Special Revenue Fund:

Transactions related to resources obtained, the uses of which are restricted for specific purposes, are
accounted for in the special revenue fund. The special revenue fund accounts for resources used for operations
(other than debt service) of the Maryland Department of Transportation Trust Fund, including construction
or improvement of transportation facilities and mass transit operations.

Debt Service Fund:

Transactions related to resources obtained and used for the payment of interest and principal on general
long-term debt obligations and transportation debt (other than Maryland Transportation Authority revenue
bonds) are accounted for in the debt service fund.

Capital Projects Fund:

Transactions related to resources obtained and used for the acquisition, construction or improvement of
certain capital facilities, including those provided to political subdivisions and other public organizations are
accounted for in the capital projects fund. Such resources are derived principally from proceeds of general
obligation bond issues, federal grants and operating transfers from the State's general fund.

The State enters into long-term contracts for construction of major capital projects and records the
commitments as encumbrances. Since the fund's resources are received, in many cases, after the long-term
contracts are executed and recorded as encumbrances, the undesignated fund balance of the capital projects
fund reflects a deficit. This deficit will be funded by future bond proceeds and capital appropriations from the
general fund (see Note 9).

PROPRIETARY FUND TYPE
Enterprise Funds:

Transactions related to commercial activities operated by the State are accounted for in the enterprise
funds. The proprietary fund type differs from governmental fund types in that the focus is on income
measurement which, together with the maintenance of equity, is an important financial indicator. The
enterprise funds include:

1. Economic Development—Direct loan and loan insurance programs of the Maryland Departments of
Housing and Community Development, Economic and Employment Development, and Environment.

2. Maryland Food Center Authority, which owns and operates warehouse facilities for use by wholesale
food distributors.

3. Maryland Transportation Authority, which constructs, maintains and operates transportation toll
facilities.

4. Maryland State Lottery Agency, which operates the State Lottery.

5. Maryland Environmental Service, which constructs, maintains and operates water supply, and liquid
and solid waste disposal facilities.

6. State Use Industries, which utilizes inmate labor from State correctional institutions to manufacture
goods, wares and merchandise to be sold to State agencies, political subdivisions, and charitable, civic,
educational, fraternal or religious associations or institutions.

7. Maryland Higher Education Loan Corporation, which assists resident students in meeting costs of
attending approved institutions by guarantying loans made by commercial lenders.

8. Maryland Deposit Insurance Fund Corporation, which insured the deposits of member State-chartered
savings and loan associations.

9. Maryland Stadium Authority, which maintains and operates a facility for the primary purpose of
holding professional baseball games in Baltimore.

At June 30,1992, the Maryland State Lottery Agency reflected a deficit in capital in the amount of $322,000.
Management expects that the deficit will be eliminated in the coming year.

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