 8/1/05+) 450 490
-------------------------------------------------------------------------------
6.30%, 8/1/24 (Prerefunded 8/1/05+) 720 785
-------------------------------------------------------------------------------
TECP, 4.10%, 9/6/00 * 750 750
-------------------------------------------------------------------------------
Baltimore City
Board of Ed. Admin., COP
5.00%, 4/1/14 (MBIA Insured) 3,635 3,585
-------------------------------------------------------------------------------
5.00%, 4/1/16 (MBIA Insured) 4,000 3,874
-------------------------------------------------------------------------------
Convention Center
6.00%, 9/1/17 (FGIC Insured)
(Prerefunded 9/1/04+) 5,180 5,483
-------------------------------------------------------------------------------
<PAGE>
Parking Fac.
5.25%, 7/1/21 (FGIC Insured) 2,000 1,975
-------------------------------------------------------------------------------
6.00%, 7/1/14 (FGIC Insured) 5,155 5,622
-------------------------------------------------------------------------------
6.00%, 7/1/15 (FGIC Insured) 5,460 5,937
-------------------------------------------------------------------------------
6.00%, 7/1/16 (FGIC Insured) 5,785 6,279
-------------------------------------------------------------------------------
6.00%, 7/1/17 (FGIC Insured) 6,135 6,652
-------------------------------------------------------------------------------
6.00%, 7/1/18 (FGIC Insured) 6,505 7,041
-------------------------------------------------------------------------------
Tindeco Wharf Apartments
6.60%, 12/20/24 (GNMA Guaranteed) 1,000 1,030
-------------------------------------------------------------------------------
Wastewater
5.60%, 7/1/13 (MBIA Insured) 19,300 20,349
-------------------------------------------------------------------------------
5.625%, 7/1/30 (FSA Insured) 5,000 5,020
-------------------------------------------------------------------------------
5.65%, 7/1/20 (MBIA Insured) 2,000 2,065
-------------------------------------------------------------------------------
Baltimore City
Water
5.80%, 7/1/15 (FGIC Insured) $ 3,350 $ 3,486
-------------------------------------------------------------------------------
6.00%, 7/1/15 (FGIC Insured) 6,250 6,796
-------------------------------------------------------------------------------
6.00%, 7/1/16 (FSA Insured) 1,230 1,311
-------------------------------------------------------------------------------
6.00%, 7/1/19 (FSA Insured) 750 793
-------------------------------------------------------------------------------
6.00%, 7/1/20 (FSA Insured) 990 1,045
-------------------------------------------------------------------------------
6.00%, 7/1/21 (FSA Insured) 1,650 1,737
-------------------------------------------------------------------------------
Baltimore City, GO
Zero Coupon, 10/15/08 (FGIC Insured)
(Prerefunded 10/15/05+) 2,015 1,331
-------------------------------------------------------------------------------
Zero Coupon, 10/15/09 (FGIC Insured)
(Prerefunded 10/15/05+) 2,430 1,511
-------------------------------------------------------------------------------
Zero Coupon, 10/15/11 (FGIC Insured)
(Prerefunded 10/15/05+) 3,975 2,181
-------------------------------------------------------------------------------
<PAGE>
Consolidated Public Improvement
Zero Coupon, 10/15/06 (FGIC Insured) 3,100 2,284
-------------------------------------------------------------------------------
Zero Coupon, 10/15/08 (FGIC Insured) 1,785 1,171
-------------------------------------------------------------------------------
Zero Coupon, 10/15/09 (FGIC Insured) 2,170 1,327
-------------------------------------------------------------------------------
Zero Coupon, 10/15/11 (FGIC Insured) 4,765 2,607
-------------------------------------------------------------------------------
5.50%, 10/15/16 (FGIC Insured) 775 800
-------------------------------------------------------------------------------
7.00%, 10/15/07 (MBIA Insured) 500 571
-------------------------------------------------------------------------------
7.00%, 10/15/08 (MBIA Insured) 5,190 5,999
-------------------------------------------------------------------------------
7.50%, 10/15/09 (FGIC Insured) 2,635 3,172
-------------------------------------------------------------------------------
Baltimore City, Port Fac., E.I. DuPont - Conoco,
6.50%, 10/1/11 10,900 11,494
-------------------------------------------------------------------------------
Baltimore County
North Brooke Apartments
6.35%, 1/20/21 (GNMA Guaranteed) 3,000 3,075
-------------------------------------------------------------------------------
Pickersgill Retirement Community
7.70%, 1/1/21 (Prerefunded 1/1/02+) 3,550 3,763
-------------------------------------------------------------------------------
Sheppard and Enoch Pratt Hosp.
VRDN (Currently 4.25%) 1,300 1,300
-------------------------------------------------------------------------------
Stella Maris, 7.50%, 3/1/21 (Prerefunded 3/1/01+) 2,760 2,856
-------------------------------------------------------------------------------
Baltimore County, GO
Pension Funding
5.125%, 8/1/14 4,300 4,325
-------------------------------------------------------------------------------
5.125%, 8/1/15 4,195 4,196
-------------------------------------------------------------------------------
Baltimore County Economic Dev.
Maryvale Preparatory School Fac., 6.50%, 5/1/11 600 569
-------------------------------------------------------------------------------
Calvert County Economic Dev.,
Asbury Solomons Island Fac.
5.00%, 1/1/27 (MBIA Insured) $ 1,250 $ 1,159
-------------------------------------------------------------------------------
Calvert County, PCR, Baltimore Gas and Electric,
5.55%, 7/15/14 5,650 5,743
-------------------------------------------------------------------------------
Carroll County
Copper Ridge, 7.75%, 1/1/18 (Prerefunded 1/1/03+) 3,000 3,261
-------------------------------------------------------------------------------
Fairhaven, 7.75%, 1/1/11 (Prerefunded 1/1/01+) 1,000 1,030
-------------------------------------------------------------------------------
<PAGE>
Carroll County, GO
Consolidated Public Improvement
County Commissoners
5.50%, 12/1/16 1,130 1,158
-------------------------------------------------------------------------------
5.50%, 12/1/18 1,230 1,248
-------------------------------------------------------------------------------
5.50%, 12/1/19 1,130 1,143
-------------------------------------------------------------------------------
5.625%, 10/1/20 1,900 1,933
-------------------------------------------------------------------------------
7.30%, 10/1/20 (Prerefunded 10/1/00+) 2,000 2,045
-------------------------------------------------------------------------------
Charles County
Holly Station, 6.45%, 5/1/26 (FHA Guaranteed) 1,780 1,821
-------------------------------------------------------------------------------
New Forest Apartments
6.10%, 11/1/28 (FHA Guaranteed) 5,000 5,048
-------------------------------------------------------------------------------
Damascus Gardens Dev., Multi Family
7.375%, 8/15/17 (FHA Guaranteed)
(Escrowed to Maturity) 3,635 4,267
-------------------------------------------------------------------------------
Frederick City, GO, General Improvement
6.125%, 12/1/09 (FGIC Insured) 1,840 1,930
-------------------------------------------------------------------------------
Frederick County
Buckinghams Choice, 5.90%, 1/1/17 1,855 1,649
-------------------------------------------------------------------------------
Frederick County, Public Fac., GO
5.25%, 7/1/15 925 932
-------------------------------------------------------------------------------
5.75%, 7/1/19 6,430 6,665
-------------------------------------------------------------------------------
Gaithersburg Hosp. Fac.
Asbury Methodist Home, 5.50%, 1/1/20 2,150 1,968
-------------------------------------------------------------------------------
Shady Grove Adventist Hosp.
6.50%, 9/1/12 (FSA Insured) 5,000 5,685
-------------------------------------------------------------------------------
Howard County, Golf Course Fac., 6.00%, 2/15/21 3,110 3,193
-------------------------------------------------------------------------------
Howard County, GO, COP, 8.15%, 2/15/20 465 607
-------------------------------------------------------------------------------
<PAGE>
Laurel, GO
6.90%, 7/1/07 (MBIA Insured)
(Prerefunded 7/1/01+) 1,000 1,041
-------------------------------------------------------------------------------
7.00%, 7/1/09 (MBIA Insured)
(Prerefunded 7/1/01+) 550 573
-------------------------------------------------------------------------------
Maryland, GO
7.00%, 10/15/03 (Prerefunded 10/15/00+) $ 2,000 $ 2,026
-------------------------------------------------------------------------------
7.10%, 10/15/04 (Prerefunded 10/15/00+) 3,000 3,055
-------------------------------------------------------------------------------
State and Local Fac.
5.00%, 8/1/12 4,650 4,692
-------------------------------------------------------------------------------
5.25%, 7/15/13 18,900 19,304
-------------------------------------------------------------------------------
5.25%, 7/15/14 10,045 10,199
-------------------------------------------------------------------------------
5.70%, 3/15/10 5,000 5,292
-------------------------------------------------------------------------------
5.75%, 8/1/15 20,590 21,823
-------------------------------------------------------------------------------
Maryland CDA
5.95%, 9/1/29 * 20,475 20,532
-------------------------------------------------------------------------------
6.20%, 7/1/23 * 3,885 3,942
-------------------------------------------------------------------------------
Residential
5.15%, 3/1/18 * 4,250 3,970
-------------------------------------------------------------------------------
5.85%, 9/1/21 * 5,000 4,992
-------------------------------------------------------------------------------
6.125%, 9/1/20 * 5,160 5,285
-------------------------------------------------------------------------------
<PAGE>
Single Family
5.40%, 4/1/11 1,000 1,019
-------------------------------------------------------------------------------
5.85%, 7/1/27 * 7,000 6,842
-------------------------------------------------------------------------------
5.875%, 7/1/16 3,650 3,733
-------------------------------------------------------------------------------
5.875%, 9/1/25 * 3,500 3,506
-------------------------------------------------------------------------------
5.95%, 4/1/16 900 922
-------------------------------------------------------------------------------
6.00%, 4/1/17 2,500 2,521
-------------------------------------------------------------------------------
6.45%, 4/1/14 1,000 1,024
-------------------------------------------------------------------------------
6.75%, 4/1/10 * 5,000 5,138
-------------------------------------------------------------------------------
6.75%, 4/1/26 * 9,135 9,330
-------------------------------------------------------------------------------
6.80%, 4/1/22 * 2,845 2,926
-------------------------------------------------------------------------------
6.80%, 4/1/24 * 2,660 2,735
-------------------------------------------------------------------------------
6.85%, 4/1/11 4,895 5,006
-------------------------------------------------------------------------------
7.00%, 4/1/14 2,720 2,799
-------------------------------------------------------------------------------
7.05%, 4/1/17 4,750 4,888
-------------------------------------------------------------------------------
7.25%, 4/1/11 2,000 2,044
-------------------------------------------------------------------------------
7.25%, 4/1/19 9,000 9,196
-------------------------------------------------------------------------------
7.25%, 4/1/27 9,250 9,451
-------------------------------------------------------------------------------
7.375%, 4/1/10 480 488
-------------------------------------------------------------------------------
Maryland Economic Dev., Associated Jewish Charities
5.67%, 7/15/29 16,645 15,327
-------------------------------------------------------------------------------
Maryland Energy Fin. Admin.
Wheelabrator Technologies
6.30%, 12/1/10 * $ 6,145 $ 6,463
-------------------------------------------------------------------------------
6.45%, 12/1/16 * 2,600 2,663
-------------------------------------------------------------------------------
<PAGE>
Maryland HHEFA
Anne Arundel Medical Center
5.125%, 7/1/33 (FSA Insured) 7,000 6,532
-------------------------------------------------------------------------------
Bradford Oaks Nursing and Rehabilitation Center
6.375%, 1/1/19 1,500 1,316
-------------------------------------------------------------------------------
6.375%, 1/1/27 2,000 1,687
-------------------------------------------------------------------------------
Calvert Memorial Hosp., 5.00%, 7/1/28 1,550 1,338
-------------------------------------------------------------------------------
Catholic Health Initiatives, 6.00%, 12/1/20 3,400 3,484
-------------------------------------------------------------------------------
Chesapeake Hosp., 5.375%, 1/1/28 (FSA Insured) 5,250 5,121
-------------------------------------------------------------------------------
Doctor's Community Hosp., 5.50%, 7/1/24 3,050 2,428
-------------------------------------------------------------------------------
Francis Scott Key Medical Center
5.00%, 7/1/18 (FGIC Insured) 4,880 4,642
-------------------------------------------------------------------------------
5.00%, 7/1/23 (FGIC Insured) 3,000 2,799
-------------------------------------------------------------------------------
Frederick Memorial Hosp.
5.00%, 7/1/23 (FGIC Insured) 5,500 5,131
-------------------------------------------------------------------------------
5.00%, 7/1/28 (FGIC Insured) 3,750 3,452
-------------------------------------------------------------------------------
Good Samaritan Hosp.
5.60%, 7/1/06 (Escrowed to Maturity) 1,545 1,631
-------------------------------------------------------------------------------
5.60%, 7/1/07 (Escrowed to Maturity) 1,875 1,987
-------------------------------------------------------------------------------
5.75%, 7/1/13 (Escrowed to Maturity) 2,480 2,640
-------------------------------------------------------------------------------
5.75%, 7/1/13 (AMBAC Insured)
(Escrowed to Maturity) 1,520 1,618
-------------------------------------------------------------------------------
Helix Health
5.00%, 7/1/27 (AMBAC Insured)
(Escrowed to Maturity) 9,000 8,396
-------------------------------------------------------------------------------
5.125%, 7/1/10 (AMBAC Insured)
(Escrowed to Maturity) 2,485 2,563
-------------------------------------------------------------------------------
5.25%, 8/15/38 (AMBAC Insured) 15,000 13,869
-------------------------------------------------------------------------------
Howard County General Hosp.
5.50%, 7/1/21 (Escrowed to Maturity) 5,000 5,062
-------------------------------------------------------------------------------
Johns Hopkins Hosp.
Zero Coupon, 7/1/19 9,460 3,294
-------------------------------------------------------------------------------
4.50%, 5/15/35 2,000 1,627
-------------------------------------------------------------------------------
5.50%, 5/15/38 10,590 10,375
-------------------------------------------------------------------------------
TECP, 4.10%, 9/5/00 1,400 1,400
-------------------------------------------------------------------------------
<PAGE>
Maryland HHEFA
Johns Hopkins Medical Institute Parking Fac.
5.375%, 7/1/20 (AMBAC Insured) $ 5,550 $ 5,480
-------------------------------------------------------------------------------
5.50%, 7/1/26 (AMBAC Insured) 3,220 3,189
-------------------------------------------------------------------------------
Johns Hopkins Univ.
5.125%, 7/1/20 11,660 11,286
-------------------------------------------------------------------------------
5.25%, 7/1/15 3,500 3,524
-------------------------------------------------------------------------------
5.25%, 7/1/16 9,540 9,561
-------------------------------------------------------------------------------
5.25%, 7/1/17 3,100 3,089
-------------------------------------------------------------------------------
6.00%, 7/1/39 18,645 19,740
-------------------------------------------------------------------------------
Kennedy Kreiger Institute
6.75%, 7/1/22 (Prerefunded 7/1/01+) 2,850 2,906
-------------------------------------------------------------------------------
7.40%, 7/1/11 (Prerefunded 7/1/01+) 370 386
-------------------------------------------------------------------------------
Loyola College
5.00%, 10/1/39 8,500 7,632
-------------------------------------------------------------------------------
5.375%, 10/1/26 (MBIA Insured) 5,820 5,665
-------------------------------------------------------------------------------
Maryland General Hosp.
6.20%, 7/1/24 (MBIA Insured) 4,000 4,168
-------------------------------------------------------------------------------
Mercy Medical Center, 6.50%, 7/1/13 (FSA Insured) 2,155 2,432
-------------------------------------------------------------------------------
Peninsula Regional Medical Center
5.00%, 7/1/23 (MBIA Insured) 10,000 9,329
-------------------------------------------------------------------------------
Pooled Loan Program, VRDN (Currently 4.20%) 3,600 3,600
-------------------------------------------------------------------------------
Union Hosp. of Cecil County
6.625%, 7/1/12 (Prerefunded 7/1/02+) 1,545 1,634
-------------------------------------------------------------------------------
Union Memorial Hosp.
6.60%, 7/1/06 (MBIA Insured)
(Prerefunded 7/1/01+) 500 519
-------------------------------------------------------------------------------
6.75%, 7/1/11 (MBIA Insured)
(Prerefunded 7/1/01+) 3,000 3,118
-------------------------------------------------------------------------------
6.75%, 7/1/21 (MBIA Insured)
(Prerefunded 7/1/01+) 7,895 8,205
-------------------------------------------------------------------------------
<PAGE>
Univ. of Maryland Medical System
5.00%, 7/1/20 (FGIC Insured) 5,960 5,630
-------------------------------------------------------------------------------
6.625%, 7/1/20 5,065 5,168
-------------------------------------------------------------------------------
6.75%, 7/1/30 15,285 15,625
-------------------------------------------------------------------------------
7.00%, 7/1/11 (FGIC Insured)
(Prerefunded 7/1/01+) 4,550 4,738
-------------------------------------------------------------------------------
7.00%, 7/1/17 (FGIC Insured)
(Prerefunded 7/1/01+) 7,770 8,091
-------------------------------------------------------------------------------
7.00%, 7/1/22 (FGIC Insured) 2,020 2,414
-------------------------------------------------------------------------------
Maryland HHEFA
Upper Chesapeake Hosp.
5.125%, 1/1/38 (FSA Insured) $ 9,415 $ 8,717
-------------------------------------------------------------------------------
Maryland Ind. Dev. Fin. Auth.
American Center for Physics Headquarters Fac.
6.25%, 1/1/07 5,770 5,812
-------------------------------------------------------------------------------
6.375%, 1/1/12 5,900 5,977
-------------------------------------------------------------------------------
6.625%, 1/1/17 4,250 4,293
-------------------------------------------------------------------------------
Bon Secours Health
5.929%, 8/26/22 (FSA Insured) 15,000 15,798
-------------------------------------------------------------------------------
Holy Cross Health, 5.60%, 12/1/09 2,780 2,936
-------------------------------------------------------------------------------
McDonogh School Fac., VRDN (Currently 4.25%) 10,795 10,795
-------------------------------------------------------------------------------
Maryland Local Gov't. Income Trust, GO, COP
6.80%, 8/1/01 835 851
-------------------------------------------------------------------------------
7.125%, 8/1/09 3,000 3,091
-------------------------------------------------------------------------------
Maryland National Capital Park Planning Commission
Little Bennett Golf Fac.
8.25%, 10/1/11 (Prerefunded 10/1/02+) 1,980 2,165
-------------------------------------------------------------------------------
Maryland Stadium Auth.
VRDN (Currently 4.30%) * 15,700 15,700
-------------------------------------------------------------------------------
Baltimore Convention Center Expansion
5.875%, 12/15/11 (AMBAC Insured) 2,025 2,138
-------------------------------------------------------------------------------
<PAGE>
Maryland Transportation Auth.
Zero Coupon, 7/1/07 (FGIC Insured) 8,500 6,147
-------------------------------------------------------------------------------
Zero Coupon, 7/1/08 (FGIC Insured) 2,000 1,374
-------------------------------------------------------------------------------
Zero Coupon, 7/1/09 (FGIC Insured) 10,410 6,788
-------------------------------------------------------------------------------
6.80%, 7/1/16 (Escrowed to Maturity) 15,535 17,918
-------------------------------------------------------------------------------
Baltimore-Washington Int'l. Airport
6.25%, 7/1/14 (FGIC Insured) * 3,305 3,479
-------------------------------------------------------------------------------
Maryland Water Quality Fin. Admin.
6.70%, 9/1/13 (Prerefunded 9/1/01+) 1,280 1,335
-------------------------------------------------------------------------------
7.10%, 9/1/13 (Prerefunded 9/1/01+) 985 1,031
-------------------------------------------------------------------------------
7.25%, 9/1/11 (Prerefunded 9/1/00+) 1,700 1,734
-------------------------------------------------------------------------------
7.25%, 9/1/12 (Prerefunded 9/1/00+) 2,000 2,040
-------------------------------------------------------------------------------
Revolving Loan Fund
Zero Coupon, 9/1/02 1,185 1,081
-------------------------------------------------------------------------------
Zero Coupon, 9/1/07 1,125 803
-------------------------------------------------------------------------------
6.00%, 9/1/15 1,600 1,650
-------------------------------------------------------------------------------
Montgomery County
Golf Course, 6.125%, 10/1/22 $ 2,260 $ 2,171
-------------------------------------------------------------------------------
Montgomery County, GO
Consolidated Public Improvement
5.375%, 5/1/09 2,850 3,006
-------------------------------------------------------------------------------
5.375%, 5/1/10 2,700 2,836
-------------------------------------------------------------------------------
5.375%, 5/1/16 4,000 4,051
-------------------------------------------------------------------------------
6.00%, 1/1/20 6,500 6,941
-------------------------------------------------------------------------------
6.125%, 10/1/13 (Prerefunded 10/1/04+) 2,500 2,702
-------------------------------------------------------------------------------
6.125%, 10/1/14 (Prerefunded 10/1/04+) 3,150 3,405
-------------------------------------------------------------------------------
7.10%, 10/1/09 (Prerefunded 10/1/00+) 1,000 1,022
-------------------------------------------------------------------------------
7.10%, 10/1/10 (Prerefunded 10/1/00+) 1,840 1,881
-------------------------------------------------------------------------------
<PAGE>
Montgomery County Housing Opportunities Commission
Multi-Family
6.10%, 7/1/30 4,620 4,681
-------------------------------------------------------------------------------
6.25%, 7/1/25 5,500 5,585
-------------------------------------------------------------------------------
7.50%, 7/1/24 3,000 3,099
-------------------------------------------------------------------------------
Single Family
Zero Coupon, 7/1/27 5,285 1,045
-------------------------------------------------------------------------------
Zero Coupon, 7/1/28 12,985 2,458
-------------------------------------------------------------------------------
Zero Coupon, 7/1/31 10,610 1,497
-------------------------------------------------------------------------------
5.75%, 7/1/13 1,750 1,810
-------------------------------------------------------------------------------
5.90%, 7/1/17 1,585 1,592
-------------------------------------------------------------------------------
6.00%, 7/1/17 4,110 4,140
-------------------------------------------------------------------------------
6.50%, 7/1/11 2,550 2,608
-------------------------------------------------------------------------------
6.65%, 7/1/16 2,185 2,296
-------------------------------------------------------------------------------
6.80%, 7/1/17 2,445 2,490
-------------------------------------------------------------------------------
Montgomery County Housing Opportunities Commission, GO
6.90%, 7/1/19 2,000 2,022
-------------------------------------------------------------------------------
Montgomery County, PCR,Potomac Electric, 5.375%,2/15/24 4,110 3,954
-------------------------------------------------------------------------------
Morgan State Univ., Academic Fees and Auxiliary Fac.
6.05%, 7/1/15 (MBIA Insured) 1,100 1,201
-------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Auth.
Baltimore Resco Retrofit, 5.00%, 1/1/12 * 5,750 4,998
-------------------------------------------------------------------------------
Montgomery County Resources
6.00%, 7/1/08 * 10,000 10,654
-------------------------------------------------------------------------------
6.20%, 7/1/10 * 7,750 8,106
-------------------------------------------------------------------------------
6.30%, 7/1/16 (MBIA Insured) * 13,985 14,540
-------------------------------------------------------------------------------
Northeast Maryland Waste Disposal Auth.
Southwest Resource Recovery Fac., 6.30%, 7/1/16 * $ 5,795 $ 5,967
-------------------------------------------------------------------------------
<PAGE>
Prince George's County
Dimensions Health
5.375%, 7/1/14 2,685 1,732
-------------------------------------------------------------------------------
7.00%, 7/1/01 675 659
-------------------------------------------------------------------------------
7.00%, 7/1/22 (Prerefunded 7/1/02+) 2,660 2,834
-------------------------------------------------------------------------------
7.20%, 7/1/06 420 435
-------------------------------------------------------------------------------
7.20%, 7/1/06 (Prerefunded 7/1/02+) 1,985 2,055
-------------------------------------------------------------------------------
Prince George's County Housing Auth.
Amortized Collateral
6.15%, 8/1/19 * 750 766
-------------------------------------------------------------------------------
6.20%, 2/1/32 * 1,000 1,024
-------------------------------------------------------------------------------
New Keystone, 6.80%, 7/1/25 (MBIA Insured) 2,600 2,678
-------------------------------------------------------------------------------
Riverview Terrace Apartments
6.70%, 6/20/20 (GNMA Guaranteed) 1,500 1,568
-------------------------------------------------------------------------------
Stevenson Apartments
6.35%, 7/20/20 (GNMA Guaranteed) 2,200 2,244
-------------------------------------------------------------------------------
Prince George's County IDA,
Upper Marlboro Justice Center
5.25%, 6/30/19 (MBIA Insured) 1,500 1,463
-------------------------------------------------------------------------------
Prince George's County, PCR
Potomac Electric
5.75%, 3/15/10 6,250 6,670
-------------------------------------------------------------------------------
6.375%, 1/15/23 7,175 7,451
-------------------------------------------------------------------------------
Queen Annes County, GO
School and Public Fac.
5.25%, 1/15/15 (FGIC Insured) 2,040 2,066
-------------------------------------------------------------------------------
5.25%, 1/15/16 (FGIC Insured) 1,375 1,384
-------------------------------------------------------------------------------
5.25%, 1/15/20 (FGIC Insured) 3,565 3,531
-------------------------------------------------------------------------------
<PAGE>
St. Mary's County, GO
Consolidated Public Improvement
5.50%, 10/1/13 1,680 1,755
-------------------------------------------------------------------------------
6.00%, 10/1/15 1,875 2,017
-------------------------------------------------------------------------------
6.00%, 10/1/16 1,980 2,121
-------------------------------------------------------------------------------
6.00%, 10/1/17 1,095 1,168
-------------------------------------------------------------------------------
6.00%, 10/1/18 2,115 2,251
-------------------------------------------------------------------------------
6.00%, 10/1/19 2,345 2,492
-------------------------------------------------------------------------------
Univ. of Maryland
5.25%, 10/1/12 $ 3,005 $ 3,087
-------------------------------------------------------------------------------
5.25%, 10/1/13 4,770 4,860
-------------------------------------------------------------------------------
5.375%, 10/1/16 3,960 4,005
-------------------------------------------------------------------------------
5.75%, 10/1/20 6,555 6,759
-------------------------------------------------------------------------------
Auxiliary Fac. and Tuition
5.60%, 4/1/11 3,155 3,300
-------------------------------------------------------------------------------
5.75%, 4/1/17 4,400 4,541
-------------------------------------------------------------------------------
6.375%, 4/1/09 (Prerefunded 10/1/02+) 2,100 2,224
-------------------------------------------------------------------------------
6.50%, 4/1/12 (Prerefunded 10/1/02+) 440 467
-------------------------------------------------------------------------------
Washington Suburban Sanitary Dist., GO
6.20%, 6/1/11 2,400 2,502
-------------------------------------------------------------------------------
6.20%, 6/1/12 1,500 1,568
-------------------------------------------------------------------------------
6.40%, 1/1/15 2,270 2,366
-------------------------------------------------------------------------------
6.625%, 6/1/18 (Prerefunded 6/1/04+) 3,665 3,945
-------------------------------------------------------------------------------
Worcester County Sanitary Dist.
6.50%, 8/15/12 (Prerefunded 8/15/02+) 1,265 1,340
-------------------------------------------------------------------------------
Total Maryland (Cost $959,047) 987,551
-------------------------------------------------------------------------------
<PAGE>
PUERTO RICO 4.2%
Puerto Rico Commonwealth, GO, 6.25%,7/1/12(MBIA Insured 1,750 1,985
-------------------------------------------------------------------------------
Puerto Rico Commonwealth
Highway and Transportation Auth.
4.75%, 7/1/38 10,000 8,641
-------------------------------------------------------------------------------
5.00%, 7/1/38 1,620 1,477
-------------------------------------------------------------------------------
5.50%, 7/1/15 (FSA Insured) 5,000 5,265
-------------------------------------------------------------------------------
5.875%, 7/1/21 (MBIA Insured) 3,020 3,182
-------------------------------------------------------------------------------
Puerto Rico Electric Power Auth.
5.375%, 7/1/27 (MBIA Insured) 1,475 1,467
-------------------------------------------------------------------------------
7.00%, 7/1/11 (Prerefunded 7/1/01+) 1,200 1,252
-------------------------------------------------------------------------------
Puerto Rico Ind. Tourist, Ed.,
Medical & Environmental Fac.
Cogen Fac., 6.625%, 6/1/26 * 2,000 2,085
-------------------------------------------------------------------------------
Puerto Rico Infrastructure Fin. Auth.
5.00%, 7/1/28 (AMBAC Insured) 10,200 9,580
-------------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, GO
6.00%, 7/1/12 (FSA Insured) 5,000 5,560
-------------------------------------------------------------------------------
6.00%, 7/1/14 (FSA Insured)
(Prerefunded 7/1/04+) 3,060 3,306
-------------------------------------------------------------------------------
Total Puerto Rico (Cost $41,153) 43,800
Total Investments in Securities
99.8% of Net Assets (Cost $1,000,200) $1,031,351
Other Assets Less Liabilities 2,487
NET ASSETS $1,033,838
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 18
Accumulated net realized gain/loss -
net of distributions (8,491)
Net unrealized gain (loss) 31,151
Paid-in-capital applicable to 101,188,491
no par value shares of beneficial interest
outstanding; unlimited number of shares authorized 1,011,160
NET ASSETS $1,033,838
NET ASSET VALUE PER SHARE $ 10.22
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
CDA Community Development Administration
COP Certificates of Participation
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FSA Financial Security Assurance Corp.
GNMA Government National Mortgage Association
GO General Obligation
HHEFA Health & Higher Educational Facility Authority
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
TECP Tax-Exempt Commercial Paper
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Maryland Tax-Free Funds
------------------------------------- Unaudited
STATEMENT OF OPERATIONS
----------------------- In thousands
Short-Term
Bond Fund Bond Fund
--------- ---------
6 Months 6 Months
Ended Ended
8/31/00 8/31/00
Investment Income (Loss)
Interest income $ 2,613 $ 29,317
--------------------------------------------------------------------------------
Expenses
Investment management 245 2,095
Custody and accounting 48 85
Shareholder servicing 45 280
Legal and audit 7 7
Prospectus and shareholder reports 4 27
Trustees 3 4
Registration 2 4
Miscellaneous 2 3
--------------------------------------------------------------------------------
Total expenses 356 2,505
--------------------------------------------------------------------------------
Net investment income (loss) 2,257 26,812
--------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (72) (697)
Futures - (54)
--------------------------------------------------------------------------------
Net realized gain (loss) (72) (751)
Change in net unrealized gain or loss on securities 1,266 35,298
--------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 1,194 34,547
--------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 3,451 $ 61,359
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Maryland Tax-Free Funds
------------------------------------- Unaudited
STATEMENT OF CHANGES IN NET ASSETS In thousands
---------------------------------- Short-Term
Bond Fund Bond Fund
6 Months Year 6 Months Year
Ended Ended Ended Ended
8/31/00 2/29/00 8/31/00 2/29/00
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 2,257 $ 4,692 $ 26,812 $ 54,225
Net realized gain (loss) (72) (37) (751) (7,183)
Change in net unrealized
gain or loss 1,266 (3,124) 35,298 (79,301)
-------------------------------------------------------------------------------
Increase (decrease) in
net assets from operations 3,451 1,531 61,359 (32,259)
-------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (2,257) (4,692) (26,812) (54,225)
Net realized gain - - - (1,002)
-------------------------------------------------------------------------------
Decrease in net assets
from distributions (2,257) (4,692) (26,812) (55,227)
-------------------------------------------------------------------------------
Capital share transactions *
Shares sold 18,061 60,256 80,197 204,647
Distributions reinvested 1,894 3,989 18,994 40,122
Shares redeemed (29,789) (59,501) (79,271) (241,073)
-------------------------------------------------------------------------------
Increase (decrease) in
net assets from capital
share transactions (9,834) 4,744 19,920 3,696
-------------------------------------------------------------------------------
Net Assets
Increase (decrease)
during period (8,640) 1,583 54,467 (83,790)
Beginning of period 124,135 122,552 979,371 1,063,161
-------------------------------------------------------------------------------
End of period $ 115,495 $ 124,135 $1,033,838 $ 979,371
*Share information
Shares sold 3,574 11,825 8,016 19,871
Distributions reinvested 375 784 1,894 3,939
Shares redeemed (5,901) (11,694) (7,930) (23,722)
-------------------------------------------------------------------------------
Increase (decrease)
in shares outstanding (1,952) 915 1,980 88
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Maryland 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 Maryland Short-Term Tax-Free Bond Fund
(the Short-Term Bond Fund) and the Maryland Tax-Free Bond Fund (the Bond Fund),
nondiversified, open-end management investment companies, are two of the
portfolios established by the trust and commenced operations on January 29,
1993, and March 31, 1987, respectively. The Short-Term Bond Fund seeks the
highest level of income exempt from federal, Maryland state and local income
taxes consistent with modest fluctuation in principal value by investing
primarily in investment-grade Maryland municipal bonds. The Bond Fund seeks to
provide, consistent with prudent portfolio management, the highest level of
income exempt from federal, Maryland state and local income taxes by investing
primarily in investment-grade Maryland 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. 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.
<PAGE>
NOTE 2 - INVESTMENT TRANSACTIONS
--------------------------------
Purchases and sales of portfolio securities, other than short-term
securities, for the six months ended August 31, 2000, were as follows:
Short-Term
Bond Fund Bond Fund
--------- ---------
Purchases $ 13,514,000 $ 157,993,000
Sales 18,646,000 146,913,000
NOTE 3 - FEDERAL INCOME TAXES
-----------------------------
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute all of
its income. As of February 29, 2000, the Short-Term Bond Fund had capital loss
carryforwards for federal income tax purposes of $130,000, of which $121,000
expires in 2004 and $9,000 expires in 2008, and the Bond Fund had capital loss
carryforwards for federal income tax purposes of $5,728,000 all of which expires
in 2008. Each fund intends 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 Short-Term Bond and
Bond Funds were substantially the same for federal income tax purposes as for
financial reporting and totaled $114,531,000 and $1,000,200,000, respectively.
Net unrealized gain (loss) on investments was as follows:
Short-Term
Bond Fund Bond Fund
Appreciated investments $ 382,000 $ 39,709,000
Depreciated investments (421,000) (8,558,000)
Net unrealized gain (loss) $ (39,000) $ 31,151,000
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 $40,000 and $363,000 were payable at August 31, 2000 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 certa
in 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.
<PAGE>
Under the terms of the investment management agreement, the manager is
required to bear any expenses through February 28, 2001 which would cause the
Short-Term Bond Fund's ratio of total expenses to average net assets to exceed
0.60%. Thereafter, through February 28, 2003, the Short-Term Bond Fund is then
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 fund's ratio of total expenses to
average net assets to exceed 0.60%. Pursuant to this agreement, $2,000 of
management fees were not accrued by the Short-Term Bond Fund for the six months
ended August 31, 2000. Pursuant to this and a previous agreement, $2,000 of
unaccrued fees were repaid during the six months ended August 31, 2000, and
$2,000 remains subject to reimbursement through February 28, 2003. Additionally,
$5,000 of unaccrued management fees related to a previous expense limitation are
subject to reimbursement though February 28, 2001.
In addition, each fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which each fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of each fund. T. Rowe Price Services, Inc. is each fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the funds. The Short-Term Bond and Bond Funds
incurred expenses pursuant to these related party agreements totaling
approximately $69,000 and $271,000, respectively, for six months ended August
31, 2000, of which $14,000 and $55,000, 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 July 2000 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of
order.T. Rowe Price Shareholder Services
================================================================================
T. Rowe Price Mutual Funds
--------------------------
STOCK FUNDS
-----------
DOMESTIC
--------
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Developing Technologies
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total
Equity Market Index
Value
INTERNATIONAL/GLOBAL
--------------------
Emerging Europe & Mediterranean
Emerging Markets Stock
European Stock
Global Stock
Global Technology
International Discovery*
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
<PAGE>
BOND FUNDS
----------
DOMESTIC TAXABLE
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government *
Spectrum Income
Summit GNMA
Summit Limited-Term Bond *
U.S. Treasury Intermediate
U.S. Treasury Long-Term
DOMESTIC TAX-FREE
-----------------
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond *
Virginia Tax-Free Bond
INTERNATIONAL/GLOBAL
--------------------
Emerging Markets Bond
Global Bond *
International Bond
MONEY MARKET FUNDS
------------------
TAXABLE
-------
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
<PAGE>
TAX-FREE
--------
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
---------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
--------------------------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or
any other government agency. Although the funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in the funds.
Please call for a prospectus, which contains complete information,
including fees and expenses. Read it carefully before investing.
Please call for a prospectus, which contains complete information,
including fees and expenses. Read it carefully before investing. The T. Rowe
Price No-Load Variable Annuity [#V6021] is issued by Security Benefit Life
Insurance Company. In New York, it [#FSB201(11-96)] is issued by First Security
Benefit Life Insurance Company of New York, White Plains, NY. T. Rowe Price
refers to the underlying portfolios' investment managers and the distributors,
T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance Agency, Inc.;
and T. Rowe Price Insurance Agency of Texas, Inc. The Security Benefit Group of
Companies and the T. Rowe Price companies are not affiliated. The variable
annuity may not be available in all states. The contract has limitations. Call a
representative for costs and complete details of the coverage.
================================================================================
<PAGE>
T. Rowe Price Advisory Services and Retirement Resources
--------------------------------------------------------
ADVISORY SERVICES, RETIREMENT RESOURCES
---------------------------------------
T. Rowe Price is your full-service retirement
specialist. We have developed unique advisory services
that can help you meet the most difficult retirement
challenges. Our broad array of retirement plans is
suitable for individuals, the self-employed, small
businesses, corporations, and nonprofit organizations.
We also provide recordkeeping, communications, and
investment management services, and our educational
materials, self-help planning guides, and software
tools are recognized as among the industry's best. For
information or to request literature, call us at
1-800-638-5660, or visit our Web site at
www.troweprice.com.
ADVISORY SERVICES
-----------------
T. Rowe Price Retirement Income Manager [SM] helps
retirees or those within two years of retirement
determine how much income they can take in retirement.
The program uses extensive statistical analysis and the
input of financial planning professionals to suggest an
income plan that best meets your objectives.
T. Rowe Price Rollover Investment Service offers
asset allocation advice to those planning a major
change in their qualified retirement plans, such as a
401(k) rollover from a previous employer or an IRA
transfer.
RETIREMENT RESOURCES AT T. ROWE PRICE
-------------------------------------
Traditional, Roth, and Rollover IRAs
SEP-IRA and SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k) and 403(b)
457 Deferred Compensation
Planning and Informational Guides
---------------------------------
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
Insights Reports
----------------
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
Software Packages
-----------------
T. Rowe Price Retirement Planning
Analyzer [TM] CD-ROM or diskette $19.95.
To order, please call 1-800-541-5760.
Also available on the Internet for $9.95.
T. Rowe Price Variable Annuity Analyzer [TM]
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
T. ROWE PRICE IMMEDIATE VARIABLE ANNUITY (INCOME ACCOUNT)
Investment Kits
---------------
We will be happy to send you one of our
easy-to-follow investment kits when you are ready to
invest in any T. Rowe Price retirement vehicle,
including IRAs, qualified plans, small-business plans,
or our no-load variable annuities.
================================================================================
<PAGE>
T. Rowe Price Insights Reports
------------------------------
THE FUNDAMENTALS OF INVESTING
-----------------------------
Whether you are unsure how to get started or are
saving for a specific goal, such as retirement or
college, the T. Rowe Price Insights series can help you
make informed investment decisions. These reports,
written in plain English about fundamental investment
topics, can be useful at every stage of your investment
journey. They cover a range of topics, from the basic,
such as getting started with mutual funds, to the more
advanced, such as managing risk through diversification
or buying individual securities through a broker. To
request one or more Insights, call us at
1-800-638-5660.
INSIGHTS REPORTS
----------------
General Information
-------------------
The ABCs of Giving
Back to Basics: The ABCs of Investing
The Challenge of Preparing for Retirement
Financial Planning After Retirement
Getting Started: Investing With Mutual Funds
The Roth IRA: A Review
Tax Information for Mutual Fund Investors
Investment Strategies
---------------------
Conservative Stock Investing
Dollar Cost Averaging
Equity Index Investing
Growth Stock Investing
Investing for Higher Yield
Managing Risk Through Diversification
The Power of Compounding
Value Investing
<PAGE>
Types of Securities
-------------------
The Basics of International Stock Investing
The Basics of Tax-Free Investing
The Fundamentals of Fixed-Income Investing
Global Bond Investing
Investing in Common Stocks
Investing in Emerging Growth Stocks
Investing in Financial Services Stocks
Investing in Health Care Stocks
Investing in High-Yield Municipal Bonds
Investing in Money Market Securities
Investing in Mortgage-Backed Securities
Investing in Natural Resource Stocks
Investing in Science and Technology Stocks
Investing in Small-Company Stocks Understanding
Derivatives Understanding High-Yield "Junk" Bonds
Brokerage Insights
------------------
Combining Individual Securities With Mutual Funds
Getting Started: An Introduction to Individual Securities
What You Should Know About Bonds
What You Should Know About Margin and Short-Selling
What You Should Know About Options
What You Should Know About Stocks
T. Rowe Price Insights are also available for
reading or downloading on the Internet at
www.troweprice.com.
================================================================================
T. Rowe Price Brokerage
-----------------------
BROKERAGE SERVICES
------------------
T. Rowe Price Brokerage is a division of T. Rowe
Price Investment Services, Inc., Member NASD/SIPC.
T. Rowe Price Brokerage provides high-quality
services and financial tools you can use to manage your
investments effectively and conveniently. We also offer
commission savings over full-service brokerages on a
number of transactions.*
<PAGE>
Internet and Automated Services You can enter
trades, access quotes, and review account information
24 hours a day, seven days a week, by telephone or
computer. We offer a flat-rate commission of $24.95 on
stock trades placed through our Internet-Trader
service.**
Research Services To help you make informed
investment decisions, we offer access to several
sources of data. You can research your investments
using our Online Research & News Service, provided by
Thomson Investors Network, which includes company
profiles, intraday and 12-month interactive charting,
and analysts' ratings and earnings estimates. Using our
Research On Call service, you can request reports from
Standard & Poor's, Vicker's, Lipper, and other
well-known research providers to be delivered by fax or
by mail.
Dividend Reinvestment Service This service helps
keep more of your money working for you. Cash dividends
(of $10 or greater) from your eligible securities will
be invested automatically in additional shares of the
same company, free of charge. Most stocks listed on
national securities exchanges or Nasdaq are eligible
for this service.
* Based on a July 2000 survey for
representative-assisted stock trades.
Services vary by firm, and commissions may
vary depending on size of order. ** $24.95
per trade for up to 1,000 shares plus an
additional $.02 for each share over 1,000
shares. Visit our Web site for a complete
commission schedule or call for rates on
representative-assisted and other
non-Internet trades.
================================================================================
<PAGE>
FOR FUND AND ACCOUNT INFORMATION
OR TO CONDUCT TRANSACTIONS,
24 HOURS, 7 DAYS A WEEK
By touch-tone telephone
TELE*ACCESS 1-800-638-2587
By Account Access on the Internet
WWW.TROWEPRICE.COM/ACCESS
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132
TO OPEN A BROKERAGE ACCOUNT
OR OBTAIN INFORMATION, CALL:
1-800-638-5660
INTERNET ADDRESS:
www.troweprice.com
PLAN ACCOUNT LINES FOR RETIREMENT
PLAN PARTICIPANTS:
The appropriate 800 number appears
on your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus appropriate
to the fund or funds covered in this
report.
WALK-IN INVESTOR CENTERS:
For directions, call 1-800-225-5132
or visit our Web site
BALTIMORE AREA
DOWNTOWN
101 East Lombard Street
OWINGS MILLS
Three Financial Center
4515 Painters Mill Road
BOSTON AREA
386 Washington Street
Wellesley
COLORADO SPRINGS
4410 ArrowsWest Drive
LOS ANGELES AREA
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
TAMPA
4200 West Cypress Street
10th Floor
WASHINGTON, D.C.
900 17th Street N.W.
Farragut Square
T. Rowe Price Investment Services, Inc., Distributor. C12-051 8/31/00
