17. Deferred Compensation Plan:

The State offers its employees a deferred compensation plan created in accordance with Internal Revenue
Code Section 457. The plan, available to all State employees, permits them to defer a portion of their salary until
future years. Participation in the plan is optional. The deferred compensation is not available to employees until
termination, retirement, death or unforeseeable emergency. All amounts of compensation deferred under the
plan, all property and rights purchased with those amounts, and all income attributable to those amounts,
property or rights are (until paid or made available to the employee or other beneficiary) solely the property and
rights of the State subject only to the claims of the government's general creditors. Participants' rights under
the plan are equal to those of general creditor of the State in an amount equal to the fair market value of the
deferred account for each participant.

It is the opinion of the government's legal counsel that the government has no liability for losses under the
plan but does have the duty of due care that would be required of an ordinary prudent investor. The government
believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future.

Investments are managed by the plan's trustee under one of several investment options, or a combination
thereof. The choice of the .investment option(s) is made by the participants.

18. Commitments:

The State leases office space under various agreements that are accounted for as operating leases. Many
of the agreements contain rent escalation clauses and renewal options. Future lease expense commitments under
these agreements at June 30, 1988 are as follows (amounts expressed in thousands):

At June 30, 1988, the Department of Transportation and Maryland Transportation Authority had
commitments of approximately $910,358,000 and $136,000,000, respectively, for construction of highway and
mass transit facilities. Approximately 51% of future expenditures related to the Department of Transportation
commitments are expected to be reimbursed from proceeds of approved federal grants when the actual costs
are incurred. The remaining portion will be funded by other financial resources of the Department.

The Department of Transportation, as lessor, leases terminal space at various marine terminals, airport
facilities and office space pursuant to various operating leases. Minimum future rental revenues are as follows
(amounts expressed in thousands):

61