B. Higher Education and University Hospital Fund:

Certain State Colleges have issued revenue bonds and mortgage loans payable for the acquisition of stu-
dent housing and other facilities. Student fees and other user revenues collateralize the revenue bonds, and
the mortgage loans payable are collateralized by real estate. Interest rates range from 3% to 6% on the reve-
nue bonds and 6% to 10% on the mortgage loans payable. Maturities of principal (amounts expressed in
thousands) are as follows:

Years ending
June 30,	Amount
1982	$ 468
1983	521
1984	595
1985	605
1986	624
1987 and thereafter	18,446
	$21,259

13. Commitments:

At June 30, 1981, the Department of Transportation and Maryland Transportation Authority had com-
mitments of approximately $295,000,000 and $25,041,000, respectively, for construction of highway and
mass transit facilities. Approximately 62% of future expenditures related to the Department of Transporta-
tion commitments are expected to be reimbursed from proceeds of approved federal grants when the actual
costs are incurred.

As of June 30, 1981, direct mortgage loan programs included in other enterprise funds had unfunded
mortgage loan commitments aggregating approximately $57,348,000. These commitments are expected to be
funded from existing program resources and proceeds from revenue bonds to be issued.

Principally all full-time employees accrue annual leave based on the number of years employed up to a
maximum of 25 days per calendar year. Earned annual leave may be accumulated up to a maximum of 35
days as of the end of each calendar year. As of June 30, 1981, accumulated earned but unused annual leave
for employees whose activities are accounted for in governmental fund types aggregated approximately $49
million.

The State is insured for workers' compensation losses by the State Accident Fund under a contract
which provides for the State to pay premiums based upon loss experience plus a proportionate share of ad-
ministrative costs. In the event of termination of the contract, the State is obligated for any premium defi-
ciency existing at the time of termination. As of June 30, 1981, anticipated workers' compensation claims in
the amount of $19,500,000 applicable to State employees were accrued in Nonexpendable Trust Fund.

Effective July 1, 1979, the State is required to distribute to its political subdivisions the estimated local
portion of income tax withholding and estimated payments received for which no individual income tax re-
turns, claiming the payments, were filed by the taxpayers. In fiscal year 1981, the State distributed approxi-
mately $6 million applicable to payments received for tax years prior to 1978. Amounts received for tax
years after 1978 will become distributable to the political subdivisions upon the expiration of the three year
period during which taxpayers have the right to file tax returns and claim refunds. As of June 30, 1981, the
approximate balance of such unclaimed payments was $8,431,000 for the tax year 1978, which, to the extent
not claimed by taxpayers, will be distributed to the political subdivisions and recorded as an expenditure in
the year 1982. Because the legislation requiring these distributions became effective July 1, 1979, the State
accrues the liability for distributions applicable to tax years after 1978.

14. Contingencies:

The State is party to legal proceedings, which normally recur in governmental operations. The legal pro-
ceedings are not, in the opinion of the Attorney General, likely to have a material adverse impact on the fi-
nancial position of the affected funds.

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