receivership. The Economic Development Opportunities Program Fund is to be used for extraordinary economic
development opportunities and only as a supplement to existing programs. The Catastrophic Event Fund is to be
used to respond without undue delay to a natural disaster or other catastrophic event that cannot be managed
without appropriations. The Revenue Stabilization Account is designed to retain State revenues for future needs
and reduce the need for future tax increases. During fiscal year 1992, $15,000,000 of the Revenue Stabilization
Account was utilized due to revenue shortfalls.

A portion of the special revenue fund balance, in the amount of $39,000 at June 30,1992, has been reserved for
the Maryland Emergency Medical Services System, which was established to provide resources to be used for the
procurement of new helicopters and related equipment, ground support equipment, and other capital equipment
related to the helicopters, and for equipment related to the Emergency Medical Services' Communication System.

C. Enterprise Funds and Pension Trust Funds:

Basis of Accounting:

The accounts of the enterprise funds and pension trust funds are maintained and reported using the accrual
basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time
liabilities are incurred.

Property, Plant and Equipment:

Significant property, plant and equipment of enterprise funds are stated at cost. Depreciation of the cost of
property, plant and equipment of the Economic Development Insurance and Loan Programs, Maryland Food
Center Authority, Maryland State Lottery Agency, Maryland Environmental Service, State Use Industries,
Maryland Higher Education Loan Corporation and the Maryland Stadium Authority is provided on the
straight-line basis over estimated useful lives of 25 to 50 years for depreciable real property, 5 to 10 years for
building improvements, and 3 to 10 years for equipment. Repairs and maintenance are charged to operations in
the period incurred. Replacements, additions and betterments are capitalized.

The Maryland Transportation Authority (Authority) accounts for toll facilities pursuant to betterment
accounting, whereby property costs represent a historical accumulation of costs expended to acquire
rights-of-way and to construct, reconstruct, and place in operation the various projects and related facilities. Costs
also include the cost of improvement, enlargement, betterments and certain general and administrative expenses
incurred during the construction phase. Subsequent betterments are capitalized. Replacements are accounted for
as a period cost. Such period costs are included in the operation and maintenance of facilities. Depreciation of the
projects and related facilities is not included as an operating expense or otherwise provided. The Authority is
required, by trust agreement covenants, to at all times maintain the facilities in good repair and in sound
operating condition and make all necessary repairs, renewals and replacements. Essentially, the majority of the
Authority's assets (bridges, tunnels and turnpikes) have an indefinite life.

Lottery Revenues, Prizes and Operating Transfers:

Revenues and prizes of the Maryland State Lottery Agency (Lottery) are generally recognized as drawings
are held. Certain prizes are payable in deferred installments. Such liabilities are recorded at the present value of
amounts payable in the future. State law requires the Lottery to transfer to the State revenues in excess of
amounts allocated to prize awards, operating expenses and capital expenditure payments. The excess revenues
from selected games are transferred to the Maryland Stadium Authority. The excess revenues from all other
games are transferred to the State's general fund.

Provisions for Insurance and Loan Losses:

Current provisions are made for estimated losses resulting from insurance of loans and uncollectible loans.
Loss provisions are based on the current status of insured and direct loans, including delinquencies, economic
conditions, loss experience, estimated value of collateral and other factors which may affect their realization.

The Maryland Deposit Insurance Fund Corporation provides for insurance losses at the time a member
savings and loan association requires financial assistance or when such assistance is anticipated. These amounts
are reviewed periodically and adjusted as required based on the financial and economic conditions at the time.

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