STATE OF MARYLAND

Notes to General Purpose Financial Statements
for the year ended June 30, 2000

1. Financial Reporting Entity And Description of Funds and Account Groups:

A. Reporting Entity:

The accompanying financial statements include the various departments, agencies, and other organizational units governed by
the General Assembly and/or Constitutional Officers of the State of Maryland (State).

As required by generally accepted accounting principles, these financial statements present the state government (primary
government) and its component units (entities for which the State is considered to be financially accountable). The Governmental
Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria
include the State appointing a voting majority of an organizations governing body and (1) the ability of the governing body to
impose its will on that organization, or (2) the potential for the organization to provide specific financial benefits to, or impose
specific financial burdens on the State.

DISCRETE COMPONENT UNITS

These component units are entities which are legally separate from the State, but are financially accountable to the State, or
whose relationships with the State are such that exclusion would cause the State's financial statements to be misleading or
incomplete. The two Component Units columns of the combined financial statements include the financial data of these entities.

Colleges and Universities (Higher Education Fund) - Colleges and universities consist of the University System of Maryland,
Morgan State University, St. Mary's College of Maryland and Baltimore City Community College. Each entity is governed by
its own Board of Regents, or Board of Trustees, whose members are appointed by the Governor. The colleges and universities are
funded through State appropriations, tuition, federal grants, and private donations and grants. Because the colleges and
universities are similar in nature and function, they have been combined and presented as a single discretely presented component
unit. Most of the financial information for foundations affiliated with the universities and colleges has not been included with
the financial information of the colleges and universities in accordance with the requirements of GASB Statement No. 14.

Maryland Stadium Authority (Proprietary Fund Type) - The Maryland Stadium Authority (Authority) was created as a
body corporate and politic and as an independent unit of the Executive Department of the State of Maryland. The Authority's
purpose is to acquire land and to construct, operate and/or manage various capital facilities in the State. The Board consists of
seven members, of which, six are appointed by the Governor, with the advice and consent of the State Senate, and one whom is
appointed by the Mayor of Baltimore City, with the advice and consent of the State Senate. The Maryland State Legislature and
the Board of Public Works (consisting of the Governor, Comptroller and the Treasurer) have approved all of the projects and
bond issuances of the Authority.

Maryland Food Center Authority (Proprietary Fund Type) - The Maryland Food Center Authority (Authority) is a body
corporate and politic, the governing board of which is composed of twelve members. Four members are State officials, and eight
are appointed by the Governor. The Authority was created to establish and operate a consolidated wholesale food center within
the Greater Baltimore Region and is subject to State regulations.

Maryland Environmental Service (Proprietary Fund Type) - The Maryland Environmental Service (Service) was created as
a body corporate and politic and is governed by a nine-member Board of Directors. The Board of Directors and the officers of
the Service are appointed and/or approved by the Governor. The Service helps private industry and local governments manage
liquid, solid and hazardous wastes. In accordance with direction from the Governor, the Service plans and establishes major
resource recovery facilities, solid waste management plans and hazardous waste management programs.

Maryland Industrial Development Financing Authority (Proprietary Fund Type) - The Maryland Industrial Development
Financing Authority (Authority) was established as a body corporate and politic and a public instrumentality of the State. The
Authority consists of nine members, the Secretary of the Department of Business and Economic Development, or his designee,
the State Treasurer or the State Comptroller, as designated by the Governor; and seven members appointed by the Secretary of
the Department of Business and Economic Development and approved by the Governor. The Authority provides financial
assistance to enterprises seeking to locate or expand operations in Maryland.

Maryland Prepaid College Trust (Proprietary Fund Type) - The Maryland Prepaid College Trust (Trust) is an independent
agency of the State and is directed by the Maryland Higher Education Investment Board. The Board consists of four State
officials and five members of the public appointed by the Governor. The Trust provides a method for Maryland citizens to save
money for college tuition. A purchaser may enter into a single payment or installment contract with the Trust for the future
payment of tuition and fees for a designated beneficiary. The law provides that the Board shall invest the assets of the Trust to
earn sufficient revenues to pay all administrative costs. Legislation passed July 1, 2000, established an additional financial

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