<PAGE>
================================================================================
T. Rowe Price
- --------------------------------------------------------------------------------
Annual Report
New York Tax-Free Funds
- --------------------------------------------------------------------------------
February 29, 2000
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
NEW YORK TAX-FREE FUNDS
- -----------------------
* Interest rates rose and bond prices fell as the Fed tightened monetary
policy to constrain inflationary pressures.
* The money market fund benefited from rising rates, but the bond fund was
down in a difficult environment.
* A combination of duration and credit strategies helped boost the funds'
dividend yields as we positioned the portfolios for the year ahead.
* Municipal yields are currently very attractive compared with the yields on
similar taxable alternatives. We are optimistic about the outlook for New
York but will closely monitor debt levels within the state.
UPDATES AVAILABLE
- -----------------
For updates on T. Rowe Price funds following the end of each calendar
quarter, please see our Web site at www.troweprice.com.
FELLOW SHAREHOLDERS
- -------------------
The Federal Reserve raised the federal funds rate three times in 1999 and
twice so far in 2000 in a continuing effort to slow economic growth to a pace
that will constrain inflationary pressures. As a result of a powerful economy
and higher interest rates, many intermediate and longer-term funds posted weak
returns during the past 6- and 12-month periods, although the tone of the market
began to improve early this year. Only money market funds benefited from rising
short-term rates.
MARKET ENVIRONMENT
- ------------------
******************************************************
NEW YORK YIELD INDEXES
----------------------
New York Bond Index New York Money Index
2/28/99 5.16 2.75
5.22 2.85
5.26 3.9
5/31 5.36 3.1
5.57 3.3
5.66 2.9
8/31 5.85 3.15
6.04 3.7
6.17 3.35
11/30 6.1 3.6
6.27 5.35
6.3 2.75
2/29/00 6.11 3.65
******************************************************
<PAGE>
The Fed has drawn a clear line in the sand in the face of a persistently
strong economy, which surged more than 6% in the second half of 1999. By early
2000, it was evident that domestic demand was not slowing sufficiently to temper
the powerful economy, which has been augmented by a recovery in U.S. exports and
by increased government spending made possible by soaring tax receipts. In this
environment, Fed Chairman Alan Greenspan left no room for doubt that the Fed
will remain diligent in its fight to contain inflation.
Interest rates and municipal bond yields trended upward in response to the
Fed's hikes in key short-term rates. After outperforming taxable bonds during
the first half of 1999, municipals lost ground in the second half as
lower-quality tax-exempt securities, in particular, did poorly. Year-end was
particularly challenging for municipal bond funds due to a confluence of events.
Municipals began to weaken when some buyers fled into higher-yielding corporate
bonds, which flooded the market in the third quarter. In the fourth quarter,
normally strong demand from investors waned because of competition from the
surging stock market, and from selling to realize tax losses at year-end.
Redemptions from municipal bond funds increased as a result of these factors.
One factor that aided municipals in 1999 was the relatively light supply of new
issues, which was down 21% from the previous year.
The funds' fiscal year ended on a positive note, however, as prices climbed
and long-term municipal yields fell in February along with longer-term Treasury
yields. The rally in bond prices began when the Treasury announced its intention
to reduce outstanding debt further through the purchase of Treasury bonds. The
proposed reduction in federal debt sent shock waves through the bond market as
investors scrambled to discern which maturities would be affected most and
searched for alternative securities. The Treasury's buyback program led to an
inversion of the yield curve, as two-year Treasury yields rose above 30-year
yields. The municipal yield curve, however, maintained a positive slope, and the
sharp drop in long-term Treasury yields has made similar municipal yields
attractive in comparison.
**********************************
In New York, the strength of the
national economy and the bull
market on Wall Street continued
to benefit the state.
**********************************
In New York, the strength of the national economy and the bull market on
Wall Street continued to benefit the state. New York added about 200,000 jobs
last year, representing annual growth of 2.6%, which was slightly better than
the national rate. However, the rate of job growth was uneven across the state.
About 80% of it was downstate while the upstate region, which depends on
manufacturing, continued to stagnate.
Nevertheless, New York's financial condition has been improving during the
past few years, and the state has enjoyed budget surpluses each year since 1995.
Citing the strong economy, fundamental changes in fiscal management, and
controlled spending during this period of revenue growth, Standard & Poor's
upgraded the state's credit rating to A+ last November. The rating agency also
upgraded all of the state's appropriation-backed debt this March because of the
state's ability to manage its finances and meet its debt obligations.
<PAGE>
NEW YORK TAX-FREE MONEY FUND
- ----------------------------
The New York Tax-Free Money Fund's results surpassed those of the Lipper
peer group average for both the 6- and 12-month periods ended February 29, 2000,
a reflection of our maturity strategy and the fund's relatively low expense
ratio.
******************************************************
PERFORMANCE COMPARISON
----------------------
Periods Ended 2/29/00 6 Months 12 Months
--------------------- -------- ---------
New York Tax-Free
Money Fund 1.48% 2.79%
Lipper New York Tax-Exempt
Money Market Funds Average 1.45 2.74
******************************************************
During the past six months, the Federal Reserve raised key short-term
interest rates three times following two earlier rate hikes, for a total of 125
basis points (100 basis points equal one percentage point). As would be
expected, tax-exempt money market yields moved higher by a similar amount. For
the entire fiscal year, 30- to 90-day rates rose about 100 basis points, while
six-month and one-year note rates climbed 115 and 120 basis points to 4.05% and
4.20%, respectively.
The short-term municipal yield curve steepened during the 12-month period,
as six-month and one-year yields rose more than shorter-term yields. A year ago,
this was not the case. For the six months ended February 1999, overnight and
weekly securities offered the same average return as a one-year security, so
performance was not necessarily influenced by the maturity structure of the
portfolio. At the end of February 2000, overnight and weekly investments
averaged 3.49% over the past six months while one-year notes averaged 3.98%, a
difference of 49 basis points.
These changes in money market yields benefited performance relative to our
peer group. The fund closed the fiscal year with a weighted average maturity of
48 days, 11 days shorter than six months ago and two days shorter than last
February. However, our competitors have allowed their maturities to shorten even
more, enabling us to provide a higher yield than the average competitor. We
expect the Federal Reserve to apply gradual, but persistent, pressure to the fed
funds rate until economic growth slows to an acceptable level. It is the Fed's
gradual approach that has kept us so far from further shortening our maturity.
We believe we can earn the additional yield that the yield curve offers without
concern over a quick pickup in rates, and we expect to increase our yield as the
move to higher interest rates unfolds in a measured fashion.
<PAGE>
NEW YORK TAX-FREE BOND FUND
- ---------------------------
******************************************************
PERFORMANCE COMPARISON
----------------------
Periods Ended 2/29/00 6 Months 12 Months
--------------------- -------- ---------
New York Tax-Free
Bond Fund -0.63% -4.47%
Lipper New York Municipal
Debt Funds Average -1.27 -4.72
******************************************************
Returns for both periods cited in the table were negative as interest rates
rose steadily. Dividends per share of $0.26 and $0.52, respectively, for the 6-
and 12-month periods failed to overcome the decline in net asset value, which
raised the six-month dividend yield from 4.98% to 5.21%. However, the fund
outperformed the peer group average in both periods as a result of our maturity
strategy, purchases made during the past few months, and a lower duration that
was closer to a neutral position. (Duration is a measure of a bond fund's
sensitivity to interest rates. For example, a fund with a duration of nine years
would fall or rise about 9% in price in response to a one-percentage-point rise
or fall in interest rates.)
Performance was enhanced by our decision late last year to shift assets
from securities with seven- to 15-year maturities to those maturing in 20 years
or longer. As the Fed tightened during the past eight months, the rise in
shorter rates had a greater negative impact on the shorter-term securities,
making that area of the yield curve a good place to avoid. The longer-term bonds
we purchased suffered less and provided higher income. We have been maintaining
a so-called "barbell" maturity structure, emphasizing both extremely short- and
long-term securities, and will adopt a "laddered" structure with maturities
spread out more evenly once we are comfortable that the Fed has finished raising
short-term rates.
The fund's cash reserves reached their highest level during the summer as
we prepared for the possibility of year-end redemptions. This strategy proved
beneficial; as the market weakened in the second half, our reserves afforded us
the opportunity to buy bonds at lower prices. We have since drawn cash levels
down to normal levels as the municipal environment improved.
Within sectors, we reduced our hospital holdings further as the financial
condition of the industry continues to be weak, and we added to tax-backed
general obligation bonds because of their relative attractiveness. As with the
federal government, tax revenues are increasing within New York state, reducing
the need for new borrowing and providing a strong backdrop for state bonds. The
fund's dividend yield for the past 12 months was 5.24%, up from 5.10% six months
ago and 4.88% at the end of February 1999. (A tax-exempt yield of 5.24% is
equivalent to a taxable yield of 8.19% for investors in the 36% income tax
bracket.)
<PAGE>
OUTLOOK
- -------
The economy has yet to show signs of slowing to a level the Fed would
prefer. Rather, available economic data suggest that real GDP growth could
approach 5% in the first quarter of 2000. Except for soaring oil and some other
commodity prices, overall inflation remains in check. However, the strong pace
of economic growth is straining the supply of both labor and products. Cost
pressures have been mounting, and the Fed is concerned that they will be
reflected in higher inflation. As long as accelerating inflation remains a
threat, the Fed is likely to move short-term rates higher in the months ahead.
**********************************
Except for soaring oil and some
other commodity prices, overall
inflation remains in check.
**********************************
We remain optimistic about the future of the state's credit profile but
will closely monitor the high debt levels of both New York State and City, as
well as their projected budget gaps for the next few years. Slow growth upstate
during a time of unprecedented expansion casts a shadow over the region's
ability to manage its financial condition in the event of a downturn. Many
states have established "affordability" targets for debt levels, a step New York
has yet to take. It is crucial that both state and city governments establish
fiscal priorities as mandated tax cuts are phased in.
Municipal prices have built up some momentum after their February gains.
Light municipal supply continues to benefit our segment of the fixed income
market, and there has been a slight pickup in cash flows into municipal bond
funds. Any slowdown in economic growth as a result of Fed tightening should bode
well for the overall bond market. Overall, while the environment for tax-free
bonds was negative last year, municipal yields are extremely appealing on an
after-tax basis compared with taxable securities.
Respectfully submitted,
/s/
Patrice L. Berchtenbreiter
Chairman of the Investment Advisory Committee
New York Tax-Free Money Fund
William F. Snider
/s/
Chairman of the Investment Advisory Committee
New York Tax-Free Bond Fund
March 24, 2000
*******************************************************************
EFFECTIVE APRIL 1, 2000, KONSTANTINE B. MALLAS IS CHAIRMAN OF THE NEW YORK
TAX-FREE BOND FUND'S INVESTMENT ADVISORY COMMITTEE, RESPONSIBLE FOR ITS
DAY-TO-DAY MANAGEMENT. MR. MALLAS JOINED THE FIRM IN 1987 AND HAS BEEN INVOLVED
IN THE TAX-EXEMPT BOND MANAGEMENT PROCESS SINCE 1991. HE IS A VICE PRESIDENT OF
T. ROWE PRICE AND HAS BEEN A MEMBER OF THE FUND'S ADVISORY COMMITTEE SINCE 1994.
HE SUCCEEDS WILLIAM F. SNIDER, WHO HAS LEFT T. ROWE PRICE TO PURSUE NEW
OPPORTUNITIES.
This updates the portfolio management section of the New York Tax-Free Bond
Fund prospectus dated July 1, 1999.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- -------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
KEY STATISTICS
- --------------
8/31/99 2/29/00
NEW YORK TAX-FREE MONEY FUND
- ----------------------------
Price Per Share $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
Dividends Per Share
For 6 months 0.013 0.015
- -------------------------------------------------------------------------------
For 12 months 0.026 0.028
- -------------------------------------------------------------------------------
Dividend Yield (7-Day Compound) * 2.65% 3.31%
- -------------------------------------------------------------------------------
Weighted Average Maturity (days) 59 48
- -------------------------------------------------------------------------------
Weighted Average Quality ** First Tier First Tier
- -------------------------------------------------------------------------------
NEW YORK TAX-FREE BOND FUND
- ---------------------------
Price Per Share $ 10.53 $ 10.20
- -------------------------------------------------------------------------------
Dividends Per Share
For 6 months 0.26 0.26
- -------------------------------------------------------------------------------
For 12 months 0.53 0.52
- -------------------------------------------------------------------------------
Dividend Yield *
For 6 months 4.98% 5.21%
- -------------------------------------------------------------------------------
For 12 months 5.10 5.24
- -------------------------------------------------------------------------------
30-Day Standardized Yield 4.94 5.25
- -------------------------------------------------------------------------------
Weighted Average Maturity (years) 18.7 17.8
- -------------------------------------------------------------------------------
Weighted Average Effective Duration (years) 9.3 9.2
- -------------------------------------------------------------------------------
Weighted Average Quality *** A+ AA-
- -------------------------------------------------------------------------------
* Dividends earned and reinvested for the periods indicated are annualized
and divided by the fund's net asset value at the end of the period.
** All securities purchased in the money fund are rated in the two highest
categories as established by national rating agencies or, if unrated, are
deemed of comparable quality by T. Rowe Price.
*** Based on T. Rowe Price research.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- -------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------
SECTOR DIVERSIFICATION
- ----------------------
Percent of Percent of
Net Assets Net Assets
8/31/99 2/29/00
NEW YORK TAX-FREE MONEY FUND
- ----------------------------
Prerefunded Bonds 12% 18%
- -----------------------------------------------------------------------------
Housing Finance Revenue 12 14
- -----------------------------------------------------------------------------
Dedicated Tax Revenue 11 13
- -----------------------------------------------------------------------------
Water and Sewer Revenue 8 12
- -----------------------------------------------------------------------------
Miscellaneous Revenue 13 9
- -----------------------------------------------------------------------------
General Obligation - Local 8 9
- -----------------------------------------------------------------------------
Nuclear Revenue 10 7
- -----------------------------------------------------------------------------
Hospital Revenue 8 4
- -----------------------------------------------------------------------------
Ground Transportation Revenue - 4
- -----------------------------------------------------------------------------
Electric Revenue 4 3
- -----------------------------------------------------------------------------
General Obligation - State 2 3
- -----------------------------------------------------------------------------
Educational Revenue 7 2
- -----------------------------------------------------------------------------
Industrial and Pollution Control Revenue 3 2
- -----------------------------------------------------------------------------
All Other 3 1
- -----------------------------------------------------------------------------
Other Assets Less Liabilities -1 -1
- -----------------------------------------------------------------------------
Total 100% 100%
<PAGE>
NEW YORK TAX-FREE BOND FUND
- ---------------------------
Dedicated Tax Revenue 16% 19%
- -----------------------------------------------------------------------------
Lease Revenue 11 15
- -----------------------------------------------------------------------------
Water and Sewer Revenue 7 9
- -----------------------------------------------------------------------------
Housing Finance Revenue 6 8
- -----------------------------------------------------------------------------
General Obligation - Local 10 8
- -----------------------------------------------------------------------------
Air and Sea Transportation Revenue 7 7
- -----------------------------------------------------------------------------
Educational Revenue 7 7
- -----------------------------------------------------------------------------
Hospital Revenue 10 6
- -----------------------------------------------------------------------------
Prerefunded Bonds 4 5
- -----------------------------------------------------------------------------
Ground Transportation Revenue 5 4
- -----------------------------------------------------------------------------
Miscellaneous Revenue 3 3
- -----------------------------------------------------------------------------
Industrial and Pollution Control Revenue 3 2
- -----------------------------------------------------------------------------
All Other 10 6
- -----------------------------------------------------------------------------
Other Assets Less Liabilities 1 1
- -----------------------------------------------------------------------------
Total 100% 100%
================================================================================
<PAGE>
T. Rowe Price New York 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.
****************************************************************
Lipper New York
Tax-Exempt Money New York Tax-Free
Market Funds Average Money Fund
2/90 10000 10000
2/91 10505 10479
2/92 10889 10857
2/93 11135 11098
2/94 11334 11303
2/95 11612 11584
2/96 11987 11962
2/97 12331 12310
2/98 12708 12693
2/99 13056 13050
2/00 13411 13414
****************************************************************
Lehman Lipper New York New York
Municipal Municipal Debt Tax-Free
Bond Index Funds Average Bond Fund
---------- ------------- ---------
2/90 10000 10000 10000
2/91 10992 10731 10773
2/92 12013 11902 11922
2/93 13666 13785 13805
2/94 14423 14578 14676
2/95 14695 14500 14785
2/96 16318 15934 16329
2/97 17217 16653 17149
2/98 18790 18902 18821
2/99 19946 19197 19965
2/00 19530 18325 19072
****************************************************************
<PAGE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 2/29/00 1 Year 3 Years 5 Years 10 Years
- --------------------- ------ ------- ------- --------
New York Tax-Free Money Fund 2.79% 2.90% 2.98% 2.98%
New York Tax-Free Bond Fund -4.47 3.61 5.22 6.67
Investment return represents past performance and will vary. Shares of the
bond fund may be worth more or less at redemption than at original purchase.
Investments in the Money Fund are not insured or guaranteed by the FDIC or any
other government agency. Although it seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
fund.
================================================================================
T. Rowe Price New York Tax-Free Money Fund
- ------------------------------------------
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
Year
Ended
2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
NET ASSET VALUE
Beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment activities
Net investment income(loss) 0.028* 0.028* 0.031* 0.029* 0.032*
Distributions
Net investment income (0.028) (0.028) (0.031) (0.029) (0.032)
- -------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Ratios/Supplemental Data
Total return** 2.79%* 2.81%* 3.11%* 2.91%* 3.26%*
- -------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.55%* 0.55%* 0.55%* 0.55%* 0.55%*
- -------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 2.76%* 2.77%* 3.07%* 2.86%* 3.21%*
- -------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $114,524 $106,119 $ 95,333 $ 82,729 $ 71,040
- -------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.55% voluntary expense limitation in
effect through 2/28/01.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Bond Fund
- -----------------------------------------
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
Year
Ended
2/29/00 2/28/99 2/28/98 2/28/97 2/29/96
NET ASSET VALUE
Beginning of period $ 11.23 $ 11.26 $ 10.80 $ 10.85 $ 10.37
- ------------------------------------------------------------------------------
Investment activities
Net investment income(loss) 0.52 0.53 0.57 0.57* 0.58*
Net realized and
unrealized gain (loss) (1.02) 0.13 0.46 (0.05) 0.48
- ------------------------------------------------------------------------------
Total from
investment activities (0.50) 0.66 1.03 0.52 1.06
- ------------------------------------------------------------------------------
Distributions
Net investment income (0.52) (0.53) (0.57) (0.57) (0.58)
Net realized gain (0.01) (0.16) - - -
- ------------------------------------------------------------------------------
Total distributions (0.53) (0.69) (0.57) (0.57) (0.58)
- ------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 10.20 $ 11.23 $ 11.26 $ 10.80 $ 10.85
Ratios/Supplementa Data
Total return** (4.47)% 6.08% 9.75% 5.02%* 10.44%*
- ------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.58% 0.59% 0.61% 0.65%* 0.65%*
- ------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets 4.94% 4.77% 5.16% 5.35%* 5.42%*
- ------------------------------------------------------------------------------
Portfolio turnover rate 77.5% 55.4% 55.0% 96.9% 116.0%
- ------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $180,243 $216,010 $177,393 $144,532 $134,933
- ------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.65% voluntary expense limitation in
effect through 2/28/97.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Money Fund
- ------------------------------------------ February 29, 2000
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
NEW=YORK==100.9%===============================================================
Dormitory Auth. of the State of New York
VRDN (Currently 3.70%) $ 1,000 $ 1,000
- -------------------------------------------------------------------------------
City Univ. Systems
7.50%, 7/1/20 (FGIC Insured)
(Prerefunded 7/1/00+) 2,065 2,133
- -------------------------------------------------------------------------------
7.625%, 7/1/20 (Prerefunded 7/1/00+) 75 78
- -------------------------------------------------------------------------------
7.875%, 7/1/17 (Prerefunded 7/1/00+) 2,350 2,426
- -------------------------------------------------------------------------------
Cornell Univ., VRDN (Currently 3.75%) 1,600 1,600
- -------------------------------------------------------------------------------
Manhattanville College
7.50%, 7/1/22 (MBIA Insured)
(Prerefunded 7/1/00+) 555 573
- -------------------------------------------------------------------------------
Memorial Sloan Kettering Cancer Center
VRDN (Currently 3.70%) 3,000 3,000
- -------------------------------------------------------------------------------
VRDN(Currently 3.75%) 1,500 1,500
- -------------------------------------------------------------------------------
Metropolitan Museum of Art
VRDN (Currently 3.70%) 1,605 1,605
- -------------------------------------------------------------------------------
Oxford Univ. Press, VRDN (Currently 3.80%) 1,535 1,535
- -------------------------------------------------------------------------------
State Univ.
7.25%, 5/15/04 (Prerefunded 5/15/00+) 830 853
- -------------------------------------------------------------------------------
7.375%, 5/15/14 (Prerefunded 5/15/00+) 2,500 2,567
- -------------------------------------------------------------------------------
7.70%, 5/15/12 (Prerefunded 5/15/00+) 2,560 2,634
- -------------------------------------------------------------------------------
Univ. Ed. Fac.
6.125%, 5/15/20 (Prerefunded 5/15/00+) 1,000 1,004
- -------------------------------------------------------------------------------
Univ. Systems
7.625%, 7/1/20 (MBIA Insured)
(Prerefunded 7/1/00+) 75 77
- -------------------------------------------------------------------------------
Erie County Water Auth.
VRDN (Currently 3.65%)
(AMBAC Insured) 3,750 3,750
- -------------------------------------------------------------------------------
<PAGE>
Great Neck Water Auth.
VRDN (Currently 3.75%) (FGIC Insured) 910 910
- -------------------------------------------------------------------------------
Manhasset Union Free School Dist., GO, TAN,
4.00%, 6/29/00 1,000 1,002
- -------------------------------------------------------------------------------
Metropolitan Transportation Auth.
4.25%, 4/1/00 (MBIA Insured) 600 600
- -------------------------------------------------------------------------------
6.00%, 7/1/19 (Prerefunded 7/1/00+) 100 100
- -------------------------------------------------------------------------------
TECP, 3.70%, 3/3/00 1,000 1,000
- -------------------------------------------------------------------------------
Metropolitan Transportation Auth.
Commuter Fac., 7.50%, 7/1/16 (Prerefunded 7/1/00+) $ 1,000 $ 1,032
- -------------------------------------------------------------------------------
Transit Fac., 7.50%, 7/1/19 (Prerefunded 7/1/00+) 100 103
- -------------------------------------------------------------------------------
Municipal Assistance Corp. of New York City
VRDN (Currently 3.98%) 2,300 2,300
- -------------------------------------------------------------------------------
5.50%, 7/1/00 480 483
- -------------------------------------------------------------------------------
Nassau County IDA, Cold Spring Harbor Laboratory
VRDN (Currently 3.75%) 1,650 1,650
- -------------------------------------------------------------------------------
New York City
5.00%, 8/1/00 (Escrowed to Maturity) 240 241
- -------------------------------------------------------------------------------
7.25%, 3/15/18 (Prerefunded 3/15/00+) 320 325
- -------------------------------------------------------------------------------
7.25%, 3/15/20 (Prerefunded 3/15/00+) 2,000 2,033
- -------------------------------------------------------------------------------
7.75%, 3/15/04 (Prerefunded 3/15/00+) 500 509
- -------------------------------------------------------------------------------
New York City, GO
VRDN (Currently 3.90%) 200 200
- -------------------------------------------------------------------------------
VRDN (Currently 4.05%) 5,000 5,000
- -------------------------------------------------------------------------------
New York City Housing Dev.
VRDN (Currently 3.75%)
(FNMA Guaranteed) 1,000 1,000
- -------------------------------------------------------------------------------
Brittany Dev., VRDN (Currently 3.80%)
(FNMAGuaranteed) * 3,500 3,500
- -------------------------------------------------------------------------------
Multifamily Rental Housing, Columbus Green
VRDN (Currently 3.75%)
(FNMA Guaranteed) 300 300
- -------------------------------------------------------------------------------
Tribeca Tower
VRDN(Currently 3.75%) (FNMAGuaranteed) * 2,000 2,000
- -------------------------------------------------------------------------------
<PAGE>
New York City IDA, American Civil Liberties Fac.
VRDN (Currently 3.65%) 917 917
- -------------------------------------------------------------------------------
New York City Municipal Water Finance Auth.
TECP, 3.60%, 4/7/00 2,000 2,000
- -------------------------------------------------------------------------------
Water & Sewer System
VRDN (Currently 3.93%) (FGIC Insured) 5,000 5,000
- -------------------------------------------------------------------------------
New York City Transitional Fin. Auth.
VRDN (Currently 3.90%) 5,000 5,000
- -------------------------------------------------------------------------------
New York City Trust Cultural Resources
American Museum of National History
VRDN (Currently 3.65%) (MBIA Insured) 1,000 1,000
- -------------------------------------------------------------------------------
3.70%, 7/1/00 (AMBAC Insured) 4,000 4,000
- -------------------------------------------------------------------------------
New York Environmental Fac.
State Water Revolving Fund, 6.70%, 6/15/00 625 630
- -------------------------------------------------------------------------------
New York State, GO
TECP, 3.55%, 4/6/00 $ 1,600 $ 1,600
- -------------------------------------------------------------------------------
3.90%, 10/5/00 2,000 2,000
- -------------------------------------------------------------------------------
New York State Energy Research and Dev. Auth.
VRDN (Currently 3.90%) * 3,500 3,500
- -------------------------------------------------------------------------------
Orange and Rockland Utilities
VRDN (Currently 3.65%) (FGIC Insured) 3,600 3,600
- -------------------------------------------------------------------------------
New York State Environmental Fac.
New York City Municipal Water, 5.10%, 6/15/00 100 100
- -------------------------------------------------------------------------------
State Water Revolving Fund, 4.00%, 10/15/00 1,895 1,895
- -------------------------------------------------------------------------------
New York State Housing Fin. Agency
VRDN (Currently 3.85%) * 2,900 2,900
- -------------------------------------------------------------------------------
7.80%, 9/15/10 (Prerefunded 9/15/00+) 35 36
- -------------------------------------------------------------------------------
8.00%, 11/1/08 (Prerefunded 11/1/00+) 875 915
- -------------------------------------------------------------------------------
Normandie Court II Multi-Family
VRDN (Currently 3.80%) (FHLMCGuaranteed) * 5,000 5,000
- -------------------------------------------------------------------------------
New York State Local Gov't. Assistance
VRDN (Currently 3.70%) 2,500 2,500
- -------------------------------------------------------------------------------
VRDN (Currently 3.75%) 2,200 2,200
- -------------------------------------------------------------------------------
<PAGE>
New York State Medical Care Fac.
7.875%, 8/15/20
(Prerefunded 8/15/00+) 1,150 1,193
- -------------------------------------------------------------------------------
Mental Health Services
8.00%, 5/1/00 (Escrowed to Maturity) 100 101
- -------------------------------------------------------------------------------
New York State Mortgage Agency
Homeowner Mortgage, 4.60%, 4/1/00 * 900 900
- -------------------------------------------------------------------------------
New York State Power Auth.
3.55%, 3/1/00 3,000 3,000
- -------------------------------------------------------------------------------
4.00%, 9/1/00 1,400 1,400
- -------------------------------------------------------------------------------
6.50%, 1/1/01 (Prerefunded 1/1/01+) 310 315
- -------------------------------------------------------------------------------
6.75%, 1/1/18 (Prerefunded 1/1/01+) 365 380
- -------------------------------------------------------------------------------
New York State Thruway Auth.
Highway and Bridge Trust
4.90%, 4/1/00 (AMBAC Insured) 1,200 1,201
- -------------------------------------------------------------------------------
6.00%, 4/1/00 (AMBAC Insured) 875 876
- -------------------------------------------------------------------------------
New York State Urban Dev., 7.30%, 4/1/00
(Escrowed to Maturity) 50 50
- -------------------------------------------------------------------------------
Roslyn Union Free School Dist., GO, TAN,
4.00%, 6/29/00 1,000 1,002
- -------------------------------------------------------------------------------
Smithtown Central School Dist., GO, TAN,
3.80%, 6/26/00 $ 2,100 $ 2,102
- -------------------------------------------------------------------------------
St. Lawrence County IDA, ALCOA, VRDN
(Currently 3.94%) * 1,700 1,700
- -------------------------------------------------------------------------------
Triborough Bridge & Tunnel Auth.
VRDN (Currently 3.80%) (AMBAC Insured) 4,300 4,300
- -------------------------------------------------------------------------------
6.875%, 1/1/05 (Prerefunded 1/1/01+) 750 780
- -------------------------------------------------------------------------------
7.00%, 1/1/21 (Prerefunded 1/1/01+) 350 363
- -------------------------------------------------------------------------------
Westchester County, GO, 4.60%, 11/15/00 500 502
- -------------------------------------------------------------------------------
Total New York (Cost $115,581) 115,581
<PAGE>
Total=Investments=in=Securities================================================
100.9% of Net Assets (Cost $115,581) $ 115,581
Other Assets Less Liabilities (1,057)
NET ASSETS $ 114,524
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 3
Accumulated net realized gain/loss -
net of distributions (2)
Paid-in-capital applicable to 114,525,998 no par
value shares of beneficial interest outstanding;
unlimited number of shares authorized 114,523
NET ASSETS $ 114,524
NET ASSET VALUE PER SHARE $ 1.00
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Company
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GO General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
TAN Tax Anticipation Note
TECP Tax-Exempt Commercial Paper
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Bond Fund
- ----------------------------------------- February 29, 2000
STATEMENT OF NET ASSETS
- -----------------------
Par Value
In thousands
NEW=YORK==96.0%================================================================
Albany County Airport Auth.
5.50%, 12/15/19 (FSA Insured) * $ 500 $ 465
- -------------------------------------------------------------------------------
Allegany County IDA
Hougton College Civic Fac.
5.00%, 1/15/11 520 476
- -------------------------------------------------------------------------------
5.25%, 1/15/18 400 346
- -------------------------------------------------------------------------------
Dormitory Auth. of the State of New York
City Univ., 5.75%, 7/1/11 (AMBAC Insured) 2,000 2,066
- -------------------------------------------------------------------------------
Columbia Univ.
5.00%, 7/1/18 1,000 901
- -------------------------------------------------------------------------------
5.00%, 7/1/22 2,500 2,203
- -------------------------------------------------------------------------------
Dept. of Health, 5.50%, 7/1/25 (MBIA Insured) 1,500 1,377
- -------------------------------------------------------------------------------
Maimonides Medical Center
5.75%, 8/1/35 (MBIA Insured) 1,500 1,428
- -------------------------------------------------------------------------------
New York Medical College
5.25%, 7/1/12 (MBIA Insured) 2,110 2,052
- -------------------------------------------------------------------------------
North Shore Health System
5.50%, 11/1/13 (MBIA Insured) 3,010 2,995
- -------------------------------------------------------------------------------
Nyack Hosp., 6.00%, 7/1/06 2,000 1,959
- -------------------------------------------------------------------------------
Rockefeller Univ.
6.75%, 7/1/11 (Prerefunded 7/1/01+) 1,365 1,431
- -------------------------------------------------------------------------------
State Univ. Ed. Fac., 7.50%, 5/15/11 2,300 2,601
- -------------------------------------------------------------------------------
Westchester County Court Fac.
5.25%, 8/1/14 2,500 2,379
- -------------------------------------------------------------------------------
5.25%, 8/1/15 2,000 1,883
- -------------------------------------------------------------------------------
5.25%, 8/1/16 4,250 3,966
- -------------------------------------------------------------------------------
Essex County IDA, PCR, 5.70%, 7/1/16 * 1,850 1,783
- -------------------------------------------------------------------------------
Huntington Housing Auth., Gurwin Jewish Senior Residences
6.00%, 5/1/39 750 611
- -------------------------------------------------------------------------------
<PAGE>
Long Island Power Auth., 5.25%, 12/1/26 1,000 867
- -------------------------------------------------------------------------------
Metropolitan Transportation Auth.
5.25%, 4/1/14 (FGIC Insured) 4,540 4,314
- -------------------------------------------------------------------------------
Commuter Fac., 5.00%, 7/1/11 (AMBAC Insured) 2,000 1,915
- -------------------------------------------------------------------------------
Transit Fac., 4.75%, 7/1/16 (FSA Insured) 1,750 1,516
- -------------------------------------------------------------------------------
Transportation Fac., 5.875%, 7/1/27 (MBIA Insured) 2,300 2,251
- -------------------------------------------------------------------------------
Mount Sinai Union Free School Dist., GO
6.20%, 2/15/17 (AMBAC Insured) $ 1,025 $ 1,085
- -------------------------------------------------------------------------------
6.20%, 2/15/18 (AMBAC Insured) 515 543
- -------------------------------------------------------------------------------
Nassau County, 6.50%, 11/1/13 (FGIC Insured)
(Prerefunded 11/1/04+) 1,500 1,633
- -------------------------------------------------------------------------------
Nassau County IDA
Hofstra Univ.
4.75%, 7/1/28 (MBIA Insured) 2,500 2,017
- -------------------------------------------------------------------------------
5.00%, 7/1/23 (MBIA Insured) 2,000 1,721
- -------------------------------------------------------------------------------
6.90%, 1/1/14 (Prerefunded 1/1/05+) 350 382
- -------------------------------------------------------------------------------
6.90%, 1/1/15 (Prerefunded 1/1/05+) 375 410
- -------------------------------------------------------------------------------
New Rochelle, GO
6.25%, 3/15/17 (MBIA Insured) 375 384
- -------------------------------------------------------------------------------
6.25%, 3/15/18 (MBIA Insured) 400 409
- -------------------------------------------------------------------------------
6.25%, 3/15/19 (MBIA Insured) 425 434
- -------------------------------------------------------------------------------
New York City, GO
5.25%, 8/1/15 1,500 1,392
- -------------------------------------------------------------------------------
5.75%, 10/15/13 1,100 1,102
- -------------------------------------------------------------------------------
5.875%, 3/15/12 2,345 2,379
- -------------------------------------------------------------------------------
6.00%, 8/1/12 1,000 1,021
- -------------------------------------------------------------------------------
6.25%, 8/1/09 1,750 1,841
- -------------------------------------------------------------------------------
7.625%, 2/1/14 (Prerefunded 2/1/02+) 500 533
- -------------------------------------------------------------------------------
7.75%, 8/15/15 55 59
- -------------------------------------------------------------------------------
7.75%, 8/15/15 (Prerefunded 8/15/01+) 35 36
- -------------------------------------------------------------------------------
<PAGE>
New York City Health and Hosp., Health Systems Bonds
5.25%, 2/15/17 (AMBACInsured) 1,500 1,330
- -------------------------------------------------------------------------------
New York City IDA
American Airlines, 5.40%, 7/1/20 * 1,500 1,284
- -------------------------------------------------------------------------------
Brooklyn Navy Yard Cogeneration, 5.65%, 10/1/28 * 2,500 2,164
- -------------------------------------------------------------------------------
Horace Mann School, 4.90%, 7/1/13 (MBIA Insured) 1,320 1,186
- -------------------------------------------------------------------------------
Nightingale Bamford School, 5.85%, 1/15/20 1,380 1,340
- -------------------------------------------------------------------------------
Terminal One Group Assoc., 6.00%, 1/1/19 * 2,500 2,453
- -------------------------------------------------------------------------------
USTA National Tennis Center
6.375%, 11/15/14 (FSA Insured) 1,000 1,047
- -------------------------------------------------------------------------------
New York City Municipal Water Fin. Auth.
5.25%, 6/15/29 (FGIC Insured) 3,000 2,635
- -------------------------------------------------------------------------------
New York City Transitional Fin. Auth.
Water and Sewer
5.00%, 6/15/17 (FGIC Insured) $ 2,000 $ 1,781
- -------------------------------------------------------------------------------
5.375%, 6/15/26 (FSA Insured) 6,000 5,419
- -------------------------------------------------------------------------------
5.875%, 6/15/26 5,000 4,840
- -------------------------------------------------------------------------------
VRDN (Currently 3.75%) 1,400 1,400
- -------------------------------------------------------------------------------
VRDN (Currently 4.05%) 2,000 2,000
- -------------------------------------------------------------------------------
Future Tax
5.00%, 5/1/26 1,350 1,146
- -------------------------------------------------------------------------------
5.125%, 8/15/21 5,000 4,415
- -------------------------------------------------------------------------------
5.75%, 8/15/19 5,000 4,897
- -------------------------------------------------------------------------------
6.00%, 8/15/15 (FGIC Insured) 1,000 1,025
- -------------------------------------------------------------------------------
6.00%, 11/15/24 1,500 1,501
- -------------------------------------------------------------------------------
New York State, GO
7.125%, 11/15/16 (Prerefunded 11/15/00+) 500 520
- -------------------------------------------------------------------------------
New York State Energy Research and Dev. Auth.,
Lilco Project
5.15%, 3/1/16 (MBIA Insured) 1,000 913
- -------------------------------------------------------------------------------
<PAGE>
New York State Environmental Fac., PCR
New York City Municipal Water, 7.50%, 6/15/12 500 514
- -------------------------------------------------------------------------------
State Water Revolving Fund, 5.75%, 6/15/12 1,000 1,027
- -------------------------------------------------------------------------------
New York State Housing Fin. Agency
Service Contract Obligations
7.375%, 9/15/21 (Prerefunded 3/15/02+) 150 161
- -------------------------------------------------------------------------------
State Univ. Construction
8.00%, 5/1/11 (Escrowed to Maturity) 1,000 1,192
- -------------------------------------------------------------------------------
New York State Local Gov't. Assistance
5.00%, 4/1/23 3,000 2,551
- -------------------------------------------------------------------------------
6.00%, 4/1/14 2,000 2,085
- -------------------------------------------------------------------------------
New York State Medical Care Fac. Fin. Agency
6.125%, 2/15/14 (Prerefunded 2/15/04+) 125 131
- -------------------------------------------------------------------------------
Mental Health Services
6.375%, 8/15/10 (FGIC Insured)
(Prerefunded 2/15/02+) 450 472
- -------------------------------------------------------------------------------
New York Hosp.
6.50%, 8/15/29 (AMBAC Insured)
(Prerefunded 2/15/05+) 2,000 2,157
- -------------------------------------------------------------------------------
New York State Mortgage Agency
Homeowner Mortgage
5.70%, 10/1/17 * $ 2,120 $ 2,061
- -------------------------------------------------------------------------------
5.85%, 10/1/18 * 1,185 1,136
- -------------------------------------------------------------------------------
5.95%, 4/1/30 * 1,500 1,422
- -------------------------------------------------------------------------------
6.40%, 4/1/27 * 965 981
- -------------------------------------------------------------------------------
7.50%, 4/1/26 * 2,750 2,954
- -------------------------------------------------------------------------------
7.75%, 4/1/16 500 511
- -------------------------------------------------------------------------------
New York State Thruway Auth., Highway and Bridge
5.00%, 4/1/17 (FGIC Insured) 6,500 5,811
- -------------------------------------------------------------------------------
New York State Urban Dev.
Correctional Capital Fac.
5.375%, 1/1/25 2,500 2,211
- -------------------------------------------------------------------------------
6.00%, 1/1/15 (AMBACInsured) 4,000 4,080
- -------------------------------------------------------------------------------
7.00%, 1/1/21 (Prerefunded 1/1/02+) 500 530
- -------------------------------------------------------------------------------
Sr. Lien, 5.375%, 7/1/22 6,500 5,936
- -------------------------------------------------------------------------------
<PAGE>
Niagara County, GO
Environmental Infrastructure
5.25%, 8/15/14 (MBIA Insured) 435 414
- -------------------------------------------------------------------------------
5.25%, 8/15/15 (MBIA Insured) 335 317
- -------------------------------------------------------------------------------
Niagara Frontier Transportation Airport Auth.
Greater Buffalo Int'l. Airport
6.125%, 4/1/14 (AMBAC Insured) * 1,385 1,410
- -------------------------------------------------------------------------------
Nyack Union Free School Dist., GO
5.25%, 12/15/13 (FGIC Insured) 1,290 1,255
- -------------------------------------------------------------------------------
5.25%, 12/15/15 (FGIC Insured) 550 526
- -------------------------------------------------------------------------------
Oneida County IDA
St. Elizabeth Medical Center
5.50%, 12/1/10 500 439
- -------------------------------------------------------------------------------
5.625%, 12/1/09 1,000 903
- -------------------------------------------------------------------------------
5.75%, 12/1/19 1,600 1,305
- -------------------------------------------------------------------------------
Port Auth. of New York and New Jersey
5.50%, 9/1/12 (MBIA Insured) * 900 896
- -------------------------------------------------------------------------------
5.875%, 7/1/11 * 1,000 1,017
- -------------------------------------------------------------------------------
5.875%, 9/15/15 (FGIC Insured) * 2,000 2,011
- -------------------------------------------------------------------------------
6.125%, 6/1/94 1,000 1,025
- -------------------------------------------------------------------------------
Port Auth. of New York and New Jersey
6.50%, 10/1/01 * $ 600 $ 609
- -------------------------------------------------------------------------------
6.50%, 7/15/19 (FGIC Insured) * 2,000 2,064
- -------------------------------------------------------------------------------
6.50%, 11/1/26 * 1,500 1,520
- -------------------------------------------------------------------------------
6.75%, 4/15/26 (MBIA Insured) * 500 513
- -------------------------------------------------------------------------------
Special Project, 6.75%, 10/1/11 * 1,000 1,019
- -------------------------------------------------------------------------------
Suffolk County, GO, 5.25%, 10/15/14 (FGICInsured) 1,240 1,180
- -------------------------------------------------------------------------------
Suffolk County IDA, Jeffersons Ferry, 7.20%, 11/1/19 2,000 1,927
- -------------------------------------------------------------------------------
Suffolk County Judicial Fac., John P. Cohalan Complex
5.75%, 4/15/14 (AMBACInsured) 4,510 4,540
- -------------------------------------------------------------------------------
Syracuse IDA, St. Joseph's Hosp. Health Center
7.50%, 6/1/18 (Prerefunded 6/1/01+) 1,000 1,054
- -------------------------------------------------------------------------------
Triborough Bridge and Tunnel Auth., 5.00%, 1/1/20 2,060 1,810
- -------------------------------------------------------------------------------
<PAGE>
United Nations Dev.
5.30%, 7/1/11 910 879
- -------------------------------------------------------------------------------
5.40%, 7/1/14 865 816
- -------------------------------------------------------------------------------
Westchester County IDA, Wheelabrator
5.50%, 7/1/09 * 370 327
- -------------------------------------------------------------------------------
6.00%, 7/1/08 (AMBAC Insured) * 2,000 2,084
- -------------------------------------------------------------------------------
Yonkers IDA, Civic Fac., St. Joseph Hosp., 6.20%, 3/1/20 1,000 860
- -------------------------------------------------------------------------------
Total New York (Cost $174,735) 173,105
- -------------------------------------------------------------------------------
PUERTO=RICO==1.7%==============================================================
Puerto Rico Commonwealth
Highway and Transportation Auth.
5.00%, 7/1/36 1,000 826
- -------------------------------------------------------------------------------
6.375%, 7/1/08 (FSA Insured) 1,000 1,048
- -------------------------------------------------------------------------------
Puerto Rico Commonwealth Infrastructure Fin. Auth.
Special Tax, 7.75%, 7/1/08 340 344
- -------------------------------------------------------------------------------
Puerto Rico Municipal Fin. Agency, 5.50%, 8/1/02 820 833
- -------------------------------------------------------------------------------
Total Puerto Rico (Cost $3,026) 3,051
- -------------------------------------------------------------------------------
U.=S.=VIRGIN=ISLANDS==1.0%=====================================================
Virgin Islands PFA, GO, Gross Receipts Taxes,
6.50%, 10/1/24 1,730 1,711
- -------------------------------------------------------------------------------
Total U. S. Virgin Islands (Cost $1,730) 1,711
<PAGE>
=Total=Investments=in=Securities===============================================
98.7% of Net Assets (Cost $179,491) $177,867
Other Assets Less Liabilities 2,376
NET ASSETS $180,243
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 10
Accumulated net realized gain/loss -
net of distributions (6,339)
Net unrealized gain (loss) (1,624)
Paid-in-capital applicable to 17,670,250 no par
value shares of beneficial interest outstanding;
unlimited number of shares authorized 188,196
NET ASSETS $180,243
NET ASSET VALUE PER SHARE $ 10.20
* Interest subject to alternative minimum tax
+ Used in determining portfolio maturity
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Corp.
GO General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Investors Assurance Corp.
PCR Pollution Control Revenue
PFA Public Facility Authority
VRDN Variable Rate Demand Note
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- -------------------------------------
STATEMENT OF OPERATIONS
- -----------------------
Money Fund Bond Fund
In thousands
Year Year
Ended Ended
2/29/00 2/29/00
Investment Income (Loss)
Interest income $ 3,571 $ 11,334
- -------------------------------------------------------------------------------
Expenses
Investment management 384 863
Custody and accounting 94 117
Shareholder servicing 79 166
Legal and audit 13 13
Prospectus and shareholder reports 11 23
Trustees 6 6
Registration 4 4
Miscellaneous 4 5
- -------------------------------------------------------------------------------
Total expenses 595 1,197
Expenses paid indirectly (5) (3)
- -------------------------------------------------------------------------------
Net expenses 590 1,194
- -------------------------------------------------------------------------------
Net investment income (loss) 2,981 10,140
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities - (6,269)
Futures - 124
- -------------------------------------------------------------------------------
Net realized gain (loss) - (6,145)
Change in net unrealized gain or loss on securities - (14,035)
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) - (20,180)
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,981 $ (10,040)
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- -------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------- In thousands
Money Fund Bond Fund
Year Year
Ended Ended
2/29/00 2/28/99 2/29/00 2/28/99
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 2,981 $ 2,831 $ 10,140 $ 9,258
Net realized gain (loss) - - (6,145) 1,883
Change in net unrealized
gain or loss - - (14,035) 245
- -------------------------------------------------------------------------------
Increase (decrease) in
net assets from operations 2,981 2,831 (10,040) 11,386
- -------------------------------------------------------------------------------
Distributions to shareholders
Net investment income (2,981) (2,831) (10,140) (9,258)
Net realized gain - - (198) (2,765)
- -------------------------------------------------------------------------------
Decrease in net assets
from distributions (2,981) (2,831) (10,338) (12,023)
- -------------------------------------------------------------------------------
Capital share transactions *
Shares sold 84,976 87,072 49,752 69,913
Distributions reinvested 2,890 2,735 8,112 9,548
Shares redeemed (79,461) (79,021) (73,253) (40,207)
- -------------------------------------------------------------------------------
Increase (decrease) in
net assets from capital
share transactions 8,405 10,786 (15,389) 39,254
- -------------------------------------------------------------------------------
Net Assets
Increase (decrease)
during period 8,405 10,786 (35,767) 38,617
Beginning of period 106,119 95,333 216,010 177,393
- -------------------------------------------------------------------------------
End of period $ 114,524 $ 106,119 $ 180,243 $ 216,010
* Share information
Shares sold 84,976 87,072 4,624 6,222
Distributions reinvested 2,890 2,735 767 850
Shares redeemed (79,461) (79,021) (6,964) (3,582)
- -------------------------------------------------------------------------------
Increase (decrease)
in shares outstanding 8,405 10,786 (1,573) 3,490
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price New York Tax-Free Funds
- ------------------------------------- February 29, 2000
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
T. Rowe Price State Tax-Free Income Trust (the trust) is registered under
the Investment Company Act of 1940. The New York Tax-Free Money Fund (the Money
Fund) and the New York Tax-Free Bond Fund (the Bond Fund), nondiversified,
open-end management investment companies, are two of the portfolios established
by the trust and commenced operations on August 28, 1986. The accompanying
financial statements are prepared in accordance with generally accepted
accounting principles for the investment company industry; these principles may
require the use of estimates by fund management.
Valuation Debt securities are generally traded in the over-the-counter
market. Except for securities held by the Money Fund, investments in securities
are stated at fair value as furnished by dealers who make markets in such
securities or by an independent pricing service, which considers yield or price
of bonds of comparable quality, coupon, maturity, and type, as well as prices
quoted by dealers who make markets in such securities. Securities held by the
Money Fund are valued at amortized cost, which approximates fair value.
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 prin-ciples. Expenses paid indirectly reflect credits earned on daily
uninvested cash balances at the custodian and are used to reduce each fund's
custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
- --------------------------------
Purchases and sales of portfolio securities for the Bond Fund, other than
short-term securities, aggregated $151,460,000 and $166,236,000, respectively,
for the year ended February 29, 2000.
<PAGE>
NOTE 3 - FEDERAL INCOME TAXES
- -----------------------------
No provision for federal income taxes is required since each fund intends
to continue to qualify as a regulated investment company and distribute all of
its income. As of February 29, 2000, the Money and Bond Funds had capital loss
carryforwards for federal income tax purposes of $2,000, all of which expires in
2005, and $3,767,000, all of which expires in 2008, respectively. The Money and
Bond Funds intend to retain gains realized in future periods that may be offset
by available capital loss carryforwards.
In order for the Bond Fund's capital accounts and distributions to
shareholders to reflect the tax character of certain transactions, the following
reclassifications were made during the year ended February 29, 2000. The results
of operations and net assets were not affected by the increases/(decreases) to
these accounts.
***********************************************************
Undistributed net investment income $ 1,000
Undistributed net realized gain (5,000)
Paid-in-capital 4,000
***********************************************************
At February 29, 2000, the costs of investments for the Money and Bond Funds
for federal income tax purposes was substantially the same as for financial
reporting and totaled $115,581,000 and $179,491,000, respectively. For the Money
Fund, amortized cost is equivalent to value; and for the Bond Fund, net
unrealized loss aggregated $1,624,000 at period-end, of which $3,140,000 related
to appreciated investments and $4,764,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $31,000 and $60,000 were payable at February 29, 2000 by the Money and
Bond Funds, respectively. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.10% of average daily net assets
and a group fee. The group fee is based on the combined assets of certain mutual
funds sponsored by the manager or Rowe Price-Fleming 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 February 29, 2000, and for
the year then ended, the effective annual group fee rate was 0.32%. Each fund
pays a pro-rata share of the group fee based on the ratio of its net assets to
those of the group. Under the terms of the investment management agreement, the
manager is required to bear any expenses through February 28, 2001, which would
cause the Money Fund's ratio of total expenses to average net assets to exceed
0.55%. Pursuant to this agreement, $70,000 of management fees were not accrued
by the Money Fund for the year ended February 29, 2000 and $177,000 remain
unaccrued from prior periods. Subject to shareholder approval, the Money Fund
may reimburse the manager for these expenses, provided that average net assets
have grown or expenses have declined sufficiently to allow reimbursement without
causing the Money Fund's ratio of expenses to average net assets to exceed
0.55%.
<PAGE>
In addition, each fund has entered into agreements with the manager and a
wholly owned subsidiary of the manager, pursuant to which each fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of each fund. T. Rowe Price Services, Inc. is each fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the funds. The Money and Bond Funds incurred expenses
pursuant to these related party agreements totaling approximately $134,000 and
$211,000, respectively, for the year ended February 29, 2000, of which $14,000
and $27,000, respectively, were payable at period-end.
================================================================================
T. Rowe Price New York Tax-Free Funds
- -------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
To the Board of Trustees of T. Rowe Price State Tax-Free Income Trust
and Shareholders of New York Tax-Free Money Fund and New York
Tax-Free Bond Fund
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
New York Tax-Free Money Fund and New York Tax-Free Bond Fund (two of the
portfolios comprising T. Rowe Price State Tax-Free Income Trust, hereafter
referred to as "the Funds") at February 29, 2000, and the results of each of
their operations, the changes in each of their net assets and the financial
highlights for each of the fiscal periods presented, in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence support- ing the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
February 29, 2000, by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
March 17, 2000
================================================================================
T. Rowe Price New York Tax-Free Funds
- -------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 2/29/00
----------------------------------------------------------
We are providing this information as required by the Internal Revenue Code.
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The Bond Fund's distributions to shareholders included:
* $126,000 from short-term capital gains,
* $72,000 from long-term capital gains, subject to the 20% rate
gains category,
* $10,183,000 which qualified as exempt-interest dividends.
The Money Fund's distributions to shareholders included $2,876,000 which
qualified as exempt-interest dividends.
================================================================================
<PAGE>
T. Rowe Price Shareholder Services
- ----------------------------------
INVESTMENT SERVICES AND INFORMATION
-----------------------------------
KNOWLEDGEABLE SERVICE REPRESENTATIVES
-------------------------------------
BY PHONE 1-800-225-5132 Available Monday
through Friday from 8 a.m. to 10 p.m. ET and
weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor
Centers.
ACCOUNT SERVICES
----------------
Checking Available on most fixed income funds
($500 minimum).
Automatic Investing From your bank account or
paycheck.
Automatic Withdrawal Scheduled, automatic
redemptions.
Distribution Options Reinvest all, some, or
none of your distributions.
Automated 24-Hour Services Including
Tele*AccessRegistration Mark and the T. Rowe
Price Web site on the Internet. Address:
www.troweprice.com
<PAGE>
BROKERAGE SERVICES*
-------------------
Individual Investments Stocks, bonds,
options, precious metals, and other
securities at a savings over full-service
commission rates. **
INVESTMENT INFORMATION
----------------------
Combined Statement Overview of all your
accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of
their strategies and results.
T. Rowe Price Report Quarterly investment
newsletter discussing markets and financial
strategies.
Performance Update Quarterly review of all T.
Rowe Price fund results.
Insights Educational reports on investment
strategies and financial markets.
Investment Guides Asset Mix Worksheet,
College Planning Kit, Diversifying Overseas:
A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide,
and Retirement Planning Kit.
* T. Rowe Price Brokerage is a
division of T. Rowe Price
Investment Services, Inc.,
Member NASD/SIPC.
** Based on a September 1999
survey for
representative-assisted stock
trades. Services vary by firm,
and commissions may vary
depending on size of order.
================================================================================
For fund and account information
or to conduct transactions,
24 hours, 7 days a week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
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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. C04-050 2/29/00
